TITLE:  Universal Construction Company, Inc., d/b/a Turner-Universal, B-292407, August 18, 2003
BNUMBER:  B-292407
DATE:  August 18, 2003
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Universal Construction Company, Inc., d/b/a Turner-Universal, B-292407, August
18, 2003

   Decision
    
    
Matter of:   Universal Construction Company, Inc., d/b/a Turner-Universal
    
File:            B-292407
    
Date:              August 18, 2003
    
Clifton B. Welch, Esq., and John D. Marshall, Jr., Esq., Griffin Cochrane
& Marshall, for the protester.
Joel S. Rubinstein, Esq., and Lawrence M. Prosen, Esq., Bell, Boyd &
Lloyd, for GSC Construction, Inc., an intervenor.
Bernard J. Roan, Esq., and Christi Dame, Esq., National Aeronautics and
Space Administration, and John W. Klein, Esq., and Kenneth Dodds, Esq.,
U.S. Small Business Administration, for the agencies.
Linda S. Lebowitz, Esq., and Michael R. Golden, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
In accordance with the Small Business Act and the clause at Federal
Acquisition Regulation S: 52.219-4, agency properly awarded a contract to
an Historically Underutilized Business Zone small business concern whose
evaluated price was not more than 10 percent higher than the evaluated
price of a large business.
DECISION
    
Universal Construction Company, Inc., d/b/a Turner-Universal, protests the
award of a contract to GSC Construction, Inc. under invitation for bids
(IFB) No. MSFC-0-03-03, issued by the National Aeronautics and Space
Administration (NASA), for the construction of a 5-story office building
at the Marshall Space Flight Center in Alabama.  Turner‑Universal, a
large business that submitted the apparent low bid, protests the award to
GSC, an Historically Underutilized Business Zone (HUBZone) small business
concern, as a result of the agency's application of a 10 percent HUBZone
price evaluation preference to Turner-Universal's low bid.
    

   We deny the protest.
    
The IFB was issued on an unrestricted basis on March 17, 2003, and
incorporated the clause at Federal Acquisition Regulation (FAR) S:
52.219-4, captioned *Notice of Price Evaluation Preference for HUBZone
Small Business Concerns.*[1]  In relevant part, this clause provides the
following:
    
(a)  Definition.  *HUBZone small business concern,* as used in this
clause, means a small business concern that appears on the List of
Qualified HUBZone Small Business Concerns maintained by the Small Business
Administration.
(b)  Evaluation preference.  (1) Offers will be evaluated by adding a
factor of 10 percent to the price of all offers, except*
(i)                Offers from HUBZone small business concerns that have
not waived the evaluation preference;
(ii)              Otherwise successful offers from small business
concerns[.]
FAR S: 52.219-4(a), (b); see Delaney Constr. Corp.; Tug Hill Constr., Inc.
v. United States, 56 Fed. Cl. 470 (2003).
    
Ten firms, including Turner-Universal and GSC, submitted bids by the
stated bid opening time.  As relevant here, Turner‑Universal, a
large business, submitted the apparent low bid; GSC, a HUBZone small
business concern, submitted the apparent seventh low bid.  (The second
through fourth low bids were submitted by non‑HUBZone small business
concerns and the fifth and sixth low bids were submitted by large
businesses.)  In accordance with the clause at FAR S: 52.219-4, as quoted
above, because GSC was a HUBZone small business concern and it did not
waive the application of the 10 percent HUBZone price evaluation
preference, the agency added a 10 percent price evaluation preference to
the bid submitted by Turner‑Universal.  The following table
summarizes the price evaluation:
    

   +------------------------------------------------------------------------+
|                |Type of Business |Bid as      |10%        |Bid as      |
|                |                 |Submitted   |Preference |Evaluated   |
|----------------+-----------------+------------+-----------+------------|
|Turner-Universal|Large Business   |$17,056,832 |$1,705,683 |$18,762,515 |
|----------------+-----------------+------------+-----------+------------|
|GSC             |HUBZone Small    |$17,954,010 |N/A        |$17,954,010 |
|                |Business         |            |           |            |
+------------------------------------------------------------------------+

    
Contracting Officer's Statement at 6.[2]
    
As a result of the application of the 10 percent HUBZone price evaluation
preference, GSC's bid was evaluated as low.  The agency awarded the
contract to GSC.
    
