B-143549, AUG. 31, 1960

B-143549, AUG. 31, 1960

TO MODEL ENGINEERING AND MANUFACTURING COMPANY, INC.:

REFERENCE IS MADE TO LETTER OF JULY 15, 1960, AND ENCLOSURE, FROM GLENN BLACKSHEAR, ATTORNEY, PROTESTING ON YOUR BEHALF AGAINST THE AWARD OF A CONTRACT TO MAXWELL ELECTRONICS CORPORATION, UNDER INVITATION FOR BIDS NO. JD-IFB-383-944-60, ISSUED BY THE DEPARTMENT OF THE NAVY, AVIATION SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA.

YOUR ATTORNEY CONTENDS THAT ALTHOUGH YOUR PROPOSAL WAS THE FOURTH LOWEST RECEIVED, AWARD OF THE CONTRACT SHOULD HAVE BEEN MADE TO YOU SINCE YOU WERE THE LOWEST QUALIFIED, RESPONSIVE BIDDER. THE BASIS FOR SUCH CONTENTION IS THAT, AS TO THE SECOND LOW BIDDER, THE INVOLVED PROCUREMENT IN ITS ENTIRETY WAS SET ASIDE FOR SMALL BUSINESS, AND THAT SUCH BIDDER IS A WHOLLY OWNED SUBSIDIARY OF A CORPORATION WHICH IS UNABLE TO QUALIFY AS A SMALL BUSINESS CONCERN. WITH RESPECT TO THE THIRD LOW BIDDER, IT IS STATED THAT ITS PROPOSAL WAS MATERIALLY DEFECTIVE AND THEREFORE COULD NOT BE CONSIDERED. THE CORRECTNESS OF SUCH CONTENTIONS CANNOT BE VERIFIED FROM THE RECORD; HOWEVER, WE DO NOT CONSIDER THAT SUCH MATTERS ARE MATERIAL TO THE DISPOSITION OF THE CASE IN VIEW OF OUR CONCLUSION THAT AWARD OF THE CONTRACT TO THE LOWEST BIDDER SHOULD NOT BE DISTURBED.

IN THAT CONNECTION YOUR ATTORNEY URGES, IN SUBSTANCE, THAT MAXWELL ELECTRONICS CORPORATION DOES NOT POSSESS THE NECESSARY PHYSICAL OR FINANCIAL RESOURCES TO QUALIFY AS A RESPONSIBLE BIDDER WITHIN THE PURVIEW OF THE APPLICABLE PROCUREMENT STATUTES AND REGULATIONS. IN SUPPORT OF SUCH ALLEGATION, IT IS STATED THAT IN THREE PREVIOUS INSTANCES BIDS OF THE ABOVE-NAMED CONTRACTOR HAVE BEEN REJECTED, AND YOUR ATTORNEY PRESUMES THAT SUCH ACTION WAS BASED UPON ADVERSE FACILITY CAPABILITY REPORTS.

THE RECORD DISCLOSES IN THIS CASE THAT UPON EVALUATION OF THE BIDS AND DETERMINATION THAT THE NET PRICE QUOTED BY MAXWELL ELECTRONICS CORPORATION WAS SUBSTANTIALLY LOWER THAN THE OTHER BIDS RECEIVED, A DETAILED PREAWARD SURVEY OF ITS FACILITIES WAS MADE BY A LOCAL INSPECTOR OF NAVAL MATERIAL AND A QUALIFIED ENGINEER FROM THE NAVAL AVIONICS FACILITY AT INDIANAPOLIS, INDIANA, WHO IS FAMILIAR WITH THE PRODUCT INVOLVED. THE REPORT STATES THAT THE SAID COMPANY HAS THE TECHNICAL KNOWLEDGE AND ABILITY TO PRODUCE THE EQUIPMENT IN COMPLIANCE WITH ALL THE CONTRACTUAL REQUIREMENTS. ALSO, IT IS STATED THAT ANY ADDITIONAL PERSONNEL REQUIRED SHOULD NOT POSE A PROBLEM TO THE CONTRACTOR SINCE ITS PLANT IS LOCATED IN A LABOR DISTRESSED AREA. AS TO ITS PRESENT FINANCIAL POSITION IT IS FURTHER REPORTED THAT ANY ADDITIONAL WORKING CAPITAL WHICH MAY BE REQUIRED WILL BE MADE AVAILABLE TO THE CONTRACTOR PURSUANT TO A COMMITMENT OBTAINED FROM AN IDENTIFIED SMALL BUSINESS INVESTMENT COMPANY.

IN REGARD TO THE ALLEGATION THAT THE SUBJECT CONTRACTOR PREVIOUSLY HAD SUBMITTED THREE LOW BIDS, TWO TO THE ROME AIR FORCE BASE, ROME, NEW YORK, AND THE THIRD TO THE NAVY PURCHASING OFFICE, WASHINGTON, D.C., WHICH WERE REJECTED, YOUR ATTORNEY STATES THAT IT IS LOGICAL TO ASSUME THAT THESE REJECTIONS WERE BASED UPON ADVERSE FACILITY CAPABILITY REPORTS. THOSE ASSUMPTIONS ARE WITHOUT MERIT. THE BASIS FOR REJECTING ONE OF THE TWO MAXWELL BIDS (IFB-60-391) BY THE PROCUREMENT OFFICIALS AT THE ROME AIR FORCE BASE IS REPORTED TO HAVE BEEN DUE TO THE BIDDER'S INABILITY TO COMPLY WITH THE DELIVERY REQUIREMENTS OF THE INVITATION. IN THE SECOND CASE REFERRED TO INVOLVING ROME AIR FORCE BASE (IFB-60-555), WE ARE INFORMALLY ADVISED THAT AWARD WAS MADE TO MAXWELL, AND IN BOTH CASES SATISFACTORY FACILITY CAPABILITY REPORTS WERE MADE. IN REGARD TO THE PROCUREMENT INVOLVING THE NAVY PURCHASING OFFICE IN WASHINGTON, D.C., SUCH REJECTION WAS DUE TO THE FAILURE OF THE BIDDER TO OBTAIN PRIOR APPROVAL OF ITS EQUIPMENT BY THE FEDERAL COMMUNICATIONS COMMISSION AS REQUIRED BY THE INVITATION. THE RECORD FURTHER DISCLOSES THAT SINCE MAY 1958, AWARD OF FIVE OTHER CONTRACTS IN EXCESS OF $400,000 HAVE BEEN MADE TO THE SAID BIDDER BY FOUR GOVERNMENT AGENCIES, INCLUDING THE UNITED STATES AIR FORCE.

THE DETERMINATION OF THE QUALIFICATIONS OF A BIDDER IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE OFFICERS CONCERNED AND IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF REASONABLE FACTUAL BASIS FOR THE DETERMINATION AWARD TO A LOW BIDDER WILL NOT BE QUESTIONED. SINCE MAXWELL ELECTRONICS CORPORATION SUBMITTED A BID SUBSTANTIALLY LOWER THAN THE OTHER PROPOSALS RECEIVED, AND SINCE THE CORPORATION HAS BEEN FOUND TO POSSESS THE PHYSICAL AND FINANCIAL RESOURCES TO PERFORM THE CONTRACT, BASED UPON A SURVEY CONDUCTED IN GOOD FAITH, WE DO NOT FEEL JUSTIFIED IN QUESTIONING THE ACTION TAKEN BY THE ADMINISTRATIVE OFFICE.