B-157446, NOV. 2, 1965

B-157446: Nov 2, 1965

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INC.: REFERENCE IS MADE TO YOUR TELEGRAM OF AUGUST 11. WE HAVE ALSO RECEIVED A COPY OF YOUR LETTER OF SEPTEMBER 28. IN WHICH IT IS ALLEGED THAT A CERTIFICATE OF COMPETENCY (COC). WHICH WAS ISSUED BY THE SMALL BUSINESS ADMINISTRATION (SBA) IN SEPTEMBER 1965. IS NULL AND VOID BECAUSE IT WAS ISSUED AFTER THE SBA'S AUTHORITY AND JURISDICTION ON THIS PROCUREMENT HAD EXPIRED. THAT REJECTION OF ITS LOW BID WAS THEREFORE JUSTIFIED. SINCE GTI IS A SMALL BUSINESS CONCERN THE MATTER OF ITS RESPONSIBILITY WAS REFERRED TO THE SBA FOR A DETERMINATION AS TO WHETHER IT SHOULD ISSUE A COC. WHICH EXTENSION WAS TO HAVE EXPIRED ON SEPTEMBER 20. THE SBA INFORMED THE DEPARTMENT THAT GTI "IS IN CHAPTER 11 WITH APPOINTED RECEIVER" WHO "HAS DONE MUCH TO ASSIST THE FIRM IN ITS FINANCIAL INDEBTEDNESS.

B-157446, NOV. 2, 1965

TO LEAR SIEGLER, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF AUGUST 11, 1965, IN WHICH YOU PROTEST A PROPOSED AWARD OF A CONTRACT TO GUIDANCE TECHNOLOGY, INC. (GTI), FOR REMOTE ATTITUDE INDICATING SYSTEMS UNDER INVITATION FOR BIDS NO. 600- 849-65, ISSUED BY THE NAVY PURCHASING OFFICE (NPO), WASHINGTON NAVY YARD, ON THE GROUNDS THAT GTI DOES NOT MEET DEPARTMENT OF DEFENSE STANDARDS OF RESPONSIBILITY AS SET FORTH IN ASPR 1-903.1. WE HAVE ALSO RECEIVED A COPY OF YOUR LETTER OF SEPTEMBER 28, 1965, TO THE CONTRACTING OFFICER RESPONSIBLE FOR THIS PROCUREMENT, IN WHICH IT IS ALLEGED THAT A CERTIFICATE OF COMPETENCY (COC), WHICH WAS ISSUED BY THE SMALL BUSINESS ADMINISTRATION (SBA) IN SEPTEMBER 1965, IS NULL AND VOID BECAUSE IT WAS ISSUED AFTER THE SBA'S AUTHORITY AND JURISDICTION ON THIS PROCUREMENT HAD EXPIRED.

THE ADMINISTRATIVE RECORD STATES THAT THE CONTRACTING OFFICER DETERMINED IN ACCORDANCE WITH SECTION I, PART 9 OF ASPR, THAT GTI LACKED FINANCIAL RESPONSIBILITY, AND THAT REJECTION OF ITS LOW BID WAS THEREFORE JUSTIFIED. SINCE GTI IS A SMALL BUSINESS CONCERN THE MATTER OF ITS RESPONSIBILITY WAS REFERRED TO THE SBA FOR A DETERMINATION AS TO WHETHER IT SHOULD ISSUE A COC. THE PROCURING ACTIVITY GRANTED THE SBA A 5 DAY EXTENSION OF THE NORMAL 15 DAY COC APPLICATION PROCESSING TIME AFFORDED BY ASPR 1-705.4, WHICH EXTENSION WAS TO HAVE EXPIRED ON SEPTEMBER 20, 1965. THE RECORD DOES NOT INDICATE WHETHER NPO EXPLICITLY GRANTED ANY EXTENSION BEYOND SEPTEMBER 20.

ON SEPTEMBER 16, THE SBA FORWARDED INFORMATION TO THE NAVY DEPARTMENT BY WRITTEN MEMORANDUM "IN ACCORDANCE WITH THE AGREEMENT WITH DOD.' THE SBA INFORMED THE DEPARTMENT THAT GTI "IS IN CHAPTER 11 WITH APPOINTED RECEIVER" WHO "HAS DONE MUCH TO ASSIST THE FIRM IN ITS FINANCIAL INDEBTEDNESS. SOURCES OF FUNDS ARE AS FOLLOWS: WORKING CAPITAL, PROGRESS PAYMENTS, AND SBA LOAN IS POSSIBLE UPON APPROVAL OF PREPRODUCTION EQUIPMENT.

