B-182635, MAR 26, 1975

B-182635, MAR 26, 1975

1. PROTEST THAT SMALL BUSINESS SET-ASIDE SHOULD BE WITHDRAWN BECAUSE INSUFFICIENT COMPETITION REMAINED AFTER PROTESTER'S DISQUALIFICATION AS SMALL BUSINESS, WAS TIMELY WHEN FILED WITHIN FIVE DAYS FROM WHEN PROTESTER WAS NOTIFIED OF ITS DISQUALIFICATION. 2. TOTAL SMALL BUSINESS SET-ASIDE IS APPROPRIATE WHERE CONTRACTING OFFICER DID NOT ABUSE HIS DISCRETION IN DETERMINING, PURSUANT TO ASPR SEC. 1-706.5(A)(1), THAT THERE WAS REASONABLE EXPECTATION OF ADEQUATE COMPETITION AND REASONABLE PRICES. ALSO, FACT THAT SET-ASIDE RESULTED IN HIGHER PRICE THAN AN UNRESTRICTED PROCUREMENT IS NOT RELEVANT TO PROPRIETY OF DECISION TO SET ASIDE PROCUREMENT.

DEWITT TRANSFER AND STORAGE COMPANY:

DEWITT TRANSFER AND STORAGE COMPANY (DEWITT) PROTESTS THE TOTAL SMALL BUSINESS SET-ASIDE OF INVITATION FOR BIDS (IFB) M00681-75-B-0014, ISSUED ON AUGUST 15, 1974, BY THE UNITED STATES MARINE CORPS, CAMP PENDLETON, CALIFORNIA. THE SOLICITATION WAS FOR THE NORMAL SERVICE REQUIREMENTS OF PACKING, MOVING AND STORING HOUSEHOLD GOODS AND EFFECTS AT CAMP PENDLETON DURING CALENDAR YEAR 1975.

BIDS WERE OPENED ON OCTOBER 30, 1974, WITH FOUR BIDDERS RESPONDING. DEWITT, THE INCUMBENT CONTRACTOR, WHO BID "ALL OR NONE" ON ALL SCHEDULES AND ALL AREAS, APPEARED TO BE THE LOW RESPONSIVE BIDDER. MISSION VAN AND STORAGE COMPANY, INC., ACE VAN AND STORAGE CORP., INC., AND MAPAC, INC. ALSO BID ON ALL OR NONE BASIS AS A JOINT VENTURE (MAPAC). ADDITIONALLY, AAA TRANSFER AND STORAGE COMPANY AND SULLIVAN STORAGE AND TRANSFER COMPANY SUBMITTED PARTIAL BIDS. SINCE THE INVITATION CONTEMPLATED THE POSSIBILITY OF SECONDARY AND TERTIARY AWARDS, AS WELL AS THE POSSIBILITY OF MULTIPLE AWARDS, THE CONTRACTING OFFICER REQUESTED THE SMALL BUSINESS ADMINISTRATION (SBA) TO VERIFY THE SMALL BUSINESS STATUS OF THE MAPAC JOINT VENTURE. CONCURRENTLY, MAPAC PROTESTED DEWITT'S SIZE STATUS TO THE SBA.

ON NOVEMBER 27, 1974, THE SBA DETERMINED THAT MAPAC WAS A SMALL BUSINESS FOR PURPOSES OF THE SUBJECT SOLICITATION. HOWEVER, ON DECEMBER 10, 1974, THE SBA DETERMINED THAT SINCE DEWITT FAILED TO FURNISH IT WITH THE APPROPRIATE INFORMATION WITHIN THE TIME FRAME ALLOWED, DEWITT AND ITS AFFILIATED COMPANIES DID NOT QUALIFY AS A SMALL BUSINESS.

THE FOLLOWING DAY, COUNSEL FOR DEWITT PROTESTED THE MAKING OF AN AWARD UNDER THE SUBJECT SOLICITATION. DEWITT ARGUES THAT UPON ITS DISQUALIFICATION AS A SMALL BUSINESS, THERE REMAINED ONLY ONE SMALL BIDDER QUALIFIED TO BID ON THE SOLICITATION. ACCORDINGLY, AN AWARD OF A CONTRACT PURSUANT TO THE SOLICITATION WOULD DENY A GROUP OF BIDDERS, INCLUDING DEWITT, "THE EQUAL PROTECTION OF THE LAW AND WOULD PROVIDE AN ARBITRARY, UNREASONABLE AND UNFAIR ADVANTAGE TO A SINGLE BIDDER." FURTHERMORE, DEWITT CONTENDS THAT UNDER THESE CIRCUMSTANCES, THE TOTAL SMALL BUSINESS SET-ASIDE WOULD STIFLE COMPETITION AND RESULT IN THE GOVERNMENT PAYING AT LEAST EIGHT PERCENT MORE FOR THE REQUIRED SERVICES. DEWITT ASKS THAT THE SOLICITATION BE CANCELED AND REISSUED ON AN UNRESTRICTED BASIS.

