B-132819, JAN. 28, 1958

B-132819: Jan 28, 1958

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 2. THE ESSENCE OF YOUR COMPLAINT IS THAT YOU WERE NOT AFFORDED AN OPPORTUNITY TO FILE A REQUEST WITH THE SMALL BUSINESS ADMINISTRATION FOR A CERTIFICATE OF COMPETENCY EVEN THOUGH YOU SUBMITTED THE LOWEST PROPOSAL RECEIVED. SIX PROPOSALS WERE RECEIVED. NEGOTIATIONS WERE CONDUCTED WITH YOUR COMPANY AND. A PRE-AWARD SURVEY WAS CONDUCTED BY THE INSPECTOR OF NAVAL MATERIAL. THE ONLY FULL-TIME TECHNICAL OR ENGINEERING EMPLOYEE IS MR. THE COMPANY IS FULLY DEPENDENT ON OBTAINING QUALIFIED PERSONNEL FROM OTHER INDUSTRIAL PLANTS IN THE AREA ON A PART-TIME BASIS. THE AVAILABILITY OF THESE EMPLOYEES AT THE TIMES NEEDED IS NOT KNOWN. "/3) THE INSPECTOR CONSIDERS THE POSSIBILITY OF THE BIDDER NOT COMPLYING WITH THE REQUIRED DELIVERY OR PERFORMANCE SCHEDULE IS TOO GREAT FOR REASONS STATED IN SUBPARAGRAPH (2) ABOVE.

B-132819, JAN. 28, 1958

TO LES JONES TRAINING AIDS, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 2, 1957, PROTESTING THE AWARD OF A CONTRACT BY THE NAVAL TRAINING DEVICE CENTER, PORT WASHINGTON, NEW YORK, TO ANOTHER FIRM UNDER A TENDER FOR PROPOSALS DATED APRIL 24, 1957. THE ESSENCE OF YOUR COMPLAINT IS THAT YOU WERE NOT AFFORDED AN OPPORTUNITY TO FILE A REQUEST WITH THE SMALL BUSINESS ADMINISTRATION FOR A CERTIFICATE OF COMPETENCY EVEN THOUGH YOU SUBMITTED THE LOWEST PROPOSAL RECEIVED.

IT APPEARS FROM THE RECORD THAT THE NAVAL TRAINING DEVICE CENTER DETERMINED THAT SINCE FULFILLMENT OF THE REQUIREMENT OF AN ANIMATED TRAINING PANEL AID CALLED FOR THE DESIGN AND FABRICATION OF A PROTOTYPE, SPECIFICATIONS COULD NOT BE DRAFTED TO SUPPORT A PROCUREMENT BY FORMAL ADVERTISING. HENCE, THE CENTER SOLICITED PROPOSALS UNDER NEGOTIATION PROCEDURES FROM SEVEN SOURCES BY LETTER DATED APRIL 24, 1957, FOR THE FURNISHING OF SUCH TRAINING AID. AS A RESULT OF THE SOLICITATION, SIX PROPOSALS WERE RECEIVED, INCLUDING YOUR LOWEST PROPOSAL IN THE AMOUNT OF $49,445, AND THE SECOND LOWEST PROPOSAL OF $53,894.57 FROM BURTON-RODGERS TECHNICAL TRAINING AIDS, INC., ALSO A SMALL BUSINESS CONCERN.

NEGOTIATIONS WERE CONDUCTED WITH YOUR COMPANY AND, IN VIEW OF THE LIMITED INFORMATION REGARDING YOUR RECORD OF PERFORMANCE, SKILLS, AND TECHNICAL ABILITY, A PRE-AWARD SURVEY WAS CONDUCTED BY THE INSPECTOR OF NAVAL MATERIAL, LOS ANGELES, PURSUANT TO SECTION 1-307 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). THE REPORT OF PRE-AWARD SURVEY DATED JUNE 21, 1957, CONTAINED THE FOLLOWING CONCLUSIONS AND RECOMMENDATIONS OF THE INSPECTOR OF NAVAL MATERIAL, LOS ANGELES, RELATIVE TO YOUR QUALIFICATIONS.

"/1) THE FINANCIAL POSITION OF THE CORPORATION APPEARS WEAK AND READY AVAILABILITY OF FUNDS COULD NOT BE VERIFIED.

