B-152134, OCT. 24, 1963

B-152134, OCT. 24, 1963

TO ACME OF COLORADO:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JULY 26, 1963, WITH ENCLOSURES, PROTESTING THE AWARD OF CONTRACT NO. NBY-53539 TO THE SPRINGFIELD WHITE CASTLE COMPANY, SPRINGFIELD, MISSOURI, BY THE DIRECTOR, SOUTHWEST DIVISION, BUREAU OF YARDS AND DOCKS, DEPARTMENT OF THE NAVY, UNDER INVITATION NO. 53539/63.

THE INVITATION WHICH WAS ISSUED ON MAY 31, 1963, BY THE SOUTHWEST DIVISION, SOLICITED BIDS FOR FURNISHING ALL MATERIALS AND EQUIPMENT AND PERFORMING ALL LABOR FOR CERTAIN CUSTODIAL SERVICES FROM JULY 1, 1963, THROUGH JUNE 30, 1964, AT THE NAVAL AIR STATION, POINT MUGU, CALIFORNIA. THERE WAS SET FORTH ON THE FACE OF THE INVITATION THE STATEMENT,"BIDS ON THIS PROJECT ARE RESTRICTED TO SMALL BUSINESS CONCERNS AS DEFINED BY THE SMALL BUSINESS ADMINISTRATION.' IT APPEARS THAT FOUR BIDS WERE RECEIVED AND THE SPRINGFIELD WHITE CASTLE COMPANY WAS THE LOW BIDDER. SINCE THIS COMPANY HAD CERTIFIED ON ITS BID THAT IT WAS A SMALL BUSINESS CONCERN AND SINCE SUCH CERTIFICATION SUBSEQUENTLY HAD BEEN AFFIRMED BY THE LOS ANGELES OFFICE OF THE SMALL BUSINESS ADMINISTRATION, CONTRACT NO. NBY-53539 WAS AWARDED ON JUNE 21, 1963, TO THE SPRINGFIELD WHITE CASTLE COMPANY IN THE ESTIMATED AMOUNT OF $283,178.15. ON JUNE 21, 1963, THE DATE OF THE AWARD, THE DIRECTOR, OFFICE OF SMALL BUSINESS SIZE STANDARDS, WASHINGTON, D.C., MADE A DETERMINATION, IN CONNECTION WITH THE SIZE STATUS OF THE SPRINGFIELD WHITE CASTLE COMPANY IN A MATTER UNRELATED TO THE INSTANT CASE THAT THIS COMPANY WAS NOT SMALL BUSINESS.

YOU PROTEST THE AWARD OF CONTRACT NO. NBY-53539 MADE TO THE SPRINGFIELD WHITE CASTLE COMPANY ON THE GROUND THAT THAT COMPANY WAS NOT ELIGIBLE TO RECEIVE THE CONTRACT SINCE IT DID NOT QUALIFY ON A SMALL BUSINESS CONCERN AT THE TIME THE AWARD WAS MADE.

IT APPEARS THAT WITHIN A FEW HOURS AFTER THE BIDS WERE OPENED ON JUNE 19, 1963, AND PRIOR TO AWARD, YOU PROTESTED THE STATUS OF SPRINGFIELD WHITE CASTLE COMPANY AS A SMALL BUSINESS CONCERN. HOWEVER, PROMPTLY FOLLOWING YOUR PROTEST THE SOUTHWEST DIVISION TELEPHONED THE LOS ANGELES OFFICE OF THE SMALL BUSINESS ADMINISTRATION ON JUNE 20, 1963, AND REQUESTED A DETERMINATION AS TO WHETHER WHITE CASTLE WAS OR WAS NOT SMALL BUSINESS. ON THE SAME DATE THE SOUTHWEST DIVISION WAS ADVISED BY THE SBA OFFICE THAT THE COMPANY WAS SMALL BUSINESS, AND THIS INFORMATION WAS CONFIRMED BY A LETTER OF THAT AGENCY DATED JUNE 27, 1963. ON THE BASIS OF THE SBA DETERMINATION AND THE SELF CERTIFICATION OF WHITE CASTLE THAT IT WAS A SMALL BUSINESS CONCERN AND THAT IT PREVIOUSLY HAD NOT BEEN DENIED A SMALL BUSINESS CERTIFICATE BY THE SMALL BUSINESS ADMINISTRATION, CONTRACT NO. NBY-53539 WAS AWARDED TO THE SPRINGFIELD WHITE CASTLE COMPANY ON JUNE 21, 1963.

