B-160748, MAR. 9, 1967

B-160748, MAR. 9, 1967

TO ELROD COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM OF JANUARY 23, 1967, PROTESTING THE AWARD OF A CONTRACT BY DEFENSE PERSONNEL SUPPORT CENTER (DPSC), DEFENSE SUPPLY AGENCY (DSA) TO UNITED GLOVER BOBBIN COMPANY (UNITED) FOR THE MANUFACTURE AND DELIVERY OF 2,474,700 TENT POLE SECTIONS UNDER INVITATION FOR BIDS (IFB) NO. DSA-100-67-B-0599. YOU ALSO REQUEST THAT THE AWARD BE SET ASIDE UNTIL QUESTIONS PERTAINING TO UNITED'S "PERFORMANCE HISTORY AND CURRENT ABILITY TO PERFORM AS WELL AS QUESTIONS INVOLVING NUMEROUS DELAYS AND IFB REQUIREMENTS ON THIS CONTRACT OVER A PERIOD OF SIX MONTHS HAVE BEEN RESOLVED.'

ON MAY 7, 1966, IFB NO. DSA-100-66-1734 WAS ISSUED FOR 2,984,400 TENT POLE SECTIONS. UNITED'S WAS THE LOWEST OF THE FOUR RESPONSIVE BIDS RECEIVED, BUT WAS REJECTED AS A RESULT OF A RECOMMENDATION OF "NO AWARD" ON A PREAWARD PLANT SURVEY DATED JUNE 14, 1966. PURSUANT TO ASPR 1-705.4 (C), THE MATTER WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR A DETERMINATION AS TO UNITED'S CAPACITY AND CREDIT. ON JULY 7, 1966, SBA DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY (COC). IT WAS THEN INTENDED TO AWARD THE CONTRACT TO YOU, THE NEXT LOWEST RESPONSIVE BIDDER. HOWEVER, IT WAS DECIDED THAT ONLY ABOUT 2.5 MILLION TENT POLE SECTIONS WERE REQUIRED INSTEAD OF THE ADVERTISED NUMBER OF 2,984,400, AND SINCE BOTH YOU AND WEST COAST FACTORS, THE THIRD LOW BIDDER, HAD CONDITIONED YOUR BIDS WITH MINIMUM QUANTITIES, THE AWARD COULD NOT BE MADE TO EITHER OF YOU. THE BID OF THE FOURTH RESPONSIVE BIDDER, WOODWORKERS EQUIPMENT AND SUPPLY COMPANY, WAS APPROXIMATELY 100 PERCENT HIGHER THAN PRIOR AWARD PRICES. CONSEQUENTLY, THE IFB WAS CANCELLED.

ON AUGUST 17, 1966, IFB NO. DSA-100-67-B-0321 WAS ISSUED FOR 409,178 TENT POLE SECTIONS, WITH A BID OPENING DATE OF SEPTEMBER 6, 1966. ON AUGUST 24, 1966, A REQUEST WAS RECEIVED FROM A DIVISION OF DPSC THAT THE IFB BE AMENDED TO INCREASE THE QUANTITY TO 449,578 UNITS. ON AUGUST 26, 1966, DSA HEADQUARTERS DIRECTED THAT THE IFB BE AMENDED TO A QUANTITY IN EXCESS OF TWO MILLION AND THAT THE BID OPENING DATE BE EXTENDED IF NECESSARY. THE ENTIRE IFB WAS CANCELLED ON AUGUST 31, 1966, BY DIRECTION OF THE DIRECTOR, DSA.

