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089456 1 (1970-01-05)

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  .   a                 UNITED STATES GENERAL  ACCOUNTING  OFFICE
                                 WASHINGTON,  D.C. 20548

 CIVIL DIVISION
                                                               J  5   1970



            Dear Mr. Sandoval:

                 In response to   request  from Congressman Lloyd Meeds, the
            General Accounting Ofi'   REse¶examined into the procurement  of
            cleated plywood containers  by the General Services Administration.
            The Congressman's request  was made on behalf of the Loctwall
            Corporation, Lynnwood, Washington--a  small business--which pro-
            tested a decision by GSA  not to award a contract for container
            items on which Loctwall was  the low bidder.

                 Loctwallts protest  stemmed from the fact that Lootwall had
            reached the mistaken conclusion  that it would be awarded a con-
            tract without fail.  Loctwall's  conclusion was based, in part,
            on inforaation--both verbal  and written--received from SBATs
            Pacific Coastal Area Office in  conjunction with its efforts to
            grant a Certificate of Competency  to Loctwall for the subject
            procurement.

                 1e believe that the problems  experienced as a result of
            Loctwallts mistaken conclusion  indicate a need for SBA to take
            positive steps to avoid such misunderstandings  in the future.
            To this end, we recommend that  SBA (1) emphasize to operating
            personnel the necessity to refrain  from disclosing any informa-
            tion regarding contract award to prospective  suppliers and
            (2) instruct its area offices  that written communications with
            prospective suppliers who apply  for a Certificate of Competency
            be phrased in a manner which does not  offer promise of a con-
            tract award.

                 An information copy of our report  to Congressman Meeds is
            enclosed.

                                              Sincerely yours,




                                              Hen yEschwege
                                              Associate Director

            Enclosures - 2


            The Honorable Hilary Sandoval, Jr.
            Administrator, Small Business               -          -
              Administration                  fX

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