B-146244, SEP. 6, 1961

B-146244, SEP. 6, 1961

TO THE SECRETARY OF THE AIR FORCE:

WE REFER TO A LETTER OF JUNE 28, 1961, WITH ENCLOSURE, FROM YOUR DEPUTY FOR PROCUREMENT AND PRODUCTION, REQUESTING A DECISION RELATIVE TO AN AWARD OF THE SET-ASIDE PORTION OF INVITATION FOR BIDS NO. 36-600 61-253. AWARD OF THE NON-SET-ASIDE PORTION OF THE INVITATION WAS MADE ON MAY 26, 1961, TO LITE INDUSTRIES, INC., AS THE LOW BIDDER.

THE INVITATION, CALLING FOR A QUANTITY OF 10,086 "SLINGS, CARGO, AERIAL DELIVERY," UNDER FOUR NUMBERED ITEMS, INCLUDED NOTICE OF A FIFTY PERCENT LABOR SURPLUS AREA SET-ASIDE. THE SET-ASIDE CLAUSE PROVIDED THAT NEGOTIATIONS FOR THE SET-ASIDE PORTION WOULD BE CONDUCTED ONLY WITH RESPONSIBLE LABOR SURPLUS AREA CONCERNS (AND SMALL BUSINESS CONCERNS TO THE EXTENT INDICATED) WHO HAD SUBMITTED RESPONSIVE BIDS ON THE NON-SET- ASIDE PORTION AT A UNIT PRICE WITHIN 120 PERCENT OF THE HIGHEST AWARD MADE ON THE NON-SET-ASIDE PORTION, IN THE FOLLOWING ORDER OF PRIORITY:

"GROUP 1. PERSISTENT LABOR SURPLUS AREA CONCERNS WHICH ARE ALSO SMALL BUSINESS CONCERNS.

"GROUP 2. OTHER PERSISTENT LABOR SURPLUS AREA CONCERNS.

"GROUP 3. SUBSTANTIAL LABOR SURPLUS AREA CONCERNS WHICH ARE ALSO SMALL BUSINESS CONCERNS.

"GROUP 4. OTHER SUBSTANTIAL LABOR SURPLUS AREA CONCERNS.

"GROUP 5. SMALL BUSINESS CONCERNS WHICH ARE NOT LABOR SURPLUS AREA CONCERNS.'

A "LABOR SURPLUS AREA" WAS DEFINED AS A GEOGRAPHICAL AREA WHICH AT THE TIME OF AWARD IS:

"/I) CLASSIFIED BY THE DEPARTMENT OF LABOR AS AN "AREA OF SUBSTANTIAL LABOR SURPLUS" OR AS AN ,AREA OF SUBSTANTIAL AND PERSISTENT LABOR SURPLUS" AND LISTED AS SUCH BY THAT DEPARTMENT IN CONJUNCTION WITH ITS BIMONTHLY PUBLICATION "AREA LABOR MARKET TRENDS; " OR

"/II) NOT CLASSIFIED AS IN (I) ABOVE, BUT WHICH IS INDIVIDUALLY CERTIFIED AS AN AREA OF PERSISTENT OR SUBSTANTIAL LABOR SURPLUS BY THE DEPARTMENT OF LABOR AT THE REQUEST OF ANY PROSPECTIVE CONTRACTOR.'

A LABOR SURPLUS AREA CONCERN INCLUDES:

(I) PERSISTENT LABOR AREA CONCERNS WHICH WILL PERFORM OR CAUSE TO BE PERFORMED ANY CONTRACTS AWARDED TO THEM AS LABOR SURPLUS AREA CONCERNS SUBSTANTIALLY IN "AREAS OF SUBSTANTIAL AND PERSISTENT LABOR SURPLUS; " AND

(II) SUBSTANTIAL LABOR SURPLUS AREA CONCERNS WHICH WILL PERFORM OR CAUSE TO BE PERFORMED ANY CONTRACTS AWARDED TO THEM "AS LABOR SURPLUS AREA CONCERNS SUBSTANTIALLY" IN "AREAS OF SUBSTANTIAL LABOR SURPLUS.'"

