B-151834, SEP. 5, 1963, 43 COMP. GEN. 228

B-151834, SEP. 5, 1963, 43 COMP. GEN. 228

BIDDERS - QUALIFICATIONS - PRIOR UNSATISFACTORY PERFORMANCE. BIDDERS - QUALIFICATIONS - PRIOR UNSATISFACTORY PERFORMANCE THE DETERMINATION BY A CONTRACTING OFFICER UNDER THE CRITERIA ESTABLISHED IN PAR. 1-903, ARMED SERVICES PROCUREMENT REGULATION, THAT A LOW BIDDER WITH A RECORD OF UNSATISFACTORY PERFORMANCE ON NUMEROUS GOVERNMENT CONTRACTS DOES NOT QUALIFY AS A RESPONSIBLE BIDDER UNDER PAR. 1-903.1 (III) HAVING BEEN AFFIRMED BY THE REFUSAL OF THE SMALL BUSINESS ADMINISTRATION TO ISSUE A CERTIFICATE OF COMPETENCY IS A VALID DETERMINATION FOR THE PARTICULAR PROCUREMENT; HOWEVER, IN THE EVENT THE CONTRACTOR IS ELIGIBLE FOR A SUBSEQUENT PROCUREMENT AWARD, A DETERMINATION OF RESPONSIBILITY WOULD HAVE TO BE MADE ON THE BASIS OF QUALIFICATION AND RECORD OF PERFORMANCE AT THAT TIME. THE FACT THAT A CONTRACTOR WHO DID NOT MEET MONTHLY DELIVERY REQUIREMENTS MET THE FINAL DELIVERY DATE PRESCRIBED BY THE CONTRACT DOES NOT AFFECT THE RECORD OF POOR PERFORMANCE UNDER THE CONTRACT, THE INTERIM DELIVERY SCHEDULES BEING AS SIGNIFICANT AS THE FINAL DELIVERY REQUIREMENT AND, THEREFORE, FAILURE TO COMPLY WITH THE INTERIM SCHEDULES IS NOT EXCUSED OR MITIGATED BY CONFORMITY WITH THE FINAL DELIVERY DATE.

TO DRINKER, BIDDLE AND REATH, SEPTEMBER 5, 1963:

WE REFER TO LETTER OF JUNE 20, 1963, WITH ENCLOSURES AND SUBSEQUENT CORRESPONDENCE FROM OR ON BEHALF OF THE MOLDED INSULATION COMPANY PROTESTING AGAINST THE PROPOSED REJECTION OF THAT FIRM'S LOW BID UNDER INVITATION NO. AMC-36-039-63-649-B4 ISSUED MARCH 27, 1963, BY THE ARMY ELECTRONICS MATERIEL AGENCY FOR THE PROCUREMENT OF A QUANTITY OF RADIOSONDE SETS.

BIDS WERE OPENED ON APRIL 26, 1963, AND MOLDED'S LOW BID ON THE BASIS OF AWARD OF THE TOTAL PROCUREMENT WAS $137,248.59 LOWER THAN THE SECOND LOWEST BID. NO QUESTION HAS BEEN RAISED WITH RESPECT TO THE RESPONSIVENESS OF THE LOW BID; HOWEVER, THE CONTRACTING OFFICER AND THE ELECTRONICS MATERIEL AGENCY CONTRACTOR EVALUATION BOARD, IN CONSIDERING THE RESPONSIBILITY OF THE LOW BIDDER PURSUANT TO SECTION I, PART 9, OF THE ARMED SERVICES PROCUREMENT REGULATION, DETERMINED THAT THE FIRM WAS NOT CAPABLE OF ASSURING SATISFACTORY PERFORMANCE. SINCE MOLDED QUALIFIES AS A SMALL BUSINESS FOR PURPOSES OF THIS PROCUREMENT, THE MATTER WAS SUBMITTED BY LETTER OF MAY 29, 1963, FROM THE CONTRACTING OFFICER TO THE SMALL BUSINESS ADMINISTRATION IN ACCORDANCE WITH ASPR 1-705.6 (B). IN REPLY BY LETTER OF JUNE 13, 1963, THE SMALL BUSINESS ADMINISTRATION ADVISED THE CONTRACTING AGENCY THAT SBA DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY BASED ON A COMPREHENSIVE ANALYSIS OF ALL AVAILABLE INFORMATION.

