B-146316, OCT. 16, 1961

B-146316: Oct 16, 1961

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TO TRANSDYNE CORPORATION: FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO TRG. PROPOSALS WERE REQUESTED FOR FURNISHING 6 TO 24 RADAR INTERFERENCE TRAINERS CAPABLE OF SIMULATING AND TRANSMITTING VARIOUS TYPES OF INTERFERENCE SIGNALS FOR USE IN THE TRAINING OF RADAR OPERATORS. THE CLOSING DATE FOR RECEIPT OF PROPOSALS WAS JUNE 13. NEGOTIATIONS WERE UNDERTAKEN THEREAFTER FOR A FIRM QUANTITY OF 23 RADAR TRAINERS WITH YOU AS LOW BIDDER AND WITH THE SECOND AND THIRD LOW BIDDERS. AS A RESULT OF THIS SURVEY IT WAS DETERMINED BY THE CONTRACTOR EVALUATION BOARD. THAT YOU DID NOT HAVE THE TECHNICAL ABILITY TO ASSURE SATISFACTORY PERFORMANCE. IF THE BID OR PROPOSAL IS TO BE REJECTED FOR THIS REASON ALONE.

B-146316, OCT. 16, 1961

TO TRANSDYNE CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO TRG, INCORPORATED, BY THE U.S. ARMY SIGNAL SUPPLY AGENCY, PHILADELPHIA, PENNSYLVANIA, UNDER REQUEST FOR PROPOSALS NO. SC-36-039 61-10110-B4.

PROPOSALS WERE REQUESTED FOR FURNISHING 6 TO 24 RADAR INTERFERENCE TRAINERS CAPABLE OF SIMULATING AND TRANSMITTING VARIOUS TYPES OF INTERFERENCE SIGNALS FOR USE IN THE TRAINING OF RADAR OPERATORS. THE CLOSING DATE FOR RECEIPT OF PROPOSALS WAS JUNE 13, 1961, AND NEGOTIATIONS WERE UNDERTAKEN THEREAFTER FOR A FIRM QUANTITY OF 23 RADAR TRAINERS WITH YOU AS LOW BIDDER AND WITH THE SECOND AND THIRD LOW BIDDERS, TRG, INCORPORATED AND ELECTROSPACE CORPORATION, RESPECTIVELY. ON JUNE 20, 1961, MESSRS. ALBERT R. MAYER AND PATRICK B. MALLOY, ELECTRONIC ENGINEERS WITH THE U.S. ARMY SIGNAL MATERIEL SUPPORT AGENCY, FORT MONMOUTH, NEW JERSEY, VISITED YOUR PLANT FOR THE PURPOSE OF MAKING A PREAWARD SURVEY. AS A RESULT OF THIS SURVEY IT WAS DETERMINED BY THE CONTRACTOR EVALUATION BOARD, WITH THE CONCURRENCE OF THE CONTRACTING OFFICER, THAT YOU DID NOT HAVE THE TECHNICAL ABILITY TO ASSURE SATISFACTORY PERFORMANCE.

PARAGRAPH 1-705.6 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION IN EFFECT AT THE TIME PROVIDED THAT:

"IF A SMALL BUSINESS CONCERN HAS SUBMITTED AN OTHERWISE ACCEPTABLE BID OR PROPOSAL BUT HAS BEEN FOUND BY THE CONTRACTING OFFICER TO BE NONRESPONSIBLE AS TO CAPACITY OR CREDIT, AND IF THE BID OR PROPOSAL IS TO BE REJECTED FOR THIS REASON ALONE, (I) SBA SHALL BE NOTIFIED OF THE CIRCUMSTANCES SO AS TO PERMIT IT TO ISSUE A CERTIFICATE OF COMPETENCY AND (II) AWARD SHALL BE WITHHELD PENDING EITHER SBA ISSUANCE OF A CERTIFICATE OF COMPETENCY OR THE EXPIRATION OF TEN WORKING DAYS AFTER SBA IS SO NOTIFIED, WHICHEVER IS EARLIER, SUBJECT TO THE FOLLOWING:

"/A) THIS PROCEDURE IS NOT MANDATORY WHERE THE CONTRACTING OFFICER CERTIFIES IN WRITING THAT AWARD MUST BE MADE WITHOUT DELAY AND INCLUDES IN THE CONTRACT FILE A STATEMENT SIGNED BY HIM WHICH JUSTIFIES THE CERTIFICATE.'

