B-162596, JAN. 24, 1968

B-162596: Jan 24, 1968

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WHERE DETERMINATION THAT BIDDER LACKED RESPONSIBILITY AFTER TWO PREAWARD SURVEYS WERE CONDUCTED AND MATTER WAS REFERRED TO SBA BUT BIDDER WITHDREW APPLICATION FOR CERTIFICATE OF COMPETENCY. THERE IS NO BASIS FOR DISTURBING AWARD. GRUBER: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 29. 420 PER UNIT WAS THE LOWEST RESPONSIVE BID RECEIVED UNDER THE INVITATION. WHICH REQUIRES THAT CONTRACTS SHALL BE AWARDED ONLY TO PROSPECTIVE CONTRACTORS WHICH HAVE BEEN AFFIRMATIVELY DETERMINED TO BE RESPONSIBLE. INDICATED THAT RAPID ELECTRIC WAS NOT A RESPONSIBLE BIDDER WITH REFERENCE TO THE PRESENT PROCUREMENT AND CONCLUDED WITH A RECOMMENDATION OF NO AWARD. THE DETERMINATION OF NONRESPONSIBILITY WAS BASED.

B-162596, JAN. 24, 1968

BIDDERS - RESPONSIBILITY - SMALL BUSINESS DECISION DENYING PROTEST OF RAPID ELECTRIC CO., INC., AGAINST REJECTION OF BID FOR WELDING MACHINES FOR NAVY UNDER 100 PERCENT SMALL BUSINESS SET ASIDE PROCUREMENT. WHERE DETERMINATION THAT BIDDER LACKED RESPONSIBILITY AFTER TWO PREAWARD SURVEYS WERE CONDUCTED AND MATTER WAS REFERRED TO SBA BUT BIDDER WITHDREW APPLICATION FOR CERTIFICATE OF COMPETENCY, DETERMINATION MUST BE REGARDED AS HAVING BEEN BASED ON SUBSTANTIAL EVIDENCE. THEREFORE, THERE IS NO BASIS FOR DISTURBING AWARD.

TO MR. IRVING M. GRUBER:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 29, 1967, PROTESTING, ON BEHALF OF RAPID ELECTRIC CO., INC. (RAPID ELECTRIC), AGAINST THE REJECTION OF ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. N00600-67-B- 1219, ISSUED ON JUNE 26, 1967, BY THE UNITED STATES NAVY PURCHASING OFFICE, WASHINGTON, D.C.

THE INVITATION, A 100-PERCENT SMALL BUSINESS SET-ASIDE, SOLICITED BIDS FOR THE PURCHASE OF 10 LIQUID-COOLED WELDING MACHINES TO BE MANUFACTURED IN ACCORDANCE WITH THE PERFORMANCE SPECIFICATIONS INCORPORATED THEREIN. RAPID ELECTRIC'S BID OF $3,420 PER UNIT WAS THE LOWEST RESPONSIVE BID RECEIVED UNDER THE INVITATION.

IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1 902, WHICH REQUIRES THAT CONTRACTS SHALL BE AWARDED ONLY TO PROSPECTIVE CONTRACTORS WHICH HAVE BEEN AFFIRMATIVELY DETERMINED TO BE RESPONSIBLE, THE CONTRACTING OFFICER REQUESTED A COMPLETE PREAWARD SURVEY TO DETERMINE WHETHER RAPID ELECTRIC POSSESSED THE NECESSARY RESPONSIBILITY TO PERFORM THE ANTICIPATED CONTRACT. IN THIS REGARD, THE CONTRACTING OFFICER SPECIFICALLY REQUESTED THAT "PARTICULAR EMPHASIS * * * BE PLACED IN THE POTENTIAL CONTRACTOR'S TECHNICAL RESPONSIBILITY SINCE THREE OTHER FIRMS ATTEMPTING TO PRODUCE THIS EQUIPMENT FOR THE FIRST TIME EXPERIENCED DIFFICULTY AND DELAY IN SURMOUNTING TECHNICAL PROBLEMS.'