Turner-Universal protests the agency's application of the 10 percent
HUBZone price evaluation preference to its bid, which resulted in GSC's
evaluated price being lower than Turner-Universal's evaluated price.
    
The Small Business Act provides that
    
in any case in which a contract is to be awarded on the basis of full and
open competition, the price offered by a qualified HUBZone small business
concern shall be deemed as being lower than the price offered by another
offeror (other than another small business concern), if the price offered
by the qualified HUBZone small business concern is not more than 10
percent higher than the price offered by the otherwise lowest, responsive,
and responsible offeror.
15 U.S.C. S: 657a(b)(3)(A).
    
In other words, in accordance with the Small Business Act and the
regulatory implementation of that Act as contained in the clause at FAR S:
52.219-4 (which was incorporated in this IFB), in an unrestricted, full
and open competition, a HUBZone small business concern can displace a
large business as the low bidder if the evaluated price of the HUBZone
small business concern is not more than 10 percent higher than the
evaluated price of the large business.
    
Here, the agency added 10 percent to Turner-Universal's bid, thereby
making Turner‑Universal's evaluated price higher than GSC's
evaluated price.  Since the evaluated price of GSC, a HUBZone small
business concern, was not more than 10 percent higher than that of
Turner‑Universal, a large business, the agency, consistent with the
Small Business Act and the clause at FAR S: 52.219-4, properly awarded the
contract to GSC. [3]  On this record, we have no basis to object to the
award to GSC based on its low evaluated price.
    
The protest is denied.[4]
    
Anthony H. Gamboa
General Counsel
    
    
    
    

   ------------------------

   [1] The HUBZone program was created in 1997 and is designed to provide
federal contracting assistance for qualified small business concerns that
are located in, and that employ persons that reside in, historically
underutilized business zones, in an effort to increase employment
opportunities, investment, and economic development in those areas.  In
order to be eligible for contracting assistance, a concern must meet
specific criteria involving ownership, control, principal office location,
and the residence of its employees, and must be certified by the
U.S. Small Business Administration (SBA).  15 U.S.C. S: 632(p).  Once a
firm receives HUBZone certification, its name appears on the SBA's List of
Qualified HUBZone Small Business Concerns and the firm becomes eligible
for HUBZone program preferences that include, of most relevance in this
protest, a HUBZone price evaluation preference in an unrestricted, full
and open competition.  15 U.S.C. S: 657a(b)(3)(A).
[2] We note that the bid amount shown in the contracting officer's
statement for  Turner-Universal is slightly higher than the bid amount
shown in Turner-Universal's protest.  Protest at 3.  In the above chart,
we have used the slightly lower amount as shown in Turner-Universal's
protest.
[3] Turner-Universal raises various arguments about how it, as a large
business, could not be displaced by GSC, a HUBZone small business concern,
when an intervening non-HUBZone small business concern has a lower price
than GSC, which Turner‑Universal maintains would negate the
application of the above-discussed preference to its bid and would require
that the award be made to it.  Protester's Comments at 2. 
Turner-Universal bases these arguments on an *example* contained in 13
C.F.R. S: 126.613, which does appear to support the protester's position. 
That *example,* however, was not incorporated or otherwise referenced in
this IFB and,  as explained by the SBA in its report filed in this
protest, the *example* contains an error.  SBA Report at 3-4.  In
addition, to the extent Turner‑Universal believes that the
evaluation scheme in this IFB was inconsistent with the *example* in 13
C.F.R. S: 126.613, this matter involves an alleged solicitation
impropriety that was not timely raised prior to bid opening.  Bid Protest
Regulations, 4 C.F.R. S: 21.2(a)(1) (2003).  Finally, as discussed above,
in this case the agency applied the HUBZone price evaluation preference
consistent with the Small Business Act and the applicable FAR clause as
incorporated in this IFB and properly awarded the contract to GSC.
[4] In developing the protest record, our Office solicited the views of
the SBA, which concurred with NASA's position that this protest should be
denied.