PURSUANT TO THE ABOVE REGULATION THE CONTRACTING OFFICER REFERRED THE MATTER TO THE SMALL BUSINESS ADMINISTRATION ON JUNE 24, 1961, FOR CONSIDERATION OF THE ISSUANCE OF A CERTIFICATE OF COMPETENCY WITH THE REQUEST THAT ACTION BE EXPEDITED SINCE AWARD MUST BE MADE BY JUNE 30, 1961. WHEN SMALL BUSINESS ADMINISTRATION WAS UNABLE TO PROCESS THE CASE BY JUNE 30, THE CONTRACTING OFFICER DETERMINED THAT AWARD MUST BE MADE WITHOUT FURTHER DELAY AND AWARDED THE CONTRACT TO TRG, INCORPORATED, IN AN AMOUNT APPROXIMATELY $22,000 HIGHER THAN YOUR BID.

YOU PROTEST THIS AWARD ON THE GROUNDS THAT YOU WERE TECHNICALLY QUALIFIED TO PERFORM; THAT THE AWARD WAS MADE ON JUNE 30, 1961, TO PREVENT THE LAPSE OF 1961 FISCAL YEAR FUNDS, WHICH YOU AVER IS NOT A VALID REASON; AND THAT SMALL BUSINESS ADMINISTRATION SHOULD HAVE BEEN GIVEN MORE TIME TO ISSUE A CERTIFICATE OF COMPETENCY. YOU ALLEGE FURTHER THAT IN EVALUATING YOUR TECHNICAL ABILITY THE GOVERNMENT REPRESENTATIVES FAILED TO INTERVIEW YOUR TOP ENGINEERING PERSONNEL AND THAT YOU HAVE COMPLETED RADAR INSTRUMENTS FOR THE NAVY AND AIR FORCE, SEVERAL OF WHICH YOU DESCRIBE, THAT ARE FAR MORE COMPLICATED THAN THE INTERFERENCE TRAINERS HERE INVOLVED.

THE RECORD SHOWS THAT THE SIGNAL CORPS FIELD ENGINEERING SURVEY TEAM DID INTERVIEW YOUR TOP PERSONNEL, INCLUDING MR. LOITERMAN, DIRECTOR OF ENGINEERING, MR. VOAK, ASSISTANT DIRECTOR OF ENGINEERING AND MR. GENTILE, PROJECT MANAGER, AND THAT YOUR PRESIDENT, MR. KAY WAS AT THE PLANT DURING THE PREAWARD SURVEY AND WAS INTRODUCED TO THE GOVERNMENT REPRESENTATIVES, BUT DID NOT VOLUNTEER ANY INFORMATION OR REQUEST TO BE PRESENT DURING THE DISCUSSIONS.

THE SURVEY REVEALED THAT YOU HAD NO PROPOSED PRODUCTION PLANS FOR THE MANUFACTURE OF THE TRAINERS AND NO FIRM COMMITMENTS FOR DELIVERY OF THE REQUIRED PURCHASE PARTS. NEGOTIATION PREVIOUSLY HAD DISCLOSED THAT YOU WERE NOT FAMILIAR WITH AN IMPORTANT COMPONENT, A BACKWARD WAVE OSCILLATOR TUBE, WHICH YOU HAD INCLUDED IN YOUR QUOTATION AT $18 EACH, WHEREAS THE ACTUAL COST WAS $2,595. IT APPEARED FURTHER THAT YOU DID NOT HAVE ADEQUATE EQUIPMENT FOR TESTING THE RADAR TRAINERS AND THAT YOU ANTICIPATED USING GOVERNMENT-FURNISHED TEST EQUIPMENT WHICH IS NOT ADEQUATE FOR PRODUCTION TESTING, AND WHICH THE REQUEST FOR PROPOSALS CLEARLY STATES IS FOR DEVELOPING MAINTENANCE DATA.

IT IS REPORTED FURTHER THAT YOUR PERSONNEL INTERVIEWED COULD NOT SHOW THAT YOUR CORPORATION HAD ANY PREVIOUS EXPERIENCE IN RF TRANSMISSION OR MICROWAVE EQUIPMENT, PARTICULARLY EQUIPMENT IN THE K BAND FREQUENCIES; THAT YOUR EXPERIENCE APPEARED TO HAVE BEEN PRIMARILY IN VIDEO RECEIVING EQUIPMENT; AND THAT NONE OF THE THEN CURRENT OR PREVIOUS CONTRACTS INDICATED ANY EXPERIENCE ON EQUIPMENT IN THE FREQUENCY RANGE OF 12.5 TO 17.5 KMC. REVIEW OF PREVIOUS CONTRACTS INDICATED THAT TRANSDYNE HAD NOT PRODUCED, NOR DID PERSONNEL HAVE ANY EXPERIENCE IN THE PRODUCTION OF EQUIPMENT OF EQUAL OR GREATER COMPLEXITY.

