B-153002, FEB. 3, 1964

B-153002: Feb 3, 1964

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BIDS WERE OPENED ON OCTOBER 23. THE FOLLOWING UNIT PRICES WERE RECEIVED FROM THE THREE RESPONDING BIDDERS. 322.60 THE BID OF JO-BAR WAS REJECTED AS NONRESPONSIVE TO THE ADVERTISED SPECIFICATIONS. YOUR BID WAS REJECTED ON THE BASIS OF A DETERMINATION BY THE CONTRACTING OFFICER THAT YOUR COMPANY WAS NOT A RESPONSIBLE BIDDER SINCE YOU HAD AN EXCEPTIONALLY POOR CONTRACT PERFORMANCE REPORT AND A SERIOUS CONTRACT DELINQUENCY HISTORY. AWARD WAS THEREFORE MADE TO STRINGER WELDING AND MACHINE AS THE LOWEST RESPONSIVE. THE DETERMINATION OF THE CONTRACTING OFFICER OF YOUR NONRESPONSIBILITY WAS BASED ON DELIVERY RELIABILITY REPORTS OBTAINED FROM THE COGNIZANT GOVERNMENT BUYER AND CONTRACT ADMINISTRATOR WHICH DISCLOSED THAT YOU DID NOT HAVE A SATISFACTORY RECORD OF CURRENT PERFORMANCE RELATING TO CONTRACTS NOS.

B-153002, FEB. 3, 1964

TO ALLIED SPECIALTIES COMPANY:

WE REFER TO YOUR TELEFAX OF DECEMBER 3, 1963, AND LETTER OF DECEMBER 6, 1963, WITH ENCLOSURES, PROTESTING AGAINST THE REJECTION OF YOUR LOW BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 156-274 64 FOR THE PROCUREMENT OF CERTAIN FLANGE ASSEMBLIES.

BIDS WERE OPENED ON OCTOBER 23, 1963, AND THE FOLLOWING UNIT PRICES WERE RECEIVED FROM THE THREE RESPONDING BIDDERS.

CHART

ALLIED SPECIALTIES COMPANY $ 649.00

JO-BAR MANUFACTURING CORPORATION 985.00

STRINGER WELDING AND MACHINE 1,322.60

THE BID OF JO-BAR WAS REJECTED AS NONRESPONSIVE TO THE ADVERTISED SPECIFICATIONS, AND YOUR BID WAS REJECTED ON THE BASIS OF A DETERMINATION BY THE CONTRACTING OFFICER THAT YOUR COMPANY WAS NOT A RESPONSIBLE BIDDER SINCE YOU HAD AN EXCEPTIONALLY POOR CONTRACT PERFORMANCE REPORT AND A SERIOUS CONTRACT DELINQUENCY HISTORY. AWARD WAS THEREFORE MADE TO STRINGER WELDING AND MACHINE AS THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER. THE DETERMINATION OF THE CONTRACTING OFFICER OF YOUR NONRESPONSIBILITY WAS BASED ON DELIVERY RELIABILITY REPORTS OBTAINED FROM THE COGNIZANT GOVERNMENT BUYER AND CONTRACT ADMINISTRATOR WHICH DISCLOSED THAT YOU DID NOT HAVE A SATISFACTORY RECORD OF CURRENT PERFORMANCE RELATING TO CONTRACTS NOS. N156-41170, N156-42570 AND N156-42781. IT IS YOUR VIEW THAT DELINQUENCIES UNDER THESE CONTRACTS WERE CAUSED BY INADEQUACIES IN APPLICABLE GOVERNMENT SPECIFICATIONS AND THAT THE DELAYS WERE BEYOND YOUR CONTROL. HOWEVER, THE CONTRACTING OFFICER HAS REPORTED AS FOLLOWS WITH RESPECT TO YOUR PERFORMANCE UNDER THESE THREE CONTRACTS:

"/A) CONTRACT N156-41170

"THE CONTRACT, AWARDED ON 20 JANUARY 1962, CALLED FOR 10 PISTON AND INSERT ASSEMBLIES AT A UNIT PRICE OF $462.67, TOTAL PRICE OF $4,626.70, PLUS $145.00 OF PATTERN EQUIPMENT USED IN THE MANUFACTURE OF THE ASSEMBLY. DELIVERY WAS DUE 120 DAYS AFTER DATE OF CONTRACT OR APPROXIMATELY 20 MAY 1962. ON JUNE 15, 1962 THE CONTRACTING OFFICER WROTE CONTRACTOR THAT DELIVERY WAS OVERDUE AND REQUESTED ADVICE AS TO WHEN DELIVERY COULD BE MADE IF THE GOVERNMENT ELECTED NOT TO TERMINATE. CONTRACTOR REPLIED ON 20 JULY 1962 THAT HIS SUBCONTRACTOR HAD DELAYED IN DELIVERY OF CASTINGS DUE TO "A HIGH RATE OF REJECTION," THAT CONTRACTOR HAD NOW RECEIVED THE CASTINGS AND THAT DELIVERY UNDER THE CONTRACT WOULD BE COMPLETED 22 SEPTEMBER 1962. THE CONTRACT WAS AMENDED IN AUGUST 1962 TO CALL FOR DELIVERY ON 22 SEPTEMBER AND THE PRICE WAS REDUCED IN CONSIDERATION FOR THE EXTENSION. NO MATERIAL WAS DELIVERED IN SEPTEMBER AND IN OCTOBER THE CONTRACTING OFFICER AGAIN WROTE THE CONTRACTOR WITH RESPECT TO DELIVERY. THE CONTRACTOR REPLIED THAT HE WOULD HAVE THE MATERIAL PROCESSED DURING NOVEMBER AND THAT IT WOULD BE DELIVERED BY 12 DECEMBER AT DESTINATION. AGAIN THE CONTRACT WAS AMENDED, AT THE PRICE REDUCTION, TO EXTEND DELIVERY DATE TO 12 DECEMBER 1962. NO DELIVERY WAS MADE AND IN RESPONSE TO A LETTER FROM THE CONTRACTING OFFICER, THE CONTRACTOR IN FEBRUARY 1963 REPLIED THAT HE WAS HAVING DIFFICULTY APPLYING STELLITE WHICH HAD NO HAIR CRACKS TO THE ARTICLES BUT THAT IF HE WERE SUCCESSFUL IN OVERCOMING THESE DIFFICULTIES, DELIVERY COULD BE COMPLETED IN 7 TO 8 WEEKS. THE CONTRACTOR CONTINUED TO HAVE DIFFICULTY MEETING THE GOVERNMENT INTERPRETATION OF THE SPECIFICATIONS CONCERNING STELLITE APPLICATION AND IN OTHER AREAS. CORRESPONDENCE AND MEETINGS BETWEEN THE PARTIES CONTINUED UNTIL APPROXIMATELY 1 OCTOBER 1963, WHEN CONTRACTOR FINALLY DELIVERED THE FIRST ACCEPTABLE UNIT. ON 8 OCTOBER 1963 THE CONTRACTOR ADVISED THAT ALL DELIVERIES WOULD BE COMPLETED DURING THE WEEK OF 8 NOVEMBER 1963. THE GOVERNMENT ADVISED THAT IT WOULD ACCEPT SUCH DELIVERY AND SENT TO CONTRACTOR A CONTRACT MODIFICATION TO THAT EFFECT FOR ACCEPTANCE. BUT AGAIN "PROBLEMS" SEEM TO INTERVENE. CONTRACTOR REPLIED ON 18 NOVEMBER THAT "UNANTICIPATED DELAYS" WOULD PREVENT DELIVERY BY 8 NOVEMBER, BUT THAT HALF OF THE QUANTITY WOULD BE DELIVERED NOVEMBER 25 AND THE REMAINDER ON NOVEMBER 29. AS OF 3 DECEMBER 1963, NONE OF THE PROMISED DELIVERIES HAD BEEN MADE. THE LATEST ADVICE FROM THE CONTRACTOR DATED 6 DECEMBER 1963 IS THAT 2 ITEMS ARE AT THE PACKAGER AND WILL BE SHIPPED "WITHIN A FEW DAYS," THAT SIX ASSEMBLIES WILL BE "OFFERED FOR GOVERNMENT INSPECTION NEXT WEEK" AND THAT THE REMAINING UNIT HAS BEEN RETURNED TO THE COMPANY WHO APPLIED THE STELLITE FACING AND SHIPMENT WILL BE MADE WHEN THIS REPAIR IS COMPLETED.

