B-173808, OCT 26, 1971

B-173808, OCT 26, 1971

BID PROTEST - WALSH-HEALEY ACT - GAO JURISDICTION DECISION CONCERNING PROTEST BY LOW BIDDER AGAINST THE REJECTION OF ITS BID AND AWARD OF A CONTRACT TO SPACE CORPORATION UNDER AN IFB ISSUED BY THE SAN ANTONIO AIR MATERIEL AREA, KELLY AFB, TEXAS, FOR TEST CELL INSTRUMENTATION AND ASSOCIATED EQUIPMENT. FOLLOWING A PREAWARD SURVEY, THE CONTRACTING OFFICER DETERMINED THAT PROTESTANT DID NOT QUALIFY AS A MANUFACTURER OR REGULAR DEALER OF THE SUPPLIES BEING PROCURED WITHIN THE MEANING AND INTENT OF THE WALSH HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35-45. THIS DETERMINATION WAS AFFIRMED BY THE DEPARTMENT OF LABOR. THE RESPONSIBILITY FOR APPLYING THE CRITERIA OF THE WALSH-HEALEY ACT IS VESTED IN THE CONTRACTING OFFICER AND THE DEPARTMENT OF LABOR, AND GAO IS NOT AUTHORIZED TO REVIEW SUCH DETERMINATIONS. THEREFORE, NO ACTION MAY BE TAKEN IN CONNECTION WITH THIS PROTEST.

TO JANKE AND COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 5, 1971, WITH ENCLOSURES, PROTESTING THE REJECTION OF YOUR BID UNDER INVITATION FOR BIDS (IFB) NO. F41608-71-B-0463, ISSUED BY THE SAN ANTONIO AIR MATERIEL AREA, KELLY AIR FORCE BASE, TEXAS.

THE SUBJECT INVITATION WAS ISSUED ON JANUARY 22, 1971, FOR THE PROCUREMENT OF TEST CELL INSTRUMENTATION AND ASSOCIATED EQUIPMENT. BIDS WERE OPENED ON FEBRUARY 23, 1971, AND IT WAS DETERMINED THAT YOUR FIRM HAD SUBMITTED THE LOWEST BID.

PURSUANT TO THE WALSH-HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35-45, BIDDERS WERE REQUIRED TO INDICATE IN THEIR BIDS THAT THEY WERE EITHER THE MANUFACTURER OF, OR A REGULAR DEALER IN THE SUPPLIES OFFERED. YOU REPRESENTED IN YOUR BID THAT YOU WERE A REGULAR DEALER.

THE PROCURING ACTIVITY REQUESTED THE DEFENSE CONTRACT ADMINISTRATIVE SERVICES DISTRICT (DCASD) IN SPRINGFIELD, NEW JERSEY, TO CONDUCT A PREAWARD SURVEY OF YOUR FIRM. BASED UPON THE PREAWARD SURVEY, THE CONTRACTING OFFICER DETERMINED THAT YOUR FIRM DID NOT QUALIFY AS A MANUFACTURER OR REGULAR DEALER OF THE SUPPLIES BEING PROCURED WITHIN THE MEANING AND INTENT OF THE WALSH-HEALEY ACT AND PARAGRAPHS 12-603.1 AND 12- 603.2 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). THE CONTRACTING OFFICER ADVISED YOU OF THE DETERMINATION IN A TELEGRAM DATED MAY 3, 1971. FURTHER, IN ACCORDANCE WITH ASPR 12-604(A)(2)(II), YOU WERE AFFORDED THE OPPORTUNITY TO SUBMIT EVIDENCE TO THE CONTRACTING OFFICER CONCERNING YOUR ELIGIBILITY. THE CONTRACTING OFFICER CONSIDERED THE ADDITIONAL INFORMATION YOU SUBMITTED, BUT REMAINED OF THE VIEW THAT YOU WERE INELIGIBLE FOR AWARD.

