B-164569, DEC. 6, 1968

B-164569, DEC. 6, 1968

TO CONCEPT ELECTRONIC PRODUCTS COMPANY:

THIS IS IN REPLY TO YOUR LETTER OF JUNE 10, 1968, AND SUBSEQUENT CORRESPONDENCE, IN WHICH YOU PROTEST THE AWARDS OF CONTRACTS UNDER REQUESTS FOR PROPOSALS NOS. N00039-68-R-0078 (RFP 0078) AND N00039-68-R 0102 (RFP 0102) BY THE NAVAL ELECTRONIC SYSTEMS COMMAND (NAVELEX).

UNDER RFP 0078 THE GOVERNMENT REQUESTED MANUFACTURE AND DELIVERY OF 24 HEWLETT PACKARD MODEL 712B POWER SUPPLIES, OR EQUAL, TOGETHER WITH CERTAIN TECHNICAL DATA AND MAINTENANCE REPAIR PARTS. THE RECORD ESTABLISHES THAT YOUR OFFER WAS RESPONSIVE, BUT PRE-AWARD SURVEY OF YOUR COMPANY'S TECHNICAL AND FINANCIAL CAPABILITIES WHICH WAS CONDUCTED BY THE DEFENSE CONTRACT ADMINISTRATION SERVICE REGION RESULTED IN AN ADVERSE RECOMMENDATION.

SINCE CONCEPT WAS A SMALL BUSINESS CONCERN ON APRIL 2, 1968, THE QUESTION OF YOUR ABILITY TO PERFORM THE CONTRACT WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA), IN COMPLIANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-705.4 (C), FOR CONSIDERATION AS TO THE ISSUANCE OF A CERTIFICATE OF COMPETENCY. HOWEVER, IT APPEARS THAT YOUR OFFER HAD, BY ITS TERMS, EXPIRED ON FEBRUARY 18, AND WHILE THE QUESTION OF YOUR COMPETENCY WAS PENDING AT SBA, BY LETTER OF APRIL 10 YOU SPECIFICALLY DECLINED TO EXTEND YOUR OFFER AT THE SAME PRICE, BUT YOU INDICATED A DESIRE TO CONTRACT FOR THE ITEMS AT A "COMPETITIVE PRICE.' UPON RECEIPT OF THIS INFORMATION, ON APRIL 16 THE SBA DECLINED TO PASS UPON YOUR COMPETENCY UNTIL AND UNLESS NAVELEX CONCLUDED THAT YOUR OFFER COULD BE ACCEPTED. THE CONTRACTING OFFICER THEN EXPRESSLY REFUSED TO ENTERTAIN A MODIFICATION OF YOUR PRICE, AND ON MAY 23 AWARDED A CONTRACT TO THE NEXT LOW OFFEROR, HEWLETT PACKARD, WHICH HAD EXTENDED THE PERIOD FOR ACCEPTANCE OF ITS ORIGINAL OFFER. YOUR PROTEST AGAINST SUCH AWARD IS BASED UPON YOUR BELIEF THAT THE CONTRACTING OFFICER WAS IN ERROR IN REFUSING TO PERMIT YOU TO SUBMIT A PRICE REVISION IN CONJUNCTION WITH THE EXTENSION OF TIME FOR ACCEPTANCE OF YOUR OFFER WHICH HE HAD REQUESTED.

OTHER THAN THE REGULATIONS REQUIRING CONSIDERATION OF LATE MODIFICATIONS TO PROPOSALS, WHICH ARE SET OUT IN ASPR 3-506 (G) AND ARE CLEARLY INAPPLICABLE TO THE CIRCUMSTANCES UNDER WHICH YOUR COMPANY PROPOSED TO REVISE THE PRICE AND EXTEND THE PERIOD DURING WHICH YOUR OFFER COULD BE ACCEPTED, IT WOULD APPEAR THAT THE ONLY BASIS FOR CONSIDERATION OF A PRICE REVISION TO YOUR OFFER AFTER THE CLOSING DATE FOR RECEIPT OF OFFERS WOULD BE UNDER THOSE PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION PERTAINING TO THE CONDUCT OF NEGOTIATIONS WHICH PROVIDE, IN PERTINENT PART, AS FOLLOWS: "3-804. CONDUCT OF NEGOTIATIONS. * * * ORAL DISCUSSIONS OR WRITTEN COMMUNICATIONS SHALL BE CONDUCTED WITH OFFERORS TO THE EXTENT NECESSARY TO RESOLVE UNCERTAINTIES RELATING TO THE PURCHASE OR THE PRICE TO BE PAID. * * *. "3-805.1 (A). AFTER RECEIPT OF INITIAL PROPOSALS, WRITTEN OR ORAL DISCUSSIONS SHALL BE CONDUCTED WITH ALL RESPONSIBLE OFFERORS * * *, EXCEPT THAT THIS REQUIREMENT NEED NOT NECESSARILY BE APPLIED TO:

