B-157871, JAN. 5, 1966

B-157871: Jan 5, 1966

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TO ASTRO CLEANING AND PACKAGING CORP.: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 14. FIFTY-TWO POTENTIAL BIDDERS WERE SOLICITED AND THE PROCUREMENT WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY. WERE RECEIVED: TABLE BIDDER AMOUNT THOMPSON CONTROLS. 000.00 THE LOW BID OF THOMPSON WAS DETERMINED TO BE NONRESPONSIVE. IT IS ADMINISTRATIVELY REPORTED THAT FOR THE PURPOSE OF DETERMINING THE RESPONSIBILITY OF YOUR FIRM (ASTRO). A PREAWARD SURVEY WAS CONDUCTED BY NASA REPRESENTATIVES AT YOUR FACILITY. THE RESULTS OF THIS SURVEY CONVINCED THE CONTRACTING OFFICER THAT YOUR FIRM WAS DEFICIENT IN CERTAIN AREAS INCLUDING INADEQUATE LABOR FORCE. A PREAWARD SURVEY WAS CONDUCTED BY NASA REPRESENTATIVES AT THE KAHN PLANT FACILITY AT HARTFORD.

B-157871, JAN. 5, 1966

TO ASTRO CLEANING AND PACKAGING CORP.:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 14, 1965, WITH ENCLOSURES, PROTESTING AGAINST AWARD OF CONTRACT NO. NAS10-2931, DATED SEPTEMBER 21, 1965, TO KAHN AND COMPANY, INC., UNDER INVITATION FOR BIDS NO. CC-638-5, ISSUED BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, JOHN F. KENNEDY SPACE CENTER, FLORIDA.

THE SUBJECT INVITATION, AS AMENDED, ISSUED ON JUNE 30, 1965, CALLED FOR THE MANUFACTURE, FABRICATION, ASSEMBLY, CLEANING, TESTING AND DELIVERY OF TWENTY-FIVE ITEMS OF ELECTRO-PNEUMATIC DISTRIBUTION PANELS AND MISCELLANEOUS COMPONENTS FOR THE SATURN PROGRAM. FIFTY-TWO POTENTIAL BIDDERS WERE SOLICITED AND THE PROCUREMENT WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY. AT BID OPENING ON AUGUST 11, 1965, THE FOLLOWING THREE BIDS, ALL FROM SMALL BUSINESS CONCERNS, WERE RECEIVED:

TABLE

BIDDER AMOUNT

THOMPSON CONTROLS, INC. $343,902.00

ASTRO CLEANING AND PACKAGING CORP. 647,672.60

KAHN AND COMPANY, INC. 725,000.00

THE LOW BID OF THOMPSON WAS DETERMINED TO BE NONRESPONSIVE. REJECTION OF THE THOMPSON BID PLACED THE NEXT LOW BID OF YOUR COMPANY IN LINE FOR CONSIDERATION.

IT IS ADMINISTRATIVELY REPORTED THAT FOR THE PURPOSE OF DETERMINING THE RESPONSIBILITY OF YOUR FIRM (ASTRO), A PREAWARD SURVEY WAS CONDUCTED BY NASA REPRESENTATIVES AT YOUR FACILITY. THE RESULTS OF THIS SURVEY CONVINCED THE CONTRACTING OFFICER THAT YOUR FIRM WAS DEFICIENT IN CERTAIN AREAS INCLUDING INADEQUATE LABOR FORCE, EQUIPMENT, MANAGEMENT AND ENGINEERING STAFF,"CLEAN ROOM" EFFICIENCY, AND FINANCIAL STABILITY.

