Callejas & Ross, Inc., B-281237, January 14, 1999

B-281237 Jan 14, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Small Business Administration (SBA) reasonably determined that protester was ineligible for award of 8(a) construction contract where protester failed to provide sufficient information during SBA's investigation to show that it established and maintained a qualifying office (other than office space provided by the government) staffed with at least one full-time employee within the geographic area specified in the solicitation. Inc. protests the determination by the Small Business Administration (SBA) that the firm is ineligible for an award under invitation for bids (IFB) No. Callejas asserts that SBA's determination is unreasonable because the protester does maintain a qualifying office within the geographical area called for under the IFB. View Decision Matter of: Callejas & Ross, Inc. File: B-281237 Date: January 14, 1999 DIGEST Attorneys DECISION Callejas & Ross, Inc. protests the determination by the Small Business Administration (SBA) that the firm is ineligible for an award under invitation for bids (IFB) No. DACA21-98-B-0036, issued by the Savannah District Corps of Engineers (Corps) for a construction project on Pope Air Force Base, North Carolina, because Callejas does not satisfy the geographic restriction contained in the solicitation. Callejas asserts that SBA's determination is unreasonable because the protester does maintain a qualifying office within the geographical area called for under the IFB. We deny the protest. By letter dated March 11, 1998, the Corps offered the construction requirement for extensive renovations to a family services center on the Air Force base to SBA for award through the 8(a) Business Development program. Because the value of the requirement exceeded the applicable competitive threshold amount, /1/ the Corps offered the requirement to SBA as a competitive 8(a) contract opportunity. Under this program, SBA executes contracts with other government agencies to provide goods or services, and subcontracts the performance of the contracts to small business concerns that are owned and controlled by individuals determined by SBA to be socially and economically disadvantaged. Competition for the contract is conducted by the procuring agency, while SBA makes the 8(a) eligibility determinations. 13 C.F.R. Sec. 124.311(e). By statute, 8(a) construction contracts must be awarded "to the maximum practicable extent" within "the county or State where the work is to be performed." 15 U.S.C. Sec. 637(a)(11) (1994). Under 13 C.F.R. Sec. 124.311(g)(3), SBA determines, based on its knowledge of the 8(a) portfolio, whether the competition should be limited to only those firms within the geographical boundaries of one or more SBA district offices, an entire SBA regional office, or adjacent SBA regional offices. Only those concerns located within the appropriate geographical boundaries are eligible to compete. SBA accepted the requirement as a competitive small disadvantaged business set-aside under section 8(a) of the Small Business Act, 15 U.S.C. Sec. 637(a), and issued the IFB with the following provision on its initial page: THIS CONSTRUCTION REQUIREMENT IS SUBJECT TO LOCAL BUY RESTRICTIONS. ONLY 8(a) COMPANIES MEETING LOCAL BUY CRITERIA FOR CONSTRUCTION PROJECTS IN NORTH CAROLINA WILL BE ELIGIBLE TO COMPETE. The Corps received six bids by the time set on July 30 for bid opening, of which Callejas's bid was the lowest. Callejas's principal place of business is Wichita Falls, Texas. By letter dated August 18, SBA's Charlotte North Carolina District Office requested further information from Callejas concerning its local buy eligibility for North Carolina, stating: Please forward copies of documents that will demonstrate North Carolina local buy eligibility for Callejas & Ross, Inc. Examples of documentation include the pay records of the full time employee(s), lease agreements for North Carolina business location(s), copies of letterhead identifying North Carolina business location(s) and records of telecommunications agreements in the name of Callejas & Ross, Inc. for its North Carolina site(s). In response, Callejas submitted the following: copies of payroll forms referring to "the payment of the persons employed by Callejas and Ross, Inc.