PARAGRAPH 1-703 OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES AS FOLLOWS:

"1-703 DETERMINATION OF STATUS AS SMALL BUSINESS CONCERN.

"/A) EXCEPT AS PROVIDED IN (B) BELOW, THE CONTRACTING OFFICER SHALL ACCEPT AT FACE VALUE (I) A SMALL BUSINESS CERTIFICATE (SEE 1 701.1 (E) ( THAT A BIDDER OR OFFEROR IS A SMALL BUSINESS CONCERN OR (II) A STATEMENT BY THE BIDDER OR OFFEROR THAT IS A SMALL BUSINESS CONCERN (SEE 1-701.1 AND 1-701.4).

"/B) SMALL BUSINESS CERTIFICATES AND STATEMENTS THAT A BIDDER OR OFFEROR IS A SMALL BUSINESS CONCERN SHALL BE EFFECTIVE, EVEN THOUGH QUESTIONED IN ACCORDANCE WITH THE TERMS OF THIS SUBPARAGRAPH (B), UNLESS THE SBA, IN RESPONSE TO SUCH QUESTION AND PURSUANT TO THE PROCEDURES IN (3) BELOW, DETERMINES THAT THE BIDDER OR OFFEROR IN QUESTION IS NOT A SMALL BUSINESS CONCERN. THE CONTROLLING POINT IN TIME FOR A DETERMINATION CONCERNING THE SIZE STATUS OF A QUESTIONED BIDDER OR OFFEROR SHALL BE THE DATE OF AWARD, EXCEPT THAT NO BIDDER OR OFFEROR SHALL BE ELIGIBLE FOR AWARD AS A SMALL BUSINESS CONCERN UNLESS HE HAS IN GOOD FAITH REPRESENTED HIMSELF AS SMALL BUSINESS PRIOR TO THE OPENING OF BIDS OR CLOSING DATE FOR SUBMISSION OF OFFERS (SEE 2 405 (II) WITH RESPECT TO MINOR INFORMALITIES AND IRREGULARITIES IN BIDS).

"/1) ANY BIDDER OR OFFEROR MAY, PRIOR TO AWARD, QUESTION THE SMALL BUSINESS STATUS OF THE APPARENTLY SUCCESSFUL BIDDER OR OFFEROR BY SENDING A WRITTEN PROTEST TO THE CONTRACTING OFFICER AND TO THE SBA REGIONAL OFFICE FOR THE REGION IN WHICH THE QUESTIONED BIDDER OR OFFEROR HAS HIS PRINCIPAL PLACE OF BUSINESS. SBA WILL PROMPTLY NOTIFY THE CONTRACTING OFFICER OF THE DATE OF ITS RECEIPT OF ANY SUCH PROTEST AND WILL ADVISE THE QUESTIONED BIDDER OR OFFEROR THAT HIS SMALL BUSINESS STATUS IS UNDER REVIEW.

"/2) A CONTRACTING OFFICER MAY, PRIOR TO AWARD, QUESTION THE SMALL BUSINESS STATUS OF THE APPARENTLY SUCCESSFUL BIDDER OR OFFEROR BY SENDING A WRITTEN NOTICE TO THE SBA REGIONAL OFFICE FOR THE REGION IN WHICH THE BIDDER OR OFFEROR HAS HIS PRINCIPAL PLACE OF BUSINESS. SUCH NOTICE SHALL CONTAIN A STATEMENT OF THE BASIS FOR QUESTIONING AND OF AVAILABLE SUPPORTING FACTS. SBA WILL PROMPTLY NOTIFY THE CONTRACTING OFFICER OF THE DATE SUCH NOTICE WAS RECEIVED AND WILL ADVISE THE BIDDER OR OFFEROR IN QUESTION THAT HIS SMALL BUSINESS STATUS IS UNDER REVIEW.

