B-146677, OCTOBER 10, 1961, 41 COMP. GEN. 230

B-146677: Oct 10, 1961

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ON THE BASIS OF FORMAL ADVERTISING WOULD BE A DEVIATION FROM FORMAL ADVERTISING PRINCIPLES IN THAT BIDS SUBMITTED BY SMALL BUSINESS BIDDERS ARE NOT CONSIDERED FIRM BIDS FOR THE SET-ASIDE. THE AWARD FOR THE SET- ASIDE IS ORDINARILY AT A DIFFERENT PRICE FROM THAT BID BY THE PARTY TO WHOM AWARD IS MADE. THE CONTRACT FOR THE SET-ASIDE IS NOT FORMED BY THE GOVERNMENT'S ACCEPTANCE OF AN OFFER BUT BY THE CONTRACTOR'S ACCEPTANCE. WHICH PROVIDES THAT SMALL BUSINESS CONCERNS SHALL BE AWARDED ANY CONTRACT FOR THE SALE OF GOVERNMENT PROPERTY WHICH IS DETERMINED BY THE SMALL BUSINESS ADMINISTRATION AND THE DISPOSAL AGENCY TO BE IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF THE TOTAL SALES OF GOVERNMENT PROPERTY BE MADE TO SMALL BUSINESS.

