B-157094, AUG. 31, 1965

B-157094: Aug 31, 1965

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INC.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED JUNE 24. NINE BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE LOWEST BID WAS SUBMITTED BY YOUR FIRM AND THE NEXT LOWEST BID WAS SUBMITTED BY THE AMCEL PROPULSION COMPANY. AWARD TO YOUR CORPORATION WAS NOT RECOMMENDED. THE SURVEY DISCLOSED THAT YOUR FIRM'S FACILITIES WERE INADEQUATE FOR THE MANUFACTURE OF THE REQUIRED ITEM. THAT YOUR FIRM DID NOT HAVE ANY EMPLOYED PERSONNEL. THAT YOU DID NOT HAVE AN ESTABLISHED QUALITY CONTROL SYSTEM IN EFFECT. THAT YOUR FIRMDID NOT HAVE ANY ESTABLISHED PRODUCTION CONTROL PROCEDURES. THE SMALL BUSINESS ADMINISTRATION (SBA) WAS NOTIFIED BY THE CONTRACTING OFFICER THAT THE BID OF YOUR FIRM WAS BEING REJECTED FOR THE ABOVE REASONS AND ADVICE WAS REQUESTED AS TO WHETHER THAT ADMINISTRATION WOULD ISSUE A CERTIFICATE OF COMPETENCY IN YOUR BEHALF.

B-157094, AUG. 31, 1965

TO SUFFOLK NOVELTY FIREWORKS CO., INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED JUNE 24, 1965, PROTESTING AGAINST THE MAKING OF ANY AWARD OTHER THAN YOUR FIRM UNDER INVITATION NO. 104-1382-65, ISSUED BY THE UNITED STATES NAVY SHIPS PARTS CONTROL CENTER, MECHANICSBURG, PENNSYLVANIA.

THE INVITATION REQUESTED BIDS FOR FURNISHING THE NAVY'S ESTIMATED REQUIREMENTS FOR AIRCRAFT PARACHUTE FLARES DURING FISCAL YEARS 1965 AND 1966. NINE BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE LOWEST BID WAS SUBMITTED BY YOUR FIRM AND THE NEXT LOWEST BID WAS SUBMITTED BY THE AMCEL PROPULSION COMPANY.

SINCE THE PROCUREMENT ACTIVITY DETERMINED, AFTER A PREAWARD SURVEY OF YOUR COMPANY'S RESPONSIBILITY AS A PROSPECTIVE GOVERNMENT CONTRACTOR, THAT YOUR COMPANY DID NOT MEET THE MINIMUM STANDARDS OF RESPONSIBILITY PRESCRIBED BY PARAGRAPHS 1-902 AND 1-903 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), AWARD TO YOUR CORPORATION WAS NOT RECOMMENDED. SPECIFICALLY, THE SURVEY DISCLOSED THAT YOUR FIRM'S FACILITIES WERE INADEQUATE FOR THE MANUFACTURE OF THE REQUIRED ITEM; THAT YOUR FIRM DID NOT HAVE ANY EMPLOYED PERSONNEL; THAT YOU DID NOT HAVE AN ESTABLISHED QUALITY CONTROL SYSTEM IN EFFECT; THAT YOUR FIRMDID NOT HAVE ANY ESTABLISHED PRODUCTION CONTROL PROCEDURES; AND THAT AT THE TIME OF THE SURVEY NONE OF YOUR FIRM'S OFFICIALS DISPLAYED ANY EVIDENCE OF HAVING PRODUCED OR HAVING KNOWLEDGE OF PRODUCING THIS OR SIMILAR ITEMS. ON JUNE 24, 1965, THE SMALL BUSINESS ADMINISTRATION (SBA) WAS NOTIFIED BY THE CONTRACTING OFFICER THAT THE BID OF YOUR FIRM WAS BEING REJECTED FOR THE ABOVE REASONS AND ADVICE WAS REQUESTED AS TO WHETHER THAT ADMINISTRATION WOULD ISSUE A CERTIFICATE OF COMPETENCY IN YOUR BEHALF. LATER IT WAS DETERMINED THAT AN AWARD MUST BE MADE WITHOUT DELAY BECAUSE OF THE URGENT NEED FOR THE FLARES AND THAT THE TIME WHICH WOULD BE REQUIRED BY THE SBA TO DETERMINE WHETHER OR NOT IT SHOULD ISSUE A CERTIFICATE OF COMPETENCY IN YOUR BEHALF COULD NOT BE PERMITTED. THIS ACTION IS SUPPORTED BY A CERTIFICATE EXECUTED BY THE CONTRACTING OFFICER PURSUANT TO ASPR 1-705.4 (B) (I), WHICH PROVIDES AS FOLLOWS:

"/I) THIS PROCEDURE IS NOT MANDATORY WHERE THE CONTRACTING OFFICER CERTIFIES IN WRITING THAT AWARD MUST BE MADE WITHOUT DELAY, INCLUDES THIS CERTIFICATION AND SUPPORTING INFORMATION IN THE CONTRACT FILE, AND PROMPTLY FURNISHES A COPY TO THE SBA REPRESENTATIVE.'

