B-164448, JUL. 19, 1968

B-164448: Jul 19, 1968

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AGAINST AWARDS WHICH WERE MADE BY THE DEPARTMENT OF THE NAVY TO OTHER OFFERORS UNDER SOLICITATION NO. THE SUBSTANCE OF YOUR PROTEST IS THAT YOUR TOTAL PROPOSAL PRICE WAS LOWER THAN THE TOTAL PRICE OF THE AWARDS IN QUESTION AND THAT YOUR DISQUALIFICATION FOR AWARD WAS NOT JUSTIFIED. THE PURCHASE REQUEST PURSUANT TO WHICH THE SOLICITATION WAS ISSUED WAS DATED FEBRUARY 29. AS THE DATE THE MATERIAL WAS REQUIRED FOR THE REPAIR AND OVERHAUL OF THE USS JOHN ADAMS. THE SOLICITATION WAS DISTRIBUTED TO 18 PROSPECTIVE SUPPLIERS. WHETHER OR NOT THERE ARE NEGOTIATIONS SUBSEQUENT TO ITS RECEIPT. UNLESS THE OFFER IS WITHDRAWN BY WRITTEN NOTICE RECEIVED BY THE GOVERNMENT PRIOR TO AWARD. SUBSEQUENT NEGOTIATIONS ARE CONDUCTED.

B-164448, JUL. 19, 1968

TO STEAM SPECIALTIES COMPANY:

WE REFER TO YOUR PROTEST BY LETTER DATED MAY 24, 1968, AS SUPPLEMENTED BY CORRESPONDENCE FROM YOUR ATTORNEY, AGAINST AWARDS WHICH WERE MADE BY THE DEPARTMENT OF THE NAVY TO OTHER OFFERORS UNDER SOLICITATION NO. N00406-68- R-0191, ISSUED MARCH 6, 1968, BY THE NAVAL SUPPLY CENTER, PUGET SOUND, WASHINGTON, FOR THE PROCUREMENT OF BALL VALVE PARTS MADE FROM TITANIUM ALLOY. THE SUBSTANCE OF YOUR PROTEST IS THAT YOUR TOTAL PROPOSAL PRICE WAS LOWER THAN THE TOTAL PRICE OF THE AWARDS IN QUESTION AND THAT YOUR DISQUALIFICATION FOR AWARD WAS NOT JUSTIFIED.

THE PURCHASE REQUEST PURSUANT TO WHICH THE SOLICITATION WAS ISSUED WAS DATED FEBRUARY 29, 1968, AND CITED ISSUE PRIORITY DESIGNATOR 4 WITH AUGUST 1, 1968, AS THE DATE THE MATERIAL WAS REQUIRED FOR THE REPAIR AND OVERHAUL OF THE USS JOHN ADAMS, A POLARIS SUBMARINE. THE SOLICITATION WAS DISTRIBUTED TO 18 PROSPECTIVE SUPPLIERS.

SECTION 4.0, ON PAGE 9 OF THE SOLICITATION REQUIRED DELIVERY OF THE MATERIAL TO THE PUGET SOUND NAVAL SHIPYARD, BREMERTON, WASHINGTON, AND STIPULATED THAT THE GOVERNMENT DESIRED DELIVERY OF ALL QUANTITIES OF ALL 38 ITEMS LISTED IN THE SOLICITATION WITHIN 120 DAYS.

PARAGRAPH 10, SOLICITATION INSTRUCTIONS AND CONDITIONS, STANDARD FORM 33A, PERTAINING TO AWARD, INCLUDED THE FOLLOWING PERTINENT LANGUAGE:

"/B) THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL OFFERS AND TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN OFFERS RECEIVED.

"/C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY OFFER, UNLESS THE OFFEROR QUALIFIES HIS OFFER BY SPECIFIC LIMITATIONS. UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, OFFERS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED; AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT PRICES OFFERED UNLESS THE OFFEROR SPECIFIES OTHERWISE IN HIS OFFER.