IN A LETTER DATED JUNE 9, 1971, YOU WERE ADVISED THAT THE MATTER OF YOUR ELIGIBILITY UNDER THE WALSH-HEALEY ACT WAS BEING REFERRED TO THE ADMINISTRATOR OF THE WAGE AND HOUR AND PUBLIC CONTRACTS DIVISION OF THE DEPARTMENT OF LABOR FOR A FINAL DETERMINATION. ON JUNE 21, 1971, THE DEPARTMENT OF LABOR DETERMINED THAT YOUR FIRM DID NOT QUALIFY AS EITHER A MANUFACTURER OR REGULAR DEALER WITHIN THE MEANING OF THE PUBLIC CONTRACTS ACT AND REGULATIONS ISSUED THEREUNDER (41 CFR 50-201.101).

ON JULY 27, 1971, AN AWARD WAS MADE TO SPACE CORPORATION AS THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER. IN YOUR LETTER OF AUGUST 5, 1971, TO OUR OFFICE PROTESTING THE REJECTION OF YOUR BID, YOU STATED THAT YOU DID NOT AGREE WITH THE DISQUALIFICATION OF YOUR FIRM.

FOR REASONS SET OUT BELOW, WE MUST CONCLUDE THAT THE REJECTION OF YOUR BID IS NOT SUBJECT TO QUESTION BY OUR OFFICE. THE WALSH-HEALEY ACT, PROVIDES THAT, WITH CERTAIN EXCEPTIONS NOT HERE MATERIAL, EVERY CONTRACT EXCEEDING $10,000 IN AMOUNT ENTERED INTO BY ANY GOVERNMENT AGENCY FOR THE PROCUREMENT OF SUPPLIES SHALL CONTAIN A STIPULATION THAT THE CONTRACTOR IS A MANUFACTURER OF OR REGULAR DEALER IN SUCH SUPPLIES. THE ACT, AS AMENDED, PROVIDES AT 41 U.S.C. 38 THAT THE SECRETARY OF LABOR SHALL HAVE AUTHORITY TO ADMINISTER THE PROVISIONS OF THAT ACT AND TO MAKE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO THAT END. THE "WALSH-HEALEY PUBLIC CONTRACTS ACT RULINGS AND INTERPRETATIONS NO. 3," PUBLISHED BY THE DEPARTMENT OF LABOR, STATES AT SECTION 29:

"(A) THE RESPONSIBILITY OF DETERMINING WHETHER OR NOT A BIDDER IS QUALIFIED AS A MANUFACTURER OR AS A REGULAR DEALER UNDER THE PUBLIC CONTRACTS ACT RESTS IN THE FIRST INSTANCE WITH THE CONTRACTING AGENCY. HOWEVER, ANY DECISION WHICH THE CONTRACTING OFFICER MIGHT MAKE IS SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR WHICH IS CHARGED WITH THE ADMINISTRATION OF THE ACT. THE DEPARTMENT OF LABOR MAY DETERMINE THE QUALIFICATIONS OF A BIDDER IN THE FIRST INSTANCE IN THE ABSENCE OF ANY DECISION BY THE CONTRACTING OFFICER."

THUS, RESPONSIBILITY FOR APPLYING THE CRITERIA OF THE WALSH-HEALEY ACT IS VESTED IN THE CONTRACTING OFFICER AND THE DEPARTMENT OF LABOR. OUR OFFICE IS NOT AUTHORIZED TO REVIEW DETERMINATIONS AS TO WHETHER PARTICULAR FIRMS ARE REGULAR DEALERS OR MANUFACTURERS WITHIN THE PURVIEW OF THE WALSH- HEALEY ACT AND WE HAVE DENIED JURISDICTION IN THIS AREA BECAUSE SUCH DETERMINATIONS REST WITH THE CONTRACTING OFFICER SUBJECT TO FINAL REVIEW BY THE DEPARTMENT OF LABOR. B-173298, AUGUST 3, 1971; B-171426, APRIL 27, 1971; B-166905, JULY 24, 1969.

IN VIEW OF THE FOREGOING, NO FURTHER ACTION WILL BE TAKEN BY OUR OFFICE IN CONNECTION WITH YOUR PROTEST.