B-164635, DEC. 24, 1968

B-164635: Dec 24, 1968

Additional Materials:

Contact:

Ralph O. White
(202) 512-8278
WhiteRO@gao.gov

Kenneth E. Patton
(202) 512-8205
PattonK@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR PROTESTS AGAINST THE SETTING ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION OF CERTAIN PROCUREMENTS OF MOVING SERVICES BY SEVERAL GOVERNMENT DEPARTMENTS AND AGENCIES. IT IS YOUR CONTENTION THAT THESE TOTAL SET-ASIDES FREQUENTLY RESULT IN A NONCOMPETITIVE PROCUREMENT BECAUSE ONLY ONE RESPONSIVE SMALL BUSINESS CONCERN SUBMITS A BID AND THE COST TO THE GOVERNMENT IS MUCH GREATER THAN IF THE PROCUREMENT HAD BEEN ON AN UNRESTRICTED BASIS. WE HAVE RECEIVED REPORTS FROM THE DEPARTMENTS OR AGENCIES CONCERNED WITH THE SPECIFIC SOLICITATIONS YOU HAVE CITED. THE DEPARTMENT OF TRANSPORTATION ADVISES THAT THE THREE INVITATIONS REFERRED TO BY YOU WERE ISSUED BY FAA.

B-164635, DEC. 24, 1968

TO JACOBS MOVING, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR PROTESTS AGAINST THE SETTING ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION OF CERTAIN PROCUREMENTS OF MOVING SERVICES BY SEVERAL GOVERNMENT DEPARTMENTS AND AGENCIES.

SPECIFICALLY, YOU REFER TO PROCUREMENTS BY THE FEDERAL AVIATION AGENCY OF THE DEPARTMENT OF TRANSPORTATION, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, INTERNAL REVENUE SERVICE, AND THE DEPARTMENT OF THE INTERIOR. BASICALLY, IT IS YOUR CONTENTION THAT THESE TOTAL SET-ASIDES FREQUENTLY RESULT IN A NONCOMPETITIVE PROCUREMENT BECAUSE ONLY ONE RESPONSIVE SMALL BUSINESS CONCERN SUBMITS A BID AND THE COST TO THE GOVERNMENT IS MUCH GREATER THAN IF THE PROCUREMENT HAD BEEN ON AN UNRESTRICTED BASIS. IN ADDITION, YOU CONTEND THAT A SMALL BUSINESS CONCERN CANNOT HANDLE THE DAILY MANPOWER FLUCTUATIONS INHERENT IN THIS TYPE OF CONTRACT.

WE HAVE RECEIVED REPORTS FROM THE DEPARTMENTS OR AGENCIES CONCERNED WITH THE SPECIFIC SOLICITATIONS YOU HAVE CITED. THE DEPARTMENT OF TRANSPORTATION ADVISES THAT THE THREE INVITATIONS REFERRED TO BY YOU WERE ISSUED BY FAA. INVITATION FOR BIDS NO. DOT-OS-00-1, FOR CURRENT FISCAL YEAR MOVING SERVICES FOR THE OFFICE OF THE SECRETARY, WAS FURNISHED TO 12 SMALL BUSINESS FIRMS. BIDS WERE RECEIVED FROM H AND M MOVING COMPANY, INCORPORATED, AND FROM COMMERCIAL STORAGE, INCORPORATED. AWARD WAS MADE TO H AND M AS THE LOW RESPONSIVE BIDDER. ON INVITATION FOR BIDS NO. T8- 001, FOR THE PRIOR FISCAL YEAR MOVING SERVICES FOR THE OFFICE OF THE SECRETARY, 16 FIRMS WERE SOLICITED AND FIVE RESPONDED. YOU WERE THE LOW BIDDER. ALTHOUGH YOU CERTIFIED YOU WERE SMALL BUSINESS, YOUR BID WAS REJECTED AS NONRESPONSIVE BECAUSE YOUR FIRM WAS DETERMINED NOT TO BE A SMALL BUSINESS AND AWARD WAS MADE TO THE SECOND LOW RESPONSIVE BIDDER, COMMERCIAL STORAGE, INCORPORATED. SEVENTEEN FIRMS WERE SOLICITED ON INVITATION FOR BIDS NO. WA5S-8-0521, FOR THE CURRENT FISCAL YEAR MOVING SERVICES FOR THE FAA, AND TWO BIDS WERE RECEIVED. H AND M MOVING COMPANY, INCORPORATED, RECEIVED THE AWARD. NO DIFFICULTY IN PERFORMANCE OF THESE CONTRACTS IS REPORTED.

