B-136754, SEPTEMBER 26, 1958, 38 COMP. GEN. 248

B-136754: Sep 26, 1958

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WAS FOUND TO LACK THE TECHNICAL PRODUCTION QUALIFICATIONS WAS PROPER UNDER THE TEN-DAY EXCEPTION PRESCRIBED IN PARAGRAPH 1.705.6 (B) (II) OF THE ARMED SERVICES PROCUREMENT REGULATION. 1958: REFERENCE IS MADE TO COPY OF YOUR LETTER OF JULY 1. THE LOWEST BID RECEIVED UNDER THIS INVITATION WAS REJECTED AS BEING NONRESPONSIVE BECAUSE THE CAMERAS OFFERED BY THAT BIDDER MATERIALLY DEVIATED FROM THE SPECIFICATIONS. WAS THE SECOND LOWEST BID RECEIVED. A PREAWARD SURVEY WAS CONDUCTED OF YOUR FACILITIES ON JUNE 18. THE REPORT OF SURVEY CONCLUDED THAT: THE SUMMARY OF CONTRACTOR'S CAPABILITY FACTORS IS BASED ON 100 PERCENT SUBCONTRACTING OF ALL PRODUCTION OPERATIONS. * * * BASED ON BACKGROUND INFORMATION CONTRACTOR IS NOT CONSIDERED TO TECHNICALLY QUALIFIED.

B-136754, SEPTEMBER 26, 1958, 38 COMP. GEN. 248

CONTRACTS - AWARDS - SMALL BUSINESS CONCERNS - CERTIFICATION - DELAYS AN AWARD TO OTHER THAN THE LOW BIDDER AFTER A CERTIFICATION BY THE CONTRACTING OFFICER THAT THE URGENT NEED FOR EQUIPMENT IN CONNECTION WITH HIGH PRIORITY RESEARCH AND DEVELOPMENT WORK WOULD NOT PERMIT DELAY IN THE CONTRACT AWARD FOR A PERIOD OF TEN DAYS PENDING ACTION BY THE SMALL BUSINESS ADMINISTRATION ON THE ISSUANCE OF CERTIFICATE OF COMPETENCY TO THE LOW BIDDER WHO, AS THE RESULT OF A PREAWARD SURVEY, WAS FOUND TO LACK THE TECHNICAL PRODUCTION QUALIFICATIONS WAS PROPER UNDER THE TEN-DAY EXCEPTION PRESCRIBED IN PARAGRAPH 1.705.6 (B) (II) OF THE ARMED SERVICES PROCUREMENT REGULATION, WHICH REGULATION PROMULGATED PURSUANT TO 10 U.S.C. 2301 HAS THE FORCE AND EFFECT OF LAW.

TO THE AUDIO-SONICS CORPORATION, SEPTEMBER 26, 1958:

REFERENCE IS MADE TO COPY OF YOUR LETTER OF JULY 1, 1958, TO THE PROCUREMENT OFFICE, ABERDEEN PROVING GROUND, MARYLAND, AND TO YOUR LETTER OF AUGUST 22, 1958, CONCERNING YOUR PROTEST AGAINST THE AWARD OF ANY CONTRACT TO A BIDDER OTHER THAN YOUR FIRM UNDER INVITATION FOR BIDS NO. ORD-18-001-58-173, ISSUED ON MAY 9, 1958.

THE INVITATION REQUESTED BIDS TO BE OPENED ON JUNE 10, 1958, FOR TWO MOTION PICTURE CAMERAS, FULL FRAME, 70 MM, SIXTY FRAMES PER SECOND, COMPLETE WITH TWO MAGAZINES, 1,000 FOOT CAPACITY, IN ACCORDANCE WITH AN ATTACHED DRAWING AND SPECIFICATIONS. THE LOWEST BID RECEIVED UNDER THIS INVITATION WAS REJECTED AS BEING NONRESPONSIVE BECAUSE THE CAMERAS OFFERED BY THAT BIDDER MATERIALLY DEVIATED FROM THE SPECIFICATIONS. THE ABSTRACT OF BIDS INDICATES THAT YOUR BID IN THE AMOUNT OF $9,310 PER CAMERA, LESS A DISCOUNT OF 1/4 PERCENT, 20 DAYS, WAS THE SECOND LOWEST BID RECEIVED. VIEW THEREOF, A PREAWARD SURVEY WAS CONDUCTED OF YOUR FACILITIES ON JUNE 18, 1958, BY THE LOS ANGELES ORDNANCE DISTRICT. THE REPORT OF SURVEY CONCLUDED THAT:

THE SUMMARY OF CONTRACTOR'S CAPABILITY FACTORS IS BASED ON 100 PERCENT SUBCONTRACTING OF ALL PRODUCTION OPERATIONS. * * * BASED ON BACKGROUND INFORMATION CONTRACTOR IS NOT CONSIDERED TO TECHNICALLY QUALIFIED, NOR PRODUCTIVELY EQUIPPED TO PRODUCE BID ITEM. AWARD IS NOT RECOMMEND.

