B-162570, DEC. 18, 1967

B-162570, DEC. 18, 1967

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 1, 1967, FROM THE ACTING DIRECTOR OF PROCUREMENT AND PRODUCTION, HEADQUARTERS, UNITED STATES ARMY MATERIEL COMMAND, FURNISHING THE REPORT REQUESTED IN OUR LETTER TO YOU OF OCTOBER 3, 1967, ON THE PROTEST OF THE METAL CRAFT COMPANY, MARLETTE, MICHIGAN, AGAINST THE AWARD OF A CONTRACT ON SEPTEMBER 14, 1967, TO THE MECHTRON CORPORATION, ORLANDO, FLORIDA, PURSUANT TO REQUEST FOR PROPOSALS NO. DAAE07-67-R-2756, ISSUED JUNE 15, 1967, BY THE ARMY TANK-AUTOMOTIVE COMMAND, PROCUREMENT AND PRODUCTION DIRECTORATE, WARREN, MICHIGAN.

THE LETTER OF NOVEMBER 1, 1967, STATES THAT A STOP ORDER WAS ISSUED TO THE MECHTRON CORPORATION AND EXPRESSES THE OPINION THAT THE CONTRACTING OFFICER'S ACTION IN AWARDING THE CONTRACT TO THAT FIRM WAS ERRONEOUS. IS PROPOSED, IF WE CONCUR IN THIS OPINION, TO CANCEL THE CONTRACT AND AWARD THE PROCUREMENT TO THE METAL CRAFT COMPANY.

PROPOSALS WERE REQUESTED AT F.O.B. ORIGIN PRICES ON 6,936 UNITS OF THE FOLLOWING ITEM: KIT, MOUNTING-M14 RIFLE, FEDERAL STOCK NO. 2590 045-9611. PROPOSALS WERE SOLICITED FROM SMALL BUSINESS CONCERNS ONLY AND THE REQUEST FOR PROPOSALS CONTAINED A PROVISION RELATING TO COMPONENT PARTS WHICH INCLUDED A REQUIREMENT THAT THE CATCH ASSEMBLY PART MANUFACTURED BY THE STEWART-WARNER COMPANY BE FURNISHED. THE REQUEST FOR PROPOSALS ALSO CONTAINED A DESIRED 180-DAY DELIVERY SCHEDULE.

THE EIGHT PROPOSALS RECEIVED IN RESPONSE TO THE REQUEST WERE OPENED ON JULY 18, 1967. THE THREE LOWEST OFFERS, IN THE RESPECTIVE AMOUNTS OF $25,455.12, $27,050.40 AND $32,113.68, WERE SUBMITTED BY THE METAL CRAFT COMPANY, THE KISKO MANUFACTURING COMPANY, ST. LOUIS, MISSOURI, AND THE MECHTRON CORPORATION.

THE CONTRACTING OFFICER INITIALLY REQUESTED PRE-AWARD SURVEYS TO BE CONDUCTED ON THE TWO LOW OFFERORS IN ORDER TO ASSIST HIM IN DETERMINING THE RESPONSIBILITY OF THOSE OFFERORS TO PERFORM THE PROPOSED CONTRACT. THE REPORTS OF SURVEY RECOMMENDED IN EACH CASE THAT NO AWARD BE MADE TO THE COMPANY INVOLVED. THE CONTRACTING OFFICER THEN REQUESTED A PRE-AWARD SURVEY OF THE MECHTRON CORPORATION AND HE WAS FURNISHED A SURVEY REPORT RECOMMENDING THAT FAVORABLE ACTION BE TAKEN ON THAT FIRM'S PROPOSAL. THE CONTRACTING OFFICER MADE DETERMINATIONS OF NONRESPONSIBILITY IN REGARD TO THE TWO LOW OFFERORS AND, BY LETTER DATED SEPTEMBER 14, 1967, THE DATE ON WHICH THE PROPOSAL OF THE MECHTRON CORPORATION WAS ACCEPTED, THE METAL CRAFT COMPANY WAS ADVISED THAT "AWARD WAS NOT MADE TO YOUR FIRM DUE TO YOUR FAILURE TO MAKE TIMELY DELIVERIES ON PRIOR CONTRACTS.'