"/2) THE CORPORATION HAS NO PERMANENT ORGANIZATION TO PERFORM THE PROPOSED CONTRACT. THE ONLY FULL-TIME TECHNICAL OR ENGINEERING EMPLOYEE IS MR. LES JONES. THE COMPANY IS FULLY DEPENDENT ON OBTAINING QUALIFIED PERSONNEL FROM OTHER INDUSTRIAL PLANTS IN THE AREA ON A PART-TIME BASIS. THE AVAILABILITY OF THESE EMPLOYEES AT THE TIMES NEEDED IS NOT KNOWN.

"/3) THE INSPECTOR CONSIDERS THE POSSIBILITY OF THE BIDDER NOT COMPLYING WITH THE REQUIRED DELIVERY OR PERFORMANCE SCHEDULE IS TOO GREAT FOR REASONS STATED IN SUBPARAGRAPH (2) ABOVE. FURTHERMORE, THE CORPORATION IS A SMALL CONCERN WITH MR. LES JONES AS THE KEY INDIVIDUAL. ILLNESS, ACCIDENTS, ETC., COULD PLACE THE CORPORATION IN A PRECARIOUS POSITION AND REDUCE, IF NOT CURTAIL, ITS ABILITY TO PRODUCE.

"2. IN VIEW OF THE ABOVE DETERMINATIONS, IT IS RECOMMENDED THAT LES JONES TRAINING AIDS, INC. NOT BE GIVEN FAVORABLE CONSIDERATION FOR AWARD OF CONTRACT ON THE SUBJECT REQUEST FOR QUOTATION.'

UNDER SUCH CIRCUMSTANCES, AND IN VIEW OF ENGINEERING OPINION THAT THE UNSTABLE NATURE OF YOUR ORGANIZATION RENDERED IT UNCERTAIN THAT TIMELY DELIVERY OF AN ACCEPTABLE TRAINING AID COULD BE ACCOMPLISHED, THE CONTRACTING OFFICER CONCLUDED THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD BE SERVED BY CONDUCTING NEGOTIATIONS WITH BURTON RODGERS TECHNICAL TRAINING AIDS, INC. IN THAT CONNECTION, IT MAY BE POINTED OUT THAT THE DETERMINATION OF THE QUALIFICATIONS OF A BIDDER IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE OFFICER CONCERNED, AND IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF REASONABLE FACTUAL BASIS FOR THE DETERMINATION, WE WILL NOT OBJECT THERETO. WE THINK THAT ON THE RECORD BEFORE US THERE WAS A BASIS FOR THE DETERMINATION MADE. THE NEGOTIATIONS WITH BURTON-RODGERS TECHNICAL TRAINING AIDS, INC., DISCLOSED THAT THIS SMALL BUSINESS CONCERN WAS FULLY QUALIFIED AS TO EXPERIENCE, PERSONNEL AND KNOW-HOW TO DELIVER AN ACCEPTABLE TRAINING DEVICE. ACCORDINGLY, ON JUNE 27, 1957, A CONTRACT WAS AWARDED TO BURTON-RODGERS TECHNICAL TRAINING AIDS, INC., PURSUANT TO 10 U.S.C. 2304 (A) (10) IN THE AMOUNT OF $53,894.57. AT THE TIME OF THE AWARD, YOU HAD NOT FURNISHED A CERTIFICATE OF COMPETENCY NOR HAD THE CONTRACTING OFFICER RECEIVED ANY INFORMATION THAT YOU WERE SEEKING SUCH A CERTIFICATE FROM THE SMALL BUSINESS ADMINISTRATION.

