B-151579, JUL. 12, 1963

B-151579: Jul 12, 1963

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TWO AMENDMENTS TO THE INVITATION WERE ISSUED. IN RESPONSE TO THE INVITATION 5 BIDS WERE RECEIVED AS FOLLOWS: TABLE U.S. 702.00 BIDS WERE OPENED ON NOVEMBER 8. ON THE SAME DATE THE BIDS ARE FORWARDED TO THE NAVAL TORPEDO STATION. BEFORE AWARD SEVERAL TIME EXTENSIONS WERE REQUESTED BY THE PUGET SOUND NAVAL SHIPYARD. WHICH WAS NOT ACCEPTED BY BOURNS. THE REPORT INDICATES THESE TIME EXTENSIONS WERE REQUESTED IN ORDER THAT YOUR CONCERN WOULD HAVE AN OPPORTUNITY TO FURNISH ACCEPTABLE PREPRODUCTION SAMPLES AS REQUIRED UNDER YOUR EXISTING CONTRACT WITH NAVAL TORPEDO STATION LOCATED AT KEYPORT. THAT THE REQUIREMENT FOR THE ITEMS IN THE PRESENT PROCUREMENT WAS BECOMING CRITICAL. AWARD WAS MADE TO FAIRCHILD CONTROL CORPORATION.

B-151579, JUL. 12, 1963

TO MR. DAVID A. WINER:

WE REFER TO YOUR TELEGRAM OF MAY 17, 1963, AND SUBSEQUENT CORRESPONDENCE AND DISCUSSIONS PROTESTING THE AWARD OF CONTRACT NO. N 251/253/-18776 A/X), DATED APRIL 15, 1963, FOR THE PROCUREMENT OF CERTAIN PRESSURE POTENTIOMETERS TO OTHER THAN YOUR CONCERN.

BY IFB 251-154-63 DATED OCTOBER 9, 1962, THE PUGET SOUND NAVAL SHIPYARD, BREMERTON, WASHINGTON, SOLICITED BIDS FOR 710 PRESSURE POTENTIOMETERS FOR THE NAVAL TORPEDO STATION LOCATED AT KEYPORT, WASHINGTON, AT AN ESTIMATED COST OF $46,860.00. TWO AMENDMENTS TO THE INVITATION WERE ISSUED. THE OCTOBER 22, 1962, AMENDMENT INCREASED THE PROCUREMENT FROM 710 TO 720 UNITS. THE OCTOBER 30, 1962, AMENDMENT CHANGED THE DELIVERY DATE FOR PRE- PRODUCTION SAMPLES FROM 30 TO 40 DAYS AFTER AWARD OF CONTRACT.

IN RESPONSE TO THE INVITATION 5 BIDS WERE RECEIVED AS FOLLOWS:

TABLE

U.S. GAUGE $47,757.60

FAIRCHILD CONTROL CORPORATION 52,895.00

SERVANIC INSTRUMENT, INCORPORATED 56,444.00

BOURNS, INCORPORATED 57,268.00

COMPUTER INSTRUMENT, INCORPORATED 57,702.00

BIDS WERE OPENED ON NOVEMBER 8, 1962, AND ON THE SAME DATE THE BIDS ARE FORWARDED TO THE NAVAL TORPEDO STATION, KEYPORT, WASHINGTON, FOR TECHNICAL EVALUATION. BEFORE AWARD SEVERAL TIME EXTENSIONS WERE REQUESTED BY THE PUGET SOUND NAVAL SHIPYARD, AND ACCEPTED BY ALL BIDDERS EXCEPT AS TO THE LAST TIME EXTENSION REQUESTED ON MARCH 7, 1963, WHICH WAS NOT ACCEPTED BY BOURNS, INCORPORATED, AND COMPUTER INSTRUMENT, INCORPORATED. THE REPORT INDICATES THESE TIME EXTENSIONS WERE REQUESTED IN ORDER THAT YOUR CONCERN WOULD HAVE AN OPPORTUNITY TO FURNISH ACCEPTABLE PREPRODUCTION SAMPLES AS REQUIRED UNDER YOUR EXISTING CONTRACT WITH NAVAL TORPEDO STATION LOCATED AT KEYPORT,WASHINGTON. AFTER IT BECAME APPARENT TO THE PUGET SOUND NAVAL SHIPYARD THAT YOUR CONCERN COULD NOT PRODUCE AN ACCEPTABLE PREPRODUCTION MODEL UNDER YOUR EXISTING CONTRACT, AND THAT THE REQUIREMENT FOR THE ITEMS IN THE PRESENT PROCUREMENT WAS BECOMING CRITICAL, AWARD WAS MADE TO FAIRCHILD CONTROL CORPORATION, 6111 E. WASHINGTON BOULEVARD, LOS ANGELES 22, CALIFORNIA, ON APRIL 15, 1963, AS THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER. THE CONTRACT AWARDED TO FAIRCHILD CONTROL CORPORATION WAS FOR 600 PRESSURE POTENTIOMETERS. THE CONTRACT PROVIDED THAT THE DELIVERY DATE FOR PREPRODUCTION SAMPLES WOULD BE JUNE 27, 1963. IT WAS SUBSEQUENTLY DISCOVERED THAT JUNE 27, 1963, HAD ERRONEOUSLY BEEN INSERTED IN THIS CONTRACT DUE TO A CLERICAL ERROR. ON MAY 17, 1963, THE CONTRACTING OFFICER FURNISHED A CHANGE ORDER TO FAIRCHILD CONTROL CORPORATION ESTABLISHING MAY 27, 1963 AS THE CORRECT DELIVERY DATE.

