B-163860, AUG. 14, 1968

B-163860, AUG. 14, 1968

TO SPACE SYSTEMS LABORATORY, INC.:

REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO BAUSCH AND LOMB OPTICAL COMPANY UNDER REQUEST FOR PROPOSAL (RFP) NO. DAAA25-68-R-0294, ISSUED BY THE FRANKFORD ARSENAL, PHILADELPHIA, PENNSYLVANIA.

THE SUBJECT RFP WAS FOR 869 COLLIMATORS, INFINITY AIMING REFERENCE. THE 24 COMPANIES SOLICITED, FIVE RESPONDED WITH PROPOSALS WITH PRICES RANGING FROM $469 EACH TO $720, YOUR FIRM OFFERING THE LOWEST PRICE. PURSUANT TO THE ARMED SERVICES PROCUREMENT REGULATIONS (ASPR) 1-905.4, THE CONTRACTING OFFICER REQUESTED A PRE-AWARD SURVEY BY THE DEFENSE CONTRACT ADMINISTRATIVE SERVICES DISTRICT, ORLANDO, FLORIDA (DCASD-ORLANDO) IN CONNECTION WITH YOUR RESPONSIBILITY TO PERFORM IF AWARDED THE CONTRACT. DCASD-ORLANDO RECOMMENDED AGAINST AWARD ON THE BASIS THAT YOUR FIRM WAS DEFICIENT IN THE FOLLOWING AREAS: PRODUCTION CAPABILITY, FINANCIAL CAPABILITY, PAST PERFORMANCE RECORD, ABILITY TO MEET REQUIRED DELIVERY SCHEDULES, AND TENACITY AND PERSEVERANCE. ON THE BASIS OF THE NEGATIVE PRE-AWARD SURVEY AND A SUBSEQUENT REVIEW OF YOUR RESPONSIBILITY BASED ON THE RECORDS OF THE FRANKFORD ARSENAL, THE CONTRACTING OFFICER DETERMINED, PURSUANT TO ASPR 1-705.4 (C) (V), THAT YOUR FIRM WAS NOT RESPONSIBLE BECAUSE OF LACK OF TENACITY AND PERSEVERANCE. ON FEBRUARY 21, 1968, AWARD WAS MADE TO BAUSCH AND LOMB, INC., THE SECOND LOW OFFEROR.

ACCORDING TO THE ADMINISTRATIVE REPORT, THE ABOVE-MENTIONED REVIEW OF THE RECORDS AT THE FRANKFORD ARSENAL DISCLOSED THAT UNDER CONTRACT NO. DA-36- 038-AMC-2299 (W), DATED JANUARY 29, 1965, AS REVISED BY MODIFICATION NOS. 8, 13, AND 15, DATED AUGUST 17, 1965, JANUARY 24, 1966, AND FEBRUARY 23, 1966, RESPECTIVELY, YOU SHOULD HAVE DELIVERED 1,250 COLLIMATORS ACCORDING TO THE FOLLOWING SCHEDULE: 1965 NOVEMBER 25 MAY 125

DECEMBER 102JUNE 125 1966 JANUARY 100 JULY 100

FEBRUARY 125 AUGUST 100

MARCH 125 SEPTEMBER 100

APRIL 125 OCTOBER 98

BY OCTOBER 1966, YOU HAD ONLY DELIVERED 794 UNITS AS FOLLOWS: 1965 NOVEMBER 25 MAY

0

DECEMBER 102 JUNE 117 1966 JANUARY 0 JULY 45

FEBRUARY 130 AUGUST 33

MARCH 121 SEPTEMBER 0

APRIL 221 OCTOBER 0

THE PROCURING ACTIVITY ATTRIBUTED THE DELIVERY SLIPPAGES UNDER THIS CONTRACT TO INSUFFICIENT OR DEFECTIVE COMPONENTS FROM YOUR GERMAN SUPPLIERS. IT WAS STATED THAT YOUR FIRM PERSISTED IN USING GERMAN SUPPLIERS, NOTWITHSTANDING THE AVAILABILITY OF DOMESTIC SUPPLIERS.