IN THAT CONNECTION, IT IS REPORTED THAT THE PARACHUTE FLARES WERE INTENDED TO SUPPORT TACTICAL OPERATIONS TO WHICH A PRIORITY DESIGNATION HAD BEEN ASSIGNED AND THAT A PORTION OF THESE FLARES WERE URGENTLY REQUIRED DUE TO THE NEED TO SUPPORT CURRENT OPERATIONS IN VIET NAM. CONTRACT FOR FURNISHING 41,250 FLARES WAS AWARDED TO THE AMCEL PROPULSION COMPANY ON JUNE 28, 1965.

IN YOUR LETTER OF JUNE 24, 1965, TO THE CONTRACTING OFFICER, YOU STATE:

"WE HEREWITH PROTEST ANY AWARD UNDER THE ABOVE REFERENCED IFB TO ANY OTHER THAN THE LOW BIDDER, SUFFOLK NOVELTY FIREWORKS CO., INC.

"A PRELIMINARY PRE-AWARD SURVEY WAS CONDUCTED BY THE INSPECTOR OF NAVAL MATERIAL, GARDEN CITY, N.Y. ON JUNE 18. AT THIS MEETING WE WERE ADVISED THAT WE SHOULD SUBMIT ALL SUBSTANTIATING DATA BY JUNE 25. ON JUNE 23 WE WERE ADVISED THAT THIS DATA WOULD NOT BE REQUIRED, SINCE A REPORT BY THE INSPECTOR OF NAVAL MATERIAL HAD BEEN SUBMITTED AT 9 A.M., JUNE 23. JUNE 24 AT 11 A.M. WE WERE ASKED BY THE SMALL BUSINESS ADMINISTRATION IF WE WISHED TO FILE FOR A CERTIFICATE OF COMPETENCY, WE REPLIED IN THE AFFIRMATIVE. ON JUNE 24 AT 3:30 P.M. WE WERE ADVISED BY THE SMALL BUSINESS ADMINISTRATION THAT WE WOULD NOT BE PERMITTED TO FILE FOR A CERTIFICATE OF COMPETENCY.

"THE AWARD OF THIS CONTRACT TO OTHER THAN THE LOW BIDDER WOULD COST THE GOVERNMENT AN ADDITIONAL $484,687.50: FURTHER IN PLACING THE LABOR SURPLUS AREA SET-ASIDE THE GOVERNMENT WOULD SPEND AN ADDITIONAL $484,687.50 ON THIS PORTION OF THE AWARD, MAKING A TOTAL UNJUSTIFIED EXPENDITURE OF $969,275.00.

"SUFFOLK NOVELTY FIREWORKS CO., IS FULLY QUALIFIED TO PERFORM ON THIS CONTRACT. IT HAS HELD RESEARCH AND DEVELOPMENT CONTRACTS, AS WELL AS PRODUCTION CONTRACTS, WITH THE DEPARTMENT OF THE NAVY. SUFFOLK NOVELTY FIREWORKS CO., INC. WAS THE DEVELOPER OF THE SIMULATED ATOMIC BOMB FOR THE DEPARTMENT OF THE NAVY.

"SUFFOLK NOVELTY FIREWORKS CO., INC. HAS PERFORMED ALL GOVERNMENT CONTRACTS AWARDED IT SUCCESSFULLY AND ON SCHEDULE.

"THIS PROTEST IS DIRECTED THROUGH THE CONTRACTING OFFICER TO THE COMPTROLLER GENERAL OF THE UNITED STATES.'

IT LONG HAS BEEN AN ESTABLISHED RULE OF OUR OFFICE THAT THE DETERMINATION OF THE CAPABILITIES OF A BIDDER--- INDEPENDENT OF THE AUTHORITY OF THE SBA TO ISSUE A CERTIFICATE OF COMPETENCY--- IS PRIMARILY A 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. IT APPEARS THAT THE REJECTION OF YOUR BID WAS BASED UPON REASONABLE GROUNDS.

THE RECORD BEFORE US AMPLY SUPPORTS THE DETERMINATION OF URGENCY AND THAT THE AWARD MADE TO AMCEL PROPULSION COMPANY WILL ASSURE CONTINUOUS UNINTERRUPTED PRODUCTION OF THE PARACHUTE FLARES WHICH MUST BE FURNISHED TO THE ARMED FORCES IN VIET NAM.

IN VIEW OF THE FOREGOING, WE MUST CONCLUDE THAT THE AWARD MADE IS NOT SUBJECT TO LEGAL OBJECTION BY THIS OFFICE.