B-168184, JAN. 21, 1970

B-168184, JAN. 21, 1970

BID PROTEST--SMALL BUSINESS SET-ASIDE DETERMINATION DECISION TO ARMOUR AND CO. DENYING PROTEST AGAINST GSA'S TOTAL SMALL BUSINESS SET-ASIDE FOR CUSHIONING MATERIAL. WHERE BASED ON A PRIOR PROCUREMENT EXPERIENCE, A NEW TERM SOLICITATION ON A TOTAL SMALL BUSINESS SET-ASIDE WAS MADE BUT ONLY ONE SMALL BUSINESS WAS ACTUALLY ELIGIBLE FOR AWARD THE BEST INTERESTS WOULD BE TO MAKE AWARD UNDER PRESENT INVITATION THERE BEING NO INDICATION THAT THE PROCURING AGENCY WAS AWARE THAT COMPETITION WOULD NOT BE POSSIBLE. HOWEVER IN A LETTER TO GSA IT IS SUGGESTED THAT AN EXCLUSIVE SMALL BUSINESS SET-ASIDE FOR THE MATERIAL SHOULD BE REVIEWED.

TO ARMOUR AND COMPANY:

THIS IS IN REFERENCE TO THE LETTER OF OCTOBER 21, 1969, ENCLOSING A COPY OF A PROTEST LETTER DATED OCTOBER 20, 1969, DIRECTED TO THE GENERAL SERVICES ADMINISTRATION (GSA). THE PROTEST IS AGAINST THE DETERMINATION THAT ITEMS NOS. 69 THROUGH 137 OF ADVERTISED SOLICITATION NO. FPNGA-P- 70658-A-10-20-69, ISSUED BY THE FEDERAL SUPPLY SERVICE, GSA, FOR CUSHIONING MATERIAL, SHOULD BE A TOTAL SET ASIDE FOR SMALL BUSINESS CONCERNS.

THE TERM OF THE CONTRACT AWARDED PURSUANT TO THIS SOLICITATION IS TO BE FROM FEBRUARY 1, 1970 OR DATE OF AWARD, WHICHEVER IS LATER, THROUGH JANUARY 31, 1971. THE AWARD PROVISIONS PROVIDE THAT AWARD WILL BE MADE ON AN ITEM-BY-ITEM BASIS.

BIDS WERE OPENED ON OCTOBER 20, 1969, AND BIDS WERE RECEIVED FROM BLOCKSOM & COMPANY (BLOCKSOM), ARMOUR INDUSTRIAL PRODUCTS COMPANY, F.P. WOLL & COMPANY (WOLL), AND GEORGE B. WOODCOCK & COMPANY (WOODCOCK).

ARMOUR'S BID WAS LOW FOR CERTAIN OF THE SET-ASIDE ITEMS; HOWEVER, ARMOUR'S BID FOR THESE ITEMS WAS REJECTED AS NON-RESPONSIVE SINCE ARMOUR DOES NOT QUALIFY AS A SMALL BUSINESS CONCERN. BLOCKSOM, A SMALL BUSINESS CONCERN, IS IN LINE FOR THE AWARD FOR ALL OF THE SET ASIDE ITEMS. GSA HAS ADVISED THAT AWARD WILL BE WITHHELD PENDING OUR DECISION ON THE MATTER.

ARMOUR'S LETTERS OF PROTEST QUESTION WHETHER THERE WERE SUFFICIENT NUMBERS OF SMALL BUSINESS CONCERNS CONSIDERED CAPABLE OF FURNISHING THE CUSHIONING MATERIAL AT FAIR AND REASONABLE PRICES AS CONTEMPLATED BY 13 OF THE CODE OF FEDERAL REGULATIONS (CFR) 127.15-2 (A) (2) AND 13 CFR 127.15-2 (A) (3). IT IS URGED THAT WOLL DOES NOT HAVE THE CAPABILITY TO QUOTE COMPETITIVELY ON ITEMS NOS. 69 TO 137 AND THAT WOODCOCK COULD NOT BE CONSIDERED AS MEANINGFUL COMPETITION SINCE WOODCOCK IS MERELY A DEALER FOR BLOCKSOM.

