B-152080, OCT. 9, 1963

B-152080, OCT. 9, 1963

TO ENGINEERING RECORD COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR UNDATED LETTER, WITH ENCLOSURE, PROTESTING THE AWARD OF CONTRACT UNDER DEPARTMENT OF THE AIR FORCE INVITATION NO. 04-693-63-12 TO ANY FIRM OTHER THAN YOUR CORPORATION. REFERENCE ALSO IS MADE TO SUBSEQUENT LETTERS DATED JULY 29, AUGUST 13 AND 26, AND SEPTEMBER 3, 1963, FROM YOU IN THIS MATTER.

IT APPEARS THAT IN RESPONSE TO THE INVITATION, WHICH WAS ISSUED ON APRIL 22, 1963, BY THE BASE PROCUREMENT BRANCH, 6592D SUPPORT GROUP, LOS ANGELES, CALIFORNIA, YOU SUBMITTED A BID DATED MAY 20, 1963, OFFERING TO OPERATE THE SPECIFIED AIR FORCE PRINTING DIVISION FOR THE PERIOD OF TIME STATED FOR A TOTAL PRICE OF $312,762. FIFTEEN OTHER BIDS WERE RECEIVED INCLUDING THE NEXT LOW BID FROM THE INDUSTRIAL ART AND ENGINEERING COMPANY, TARZANA, CALIFORNIA, IN THE TOTAL AMOUNT OF $374,880. THE AIR FORCE REPORTS THAT YOUR BID WAS AT A UNIT PRICE OF $2.44 AN HOUR FOR THE SERVICES AGAINST AN HOURLY RATE OF $2.95 OF THE NEXT LOW BID. IT IS REPORTED FURTHER THAT YOU CONFIRMED YOUR BID AND SUBMITTED JUSTIFICATION FOR YOUR OFFER WHEN THE CONTRACTING OFFICER HAD SOME DOUBT AS TO THE ADEQUACY OF THE PRICE QUOTED BY YOU. SUBSEQUENTLY, A FACILITY CAPABILITY REPORT WAS ISSUED ON YOUR CORPORATION WHICH WAS ESSENTIALLY UNFAVORABLE SO FAR AS CONCERNED YOUR COMPETENCY TO PERFORM THE WORK. IN VIEW THEREOF, THE GOVERNMENT CONTRACTING OFFICER SUBMITTED THE MATTER TO THE SMALL BUSINESS ADMINISTRATION REQUESTING A CERTIFICATE OF COMPETENCY. ON JULY 9, 1963, THE SMALL BUSINESS ADMINISTRATION DECLINED TO ISSUE SUCH A CERTIFICATE. THE CONTRACTING OFFICER THEN REJECTED YOUR BID AS BEING NONRESPONSIVE AND AN AWARD OF A CONTRACT WAS APPROVED ON JULY 18, 1963 -- TO BE EFFECTIVE WITH THE AVAILABILITY OF FUNDS ON AUGUST 26, 1963-- TO THE INDUSTRIAL ART AND ENGINEERING COMPANY ON THE BASIS OF THE NEXT LOWEST BID RECEIVED.

YOUR PROTEST APPEARS TO BE BASED PRIMARILY ON THE CONTENTION THAT AN AWARD OF THE CONTRACT SHOULD HAVE BEEN MADE TO YOU SINCE YOU WERE THE LOW BIDDER AND HAVE THE DEMONSTRATED CAPABILITY TO PERFORM.

