B-169260, MAY 19, 1970

B-169260, MAY 19, 1970

CONTRACTS--AWARDS--LABOR SURPLUS AREAS--QUALIFICATION OF BIDDER-- PRIORITY CHANGES UNDER REQUEST FOR PROPOSALS CONTAINING LABOR SURPLUS AREA SET-ASIDE, CONCERN WHO WAS IN THIRD PRIORITY PREFERENCE GROUP--SMALL BUSINESS CONCERN IN PERSISTENT LABOR SURPLUS AREA--WHO ONLY AFTER OPENING OF PROPOSALS FURNISHED CERTIFICATE OF ELIGIBILITY TO OBTAIN FIRST PRIORITY PREFERENCE, MAY NOT BE CONSIDERED FOR AWARD AS "CERTIFIED-ELIGIBLE" SMALL BUSINESS CONCERN SINCE CERTIFICATION IS ONE OF RESPONSIVENESS AND NOT RESPONSIBILITY; SUCH PREFERENCE INFORMATION MUST BE SUBMITTED WITH BID, IS NOT SUBJECT TO LATER NEGOTIATION NOR IS CHANGE OF PERFORMANCE CLASSIFICATION PERMITTED WHICH WILL ADVANCE PRIORITY PREFERENCE. SEE COMP. GEN. DECS. CITED.

TO CLARK CABLE CORPORATION:

REFERENCE IS MADE TO YOUR LETTER DATED MARCH 2, 1970, PROTESTING AGAINST THE AWARD OF THE LABOR SURPLUS SET-ASIDE PORTION UNDER REQUEST FOR PROPOSALS (RFP) NO. DSA 700-70-R-2123 TO ANY OFFEROR OTHER THAN YOUR OWN COMPANY.

THE RFP WAS ISSUED ON SEPTEMBER 23, 1969, BY THE DEFENSE CONSTRUCTION SUPPLY CENTER AND COVERED AN AGGREGATE OF 3,750 IGNITION COILS, HALF OF WHICH WERE SET-ASIDE FOR LABOR SURPLUS AREA CONCERNS. THE RFP INCORPORATED BY REFERENCE THE FOLLOWING PROVISIONS REGARDING THE LABOR SURPLUS SET-ASIDE PORTION OF THE PROCUREMENT:

"8.103 - ASPR 1-804.2 (B) - NOTICE OF LABOR SURPLUS AREA SET-ASIDE (1968 SEP)

"(A) GENERAL. A PORTION OF THIS PROCUREMENT, AS IDENTIFIED ELSEWHERE IN THE SCHEDULE, HAS BEEN SET ASIDE FOR AWARD ONLY TO ONE OR MORE LABOR SURPLUS AREA CONCERNS, AND, TO A LIMITED EXTENT, TO SMALL BUSINESS CONCERNS WHICH DO NOT QUALIFY AS LABOR SURPLUS AREA CONCERNS. NEGOTIATIONS FOR AWARD OF THE SET-ASIDE PORTION WILL BE CONDUCTED ONLY WITH RESPONSIBLE LABOR SURPLUS AREA CONCERNS (AND SMALL BUSINESS CONCERNS TO THE EXTENT INDICATED BELOW) WHO HAVE SUBMITTED RESPONSIVE BIDS OR PROPOSALS ON THE NON-SET-ASIDE PORTION AT A UNIT PRICE NO GREATER THAN 120 PERCENT OF THE HIGHEST UNIT PRICE AT WHICH AN AWARD IS MADE ON THE NON-SET -ASIDE PORTION. (FOR THE PURPOSES OF THIS PARAGRAPH (A), SUCH 'UNIT PRICE' IN THE CASE OF AWARD OF THE NON-SET-ASIDE PORTION TO A FOREIGN BIDDER SHALL BE THE EVALUATED UNIT PRICE ESTABLISHED UNDER APPLICABLE BUY AMERICAN-BALANCE OF PAYMENTS PROCEDURES.) NEGOTIATIONS FOR THE SET-ASIDE PORTION WILL BE CONDUCTED WITH SUCH BIDDERS IN THE FOLLOWING ORDER OF PRIORITY:

GROUP 1. CERTIFIED-ELIGIBLE CONCERNS WHICH ARE ALSO SMALL BUSINESS CONCERNS.