THE PREAWARD SURVEY, CONDUCTED AT RAPID ELECTRIC'S FACILITY LOCATED AT 1300 HERSCHELL STREET, BRONX, NEW YORK, INDICATED THAT RAPID ELECTRIC WAS NOT A RESPONSIBLE BIDDER WITH REFERENCE TO THE PRESENT PROCUREMENT AND CONCLUDED WITH A RECOMMENDATION OF NO AWARD. THE DETERMINATION OF NONRESPONSIBILITY WAS BASED, IN PART, UPON EVIDENCE THAT RAPID ELECTRIC DID NOT HAVE SUFFICIENT TECHNICAL DESIGN INFORMATION TO OVERCOME THE PROBLEMS OF HEAT TRANSFER AND PRESSURE VESSEL CONSTRUCTION, OR A MANUFACTURING PLAN INDICATIVE OF PREPARATION FOR THE HANDLING OF VENDOR MATERIALS AND SUBCONTRACTOR COMPONENTS AND SERVICES.

SINCE RAPID ELECTRIC IS A SMALL BUSINESS CONCERN AND THE CONTRACTING OFFICER HAD DETERMINED THAT IT DID NOT POSSESS THE REQUISITE CAPACITY TO PERFORM THE ANTICIPATED CONTRACT UNDER THE CRITERIA SET OUT IN ASPR 1-903, THE ENTIRE MATTER WAS SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION (SBA), WHICH IS RESPONSIBLE FOR THE FINAL DETERMINATION OF A PROSPECTIVE CONTRACTOR'S COMPETENCY, AS TO CAPACITY AND CREDIT, TO PERFORM A SPECIFIC CONTRACT. SEE 15 U.S.C. 637 (B) (7) AND ASPR 1 705.4.

PRIOR TO A FINAL DETERMINATION BY SBA OF RAPID ELECTRIC'S COMPETENCY TO PERFORM THE ANTICIPATED CONTRACT, YOU PROTESTED THE CONTRACTING OFFICER'S NEGATIVE DETERMINATION OF RESPONSIBILITY ON THE GROUND THAT NO INSPECTION HAD BEEN MADE OF THE FACILITY WHERE RAPID ELECTRIC INTENDED TO MANUFACTURE THE PROCUREMENT ITEM. SPECIFICALLY, YOU ALLEGED THAT THE PREAWARD SURVEY HAD BEEN CONDUCTED AT RAPID ELECTRIC'S NEW YORK FACILITY, WHEREAS, IN THE INVITATION, RAPID ELECTRIC HAD STATED THAT THE PROCUREMENT ITEMS WOULD BE MANUFACTURED AT ITS FACILITY IN BROOKFIELD, CONNECTICUT. HOWEVER, WE NOTE THAT RAPID ELECTRIC STATED ON PAGE 21 OF ITS BID AS FOLLOWS: "/2) NAME OF PRINCIPAL MANUFACTURER (NOT DEALER) OF THE SUPPLIES:

RAPID ELECTRIC CO., INC. "/3) PLACE OF PRINCIPAL MANUFACTURE OF SUPPLIES OR PERFORMANCE OF SERVICES:

1300 HERSCHELL ST. BRONX, NEW YORK 10461 (STREET ADDRESS) (CITY) (COUNTY) (STATE) "/4) LOCATION WHERE SUPPLIES WILL BE INSPECTED AND NAME OF COMPANY:

GRAYSBRIDGE ROAD, BROOKFIELD, CONN. (STREET ADDRESS) (CITY) (COUNTY) (STATE)

SAME RAPID ELECTRIC CO. (NAME OF COMPANY) "/5) LOCATION OF CONTRACTOR'S OFFICE FROM WHICH THE CONTRACT WILL BE ADMINISTERED N.Y. ADDRESS ;,

