B-181474, NOV 21, 1974

B-181474, NOV 21, 1974

LOW BIDDER PROTESTING DETERMINATION OF ARMY AND DEPARTMENT OF LABOR THAT IT DOES NOT QUALIFY AS MANUFACTURER UNDER WALSH-HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35, IS ADVISED THAT SUCH DETERMINATION MAY NOT BE DISTURBED BY GAO BECAUSE RESPONSIBILITY FOR DETERMINING WHETHER BIDDER IS QUALIFIED AS REGULAR DEALER OR MANUFACTURER RESTS IN FIRST INSTANCE WITH CONTRACTING AGENCY AND IN ACCORDANCE WITH ACT SUCH DETERMINATION IS SUBJECT TO REVIEW BY SECRETARY OF LABOR AND NOT BY GAO. ALSO, ACT PROVIDES FOR JUDICIAL REVIEW OF LABOR DEPARTMENT DETERMINATION.

WELMETCO, LTD.:

WELMETCO, LTD. (WELMETCO), PROTESTS THE DETERMINATION BY THE UNITED STATES ARMY ARMAMENT COMMAND, ROCK ISLAND, ILLINOIS, PURSUANT TO INVITATION FOR BIDS (IFB) DAAA09-74-B-0073, THAT IT IS INELIGIBLE FOR AWARD OF ALTERNATE A BECAUSE IT DOES NOT QUALIFY AS A MANUFACTURER WITHIN THE MEANING OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT (41 U.S.C. 35- 45(1970)), AS IMPLEMENTED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 12-603.1. THE CONTRACTING OFFICER'S DETERMINATION ADVERSE TO WELMETCO WAS REFERRED TO THE DEPARTMENT OF LABOR FOR REVIEW. ON OCTOBER 23, 1974, THE DEPARTMENT HELD THAT:

"WE *** FIND NO REASON TO QUESTION THE INITIAL DETERMINATION *** THAT WELMETCO, LTD. IS NOT ELIGIBLE AS A MANUFACTURER WITHIN THE MEANING OF THE PUBLIC CONTRACTS ACT AND ASPR 12-603.1 IN THAT THAT BIDDER HAS NOT MADE A SHOWING THAT IT HAS MADE ALL NECESSARY PRIOR ARRANGEMENTS AND DEFINITE COMMITMENTS FOR SPACE, EQUIPMENT, AND PERSONNEL TO PERFORM THE MANUFACTURING OPERATIONS REQUIRED FOR CONTRACT FULFILLMENT."

AS WE HAVE RECENTLY EXPLAINED IN MATTER OF SOLAR LABORATORIES, INC., B- 179795, B-179974, B-180167, B-180288, B-180289, B-180350, B-180451, APRIL 3, 1974, THE DETERMINATION WHETHER A CONTRACTOR IS A MANUFACTURER WITHIN THE MEANING OF THE WALSH-HEALEY ACT HAS BEEN VESTED BY THE CONGRESS IN THE DEPARTMENT OF LABOR. 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 PLACES NO RESPONSIBILITY OR AUTHORITY IN THE GENERAL ACCOUNTING OFFICE RESPECTING THE ADMINISTRATION OF THE ACT. THE RESPONSIBILITY FOR ADMINISTERING THE PROVISIONS OF THE ACT AND THE AUTHORITY TO PRESCRIBE RULES AND REGULATIONS, TO CONDUCT HEARINGS, AND TO MAKE FINDINGS OF FACT AND DECISIONS THEREON NECESSARY TO ENFORCE THE PROVISIONS OF THE ACT ARE PLACED IN THE SECRETARY OF LABOR. IN IMPLEMENTATION OF THE ACT, THE DEPARTMENT OF LABOR HAS PUBLISHED THE "WALSH-HEALEY PUBLIC CONTRACTS ACT RULINGS AND INTERPRETATIONS NO. 3." SECTION 29 OF THE RULINGS AND INTERPRETATIONS PROVIDES:

"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."

IN VIEW OF SECTION 29, IN B-179509, B-179518, NOVEMBER 6, 1973, OUR OFFICE STATED:

"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 LABOR. B-173808, OCTOBER 26, 1971; B 173298, AUGUST 3, 1971; B-171426, APRIL 27, 1971; B-166905, JULY 24, 1969."

FURTHER, SECTION 5 OF THE WALSH-HEALEY ACT, 41 U.S.C. 39, PROVIDES FOR A HEARING BY THE SECRETARY OF LABOR, OR A REPRESENTATIVE DESIGNATED BY HIM, FOR "ANY PERSON AFFECTED BY ANY RULING OF ANY AGENCY OF THE UNITED STATES IN RELATION TO ANY PROPOSAL OR CONTRACT INVOLVING THE PROVISIONS" OF THE ACT. ADDITIONALLY, SECTION 10(C) OF THE ACT, 41 U.S.C. 43AC), PROVIDES THAT "ANY INTERESTED PERSON SHALL HAVE THE RIGHT OF JUDICIAL REVIEW OF ANY LEGAL QUESTION WHICH MIGHT OTHERWISE BE RAISED, INCLUDING, BUT NOT LIMITED TO *** THE INTERPRETATION OF *** MANUFACTURER." SEE ALSO CITY CHEMICAL CORPORATION V. SHREFFLER, 333 F. SUPP. 46 (1971).

WELMETCO HAS INDICATED THAT DUE TO THE URGENCY OF THE PROCUREMENT, DCASD REFUSED TO GRANT IT AN EXTENSION IN ORDER FOR IT TO FURNISH DCASD ALL THE NECESSARY INFORMATION PERTAINING TO ITS QUALIFICATION AS A MANUFACTURER. WELMETCO ALSO ALLEGES THAT THE DEPARTMENT OF LABOR WAS NEVER PROVIDED WITH CERTAIN INFORMATION GIVEN THE CONTRACTING OFFICER SUBSEQUENT TO THE PRE- AWARD SURVEY IN PARTICULAR, WELMETCO'S LETTER OF AUGUST 21, 1974, ADDRESSED TO THE COMMANDER, ROCK ISLAND ARSENAL. WE HAVE BEEN INFORMALLY ADVISED BY THE DEPARTMENT OF LABOR THAT IT WAS IN RECEIPT OF THE SUBJECT LETTER AS WELL AS ALL OTHER INFORMATION PROVIDED TO THE AGENCY BOTH BEFORE AND AFTER THE PRE-AWARD SURVEY BY WELMETCO OR ITS COUNSEL. FURTHERMORE, IF WELMETCO BELIEVES THAT ITS CASE HAS BEEN PREJUDICED BY THE OMISSION OF PERTINENT INFORMATION FROM ITS FILE, AS CONSIDERED BY DCASD AND THE DEPARTMENT OF LABOR, SUCH AN ALLEGATION IS FOR CONSIDERATION BY THE DEPARTMENT OF LABOR AND NOT BY THE GENERAL ACCOUNTING OFFICE. MATTER OF SOLAR LABORATORIES, INC., SUPRA.

ACCORDINGLY, THE DETERMINATION BY THE DEPARTMENT OF LABOR THAT THE FIRM DOES NOT QUALIFY AS A MANUFACTURER UNDER THE WALSH-HEALEY ACT MAY NOT BE DISTURBED BY OUR OFFICE.