B-151834, NOV. 29, 1963

B-151834, NOV. 29, 1963

TO MOLDED INSULATION COMPANY:

WE REFER AGAIN TO YOUR TELEGRAM OF SEPTEMBER 5, 1963 AND ADDITIONAL CORRESPONDENCE CONCERNING THE RESPONSIBILITY OF THE SECOND LOW BIDDER UNDER INVITATION FOR BIDS NO. AMC-36-039-63-649-B4 ISSUED MARCH 27, 1963BY THE ARMY ELECTRONICS MATERIEL AGENCY FOR THE PROCUREMENT OF A QUANTITY OF RADIOSONDE SETS.

WHEN BIDS WERE OPENED ON APRIL 26, 1963, IT WAS DETERMINED THAT THE BID SUBMITTED BY YOUR FIRM WAS LOW. HOWEVER, THE CONTRACTING AGENCY DETERMINED THAT YOUR FIRM WAS NOT CAPABLE OF ASSURING SATISFACTORY PERFORMANCE AND, THEREFORE, COULD NOT BE REGARDED AS RESPONSIBLE. SINCE MOLDED QUALIFIED AS A SMALL BUSINESS FOR PURPOSES OF THE PROCUREMENT, THE MATTER WAS SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION IN ACCORDANCE WITH ASPR 1-705.6 (B). THE SMALL BUSINESS ADMINISTRATION DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY. YOU PROTESTED THE DETERMINATION OF NONRESPONSIBILITY AND IN OUR DECISION B-151834, SEPTEMBER 5, 1963 (43 COMP. GEN. --) IT WAS CONCLUDED THAT WE COULD FIND NO BASIS TO DISTURB THE DETERMINATION.

SUBSEQUENTLY, THE CONTRACTING AGENCY PROPOSED TO MAKE AWARD TO THE SECOND LOW BIDDER, THE FRIEZ INSTRUMENT DIVISION OF BENDIX CORPORATION, AND A CONTRACT WITH THAT FIRM WAS ENTERED INTO ON SEPTEMBER 12, 1963.

IT IS YOUR POSITION THAT ON THE BASIS OF THE CRITERIA APPLIED WITH RESPECT TO YOUR FIRM, THE SECOND LOW BIDDER SHOULD ALSO BE FOUND TO BE NONRESPONSIBLE AND THAT THE FAILURE TO ARRIVE AT THE SAME CONCLUSION AS TO FRIEZ INDICATES THE USE OF A DIFFERENT STANDARD. IN YOUR LETTER OF SEPTEMBER 9, 1963 TO THE PROCURING AGENCY, COPY OF WHICH WAS FURNISHED TO US, YOU SET OUT SEVEN INSTANCES TENDING TO SUPPORT YOUR CONCLUSION THAT THE PAST RECORD OF PERFORMANCE BY THE SUCCESSFUL CONTRACTOR IS SUCH THAT APPLYING THE STANDARD EMPLOYED ON YOUR FIRM WOULD ALSO RESULT IN A DETERMINATION OF NONRESPONSIBILITY.

YOU CONTEND THAT DELIVERIES BY FRIEZ UNDER 1960 AND 1961 WEATHER BUREAU CONTRACTS WERE SUBSTANTIALLY DELAYED. FRIEZ STATES THAT THESE CONTRACTS CALLED FOR LIQUIDATED DAMAGES OF $1.00 PER UNIT FOR FAILURE TO MEET DELIVERY SCHEDULES PLUS A PERIOD OF GRACE. UNDER THOSE CONTRACTS WHICH COVERED A TOTAL OF ALMOST 175,000 UNITS ONLY $170.00 IN LIQUIDATED DAMAGES WAS CHARGED AGAINST THE CONTRACTOR. THE ADMINISTRATIVE REPORT INDICATES THAT THE COMPANY'S PERFORMANCE ON THE WEATHER BUREAU CONTRACT WAS REGARDED AS SATISFACTORY.

YOU NEXT POINT OUT THAT UNDER SIGNAL CORPS ORDER NO. 8021-PP-60, FRIEZ WAS LATE IN THE DELIVERY OF 2,784 UNITS. WHILE IT IS CONCEDED THAT THIS TARDINESS IN DELIVERY DID EXIST, IT IS POINTED OUT THAT OVER NINETY PERCENT OF THE UNITS INCLUDED IN THE ORDER WERE DELIVERED ON TIME.

YOU NEXT STATE THAT PREPRODUCTION AND PRODUCTION DELIVERIES UNDER NAVY CONTRACT NO. N383-80619A RESULTING FROM INVITATION NO. 383-588-63 WERE NOT DELIVERED ON SCHEDULE. THE ADMINISTRATIVE REPORT INDICATES THAT EVEN THOUGH THE GOVERNMENT WAS THIRTY DAYS LATE IN NOTIFYING THE CONTRACTOR OF PREPRODUCTION APPROVAL, THE CONTRACT WAS COMPLETED THREE MONTHS AHEAD OF SCHEDULE.