"/E) THE GOVERNMENT MAY ACCEPT WITHIN THE TIME SPECIFIED THEREIN, ANY OFFER (OR PART THEREOF, AS PROVIDED IN (C) ABOVE), WHETHER OR NOT THERE ARE NEGOTIATIONS SUBSEQUENT TO ITS RECEIPT, UNLESS THE OFFER IS WITHDRAWN BY WRITTEN NOTICE RECEIVED BY THE GOVERNMENT PRIOR TO AWARD. SUBSEQUENT NEGOTIATIONS ARE CONDUCTED, THEY SHALL NOT CONSTITUTE A REJECTION OR COUNTER OFFER ON THE PART OF THE GOVERNMENT.

"/F) THE RIGHT IS RESERVED TO ACCEPT OTHER THAN THE LOWEST OFFER AND TO REJECT ANY OR ALL OFFERS.'

SECTION 9.0, OTHER PROVISIONS, ON PAGE 15 OF THE SOLICITATION, PROVIDED AS FOLLOWS: "9.1 AWARD BY LOT (JULY 1965) SUBJECT TO THE PROVISIONS OF PARAGRAPH 10 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS, STANDARD FORM 33A DATED DEC. 1966, AWARDS WILL GENERALLY BE MADE TO A SINGLE BIDDER ON EACH ENTIRE LOT. HOWEVER, THE GOVERNMENT RESERVES THE RIGHT TO AWARD BY ITEM WHEN THE CONTRACTING OFFICER DETERMINES IT IS MOST ADVANTAGEOUS TO THE GOVERNMENT.'

ON APRIL 10, THE SIX OFFERS WHICH HAD BEEN RECEIVED BY THE PROCURING ACTIVITY WERE OPENED. THE TOTAL PRICES IN FOUR OF THE OFFERS RANGED FROM $94,931.75 TO $115,402.80, AND THE TWO REMAINING OFFERS TOTALED $155,407.00 AND $183,172.08, RESPECTIVELY. YOUR TOTAL PRICE WAS $98,640.90.

THE EVALUATION STAFF AT THE PUGET SOUND NAVAL SHIPYARD RECOMMENDED A SINGLE AWARD AT THE LOWEST TOTAL OFFER OF $94,931.75. HOWEVER, THE CONTRACTING OFFICER DETERMINED THAT BY SPLITTING THE AWARD BY ITEMS THE GOVERNMENT COULD REALIZE A SAVING OF APPROXIMATELY $5,169.30. THE EVALUATIONS BY BOTH THE PUGET SOUND NAVAL SHIPYARD AND THE CONTRACTING OFFICER WERE COMPLETED BY APRIL 18.

ON APRIL 19, THE CONTRACTING OFFICER REQUESTED THE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD), OAKLAND, CALIFORNIA, TO CONDUCT A LIMITED PRE-AWARD SURVEY ON YOU AND TWO OF THE OTHER LOW OFFERORS. MAY 3, THE CONTRACTING OFFICER RECEIVED THE DCASD PRE AWARD SURVEY REPORT ON YOU WHICH CONTAINED A RECOMMENDATION FOR NO AWARD ON THE GROUND THAT YOU DID NOT HAVE THE QUALITY CONTROL CAPABILITY TO PERFORM UNDER THE PROCUREMENT PROVISIONS. THE REPORT INDICATED THAT YOU HAD PREVIOUSLY SUBCONTRACTED ALL MANUFACTURING AND ASSEMBLING BUT HAD NO QUALITY DOCUMENTATION ON FILE CONCERNING YOUR SUBCONTRACTORS; THAT YOU HAD NO EXISTING QUALITY PROGRAM IN EFFECT; THAT YOU LACKED THE NECESSARY MEASURING AND TEST EQUIPMENT ALTHOUGH YOU INDICATED YOU PLANNED TO PURCHASE SUCH EQUIPMENT; AND THAT WHILE YOU HAD GENERATED A QUALITY CONTROL MANUAL WITH THE INTENT OF MEETING THE APPLICABLE MILITARY SPECIFICATION, THERE WAS NO EVIDENCE OF ANY PLANNING FOR INSPECTION OF PRODUCT CHARACTERISTIC OR TEST REQUIRED.

