B-227939, Oct 5, 1987, 87-2 CPD 334

B-227939, Oct 5, 1987, 87-2 CPD 334

PROCUREMENT - Bid Protests - Agency-level Protests - Protest Timeliness - GAO Review DIGEST: 1. Protest that contracting aqency's failure to forward protester's size protest against a competing firm promptly to the Small Business Administration (SBA) improperly prejudiced the protester is denied where protester's size protest was untimely and, therefore, would not have affected the outcome of the procurement; and the contracting agency filed its own size protest and the SBA determined the protested firm to be a small business concern for the current acquisition. PROCUREMENT - Bid Protests - GAO Procedures - Protest Timeliness - 10-day Rule 2. Protest allegation first raised in protester's postconference comments that agency actions improperly prevented protester from filing a preaward appeal of an SBA regional office size status determination is untimely where based on information known to the protester at the time the initial protest was filed. 3. Protest against proposed award to another bidder based on allegedly improper evaluation of bids on a line item basis is untimely where filed more than 10 working days after the basis of protest was known.

Dakota Tribal Industries, Inc.:

Dakota Tribal Industries, Inc. (DTI) protests the award of contract for camouflage screens to Brownell and Co., Inc., under invitation for bids (IFB) No. DAAKOl-87-B-A212, a small business set-aside issued by the Army. /1/ The IFB solicited bids for three different-shaped (square, hexagonal and rhombic) camouflage screens in three different color patterns. The solicitation provided for award on an item or combination of items basis resulting in the lowest cost to the government. We deny the protest in part and dismiss it in part.

DTI contends that the Army failed to comply with the provisions of the Federal Acquisition Regulation (FAR), 48 C.F.R. Sec. 19.302(c)(1) (1986), by not promptly forwarding to the Small Business Administration (SBA) DTI's size status protest that Brownell is not a small business concern eligible for award under this solicitation.

The FAR provisions state that "any contracting officer who receives a (size) protest, whether timely or not, shall promptly forward the protest to the SBA regional office for the geographical area where the principal office of the concern in question is located." The protester contends that, had SBA considered its size protest, Brownell would have been found not to be a small business for this acquisition.

The record indicates that at the May 1, 1987, bid opening, Brownell was determined the low bidder for certain hexagonal and square camouflage screens. DTI states that in mid May it learned that the Army was considering making an award to Brownell for these square and hexagonal screens, instead of awarding the contract on the basis of complete color pattern sets of camouflage screens (which include the three different shapes). DTI states that, prior to bid opening, the Army had assured DTI that award would be made on the basis of complete color pattern sets of screens. Upon learning that the Army intended to award to Brownell, DTI advised the contracting officer that it believed that Brownell did not qualify as a small business under the size standard for this procurement. DTI further states that because it realized there might be some questions about the timeliness of a size protest filed by DTI more than 5 days after the May 1 bid opening, it suggested, and the contracting officer agreed, that it would be desirable for the contracting officer to request a size determination. In this regard, in order to be timely and apply to a protested procurement, a size protest must be filed with the contracting officer by the close of business of the fifth business day after bid opening. FAR, 48 C.F.R. Sec. 19.302(d)(1). Otherwise, an untimely protest may be forwarded to SBA for a determination applicable to future procurements. However, a contracting officer's size protest is always considered timely even if filed after the 5-day period. FAR, 48 C.F.R. Sec. 19.302(d) (2).

On May 18, the Army filed with SBA a request for reconfirmation of the small business size status of Brownell. /2/ By letter of May 20, DTI also protested Brownell's small business size status to the contracting officer, arguing that Brownell is affiliated with Bridgeport-Grundy, Ltd., a large business concern, and that the restructuring arrangement between these two firms "is ineffective to negate control of Brownell by BridgeportGrundy" under SBA regulations. Due to inadvertence, according to the Army, DTI's size protest was not forwarded to SBA until after a June 15, SBA regional office determination that "Brownell and all its affiliates are a small business" for the current solicitation. On June 30, the Army made an award to Brownell. On July 6, DTI appealed the SBA regional office decision to SBA's Office of Hearings and Appeals (OHA), pursuant to 13 C.F.R. Sec. 121.11 (1986).

DTI argues that it was prejudiced by the contracting officer's failure to forward DTI's size protest. DTI states that SBA's determination did not address the firm's argument that Brownell's restructuring arrangement violated SBA's voting trust regulations, which provide that agreements separating voting power from beneficial ownership of voters stock are not valid if entered into for the purpose of shifting control of a concern so that such a concern or another concern may qualify as a small business. 13 C.F.R. Sec. 121.3(a)(v). DTI maintains that if the contracting officer had promptly forwarded the firm's size protest, this issue would have been considered along with the contracting officer's size protest and, thus, the SBA's ruling on DTI's protest would have applied to this procurement. To remedy the contracting officer's failure to forward the protest, DTI requests that if, on appeal, Brownell is found to be a large business, this Office direct the Army to apply SBA's ruling to the current acquisition. The protester makes this request notwithstanding FAR, 48 C.F.R. Sec. 19.302(i), which provides that a ruling on appeal does not affect the award of a contract if, as here, the ruling is received after the award.