GROUP 2. OTHER CERTIFIED-ELIGIBLE CONCERNS.

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

GROUP 4. OTHER PERSISTENT LABOR SURPLUS AREA CONCERNS.

GROUP 5. SUBSTANTIAL LABOR SURPLUS AREA CONCERNS WHICH ARE ALSO SMALL BUSINESS CONCERNS.

GROUP 6. OTHER SUBSTANTIAL LABOR SURPLUS AREA CONCERNS.

GROUP 7. SMALL BUSINESS CONCERNS WHICH ARE NOT SURPLUS AREA CONCERNS. WITHIN EACH OF THE ABOVE GROUPS, NEGOTIATIONS WITH SUCH CONCERNS WILL BE IN THE ORDER OF THEIR BIDS ON THE NON-SET-ASIDE PORTION, BEGINNING WITH THE LOWEST RESPONSIVE BID. THE SET-ASIDE PORTION SHALL BE AWARDED AT THE HIGHEST UNIT PRICE AWARDED ON THE NON SET-ASIDE PORTION, ADJUSTED TO REFLECT TRANSPORTATION AND OTHER COST FACTORS WHICH ARE CONSIDERED IN EVALUATING BIDS ON THE NON-SET-ASIDE PORTION, EXCEPT WHERE A RESPONSIVE BID HAS BEEN SUBMITTED ON THE NON SET-ASIDE PORTION AT A UNIT PRICE WHICH WHEN SO ADJUSTED IS LOWER THAN THE ADJUSTED HIGHEST UNIT PRICE AWARDED ON THE NON-SET-ASIDE PORTION BUT COULD NOT BE ACCEPTED BECAUSE OF QUANTITY LIMITATIONS OR OTHER CONSIDERATION (SUCH AS THE BIDDER'S RESPONSIBILITY).

"(2) THE TERM 'LABOR SURPLUS AREA CONCERN' INCLUDES CERTIFIED ELIGIBLE CONCERNS, PERSISTENT LABOR SURPLUS AREA CONCERNS, AND SUBSTANTIAL LABOR SURPLUS AREA CONCERNS, AS DEFINED BELOW:

(I) 'CERTIFIED-ELIGIBLE CONCERN' MEANS A CONCERN (A) LOCATED IN OR NEAR A SECTION OF CONCENTRATED UNEMPLOYMENT OR UNDEREMPLOYMENT WHICH HAS BEEN CERTIFIED BY THE SECRETARY OF LABOR IN ACCORDANCE WITH 29 CFR 8.7 (B) WITH RESPECT TO THE EMPLOYMENT OF DISADVANTAGED PERSONS RESIDING WITHIN SUCH SECTIONS, AND (B) WHICH WILL AGREE TO PERFORM, OR CAUSE TO BE PERFORMED BY A CERTIFIED CONCERN, A SUBSTANTIAL PROPORTION OF A CONTRACT IN OR NEAR SUCH SECTIONS; IT INCLUDES A CONCERN WHICH, THOUGH NOT SO CERTIFIED, AGREES TO HAVE A SUBSTANTIAL PROPORTION OF A CONTRACT PERFORMED BY CERTIFIED CONCERNS IN OR NEAR SUCH SECTIONS. A CONCERN SHALL BE DEEMED TO PERFORM A SUBSTANTIAL PROPORTION OF A CONTRACT IN OR NEAR SECTIONS OF CONCENTRATED UNEMPLOYMENT OR UNDEREMPLOYMENT IF THE COSTS THAT THE CONCERN WILL INCUR ON ACCOUNT OF MANUFACTURING OR PRODUCTION IN OR NEAR SUCH SECTIONS (BY ITSELF IF A CERTIFIED CONCERN, OR BY CERTIFIED CONCERNS ACTING AS FIRST-TIER SUBCONTRACTORS) AMOUNT TO MORE THAN 30 PERCENT OF THE CONTRACT PRICE.

