B-156182, JUN. 16, 1965

B-156182, JUN. 16, 1965

TO SPACEONIX, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF FEBRUARY 22, 1965, PROTESTING AGAINST THE ACTION OF THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, PROCUREMENT DIVISION, COCOA BEACH, FLORIDA, IN REJECTING YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. CC 119-5, DATED NOVEMBER 11, 1964. WE ALSO HAVE YOUR LETTER OF FEBRUARY 24, 1965, AND YOUR TELEGRAMS OF MARCH 18 AND 23, 1965, IN THIS MATTER.

THE SUBJECT INVITATION SOLICITED BIDS ON SUPPLIES OR SERVICES TO PROCURE, MANUFACTURE, FABRICATE, ASSEMBLE, FURNISH AND CHECK OUT 39 ITEMS OF HARDWARE CONSISTING OF CABLE ASSEMBLIES, SPARES AND RELATED MATERIAL. THE COVER SHEET OF THE INVITATION PROVIDES THAT THE BIDDER AGREES ,TO FURNISH ANY OR ALL OF THE ITEMS ON WHICH PRICES ARE QUOTED, AT THE PRICE SET OPPOSITE EACH ITEM, * * *.' THE CONTINUATION SHEET, PAGE 35 OF THE INVITATION, PROVIDES THAT:

"BIDS WILL BE EVALUATED AND AWARD WILL BE MADE ON A BASIS OF THE LOWEST AGGREGATE BID FOR ITEMS 1 THRU 39.'

INVITATIONS FOR BIDS WERE SENT TO 134 POTENTIAL SUPPLIERS. BIDS WERE OPENED ON DECEMBER 23, 1964, AND THE FOLLOWING NINE BIDS WERE RECEIVED:

TABLE

BIDDER AMOUNT

SYSTEMS ENGINEERING CORPORATION $ 331,219.78

SPACO, INC. 596,356.00

CHRYSLER CORPORATION 637,570.00

DOUGLAS AIRCRAFT CO. 647,520.00

BENDIX CORP. 654,031.00

HAYES INTERNATIONAL CORP. 654,572.60

SPACEONIX 697,170.38

FAIRCHILD HILLER CORP. 778,551.13

LOCKHEED AIRCRAFT CORP. 1,371,447.00

IT IS ADMINISTRATIVELY REPORTED THAT THE AMOUNT OF $697,170.38, SHOWN ABOVE AS YOUR BID, REPRESENTED THE MATHEMATICAL SUM OF THE EXTENDED BID PRICES OF ALL ITEMS ON WHICH YOU QUOTED. WHILE YOU HAD INDICATED A TOTAL AGGREGATE PRICE OF $553,455.77, IT WAS INITIALLY DETERMINED THAT THE FIGURE $697,170.38 SHOULD BE USED FOR PRICE EVALUATION PURPOSES, AND ON THAT BASIS YOU RATED SEVENTH HIGHEST IN PRICE OUT OF A TOTAL OF NINE BIDS. AFTER BID OPENING, SYSTEMS ENGINEERING CORPORATION, REQUESTED AND WAS GRANTED PERMISSION TO WITHDRAW ITS BID ON THE GROUNDS OF MISTAKE. THIS WITHDRAWAL PLACED SPACO, INC., IN THE POSITION OF LOW BIDDER, AND A PREAWARD SURVEY WAS CONDUCTED AT THE SPACO FACILITY, WHEREUPON SPACO WAS DETERMINED TO BE RESPONSIBLE TO PERFORM THE CONTRACT.