B-146677, OCTOBER 10, 1961, 41 COMP. GEN. 230

CONTRACTS - AWARDS - SMALL BUSINESS CONCERNS - ADVERTISING--- CONTRACTS AWARDS - SMALL BUSINESS CONCERNS - SALES OF GOVERNMENT PROPERTY - ADMINISTRATIVE DETERMINATION--- CONTRACTS - AWARDS - SMALL BUSINESS CONCERNS - SALES OF GOVERNMENT PROPERTY - ADMINISTRATIVE DETERMINATION- - CONTRACTS - AWARDS - SMALL BUSINESS CONCERNS - SALES OF GOVERNMENT PROPERTY - ADMINISTRATIVE DETERMINATION THE ADOPTION OF A SMALL BUSINESS SET-ASIDE PROCEDURE FOR THE DISPOSITION OF 50 PERCENT OF THE REMAINING STOCK OF A DRUG ACQUIRED UNDER THE STRATEGIC AND CRITICAL MATERIALS STOCK PILING ACT, 50 U.S.C. 98-98H, AND OFFERED FOR SALE, AFTER PUBLICATION OF NOTICE IN THE FEDERAL REGISTER, ON THE BASIS OF FORMAL ADVERTISING WOULD BE A DEVIATION FROM FORMAL ADVERTISING PRINCIPLES IN THAT BIDS SUBMITTED BY SMALL BUSINESS BIDDERS ARE NOT CONSIDERED FIRM BIDS FOR THE SET-ASIDE, THE AWARD FOR THE SET- ASIDE IS ORDINARILY AT A DIFFERENT PRICE FROM THAT BID BY THE PARTY TO WHOM AWARD IS MADE, AND THE CONTRACT FOR THE SET-ASIDE IS NOT FORMED BY THE GOVERNMENT'S ACCEPTANCE OF AN OFFER BUT BY THE CONTRACTOR'S ACCEPTANCE; THEREFORE, SUCH A PARTIAL SET-ASIDE WOULD NOT BE A SALE BY FORMAL ADVERTISING AS PROVIDED IN THE DISPOSITION NOTICE. ALTHOUGH A PARTIAL SMALL BUSINESS SET-ASIDE AT THE REQUEST OF THE SMALL BUSINESS ADMINISTRATION OF THE REMAINING STOCK OF AN ITEM ACQUIRED UNDER THE STOCKPILING PROGRAM AND OFFERED FOR SALE, AFTER PUBLICATION OF NOTICE IN THE FEDERAL REGISTER, ON THE BASIS OF FORMAL ADVERTISING WOULD NOT COMPLY WITH THE REQUIREMENT THAT THE SALE BE A SALE BY FORMAL ADVERTISING, IT WOULD BE PROPER FOR THE ADMINISTRATOR OF GENERAL SERVICES UNDER SECTION 2 (15) OF THE SMALL BUSINESS ACT, 15 U.S.C. 644, TO MAKE A DETERMINATION THAT SOME PART OF THE STOCK SHOULD BE SET ASIDE FOR SMALL BUSINESS AND TO OFFER SEPARATELY, BY ADVERTISING, ONLY THAT PORTION, WITH BIDDING BEING RESTRICTED TO SMALL BUSINESS, AND SUCH PROCEDURE WOULD COMPLY WITH THE DISPOSITION NOTICE PREVIOUSLY PUBLISHED. UNDER SECTION 2 (15) OF THE SMALL BUSINESS ACT, 15 U.S.C. 644, WHICH PROVIDES THAT SMALL BUSINESS CONCERNS SHALL BE AWARDED ANY CONTRACT FOR THE SALE OF GOVERNMENT PROPERTY WHICH IS DETERMINED BY THE SMALL BUSINESS ADMINISTRATION AND THE DISPOSAL AGENCY TO BE IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF THE TOTAL SALES OF GOVERNMENT PROPERTY BE MADE TO SMALL BUSINESS, THE SMALL BUSINESS ADMINISTRATION CANNOT UNILATERALLY MAKE THE DETERMINATION, BUT IT MUST BE CONCURRED IN BY THE DISPOSAL AGENCY AND, IN THE EVENT OF FAILURE TO AGREE, THE DECISION OF THE HEAD OF THE DISPOSAL AGENCY IS FINAL. IN DISPOSING OF ITEMS ACQUIRED UNDER THE STRATEGIC AND CRITICAL MATERIALS STOCK PILING ACT, 50 U.S.C. 98-98H, WHICH REQUIRES THAT THE PLAN OF DISPOSITION BE FIXED WITH DUE REGARD TO THE PROTECTION OF THE UNITED STATES AGAINST AVOIDABLE LOSS ON THE SALE TO SMALL BUSINESS CONCERNS, THE PROVISIONS IN SECTION 127.15-2 (D) OF THE SMALL BUSINESS REGULATIONS WHICH AUTHORIZE THE WITHDRAWAL OF A SET-ASIDE WHEN THE CONTRACTING OFFICER CONSIDERS THAT A SMALL BUSINESS AWARD "WOULD BE DETRIMENTAL TO THE PUBLIC INTEREST," ALTHOUGH LIMITED TO PROCUREMENTS WOULD, BY ANALOGY, BE APPLICABLE TO SALES BY THE GOVERNMENT SO THAT IF A DETERMINATION TO SET ASIDE A PORTION OF A STOCKPILED ITEM FOR SMALL BUSINESS IS MADE, THE NON- SET-ASIDE PORTION SHOULD BE ADVERTISED AND THE PRICE REALIZED ON THAT SALE SHOULD BE USED AS A BASIS FOR DETERMINING WHETHER ACCEPTANCE OF THE BEST BID ON THE SET-ASIDE WOULD RESULT IN "AVOIDABLE LOSS" OR FOR ESTABLISHING THE UPSET PRICE FOR THE SET-ASIDE.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, OCTOBER 10, 1961:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 15, 1961, AND SEPARATE PRESENTATION BY THE ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION, UNDER DATE OF SEPTEMBER 1, 1961, CONCERNING THE PROPRIETY OF SETTING ASIDE FOR OFFERING TO SMALL BUSINESS FIRMS OF A PORTION OF 9,524,000 OUNCES OF QUININE SULPHATE TO BE DISPOSED OF BY YOUR AGENCY.

THE MATERIAL IN QUESTION IS A PORTION OF A STOCK ACQUIRED UNDER AUTHORITY OF THE STRATEGIC AND CRITICAL MATERIALS STOCK PILING ACT, 53 STAT. 811, AS AMENDED, 50 U.S.C. 98-98H, AND TO BE DISPOSED OF PURSUANT TO THE ACT OF JULY 23, 1946, 60 STAT. 597, 50 U.S.C. 98B (E). UNDER THE PROVISIONS OF THE LAST-CITED SECTION, NOTICE OF THE PROPOSED DISPOSITION OF APPROXIMATELY 13,860,000 OUNCES OF QUININE (OF WHICH THE 9,524,000 OUNCES MENTIONED IN YOUR LETTER IS A PART) WAS PUBLISHED IN THE FEDERAL REGISTER ON AUGUST 10, 1960, (25 FR 7556) AND TRANSMITTED TO THE CONGRESS AND TO THE ARMED SERVICES COMMITTEE OF EACH HOUSE THEREOF. PURSUANT TO THE STATUTORY REQUIREMENT THAT SUCH NOTICE SHALL STATE "THE PLAN OF DISPOSITION PROPOSED TO BE FOLLOWED," IT WAS STATED THAT YOUR ADMINISTRATION "PROPOSES TO TRANSFER SAID QUININE TO OTHER GOVERNMENT AGENCIES OR TO SELL SAID QUININE BY FORMAL ADVERTISING.'