"(C) IDENTIFICATION OF AREAS OF PERFORMANCE. EACH BIDDER DESIRING TO BE CONSIDERED FOR AWARD AS A LABOR SURPLUS AREA CONCERN ON THE SET ASIDE PORTION OF THIS PROCUREMENT SHALL IDENTIFY IN HIS BID THE GEOGRAPHICAL AREAS IN WHICH HE PROPOSES TO PERFORM, OR CAUSE TO BE PERFORMED, A SUBSTANTIAL PROPORTION OF THE PRODUCTION OF THE CONTRACT. IF THE DEPARTMENT OF LABOR CLASSIFICATION OF ANY SUCH AREA CHANGES AFTER THE BIDDER HAS SUBMITTED HIS BID, THE BIDDER MAY CHANGE THE AREAS IN WHICH HE PROPOSES TO PERFORM, PROVIDED, THAT HE SO NOTIFIES THE CONTRACTING OFFICER BEFORE AWARD OF THE SET-ASIDE PORTION. PRIORITY FOR NEGOTIATION WILL BE BASED UPON THE LABOR SURPLUS CLASSIFICATION OF THE DESIGNATED PRODUCTION AREAS AS OF THE TIME OF THE PROPOSED AWARD.

"(D) ELIGIBILITY BASED ON CERTIFICATION. WHERE ELIGIBILITY FOR PREFERENCE IS BASED UPON THE STATUS OF THE BIDDER OR BIDDER'S SUBCONTRACTORS AS A 'CERTIFIED-ELIGIBLE CONCERN,' THE BIDDER SHALL FURNISH WITH HIS BID EVIDENCE OF CERTIFICATION BY THE SECRETARY OF LABOR.

"8.105 STATEMENT OF SET-ASIDE QUANTITY

"THE QUANTITIES OF THE ITEMS SET FORTH ABOVE REPRESENT THE NON-SET ASIDE PORTION OF THIS PROCUREMENT. BIDS SUBMITTED IN RESPONSE TO THIS SOLICITATION WILL DETERMINE ELIGIBILITY FOR PARTICIPATION IN NEGOTIATIONS FOR THE SET-ASIDE PORTION SET FORTH BELOW, PURSUANT TO THE NOTICE OF SET- ASIDE. DO NOT BID ON THE SET-ASIDE PORTION OF THIS PROCUREMENT.

ITEM NO. QUANTITY SET-ASIDE TO BE CONSIDERED FOR PREFERENTIAL TREATMENT FOR PERFORMANCE IN LABOR SURPLUS AREAS FOR THE SET-ASIDE PORTION OF THIS PROCUREMENT, BIDDERS MUST STATE BELOW THE PLACE OF PERFORMANCE IN LABOR SURPLUS AREAS OF THE SET-ASIDE PORTION AND THE AMOUNT OF COSTS THAT WILL BE INCURRED BY THE BIDDER AND/OR ITS FIRST-TIER SUBCONTRACTORS ON ACCOUNT OF MANUFACTURING OR PRODUCTION AT EACH PLANT LOCATION.

PLANT NAME AND LOCATION AMOUNT OF COSTS

(TO BE INCLUDED IN (EXPRESSED AS PERCENT

SOLICITATION) OF CONTRACT PRICE) NOTE: TO QUALIFY AS A CERTIFIED ELIGIBLE CONCERN, MORE THAN 30% OF THE CONTRACT PRICE MUST BE PERFORMED IN AREAS OF UNEMPLOYMENT OR UNDEREMPLOYMENT. THE OFFEROR OR FIRST-TIER SUBCONTRACTOR MUST BE CERTIFIED BY THE DEPARTMENT OF LABOR PRIOR TO BID OPENING, AND EVIDENCE OF CERTIFICATION ISSUED BY SECRETARY OF LABOR MUST ACCOMPANY THE BID. TO QUALIFY FOR PERFORMANCE AS A PERSISTENT OR SUBSTANTIAL LABOR SURPLUS AREA CONCERN, MORE THAN 50% OF CONTRACT PRICE MUST BE PERFORMED IN AREAS OF PERSISTENT OR SUBSTANTIAL LABOR SURPLUS. (ASPR 1-706.6 (B) AND 1 -804.2 (A))."

