B-164199, AUG. 12, 1968

B-164199: Aug 12, 1968

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TO LEHMANN MACHINE COMPANY: REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 2. IT IS REPORTED THAT THE SUBJECT PROCUREMENTS ARE OF SIGNIFICANT DOLLAR VALUE AND CALL FOR THE FURNISHING OF HIGHLY SOPHISTICATED MACHINE TOOLS. REQUEST FOR PROPOSAL (RFP) -0468 WAS ISSUED ON JANUARY 26. RFP - 0462 WAS ISSUED ON FEBRUARY 9. TWO PROPOSALS WERE RECEIVED UNDER RFP -0462 AND THREE PROPOSALS WERE RECEIVED UNDER RFP -0468. YOUR COMPANY WAS THE LOW EVALUATED OFFEROR UNDER BOTH SOLICITATIONS. A PREAWARD SURVEY WAS MADE REGARDING THE CAPABILITY OF YOUR COMPANY TO PERFORM THE PROPOSED CONTRACTS AND IT WAS CONCLUDED THAT YOU WERE NOT A RESPONSIBLE BIDDER WITHIN THE MEANING OF ASPR 1-902. THE AREAS IN WHICH YOUR COMPANY WAS DETERMINED UNSATISFACTORY WERE YOUR TECHNICAL CAPABILITY.

B-164199, AUG. 12, 1968

TO LEHMANN MACHINE COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM OF MAY 2, 1968, AND SUPPLEMENTAL CORRESPONDENCE REGARDING YOUR PROTEST AGAINST THE REJECTION OF YOUR BIDS UNDER REQUESTS FOR PROPOSALS NOS. DAAG11-68-R-0462 AND -0468 ISSUED BY THE CHICAGO PROCUREMENT DETACHMENT, DEPARTMENT OF THE ARMY.

IT IS REPORTED THAT THE SUBJECT PROCUREMENTS ARE OF SIGNIFICANT DOLLAR VALUE AND CALL FOR THE FURNISHING OF HIGHLY SOPHISTICATED MACHINE TOOLS. REQUEST FOR PROPOSAL (RFP) -0468 WAS ISSUED ON JANUARY 26, 1968, AND RFP - 0462 WAS ISSUED ON FEBRUARY 9, 1968. BOTH SOLICITATIONS CALLED FOR THE FURNISHING OF LATHES TOGETHER WITH ACCESSORIES AND SPARE PARTS IN ACCORDANCE WITH REQUIREMENTS AS SET FORTH THEREIN (THREE 19-1/2 INCH HOLLOW SPINDLE LATHES UNDER RFP -0462 AND FIVE 40 INCHES X 40 FEET HEAVY- DUTY ENGINE LATHES UNDER RFP 0468). TWO PROPOSALS WERE RECEIVED UNDER RFP -0462 AND THREE PROPOSALS WERE RECEIVED UNDER RFP -0468. YOUR COMPANY WAS THE LOW EVALUATED OFFEROR UNDER BOTH SOLICITATIONS. A PREAWARD SURVEY WAS MADE REGARDING THE CAPABILITY OF YOUR COMPANY TO PERFORM THE PROPOSED CONTRACTS AND IT WAS CONCLUDED THAT YOU WERE NOT A RESPONSIBLE BIDDER WITHIN THE MEANING OF ASPR 1-902. THE AREAS IN WHICH YOUR COMPANY WAS DETERMINED UNSATISFACTORY WERE YOUR TECHNICAL CAPABILITY, PLANT FACILITIES AND EQUIPMENT, FINANCIAL CAPABILITY, PURCHASING AND SUBCONTRACTING, ABILITY TO MEET DESIRED SCHEDULE AND PERFORMANCE RECORD. ACCORDINGLY, THE MATTER WAS SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR REVIEW AND POSSIBLE ISSUANCE OF CERTIFICATES OF COMPETENCY. BY LETTER DATED MAY 27, 1968, THE SBA ADVISED THE ADMINISTRATIVE OFFICE THAT IT DECLINED TO ISSUE CERTIFICATES OF COMPETENCY UNDER THE INSTANT PROPOSALS.

