B-159483, FEB. 17, 1967
Highlights
THAT THERE WAS NO LEGAL BASIS FOR QUESTIONING THE SET-ASIDE SINCE IT HAD NOT BEEN ESTABLISHED THAT THE SET-ASIDE DETERMINATION WAS ARBITRARY. THE DEPARTMENT OF THE ARMY HAS ADVISED THAT AN AWARD UNDER THE INSTANT INVITATION WAS MADE TO MADISON LIMESTONE COMPANY. WE HAVE REVIEWED YOUR LETTERS OF DECEMBER 22 AND 29. WE AGREE THAT THE MATTERS PRESENTED THEREIN RAISE QUESTIONS AS TO WHETHER THERE IS MEANINGFUL SMALL BUSINESS COMPETITION IN REDSTONE ARSENAL PROCUREMENTS OF CRUSHED STONE AND PUG MILL MIX. FOR THESE ITEMS WERE REASONABLE. IT WAS PRECISELY FOR THESE REASONS THAT WE RECOMMENDED TO THE SECRETARY OF THE ARMY THAT A REVIEW BE MADE OF PROCUREMENTS OF CRUSHED STONE AND PUG MILL MIX AT REDSTONE ARSENAL TO DETERMINE WHETHER FUTURE PROCUREMENTS OF THESE ITEMS SHOULD BE SET ASIDE IN FAVOR OF SMALL BUSINESS CONCERNS.
B-159483, FEB. 17, 1967
TO VULCAN MATERIALS COMPANY:
WE REFER TO YOUR LETTERS OF DECEMBER 22 AND 29, 1966, REQUESTING RECONSIDERATION OF OUR DECISION, B-159483, DECEMBER 1, 1966.
YOU PROTESTED AGAINST THE TOTAL SET-ASIDE IN FAVOR OF SMALL BUSINESS CONCERNS UNDER INVITATION FOR BIDS NO. DAAH0366B0187, ISSUED BY THE UNITED STATES ARMY MISSILE SUPPORT COMMAND, PURCHASING AND CONTRACTING DIVISION, REDSTONE ARSENAL, ALABAMA, FOR THE PROCUREMENT OF CRUSHED STONE AND PUG MILL MIX. WE CONCLUDED IN OUR DECISION OF DECEMBER 1, 1966, THAT THERE WAS NO LEGAL BASIS FOR QUESTIONING THE SET-ASIDE SINCE IT HAD NOT BEEN ESTABLISHED THAT THE SET-ASIDE DETERMINATION WAS ARBITRARY, CAPRICIOUS OR MADE IN BAD FAITH.
THE DEPARTMENT OF THE ARMY HAS ADVISED THAT AN AWARD UNDER THE INSTANT INVITATION WAS MADE TO MADISON LIMESTONE COMPANY, INCORPORATED, ON JANUARY 27, 1967.
WE HAVE REVIEWED YOUR LETTERS OF DECEMBER 22 AND 29, 1966, AND WE AGREE THAT THE MATTERS PRESENTED THEREIN RAISE QUESTIONS AS TO WHETHER THERE IS MEANINGFUL SMALL BUSINESS COMPETITION IN REDSTONE ARSENAL PROCUREMENTS OF CRUSHED STONE AND PUG MILL MIX. A QUESTION HAS ALSO BEEN RAISED WHETHER THE PRICES FROM MADISON LIMESTONE COMPANY, INCORPORATED, FOR THESE ITEMS WERE REASONABLE. IT WAS PRECISELY FOR THESE REASONS THAT WE RECOMMENDED TO THE SECRETARY OF THE ARMY THAT A REVIEW BE MADE OF PROCUREMENTS OF CRUSHED STONE AND PUG MILL MIX AT REDSTONE ARSENAL TO DETERMINE WHETHER FUTURE PROCUREMENTS OF THESE ITEMS SHOULD BE SET ASIDE IN FAVOR OF SMALL BUSINESS CONCERNS. WE ARE SENDING A COPY OF THIS LETTER TOGETHER WITH COPIES OF YOUR LETTERS OF DECEMBER 22 AND 29, 1966, TO THE DEPARTMENT OF THE ARMY FOR THEIR CONSIDERATION.