NASA REPORTS THAT INVITATION FOR BIDS NO. DHC-22-10-2374-A, CITED IN YOUR LETTER, WAS ISSUED ON JULY 10, 1967, TO EIGHT SMALL BUSINESS FIRMS AND FIVE BIDS WERE RECEIVED FROM FIVE SELF-CERTIFIED SMALL BUSINESS CONCERNS. AWARD WAS MADE TO COMMERCIAL STORAGE, THE LOW RESPONSIBLE BIDDER, AND THERE IS NO REPORT OF ANY DIFFICULTY IN PERFORMANCE.

THE IRS REPORTS THAT ITS CONTRACTS FOR MOVING SERVICES IN FISCAL YEARS 1967 AND 1968 WERE NOT SET ASIDE FOR SMALL BUSINESS. IN 1967 BIDS WERE SENT TO 14 FIRMS AND FOUR BIDS WERE RECEIVED. ALL FIRMS CERTIFIED THEY WERE SMALL BUSINESS CONCERNS. GREENWOOD'S TRANSFER RECEIVED THE AWARD. FOR FISCAL YEAR 1968, 12 FIRMS WERE SOLICITED AND FOUR BIDS WERE RECEIVED. ALL BIDDERS, INCLUDING YOUR FIRM, CERTIFIED THEY WERE SMALL BUSINESS. YOU RECEIVED THE AWARD. THE CURRENT FISCAL YEAR PROCUREMENT WAS SET ASIDE FOR SMALL BUSINESS AND 14 FIRMS WERE SOLICITED. TWO BIDS WERE RECEIVED AND COMMERCIAL STORAGE, INCORPORATED, WAS AWARDED THE CONTRACT. IT IS ALSO REPORTED THAT GREENWOOD'S TRANSFER HAD INTENDED TO BID, BUT CONFUSED THIS INVITATION WITH ANOTHER AND FAILED TO DO SO. THERE IS NO REPORT OF ANY DIFFICULTY IN PERFORMANCE OF ANY OF THE CONTRACTS.

YOU HAVE ALSO CITED DEPARTMENT OF THE INTERIOR SOLICITATION NO. 768. INTERIOR REPORTS THAT THE SOLICITATION WAS SENT TO 11 FIRMS. COMMERCIAL STORAGE, INCORPORATED, WAS THE ONLY FIRM RESPONDING. PRIOR TO MAKING AN AWARD, COMMERCIAL'S BID PRICE WAS CHECKED WITH ITS BID PRICE TO ANOTHER DEPARTMENT AND DETERMINED TO BE REASONABLE. THEREFORE, AN AWARD WAS MADE. APPARENTLY, PERFORMANCE IS SATISFACTORY.

SECTION 15 OF THE SMALL BUSINESS ACT, 15 U.S.C. 644, PROVIDES THAT SMALL BUSINESS CONCERNS SHALL RECEIVE ANY AWARD OR CONTRACT OR ANY PART THEREOF AS TO WHICH 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 ARE PLACED WITH SMALL BUSINESS CONCERNS. UNDER SECTION 15 OF THE ACT THE DETERMINATION AS TO WHETHER A PARTICULAR PROCUREMENT SHOULD BE SET ASIDE IS WITHIN THE JURISDICTION OF THE PROCURING AGENCY AND THE SMALL BUSINESS ADMINISTRATION. IMPLEMENTING THE STATUTORY MANDATE ARE THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) AND THE FEDERAL PROCUREMENT REGULATIONS (FPR). WITH RESPECT TO TOTAL SET-ASIDES, ASPR 1 706.5 AND FPR 1-1.706-5 PROVIDE, IN SUBSTANCE, THAT THE ENTIRE AMOUNT OF AN INDIVIDUAL PROCUREMENT MAY BE SET ASIDE EXCLUSIVELY FOR SMALL BUSINESS PARTICIPATION WHERE THERE IS A REASONABLE EXPECTATION THAT A SUFFICIENT NUMBER OF BIDS OR PROPOSALS WILL BE OBTAINED "SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES.' THESE PARAGRAPHS ALSO PROVIDE THAT WHILE THE PAST PROCUREMENT HISTORY OF THE ITEM OR SIMILAR ITEMS IS IMPORTANT, IT IS NOT THE ONLY CONTROLLING FACTOR WHICH SHOULD BE CONSIDERED IN DETERMINING WHETHER SUCH A REASONABLE EXPECTATION EXISTS.

