B-155880, APR. 15, 1965

B-155880: Apr 15, 1965

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INC.: WE HAVE YOUR LETTER OF FEBRUARY 5. THE RECORD DISCLOSES THAT AWARD WAS MADE TO THE SECOND LOW BIDDER BECAUSE A PREAWARD SURVEY TEAM HAD CONCLUDED THAT YOUR FIRM LACKED TECHNICAL AND PRODUCTION CAPABILITIES AND FINANCIAL ABILITY. YOU URGE THAT THE DOUBT AS TO YOUR FIRM'S ABILITY TO PERFORM THIS CONTRACT COULD NOT HAVE ARISEN IF THE CONTRACTING OFFICER AND THE SBA WERE AWARE OF. IT DETERMINED THAT YOUR BROOKLYN PLANT DID NOT HAVE SUFFICIENT FLOOR SPACE FOR THE FINAL ASSEMBLY OPERATIONS. THE ADMINISTRATIVE REPORTS POINTS OUT THAT THE REFUSAL TO MAKE AN AFFIRMATIVE FINDING OF RESPONSIBILITY WAS BASED IN PART ON YOUR FAILURE TO FURNISH. SCHULMAN ASSERTED RAND WAS WILLING TO ADVANCE. WE HAVE HELD THAT THE REFUSAL OF SBA 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. 39 COMP.

B-155880, APR. 15, 1965

TO EAST COAST PACKING COMPANY, INC.:

WE HAVE YOUR LETTER OF FEBRUARY 5, 1965, WITH ENCLOSURES, FORWARDED HERE WITH AN ADMINISTRATIVE REPORT DATED MARCH 8, 1965, FROM THE UNITED STATES ARMY MATERIEL COMMAND, WASHINGTON, D.C., IN WHICH YOU PROTEST THE REJECTION OF YOUR LOW BID FOR FURNISHING SHIPPING AND STORAGE CONTAINERS AS SPECIFIED IN INVITATION FOR BIDS NO. AMC/A/-11 173-65-24, ISSUED BY THE AMMUNITION PROCUREMENT AND SUPPLY DEPOT, JOLIET, ILLINOIS.

THE RECORD DISCLOSES THAT AWARD WAS MADE TO THE SECOND LOW BIDDER BECAUSE A PREAWARD SURVEY TEAM HAD CONCLUDED THAT YOUR FIRM LACKED TECHNICAL AND PRODUCTION CAPABILITIES AND FINANCIAL ABILITY, THE CONTRACTING OFFICER HAD REFUSED TO MAKE AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY, AND THE SMALL BUSINESS ADMINISTRATION (SBA), UPON REFERRAL OF THE MATTER TO IT IN ACCORDANCE WITH REGULATIONS, HAD DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY IN FAVOR OF YOUR FIRM. YOU URGE THAT THE DOUBT AS TO YOUR FIRM'S ABILITY TO PERFORM THIS CONTRACT COULD NOT HAVE ARISEN IF THE CONTRACTING OFFICER AND THE SBA WERE AWARE OF, AND HAD GIVEN SUFFICIENT WEIGHT TO, THE FACT THAT AS A SUBCONTRACTOR FOR SECOND LOW AND SUCCESSFUL BIDDER IN THIS PROCUREMENT, YOU HAD ALREADY SATISFACTORILY PRODUCED THE WOOD FABRICATION FOR IDENTICAL CONTAINERS. YOU ALSO ALLEGE THAT A FINANCIAL COMMITMENT OF UP TO $50,000 BY RAND CREDIT CORPORATION, EVIDENCED BY A LETTER FROM A GERALD L. SCHULMAN, TOGETHER WITH PROGRESS PAYMENTS, SHOULD BE MORE THAN SUFFICIENT TO PROTECT THE GOVERNMENT'S INTERESTS.

THE ADMINISTRATIVE REPORT DEMONSTRATES THAT THE PRODUCTION OF THE SUBJECT CONTAINERS REQUIRES THE FABRICATION OF BOTH METAL AND WOODEN COMPONENTS, AND THE ASSEMBLY OF THE TWO TYPES OF COMPONENTS. THE PREAWARD SURVEY TEAM EXPRESSED SOME DOUBT THAT THE GENERAL MANAGER OF YOUR FIRM, WHO YOU SAY HAS SINCE BEEN ASSIGNED TO OTHER DUTIES, POSSESSED SUFFICIENT KNOWLEDGE FOR PRODUCTION OF THE END ITEM. MOREOVER, IT DETERMINED THAT YOUR BROOKLYN PLANT DID NOT HAVE SUFFICIENT FLOOR SPACE FOR THE FINAL ASSEMBLY OPERATIONS, AND THAT YOU COULD NOT SUBSTANTIATE ANY NEGOTIATIONS FOR LEASING ADDITIONAL FLOOR SPACE AT A PROPOSED PLANT IN ENGLEWOOD, NEW JERSEY. FURTHERMORE, THE ADMINISTRATIVE REPORTS POINTS OUT THAT THE REFUSAL TO MAKE AN AFFIRMATIVE FINDING OF RESPONSIBILITY WAS BASED IN PART ON YOUR FAILURE TO FURNISH, AS REQUIRED, THE NAME OF YOUR BANK, YOUR FINANCIAL STATEMENT, YOUR CASH FLOW CHART, AND A REQUESTED LETTER FROM RAND CREDIT CORPORATION SIGNED BY AN OFFICIAL OF THAT CORPORATION PROMISING TO MAKE AVAILABLE THE $50,000 WHICH THE UNIDENTIFIED MR. SCHULMAN ASSERTED RAND WAS WILLING TO ADVANCE.

WE HAVE HELD THAT THE REFUSAL OF SBA 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. 39 COMP. GEN. 705. WHEN THE ISSUANCE OF A CERTIFICATE OF 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. NOR DO WE DISTURB THE DETERMINATIONS OF A CONTRACTING OFFICER WHERE, AS HERE, THEY APPEAR TO BE SUPPORTED BY SUBSTANTIAL EVIDENCE OF RECORD AND ARE NEITHER ARBITRARY NOR CAPRICIOUS. SEE B-146257, DATED AUGUST 8, 1961.

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