B-176375, AUG 28, 1972

B-176375, AUG 28, 1972

BID PROTEST - MANUFACTURER OR REGULAR DEALER V. CAPACITY OR CREDIT DENIAL OF PROTEST BY ALLIED MATERIALS AND EQUIPMENT CO., INC., AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER AN IFB ISSUED BY THE U.S. ARMY WEAPONS COMMAND, ROCK ISLAND, ILL. THE RESPONSIBILITY OF DETERMINING WHETHER OR NOT A BIDDER IS QUALIFIED AS A REGULAR DEALER OR MANUFACTURER RESTS IN THE FIRST INSTANCE WITH THE CONTRACTING AGENCY. UNDER THE WALSH-HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35, THESE DETERMINATIONS ARE SUBJECT TO REVIEW BY THE SECRETARY OF LABOR, NOT GAO. SEE B-161933, OCTOBER 29, 1967. FURTHER, IT CANNOT BE CONCLUDED THAT THE CONTRACTING OFFICER'S DETERMINATION CIRCUMVENTS THE SBA'S CERTIFICATE OF COMPETENCY PROCEDURES SINCE THE TWO PROCEDURES REGULATE DIFFERENT AREAS OF PROCUREMENT POLICY.

TO ALLIED MATERIALS AND EQUIPMENT CO., INC.:

REFERENCE IS MADE TO YOUR TELEFAX MESSAGE DATED JUNE 28, 1972, AND SUPPLEMENTAL CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER IFB DAAF03-72-B-1497, ISSUED BY THE U.S. ARMY WEAPONS COMMAND, ROCK ISLAND, ILLINOIS.

THE ABOVE INVITATION WAS FOR THE PROCUREMENT OF 240 RINGS, FSN 1005 399- 6805, FOR USE IN CONNECTION WITH MT. M.G. AA, CAL. 50, M48 SERIES TANK. BIDS WERE OPENED, AS SCHEDULED, ON MAY 22, 1972. YOUR FIRM SUBMITTED THE LOW BID. CONSEQUENTLY, THE CONTRACTING OFFICER REQUESTED THAT A PREAWARD SURVEY OF YOUR FIRM BE CONDUCTED. PREAWARD SURVEY (PAS) NO. S2604A26004PC DATED JUNE 14, 1972, WAS CONDUCTED BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES OFFICE (DCASO), KANSAS CITY, AND COMPLETE AWARD TO YOUR FIRM WAS RECOMMENDED. HOWEVER, ON THE REVERSE SIDE OF PAGE 1 OF DD FORM 1524-1, THE PRODUCTION PORTION OF THE PAS, THE FOLLOWING STATEMENT WAS MADE:

"SECTION II-3

"BIDDER CONSIDERS HIMSELF TO BE A REGULAR DEALER IN THE FIELD OF AUTOMOTIVE AND VEHICLE PARTS AND CLOSELY RELATED ITEMS. BIDDER DOES NOT PERFORM ANY MANUFACTURING IN HIS FACILITY. BIDDER WILL SUBCONTRACT ALL MANUFACTURING, MACHINERY AND FABRICATION TO OTHER FIRMS.

"IT IS THE OPINION OF THE SURVEYOR THAT THE BIDDER DOES NOT AND CANNOT MEET THE REQUIREMENTS OF THE WALSH-HEALEY PUBLIC CONTRACT ACT, UNDER ASPR 12-603, AS A MANUFACTURER OR REGULAR DEALER FOR THIS BID ITEM."

IT WAS RECOMMENDED THAT THE CONTRACTING OFFICER REQUEST A LEGAL OPINION, IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATIONS (ASPR) 12-603, IN REGARD TO THIS MATTER BEFORE MAKING THE AWARD. AS A RESULT THE CONTRACTING OFFICER DETERMINED, IN ACCORDANCE WITH ASPR 12 604(A)(1), THAT YOUR FIRM DID NOT, AS REQUIRED BY THE WALSH-HEALEY ACT AND ASPR 12-601, QUALIFY EITHER AS A MANUFACTURER OF, OR A REGULAR DEALER IN, THE SUPPLIES OFFERED. YOU WERE ADVISED OF THIS DETERMINATION BY LETTER OF JUNE 21, 1972.

IN A LETTER DATED JUNE 27, 1972, TO THE PROCURING ACTIVITY, YOU STATED THAT DUE TO A TYPOGRAPHICAL ERROR THE BLOCK DESIGNATING YOUR FIRM A REGULAR DEALER HAD BEEN CHECKED AND THAT ONLY THE "MANUFACTURER" BLOCK SHOULD HAVE BEEN CHECKED. YOU STATED THAT YOUR FIRM WOULD PERFORM A LARGE ENOUGH PORTION OF THE WORK INVOLVED TO BE CONSIDERED A MANUFACTURER OF THE ITEMS OFFERED. YOU ALSO PRESENTED INFORMATION CONCERNING YOUR FIRM'S MANUFACTURING SPACE, PRODUCTION EQUIPMENT AND INSPECTION EQUIPMENT. THIS INFORMATION WAS FORWARDED TO THE PAS TEAM WHO ACKNOWLEDGED THAT YOUR FIRM DID HAVE 20,000 SQUARE FEET OF SPACE WHICH COULD BE USED FOR MANUFACTURING PURPOSES AND CERTAIN MACHINES AND INSPECTION EQUIPMENT. HOWEVER, IT WAS POINTED OUT THAT THE EQUIPMENT COULD NOT BE USED TO MANUFACTURE THE BID ITEM AND THAT WHILE YOUR FIRM DID HAVE CERTAIN INSPECTION EQUIPMENT, A SPECIAL GAUGE FOR THE BID ITEM WOULD HAVE TO BE PURCHASED OR MADE.