IN REGARD TO THE CONTENTION THAT THE INSTANT INVITATION SHOULD HAVE BEEN CANCELLED, IT IS THE POSITION OF THIS OFFICE THAT CANCELLATION OF AN INVITATION AFTER BIDS HAVE BEEN OPENED AND PRICES REVEALED IS AN UNDESIRABLE RESULT; THEREFORE, THE CANCELLATION OF AN INVITATION AFTER BID OPENING MUST BE JUSTIFIED BY COGENT REASONS. SEE MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 CT.CL. 699, 719; 39 COMP. GEN. 396 AND B- 159412, SEPTEMBER 6, 1966.
IN OUR DECISION OF DECEMBER 1, 1966, WE ADVISED YOU OF OUR OPINION THAT AN AWARD UNDER THE INVITATION AS ISSUED WAS THE BETTER COURSE OF ACTION IN VIEW OF THE FACTS AND CIRCUMSTANCES PRESENTED. THE INFORMATION IN YOUR LETTERS OF DECEMBER 22 AND 29, 1966, IS NOT SUFFICIENT TO CAUSE US TO CHANGE OUR VIEW. IN THIS CONNECTION IT HAS NOT BEEN ESTABLISHED THAT THE CONTRACTING OFFICER WAS AWARE, AT THE TIME OF THE DETERMINATION WAS MADE TO SET ASIDE THIS PROCUREMENT IN FAVOR OF SMALL BUSINESS, OF THE QUESTIONS WHICH HAVE NOW BEEN RAISED REGARDING THE ADEQUACY OF MEANINGFUL SMALL BUSINESS COMPETITION AND THE REASONABLENESS OF THE PRICES IN THE BIDS RECEIVED. THESE MATTERS CERTAINLY SHOULD BE CONSIDERED IN ANY FUTURE SET- ASIDE DETERMINATIONS FOR CRUSHED STONE AND PUG MILL MIX AT REDSTONE ARSENAL.
YOU ARE ADVISED THAT SECTION 1-706.5 OF THE ARMED SERVICES PROCUREMENT REGULATION DOES NOT ESTABLISH ANY SPECIFIC MINIMUM NUMBER OF BIDS WHICH MUST BE EXPECTED BEFORE A PROCUREMENT CAN BE SET ASIDE IN FAVOR OF SMALL BUSINESS CONCERNS. THIS SECTION OF ASPR PROVIDES THAT THE ENTIRE AMOUNT OF AN INDIVIDUAL PROCUREMENT SHALL BE SET ASIDE EXCLUSIVELY FOR SMALL BUSINESS CONCERNS IF THE CONTRACTING OFFICER DETERMINES THAT THERE IS A REASONABLE EXPECTATION THAT BIDS OR PROPOSALS WILL BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WILL BE MADE AT REASONABLE PRICES. THIS DETERMINATION IS BASED PRIMARILY ON THE JUDGMENT OF THE CONTRACTING OFFICER. WHILE A QUESTION HAS NOW BEEN RAISED WHETHER THERE WAS ACTUAL SMALL BUSINESS COMPETITION WITH MADISON LIMESTONE COMPANY, INCORPORATED, IT HAS NOT BEEN SHOWN THAT THE CONTRACTING OFFICER ACTED OTHER THAN IN GOOD FAITH IN MAKING THE DETERMINATION TO SET ASIDE THE INSTANT PROCUREMENT IN FAVOR OF SMALL BUSINESS.
WE DECLINE TO RULE ON THE QUESTION WHETHER A PARTIAL SET-ASIDE WOULD HAVE BEEN PROPER, SINCE THIS MATTER IS NOT AN ISSUE IN THE INSTANT PROCUREMENT.
PURSUANT TO OUR REVIEW WE FIND THAT THE AWARD TO MADISON LIMESTONE COMPANY, INCORPORATED, RESULTED IN A VALID AND BINDING CONTRACT. IN THESE CIRCUMSTANCES OUR OFFICE WILL TAKE NO FURTHER ACTION WITH RESPECT TO THE INSTANT PROCUREMENT.