IN ACCORDANCE WITH THE FOREGOING IT IS PROPOSED TO REJECT THE LOW BIDDER AS NONRESPONSIBLE AND AWARD TO THE SECOND LOW BIDDER.

THE PROCUREMENT WAS UNDERTAKEN IN ACCORDANCE WITH THE REQUIREMENTS IMPOSED BY 10 U.S.C. 2304 (A) REQUIRING THE USE OF FORMAL ADVERTISING WITH CERTAIN EXCEPTIONS NOT HERE APPLICABLE. IT IS PROVIDED AT 10 U.S.C. 2305 (C) THAT CONTRACTS SHALL BE AWARDED UNDER SUCH PROCEDURE ONLY TO A RESPONSIBLE AND RESPONSIVE BIDDER. CONSISTENT WITH THE STATUTORY LIMITATION, ASPR 1904.1 PRECLUDES AWARDS OF THIS KIND UNLESS THE CONTRACTING OFFICER FIRST MAKES AN AFFIRMATIVE DETERMINATION THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE UNDER THE CRITERIA SET OUT IN ASPR 1 -903. ONE OF THE CRITERIA, SET OUT AT ASPR 1-903.1 (III), IS THAT A PROSPECTIVE CONTRACTOR TO QUALIFY AS RESPONSIBLE MUST HAVE A SATISFACTORY RECORD OF PERFORMANCE. THE DETERMINATIONS OF NONRESPONSIBILITY BY THE CONTRACTING OFFICER AND THE CONTRACTOR EVALUATION BOARD WERE BASED IN LARGE MEASURE UPON THE RECORD OF PERFORMANCE BY THE COMPANY UNDER CERTAIN GOVERNMENT CONTRACTS FOR RADIOSONDE EQUIPMENT AWARDED SINCE THE BEGINNING OF 1960.

THE FIRST OF THESE CONTRACTS, NO. 20000-PC-60-B4-B4, WAS AWARDED BY THE ELECTRONICS MATERIEL AGENCY ON JANUARY 28, 1960. UNDER THE TERMS OF THE CONTRACT 10,000 UNITS WERE REQUIRED TO BE DELIVERED BY THE END OF OCTOBER 1960. AT THAT TIME ONLY 3,408 HAD BEEN SHIPPED. FURTHER, THE CONTRACTOR DID NOT CATCH UP WITH THE MONTHLY DELIVERY REQUIREMENTS IMPOSED UNDER THE TERMS OF THE CONTRACT UNTIL MAY 1961. IN ITS DEFENSE THE COMPANY, ITSELF AND THROUGH COUNSEL, NOTED THAT ALTHOUGH INITIAL DELIVERIES WERE SLOWER THAN CALLED FOR BY THE CONTRACT, THE COMPANY AFTER THE FIRST TWO MONTHS WAS ABLE TO SHIP FASTER THAN SCHEDULED SO THAT THE CUMULATIVE REQUIREMENTS WERE MET DURING MAY, AND FINAL DELIVERIES WERE MADE ON TIME.

WE THINK IT PROPER TO NOTE WITH RESPECT TO THE HISTORY OF PERFORMANCE UNDER THIS CONTRACT THAT INTERIM DELIVERY SCHEDULES ARRE AS SIGNIFICANT AS THE FINAL DELIVERY REQUIREMENT AND WE DO NOT THINK THAT THE FAILURE TO COMPLY WITH THE INTERIM SCHEDULE IS EXCUSED OR MITIGATED BY CONFORMITY WITH THE FINAL DELIVERY DATE.

IN ARRIVING AT THE CONCLUSION OF NONRESPONSIBILITY, THE CONTRACTING OFFICER AND EVALUATION BOARD CONSIDERED ALSO ELECTRONICS MATERIEL AGENCY CONTRACT NO. 19299-PC-61-B4-B4 WHICH WAS TERMINATED FOR DEFAULT ON MARCH 16, 1962. THE CONTRACTOR CONCEDES THAT THE CONTRACT WAS TERMINATED FOR DEFAULT BUT CONTENDS THAT THE TERMINATION WAS NOT CONTESTED ONLY UPON HIS UNDERSTANDING THAT THE DEFAULT ACTION WOULD NOT AFFECT FUTURE CONTRACT AWARDS. THE FOLLOWING LANGUAGE FROM A LETTER OF MAY 21, 1962, WRITTEN BY THE CONTRACTING OFFICER TO THE CONTRACTOR IS PRESENTED IN SUPPORT OF THE CONTRACTOR'S UNDERSTANDING:

AS STATED TO YOU IN DISCUSSIONS WITH THE UNDERSIGNED BOTH IN THIS OFFICE AND ON TELEPHONE, NO AWARD COULD BE MADE TO YOUR COMPANY FOR THE PROCUREMENT OF THE DEFAULTED RADIOSONDES.