"THE CONTRACTING OFFICER CONSIDERS THAT THE PIECE INVOLVED IN THE CONTRACT IS DIFFICULT TO MANUFACTURE AND THAT SOME OF THE DELAY IN DELIVERY WAS DUE TO THE GOVERNMENT'S INSISTENCE ON ACHIEVING A HIGHER DEGREE OF RELIABILITY IN A CRITICAL PART THAN THE CONTRACTOR REALIZED WAS NECESSARY FROM THE CONTRACT PROVISIONS. THE CONTRACTING OFFICER IS PRESENTLY GIVING CONSIDERATION TO THE CONTRACTOR'S REQUEST FOR AN EQUITABLE ADJUSTMENT IN THE CONTRACT PRICE AS A RESULT OF THE INCREASE COST WHICH CONTRACTOR HAS INCURRED IN MEETING THE STELLITE REQUIREMENTS. HOWEVER, THE CONTRACTING OFFICER CONSIDERS THAT A SUBSTANTIAL PART OF THE DELAY IN DELIVERY (SUCH DELAY HAS NOW EXTENDED TO NINETEEN MONTHS) IS DUE TO THE FAULT OF THE CONTRACTOR, AND THAT THE DELAY CLEARLY EVIDENCES EXCEPTIONALLY POOR PERFORMANCE AND SERIOUS DELINQUENCY ON THE CONTRACTOR'S PART.

"/B) CONTRACT N156-42570

"THE CONTRACT WAS AWARDED ON 5 DECEMBER 1962 AND COVERED QUANTITY OF 650 STEEL ROLLERS AT A UNIT PRICE OF $15.87, TOTAL CONTRACT PRICE $10,315.50. THE CONTRACT SPECIFIED DELIVERY 120 DAYS AFTER DATE OF CONTRACT OR 4 APRIL 1963. DELIVERY OF A QUANTITY OF 359 ACCEPTABLE PIECES HAS BEEN MADE. THE LATEST ADVICE FROM THE CONTRACTOR ON 6 DECEMBER 1963 IS THAT 100 PIECES WILL BE OFFERED FOR INSPECTION "NEXT WEEK," THAT APPROXIMATELY 100 PIECES LOST IN HEAT TREATING WILL BE DELIVERED IN "APPROXIMATELY SIX WEEKS," AND THAT REPLACEMENT FOR 91 DEFECTIVE PIECES PREVIOUSLY DELIVERED TO THE GOVERNMENT WILL BE MADE AFTER THE PIECES ARE RETURNED BY THE GOVERNMENT.

