B-170285, NOV. 10, 1970

B-170285, NOV. 10, 1970

BID PROTEST - LABOR SURPLUS SET-ASIDE DENIAL OF PROTEST AGAINST MANNER IN WHICH PROCUREMENT OF PAPER WAS HANDLED BY DEFENSE PERSONNEL SUPPORT CENTER AND FAILURE OF PROCURING AGENCY ALTHOUGH FAILURE TO SET-ASIDE A SMALL BUSINESS PROCUREMENT FOR LABOR SURPLUS CONCERNS WAS INADVERTENT THE CONTRACTING OFFICER'S FAILURE TO AMEND AN INVITATION SOME 8 DAYS BEFORE OPENING IS NOT INCONSISTENT WITH PROCUREMENT OBJECTIONS OR IN CONTRAVENTION OF DISCRETION. PROTESTANT'S LETTER WHICH DOES NOT PURPORT TO CONFIRM A TELEPHONE CONVERSATION THAT CONTRACTING OFFICER THOUGHT WAS MERELY AN INQUIRY RATHER THAN A PROTEST DOES NOT PROVIDE BASIS FOR CONCLUDING THAT THE CONTRACTING OFFICER WAS REMISS IN NOT CONSIDERING THE CALL A PROTEST AND HOLDING IN ABEYANCE THE AWARD, PARTICULARLY SINCE ITEM WAS TO BE USED AS GOVERNMENT FURNISHED SUPPLIES FOR DELIVERY TO ASSEMBLY CONTRACTOR'S PLANTS FOR INCLUSION IN A RATION PARCEL. SINCE PROTESTANT WAS NOT PREJUDICED BY AWARD THE PROTEST MUST BE DENIED.

TO HELGESEN, PETERSON, ENGBERG & SPECTOR:

FURTHER REFERENCE IS MADE TO YOUR CORRESPONDENCE WITH THE DEFENSE SUPPLY AGENCY (DSA) AND OUR OFFICE PROTESTING ON BEHALF OF WEXLER PAPER PRODUCTS (WEXLER) AGAINST THE MANNER IN WHICH THE PROCUREMENT WAS HANDLED UNDER IFB NO. DSA 13H-70-B-0490, ISSUED ON MAY 19, 1970, BY THE DEFENSE PERSONNEL SUPPORT CENTER (DPSC), PHILADELPHIA, PENNSYLVANIA.

THE SUBJECT SOLICITATION, A 100 PERCENT SET-ASIDE FOR SMALL BUSINESS, CALLED FOR BIDS ON 32,874,162 PACKETS OF TYPE II PAPER TOILET TISSUE FOR DELIVERY ON AN F.O.B. DESTINATION DELIVERY BASIS FOR THREE DESTINATIONS.

OF THE SIX SMALL BUSINESS FIRMS INVITED TO SUBMIT BIDS, STRAUBEL PAPER COMPANY (STRAUBEL) AND WEXLER RESPONDED. WHEN BIDS WERE OPENED ON JUNE 25, 1970, STRAUBEL WAS LOW ON ITEMS 0002 AND 0003 AND LOW FOR 10,900,000 PACKETS OF THE TOTAL NUMBER OF 19,803,652 PACKETS OF ITEM 0001, LEAVING WEXLER LOW ON THE REMAINING 8,903,652 PACKETS OF ITEM 0001, WHICH REPRESENTS APPROXIMATELY 28 PERCENT OF THE TOTAL REQUIREMENT. CONSEQUENTLY, AWARDS WERE MADE TO THOSE FIRMS ON JUNE 30, 1970.

YOUR PRINCIPAL CONTENTIONS ARE THAT THE INVITATION WAS WRONGFULLY ISSUED IN THAT IT FAILED TO PROVIDE A SET-ASIDE FOR LABOR SURPLUS AREA CONCERNS, AND THAT A FAST AWARD WAS MADE AFTER WEXLER HAD LODGED A PROTEST WITH THE CONTRACTING OFFICER PRIOR TO THE AWARDS.