PURSUANT TO PARAGRAPH 1-705.6 OF THE ARMED SERVICES PROCUREMENT REGULATION, THE CONTRACTING OFFICER REFERRED TO THE MATTER OF YOUR PRODUCTIVE CAPABILITY TO THE LOS ANGELES DISTRICT OFFICE OF THE SMALL BUSINESS ADMINISTRATION FOR THE PURPOSE OF AFFORDING THAT ADMINISTRATION AN OPPORTUNITY TO ISSUE A CERTIFICATE OF COMPETENCY ON YOUR BEHALF. THE PROCUREMENT AGENCY WAS ADVISED BY MR. GEORGE MELISSARATO AND MR. ARTHUR B. LEONARD OF THE SMALL BUSINESS ADMINISTRATION THAT INSTRUCTIONS PRECLUDED THE ISSUANCE OF ANY CERTIFICATE OF COMPETENCY AFTER JUNE 20, 1958, AND THAT IT COULD NOT POSSIBLY ISSUE A CERTIFICATE IN LESS THAN 10 DAYS. THIS ACTION WAS IN ACCORDANCE WITH PARAGRAPH 1-705.6 (B) (II) OF THE REGULATION WHICH REQUIRES THAT AWARD SHALL BE WITHHELD PENDING EITHER THE ISSUANCE OF SUCH CERTIFICATE OR THE EXPIRATION OF 10 WORKING DAYS AFTER THE ADMINISTRATION IS NOTIFIED OF THE CIRCUMSTANCES, WHICHEVER IS THE EARLIER, AND ALSO IN CONSONANCE WITH THE DISCRETIONARY AUTHORITY VESTED IN THE ADMINISTRATION BY 15 U.S.C. CODE 641. MOREOVER, PURSUANT TO PARAGRAPH 1- 705.6 (B) (A) OF THAT REGULATION, THE CONTRACTING OFFICER CERTIFIED IN WRITING THAT THE URGENT NEED FOR THE CAMERAS IN CONNECTION WITH HIGH PRIORITY RESEARCH AND DEVELOPMENT WORK WOULD NOT PERMIT DELAY IN THE AWARD OF A CONTRACT FOR A PERIOD OF 10 WORKING DAYS PENDING ACTION BY THE SMALL BUSINESS ADMINISTRATION. THESE REGULATIONS PROMULGATED UNDER THE ARMED SERVICES PROCUREMENT ACT, AS AMENDED, 10 U.S.C. 2301, ET SEQ., HAVE THE FORCE OF LAW. SEE PUBLIC UTILITIES COMMISSION OF CALIFORNIA V. UNITED STATES, 355 U.S. 534, 542.

ACCORDINGLY, BASED UPON A FAVORABLE PREAWARD SURVEY, AWARD OF CONTRACT NO. DA-18-001-509-0RD-4989 WAS MADE TO THE THIRD LOW BIDDER, GORDON ENTERPRISES, INC., ON JUNE 30, 1958, FOR THE TWO CAMERAS AT A UNIT PRICE OF $12,700 LESS A DISCOUNT OF 2 1/4 PERCENT, 45 DAYS.

IT LONG HAS BEEN AN ESTABLISHED RULE OF OUR OFFICE THAT THE DETERMINATION OF THE QUALIFICATIONS OF A BIDDER IS PRIMARILY THE FUNCTION OF THE CONTRACTING AGENCY, AND IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF REASONABLE FACTUAL BASIS FOR THE DETERMINATION, WE WILL NOT OBJECT TO THE DETERMINATION AS MADE. WE BELIEVE THAT ON THE RECORD BEFORE US THERE WAS A BASIS FOR THE DETERMINATION MADE AS TO YOUR TECHNICAL PRODUCTION QUALIFICATIONS. THIS WOULD APPEAR TO BE ESPECIALLY TRUE SINCE YOU HAD NOT PREVIOUSLY BEEN ENGAGED IN CAMERA MANUFACTURING AND WERE NOT EQUIPPED TO PRODUCE CAMERAS IN YOUR OWN FACILITY.

WHILE, AS STATED IN YOUR LETTER TO THE ABERDEEN PROCUREMENT OFFICE, WE HELD IN B-132819 OF JANUARY 28, 1958, THAT PARAGRAPH 1-705.6 OF THE REGULATION IMPOSED A MANDATORY REQUIREMENT,"WITH CERTAIN LIMITED EXCEPTIONS," TO SUBMIT MATTERS OF SMALL BUSINESS COMPETENCY TO THE SMALL BUSINESS ADMINISTRATION FOR RESOLUTION PRIOR TO AWARD, THIS PARTICULAR CASE FALLS SQUARELY WITHIN THE 10-DAY EXCEPTION PRESCRIBED BY PARAGRAPH 1- 705.6 (B) (II) OF THE REGULATION.

THEREFORE, WE MUST CONCLUDE THAT NO LEGAL BASIS EXISTS FOR DISTURBING THE AWARD MADE TO GORDON ENTERPRISES, INC., UNDER THE SUBJECT INVITATION.