THEREAFTER YOU APPLIED FOR A CERTIFICATE OF COMPETENCY FROM THE SMALL BUSINESS ADMINISTRATION BUT IN A COMMUNICATION DATED SEPTEMBER 17, 1965, TO THE CONTRACTING OFFICER AT THE KENNEDY SPACE CENTER, THE SMALL BUSINESS ADMINISTRATION (ATLANTA REGIONAL OFFICE) STATED THAT THE SBA DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY TO YOU FOR THIS PROCUREMENT. AFTER ELIMINATION OF THE THOMPSON AND ASTRO BIDS, THE BID OF KAHN AND COMPANY, INC., BECAME ELIGIBLE FOR CONSIDERATION. A PREAWARD SURVEY WAS CONDUCTED BY NASA REPRESENTATIVES AT THE KAHN PLANT FACILITY AT HARTFORD, CONNECTICUT, AND THIS FIRM WAS FOUND TO BE TECHNICALLY RESPONSIVE AND FINANCIALLY RESPONSIBLE TO PERFORM THE CONTRACT. SUCH FINDING WAS IN CONSONANCE WITH NATIONAL AERONAUTICS AND SPACE ADMINISTRATION PROCUREMENT REGULATION 1.904 WHICH REQUIRES THAT PRIOR TO THE AWARD OF A CONTRACT TO ANY PERSON OR FIRM, THAT THE CONTRACTING OFFICER FIRST DETERMINE THAT SUCH PERSON OR FIRM IS RESPONSIBLE WITHIN THE MEANING OF NASA PROCUREMENT REGULATION 1.902 AND 1.903.

YOUR FIRM REQUESTED AND WAS GRANTED A CONFERENCE AT KENNEDY SPACE CENTER ON SEPTEMBER 21, 1965. HOWEVER, NO EVIDENCE WAS PRESENTED BY YOU TO CHANGE KENNEDY SPACE CENTER'S PRIOR DETERMINATION THAT ASTRO WAS NOT RESPONSIBLE IN TERMS OF CAPACITY AND CREDIT. THE CONTRACTING OFFICER REPORTS THAT THE MEETING WITH ASTRO WAS ADJOURNED AT APPROXIMATELY 3:30 P.M. ON SEPTEMBER 21, 1965. THEREAFTER, AT APPROXIMATELY 4:15 P.M. THAT SAME DAY, AWARD OF CONTRACT WAS MADE TO KAHN AND COMPANY, INC., AND ASTRO WAS SO NOTIFIED ON SEPTEMBER 22, 1965.

IT IS WELL ESTABLISHED BOTH BY DECISIONS OF THE COURTS AND OUR OFFICE, THAT AN ADMINISTRATIVE DETERMINATION OF THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR IS CONCLUSIVE UNLESS IT IS SHOWN THAT SUCH DETERMINATION WAS NOT BASED ON SUBSTANTIAL EVIDENCE DEMONSTRATING THE BIDDER'S LACK OF RESPONSIBILITY.

THE PROJECTION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT. FRIEND V. LEE, 221 F.2D 96. WHILE SUCH JUDGMENT SHOULD BE BASED ON FACT AND SHOULD BE ARRIVED AT IN GOOD FAITH, IT MUST PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICES INVOLVED SINCE THEY ARE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, THEY MUST BEAR THE BRUNT OF ANY DIFFICULTY EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY AND THEY MUST MAINTAIN THE DAY-TO-DAY RELATIONS WITH THE CONTRACTOR ON BEHALF OF THE GOVERNMENT. FOR THESE REASONS IT WOULD BE UNREASONABLE TO SUPERIMPOSE THE JUDGMENT OF OUR OFFICE OR ANY OTHER AGENCY OR GROUP ON THAT OF THE CONTRACTING OFFICIALS IN ANY CASE IN WHICH THERE APPEARS TO BE A SUBSTANTIAL BASIS FOR THE ACTIONS OF THOSE OFFICIALS. THE FACTS SHOWN BY THE FILE IN THE INSTANT MATTER INDICATE THAT THERE WAS A SUBSTANTIAL BASIS FOR THE ACTIONS OF THE ADMINISTRATIVE OFFICERS IN REJECTING YOUR BID AND THAT SUCH ACTIONS WERE TAKEN IN GOOD FAITH, AFTER CAREFUL CONSIDERATION, FOR THE PURPOSE OF SERVING THE BEST INTERESTS OF THE GOVERNMENT. WE HAVE HELD THAT THE REFUSAL OF THE SMALL BUSINESS ADMINISTRATION TO ISSUE A CERTIFICATE OF COMPETENCY TO A SMALL BUSINESS BIDDER MUST BE REGARDED AS PERSUASIVE WITH RESPECT TO THE COMPETENCY OR CREDIT OF THE BIDDER CONCERNED. 39 COMP. GEN. 705. WHEN THE ISSUANCE OF A CERTIFICATE OF COMPETENCY IS DENIED, THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY MUST BE REGARDED AS HAVING BEEN AFFIRMED.

