B-148911, JUL. 12, 1962

B-148911, JUL. 12, 1962

TO LYONS-ALPHA PRODUCTS COMPANY, INCORPORATED:

WE REFER TO YOUR LETTER OF MAY 12, 1962, PROTESTING THE AWARD TO VULCAN HART CORPORATION UNDER INVITATION FOR BIDS NO. DSA-4-62-535, ISSUED ON FEBRUARY 12, 1962, BY THE DEFENSE GENERAL SUPPLY CENTER, RICHMOND, VIRGINIA.

THE INVITATION ASKED FOR BIDS ON A NUMBER OF GRIDDLES, IN ACCORDANCE WITH THE INDICATED SPECIFICATIONS. BIDS WERE INVITED F.O.B. TO THE DESTINATIONS INDICATED FOR ITEMS NOS. 1A THROUGH 1I, AND F.O.B. ORIGIN FOR ITEM NO. J, FOR THE QUANTITIES LISTED. THE PROCUREMENT WAS TOTALLY RESTRICTED TO SMALL BUSINESS CONCERNS, AND PAGE NO. 2 OF THE INVITATION STATED THAT EACH BIDDER QUALIFYING AS A SMALL BUSINESS CONCERN ONLY BECAUSE HE WAS ALSO A LABOR SURPLUS AREA CONCERN SHOULD IDENTIFY IN HIS BID THE GEOGRAPHICAL AREAS IN WHICH HE PROPOSED TO PERFORM OR CAUSE TO BE PERFORMED A SUBSTANTIAL PROPORTION OF THE PRODUCTION OF THE CONTRACT.

THE INVITATION INFORMED BIDDERS THAT ON THE ASSUMPTION OF AN AWARD BY APRIL 2, 1962, DELIVERY WAS DESIRED BY SEPTEMBER 28, 1962, BUT REQUIRED NO LATER THAN OCTOBER 31, 1962. HOWEVER, DELIVERY TIME WAS TO BE EXTENDED BY THE NUMBER OF DAYS THAT THE ACTUAL AWARD DATE WAS LATER THAN THE EXPECTED AWARD DATE OF APRIL 2, 1962.

BIDS WERE OPENED ON MARCH 2, 1962, AND OF THE THREE FIRMS RESPONDING TO THE INVITATION, VULCAN HART CORPORATION WAS THE LOW BIDDER ON ITEMS NOS. 1A, 1B, 1D, 1E, 1F AND 1J, WHILE LYONS-ALPHA PRODUCTS COMPANY WAS LOW BIDDER ON ITEMS 1G, 1H AND 1I. VULCAN HART AND LYONS ALPHA SUBMITTED IDENTICAL BIDS ON ITEM NO. 1C.

VULCAN HART PROTESTED THE SMALL BUSINESS STATUS OF LYONS-ALPHA AND PURSUANT THERETO THE SMALL BUSINESS ADMINISTRATION ADVISED THE CONTRACTING OFFICER BY LETTER OF MARCH 30, 1962, THAT LYONS-ALPHA HAD AN AVERAGE OF 576 EMPLOYEES, AND THUS, WAS NOT QUALIFIED AS SMALL BUSINESS; HOWEVER, IT WOULD QUALIFY IF IT WERE PERMITTED TO CHANGE ITS PRODUCTION FACILITIES FROM THAT SHOWN IN ITS BID TO AN AREA OF LABOR SURPLUS. SUCH PERMISSION WAS DENIED BY THE CONTRACTING OFFICER.

IN A LETTER OF MARCH 27, 1962, YOU QUESTIONED THE SMALL BUSINESS STATUS OF VULCAN HART. BY TELEGRAM OF MAY 4, 1962, THE DIRECTOR, OFFICE OF SMALL BUSINESS SIZE STANDARDS, WASHINGTON, D.C., ADVISED THE CONTRACTING OFFICER THAT VULCAN HART QUALIFIED AS A SMALL BUSINESS CONCERN FOR PURPOSES OF THIS PROCUREMENT. ON MAY 8, 1962, AN AWARD COVERING ALL DESTINATIONS WAS MADE TO VULCAN HART. ON MAY 11, 1962, YOU FILED AN APPEAL TO THE SBA SIZE APPEALS BOARD ON THE MAY 4TH DETERMINATION DENYING YOUR PROTEST. THAT APPEAL IS CURRENTLY PENDING.