IN SUPPORT OF YOUR FIRST CONTENTION, YOU ASSERT THAT IN EARLY JUNE 1970, WEXLER PROTESTED TO THE CONTRACTING OFFICER OVER HIS FAILURE TO ISSUE A LABOR SURPLUS SET-ASIDE, AND ON JUNE 16 WEXLER REQUESTED THE SPECIAL ASSISTANT FOR SMALL BUSINESS, DEFENSE CONTRACT ADMINISTRATIVE SERVICES, TWIN CITIES, MINNESOTA, TO NOTIFY THE CONTRACTING OFFICER OF WEXLER'S STATUS AS A CERTIFIED ELIGIBLE CONCERN UNDER PART 8 (PARAGRAPHS 1-800 - 1- 806.2) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). THE CONTRACTING OFFICER DENIES HAVING SPOKEN WITH ANY REPRESENTATIVE OF WEXLER UNTIL JUNE 26, 1970, ONE DAY AFTER BID OPENING. HE DOES INDICATE THAT HE SPOKE OVER THE TELEPHONE WITH THE SMALL BUSINESS REPRESENTATIVE ON JUNE 17, AND RELATED THE FOLLOWING REPORTED INFORMATION TO HIM.

"THE SOLICITATION WAS SET-ASIDE 100% FOR SMALL BUSINESS. THIS DETERMINATION HAD BEEN MADE ON 70 MAY 18, IN COORDINATION WITH THE DPSC SMALL BUSINESS SPECIALIST, AFTER A REVIEW OF AVAILABLE ABSTRACTS OF PRIOR PROCUREMENTS. THE REVIEW HAD NOTED THAT THE PREVIOUS SOLICITATION WAS A 50% SMALL BUSINESS SET-ASIDE WITH FOUR OFFERS RECEIVED FROM SMALL BUSINESSES AND ALL AWARDS TO SMALL BUSINESSES. BASED ON THIS, IT WAS DETERMINED TO FURTHER RESTRICT THIS CURRENT SOLICITATION TO 100% SMALL BUSINESS PARTICIPATION. AT THIS TIME, NO DATA WAS AVAILABLE THAT INDICATED A LABOR SURPLUS SET-ASIDE WAS APPROPRIATE. DETERMINATION NUMBER 70-475 WAS ASSIGNED BY THE SMALL BUSINESS SPECIALIST.

" *** IT WAS ALSO EXPLAINED THAT THIS PROCUREMENT WAS FOR COMPONENTS OF A MEAL COMBAT INDIVIDUAL RATION, IMMEDIATE AWARD OF WHICH IS ESSENTIAL TO MEET REQUIRED DELIVERY DATES. DELAY IN AWARD OF THIS ITEM COULD SERIOUSLY JEOPARDIZE RECEIPT OF THE ENTIRE MEAL RATION. IT WAS FELT THAT ANOTHER DETERMINATION TOWARDS LABOR SURPLUS, AT THIS TIME, WOULD REQUIRE ANOTHER AMENDMENT TO THE SOLICITATION AND EXTENSION OF THE OPENING DATE WITH CORRESPONDING EXTENSION OF CONTRACT DELIVERY REQUIREMENTS. IT WAS FELT THAT WE COULD NOT AFFORD THIS DELAY. STILL FURTHER, IT WAS INDICATED TO MR. SCHUMAKER THAT STRONG CONSIDERATION WOULD BE GIVEN TO THE ESTABLISHMENT OF A 50% LABOR SURPLUS SET-ASIDE ON THE NEXT INCREMENTAL PROCUREMENT WHICH IS ANTICIPATED IN LATE SUMMER OR EARLY FALL. MR. SCHUMAKER WAS REQUESTED TO FORWARD THIS INFORMATION TO WEXLER PAPER PRODUCTS (WHO HAD INITIATED THE REQUEST) AND IF THERE WERE FURTHER QUESTIONS RELATIVE TO THIS MATTER THAT EITHER HE OR THE CONTRACTOR SHOULD ADVISE ME. A RECOUNT OF THE ENTIRE CONVERSATION WAS GIVEN TO THE DPSC SMALL BUSINESS SPECIALIST WHO AGREED WITH THE MANNER IN WHICH THE PROBLEM HAD BEEN HANDLED."

CONCERNING THE TELEPHONE CONVERSATION BETWEEN THE CONTRACTING OFFICER AND WEXLER, IT IS REPORTED:

"ON JUNE 26, 1970, THE DAY AFTER THE BID OPENING, MR. WEXLER OF WEXLER PAPER PRODUCTS CALLED THE UNDERSIGNED AND WANTED TO KNOW WHY NO SET-ASIDE FOR LABOR SURPLUS WAS MADE ON THE IFB. THE INFORMATION PREVIOUSLY FURNISHED TO MR. SCHUMAKER WAS GIVEN TO MR. WEXLER. HE THEN INDICATED THAT HE INTENDED TO GET TOGETHER WITH HIS ATTORNEY AND WAS GOING TO FILE A PROTEST."