IN YOUR LETTERS PROTESTING THE DETERMINATION THAT YOU WERE NONRESPONSIBLE YOU ALLEGE THAT THE PREAWARD SURVEY WAS CONDUCTED IN A VERY HASTY AND POOR MANNER. SPECIFICALLY, YOU STATE THAT YOU CANNOT UNDERSTAND WHY YOU WERE FOUND CAPABLE OF PERFORMING THE PROCUREMENT COVERED BY RFP -0472 WHICH CALLED FOR THE FURNISHING OF ONE EACH 16 INCH HOLLOW SPINDLE LATHE AND IMMEDIATELY THEREAFTER FOUND TO BE NONRESPONSIBLE FOR PERFORMANCE OF RFP - 0462 AND RFP -0468. YOU POINT OUT THAT THE MACHINES ON RFP -0462 HAVE BASICALLY THE SAME PARTS AS RFP -0472 WITH VARIATION AS TO SIZE AND SOME PURCHASED ITEMS TO BE INSTALLED. RFP -0472 HAS A 16-INCH HOLE THROUGH THE SPINDLE AND RFP 0462 HAS A 19-1/2 INCH HOLE THROUGH THE SPINDLE. YOU ALSO ALLEGE THAT YOUR PLANT FACILITIES ARE SUFFICIENT TO HANDLE MANY TIMES THE ORDERS UNDER CONSIDERATION. YOU ALSO CONTEND THAT SUFFICIENT CREDIT WOULD BE AVAILABLE IF PROGRESS PAYMENTS WERE MADE. FURTHER, YOU PROTEST THE CONSIDERATION OF THE PREVIOUS DEFAULT IN 1962-63 BY LEHMANN-BRANDES MACHINE COMPANY AS AN ELEMENT IN DETERMINING YOUR RESPONSIBILITY.

IT IS REPORTED ADMINISTRATIVELY THAT THE PROCUREMENTS IN QUESTION ARE OF SIGNIFICANT DOLLAR VALUE, CALL FOR THE FURNISHING OF HIGHLY SOPHISTICATED MACHINE TOOLS WHICH ARE TO BE USED IN SUPPORT OF UNITED STATES OPERATIONS IN SOUTHEAST ASIA AND THE DELIVERY OF WHICH WILL RESULT IN SUBSTANTIAL DOLLAR SAVINGS IN THE PERFORMANCE OF VITAL WORK ON MILITARY WEAPONS. IS ALSO REPORTED THAT, BASED ON THE MANY NEGATIVE RESPONSES RECEIVED FROM THE FIRMS SOLICITED APPARENTLY BECAUSE OF THE NEED FOR HIGHLY SKILLED PERSONNEL TO ASSURE TIMELY DELIVERY, THE DIFFICULTY OF DESIGN AND THE MANUFACTURING SPACE AND FACILITIES REQUIRED TO PERFORM THE CONTRACTS, IT WAS EMPHASIZED TO THE CONTRACTING OFFICER THAT IT WAS VITALLY NECESSARY THAT THERE BE FULL COMPLIANCE WITH THE REGULATIONS IN DETERMINING THE RESPONSIBILITY OF PROSPECTIVE CONTRACTORS.

WHILE IT MAY BE THAT ALL THE AREAS IN WHICH YOU WERE DETERMINED TO BE UNSATISFACTORY WHEN CONSIDERED INDIVIDUALLY WOULD NOT NECESSARILY REQUIRE REJECTION OF YOUR OFFERS, WHEN SUCH FACTORS ARE CONSIDERED COLLECTIVELY SERIOUS DOUBT IS RAISED AS TO YOUR ABILITY TO MAKE TIMELY DELIVERY OF THE CRITICAL ITEMS. IN ANY EVENT, WE HAVE HELD CONSISTENTLY THAT THE DETERMINATION OF A PROSPECTIVE CONTRACTOR'S ABILITY TO PERFORM A CONTRACT IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE OFFICES CONCERNED, AND IN THE ABSENCE OF A SHOWING OF BAD FAITH, OR THE LACK OF A REASONABLE GROUND THEREFOR, THERE IS NO BASIS UPON WHICH WE MAY OBJECT. 37 COMP. GEN. 430, 435. THE PROJECTION OF A PROPOSED CONTRACTOR'S ABILITY TO PERFORM A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT. 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 MAJOR BRUNT OF ANY DIFFICULTIES 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.

THE FACT THAT YOU WERE DETERMINED TO BE A RESPONSIBLE BIDDER UNDER RFP - 0472 INDICATES TO US THAT THE CONTRACTING OFFICER DID NOT ARBITRARILY REJECT YOUR OFFER UNDER THE OTHER TWO RFP'S BUT, RATHER, THAT HE EXERCISED HIS BEST JUDGMENT AND ACTED IN GOOD FAITH IN DETERMINING YOUR RESPONSIBILITY UNDER EACH OF THE REQUESTS FOR PROPOSALS. IN VIEW THEREOF, AND SINCE THE SBA REFUSED TO ISSUE CERTIFICATES OF COMPETENCY, WE SEE NO LEGAL BASIS UPON WHICH WE MAY PROPERLY OBJECT TO THE DETERMINATION TO REJECT YOUR OFFERS.