GSA HAS ADVISED THAT THE DETERMINATION THAT CERTAIN OF THE ITEMS OF THIS PROCUREMENT SHOULD BE A TOTAL SET-ASIDE FOR SMALL BUSINESS CONCERNS WAS BASED ON THE FOLLOWING:

"THE INITIAL DETERMINATION TO SET-ASIDE THE ITEMS INVOLVED IN THE PROTEST WAS MADE IN SEPTEMBER 1968, AND THE SET-ASIDE WAS FIRST CONTAINED IN THE SOLICITATION * * * FOR CUSHIONING MATERIAL FOR THE CONTRACT PERIOD WHICH EXPIRES ON JANUARY 31, 1970. WHEN BIDS SUBMITTED IN RESPONSE TO THAT SOLICITATION WERE OPENED, THERE WERE FIVE SMALL BUSINESS CONCERNS WHICH BID ON SET-ASIDE ITEMS * * *. THE PRICES AT WHICH AWARDS WERE MADE WERE CONSIDERED REASONABLE.

"PRIOR TO THE ISSUANCE OF THE CURRENT SOLICITATION IN WHICH THE SET ASIDE ITEMS ARE SUBSTANTIALLY THE SAME AS IN THE PREVIOUS PROCUREMENT, THE REVIEW CONTEMPLATED BY SECTION 1-1.706.3 OF THE FPR WAS MADE. AT THAT TIME THE CONTRACTING OFFICER WAS NOT AWARE OF ANY REASON TO BELIEVE THAT THE SET-ASIDE SHOULD BE REVOKED OR MODIFIED. * * *" GSA HAS DETERMINED THAT THE PRICES IN BLOCKSOM'S BID FOR THIS PROCUREMENT ARE REASONABLE.

WE HAVE REVIEWED ADVERTISED SOLICITATION NO. FPNGA-P-70335-A-10-7-68 FOR CUSHIONING MATERIAL FOR THE PERIOD ENDING JANUARY 31, 1970, MENTIONED IN GSA'S REPORT. ITEMS NOS. 25 THROUGH 36 AND ITEMS NOS. 100 THROUGH 151 WERE SET ASIDE FOR SMALL BUSINESS CONCERNS. WE HAVE NOT RECEIVED ANY INFORMATION WITH RESPECT TO ITEMS NOS. 25 THROUGH 36. ITEMS NOS. 100 THROUGH 151 WERE SIMILAR TO THE SET-ASIDE ITEMS OF THE INSTANT SOLICITATION. A REVIEW OF THE BID ABSTRACT FOR ITEMS NOS. 100 - 151 REVEALS THAT THERE WERE AT LEAST FOUR BIDS FROM SMALL BUSINESS CONCERNS. THE AWARD PROVISION IN THAT SOLICITATION PROVIDED THAT AWARD WOULD BE MADE IN THE AGGREGATE BY GROUP ON THE BASIS OF THE GOVERNMENT'S ESTIMATED PEAK MONTHLY REQUIREMENTS TO THE LOW RESPONSIVE OFFERORS UP TO THEIR STATED MONTHLY SUPPLY POTENTIALS.

THE BIDDERS FOR THE VARIOUS GROUPS WITHIN ITEMS NOS. 100 TO 151 WERE AMERICAN LATEX FIBRE CORPORATION, BLOCKSOM & COMPANY, NU-PAK COMPANY, AND F.P. WOLL & COMPANY. WOODCOCK WAS NOT A BIDDER ON THIS SOLICITATION. HAVE BEEN ADVISED BY GSA THAT THE PROCURING ACTIVITY WAS NOT AWARE PRIOR TO BID OPENING THAT AMERICAN LATEX AND NU-PAK WOULD NOT SUBMIT BIDS ON THE INSTANT SOLICITATION. WOLL'S BID ON THE PRIOR SOLICITATION AT LEAST ON SOME OF THE SET-ASIDE AGGREGATE GROUPS WAS COMPETITIVE WITH THE OTHER BIDS ON THESE GROUPS.

IN B-166255, MAY 2, 1969, IT WAS STATED AS FOLLOWS WITH REGARD TO THE ROLE OF THIS OFFICE IN REVIEWING SMALL BUSINESS SET-ASIDE DETERMINATIONS:

"THE DETERMINATION TO SET ASIDE A PART OF A PROCUREMENT EXCLUSIVELY FOR SMALL BUSINESS PARTICIPATION IS A DISCRETIONARY ACT ON THE PART OF THE CONTRACTING OFFICER NOT SUBJECT TO QUESTION BY OUR OFFICE UNLESS DETERMINED TO BE ARBITRARY, CAPRICIOUS, OR MADE IN BAD FAITH. SEE B 159483, DECEMBER 1, 1966; B-164555, SEPTEMBER 10, 1968."