THE INTERVIEW ALSO REVEALED THAT YOUR BID WAS PREPARED FROM THE SPECIFICATIONS AND PHOTOGRAPHS ACCOMPANYING THE REQUEST FOR PROPOSALS, AND FROM VERBAL INFORMATION OBTAINED FROM SOURCES OTHER THAN THE SIGNAL CORPS, WITHOUT EXAMINING THE OFFICIAL MODEL AND DRAWINGS ON DISPLAY FOR THE BENEFIT OF BIDDERS FROM MAY 19 TO JUNE 8, 1961, AND THAT IN ADDITION TO THE GROSS MISCONCEPTION AS TO THE BACKWARD WAVE OSCILLATOR TUBE THERE WAS LACK OF FAMILIARITY WITH THE SPECIAL RF PLUMBING AND ANTENNA REQUIREMENTS.

ALL OF THE ABOVE INDICATES A GENERAL LACK OF RECOGNITION OF THE COMPLICATED NATURE OF THE EQUIPMENT AND THE PRODUCTION PROBLEMS INVOLVED AND APPEARS CLEARLY TO JUSTIFY THE CONCLUSION THAT YOU DID NOT POSSESS THE REQUIRED TECHNICAL ABILITY TO MANUFACTURE THE RADAR TRAINERS WITHIN THE REQUIRED DELIVERY SCHEDULE.

AS TO THE FAILURE OF THE SIGNAL CORPS TO HOLD UP THE AWARD INTO THE FISCAL YEAR 1962, THE RECORD SHOWS THAT THE EQUIPMENT WAS URGENTLY NEEDED BY THE TRAINING AID SUB-CENTER AND USA ARTILLERY AND MISSILE SCHOOL FOR THE TRAINING OF OPERATORS AND PARTICULARLY TO MEET TRAINING SCHEDULES FOR COMBAT EFFECTIVENESS. THE PROCUREMENT OF THE RADAR TRAINERS WAS A FIRM REQUIREMENT OF THE 1961 FISCAL YEAR PROGRAM AND IS FUNDED WITH ONE-YEAR MONEY, AND IF THE AWARD HAD NOT BEEN MADE ON JUNE 30, THE FUNDS USED FOR THE PROCUREMENT WOULD NOT HAVE BEEN AVAILABLE FOR OBLIGATION AND A SIGNIFICANT PERIOD MIGHT HAVE ELAPSED BEFORE OTHER FUNDS BECAME AVAILABLE. WE DO NOT BELIEVE THAT THE LAPSE OF FUNDS ALONE WOULD BE A VALID REASON FOR NOT DELAYING AN AWARD BUT WHEN, AS HERE, IT WOULD RESULT IN ADDITIONAL DELAY DUE TO NONAVAILABILITY OF THE FUNDS AND THE REPROGRAMMING OF THE REQUIREMENT FOR THE NEXT FISCAL YEAR, THE ACTION APPEARS TO BE JUSTIFIED.

SINCE PROPOSALS WERE ACCEPTED UNTIL JUNE 13, 1961, AND SINCE SOME TIME WAS CONSUMED BY NEGOTIATION, INCLUDING CORRECTION OF YOUR ERROR IN THE PRICE OF THE BACKWARD WAVE OSCILLATOR TUBE, THERE DOES NOT APPEAR TO HAVE BEEN ANY UNDUE DELAY IN REFERRING THE MATTER TO THE SMALL BUSINESS ADMINISTRATION, THE PREAWARD SURVEY HAVING BEEN MADE ON JUNE 20, THE EVALUATION BOARD'S REPORT ON JUNE 22, AND THE CONTRACTING OFFICER'S DETERMINATION, AFTER REVIEWING THE REPORT, ON JUNE 24. ACTUALLY, SINCE THERE WERE FEWER THAN TEN WORKING DAYS BETWEEN THE DATE OF THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY AND JUNE 30, HE WOULD HAVE BEEN JUSTIFIED IN MAKING THE AWARD IMMEDIATELY, WITHOUT REFERRING THE MATTER TO THE SMALL BUSINESS ADMINISTRATION, IN ACCORDANCE WITH THE REGULATION QUOTED ABOVE. SEE 38 COMP. GEN. 248.

IT IS PRIMARILY THE FUNCTION OF THE CONTRACTING AGENCY TO DETERMINE THE QUALIFICATIONS OF A BIDDER, AS WELL AS THE NEEDS OF THE GOVERNMENT AND THE URGENCY THEREOF, AND IN THE ABSENCE OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE DETERMINATION, WE WILL NOT OBJECT TO SUCH A DETERMINATION. CONSEQUENTLY, WE WOULD NOT BE JUSTIFIED IN OBJECTING TO THE AWARD AS MADE.