UNDER DATE OF JUNE 28, 1961, AFTER SOME FOUR MILLION OUNCES HAD BEEN SOLD BY TWO FORMALLY ADVERTISED SALES, THE SMALL BUSINESS ADMINISTRATION REQUESTED THAT FIFTY PERCENT OF THE REMAINING QUANTITY BE SET ASIDE EXCLUSIVELY FOR SMALL BUSINESS BIDDING UNDER THE PROVISIONS OF SECTION 15 OF THE SMALL BUSINESS ACT ( SECTION 2 (15), ACT OF JULY 18, 1958, 72 STAT. 395, 15 U.S.C. 644).

THE COMMISSIONER, DEFENSE MATERIALS SERVICE, GSA, REPLIED TO THE REQUEST OF THE SMALL BUSINESS ADMINISTRATION IN PART AS FOLLOWS:

THE REGULATIONS OF SBA DEALING WITH PARTIAL SET-ASIDES INVOLVING GOVERNMENT PROPERTY SALES AND DISPOSALS WHICH ARE PUBLISHED IN THE CODE OF FEDERAL REGULATIONS ( TITLE 13, CHAPTER I, SECTION 127.15-2 (C) (3) ( STATE THAT "NEGOTIATIONS WILL BE CONDUCTED BY THE DISPOSAL OFFICER WITH SMALL FIRMS.' THE SETTING ASIDE OF APPROXIMATELY FIFTY PERCENT OF THE QUININE FOR SMALL BUSINESS BIDDING PURSUANT TO THOSE PUBLISHED REGULATIONS WOULD PLACE RESTRICTIONS UPON THE SALE WHICH WOULD BE INCOMPATIBLE WITH THE FULL, FREE AND OPEN COMPETITION THAT WAS CONTEMPLATED BY THE INDUSTRY ADVISORY MEETING AND BY THE NOTICE PUBLISHED IN THE FEDERAL REGISTER.

THE SMALL BUSINESS ADMINISTRATION HAS DISAGREED WITH THE POSITION TAKEN BY THE COMMISSIONER, AND HAS FURTHER PROPOSED TO AMEND ITS REGULATIONS TO ELIMINATE ANY DISCREPANCY BETWEEN EXISTING REGULATIONS AND THE PROCEDURE URGED BY IT.

AS A RESULT OF THIS DIFFERENCE OF OPINION, YOU HAVE REQUESTED OUR ADVICE AS TO WHETHER YOU MAY MAKE A SMALL BUSINESS SET-ASIDE OF APPROXIMATELY 50 PERCENT OF THE REMAINING QUANTITY OF QUININE WITHOUT PUBLICATION OF A NOTICE OF THE CHANGED PLAN IN THE FEDERAL REGISTER AND NOTIFICATION TO THE CONGRESS THEREOF.

IN ITS PRESENTATION THE SMALL BUSINESS ADMINISTRATION ARGUES THAT THERE IS NO CONFLICT BETWEEN SECTION 15 OF THE SMALL BUSINESS ACT AND THE STRATEGIC AND CRITICAL MATERIALS STOCK PILING ACT, BUT THAT IF THERE BE SUCH A CONFLICT OF THE SMALL BUSINESS ACT, BEING THE LATER, SHOULD CONTROL. THIS ARGUMENT SEEMS TO BE BESIDE THE POINT; THE FORMAL ADVERTISING PROCEDURE IN THIS INSTANCE IS NOT PRESCRIBED BY STATUTE, BUT IS APPLICABLE SOLELY BECAUSE OF THE NOTICE ISSUED BY YOUR ADMINISTRATION IN ACCORDANCE WITH THE STATUTORY REQUIREMENT THAT 6 MONTHS' NOTICE BE GIVEN OF THE PROPOSED DISPOSITION AND THE "PLAN OF DISPOSITION" TO BE FOLLOWED.

