B-147159, OCT. 31, 1961

B-147159: Oct 31, 1961

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TO THE SEA LAMP COMPANY: REFERENCE IS MADE TO YOUR TELEGRAM OF SEPTEMBER 11. IS PREDICATED UPON THE CONTENTION THAT SINCE YOU AND THE LATTER FIRM SUBMITTED THE TWO LOWEST BIDS THE PROCUREMENT OFFICIALS ERRED IN AWARDING THE CONTRACT TO THE THIRD LOW BIDDER. SINCE YOUR PROPOSAL WAS THE LOWEST OF THE SEVEN BIDS RECEIVED. IT WAS DETERMINED THEREBY THAT SEA LAMP COMPANY IS A FIRM SOLELY OWNED BY MR. THAT SUCH ENTITY APPARENTLY WAS CONCEIVED FOR THE PURPOSE OF BIDDING ON THIS PROCUREMENT SINCE NO RECORDS OF PREVIOUS EXISTENCE WERE IN EVIDENCE. THAT YOUR NET WORTH WAS $48. STEED WAS THE FORMER PRESIDENT AND TREASURER OF THE NOW INACTIVE PHOTRON CORPORATION OF HAMPTON. CONTRACTS WITH THE LATTER FIRM WERE CANCELLED BECAUSE OF UNSATISFACTORY PERFORMANCE.

B-147159, OCT. 31, 1961

TO THE SEA LAMP COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM OF SEPTEMBER 11, 1961, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. 104-101-62, ISSUED BY SHIPS PARTS CONTROL CENTER, DEPARTMENT OF THE NAVY. YOUR PROTEST, ALSO FILED ON BEHALF OF JAY MOULDING CORPORATION, IS PREDICATED UPON THE CONTENTION THAT SINCE YOU AND THE LATTER FIRM SUBMITTED THE TWO LOWEST BIDS THE PROCUREMENT OFFICIALS ERRED IN AWARDING THE CONTRACT TO THE THIRD LOW BIDDER.

THE RECORD DISCLOSES THAT PURSUANT TO THE ARMED SERVICES PROCUREMENT REGULATION ADMINISTRATIVE PERSONNEL UNDERTOOK A PRE-AWARD FACILITIES CAPABILITY SURVEY OF YOUR ORGANIZATION, SINCE YOUR PROPOSAL WAS THE LOWEST OF THE SEVEN BIDS RECEIVED. IT WAS DETERMINED THEREBY THAT SEA LAMP COMPANY IS A FIRM SOLELY OWNED BY MR. J. H. STEED AND, THAT SUCH ENTITY APPARENTLY WAS CONCEIVED FOR THE PURPOSE OF BIDDING ON THIS PROCUREMENT SINCE NO RECORDS OF PREVIOUS EXISTENCE WERE IN EVIDENCE. THE RECORD FURTHER SHOWS THAT IN EXECUTING FORM NO. 129, YOU ASSERTED THAT AS OF JUNE 23, 1961, YOU HAD 10 PERSONS THEN EMPLOYED; THAT YOU HAD 3,500 SQUARE FEET OF MANUFACTURING SPACE AND 2,000 FEET OF WAREHOUSE SPACE; AND, THAT YOUR NET WORTH WAS $48,000. THE SURVEY ESTABLISHED, HOWEVER, THAT SEA LAMP COMPANY HAD NO EMPLOYEES; THAT SUITABLE MANUFACTURING AND WAREHOUSE SPACE HAD TO BE OBTAINED FROM ANOTHER COMPANY; AND, THAT NO SATISFACTORY FINANCIAL REPORT HAD BEEN FURNISHED.

NOTWITHSTANDING THE FOREGOING, THE ADMINISTRATIVE FILES SHOW YOUR MR. J. H. STEED WAS THE FORMER PRESIDENT AND TREASURER OF THE NOW INACTIVE PHOTRON CORPORATION OF HAMPTON, NEW JERSEY. CONTRACTS WITH THE LATTER FIRM WERE CANCELLED BECAUSE OF UNSATISFACTORY PERFORMANCE, LACK OF COOPERATION WITH THE PROCUREMENT OFFICIALS, AND FAILURE TO MEET COMMITMENTS AND OBLIGATIONS WITH ITS SUPPLIERS. IT IS FURTHER INDICATED THAT AS A RESULT OF THE FIRM'S DEFAULT UNDER A CONTRACT WITH THE FEDERAL AVIATION AGENCY CHARGES OF $60,000 WERE RAISED AGAINST PHOTRON CORPORATION TO COVER EXCESS COSTS INCURRED BY THE GOVERNMENT. THAT INDEBTEDNESS REMAINS UNPAID.

THE APPLICABLE STATUTE (10 U.S.C. 2305 (B) ( PERTAINING TO THE MATTER PROVIDES THAT AWARD AFTER FORMAL ADVERTISING SHALL BE "TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED.' RESPONSIBLE BIDDER IS ONE WHO POSSESSES NOT ONLY THE PHYSICAL AND FINANCIAL CAPABILITY TO PERFORM, BUT ALSO CERTAIN INTANGIBLES INCLUDING SKILL, EXPERIENCE, REPUTATION AND INTEGRITY. ON THE BASIS OF THE FACTS DEVELOPED, A NEGATIVE RATING WAS ACCORDED YOUR COMPANY ON THE GROUNDS OF LACK OF BUSINESS INTEGRITY AS INDICATED BY ACTIONS UNDER THE PREVIOUS CONTRACTS REFERRED TO ABOVE.

WITH RESPECT TO THE BID OF JAY MOULDING CORPORATION, A PRE-AWARD SURVEY OF THAT FIRM, LIKEWISE, WAS MADE BY REPRESENTATIVES OF THE INSPECTOR OF NAVAL MATERIAL. THE EXAMINATION DISCLOSED THAT THE COMPANY DID NOT POSSESS THE FACILITIES, KNOW-HOW OR FINANCIAL RESOURCES TO PRODUCE THE LAMP. IT ALSO APPEARS THAT THE BID WAS PREPARED AND SIGNED BY MR. J. H. STEED OF SEA LAMP COMPANY, AND THAT THE BIDDER WAS DEPENDENT UPON MR. STEED FOR PERFORMANCE IN THE EVENT OF AWARD. FOR THOSE REASONS AN ADVERSE CAPABILITY REPORT WAS SUBMITTED AND, UPON REVIEW BOTH REPORTS WERE SUSTAINED WITHOUT EXCEPTION. UNDER THE CIRCUMSTANCES IT MAY BE CONCLUDED THAT AWARD WAS MADE TO THE LOWEST RESPONSIBLE AND QUALIFIED BIDDER.

QUESTIONS PERTAINING TO THE QUALIFICATIONS OF A PROPOSED CONTRACTOR ARE FOR DETERMINATION PRIMARILY BY THE PROCURING AGENCY INVOLVED AND, IN THE ABSENCE OF CONVINCING EVIDENCE OF BAD FAITH OR THE LACK OF ANY REASONABLE BASIS FOR A PARTICULAR FINDING, THERE WOULD BE NO JUSTIFICATION FOR OBJECTION BY OUR OFFICE TO SUCH DETERMINATION.

IN THIS CASE WE FEEL THAT THE ADMINISTRATIVE FINDINGS CONSTITUTED A BONA FIDE DETERMINATION AND, THEREFORE THE ACTION TAKEN BY THE DEPARTMENT OF THE NAVY WILL NOT BE DISTURBED.