B-174911, APR 6, 1972

B-174911, APR 6, 1972

BID PROTEST - REQUEST FOR RECONSIDERATION DENIED - PENDING LITIGATION CONCERNING A REQUEST OF PACIFIC COAST UTILITIES SERVICE, INC., FOR RECONSIDERATION OF A PRIOR DECISION IN WHICH THE COMPANY WAS INFORMED THAT THE FILE ON THE PROTEST WAS BEING CLOSED BECAUSE MATERIAL ISSUES WERE ALSO INVOLVED IN A SUIT BEFORE THE COURTS. IT CONTINUES TO BE THE OPINION OF THE COMP. GEN. THAT THE AWARD BY NAVY TO THE SMALL BUSINESS ADMINISTRATION IS A MATERIAL ISSUE IN THE PENDING LITIGATION. ACCORDINGLY, THE PRIOR DECISION MUST BE AFFIRMED.

TO GRAY, JEPPSON & GORHAM:

REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 10, 1972, ON BEHALF OF PACIFIC COAST UTILITIES SERVICE, INCORPORATED, REQUESTING RECONSIDERATION OF DECISION OF FEBRUARY 14, 1972, IN WHICH WE ADVISED YOUR CLIENT THAT WE WERE CLOSING OUR FILE ON THE PROTEST WITHOUT SUBSTANTIVE ACTION BECAUSE THE MATERIAL ISSUES INVOLVED IN THE PROTEST ARE ALSO INVOLVED IN LITIGATION IN A COURT OF COMPETENT JURISDICTION.

IN REQUESTING RECONSIDERATION OF THE DECISION, YOU STATE THAT THE PROTEST TO OUR OFFICE DOES NOT INVOLVE THE SAME ISSUES BEFORE THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON UNDER CIVIL ACTION NO. 329-71C2. YOU CONTEND THAT THE PROTEST TO OUR OFFICE RELATES TO THE PROPRIETY OF AN AWARD FOR JANITORIAL SERVICES BY THE PUGET SOUND NAVAL SHIPYARD TO THE SMALL BUSINESS ADMINISTRATION, WHEREAS THE COURT ACTION INVOLVES THE PROPRIETY OF SBA AWARDING A SUBCONTRACT FOR SUCH SERVICES TO A MINORITY ENTERPRISE UNDER AUTHORITY OF 15 U.S.C. 637(A).

WE HAVE EXAMINED COPIES OF VARIOUS PLEADINGS FILED ON BEHALF OF YOUR CLIENT IN CONNECTION WITH THE REFERENCED LITIGATION. WHILE THE MAIN THRUST OF THE ARGUMENTS RELATE TO THE SBA'S MINORITY ENTERPRISE PROGRAM UNDER SECTION 8(A) OF THE SMALL BUSINESS ACT, 15 U.S.C. 637(A)(2), IT IS ALSO CLEAR THAT SEVERAL AVERMENTS RELATE TO THE PROPRIETY OF THE NAVY'S AWARD OF A "REPLACEMENT CONTRACT TO THE SMALL BUSINESS ADMINISTRATION, TO THE EXCLUSION OF ALL OTHERS, AND WITHOUT ACCEPTING ANY COMPETITIVE BIDS THEREON OR PUBLICLY ADVERTISING SAID REPLACEMENT CONTRACT." SEE, FOR EXAMPLE, AVERMENTS NOS. 17 AND 18 IN THE COMPLAINT FOR PERMANENT INJUNCTION. THEREFORE, WE BELIEVE THAT THE AWARD BY THE NAVY TO SBA IS A MATERIAL ISSUE IN THE PENDING LITIGATION.

IN ANY CASE, 15 U.S.C. 637(A)(1) AUTHORIZES SBA TO ENTER INTO CONTRACTS WITH ANY GOVERNMENT AGENCY WITH PROCUREMENT POWERS AND THE PROCURING OFFICER IS AUTHORIZED TO LET THE CONTRACT TO SBA "UPON SUCH TERMS AND CONDITIONS" AS MAY BE AGREED BETWEEN SBA AND THE PROCURING AGENCY. SUCH A PROVISION IS INCONSISTENT WITH THE CONCEPT THAT THE SBA SIMPLY HAS THE RIGHT TO COMPETE FOR THE PROCUREMENT TOGETHER WITH AND ON THE SAME TERMS AS OTHER BIDDERS OR OFFERORS. ON THE CONTRARY, THE PROVISION CLEARLY CONTEMPLATES AWARD TO SBA WITHOUT COMPETITION.

ACCORDINGLY, OUR DECISION OF FEBRUARY 14, 1972, IS AFFIRMED.