ON OCTOBER 13, 1969, THE CLOSING DATE SET FOR RECEIPT OF PROPOSALS, SIX OFFERS WERE RECEIVED, THE TWO LOWEST OF WHICH WERE SUBMITTED BY YOUR CONCERN AND CONSOLIDATED ELECTRO INDUSTRIES (CONSOLIDATED) AS FOLLOWS:

CONSOLIDATED ELECTRO INDUSTRIES $14.96

CLARK CABLE CORPORATION $17.88 THE CONTRACTING OFFICER STATES THAT AN AWARD ON THE NON-SET-ASIDE PORTION OF THE PROCUREMENT WAS SUBSEQUENTLY MADE TO CONSOLIDATED ON NOVEMBER 26, 1969, AFTER A DETERMINATION WAS MADE THAT THE COMPANY WAS THE LOWEST RESPONSIBLE OFFEROR.

WITH RESPECT TO THE LABOR SURPLUS SET-ASIDE PORTION OF THE RFP IT WAS NOTED THAT YOUR CONCERN'S UNIT PRICE WAS WITHIN 120 PERCENT OF CONSOLIDATED'S PRICE AND THAT YOU HAD INDICATED IN CLAUSE 8.105 OF YOUR OFFER THAT 53 PERCENT OF THE PRICE OF ANY CONTRACT AWARDED TO YOUR COMPANY UNDER THE SET-ASIDE PORTION WOULD BE PERFORMED IN A LOCATION WHICH WAS CLASSIFIED AS A PERSISTENT LABOR SURPLUS AREA. IN VIEW THEREOF, AND SINCE YOUR COMPANY IS A SMALL BUSINESS CONCERN, THE CONTRACTING OFFICER DETERMINED THAT YOU WERE ELIGIBLE IN PRIORITY GROUP 3 FOR CONSIDERATION ON THE SET-ASIDE PORTION. THE CONTRACTING OFFICER ALSO DETERMINED THAT CONSOLIDATED WAS ENTITLED TO GROUP3 PRIORITY.

ON OR ABOUT DECEMBER 15, 1969, YOU SUBMITTED COPIES OF TWO CERTIFICATES FROM THE SECRETARY OF LABOR WHICH INDICATED THAT YOUR COMPANY HAD BEEN APPROVED AS A "CERTIFIED-ELIGIBLE" CONCERN ON MAY 19, 1969; THAT YOU POSSESSED SUCH STATUS WHEN PROPOSALS WERE RECEIVED; AND THAT YOUR CURRENT CERTIFICATE WAS VALID THROUGH MAY 12, 1970. CONSOLIDATED ALSO SUBMITTED A CERTIFICATE SHOWING THAT IT WAS A "CERTIFIED-ELIGIBLE" CONCERN AS OF DECEMBER 16, 1969.

THE CONTRACTING OFFICER MAINTAINED THAT HE COULD NOT CONSIDER THE CERTIFICATES OFFERED BY YOUR COMPANY AND BY CONSOLIDATED SINCE THE RFP SPECIFICALLY ADVISED ALL OFFERORS IN THE NOTICE OF SET-ASIDE PROVISION," QUOTED ABOVE, THAT THESE CERTIFICATES WERE TO BE FURNISHED WITH THE OFFERS. ACCORDINGLY, THE CONTRACTING OFFICER CONCLUDED THAT YOUR CONCERN AND CONSOLIDATED COULD ONLY BE GRANTED GROUP 3 PREFERENCE, AND THAT CONSOLIDATED WAS ENTITLED TO THE FIRST PRIORITY IN NEGOTIATING AN AWARD FOR THE SET-ASIDE, SINCE ITS UNIT PRICE WAS LOWER THAN THAT SET OUT IN YOUR OFFER.

