B-156619, JUN. 8, 1965

B-156619: Jun 8, 1965

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FIVE BIDS WERE RECEIVED AND OPENED ON NOVEMBER 24. A PREAWARD SURVEY WAS CONDUCTED TO DETERMINE THE RESPONSIBILITY OF NORTHEAST AS A PROSPECTIVE CONTRACTOR. A FURTHER INVESTIGATION OF ITS CAPABILITIES WAS UNDERTAKEN WITH THE RESULT THAT A SECOND UNFAVORABLE REPORT WAS MADE ON FEBRUARY 26. THE MATTER OF NORTHEAST'S NONRESPONSIBILITY WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) ON MARCH 2. THE PROCUREMENT OFFICE COULD HAVE REGARDED THE UNFAVORABLE PREAWARD SURVEYS AS HAVING BEEN CONFIRMED AND. COULD HAVE. IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT NORTHEAST'S CAPABILITIES SHOULD BE FURTHER REVIEWED ON THE BASIS OF THE ADDITIONAL EVIDENCE FURNISHED BY NORTHEAST IN AN EFFORT TO ASSURE MAXIMUM COMPLIANCE WITH THE GENERAL POLICY OF THE DEPARTMENT OF DEFENSE TO PLACE A FAIR PROPORTION OF ITS TOTAL CONTRACTS WITH SMALL BUSINESS CONCERNS.

B-156619, JUN. 8, 1965

TO SOUTHWEST TRUCK BODY COMPANY, INC.:

BY TELEGRAMS DATED APRIL 23 AND 27, 1965, YOU PROTESTED AGAINST THE AWARD OF ANY CONTRACT TO NORTHEAST OHIO MACHINE BUILDERS, INC., UNDER SMALL BUSINESS RESTRICTED INVITATION FOR BIDS NO. AMC (T/-11-184-65-74 (B) JD, ISSUED ON NOVEMBER 3, 1964, BY THE UNITED STATES ARMY ENGINEER PROCUREMENT OFFICE, CHICAGO, ILLINOIS, FOR 22 TRAILER MOUNTED WOOD WORKING EQUIPMENT SETS, TOGETHER WITH CERTAIN SUPPORTING PUBLICATIONS.

FIVE BIDS WERE RECEIVED AND OPENED ON NOVEMBER 24, 1964, WITH THE RESULT THAT NORTHEAST APPEARED TO BE THE LOWEST BIDDER. IN ACCORDANCE WITH THE PROCEDURES PRESCRIBED BY PART 9, SECTION 1, OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), A PREAWARD SURVEY WAS CONDUCTED TO DETERMINE THE RESPONSIBILITY OF NORTHEAST AS A PROSPECTIVE CONTRACTOR. THE PREAWARD SURVEY REPORT DATED JANUARY 18, 1965, RECOMMENDED THAT AWARD SHOULD NOT BE MADE TO NORTHEAST--- A SMALL BUSINESS CONCERN--- BECAUSE IT FAILED TO MEET CERTAIN OF THE MINIMUM STANDARDS OF RESPONSIBILITY SET OUT IN ASPR 1-903. ON THE BASIS OF ADDITIONAL INFORMATION SUBMITTED BY NORTHEAST ON JANUARY 30, 1965, RELATING TO ITS RESPONSIBILITY, A FURTHER INVESTIGATION OF ITS CAPABILITIES WAS UNDERTAKEN WITH THE RESULT THAT A SECOND UNFAVORABLE REPORT WAS MADE ON FEBRUARY 26, 1965. AS REQUIRED BY ASPR 1-705.4 (B), THE MATTER OF NORTHEAST'S NONRESPONSIBILITY WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) ON MARCH 2, 1965, FOR DETERMINATION AS TO WHETHER A CERTIFICATE OF COMPETENCY SHOULD BE ISSUED TO NORTHEAST ON THIS PARTICULAR PROCUREMENT. ON MARCH 18, 1965, SBA ADVISED THE PROCUREMENT OFFICE THAT IT HAD DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY TO NORTHEAST. AT THIS POINT IN TIME, THE PROCUREMENT OFFICE COULD HAVE REGARDED THE UNFAVORABLE PREAWARD SURVEYS AS HAVING BEEN CONFIRMED AND, ACCORDINGLY, COULD HAVE, IN ITS DISCRETION, REJECTED THE LOW BIDDER AS NONRESPONSIBLE.

