B-209631 L/M, DEC 1, 1982, OFFICE OF GENERAL COUNSEL

B-209631 L/M, DEC 1, 1982, OFFICE OF GENERAL COUNSEL

PRECIS-UNAVAILABLE

MR. EDWARD C. MARRIOTT, PRESIDENT, CONSOLIDATED MAINTENANCE COMPANY:

WE REFER TO YOUR LETTER TO OUR OFFICE DATED OCTOBER 20, 1982, WHICH ASKS, IN EFFECT, WHETHER FEDERAL CONTRACTING AGENCIES ARE REQUIRED TO SET ASIDE A SPECIFIC PORTION OF THEIR CONTRACTS FOR BUSINESSES, SUCH AS YOURS, WHICH ARE OWNED BY THE HANDICAPPED. YOU NOTE THAT YOU HAVE BEEN RECEIVING FINANCIAL ASSISTANCE FROM THE SMALL BUSINESS ADMINISTRATION (SBA) UNDER SECTION 7(H) OF THE SMALL BUSINESS ACT, 15 U.S.C. SEC. 636(H) (1976), AND THAT IT IS YOUR BELIEF THAT A BROADER PROGRAM EXISTS WHICH ENTITLES HANDICAPPED-OWNED BUSINESSES TO NEGOTIATE DIRECTLY WITH FEDERAL CONTRACTING AGENCIES FOR GOVERNMENT CONTRACTS. YOU RAISED THIS POINT WITH BOTH THE GENERAL SERVICES ADMINISTRATION (GSA) AND THE DEPARTMENT OF THE NAVY (NAVY) AND STATE THAT, FOR CONFLICTING REASONS, BOTH AGENCIES HAVE INFORMED YOU THAT YOU ARE NOT ENTITLED TO SUCH A PREFERENCE.

YOUR LETTER INDICATES A BELIEF THAT A SET-ASIDE PROGRAM EXISTS FOR HANDICAPPED-OWNED BUSINESSES SIMILAR TO THE SMALL BUSINESS SET-ASIDE PROGRAM (15 U.S.C. SEC. 631) AND THE 8(A) MINORITY BUSINESS SUBCONTRACTING PROGRAM (15 U.S.C. SEC. 637(A)). HOWEVER, THERE IS NO SIMILAR STATUTORY OR REGULATORY AUTHORITY FOR HANDICAPPED-OWNED BUSINESSES. BASED ON OUR READING OF 15 U.S.C. SEC. 636(H) AND ITS IMPLEMENTING REGULATIONS, 13 C.F.R. PART 118 (1982), FINANCIAL ASSISTANCE TO HANDICAPPED ORGANIZATIONS AND INDIVIDUALS IS THE SOLE PURPOSE OF THIS STATUTORY PROVISION. THERE IS NO INDICATION THAT ANY BROADER PROGRAM WAS INTENDED.

YOUR LETTER ALSO MAKES REFERENCE TO THE WAGNER-O'DAY ACT, AS AMENDED, 41 U.S.C. SECS. 46-48C (1976). THIS ACT PROVIDES FOR THE PROCUREMENT OF CERTAIN COMMODITIES AND SERVICES FROM WORKSHOPS FOR THE BLIND AND OTHER SEVERELY HANDICAPPED BY ALL ENTITIES OF THE FEDERAL GOVERNMENT. THE COMMITTEE FOR PURCHASES FROM THE BLIND AND OTHER SEVERELY HANDICAPPED, WHICH WAS CREATED BY THE ACT, HAS THE RESPONSIBILITY OF LISTING THE COMMODITIES AND SERVICES WHICH ARE TO BE PURCHASED FROM THESE WORKSHOPS. THIS LIST IS DISTRIBUTED BY GSA. SEE FEDERAL PROCUREMENT REGULATIONS (FPR) SEC. 1-5.801(B) (1964 ED.AMEND. 176) AND DEFENSE ACQUISITION REGULATION (DAR) SEC. 5-502(A) (1976 ED.) FOR DETAILS. HOWEVER, YOU SHOULD NOTE THAT THE WORKSHOPS REFERRED TO IN THE ACT AND ITS IMPLEMENTING REGULATIONS ARE DEFINED AS NONPROFIT AGENCIES. SEE, FOR EXAMPLE, 41 U.S.C. SEC. 48B(4) AND FPR SECS. 1 5.802(H) AND (I). THE WAGNER-O'DAY ACT THEREFORE DOES NOT APPLY TO PROFIT MAKING, HANDICAPPED-OWNED BUSINESSES.

ON THE OTHER HAND, YOU SHOULD BE AWARE THAT PUBLIC AND PRIVATE ORGANIZATIONS FOR THE HANDICAPPED OR A HANDICAPPED INDIVIDUAL MAY PARTICIPATE IN SMALL BUSINESS SET-ASIDES BY SIMPLY CERTIFYING IN THEIR BIDS THEIR STATUS AS A HANDICAPPED ORGANIZATION OR INDIVIDUAL. SEE FPR SEC. 1-1.706-9 AND DAR SEC. 7-2003.91. NOTE, HOWEVER, THAT THIS IS NOT A SET-ASIDE FOR THE HANDICAPPED, BUT ONLY A MEANS OF MAKING IT EASIER FOR HANDICAPPED ORGANIZATIONS AND INDIVIDUALS TO PARTICIPATE IN THE SMALL BUSINESS SET-ASIDE PROGRAM.

THE FOREGOING HELPS EXPLAIN WHY YOU APPEARED TO RECEIVE CONFLICTING EXPLANATIONS FROM GSA AND THE NAVY WHEN THEY REFUSED TO NEGOTIATE SOLE SOURCE CONTRACTS WITH YOU. GSA STATED THAT YOUR BUSINESS DID NOT QUALIFY UNDER THE NATIONAL INDUSTRIES FOR THE SEVERELY HANDICAPPED PROGRAM. THIS, WE UNDERSTAND GSA TO BE SAYING THAT, AS A PROFIT MAKING CONCERN, YOUR BUSINESS DOES NOT FALL WITHIN THE PROVISIONS OF THE WAGNER-O'DAY ACT. THIS IS IN LINE WITH OUR CONCLUSION. THE NAVY, ON THE OTHER HAND, STATED THAT IT COULD NOT NEGOTIATE WITH YOU UNDER SECTION 7(H) OF THE SMALL BUSINESS ACT BECAUSE THAT SECTION OF THE ACT DEALS SOLELY WITH SBA LOANS AND HAS NOTHING TO DO WITH SET ASIDE PROCUREMENTS. THIS TOO IS IN LINE WITH OUR CONCLUSION.

THEREFORE, WHEN VIEWED IN THE CONTEXT OF OUR DECISION, THE INFORMATION WHICH GSA AND THE NAVY GAVE YOU WAS IN FACT ACCURATE. THERE IS PRESENTLY NO SET-ASIDE PROGRAM AVAILABLE FOR PROFIT MAKING, HANDICAPPED-OWNED BUSINESSES.