IN YOUR LETTER OF PROTEST DATED OCTOBER 14, 1965, YOU LISTED 14 QUESTIONS PRIMARILY DEALING WITH CERTAIN ADMINISTRATIVE PROCEDURES OF THE PROCURING AGENCY THAT YOU DESIRED ANSWERED. FOR YOUR INFORMATION WE ARE SUPPLYING THE CONTRACTING OFFICER'S ANSWERS TO YOUR QUESTIONS:

"THE FOLLOWING REPLYS ARE SEQUENTIAL TO THE QUESTIONS POSED IN ASTRO'S LETTER OF PROTEST:

"1. IT IS NOT CLEAR WHAT ASTRO MEANS BY THE TERM "CABLING" SUPPLY CONTRACT. THE SYNOPSIS OF THE INVITATION PROVIDES A DETAILED DEFINITION OF THE SCOPE OF WORK.

"2. DURING THE MEETING WITH ASTRO ON SEPTEMBER 21, 1965, SPECIFIC EXAMPLES OF DEFICIENCIES SUCH AS THOSE SHOWN ABOVE WERE CITED.

"3. THE SAME TECHNICAL REPRESENTATIVES, PRODUCTION SPECIALIST, AND PRICE ANALYST ATTENDED BOTH SURVEYS. ON THE KAHN SURVEY, THE QUALITY ASSURANCE DIVISION HAD A REPRESENTATIVE IN THE HARTFORD AREA AND ELECTED NOT TO SEND ANOTHER REPRESENTATIVE. A DIFFERENT PRE-AWARD SURVEY OFFICER CONDUCTED THE KAHN SURVEY DUE TO WORK ASSIGNMENTS EXISTING AT THE TIME.

"4. THE USE OF TWO SLIGHTLY DIFFERENT SURVEY TEAMS HAS NO BEARING ON WHETHER A PROPER DETERMINATION OF CAPABILITIES CAN BE MADE. OBJECTIVE SURVEYS WERE CONDUCTED IN BOTH INSTANCES TO DETERMINE CAPABILITY TO PERFORM THE PROPOSED CONTRACT.

"5. THE REQUIREMENT IS NOT FOR "NEW CONSTRUCTION" BUT FOR THE MANUFACTURE AND DELIVERY OF HARDWARE. HAD ON-SITE INSTALLATION BEEN A PART OF THE REQUIREMENT, THAT PORTION OF THE EFFORT WOULD HAVE BEEN PROPERLY CLASSIFIED AS CONSTRUCTION AND COVERED BY PROVISIONS INCIDENT TO CONSTRUCTION CONTRACTS. IF THERE HAD BEEN ANY DOUBT AS TO THE PROPER CLASSIFICATION, THE MATTER WOULD HAVE BEEN REFERRED TO THE KSC INDUSTRIAL RELATIONS OFFICE FOR DETERMINATION.

