B-162574, JAN. 10, 1968

B-162574, JAN. 10, 1968

BIDDERS - RESPONSIBILITY - SMALL BUSINESS DECISION DENYING PROTEST OF AIRFLOTE, INC. AGAINST REJECTION OF BID FOR AIRCRAFT SHELTERS BY NAVAL AIR SYSTEMS COMMAND. A BIDDER WHO WAS DETERMINED NOT TO BE RESPONSIBLE AS RESULT OF PREAWARD SURVEY AND WHO WAS DETERMINED TO LACK CAPACITY FOR CERTIFICATE OF COMPETENCY BY SBA HAD BID PROPERLY REJECTED SINCE SBA ACTION IN DENIAL OF CERTIFICATE OF COMPETENCY AFFIRMS ADMINISTRATIVE DETERMINATION OF NONRESPONSIBILITY. THEREFORE, REJECTION OF BID WAS NOT IMPROPER.

TO MR. MILTON M. MEYER:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 27, 1967, PROTESTING AGAINST THE REJECTION OF THE BID OF AIRFLOTE, INC., UNDER NAVAL AIR SYSTEMS COMMAND INVITATION FOR BIDS N00019-67-B-0152 COVERING THE PROCUREMENT OF CERTAIN AIRCRAFT SHELTERS.

YOU HAVE PROTESTED THE REJECTION OF YOUR BID, ALLEGING THAT THE SPECIFICATIONS WERE VAGUE AND INDEFINITE AND PREVENTED ACCURATE, INTELLIGENT AND FAIR BIDDING. YOU CONTEND THAT THE COMMAND AWARDED A NEGOTIATED CONTRACT FOR 34 OF THE SHELTERS TO STROMBERG-CARLSON THEREBY REDUCING THE INVITATION QUANTITY FROM 83 TO 49, AND THAT THE SMALL BUSINESS SET-ASIDE RESTRICTION OF THE PROCUREMENT WAS DELETED. LASTLY, YOU CONTEND THAT AIRFLOTE WAS IMPROPERLY DENIED A CERTIFICATE OF COMPETENCY BY THE SMALL BUSINESS ADMINISTRATION, AND THAT WITHOUT FURTHER INVESTIGATION ON THE PART OF THE PROCUREMENT AGENCY AND WITHOUT AN OPPORTUNITY TO CLARIFY OR ELIMINATE THE LACK OF A CERTIFICATE OF COMPETENCY, AN AWARD WAS MADE TO STROMBERG-CARLSON UNDER THE INVITATION FOR THE BALANCE OF THE SHELTERS.

THE RECORD DISCLOSES THAT A PREAWARD SURVEY OF AIRFLOTE WAS CONDUCTED BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT, NEWARK, AT THE REQUEST OF THE COMMAND. THE RESULT OF THE INVESTIGATION WAS A RECOMMENDATION THAT NO AWARD BE MADE TO AIRFLOTE. THE CONTRACTING OFFICER THEN DETERMINED THAT AIRFLOTE WAS NOT RESPONSIBLE TO PERFORM THE PROCUREMENT BECAUSE OF AN UNSATISFACTORY QUALITY ASSURANCE PROGRAM. THE MATTER WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION FOR CONSIDERATION FOR A CERTIFICATE OF COMPETENCY. THE SMALL BUSINESS ADMINISTRATION CONDUCTED AN INVESTIGATION OF THE COMPETENCY OF AIRFLOTE TO PERFORM THE PROCUREMENT. THE INVESTIGATION DISCLOSED THAT THE COMPANY DID NOT HAVE THE NECESSARY QUALITY CONTROL PROGRAM AND THAT ITS PRODUCTION PLANNING AND EQUIPMENT WERE INADEQUATE TO PERFORM THE PROCUREMENT. THE SMALL BUSINESS ADMINISTRATION CERTIFICATE OF COMPETENCY REVIEW COMMITTEE IN NEW YORK THEREFORE RECOMMENDED THAT A CERTIFICATE OF COMPETENCY NOT BE ISSUED TO AIRFLOTE. THE AREA ADMINISTRATOR OF THE SMALL BUSINESS ADMINISTRATION APPROVED THE RECOMMENDATION.

THUS, IN THE CIRCUMSTANCES, IT DOES NOT APPEAR THAT AIRFLOTE WAS IMPROPERLY DENIED A CERTIFICATE OF COMPETENCY. IN THAT CONNECTION, 15 U.S.C. 637 (B) (7) PROVIDES THAT THE SMALL BUSINESS ADMINISTRATION IS AUTHORIZED TO CERTIFY TO GOVERNMENT PROCUREMENT OFFICERS WITH RESPECT TO THE COMPETENCY AS TO CAPACITY AND CREDIT OF ANY SMALL BUSINESS CONCERN TO PERFORM SPECIFIC CONTRACTS AND THAT SUCH CERTIFICATIONS ARE "CONCLUSIVE.' FURTHER, OUR OFFICE HAS HELD THAT THE REFUSAL OF THE SMALL BUSINESS ADMINISTRATION TO ISSUE A CERTIFICATE OF COMPETENCY MUST BE REGARDED AS PERSUASIVE WITH RESPECT TO A BIDDER'S LACK OF COMPETENCY OR CREDIT. COMP. GEN. 705.

SINCE THE SMALL BUSINESS ADMINISTRATION, PURSUANT TO THE AUTHORITY VESTED IN IT BY 15 U.S.C. 637 (B) (7), DETERMINED NOT TO CERTIFY AIRFLOTE'S CAPACITY TO THE PROCUREMENT ACTIVITY, IT MUST BE CONCLUDED THAT THE ADMINISTRATIVE DETERMINATION OF NONRESPONSIBILITY HAS BEEN AFFIRMED. THAT BEING THE CASE, NO LEGAL AWARD COULD HAVE BEEN MADE TO THE COMPANY UNDER 10 U.S.C. 2305 (B) WHICH REQUIRES THAT AWARDS BE MADE TO "RESPONSIBLE BIDDERS" ONLY.

IN VIEW OF THE FOREGOING, THE REJECTION OF THE AIRFLOTE BID DOES NOT APPEAR TO HAVE BEEN IMPROPER. MOREOVER, UNDER ARMED SERVICES PROCUREMENT REGULATION 1-705.4 (C), THE CONTRACTING AGENCY IS NOT REQUIRED TO DELAY AN AWARD BEYOND THE DATE THE SMALL BUSINESS ADMINISTRATION COMPLETED ITS ACTION UNDER THE CERTIFICATE OF COMPETENCY PROCEDURE.

SINCE AIRFLOTE WAS NOT LEGALLY ENTITLED TO AN AWARD IN THE CIRCUMSTANCES, THE OTHER GROUNDS OF PROTEST NEED NOT BE CONSIDERED.