* * * * * * * "/V) PROCUREMENTS IN WHICH IT CAN BE CLEARLY DEMONSTRATED FROM THE EXISTENCE OF ADEQUATE COMPETITION OR ACCURATE PRIOR COST EXPERIENCE WITH THE PRODUCT OR SERVICE THAT ACCEPTANCE OF THE MOST FAVORABLE INITIAL PRICE PROPOSAL WITHOUT DISCUSSION WOULD RESULT IN A FAIR AND REASONABLE PRICE. * * *. "/B). * * * WHENEVER NEGOTIATIONS ARE CONDUCTED WITH SEVERAL OFFERORS, * * * ALL OFFERORS SELECTED * * * SHALL BE OFFERED AN EQUITABLE OPPORTUNITY TO SUBMIT SUCH PRICE, TECHNICAL OR OTHER REVISIONS, IN THEIR PROPOSALS AS MAY RESULT FROM THE NEGOTIATIONS. ALL SUCH OFFERORS SHALL BE INFORMED OF THE SPECIFIED DATE * * * OF THE CLOSING OF NEGOTIATIONS AND THAT ANY REVISIONS TO THEIR PROPOSALS MUST BE SUBMITTED BY THAT DATE. * * *.'

WHILE THE CONTRACTING OFFICER IN THE INSTANT CASE COULD HAVE ASKED FOR AND CONSIDERED PRICE REVISIONS IN CONJUNCTION WITH HIS REQUEST FOR EXTENSIONS OF THE PERIOD DURING WHICH OFFERS COULD BE ACCEPTED, WE SEE NO VALID BASIS ON WHICH IT CAN BE CONTENDED THAT HE WAS REQUIRED BY LAW OR REGULATION TO DO SO. CLEARLY, AS INDICATED BY HIS EXAMINATION INTO YOUR RESPONSIBILITY AND THE REFERRAL OF THAT QUESTION TO SBA, THE CONTRACTING OFFICER HAD ALREADY DECIDED THAT YOUR OFFERED PRICE WAS REASONABLE AND THAT AN AWARD WOULD BE MADE TO YOU WITHOUT DISCUSSION IF YOU WERE FOUND TO BE A RESPONSIBLE BIDDER. THE LEGALITY OF SUCH A PROCEDURE IS NOT OPEN TO QUESTION IN A "BRAND NAME OR EQUAL" PROCUREMENT SUCH AS THE INSTANT PROCUREMENT WHERE, BUT FOR THE DETERMINATION OF URGENT NEED, THE PROCUREMENT WOULD HAVE BEEN ACCOMPLISHED UNDER FORMALLY ADVERTISED PROCEDURES, AND AN AWARD WOULD HAVE BEEN MADE TO THE LOW RESPONSIBLE BIDDER WITHOUT OPPORTUNITY FOR DISCUSSION OR PRICE REVISION.

IN THE CIRCUMSTANCES, IT IS OUR OPINION THAT THE CONTRACTING OFFICER'S FAILURE TO PERMIT YOUR COMPANY TO SUBMIT A NEW PRICE WOULD NOT OPERATE TO INVALIDATE THE SUBSEQUENT AWARD TO HEWLETT PACKARD, AND YOUR PROTEST UNDER RFP 0078 MUST THEREFORE BE DENIED.