HAVING BEEN APPRISED OF THE POSSIBILITY OF CONTRACT AWARD TO SPACO AT ITS PRICE OF $596,356, AND OF THE FACT THAT YOUR LOWER AGGREGATE BID PRICE OF $553,455.77 WAS NOT BEING CONSIDERED FOR THE PURPOSES OF AWARD, YOUR ATTORNEYS FORWARDED A LETTER DATED JANUARY 26, 1965, TO THE KENNEDY SPACE CENTER (KSC), PROTESTING AWARD OF CONTRACT UNDER THE SUBJECT INVITATION TO ANY SOURCE OTHER THAN SPACEONIX. AFTER RECEIPT OF YOUR PROTEST AT KSC, BID PRICES WERE FURTHER REVIEWED, AND IT WAS ADMINISTRATIVELY DETERMINED (RELYING ON OUR DECISION B-149051, DATED JUNE 29, 1962) THAT CONSIDERATION SHOULD BE GIVEN TO YOUR LOW AGGREGATE BID OF $553,455.77. ACCORDINGLY, A DECISION WAS MADE BY KSC TO CONDUCT A PREAWARD SURVEY AT THE SPACEONIX FACILITY, TITUSVILLE, FLORIDA, ON FEBRUARY 2, 1965. THIS SURVEY INCLUDED, AMONG OTHER THINGS, STUDIES OF YOUR COMPANY BACKGROUND AND ORGANIZATION, MANAGEMENT AND LABOR, FINANCIAL CAPACITY, PRODUCTION, TECHNICAL/QUALITY CAPACITY, FACILITIES, DELIVERY PERFORMANCE, PURCHASING MATERIALS CONTROL, ACCOUNTING, NONDISCRIMINATION, TRANSPORTATION AND SAFETY. ON THE BASIS OF SUCH SURVEY, IT WAS THE JUDGMENT OF THE SURVEY TEAM THAT:

"SPACEONIX DOES NOT HAVE THE TECHNICAL CAPABILITY TO PERFORM UNDER CONTRACT SPECIFIED ON IFB CC-119-5. THEY INTEND, AFTER RECEIPT OF AWARD, TO COMPLETELY ESTABLISH SUCH A CAPABILITY BUT FAIL TO DEMONSTRATE ACCEPTABLE EVIDENCE OF ABILITY OR DEFINITIVE PLANS TO OBTAIN THE EXPERIENCE, ORGANIZATION, TECHNICAL QUALIFICATIONS, SKILLS AND FACILITIES WHICH THEY NOW LACK.'

ON THE BASIS OF THE PREAWARD SURVEY TEAM'S RECOMMENDATIONS, THE CONTRACTING OFFICER DETERMINED THAT YOUR FIRM WAS NOT TECHNICALLY RESPONSIBLE IN THAT IT FAILED TO MEET THE MINIMUM STANDARDS REQUIRED BY NATIONAL AERONAUTICS AND SPACE ADMINISTRATION PROCUREMENT REGULATION (NASA PR) 1.903-1 (III) AND (V), TO PERFORM THE PROPOSED CONTRACT.