NO OTHER PRECLUSIONS ARE PRESENTLY CONTEMPLATED AND THE CUSTOMARY AGENCY EVALUATION WILL BE PERFORMED ON ALL FUTURE BIDS SUBMITTED BY YOUR COMPANY.

WE CANNOT READ THE QUOTED LANGUAGE TO INDICATE ANY COMMITMENT ON THE PART OF THE CONTRACTING OFFICER WHICH WOULD AFFECT THE IMPACT OF THE DEFAULT TERMINATION ON SUBSEQUENT AWARDS. IN ANY CASE WE SERIOUSLY QUESTION THAT A CONTRACTING OFFICER COULD AGREE TO A LIMITATION ON THE CONCLUSIONS WHICH MIGHT BE DRAWN, AT LEAST BY OTHERS, FROM AN OFFICIAL ACTION.

THE DETERMINATION OF RESPONSIBILITY WAS ALSO BASED IN SOME MEASURE ON INFORMATION FROM THE WEATHER BUREAU THAT MOLDED WAS SERIOUSLY DELINQUENT UNDER TWO CONTRACTS WITH THAT AGENCY, LIQUIDATED DAMAGES IN THE AMOUNT OF $5,000 HAVING BEEN ASSESSED UNDER ONE. WITH RESPECT TO THESE CONTRACTS IT IS POINTED OUT THAT THE COMPANY ON JUNE 6, 1963, RECEIVED A LETTER FROM THE WEATHER BUREAU INDICATING THAT ALTHOUGH THE BUREAU WAS NOT COMPLETELY SATISFIED WITH THE FIRM'S PERFORMANCE THE PAST YEAR IT WOULD CONTINUE TO MAKE AWARDS TO MOLDED ON FUTURE PROCUREMENTS IF MOLDED OFFERED THE MOST ADVANTAGEOUS PRICE.

INFORMATION ON PERFORMANCE BY THE FIRM OF CONTRACTS WITH THE NAVY BUREAU OF WEAPONS WAS CONSIDERED BY THE CONTRACTING OFFICER AND THE EVALUATION BOARD. UNDER THESE CONTRACTS, NO. N600 (19) 56537 AND N600 (19) 57011, A SIGNIFICANT DELAY HAS OCCURRED IN THE APPROVAL OF REQUIRED PRE-PRODUCTION SAMPLES. DEPARTMENT OF THE NAVY REPRESENTATIVES HAVE INDICATED THAT THE DELAYS WERE REGARDED AS DUE IN SUBSTANTIAL MEASURE TO DELAY EXPERIENCED BY THE FIRM IN THE SOLUTION OF PROBLEMS IN PRODUCING A PRE-PRODUCTION SAMPLE MEETING REQUIREMENTS. SUBSTANTIALLY THE SAME SITUATION IS SAID TO APPLY WITH RESPECT TO CONTRACT NO. 80620A WITH THE AVIATION SUPPLY OFFICE. IS NOTED ON BEHALF OF THE COMPANY WITH RESPECT TO THE LAST THREE CONTRACTS THERE HAS BEEN NO DELAY OF ANY SIGNIFICANCE IN MEETING DELIVERY SCHEDULES.