HOWEVER, IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT NORTHEAST'S CAPABILITIES SHOULD BE FURTHER REVIEWED ON THE BASIS OF THE ADDITIONAL EVIDENCE FURNISHED BY NORTHEAST IN AN EFFORT TO ASSURE MAXIMUM COMPLIANCE WITH THE GENERAL POLICY OF THE DEPARTMENT OF DEFENSE TO PLACE A FAIR PROPORTION OF ITS TOTAL CONTRACTS WITH SMALL BUSINESS CONCERNS. SEE ASPR 1-702. ON MARCH 30, 1965, THE CONTRACTING OFFICER, AFTER CONSULTATION WITH THE CONTRACTOR SELECTION BOARD, DETERMINED THAT SINCE SIGNIFICANT ADDITIONAL DATA HAD BEEN FURNISHED WHICH REFLECTED FAVORABLY UPON NORTHEAST'S CAPABILITY TO PERFORM, THOUGH NOT SUFFICIENTLY SO TO PERSUADE THE CONTRACTING OFFICER TO AFFIRMATIVELY DETERMINE THAT NORTHEAST WAS RESPONSIBLE, SBA SHOULD BE GIVEN ANOTHER OPPORTUNITY TO CONSIDER THE ENTIRE RECORD RELATING TO NORTHEAST'S CAPABILITIES UNDER ITS CERTIFICATE OF COMPETENCY PROCEDURES. THEREFORE, ON MARCH 31, 1965, THE CONTRACTING OFFICER RESUBMITTED THE ENTIRE MATTER OF NORTHEAST'S NONRESPONSIBILITY TO SBA FOR RESOLUTION.

UNDER ASPR 1-705.4 (B) AND 13 C.F.R. 124.8-16 (A), SBA HAD UNTIL THE CLOSE OF BUSINESS APRIL 21, 1965, OR 15 WORKING DAYS, TO MAKE A DETERMINATION WHETHER IT SHOULD ISSUE A CERTIFICATE OF COMPETENCY IN THIS CASE. ON APRIL 21, 1965, THE CONTRACTING OFFICE WAS ADVISED BY TELEPHONE THAT SBA HAD DECIDED TO ISSUE A CERTIFICATE OF COMPETENCY TO NORTHEAST. THIS FACT WAS CONFIRMED BY SBA LETTER DATED APRIL 22, 1965, WHEREIN IT ADVISED THE PROCUREMENT OFFICE THAT ITS CERTIFICATE WAS VALID FOR 60 DAYS FROM THE DATE OF ITS ISSUANCE AND THEREAFTER WAS SUBJECT TO SBA REEVALUATION.

YOUR PROTEST IS ON THE FOLLOWING BASES:

1. THE LONG DELAY SINCE THE OPENING OF BIDS WAS NOT IN THE INTEREST OF THE GOVERNMENT BECAUSE A BIDDER'S RESPONSIBILITY AS TO CAPACITY AND CREDIT SHOULD BE DETERMINED AT THE TIME OF BID OPENING.

2. THE CERTIFICATE OF COMPETENCY WAS NOT TIMELY ISSUED BY SBA. THEREFORE, SOUTHWEST SHOULD HAVE BEEN AWARDED THE CONTRACT AFTER EXPIRATION OF THE SBA PROCESSING PERIOD AND PRIOR TO ISSUANCE OF THE CERTIFICATE OF COMPETENCY.

3. THE LOW BID OF NORTHEAST ON THE END ITEM INCLUDED THE COST OF REQUIRED PUBLICATIONS WHICH INDICATES THAT IT LACKS TECHNICAL UNDERSTANDING OF THE GOVERNMENT'S MANUAL REQUIREMENTS.

