AFFIRMED ON RECONSIDERATION: June 21, 1993 GSBCA 12346-P-R RMTC SYSTEMS, INC., Protester, and SMALL BUSINESS ADMINISTRATION, Intervening Agency, v. DEPARTMENT OF THE AIR FORCE, Respondent. Michael D. Hays of Dow, Lohnes & Albertson, Washington, DC, counsel for Protester. John W. Klein and Audrey H. Liebross, Office of General Law, Small Business Administration, Washington, DC, counsel for Intervening Agency. Clarence D. Long, III, and Joseph M. Goldstein, Office of the General Counsel, Department of the Air Force, Washington, DC, counsel for Respondent. Before Board Judges DEVINE, BORWICK, and GOODMAN. GOODMAN, Board Judge. On April 30, 1993, RMTC Systems, Inc. (RMTC or protester) filed a motion for reconsideration of this Board's decision dated April 29, 1993, denying RMTC's protest. Because of the issues raised in the motion for reconsideration, the Small Business Administration (SBA) requested, and was granted, leave to intervene and filed a response to the motion. On May 17, 1993, the Department of the Air Force (Air Force or respondent) moved to dismiss RMTC's motion for reconsideration. For the reasons stated below, respondent's motion to dismiss is denied, protester's motion for reconsideration is granted, and the Board's decision dated April 29, 1993 is affirmed. Background Our previous decision found that RMTC, the low offeror, had made a material misrepresentation in its best and final offer (BAFO) by falsely certifying that it had not had a contract terminated for default in the three years previous to its offer in the instant procurement. We held that the contracting officer had properly eliminated RMTC from the procurement because of the false certification. RMTC moved for reconsideration, and the SBA, while not having been a party to the protest before our decision was rendered, intervened on reconsideration. On May 17, 1993, after briefs were received in response to the motion for reconsideration, but before the Board had an opportunity to issue a decision on reconsideration, respondent filed a motion to dismiss RMTC's motion for reconsideration. The basis of respondent's motion to dismiss is that on May 13, 1993, the Department of the Army issued a letter initiating debarment proceedings against RMTC, which allegedly precludes RMTC from being awarded any contract, including the contract in the procurement at issue in this protest. Respondent therefore contends that RMTC is not an interested party, and the Board lacks jurisdiction to rule on the motion for reconsideration. Discussion 1. Respondent's Motion to Dismiss By letter dated May 13, 1993, the Department of the Army informed RMTC that RMTC was being proposed for debarment. Section 9.405(a) of the Federal Acquisition Regulation (FAR) precludes contractors who are "debarred, suspended or proposed for debarment from receiving contracts," and provides that "agencies shall not solicit offers from (or) award contracts to . . . these contractors unless the acquiring agency's head or designee determines that there is a compelling reason for such action." 48 CFR 9.405 (1992). As a result of the proposed debarment, RMTC is precluded from receiving contracts "unless the acquiring agency's head or designee determines that there is a compelling reason for such action." Id. Respondent contends that the Board lacks jurisdiction because RMTC is no longer an interested party, as a contractor whom the Government proposes to debar cannot be awarded a contract. Our previous decision in this protest decided the propriety of the contracting officer's actions in eliminating RMTC from the instant procurement. RMTC was an interested party throughout the pendency of this protest and on the date the protest was denied. The debarment proceedings were initiated after our decision of April 29, 1993, denying the protest. Protester's motion for reconsideration is based on the original jurisdictional grounds. The proposed debarment does not negate the fact that the Board had jurisdiction when we issued our previous decision nor does it divest this Board of jurisdiction to rule on protester's motion for reconsideration of our previous decision. Were we to grant the protest on reconsideration, even if the proposed debarment precludes RMTC from being awarded the contract, RMTC's remedy might also include an award of attorneys' fees and costs. Thus, the proposed debarment does not divest RMTC of interested party status, nor render moot the issues raised in the protest. Respondent's motion to dismiss for lack of jurisdiction is, therefore, denied. 2. Protester's Motion for Reconsideration Rule 32(a)1 permits reconsideration of a Board decision "for any of the reasons stated in Rule 33(a) and the reasons established by the rules of common law or equity." Protester's motion for reconsideration merely raises arguments addressed by the Board in its previous decision. Protester has not shown that any of the grounds enumerated in Rule 33 are applicable here2 ____________________ 1 48 CFR 6101 (1992). 