THE DECISION BY THE CONTRACTING OFFICER TO MAKE THIS AWARD TO FAIRCHILD CONTROL CORPORATION WAS BASED ON HIS DETERMINATION THAT YOUR CONCERN WAS NOT A RESPONSIBLE BIDDER. THIS DETERMINATION WAS BASED ON AN ITEM STATUS REPORT WHICH THE CONTRACTING OFFICER RECEIVED FROM THE KEYPORT NAVAL TORPEDO STATION ON MARCH 20, 1963 STATING:

"DO NOT AWARD TO U.S. GAUGE BECAUSE THEY ARE PRESENTLY UNABLE TO PERFORM UNDER KEYPORT CONTRACT N 253/382/X) WHICH IS FOR LIKE ITEM. * * * "

THE RECORD ALSO INDICATES THAT IN ADDITION TO THE ABOVE REPORT FROM KEYPORT, THERE WERE SEVERAL TELEPHONE CONVERSATIONS BETWEEN KEYPORT AND PUGET SOUND AND THAT PUGET SOUND CAREFULLY FOLLOWED YOUR PROGRESS UNDER THE KEYPORT CONTRACT.

PURSUANT TO CONTRACT N 253/382/X) WHICH WAS AWARDED TO YOUR CONCERN BY THE KEYPORT NAVAL TORPEDO STATION ON AUGUST 7, 1962, YOU WERE TO FURNISH 4 ACCEPTABLE PREPRODUCTION SAMPLES. THE RECORD ESTABLISHES THAT ALTHOUGH YOU FURNISHED 2 SETS OF PREPRODUCTION SAMPLES PRIOR TO APRIL 15, 1963, NONE OF THE SAMPLES WAS FOUND ACCEPTABLE BY THE KEYPORT NAVAL TORPEDO STATION BY THE TIME OF AWARD OF THE PRESENT CONTRACT TO FAIRCHILD CONTROL CORPORATION. IT HAS BEEN BROUGHT TO OUR ATTENTION THAT YOUR THIRD SET OF PREPRODUCTION SAMPLES FURNISHED KEYPORT HAVE ALSO BEEN REJECTED AND THAT ON JUNE 27, 1963, KEYPORT NOTIFIED YOU BY TELEGRAM THAT CONTRACT N 253/382/X) WAS TERMINATED FOR DEFAULT PURSUANT TO CLAUSE 11.

ON MAY 10, 1963, YOUR CONCERN SENT A TELEGRAM TO PUGET SOUND NAVAL SHIPYARD PROTESTING THE AWARD MADE TO FAIRCHILD CONTROL CORPORATION, AND ON MAY 17, 1963, A TELEGRAM WAS DIRECTED TO THIS OFFICE PROTESTING THE ACTION TAKEN BY THE CONTRACTING OFFICER. SUBSEQUENT TO YOUR PROTEST OF MAY 17, 1963, THERE WERE SEVERAL DISCUSSIONS BETWEEN REPRESENTATIVES OF YOUR CONCERN AND THIS OFFICE. YOU ALSO PROVIDED THIS OFFICE WITH SUBSTANTIAL TECHNICAL INFORMATION. YOUR CONTENTIONS ARE THAT THE TESTS CONDUCTED AT THE KEYPORT NAVAL TORPEDO STATION ON THE PREPRODUCTION SAMPLES FURNISHED PURSUANT TO YOUR CONTRACT WITH KEYPORT WERE IMPROPER AND THAT YOUR SAMPLES WERE IMPROPERLY REJECTED. YOU CONTEND THAT YOUR CONCERN WAS A RESPONSIBLE BIDDER FOR THE PROCUREMENT IN THE INSTANT CASE AND THAT THE CONTRACTING OFFICER AT THE PUGET SOUND NAVAL SHIPYARD ACTED IN AN ARBITRARY AND CAPRICIOUS MANNER IN MAKING AN AWARD TO OTHER THAN YOUR CONCERN.