"THE FIRST CORRESPONDENCE RECEIVED BY THE CONTRACTING OFFICER FROM THE CONTRACTOR UNDER THIS CONTRACT WAS A LETTER DATED 8 APRIL 1963 (A DATE 4 DAYS AFTER DELIVERY UNDER THE CONTRACT WAS TO HAVE BEEN COMPLETED) STATING "THE DIMENSIONS NECESSARY TO FINISH THE PART ARE NOT CLEAR. PLEASE SEND US A LARGE DRAWING SUITABLE FOR THE MAN AT THE MACHINE TO READ. WHILE THE DRAWING ORIGINALLY FURNISHED WITH THE IFB MUST HAVE BEEN CONSIDERED BY THE BIDDER TO HAVE BEEN SUITABLE, THE CONTRACTING OFFICER PROMPTLY WROTE TO THE COGNIZANT TECHNICAL DIVISION IN AN ATTEMPT TO SECURE A LARGER COPY OF THE DRAWING. A COPY OF THE REVISION 2 DRAWING CALLED OUT IN THE CONTRACT WAS NOT AVAILABLE, BUT THE CONTRACTING OFFICER SECURED AN ENLARGED COPY OF A REVISION 3 DRAWING WHICH WAS FORWARDED TO THE CONTRACTOR WITH A LETTER WHICH CLEARLY STATED THAT THE DRAWING WAS NOT THE ONE CALLED OUT IN THE CONTRACT AND THAT THE CONTRACTOR MUST COMPLY WITH THE CONTRACT SPECIFICATIONS AND REQUIREMENTS. ON 3 MAY CONTRACTOR ADVISED THAT THE CONTRACT ITEMS HAD BEEN ROUGH MACHINED AND THAT HE COULD COMPLETE AT A RATE OF 200 PER WEEK. ON 20 MAY CONTRACTOR ADVISED THAT THE FIRST 96 PIECES HAD BEEN COMPLETED AND SUBMITTED TO MAGNAFLUX CORPORATION FOR INSPECTION REQUIRED UNDER THE CONTRACT AND THAT APPROXIMATELY 35 PIECES WERE "OF A QUESTIONABLE NATURE.' CONTRACTOR SUBMITTED 3 OF THE REJECTED PIECES TO DETERMINE IF THE CONTRACTING OFFICER WOULD ACCEPT THEM. THE CONTRACTOR WAS ADVISED THREE DAYS LATER THAT THE DEFECTIVE PIECES WOULD NOT BE ACCEPTED. THE NEXT WORD FROM CONTRACTOR CAME IN A LETTER DATED 25 SEPTEMBER 1963 STATING THAT 91 HAD BEEN SHIPPED, OTHERS WERE READY FOR INSPECTION OR IN PROCESS OF MANUFACTURE, BUT THAT IT HAD BEEN BROUGHT TO THE ATTENTION OF THE CONTRACTOR THAT THE MATERIAL HAD NOT BEEN "NORMALIZED" AS REQUIRED BY THE MATERIAL PROCESS REQUIREMENT FORMING A PART OF THE CONTRACT. CONTRACTOR REQUESTED ADVICE AS TO WHETHER THIS MATERIAL, ALTHOUGH NOT IN ACCORDANCE WITH CONTRACT SPECIFICATIONS, WOULD BE ACCEPTABLE TO THE GOVERNMENT. THE CONTRACTOR'S REQUEST WAS SUBMITTED TO THE COGNIZANT TECHNICAL SECTION FOR REVIEW, AND AFTER REVIEW THE CONTRACTOR WAS ADVISED ON 5 NOVEMBER THAT THE MATERIAL WOULD NOT BE ACCEPTED BY THE GOVERNMENT. AS STATED ABOVE, DELIVERY WAS DUE ON 4 APRIL 1963. NINE MONTHS LATER DELIVERY OF APPROXIMATELY HALF THE CONTRACT QUANTITY HAD NOT BEEN COMPLETED. IT IS TRUE THAT THE GOVERNMENT HAD CONSUMED SOME TIME (CHARACTERIZED BY THE CONTRACTOR AS ACTIONS WHICH DELAYED HIS DELIVERY) IN ANSWERING INQUIRIES SUBMITTED BY THE CONTRACTOR. THESE INCLUDED: (1) A MONTHS TIME IN ANSWERING CONTRACTOR'S REQUEST MADE FOUR DAYS AFTER THE CONTRACT DELIVERY WAS DUE FOR A DRAWING WHICH THE GOVERNMENT WAS NOT REQUIRED TO FURNISH UNDER THE CONTRACT, AND WHICH IT WAS UNABLE TO FURNISH; (2) A PERIOD OF THREE DAYS TO DENY CONTRACTOR'S REQUEST TO ACCEPT MATERIAL WHICH HAD FAILED THE MAGNAFLUX TESTS REQUIRED BY THE SPECIFICATIONS; (3) APPROXIMATELY A MONTH TO DENY CONTRACTOR'S REQUEST THAT THE GOVERNMENT ACCEPT MATERIAL WHICH, TO THE CONTRACTOR'S KNOWLEDGE, HAD NOT BEEN "NORMALIZED" AS REQUIRED BY THE CONTRACT SPECIFICATION. IT IS THE OPINION OF THE CONTRACTING OFFICER THAT THE DELAY IN DELIVERY UNDER THIS CONTRACT WAS NOT EXCUSED AND THAT THE CONTRACTOR'S UNJUSTIFIED ATTEMPT TO SHIFT THE BLAME FOR THIS DELAY TO THE GOVERNMENT SERVES ONLY TO EMPHASIZE THE EXTREMELY POOR PERFORMANCE RECORD OF THE CONTRACTOR UNDER THIS CONTRACT.

