B-166240, MAY 12, 1969

B-166240, MAY 12, 1969

TO DOMCO TEXTILES, INC:

YOUR LETTER OF APRIL 25, 1969, REQUESTS, IN EFFECT, RECONSIDERATION OF OUR DECISION OF APRIL 18, 1969, B-166240, HOLDING THAT THE CONTRACTING OFFICER'S DETERMINATION AS TO YOUR FIRM'S NONRESPONSIBILITY CONCLUSIVELY PRECLUDED FAVORABLE CONSIDERATION OF YOUR BID.

YOU FIRST PROTESTED ON THE BASIS THAT THE SMALL BUSINESS ADMINISTRATION (SBA) DID NOT ISSUE A CERTIFICATE OF COMPETENCY (COC) TO YOUR FIRM BECAUSE THE PROCUREMENT AGENCY WITHDREW THE REFERRAL AND THEREBY PREVENTED SBA FROM DETERMINING WHETHER A COC SHOULD BE ISSUED TO YOUR FIRM. YOU NOW CONTEND AS FOLLOWS: "DOMCO TEXTILES, INC. IS A SMALL BUSINESS, AND SO STATED ON STANDARD FORM 33 OF THE SUBJECT REQUEST FOR PROPOSAL. THIS REPRESENTATION IS EFFECTIVE. WE HAVE NEVER BEEN NOTIFIED BY THE SMALL BUSINESS ADMINISTRATION THAT A SIZE DETERMINATION HAS BEEN MADE. WE HAVE BEEN ADVISED BY THE SMALL BUSINESS ADMINISTRATION THAT NO SIZE DETERMINATION HAS BEEN MADE OF OUR FIRM. "WE HAVE BEEN ADVISED BY THE SMALL BUSINESS ADMINISTRATION THAT BY TELEPHONE REQUEST OF 6 FEBRUARY 1969 FRANKFORD ARSENALS CONTRACTING OFFICER REQUESTED THAT THE SBA RETURN THE REFERRAL FOR A CERTIFICATE OF COMPETENCY WITHOUT TAKING ACTION THEREON.'

YOU CITE IN THIS REGARD PARAGRAPHS 1-703 (B) AND 1-703 (B) (3) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WHICH PROVIDE FOR THE SELF- CERTIFICATION OF SMALL BUSINESS STATUS AND THE SBA REGIONAL DIRECTOR'S AUTHORITY TO DETERMINE SMALL BUSINESS STATUS WITH APPROPRIATE NOTICE TO THE OFFEROR AND THE CONTRACTING OFFICER. YOU STATE THAT NEITHER OF THESE REGULATIONS WAS FOLLOWED IN YOUR CASE.

THE SELF-CERTIFICATION PROCEDURE IS DESIGNED TO SIMPLIFY AND EXPEDITE SIZE DETERMINATIONS AND PROCUREMENT PROCESSES. THE PROVISIONS OF ASPR 1- 703 ARE ALSO DESIGNED TO PRECLUDE A DELAY IN THE PROCUREMENT PROCESSES. HOWEVER, THAT REGULATION DOES NOT PERMIT A CONTRACTING OFFICER TO KNOWINGLY MAKE AN AWARD TO A NONRESPONSIBLE OFFEROR WHO IS INELIGIBLE UNDER THE SMALL BUSINESS SIZE STANDARDS AND REGULATIONS.

UNDER THE FACTS OF THE INSTANT CASE, THE CONTRACTING OFFICER WAS REQUIRED, IN VIEW OF YOUR SELF-CERTIFICATION AND HIS DOUBTS AS TO YOUR RESPONSIBILITY, TO SUBMIT THE MATTER OF YOUR CAPACITY AND CREDIT TO SBA FOR ITS DETERMINATION. SEE ASPR 1-705.4 (C). AS STATED IN OUR DECISION OF APRIL 18, TO YOU, A REPRESENTATIVE OF SBA QUESTIONED THE CONTRACTING OFFICER AS TO THE SMALL BUSINESS SIZE STATUS OF YOUR FIRM ON FEBRUARY 4, 1969. THEREAFTER, ON FEBRUARY 6, 1969, SBA RETURNED YOUR CASE FILE TO THE CONTRACTING OFFICER AND STATED: "SUBJECT REFERRAL FOR BANDOLEER M-2, UNDER SOLICITATION DAAA25-69-R-0181 IS RETURNED HEREWITH WITHOUT ACTION AS REQUESTED. "SINCE THE PRE-AWARD SURVEY CONDUCTED BY DCASR, N.Y. INDICATES THAT SUBJECT FIRM DOES NOT MEET THE REQUIREMENTS OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT; SUBJECT FIRM AND ITS AFFILIATES EMPLOY OVER 700 EMPLOYEES (APPLICABLE SIC 2399 PERMITS NO MORE THAN 500 EMPLOYEES); THE CRITICAL NATURE OF THE PROCUREMENT (DO-A6); THE POSSIBILITY OF THE BID BEING CONSIDERED UNRESPONSIVE, AND THE FAILURE TO APPLY THE NECESSARY TENACITY AND PERSEVERANCE AS INDICATED BY DCASR ARE ALL REASONS NOT WITHIN CAPACITY AND/OR CREDIT AS CALLED FOR IN THE ARMED SERVICES PROCUREMENT REGULATION FOR CERTIFICATE OF COMPETENCY ACTION.'

