B-131286, JUN. 14, 1957

B-131286: Jun 14, 1957

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TO BROOKFIELD WIRE COMPANY: FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE ACTION OF THE PROCUREMENT OFFICIALS AT TOPEKA AIR FORCE DEPOT. ON THE GROUND THAT RANDY WIRE WORKS WAS ORIGINALLY DETERMINED TO BE NOT QUALIFIED TO PERFORM. WAS. IT IS CONTENDED THAT WHEN RANDY WIRE WORKS WAS FIRST DETERMINED TO BE NOT QUALIFIED. A PRE-AWARD SURVEY SHOWED THAT BROOKFIELD WIRE COMPANY WAS QUALIFIED. THE AWARD SHOULD HAVE BEEN MADE TO BROOKFIELD AT THAT TIME ACCORDING TO STANDARD CONTRACTING PROCEDURES. IN SUPPORT OF YOUR CONTENTION THAT THE CONTRACT SHOULD NOT HAVE BEEN AWARDED TO RANDY WIRE WORKS YOU ADVISE BY LETTER OF MAY 7. THE REPORT FURNISHED IN THE MATTER BY THE DEPARTMENT OF THE AIR FORCE SHOWS THAT THE INVITATION INVOLVED WAS OPENED ON NOVEMBER 26.

B-131286, JUN. 14, 1957

TO BROOKFIELD WIRE COMPANY:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE ACTION OF THE PROCUREMENT OFFICIALS AT TOPEKA AIR FORCE DEPOT, TOPEKA, KANSAS, IN AWARDING A CONTRACT TO RANDY WIRE WORKS, INC., NORTH BERGEN, NEW JERSEY, PURSUANT TO INVITATION FOR BIDS NO. 14-604-57-513.

AS SECOND LOW BIDDER ON THIS PROCUREMENT YOU PROTEST THE AWARD TO RANDY WIRE WORKS, INC., THE LOW BIDDER, ON THE GROUND THAT RANDY WIRE WORKS WAS ORIGINALLY DETERMINED TO BE NOT QUALIFIED TO PERFORM, BUT WAS, CONTRARY TO NORMAL PROCEDURE, GIVEN THE BENEFIT OF LONG DELAY IN THE AWARD IN ORDER TO ALLOW IT TO PUT ITSELF IN POSITION TO DO SO. IT IS CONTENDED THAT WHEN RANDY WIRE WORKS WAS FIRST DETERMINED TO BE NOT QUALIFIED, AND A PRE-AWARD SURVEY SHOWED THAT BROOKFIELD WIRE COMPANY WAS QUALIFIED, THE AWARD SHOULD HAVE BEEN MADE TO BROOKFIELD AT THAT TIME ACCORDING TO STANDARD CONTRACTING PROCEDURES. ALSO, IN SUPPORT OF YOUR CONTENTION THAT THE CONTRACT SHOULD NOT HAVE BEEN AWARDED TO RANDY WIRE WORKS YOU ADVISE BY LETTER OF MAY 7, 1957, THAT THE CORPORATION EITHER HAD FILED A PETITION OR HAD BEEN PETITIONED INTO BANKRUPTCY.

THE REPORT FURNISHED IN THE MATTER BY THE DEPARTMENT OF THE AIR FORCE SHOWS THAT THE INVITATION INVOLVED WAS OPENED ON NOVEMBER 26, 1956, THAT NINE BIDS WERE RECEIVED AND THAT RANDY WIRE WORKS, INC., WAS THE LOW BIDDER, FREIGHT AND DISCOUNTS CONSIDERED.

A PRE-AWARD SURVEY (FACILITIES CAPABILITY REPORT) WAS CONDUCTED BY THE NEWARK AIR PROCUREMENT DISTRICT IN RESPONSE TO A REQUEST DATED DECEMBER 5, 1956, BY THE PROCURING CONTRACTING OFFICER. AFTER INVESTIGATION OF MANUFACTURING PROCESSES, QUALITY CONTROL PROCEDURES, AND FINANCIAL STABILITY, THE AIR PROCUREMENT DISTRICT RECOMMENDED DENIAL OF AWARD. THE RECOMMENDED DENIAL WAS FORMALLY TRANSMITTED TO THE MIDDLETOWN AIR MATERIEL AREA ON DECEMBER 28, 1956. THE FACILITY ADVISORY BOARD AT MIDDLETOWN AIR MATERIEL AREA, AFTER APPROPRIATE REVIEW, SUSTAINED THE DENIAL AND SO ADVISED THE PROCURING OFFICER AND THE SMALL BUSINESS ADMINISTRATION ON JANUARY 4, 1957.

