B-162468, DEC. 19, 1967

B-162468, DEC. 19, 1967

TO BERTSCH INTERNATIONAL:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST REJECTION OF YOUR BID AND AWARD OF A CONTRACT TO ANOTHER FIRM BY THE AIR FORCE UNDER INVITATION FOR BIDS NO. F04697-67-B-0072.

THE SUBJECT INVITATION, ISSUED ON JUNE 22, 1967, CALLED FOR BIDS ON TWO STEAM GENERATORS, RELATED EQUIPMENT, AND SPARES. FOUR BIDS WERE RECEIVED AND OPENED ON JULY 12, 1967. YOU WERE THE LOW BIDDER AND CYCLOTHERM DIVISION, OSWEGO PACKAGE BOILER COMPANY, INCORPORATED, WAS SECOND LOWEST. AS THE RESULT OF A NEGATIVE PRE-AWARD SURVEY, THE CONTRACTING OFFICER FOUND YOUR FIRM NONRESPONSIBLE PURSUANT TO ASPR 1 903.U1/V), WHICH REQUIRES A PROSPECTIVE CONTRACTOR TO BE ELIGIBLE UNDER PART 12, SUBPART F, OF ASPR, AND AWARDED A CONTRACT TO CYCLOTHERM ON SEPTEMBER 7, 1967. THE AIR FORCE REPORTS THAT AS OF OCTOBER 2, 1967, THE CONTRACT WAS 20 PERCENT COMPLETED AND DELIVERY WAS SCHEDULED FOR NOVEMBER 3, 1967.

YOU CONTEND THAT YOUR FIRM WAS ERRONEOUSLY DETERMINED NONRESPONSIBLE AND IN SUPPORT OF YOUR POSITION CITE OUR DECISION OF SEPTEMBER 14, 1967, B- 161290. THE CITED DECISION INVOLVED A PROCUREMENT BY THE MARINE CORPS WHERE YOU WERE ALSO DETERMINED NONRESPONSIBLE. THE BASIS FOR THE DETERMINATION OF NONRESPONSIBILITY IN THAT CASE, AS IN THE SUBJECT CASE, WAS THE FINDING THAT YOUR FIRM DID NOT QUALIFY AS A "REGULAR DEALER" WITHIN THE MEANING OF ASPR 12-603.2 AND, THEREFORE, WERE NOT ELIGIBLE FOR AWARD UNDER THE TERMS OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35-45. SEE ASPR 12-601. HOWEVER, WE POINTED OUT IN OUR DECISION THAT SINCE ASPR 12-602.2 (A) EXEMPTS PURCHASES OF GENERALLY AVAILABLE COMMERCIAL ITEMS NEGOTIATED PURSUANT TO ASPR 3-202 FROM THE COVERAGE OF THE WALSH-HEALEY ACT, THE DETERMINATION OF NONRESPONSIBILITY WAS IN ERROR.

ALTHOUGH THE FACTS OF THE INSTANT CASE ARE ESSENTIALLY THE SAME AS THOSE PRESENT IN THE CITED DECISION, THERE IS ONE CRITICAL DIFFERENCE WHICH DISTINGUISHES THE CASES AND MAKES THE PRIOR HOLDING INAPPLICABLE TO THE PRESENT SITUATION. WE REFER TO THE FACT THAT THE MARINE CORPS PROCUREMENT WAS NEGOTIATED PURSUANT TO ASPR 3-202, WHICH IS AN IMPLEMENTATION OF 10 U.S.C. 2304 (A) (2). NEGOTIATION IS AUTHORIZED UNDER THIS STATUTE WHERE IT IS DETERMINED THAT THE PUBLIC EXIGENCY WILL NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING. CONSISTENT WITH THE PUBLIC EXIGENCY JUSTIFICATION FOR NEGOTIATION, ASPR 12-602.2 (A) EXEMPTS THE NEGOTIATED PURCHASES OF GENERALLY AVAILABLE ITEMS FROM THE WALSH-HEALEY ACT. HOWEVER, THE SUBJECT PROCUREMENT WAS EFFECTED BY FORMAL ADVERTISING PURSUANT TO 10 U.S.C. 2304 (A). SINCE PROCUREMENT BY FORMAL ADVERTISING IS NOT EXEMPT FROM THE WALSH-HEALEY ACT, THE PROVISIONS OF ASPR, PART 12, SUBPART F, ARE APPLICABLE TO THE INSTANT PROCUREMENT. THEREFORE, THE ONLY QUESTION IS WHETHER THESE PROVISIONS WERE PROPERLY APPLIED IN FINDING YOU NONRESPONSIBLE.

IN ORDER TO BE ELIGIBLE FOR AWARD OF A CONTRACT SUBJECT TO THE WALSH- HEALEY ACT YOU MUST QUALIFY AS EITHER A MANUFACTURER OR REGULAR DEALER OF THE GOODS BEING PROCURED. ASPR 12-601. IN YOUR BID YOU REPRESENTED YOURSELF AS A "REGULAR DEALER.' ASPR 12-603-2 (A), IN PERTINENT PART, DEFINES A "REGULAR DEALER" AS FOLLOWS: "* * * PERSON, WHO OWNS, OPERATES, OR MAINTAINS A STORE, WAREHOUSE, OR OTHER ESTABLISHMENT IN WHICH MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT OF THE GENERAL CHARACTER DESCRIBED BY THE SPECIFICATIONS AND REQUIRED UNDER THE CONTRACT ARE BOUGHT, KEPT IN STOCK, AND SOLD TO THE PUBLIC IN THE USUAL COURSE OF BUSINESS.' THE SURVEY TEAM REPORTS THAT YOUR BUSINESS FACILITIES CONSISTED OF A SALES OFFICE IN A PRIVATE RESIDENCE WITHOUT STORAGE FACILITIES OR AN INVENTORY OF THE ITEMS BEING PROCURED. IN THESE CIRCUMSTANCES, IT WOULD APPEAR THAT THERE WAS A BASIS FOR THE CONTRACTING OFFICER'S DETERMINATION THAT YOU DID NOT QUALIFY AS A ,REGULAR DEALER" UNDER THE LAW AND REGULATION. AT ANY RATE, WHERE THE CONTRACTING OFFICER'S DETERMINATION IN THIS REGARD IS CHALLENGED IT IS THE RESPONSIBILITY OF THE DEPARTMENT OF LABOR TO MAKE THE FINAL DETERMINATION. ASPR 12-604.

ALTHOUGH ABCO, THE MANUFACTURER YOU REPRESENT AND WHOSE GENERATOR YOU BID, MAY BID AND CONTRACT THROUGH AN AUTHORIZED AGENCY, THE EXISTENCE OF THE AGENCY MUST BE DISCLOSED AND THE AGENT MUST BID AND CONTRACT IN THE NAME OF THE PRINCIPAL. ASPR 12-603.4. SINCE THE BID WAS SUBMITTED IN YOUR NAME WITHOUT DISCLOSURE OF ANY AGENCY RELATIONSHIP WITH ABCO, IT WAS NOT PROPERLY FOR CONSIDERATION UNDER THE CITED REGULATION.

IN THESE CIRCUMSTANCES, THERE IS NO LEGAL BASIS UPON WHICH OUR OFFICE MAY OBJECT TO THE ADMINISTRATIVE ACTION IN THIS CASE.