HOWEVER, IN CONNECTION WITH THIS CONTRACT IT MUST BE POINTED OUT THAT THE CONTRACT AS ORIGINALLY AWARDED ONLY CALLED FOR 852 UNITS, PRODUCTION TO BEGIN IN AUGUST 1965 AND TO BE COMPLETED IN MAY 1966, AN EXTENSION TO JULY 1966 BEING GRANTED AS A RESULT OF ENGINEERING CHANGE ORDERS (MODIFICATION NO. 8 AUGUST 12, 1965). BY MODIFICATION NO. 14, 398 UNITS WERE ADDED, EVEN THOUGH AT THIS POINT IN TIME THERE WAS SOME EVIDENCE OF YOUR INABILITY TO MEET THE DELIVERY SCHEDULE DUE TO LATE DELIVERIES OF MATERIAL FROM YOUR GERMAN SUPPLIERS, AS WELL AS ENGINEERING AND START UP PROBLEMS, AS YOU CONTEND, EVIDENCED BY SEVERAL ENGINEERING CHANGES. AS A RESULT OF THIS ADD-ON TO THE CONTRACT ITS COMPLETION DATE WAS EXTENDED TO NOVEMBER. WHILE THIS ALLOWED A FOUR MONTH LEAD TIME, YOU CONTEND IT WAS TOO SHORT, AND THAT NINE MONTHS WOULD HAVE BEEN MORE REALISTIC. (THE PROCURING ACTIVITY MAINTAINS THAT NINE MONTHS LEAD TIME IS NORMAL FOR FIRST TIME PRODUCERS; YOU WERE SUPPOSEDLY AN ESTABLISHED PRODUCER. IT IS NOTED THAT 6 OR 7 MONTHS APPEARS TO BE THE NORMAL LEAD TIME FOR ESTABLISHED PRODUCERS.) MODIFICATION NO. 18 OF JANUARY 25, 1967, GRANTED AN EXTENSION TO MARCH 1967, GIVEN IN CONSIDERATION FOR ACCELERATING THE SCHEDULE UNDER CONTRACT NO. DA-36-038-AMC-4114 (W), AWARDED MAY 25, 1966.

CONCERNING THE LATTER CONTRACT, THE REPORT STATED: "4. A FURTHER REVIEW BY THE CONTRACTING OFFICER OF SSL'S RESPONSIBILITY, BASED UPON THE RECORDS OF FRANKFORD ARSENAL, DISCLOSED THE FOLLOWING:

"A. UNDER CONTRACT DA-36-038-AMC-4114, DATED 25 MAY 1966 AS AMENDED THROUGH MODIFICATION NO. 5 DATED 29 SEPTEMBER 1966, SSL WAS REQUIRED TO DELIVER 1633 COLLIMATORS AS FOLLOWS: 1967 FEBRUARY

50 JULY 200

MARCH 100 AUGUST 200

APRIL 154SEPTEMBER 200

MAY 200 OCTOBER 240

JUNE 200 NOVEMBER 89

"/1) BY MODIFICATION NOS. 7 AND 8 DATED 25 JANUARY 1967 AND 27 FEBRUARY 1967 RESPECTIVELY, SSL AGREED TO ACCELERATE THIS SCHEDULE IN CONSIDERATION FOR AN EXTENSION OF DELIVERIES UNDER ANOTHER CONTRACT AND FOR AN ADDITIONAL 62 UNITS AS FOLLOWS: 1967 FEBRUARY 174JUNE 300

MARCH 300 JULY 295

APRIL 300 AUGUST 26

MAY 300

"/2) BY 30 APRIL 1967, SSL HAD ONLY DELIVERED 200 UNITS NOTWITHSTANDING 774 UNITS SHOULD HAVE BEEN DELIVERED.

"/3)INASMUCH AS IT WAS OBVIOUS THAT SSL COULD NOT MAINTAIN THE REQUIRED DELIVERY SCHEDULE SET FORTH UNDER (1) ABOVE, THE SCHEDULE WAS RELAXED BY MODIFICATION NO. 9 DATED 15 MARCH 1967, FOR SSL'S BENEFIT, TO ESTABLISH A SCHEDULE MORE REALISTIC WITH RESPECT TO ITS ESTIMATED CAPACITY OF NOT MORE THAN 200 UNITS PER MONTH. THIS MODIFICATION, ACCORDINGLY, EXTENDED THE COMPLETION DATE FOR THE 1695 UNITS TO NOVEMBER 1967 FROM THE PREVIOUS FINAL DATE OF AUGUST 1967.

"/4) THE SUBSTANTIAL CAUSE OF SSL'S FAILURES UNDER THIS CONTRACT WAS ATTRIBUTABLE TO ITS INABILITY TO OBTAIN TIMELY DELIVERY OF COMPONENTS FROM ITS GERMAN VENDORS, NOTWITHSTANDING THAT SUCH COMPONENTS COULD HAVE BEEN READILY OBTAINED BY SSL FROM DOMESTIC SOURCES.'

IT IS YOUR CONTENTION THAT THE ACCELERATED SCHEDULE WAS UNREALISTIC. IS NOTED THAT THROUGHOUT THE REMAINDER OF THE CONTRACT YOU PERFORMED SATISFACTORILY, EXCEPT FOR A PERIOD IN NOVEMBER AND DECEMBER 1967 IN WHICH YOU WERE 54 UNITS DELINQUENT. ACCORDING TO THE NOVEMBER AND DECEMBER MONTHLY PRODUCTION PROGRESS REPORTS, THE DELINQUENCY WAS THE RESULT OF THE LATE ARRIVAL OF COMPONENTS FROM A GERMAN SUPPLIER. HOWEVER, IT IS YOUR CONTENTION THAT THIS DELINQUENCY IS OF A MINOR NATURE AND THAT FOR THE LAST NINE MONTHS OF THE CONTRACT YOU HAD A SUSTAINED PRODUCTION OF 200 UNITS PER MONTH.