"/C) CONTRACT N156-42781

THIS CONTRACT WAS AWARDED ON 19 JANUARY 1963 AND COVERED THREE LOTS OF MATERIAL. LOT I (ITEMS 1 TO 5) CONSISTED OF A QUANTITY OF 25 STEEL RINGS, NAEL PART NO. 17-41985-1, AT A UNIT PRICE OF $107.00. LOT II (ITEMS 6 TO 10) CONSISTED OF A QUANTITY OF 80 STEEL WATER BREAK VENT BODIES, PART NO. 14-31930-1, AT A UNIT PRICE OF $19.40. LOT III (ITEMS 11 TO 15) CONSISTED OF A QUANTITY OF 200 STEEL VENT VALVE ASSEMBLIES, PART NO. 317628-1, AT A UNIT PRICE OF $5.17. THE TOTAL CONTRACT PRICE WAS $5,796.00. DELIVERY OF A PORTION OF THE MATERIAL WAS TO BE MADE 90 DAYS AFTER DATE OF CONTRACT AND THE REMAINDER WAS TO BE DELIVERED 120 DAYS AFTER DATE OF CONTRACT.

"AS STATED ABOVE, DELIVERIES WERE TO BE COMPLETED IN APRIL AND MAY 1963. CONTRACTOR MADE DELIVERY OF LOT 1 IN JULY 1963 AND LOT III IN NOVEMBER 1963. NOT MORE THAN 10 OF THE 80 PIECES DUE UNDER LOT II HAVE BEEN DELIVERED.

"IT IS TO BE NOTED THAT IN ITS LETTER OF PROTEST DATED DECEMBER 6, 1963 THE CONTRACTOR HAS OFFERED NO EXPLANATION FOR THE SEVERAL MONTHS OF DELAY WHICH WERE INCURRED IN COMPLETING LOTS I AND III. THE CONTRACTING OFFICER IS NOT AWARE OF ANY ACTION ON THE PART OF THE GOVERNMENT OR ANY OTHER CAUSE BEYOND THE CONTROL OF THE CONTRACTOR WHICH WOULD EXCUSE OR JUSTIFY THE EXTENSIVE DELAYS WITH RESPECT TO THESE LOTS. WITH RESPECT TO LOT II, CONTRACTOR'S ONLY ASSERTED REASON FOR DELAY IN DELIVERY IS HIS STATEMENT THAT THE STOCK SIZE SPECIFIED ON THE GOVERNMENT DRAWING WAS INADEQUATE FOR MANUFACTURE OF MATERIAL MEETING THE DIMENSIONS REQUIRED BY THE DRAWING. THE CONTRACTING OFFICER, AFTER REVIEWING THE DRAWING WITH TECHNICAL PERSONNEL, CONSIDERS THAT IN VIEW OF THE DIMENSIONAL TOLERANCES SPECIFIED ON THE DRAWING, THE STOCK SIZE SPECIFIED ON THE DRAWING IS ADEQUATE FOR MANUFACTURE OF THE PART IN ACCORDANCE WITH THE DRAWING REQUIREMENTS. ACCORDINGLY, THE CONTRACTING OFFICER FURTHER CONSIDERS THAT CONTRACTOR HAS ADVANCED NO REASONABLE EXCUSE FOR THE PRESENTLY INCURRED SEVEN MONTHS DELAY IN DELIVERY OF MATERIAL UNDER LOT II.'

IN 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 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, 3D ED., VOL. 10, SEC. 29.73, AND THE CASES THERE CITED; 38 COMP. GEN. 131., 33 ID. 549; BROWN V. CITY OF PHOENIX, 272 P.2D 358; MCNICHOLS V. CITY AND COUNTY OF DENVER, 274 P.2D 317. THUS, THE ONLY QUESTION FOR CONSIDERATION IS WHETHER THE DETERMINATION ADMINISTRATIVELY MADE OF YOUR NONRESPONSIBILITY MEETS THE CRITERIA DISCUSSED. PARAGRAPH 1-902 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 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 WHICH 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 OF RESPONSIBILITY, INCLUDING THE PROSPECTIVE CONTRACTOR, EXISTING INFORMATION WITHIN THE DEPARTMENT OF DEFENSE, PUBLICATIONS AND OTHER SOURCES SUCH AS SUPPLIERS, SUBCONTRACTORS, ETC.

ON THE BASIS OF THE RECORD BEFORE US, WE CONCLUDE THAT THE DETERMINATION OF THE CONTRACTING OFFICER BASED ON THE ABOVE-QUOTED INFORMATION WAS REASONABLE AND IN ACCORD WITH THE CITED AUTHORITIES. ONCE THIS REQUIREMENT IS SATISFIED, WE WILL NOT QUESTION OR LOOK BEHIND A DETERMINATION OF RESPONSIBILITY MADE BY THE CONTRACTING OFFICER.