B-167369, DEC. 1, 1969

B-167369, DEC. 1, 1969

BIDDERS--QUALIFICATIONS--ADMINISTRATIVE DETERMINATIONS--PROPRIETY REJECTION OF LOW BID BECAUSE OF UNFAVORABLE PREAWARD SURVEY WHICH FOUND CONTRACTOR TO BE NONRESPONSIBLE BIDDER WITHIN MEANING OF ASPR 1 903.1 (III) AS TO PURCHASING AND SUBCONTRACTING, PERFORMANCE RECORD, AND ABILITY TO MEET REQUIRED DELIVERY SCHEDULE IS UPHELD AND PROTEST IS DENIED SINCE DETERMINATION OF RESPONSIBILITY ( INCLUDING PROSPECTIVE CONTRACTOR'S ABILITY TO MAKE DELIVERY WITHIN CRITICAL TIME PERIOD) IS PRIMARILY FUNCTION OF CONTRACTING OFFICER AND IS MATTER OF JUDGMENT INVOLVING CONSIDERABLE RANGE OF DISCRETION WHICH WILL NOT BE QUESTIONED BY GAO. BIDDERS--QUALIFICATIONS--PREAWARD SURVEYS--PROCEDURE ALTHOUGH UNSUCCESSFUL BIDDER QUESTIONS DCASR PREAWARD SURVEY UPON WHICH DETERMINATION OF FIRM'S RESPONSIBILITY WAS BASED, GAO WILL NOT QUESTION CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY FOR DCASR PREAWARD SURVEYS ARE CONDUCTED BY TEAM OF TECHNICAL REPRESENTATIVES COMPRISED OF QUALITY ASSURANCE, PRODUCTION AND FINANCIAL SPECIALISTS, WITH RESULTS COMPILED AND FORWARDED TO PREAWARD MONITOR WITH RECOMMENDATIONS IN RESPECTIVE AREAS OF ANALYSIS. PREAWARD FINDINGS ARE THEN SUBJECTED TO REVIEW AND EXAMINATION BY PREAWARD SURVEY BOARD COMPRISED OF KEY PERSONNEL APPOINTED BY REGION DIRECTOR WITH FINAL REPORT REPRESENTING COLLECTIVE RECOMMENDATIONS OF REGION BUT ULTIMATE AUTHORITY AS TO BIDDER'S RESPONSIBILITY RESTS WITH CONTRACTING OFFICER UPON EVALUATION OF PREAWARD SURVEY REPORT.

TO TAVCO, INC.:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 21, 1969, AND PRIOR CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF A CONTRACT TO WALTER KIDDE AND COMPANY UNDER REQUEST FOR PROPOSALS (RFP) NO. N00197-69-R 0019, ISSUED BY THE NAVAL ORDNANCE STATION, LOUISVILLE, KENTUCKY.

THE SUBJECT RFP, ISSUED ON FEBRUARY 14, 1969, SOLICITED OFFERS FOR FURNISHING 386 AIR FLASKS. OFFERS WERE SOLICITED ON TWO BASES: ITEM 1 -- INCLUDING FIRST ARTICLE APPROVAL TESTS; AND ITEM 2 -- EXCLUDING FIRST ARTICLE APPROVAL TESTS. THE PROCUREMENT WAS SYNOPSIZED AND MAILED TO 35 PROSPECTIVE OFFERORS. AMENDMENT NO. 0001 TO THE RFP CHANGED THE SPECIFICATIONS AND EXTENDED THE CLOSING DATE FROM MARCH 10 TO MARCH 14, 1969. IT IS REPORTED THAT 10 OFFERS WERE RECEIVED IN RESPONSE TO THE RFP AND YOUR FIRM, TAVCO, SUBMITTED THE FIFTH LOWEST OFFER FOR ITEM 1 AND THE THIRD LOWEST OFFER FOR ITEM 2. DURING SUBSEQUENT NEGOTIATIONS, TAVCO REVISED ITS PRICE ON ITEM 1 BUT MADE NO OFFER ON ITEM 2. AS A RESULT OF THE NEGOTIATIONS CONDUCTED UNDER THE RFP, TAVCO BECAME THE LOW OFFEROR FOR ITEM 1. IN ORDER TO MAKE A DETERMINATION OF TAVCO'S ABILITY TO PERFORM, THE CONTRACTING OFFICER REQUESTED THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION-LOS ANGELES (DCASR) TO PERFORM A PREAWARD SURVEY OF TAVCO AS A PROPOSED CONTRACTOR.