THE SET-ASIDE AWARD IS TO BE MADE AT THE HIGHEST UNIT PRICE AWARDED ON THE NON-SET-ASIDE PORTION, ADJUSTED TO REFLECT TRANSPORTATION AND OTHER COST FACTORS CONSIDERED IN EVALUATING BIDS ON THE NON-SET-ASIDE PORTION.

BIDS WERE REQUESTED F.O.B. CARRIER'S EQUIPMENT AT THE PLANT AT WHICH SUCH SUPPLIES ARE TO BE FINALLY INSPECTED AND ACCEPTED, OR THE POINT NEAREST THERETO THAT CARRIER SERVICE IS AVAILABLE. BIDDERS WERE REQUESTED TO SUPPLY THEIR F.O.B. POINT AND THE LOCATION OF THEIR PLANT FOR FINAL INSPECTION AND ACCEPTANCE.

IN ITS BID, LITE INDUSTRIES INDICATED PATERSON, NEW JERSEY, AS ITS F.O.B. POINT AND PLACE OF FINAL INSPECTION AND ACCEPTANCE. PATERSON, NEW JERSEY IS DESIGNATED AS AN AREA OF SUBSTANTIAL LABOR SURPLUS. THE BID OPENING WAS HELD ON MARCH 27, 1961. ON MAY 3, 1961, LITE INDUSTRIES SENT A TELEGRAM TO THE PROCURING OFFICE ADVISING THAT IT WOULD MANUFACTURE AND SHIP THE SET-ASIDE PORTION AT ITS PLANT AT LONG BRANCH, NEW JERSEY, AN AREA OF PERSISTENT LABOR SURPLUS. THIS INFORMATION WAS CONFIRMED IN A LETTER OF MAY 29, 1961, ACKNOWLEDGING RECEIPT OF THE NON-SET-ASIDE PORTION AWARD AND OFFERING TO ACCEPT THE SET-ASIDE PORTION. WE ARE ADVISED THAT AN AWARD ON THE SET-ASIDE PORTION HAS BEEN MADE TO KINGS POINT.

IN A DECISION OF TODAY TO THE SECRETARY OF THE ARMY (B-145942, B 146040, COPY HEREWITH), WE HELD THAT AN AWARD UNDER A LABOR SURPLUS SET-ASIDE WOULD NOT BE QUESTIONED, WHETHER NEGOTIATED ON THE BASIS OF INFORMATION CONTAINED IN THE BIDS OR ON INFORMATION FURNISHED AFTER OPENING IN A SITUATION WHERE THE INVITATION DID NOT REQUIRE SUFFICIENT INFORMATION TO ENABLE A DETERMINATION WHETHER BIDDERS COULD QUALIFY AS LABOR SURPLUS AREA CONCERNS. SEE B-146258, AUGUST 28, 1961. THIS INVITATION ALSO FAILS TO REQUIRE SUFFICIENT INFORMATION IN ORDER TO MAKE THAT DETERMINATION IN ACCORDANCE WITH THE DEFINITION OF A LABOR SURPLUS AREA CONCERN SET FORTH IN SECTION 1-801.1 ASPR. HOWEVER, THE AWARD MADE UNDER THE NEGOTIATION WILL NOT BE QUESTIONED.

WE ARE OF THE VIEW THAT INVITATIONS INVOLVING LABOR SURPLUS SET ASIDES SHOULD CONTAIN CLEAR STATEMENTS AS TO THE INFORMATION WHICH BIDDERS WILL BE REQUIRED TO FURNISH, THE SUPPORTING DATA, IF ANY, WHICH MAY BE REQUIRED, AND WHETHER ANY OR ALL SUCH INFORMATION MAY BE FURNISHED WITH THE INVITATION AND THE EFFECT OF FAILURE TO FURNISH IT. PENDING ISSUANCE OF SUCH INSTRUCTIONS AND ADEQUATE FORMS, WE BELIEVE THAT NEGOTIATIONS FOR LABOR SURPLUS SET-ASIDES ON FUTURE PROCUREMENTS UNDER INVITATIONS CONTAINING NO MORE SPECIFIC REQUIREMENTS THAN THOSE HERE CONSIDERED SHOULD BE CONDUCTED ON THE BASIS OF FULL INFORMATION OBTAINED FROM ALL ELIGIBLE INTERESTED BIDDERS.