YOU CONTEND THAT THE SIZE STANDARD REGULATIONS WERE APPLIED IN ERROR IN MAKING THE MAY 4TH DECISION REGARDING THE SMALL BUSINESS STATUS OF VULCAN HART. YOU STATE FURTHER, THAT YOU WERE NOT NOTIFIED OF THE MAY 4TH DETERMINATION BY EITHER THE CONTRACTING AGENCY OR THE SBA UNTIL AFTER THE MAY 8TH AWARD. SUCH ACTION ON THE PART OF THE SMALL BUSINESS ADMINISTRATION AND THE AGENCY, YOU SAY, IS IMPROPER. IT IS YOUR CONCLUSION THAT YOU WERE NOT TREATED FAIRLY NOR IN ACCORDANCE WITH THE REGULATIONS.

A DETERMINATION BY SBA THAT A CONCERN IS SMALL BUSINESS FOR PURPOSES OF AWARD ON A GOVERNMENT PROCUREMENT IS CONCLUSIVE. 15 U.S.C. 632, 637 (B) (6). ACCORDINGLY, THIS OFFICE WILL NOT UNDERTAKE TO QUESTION THE SBA DETERMINATION THAT VULCAN HART WAS A SMALL BUSINESS CONCERN FOR PURPOSES OF THIS AWARD. SEE 37 COMP. GEN. 679. THE ARMED SERVICES PROCUREMENT REGULATION, SECTION 1-703, PROVIDES THAT ANY BIDDER MAY, PRIOR TO AWARD, QUESTION THE SMALL BUSINESS STATUS OF THE APPARENTLY SUCCESSFUL BIDDER. TEN WORKING DAY PERIOD IS ALLOWED (EXCEPT IN CASES OF URGENT PROCUREMENT) FOR THE SBA TO DETERMINE THE SIZE STATUS OF THE QUESTIONED BIDDER BEFORE AWARD WILL BE MADE, AND THE REGULATION STATES THAT THE SBA WILL NOTIFY THE CONTRACTING OFFICER AND THE BIDDER OF ITS DECISION. THE SBA REGULATIONS PUBLISHED AT 13 CFR 121, 3-5 (A) (2) PROVIDE THAT SBA SHALL NOTIFY THE CONTRACTING OFFICER, THE PROTESTANT AND THE PROTESTED BIDDER OF ITS DECISION WITHIN TEN WORKING DAYS, IF POSSIBLE. AN APPEAL PROCEDURE IS ALSO PROVIDED IN THE SBA REGULATIONS (SEE 13 CFR 121.3-6).

THE BIDS WERE OPENED ON MARCH 2, 1962, AND IT WAS ANTICIPATED THAT THE AWARD WOULD BE MADE BY APRIL 2, 1962. YOU PROTESTED THE SMALL BUSINESS STATUS OF VULCAN HART ON MARCH 27, 1962, AND IT WAS NOT UNTIL MAY 4, 1962, THAT THE SBA ADVISED THE CONTRACTING OFFICE OF ITS DECISION. THE AWARD TO VULCAN HART WAS MADE ON MAY 8TH, OR 42 DAYS AFTER THE TIME YOU FILED THE PROTEST, AND ON THE SAME DAY SBA SENT YOU A LETTER NOTIFYING YOU OF ITS DECISION. IT DOES NOT APPEAR THAT THE AWARD WAS MADE IN HASTE, SINCE IT COULD HAVE BEEN MADE AT LEAST A MONTH EARLIER. NOTIFICATION TO YOU OF THE SBA DETERMINATION REGARDING VULCAN HART PRIOR TO THE AWARD WOULD PRESUMABLY, HAVE GIVEN YOU THE OPPORTUNITY TO PRESENT AN APPEAL TO THE SBA SIZE APPEALS BOARD PRIOR TO THE TIME THE AWARD WAS MADE. HOWEVER, WE DO NOT FIND ANY PROVISION IN ASPR OR IN THE SBA REGULATIONS REQUIRING A STAY IN THE AWARD PROCEEDINGS PENDING THE OUTCOME OF AN APPEAL TO THE SIZE APPEALS BOARD. ABSENT SUCH REQUIREMENT, IT IS OUR VIEW THAT AFTER A SBA SIZE DETERMINATION HAS BEEN RECEIVED BY THE CONTRACTING AGENCY, THE AGENCY MUST DETERMINE WITHIN ITS SOUND DISCRETION, WHETHER THE AWARD SHOULD BE DELAYED PENDING DECISION ON THE APPEAL. UNDER THE CIRCUMSTANCES, WE ARE UNABLE TO CONCLUDE THAT THE ADMINISTRATIVE ACTION IN MAKING AN AWARD ON MAY 8TH WAS CONTRARY TO REGULATION OR UNFAIR TO ANY BIDDER.