B-174027, FEB 8, 1972

B-174027, FEB 8, 1972

BID PROTEST - SMALL BUSINESS SET-ASIDE - SBA DETERMINATION DECISION DENYING PROTEST OF OCEAN ELECTRIC CORPORATION AGAINST AWARD OF A TOTAL SMALL BUSINESS SET-ASIDE TO STARR ELECTRIC COMPANY, INC., UNDER AN IFB ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND, FOR THE CONSTRUCTION OF ELECTRICAL POWER IMPROVEMENTS AT THE NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VA. THE SMALL BUSINESS ADMINISTRATION (SBA) FOUND NO EVIDENCE OF AN EXPRESS OR IMPLIED VENTURE BETWEEN STARR AND THE BRYANT ELECTRIC COMPANY, A LARGE BUSINESS CONCERN. THE PROTEST MUST BE DENIED SINCE SBA DECISIONS ARE CONCLUSIVE UNDER 15 U.S.C., SEC. 637(B)(6).

TO OCEAN ELECTRIC CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 2, 1971, WITH ENCLOSURE, PROTESTING AGAINST THE AWARD OF CONTRACT NO. N62470-71-B 0817 TO THE STARR ELECTRIC COMPANY, INC., GREENSBORO, NORTH CAROLINA, BY THE ATLANTIC DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, NORFOLK, VIRGINIA, PURSUANT TO INVITATION FOR BIDS NO. 05-71-0817.

THE SUBJECT INVITATION, A TOTAL SMALL BUSINESS SET-ASIDE, WAS ISSUED ON JULY 19, 1971, FOR THE CONSTRUCTION OF ELECTRICAL POWER IMPROVEMENTS, 3RD INCREMENT, NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA. BIDS WERE OPENED ON AUGUST 31, 1971, WITH THE RESULT THAT THE STARR ELECTRIC COMPANY SUBMITTED THE LOW BID.

BY LETTER DATED SEPTEMBER 2, 1971, TO THE CONTRACTING OFFICER, YOU PROTESTED AGAINST AN AWARD TO STARR. YOU CONTENDED THAT ALTHOUGH STARR IS A SMALL BUSINESS CONCERN, THERE WAS REASON TO BELIEVE THAT THE BRYANT ELECTRIC COMPANY, A LARGE BUSINESS CONCERN, PREPARED AND DELIVERED THE BID IN THE NAME OF STARR AND THAT BRYANT WILL PERFORM THE WORK IF THE CONTRACT IS AWARDED TO STARR. YOU MAINTAINED THAT STARR AND BRYANT SHOULD BE REGARDED AS A JOINT VENTURE FOR SIZE DETERMINATION PURPOSES. ON SEPTEMBER 9, 1971, THE PROCUREMENT OFFICE REFERRED THE CONTENTIONS TO THE SMALL BUSINESS ADMINISTRATION (SBA) REGIONAL OFFICE IN ATLANTA, GEORGIA, FOR A DETERMINATION OF SIZE STATUS. BY LETTER DATED SEPTEMBER 29, 1971, THE SBA DISTRICT DIRECTOR, CHARLOTTE, NORTH CAROLINA, ADVISED THE CONTRACTING OFFICER THAT THERE WAS NO EVIDENCE OF AN ASSOCIATION BETWEEN STARR AND BRYANT FOR PURPOSES OF THE PROCUREMENT OTHER THAN AS A CONTRACTOR AND SUBCONTRACTOR AND THAT STARR HAD BEEN DETERMINED TO BE A SMALL BUSINESS FOR PURPOSES OF THE PROCUREMENT. THEREAFTER, ON OCTOBER 1, 1971, YOU ADVISED THE PROCURING ACTIVITY THAT YOUR FIRM HAD APPEALED THE DETERMINATION TO THE SBA SIZE APPEALS BOARD.

IT IS REPORTED THAT BECAUSE THE WAGE RATES INCORPORATED INTO THE INVITATION FOR BIDS WERE DUE TO EXPIRE ON OCTOBER 28, 1971, THE CONTRACTING OFFICER CONTACTED THE SBA SIZE APPEALS BOARD ON OCTOBER 27, 1971, FOR THE PURPOSE OF ASCERTAINING WHETHER A DECISION HAD BEEN RENDERED BY THE BOARD ON THE APPEAL. THE CONTRACTING OFFICER WAS ADVISED THAT NO DECISION HAD BEEN RENDERED AND THAT IT WAS UNLIKELY THAT A DECISION WOULD BE RENDERED BY THE CLOSE OF BUSINESS ON OCTOBER 28, 1971. ON OCTOBER 28, 1971, CONTRACT NO. N62470-71-B-0817 WAS AWARDED TO STARR. ON NOVEMBER 3, 1971, THE SBA SIZE APPEALS BOARD DENIED THE APPEAL ON THE BASIS THAT THERE WAS NO EVIDENCE OF AN EXPRESS OR IMPLIED JOINT VENTURE AS DEFINED IN SUBSECTION 121.3-14(C)(7)(I) OF THE SMALL BUSINESS SIZE STANDARDS REGULATIONS AND THAT STARR WAS A SMALL BUSINESS CONCERN FOR PURPOSES OF THE PROCUREMENT. PURSUANT TO SECTIONS 3 AND 8(B)(6) OF THE SMALL BUSINESS ACT, 15 U.S.C. 632 AND 637(B)(6), RESPECTIVELY, SBA IS AUTHORIZED TO PRESCRIBE SIZE STANDARDS FOR INDUSTRY AND DETERMINE WHICH ENTERPRISES QUALIFY UNDER THOSE STANDARDS AS SMALL BUSINESS CONCERNS. SECTION 637(B)(6) FURTHER STATES THAT "OFFICES OF THE GOVERNMENT HAVING PROCUREMENT OR LENDING POWERS *** SHALL ACCEPT AS CONCLUSIVE THE ADMINISTRATION'S DETERMINATION AS TO WHICH ENTERPRISES ARE TO BE DESIGNATED 'SMALL-BUSINESS CONCERNS,' AS AUTHORIZED AND DIRECTED UNDER THIS PARAGRAPH."

SINCE THE DECISION OF THE SBA IS "CONCLUSIVE" BY STATUTE, THE PROTEST IS DENIED. 46 COMP. GEN. 898, 900 (1967) AND 44 ID. 271, 273 (1964).