B-173504, DEC 29, 1971

B-173504, DEC 29, 1971

BID PROTEST - SMALL BUSINESS STATUS - METHOD OF DETERMINATION DECISION SUSTAINING A DETERMINATION, PROTESTED BY PLANT ENGINEERING, INC., IN FAVOR OF DYNAMIC INTERNATIONAL, INC., CONCERNING AN AWARD FOR REFUSE COLLECTION AND REMOVAL SERVICES UNDER AN IFB ISSUED BY FT. LEE, VA., BASED ON A CLASSIFICATION BY THE SMALL BUSINESS ADMINISTRATION. THE SBA'S METHOD OF DETERMINING THE TIME PERIODS FOR WHICH DYNAMIC'S AVERAGE ANNUAL RECEIPTS ARE TO BE COMPUTED IS SUSTAINED SINCE BY LAW A BIDDER IS ONLY REQUIRED TO HAVE CERTIFIED TO BEING A SMALL BUSINESS CONCERN AT THE TIME OF THE BID OPENING AND AWARD. FURTHERMORE, GAO HAS NO JURISDICTION TO MAKE A FINDING OF SIZE STATUS.

TO FRIED, FRANK, HARRIS, SHRIVER & KAMPELMAN:

REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 1, 1971, ON BEHALF OF PLANT ENGINEERING, INCORPORATED (PLANT ENGINEERING), CONCERNING OUR DECISION DATED NOVEMBER 26, 1971, B-173504, WHEREIN IT WAS HELD THAT THERE WAS NO BASIS FOR THIS OFFICE TO QUESTION THE DETERMINATION DATED JUNE 30, 1971, BY THE SMALL BUSINESS ADMINISTRATION SIZE APPEALS BOARD FINDING DYNAMIC INTERNATIONAL, INCORPORATED (DYNAMIC), TO BE A SMALL BUSINESS CONCERN FOR THE PURPOSES OF CONTRACT AWARD FOR REFUSE COLLECTION AND REMOVAL SERVICES AT FORT LEE, VIRGINIA, UNDER INVITATION FOR BIDS NO. DABB27-71-B-0070.

YOUR PRIOR PROTEST WAS BASED ON THE CONTENTION THAT SBA'S ACCEPTANCE OF DYNAMIC'S TAX RETURNS FILED WITH THE INTERNAL REVENUE SERVICE AS THE BASIS FOR ITS DECISION THAT DYNAMIC'S AVERAGE ANNUAL RECEIPTS FOR ITS PRECEDING THREE FISCAL YEARS WERE LESS THAN ONE MILLION DOLLARS WAS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. SINCE DYNAMIC'S BOOKS ARE KEPT ON A CASH RECEIPTS CALENDAR-YEAR BASIS, THE CALENDAR YEARS 1968, 1969 AND 1970 WERE THE FISCAL YEARS INVOLVED IN THE DECISION.

YOU NOW CONTEND THAT SINCE PLANT ENGINEERING'S PRIOR CONTRACT AT FORT LEE HAS BEEN EXTENDED BY THE ARMY THROUGH DECEMBER 31, 1971, PENDING CONSIDERATION OF ITS PROTEST, DYNAMIC WILL NOT BE ABLE TO COMMENCE PERFORMANCE OF ANY CONTRACT AWARDED UNDER THE SUBJECT IFB UNTIL JANUARY 1, 1972. SINCE DYNAMIC'S CURRENT FISCAL YEAR WILL EXPIRE ON DECEMBER 31, 1971, YOU ASSERT THAT DYNAMIC'S SIZE STATUS AS OF JANUARY 1, 1972, MUST BE DETERMINED BY USING DYNAMIC'S RECEIPTS FOR THE PERIOD JANUARY 1, 1969 THROUGH DECEMBER 31, 1971. YOU ALLEGE THAT DYNAMIC'S AVERAGE ANNUAL RECEIPTS FOR THESE YEARS (1969, 1970 AND 1971) WILL EXCEED THE APPLICABLE ONE MILLION DOLLARS SIZE STANDARD, AND, THEREFORE, DYNAMIC MUST BE CONSIDERED NOT TO BE A SMALL BUSINESS CONCERN FOR THE PURPOSES OF THE SUBJECT IFB AND, HENCE, INELIGIBLE FOR AWARD. ON THAT BASIS YOU REQUEST THAT WE RECONSIDER OUR DECISION OF NOVEMBER 26, 1971, AND THAT WE INFORM THE DEPARTMENT OF THE ARMY THAT DYNAMIC IS NOT A SMALL BUSINESS CONCERN FOR PURPOSES OF THE SUBJECT IFB.

WE ARE ADVISED BY THE DEPARTMENT OF THE ARMY THAT AN AWARD UNDER THE SUBJECT IFB WAS MADE TO DYNAMIC ON DECEMBER 2, 1971, WITH PERFORMANCE TO COMMENCE ON JANUARY 1, 1972. OBVIOUSLY IF PERFORMANCE IS TO COMMENCE JANUARY 1, 1972, THE AWARD TO DYNAMIC WAS REQUIRED TO BE MADE IN EARLY DECEMBER 1971, IN ORDER TO PERMIT IT TO PREPARE TO UNDERTAKE THE PERFORMANCE.

A BIDDER, TO BE ELIGIBLE FOR AWARD OF A SMALL BUSINESS SET-ASIDE PROCUREMENT, IS REQUIRED TO HAVE CERTIFIED IN GOOD FAITH TO BE A SMALL BUSINESS CONCERN AT THE TIME OF THE BID OPENING AND TO BE A SMALL BUSINESS CONCERN AT THE TIME OF AWARD. ASPR 1-703 (B)(2); 46 COMP. GEN. 898 (1967). AS OF THE DATE OF THE AWARD TO DYNAMIC THE SBA SIZE APPEALS BOARD'S DECISION OF JUNE 30, 1971, WAS STILL APPLICABLE TO DYNAMIC'S SIZE STATUS. FURTHERMORE, THIS OFFICE COULD NOT MAKE A DETERMINATION AS REQUESTED BY YOU WITH RESPECT TO THE SIZE STATUS OF DYNAMIC, EVEN IF A FURTHER DETERMINATION WERE REQUIRED. THE JURISDICTION TO MAKE SUCH DETERMINATIONS IS VESTED BY 15 U.S.C. 637 (B)(6) IN THE SMALL BUSINESS ADMINISTRATION.

FOR THE FOREGOING REASONS, WE FIND NO BASIS TO MODIFY THE DECISION OF NOVEMBER 26, 1971, OR TO QUESTION THE AWARD MADE TO DYNAMIC BY THE DEPARTMENT OF THE ARMY.