THE ADMINISTRATIVE REPORT ALSO DISCUSSED YOUR PERFORMANCE UNDER A CONTRACT FOR THE PRODUCTION OF 3505 ELBOW TELESCOPES. THE REPORT SAID THAT:

"B. UNDER CONTRACT DA-36-038-AMC-3957, DATED 22 APRIL 1966, AS AMENDED BY MODIFICATION NO. 1, DATED 20 JUNE 1966, SSL WAS REQUIRED TO DELIVER 3505 TELESCOPES, ELBOW M109 AS FOLLOWS: 1966 OCTOBER 100 MARCH 500

NOVEMBER 200 APRIL 498

DECEMBER 500 MAY 500 1967 JANUARY 500 JUNE 207

FEBRUARY 500

"/1) THE FIRST DELIVERIES BY SSL UNDER THIS CONTRACT WERE NOT MADE UNTIL 292 UNITS WERE DELIVERED IN MAY 1967, AND THERE WERE NO DELIVERIES IN JUNE 1967, AND ONLY 285 UNITS WERE DELIVERED DURING JULY 1967.

"/2) BY MODIFICATION NO. 6 DATED 31 JULY 1967, THE SCHEDULE WAS RELAXED FOR SSL'S BENEFIT TO SET FORTH ONE WHICH WAS MORE REALISTIC IN RELATIONSHIP TO SSL'S ESTIMATED CAPACITY OF NOT BEING ABLE TO MAKE MORE THAN 400 UNITS A MONTH. 1967 MAY 292 NOVEMBER 400

JUNE 0 DECEMBER 400

JULY 280 1968JANUARY 400

AUGUST 300 FEBRUARY 400

SEPTEMBER 300 MARCH 400

OCTOBER 300 APRIL 33

"/3) DURING AUGUST 1967 SSL DELIVERED ONLY 53 UNITS; IN SEPTEMBER 300 UNITS; IN OCTOBER - 261 UNITS; AND IN NOVEMBER - NO DELIVERIES.

"/4) BY MODIFICATION NO. 7 DATED 11 DECEMBER 1967, THE SCHEDULE WAS AGAIN RELAXED FOR SSL'S BENEFIT AS FOLLOWS: 1967 MAY 292 DECEMBER 550

JUNE 0 1968 JANUARY 400

JULY 285 FEBRUARY 400

AUGUST 53 MARCH 400

SEPTEMBER 300 APRIL 414

OCTOBER 261 MAY 150

NOVEMBER 0

"/5) DURING DECEMBER 1967, SSL MADE NO DELIVERIES, IN JANUARY 1968 ONLY 194 UNITS WERE DELIVERED, AND IN FEBRUARY 1968 ONLY 307 UNITS WERE DELIVERED.

"/6) THE SUBSTANTIAL CAUSE OF SSL'S FAILURES UNDER THIS CONTRACT WERE AGAIN DUE TO INSUFFICIENT OR DEFECTIVE COMPONENTS FROM GERMAN VENDORS, NOTWITHSTANDING THAT SUCH COMPONENTS COULD HAVE BEEN READILY OBTAINED FROM DOMESTIC SOURCES.'

IT IS YOUR CONTENTION THAT THE DELINQUENCIES UNDER AMC-3957 WERE CAUSED BY THE GOVERNMENT'S FAILURE TO CORRECT DRAWING ERRORS AND DESIGN DEFICIENCIES. YOU STATE THAT WHEN FABRICATION OF THE DETAILED PARTS AND ASSEMBLIES IS ACCOMPLISHED IN ACCORDANCE WITH GOVERNMENT DRAWINGS, THE GOVERNMENT PERFORMANCE SPECIFICATIONS CANNOT BE MET. SPECIFICALLY, YOU POINT OUT THAT IN DECEMBER OF 1966 THE INCONSISTENCY BETWEEN THE OBJECTIVE CELL TOLERANCE REQUIREMENTS AND THE COLLIMATION REQUIREMENTS IN THE SPECIFICATIONS WAS BROUGHT TO THE ATTENTION OF DCASD, ORLANDO, AND THAT IN MARCH OF 1967 YOU SUBMITTED A REQUEST FOR TECHNICAL ACTION (TAR) DCASD- 3957-1-67, REQUESTING THAT THIS INCONSISTENCY BE CORRECTED. HOWEVER, YOU STATE THAT IT WAS NOT UNTIL MAY OF 1968, AFTER ADDITIONAL CORRESPONDENCE AND SEVERAL MEETINGS WITH TECHNICAL PERSONNEL AT DCASD AND THE FRANKFORD ARSENAL, THAT RELIEF WAS GRANTED. (SEE TAR DCASD-3957-2-67, DATED MAY 9, 1967, RECEIVED BY YOU ON MAY 15, 1968.) YOU STATE THAT YOU ALSO REQUESTED CONTRACT CHANGES WITH RESPECT TO: (1) EYE PIECE DESIGN, (2) RESOLUTION PROBLEM RESULTING FROM INADEQUATE DESIGN INFORMATION AND CONTROL, (3) MOISTURE PROBLEM. YOU DENY THAT THE DELINQUENCIES IN THE DELIVERY SCHEDULE WERE CAUSED BY INSUFFICIENT OR DEFECTIVE COMPONENTS FROM YOUR GERMAN SUPPLIERS.

