B-151953, OCT. 16, 1963

B-151953, OCT. 16, 1963

TO HARVELL-KILGORE CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE AWARD MADE UNDER REQUEST FOR PROPOSALS NO. APC 325-63 ISSUED BY HEADQUARTERS, AMMUNITION PROCUREMENT AND SUPPLY AGENCY (APSA).

THE PROCUREMENT INVOLVED COVERED 119,300 ILLUMINATING SHELLS, M301A2, 81MM, AND CONTAINED DELIVERY REQUIREMENT OF THE PILOT MODEL DURING OCTOBER AND AN INITIAL PRODUCTION OF 7,000 UNITS DURING NOVEMBER 1963. THE PROCUREMENT WAS CLASSIFIED BY THE PRIORITY DESIGNATOR 06 BY THE COGNIZANT NATIONAL INVENTORY CONTROL POINT. IN VIEW OF THE URGENT DELIVERY REQUIREMENT, THE PROCUREMENT WAS NEGOTIATED PURSUANT TO 10 U.S.C. 2304 (A) (2) AND ASPR 3-202.2 (VI). FORMAL PROPOSALS WERE REQUESTED FROM HERVELL- KILGORE CORPORATION AND TWO OTHER PROSPECTIVE SUPPLIERS. INFORMAL QUOTATIONS HAD BEEN PREVIOUSLY SOLICITED FOR THE SHELLS INVOLVED BUT DUE TO A TWO MONTH EXTENSION IN THE DELIVERY SCHEDULE SUFFICIENT TIME BECAME AVAILABLE TO SOLICIT THE FORMAL PROPOSALS.

IN CONNECTION WITH THIS PROCUREMENT A PRE-AWARD SURVEY OF HARVELL KILGORE CORPORATION WAS CONDUCTED BY REPRESENTATIVES OF PICATINNY ARSENAL, CINCINNATI PROCUREMENT DISTRICT, AND HEADQUARTERS, AMMUNITION PROCUREMENT AND SUPPLY AGENCY EARLY IN MAY 1963. AS A RESULT OF THE SURVEY, CINCINNATI PROCUREMENT DISTRICT RECOMMENDED HARVELL-KILGORE CORPORATION FOR AN AWARD. PICATINNY ARSENAL QUALIFIED THEIR RECOMMENDATION OF AN AWARD TO HARVELL-KILGORE AND THE AMMUNITION PROCUREMENT AND SUPPLY AGENCY RECOMMENDED THAT AWARD NOT BE MADE TO HARVELL-KILGORE DUE TO (1) DELINQUENCY IN DELIVERY UNDER FOUR OTHER PRIME CONTRACT ITEMS AND ONE SUBCONTRACT ITEM, (2) LACK OF ADEQUATE SUPERVISORY PRODUCTION AND TECHNICAL PERSONNEL AND (3) POOR HOUSEKEEPING CONDITIONS IN THE PLANT RESULTING IN UNSAFE CONDITIONS.

WHILE HARVELL-KILGORE SUBMITTED THE LOWEST QUOTATION, THE ALLOCATION BOARD DID NOT RECOMMEND AN AWARD TO HARVELL-KILGORE, HOWEVER, THE REVIEWING OFFICIAL REQUESTED, BEFORE A FINAL DETERMINATION BE MADE ON THIS ACTION, THAT ANOTHER SURVEY BE MADE BY PICATINNY ARSENAL OF HARVELL- KILGORE, TO DETERMINE WHAT PROGRESS HAD BEEN MADE ON THE PLANNED ACTIONS DISCUSSED DURING THE EARLIER SURVEY BY PICATINNY ARSENAL, CINCINNATI PROCUREMENT DISTRICT AND APSA PERSONNEL. THE REVIEWING OFFICIAL ALSO REQUESTED THAT SURVEYS BE MADE TO CONFIRM THE FACT THAT THE OTHER TWO FIRMS HAD THE NECESSARY TECHNICAL CAPABILITY, PRODUCTION, KNOW-HOW, AND AVAILABLE IDLE FACILITIES REQUIRED TO PRODUCE ACCEPTABLE ITEMS WITHIN THE MANDATORY DELIVERY SCHEDULE. PURSUANT TO SUCH REQUEST, A TECHNICAL REPRESENTATIVE WENT TO HARVELL-KILGORE'S PLANT ON JUNE 12, 1963 FOR THE PURPOSE OF DETERMINING THE PROGRESS IT HAD MADE SINCE THE ORIGINAL SURVEY IN MAY.

