B-152179, SEP. 24, 1963

B-152179, SEP. 24, 1963

TO MOLDED INSULATION COMPANY:

REFERENCE IS MADE TO LETTERS DATED AUGUST 28, 1963, AND SEPTEMBER 9, FROM YOUR ATTORNEY, CONCERNING YOUR PROTEST AGAINST A PROPOSED AWARD BY THE DEPARTMENT OF THE ARMY UNDER INVITATION FOR BIDS NO. AMG/W/-11-119-63-562, ROCK ISLAND ARSENAL. IN PARTICULAR, YOU ARE PROTESTING YOUR DISQUALIFICATION FROM RECEIVING THE PROCUREMENT CONTRACT FOR THIS ITEM, ALTHOUGH YOU WERE THE LOW BIDDER, BECAUSE IT HAS BEEN DECIDED THAT YOUR COMPANY DOES NOT QUALIFY AS SMALL BUSINESS FOR THIS ITEM, WHICH DECISION YOU HAVE PROTESTED AS BEING IMPROPER.

A REVIEW OF THE RECORD WHICH HAS BEEN FURNISHED TO THIS OFFICE INDICATES THAT THE ABOVE INVITATION WAS ISSUED ON APRIL 12, 1963, COVERING A MINIMUM REQUIREMENT FOR 144,415 M8A1 SCABBARDS, AND A MAXIMUM QUANTITY OF 600,000. THE PREVIOUS PROCUREMENT ON THIS ITEM, BASED UPON A FIFTY PERCENT LABOR SURPLUS SET-ASIDE RESULTED IN BIDS FROM SIX COMPANIES CLASSIFIED AS SMALL BUSINESS FOR PURPOSES OF THAT INVITATION. ACCORDINGLY, PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION 1-706.5, IT WAS DETERMINED JOINTLY BY THE CONTRACTING OFFICER AND SMALL BUSINESS REPRESENTATIVE THAT THE SUBJECT INVITATION WOULD BE SET ASIDE FOR EXCLUSIVE SMALL BUSINESS PARTICIPATION, AS THERE WAS A REASONABLE EXPECTATION THAT BIDS WOULD BE OBTAINED FROM A SUFFICIENT NUMBER OF RESPONSIBLE SMALL BUSINESS CONCERNS SO THAT AWARDS WOULD BE MADE AT REASONABLE PRICES.

THE INVITATION WAS DISTRIBUTED NATIONALLY TO FORTY-ONE SOURCES; BIDS WERE OPENED ON MAY 14, 1963, AND FOUR BIDS WERE RECEIVED AS FOLLOWS:

BIDDER BID PRICE MINIMUM QUANTITY MOLDED INSULATION CO. $207,063.96 WILSON-DUGGAR CO., INC. 208,351.51 LASKO METAL PRODUCTS CO.

230,386.56 VICTORY PLASTICS CO. 236,729.17

THE INVITATION ALSO PROVIDED THAT TRANSPORTATION CHARGES TO DESTINATION WOULD BE EVALUATED ON A PORTION OF THE MINIMUM QUANTITY; BUT AFTER ADDING THE APPLICABLE TRANSPORTATION EVALUATION FOR EACH BIDDER, RANKING OF THE BIDDERS WAS NOT CHANGED.

WE ARE INFORMED THAT PRIOR TO BID OPENING A REPRESENTATIVE OF YOUR COMPANY CALLED THE ARMY HEADQUARTERS TO DISCUSS YOUR STATUS WITH RESPECT TO BIDDING ON THE SMALL BUSINESS SET-ASIDE, AND THAT YOU ATTACHED A LETTER DATED MAY 10, 1963, TO YOUR BID ADVISING THAT YOU WERE IN THE PROCESS OF PROTESTING TO THE SMALL BUSINESS ADMINISTRATION THE SMALL BUSINESS DEFINITION AS APPLIED TO THE BID. ALSO, ON MAY 14, 1963, YOU INDICATED THAT YOU WERE DISTURBED THAT YOU COULD NOT SUBMIT A BID AS A SMALL BUSINESS CONCERN AND NOTIFIED THE AGENCY OF YOUR INTENTION TO APPEAL TO HIGHER AUTHORITY FOR A REVIEW OF THE SITUATION. ON THE SAME DAY IT IS REPORTED THAT YOU WROTE THE SMALL BUSINESS ADMINISTRATION REQUESTING A REVIEW OF ITS DECISION THAT YOUR COMPANY WAS NOT A SMALL BUSINESS CONCERN FOR THE PURPOSES OF BIDDING ON THE M8A1 SCABBARD. BECAUSE OF THE QUESTION RAISED WITH RESPECT TO THE STATUS OF YOUR COMPANY IN THIS REGARD, A FORMAL SIZE DETERMINATION WAS REQUESTED FROM THE SMALL BUSINESS ADMINISTRATION; AFTER WHICH THE ADMINISTRATION ADVISED THE HEADQUARTERS THAT YOURS WAS NOT A SMALL BUSINESS CONCERN FOR PURPOSES OF THE REFERENCED INVITATION FOR BIDS.

AS A RESULT OF THE FACTS DETERMINED BY THE PRE-AWARD SURVEY OF WILSON- DUGGAR CO., INC., AND AN INDEPENDENT SURVEY MADE BY WEAPONS COMMAND PERSONNEL, THE CONTRACTING OFFICER DETERMINED THAT THE WILSON DUGGAR COMPANY, INC., WAS A RESPONSIBLE FIRM WITHIN THE MEANING OF PARAGRAPH 1- 706.5 OF THE ARMED SERVICES PROCUREMENT REGULATION; AND, ACCORDINGLY, AWARD OF A CONTRACT WAS APPROVED BY THE BOARD OF AWARDS ON JULY 12, 1963.

UNDER THE TERMS OF THE SMALL BUSINESS ACT, AS AMENDED, 15 U.S.C. 637 (B) (6), THE SMALL BUSINESS ADMINISTRATION IS EMPOWERED TO DETERMINE WHICH FIRMS WITHIN ANY INDUSTRY ARE TO BE DESIGNATED AS SMALL BUSINESS CONCERNS FOR PURPOSES OF GOVERNMENT PROCUREMENT, AND SUCH DETERMINATIONS ARE CONCLUSIVE UPON THE PROCUREMENT OFFICERS OF THE GOVERNMENT. WE HAVE CONSISTENTLY TAKEN THE POSITION THAT WE HAVE NO AUTHORITY TO QUESTION THE SIZE DETERMINATIONS OF THE SMALL BUSINESS ADMINISTRATION, EXCEPT UPON CLEAR AND CONVINCING PROOF THAT THE FINDING IS ARBITRARY OR CLEARLY ERRONEOUS. B-149575, SEPTEMBER 12, 1962; B-136751, SEPTEMBER 25, 1958; B- 130725, MAY 13, 1957. CF. 35 COMP. GEN. 233 AND 37 ID. 679. NO EVIDENCE TO SUPPORT SUCH A DETERMINATION HAS BEEN SUBMITTED IN THIS INSTANCE.

IN VIEW OF THE FOREGOING, WE MUST CONCLUDE THAT THERE HAS BEEN PRESENTED NO BASIS WHICH WOULD JUSTIFY A DETERMINATION BY US THAT THE AWARD TO THE WILSON-DUGGAR COMPANY, INC., BY THE DEPARTMENT OF THE ARMY WAS IMPROPER.