CONCERNING YOUR FIRST POINT OF PROTEST, IT SHOULD BE OBSERVED THAT BOTH THE PROCUREMENT STATUTES AND THE IMPLEMENTING REGULATIONS REQUIRE THAT AWARDS BE MADE TO THE LOWEST RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION FOR BIDS. THE REJECTION OF A LOW BID IS ALWAYS A MATTER OF SERIOUS CONCERN BOTH IN TERMS OF SAVINGS TO THE GOVERNMENT AND THE PRESERVATION OF THE COMPETITIVE BIDDING SYSTEM. SINCE SBA, THE AGENCY CHARGED BY LAW TO FOSTER THE PARTICIPATION OF SMALL BUSINESS IN GOVERNMENT PROCUREMENT, IS ENTITLED TO THE BENEFIT OF ALL INFORMATION RESPECTING THE QUALIFICATIONS OF A SMALL BUSINESS BIDDER BEFORE IT FINALLY DETERMINES WHETHER A CERTIFICATE OF COMPETENCY SHOULD BE ISSUED, WE BELIEVE THAT ADMINISTRATIVE DELAYS RESULTING FROM AN EXHAUSTIVE REVIEW OF A SMALL BUSINESS BIDDER'S QUALIFICATIONS WHICH, BY REGULATION AND LAW, REQUIRES A SUBMISSION OF AN ADVERSE RESPONSIBILITY FINDING TO SBA FOR RESOLUTION ARE NOT SUBJECT TO QUESTION ESPECIALLY WHERE SUFFICIENT TIME WAS AVAILABLE TO THE PROCUREMENT OFFICE. MOREOVER, WE HAVE TAKEN THE POSITION THAT MATTERS OF RESPONSIBILITY SHOULD BE MEASURED WITH RESPECT TO THE TIME OF AWARD RATHER THAN AN EARLIER TIME. 39 COMP. GEN. 655; 41 ID. 302. HERE, THE RESPONSIBILITY OF NORTHEAST WAS NOT FIXED AT THE DATE OF BID OPENING BUT COULD BE RESOLVED THEREAFTER UP TO THE DATE OF AWARD. ASPR 1-904.1.

FROM THE RECORD BEFORE US, SBA HAD UNTIL THE CLOSE OF BUSINESS APRIL 21, 1965, TO ISSUE A CERTIFICATE OF COMPETENCY. WHILE THE FORMAL NOTICE OF THE CERTIFICATE OF COMPETENCY WAS DATED ON APRIL 22, 1965, SBA INFORMALLY NOTIFIED THE PROCUREMENT OFFICE OF ITS AFFIRMATIVE DECISION ON APRIL 21, 1965. WE THUS VIEW THE APRIL 22 NOTICE AS IN THE NATURE OF CONFIRMATORY ADVICE AND, AS SUCH, ENTIRELY PROPER. IN ANY EVENT, THE 15 WORKING DAY PERIOD SPECIFIED BY THE REGULATION IS FOR THE BENEFIT OF THE PROCUREMENT OFFICE WHICH, AFTER EXPIRATION OF SUCH PERIOD, MAY EITHER PROCEED INDEPENDENTLY OF SBA ADVICE OR AWAIT SUCH ADVICE AS IT DEEMS APPROPRIATE.

YOUR FINAL POINT OF PROTEST WOULD NOW APPEAR TO BE ACADEMIC SINCE THE CERTIFICATE OF COMPETENCY ISSUED TO NORTHEAST HAS EFFECTIVELY RESOLVED ANY QUESTION AS TO ITS TECHNICAL ABILITY IN ITS FAVOR. BUT WE UNDERSTAND THAT IT IS THE COMMON PRACTICE OF MANY BIDDERS TO ABSORB ALL OR A PORTION OF PUBLICATION COSTS IN THEIR OVERHEAD OTHERWISE INCLUDED IN THE BID PRICE FOR THE END ITEM.