IN ORDER NOT TO HINDER MOVING OPERATIONS AT CAMP PENDLETON, DEWITT OFFERED AND WAS GRANTED AN EXTENSION TO ITS CALENDAR 1974 YEAR CONTRACT. HOWEVER, THAT EXTENSION AND THE EXTENSIONS OF THE OTHER BIDS SUBMITTED FOR CONSIDERATION UNDER THE 1975 REQUIREMENT EXPIRED ON FEBRUARY 28, 1975. ACCORDINGLY, THE MARINE CORPS HAS NOW MADE AWARD, NOTWITHSTANDING THIS PROTEST, TO THE MAPAC JOINT VENTURE AS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER.

OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS, 4 CODE OF FEDERAL REGULATIONS (CFR) SEC. 20.2 (1974) PROVIDE THAT PROTESTS BASED ON ALLEGED IMPROPRIETIES IN ANY TYPE OF SOLICITATION WHICH ARE APPARENT PRIOR TO BID OPENING MUST BE FILED IN THIS OFFICE PRIOR TO BID OPENING. IN ALL OTHER CASES, PROTESTS SHOULD BE FILED WITHIN FIVE WORKING DAYS AFTER THE BASIS OF THE PROTEST IS KNOWN OR SHOULD HAVE BEEN KNOWN, WHICHEVER IS EARLIER. THE MARINE CORPS CONTENDS THAT SINCE DEWITT, IN ESSENCE, IS PROTESTING AGAINST THE FACT THAT THE PROCUREMENT WAS A TOTAL SMALL BUSINESS SET- ASIDE, AND SINCE THAT FACT WAS APPARENT ON THE FACE OF THE SOLICITATION, DEWITT'S PROTEST RECEIVED HERE ON DECEMBER 12, 1974, IS CLEARLY UNTIMELY.

WE BELIEVE THAT TO REQUIRE A BUSINESS WHICH PRESUMABLY CERTIFIES ITSELF IN GOOD FAITH AS SMALL, TO PROTEST BEFORE BID OPENING THAT A SET ASIDE DETERMINATION WAS IMPROPER BECAUSE, AFTER THAT BIDDER'S DISQUALIFICATION AS TO SIZE, INADEQUATE COMPETITION AND UNREASONABLY HIGH PRICES EXISTED, WOULD REQUIRE THE PROTESTER TO HAVE KNOWLEDGE OF THE BIDDING OUTCOME AND DEGREE OF COMPETITION WHEN SUCH INFORMATION WOULD NOT BE AVAILABLE TO IT. ACCORDINGLY, SINCE DEWITT'S PROTEST WAS FILED HERE WITHIN FIVE WORKING DAYS FROM ITS RECEIPT OF NOTIFICATION OF DISQUALIFICATION, THE PROTEST MUST BE CONSIDERED TIMELY.

SECTION 15 OF THE SMALL BUSINESS ACT OF 1953 PROVIDES THAT SMALL BUSINESS CONCERNS SHALL RECEIVE ANY AWARD OR CONTRACT OR ANY PART THEREOF WHEN IT IS DETERMINED TO BE IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF THE TOTAL PURCHASES AND CONTRACTS FOR PROPERTY AND SERVICES FOR THE GOVERNMENT IS PLACED WITH SMALL BUSINESS CONCERNS. SEE 15 U.S.C. SEC. 644 (1970). IN IMPLEMENTATION OF THIS POLICY, ASPR SEC. 1-706.5(A)(1) (1974 ED.) PROVIDES THAT:

"*** THE ENTIRE AMOUNT OF AN INDIVIDUAL PROCUREMENT OR A CLASS OF PROCUREMENTS, INCLUDING BUT NOT LIMITED TO CONTRACTS FOR MAINTENANCE, REPAIR, AND CONSTRUCTION, SHALL BE SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION *** IF THE CONTRACTING OFFICER DETERMINES THAT THERE IS REASONABLE EXPECTATION THAT OFFERS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES. TOTAL SET-ASIDES SHALL NOT BE MADE UNLESS SUCH A REASONABLE EXPECTATION EXISTS. *** ALTHOUGH PAST PROCUREMENT HISTORY OF THE ITEM OR SIMILAR ITEMS IS ALWAYS IMPORTANT, IT IS NOT THE ONLY FACTOR WHICH SHOULD BE CONSIDERED IN DETERMINING WHETHER A REASONABLE EXPECTATION EXISTS."