AFTER CONSIDERATION OF THE ADDITIONAL INFORMATION SUPPLIED BY YOU, THE CONTRACTING OFFICER WAS STILL OF THE OPINION THAT THERE WAS NO INDICATION THAT YOUR FIRM "*** PRODUCES ON THE PREMISES THE MATERIALS, SUPPLIES, ARTICLES OR EQUIPMENT REQUIRED UNDER THE CONTRACT AND OF THE GENERAL CHARACTER DESCRIBED IN THE SPECIFICATIONS ***", OR THAT THERE WAS ANY INDICATION THAT YOUR FIRM WAS "*** NEWLY ENTERING INTO SUCH MANUFACTURING ACTIVITY ***." THE PROCURING ACTIVITY SUBSEQUENTLY REQUESTED THE DEPARTMENT OF LABOR TO REVIEW THE CONTRACTING OFFICER'S INITIAL DETERMINATION UNDER THE ACT.

YOU ALSO STATED IN YOUR LETTER OF JUNE 27 THAT THE DETERMINATION THAT YOU DID NOT QUALIFY AS A MANUFACTURER OR REGULAR DEALER CIRCUMVENTED THE AUTHORITY OF THE SMALL BUSINESS ADMINISTRATION (SBA) WITH REGARD TO ITS CERTIFICATE OF CAPACITY (COMPETENCY) (COC) PROCEDURES, SINCE THE DETERMINATION WAS BASED ON YOUR FIRM'S CAPACITY TO MANUFACTURE THE BID ITEM. YOU REQUESTED THAT THE MATTER BE SUBMITTED TO SBA FOR FINAL DETERMINATION REGARDING YOUR FIRM'S CAPACITY.

IT IS WELL ESTABLISHED THAT THE RESPONSIBILITY OF DETERMINING WHETHER OR NOT A BIDDER IS QUALIFIED AS A REGULAR DEALER OR MANUFACTURER RESTS IN THE FIRST INSTANCE WITH THE CONTRACTING AGENCY.

SEE B-157352, SEPTEMBER 30, 1965. IN ACCORDANCE WITH THE WALSH HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35, THESE DETERMINATIONS BY THE CONTRACTING AGENCIES ARE SUBJECT TO REVIEW BY THE SECRETARY OF LABOR AND NOT BY THE GENERAL ACCOUNTING OFFICE. SEE B-161933, OCTOBER 29, 1967; B- 166905, JULY 24, 1969.

IN REGARD TO YOUR CONTENTION THAT THE DETERMINATION THAT YOU DID NOT QUALIFY AS A MANUFACTURER OR REGULAR DEALER CIRCUMVENTED THE AUTHORITY OF SBA UNDER ITS COC PROCEDURES, OUR OFFICE, IN 37 COMP. GEN. 676, 678 (1958), DEALT WITH THIS QUESTION AND STATED:

"SINCE BY ITS TERMS SECTION 213 OF THE SMALL BUSINESS ACT, 15 U.S.C. 642, MAKES CONCLUSIVE THE ADMINISTRATION'S CERTIFICATION OF A SMALL BUSINESS CONCERN AS COMPETENT WITH RESPECT TO 'CAPACITY AND CREDIT,' WE THINK SUCH PROVISION MUST BE CONSTRUED AS CONTROLLING ONLY INSOFAR AS IT CONFLICTS WITH A DETERMINATION BY A PROCUREMENT OFFICER AS TO THE 'CAPACITY OR CREDIT' OF A BIDDER. HOWEVER, IF A BIDDER IS FOUND NOT TO BE QUALIFIED FOR OTHER REASONS, AS FOR EXAMPLE LACK OF INTEGRITY OR A CONSISTENT RECORD OF DEFAULT UNDER PRIOR CONTRACTS; OR IF HE IS FOUND NOT TO BE A 'MANUFACTURER' OR 'REGULAR DEALER,' *** IN OUR VIEW THE CERTIFICATE OF COMPETENCY, BEING LIMITED BY STATUTE TO 'CAPACITY AND CREDIT,' WOULD NOT BE DETERMINATIVE OF THE AWARD TO BE MADE."

IN A LATER DECISION THIS OFFICE STATED THAT A COC IS CONCLUSIVE AS TO WHETHER A BIDDER CAN PERFORM. SEE 43 COMP. GEN. 298. IN THE PRESENT CASE THERE DOES NOT APPEAR TO BE ANY QUESTION CONCERNING THE ABILITY OF YOUR FIRM AND ITS SUBCONTRACTORS TO PERFORM THE CONTRACT. THIS IS EVIDENCED BY THE FACT THAT THE PAS TEAM DETERMINED THAT YOUR FIRM HAD THE CAPABILITY TO PERFORM THIS CONTRACT. FOR THAT MATTER, WE ARE ADVISED THAT THE CONTRACTING OFFICER IS PREPARED TO MAKE AN AWARD TO YOUR FIRM SHOULD THE DEPARTMENT OF LABOR FIND THAT YOU ARE AN ELIGIBLE MANUFACTURER.

WE ARE UNABLE TO CONCLUDE THAT SBA'S AUTHORITY UNDER ITS COC PROCEDURES WAS IN ANY WAY CIRCUMVENTED BY THE CONTRACTING OFFICER'S DETERMINATION THAT YOU ARE NOT AN ELIGIBLE MANUFACTURER IN ACCORDANCE WITH THE WALSH- HEALEY ACT AND, SINCE SUCH DETERMINATIONS ARE NOT SUBJECT TO REVIEW BY THIS OFFICE, NO FURTHER ACTION WILL BE TAKEN BY THIS OFFICE IN CONNECTION WITH THIS MATTER.