B-194414 L/M, FEB 21, 1980

B-194414 L/M, FEB 21, 1980

OFFICE OF GENERAL COUNSEL

ANTHONY L. KALLOCH, SALES AND MARKETING:

THIS LETTER RESPONDS TO YOUR TELEGRAM RECEIVED OCTOBER 19, 1979, REQUESTING CLARIFICATION OF OUR DECISION SAVORY EQUIPMENT COMPANY, B-194414, SEPTEMBER 19, 1979, 79-2 CPD 203, WHEREIN WE DENIED YOUR FIRM'S PROTEST, WHICH ASSERTED THAT THE GENERAL SERVICES ADMINISTRATION (GSA) LACKED A REASONABLE BASIS TO SET ASIDE FOR SMALL BUSINESS SOLICITATION FPCC-Z-36350-N-3-27-79 FOR THE ACQUISITION OF "TOASTERS, ROTARY, HEAVY DUTY" UNDER THE MULTIPLE AWARD FEDERAL SUPPLY SCHEDULE (FSS).

THAT DECISION, RESPONDING TO YOUR ALLEGATION THAT ONLY ONE SMALL BUSINESS CONCERN - HATCO COMPANY - WAS CAPABLE OF MEETING THE SOLICITATION REQUIREMENTS, HELD THAT AT THE TIME THE CONTRACTING OFFICER DETERMINED TO SET ASIDE THE ACQUISITION HE REASONABLY ANTICIPATED COMPETITION FROM THE SUPPLIERS OF TOASTERS MANUFACTURED BY THREE SMALL BUSINESS CONCERNS, HATCO, WELLS AND PRINCE CASTLE. GSA ACTUALLY RECEIVED ONLY TWO SMALL BUSINESS BIDS, OFFERING TOASTERS MANUFACTURED BY HATCO AND THE HOLMAN GROUP (HOLMAN). HATCO'S TOASTERS CONVENTIONALLY TOAST BREAD BY INDIRECT HEAT, WHEREAS HOLMAN'S TOASTERS GRILL BREAD BY PLACING IT IN DIRECT CONTACT WITH THE HEATING ELEMENT. SAVORY UNSUCCESSFULLY CONTENDED THAT HOLMAN'S PRODUCTS WERE NOT TOASTERS WITHIN THE MEANING OF THE SOLICITATION, AND THEREFORE GSA ONLY RECEIVED ONE OFFER WHICH COMPLIED WITH THE REQUIREMENTS OF THE SOLICITATION.

YOU NOW CONTEND THAT OUR DECISION IGNORES THE "SOLE SOURCE" IMPLICATIONS OF THE ACQUISITION AND ALSO FAILS TO CONSIDER THAT HOLMAN'S OFFERED TOASTERS NEVER HAD BEEN MARKETED COMMERCIALLY PRIOR TO THE SUBMISSION OF HOLMAN'S OFFER.

WE VIEW YOUR TELEGRAM AS A REQUEST FOR CLARIFICATION OF OUR DECISION, NOT FOR ITS RECONSIDERATION, AS A RECONSIDERATION REQUEST WOULD BE UNTIMELY UNDER OUR BID PROTEST PROCEDURES. SEE 4 C.F.R. SEC. 20.9(B) (1979); S.A.F.E. EXPORT CORPORATION - RECONSIDERATION, B-192335, MARCH 29, 1979, 79-1 CPD 214; VANIR RESEARCH COMPANY - RECONSIDERATION, B-189977, OCTOBER 19, 1977, 77-2 CPD 306.

AS WE INDICATED IN OUR PRIOR DECISION, THIS OFFICE HAS RECOGNIZED THE RIGHT OF A CONTRACTING ACTIVITY TO MAKE AN AWARD UNDER A SMALL BUSINESS SET-ASIDE WHERE ONLY ONE OFFEROR QUALIFIES AS A SMALL BUSINESS. SEE CDI MARINE COMPANY, B-188905, NOVEMBER 15, 1977, 77-2 CPD 367. HOWEVER, WE PRESUME THAT YOUR CONCERN OVER THE SOLE SOURCE IMPLICATIONS OF THE ACQUISITION STEMS FROM THE FACT THAT THERE WILL BE NO COMPETITION FOR ORDERS OF CONVENTIONAL TOASTERS AMONG MULTIPLE AWARD FSS CONTRACTORS SINCE ONLY ONE CONTRACTOR SUPPLIES SUCH TOASTERS. SINCE THE FSS DOES NOT DISTINGUISH BETWEEN TOASTERS WHICH CONVENTIONALLY TOAST BREAD AND TOASTERS WHICH GRILL BREAD, THERE WILL BE COMPETITION BETWEEN TWO FSS CONTRACTORS - HATCO AND HOLMAN - FOR THE ORDERS OF FSS USER AGENCIES REQUIRING TOASTERS. THEREFORE, THERE ARE NO SOLE SOURCE IMPLICATIONS WHICH OUR DECISION SHOULD HAVE ADDRESSED.

REGARDING YOUR CONTENTION THAT HOLMAN'S TOASTERS HAD NOT BEEN COMMERCIALLY AVAILABLE PRIOR TO THIS ACQUISITION, WE ARE NOT AWARE OF ANY LEGAL REQUIREMENT THAT A PRODUCT BE MARKETED COMMERCIALLY BEFORE IT IS OFFERED FOR AN FSS CONTRACT. THE SOLICITATION DID REQUIRE THAT IF OFFERED PRICES ARE BASED ON CATALOG OR MARKET PRICES OF COMMERCIAL ITEMS, THE OFFEROR MUST CERTIFY THAT SUBSTANTIAL QUANTITIES OF THE ITEMS HAVE BEEN SOLD TO THE GENERAL PUBLIC AT SUCH PRICES. GSA HAS INFORMALLY ADVISED US THAT HOLMAN'S PRICES WERE BASED ON CATALOG PRICES AND THAT HOLMAN SUBMITTED THE REQUIRED CERTIFICATION. WE POINT OUT THAT SAVORY HAD THE BURDEN OF AFFIRMATIVELY PROVING ITS CASE, AND THE RECORD CONTAINED NO EVIDENCE THAT HOLMAN FALSELY CERTIFIED THAT IT HAD SOLD SUBSTANTIAL QUANTITIES OF ITS OFFERED PRODUCT TO THE GENERAL PUBLIC. THEREFORE, WE COULD NOT TAKE LEGAL OBJECTION TO AWARD TO HOLMAN. SEE BELL & HOWELL CORPORATION; REALIST, INC., B-193301, FEBRUARY 6, 1979, 79-1 CPD 82.