B-169596, JUL. 14, 1970

B-169596, JUL. 14, 1970

BID PROTEST -- BIDDER RESPONSIBILITY DECISION TO HUBER CORPORATION DENYING PROTEST AGAINST AWARD OF CONTRACT BY DEPT. OF THE ARMY TO GENERAL STEEL TANK CO., LOW BIDDER FOR MOTORIZED THREE WHEELED ROLLERS ON THE BASIS THAT BIDDER IS NOT A MANUFACTURER AND CAN NOT MEET DELIVERY SCHEDULE. AWARD TO LOW BIDDER AFTER PRE-AWARD SURVEY AND VERIFICATION OF QUALIFICATIONS WITH SBA AND DEPT. OF LABOR DETERMINATION MUST BE REGARDED AS PROPER.

TO HUBER CORPORATION:

WE REFER TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT (DAAK-01-69 C- A856-A4) BY THE DEPARTMENT OF THE ARMY TO GENERAL STEEL TANK COMPANY (GENERAL) FOR A QUANTITY OF MOTORIZED THREE WHEELED ROLLERS IN ACCORDANCE WITH APPLICABLE MILITARY SPECIFICATIONS.

INVITATION FOR BIDS (IFB) NO. DAAK01-69-B-8260 WAS ISSUED ON APRIL 18, 1969, FOR 66 MOTORIZED ROLLERS AND RELATED ITEMS INCLUDING ENGINEERING DRAWINGS (ITEM 0005) AND A PROVISIONING LIST (ITEM 0007). THIRTY FIRMS WERE SOLICITED; THE TWO BIDS RECEIVED AND OPENED ON JUNE 20, 1969, WERE YOURS AT $766,599.12, AND GENERAL'S AT $658,580. THE CONTRACT WAS AWARDED TO GENERAL, THE LOW BIDDER, ON JUNE 27, 1969.

THEREAFTER, ON JULY 2, 1969, YOU PROTESTED TO THE CONTRACTING OFFICER, CONTENDING THAT GENERAL WAS NOT A MANUFACTURER OF THE ITEMS IN QUESTION. IN ADDITION, YOU QUESTIONED THE CONTRACTOR'S ABILITY TO MEET THE DELIVERY REQUIREMENTS, PARTICULARLY ON ITEMS 0005 AND 0007.

A LETTER OF MARCH 18, 1970, EXPRESSED YOUR UNDERSTANDING THAT GENERAL HAD NOT MET THE ORIGINALLY REQUIRED DELIVERY DATE FOR ITEMS 0005 AND 0007 AND THAT CONCESSIONS HAD BEEN MADE TO GENERAL BY THE ARMY.

THE CONTRACTING OFFICER REPORTS THAT PRIOR TO THE AWARD OF THE CONTRACT HE REQUESTED EITHER A PRE-AWARD SURVEY ON GENERAL TO DETERMINE ITS RESPONSIBILITY AND CAPABILITY, OR A WAIVER OF THE SURVEY. IN RESPONSE TO THE CONTRACTING OFFICER'S REQUEST THE U.S. ARMY MOBILITY EQUIPMENT COMMAND RECOMMENDED AWARD TO GENERAL ON THE BASIS OF AVAILABLE INFORMATION. THE CONTRACTING OFFICER ALSO VERIFIED GENERAL'S QUALIFICATIONS WITH THE SMALL BUSINESS ADMINISTRATION.

WITH RESPECT TO YOUR CONTENTIONS CONCERNING THE STATUS OF GENERAL AS A "MANUFACTURER" UNDER THE WALSH-HEALEY ACT THE CONTRACTING OFFICER REPORTS THAT, ACCORDING TO INFORMATION GIVEN TO HIM BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION, GENERAL HAD PRIOR GOVERNMENT CONTRACTS FOR SIMILAR ITEMS AND HAD ADEQUATE FACILITIES AND EQUIPMENT, NECESSARY TECHNICAL PRODUCTION AND PERFORMANCE SKILLS NEEDED TO SATISFACTORILY COMPLETE THE CONTRACT.