DURING THE PERIOD MAY 6 TO 11, THE PROCUREMENT NEED WAS CONSIDERED IN THE LIGHT OF THE THREE REMAINING LOW PROPOSALS, AND ITEMS 23 THROUGH 29 AND 32 THROUGH 35 WERE CANCELLED. ON MAY 13, THE PUGET SOUND NAVAL SHIPYARD WAS REQUESTED TO PERMIT DELAY OF THE AWARD TO SUBMIT THE MATTER (PRESUMABLY OF YOUR CAPABILITY) TO THE SMALL BUSINESS ADMINISTRATION (SBA) UNDER THE CERTIFICATE OF COMPETENCY (COC) PROCEDURE PRESCRIBED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1 705.4. WITH CERTAIN EXCEPTIONS, SUCH PROCEDURE REQUIRES WITHHOLDING OF AWARD UNTIL SBA ACTION CONCERNING THE ISSUANCE OF A COC, OR UNTIL 15 WORKING DAYS AFTER SBA IS NOTIFIED OF THE ADMINISTRATIVE INTENT TO REJECT THE PARTICULAR BID OR OFFER FOR LACK OF CAPACITY OR CREDIT, WHICHEVER IS EARLIER. PURSUANT TO ADVICE FROM THE SHIPYARD THAT DELIVERY BY SEPTEMBER 13, 1968, WAS CRITICAL, THE CONTRACTING OFFICER INVOKED THE EXCEPTION IN ASPR 1-705.4 (C) (IV) PERMITTING NONREFERRAL TO SBA WHEN AWARD MUST BE MADE WITHOUT DELAY, AND NOTIFIED THE SBA THAT YOUR LOW OFFER FOR 15 ITEMS OF TITANIUM BALLS AND SEATS FOR VALVES, IN THE AMOUNT OF $59,268, WAS BEING REJECTED ON THE BASIS OF THE UNFAVORABLE PRE-AWARD SURVEY REPORT INDICATING LACK OF THE REQUIRED QUALITY ASSURANCE CAPABILITY TO PERFORM THE CONTRACT. THE STATEMENT OF URGENCY WHICH THE CONTRACTING OFFICER FORWARDED WITH THE NOTICE TO SBA STATED THAT THE CRITICAL DELIVERY DATE OF SEPTEMBER 13 WOULD NOT ALLOW THE DELAY FOR THE COC PROCEDURE SINCE IMMEDIATE AWARD WAS NECESSARY IN ORDER TO ADHERE TO THE REQUIRED SCHEDULE.

ON MAY 20, OR 11 WORKING DAYS AFTER THE CONTRACTING OFFICER RECEIVED THE ADVERSE DCASD PRE-AWARD SURVEY REPORT ON YOU, AWARDS WERE MADE TO THE OTHER THREE LOW OFFERORS BASED ON THE LOWEST PRICES OFFERED FOR THE VARIOUS ITEMS, AS FOLLOWS:

OFFEROR ITEMS PRICE

BERGEN CARBIDE MFG. CORP. 1, 2, 11, 12, $59,831.00

17-22, 36-38

MORELAND TOOL COMPANY, INC. 3-10, 38 7,111.80

P.J. HYDRAULIC, INC. 13-16, 30, 31, 19,620.00

38-41

YOU CLAIM THAT UNDER TWO OF THE CONTRACTS WHICH WERE AWARDED, THE PRICES OF 23 OF THE ITEMS TOTALLED $79,451, WHEREAS YOUR PRICE ON THE SAME ITEMS TOTALLED ONLY $72,898. CONCERNING THE MATTER OF YOUR QUALITY ASSURANCE CAPABILITY, YOU STATE THAT YOU ACQUIRED THE NECESSARY TEST EQUIPMENT WITHIN TWO DAYS AFTER THE VISIT OF THE DCASD SURVEY TEAM; THAT THE ABSENCE OF PRODUCTION CHARTS ON YOUR PREVIOUS CONTRACTS, INCLUDING ONE WHICH WAS IN PROGRESS AT THE TIME OF THE SURVEY, DID NOT AFFECT THE QUALITY OF YOUR WORK; AND THAT SINCE YOU TOOK NO EXCEPTIONS TO THE TECHNICAL REQUIREMENTS OF THE SOLICITATION, SUCH AS TESTS, CERTIFICATIONS, ETC., YOU WERE COMMITTED TO THE LETTER OF THE CONTRACT. ACCORDINGLY, YOU CLAIM THAT YOU HAVE BEEN DISCRIMINATED AGAINST AND YOU THEREFORE QUESTION THE MERIT AND INTEGRITY OF THE AWARDS.

YOUR ATTORNEY COMPLAINS THAT YOU WERE NOT PROPERLY NOTIFIED OF THE REASONS FOR THE REJECTION OF YOUR OFFER, AS REQUIRED BY ASPR 3-508.3 (A) (V); THAT YOU WERE NEVER AFFORDED AN OPPORTUNITY TO ANSWER THE OBJECTIONS TO YOUR CAPABILITIES AS DISCLOSED IN THE PRE-AWARD SURVEY; AND THAT AMPLE TIME EXISTED BETWEEN THE DATE OF OPENING OF THE OFFERS, APRIL 10, AND THE AWARDS, MAY 20, FOR OBTAINING A COC FROM SBA.

ASPR 3-202.2 AUTHORIZES THE USE OF NEGOTIATION FOR PROCUREMENTS OF COMPELLING AND UNUSUAL URGENCY AND PROVIDES FOR OBTAINING COMPETITION TO THE MAXIMUM EXTENT PRACTICABLE WITHIN THE TIME ALLOWED. FURTHER, THE CITATION OF A PRIORITY DESIGNATOR 1 THROUGH 6, INCLUSIVE, ON A PURCHASE REQUEST IS SUFFICIENT JUSTIFICATION UNDER ASPR 3-202.2 (VI) FOR THE USE OF SUCH NEGOTIATION AUTHORITY. IN THIS CASE, THE PURCHASE REQUEST IS REPORTED TO HAVE CITED PRIORITY DESIGNATOR 4, AND SIX OF THE 18 SOURCES SOLICITED RESPONDED TO THE SOLICITATION. ACCORDINGLY, THE PROCURING ACTIVITY PROPERLY EXERCISED THE NEGOTIATION AUTHORITY GRANTED BY THE REGULATION.

ASPR 1-902 PROVIDES, AMONG OTHER THINGS, THAT PURCHASES SHALL BE MADE FROM, AND CONTRACTS AWARDED TO, RESPONSIBLE PROSPECTIVE CONTRACTORS ONLY, I.E., THOSE CONTRACTORS WHO MEET THE STANDARDS SET FORTH IN ASPR 1-903 AND SUCH SPECIAL STANDARDS AS MAY BE PRESCRIBED IN CONNECTION WITH THE PROCUREMENT PURSUANT TO ASPR 1-903.3 AND BY OVERSEAS COMMANDERS. FURTHER, WHERE DOUBT AS TO PRODUCTIVE CAPACITY OR FINANCIAL STRENGTH CANNOT BE RESOLVED AFFIRMATIVELY, ASPR 1-902 REQUIRES A DETERMINATION OF NONRESPONSIBILITY. WITH CERTAIN EXCEPTIONS NOT HERE PERTINENT, ASPR 1- 904.1 MAKES THE ISSUANCE OF AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY A PREREQUISITE TO AWARD.

