B-153849, MAY 22, 1964

B-153849: May 22, 1964

Additional Materials:

Contact:

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

 

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

INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 1. WAS SET UP IN TWO LOTS. LOT 1 WAS FOR 736 LAU-34/A GUIDED MISSILE LAUNCHERS. LOT 2 WAS FOR 735 LAU-34/A GUIDED MISSILE LAUNCHERS. WAS LOW AND CONTRACT NO. N600/19/61766 WAS AWARDED TO THIS FIRM ON FEBRUARY 4. THE UNIT PRICE PER MISSILE LAUNCHER WAS $789.84. THE LATTER FIRM NOTIFIED THE PROCURING OFFICE THAT IT WAS NOT INTERESTED IN THE SET-ASIDE QUANTITY DUE TO THE LOW PRICE THAT IT WOULD HAVE TO MEET. WAS PERFORMED BY THE INSPECTOR OF NAVAL MATERIAL. IS NOT CONSIDERED A SUITABLE SOURCE OF SUPPLY BECAUSE OF LACK OF TECHNICAL EXPERIENCE. WAS DETERMINED NOT TO BE A RESPONSIBLE SOURCE OF SUPPLY BY THE CONTRACTING OFFICER DUE TO A LACK OF CAPACITY AND A COPY OF ALLIED'S BID AND ALL RELATED MATERIALS WAS FORWARDED TO THE SMALL BUSINESS ADMINISTRATION FOR APPROPRIATE ACTION ON FEBRUARY 26.

B-153849, MAY 22, 1964

TO ALLIED ORDNANCE, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 1, 1964, PROTESTING IMPENDING PROCUREMENT ACTION IN MAKING AWARD UNDER NAVY PURCHASING OFFICE INVITATION NO. 600-231-64 FOR CERTAIN GUIDED MISSILE LAUNCHERS. YOU SPECIFICALLY REQUEST THAT THIS OFFICE REVIEW THE ELIGIBILITY OF ALLIED ORDNANCE AS A BIDDER RESPONSIVE TO THE INVITATION AND ASK, IN EFFECT, THAT WE INTERCEDE IN THE MATTER BY REQUIRING THE PROCURING AGENCY TO REEXAMINE YOUR COMPETENCY TO PERFORM BY CONSIDERING THE STEPS TAKEN BY YOUR COMPANY TO REMOVE THE DOUBT THAT EARLIER EXISTED AS TO YOUR LACK OF CAPACITY.

THE INVITATION DATED OCTOBER 8, 1963, BASED ON REQUIREMENTS OF PR19 64- 5081-WEPS, REPRESENTING FIRM REQUIREMENTS TO ENABLE THE MEETING OF PRODUCTION AIRCRAFT SCHEDULES, WAS SET UP IN TWO LOTS. LOT 1 WAS FOR 736 LAU-34/A GUIDED MISSILE LAUNCHERS, PLUS AN OPTION QUANTITY OF 52. LOT 2 WAS FOR 735 LAU-34/A GUIDED MISSILE LAUNCHERS, PLUS AN OPTION QUANTITY OF 51 ALL OF WHICH REPRESENTED THE SET-ASIDE QUANTITY FOR NEGOTIATION WITH ELIGIBLE FIRMS IN LABOR SURPLUS AREAS. THE BID OF SPERRY FARRAGUT COMPANY, BRISTOL, TENNESSEE, WAS LOW AND CONTRACT NO. N600/19/61766 WAS AWARDED TO THIS FIRM ON FEBRUARY 4, 1964. THE UNIT PRICE PER MISSILE LAUNCHER WAS $789.84. BIDS OF THREE FIRMS QUALIFIED FOR CONSIDERATION AS TO THE AWARD OF THE SET-ASIDE QUANTITY INCLUDED ALLIED ORDNANCE, INC., BENRUS WATCH CO., INC., AND THE LINOCHINE PRODUCTS CORP. THE LATTER FIRM NOTIFIED THE PROCURING OFFICE THAT IT WAS NOT INTERESTED IN THE SET-ASIDE QUANTITY DUE TO THE LOW PRICE THAT IT WOULD HAVE TO MEET.