OUR OFFICE HAS HELD THAT THE DETERMINATION AS TO WHETHER SUCH A REASONABLE EXPECTATION EXISTS 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. 45 COMP. GEN. 228. WE ARE AWARE OF NO REQUIREMENT, STATUTORY OR REGULATORY, WHICH WOULD MAKE A TOTAL SMALL BUSINESS SET-ASIDE CONTINGENT UPON A DETERMINATION THAT COSTS TO THE GOVERNMENT WOULD NOT BE INCREASED THEREBY. APPLICABLE REGULATIONS ONLY REQUIRE THAT A REASONABLE EXPECTATION EXIST THAT SUFFICIENT SMALL BUSINESS CONCERNS WILL SUBMIT BIDS TO AFFORD ADEQUATE PRICE COMPETITION. THEREFORE, IN ESTABLISHING A SET-ASIDE FOR SMALL BUSINESS PARTICIPATION ONLY, THE FACT THAT LOWER BIDS MAY BE EXPECTED FROM LARGE BUSINESS CONCERNS IS NOT NECESSARILY A DETERMINING FACTOR. 43 COMP. GEN. 497, 500.

WE HAVE ALSO HELD THAT THE RECEIPT OF ONLY ONE RESPONSIVE BID DOES NOT PRECLUDE AWARD OF A CONTRACT OR NULLIFY AN AWARD WHERE THE SET ASIDE APPEARS TO HAVE BEEN MADE WITHIN THE FRAMEWORK OF PERTINENT LAWS AND REGULATIONS ON THE BASIS OF A DETERMINATION AUTHORIZED TO BE MADE BY THE CONTRACTING OFFICER. B-156718, JUNE 16, 1965; B-154641, OCTOBER 15, 1964.

IN THE CIRCUMSTANCES SURROUNDING THE SET-ASIDES YOU HAVE CITED, WE FIND NO EVIDENCE THAT AT THE TIME THE DETERMINATION WAS MADE TO SET ASIDE ANY OF THE PARTICULAR PROCUREMENTS SUCH DETERMINATION WAS ARBITRARY, CAPRICIOUS, MADE IN BAD FAITH, OR OTHERWISE AN ABUSE OF THE ADMINISTRATIVE DISCRETION PERMITTED. HOWEVER, IN THOSE INSTANCES WHERE THE COMPETITION ANTICIPATED WAS NOT GENERATED, WE BELIEVE THAT THE DECISION TO MAKE A TOTAL SET-ASIDE IN FUTURE PROCUREMENTS SHOULD BE CAREFULLY CONSIDERED AND POTENTIAL SOURCES OF SMALL BUSINESS INTEREST SHOULD FIRST BE THOROUGHLY INVESTIGATED.

WITH RESPECT TO YOUR CONTENTION THAT A SMALL BUSINESS CONCERN CANNOT HANDLE THE DAILY MANPOWER FLUCTUATIONS INHERENT IN THIS TYPE OF CONTRACT, THERE IS NO REPORT OF ANY DIFFICULTY IN THIS REGARD IN THE ADMINISTRATIVE REPORTS SUBMITTED IN RESPONSE TO YOUR PROTEST. MOREOVER, A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY IS A QUESTION OF FACT PRIMARILY FOR DETERMINATION BY THE CONTRACTING OFFICER CONCERNED, AND SUCH DETERMINATION WILL NOT BE DISTURBED BY OUR OFFICE IN THE ABSENCE OF CONVINCING EVIDENCE THAT THE DETERMINATION WAS ARBITRARY, CAPRICIOUS, OR NOT BASED UPON SUBSTANTIAL EVIDENCE. 45 COMP. GEN. 4.

ACCORDINGLY, WE FIND NO BASIS FOR OUR OFFICE TO OBJECT TO THE ADMINISTRATIVE ACTION WITH REGARD TO THE SET-ASIDES YOU HAVE CITED.

Jan 25, 2021

Jan 22, 2021

Jan 21, 2021

Jan 19, 2021

Looking for more? Browse all our products here