IN VIEW OF THE PROCURING ACTIVITY'S EXPERIENCE IN OBTAINING COMPETITION IN A PRIOR PROCUREMENT WHERE SIMILAR ITEMS HAD BEEN EXCLUSIVELY SET ASIDE FOR SMALL BUSINESS CONCERNS, WE CANNOT SAY THAT THE DETERMINATION TO SET ASIDE SOME OF THE ITEMS OF THE INSTANT PROCUREMENT WAS ARBITRARY OR CAPRICIOUS. MOREOVER, WE HAVE FOUND NO EVIDENCE THAT GSA ACTED IN OTHER THAN GOOD FAITH IN MAKING THE SET ASIDE DETERMINATION.

IN VIEW OF THE WOODCOCK-BLOCKSOM DEALER RELATIONSHIP WE AGREE THAT IT IS QUESTIONABLE WHETHER WOODCOCK COULD BE CONSIDERED AS MEANINGFUL COMPETITION TO BLOCKSOM. IT CANNOT BE ASSUMED THAT GSA KNEW THAT WOLL WOULD NOT BE MORE COMPETITIVE IN THE INSTANT PROCUREMENT. AS PREVIOUSLY INDICATED GSA HAS ADVISED THAT THE PROCURING ACTIVITY WAS NOT AWARE THAT AMERICAN LATEX AND NU-PAK WOULD NOT SUBMIT BIDS.

THE RECORD INDICATES THAT BIDS HAVE BEEN OPENED AND PRICES REVEALED, THE PRESENT CONTRACT IS ABOUT TO EXPIRE, AND BLOCKSOM'S PRICES ARE CONSIDERED REASONABLE. CONSIDERING ALL OF THE FOREGOING FACTORS, IT IS THE OPINION OF OUR OFFICE THAT THE BEST COURSE OF ACTION IN THIS CASE IS TO MAKE THE AWARD UNDER THE INSTANT INVITATION AS ISSUED. THE MATTERS WHICH HAVE BEEN BROUGHT TO LIGHT AS A RESULT OF OUR REVIEW SHOULD, OF COURSE, BE CONSIDERED IN GSA'S REVIEW OF WHETHER SMALL BUSINESS SET-ASIDES SHOULD BE CONTINUED IN FUTURE PROCUREMENTS OF CUSHIONING MATERIAL.

TO MR. KUNZIG:

WITH REFERENCE TO THE LETTER DATED DECEMBER 23, 1969, FROM THE GENERAL COUNSEL, GENERAL SERVICES ADMINISTRATION, FURNISHING OUR OFFICE WITH A REPORT ON THE PROTEST BY ARMOUR AND COMPANY AGAINST THE DETERMINATION THAT CERTAIN OF THE ITEMS UNDER SOLICITATION NO. FPNGA-P 70658-A-10-20-69, ISSUED BY THE FEDERAL SUPPLY SERVICE, SHOULD BE EXCLUSIVELY SET ASIDE FOR SMALL BUSINESS CONCERNS, WE ARE ENCLOSING A COPY OF OUR DECISION TO ARMOUR ADVISING THAT THE BEST COURSE OF ACTION IS TO MAKE THE AWARD UNDER THE INVITATION AS ISSUED. WE HAVE ALSO ADVISED ARMOUR THAT THE MATTERS WHICH WERE BROUGHT TO OUR ATTENTION REGARDING F. P. WOLL'S BID, THE WOODCOCK- BLOCKSOM DEALER RELATIONSHIP, AND THE FAILURE OF AMERICAN LATEX AND NU-PAK TO BID ON THIS PROCUREMENT SHOULD BE CONSIDERED BY GSA IN ITS REVIEW OF WHETHER THE PRACTICE OF HAVING AN EXCLUSIVE SMALL BUSINESS SET-ASIDE FOR CERTAIN ITEMS IN PROCUREMENTS OF CUSHIONING MATERIAL SHOULD BE CONTINUED IN FUTURE PROCUREMENTS.