IT IS ALSO REPORTED THAT AIR FORCE (AF) CONTRACT 36/600/-22522 WAS TERMINATED FOR DEFAULT BECAUSE OF YOUR INABILITY TO RETAIN EMPLOYEES WITH THE NECESSARY SKILLS TO PERFORM AND THAT THE CONTRACT SCHEDULE WAS EXTENDED UNDER CONTRACT AF09/603/-60360 AFTER A SHOW CAUSE LETTER HAD BEEN ISSUED. THIS WAS ATTRIBUTED TO PERSONNEL PROBLEMS AND NOT TO DIFFICULTIES WITH YOUR SUPPLIER. (IT IS NOTED THAT THE INITIAL REPORT OF APRIL 3, 1968, STATED THAT THE CAUSE OF YOUR HAVING AF 36/600/-22522 TERMINATED FOR DEFAULT AND THE POOR PERFORMANCE ON AF09/603/-60360 WAS THE FAILURE OF YOUR GERMAN SUPPLIERS, HOWEVER SUCH CONCLUSIONS WERE NOT SUPPORTED BY THE PRE-AWARD SURVEY.) YOU STATE THAT BOTH OF THESE CONTRACTS WERE BASICALLY RESEARCH AND DEVELOPMENT CONTRACTS AND THAT YOU DID EXPERIENCE SOME TECHNICAL DIFFICULTIES. HOWEVER, YOU DENY THAT ANY GERMAN MADE PARTS WERE USED FOR THESE CONTRACTS.

CONCERNING DAAA-25-67-D-1024, AWARDED JUNE 28, 1967, NO MENTION WAS MADE IN THE REPORTS CONCERNING ANY DIFFICULTIES IN CONNECTION WITH THIS CONTRACT, EXCEPT FOR A DELAY CAUSED BY THE GOVERNMENT'S FAILURE TO FURNISH CERTAIN BATTERY BOXES ON TIME. HOWEVER, DCASD STATES THAT THIS CONTRACT WAS NOT CONSIDERED AS SIGNIFICANT IN THE PRE-AWARD EVALUATION OF YOUR RESPONSIBILITY INASMUCH AS FIRST DELIVERIES WERE NOT TO BEGIN UNTIL JANUARY 1968, AND AT THE TIME OF THE PRE-AWARD EVALUATION THE GOVERNMENT HAD NOT YET FURNISHED THE ABOVE-MENTIONED BATTERY BOXES, WHICH CAUSED A DELAY IN THE JANUARY 1968 DELIVERIES.

THE OFFICIAL DETERMINATION OF NON-RESPONSIBILITY BY THE CONTRACTING OFFICER STATES THAT:

"BASED ON THE ABOVE, I HEREBY FIND THAT SPACE SYSTEMS LABORATORIES, INC., HAS A PAST UNSATISFACTORY RECORD OF PERFORMANCE, NOT DUE TO INADEQUATE CAPACITY OR CREDIT, BUT DUE INSTEAD TO ITS FAILURE TO APPLY NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB. I ACCORDINGLY DETERMINE THAT IT IS UNNECESSARY TO REFER THIS CASE FOR A CERTIFICATE OF COMPETENCY TO THE SMALL BUSINESS ADMINISTRATION UNDER THE TERMS OF ASPR 1-705.4 (C) (V).' BY THIS DETERMINATION, THE PROCURING ACTIVITY HAS FOUND THAT YOUR UNSATISFACTORY PERFORMANCE RECORD WAS NOT DUE SOLELY TO LACK OF CAPACITY OR CREDIT, AND UNDER THE CITED REGULATION REFERENCE TO THE SMALL BUSINESS ADMINISTRATION WAS THEREFORE NOT REQUIRED. THIS OFFICE HAS HELD, HOWEVER, THAT A RECORD OF PAST DELIQUENCIES OR DEFAULTS BY A CONTRACTOR PROVIDES NO BASIS FOR REFUSING TO MAKE AN AWARD WITHOUT REFERRAL TO SBA IF SUCH DELINQUENCIES OR DEFAULTS WERE DUE TO FACTORS INCLUDED IN CAPACITY OR CREDIT (38 COMP. GEN. 289; B-151407, SEPTEMBER 21, 1963), AND IN ORDER TO ESTABLISH A PROPER RECORD ON WHICH TO DETERMINE THE PROPRIETY OF AN AWARD IN SUCH A CASE ASPR 1-705.4 (C) (VI) PROVIDED AS FOLLOWS DURING THE PERIOD IN QUESTION:

"A DETERMINATION BY A CONTRACTING OFFICER THAT A SMALL BUSINESS CONCERN IS NOT RESPONSIBLE FOR REASONS OTHER THAN DEFICIENCIES IN CAPACITY OR CREDIT (E.G., LACK OF INTEGRITY, BUSINESS ETHICS, OR PERSISTENT FAILURE TO APPLY NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB) MUST BE SUPPORTED BY SUSTANTIAL EVIDENCE DOCUMENTED IN THE CONTRACT FILE.' THE RECORD INDICATES THAT THE PRIMARY REASON FOR THE PROCURING ACTIVITY'S DETERMINATION THAT YOUR FIRM LACKED THE NECESSARY TENACITY AND PERSEVERANCE TO PERFORM THIS CONTRACT WAS THE REPEATED FAILURE OF YOUR SUPPLIERS (MOSTLY GERMAN) TO MAKE TIMELY DELIVERIES OF A SUFFICIENT NUMBER OF ACCEPTABLE PARTS, AND YOUR REFUSAL TO SWITCH TO MORE RELIABLE DOMESTIC SUPPLIERS. THIS OFFICE HAS HELD THAT POOR CONTROL ON THE PART OF A CONTRACTOR IN OBTAINING TIMELY DELIVERIES OF MATERIALS FROM SUBCONTRACTORS RELATES TO THE TENACITY AND PERSEVERANCE OF A CONTRACTOR, RATHER THAN TO HIS CAPACITY OR CREDIT. B-159062, JULY 20, 1966. IT THEREFORE FOLLOWS THAT THE DETERMINATION THAT YOUR FIRM WAS NOT A RESPONSIBLE BIDDER MUST BE SUPPORTED BY SUBSTANTIAL EVIDENCE IN THE CONTRACT FILE AS TO YOUR FAILURE TO MAKE OR MAINTAIN ADEQUATE ARRANGEMENTS TO INSURE TIMELY DELIVERY OF MATERIALS OR COMPONENTS FROM SUPPLIERS OR SUBCONTRACTORS.

THE PRE-AWARD SURVEY PREPARED BY DCASD, ORLANDO, RECOMMENDED AGAINST AWARD ON THE BASIS THAT YOUR PRODUCTION CAPABILITY TO MEET THE RFP DELIVERY SCHEDULE WAS UNSATISFACTORY BECAUSE AVAILABILITY OF NECESSARY COMPONENTS FROM GERMAN SUPPLIERS FOR THE COLLIMATORS WAS INSUFFICIENT TO MEET BOTH THE REQUIREMENTS OF YOUR CURRENT CONTRACT (DAAA 25-67-D 1024) AND THE REQUIREMENTS OF THE RFP, AND THAT THIS LACK OF CAPABILITY WAS EVIDENT FROM THE INABILITY OF THESE VENDORS TO MEET THE PREVIOUS PRIME CONTRACT COMMITMENTS TOGETHER WITH YOUR REFUSAL TO SELECT DOMESTIC VENDORS WHO COULD MEET SUCH REQUIREMENTS. THIS IS SUPPORTED BY THE CONTRACT PERFORMANCE ANALYSIS OF MARCH 20, 1967, AND JULY 6, 1967, IN CONNECTION WITH CONTRACT NO. DA-36-038-AMC-2299/W), IN WHICH IT WAS STATED THAT ONE OF THE CAUSES FOR THE DELIVERY DELIQUENCIES WAS LATE RECEIPT OF MATERIAL FROM GERMAN VENDORS. IN CONNECTION WITH THIS CONTRACT, SEE YOUR LETTER OF OCTOBER 1, 1965, TO DCASD, ORLANDO, WHEREIN YOU LISTED PARTS NOT YET RECEIVED FROM GERMANY. ALSO, IN CONNECTION WITH THIS CONTRACT, THE NOVEMBER AND DECEMBER 1966 MONTHLY REPORTS OF DELINQUENT DELIVERY STATES THAT DELINQUENCIES ARE DUE TO INABILITY TO CONTROL FOREIGN SUBCONTRACTORS AND TO LATE RECEIPT OF PARTS FROM SUCH SUPPLIERS. FURTHER, A REPORT ON A TRIP TO YOUR PLANT IN JANUARY 1966 BY PHILIP SHANKER, PROCUREMENT DIRECTORATE, FIRE CONTROL DIVISION, IT WAS NOTED THAT YOU WERE MISSING CERTAIN PARTS WHICH WERE TO BE OBTAINED FROM GERMAN SOURCES. THE RECORD FURTHER INDICATES THAT YOU BECAME DELINQUENT ON CONTRACT 2299/W) ON JUNE 1, 1966, AND THAT THE CAUSE GIVEN FOR THE DELINQUENCY WAS NON-RECEIPT OF COMPONENTS SUBCONTRACTED TO A FIRM IN GERMANY, AND THE INDUSTRIAL SPECIALIST RECOMMENDED THAT A "SHOW CAUSE" LETTER BE ISSUED.