AMONG THE STANDARDS PRESCRIBED IN ASPR 1-903.2 WHICH MUST BE MET BY PROSPECTIVE CONTRACTORS FOR PRODUCTION, MAINTENANCE, CONSTRUCTION, AND RESEARCH AND DEVELOPMENT CONTRACTS, IS POSSESSION OF QUALITY ASSURANCE MEASURES, INCLUDING THOSE APPLICABLE TO MATERIALS PRODUCED OR SERVICES PERFORMED BY SUBCONTRACTORS.

ASPR 1-905.4 (B) REQUIRES THE PERFORMANCE OF A PRE-AWARD SURVEY, CONSISTING OF AN EVALUATION BY A CONTRACT ADMINISTRATION OFFICE OF A PROSPECTIVE CONTRACTOR'S CAPABILITY TO PERFORM UNDER THE TERMS OF A PROPOSED CONTRACT, WHEN THE INFORMATION AVAILABLE TO THE PURCHASING OFFICE IS NOT SUFFICIENT TO ENABLE THE CONTRACTING OFFICER TO MAKE A DETERMINATION REGARDING THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR. ASPR 1-905.4 (C) PROVIDES THAT REGARDLESS OF THE APPARENT SUFFICIENCY OF AVAILABLE INFORMATION INDICATING RESPONSIBILITY WITH RESPECT TO THE STANDARDS SET FORTH IN ASPR 1-903.1 (I) AND (II), IN PROCUREMENTS WHICH ARE SIGNIFICANT EITHER IN DOLLAR VALUE OR IN THE CRITICAL NATURE OF THE REQUIREMENT, CONSIDERATION SHALL BE GIVEN TO REQUESTING THE CONTRACT ADMINISTRATION OFFICE TO VERIFY INFORMATION REGARDING CURRENT WORKLOAD AND FINANCIAL CAPACITY. ASPR 1-705.4 (C) REQUIRES A PRE-AWARD SURVEY PRIOR TO A DETERMINATION BY A CONTRACTING OFFICER THAT A SMALL BUSINESS CONCERN IS NOT RESPONSIBLE BECAUSE OF A LACK OF CAPACITY OR CREDIT ON A PROPOSED AWARD OF MORE THAN $10,000. ASPR 1-905.4 (A) REQUIRES THE CONTRACTING OFFICER TO USE THE INFORMATION FURNISHED IN A PRE-AWARD SURVEY IN DETERMINING THE PROSPECTIVE CONTRACTOR'S RESPONSIBILITY.

ASPR 1-907, RELATING TO DISCLOSURE OF PRE-AWARD SURVEY DATA, READS AS FOLLOWS:

"1-907 DISCLOSURE OF PRE-AWARD DATA. DATA, INCLUDING INFORMATION OBTAINED FROM A PRE-AWARD SURVEY, ACCUMULATED FOR PURPOSES OF DETERMINING THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR SHALL NOT BE RELEASED OUTSIDE THE GOVERNMENT AND SHALL NOT BE MADE AVAILABLE FOR INSPECTION BY INDIVIDUALS, FIRMS, OR TRADE ORGANIZATIONS (SEE 1-329.3 (C) (5) ). SUCH DATA MAY BE DISCLOSED TO, OR SUMMARIZED FOR, OTHER ELEMENTS WITHIN THE GOVERNMENT ON THEIR REQUEST, AND SHALL BE MADE AVAILABLE TO DEPARTMENT OF DEFENSE PROCUREMENT PERSONNEL UPON REQUEST IN ACCORDANCE WITH 1-905.1. PRIOR TO MAKING A DETERMINATION OF RESPONSIBILITY, SUCH DATA MAY BE DISCUSSED WITH THE PROSPECTIVE CONTRACTOR AS DETERMINED NECESSARY BY THE PURCHASING OFFICE. AFTER AN AWARD, THE FINDINGS OF THE PRE-AWARD SURVEY MAY BE DISCUSSED BY THE CONTRACTING OFFICER WITH THE COMPANY SURVEYED AS PROVIDED IN 2-408 AND 3-508, OR IF APPROPRIATE, BY THE HEAD OF THE CONTRACT ADMINISTRATION OFFICE OR HIS DESIGNEE.'

