B-152831, JAN. 8, 1964

B-152831: Jan 8, 1964

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

BIDS WERE OPENED ON SEPTEMBER 3. WAS THE LOW BIDDER. THE DESIRED DELIVERY SCHEDULE ON PAGE 11 OF THE INVITATION INDICATED THAT DELIVERY OF ITEMS 4 THROUGH 66 WAS DESIRED WITHIN 120 DAYS AFTER RECEIPT OF CONTRACT. CERTAIN QUANTITIES OF ITEMS 1 THROUGH 3 WERE ALSO DESIRED WITHIN 120 DAYS AFTER RECEIPT OF CONTRACT. THE REMAINING QUANTITIES OF ITEMS 1 THROUGH 3 WERE TO BE DELIVERED IN STATED QUANTITIES EVERY 60 DAYS THEREAFTER. THE REQUIRED DELIVERY SCHEDULE ALSO ON PAGE 11 OF THE INVITATION STATED THAT DELIVERY OF ITEMS 4 THROUGH 66 WAS REQUIRED WITHIN 4 MONTHS AFTER THE RECEIPT OF CONTRACT. WERE REQUIRED WITHIN 120 DAYS AFTER THE RECEIPT OF CONTRACT AND STATED NUMBERS OF THE REMAINING UNITS WERE TO BE DELIVERED IN PERIODS BETWEEN 10 MONTHS AND 12 MONTHS THEREAFTER.

B-152831, JAN. 8, 1964

TO LEONARD L. PICKERING, ESQUIRE:

ON NOVEMBER 5, 1963, YOU DIRECTED A TELEGRAM TO THIS OFFICE ADVISING US THAT THE BID OF QUE ENTERPRISES, INCORPORATED, THE LOW BID IN RESPONSE TO INVITATION FOR BIDS NO. 60921-1-64B, HAD BEEN REJECTED. YOU STATED THAT YOU HAD NOT BEEN ADVISED AS TO THE REASONS FOR THE REJECTION OF QUE'S BID AND YOU REQUESTED THAT THE MATTER BE REVIEWED BY THIS OFFICE.

ON JULY 18, 1963, THE UNITED STATES NAVAL ORDNANCE LABORATORY, WHITE OAK, SILVER SPRING, MARYLAND, ISSUED INVITATION FOR BIDS NO. 60921-1-64B. PAGE 2 OF THE INVITATION REQUESTED ,STEPLADDER PRICES" FOR ITEMS 1, 2, AND 3 WHICH WOULD RESULT IN A PROCUREMENT OF 12, 16, OR 20 ,DUMMY GUIDED MISSILES" IN ACCORD WITH APPLICABLE SPECIFICATIONS AND DRAWINGS UNDER ITEM 1; 17, 21, OR 25 "MITIGATING SHOCK NOSE FAIRING, MK 18-0, LD 519022" UNDER ITEM 2; AND 14, 18, OR 22 ,PULL SWITCH, MK 105-0" UNDER ITEM 3. ITEMS 4 TO 66 REQUESTED PRICES ON VARIOUS QUANTITIES OF SPARE PARTS LISTED AND DESCRIBED ON PAGES 2 THROUGH 5 OF THE INVITATION. BIDS WERE OPENED ON SEPTEMBER 3, 1963, AND QUE ENTERPRISES, INCORPORATED, WAS THE LOW BIDDER.

THE DESIRED DELIVERY SCHEDULE ON PAGE 11 OF THE INVITATION INDICATED THAT DELIVERY OF ITEMS 4 THROUGH 66 WAS DESIRED WITHIN 120 DAYS AFTER RECEIPT OF CONTRACT; CERTAIN QUANTITIES OF ITEMS 1 THROUGH 3 WERE ALSO DESIRED WITHIN 120 DAYS AFTER RECEIPT OF CONTRACT; AND THE REMAINING QUANTITIES OF ITEMS 1 THROUGH 3 WERE TO BE DELIVERED IN STATED QUANTITIES EVERY 60 DAYS THEREAFTER. THE REQUIRED DELIVERY SCHEDULE ALSO ON PAGE 11 OF THE INVITATION STATED THAT DELIVERY OF ITEMS 4 THROUGH 66 WAS REQUIRED WITHIN 4 MONTHS AFTER THE RECEIPT OF CONTRACT. DELIVERY OF 4 UNITS OF ITEM 1; 9 UNITS OF ITEM 2; AND 6 UNITS OF ITEM 3; WERE REQUIRED WITHIN 120 DAYS AFTER THE RECEIPT OF CONTRACT AND STATED NUMBERS OF THE REMAINING UNITS WERE TO BE DELIVERED IN PERIODS BETWEEN 10 MONTHS AND 12 MONTHS THEREAFTER. QUE'S BID INDICATED THAT QUE WAS A SMALL BUSINESS CONCERN.