THE DECISION TO SET ASIDE A PARTICULAR PROCUREMENT EXCLUSIVELY FOR SMALL BUSINESS SHOULD BE MADE ON THE BASIS OF THE CIRCUMSTANCES EXISTING AT THE TIME THE DECISION IS MADE. B-172165, SEPTEMBER 3, 1971. MOREOVER, OUR OFFICE HAS CONSISTENTLY HELD IN SUCH MATTERS THAT THE DETERMINATION AS TO WHETHER A REASONABLE EXPECTATION EXISTS FOR ADEQUATE COMPETITION FROM SMALL BUSINESS FIRMS IS WITHIN THE AMBIT OF SOUND ADMINISTRATIVE DISCRETION AND WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER IN THE ABSENCE OF A CLEAR SHOWING OF ABUSE OF THE DISCRETION PERMITTED HIM. B-171693, APRIL 22, 1971; B 168534(1) AND (2), JANUARY 16, 1970; 45 COMP. GEN. 228 (1965). THE FACT THAT LOWER BIDS MAY BE EXPECTED FROM LARGE BUSINESS CONCERNS IN AN UNRESTRICTED PROCUREMENT IS NOT A SIGNIFICANT FACTOR IN DETERMINING WHETHER A PROCUREMENT SHOULD BE SET ASIDE FOR SMALL BUSINESS PARTICIPATION, AND WE HAVE HELD THAT THERE IS NO REQUIREMENT THAT THE PRICES OFFERED UNDER A TOTAL SET ASIDE PROCUREMENT BE EQUAL TO, OR BETTER THAN, PRICES WHICH MIGHT REASONABLY HAVE BEEN ANTICIPATED AS A RESULT OF UNRESTRICTED COMPETITION. 43 COMP. GEN. 497 (1963).

DEWITT STATES THAT AT A CONFERENCE WITH THE CONTRACTING OFFICER IN THE LATE SUMMER OF 1974, IT WAS POINTED OUT IN REFERENCE TO THE CAMP PENDLETON AND EL TORO MARINE CORPS AIR STATION 1975 MOVING SERVICES REQUIREMENTS, THAT THE NUMBER OF POTENTIAL SMALL BUSINESS BIDDERS WAS EXTREMELY SMALL AND THAT IN ORDER TO STIMULATE A REASONABLE BIDDING RESPONSE, THE PROCUREMENT SHOULD NOT BE SET ASIDE. FOR PURPOSES OF COMPARISON, DEWITT INDICATES THAT ALTHOUGH THERE WERE 35 NAMES ON THE BIDDERS LIST FOR EL TORO AND ONLY 24 ON THE PENDLETON LIST, ONLY THE PENDLETON REQUIREMENT WAS SET ASIDE. DEWITT BELIEVES THAT THIS DEMONSTRATES THE UNREASONABLENESS OF THE SUBJECT SET-ASIDE DETERMINATION.

THE RECORD INDICATES THAT ON NOVEMBER 8, 1971, FUTURE PROCUREMENTS FOR MOVING SERVICES AT BOTH PENDLETON AND EL TORO WERE SET ASIDE FOR EXCLUSIVE PARTICIPATION OF SMALL BUSINESSES. APPROXIMATELY ONE YEAR LATER, THE SET- ASIDE DETERMINATION FOR EL TORO WAS REVOKED ON ACCOUNT OF INADEQUATE SMALL BUSINESS COMPETITION. THAT WAS NOT THE CASE WITH THE CAMP PENDLETON REQUIREMENT, WHICH CONTINUED TO BE SERVICED BY A SMALL BUSINESS CONTRACTOR FOR EACH OF THE CALENDAR YEARS 1972, 1973 AND 1974. THE 1974 PROCUREMENT RESULTED IN THE SUBMISSION OF FIVE SMALL BUSINESS BIDS, INCLUDING THE ONE ON WHICH DEWITT RECEIVED AWARD. ACCORDINGLY, WE BELIEVE THAT NOTWITHSTANDING THE INFORMAL ADVICE ALLEGEDLY GIVEN AT THE CONFERENCE, THE CONTRACTING OFFICER REASONABLY COULD HAVE EXPECTED THAT IN VIEW OF THE FIVE BIDS SUBMITTED ON THE PRIOR YEAR'S PROCUREMENT, AND IN THE ABSENCE OF INFORMATION LEADING TO THE BELIEF THAT ANY OF THE PREVIOUS BIDDERS WOULD FAIL TO QUALIFY AS SMALL BUSINESS, A TOTAL SMALL BUSINESS SET ASIDE WOULD RESULT IN ADEQUATE COMPETITION AND REASONABLE PRICES. ADEQUATE COMPETITION AND REASONABLE PRICES.