IN REPLY TO YOUR CONTENTIONS CONCERNING DELIVERY DELAYS, THE CONTRACTING OFFICER REPORTS THAT AT A POST-AWARD CONFERENCE HELD AT THE CONTRACTOR'S PLANT (JULY 14-17, 1969), IT APPEARED THAT THE CONTRACTOR WOULD HAVE SOME DIFFICULTY IN DELIVERING ITEMS 0005 AND 0007 ON THE REQUIRED DELIVERY DATE OF AUGUST 26, 1969. THE CONTRACTOR REQUESTED AN EXTENSION OF DELIVERY OF THESE TWO ITEMS. THE CONTRACTING OFFICER DETERMINED THAT AN EXTENSION OF DELIVERY ON ITEMS 0005 AND 0007 SHOULD HAVE NO EFFECT ON DELIVERY OF THE END ITEMS AND HE, THEREFORE, EXTENDED THE DELIVERY DATE TO DECEMBER 15, 1969, IN CONSIDERATION OF A PRICE REDUCTION OF $114. THEREAFTER, THE CONTRACTOR FORWARDED ITEMS 0005 AND 0007 ON DECEMBER 15, 1969, BUT THE DRAWINGS AND PROVISIONING LISTS WERE NOT COMPLETE. ON JANUARY 26, 1970, THE PROVISIONING LIST WAS RETURNED AS UNSATISFACTORY. THE PROVISIONING LIST WAS THEN RESUBMITTED ON MARCH 5, 1970. ALTHOUGH, IT WAS NOT 100 PERCENT COMPLETE, THE PROVISIONING LIST WAS RETAINED AND THE CONTRACTOR WAS ADVISED TO SUBMIT THE REMAINING DATA REQUIREMENTS. THE CONTRACTOR HAD NOT FURNISHED A COMPLETE BREAKDOWN OF ALL COMPONENTS, ASSEMBLIES, SUBASSEMBLIES AND ITEMS, AND HE HAD NOT INSERTED THE ACTUAL MANUFACTURER'S NAME ON ALL ITEMS SUPPLIED BY SUBCONTRACTORS. ON MARCH 24, 1970, 19 OF THE 120 DRAWINGS WERE RETURNED. A REVISED DELIVERY DATE FOR ALL DELINQUENT ITEMS WAS NEGOTIATED FOR AN $800 PRICE REDUCTION AND THE CONTRACT WAS SO MODIFIED ON APRIL 24, 1970. THE END ITEM (0001) DELIVERY DATE WAS NOT CHANGED BY THE MODIFICATION.

IT IS FURTHER REPORTED THAT THE CONTRACTING OFFICER ON MAY 8, 1970, REQUESTED THE DEFENSE CONTRACT ADMINISTRATION SERVICES (DCAS) TO VISIT THE CONTRACTOR'S PLANT AND REPORT ON THE PROGRESS OF THE CONTRACT. ON MAY 12, 1970, DCAS REPORTED THAT THE CONTRACTOR WAS PROGRESSING SATISFACTORILY AND, IN ITS OPINION, SHOULD MEET ALL DELIVERY DATES.

YOUR CONTENTIONS ARE ALL ESSENTIALLY DIRECTED TO THE QUESTION OF WHETHER GENERAL WAS A RESPONSIBLE BIDDER IN ACCORDANCE WITH APPLICABLE LAW AND REGULATIONS. WHILE YOUR PREDICTION ON DELIVERY OF ITEMS 0005 AND 0007 HAS BEEN PROVEN CORRECT BY SUBSEQUENT EVENTS, THIS ALONE DOES NOT WARRANT A CONCLUSION THAT THE CONTRACTING OFFICER'S DETERMINATION ON GENERAL'S RESPONSIBILITY WAS LEGALLY DEFICIENT. DETERMINATIONS CONCERNING THE RESPONSIBILITY OF PROSPECTIVE CONTRACTORS INVOLVE AN EXERCISE OF JUDGMENT AND DISCRETION AND THY MUST BE MADE ON THE BASIS OF THE EVIDENCE AVAILABLE TO THE CONTRACTING OFFICER AT THE TIME THE CONTRACT IS AWARDED. THE AUTHORITY TO MAKE THESE DETERMINATIONS IS VESTED PRIMARILY IN THE PROCUREMENT AGENCY ACTING THROUGH THE CONTRACTING OFFICER AND WHEN A DETERMINATION IS MADE IT CANNOT BE UPSET BY THIS OFFICE UNLESS IT WAS ARBITRARY, CAPRICIOUS OR FRAUDULENT. 38 COMP. GEN. 131, 133 (1958); 37 ID. 430, 435, (1957). WE FIND NOTHING IN THE RECORD TO INDICATE THAT THE CONTRACTING OFFICER'S DETERMINATION IN THIS CASE WAS OUTSIDE THE REASONABLE RANGE, OR AN ABUSE, OF HIS ADMINISTRATIVE DISCRETION.