THE DCASR PREAWARD SURVEY TEAM'S REPORT TO THE CONTRACTING OFFICER RECOMMENDED THAT AWARD NOT BE MADE TO TAVCO BECAUSE OF UNSATISFACTORY RATINGS IN THREE AREAS: PURCHASING AND SUBCONTRACTING; PERFORMANCE RECORD; AND ABILITY TO MEET REQUIRED DELIVERY SCHEDULE. THE REPORT INDICATED A PRESENT STATE AND HISTORY OF POOR BUSINESS PRACTICES AND CONTRACT DELINQUENCY TOGETHER WITH A FAILURE BY TAVCO TO APPLY THE NECESSARY TENACITY AND PERSEVERANCE TO CONTRACTS AWARDED TO IT IN THE PAST. SPECIFICALLY, IT WAS REPORTED THAT TAVCO'S RECORD OF COMPLETED CONTRACTS FOR THE LAST TWO CALENDAR QUARTERS, LAST QUARTER 1968 AND FIRST QUARTER 1969, COVERS 37 CONTRACTS OF WHICH 15 WERE COMPLETED UNSATISFACTORILY, OR A 40-PERCENT DELINQUENCY. ALSO, TAVCO'S RECORD FOR THE FIRST 9 MONTHS OF 1968 SHOWS 71 CONTRACTS COMPLETED WITH 50 UNSATISFACTORY, OR A 70-PERCENT DELINQUENCY. MOREOVER, WITH RESPECT TO THE DELIVERY DATE FOR THE INSTANT PROCUREMENT, TAVCO DID NOT SCHEDULE ITS PRODUCTION OPERATIONS ADEQUATELY IN ORDER TO ALLOW TIME FOR FIRST ARTICLE APPROVAL BY THE GOVERNMENT.

TAKING INTO CONSIDERATION THE FOREGOING RESULTS OF THE DCASR PREAWARD SURVEY, THE CONTRACTING OFFICER MADE A DETERMINATION THAT TAVCO DID NOT MEET THE MINIMUM STANDARDS FOR A RESPONSIBLE CONTRACTOR UNDER PARAGRAPH 1- 903.1 (III) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). IN THIS RESPECT, IT SHOULD BE NOTED THAT TAVCO WAS NOT DETERMINED TO BE "NONRESPONSIVE" BUT NONRESPONSIBLE FOR THE PURPOSES OF THIS PROCUREMENT.

THE CRUX OF YOUR PROTEST IS THAT THE DCASR PREAWARD SURVEY TEAM WAS NOT QUALIFIED TO JUDGE YOUR FIRM'S CAPABILITIES AND YOU FEEL THAT THE RESULTS OF THE DCASR PREAWARD SURVEY ARE NOT ACCURATE. IT IS OUR UNDERSTANDING THAT DCASR PREAWARD SURVEYS, SUCH AS THE ONE HERE INVOLVED, ARE GENERALLY ACCOMPLISHED ON A TEAM BASIS COMPRISED OF TECHNICAL REPRESENTATIVES IN THE QUALITY ASSURANCE AND PRODUCTION AREAS AND FINANCIAL SPECIALISTS. THE RESULTS OF THEIR INDIVIDUAL INVESTIGATIONS ARE COMPILED AND FORWARDED TO A PREAWARD MONITOR WITH RECOMMENDATIONS IN THEIR RESPECTIVE AREAS OF ANALYSIS. THE PREAWARD FINDINGS AND RECOMMENDATIONS ARE THEN SUBJECTED TO A SUPERVISORY REVIEW AND ULTIMATELY ARE EXAMINED BY A PREAWARD SURVEY BOARD COMPOSED OF KEY PERSONNEL APPOINTED BY THE REGION DIRECTOR. THE FINAL REPORT SUBMITTED TO THE CONTRACTING OFFICER REPRESENTS THE COLLECTIVE JUDGMENTS AND RECOMMENDATIONS OF THE REGION. HOWEVER, THE ULTIMATE AUTHORITY AS TO WHETHER TO GRANT OR DENY AN AWARD STILL RESTS WITH THE CONTRACTING OFFICER WHO EVALUATES THE RECOMMENDATIONS CONTAINED IN THE PREAWARD SURVEY REPORT, TOGETHER WITH OTHER INFORMATION AVAILABLE TO HIM, IN RENDERING A FINAL DETERMINATION REGARDING THE PROPOSED CONTRACTOR'S RESPONSIBILITY. B-160649, AUGUST 7, 1967; B-160562, JULY 26, 1967.

PARAGRAPH 1-902 OF ASPR PROVIDES PURCHASES SHALL BE AWARDED ONLY TO RESPONSIBLE PROSPECTIVE CONTRACTORS. ASPR 1-904.1 REQUIRES THE CONTRACTING OFFICER TO DETERMINE THE RESPONSIBILITY OF THE PROSPECTIVE CONTRACTOR. THIS REGULATION FURTHER PROVIDES THAT THIS DETERMINATION OF RESPONSIBILITY IS TO BE MADE WITHIN THE FRAMEWORK OF ASPR 1-902 AND 1- 903. UNDER ASPR 1-903.1 (III), A PROSPECTIVE CONTRACTOR MUST --

"/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; "

IT IS WELL SETTLED THAT A DETERMINATION OF RESPONSIBILITY (INCLUDING THE PROSPECTIVE CONTRACTOR'S ABILITY TO MAKE DELIVERY WITHIN A CRITICAL TIME PERIOD) IS PRIMARILY THE FUNCTION OF THE CONTRACTING OFFICER AND IS A MATTER OF JUDGMENT INVOLVING A CONSIDERABLE RANGE OF DISCRETION. 39 COMP. GEN. 705, 711 (1960); 37 ID. 430, 435 (1957). ON THE RECORD BEFORE US, WE CONCLUDE THAT THE CONTRACTING OFFICER'S DETERMINATION AS TO TAVCO'S NONRESPONSIBILITY FOR PURPOSES OF THE INSTANT PROCUREMENT IS NOT SUBJECT TO QUESTION BY OUR OFFICE.