2 Rule 33 states the following grounds: (a) Grounds. The Board may relieve a party from the operation of a final decision or order for any of the following reasons: (1) Newly discovered evidence which could not have been earlier discovered, even through due diligence; (2) Justifiable or excusable mistake, inadvertence, surprise, or neglect; (3) Fraud, misrepresentation, or other misconduct of an adverse party; (4) The decision has been satisfied, released, or discharged, or a prior decision upon which it is based has been reversed or otherwise vacated, and it is no longer equitable that the decision would have prospective application; (5) The decision is void, whether for lack of jurisdiction or otherwise; or (continued...) nor has it shown any other valid ground for reconsideration. Protester's motion has two bases. While both bases of the motion for reconsideration were not raised previously by protester, the issues involved were considered by the Board in its previous decision. However, the SBA alleged in its motion to intervene that it found out about this protest only after the Board's previous decision was issued, and it therefore had no notice nor fair chance to present its position. SBA sought to intervene ". . . because the case has major implications for its jurisdiction under section 8(b)(7)(A) of the Small Business Act, 15 U.S.C. 637(b)(7)(A)." SBA's Response to Request for Reconsideration at 4. In light of the SBA's intervention and the implications of our decision to the SBA's jurisdiction, we grant reconsideration. Protester and the SBA first argue that the contracting officer's determination to eliminate RMTC from the procurement, while characterized by the contracting officer as an issue of nonresponsiveness, was actually a de facto determination of offeror responsibility.3 We addressed this issue in our previous decision. We stated that the resolution of the protest did "not depend on whether the determination of the contracting officer resolved an issue of responsiveness or responsibility. Rather, the issue is whether RMTC was properly eliminated from the procurement as the result of a material misrepresentation in its BAFO." RMTC Systems, Inc. v. Department of the Army, GSBCA 12346-P, slip op. at 10 n.4 (Apr. 29, 1993). The solicitation classified a previous default termination as a responsibility matter. Our denial of RMTC's protest was based on previous decisions of this Board in which we have held that in circumstances of material misrepresentation by an offeror, the relevant legal issue was neither the offeror's responsibility nor its integrity, but whether the integrity of the bidding process had been compromised. The integrity of the bidding process demands that the contracting officer be able to take the documents contained in the offeror's submission at face value. University Systems, Inc. v. Department of Health and Human Services, GSBCA 12039-P, 1992 BPD 380; Sterling Federal Systems, Inc., GSBCA 10381-P, 90-2 BCA 22,082, 1990 BPD 70. In the instant protest, we held that the integrity of the procurement process must be protected when we are presented with a material misrepresentation by an offeror, and in denying RMTC's protest, we determined that the contracting officer had so protected the process in eliminating RMTC from the instant procurement. ____________________ 2(...continued) (6) Any other ground justifying relief from the operation of the decision or order. 3 SBA's response also asserts that the contracting officer actually made a de facto determination of nonresponsibility. Protester's and the SBA's argument that the contracting officer had made a de facto responsibility determination, while previously not specifically raised by protester, was considered by the Board in our previous decision, but was not the determinative issue as now asserted by RMTC and the SBA. Protester and the SBA also ask us to reconsider our previous decision in light of 15 U.S.C. 637(b)(7)(A) (1988) of the Small Business Act.4 Both parties interpret this statute as forbidding the contracting officer from eliminating RMTC from the procurement on the basis of responsibility or integrity without first having referred the matter for a final disposition to the SBA. Protester argues that the contracting officer's elimination of RMTC from the procurement and our decision which upheld the contracting officer's action violated the statute. While we did not address the specific statutory provision, we did address this issue in our previous decision. Protester's and the SBA's assertions are supported neither by case law nor by the legislative history of the Small Business Act. In University Systems, Inc., cited in our previous decision in this protest, protester argued that its elimination from the procurement by the contracting officer was a responsibility determination, and that its due process rights were violated because it had not been allowed to rebut this determination