B-154756, DEC. 30, 1964

B-154756, DEC. 30, 1964

TO MR. JOHN DIETRICH, BARRISTER AND SOLICITOR:

WE HAVE YOUR LETTER OF NOVEMBER 10, 1964, WITH ENCLOSURES, WITH FURTHER REFERENCE TO THE SMALL BUSINESS ELIGIBILITY OF MID-WEST CONSTRUCTION, LTD., FOR AWARD OF A CONTRACT UNDER INVITATION FOR BIDS NO. 1-64-18, ISSUED BY THE FOREST SERVICE, DEPARTMENT OF AGRICULTURE, ON MAY 26, 1964. YOU REQUEST THAT WE RECONSIDER OUR DECISION OF NOVEMBER 2, 1964, WHEREIN WE HELD THAT THE AWARD MADE TO MID-WEST UNDER THE INVITATION SHOULD BE CANCELED BECAUSE IT DID NOT HAVE A PLACE OF BUSINESS LOCATED IN THE UNITED STATES AT THE DATE OF AWARD.

YOU CONTEND THAT THE DECISION OF THE SMALL BUSINESS ADMINISTRATION (SBA) SIZE APPEALS BOARD THAT MID-WEST DID NOT MAINTAIN A PLACE OF BUSINESS IN THE UNITED STATES AND WAS NOT, THEREFORE, A SMALL BUSINESS CONCERN FOR GOVERNMENT CONSTRUCTION PURPOSES WITHIN THE MEANING OF SECTION 121.3-2/G) OF THE SMALL BUSINESS SIZE STANDARDS REGULATION, WAS ERRONEOUS AND NOT SUPPORTED BY EVIDENCE.

WE HAVE NO AUTHORITY OF LAW TO DISTURB SUCH A RULING OF THE SBA SIZE APPEALS BOARD FOR THE REASONS SET FORTH BELOW.

UNDER 15 U.S.C. 637 (B) (6), SBA IS AUTHORIZED TO DETERMINE WHICH FIRMS WITHIN ANY INDUSTRY ARE TO BE DESIGNATED AS SMALL BUSINESS CONCERNS FOR PURPOSES OF GOVERNMENT PROCUREMENT. THIS PROVISION OF LAW 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.' REGULATIONS OF SBA DEFINING A SMALL BUSINESS CONCERN, HAVE THE FORCE AND EFFECT OF LAW. OTIS STEEL PRODUCTS CORPORATION V. UNITED STATES, 316 F.2D 937. IN THE CASE OF SPRINGFIELD WHITE CASTLE COMPANY V. FOLEY, UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MISSOURI, MAY 27, 1964, THE COURT, IN CONSIDERING AN ACTION TO DETERMINE WHETHER A DECISION BY SBA THAT THE PLAINTIFF WAS NOT A SMALL BUSINESS CONCERN WAS ERRONEOUS AND NOT SUPPORTED BY SUBSTANTIAL EVIDENCE, HELD IN PERTINENT PART:

"BEFORE EMBARKING ON A DISCUSSION OF THE FACTS IT SHOULD FIRST BE POINTED OUT THAT IF THE DETERMINATION OF THE ADMINISTRATOR IS SUPPORTED BY SUBSTANTIAL EVIDENCE, THEN THAT DECISION IS FINAL UNLESS ERRONEOUS AS A MATTER OF LAW. SEC. 1009, TITLE 5, U.S.C. IN THE PRESENT CASE THE PLAINTIFF DOES NOT QUARREL WITH THE VALIDITY OF THE REGULATIONS UNDER WHICH IT WAS DETERMINED THAT PLAINTIFF IS NOT A SMALL BUSINESS, BUT PLAINTIFF ASSERTS THAT THE FINDING OF THE ADMINISTRATOR IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. WHILE THIS COURT MIGHT, IF MAKING THE ORIGINAL DETERMINATION, REACH A RESULT DIFFERENT THAN THAT REACHED BY THE ADMINISTRATOR, IF THE FINDING OF THE ADMINISTRATOR IS SUPPORTED BY SUBSTANTIAL EVIDENCE THEN THE FINDING OF THE ADMINISTRATOR MUST STAND AS FINAL. * * *"

THE COURT IN THAT CASE HELD THAT THE SBA DECISION WAS SUPPORTED BY SUBSTANTIAL EVIDENCE.

FOR SUBSTANTIALLY THE SAME REASON AS STATED BY THE COURT ABOVE AND SINCE THE DECISION OF SBA, BY STATUTE, IS "CONCLUSIVE," WE ARE PRECLUDED FROM CONSIDERING YOUR REQUEST FOR A REVIEW OF THE DECISION AND FOR A HEARING BEFORE OUR OFFICE ON THE MATTER.

HOWEVER, SINCE YOUR REQUEST IS PROPERLY FOR CONSIDERATION BY THE SMALL BUSINESS ADMINISTRATION, WE ARE BY LETTER DATED TODAY FORWARDING YOUR LETTER OF NOVEMBER 10, 1964, TO THE ADMINISTRATOR OF THAT AGENCY FOR WHATEVER ACTION HE MAY DEEM APPROPRIATE UNDER THE CIRCUMSTANCES.