B-154585, SEP. 11, 1964

B-154585, SEP. 11, 1964

TO TECHNER, RUBIN AND SHAPIRO:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 25, 1964, ON BEHALF OF GOODWAY PRINTING COMPANY, INC., ARLINGTON, VIRGINIA, PROTESTING REJECTION OF THE COMPANY'S LOW BID UNDER INVITATION FOR BIDS NO. 600 924-64, ISSUED BY THE NAVY PURCHASING OFFICE, WASHINGTON, D.C.

THE INVITATION COVERED REQUIREMENTS OF THE BUREAU OF SHIPS FOR FISCAL YEAR 1965 FOR MANUSCRIPT-TYPE ART SERVICES AND SUPPLEMENTAL SERVICES INCIDENTAL THERETO. THIS PROCUREMENT WAS A 100 PERCENT SET ASIDE FOR SMALL BUSINESS CONCERNS AND THE IFB PROVIDED THAT SAMPLES OF WORK TO BE OFFERED UNDER ANY RESULTING CONTRACT SHOULD ACCOMPANY THE BIDS. EVALUATION OF SUCH SAMPLES WAS TO BE OF ASSISTANCE TO THE CONTRACTING OFFICER IN DETERMINING THE RESPONSIBILITY OF THE BIDDERS. TWELVE BIDS WERE RECEIVED AND OPENED ON JUNE 10, 1964, AND EACH BIDDER REPRESENTED ON THE FACE OF ITS BID THAT IT WAS A SMALL BUSINESS CONCERN. THE INVITATION STATED THAT THE WORK TO BE PERFORMED WAS CLASSIFIED UNDER STANDARD INDUSTRY CLASSIFICATION NO. 3861, AS TO WHICH THE APPLICABLE SMALL BUSINESS DEFINITION WAS THE EMPLOYMENT OF LESS THAN 500 EMPLOYEES.

A TECHNICAL EVALUATION OF THE BIDS BY THE BUREAU OF SHIPS RESULTED IN A DETERMINATION THAT 40 PERCENT OF THE SAMPLES SUBMITTED BY GOODWAY PRINTING COMPANY WERE INCOMPLETE OR UNSATISFACTORY AND THAT THE COMPANY, FOR THE PURPOSES OF THIS PROCUREMENT, WAS THEREFORE NOT TECHNICALLY RESPONSIBLE. HOWEVER, WHEN A CONTRACTING OFFICER PROPOSES TO REJECT THE BID OF A SMALL BUSINESS CONCERN SOLELY BECAUSE OF LACK OF CAPACITY OR CREDIT, HE IS REQUIRED BY SECTION 1-705.4 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) TO NOTIFY THE SMALL BUSINESS ADMINISTRATION (SBA) OF THE CIRCUMSTANCES, FOR CONSIDERATION OF ISSUANCE OF A CERTIFICATE OF COMPETENCY (C.O.C.). SBA WAS THEREFORE DULY NOTIFIED, AND IN THE COURSE OF TAKING ACTION ON THE REQUEST FOR A C.O.C., THAT AGENCY GAVE CONSIDERATION ALSO TO THE SIZE STATUS OF GOODWAY PRINTING COMPANY. REVIEWING THE MATTER IT WAS NOTED THAT THE CONTRACT COVERED GRAPHIC ART SERVICES, AND IT WAS DETERMINED BY SBA THAT THE CORRECT INDUSTRY CLASSIFICATION WAS NO. 8999, WHICH COVERS SERVICES, NOT ELSEWHERE CLASSIFIED, RATHER THAN 3861 AS STATED IN THE INVITATION.

SINCE THE SIZE STANDARD FOR THESE SERVICES IS NOT SEPARATELY DEFINED BY REGULATION, IT COMES UNDER THE GENERAL PROVISIONS OF SECTION 1 701.1 (A) (2) (D) OF ASPR, WHICH PROVIDES THAT "FOR SERVICES NOT ELSEWHERE DEFINED IN THIS SECTION, THE AVERAGE ANNUAL SALES OR RECEIPTS OF THE CONCERN AND ITS AFFILIATES FOR THE PRECEDING THREE FISCAL YEARS MUST NOT EXCEED $1 MILLION.' THIS IS IN CONFORMITY WITH THE REGULATIONS ISSUED BY THE SMALL BUSINESS ADMINISTRATION, SECTION 121.3 8 (D) OF TITLE 13, CODE OF FEDERAL REGULATIONS. SINCE GOODWAY PRINTING COMPANY'S ANNUAL RECEIPTS FAR EXCEED $1,000,000, IT WAS DETERMINED BY SBA THAT GOODWAY PRINTING COMPANY WAS NOT A SMALL BUSINESS CONCERN FOR THE PURPOSES OF THE INVOLVED PROCUREMENT AND THAT NO FURTHER ACTION NEED BE TAKEN ON THE REQUEST FOR A C.O.C.

SECTION 8 (B) (6) OF THE SMALL BUSINESS ACT, AS AMENDED BY PUBLIC LAW 85- 536, 72 STAT. 390, 15 U.S.C. 637 (B) (6), AUTHORIZES THE SMALL BUSINESS ADMINISTRATION TO DETERMINE WHICH BUSINESS ENTERPRISES ARE TO BE DESIGNATED AS SMALL BUSINESS CONCERNS, AND MAKES ITS DETERMINATIONS IN THESE MATTERS CONCLUSIVE ON THE PROCURING AGENCIES. WE HAVE THEREFORE CONSISTENTLY TAKEN THE POSITION THAT WE HAVE NO AUTHORITY TO QUESTION THE SIZE DETERMINATIONS OF SBA, EXCEPT UPON CLEAR AND CONVINCING EVIDENCE THAT THE FINDING IS ARBITRARY OR CLEARLY ERRONEOUS. 38 COMP. GEN. 328, 331; B- 147020, NOVEMBER 17, 1961. WE FIND NO SUCH EVIDENCE IN THE INSTANT CASE.

SINCE IT APPEARS THAT THE DETERMINATION BY SBA WAS IN STRICT ACCORDANCE WITH THE REGULATIONS AND SINCE THIS WAS A TOTAL SET-ASIDE FOR SMALL BUSINESS, GOODWAY PRINTING COMPANY CANNOT BE CONSIDERED ELIGIBLE FOR THE AWARD, AND THE PROTEST MUST BE DENIED.