DEWITT CONTENDS THAT SINCE TWO OF THE BIDS ON THE 1975 REQUIREMENT WERE ONLY PARTIAL BIDS WHICH, EVEN IF TAKEN TOGETHER, COULD NOT HAVE FULFILLED THE ENTIRE REQUIREMENT, THEY SHOULD NOT BE CONSIDERED IN DETERMINING WHETHER ADEQUATE COMPETITION WAS ACHIEVED. THEREFORE, DEWITT ASSERTS THAT UPON ITS DISQUALIFICATION ONLY MAPAC'S ALL OR NONE BID REMAINED, AND THAT THAT ONE BID ALONE DOES NOT CONSTITUTE ADEQUATE COMPETITION.

WE DO NOT AGREE THAT ONLY ONE BID REMAINED OR THAT COMPETITION WAS INADEQUATE. THE SOLICITATION PERMITTED PARTIAL AS WELL AS ALL OR NONE BIDS. MOREOVER, UNDER THE TERMS OF THE INVITATION, THE GOVERNMENT WAS NOT REQUIRED TO FULFILL ITS ENTIRE REQUIREMENT BY MAKING AWARD ON THE BASIS OF ONE OR A COMBINATION OF SEVERAL BIDS, FOR THE GOVERNMENT RESERVED THE RIGHT TO AWARD ADDITIONAL CONTRACTS TO THE EXTENT NECESSARY TO MEET ITS ESTIMATED MAXIMUM REQUIREMENTS. ACCORDINGLY, THE GOVERNMENT COULD HAVE ACCEPTED ONE OR MORE OF THE PARTIAL BIDS AND RESOLICITED FOR THE REMAINDER OF ITS REQUIREMENT. THEREFORE, FOR PURPOSES OF DETERMINING WHETHER ADEQUATE COMPETITION EXISTED, PARTIAL BIDS COULD NOT BE DISCOUNTED. CONSEQUENTLY, UPON DEWITT'S DISQUALIFICATION, THERE STILL REMAINED THREE BIDS ELIGIBLE FOR CONSIDERATION. FURTHERMORE, THE FACT THAT ACCEPTANCE OF THE MAPAC BID RESULTED IN A HIGHER PRICE TO THE GOVERNMENT IS NOT ENOUGH TO CANCEL THE INVITATION OR OVERTURN THE AWARD. 43 COMP. GEN. 497 (1963).

THE MARINE CORPS HAS INDICATED THAT "SINCE PROTESTANT HAS BEEN FOUND TO BE A LARGE BUSINESS, UNLESS CIRCUMSTANCES CHANGE, IT WOULD APPEAR THAT THE SUCCESSOR SOLICITATIONS FOR CALENDAR YEAR 1976, WOULD NOT BE SET ASIDE FOR EXCLUSIVE PARTICIPATION OF SMALL BUSINESS." DEWITT INFERS FROM THIS STATEMENT THAT THE MARINE CORPS IMPLICITLY ACCEPTS THE CONCLUSION THAT THE 1975 REQUIREMENT WAS IMPROPERLY SET ASIDE. A SET ASIDE DETERMINATION MUST BE JUDGED ON THE BASIS OF THE FACTS AND CIRCUMSTANCES EXISTING AT THE TIME OF THE DECISION AND NOT IN VIEW OF FACTS THAT SUBSEQUENTLY COME TO LIGHT. WE BELIEVE THAT ON THE BASIS OF THE FACTS AND CIRCUMSTANCES EXISTING AT THE TIME THAT THE DECISION TO SET-ASIDE THE PROCUREMENT WAS MADE, THE CONTRACTING OFFICER ACTED REASONABLY AND WITHIN THE PURVIEW OF HIS DISCRETION.

ACCORDINGLY, THE PROTEST IS DENIED.