A PREAWARD SURVEY OF ALLIED ORDNANCE, INC., WAS PERFORMED BY THE INSPECTOR OF NAVAL MATERIAL, NEWARK. THE REPORT, DATED FEBRUARY 13, 1964, INDICATED THAT ALLIED ORDNANCE, INC., IS NOT CONSIDERED A SUITABLE SOURCE OF SUPPLY BECAUSE OF LACK OF TECHNICAL EXPERIENCE, INADEQUATE QUALITY CONTROL PROGRAM OF THE MAJOR SUBCONTRACTOR, AND THE INABILITY OF THE BIDDER TO MEET DELIVERY REQUIREMENTS FOR THE PREPRODUCTION SAMPLES. ALLIED ORDNANCE, INC., WAS DETERMINED NOT TO BE A RESPONSIBLE SOURCE OF SUPPLY BY THE CONTRACTING OFFICER DUE TO A LACK OF CAPACITY AND A COPY OF ALLIED'S BID AND ALL RELATED MATERIALS WAS FORWARDED TO THE SMALL BUSINESS ADMINISTRATION FOR APPROPRIATE ACTION ON FEBRUARY 26, 1964.

REPORT RECEIVED FROM THE SMALL BUSINESS ADMINISTRATION SHOWS THAT THE APPLICATION FOR A CERTIFICATE OF COMPETENCY SUBMITTED BY ALLIED ORDNANCE, INC., WAS CONSIDERED BY AN INDUSTRIAL SPECIALIST AND BY THE CERTIFICATE OF COMPETENCY REVIEW COMMITTEE OF THAT ADMINISTRATION AND THAT BASED ON A COMPREHENSIVE ANALYSIS OF ALL AVAILABLE INFORMATION, THAT AGENCY DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY IN THIS INSTANCE. IN SUMMARY IT WAS FOUND, AMONG OTHER THINGS, THAT MANAGEMENT DOES NOT HAVE ANY EXPERIENCE IN PRODUCING ITEMS SIMILAR TO THOSE OF THE PROPOSED WARD; PRODUCTION PLANNING GIVES NO ASSURANCE THAT THE FIRM CAN MEET THE DELIVERY SCHEDULE OF THE BID INVITATION; COST ESTIMATES OF THE APPLICANT ARE NOT REALISTIC; PERSONNEL PLANNING FOR THE PROPOSED AWARD IS DOUBTFUL; NO REASONABLE ASSURANCE WAS GIVEN THAT THE NECESSARY MACHINERY, EQUIPMENT AND TOOLING WILL BE AVAILABLE IN VIEW OF APPLICANT'S PLANNING; QUALITY CONTROL PROCEDURES ARE QUESTIONABLE, AND, THAT PLANNING DOES NOT INDICATE MATERIALS WILL BE AVAILABLE IN SUFFICIENT TIME TO FUNCTION THE PROPOSED AWARD.

THE RECORD FURTHER SHOWS THAT ALLIED ORDNANCE, INC., DELIVERED A LETTER TO NAVY PURCHASING OFFICE ON MARCH 31, 1964, STATING THAT PREVIOUS WEAKNESSES HAD BEEN CORRECTED AND THAT A NEW SUBCONTRACTOR, RADAX, INC., HAS BEEN SELECTED. NO FURTHER ACTION WAS TAKEN BY NAVY WITH RESPECT TO THE ALLIED LETTER SINCE, UPON FAILURE OF THE SMALL BUSINESS ADMINISTRATION TO GRANT A CERTIFICATE OF COMPETENCY, THE NORMAL ADMINISTRATIVE CHANNELS OF APPEAL WERE CONSIDERED TO HAVE BEEN EXHAUSTED. A DETERMINATION TO AWARD A CONTRACT TO THE BENRUS WATCH COMPANY WAS SUBSEQUENTLY MADE AND APPROVED ON APRIL 3, 1964, BECAUSE OF THE URGENT NEED FOR MISSILE LAUNCHERS TO MEET PRODUCTION AIRCRAFT SCHEDULES.

WE HAVE CONSISTENTLY HELD THAT THE DETERMINATION 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 DISCLOSES THAT THE QUALIFICATIONS OF ALLIED ORDNANCE, INC., TO PERFORM THE CONTRACT WERE CONSIDERED RATHER EXTENSIVELY BY THE ADMINISTRATIVE OFFICIALS. IN THESE CIRCUMSTANCES WE HAVE HELD THAT THE REFUSAL OF SMALL BUSINESS ADMINISTRATION 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. COMP. GEN. 705. WHEN THE ISSUANCE OF A CERTIFICATE OF COMPETENCY IS DENIED, THE CONTRACTING OFFICER'S DETERMINATION ON 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. SEE B-152831, DATED JANUARY 8, 1964; B- 152080, DATED OCTOBER 9, 1963, AND B-151977, DATED OCTOBER 3, 1963. 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 ALLIED ORDNANCE, INC., AND YOUR PROTEST IS DENIED.