ON SEPTEMBER 9, 1963, THE CONTRACTING OFFICER REQUESTED A PARTIAL PRE- AWARD SURVEY OF QUE ENTERPRISES, INCORPORATED AS THE CONTRACTING OFFICER HAD NO RECORD REGARDING QUE'S PERFORMANCE UNDER PRIOR CONTRACTS WITH THE NAVAL ORDNANCE LABORATORY AT SILVER SPRING, MARYLAND. ON OCTOBER 3, 1963, THE RESULTS OF THE FIRST PARTIAL PRE-AWARD SURVEY WERE TRANSMITTED TO THE CONTRACTING OFFICER BY THE INSPECTOR OF NAVAL MATERIAL, LOS ANGELES, CALIFORNIA, CONCLUDING THAT QUE ENTERPRISES, INCORPORATED, WAS NOT CONSIDERED QUALIFIED TO PERFORM ON THIS INVITATION. IN PARTICULAR THE SURVEY FOUND THAT QUE'S CAPABILITIES WERE INADEQUATE TO ENABLE QUE TO MEET REQUIRED DELIVERIES AND IN THIS REGARD THAT QUE DID NOT HAVE ADEQUATE MANUFACTURING PLANNING TO INSURE ACCEPTABLE PERFORMANCE; THAT QUE DID NOT HAVE THE NECESSARY SKILLED PERSONNEL AVAILABLE TO PRODUCE THE REQUIRED ITEMS; AND THAT QUE WOULD REQUIRE A MINIMUM OF 6 MONTHS TO START DELIVERIES. IN SUMMARY, THE CONCLUSIONS IN THE PRE-AWARD SURVEY ADVISED THE CONTRACTING THAT IT WAS DOUBTFUL WHETHER QUE COULD PERFORM THIS CONTRACT WITHIN THE TIME STIPULATED IN THE REQUIRED DELIVERY SCHEDULE AND IN THESE CIRCUMSTANCES THE CONTRACTING OFFICER WAS UNABLE TO MAKE AN AFFIRMATIVE FINDING CONCERNING QUE'S RESPONSIBILITY AS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION, SEC. 1-904.

ON OCTOBER 15, 1963, THE CONTRACTING OFFICER NOTIFIED THE SMALL BUSINESS ADMINISTRATION THAT QUE'S BID WAS NOT ACCEPTABLE DUE TO LACK OF CAPACITY AND REQUESTED ACTION BY THE SMALL BUSINESS ADMINISTRATION REGARDING THE ISSUANCE OF A CERTIFICATE OF COMPETENCY TO QUE ENTERPRISES, INCORPORATED. ON NOVEMBER 4, 1963, THE SMALL BUSINESS ADMINISTRATION SENT THE FOLLOWING LETTER TO THE CONTRACTING OFFICER REGARDING THE ISSUANCE OF A CERTIFICATE OF COMPETENCY TO QUE ENTERPRISES, INCORPORATED:

FOR A CERTIFICATE OF COMPETENCY FILED BY THE SUBJECT SMALL BUSINESS FIRM IN RELATION TO THE ABOVE REFERENCED PROCUREMENT AS DESCRIBED BELOW:

ITEMS L.B., 16 EACH, DUMMY GUIDED MISSILE MK 34 MOD O; ITEM 2.B., 21 EACH, MITIGATING SHOCK NOSE FAIRING MK 18-0; ITEM 3.B., 18 EACH, PULL SWITCH MK 105-C, PLUS ITEMS 4 THROUGH 66.

"BASED ON A COMPREHENSIVE ANALYSIS OF ALL AVAILABLE INFORMATION, THIS AGENCY HAS DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY IN THIS INSTANCE.'

THE RESULTS OF A FOLLOW-UP SURVEY BY THE INSPECTOR OF NAVAL MATERIAL, LOS ANGELES, CALIFORNIA, TRANSMITTED TO THE CONTRACTING OFFICER ON NOVEMBER 14, 1963, INDICATED THAT THERE WAS NO ADDITIONAL INFORMATION CONCERNING QUE ENTERPRISES, INCORPORATED, WHICH WOULD ALTER THE CONCLUSIONS CONTAINED IN THE PARTIAL PRE-AWARD SURVEY DATED OCTOBER 3, 1963.

ON NOVEMBER 15, 1963, THE CONTRACTING OFFICER ADVISED YOU OF THE CONCLUSIONS CONTAINED IN THE PRE-AWARD SURVEY OF OCTOBER 3, 1936,AND YOU WERE ALSO ADVISED THAT QUE'S BID WAS REJECTED AS THE CONTRACTING OFFICER WAS UNABLE TO MAKE AN AFFIRMATIVE DETERMINATION THAT QUE WAS A RESPONSIBLE BIDDER.

IN THESE CIRCUMSTANCES WE HAVE HELD THAT THE REFUSAL OF SBA TO ISSUE A CERTIFICATE OF COMPETENCY AS TO A SMALL BUSINESS BIDDER MUST BE REGARDED AS PERSUASIVE WITH RESPECT TO THE COMPETENCY OR CREDIT OF THE BIDDER CONCERNED. 39 COMP. GEN. 705. WHEN THE ISSUANCE OF A CERTIFICATE OF COMPETENCY IS DENIED, THE CONTRACTING OFFICER'S DETERMINATIONS OF THE SMALL BUSINESS ADMINISTRATION OR REQUIRE IT TO ISSUE A CERTIFICATE OF COMPETENCY. NOR DO WE DISTURB THE DETERMINATIONS OF A CONTRACTING OFFICER WHERE, AS HERE, THEY DO NOT APPEAR TO BE EITHER ARBITRARY OR CAPRICIOUS.

IN VIEW OF THE FOREGOING, WE SEE NO BASIS FOR DISTURBING THE ADMINISTRATIVE ACTION TAKEN IN REJECTING THE BID OF QUE ENTERPRISES, INCORPORATED.