"6. THE AWARDED CONTRACT IS NOT SUBJECT TO THE DAVIS-BACON ACT. (SEE 5 ABOVE)

"7. AT THE TIME ASTRO REQUESTED PERMISSION TO PRESENT THEIR CASE, IT WAS AGREED THAT WE WOULD MEET ON SEPTEMBER 21, 1965; AND THEY WOULD BE ADVISED OF KSC'S DETERMINATION ON SEPTEMBER 22, 1965. THE MEETING CONVENED AT 2:00 P.M. AND CLOSED AT APPROXIMATELY 3:30 P.M. AFTER THE ASTRO REPRESENTATIVES WERE EXCUSED, THE SURVEY TEAM REMAINED FOR DISCUSSION. WAS UNANIMOUSLY AGREED THAT ASTRO HAD NOT PRESENTED EVIDENCE WHICH DEMONSTRATED THEIR CAPABILITY TO PERFORM THE PROPOSED CONTRACT OR WHICH WARRANTED FURTHER EXAMINATION OF DISCUSSION. AWARD WAS MADE TO KAHN AT APPROXIMATELY 4:15 P.M.

"8. KSC DID NOT SUGGEST NOR WAS IT CONTEMPLATED THAT AWARD COULD BE MADE ONLY TO A CONTRACTOR PRESENTLY FABRICATING PANELS. AS A MATTER OF-COURSE, IT IS ALWAYS CONTEMPLATED THAT CAPABILITY TO PERFORM WILL HAVE TO BE DEMONSTRATED.

"9. KAHN FABRICATES PANELS ON A CONTINUAL BASIS. THEY PRESENTLY HAVE PANELS IN PRODUCTION OTHER THAN THE KSC REQUIREMENT.

"10. QUESTION SHOULD BE DIRECTED TO SBA. NO COMMENT.

"11. THE STATEMENT BY THE KSC SURVEY TEAM MEMBER WAS TO THE EFFECT THAT HE COULD NOT SEE HOW ASTRO OR ANY OTHER FIRM COULD ACCOMPLISH THE VOLUME OF SBA PAPERWORK WITHIN THE FIVE DAYS ALLOWED.

"12. QUESTION SHOULD BE DIRECTED TO SBA. NO COMMENT.

"13.THE SURVEY TEAMS ARE KNOWLEDGEABLE OF THE CONTENTS OF THE INVITATION AND WHAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE FOR. THE TWO TECHNICAL REPRESENTATIVES ARE THE TWO PROJECT ENGINEERS WHO HAVE SUPERVISED THE TECHNICAL ASPECTS OF THE REQUIREMENT SINCE ITS INCEPTION. THE QUALITY REPRESENTATIVES ARE EXPERIENCED IN COMPONENT AND PANEL ASSEMBLY UNDER CLEAN ROOM CONDITIONS.

"14. CERTAINLY THERE WAS NO PREDETERMINED DECISION, PRIOR TO OR SUBSEQUENT TO BID OPENING, ON WHO WOULD FABRICATE THE PANELS. SOLICITATION, EVALUATION AND AWARD WAS PROCESSED IN ADHERENCE TO THE SPIRIT AND INTENT OF COMPETITIVE BID PROCEDURES AND REGULATIONS. AT THE TIME OF BID OPENING, WE KNEW OF ASTRO'S EXISTENCE AS THEY ARE A SUB- CONTRACTOR TO OUR GSE INSTALLATION CONTRACTOR. THERE WAS A 129 FORM ON FILE ON THOMPSON, BUT NO OTHER INFORMATION WAS AVAILABLE FOR THAT FIRM. THERE WAS NOTHING ON FILE ON KAHN, AND NONE OF THE DIVISION PERSONNEL COULD IDENTIFY THEM. THIS WAS THE FIRST TIME KAHN HAD BID ON A KSC REQUIREMENT.'

IN THE CIRCUMSTANCES, NO LEGAL BASIS EXISTS FOR DISTURBING THE ACTION OF THE ADMINISTRATIVE OFFICIALS AND THUS THERE IS NO PROPER BASIS FOR OBJECTION BY OUR OFFICE TO THE AWARD OF THE PROCUREMENT TO ANOTHER BIDDER. 37 COMP. GEN. 430, 435.