UPON RECEIPT OF THE CONCLUSIONS REACHED BY THE PRE-AWARD SURVEY TEAM, IN ORDER TO EXPEDITE AN AWARD IN THE EVENT OF FINAL REJECTION OF THE RANDY BID, A PRE-AWARD SURVEY WAS REQUESTED ON BROOKFIELD WIRE COMPANY, INC., ON DECEMBER 27, 1956. AN UNQUALIFIED AFFIRMATIVE REPORT ON BROOKFIELD WAS ISSUED BY THE BOSTON AIR PROCUREMENT DISTRICT ON JANUARY 9, 1957. HOWEVER, AWARD TO BROOKFIELD COULD NOT BE MADE UNTIL FINAL DETERMINATION BY THE SMALL BUSINESS ADMINISTRATION AS TO THE ISSUANCE OF A CERTIFICATE OF COMPETENCY. THE SMALL BUSINESS ADMINISTRATION REGIONAL OFFICE, NEW YORK, NEW YORK, ON JANUARY 17, 1957, RECOMMENDED THE ISSUANCE OF A CERTIFICATE OF COMPETENCY ON RANDY WIRE WORKS, BUT IT IS REPORTED THAT THE RECOMMENDATION WAS SUBSEQUENTLY OVERRULED BY THE CENTRAL OFFICE. IN THE MEANWHILE, OFFICIALS OF RANDY WIRE WORKS PROTESTED TO THE DIRECTORATE OF PROCUREMENT AND PRODUCTION THE ACCURACY OF THE CONCLUSIONS OF THE FACILITY CAPABILITY SURVEY TEAM, PARTICULARLY AS TO THE AIR FORCE EVALUATIONS OF RANDY WIRE WORKS' PRODUCTION CAPABILITIES IN PRODUCING AN ACCEPTABLE "BRIGHT" WIRE, AND IT WAS AGREED THAT THE MATTER WOULD BE LOOKED INTO FURTHER.

SUBSEQUENTLY, A MEETING WITH AIR FORCE REPRESENTATIVES WAS HELD IN THE PLANT OF RANDY WIRE WORKS TO DETERMINE WHETHER THE CONCLUSIONS OF THE ORIGINAL FACILITIES CAPABILITY SURVEY TEAM MIGHT BE IN ERROR OR INCOMPLETE. IT WAS CONCLUDED THAT THERE WERE SUFFICIENT REASONS FOR REQUESTING ANOTHER FACILITIES CAPABILITY REPORT TO CLARIFY THE ELEMENTS IN QUESTION, FOR THE REASON THAT THE ORIGINAL FACILITIES CAPABILITY REPORT WAS NOT COMPLETELY REFLECTIVE OF THE COMPANY'S TRUE CAPABILITY. THIS CONCLUSION WAS BASED ON THE FACILITIES, PRODUCTION, AND FINANCIAL CAPABILITY OF RANDY WIRE WORKS AT THE TIME OF THE ORIGINAL FACILITIES CAPABILITY REPORT. THE AIR FORCE STATES THAT THE DECISION TO CONDUCT A SECOND SURVEY WAS NOT RELATED TO IMPROVEMENTS MADE BY THE CORPORATION FROM THE TIME OF THE FIRST FACILITIES CAPABILITY REPORT, ALTHOUGH CERTAIN IMPROVEMENTS WERE MADE TO PRODUCTION AND QUALITY CONTROL PROCEDURES DURING THIS PERIOD; AND IT IS FURTHER STATED THAT IT IS NOT FELT THAT THE TIME LAG BETWEEN THE FIRST AND SUCCEEDING FACILITIES CAPABILITY REPORT IN ANYWAY CONTRIBUTED TO THE EVENTUAL QUALIFICATION OF RANDY WIRE WORKS. AN ATTEMPT TO SATISFY ANY MISUNDERSTANDINGS THAT MIGHT HAVE EXISTED IN THE AREA OF PRODUCT QUALITY, INSPECTION STANDARDS, AND FINANCIAL CAPABILITY OF THE CORPORATION, REPRESENTATIVES OF HEADQUARTERS, AIR MATERIEL COMMAND, THE NEWARK AIR PROCUREMENT DISTRICT, AND THE TOPEKA AIR FORCE DEPOT CONVENED AT HEADQUARTERS, AIR MATERIEL COMMAND ON MARCH 11, 1957. THE CASE WAS REVIEWED AND THE AIR FORCE POSITION CLARIFIED. BIDDERS IN LINE FOR POSSIBLE AWARD WERE REQUESTED TO EXTEND THE ACCEPTANCE DATE OF THEIR BIDS PENDING FINAL DECISION AS TO THE RESPONSIBILITY OF RANDY WIRE WORKS. THE SECOND FACILITIES CAPABILITY REPORT ON RANDY WIRE WORKS WAS COMPLETED ON MARCH 20, 1957. THIS REPORT WAS AFFIRMATIVE AND THE CONTRACT WAS AWARDED TO RANDY WIRE WORKS ON MARCH 25, 1957.