UNDER SUCH REGULATIONS, THE CONTRACTING OFFICER'S REQUEST FOR A LIMITED PRE-AWARD SURVEY OF YOUR FACILITIES WAS JUSTIFIED BY THE CRITICAL NATURE OF THE PROCUREMENT NEED ALONE. MORE IMPORTANT, EVEN IF THE CONTRACTING OFFICER HAD CONCLUDED ON THE BASIS OF INFORMATION ALREADY AVAILABLE TO HIM THAT YOU WERE NOT RESPONSIBLE AS TO CAPACITY, HE WAS NEVERTHELESS REQUIRED BY ASPR 1-705.4 (C) TO REQUEST A PRE AWARD SURVEY BEFORE MAKING AN ADVERSE DETERMINATION IN VIEW OF YOUR STATUS AS A SMALL BUSINESS CONCERN. ASPR 1- 905.4 (A) REQUIRED THAT THE CONTRACTING OFFICER USE THE PRE-AWARD SURVEY REPORT DATA IN MAKING HIS ULTIMATE DETERMINATION OF YOUR RESPONSIBILITY, AND SUCH ACTION WAS NOT POSSIBLE BEFORE MAY 3, THE DATE THE REPORT WAS RECEIVED. ACCORDINGLY, ABSENT ANY EVIDENCE OF RECORD TO CONTROVERT THE INFORMATION IN THE REPORT INDICATING THAT YOU LACKED QUALITY ASSURANCE CAPABILITY, A FACTOR WHICH WAS PROPERLY COVERED BY THE SURVEY ALONG WITH THE FACTORS OF ADEQUACY OF YOUR EQUIPMENT AND THE QUALITY CONTROL OVER PERFORMANCE OF YOUR SUBCONTRACTORS, WE ARE UNABLE TO CONCLUDE THAT THE INFORMATION IN THE REPORT DID NOT CONSTITUTE A VALID BASIS FOR DOUBT ON THE PART OF THE CONTRACTING OFFICER CONCERNING YOUR CAPABILITY TO PERFORM THE CONTRACT, WITHIN THE MEANING OF ASPR 1-902, SO AS TO REQUIRE A NEGATIVE DETERMINATION BY HIM AS TO YOUR RESPONSIBILITY. AS TO THE FACT THAT THE CONTRACTING OFFICER DID NOT DISCUSS THE PRE-AWARD SURVEY DATA WITH YOU PRIOR TO THE ISSUANCE OF HIS DETERMINATION, IT IS TO BE NOTED THAT THE LANGUAGE OF ASPR 1-907 IS PERMISSIVE IN THIS REGARD. ACCORDINGLY, AND SINCE THE PROCUREMENT HAD BECOME CRITICAL BY THE TIME THE SURVEY REPORT HAD BEEN RECEIVED AND THE REMAINING LOW OFFERS HAD BEEN RECONSIDERED IN THE LIGHT OF THE DECREASED PROCUREMENT NEEDS, THE CONTRACTING OFFICER'S ELECTION TO PROCEED WITH ISSUANCE OF HIS DETERMINATION WITHOUT DISCUSSING THE SURVEY REPORT WITH YOU DOES NOT APPEAR TO HAVE BEEN AN IMPROPER EXERCISE OF THE DISCRETION GRANTED TO HIM BY THE REGULATION.