THE REPORT OF SURVEY ON THE METAL CRAFT COMPANY INDICATED THAT THE COMPANY WAS DELINQUENT DURING THE CURRENT YEAR IN MAKING DELIVERIES OF IDENTICAL KITS. IT WAS REPORTED THAT THE DELAYS WERE CAUSED BY THE LATE RECEIPT OF CATCH ASSEMBLY PARTS FROM THE STEWART-WARNER CORPORATION. WAS ALSO REPORTED THAT THE CATCH ASSEMBLY PARTS REQUIRED FOR THE PRODUCTION OF THE ADDITIONAL QUANTITY OF 6,936 KITS UNDER THE CONTRACT IN QUESTION COULD NOT BE OBTAINED BY THE METAL CRAFT COMPANY UNTIL ABOUT 180 DAYS AFTER AN ORDER WAS PLACED WITH THE STEWART-WARNER CORPORATION, AND THAT THE METAL CRAFT COMPANY COULD NOT THEREFORE MEET THE 180-DAY DELIVERY SCHEDULE OF THE REQUEST FOR PROPOSALS. IT WAS ESTIMATED THAT 35 DAYS OF ADDITIONAL TIME WOULD BE REQUIRED FOR PRODUCTION, INSPECTION, PACKAGING AND SHIPMENT OF THE KITS AFTER THE METAL CRAFT COMPANY RECEIVED THE NECESSARY CATCH ASSEMBLY PARTS.

THE METAL CRAFT COMPANY SUBMITTED WITH ITS LETTER OF PROTEST TO OUR OFFICE A COPY OF A LETTER DATED AUGUST 9, 1967, FROM THE STEWART-WARNER CORPORATION, STATING THAT DELIVERY OF THE CATCH ASSEMBLIES ON A PREVIOUS ORDER OF THE METAL CRAFT COMPANY HAD BEEN DELAYED BECAUSE OF A SEVERE SNOW STORM AND A "TRUCK STRIKE.' THE METAL CRAFT COMPANY WAS GIVEN ASSURANCE THAT, IF AN ORDER WAS PLACED FOR AN ADDITIONAL QUANTITY OF 6,936 CATCH ASSEMBLIES, DELIVERY WOULD BE MADE NO LATER THAN 120 DAYS AFTER RECEIPT OF ORDER.

THERE HAS BEEN NO FINDING IN THIS CASE THAT ANY PAST UNSATISFACTORY PERFORMANCE ON THE PART OF THE METAL CRAFT COMPANY WAS DUE TO A FAILURE TO APPLY NECESSARY TENACITY OR PERSERVERANCE TO DO AN ACCEPTABLE JOB, AS DISTINGUISHED FROM ANY PAST UNSATISFACTORY PERFORMANCE WHICH MAY HAVE BEEN DUE TO A LACK OF CAPACITY OR CREDIT TO MEET CONTRACT PERFORMANCE REQUIREMENTS. IN THIS CONNECTION, THE CONTRACTING OFFICER HAS INDICATED THAT THE CASE SHOULD HAVE BEEN REFERRED TO THE SMALL BUSINESS ADMINISTRATION FOR CONSIDERATION OF THE QUESTION WHETHER A SMALL BUSINESS CERTIFICATE OF COMPETENCY SHOULD BE ISSUED IN FAVOR OF THE METAL CRAFT COMPANY, AND WE AGREE THAT SUCH ACTION SHOULD HAVE BEEN TAKEN BEFORE REJECTING THE PROPOSAL OF THAT COMPANY. SEE 43 COMP. GEN. 298, TO THE EFFECT THAT, UNLESS AN AWARD MUST BE MADE WITHOUT DELAY, OR THE FINDING OF NONRESPONSIBILITY ON THE PART OF A SMALL BUSINESS CONCERN IS BASED ON SUBSTANTIAL EVIDENCE THAT A SITUATION RESULTING FROM FACTORS NOT INCLUDED IN CAPACITY OR CREDIT EXISTS TO JUSTIFY THE FINDING, A CONTRACT AWARDED AFTER THE REJECTION OF A SMALL BUSINESS BID OR PROPOSAL WITHOUT SUBMITTING THE MATTER TO THE SMALL BUSINESS ADMINISTRATION WOULD BE REGARDED AS INVALID.

THEREFORE, AND IN VIEW OF THE CONTRACTING OFFICER'S POSITION THAT THE METAL CRAFT COMPANY WOULD NOW BE FOUND RESPONSIBLE IF THE PRIOR DETERMINATION WAS INVALIDATED, WE AGREE WITH THE PROPOSED ADMINISTRATIVE ACTION TO CANCEL THE CONTRACT WITH THE MECHTRON CORPORATION AND TO AWARD THE PROCUREMENT TO THE METAL CRAFT COMPANY AS THE LOW RESPONSIVE AND RESPONSIBLE OFFEROR.

COPIES OF THIS DECISION ARE BEING MAILED TO THE METAL CRAFT COMPANY AND TO THE MECHTRON CORPORATION.