by referral to the SBA. This Board held that our de novo review and our power to suspend discovery provide adequate opportunity for the protester to be heard in accordance with the protester's due ____________________ 4 This section reads, in pertinent part: (b) It shall also be the duty of the [Small Business] Administration and it is empowered, whenever it determines such action is necessary, (7)(A) To certify to Government procurement officers . . . with respect to all elements of responsibility, including, but not limited to, capability, competency, capacity, credit, integrity, perseverance, and tenacity, of any small business concern or group of such concerns to receive and perform a specific Government contract. A Government procurement officer . . . may not, for any reason specified in the preceding sentence, preclude any small business concern or group of such concerns from being awarded such contract without referring the matter for a final disposition to the Administration. process rights,5 and that removal of an offeror from the procurement for reasons relating to the integrity of the procurement process did not require SBA review. In deciding University Systems, Inc., the Board cited NKF Engineering, Inc. v. United States, 805 F.2d 372 (Fed. Cir. 1986), in which the Court addressed the issue of bidder disqualification resulting from a compromise of the integrity of the bidding process. The Court held that the contracting officer need not defer to the SBA pursuant to 15 U.S.C. 637(b)(7)(A) if the issue did not involve the status of the offeror as a small business. The Court cited prior case law that explored the legislative intent of the Small Business Act, 15 U.S.C. 637(b)(7)(A). In Siller Brothers, Inc. v. United States, 655 F.2d 1039 (Ct. Cl. 1981), cert. denied, 456 U.S. 925 (1982), the Court of Claims examined the legislative history of 15 U.S.C. 637(b)(7)(A)6 and found that the purpose of this provision was to end the discrimination against small businesses that existed because contracting officers had barred those businesses solely because of their small size and the disabilities allegedly resulting from that fact. In Siller Brothers, Inc., the Court of Claims held that an offeror was properly eliminated from the procurement not because of alleged deficiencies stemming from its size as a small business, but because of its failure to perform under a prior contract. The Court found that "[t]he result would have been the same if the plaintiff had not been a small business." 655 F.2d at 1044. The Court reasoned that since the statute was not meant to require a resolution by the SBA when the issue resulting in the offeror's disqualification did not involve the offeror's status as a small business, the contracting officer was not required to defer its determination of nonresponsibility to the SBA. See Electro-Methods, Inc. v. United States, 3 Cl. Ct. 500 (1983), aff'd in part and rev'd in part on other grounds, 728 F.2d 1471 (Fed. Cir. 1984), in which the Claims Court, citing Siller Bros., Inc., again rejected the need for the contracting officer to defer to the SBA before suspending an offeror when the offeror's status as a small business was not a factor. See also Compliance Corp. v. United States, 22 Cl. Ct. 193 (1990). ____________________ 5 The procurement in the instant protest was suspended by this Board's decision of April 5, 1993, because of the Government's failure to timely notify protester of contract award. 6 15 U.S.C. 637(b)(7)(A) in its present form was included in the Small Business Act by amendment in 1977. See Siller ___ ______ Brothers, Inc., 655 F.2d at 1042-44, for the Court of Claims' ______________ analysis of the legislative history of this provision and prior provisions of the Act. In the instant procurement, RMTC's false certification and material misrepresentation in its BAFO did not arise from RMTC's status as a small business. The certification required by the solicitation concerning previous defaulted contracts and the standards of conduct that were violated by RMTC in making the material misrepresentation about its prior default history are not applicable solely to small businesses. The contracting officer's decision to eliminate RMTC from the procurement had nothing to do with RMTC's status as a small business, but everything to do with its having made a material misrepresentation that resulted in a compromise of the integrity of the bidding process. No deference to the SBA was required by statute to resolve the matter of RMTC's false certification. Our previous decision did not violate the Small Business Act as alleged by protester and the SBA. Decision Respondent's motion to dismiss is DENIED. Protester's motion for reconsideration is GRANTED. The Board decision of April 29, 1993 is AFFIRMED. _____________________ ALLAN H. GOODMAN Board Judge We concur: _____________________ _____________________ DONALD W. DEVINE ANTHONY S. BORWICK Board Judge Board Judge