INVITATION NO. 04-693-63-12 REQUIRED THAT THERE BE FURNISHED ABOUT 60 SKILLED OPERATING PERSONNEL AND TECHNICAL SUPERVISORS INCLUDING, AMONG OTHERS, PLANT MANAGER, PLANT LEADER, LITHOGRAPHERS, PRESSMEN, EDITORS/PROOF READERS, ARTISTS, AND VARITYPISTS. DURING THE PREVIOUS YEAR THE FOREGOING SERVICES WERE PROCURED BY THE AIR FORCE UNDER TWO SEPARATE CONTRACTS, ONE FOR PRINTING AND THE OTHER COVERING GRAPHICS WHICH LATTER CONTRACT WAS AWARDED TO YOU. THE GOVERNMENT CONTRACTING OFFICER WAS AWARE THAT THE CONSOLIDATION OF BOTH OF THESE SERVICES, WHICH REQUIRED SUCH SKILLED OPERATING PERSONNEL, WOULD, OF COURSE, THROW A GREATER BURDEN UPON ANY SUCCESSFUL BIDDER TO PERFORM SATISFACTORILY. MOREOVER, IT IS REPORTED THAT THE CONTRACTING OFFICER ALSO WAS CONCERNED OVER YOUR REPORTED POOR PERFORMANCE UNDER THE PREVIOUS GRAPHICS CONTRACT--- COVERING ONLY A PART OF THE SERVICES HERE REQUIRED--- YOUR INEXPERIENCE IN FURNISHING PRINTING PERSONNEL, AND THE UNUSUALLY LOW BID SUBMITTED BY YOU UNDER INVITATION NO. 04-693 63-12. IN OTHER WORDS, THE CONTRACTING OFFICER HAD BEFORE HIM A RECORD OF PREVIOUS UNSATISFACTORY PERFORMANCE BY A CONTRACTOR SUBMITTING A BID COVERING NOT ONLY SERVICES WITHIN ITS EXPERIENCE BUT OTHER TYPES OF SERVICES UPON WHICH IT WAS NOT PREPARED BY EXPERIENCE TO PERFORM OR BID, ALL AT AN UNREALISTICALLY LOW PRICE. IT IS REPORTED THAT EVIDENCE IS PRESENTED TO SHOW THAT IN THE PERFORMANCE OF YOUR PRIOR CONTRACT FOR GRAPHICS SERVICES YOU WERE UNABLE TO MAINTAIN FULL STRENGTH, THEREBY JEOPARDIZING OVERALL OPERATIONS AND ADVERSELY AFFECTING THE AIR FORCE MISSION; ALSO, THAT THE DELINQUENT STATUS OF THIS PRIOR CONTRACT WAS DUE TO YOUR LOW BID PRICE AND THE RESULTING NECESSITY FOR PAYING WAGES LOWER THAN THE PREVAILING AREA RATE FOR REQUISITE PERSONNEL. IN ADDITION, YOU WERE UNABLE TO MAINTAIN FULL WORK FORCE STRENGTH, AND THE TURNOVER RATE OF PERSONNEL WAS VERY HIGH, RESULTING IN MARGINAL PRODUCTIVITY AND QUALITY. FOR THESE REASONS THE CONTRACTING OFFICER REQUESTED A FACILITY CAPABILITY REPORT ON YOUR CORPORATION. IT IS THUS APPARENT THAT THIS REQUEST WAS NOT MADE SOLELY ON THE BASIS OF THE LOW BID SUBMITTED BY YOU, BUT RATHER WAS DUE TO THE OVERALL CIRCUMSTANCES INVOLVED. THE FACILITY CAPABILITY REPORT WAS, IN ESSENCE, NEGATIVE, IN THAT IT INDICATED THAT YOU DID NOT HAVE THE ADEQUATE PRODUCTION AND ENGINEERING CAPABILITY TO SATISFACTORILY PERFORM. IT WAS NOT UNTIL AFTER THE RECEIPT OF THE FACILITY CAPABILITY REPORT AND THE SUBSEQUENT REFUSAL OF THE SMALL BUSINESS ADMINISTRATION TO ISSUE YOU A CERTIFICATE OF COMPETENCY IN THE CASE THAT YOU WERE CONSIDERED NONRESPONSIVE AND THE AWARD MADE TO THE INDUSTRIAL ART AND ENGINEERING COMPANY.

WE HAVE CONSISTENTLY HELD THAT THE QUESTION AS TO THE QUALIFICATIONS OF A PROPOSED CONTRACTOR IS PRIMARILY FOR DETERMINATION BY THE PROCUREMENT AGENCY AND, IN THE ABSENCE OF CONVINCING EVIDENCE OF BAD FAITH OR OF A REASONABLE BASIS FOR THE DETERMINATION AS MADE, WE WILL NOT INTERPOSE ANY OBJECTION TO SUCH DETERMINATION. ON THE RECORD BEFORE US WE FIND NO SUCH EVIDENCE. MOREOVER, WE HAVE HELD THAT THE REFUSAL OF THE SBA TO ISSUE A CERTIFICATE OF COMPETENCY, AS IN THIS CASE, MUST BE REGARDED AS PERSUASIVE WITH RESPECT TO THE COMPETENCY OR CREDIT OF THE BIDDER CONCERNED. COMP. GEN. 705. WHEN THE ISSUANCE OF A CERTIFICATE OF COMPETENCY IS DENIED THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY MUST BE REGARDED AS HAVING BEEN AFFIRMED. IN THAT CONNECTION, WE HAVE NO AUTHORITY TO REVIEW DETERMINATIONS OF THE SMALL BUSINESS ADMINISTRATION.

IN VIEW OF THE FOREGOING, WE SEE NO BASIS FOR DISTURBING THE AWARD MADE TO THE INDUSTRIAL ART AND ENGINEERING COMPANY UNDER INVITATION NO. 04-693- 63-12.