B-139874, AUG. 19, 1959

B-139874, AUG. 19, 1959

TO ASCO PRODUCTS CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 9, 1959, PROTESTING AGAINST THE ACTION OF THE CENTER PURCHASING OFFICE, MARINE CORPS SUPPLY CENTER, ALBANY, GEORGIA, IN REJECTING YOUR BID AND AWARDING CONTRACT NO. N67004-2616 TO THE NEXT LOWEST BIDDER, JOE BRASHEARS STEEL, INC.

THE RECORD INDICATES THAT BY INVITATION NO. 67004-35-59, BIDS WERE REQUESTED FOR FURNISHING 104,000 POUNDS OF SEALER, HOT POURED TYPE AND IN THE INVITATION PROSPECTIVE BIDDERS WERE ADVISED THAT THE GOVERNMENT DESIRED DELIVERY OF THE SEALER COMPOUND WITHIN 21 DAYS AFTER DATE OF THE CONTRACT. AS YOUR BID IN THE AMOUNT OF $10,067.20 WAS THE APPARENT LOWEST BID RECEIVED, THE CONTRACTING OFFICER INITIATED A PRE AWARD SURVEY TO DETERMINE YOUR RESPONSIBILITY AS A GOVERNMENT CONTRACTOR. IN ADDITION TO REQUESTING THE INSPECTOR OF NAVAL MATERIAL, NEWARK, NEW JERSEY, TO CONDUCT A PRE-AWARD SURVEY OF YOUR ABILITY TO PERFORM THE PROPOSED CONTRACT, THE CONTRACTING OFFICER BY TELEGRAM DATED JANUARY 28, 1959, REQUESTED THE NEW YORK REGIONAL OFFICE OF THE SMALL BUSINESS ADMINISTRATION TO FURNISH A CERTIFICATION AS TO YOUR CAPACITY AND CREDIT, WHICH ACTION, IT IS REPORTED, WAS TAKEN IN ACCORDANCE WITH THE PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION. BY LETTER DATED FEBRUARY 3, 1959, THE NEW YORK REGIONAL OFFICE OF THE SMALL BUSINESS ADMINISTRATION ADVISED THE CONTRACTING OFFICER THAT A COMPREHENSIVE SURVEY OF YOUR CAPACITY AND CREDIT HAD NOT BEEN CONDUCTED, BUT THAT ON THE BASIS OF THE INFORMATION OBTAINED BY THEM, IT WOULD APPEAR THAT YOU WERE COMPETENT AS TO CAPACITY AND CREDIT TO PRODUCE THE REQUIRED QUANTITY OF SEALER COMPOUND. IN HIS REPORT OF JUNE 30, 1959, THE ACTING QUARTERMASTER GENERAL OF THE MARINE CORPS STATES THAT THE PRE-AWARD SURVEY CONDUCTED BY THE INSPECTOR OF NAVAL MATERIAL INDICATED THAT YOU WERE NOT CONSIDERED A SUITABLE SOURCE OF SUPPLY FOR THE FOLLOWING REASONS: (1) YOU HAD INADEQUATE PRODUCTION AND QUALITY CONTROLS, AND (2) YOU WERE RELUCTANT TO COMPLY WITH THE INSPECTION REQUIREMENTS CONTAINED IN GOVERNMENT CONTRACTS; AND THAT ON THE BASIS OF THE FOREGOING INFORMATION, THE CONTRACTING OFFICER DETERMINED THAT YOU WERE NOT A RESPONSIBLE PROSPECTIVE SUPPLIER IN ACCORDANCE WITH THE REQUIREMENTS CONTAINED IN SECTION 1-307 OF THE ARMED SERVICES PROCUREMENT REGULATION.