ONE OF THE SIGNIFICANT FACTORS IN DETERMINING THE RESPONSIBILITY OF A BIDDER IS HIS APPARENT ABILITY TO PERFORM IN ACCORDANCE WITH THE REQUIREMENTS SET OUT IN THE INVITATION. SUCH ABILITY IS FOR DETERMINATION PRIMARILY BY THE CONTRACTING AGENCY AND ABSENT A SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS THEREFOR, WE WILL NOT QUESTION THE VALIDITY OF THE DETERMINATION. 37 COMP. GEN. 430, 435. DECIDING A PROSPECTIVE CONTRACTOR'S PROBABLE ABILITY TO PERFORM A CONTRACT TO BE AWARDED INVOLVES A FORECAST WHICH MUST OF NECESSITY BE A MATTER OF JUDGMENT. SUCH JUDGMENT SHOULD OF COURSE BE BASED ON FACT AND REACHED IN GOOD FAITH; HOWEVER, IT IS ONLY PROPER THAT IT BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICERS INVOLVED WHO SHOULD BE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, WHO MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES EXPERIENCED IN OBTAINING REQUIRED PERFORMANCE, AND WHO MUST MAINTAIN DAY TO DAY RELATIONS WITH THE CONTRACTOR ON THE GOVERNMENT'S BEHALF. 39 COMP. GEN. 705, 711. THE DISCRETION INVESTED IN THE CONTRACTING AGENCY IN SUCH MATTERS IS SO BROAD THAT OPPOSITE DETERMINATIONS BY DIFFERENT CONTRACTING OFFICERS WITH RESPECT TO THE RESPONSIBILITY OF THE SAME BIDDER, FOR THE SAME KIND OF PROCUREMENT AND WITH REFERENCE TO THE SAME SET OF FACTS HAVE BOTH BEEN UPHELD. 39 COMP. GEN. 468, 472.

AS WE HAVE NOTED, THE QUESTION OF MOLDED'S RESPONSIBILITY WAS SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION PURSUANT TO REGULATION, AND THAT AGENCY IN CONSIDERATION OF ALL AVAILABLE INFORMATION DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY. HAD SUCH CERTIFICATE BEEN ISSUED IT WOULD UNDER SECTION 8 (B) (7) OF THE SMALL BUSINESS ACT, 15 U.S.C. 637 (B) (7) BE CONCLUSIVE UPON THE PROCUREMENT OFFICERS OF THE GOVERNMENT. WE HAVE HELD THAT THE REFUSAL OF THE SMALL BUSINESS ADMINISTRATION TO ISSUE SUCH CERTIFICATE MUST BE REGARDED AS PERSUASIVE WITH RESPECT TO THE COMPETENCY OF THE BIDDER, AND THE DENIAL THEREOF AS AN AFFIRMATION OF THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY. B-146205, SEPTEMBER 20, 1961; B 145983, JUNE 26, 1961; B-136545, FEBRUARY 10, 1959.

IN VIEW OF THE FOREGOING, WHILE IT MAY BE THAT OTHER CONTRACTING OFFICERS MIGHT VERY PROPERLY ON THE BASIS OF THE SAME FACTS FIND MOLDED RESPONSIBLE WITH RESPECT TO THE PROCUREMENT, WE FIND NO BASIS TO DISTURB THE DETERMINATION OF NONRESPONSIBILITY.

AN EXCEPTION HAS BEEN NOTED TO THE DETERMINATION OF THE SMALL BUSINESS ADMINISTRATION IN THIS MATTER ON THE GROUND THAT THE CAPACITY OF MOLDED'S FACILITIES TO MEET THE DELIVERY SCHEDULE CAN BE READILY ESTABLISHED. THE TERM CAPACITY AS USED IN CONNECTION WITH CERTIFICATES OF COMPETENCY EMBRACES MORE THAN THE AVAILABILITY OF FACILITIES ADEQUATE TO THE PERFORMANCE OF THE CONTRACT; IT HAS REFERENCE TO THE OVERALL ABILITY OF A BIDDER TO MEET ALL OF THE REQUIREMENTS OF A PROCUREMENT INCLUDING EXPERIENCE, SKILLS, KNOW-HOW AND TECHNICAL KNOWLEDGE. 38 COMP. GEN. 864, 869.

THE DETERMINATION OF THE CONTRACTING OFFICER IS VALID ONLY WITH RESPECT TO THE INSTANT PROCUREMENT. IN THE EVENT MOLDED IS ELIGIBLE FOR A SUBSEQUENT AWARD ON A PROCUREMENT BY THE ELECTRONICS MATERIEL AGENCY OR ANY OTHER AGENCY ITS RESPONSIBILITY WOULD HAVE TO BE DETERMINED ON THE BASIS OF ITS QUALIFICATION AND RECORD OF PERFORMANCE AT THAT TIME.