NEITHER IS THERE ANY QUESTION AS TO THE AUTHORITY TO SET ASIDE SOME OR ALL OF THE QUININE STOCK FOR DISPOSAL EXCLUSIVELY TO SMALL BUSINESS FIRMS. SECTION 15 OF THE SMALL BUSINESS ACT SPECIFICALLY PROVIDES THAT SMALL BUSINESS CONCERNS SHALL BE AWARDED ANY CONTRACT FOR THE SALE OF GOVERNMENT PROPERTY AS TO WHICH IT IS DETERMINED BY THE SMALL BUSINESS ADMINISTRATION AND THE DISPOSAL AGENCY TO BE IN THE INTEREST OF ASSURING THAT A FAIR PROPORTION OF THE TOTAL SALES OF GOVERNMENT PROPERTY BE MADE TO SMALL BUSINESS CONCERNS; HOWEVER, THE SMALL BUSINESS ADMINISTRATION CANNOT UNILATERALLY MAKE THE NECESSARY DETERMINATION; IT MUST BE CONCURRED IN BY THE DISPOSAL AGENCY, AND IN THE EVENT OF FAILURE TO AGREE THE DECISION OF THE HEAD OF THE DISPOSAL AGENCY IS FINAL. IT IS THE DECISION WHICH YOU HAVE BEEN CALLED ON TO MAKE, AND IT IS UNDERSTOOD THAT YOU DESIRE TO CONSIDER, IN CONNECTION THEREWITH, WHETHER YOUR CONCURRENCE IN THE PROPOSED SET-ASIDE WOULD REQUIRE A NEW NOTICE UNDER THE STOCKPILING LAW, WITH THE RESULTING DELAY IN DISPOSAL OF THE MATERIAL, OR WHETHER DISPOSAL OF THE SET-ASIDE COULD BE MADE UNDER THE NOTICE ALREADY PUBLISHED.

WE DO NOT BELIEVE THAT THE ANSWER IS TO BE FOUND MERELY BY CONSIDERATION OF THE SMALL BUSINESS ACT; ITS PROVISIONS ARE DIRECTED TO THE ULTIMATE OBJECTIVE OF AWARDING CONTRACTS TO SMALL BUSINESS CONCERNS, AND THE SPECIFIC MEANS OF ACHIEVING THAT OBJECTIVE ARE LEFT TO BE WORKED OUT WITHIN THE FRAMEWORK OF EXISTING CONTRACTING PROCEDURES, AS SUPPLEMENTED WHERE NECESSARY BY REGULATIONS WHICH THE SMALL BUSINESS ADMINISTRATOR IS AUTHORIZED TO MAKE. THERE IS NO REQUIREMENT THAT SMALL BUSINESS CONTRACTS BE AWARDED BY FORMAL ADVERTISING PROCEDURES, NOR IS THERE ANY PROVISION IN THE ACT WHICH WOULD PRECLUDE SMALL BUSINESS AWARDS THROUGH EITHER FORMAL ADVERTISING OR NEGOTIATION PROCEDURES. WHETHER ANY PARTICULAR METHOD OF CONTRACTING IS TO BE CONSIDERED AS FORMAL ADVERTISING OR NEGOTIATION MUST BE DETERMINED ON THE BASIS OF THE ACTUAL TERMS OF THE PROCEDURE ADOPTED, AND NOT MERELY BY THE FACT THAT IT INVOLVES A SMALL BUSINESS SET-ASIDE.

IN YOUR SUBMISSION REFERENCE IS MADE TO OUR DECISION 37 COMP. GEN. 271, WHILE THE SMALL BUSINESS ADMINISTRATOR'S SUBMISSION CALLS ATTENTION TO 38 COMP. GEN. 326. BOTH THOSE DECISIONS INVOLVED THE SAME QUESTION--- NAMELY, WHETHER CONTRACTS FOR CONSTRUCTION OF HOUSING UNDER SECTION 403 OF THE HOUSING AMENDMENTS OF 1955, AS AMENDED, 42 U.S.C. 1594, COULD BE SET ASIDE FOR EXCLUSIVE AWARD TO SMALL BUSINESS CONCERNS. IN THE EARLIER DECISION, WE CONCLUDED THAT SUCH SET-ASIDES WOULD NOT BE PROPER--- NOT BECAUSE THEY WOULD NECESSARILY BE INCONSISTENT WITH THE ADVERTISING REQUIREMENTS OF THE HOUSING LAW, BUT ON THE GROUND THAT WE WERE NOT SATISFIED THAT THE PROVISIONS OF THE 1953 SMALL BUSINESS ACT THEN IN EFFECT WERE APPLICABLE TO CONSTRUCTION CONTRACTS. FOLLOWING THE ENACTMENT OF THE 1958 ACT THE QUESTION WAS RESUBMITTED, AND IN THE LIGHT OF THE SPECIFIC REFERENCES THEREIN TO CONTRACTS FOR "MAINTENANCE, REPAIR AND CONSTRUCTION," IT WAS STATED IN THE LATER DECISION THAT "WE NOW PERCEIVE NO LEGAL OBJECTION TO YOUR ORIGINAL PROPOSAL THAT A FAIR PROPORTION OF THE CONTRACTS TO BE AWARDED PURSUANT TO SECTION 403 OF THE HOUSING AMENDMENTS OF 1955, AS AMENDED, BE SET ASIDE FOR SMALL BUSINESS AWARDS AFTER ADVERTISING IN THE USUAL MANNER EXCEPT THAT ONLY SMALL BUSINESSES WOULD BE ELIGIBLE TO BID.'

