B-155354, NOV. 23, 1964

B-155354: Nov 23, 1964

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DAVIS COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 7. THE FIVE BIDS RECEIVED WERE OPENED SEPTEMBER 25. M. STEINTHAL AND COMPANY WAS THE LOWEST BIDDER AND YOU WERE THE SECOND LOWEST. YOU QUESTION THE PROPRIETY OF MAKING AWARD TO STEINTHAL AS CONTEMPLATED BECAUSE OF YOUR BELIEF THAT IT WILL NOT BE ABLE TO MEET THE DELIVERY SCHEDULE REQUIRED IN VIEW OF ITS PRESENT BACKLOG OF CONTRACTS. BECAUSE YOU BELIEVE IT IS NOT A "SMALL BUSINESS CONCERN.'. STEINTHAL IS PERFORMING SIXTEEN CONTRACTS FOR THE NAVY AND IS CURRENT WITH DELIVERIES ON ALL BUT ONE. THE DELAY ON THIS ONE CONTRACT IS ATTRIBUTED TO SLOW RECEIPT OF SUBCONTRACTED HARDWARE ITEMS. WITH WHICH THERE HAVE BEEN SOME TECHNICAL PROBLEMS.

B-155354, NOV. 23, 1964

TO THE HUGH F. DAVIS COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 7, 1964, AND ENCLOSURES, PROTESTING AGAINST THE PROPOSED AWARD OF A CONTRACT TO M. STEINTHAL AND COMPANY BY THE UNITED STATES NAVY UNDER INVITATION FOR BIDS NO. 600-121-65, A TOTAL SMALL BUSINESS SET-ASIDE.

THE INVITATION CALLS FOR BIDS ON FURNISHING 1076 PARAPAKS, MK 33, MOD O, ON A SPECIFIED DELIVERY SCHEDULE EXTENDING OVER AN ELEVEN MONTH PERIOD. THE FIVE BIDS RECEIVED WERE OPENED SEPTEMBER 25, 1964, AND ALL BIDS OFFERED DELIVERY IN ACCORDANCE WITH THE DELIVERY SCHEDULE SET FORTH IN THE INVITATION. M. STEINTHAL AND COMPANY WAS THE LOWEST BIDDER AND YOU WERE THE SECOND LOWEST. YOU QUESTION THE PROPRIETY OF MAKING AWARD TO STEINTHAL AS CONTEMPLATED BECAUSE OF YOUR BELIEF THAT IT WILL NOT BE ABLE TO MEET THE DELIVERY SCHEDULE REQUIRED IN VIEW OF ITS PRESENT BACKLOG OF CONTRACTS, AND BECAUSE YOU BELIEVE IT IS NOT A "SMALL BUSINESS CONCERN.'

AS A RESULT OF YOUR PROTEST, INSPECTOR OF NAVAL MATERIAL, ATLANTA, HAS CONDUCTED A PREAWARD SURVEY TO DETERMINE STEINTHAL'S CAPABILITY TO MEET THE DELIVERY SCHEDULE. THIS SURVEY INVOLVED, AMONG OTHER THINGS, AN EXAMINATION AND EVALUATION OF THE COMPANY'S ORGANIZATION, MANAGEMENT AND LABOR, PLANT FACILITIES, FINANCIAL POSITION, QUALITY CONTROL, PAST PERFORMANCE UNDER GOVERNMENT CONTRACTS, AND PRESENT BACKLOG OF GOVERNMENT CONTRACTS.

THE SURVEY REVEALED THAT STEINTHAL HAS HAD SOME DIFFICULTY IN THE PAST IN MEETING DELIVERY DATES ON SOME CONTRACTS WITH THE NAVY. MUCH OF THIS DIFFICULTY RESULTED FROM DELAY IN RECEIVING CLARIFICATION OF DRAWING DISCREPANCIES AND PREPRODUCTION SAMPLE APPROVALS, AND FROM SLOW RECEIPT OF SUBCONTRACTED MATERIALS DUE TO TECHNICAL PROBLEMS WITH COMPLICATED HARDWARE ITEMS. PRESENTLY, STEINTHAL IS PERFORMING SIXTEEN CONTRACTS FOR THE NAVY AND IS CURRENT WITH DELIVERIES ON ALL BUT ONE. THE DELAY ON THIS ONE CONTRACT IS ATTRIBUTED TO SLOW RECEIPT OF SUBCONTRACTED HARDWARE ITEMS, WITH WHICH THERE HAVE BEEN SOME TECHNICAL PROBLEMS. ARRANGEMENTS HAVE BEEN MADE WITH BOTH STEINTHAL AND THE SUBCONTRACTOR TO CORRECT THIS SITUATION. A CHECK WITH AIR FORCE OFFICIALS INDICATES THAT STEINTHAL IS CONTINUALLY IN PERFORMANCE OF FROM TWENTY TO THIRTY CONTRACTS FOR THEM WITHOUT ANY SIGNIFICANT PROBLEMS. THE SURVEY ALSO INCLUDED AN ANALYSIS OF THE PERCENTAGE OF PLANT HOUR WORKLOAD, BASED ON A FORTY HOUR WEEK, COMMITTED ON PRESENT CONTRACTS AND ANTICIPATED FROM OUTSTANDING BIDS, INCLUDING THE BID HERE INVOLVED. THIS ANALYSIS COVERS A THIRTEEN MONTH PERIOD, AND SHOWS THAT THE PERCENTAGE OF THE PLANT HOUR WORKLOAD COMMITTED AND ANTICIPATED NEVER EXCEEDS 89 PERCENT. THE CONCLUSIONS REACHED FROM THIS SURVEY ARE STATED IN THE ADMINISTRATIVE REPORT AS FOLLOWS:

"IT IS THE OPINION OF INSMAT ATLANTA THAT MR. STENTHAL AND CO., INC., AND THEIR MANUFACTURING FACILITIES, ROXBORO MANUFACTURING CO., ROXBORO, N.C., CAN SUCCESSFULLY PERFORM ON SUBJECT IFB. IT HAS ADEQUATE MANUFACTURING FACILITIES, MANAGEMENT, TECHNICAL ABILITY, MANPOWER, SUPPLIER COMMITMENTS, RESOURCES, AND OPEN CAPACITY TO COMPLY WITH ALL THE TERMS AND DELIVERY REQUIREMENTS OUTLINED IN IFB 600-121 65.'

THE FUNCTION OF DETERMINING THE RESPONSIBILITY OF A BIDDER IS THAT OF THE CONTRACTING ACTIVITY, AND NOT OF THE GENERAL ACCOUNTING OFFICE. SUCH A DETERMINATION IS NECESSARILY A MATTER OF JUDGMENT, AND MUST PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING ACTIVITY INVOLVED. WHERE SUCH JUDGMENT IS BASED UPON SUBSTANTIAL FACTUAL GROUNDS AND ARRIVED AT IN GOOD FAITH, WE MAY NOT PROPERLY OBJECT TO SUCH DETERMINATION. 38 COMP. GEN. 131; 37 COMP. GEN. 798; B-153642, APRIL 30, 1964. THE QUESTION WHICH YOU HAVE RAISED REGARDING STEINTHAL'S CAPABILITY TO MEET THE DELIVERY SCHEDULE REQUIRED BY THE INVITATION APPEARS TO HAVE BEEN THOROUGHLY INVESTIGATED AND CONSIDERED BY THE PROCURING ACTIVITY INVOLVED, WHICH HAS DETERMINED THAT THE PROSPECTIVE CONTRACTOR IS CAPABLE OF PERFORMING THE PROPOSED CONTRACT IN ACCORDANCE WITH THE DELIVERY SCHEDULE, AS WELL AS IN ALL OTHER RESPECTS. WE THINK SUCH DETERMINATION IS COMPETENT AND AFFORDS NO BASIS FOR OBJECTION BY OUR OFFICE.

WITH RESPECT TO YOUR QUESTION CONCERNING WHETHER STEINTHAL IS A "SMALL BUSINESS CONCERN" FOR PURPOSES OF THIS PROCUREMENT, THE CONTRACTING OFFICER SUBMITTED THIS QUESTION TO THE SMALL BUSINESS ADMINISTRATION FOR DETERMINATION PURSUANT TO PARAGRAPH 1-703/B) (1) OF THE ARMED SERVICES PROCUREMENT REGULATION. YOU HAVE BEEN ADVISED BY LETTER FROM CHARLES H. KRIGER, REGIONAL DIRECTOR, SMALL BUSINESS ADMINISTRATION, DATED OCTOBER 16, 1964, THAT IT HAS BEEN DETERMINED THAT STEINTHAL QUALIFIES AS A "SMALL BUSINESS CONCERN" FOR THIS PROCUREMENT. UNDER AUTHORITY OF 15 U.S.C. 637/B) (6) SUCH A DETERMINATION IS CONCLUSIVE ON THE PROCUREMENT OFFICERS OF THE GOVERNMENT, AND MAY NOT BE QUESTIONED BY OUR OFFICE.

ACCORDINGLY, THERE IS NO BASIS ON WHICH OUR OFFICE MAY OBJECT TO AWARD OF THIS CONTRACT TO M. STEINTHAL AND COMPANY, AND YOUR PROTEST MUST THEREFORE BE DENIED.