YOU AVER ALSO THAT UNDER SIGNAL CORPS ORDER NO. 07207-PP-59 RESULTING FROM INVITATION NO. 59-582, DELIVERIES WERE SO DELINQUENT THAT THE GOVERNMENT HAD TO NEGOTIATE A REPLACEMENT CONTRACT WITH ANOTHER FIRM AT A HIGHER COST. THE ADMINISTRATIVE REPLY TO THE STATEMENT IS THAT THE DELAYS WERE FOUND BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS IN DECISION NO. 7589, DATED JUNE 27, 1962, TO BE BEYOND THE CONTROL AND WITHOUT THE FAULT OR NEGLIGENCE OF THE CONTRACTOR.

NEXT IT IS STATED THAT DELIVERIES UNDER SIGNAL CORPS ORDER NO. 10986 PP- 61 WERE LATE. THE ADMINISTRATIVE REPORT ACKNOWLEDGES THAT THE CONTRACTOR WAS ONE MONTH LATE ON INITIAL DELIVERIES, BUT CAUGHT UP WITH THE SCHEDULE IN THE SECOND MONTH AND COMPLETED THE CONTRACT ON TIME.

IT IS NEXT CONTENDED THAT FRIEZ IS NOT MEETING DELIVERY SCHEDULES UNDER AIR FORCE DEVELOPMENT CONTRACT NO. AF 19-16281-1655. BENDIX CONTENDS THAT OF THE THIRTY UNITS REQUIRED TO BE DESIGNED, DEVELOPED AND FABRICATED UNDER THE CONTRACT, TEN WERE DELIVERED THREE MONTHS EARLY AND THE REMAINDER WAS DELIVERED ON TIME. IT IS FURTHER STATED BY FRIEZ THAT THE DRAWINGS REQUIRED TO BE DELIVERED UNDER THE TERMS OF THE CONTRACT WERE SEVERAL MONTHS LATE DUE TO GOVERNMENT ORDERED CHANGES IN SCOPE AND THE REQUIREMENTS FOR ACCELERATED DELIVERY.

FINALLY, YOU CONTEND THAT UNDER AIR FORCE CONTRACT NO. AF 33/600/40743 ALL FLIGHT TESTS HAVE FAILED TO DATE. FRIEZ STATES THAT THE CONTRACT FOR THE DESIGN AND DEVELOPMENT OF AN AIRBORNE WEATHER SYSTEM AS MODIFIED IN SEPTEMBER 1962 REQUIRED DELIVERY BY NOVEMBER 6, 1962. FRIEZ FURTHER REPORTS THAT ALL HARDWARE ITEMS WERE COMPLETED IN OCTOBER OF 1962, BUT THAT FINAL COMPLETION IS DEPENDENT ON THE AVAILABILITY OF USAF AIRCRAFT FOR FLIGHT TESTING. WITH RESPECT TO THE AIR FORCE CONTRACTS THE ADMINISTRATIVE REPORT INDICATES THAT THE AIR FORCE AT BALTIMORE CONSIDERS FRIEZ'S PERFORMANCE ON CONTRACTS AS SATISFACTORY, WHILE HANSCOM FIELD CHARACTERIZES FRIEZ PERFORMANCE AS VERY GOOD.

AS WE INDICATED IN OUR DECISION OF SEPTEMBER 5, 1963 ON THE SAME PROCUREMENT, THE APPARENT ABILITY OF A BIDDER TO PERFORM IN ACCORDANCE WITH THE REQUIREMENTS SET OUT IN THE INVITATION IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING AGENCY AND IS NOT SUBJECT TO QUESTION BY OUR OFFICE IN THE ABSENCE OF A SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS THEREFOR. 37 COMP. GEN. 430, 435. A COMPARISON OF THE RECORD OF PERFORMANCE BY YOUR FIRM FOR THE LAST FEW YEARS AS COMPARED WITH THAT OF THE SUCCESSFUL CONTRACTOR PROVIDES, IN OUR VIEW, NO BASIS TO CONCLUDE THAT THE DETERMINATIONS WITH RESPECT TO THE RESPONSIBILITY OF THE TWO FIRMS WERE ARBITRARY OR CAPRICIOUS OR UNREASONABLE OR MADE IN BAD FAITH. THEREFORE, AND IN VIEW OF THE DISCRETION VESTED IN THE CONTRACTING AGENCY WITH RESPECT TO SUCH MATTERS WE MUST CONCLUDE THAT THERE IS NO BASIS UPON WHICH WE MAY QUESTION THE LEGALITY OF THE AWARD MADE PURSUANT TO THE INVITATION. SEE 39 COMP. GEN. 468, 472.