In any event, DTI argues that its May 20 size protest should be considered timely because it was submitted to the contracting officer within 5 days after the firm learned that the Army intended to make awards on the basis of individual shape camouflage screens, which could result in an award to Brownell.

Initially, we find that DTI's May 20 size protest is untimely. A protest against the small business status of any of the bidders on a procurement must be filed within 5 days of bid opening as set forth in FAR, 48 C.F.R. Sec. 19.302(d)(1) and in 13 C.F.R. Sec. 121.9. M&H Concrete Structures, Inc., B-206276, Apr. 15, 1982, 82-1 CPD Para. 348. For example, we have held that protests against the small business status of any bidder, whether or not low, on a procurement set aside solely for small business participation, must be made within the 5 day period. M&H Concrete Structures, Inc., B-206276, supra. Accordingly, the protester was not entitled to wait to protest the small business status of Brownell until after it learned of the Army's intention to award to that firm and DTI's May 20 size protest filed more than 5 working days after the May 1 bid opening is untimely.

Further, while a contracting officer who receives a size protest, whether timely or not, should promptly forward the protest to the SBA, we do not find, as DTI alleges, that it was prejudiced by the contracting officer's failure to do so here. Since DTI's protest was not timely, any ruling on that protest would have been prospective only. T.S. Head & Associates, Inc., B-220316, Sept. 30, 1985, 85-2 CPD Para. 368.

In any event, the SBA did in fact issue a size status determination on Brownell applicable to this acquisition because the contracting officer filed a size protest. The protester concedes that this protest was filed at its suggestion to make certain there would be a timely size protest before SBA. In SBA's June 15 size determination, the agency considered the alleged affiliation between Brownell and Bridgeport-Grundy and, in doing so, reviewed documents restructuring voting rights between these firms. Thus, SBA implicitly, if not explicitly, considered whether these restructuring agreements violated SBA's regulations. /3/ Based on its review of these documents, SBA determined that Brownell was a small business and concluded that the restructuring agreements did not violate SBA small business regulations. Thus, based on this record, we cannot conclude that the protester was harmed by the agency's failure to forward its untimely size protest. See Service Engineers Co., B-225623, Apr. 28, 1987, 87-1 CPD Para. 442.

DTI contends for the first time in its August 28, post-conference comments that because the Army failed to promptly forward its size status protest to the SBA, it was not considered an interested party by the SBA to the size status proceeding on Brownell and thus did not promptly receive a copy of the SBA's decision. As a result, DTI was unable to file an appeal of the SBA decision before the Army's award to Brownell.

FAR, 48 C.F.R. Sec. 19.302(h)(1), provides that when a size status protest is filed with an SBA regional office, a contracting officer must withhold award for 10 business days or until the SBA has made its decision, whichever occurs first. However, there is no requirement that a contracting officer withhold a contract award until SBA renders a decision on appeal from an SBA regional office size determination. William Enterprises, Inc., B-224669, Sept. 24, 1986, 86-2 CPD Para. 347. Thus, the alleged delay in DTI's receiving notification of the SBA regional office size determination prior to award did not prejudice DTI, because its filing of an appeal before award would not have precluded the contracting officer from making an award.

Finally, DTI protests the "contracting officer's decision not to make award on the basis of complete color pattern sets of camouflage screens." Although the solicitation advised bidders that awards would be made for the items or combination of items that would result in the lowest aggregate cost to the government, the protester states that, based on information given to the firm by the contract specialist and its reading of other solicitation provisions, it reasonably believed that award would be made on the basis of complete color pattern sets of camouflage screens as had been done in the past.

This ground for protest also is untimely. Our Regulations require that protests be filed not later than 10 working days after the basis of protest is known or should have been known, whichever is earlier. C.F.R. Sec. 21.2(a)(2). Here, it is clear that the protester knew that the Army intended to make awards on a line item basis (that is, for individual shape camouflage screens) not later than May 20, when DTI filed a size protest with the contracting officer alleging that Brownell (the low bidder for certain shape camouflage screens) should not be considered for such partial awards because the firm is not a small business. Since DTI did not protest the evaluation of bids on a line item basis which could result in an award to Brownell until a month after the firm learned that the Army proposed to award to Brownell on this basis, DTI's protest is untimely and will not be considered on the merits.

We note that DTI points out that in mid-May "it orally objected" to award on a line item basis. However, DTI,s oral complaint to the contracting agency does not constitute a protest such that a subsequent protest to our Office would be timely. Oral protests are no longer provided for under the FAR, 48 C.F.R. Sec. 33.101. See Anthony R. Teel, B-219052, Oct. 4, 1985, 85-2 CPD Para. 379.

The protest is denied in part and dismissed in part.

/1/ Both DTI and Brownell received awards under this multiple award solicitation.

/2/ On January 30, 1987, the SBA certified Brownell a small busines for procurements "in which the size criteria is 500 employees or less"- which is the size standard for this procurement. Previously, SBA had found that Brownell did not meet this size standard.

/3/ In this regard, we note that DTI, in its May 20 size protest, did not provide any evidence or information supporting its argument that Brownell's restructuring arrangements violated the SBA regulations.