THE GROUNDS FOR YOUR PROTEST MAY BE SUMMARIZED AS FOLLOWS:

1. YOU HAVE SUBMITTED A COPY OF YOUR "CERTIFIED-ELIGIBLE" CERTIFICATE TO THE DEFENSE CONSTRUCTION SUPPLY CENTER UNDER PRIOR PROCUREMENTS. IN VIEW THEREOF, YOU MAINTAIN THAT YOU WERE NOT REQUIRED TO SUBMIT ANOTHER CERTIFICATE WITH YOUR OFFER UNDER THE SUBJECT PROCUREMENT, SINCE THE CONTRACTING OFFICER WAS AWARE OF YOUR "CERTIFIED ELIGIBLE" STATUS.

2. SINCE THE SUBJECT PROCUREMENT WAS NEGOTIATED, RATHER THAN ADVERTISED, THERE SHOULD BE NO OBJECTION TO CONSIDERING THE CERTIFICATE FURNISHED PRIOR TO THE DATE OF AWARD.

3. THE NOTATION IN CLAUSE 8.105 OF YOUR OFFER CONCERNING THE PLANT LOCATION AND AMOUNT OF COSTS OF PERFORMING THE SET-ASIDE AWARD AT THAT FACILITY CONSTITUTED EVIDENCE OF YOUR "CERTIFIED-ELIGIBLE" STATUS.

4. PROVISION 4 (C) OF THE NOTICE OF SET-ASIDE CLAUSE, QUOTED ABOVE, PERMITTED ANY OFFEROR TO CHANGE HIS PRIORITY PREFERENCE IF SUCH NOTICE WAS PROVIDED TO THE CONTRACTING OFFICER PRIOR TO THE AWARD OF THE SET ASIDE.

IN VIEW THEREOF, YOU CONTEND THAT YOU SHOULD BE PERMITTED TO CHANGE YOUR PRIORITY STATUS TO GROUP 1.

IN RESPONSE TO YOUR ALLEGATION THAT THE PROCURING ACTIVITY HAD KNOWLEDGE OF THE GROUP 1 STATUS OF YOUR CONCERN FROM PRIOR PROCUREMENTS, THE CONTRACTING OFFICER STATES THAT YOUR POSITION IS APPARENTLY BASED ON THE ASSUMPTION THAT A CENTRAL FILE OF CERTIFIED ELIGIBLE CONCERNS IS MAINTAINED FOR REFERENCE AT THE PROCURING ACTIVITY. HOWEVER, THE CONTRACTING OFFICER STATES THAT CERTIFICATES OF GROUP 1 STATUS RECEIVED UNDER PROCUREMENTS ARE NOT MAINTAINED IN A CENTRAL FILE, BUT ONLY CONTAINED IN THE FILE FOR THE INDIVIDUAL PROCUREMENT. ACCORDINGLY, THE CONTRACTING OFFICER MAINTAINS THAT IT WAS IMPOSSIBLE FOR HIM TO KNOW THAT YOUR CONCERN HAD PREVIOUSLY BEEN GRANTED "CERTIFIED-ELIGIBLE" STATUS. THIS CONNECTION, IT SHOULD BE NOTED THAT EVEN IF THE CONTRACTING OFFICER KNEW THAT YOUR CONCERN POSSESSED A "CERTIFIED-ELIGIBLE" CERTIFICATE PRIOR TO THE DATE SET FOR RECEIPT OF PROPOSALS IN THE INSTANT PROCUREMENT, SUCH KNOWLEDGE WOULD NOT WARRANT AN ASSUMPTION THAT YOU WERE CLAIMING THIS PRIORITY UNDER THE SUBJECT RFP, SINCE THERE IS NO REQUIREMENT THAT AN OFFEROR MUST PRODUCE UNDER OR CLAIM THE HIGHEST LABOR SURPLUS PRIORITY WHICH HE POSSESSES.