WE AGREE WITH THE VIEW OF THE SMALL BUSINESS ADMINISTRATION THAT THE LAST MENTIONED DECISION SUPPORTS THE PROPOSITION THAT THERE MAY BE FORMAL ADVERTISING EVEN THOUGH BIDDING IS RESTRICTED TO A LIMITED CLASS OR GROUP. SIMILAR RESTRICTIONS ON ELIGIBILITY OF PROSPECTIVE BIDDERS MAY BE IMPOSED BY SPECIFIC STATUTORY PROVISIONS, SUCH AS THE "MANUFACTURER OR REGULAR DEALER" REQUIREMENT OF THE WALSH-HEALEY ACT, OR BY ADMINISTRATIVE PRESCRIPTION OF SPECIAL QUALIFICATIONS IN PARTICULAR PROCUREMENTS, WHICH HAVE BEEN UPHELD WHERE FOUND TO BE SUPPORTED BY CLEAR DETERMINATIONS THAT BIDDERS NOT HAVING THE STATED QUALIFICATIONS COULD NOT BE CONSIDERED TO BE CAPABLE AND RESPONSIBLE CONTRACTORS OF THE ITEMS INVOLVED.

HOWEVER, THE PROCEDURES PRESCRIBED FOR PARTIAL SET-ASIDES BY PART 127 OF THE REGULATIONS OF THE SMALL BUSINESS ADMINISTRATION, AND PROPOSED BY IT TO BE USED IN CONNECTION WITH THE DISPOSAL HERE UNDER CONSIDERATION, INCLUDE FEATURES WHICH ARE WHOLLY INCOMPATIBLE WITH ESSENTIAL PRINCIPLES WHICH ARE UNIFORMLY UNDERSTOOD TO APPLY TO FORMAL ADVERTISING IN GOVERNMENT CONTRACTING. THE REGULATION ITSELF (SECTION 127.15-2 (C) (2) ( USES THE WORD "NEGOTIATIONS" TO DESCRIBE THE BASIS OF THE AWARD; EVEN THOUGH THAT WORD MIGHT BE ELIMINATED WE BELIEVE THAT THE PROCEDURE REQUIRED WOULD STILL AMOUNT IN FACT TO NEGOTIATION. UNDER THE REGULATION, BIDS ARE INVITED FOR ONLY A PORTION OF THE TOTAL PROCUREMENT ADVERTISED, AND AWARDS ARE MADE ON THE BASIS OF BIDS RECEIVED ONLY FOR THAT NON-SET- ASIDE PORTION. AS TO THE SET-ASIDE PORTION IT IS PROVIDED, AND SO STATED IN THE INVITATION, THAT SMALL BUSINESS BIDDERS WHO HAVE SUBMITTED BIDS ON THE NON-SET-ASIDE PORTION IS MADE WILL BE OFFERED THE SET-ASIDE PORTION AT A PRICE EQUAL TO THAT AT WHICH THE NON-SET-ASIDE PORTION WAS AWARDED. SUCH OFFERS WILL BE MADE TO THE SMALL BUSINESS BIDDERS IN THE ORDER OF THEIR BIDS, AND TO THAT EXTENT THE BIDDERS' RELATIVE STANDING MAY BE SAID TO BE BASED UPON ADVERTISED COMPETITIVE BIDDING. IT MAY ALSO BE ARGUED THAT SINCE THE PRICE OF THE SET-ASIDE OFFER IS THE BEST PRICE DETERMINED ON THE BASIS OF BIDS FOR THE NON-SET-ASIDE PORTION, IT ALSO IS FIXED BY COMPETITIVE BIDDING AND IS THEREFORE IN CONFORMITY WITH THE PRINCIPLES OF FORMAL ADVERTISING.