"CAPACITY: THERE ARE NO PRODUCTION PROBLEM IN CONNECTION WITH COC APPLICANT.

"IN EVENT THE REQUEST FOR COC IS WITHDRAWN OR AWARD IS MADE WITHOUT BENEFIT OF COC, PLEASE CONFIRM THE REASONS FOR SUCH ACTION BEING TAKEN.'

IT APPEARS THAT THE ABOVE INFORMATION MAY HAVE BEEN SUBMITTED TO ACCORD WITH ACTIONS CONTEMPLATED BY ASPR 1-705.4, WHICH IN SUBPARAGRAPHS D AND E PROVIDES THAT IT IS THE POLICY OF DOD TO ENDEAVOR TO REACH AGREEMENT WITH THE SBA REGARDING THE LACK OF CAPACITY OR CREDIT OF A SMALL BUSINESS CONCERN; THAT EVERY EFFORT SHOULD BE MADE TO RESOLVE ANY DIFFERENCES BETWEEN THE SBA AND THE MILITARY DEPARTMENT THROUGH A COMPLETE EXCHANGE OF PRE-AWARD SURVEY INFORMATION; AND THAT IF ANY NEW OR ADDITIONAL FACTS WARRANT, THE NEGATIVE DETERMINATION AS TO CAPACITY OR CREDIT SHOULD BE REVERSED. IN ADDITION, SUBPARAGRAPH F PROVIDES THAT THE CONTRACTING OFFICER MAY APPEAL A COC THROUGH HIS DEPARTMENT IF HE HAS SUBSTANTIAL DOUBT AS TO THE ABILITY OF THE CONTRACTOR TO PERFORM.

APPARENTLY THE NAVY DEPARTMENT AND SBA WERE UNABLE TO RESOLVE THEIR DIFFERENCES REGARDING THE ABILITY OF GTI TO PERFORM THE SUBJECT CONTRACT, SINCE THE NEGATIVE ADMINISTRATIVE DETERMINATION AS TO CREDIT DOES NOT APPEAR TO HAVE BEEN REVERSED. ON SEPTEMBER 23, 1965, PURSUANT TO SECTION 8 (B) (7) OF PUBLIC LAW 85-536, 72 STAT. 384, 15 U.S.C. 637, THE SBA CERTIFIED THAT GTI WAS COMPETENT, AS TO CAPACITY AND CREDIT, TO PERFORM THE PROPOSED PROCUREMENT COVERED BY THE SUBJECT IFB. SUBSEQUENTLY, THE NAVY DEPARTMENT DETERMINED THAT IT WOULD NOT APPEAL THE COC, SINCE THE PROPOSED CONTRACT DID NOT APPEAR TO REPRESENT A LOSS CONTRACT AND SINCE NO INFORMATION OTHER THAN THAT ALREADY FURNISHED TO SBA WAS AVAILABLE.

THE 15 DAY PERIOD ALLOTTED FOR PROCESSING A COC APPLICATION 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. B-156619, DATED JUNE 9, 1965. IN THE INSTANT CASE, IT APPEARS THE THE PROCUREMENT OFFICE CHOSE TO FORMALLY EXTEND THE TIME ALLOWED SBA UNTIL SEPTEMBER 20, AND THEN TO WAIT AN ADDITIONAL 3 DAYS UNTIL SEPTEMBER 23 TO RECEIVE SBA'S ADVICE. IN THESE CIRCUMSTANCES, WE FIND NO REASON TO DISAGREE WITH THE NAVY DEPARTMENT'S ACCEPTANCE OF THE SEPTEMBER 23 COC AS ESTABLISHING GTI'S THEN PRESENT CREDIT AND CAPACITY. 38 COMP. GEN. 289; B-156288, JULY 29, 1965.

IN VIEW OF THE FOREGOING, WE MUST CONCLUDE THAT THE PRESENT RECORD AFFORDS NO LEGAL BASIS FOR OBJECTING TO THE CONTRACT WHICH NPO PROPOSES TO AWARD TO GTI. ACCORDINGLY, YOUR PROTEST IS DENIED.