B-147632, APR. 30, 1962

B-147632, APR. 30, 1962

TO AEROLOGICAL RESEARCH, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 27, 1962, REQUESTING RECONSIDERATION OF OUR DECISION OF MARCH 13, 1962, WHEREIN, IN DENYING YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER INVITATION FOR BIDS NO. SC-36-039-62-313-A1, ISSUED BY THE U.S. ARMY SIGNAL SUPPLY AGENCY, YOU WERE ADVISED, IN SUBSTANCE, THAT THE REPORTED FACTS AND CIRCUMSTANCES AFFORDED NO LEGAL BASIS FOR DISTURBING THE AWARD.

THE FACTS OF RECORD, AS ADMINISTRATIVELY REPORTED, RESULTING IN THE CONTRACTING OFFICER'S DETERMINATION, AFFIRMED BY THE ASSISTANT CHIEF, PROCUREMENT AND DISTRIBUTION DIVISION OF THE AGENCY, THAT YOUR FIRM DID NOT QUALIFY AS A "MANUFACTURER" WITHIN THE MEANING OF THE WALSH HEALEY ACT, 41 U.S.C. 35, AND IMPLEMENTING REGULATIONS, AND IN THE AWARD TO ANOTHER FIRM, AS THE LOWEST QUALIFIED AND RESPONSIVE BIDDER, WERE SET FORTH IN DETAIL IN OUR DECISION OF MARCH 13, 1962, AND NEED NOT BE REPEATED HEREIN.

IN REQUESTING RECONSIDERATION OF OUR PRIOR DECISION, IT IS YOUR CONTENTION THAT CERTAIN INFORMATION ADMINISTRATIVELY REPORTED TO THIS OFFICE WAS INCORRECT; THAT COMPLETE DATA, RELATING TO THE RELATIONSHIP OF YOUR FIRM AND ITS WHOLLY-OWNED SUBSIDIARY, CRAIG INSTRUMENT CORPORATION, AND SUBSTANTIATING YOUR STATUS AS A MANUFACTURER, WAS SUBMITTED TO THE CONTRACTING AGENCY PRIOR TO--- AND NOT, AS ADMINISTRATIVELY REPORTED, SUBSEQUENT TO--- AWARD; AND THAT, ON THE BASIS THEREOF, YOUR FIRM SHOULD HAVE BEEN DETERMINED TO BE A MANUFACTURER.

THIS OFFICE, OF COURSE, HAS NO FIRST-HAND INFORMATION AS TO THE FACTS IN THE MATTER AND, IN THE ABSENCE OF CONVINCING EVIDENCE TO THE CONTRARY, MUST ACCEPT THE REPORT OF THE ADMINISTRATIVE OFFICE. NO SUCH EVIDENCE HAS BEEN PRESENTED. MOREOVER, EVEN ASSUMING FOR PRESENT PURPOSES THAT YOUR CONTENTION IS CORRECT AND THAT THE CONTRACTING OFFICER ERRED IN HIS DETERMINATION THAT YOU DID NOT QUALIFY AS A MANUFACTURER, THE AUTHORITY TO REVIEW THAT DETERMINATION IS VESTED EXCLUSIVELY IN THE DEPARTMENT OF LABOR AND NOT IN THIS OFFICE.