WHILE A CONTRACTING OFFICER'S JUDGMENT IN ANY PARTICULAR CASE MAY PROVE TO BE MISTAKEN IN THE LIGHT OF SUBSEQUENT EVENTS, THE ISSUE THEN BECOMES ONE OF ADMINISTERING AN EXISTING, LEGALLY SUFFICIENT CONTRACT, BUT SUCH TURN OF EVENTS DOES NOT RETROACTIVELY AFFECT THE VALIDITY OF THE ORIGINAL CONTRACT-AWARD ACTION. IN THIS CONNECTION, WE SEE NO LEGAL BASIS UPON WHICH TO QUESTION THE CONTRACTING OFFICER'S ADMINISTRATION OF THE CONTRACT, E.G., HIS DECISION TO MODIFY THE DELIVERY DATES FOR THE DELINQUENT ITEMS RATHER THAN DEFAULT THE CONTRACTOR AND RE-LET THE CONTRACT TO ANOTHER CONCERN.

WITH RESPECT TO THE QUESTION CONCERNING GENERAL'S STATUS AS A MANUFACTURER UNDER THE WALSH-HEALEY ACT, ASPR 12-603.1 DEFINES A MANUFACTURER AS A PERSON WHO OWNS, OPERATES, OR MAINTAINS A FACTORY OR ESTABLISHMENT THAT PRODUCES ON THE PREMISES THE MATERIALS, SUPPLIES, ARTICLES OR EQUIPMENT REQUIRED UNDER THE CONTRACT AND OF THE GENERAL CHARACTER DESCRIBED BY THE SPECIFICATIONS. NEITHER THE WALSH-HEALEY ACT NOR IMPLEMENTING REGULATIONS REQUIRE THE BIDDER TO STIPULATE THAT HE HAS PREVIOUSLY MANUFACTURED THE SPECIFIC ITEMS. A BIDDER IS ONLY REQUIRED TO STIPULATE THAT HE WILL BE THE MANUFACTURER OF THE ITEMS. SEE 39 COMP. GEN. 254, 257 (1959); ID. 684, 690 (1960). IN ANY EVENT, ON MAY 19, 1970, THE CONTRACTING OFFICER REQUESTED THE SECRETARY OF LABOR TO MAKE A FINAL DETERMINATION (SEE ASPR 12-604) WHETHER OR NOT GENERAL QUALIFIED AS A MANUFACTURER OF THE END ITEM AS OF JUNE 27, 1969. BY LETTER OF JUNE 10, 1970, A COPY OF WHICH WAS FURNISHED OUR OFFICE, THE ADMINISTRATOR OF THE WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS, DEPARTMENT OF LABOR, ADVISED THE CONTRACTING OFFICER THAT:

"AFTER A CAREFUL REVIEW OF THE MATERIAL YOU SUBMITTED TO THIS OFFICE, WE FIND NO REASON TO QUESTION YOUR AGENCY'S DETERMINATION THAT *** (GENERAL) IS QUALIFIED AS A MANUFACTURER FOR PURPOSES OF THE PUBLIC CONTRACTS ACT." UNDER APPLICABLE LAW AND REGULATIONS THE DEPARTMENT OF LABOR'S DETERMINATION ON THE QUESTION WHETHER A FIRM IS A MANUFACTURER OR REGULAR DEALER UNDER THE WALSH-HEALEY ACT IS FINAL AND WE ARE WITHOUT AUTHORITY TO REVIEW THE DEPARTMENT'S DETERMINATION. B-159849, OCTOBER 24, 1966; B- 162841, JANUARY 16, 1968.

ON THE BASIS OF THE RECORD BEFORE US WE SEE NO REASON TO QUESTION THE AWARD MADE TO GENERAL. THEREFORE, YOUR PROTEST MUST BE DENIED.

A SUBSEQUENT PROCUREMENT OF THE SAME BASIC ITEM BY THE DEFENSE SUPPLY AGENCY, COLUMBUS, OHIO, UNDER SOLICITATION NO. DSA700-70-B-2383 HAS ALSO BEEN QUESTIONED. WE WILL ADVISE YOU OF OUR CONCLUSIONS WITH RESPECT TO THE VALIDITY OF THIS PROCUREMENT AFTER THE RECORD HAS BEEN FULLY DEVELOPED.