WE HAVE REVIEWED YOUR RECORDS AND THE RECORDS SUBMITTED BY THE DEPARTMENT OF THE NAVY, AND WE FIND THAT THE QUESTION WHETHER THE TESTS CONDUCTED AT KEYPORT WERE PROPER OR IMPROPER IS STILL MOOT AND THERE IS STILL A QUESTION WHETHER OR NOT YOUR CONCERN WAS SUBJECTED TO DELAYS IN RECEIVING INFORMATION RELATING TO THE REJECTION OF YOUR PREPRODUCTION SAMPLES. REGARD TO THE DETERMINATION OF THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR, THE AUTHORITIES ARE IN AGREEMENT THAT THE OFFICERS IN WHOM THE POWER IS VESTED TO DETERMINE "RESPONSIBILITY" MUST DETERMINE THE FACT AND SUCH DETERMINATION CANNOT BE SET ASIDE UNLESS THE ACTION WAS ARBITRARY, CAPRICIOUS OR FRAUDULENT. DETERMINATION OF THE LOWEST RESPONSIBLE BIDDER IS TO BE MADE BY THE AUTHORIZED OFFICIAL OF THE CONTRACTING AGENCY, WHO IS REQUIRED TO ACT FAIRLY UPON REASONABLE INFORMATION WHICH SUPPORTS THE DETERMINATION MADE. WHEN SUCH OFFICIAL DETERMINES THE RESPONSIBILITY OF A BIDDER, SUCH DETERMINATION CANNOT BE OVERTHROWN BY THE COURTS OR OUR OFFICE UNLESS IT CAN BE HELD THAT THE DETERMINATION WAS ARBITRARY, CAPRICIOUS OR FRAUDULENT. SEE MCQUILLIN, MUNICIPAL CORPORATIONS, 3RD EDITION, VOLUME 10, SECTION 29.73 AND THE CASES THERE CITED; 38 COMP. GEN. 131; 33 ID. 549; BROWN V. PHOENIX, 272 P.2D 385; MCNICHOLS V. DENVER, 274 P.2D 317. THUS, THE ONLY QUESTION FOR CONSIDERATION IS WHETHER THE DETERMINATION ADMINISTRATIVELY MADE OF YOUR NONRESPONSIBILITY MEETS THE CRITERIA DISCUSSED. ASPR 1-902 PROVIDES PURCHASES SHALL BE AWARDED ONLY TO RESPONSIBLE PROSPECTIVE CONTRACTORS. ASPR 1-904.1 REQUIRES THE CONTRACTING OFFICER TO MAKE A DECISION REGARDING THE RESPONSIBILITY OF THE PROSPECTIVE CONTRACTOR. THIS REGULATION FURTHER PROVIDES THAT THIS DETERMINATION OF RESPONSIBILITY IS TO BE MADE WITHIN THE FRAMEWORK OF ASPR 1-902 AND ASPR 1-903. ASPR 1-903 PROVIDES FOR MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS. ASPR 1-903.1 (III) PROVIDES THAT PROSPECTIVE CONTRACTORS MUST HAVE A SATISFACTORY RECORD OF PERFORMANCE AND THAT A CONTRACTOR WHO IS DELINQUENT IN CURRENT CONTRACT PERFORMANCE SHALL BE PRESUMED UNABLE TO FULFILL THIS REQUIREMENT IN THE ABSENCE OF EVIDENCE TO THE CONTRARY. ASPR 1-905.3 LISTS VARIOUS SOURCES OF INFORMATION THAT SHALL BE USED BY THE CONTRACTING OFFICER IN MAKING HIS DETERMINATION OR RESPONSIBILITY INCLUDING THE PROSPECTIVE CONTRACTOR, EXISTING INFORMATION WITHIN THE DEPARTMENT OF DEFENSE, PUBLICATIONS, AND OTHER SOURCES SUCH AS SUPPLIERS, SUBCONTRACTORS, ETC.

IN THIS CASE THE DECISION OF THE CONTRACTING OFFICER DETERMINING YOUR CONCERN TO BE NONRESPONSIBLE WAS BASED ON THE INFORMATION HE RECEIVED FROM THE KEYPORT NAVAL TORPEDO STATION. THE AWARD WAS NOT MADE UNTIL THERE HAD BEEN SEVERAL EXTENSIONS TO PERMIT YOUR CONCERN TO MEET THE REQUIREMENTS OF THE KEYPORT CONTRACT. IN EVALUATING THE TECHNICAL INFORMATION INVOLVED IN THIS CASE THE CONTRACTING OFFICER NECESSARILY HAD TO RELY ON OPINIONS RENDERED BY EXPERTS IN THE FIELD. REGARDLESS OF THE OUTCOME OF THE CONTINUING DISAGREEMENT BETWEEN YOU AND THE NAVY AS TO THE PROPRIETY OF THE TESTS CONDUCTED AT KEYPORT, WE CANNOT SAY THAT THE DECISION OF THE CONTRACTING OFFICER WAS BASED ON INFORMATION KNOWN TO BE ERRONEOUS OR THE RESULTS OF TESTING KNOWN TO BE IMPROPER. WE FIND THAT THE DECISION OF THE CONTRACTING OFFICER BASED ON THE INFORMATION HE HAD AVAILABLE WAS REASONABLE AND IN ACCORD WITH THE CITED AUTHORITIES. ONCE THIS REQUIREMENT IS SATISFIED WE WILL NOT QUESTION NOR LOOK BEHIND A DETERMINATION MADE BY THE CONTRACTING OFFICER.

ACCORDINGLY, WE FIND THAT THE CONTRACTING OFFICER DID NOT ACT IN AN ARBITRARY OR CAPRICIOUS MANNER IN THIS CASE AND YOUR PROTEST IS DENIED.