SINCE THE SMALL BUSINESS ADMINISTRATION'S REPLY OF FEBRUARY 3, 1959, TO THE MARINE CORPS SUPPLY CENTER'S TELEGRAM ON JANUARY 28, 1959, DID NOT APPEAR RESPONSIVE THERETO, WE INFORMALLY CONTACTED THE WASHINGTON OFFICE OF THE SMALL BUSINESS ADMINISTRATION AND REQUESTED ADVICE AS TO WHY A FORMAL CERTIFICATE OF COMPETENCY, AS REQUESTED IN THE TELEGRAM, WAS NOT ISSUED BY THE ADMINISTRATION. BY LETTER DATED JULY 27, 1959, THE GENERAL COUNSEL OF THE SMALL BUSINESS ADMINISTRATION FORWARDED COPIES OF MEMORANDA PERTAINING TO THE MARINE CORPS SUPPLY CENTER'S TELEGRAM OF JANUARY 28, 1959. AMONG THE MEMORANDA IS ONE DATED JULY 17, 1959, FROM THE CHIEF OF PROCUREMENT AND TECHNICAL ASSISTANCE DIVISION, NEW YORK REGIONAL OFFICE, TO THE DIRECTOR, OFFICE OF PROCUREMENT AND TECHNICAL ASSISTANCE, WASHINGTON, D.C., IN WHICH IT IS STATED THAT SINCE THE MARINE CORPS SUPPLY CENTER'S TELEGRAM OF JANUARY 28, 1959, DID NOT CONTAIN THE NECESSARY INFORMATION REQUIRED FOR A CERTIFICATE OF COMPETENCY SURVEY, THE CONTRACTING OFFICER WAS INFORMALLY CONTACTED FOR THE PURPOSE OF ASCERTAINING THE TYPE OF SURVEY THE MARINE CORPS DESIRED, AND THAT THE CONTRACTING OFFICER ADVISED THAT THE INTENT OF HIS TELEGRAM WAS TO OBTAIN ANY CREDIT AND CAPACITY DATA ON YOUR CORPORATION WHICH THE SMALL BUSINESS CREDIT AND CAPACITY DATA ON YOUR CORPORATION WHICH THE SMALL BUSINESS ADMINISTRATION HAD IN ITS FILES. SINCE THE REPORT OF THE ACTING QUARTERMASTER GENERAL OF THE MARINE CORPS DID NOT INDICATE THAT THE CONTRACTING OFFICER HAD CHANGED HIS ORIGINAL REQUEST FOR A CERTIFICATION AS TO YOUR CAPACITY AND CREDIT, AS ALLEGED BY THE SMALL BUSINESS ADMINISTRATION, WE INFORMALLY CONTACTED THE MARINE CORPS IN WASHINGTON, D.C. THEY ADVISED THAT THEY COMMUNICATED WITH THE CONTRACTING OFFICER BY TELEPHONE WHO DENIES THAT HE CHANGED THE REQUEST CONTAINED IN HIS TELEGRAM OF JANUARY 28, 1959. THUS, IT APPEARS THAT THERE WAS A MISUNDERSTANDING BETWEEN THE CONTRACTING OFFICER AND THE SMALL BUSINESS ADMINISTRATION AS TO THE ACTION TO BE TAKEN BY THE ADMINISTRATION IN THE MATTER.

IN OUR DECISIONS OF OCTOBER 24, 1958, B-137471 AND B-137482, WE HELD THAT, IN THE ABSENCE OF A VALID CERTIFICATE OF URGENCY AS PRESCRIBED IN ASPR 1-705.6 (B), A DETERMINATION BY THE CONTRACTING AGENCY THAT A SMALL BUSINESS CONCERN LACKS EITHER THE CAPACITY OR CREDIT NECESSARY TO PERFORM THE CONTRACT MUST BE REFERRED TO, AND CONCURRED IN, BY THE SMALL BUSINESS ADMINISTRATION BEFORE A BID SUBMITTED BY THE SUBJECT CONCERN MAY BE REJECTED ON THOSE GROUNDS. IN THE PRESENT CASE THE CONTRACTING OFFICER REQUESTED THE SMALL BUSINESS ADMINISTRATION TO CERTIFY TO THE CAPACITY AND CREDIT OF YOUR CORPORATION AND IN REPLY THERETO, THE SMALL BUSINESS ADMINISTRATION ADVISED THE CONTRACTING OFFICER THAT "ASCO PRODUCTS CORP. WOULD APPEAR COMPETENT AS TO CAPACITY AND CREDIT TO PRODUCE 104,000 POUNDS OF 55-5 104 SEALER IN THE APPROXIMATE AMOUNT OF $11,000.' THE CONTRACTING OFFICER DID NOT ACCEPT SUCH STATEMENT AS A CERTIFICATION BY THE SMALL BUSINESS ADMINISTRATION AS TO YOUR CAPACITY AND CREDIT AND, IN VIEW OF THE NATURE THEREOF IN OUR OPINION HE WAS NOT REQUIRED TO DO SO. SINCE THE SMALL BUSINESS ADMINISTRATION DID NOT ISSUE A CERTIFICATE OF CAPACITY AND CREDIT, IT WAS THEN WITHIN THE AUTHORITY OF THE CONTRACTING OFFICER TO DETERMINE YOUR QUALIFICATIONS. AS A GENERAL RULE, THE QUESTION AS TO THE QUALIFICATIONS OF A PROPOSED CONTRACTOR IS PRIMARILY THE FUNCTION OF THE PROCUREMENT AGENCY AND, IN THE ABSENCE OF CONVINCING EVIDENCE OF BAD FAITH OR A REASONABLE BASIS FOR THE DETERMINATION AS MADE, WE ARE NOT REQUIRED TO OBJECT TO THE DETERMINATION.

UNDER THE CIRCUMSTANCES OF THIS CASE, IT APPEARING THAT THE CONTRACTING OFFICER COMPLIED WITH THE REQUIRED PROCEDURE BY REFERRING THE MATTER TO THE SMALL BUSINESS ADMINISTRATION BUT THAT THAT AGENCY NEVERTHELESS FAILED TO ISSUE A CERTIFICATE OF COMPETENCY SUCH AS WOULD HAVE BEEN CONCLUSIVE ON THE CONTRACTING OFFICER UNDER THE LAW, WE FIND NO SUBSTANTIAL LEGAL BASIS TO QUESTION THE AWARD MADE TO JOE BRASHEARS STEEL, INC., UNDER INVITATION NO. 67004-35-59. IN THAT CONNECTION WE HAVE BEEN INFORMALLY ADVISED BY THE MARINE CORPS THAT THE CONTRACTOR HAS DELIVERED THE REQUIRED SEALER COMPOUND AND HAS BEEN PAID THEREFOR.