B-156885, SEPT. 3, 1965

B-156885: Sep 3, 1965

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INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR TELEFAX OF MAY 28. WAS THE LOWEST OF FIVE BIDS RECEIVED. A PRE-AWARD SURVEY WAS REQUESTED ON VICTORY ELECTRONICS FOR THE PURPOSE OF DETERMINING ITS CAPABILITY OF PERFORMING THE PROPOSED CONTRACT. THE PRE-AWARD SURVEY EXPRESSED THE OPINION THAT VICTORY ELECTRONICS WAS NOT QUALIFIED TO PERFORM SATISFACTORILY BECAUSE THE COMPANY (1) LACKS . SINCE VICTORY ELECTRONICS WAS A SMALL BUSINESS CONCERN. THE CONTRACTING AGENCY WAS ADVISED THAT THE NEW YORK REGIONAL OFFICE OF THE SMALL BUSINESS ADMINISTRATION HAD DECLINED TO RECOMMEND THE ISSUANCE OF A CERTIFICATE OF COMPETENCY TO VICTORY ELECTRONICS. THE SMALL BUSINESS ADMINISTRATION ADVISED VICTORY ELECTRONICS OF ITS REFUSAL TO ISSUE A CERTIFICATE OF COMPETENCY AND STATED THAT THE DENIAL WAS BASED ON CREDIT.

B-156885, SEPT. 3, 1965

TO VICTORY ELECTRONICS, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR TELEFAX OF MAY 28, 1965, PROTESTING THE REJECTION OF YOUR BID SUBMITTED UNDER INVITATION FOR BIDS NO. 383-499-65, ISSUED BY THE AVIATION SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA.

THE INVITATION REQUESTED BIDS TO BE OPENED ON MARCH 19, 1965, FOR THE FURNISHING OF COMPONENTS FOR THE AN/APX7, RADAR RECOGNITION SET. THE BID OF VICTORY ELECTRONICS, IN THE TOTAL AMOUNT OF $238,801.30, WAS THE LOWEST OF FIVE BIDS RECEIVED.

A PRE-AWARD SURVEY WAS REQUESTED ON VICTORY ELECTRONICS FOR THE PURPOSE OF DETERMINING ITS CAPABILITY OF PERFORMING THE PROPOSED CONTRACT. THE PRE-AWARD SURVEY EXPRESSED THE OPINION THAT VICTORY ELECTRONICS WAS NOT QUALIFIED TO PERFORM SATISFACTORILY BECAUSE THE COMPANY (1) LACKS ,KNOW- HOW" AND SKILL PECULIAR TO THE ITEMS UNDER CONSIDERATION, (2) LACKS ADEQUATE FACILITIES AND TEST EQUIPMENT, (3) LACKS APPROPRIATE TECHNIQUE TO ASSURE COMPLIANCE WITH DELIVERY REQUIREMENTS, (4) LACKS INTRA-DEPARTMENTAL COORDINATION TO INSURE ORDERLY MATERIAL RECEIPT, AND (5) COULD NOT SATISFY DELIVERY REQUIREMENTS. UPON REVIEW OF THE INFORMATION AND RECOMMENDATIONS CONTAINED IN THEPRE-AWARD SURVEY, THE CONTRACTING OFFICER DETERMINED THAT VICTORY ELECTRONICS DID NOT MEET THE MINIMUM STANDARDS FOR RESPONSIBILITY SET FORTH IN ASPR 1-903. SINCE VICTORY ELECTRONICS WAS A SMALL BUSINESS CONCERN, AND IN ACCORDANCE WITH ASPR 1-705.4, THE CONTRACTING OFFICER REFERRED THE MATTER TO SMALL BUSINESS ADMINISTRATION SO THAT CERTIFICATE OF COMPETENCY ACTION COULD BE CONSIDERED. BY TELEGRAM DATED MAY 25, 1965, THE CONTRACTING AGENCY WAS ADVISED THAT THE NEW YORK REGIONAL OFFICE OF THE SMALL BUSINESS ADMINISTRATION HAD DECLINED TO RECOMMEND THE ISSUANCE OF A CERTIFICATE OF COMPETENCY TO VICTORY ELECTRONICS. ALSO BY LETTER OF MAY 25, 1965, THE SMALL BUSINESS ADMINISTRATION ADVISED VICTORY ELECTRONICS OF ITS REFUSAL TO ISSUE A CERTIFICATE OF COMPETENCY AND STATED THAT THE DENIAL WAS BASED ON CREDIT. THE AWARD WAS MADE TO TRANSDYNE CORPORATION ON JUNE 1, 1965, AS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER.

