B-151897, SEP. 25, 1963

B-151897: Sep 25, 1963

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER OF AUGUST 1. SIX BIDS WERE RECEIVED. A FURTHER REASON IN SUPPORT OF THE PROTEST WAS THAT THE SPECIALIZED EQUIPMENT NECESSARY TO PRODUCE THE ITEM WOULD NOT BE AVAILABLE TO MERCURY FOR THE LIFE OF THE CONTRACT SINCE THE ORIGINAL OWNER. HAD BEEN ADJUDICATED A BANKRUPT AND IT WAS CONTENDED THAT WORTHY'S PRIOR TRANSFER OF THE EQUIPMENT AND SUBSEQUENT LEASE THEREOF TO MERCURY WAS IN VIOLATION OF STATE AND FEDERAL LAW. THAT SUCH INVESTIGATIONS DISCLOSED THAT THE SAME TECHNICAL PERSONNEL FORMERLY ASSOCIATED WITH WORTHY ARE CURRENTLY EMPLOYED BY MERCURY. IS AVAILABLE TO MERCURY. THE PROTEST AGAINST AWARD TO MERCURY ON SUCH BASIS IS WITHOUT MERIT.

B-151897, SEP. 25, 1963

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER OF AUGUST 1, 1963, WITH ENCLOSURES, FROM THE ACTING DIRECTOR OF PROCUREMENT AND PRODUCTION, UNITED STATES ARMY MATERIAL COMMAND, REPLYING TO OUR LETTER OF JULY 8, 1963, CONCERNING THE PROTEST MADE BY MR. JACOB H. FISCHMAN, ATTORNEY AT LAW, ON BEHALF OF HIS CLIENT, THE CHEMICAL COMPOUNDING CORPORATION, 532 JOHNSTON AVENUE, JERSEY CITY, NEW JERSEY, AGAINST AN AWARD UNDER INVITATION NO. AMC/A/-30-070-63-141, TO ANY BIDDER OTHER THAN HIS CLIENT.

INVITATION FOR BIDS NO. AMC/A/-30-070-63-141, ISSUED UNDER SMALL BUSINESS SET-ASIDE PROCEDURES, REQUESTED BIDS FOR 160,000 EACH, POUCHES, FOOD SERVICE DISINFECTANT, POWDER FORM, EACH CONTAINING 3.35 OUNCES NET CONTENT IN ACCORDANCE WITH THE DESIGNATED SPECIFICATION. AT BID OPENING ON APRIL 15, 1963, SIX BIDS WERE RECEIVED, THE LOWEST (?237 EA. OR $37,920) FROM MERCURY CHEMICAL COMPANY, INC., 47TH STREET AND SECOND AVENUE, BROOKLYN, NEW YORK, AND THE SECOND LOWEST (?258 EA. OR $41,280) FROM THE CHEMICAL COMPOUNDING CORPORATION, 532 JOHNSTON AVENUE, JERSEY CITY 4, NEW JERSEY.

PRE-AWARD SURVEY OF THE LOW BIDDER RESULTED IN A DETERMINATION BY THE CONTRACTING OFFICER THAT DOUBT AS TO THE RIGHTS OF THAT BIDDER TO THE USE OF CERTAIN EQUIPMENT NECESSARY FOR PERFORMANCE OF THE CONTRACT, AND ALSO AS TO ITS FINANCIAL CAPACITY, PREVENTED HIS MAKING A FINDING OF RESPONSIBILITY. HE THEREFORE REFERRED THE MATTER TO THE SMALL BUSINESS ADMINISTRATION, AND ON JUNE 19 THE REGIONAL OFFICE OF THAT AGENCY ISSUED A CERTIFICATE OF COMPETENCY TO THE LOW BIDDER.

BY TELEFAX DATED JUNE 26, 1963, AS SUPPLEMENTED BY LETTER DATED JUNE 28, 1963, CHEMICAL THROUGH ITS ATTORNEY PROTESTED AGAINST AN AWARD TO ANY OTHER BIDDER, PRIMARILY ON THE GROUND THAT MERCURY DID NOT POSSESS THE "KNOW-HOW BASED ON PAST EXPERIENCE" TO SATISFACTORILY PRODUCE THE DISINFECTANT AS REQUIRED BY THE APPLICABLE SPECIFICATIONS. A FURTHER REASON IN SUPPORT OF THE PROTEST WAS THAT THE SPECIALIZED EQUIPMENT NECESSARY TO PRODUCE THE ITEM WOULD NOT BE AVAILABLE TO MERCURY FOR THE LIFE OF THE CONTRACT SINCE THE ORIGINAL OWNER, WORTHY CHEMICALS, INC., HAD BEEN ADJUDICATED A BANKRUPT AND IT WAS CONTENDED THAT WORTHY'S PRIOR TRANSFER OF THE EQUIPMENT AND SUBSEQUENT LEASE THEREOF TO MERCURY WAS IN VIOLATION OF STATE AND FEDERAL LAW.