THE FOREGOING STATEMENTS MADE BY THE SBA NEW YORK REGIONAL OFFICE ESTABLISH THAT THE COC PROCEDURES WERE INAPPLICABLE SINCE YOUR FIRM AND ITS AFFILIATES EMPLOYED MORE THAN 700 EMPLOYEES.

IN VIEW OF THE REFUSAL OF SBA TO EXERCISE ITS COC JURISDICTION, ACTION THEREAFTER WAS ON THE BASIS THAT THE OFFER FROM YOUR FIRM COULD NOT BE CONSIDERED SINCE AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY COULD NOT BE MADE IN THE LIGHT OF THE NEGATIVE PREAWARD SURVEY MADE OF YOUR CAPABILITIES. SEE ASPR 1-902 AND 1-904.1.

IN REGARD TO THE DETERMINATION OF THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR, THE AUTHORITIES ARE IN AGREEMENT THAT THE OFFICERS IN WHOM THE POWER IS VESTED TO DETERMINE ,RESPONSIBILITY" MUST DETERMINE THE FACT AND SUCH DETERMINATION CANNOT BE SET ASIDE UNLESS THE ACTION WAS ARBITRARY, CAPRICIOUS OR FRAUDULENT. SEE MCQUILLEN, MUNICIPAL CORPORATIONS, 3RD EDITION, VOLUME 10, SECTION 29.73 AND THE CASES THERE CITED; 38 COMP. GEN. 131; 33 ID. 549; BROWN V CITY OF PHOENIX, 272 P. 2D 358; MCNICHOLS V CITY AND COUNTY OF DENVER, 274 P. 2D 317. THE PRESENT RECORD SHOWS THAT THE CONTRACTING OFFICER'S ACTION IN DETERMINING THAT YOUR FIRM WAS A NONRESPONSIBLE OFFEROR WAS PROPERLY TAKEN AFTER SURVEY OF YOUR FIRM'S CAPABILITIES HAD BEEN COMPLETED WITH NEGATIVE RESULTS AND AFTER THE SBA FAILED TO ACT ON HIS REQUEST FOR A COC DETERMINATION.

YOUR REFERENCE TO THE MATERIALITY OF YOUR LOWER OFFER HAS NO APPLICATION AS PRICE ALONE FORMS NO BASIS FOR A PROPER AWARD WHERE, AS HERE, OTHER FACTORS MILITATE AGAINST AN AWARD TO YOUR FIRM. YOUR STATEMENT REGARDING THE PURPORTED URGENCY OF THE PROCUREMENT IS CONTRARY TO THE OFFICIAL POSITION OF THE PROCUREMENT AGENCY AND HAS NO IMMEDIATE RELEVANCY TO THE MERITS OF YOUR PROTEST.

IN THE EVENT YOU DESIRE A DETERMINATION OF YOUR FIRM'S SIZE FOR USE IN FUTURE PROCUREMENTS, YOU SHOULD COMMUNICATE WITH THE ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION, WASHINGTON, D.C. UNDER SECTIONS 3 AND 8 (B) (6) OF THE SMALL BUSINESS ACT OF 1958, 15 U.S.C. 632 AND 637 (B) (6), RESPECTIVELY, THAT OFFICIAL, ACTING THROUGH HIS AGENTS IN THE SBA, IS EMPOWERED TO PRESCRIBE SMALL BUSINESS SIZE STANDARDS FOR VARIOUS INDUSTIRES AND TO DETERMINE WITHIN ANY INDUSTRY THE CONCERNS WHICH ARE TO BE DESIGNATED SMALL BUSINESS CONCERNS FOR THE PURPOSE OF GOVERNMENT PROCUREMENT. SUCH DETERMINATIONS ARE CONCLUSIVE AND BINDING ON THE PROCUREMENT OFFICIALS OF THE GOVERNMENT. 46 COMP. GEN. 102, 105.

UPON REVIEW, OUR DECISION OF APRIL 18, 1969, DENYING YOUR PROTEST, IS AFFIRMED.