B-145600, MAY 18, 1961

B-145600: May 18, 1961

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IT APPEARS THAT THE TWO BIDDERS ARE SUBSIDIARIES OF DESIGNATRONICS. SEVEN BIDS WERE RECEIVED AND OPENED ON DECEMBER 14. THE MATTER OF PRECISE'S NONRESPONSIBILITY WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION ON MARCH 15. THE CONTRACT WAS AWARDED TO THE GENERAL INSTRUMENT CORPORATION AS THE LOWEST RESPONSIBLE BIDDER. THAT AUTOMATIC COIL WAS NOT QUALIFIED AS TO CAPACITY AND CREDIT TO PERFORM THE CONTRACT. THE SMALL BUSINESS ADMINISTRATION THEREUPON WAS REQUESTED TO CONSIDER WHETHER A CERTIFICATE OF COMPETENCY SHOULD BE ISSUED TO AUTOMATIC COIL. AWARD THEREFORE WAS MADE TO HAMMARLUND MANUFACTURING COMPANY. IN OUR OPINION NEITHER AWARD IS SUBJECT TO QUESTION BY OUR OFFICE. THERE IS FOR APPLICATION THE GENERAL RULE THAT THE QUESTION AS TO THE RESPONSIBILITY AND CAPABILITY OF A BIDDER ON A PROPOSED GOVERNMENT CONTRACT IS A MATTER PRIMARILY FOR DETERMINATION BY THE PROCUREMENT AGENCY AND SUCH DETERMINATION WHEN MADE WILL NOT BE QUESTIONED BY THE COURTS OR OUR OFFICE IN THE ABSENCE OF A SHOWING OF FRAUD OR LACK OF A REASONABLE BASIS FOR THE DETERMINATION.

B-145600, MAY 18, 1961

TO DESIGNATRONICS, INC.:

BY LETTER DATED APRIL 12, 1961, YOU PROTESTED AGAINST THE AWARDS MADE BY THE FEDERAL AVIATION AGENCY UNDER INVITATIONS FOR BIDS NOS. 1 1215B1 AND 1 -1180B1 TO BIDDERS OTHER THAN THE PRECISE ELECTRONICS AND DEVELOPMENT CORPORATION AND AUTOMATIC COIL CO., INC., RESPECTIVELY. WHILE YOUR FIRM DID NOT SUBMIT BIDS IN RESPONSE TO THESE INVITATIONS, IT APPEARS THAT THE TWO BIDDERS ARE SUBSIDIARIES OF DESIGNATRONICS, INC.

INVITATION NO. 1-1215B1, DATED NOVEMBER 14, 1960, REQUESTED BIDS FOR FURNISHING A QUANTITY OF VOICE FREQUENCY SIGNALING SYSTEM SEND AND RECEIVE TERMINALS, TOGETHER WITH SPARE PARTS AND RELATED EQUIPMENT AND DATA. SEVEN BIDS WERE RECEIVED AND OPENED ON DECEMBER 14, 1960, AND IT APPEARS THAT THE PRECISE ELECTRONICS AND DEVELOPMENT CORPORATION SUBMITTED THE LOWEST BID. SINCE THE PROCUREMENT ACTIVITY DETERMINED, AFTER A PREAWARD SURVEY OF THE RESPONSIBILITY OF PRECISE AS A PROSPECTIVE CONTRACTOR, THAT PRECISE DID NOT POSSESS ADEQUATE CAPACITY AND CREDIT TO QUALIFY AS A RESPONSIBLE CONTRACTOR, THE MATTER OF PRECISE'S NONRESPONSIBILITY WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION ON MARCH 15, 1961, PURSUANT TO SECTION 1-1.709 OF THE FEDERAL PROCUREMENT REGULATIONS, FOR CONSIDERATION AS TO WHETHER A CERTIFICATE OF COMPETENCY AS TO PRECISE'SCAPACITY AND CREDIT SHOULD BE ISSUED. ON APRIL 5, 1961, THE SMALL BUSINESS ADMINISTRATION ADVISED THE FEDERAL AVIATION AGENCY THAT: "BASED ON A COMPREHENSIVE ANALYSIS OF ALL INFORMATION, THIS AGENCY HAS DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY IN THIS INSTANCE.' ACCORDINGLY, THE CONTRACT WAS AWARDED TO THE GENERAL INSTRUMENT CORPORATION AS THE LOWEST RESPONSIBLE BIDDER.

WITH RESPECT TO INVITATION NO. 1-1180B1, DATED OCTOBER 11, 1961, COVERING VHF FIXED-TUNED RECEIVERS AND SPARE PARTS, IT APPEARS THAT UPON THE OPENING OF BIDS ON NOVEMBER 3, 1960, AUTOMATIC COIL SUBMITTED THE SECOND LOWEST BID--- THE FIRST BID HAVING BEEN WITHDRAWN FROM CONSIDERATION. HOWEVER, AS IN THE CASE OF PRECISE, THE FEDERAL AVIATION AGENCY DETERMINED, AFTER A PREAWARD SURVEY OF THE BIDDER'S CREDIT AND CAPACITY, THAT AUTOMATIC COIL WAS NOT QUALIFIED AS TO CAPACITY AND CREDIT TO PERFORM THE CONTRACT. THE SMALL BUSINESS ADMINISTRATION THEREUPON WAS REQUESTED TO CONSIDER WHETHER A CERTIFICATE OF COMPETENCY SHOULD BE ISSUED TO AUTOMATIC COIL. ON APRIL 5, 1961, THAT AGENCY DECLINED TO ISSUE SUCH A CERTIFICATE. AWARD THEREFORE WAS MADE TO HAMMARLUND MANUFACTURING COMPANY, INC., AS THE LOWEST RESPONSIBLE BIDDER.

IN OUR OPINION NEITHER AWARD IS SUBJECT TO QUESTION BY OUR OFFICE.

THE MATTER OF THE RESPONSIBILITY OF THESE TWO FIRMS AS PROSPECTIVE CONTRACTORS UNDER THE INVITATIONS BECAME ONE SOLELY FOR DETERMINATION BY THE PROCUREMENT AGENCY IN VIEW OF THE REFUSAL OF THE SMALL BUSINESS ADMINISTRATION TO ISSUE CERTIFICATES OF COMPETENCY. IN SUCH CASES, THERE IS FOR APPLICATION THE GENERAL RULE THAT THE QUESTION AS TO THE RESPONSIBILITY AND CAPABILITY OF A BIDDER ON A PROPOSED GOVERNMENT CONTRACT IS A MATTER PRIMARILY FOR DETERMINATION BY THE PROCUREMENT AGENCY AND SUCH DETERMINATION WHEN MADE WILL NOT BE QUESTIONED BY THE COURTS OR OUR OFFICE IN THE ABSENCE OF A SHOWING OF FRAUD OR LACK OF A REASONABLE BASIS FOR THE DETERMINATION. O-BRIEN V. CARNEY, 6 F.SUPP. 761, 762; FRIEND V. LEE, 221 F.2D 96; 20 COMP. GEN. 862, 37 ID. 430, 435; 38 ID. 131, 133. SINCE IT WAS DETERMINED ON THE BASIS OF COMPETENT EVIDENCE BY BOTH THE PROCUREMENT AGENCY AND THE SMALL BUSINESS ADMINISTRATION THAT NEITHER PRECISE NOR AUTOMATIC COIL MET THE REQUIRED STANDARDS OF RESPONSIBILITY RELATING TO THEIR ABILITY TO PERFORM THE CONTRACTS, NO LEGAL BASIS EXISTS FOR DISTURBING THE AWARDS MADE.