AS A RESULT OF YOUR PROTEST, THE CONTRACTING OFFICER REQUESTED THAT A PREAWARD SURVEY BE CONDUCTED AT RAPID ELECTRIC'S BROOKFIELD, CONNECTICUT, FACILITY. THE RESULTS OF THE SECOND SURVEY WERE AS FOLLOWS:

"B. DURING THE COURSE OF THE BASIC SURVEY THE BIDDER'S REPRESENTATIVE INDICATED THAT THE ENGINEERING EFFORT WOULD BE ACCOMPLISHED AT THE BIDDER'S FACILITY IN BROOKEFIELD, CONNECTICUT. HOWEVER, A SECONDARY SURVEY CONDUCTED AT BROOKEFILED, BY BRIDGEPORT DCAS PERSONNEL, INDICATED ONLY THE AVAILABILITY OF A SUITABLE PRODUCTION FACILITY. THE BIDDER'S PERSONNEL AT THE SECONDARY SITE STATED THAT MATERIAL CONTROLS, PLANT SCHEDULING, AND ENGINEERING CONTROLS WERE ADMINISTERED BY THE NEW YORK FACILITY.

"C. THE DCASR-NY SURVEY TEAM AGAIN VISITED THE NEW ROCHELLE, N.Y. FACILITY IN THE SINCERE EFFORT TO GIVE THE BIDDER A THIRD OPPORTUNITY TO CLARIFY HIS PLANNING FOR THE ACCOMPLISHMENT OF THIS SPECIFIC PROCUREMENT.

"D. BIDDER WAS UNABLE TO PRESENT VERIFIABLE EVIDENCE, TO THE DCASR NY SURVEY TEAM, THAT HE WAS TECHNICALLY COMPETENT TO HANDLE THE SPECIFIC PROBLEMS RELATED TO THE MECHANICS OF THIS END ITEM.

"E. IN ADDITION, HAVING DECLINED TO PERFORM AN ANALYSIS OF THE TECHNICAL REQUIREMENTS OF THIS PROCUREMENT, BIDDER WAS UNABLE TO PRESENT A PHASED PLAN FOR COMPLETION OF THE PRODUCTION ASPECTS OF THIS PROPOSED AWARD.' VIEW OF THE FOREGOING, IT WAS RECOMMENDED THAT "NO AWARD" BE MADE TO RAPID ELECTRIC.

WE ARE ADVISED THAT THE CONTRACTING OFFICER THEN RESUBMITTED TO SBA THE ISSUE OF RAPID ELECTRIC'S COMPETENCY TO PERFORM THE CONTRACT. HOWEVER, ON JANUARY 4, 1968, SBA ADVISED THE PROCUREMENT ACTIVITY THAT BY LETTER DATED DECEMBER 28, 1967, THE COUNSEL FOR RAPID ELECTRIC HAD WITHDRAWN THAT FIRM'S APPLICATION FOR A CERTIFICATE OF COMPETENCY AND, THEREFORE, THE MATTER WAS CLOSED AS OF THAT DATE.

IN OUR VIEW, THE WITHDRAWAL OF RAPID ELECTRIC'S APPLICATION FOR A CERTIFICATE OF COMPETENCY RENDERED CONCLUSIVE THE ADMINISTRATIVE DETERMINATION OF NONRESPONSIBILITY. A DETERMINATION OF RESPONSIBILITY IS PRIMARILY THE FUNCTION OF THE CONTRACTING OFFICER AND IS NECESSARILY A MATTER OF JUDGMENT INVOLVING A CONSIDERABLE RANGE OF DISCRETION. WHERE SUCH DETERMINATION IS BASED UPON SUBSTANTIAL EVIDENCE, AS IN THE PRESENT CASE, THERE IS NO VALID BASIS UPON WHICH WE MAY SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER. 37 COMP. GEN. 703; ZEPHYR AIRCRAFT CORPORATION V UNITED STATES, 122 CT. CL. 523. UNDER THESE CIRCUMSTANCES, NO LEGAL BASIS EXISTS FOR DISTURBING THE ADMINISTRATIVE ACTIONS TAKEN UNDER THE INVITATION.