B-153187, APR. 16, 1964

B-153187: Apr 16, 1964

Additional Materials:

Contact:

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

 

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

TO HIGHLAND CHEMICAL COMPANY: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF DECEMBER 30. THREE BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE LOWEST BID WAS SUBMITTED BY YOUR FIRM AND THE NEXT LOW BID WAS SUBMITTED BY THE BERMITE POWDER COMPANY. AWARD TO YOUR COMPANY WAS NOT RECOMMENDED. THAT YOUR FIRM WAS RECENTLY ORGANIZED. THE MATTER OF YOUR COMPANY'S NONRESPONSIBILITY WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) ON DECEMBER 5. COC-II-1148 IS CLOSED.'. DA-18-035-AMC-167 (A) WAS AWARDED TO THE BERMITE POWDER COMPANY. YOUR ATTORNEYS CONTEND THAT AWARD SHOULD HAVE BEEN MADE TO YOUR FIRM BECAUSE YOU WERE THE LOWEST BIDDER BY A DIFFERENTIAL OF $40. IT WAS POINTED OUT IN THE LETTER THAT COMPLETE DETAILS HAD NOT BEEN FORWARDED TO OUR OFFICE FOR THE REASON THAT ALL INFORMATION AND EVIDENCE HAD BEEN FORWARDED BY COVERING LETTER DATED DECEMBER 17.

B-153187, APR. 16, 1964

TO HIGHLAND CHEMICAL COMPANY:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF DECEMBER 30, 1963, AND LETTER DATED FEBRUARY 5, 1964, FROM YOUR ATTORNEYS, PROTESTING AGAINST THE MAKING OF ANY AWARD OTHER THAN TO YOUR COMPANY UNDER INVITATION NO. AMC/A/ -18-035-64-319 ISSUED BY THE U.S. ARMY EDGEWOOD ARSENAL, MARYLAND.

THE INVITATION REQUESTED BIDS FOR FURNISHING DOCUMENT DESTROYERS AND DOCUMENT IGNITERS. THREE BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE LOWEST BID WAS SUBMITTED BY YOUR FIRM AND THE NEXT LOW BID WAS SUBMITTED BY THE BERMITE POWDER COMPANY.

SINCE THE PROCUREMENT ACTIVITY DETERMINED, AFTER A PREAWARD SURVEY OF YOUR COMPANY'S RESPONSIBILITY AS A PROSPECTIVE GOVERNMENT CONTRACTOR, THAT YOUR COMPANY DID NOT MEET THE MINIMUM STANDARDS OF RESPONSIBILITY PRESCRIBED BY PARAGRAPHS 1-902 AND 1-903 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), AWARD TO YOUR COMPANY WAS NOT RECOMMENDED. SPECIFICALLY, THE SURVEY DISCLOSED, AMONG OTHER THINGS, THAT YOUR FIRM WAS RECENTLY ORGANIZED; THAT YOUR FIRM EMPLOYED ONLY TWO PERSONNEL; THAT YOUR FIRM HAS A SMALL LABORATORY BUT NO MANUFACTURING EQUIPMENT AND THAT AT THE TIME OF THE SURVEY YOUR COMPANY HAD NO CURRENT BUSINESS, EITHER PRIVATE OR GOVERNMENT. IN COMPLIANCE WITH THE PROVISIONS OF PARAGRAPH 1-705.6 OF THE ASPR, THE MATTER OF YOUR COMPANY'S NONRESPONSIBILITY WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) ON DECEMBER 5, 1963. UNDER DATE OF DECEMBER 26, 1963, THE SBA ADVISED THE PROCUREMENT ACTIVITY THAT:

"BASED ON A COMPREHENSIVE ANALYSIS OF ALL AVAILABLE INFORMATION, THIS REGIONAL OFFICE HAS DECLINED TO RECOMMEND ISSUANCE OF A CERTIFICATE OF COMPETENCY IN THIS INSTANCE. CASE NO. COC-II-1148 IS CLOSED.' BY LETTER OF THE SAME DATE THE SBA ADVISED YOUR FIRM THAT IT HAD CAREFULLY EVALUATED ALL THE EVIDENCE SUBMITTED BY YOU IN SUPPORT OF YOUR APPLICATION FOR A CERTIFICATE OF COMPETENCY AND THAT IT HAD FOUND NO SUFFICIENT REASON FOR DISAGREEING WITH THE PROCUREMENT AGENCY. ON DECEMBER 31, 1963, CONTRACT NO. DA-18-035-AMC-167 (A) WAS AWARDED TO THE BERMITE POWDER COMPANY.

IN THEIR LETTER OF FEBRUARY 5, 1964, YOUR ATTORNEYS CONTEND THAT AWARD SHOULD HAVE BEEN MADE TO YOUR FIRM BECAUSE YOU WERE THE LOWEST BIDDER BY A DIFFERENTIAL OF $40,000; THAT YOUR FIRM HAD DEMONSTRATED THAT IT HAS SUFFICIENT TECHNICAL KNOWLEDGE WITH ITS PLANT MANUFACTURING CAPACITY AND THAT IT HAD ADEQUATE FINANCING. IT WAS POINTED OUT IN THE LETTER THAT COMPLETE DETAILS HAD NOT BEEN FORWARDED TO OUR OFFICE FOR THE REASON THAT ALL INFORMATION AND EVIDENCE HAD BEEN FORWARDED BY COVERING LETTER DATED DECEMBER 17, 1963, TO THE SBA REGIONAL OFFICE IN NEW YORK CITY, NEW YORK. IT WAS ALSO STATED THAT IT WAS UNDERSTOOD THAT THE APPARENT REASON WHY THE SBA DENIED YOUR FIRM A CERTIFICATE OF COMPETENCY WAS THE ALLEGED LACK OF CONTROL BY YOUR FIRM AND THAT IF THIS IS TRUE, THIS OPINION AROSE FROM AN IMPROPER READING OF THE AGREEMENT BETWEEN CAN-TITE RUBBER CORPORATION, YOUR SUBCONTRACTOR, AND YOUR FIRM. IN VIEW OF THE ABOVE CONTENTION OUR OFFICE REQUESTED THE SBA TO FURNISH US A REPORT OF THE ACTION TAKEN BY THAT AGENCY WITH RESPECT TO YOUR APPLICATION FOR A CERTIFICATE OF COMPETENCY. BY LETTER DATED MARCH 17, 1964, THE SBA ADVISED OUR OFFICE THAT YOUR FIRM'S APPLICATION FOR A CERTIFICATE OF COMPETENCY WAS DENIED BECAUSE THAT AGENCY WAS UNABLE TO CERTIFY THAT YOUR COMPANY HAS THE CAPACITY REQUIRED TO PERFORM THE PROCUREMENT.

WE HAVE HELD THAT THE REFUSAL OF THE SMALL BUSINESS ADMINISTRATION TO ISSUE A CERTIFICATE OF COMPETENCY TO A SMALL-BUSINESS BIDDER MUST BE REGARDED AS PERSUASIVE WITH RESPECT TO THE COMPETENCY OR CREDIT OF THE BIDDER CONCERNED. 39 COMP. GEN. 709. WHEN THE ISSUANCE OF A CERTIFICATE OR COMPETENCY IS DENIED, THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY MUST BE REGARDED AS HAVING BEEN AFFIRMED. WE HAVE NO AUTHORITY TO REVIEW DETERMINATIONS OF THE SMALL BUSINESS ADMINISTRATION OR REQUIRE IT TO ISSUE A CERTIFICATE OF COMPETENCY. NEITHER DO WE DISTURB THE DETERMINATIONS OF A CONTRACTING OFFICER WHERE, AS HERE, THEY APPEAR TO BE SUPPORTED BY THE EVIDENCE OF RECORD AND ARE NEITHER ARBITRARY NOR CAPRICIOUS.

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