B-168566, DEC. 31, 1969

B-168566, DEC. 31, 1969

AWARDS--SMALL BUSINESS CONCERNS--SELF-CERTIFICATION--"GOOD FAITH" CERTIFICATION CONTRACT AWARDED PURSUANT TO TOTAL SMALL BUSINESS SET-ASIDE SOLICITATION TO APPARENT LOW RESPONSIVE BIDDER (WHICH HAD CERTIFIED ITSELF TO BE SMALL BUSINESS CONCERN BUT WHOSE SIZE STATUS IS QUESTIONED) IS AFFIRMED. ALTHOUGH CONTRACT AWARDED TO BIDDER WHO IS SUBSEQUENTLY DETERMINED NOT TO BE SMALL BUSINESS IS VOIDABLE AT GOVERNMENT'S OPTION AND MAY BE CANCELED IF AWARD WAS MADE ON BASIS OF SELF-CERTIFICATION WHICH WAS EITHER MADE IN BAD FAITH OR ACCEPTED BY CONTRACTING OFFICER IN BAD FAITH, RECORD LACKS EVIDENCE OF BAD FAITH IN SUBJECT AWARD. WHILE CONTRACTOR'S BID INDICATED ITS AFFILIATION WITH ANOTHER FIRM (WHICH PROTESTANT ALLEGES IS LARGE BUSINESS CONCERN), THIS ALONE IS INSUFFICIENT TO IMPUTE BAD FAITH. SEE 41 COMP. GEN. 252.

TO CHICAGO TRANSPARENT, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 4, 1969, WITH ENCLOSURES, CONCERNING THE AWARD OF CONTRACT NO. DADA15-69-C-0314 TO PLICOSE MANUFACTURING COMPANY BY WALTER REED ARMY MEDICAL CENTER. YOU HAVE ALSO SUBMITTED A LETTER DATED DECEMBER 8, 1969, WITH ENCLOSURES, WHICH INVOLVED THE SAME GENERAL SUBJECT MATTER AS THE EARLIER LETTER.

THE SOLICITATION PURSUANT TO WHICH THE SUBJECT CONTRACT WAS AWARDED WAS A TOTAL SMALL BUSINESS SET-ASIDE. BIDS WERE OPENED ON FEBRUARY 21, 1969, AND PLICOSE WAS THE LOW BIDDER AND HAD CERTIFIED ITSELF A SMALL BUSINESS CONCERN. THE BID ALSO STATED THAT PLICOSE WAS AN AFFILIATE OF DIAMOND SHAMROCK CORPORATION. SINCE PLICOSE WAS THE APPARENT LOW RESPONSIVE BIDDER, IT RECEIVED THE AWARD ON APRIL 16, 1969.

ON NOVEMBER 20, 1969, YOU WROTE THE CONTRACTING OFFICER QUESTIONING PLICOSE'S SIZE STATUS BECAUSE OF ITS AFFILIATION WITH DIAMOND SHAMROCK CORPORATION, WHICH YOU STATED WAS A LARGE BUSINESS CONCERN. BY LETTER DATED NOVEMBER 26, 1969, THE CONTRACTING OFFICER ADVISED YOU THAT SINCE YOUR PROTEST WAS NOT TIMELY, THE AWARD WAS VALID UNDER APPLICABLE REGULATIONS AND THAT THE QUESTION OF PLICOSE'S SIZE STATUS WAS BEING REFERRED TO THE SMALL BUSINESS ADMINISTRATION FOR ITS CONSIDERATION IN FUTURE PROCUREMENTS. YOU QUESTION THE CONTRACTING OFFICER'S POSITION AND REQUEST OUR DECISION ON THIS POINT. YOU ALSO ASK THAT THE CONTRACT BE CANCELLED AND AWARD MADE TO YOU FOR THE REMAINDER OF THE CONTRACT TERM. IN THE LETTER OF DECEMBER 8, 1969, YOU DISCUSS THE PRACTICALITIES OF TIMELY PROTESTING THE SIZE STATUS OF THE SUCCESSFUL BIDDER AND OBTAINING AND SUBMITTING EVIDENCE BEARING ON THIS QUESTION.

UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-703, FEDERAL PROCUREMENT REGULATIONS (FPR) 1-1.703 AND SMALL BUSINESS ADMINISTRATION REGULATION (SBAR) 121.3-8 A CONTRACTING OFFICER IS REQUIRED TO ACCEPT AT FACE VALUE FOR THE PARTICULAR PROCUREMENT INVOLVED, A CERTIFICATION BY THE BIDDER THAT IT IS A SMALL BUSINESS CONCERN UNLESS A WRITTEN PROTEST IS RECEIVED FROM ANOTHER BIDDER CONCERNING THE SIZE STATUS OF THE APPARENTLY SUCCESSFUL BIDDER OR THE CONTRACTING OFFICER QUESTIONS THE SMALL BUSINESS STATUS OF THE BIDDER AND SUBMITS HIS QUESTION TO SBA FOR DETERMINATION. THE REGULATIONS ALSO PROVIDE THAT A SIZE PROTEST WILL BE CONSIDERED TIMELY ONLY IF IT IS SUBMITTED TO THE CONTRACTING OFFICER PRIOR TO THE FIFTH DAY, EXCLUSIVE OF SATURDAYS, SUNDAYS AND LEGAL HOLIDAYS, AFTER BID OPENING. WHERE A SIZE PROTEST IS RECEIVED AFTER AWARD, THE REGULATIONS PROVIDE THAT THE PROTESTING BIDDER IS TO BE INFORMED THAT HIS PROTEST HAS BEEN REFERRED TO THE APPROPRIATE SBA REGIONAL OFFICE FOR ITS CONSIDERATION IN FUTURE PROCUREMENTS. SEE ASPR 1-703 (B) (1) (III), FPR 1-1.703-2 (B) AND SBAR 121.3-5 (A). WHERE THE PROTEST IS TIMELY THESE REGULATIONS PROVIDE THAT THE CONTRACTING OFFICER SUSPEND AWARD PROCEDURES UNTIL SBA MAKES A DETERMINATION OR 10 WORKING DAYS HAVE EXPIRED SINCE NOTIFICATION OF THE PROTEST WAS RECEIVED BY SBA, UNLESS THE URGENCY OF THE PROCUREMENT REQUIRES AN IMMEDIATE AWARD.

IT IS OUR POSITION THAT A CONTRACT AWARDED TO A BIDDER, WHO IS SUBSEQUENTLY DETERMINED NOT TO BE SMALL BUSINESS IS VOIDABLE AT THE OPTION OF THE GOVERNMENT AND MAY BE CANCELLED IF THE AWARD WAS MADE ON THE BASIS OF A SELF-CERTIFICATION WHICH WAS EITHER MADE IN BAD FAITH OR ACCEPTED BY THE CONTRACTING OFFICER IN BAD FAITH. 41 COMP. GEN. 252. WITH REGARD TO THE SUBJECT CONTRACT, YOU HAVE PRESENTED NO EVIDENCE THAT THERE WAS BAD FAITH INVOLVED IN THE AWARD OF THE CONTRACT. ALTHOUGH PLICOSE'S BID INDICATED ITS AFFILIATION WITH ANOTHER FIRM, THIS FACT ALONE IS NOT SUFFICIENT, IN OUR OPINION, TO IMPUTE BAD FAITH. SINCE THE AWARD APPEARS TO HAVE BEEN AUTHORIZED UNDER APPLICABLE REGULATIONS, THERE IS NO BASIS FOR OUR OFFICE TO DISTURB THE CONTRACT.

THE SELF-CERTIFICATION PROCEDURE DESCRIBED ABOVE WAS DESIGNED TO SIMPLIFY AND EXPEDITE SIZE DETERMINATIONS AND PROCUREMENT PROCESSES. ALTHOUGH IT IS TRUE, AS YOU POINT OUT, THAT THERE ARE SITUATIONS WHERE IT IS NOT POSSIBLE TO TIMELY PROTEST AND AN AWARD WILL BE MADE TO OTHER THAN A SMALL BUSINESS CONCERN, WE BELIEVE THAT ON THE WHOLE THE SELF CERTIFICATION PROCEDURE WORKS WELL TO BOTH INSURE THAT SMALL BUSINESS CONCERNS RECEIVE A FAIR SHARE OF THE GOVERNMENT'S BUSINESS AND TO FACILITATE TIMELY AND ORDERLY PROCUREMENT.