WITH RESPECT TO THE MATTER OF REFERRAL OF YOUR CAPABILITY TO SBA FOR DETERMINATION UNDER THE COC PROCEDURES, SUCH ACTION WAS NECESSARILY DEPENDENT UNDER ASPR 1-705.4 (C) ON THE RESULTS OF THE PRE-AWARD SURVEY. HAD THE SURVEY BEEN FAVORABLE, THE CONTRACTING OFFICER, UPON BEING SATISFIED THAT YOU WERE OTHERWISE RESPONSIBLE AND RESPONSIVE TO THE SOLICITATION, COULD HAVE PROCEEDED WITH AN AWARD TO YOU OF ONE OR MORE OF THE PROCUREMENT ITEMS AS AUTHORIZED BY THE AWARD PROVISIONS IN THE SOLICITATION WITHOUT ANY SBA ACTION. HOWEVER, AS THE RECORD SHOWS, THE SURVEY REPORT WAS ADVERSE, AND THE CONTRACTING OFFICER THEREFORE DETERMINED THAT YOU WERE NOT RESPONSIBLE. AT THIS STAGE OF THE PROCUREMENT, HAD THERE BEEN NO URGENCY, THE CONTRACTING OFFICER WOULD HAVE BEEN OBLIGATED TO INSTITUTE COC PROCEDURES ON YOUR BEHALF WITHOUT CONSULTING THE REQUISITIONING ACTIVITY. BUT THE PRIORITY DESIGNATOR ON THE PURCHASE REQUEST INDICATED THAT THE NEED WAS URGENT AT THE TIME THE PURCHASE REQUEST WAS ISSUED, AND THEREFORE THE CONTRACTING OFFICER PROPERLY SOUGHT PERMISSION OF THE ACTIVITY BEFORE TAKING IT UPON HIMSELF TO INSTITUTE COC ACTION. SINCE THE SHIPYARD PROMPTLY ADVISED THE CONTRACTING OFFICER THAT THE NEED FOR THE PROCUREMENT ITEMS HAD BECOME CRITICAL, THE SITUATION MUST BE REGARDED AS WARRANTING EXERCISE OF THE AUTHORITY CONTAINED IN ASPR 1-705.4 (C) (IV) WHEREBY THE CONTRACTING OFFICER COULD PROCEED TO REJECT YOUR OFFER WITH PROPER NOTICE TO SBA AND ISSUANCE OF A STATEMENT OF URGENCY AND TO MAKE AWARD/S) TO THE NEXT LOW RESPONSIBLE, RESPONSIVE OFFEROR/S). IN THE CIRCUMSTANCES, WE MUST CONCLUDE THAT THE REJECTION OF YOUR OFFER WAS NOT CONTRARY TO THE REGULATIONS.

CONCERNING THE SUFFICIENCY OF THE CONTRACTING OFFICER'S NOTICE OF REJECTION OF YOUR OFFER, ASPR 3-508.3 PROVIDES THAT THE WRITTEN POST AWARD NOTICE TO UNSUCCESSFUL OFFERORS SHALL INCLUDE IN GENERAL TERMS THE REASONS WHY THE OFFEROR'S PROPOSAL WAS NOT ACCEPTED WHERE THE PRICE INFORMATION DOES NOT READILY REVEAL SUCH REASON. HOWEVER, THE REGULATION PRECLUDES THE DISCLOSURE OF AN OFFEROR'S COST BREAKDOWN AND CERTAIN OTHER INFORMATION TO ANY OTHER OFFEROR, AND WHEN THE NUMBER OF ITEMS OR OTHER FACTORS MAKE LISTING OF UNIT PRICES IMPRACTICABLE, ONLY THE TOTAL CONTRACT PRICE NEED BE FURNISHED.