IN CONNECTION WITH THE REFUSAL OF SBA TO ISSUE A CERTIFICATE OF COMPETENCY TO CONCEPT UNDER RFP 0102, AND THE ENSUING AWARD OF A CONTRACT THEREUNDER TO ANOTHER OFFEROR, YOU HAVE INDICATED A BELIEF THAT SBA WAS CONFUSED AS TO THE CORRECT IDENTITY OF THE RFP (0078 OR 0102) FOR WHICH CERTIFICATION HAD BEEN REQUESTED. YOU ALSO STATE THAT, IN YOUR OPINION, SBA DID NOT HAVE ENOUGH TIME TO ADEQUATELY EVALUATE CONCEPT'S COMPETENCY.

THE RECORD OF THIS PROCUREMENT ESTABLISHES THAT BY LETTER OF APRIL 16, 1968, THE PROCURING ACTIVITY REQUESTED SBA TO CONSIDER WHETHER A CERTIFICATE OF COMPETENCY WOULD BE ISSUED TO CONCEPT FOR RFP 0102. THREE COPIES OF THE SUBJECT RFP WERE ENCLOSED THEREWITH. WHILE THIS LETTER ALSO REFERENCED CERTAIN UNFAVORABLE ASPECTS IN THE PRE-AWARD SURVEY CONDUCTED FOR RFP 0078 AS BEING RELEVANT TO THE SUBJECT PROCUREMENT, BOTH PROCUREMENTS WERE CLEARLY IDENTIFIED AND WE PERCEIVE NO APPARENT REASON FOR SBA TO HAVE BEEN CONFUSED, ESPECIALLY AS INDICATED ABOVE, IN VIEW OF SBA'S SPECIFIC REFUSAL ON APRIL 16 TO PASS UPON CONCEPT'S COMPETENCY TO PERFORM THE WORK CONTEMPLATED BY RFP 0078. ALSO, THE LETTER OF MAY 24, 1968, IN WHICH SBA DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY, REFERENCED THE CORRECT RFP, ITEM, QUANTITY, AND TOTAL VALUE OF THE SUBJECT PROCUREMENT. OUR REVIEW OF THE ENTIRE RECORD HAS REVEALED NO EVIDENCE THAT SBA WAS MISTAKEN AS TO THE IDENTITY OF THE CORRECT RFP IN THIS MATTER AND, ACCORDINGLY, YOUR POSITION IN THIS REGARD MUST BE REJECTED. MOREOVER, WE DO NOT REGARD YOUR OBJECTION THAT SBA HAD INSUFFICIENT TIME TO EVALUATE CONCEPT'S CAPACITY IN THIS INSTANCE AS A PROPER BASIS FOR PROTEST INASMUCH AS THE RECORD ESTABLISHES THAT NAVY WITHHELD THE AWARD OF THIS CONTRACT WHILE THE MATTER OF YOUR CAPACITY WAS PENDING AT SBA FOR A PERIOD OF TIME IN EXCESS OF THE MINIMUM 15 WORKING DAYS PROVIDED IN ASPR 1 -705.4 (C).

WHILE YOU HAVE INDICATED YOUR DISAGREEMENT WITH THE RESOLUTION OF THE QUESTION OF CONCEPT'S COMPETENCY, IT SHOULD BE NOTED THAT IN ANY CASE IN WHICH A SMALL BUSINESS CONCERN IS CERTIFIED BY SBA AS COMPETENT WITH RESPECT TO ITS CAPACITY AND CREDIT, THE PROVISIONS OF SECTION 8 (B) (7) OF THE SMALL BUSINESS ACT, PUBLIC LAW 85-526, 15 U.S.C. 637 (B) (7), DIRECT THE PROCUREMENT OFFICIALS OF THE GOVERNMENT TO ACCEPT SUCH CERTIFICATION AS CONCLUSIVE. SINCE THIS OFFICE HAS NO AUTHORITY TO REQUIRE ISSUANCE OF A CERTIFICATE OF COMPETENCY IN ANY CASE WHERE SBA HAS REFUSED TO DO SO, SUCH REFUSAL MUST BE REGARDED AS AT LEAST HIGHLY PERSUASIVE ON THE QUESTION OF COMPETENCY. ACCORDINGLY, YOUR PROTEST UNDER RFP 0102 IS ALSO DENIED.