IN REGARD TO THE FINANCIAL CLEARANCE GRANTED ON THE SECOND FACILITIES CAPABILITY REPORT, IT IS STATED THAT THE EVIDENCE OF FINANCIAL ASSISTANCE TO BE FURNISHED BY THE HUDSON COUNTY NATIONAL BANK, THE RELDAN TRADING COMPANY AND CRUCIBLE STEEL CORPORATION, AS SUBMITTED BY RANDY WIRE WORKS, WAS CONSIDERED SUFFICIENT TO RELY UPON AS GIVING REASONABLE ASSURANCE OF SUCCESSFUL PERFORMANCE OF THE PROPOSED CONTRACT FROM A FINANCIAL STANDPOINT.

ON APRIL 26, 1957, RANDY WIRE WORKS ADVISED THAT THEY WERE FILING A VOLUNTARY PETITION FOR AN ARRANGEMENT UNDER CHAPTER 11 OF THE BANKRUPTCY LAWS. ON APRIL 30, 1957, THE COMPANY ADVISED THAT IT HAD RECEIVED NEW FINANCIAL BACKING IN THE MINIMUM AMOUNT OF $100,000. AUTHORIZATION TO SHIP MATERIALS PRODUCED HAS BEEN GIVEN BY THE RECEIVER IN BANKRUPTCY. IS REPORTED THAT PLANT FACILITIES, MACHINERY, EQUIPMENT AND QUALITY CONTROL APPEAR ADEQUATE, AND UP TO THE PRESENT TIME THE AIR FORCE HAS NO INFORMATION INDICATING THAT THE CONTRACT WILL NOT BE SATISFACTORILY PERFORMED.

WE HAVE CONSISTENTLY HELD THAT THE QUESTION OF RESPONSIBILITY OF BIDDERS IS PRIMARILY A MATTER FOR CONSIDERATION BY THE CONTRACTING AGENCY. SEE IN THIS CONNECTION, O-BRIEN V. CARNEY, 6 F.SUPP. 761. THE BID OF RANDY WIRE WORKS WAS A FIRM BID AND THE ACCEPTANCE THEREOF, WITHOUT ANY INVESTIGATION WHATEVER BY THE GOVERNMENT AS TO ITS RESPONSIBILITY, WOULD HAVE CREATED A VALID AND BINDING CONTRACT. THE INVESTIGATION OF THE CORPORATION'S RESPONSIBILITY WAS SOLELY FOR THE PROTECTION AND BENEFIT OF THE GOVERNMENT. ORDINARILY, A LOW BIDDER IS ENTITLED TO AN AWARD UNLESS IT IS DETERMINED THAT THE BIDDER IS NOT QUALIFIED TO PERFORM OR FOR SOME OTHER SUBSTANTIAL REASON IT IS NOT TO THE ADVANTAGE OF THE GOVERNMENT TO MAKE THE AWARD TO THE LOW BIDDER, AND OUR OFFICE HAS CONSISTENTLY HELD THAT REJECTION OF A LOW BID MUST BE JUSTIFIED BY SUBSTANTIAL GROUNDS.

IN THE INSTANT CASE, WHILE IT WAS ORIGINALLY DETERMINED THAT RANDY WIRE WORKS WAS NOT QUALIFIED, THE CORPORATION PROTESTED SUCH DETERMINATION AND APPARENTLY WAS ABLE TO RAISE SUFFICIENT DOUBT AS TO THE ACCURACY OR COMPLETENESS OF THE FIRST PRE-AWARD SURVEY TO WARRANT FURTHER INVESTIGATION. IN SUCH CIRCUMSTANCES, THE ACTION OF THE OF THE AIR FORCE IN CONDUCTING THE SECOND PRE-AWARD SURVEY CANNOT PROPERLY BE CONSIDERED AS NOT IN THE BEST INTERESTS OF THE GOVERNMENT.

ACCORDINGLY, SINCE RANDY WIRE WORKS WAS THE LOW BIDDER, AND THE DETERMINATION OF ITS RESPONSIBILITY WAS REACHED AFTER THOROUGH CONSIDERATION AND APPARENTLY REPRESENTED THE BEST JUDGMENT OF THE ADMINISTRATIVE OFFICIALS CHARGED WITH THE DUTY OF MAKING SUCH DETERMINATIONS, THERE IS NO LEGAL BASIS UPON WHICH WE COULD OBJECT TO THE AWARD OF THE CONTRACT TO THAT CORPORATION.