YOU ALSO ALLEGE THAT YOUR FAILURE TO COMPLY WITH THE REQUIREMENT OF FURNISHING A CERTIFICATE OF GROUP 1 STATUS SHOULD BE WAIVED SINCE THIS IS A NEGOTIATED PROCUREMENT AND NOT SUBJECT TO THE STRICT RULES OF ADVERTISED BIDDING. IN THIS CONNECTION, THE GENERAL RULE IS WELL ESTABLISHED THAT IN ADVERTISED PROCUREMENTS A BIDDER'S FAILURE TO SUPPLY INFORMATION IN THE BID WHICH IS NECESSARY FOR A FULL EVALUATION OF THE BID WILL RENDER THE BID NONRESPONSIVE. IT IS ALSO THE SETTLED RULE THAT WHERE SUCH MATERIAL INFORMATION IS OMITTED FROM A BID IT MAY NOT BE SUPPLIED AFTER BID OPENING. B-150676, FEBRUARY 7, 1963. IN ACCORDANCE WITH THIS VIEW OUR OFFICE HAS HELD THAT INVITATIONS INVOLVING LABOR SURPLUS SET-ASIDES SHOULD STATE THE INFORMATION WHICH BIDDERS ARE TO FURNISH IN THEIR BIDS, AND THE EFFECT OF THE FAILURE TO FURNISH IT. 44 COMP. GEN. 34 (1964); 41 COMP. GEN. 160 (1961).

THUS, WHERE BIDDERS WERE WARNED THAT THEIR ELIGIBILITY FOR CONSIDERATION AS A CERTIFIED ELIGIBLE CONCERN, FOR THE PURPOSE OF PRIORITY IN THE NEGOTIATION OF THE SET-ASIDE PORTIONS, WAS PREDICATED UPON THE SUBMISSION OF PROPER CERTIFICATION WITH THEIR BIDS, WE UPHELD THE DETERMINATION THAT A BIDDER WHO DID NOT SUBMIT THE CERTIFICATION WITH HIS BID WAS NOT QUALIFIED AS A "CERTIFIED-ELIGIBLE" CONCERN. B 164115, AUGUST 30, 1968.

IN 47 COMP. GEN. 543 (1968) OUR OFFICE CONSIDERED THE LEGAL EFFECT OF THE FAILURE OF AN OFFEROR TO SUBMIT A CERTIFICATE WITH HIS OFFER SHOWING THAT HIS COMPANY WAS A CERTIFIED ELIGIBLE CONCERN IN A NEGOTIATED PROCUREMENT. WE NOTED THAT THE RULES OF ADVERTISED BIDDING ARE NOT GENERALLY APPLICABLE TO THE FLEXIBLE AND INFORMAL PROCEDURES GOVERNING NEGOTIATED PROCUREMENTS, ALTHOUGH THEY MAY SERVE AS GENERAL GUIDELINES WHERE THEIR APPLICATION SERVES THE BEST INTERESTS OF THE GOVERNMENT. HOWEVER, WE COULD NOT CONSIDER THE NEGOTIATION CONTEMPLATED BY THE LABOR SURPLUS AREA PROVISIONS OF THE RFP TO BE AMENABLE TO THE GENERAL CONCEPT OF MUTUAL, INFORMAL, BARGAINING WHICH MAY BE CONDUCTED SOMEWHAT OUTSIDE THE TERMS AND CONDITIONS OF THE RFP FOR THE FOLLOWING REASONS: "THE 'NEGOTIATION' CONTEMPLATED BY THE LABOR SURPLUS AREA SET-ASIDE PROVISIONS IS NOT CONCERNED WITH THE PRICE OF THE ARTICLES COVERED BY THE SET-ASIDE BUT ONLY WHETHER THE OFFEROR WHO IS ENTITLED TO FIRST PRIORITY WILL ACCEPT AN AWARD OF THE SET ASIDE. IN THIS REGARD, IT IS SIGNIFICANT TO POINT OUT THAT AWARD OF THE SET-ASIDE PORTION MUST BE MADE TO THE ELIGIBLE OFFEROR AT THE HIGHEST UNIT PRICE AWARDED ON THE NON-SET-ASIDE PORTION. THUS, THE ONLY NEGOTIATION THAT MAY BE INVOLVED IS THE ABILITY AND WILLINGNESS OF THE ELIGIBLE OFFEROR TO PERFORM THE SET-ASIDE. WE THEREFORE CANNOT ATTRIBUTE NEGOTIATION, IN THE USUAL SENSE OF THAT TERM, TO THE SET ASIDE PORTION OF THE PROCUREMENT. SEE 41 COMP. GEN. 230, 233-234. IN THIS CONTEXT, AND SINCE ALL OFFERORS WERE ADMONISHED BY THE SPECIFIC TERMS OF THE RFP THAT, WHEN ELIGIBILITY FOR PREFERENCE IS BASED UPON THE STATUS OF THE OFFEROR AS A CERTIFIED-ELIGIBLE CONCERN, THE OFFEROR SHALL FURNISH WITH HIS BID EVIDENCE OF CERTIFICATION BY THE SECRETARY OF LABOR, WE MUST CONCLUDE THAT THE FURNISHING OF SUCH EVIDENCE AFTER THE DATE FIXED FOR RECEIPT OF PROPOSALS HAS NO EFFECT TO CHANGE THE PRIORITY CLASSIFICATION OF MEARL FROM GROUP 3 TO GROUP 1."