IN A MEMORANDUM DATED JULY 15, 1963, THE CONTRACTING OFFICER RECOMMENDED THAT THE PROTEST BE DENIED. HE STATED THAT THE ABILITY OF MERCURY TO PERFORM UNDER AN AWARD FOR THE INVOLVED ITEM HAD BEEN INVESTIGATED BY SMALL BUSINESS ADMINISTRATION PRIOR TO ISSUANCE OF THE CERTIFICATE OF COMPETENCY AS WELL AS BY GOVERNMENT REPRESENTATIVES DURING THE PRE-AWARD SURVEY; THAT SUCH INVESTIGATIONS DISCLOSED THAT THE SAME TECHNICAL PERSONNEL FORMERLY ASSOCIATED WITH WORTHY ARE CURRENTLY EMPLOYED BY MERCURY; THAT SAID PERSONNEL HAD PREVIOUSLY SATISFACTORILY PRODUCED THE ITEM IN ACCORDANCE WITH APPLICABLE SPECIFICATIONS; THAT WORTHY HAD ORIGINALLY DEVELOPED THIS ITEM AND MANUFACTURED IT MANY TIMES FOR THE GOVERNMENT; THAT IT FOLLOWS THAT "KNOW-HOW," AS WELL AS EXPERIENCE, IS AVAILABLE TO MERCURY; THAT, THEREFORE, THE PROTEST AGAINST AWARD TO MERCURY ON SUCH BASIS IS WITHOUT MERIT; AND THAT FURTHER SINCE RECEIPT OF THE PROTEST IT HAS BEEN LEARNED THAT MERCURY HAS RECEIVED AN AWARD OF A CONTRACT FOR AN IDENTICAL ITEM FROM HQ, QMR AND E COMMAND, NATICK, MASS., NO. DA 19 129-AMC-109/N), O.I. 9077.

AS TO THE AVAILABILITY OF SPECIALIZED EQUIPMENT THE CONTRACTING OFFICER TOOK THE POSITION THAT ALL PERTINENT FACTS HAD BEEN PRESENTED TO SBA, AND THAT BY ISSUANCE OF A COC, SBA HAD, IN EFFECT, DETERMINED THAT MERCURY CAN REMAIN IN QUIET POSSESSION OF THE EQUIPMENT DURING THE LIFE OF THE PROPOSED CONTRACT; AND THAT IN VIEW THEREOF, THE PROTEST IN REGARD TO RETENTION AND USE OF THE EQUIPMENT BY MERCURY DURING THE LIFE OF THE PROPOSED CONTRACT IS WITHOUT MERIT.

BY LETTER DATED AUGUST 20, 1963, WE WERE NOTIFIED BY SBA THAT ON AUGUST 13, 1963, ITS NEW YORK REGIONAL OFFICE NOTIFIED MERCURY THAT THE COC PREVIOUSLY ISSUED TO THAT COMPANY HAD BEEN WITHDRAWN. SUBSEQUENTLY, WE WERE ADVISED INFORMALLY THAT MERCURY THROUGH ITS ATTORNEY HAD REQUESTED REVIEW BY SBA HEADQUARTERS OF THE ACTION TAKEN BY ITS NEW YORK REGIONAL OFFICE. SUCH ACTION WAS CONFIRMED BY LETTER OF SEPTEMBER 6, 1963, WITH ENCLOSURE, FROM THE CHIEF, MUNITIONS DIVISION, DIRECTORATE OF PRODUCTION AND PROCUREMENT. WE HAVE NOW BEEN FURNISHED A COPY OF LETTER DATED SEPTEMBER 5, 1963, FROM THE DEPUTY ADMINISTRATOR, SBA, TO MISS FLORRIE L. WERTHEIMER, ATTORNEY FOR MERCURY, ADVISING HER THAT THE ACTION OF THE REGIONAL DIRECTOR HAD BEEN REVIEWED AND THAT IT WAS A VALID EXERCISE OF HIS DISCRETIONARY AUTHORITY. 13, 1963, AND THAT ACTION HAS NOW BEEN SUSTAINED BY SBA, AWARD TO THE MERCURY CHEMICAL COMPANY IS NOT REQUIRED. HOWEVER, SINCE THE REFUSAL OF A COC IS NOT BINDING UPON THE CONTRACTING OFFICER, THE FINAL AUTHORITY TO DETERMINE WHETHER THAT COMPANY IS A RESPONSIBLE BIDDER RESTS WITH HIM AND WE BELIEVE THAT IT WOULD NOW BE PROPER FOR HIM TO RECONSIDER THE MATTER ON THE COMPLETE RECORD AND ARRIVE AT AN INDEPENDENT DETERMINATION ON THE QUESTION OF RESPONSIBILITY.