IN CONNECTION WITH CONTRACT NO. DA-36-038-AMC-4114, THE INDUSTRIAL SPECIALIST ALSO RECOMMENDED THAT A "SHOW CAUSE" LETTER BE ISSUED AS A RESULT OF THE FEBRUARY 1967 DELINQUENCIES, WHICH WERE ATTRIBUTED TO LATE RECEIPT OF PARTS FROM GERMAN SUPPLIERS. IT IS ALSO REPORTED IN MONTHLY PROGRESS REPORTS OF NOVEMBER AND DECEMBER 1967 ON THIS CONTRACT THAT THERE WAS A DELINQUENCY IN NOVEMBER 1967 WHICH WAS ATTRIBUTED TO LATE RECEIPT OF COMPONENTS FROM GERMANY. ADDITIONALLY, THE CONTRACT PERFORMANCE ANALYSIS OF DECEMBER 21, 1967, ON THIS CONTRACT STATED THAT THE DELINQUENCY RESULTED FROM LATE RECEIPT OF MATERIAL FROM GERMANY. THIS IS ALSO BORNE OUT BY NOTIFICATION OF DELAY IN DELIVERY (DSA FORM 593-R) DATED NOVEMBER 30, 1967, AND RECORD OF TELECON NO. 3544 DATED DECEMBER 1, 1967, BETWEEN MR. PHILIP SHANKER, PRODUCTION SPECIALIST, FRANKFORD ARSENAL, AND YOUR MR. BRADFORD. CONCERNING CONTRACT DA-36-038-AMC-3957/W), BY LETTER OF FEBRUARY 24, 1967, THE CONTRACTING OFFICER DENIED YOUR REQUEST FOR PROGRESS PAYMENTS, STATING THAT YOU WOULD NOT MEET YOUR FEBRUARY DELIVERY SCHEDULE BECAUSE OF YOUR INEFFECTIVE LIAISON WITH YOUR EUROPEAN SUPPLIERS. ACCORDING TO A REPORT, DATED DECEMBER 6, 1967, WHICH REPORTED ON A TRIP MADE TO YOUR PLANT TO ASSIST DCAS IN ITS PRE-AWARD SURVEY, ONE OF THE DETERMINING FACTORS BEARING ON YOUR ABILITY TO MEET THE REVISED CONTRACT SCHEDULES WOULD BE YOUR ABILITY TO CONTROL FOREIGN SUBCONTRACTORS FOR THE RECTICLE ASSEMBLY. THE REPORT STATED THAT SHOULD YOU NOT BE ABLE TO CONTROL THE SUBCONTRACTOR, TOTAL OR PARTIAL TERMINATION FOR DEFAULT SHOULD BE CONSIDERED. THE MONTHLY PRODUCTION PROGRESS REPORT FOR DECEMBER 1967 REPORTS THAT THE SUBCONTRACTOR FOR LENS-RETICLE SUBASSEMBLIES WAS NOT ABLE TO FURNISH THE PART IN SUFFICIENT QUANTITIES. THE REPORT FURTHER STATES THAT YOUR PRESIDENT MADE A VISIT TO GERMANY IN ORDER TO ALLEVIATE THIS PROBLEM AND THAT HE HAD SECURED A PROMISE FOR 50 LENS-RETICLE SUBASSEMBLIES PER WORKING DAY. HOWEVER, AS OF JANUARY 22, 1968 (THE DATE OF THE PROGRESS REPORT) THE PROMISE HAD NOT BEEN FULFILLED. AT THAT TIME YOU WERE STILL EXPERIENCING WORK STOPPAGES DUE TO LACK OF THESE PARTS. TRIP REPORT, DATED FEBRUARY 16, 1968, SUBMITTED BY A PRODUCTION SPECIALIST FROM FRANKFORD ARSENAL REPORTS THE FINDINGS OF A JOINT DCASD-ORLANDO FRANKFORD ARSENAL SURVEY TEAM. ONE OF THESE FINDING WAS THAT YOUR FAILURE TO RECEIVE A SUFFICIENT NUMBER OF RETICLES FROM YOUR GERMAN SUPPLIER WAS STILL A MAJOR REASON FOR YOUR DELIVERY DELAY.