"/3) SBA WILL DETERMINE THE SMALL BUSINESS STATUS OF THE QUESTIONED BIDDER OR OFFEROR AND NOTIFY THE CONTRACTING OFFICER AND THE BIDDER OR OFFEROR OF ITS DECISION. IF THE SBA DETERMINATION IS NOT RECEIVED BY THE CONTRACTING OFFICER WITHIN TEN WORKING DAYS AFTER SBA'S RECEIPT OF THE PROTEST OR NOTICE QUESTIONING SMALL BUSINESS STATUS, IT SHALL BE PRESUMED THAT THE QUESTIONED BIDDER OR OFFEROR IS A SMALL BUSINESS CONCERN. THIS PRESUMPTION WILL NOT BE USED AS A BASIS FOR MAKING AN AWARD TO THE QUESTIONED BIDDER OR OFFEROR WITHOUT FIRST ASCERTAINING WHEN A SIZE DETERMINATION CAN BE EXPECTED FROM SBA AND, WHERE PRACTICABLE, WAITING FOR SUCH DETERMINATION, UNLESS FURTHER DELAY IN AWARD WOULD BE DISADVANTAGEOUS TO THE GOVERNMENT. PENDING SBA DETERMINATION OR EXPIRATION OF THE TEN-DAY PERIOD, WHICHEVER IS EARLIER, PROCUREMENT ACTION SHALL BE SUSPENDED PROVIDED THAT SUCH TEN DAY SUSPENSION PERIOD SHALL NOT APPLY TO ANY URGENT PROCUREMENT ACTION WHICH, AS DETERMINED BY THE CONTRACTING OFFICER, MUST, IN ORDER TO PROTECT THE PUBLIC INTEREST, BE AWARDED WITHOUT DELAY AND AS TO WHICH HE INSERTS IN THE CONTRACT FILE A STATEMENT SIGNED BY HIM JUSTIFYING THIS DETERMINATION.'

UNDER THESE REGULATIONS A SMALL BUSINESS SELF-CERTIFICATION MADE IN GOOD FAITH IS EFFECTIVE, EVEN THOUGH QUESTIONED, UNLESS THE SBA DETERMINES, AS PROVIDED IN SUBPARAGRAPH (B) (3), THAT THE QUESTIONED BIDDER IS NOT A SMALL BUSINESS CONCERN. THE RECORD BEFORE US DOES NOT INDICATE THAT THE CERTIFICATION MADE BY SPRINGFIELD WHITE CASTLE WAS IMPRUDENT OR LACKING IN GOOD FAITH. IT IS ALSO NOTED THAT THE DEPARTMENT OF THE NAVY DID NOT RECEIVE MOTIVE OF THE DETERMINATION OF THE DIRECTOR, OFFICE OF SMALL BUSINESS SIZE STANDARDS, WASHINGTON, D.C., THAT SPRINGFIELD WHITE CASTLE WAS NOT SMALL BUSINESS UNTIL JULY 25, 1963, OR 35 DAYS AFTER AWARD OF THE CONTRACT. THEREFORE, AT THE TIME OF AWARD THE ONLY SBA SIZE DETERMINATION OF WHICH THE CONTRACTING OFFICE WAS AWARE WAS THAT SPRINGFIELD WHITE CASTLE WAS A SMALL BUSINESS CONCERN. THUS, THE AWARD WAS MADE STRICTLY IN ACCORDANCE WITH THE APPLICABLE REGULATIONS. UNDER THESE CIRCUMSTANCES, WE FEEL THAT IT WOULD NOT BE IN THE GOVERNMENT'S BEST INTEREST TO REQUIRE CANCELLATION OF THE CONTRACT. COMPARE 41 COMP. GEN. 252 WHERE WE HELD THAT A CONTRACT AWARDED ON THE BASIS OF PREAWARD DETERMINATIONS BY SBA TO THE EFFECT THAT THE SUCCESSFUL BIDDER WAS A SMALL BUSINESS CONCERN WOULD NOT BE DISTURBED WHERE, SUBSEQUENT TO AWARD, THE SBA DETERMINES THAT THE BIDDER WAS NOT A SMALL BUSINESS AT THE TIME AWARD WAS MADE.

ACCORDINGLY, YOUR PROTEST AGAINST THE AWARD OF CONTRACT NO. NBY 53539 TO SPRINGFIELD WHITE CASTLE IS DENIED.