RELATIVE TO YOUR ALLEGATION THAT THE CHECK WHICH WAS MADE BY THE CONTRACTING OFFICER OF THE AREA TRENDS PUBLICATION FOR CERTIFIED ELIGIBLE CONCERNS WAS INSUFFICIENT, AND YOUR CONTENTION THAT THE CONTRACTING OFFICER FAILED TO CHECK AVAILABLE ABSTRACTS OF PRIOR PROCUREMENTS TO DETERMINE WHETHER ANY LABOR SURPLUS CONCERNS WERE LIKELY TO BE INVOLVED, THE SUPPLEMENTAL ADMINISTRATIVE REPORT TO OUR OFFICE STATES:

" *** IT IS TO BE FURTHER ADVISED THAT THE SMALL BUSINESS SPECIALIST MAINTAINS A CUMULATIVE LISTING BY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBERS WHICH ARE CITED IN OUR SOLICITATION. REFERENCE WAS MADE TO THIS CUMULATIVE LISTING IN CONSIDERING SET ASIDE DETERMINATIONS FOR THE PARTICULAR PROCUREMENT INVOLVED AND NOT ONLY TO THE MOST RECENT ISSUE OF THE AREA TRENDS PUBLICATION AS SUGGESTED BY THE CONTRACTOR.

"CHECKS OF AVAILABLE PAST ABSTRACTS AT THAT TIME DID NOT INDICATE THAT SUBJECT FIRM WAS A CERTIFIED ELIGIBLE CONCERN. HOWEVER, ONCE THE CONTRACTOR ALERTED US ON 26 JUNE 1970 OF HIS STATUS AS A C. E. C. COMPANY, FURTHER INVESTIGATION DID IN FACT REVEAL AN ABSTRACT INDICATING THAT THE COMPANY HAD PREVIOUSLY NOTIFIED US OF HIS C. E. C. STATUS IN SIC CODE #5096. IN THIS REGARD, IT IS TO BE NOTED THAT THE PROCUREMENT IN QUESTION WAS THE FIRST PROCUREMENT OF THIS ITEM MADE BY THE PHILADELPHIA SUBSISTENCE HEADQUARTERS - ALL PRIOR PROCUREMENTS HAVING BEEN MADE IN THE CHICAGO REGION. THE RECORDS TRANSFERRED FROM CHICAGO WERE UNFAMILIAR TO OUR PHILADELPHIA PEOPLE AND IN MANY CASES INCOMPLETE. THESE FACTORS DID CONTRIBUTE TO THE SITUATION INDICATED HEREIN.

"CONTRACTOR IS INCORRECT WHEN HE MAKES THE ALLEGATION THAT I FAILED TO CHECK AVAILABLE ABSTRACTS OF PRIOR PROCUREMENTS TO DETERMINE WHETHER ANY LABOR SURPLUS CONCERNS WERE LIKELY TO BE INVOLVED. THIS CHECK WAS MADE AND IT WAS DETERMINED THAT THIS INITIAL PROCUREMENT OF THIS ITEM BY PHILADELPHIA SUBSISTENCE WOULD BE MADE AS HAD PREVIOUS PROCUREMENTS, NAMELY, SET ASIDE FOR SMALL BUSINESS. ALL AVAILABLE RECORDS INDICATED ITEM HAD NEVER BEEN SET ASIDE FOR LABOR SURPLUS - ONLY SET-ASIDE FOR SMALL BUSINESS. *** ."