THE DETERMINATION OF A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY IS PRIMARILY THE FUNCTION OF THE CONTRACTING OFFICER, AND IS NECESSARILY A MATTER OF JUDGMENT INVOLVING A CONSIDERABLE DEGREE OF DISCRETION. WHERE SUCH DETERMINATION IS BASED UPON SUBSTANTIAL EVIDENCE AND IS NEITHER ARBITRARY NOR CAPRICIOUS, WE WILL NOT UNDERTAKE TO SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER. SEE 45 COMP. GEN. 46; 43 ID. 257; 38 ID. 131; 38 ID. 778; 37 ID. 430, 435; 39 ID. 705, 711; AND B-160597, JUNE 13, 1967. THIS RULE HAS BEEN APPLIED WHERE THE EVIDENCE OF LACK OF TENACITY AND PERSEVERANCE CONSISTS OF MINOR FAULTS WHICH CUMULATIVELY RESULT IN UNDULY INCREASING THE GOVERNMENT'S BURDEN OF ADMINISTERING THE CONTRACT. 43 COMP. GEN. 257; B-160499, JANUARY 6, 1967. IN THE PRESENT CASE, ALTHOUGH YOU HAVE DISPUTED THE VALIDITY OF, AND RESPONSIBILITY FOR, VARIOUS OF THESE DELINQUENCIES, AND THE RECORD INDICATES THAT THE DELINQUENCIES WHICH OCCURRED DURING THE PERFORMANCE OF AF36/600/-22522, AF09/603/-60360 CANNOT BE ATTRIBUTED TO FAILURE OF GERMAN VENDORS TO MAKE TIMELY DELIVERIES, THE RECORD STILL SHOWS A SUBSTANTIAL NUMBER OF DELINQUENCIES WHICH ARE ATTRIBUTED TO LATE DELIVERIES BY FOREIGN SUPPLIERS. THE FACT THAT SUBSEQUENT EVENTS MAY HAVE ESTABLISHED THAT YOUR FIRM HAS IMPROVED ITS PERFORMANCE DOES NOT INVALIDATE THE CONTRACTING OFFICER'S DETERMINATION WHICH WAS BASED ON THE MOST CURRENT INFORMATION AVAILABLE TO HIM AT THE TIME OF DETERMINATION. SEE B-161806, FEBRUARY 26, 1968; B-158745, APRIL 27, 1966; B-158618, APRIL 15, 1966. WHILE MOST OF THE DELINQUENCIES CITED MAY NOT HAVE BEEN SERIOUS IF CONSIDERED INDIVIDUALLY, AND WHILE YOU HAVE FURNISHED EVIDENCE OF DILIGENT EFFORTS TO CURE THE DELAYS OF YOUR SUPPLIERS, WE ARE OF THE OPINION UPON REVIEW OF THE ENTIRE RECORD THAT THE NUMBER AND FREQUENCY OF DELAYS FURNISHED A REASONABLE BASIS FOR THE DETERMINATION MADE BY THE CONTRACTING OFFICER.

YOU ALSO MENTION THAT THIS PROCUREMENT WAS AUTHORIZED FOR NEGOTIATION UNDER THE AUTHORITY OF 10 U.S.C. 2304 (A) (2) AND ASPR 3 202.2 (VI), MAKING THE RULES OF ASPR 3-101 APPLICABLE. ASPR 3-101 STATES, IN PERTINENT PART, THAT:

"WHENEVER SUPPLIES OR SERVICES ARE TO BE PROCURED BY NEGOTIATION * * * PRICE QUOTATIONS, SUPPORTED BY STATEMENTS AND ANALYSES OF ESTIMATED COSTS OR OTHER EVIDENCE OF REASONABLE PRICES AND OTHER VITAL MATTERS DEEMED NECESSARY BY THE CONTRACTING OFFICER * * *, SHALL BE SOLICITED FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES OF SUPPLIES OR SERVICES CONSISTENT WITH THE NATURE OF AND REQUIREMENTS FOR THE SUPPLIES OR SERVICES TO BE PROCURED, IN ACCORDANCE WITH THE BASIC POLICIES SET FORTH IN SECTION I, PART 3 * * *.'

IT IS YOUR VIEW THAT SINCE YOUR FIRM WAS SOLICITED, IT MUST BE CONSIDERED A QUALIFIED SOURCE.

A REVIEW OF THE APPLICABLE ASPR PROVISIONS INDICATES THAT SECTION I, PART 3, PARAGRAPH 1-300.3 STATES:

"NEGOTIATION. IF THE USE OF FORMAL ADVERTISING IS NOT FEASIBLE AND PRACTICABLE, PURCHASES AND CONTRACTS FOR SUPPLIES AND SERVICES MAY BE NEGOTIATED IN ACCORDANCE WITH THE DETAILED REQUIREMENTS AND PROCEDURES SET FORTH IN SECTION III.' ASPR 3-102 (B) STATES THAT: "NO CONTRACT SHALL BE ENTERED INTO AS A RESULT OF NEGOTIATION UNLESS OR UNTIL THE FOLLOWING REQUIREMENTS HAVE BEEN SATISFIED:

"/IV) THE PROSPECTIVE CONTRACTOR HAS BEEN DETERMINED TO BE RESPONSIBLE IN ACCORDANCE WITH SECTION I, PART 9.'