WE BELIEVE, HOWEVER, THAT THIS PROCEDURE INVOLVES MATERIAL DEPARTURES FROM THOSE PRINCIPLES, IN THAT THE BIDS SUBMITTED BY SMALL BUSINESS BIDDERS ARE NOT CONSIDERED AS FIRM BIDS FOR THE SET-ASIDE WHICH ARE AVAILABLE FOR ACCEPTANCE BY THE GOVERNMENT; THE AWARD OF THE SET-ASIDE IS ORDINARILY AT A PRICE DIFFERENT FROM THAT BID BY THE PARTY TO WHOM AWARD IS MADE; AND THE CONTRACT FOR THE SET-ASIDE IS NOT FORMED BY THE GOVERNMENT'S ACCEPTANCE OF AN OFFER SUBMITTED BY THE CONTRACTOR, BUT BY THE LATTER'S ACCEPTANCE OF AN OFFER BY THE GOVERNMENT, WHICH HE CANNOT BE REQUIRED TO ACCEPT.

IN VIEW OF THESE ASPECTS OF THE PARTIAL SET-ASIDE PROCEDURE PRESCRIBED BY THE REGULATIONS, WE CONCLUDE THAT DISPOSAL BY YOUR AGENCY OF ANY PART OF THE QUININE STOCKS COVERED BY THE NOTICE PUBLISHED IN AUGUST 1960, UNDER THAT PROCEDURE, WOULD NOT BE A SALE BY FORMAL ADVERTISING.

IF, HOWEVER, IT SHOULD BE DETERMINED BY YOU THAT SOME PART OF THE STOCK IN QUESTION SHOULD BE SET ASIDE FOR DISPOSAL TO SMALL BUSINESS AND OFFERED SEPARATELY BY ADVERTISING FOR BIDS ON THAT PART ONLY, WITH BIDDING RESTRICTED TO SMALL BUSINESS CONCERNS, IT WOULD BE OUR VIEW THAT SALE ON THOSE CONDITIONS COULD PROPERLY BE MADE WITHOUT PUBLICATION OF OTHER NOTICE. IN THIS CONNECTION, AND PARTICULARLY IN VIEW OF THE REQUIREMENT IN THE ACT AUTHORIZING THE SALE THAT "THE PLAN * * * OF DISPOSITION SHALL BE FIXED WITH DUE REGARD TO THE PROTECTION OF THE UNITED STATES AGAINST AVOIDABLE LOSS ON THE SALE * * *," YOUR ATTENTION IS DIRECTED TO THE PROVISIONS OF SECTION 127.15-2 (D) OF THE SBA REGULATIONS WHICH AUTHORIZE WITHDRAWAL OF A SET-ASIDE IF THE CONTRACTING OFFICER CONSIDERS THAT A SMALL BUSINESS AWARD "WOULD BE DETRIMENTAL TO THE PUBLIC INTEREST (E.G., BECAUSE OF UNREASONABLE PRICE) * * *.' WHILE THE WORDING OF THIS PROVISION IS LIMITED TO PROCUREMENT, IT WOULD APPEAR TO BE APPLICABLE BY ANALOGY TO SALES, IN THE ABSENCE OF OTHER PROVISIONS SPECIFICALLY REFERRING THERETO. SHOULD IT BE DECIDED TO SET ASIDE A PART OF THE MATERIAL FOR OFFERING TO SMALL BUSINESS FIRMS BY FORMAL ADVERTISING, WE BELIEVE IT WOULD BE APPROPRIATE TO FIRST ADVERTISE THE NON-SET-ASIDE QUANTITY AND USE THE PRICE REALIZED ON THAT SALE AS A BASIS FOR DETERMINING WHETHER ACCEPTANCE OF THE BEST BID ON THE SET-ASIDE WOULD RESULT IN "AVOIDABLE LOSS," OR FOR ESTABLISHING AN UPSET PRICE FOR THE SET -ASIDE.

IT IS SUGGESTED THAT ANY QUESTIONS YOU MAY HAVE AS TO PROCEDURES OR APPLICATION OF PARTICULAR PROVISIONS OF THE SBA REGULATIONS BE TAKEN UP WITH THE SMALL BUSINESS ADMINISTRATION. OUR OFFICE ALSO WILL BE GLAD TO FURNISH ANY FURTHER ADVICE WHICH YOU MAY REQUEST.