YOU ARE CORRECT IN YOUR OBSERVATION THAT IT IS THE POLICY OF THE GOVERNMENT TO AWARD A FAIR PROPORTION OF PURCHASES OF SUPPLIES AND SERVICES WITH SMALL BUSINESS AND LABOR SURPLUS AREA CONCERNS, AND WE HAVE CONSISTENTLY RECOGNIZED THE VALIDITY OF THIS ESTABLISHED POLICY. HOWEVER, THE DECISION AS TO WHETHER A CERTAIN PROCUREMENT SHOULD BE SET ASIDE IN WHOLE OR IN PART FOR SMALL BUSINESS OR LABOR SURPLUS AREA CONCERNS IS WITHIN THE PROVINCE OF THE ADMINISTRATIVE AGENCIES INVOLVED. WE DO NOT THINK THAT THE APPLICABLE PROVISIONS OF ASPR MAKE IT MANDATORY THAT THERE BE SET ASIDE FOR LABOR SURPLUS AREA CONCERNS ANY PARTICULAR PROCUREMENT. CF. 43 COMP. GEN. 657, 659 (1964); 41 ID. 351 (1961). WE HAVE ALSO STATED THAT EVEN WHERE WE MAY NOT AGREE WITH SUCH A DETERMINATION, " *** WE ARE RELUCTANT TO SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER IN THE ABSENCE OF A CLEAR SHOWING OF ABUSE OF THE DISCRETION PERMITTED HIM." 45 COMP. GEN. 228, 231 (1965). IT SHOULD ALSO BE NOTED THAT OUR JURISDICTION IN THE MATTER OF AWARD OF GOVERNMENT CONTRACTS IS PRINCIPALLY TO INSURE THAT SUCH CONTRACTS ARE AWARDED IN CONFORMANCE WITH APPLICABLE LAWS AND REGULATIONS. BEYOND THAT, WE HAVE NO AUTHORITY TO DIRECT THE PLACEMENT OF INDIVIDUAL GOVERNMENT CONTRACTS IN DESIGNATED AREAS OF THE COUNTRY OR WITH PARTICULAR TYPES OF BIDDERS, OR ON ANY OTHER BASIS THAN AS REQUIRED BY LAW.

IN VIEW OF THE REPORTED FACTS, IT APPEARS THAT THE FAILURE TO CONSIDER SETTING ASIDE A PORTION OF THIS PROCUREMENT FOR LABOR SURPLUS AREA CONCERNS WAS INADVERTENT, AND WE DO NOT REGARD THE CONTRACTING OFFICER'S REFUSAL TO AMEND THE INVITATION SOME EIGHT DAYS BEFORE ITS SCHEDULED OPENING TO BE INCONSISTENT WITH THE PROCUREMENT OBJECTIVES CONTEMPLATED IN THIS INSTANCE OR IN CONTRAVENTION OF THE DISCRETION AFFORDED HIM UNDER PART 8 OF ASPR.

IN REFERENCE TO YOUR COMPLAINT CONCERNING THE MANNER IN WHICH THE INSTANT PROTEST WAS HANDLED AND THE SPEED WITH WHICH THE AWARDS WERE MADE, YOU STATE THAT THE CONTRACTING OFFICER WAS ADVISED IN THE TELEPHONE CONVERSATION ON JUNE 26 THAT WEXLER WAS "HEREBY LODGING A PROTEST" AND THAT A WRITTEN CONFIRMATION WOULD FOLLOW. YOUR PROTEST LETTER OF JUNE 26 ON BEHALF OF WEXLER ARRIVED AT DPSC ON SATURDAY, JUNE 27, BUT APPARENTLY THROUGH MISROUTING IT DID NOT COME INTO POSSESSION OF THE CONTRACTING OFFICER UNTIL JULY 2, TWO DAYS AFTER THE AWARDS WERE MADE. YOU CONTEND THAT THE CONTRACTING OFFICER DID NOT FOLLOW THE PROCEDURES IN ASPR 2-407.8 RELATING TO ORAL PROTESTS MADE BEFORE AWARD, AND THAT HE DID NOT DELAY THE AWARD FOR FIVE WORKING DAYS AFTER BID OPENING AS SPECIFIED IN ASPR 1- 703(B)(5).

ALTHOUGH YOU SAY THAT THE CONTRACTING OFFICER WAS ADVISED IN THE TELEPHONE CALL OF JUNE 26 THAT WEXLER WAS THEREBY LODGING A PROTEST, THE ADMINISTRATIVE REPORT DOES NOT INDICATE THAT THE CONTRACTING OFFICER UNDERSTOOD THE CALL AS CONSTITUTING A PROTEST AS CONTEMPLATED BY ASPR 2- 407.8. INSTEAD, THE REPORT REFLECTS, AS SHOWN ABOVE, THAT HE CONSIDERED THE CALL MERELY AS AN INQUIRY AS TO WHY NO LABOR SURPLUS SET ASIDE WAS MADE, AND AS AN EXPRESSION OF WEXLER'S INTENTION TO CONSULT WITH ITS ATTORNEY AND THEREAFTER FILE A PROTEST. IN SUCH REGARD, THE PROTEST LETTER OF JUNE 26 REFERS TO THE TELEPHONE CONVERSATION AS FOLLOWS:

"ON JUNE 26, 1970, WEXLER SPOKE WITH MR. DEANGELIS, AND WAS INFORMED THAT THE INTENT OF THE GOVERNMENT AT THIS TIME IS TO MAKE NO SET-ASIDE FOR LABOR SURPLUS AREA CONCERNS IN THIS IFB, EVEN THOUGH WEXLER HAS BEEN CERTIFIED FOR OVER EIGHTEEN MONTHS AND HAS BEEN RECERTIFIED ON MAY 5, 1970, FOR THE FOLLOWING SIX MONTH PERIOD."

THE LETTER CONTINUES:

"AS A RESULT OF THE ABOVE CONVERSATION WE ARE MAKING THIS PROTEST AT THIS TIME."

SINCE THE LETTER CLEARLY SHOWS THAT IT CONSTITUTES THE INTENDED PROTEST, AND DOES NOT PURPORT TO CONFIRM THE JUNE 26 CONVERSATION AS AN ORAL PROTEST, WE CANNOT CONCLUDE ON THE BASIS OF THE PRESENT RECORD THAT THE CONTRACTING OFFICER WAS REMISS IN NOT APPLYING THE PROTEST PROCEDURES IN ASPR 2-407.8 TO YOUR TELEPHONE CALL.

IN ANY EVENT, EVEN IF YOUR PROTEST HAD BEEN RECEIVED BY THE CONTRACTING OFFICER PRIOR TO THE AWARD, THE CIRCUMSTANCES DICTATED THAT THE AWARD BE MADE PROMPTLY AND THE PROCEDURES SET OUT IN ASPR 2-407.8 PROVIDE FOR THE MAKING OF AWARD IN SUCH A SITUATION PRIOR TO RESOLUTION OF PROTESTS MADE BEFORE THE AWARD. THE ITEMS INVOLVED IN THIS PROCUREMENT ARE USED AS GOVERNMENT FURNISHED SUPPLIES TO AN ASSEMBLY CONTRACTOR WHO PACKAGES THE COMPONENTS INTO THE FINAL RATION PARCEL. ALL COMPONENTS ARE SCHEDULED TO ARRIVE AT THE SAME TIME AT THE ASSEMBLERS' PLANTS. IN ADDITION, IT IS REPORTED THAT ANY DELAY IN DELIVERY OF A COMPONENT WOULD HAVE SUBJECTED THE GOVERNMENT TO CLAIMS BY THE THREE ASSEMBLY CONTRACTORS, TO WHOM SAID SUPPLIES WERE TO BE DELIVERED, FOR FAILURE TO CONFORM TO THE AGREED GOVERNMENT FURNISHED PROPERTY INPUT SCHEDULE OF THEIR CONTRACTS.

SINCE THE INSTANT PROCUREMENT WAS A TOTAL SMALL BUSINESS SET-ASIDE, THERE WAS A TECHNICAL VIOLATION OF ASPR 1-703(B)(5) RELATIVE TO DELAYING AWARDS FOR FIVE WORKING DAYS AFTER BID OPENING IN SUCH PROCUREMENTS, AND WE ARE BRINGING THIS MATTER TO THE ATTENTION OF THE PROCURING ACTIVITY. HOWEVER, THAT PROVISION IS FOR THE PURPOSE OF AFFORDING BIDDERS AN OPPORTUNITY TO QUESTION THE SMALL BUSINESS STATUS OF THE FIRM WHICH APPEARS TO BE IN LINE FOR THE AWARD. SINCE THE SMALL BUSINESS STATUS OF STRAUBEL IS NOT AN ISSUE, AND BECAUSE OF THE NEED FOR A PROMPT AWARD AS PREVIOUSLY DISCUSSED, WE DO NOT THINK THAT YOUR FIRM WAS MATERIALLY PREJUDICED BY THE AWARD BEING MADE WITHIN FIVE CALENDAR DAYS, NOR DO WE THINK THAT SUCH A TECHNICAL VIOLATION OF THE PERTINENT ASPR PROVISION AFFECTED THE LEGALITY OF THE CONTRACTS AWARDED TO YOUR FIRM AND STRAUBEL. SEE B-169939, AUGUST 18, 1970.

IN VIEW OF THE FOREGOING, YOUR PROTEST MUST BE DENIED.