IN A REPORT DATED JUNE 18, 1963, THE PICATINNY ARSENAL REPRESENTATIVE REPORTED THAT THE CONDITIONS PREVIOUSLY FOUND AT HARVELL-KILGORE WITH REGARD TO GENERAL HOUSEKEEPING, SAFETY, DELINQUENCY IN DELIVERIES AND DIFFICULTIES IN MANUFACTURING ACCEPTABLE QUALITY ITEMS CONTINUED TO EXIST; THAT ALTHOUGH THE DIFFICULTIES ENCOUNTERED IN PRODUCING AN ACCEPTABLE 4.2 ILLUMINATING CANISTER ASSEMBLY HAD IMPROVED, PRODUCTION HAD BEEN DEFERRED IN OTHER AREAS; AND THAT THE DIFFICULTIES IN CONNECTION WITH QUALITY PRODUCTION AND INABILITY TO MAINTAIN PRODUCTION OUTPUT WAS DUE TO INSUFFICIENT EXPERIENCED SUPERVISION AND LIMITED TECHNICAL CAPABILITIES.

FOR THE SURVEY OF THE OTHER TWO FIRMS THE PICATINNY ARSENAL REPRESENTATIVE WAS JOINED BY REPRESENTATIVES OF APSA AND THEY REPORTED BACK THAT BOTH OF THE FIRMS POSSESSED THE NECESSARY TECHNICAL CAPABILITY, PRODUCTION, KNOW-HOW, AND AVAILABLE IDLE FACILITIES REQUIRED TO PRODUCE AN ACCEPTABLE ITEM WITHIN THE MANDATORY DELIVERY SCHEDULE.

ON THE BASIS OF SUCH REPORTS THE REVIEWING OFFICIAL CONCURRED IN THE BOARD OF AWARDS RECOMMENDATION AND INSTRUCTED THAT THE ALLOCATION BE MADE TO THE LOS ANGELES PROCUREMENT DISTRICT FOR AWARD OF THE PROCUREMENT INVOLVED TO THE FLARE NORTHERN DIVISION OF ATLANTIC RESEARCH CORPORATION AFTER FURTHER NEGOTIATION.

YOU PROTEST THE ACTION TAKEN BY AMMUNITION PROCUREMENT AND SUPPLY AGENCY ON THE BASIS THAT THE DETERMINATION NOT TO MAKE AN AWARD TO HARVELL- KILGORE CORPORATION, THE LOW OFFEROR, WAS ARBITRARY FOR THE FOLLOWING REASONS: (1) NOT ENOUGH CONSIDERATION WAS GIVEN TO BASIC CAUSES OF THE DELINQUENCIES IN DELIVERIES UNDER EXISTING CONTRACTS, (2) NOT ENOUGH CONSIDERATION WAS GIVEN TO THE IMPROVEMENTS MADE IN THE AREAS OF PLANT HOUSEKEEPING, (3) NOT ENOUGH CONSIDERATION WAS GIVEN TO THE EFFORTS OF HARVELL-KILGORE TO PROVIDE FACILITIES TO ACCOMODATE THE 81MM PRODUCTION AND (4) NOT ENOUGH CONSIDERATION WAS GIVEN TO THE EXISTING QUALIFICATIONS OF HARVELL-KILGORE MANAGEMENT, TECHNICAL AND SUPERVISORY PERSONNEL AND TO ITS WILLINGNESS AND POSITIVE EFFORT TO AID TO THIS PERSONNEL, IF NECESSARY, TO SUPPORT ITS CAPACITY TO PRODUCE THE 81MM SHELL IN ACCORDANCE WITH THE REQUIRED DELIVERY SCHEDULE.

WE HAVE CONSISTENTLY HELD THAT THE QUESTION OF RESPONSIBILITY AND QUALIFICATIONS OF A BIDDER TO PERFORM A CONTRACT AS REQUIRED IS PRIMARILY THAT OF THE ADMINISTRATIVE AGENCY AND NOT OF THIS OFFICE. SEE 33 COMP. GEN. 549. THE RECORD ESTABLISHES THAT THE QUALIFICATIONS OF HARVELL- KILGORE TO PERFORM THE CONTRACT WERE CONSIDERED RATHER EXTENSIVELY BY THE ADMINISTRATIVE OFFICIALS. WHILE YOU BELIEVE THAT TOO GREAT EMPHASIS WAS PLACED ON NEGATIVE FACTORS AND NOT ENOUGH CONSIDERATION GIVEN TO POSITIVE FACTORS, WE CANNOT SAY THAT THE ADMINISTRATIVE DETERMINATION WAS WITHOUT FOUNDATION IN FACT OR WAS ARBITRARY AND CAPRICIOUS. IN SUCH CIRCUMSTANCES WE ARE REQUIRED TO ACCEPT THE ADMINISTRATIVE DETERMINATION AND, THEREFORE, YOUR PROTEST MUST BE DENIED.