ON SEPTEMBER 30, 1966, IFB NO. DSA-100-67-B-0599 (THE INSTANT PROCUREMENT) WAS ISSUED FOR 2,474,700 SECTIONS. ON THAT DATE YOU PROTESTED TO THIS OFFICE THE SOLICITATION OF BIDS, ALLEGING THAT THE PROCUREMENT SHOULD HAVE BEEN AWARDED TO YOU AS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER UNDER IFB NO. DSA-100-66-1734, DATED MAY 7, 1966. YOUR PROTEST WAS DENIED BY OUR DECISION B-160173, OCTOBER 20,1966. THE BIDS WERE OPENED ON OCTOBER 17, 1966, AND SIX BIDS WERE RECEIVED. THE LOW BIDDER, SOUTHERN WOOD PRODUCTS WAS REJECTED BASED UPON A PREAWARD PLANT SURVEY RECOMMENDATION OF PARTIAL AWARD FOR A QUANTITY LESS THAN THE MAXIMUM BID UPON, AS WELL AS OTHER FACTORS. ON NOVEMBER 2, 1966, ITS BID WAS SUBMITTED TO SBA FOR THE POSSIBLE ISSUANCE OF A COC, BUT THE LOW BIDDER DECLINED TO FILE FOR THE CERTIFICATE. THE NEXT LOW BIDDER, UNITED, WAS ALSO FOUND TO BE NONRESPONSIBLE BASED ON A PREAWARD PLANT SURVEY AND A RECOMMENDATION OF "NO AWARD" DATED NOVEMBER 7, 1966. SINCE THE DEFICIENCIES REVEALED BY THE SURVEY WERE RELATED TO THE QUESTION OF UNITED'S "CAPACITY" TO PERFORM THE CONTRACT, UNITED'S BID WAS REFERRED TO SBA ON NOVEMBER 21, 1966. ON DECEMBER 9, 1966, DPSC RECEIVED ADVICE FROM THE OFFICE OF THE AREA ADMINISTRATOR, SBA, BOSTON, THAT A COC WOULD BE ISSUED TO UNITED. ON THE SAME DATE DPSC REQUESTED THAT THE MATTER BE REFERRED TO SBA'S WASHINGTON, D.C. OFFICE FOR FURTHER CONSIDERATION BECAUSE THE CONTRACTING OFFICER COULD NOT AGREE THAT UNITED WAS A RESPONSIBLE SUPPLIER FOR ANY PORTION OF THE PROCUREMENT. THE CONTRACTING OFFICER'S DETERMINATION WAS BASED UPON UNITED'S THEN CURRENT DELINQUENCIES ON TWO CONTRACTS AWARDED BY DSA FOR ITEMS IDENTICAL TO THOSE INVOLVED IN THE INSTANT PROCUREMENT. THE QUESTION OF AWARD ON THOSE CONTRACTS HAD NOT BEEN REFERRED TO SBA FOR COC ACTION. SBA, WASHINGTON, CONCURRED WITH THE ISSUANCE OF A COC TO UNITED ON THE CURRENT PROCUREMENT. ON DECEMBER 23, 1966, REPRESENTATIVES OF DPSC, INCLUDING THE CONTRACTING OFFICER, MET WITH REPRESENTATIVES OF SBA, AND THE DEPARTMENT OF DEFENSE (INSTALLATIONS AND LOGISTICS) TO REVIEW THE FACTS AND CIRCUMSTANCES WITH RESPECT TO THE ISSUANCE OF A COC TO UNITED. SBA CONSIDERED AND EVALUATED THE OBJECTIONS PRESENTED BY DPSC, BUT FOUND THEM INSUFFICIENT TO WARRANT A DENIAL OF A COC BASED UPON UNITED'S CAPACITY AND CREDIT. ON DECEMBER 28, 1966, THE ASSOCIATE ADMINISTRATOR, SBA, WROTE TO DPSC AS FOLLOWS:

"PURSUANT TO SECTION 8 (B) (7) OF THE SMALL BUSINESS ACT, AS AMENDED, THE SMALL BUSINESS ADMINISTRATION HEREBY CERTIFIES THAT THE SUBJECT SMALL BUSINESS FIRM IS COMPETENT AS TO CAPACITY AND CREDIT, TO PERFORM THE PROPOSED PROCUREMENT COVERED BY THE ABOVE-REFERENCED INVITATION FOR BIDS.'

NOTWITHSTANDING ISSUANCE OF THE COC, REPRESENTATIVES OF DSA AGAIN CONFERRED WITH SBA OFFICIALS AND REQUESTED THAT THE COC BE WITHDRAWN, HOWEVER, SBA REFUSED TO DO SO.

A PROSPECTIVE CONTRACTOR MUST HAVE A SATISFACTORY RECORD OF PERFORMANCE IN ORDER TO BE AWARDED A CONTRACT. ASPR 1-903.1 (III). HOWEVER IF THE CONTRACTING OFFICER DETERMINES THAT A PROSPECTIVE CONTRACTOR DOES NOT HAVE A SATISFACTORY RECORD OF PERFORMANCE AND ALSO DETERMINES THAT THE UNSATISFACTORY RECORD WAS DUE SOLELY TO MATTERS RELATED TO CAPACITY OR CREDIT, THE CASE MUST BE REFERRED TO SBA FOR ITS DETERMINATION AS TO THE PROSPECTIVE CONTRACTOR'S CAPACITY OR CREDIT RELATIVE TO THE CONTRACT THEN TO BE AWARDED. ASPR 1-705.4 (C) (V).

THE TERM "CAPACITY" IS DEFINED BY ASPR 1-705.4 (A) AS FOLLOWS:

" "CAPACITY" MEANS THE OVERALL ABILITY OF A PROSPECTIVE SMALL BUSINESS CONTRACTOR TO MEET QUALITY, QUANTITY, AND TIME REQUIREMENTS OF A PROPOSED CONTRACT AND INCLUDES ABILITY TO PERFORM, ORGANIZATION, EXPERIENCE, TECHNICAL KNOWLEDGE, SKILLS,"KNOW-HOW," TECHNICAL EQUIPMENT, AND FACILITIES OR THE ABILITY TO OBTAIN THEM.'