WHILE YOU POSSESSED A CERTIFICATE ESTABLISHING THAT YOUR CONCERN WAS "CERTIFIED-ELIGIBLE" PRIOR TO THE DATE SET FOR RECEIPT OF PROPOSALS, AS DISTINGUISHED FROM THE CONCERN IN THE QUOTED DECISION, WE DO NOT BELIEVE THAT THIS FACTUAL DISTINCTION REQUIRES A DIFFERENT HOLDING IN THE SUBJECT CASE, SINCE THE PRIMARY REASON FOR CONSIDERING ONLY THE INFORMATION SET FORTH IN AN OFFEROR'S PROPOSAL AT THE DATE SET FOR RECEIPT OF PROPOSALS IN DETERMINING THE ORDER OF PRIORITY IN NEGOTIATING THE SET-ASIDE PORTION WAS THE NECESSITY FOR PRESERVING THE ORDERLY PROCESS OF THE SET-ASIDE PROCUREMENT AS CONTEMPLATED IN THE RFP. CLEARLY, THIS POLICY CONSIDERATION IS EQUALLY APPLICABLE TO THE SUBJECT PROCUREMENT. IN THIS CONNECTION, IT SHOULD BE NOTED THAT YOU DID NOT CLAIM GROUP 1 PREFERENCE UNTIL AFTER AN AWARD HAD BEEN MADE ON THE NON-SET-ASIDE PORTION OF THE PROCUREMENT AND THE ORDER OF PRIORITY IN NEGOTIATING THE SET-ASIDE WAS ESTABLISHED TO YOUR DISADVANTAGE.

WITH RESPECT TO YOUR ALLEGATION THAT YOU SUBMITTED EVIDENCE OF YOUR GROUP 1 STATUS BASED ON THE INFORMATION SET FORTH IN CLAUSE 8.105 OF YOUR OFFER, WE NOTE THAT YOUR OFFER ONLY CONTAINED THE PLANT LOCATION AND AMOUNT OF COSTS TO BE INCURRED IN PERFORMING THE SET-ASIDE PORTION AT THE FACILITY. THIS INFORMATION IS NOT SUFFICIENT TO CONSTITUTE EVIDENCE THAT YOUR CONCERN IS A "CERTIFIED-ELIGIBLE" CONCERN, AS DEFINED ABOVE. THE DEFINITION REQUIRES THAT A "CERTIFIED-ELIGIBLE" CONCERN BE CERTIFIED BY THE SECRETARY OF LABOR IN ACCORDANCE WITH 29 CFR 8.7 (B), WHICH STIPULATES THAT SUCH A CONCERN MUST AGREE TO EMPLOY A PROPORTIONATE NUMBER OF DISADVANTAGED PERSONS RESIDING WITHIN SECTIONS OF CONCENTRATED UNEMPLOYMENT OR UNDEREMPLOYMENT. THERE IS NO DATA IN CLAUSE 8.105 OF YOUR OFFER CONCERNING THIS REQUIREMENT.