THE SMALL BUSINESS ACT OF 1953, AS AMENDED, 15 U.S.C. 631-651, CONTAINS NO PROVISION REQUIRING THAT SMALL BUSINESS FIRMS COMPETING FOR GOVERNMENT BUSINESS BE GIVEN AN OPPORTUNITY TO PROCURE A CERTIFICATE OF COMPETENCY BEFORE ANY AWARD CAN BE MADE BY THE PROCUREMENT AGENCY. WHILE 15 U.S.C. 641 (D) AUTHORIZES THE SMALL BUSINESS ADMINISTRATION TO ISSUE CERTIFICATES OF COMPETENCY, THERE IS NO REQUIREMENT IN THAT SECTION OR OTHERWISE IN THE ACT WHICH COULD BE REGARDED AS IMPOSING UPON A PROCUREMENT AGENCY THE DUTY TO ASSURE ITSELF THAT A BIDDER HAS APPLIED FOR A CERTIFICATE OF COMPETENCY BEFORE AWARD, OR TO INITIATE PROCEEDINGS ON BEHALF OF A BIDDER TO OBTAIN SUCH CERTIFICATE FROM THE SMALL BUSINESS ADMINISTRATION. WE BELIEVE, HOWEVER, THAT SOUND PROCUREMENT PRACTICE, INSOFAR AS SMALL BUSINESS IS CONCERNED, SHOULD HAVE DICTATED THAT THE CONTRACTING OFFICER ADVISE YOU OF YOUR DISQUALIFICATION PRIOR TO AWARD SO THAT YOU MIGHT HAVE HAD AN OPPORTUNITY TO MAKE APPLICATION FOR A CERTIFICATE OF COMPETENCY TO THE SMALL BUSINESS ADMINISTRATION. BUT, FOR THE REASONS ABOVE INDICATED, WE DO NOT THINK THAT THE CONTRACTING OFFICER'S FAILURE TO DO SO WAS CONTRARY TO LAW.

WE, OF COURSE, RECOGNIZE THAT THE DEPARTMENT OF THE NAVY IN THIS PARTICULAR CASE, UNDER ITS OWN PROCEDURES CONTAINED IN NAVY PROCUREMENT DIRECTIVES 34-201.6, SHOULD HAVE SUBMITTED THE QUESTION OF YOUR COMPETENCY TO THE SMALL BUSINESS ADMINISTRATION PRIOR TO AWARD. IT IS REPORTED THAT AT THE TIME THE CONTRACTING OFFICER CONSIDERED THAT NFD 34-201.6 WAS NOT SUFFICIENTLY CLEAR OR MANDATORY IN ITS APPLICATION TO THE CIRCUMSTANCES OF THIS CASE. WE DO NOT AGREE WITH THIS VIEW. AND, THE DEPARTMENT OF THE NAVY CONCEDES THAT PURSUANT TO THIS DIRECTIVE THE QUESTION OF YOUR ABILITY TO PERFORM THE CONTRACT SHOULD HAVE BEEN SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION. HOWEVER THAT MAY BE, WE CANNOT CONCLUDE THAT THE FAILURE TO COMPLY WITH AN INTERNAL PROCEDURAL REQUIREMENT, AS DISTINGUISHED FROM A FAILURE TO OBSERVE A REGULATION ISSUED PURSUANT TO LAW, RENDERED THE AWARD ILLEGAL.

SUBSEQUENT TO THIS AWARD THERE WAS PROMULGATED SECTION 1-705.6 OF THE ARMED SERVICES PROCUREMENT REGULATION, EFFECTIVE JULY 1, 1957, WHICH CLEARLY IMPOSES THE MANDATORY REQUIREMENT, WITH CERTAIN LIMITED EXCEPTIONS, THAT MILITARY CONTRACTING OFFICERS SUBMIT MATTERS OF SMALL BUSINESS COMPETENCY TO THE SMALL BUSINESS ADMINISTRATION FOR RESOLUTION PRIOR TO AWARD. IN VIEW THEREOF IT IS REASONABLE TO ASSUME THAT THERE WILL NOT BE A RECURRENCE OF SUCH ACTION AS WAS TAKEN IN THIS CASE.

WHILE WE THINK THAT THE MANNER IN WHICH THE MATTER WAS HANDLED LEAVES MUCH TO BE DESIRED, WE ARE CONSTRAINED TO HOLD THAT NO LEGAL BASIS EXISTS FOR DISTURBING THE AWARD OF THE CONTRACT TO BURTON RODGERS TECHNICAL TRAINING AIDS, INC. IN THAT CONNECTION WE HAVE BEEN INFORMALLY ADVISED BY THE DEPARTMENT OF THE NAVY THAT THIS CONTRACTOR IS PROGRESSING SATISFACTORILY ON SCHEDULE AND THAT DELIVERY OF THE CONTRACT MATERIALS WILL BE ACCOMPLISHED IN AN ACCEPTABLE MANNER WITHIN THE CONTRACT PERIOD.