AMI Construction, B-286351, December 27, 2000

B-286351 Dec 27, 2000 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Was not small and thus was not eligible for a HUBZone evaluation preference was improper because such questions must be referred to the SBA under applicable regulations where the agency does not believe it can or should accept the bidder's self-certification. Was for mine reclamation work at the Aurora Partnership Mine. Section I.2(b) of the IFB stated that "offers will be evaluated by adding a factor of 10 percent to the price of all offers except . . . offers from HUBZone small business concerns that have not waived the evaluation preference." /1/ A HUBZone small business concern was defined in the IFB as one that appears on the list maintained by the Small Business Administration (SBA). /2/ IFB Sec. View Decision Matter of: AMI Construction File: B-286351 Date: December 27, 2000 DIGEST Attorneys DECISION AMI Construction protests the award of a contract to N.A. Degerstrom, Inc. under invitation for bids (IFB) No. R4-17-00-10, issued by the United States Department of Agriculture, Forest Service, for mine reclamation work. We sustain the protest. The IFB, issued on August 16, 2000, was for mine reclamation work at the Aurora Partnership Mine, an abandoned cyanide heap leach facility, in the Humboldt-Toiyabe National Forest, Mineral County, Nevada. The IFB schedule requested prices for 12 line items of work (totaled into a base bid) and for an additive item. Section I.2(b) of the IFB stated that "offers will be evaluated by adding a factor of 10 percent to the price of all offers except . . . offers from HUBZone small business concerns that have not waived the evaluation preference." /1/ A HUBZone small business concern was defined in the IFB as one that appears on the list maintained by the Small Business Administration (SBA). /2/ IFB Sec. I.2(a). The IFB incorporated standard industrial classification (SIC) code 1629, which stated the applicable small business size status standard as not more than an average of $17 million in annual receipts for the preceding 3 fiscal years. IFB Sec. K.6. On August 25, the SBA certified AMI as a qualified HUBZone small business concern under SIC code 1629 and advised AMI that it was "eligible to receive HUBZone contracting opportunities, and [would] be included in the listing of qualified HUBZone small business concerns found on the Internet at http://www.sba.gov/hubzone." The SBA also advised AMI: We note that your firm has registered in SBA's PRO-Net system. /3/ In order to receive maximum benefit from the HUBZone Empowerment Contracting Program it is strongly suggested that you update your firm's profile in PRO-Net. PRO-Net is a premier marketing tool for small businesses seeking to do business with the Federal government. It is also a source that Federal agencies will check to determine if your firm has been certified by SBA and eligible to receive contracts under the HUBZone program. Forest Service Report, Tab F, Letter from SBA to AMI, Aug. 25, 2000. Nine bids in response to the IFB were opened on September 11. Degerstrom's base bid price was the lowest at $686,564.80 and AMI's base bid price was next lowest at $744,418.16. /4/ The government base bid estimate was $609,808. In its bid, AMI certified that it met the HUBZone small business concern classification. If the 10 percent preference was applied, AMI's base bid price was the lowest. To determine whether AMI was entitled to the HUBZone evaluation preference, the Forest Service researched the SBA's PRO-Net database, which identified AMI's status as a HUBZone small business concern but did not identify that it was qualified under SIC code 1629. According to the Forest Service, the local SBA office advised the contracting officer that HUBZone small business concerns must meet the applicable SIC code to qualify for a HUBZone preference. Based on the foregoing, the Forest Service determined that AMI did not meet the IFB's small business size standard and thus was not eligible for the HUBZone preference. Forest Service Report at 2. After determining that Degerstrom's base bid price was fair and reasonable, the Forest Service made award to that firm on September 15. This protest followed. AMI protests that it is a certified HUBZone small business concern eligible under SIC code 1629 and that the agency improperly failed to accept AMI's certification and did not apply the HUBZone preference which would have made AMI the low bidder. Because this protest raised issues within the purview of the SBA, our Office requested that the SBA comment on the protest. In its submission, the SBA pointed out that the determination of whether a firm is small for purposes of a particular procurement is separate from the determination of whether the firm is a qualified HUBZone small business concern (although the latter does include a determination that the firm is small for purposes of its primary industry classification).