THE WALSH-HEALEY ACT AND THE APPLICABLE REGULATIONS PROMULGATED FOR THE GUIDANCE OF FEDERAL PROCUREMENT OFFICIALS IN THE ADMINISTRATION OF THIS STATUTE PROVIDE, AMONG OTHER REQUIREMENTS, THAT BIDS, COVERING THE MANUFACTURE OR FURNISHING OF SUPPLIES (WITH CERTAIN EXCEPTIONS NOT HERE MATERIAL) EXCEEDING $10,000 IN AMOUNT FROM PROPOSED SUPPLIERS WHO ARE NOT MANUFACTURERS OR REGULAR DEALERS OF THE COMMODITY INVOLVED SHALL BE REJECTED BY THE CONTRACTING OFFICER. THE SUBJECT STATUTE FURTHER PROVIDES THAT THE SECRETARY OF LABOR IS AUTHORIZED TO ADMINISTER THE PROVISIONS OF THE ACT AND TO PRESCRIBE THE RULES AND REGULATIONS WITH RESPECT THERETO. UNDER AUTHORITY THEREOF, THE SECRETARY OF LABOR HAS VESTED INITIAL RESPONSIBILITY WITH THE CONTRACTING AGENCY TO DETERMINE WHETHER OR NOT A BIDDER IS QUALIFIED AS A MANUFACTURER OR REGULAR DEALER SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR, WHOSE FINDING IS CONCLUSIVE AND BINDING ON ALL PARTIES CONCERNED. ON THE BASIS OF THE FOREGOING IT IS CLEAR THAT THE CONTRACTING OFFICER WAS ACTING WITHIN THE SCOPE OF HIS AUTHORITY UNDER THE ACT AND THE REGULATIONS ISSUED THEREUNDER IN DETERMINING THAT, CONTRARY TO YOUR REPRESENTATION, YOUR FIRM DID NOT QUALIFY AS A MANUFACTURER. SINCE THE DEPARTMENT OF LABOR DID NOT FIND, UPON REVIEW, THAT, ON THE BASIS OF THE EVIDENCE PRESENTED PRIOR TO AWARD, THE CONTRACTING OFFICER'S DETERMINATION WAS ERRONEOUS, THE PROCUREMENT ACTION TAKEN ON THE BASIS OF THAT DETERMINATION MAY NOT BE CONSIDERED TO HAVE BEEN IN VIOLATION OF THE LAW.

YOUR FURTHER CONTENTION THAT THE PROCURING ACTIVITY USED THE WALSH HEALEY ACT TO DEPRIVE YOU OF THE OPPORTUNITY OF BEING EVALUATED FOR AWARD OF THE CONTRACT BY THE SMALL BUSINESS ADMINISTRATION INDICATES A MISUNDERSTANDING OF THE SCOPE AND EFFECT OF EVALUATION BY THAT AGENCY. THE ISSUANCE BY THE SMALL BUSINESS ADMINISTRATION OF A CERTIFICATE OF COMPETENCY WHICH COVERS THAT AGENCY'S DETERMINATION OF A BIDDER'S COMPETENCY, AS TO CAPACITY AND CREDIT, TO PERFORM A SPECIFIC CONTRACT IS, AS TO THOSE ASPECTS OF A BIDDER'S RESPONSIBILITY, CONCLUSIVE UPON FEDERAL PROCUREMENT OFFICIALS. HOWEVER, CONTRARY TO YOUR APPARENT VIEW IN THE MATTER, THE AWARD OF THE INSTANT CONTRACT WOULD NOT HAVE BEEN REQUIRED TO BE MADE TO YOU EVEN IF THE SMALL BUSINESS ADMINISTRATION HAD DETERMINED THAT YOU QUALIFIED FOR SUCH A CERTIFICATE. THE REQUIRED DETERMINATION OF A BIDDER'S RESPONSIBILITY UNDER PARAGRAPHS 1-902 AND 1-903 OF THE ARMED SERVICES PROCUREMENT REGULATION ENCOMPASSES CRITERIA OF RESPONSIBILITY OTHER THAN CAPACITY AND CREDIT. ONE OF THE SEVERAL FACTORS IMPOSED BY LAW AND SPECIFICALLY PRESCRIBED FOR CONSIDERATION BY THE CITED PARAGRAPHS IS THAT A BIDDER, TO BE ELIGIBLE FOR AWARD, MUST BE A MANUFACTURER OF, OR A REGULAR DEALER IN, THE SUPPLIES TO BE FURNISHED. THE CONTRACTING OFFICER'S DETERMINATION THAT ON THIS SCORE YOU DID NOT QUALIFY AS AN AUTHORIZED SOURCE OF SUPPLY, IN THE ABSENCE OF APPEAL TO AND CONTRARY DETERMINATION BY THE DEPARTMENT OF LABOR, PRECLUDED AWARD TO YOUR FIRM, REGARDLESS OF COMPETENCY AS TO CAPACITY AND CREDIT, AND THUS RENDERED UNNECESSARY CONSIDERATION OF THOSE AREAS OF RESPONSIBILITY BY THE SMALL BUSINESS ADMINISTRATION. SEE PARAGRAPH 1-705.6 (B) (IV) OF THE ARMED SERVICES PROCUREMENT REGULATION.

ACCORDINGLY, WE MUST CONCLUDE THAT THERE HAS BEEN PRESENTED NO BASIS FOR QUESTIONING THE ADMINISTRATIVE ACTION IN AWARDING THE CONTRACT TO A FIRM OTHER THAN YOURSELF.