WHILE A COPY OF THE AWARD NOTICE WHICH THE CONTRACTING OFFICER SENT TO YOU IS NOT INCLUDED IN THE FILE WHICH HAS BEEN MADE AVAILABLE TO OUR OFFICE, YOUR PROTEST LETTER OF MAY 24 INDICATES THAT YOU WERE NOTIFIED OF THE NUMBER OF AWARDS AND THE PRICES AT WHICH THE CONTRACTS WERE AWARDED AND THAT THE SBA OFFICE IN SAN FRANCISCO HAS APPRISED YOU OF THE NEGATIVE PRE-AWARD SURVEY REPORT ON YOUR QUALITY ASSURANCE CAPABILITY WHICH SERVED AS THE BASIS FOR THE CONTRACTING OFFICER'S DETERMINATION THAT YOU WERE NOT RESPONSIBLE. IN ADDITION, THE CONTRACTING OFFICER, IN COMPLIANCE WITH ASPR 3-508.3, HAS RESPONDED TO CERTAIN QUESTIONS RAISED BY YOUR ATTORNEY RELATING TO THE DATE OF AWARD AND OTHER FACTORS. IT MAY BE NOTED HERE THAT SINCE THE AWARDS COVERED VARIOUS COMBINATIONS OF ITEMS, THE CONTRACTING OFFICER WAS NOT REQUIRED BY THE REGULATION TO LIST EACH ITEM AND THE UNIT PRICE INVOLVED.

BASED ON THE FACTS OF RECORD, WE CONCUR WITH THE VIEW OF THE DEPARTMENT OF THE NAVY THAT ALL OFFERORS SHOULD HAVE BEEN ADVISED OF THE DECISION TO MAKE AWARD ON THE BASIS OF VARIOUS COMBINATIONS OF ITEMS, AND IN THE TIME AVAILABLE, SHOULD HAVE BEEN AFFORDED AN OPPORTUNITY TO QUOTE REVISED PRICES. IN ADDITION, WE BELIEVE THAT THE DECREASE IN THE PROCUREMENT REQUIREMENTS WHICH WAS OCCASIONED BY THE CANCELLATION OF SEVERAL ITEMS IN THE SOLICITATION DURING THE PERIOD MAY 6 TO 11 SHOULD LIKEWISE HAVE BEEN BROUGHT TO THE ATTENTION OF ALL OFFERORS IN ACCORDANCE WITH ASPR 3-805.1 (E). HOWEVER, THERE IS NOTHING IN THE RECORD TO INDICATE THAT HAD SUCH ACTION BEEN TAKEN, THE CONTRACTING OFFICER'S DETERMINATION REGARDING YOUR RESPONSIBILITY WOULD HAVE BEEN FAVORABLE OR THAT THE REMAINING PROCUREMENT NEEDS WOULD HAVE BEEN ANY LESS CRITICAL SO AS TO JUSTIFY DELAY FOR COC ACTION BY SBA. FURTHER, WHILE IT IS TRUE, AS YOUR ATTORNEY STATES, THAT A PERIOD OF ABOUT SIX WEEKS ELAPSED BETWEEN THE DATE THE OFFERS WERE OPENED AND THE DATE THE AWARDS WERE MADE, THERE IS NO EVIDENCE OF ANY DELIBERATE DELAY ON THE PART OF THE CONTRACTING OFFICER OR THE REQUISITIONING ACTIVITY. MOREOVER, THE AWARDS WERE IN FACT MADE ONLY 11 WORKING DAYS AFTER THE DATE OF RECEIPT OF THE ADVERSE PRE-AWARD SURVEY REPORT BY THE CONTRACTING OFFICER, OR PRIOR TO THE EXPIRATION OF THE 15 WORKING DAYS WHICH WOULD HAVE BEEN ALLOWABLE FOR SBA ACTION. IN THE CIRCUMSTANCES, WE SEE NO LEGAL BASIS TO QUESTION THE VALIDITY OF THE SPLIT AWARDS, WHICH WERE MADE AT AN APPARENT SAVING OVER A SINGLE AWARD, TO THOSE LOW OFFERORS WHO PRESUMABLY WERE DETERMINED TO BE RESPONSIBLE. YOUR PROTEST IS THEREFORE DENIED.