SINCE A COC CERTIFIES THAT A PROSPECTIVE CONTRACTOR'S CAPACITY AND CREDIT ARE SUFFICIENT TO PERFORM THE CONTRACT, A CONTRACTING OFFICER IS PRECLUDED FROM USING ANY OF THE ELEMENTS COVERED BY THE CERTIFICATE AS A BASIS FOR A DETERMINATION OF NONRESPONSIBILITY. HOWEVER, HE IS NOT PRECLUDED FROM MAKING A FINDING OF NONRESPONSIBILITY ON SOME OTHER BASIS, INCLUDING THAT OF A CONSISTENT RECORD OF DEFAULT NOT ATTRIBUTABLE TO THE PROSPECTIVE CONTRACTOR'S CAPACITY OR CREDIT.

37 COMP. GEN. 676,678. THE UNSATISFACTORY RECORD COULD BE DUE TO LACK OF PERSEVERENCE, TENACITY OR INTEGRITY, ALL OF WHICH GO TO THE QUESTION OF WHETHER THE PROSPECTIVE CONTRACTOR WILL PERFORM, RATHER THAN WHETHER HE CAN PERFORM. 43 COMP. GEN. 298, 300; B-148124, APRIL 13, 1962. ALTHOUGH UNITED HAD BEEN DELINQUENT ON TWO DSA CONTRACTS, THE CONTRACTING OFFICER DETERMINED THAT THE DELINQUENCIES WERE DUE TO FACTORS RELATING TO CAPACITY OR CREDIT AND WERE, THEREFORE, COVERED BY THE COC. HE THEN MADE A DETERMINATION OF RESPONSIBILITY PURSUANT TO ASPR 1-904 FOR FACTORS NOT COVERED BY THE COC AND AWARDED THE CONTRACT TO UNITED ON JANUARY 16, 1967.

INSOFAR AS IS HERE PERTINENT, SECTION 8 (B) OF THE SMALL BUSINESS ACT OF 1958, AS AMENDED, 15 U.S.C 637 (B), PROVIDES AS FOLLOWS:

"IT SHALL ALSO BE THE DUTY OF THE (SMALL BUSINESS) ADMINISTRATION AND IT IS EMPOWERED, WHENEVER IT DETERMINES SUCH ACTION IS NECESSARY--

"/7) TO CERTIFY TO GOVERNMENT PROCUREMENT OFFICERS, AND OFFICERS ENGAGED IN THE SALE AND DISPOSAL OF FEDERAL PROPERTY, WITH RESPECT TO THE COMPETENCY, AS TO CAPACITY AND CREDIT, OF ANY SMALL-BUSINESS CONCERN OR GROUP OF SUCH CONCERNS TO PERFORM A SPECIFIC GOVERNMENT CONTRACT. IN ANY CASE IN WHICH A SMALL-BUSINESS CONCERN OR GROUP OF SUCH CONCERNS HAS BEEN CERTIFIED BY OR UNDER THE AUTHORITY OF THE ADMINISTRATION TO BE A COMPETENT GOVERNMENT CONTRACTOR WITH RESPECT TO CAPACITY AND CREDIT AS TO A SPECIFIC GOVERNMENT CONTRACT, THE OFFICERS OF THE GOVERNMENT HAVING PROCUREMENT OR PROPERTY DISPOSAL POWERS ARE DIRECTED TO ACCEPT SUCH CERTIFICATION AS CONCLUSIVE, AND ARE AUTHORIZED TO LET SUCH GOVERNMENT CONTRACT TO SUCH CONCERN OR GROUP OF CONCERNS WITHOUT REQUIRING IT TO MEET ANY OTHER REQUIREMENT WITH RESPECT TO CAPACITY AND CREDIT * * *"

IN VIEW OF THE ABOVE STATUTORY PROVISION, WE HAVE CONCLUDED IT WOULD BE IMPROPER FOR THIS OFFICE TO REVIEW DETERMINATIONS OF THE SMALL BUSINESS ADMINISTRATION AS TO A FIRM'S CAPACITY OR CREDIT. B 151977, OCTOBER 3, 1963; B-152831, JANUARY 8, 1964; B-155392, NOVEMBER 9, 1964. THEREFORE, OUR REVIEW OF THE INSTANT PROCUREMENT MUST BE LIMITED TO THOSE MATTERS WHICH DO NOT FALL WITHIN THE SCOPE OF THE CERTIFICATE OF COMPETENCY. BASED UPON OUR REVIEW OF THE RECORD, WE FIND NO BASIS ON WHICH TO QUESTION UNITED'S RESPONSIBILITY FOR ANY REASON UNRELATED TO ITS CAPACITY TO PERFORM THE CONTRACT, NEITHER DOES IT APPEAR THAT YOU HAVE RAISED ANY QUESTION OTHER THAN UNITED'S CAPACITY. ACCORDINGLY, WE FIND NO BASIS ON WHICH TO QUESTION THE VALIDITY OF THE CONTRACT AWARDED TO UNITED GLOVER BOBBIN COMPANY, AND YOUR PROTEST MUST THEREFORE BE DENIED.