YOU ALSO CLAIM THAT PROVISION 4 (C) OF THE NOTICE OF SET-ASIDE CLAUSE OF THE RFP, QUOTED ABOVE, PERMITS AN OFFEROR TO CHANGE HIS LABOR SURPLUS PRIORITY PREFERENCE UP TO THE TIME OF AWARD OF THE SET-ASIDE, SO THAT THE MATTER OF PRIORITY PREFERENCE SHOULD BE CONSIDERED A QUESTION OF RESPONSIBILITY. IN OUR DECISION QUOTED ABOVE, WE COMMENTED ON THIS MATTER AS FOLLOWS:

"IT MAY BE SAID THAT THE LABOR SURPLUS AREA PROVISIONS CARRY A CONNOTATION OF RESPONSIBILITY RATHER THAN RESPONSIVENESS IN THAT THEY STATE THAT 'PRIORITY FOR NEGOTIATION WILL BE BASED UPON THE LABOR SURPLUS CLASS OF THE DESIGNATED PRODUCTION AREAS AS OF THE TIME OF THE PROPOSED AWARD.' HOWEVER, WE DO NOT REGARD THE QUOTED LANGUAGE AS INDICATIVE OF RESPONSIBILITY ON THE BASIS THAT EVIDENCE OF SURPLUS LABOR AREA CLASS MAY BE FURNISHED AFTER BID OPENING BUT PRIOR TO AWARD. IN THE CONTEXT OF THE ENTIRE PARAGRAPH, WHICH IS ENTITLED 'IDENTIFICATION OF AREAS OF PERFORMANCE,' THE QUOTED LANGUAGE MUST BE READ IN THE LIGHT OF THE PRECEDING SENTENCE: 'IF THE DEPARTMENT OF LABOR CLASSIFICATION OF ANY SUCH AREA (THE GEOGRAPHIC AREA IDENTIFIED IN THE BID) CHANGES AFTER THE BIDDER HAS SUBMITTED HIS BID, THE BIDDER MAY CHANGE THE AREAS IN WHICH HE PROPOSES TO PERFORM, PROVIDED, THAT HE SO NOTIFIES THE CONTRACTING OFFICER BEFORE AWARD OF THE SET-ASIDE PORTION.'

"HENCE, UNDER THE LABOR SURPLUS AREA PROVISIONS, A BIDDER MAY CHANGE HIS AREA OF PERFORMANCE ORIGINALLY CERTIFIED IF THE CLASSIFICATION OF THAT AREA IS CHANGED BY THE DEPARTMENT OF LABOR BUT THE CHANGE MUST NOT RESULT IN AN ADVANCEMENT IN PRIORITY PREFERENCE. SEE B-156374, SEPTEMBER 3, 1965. IN OTHER WORDS, AN AUTHORIZED CHANGE IS PERMITTED PROVIDED THE BIDDER WILL PERFORM IN THE SAME CATEGORY STATED IN HIS BID, BUT NOT IF THE CHANGE WOULD IMPROVE HIS POSITION IN ORDER OF PRIORITY. WE THEREFORE REGARD THESE PROVISIONS AS UNRELATED TO RESPONSIBILITY SINCE THE BIDDER IS PRECLUDED FROM TAKING UNILATERAL ACTION AFFECTING HIS PREVIOUSLY STATED AREA OF PERFORMANCE AND ANY CHANGE, IF AUTHORIZED, IS ONE NOT AFFECTING HIS RELATIVE POSITION OF PRIORITY VIS-A-VIS OTHER BIDDERS." IN VIEW THEREOF, WE CAN NOT CONCUR WITH YOUR CONTENTION THAT PROVISION 4 (C) ALLOWS YOU TO CHANGE YOUR PRIORITY FROM GROUP 3 TO GROUP 1.