ASPR 1-903.1 STATES:

"1-903.1 GENERAL STANDARDS. EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH 1-903, A PROSPECTIVE CONTRACTOR MUST:

(I) HAVE ADEQUATE FINANCIAL RESOURCES, OR THE ABILITY TO OBTAIN SUCH RESOURCES AS REQUIRED DURING PERFORMANCE OF THE CONTRACT (SEE DEFENSE CONTRACT FINANCING REGULATIONS, PART 2, APPENDIX E, AND ANY AMENDMENTS THERETO; SEE ALSO 1-904.3 AND 1-905.2; FOR SBA CERTIFICATES OF COMPETENCY, SEE 1-705.4);

(II) BE ABLE TO COMPLY WITH THE REQUIRED OR PROPOSED DELIVERY OR PERFORMANCE SCHEDULE, TAKING INTO CONSIDERATION ALL EXISTING BUSINESS COMMITMENTS, COMMERCIAL AS WELL AS GOVERNMENTAL (FOR SBA CERTIFICATES OF COMPETENCY, SEE 1-705.4);

(III) HAVE A SATISFACTORY RECORD OF PERFORMANCE (CONTRACTORS WHO ARE SERIOUSLY DEFICIENT IN CURRENT CONTRACT PERFORMANCE, WHEN THE NUMBER OF CONTRACTS AND THE EXTENT OF DEFICIENCY OF EACH ARE CONSIDERED, SHALL, IN THE ABSENCE OF EVIDENCE TO THE CONTRARY OR CIRCUMSTANCES PROPERLY BEYOND THE CONTROL OF THE CONTRACTOR, BE PRESUMED TO BE UNABLE TO MEET THIS REQUIREMENT). PAST UNSATISFACTORY PERFORMANCE, DUE TO FAILURE TO APPLY NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB, SHALL BE SUFFICIENT TO JUSTIFY A FINDING OF NONRESPONSIBILITY AND IN THE CASE OF SMALL BUSINESS CONCERNS, SHALL NOT REQUIRE SUBMISSION OF THE CASE TO THE SMALL BUSINESS ADMINISTRATION; SEE 1-705.4 (C) (V) AND 1-905.2;

(IV) HAVE A SATISFACTORY RECORD OF INTEGRITY; AND

(V) BE OTHERWISE QUALIFIED AND ELIGIBLE TO RECEIVE AN AWARD UNDER APPLICABLE LAWS AND REGULATIONS; E.G., SECTION XII, PART 6.'

IN MAKING THE DETERMINATION THAT A PROSPECTIVE CONTRACTOR MEETS THESE MINIMUM STANDARDS OF RESPONSIBILITY, THIS OFFICE HAS STATED THAT MATTERS OF RESPONSIBILITY SHOULD BE MEASURED WITH RESPECT TO THE TIME OF AWARD RATHER THAN AN EARLIER TIME. 39 COMP. GEN. 655; 41 ID. 302; B-156619, JUNE 8, 1965; B-162888, JANUARY 4, 1968. IT WOULD BE UNREASONABLE TO EXPECT THE PROCURING ACTIVITY IN ALL INSTANCES TO DETERMINE A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY FOR A PARTICULAR PROCUREMENT PRIOR TO THE TIME THE RFP IS SENT OUT OR PRIOR TO BID OPENING, EVEN THOUGH THE CONTRACTOR'S RECORD ON PRIOR PROCUREMENTS MIGHT INDICATE THAT IT WAS RESPONSIBLE. SUPPORT OF THIS POSITION IT IS NOTED THAT ASPR 1-905.2 STATES:

"1-905.2 WHEN INFORMATION WILL BE OBTAINED. GENERALLY, INFORMATION REGARDING THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR (INCLUDING PRE- AWARD SURVEYS (SEE 1-905.4) WHEN DEEMED NECESSARY) SHALL BE OBTAINED PROMPTLY AFTER BID OPENING OR RECEIPT OF PROPOSALS. HOWEVER, IN NEGOTIATED PROCUREMENTS, ESPECIALLY THOSE INVOLVING RESEARCH AND DEVELOPMENT, SUCH INFORMATION MAY BE OBTAINED BEFORE THE ISSUANCE OF REQUESTS FOR PROPOSALS. NOTWITHSTANDING THE FOREGOING, INFORMATION REGARDING FINANCIAL RESOURCES (SEE 1-903.1 (I) ( AND PERFORMANCE CAPABILITY (SEE 1-903.1 (II) ( SHALL BE OBTAINED ON AS CURRENT A BASIS AS FEASIBLE WITH RELATION TO THE DATE OF CONTRACT AWARD.'

IT IS NOTED THAT THE ABOVE LANGUAGE INDICATES THAT, WHILE INFORMATION REGARDING THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR MAY BE OBTAINED PRIOR TO THE TIME THAT THE RFP IS SENT OUT, IT IS NOT NECESSARY THAT THIS BE DONE. WE MUST THEREFORE CONCLUDE THAT THE ACTION OF THE AGENCY IN SOLICITING A PROPOSAL FROM YOUR FIRM CANNOT BE CONSTRUED AS A REPRESENTATION OR DETERMINATION THAT YOUR COMPANY WAS A RESPONSIBLE BIDDER OR OFFEROR FOR PURPOSES OF CONTRACT AWARD.

IN VIEW OF THE FOREGOING, WE CONCLUDE THAT THERE IS NO LEGAL BASIS UPON WHICH OUR OFFICE MAY OBJECT TO THE ADMINISTRATIVE ACTION TAKEN IN THIS CASE, AND WE MUST THEREFORE DENY YOUR PROTEST.