IT IS STATED IN YOUR TELEFAX OF MAY 28, 1965, THAT YOU OBJECT TO THE REJECTION OF YOUR BID, BECAUSE YOU BELIEVE THAT YOU HAVE BOTH TECHNICAL AND FINANCIAL CAPACITY AND CAPABILITIES TO PERFORM THE PROPOSED CONTRACT.

WE HAVE CONSISTENTLY TAKEN THE POSITION THAT THE QUESTION AS TO THE RESPONSIBILITY OF A PROSPECTIVE GOVERNMENT CONTRACTOR IS PRIMARILY FOR CONSIDERATION AND DETERMINATION BY THE ADMINISTRATIVE AGENCY CONCERNED, OR IN THE CASE OF THE "CAPACITY AND CREDIT" OF A SMALL BUSINESS CONCERN BY THE SMALL BUSINESS ADMINISTRATION, AND WE WILL NOT QUESTION SUCH DETERMINATION IN THE ABSENCE OF A CLEAR SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE CONCLUSION REACHED. 37 COMP. GEN. 430; 38 ID. 778; 39 ID. 705, 711. THE COURTS HAVE ALSO ADOPTED A SIMILAR VIEW. BRIEN V. CARNEY. 6 F.SUPP. 761; FRIEND V. LEE, 221 FED.2D 96.

IT MAY APPEAR INCONSISTENT THAT THE CONTRACTING OFFICER DETERMINED THAT VICTORY ELECTRONICS WAS NOT TECHNICALLY QUALIFIED TO PERFORM THE PROPOSED CONTRACT, WHEREAS THE SMALL BUSINESS ADMINISTRATION'S REFUSAL TO ISSUE A CERTIFICATE OF COMPETENCY WAS BASED ON FINANCIAL RESPONSIBILITY. HOWEVER, WE DO NOT BELIEVE THAT THESE FINDINGS ARE IN FACT INCONSISTENT. THE RECORD DISCLOSES THAT IN THE PERFORMANCE OF THE PRE-AWARD SURVEY VICTORY ELECTRONICS' TECHNICAL ABILITY TO PERFORM WAS CONSIDERED IN CONSIDERABLE DETAIL AND HAVING FOUND THAT THE COMPANY WAS NOT TECHNICALLY CAPABLE THERE WAS NO NEED TO ASCERTAIN ITS FINANCIAL CAPABILITY TO PERFORM. APPARENTLY THE SMALL BUSINESS ADMINISTRATION RESTRICTED ITS CONSIDERATION TO FINANCES AND FINDING THAT THE COMPANY WAS NOT FINANCIALLY CAPABLE TO PERFORM, THERE WAS NO NEED TO CONSIDER TECHNICAL CAPABILITY. IN ANY EVENT, HOWEVER, THE DECISION OF THE SMALL BUSINESS ADMINISTRATION NOT TO ISSUE A CERTIFICATE OF COMPETENCY MUST BE VIEWED AS A CONFIRMATION, ALTHOUGH FOR A DIFFERENT REASON, OF THE CONTRACTING OFFICER'S DETERMINATION THAT VICTORY ELECTRONICS LACKED THE NECESSARY OVERALL QUALIFICATIONS TO PERFORM THE PROPOSED CONTRACT. SEE B-153446, MAY 8, 1964.

IN VIEW OF THE FOREGOING, WE FIND NO LEGAL BASIS TO QUESTION THE ACTION TAKEN BY THE ADMINISTRATIVE OFFICE IN THE AWARD OF THE CONTRACT INVOLVED.