IT IS REPORTED THAT BY MEMORANDUM OF FEBRUARY 11, 1965, THE KSC APOLLO SATURN 1/1B TEST AND SYSTEMS ENGINEERING OFFICE ADVISED THE KSC PROCUREMENT DIVISION THAT DELAYS INCURRED IN MAKING AWARD ON INVITATION FOR BIDS NO. CC-119-5 HAD JEOPARDIZED MISSION ACCOMPLISHMENT (LAUNCH SCHEDULES) AND THAT FURTHER DELAY COULD NOT BE TOLERATED. IN VIEW THEREOF, THE CONTRACTING OFFICER DETERMINED ON FEBRUARY 11, 1965, THAT THE POTENTIAL 15 WORKING DAYS THAT WOULD BE REQUIRED BY THE SMALL BUSINESS ADMINISTRATION (SBA) TO CONSIDER THE ISSUANCE OF A CERTIFICATE OF COMPETENCY TO YOUR FIRM, COUPLED WITH THE DELAYS THAT HAD PREVIOUSLY OCCURRED (PROCESSING THE REQUEST BY SYSTEMS ENGINEERING FOR PERMISSION TO WITHDRAW ITS BID, ADMINISTRATIVE CONSIDERATION OF THE ACCEPTABILITY OF YOUR QUOTED AGGREGATE PRICE AND THE PREAWARD SURVEYS), WOULD IMPACT THE SATURN 1B AND SATURN V PROGRAMS TO THE EXTENT THAT MASTER RESCHEDULING WOULD BE REQUIRED. ACCORDINGLY, ON FEBRUARY 11, 1965, THE CONTRACTING OFFICER CERTIFIED AS AUTHORIZED BY NASA PR 1.705-6 (B) (I), THAT AWARD OF A CONTRACT PURSUANT TO THE SUBJECT INVITATION MUST BE MADE WITHOUT DELAY. THE CIRCUMSTANCES SURROUNDING THE NONREFERRAL OF THE MATTER TO THE SBA FOR ISSUANCE OF A CERTIFICATE OF COMPETENCY WERE DISCUSSED WITH THE SBA REPRESENTATIVE AT KSC WHO CONSIDERED THE KSC ACTION APPROPRIATE. IN VIEW OF THE CERTIFIED URGENCY OF THE PROCUREMENT AND HAVING COMPLIED WITH APPLICABLE REGULATIONS, THE CONTRACTING OFFICER IMMEDIATELY PROCEEDED ON FEBRUARY 11, 1965, TO AWARD CONTRACT NO. NAS10-2117 TO SPACO, INC., AS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER.

IN RESPONSE TO YOUR CONTENTION THAT NASA WAS IN ERROR IN NOT CONSIDERING YOUR SUBCONTRACT ARRANGEMENT AND STRUCTURE, IT IS REPORTED THAT THE SUBCONTRACT ARRANGEMENT WAS CONSIDERED IN THE COURSE OF THE PREAWARD SURVEY AND IN SUBSEQUENT DISCUSSIONS WITH THE PRESIDENT OF SPACEONIX. HOWEVER, SPACEONIX DID NOT INDICATE PRIOR TO AWARD OF THE CONTRACT TO SPACO, THAT IT HAD MADE FIRM ARRANGEMENTS TO SUBCONTRACT THE WORK TO PRECISION INTERCONNECT CORPORATION. WITH RESPECT TO YOUR OFFER TO PROVIDE A PERFORMANCE BOND TO INSURE SATISFACTORY PERFORMANCE, NASA PR 10.103-1 (A) PROVIDES THAT PERFORMANCE BONDS SHALL NOT BE USED FOR DETERMINATIONS OF CONTRACTOR RESPONSIBILITY. ALSO, IN REGARD TO YOUR OFFER TO CORRECT ANY DEFICIENCIES REVEALED BY THE PREAWARD SURVEY, NASA REPORTS THAT THE TECHNICAL DEFICIENCIES DISCLOSED BY THE KSC SURVEY WERE SO SUBSTANTIAL IN CHARACTER THAT CORRECTION THEREOF WOULD HAVE REQUIRED THE WHOLESALE ESTABLISHMENT OF A CAPABILITY TO PERFORM THE WORK.

WITH RESPECT TO THE FAILURE OF THE PROCUREMENT AGENCY TO SUBMIT THE MATTER OF YOUR COMPETENCY AS A PROSPECTIVE GOVERNMENT CONTRACTOR TO THE SMALL BUSINESS ADMINISTRATION PRIOR TO REJECTION OF YOUR BID, SECTION 8 (B) (7) OF THE SMALL BUSINESS ACT AS AMENDED BY PUBLIC LAW 85-836, 15 U.S.C. 637 (B) (7), PROVIDES THAT THE ISSUANCE OF A CERTIFICATE OF COMPETENCY BY THE SBA IS CONCLUSIVE UPON GOVERNMENT PROCUREMENT OFFICERS WITH RESPECT TO THE COMPETENCY AS TO CAPACITY AND CREDIT, OF ANY SMALL BUSINESS TO PERFORM A GOVERNMENT CONTRACT. IN THIS RESPECT, THE GOVERNING NASA PR 1.705-6 (B) PROVIDES THAT AN OTHERWISE ACCEPTABLE BID OR PROPOSAL SUBMITTED BY A SMALL BUSINESS CONCERN SHALL NOT BE REJECTED BY REASON OF LACK OF CAPACITY OR CREDIT UNTIL THE MATTER HAS BEEN REFERRED TO THE SBA FOR THE POSSIBLE ISSUANCE OF A CERTIFICATE OF COMPETENCY. NASA PR 1.705-6 (B) (I), HOWEVER, PROVIDES THAT:

"/I) THIS PROCEDURE IS NOT MANDATORY WHERE THE CONTRACTING OFFICER CERTIFIES IN WRITING THAT AWARD MUST BE MADE WITHOUT DELAY AND PROMPTLY ADVISES THE SBA REPRESENTATIVE THEREOF, AND INCLUDES IN THE CONTRACT FILE A STATEMENT SIGNED BY HIM WHICH JUSTIFIES THE CERTIFICATE. A COPY OF THE STATEMENT SHALL BE FURNISHED TO THE SBA REPRESENTATIVE.'

WHILE YOUR BID WAS REJECTED PRIMARILY BECAUSE IT WAS DETERMINED THAT YOU WERE NOT TECHNICALLY RESPONSIBLE TO PERFORM THE WORK INVOLVED AND, ORDINARILY, UNDER NASA PROCUREMENT REGULATIONS THE MATTER WOULD BE SUBMITTED TO SBA FOR CONSIDERATION AS TO WHETHER A CERTIFICATE OF COMPETENCY SHOULD BE ISSUED, THE CONTRACTING OFFICER WAS NOT OBLIGATED TO FOLLOW SUCH PROCEDURE WHEN AWARD WAS REQUIRED TO BE MADE WITHOUT DELAY. IT WAS UNDER SUCH CIRCUMSTANCES THAT THE CONTRACTING OFFICER MADE THE REQUIRED STATEMENT AND CERTIFICATION PURSUANT TO THE PROVISIONS OF NASA PR 1.705-6 (B) (I), A COPY OF WHICH WAS FURNISHED THE SMALL BUSINESS ADMINISTRATION.

IT LONG HAS BEEN AN ESTABLISHED RULE OF OUR OFFICE THAT THE DETERMINATION OF THE CAPABILITIES OF A BIDDER--- INDEPENDENT OF THE AUTHORITY OF SBA TO ISSUE A CERTIFICATE OF COMPETENCY--- IS PRIMARILY THE RESPONSIBILITY AND FUNCTION OF THE PROCUREMENT AGENCY, AND IN THE ABSENCE OF BAD FAITH OR LACK OF REASONABLE FACTUAL BASIS FOR THE DETERMINATION, WE WILL NOT OBJECT TO THE DETERMINATION MADE. 38 COMP. GEN. 248.

THE CONTRACTING OFFICER HAS FULLY DOCUMENTED THE CIRCUMSTANCES GIVING RISE TO HIS CERTIFICATION OF THE URGENCY OF THE PROCUREMENT AND IN OUR OPINION THE RECORD BEFORE US AMPLY SUPPORTS THE DETERMINATION OF URGENCY. MOREOVER, WE DO NOT FIND THAT THE ACTIONS TAKEN BY THE AGENCY, CONSIDERING THE CHRONOLOGY OF EVENTS, WERE DILATORY. WE MUST THEREFORE CONCLUDE THAT NO LEGAL BASIS EXISTS FOR DISTURBING THE AWARD MADE TO SPACO, INC., UNDER THE SUBJECT INVITATION. ACCORDINGLY, YOUR PROTEST AGAINST SUCH AWARD MUST BE DENIED.