B-164740, SEP. 26, 1968

B-164740: Sep 26, 1968

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YOUR PROTEST IS GROUNDED PRIMARILY ON THE FACT THAT ALTHOUGH YOU ARE A SMALL BUSINESS FIRM YOU WERE NOT GIVEN AN OPPORTUNITY TO APPLY FOR A CERTIFICATE OF COMPETENCY FROM THE SMALL BUSINESS ADMINISTRATION AFTER THE CONTRACTING OFFICER HAD FOUND YOUR FIRM TO BE NONRESPONSIBLE. THE FACTS IN THE CASE ARE SET FORTH IN AN ADMINISTRATIVE REPORT FROM THE CONTRACTING OFFICER DATED JULY 29. WAS ISSUED BY THE DEPARTMENT OF THE ARMY SAN FRANCISCO PROCUREMENT AGENCY. ON THIS BASIS YOUR COMPANY WAS FOUND TO BE THE LOWEST BIDDER WHEN BIDS WERE OPENED ON JUNE 18. YOUR BID WAS IN THE AMOUNT OF $142. THE CONTRACT WAS AWARDED TO MATER MACHINE WORKS ON JUNE 28. A PROSPECTIVE CONTRACTOR MUST: * * * * * * * "/III) HAVE A SATISFACTORY RECORD OF PERFORMANCE (CONTRACTORS WHO ARE SERIOUSLY DEFICIENT IN CURRENT CONTRACT PERFORMANCE.

B-164740, SEP. 26, 1968

TO NORTHEAST OHIO MACHINE BUILDERS, INCORPORATED:

WE REFER TO YOUR TELEGRAM AND LETTER OF JULY 1, 1968, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF A CONTRACT BY THE DEPARTMENT OF THE ARMY TO MATER MACHINE WORKS FOR FURNISHING A SEMITRAILER -MOUNTED CIRCULAR SAWMILL. YOUR PROTEST IS GROUNDED PRIMARILY ON THE FACT THAT ALTHOUGH YOU ARE A SMALL BUSINESS FIRM YOU WERE NOT GIVEN AN OPPORTUNITY TO APPLY FOR A CERTIFICATE OF COMPETENCY FROM THE SMALL BUSINESS ADMINISTRATION AFTER THE CONTRACTING OFFICER HAD FOUND YOUR FIRM TO BE NONRESPONSIBLE.

THE FACTS IN THE CASE ARE SET FORTH IN AN ADMINISTRATIVE REPORT FROM THE CONTRACTING OFFICER DATED JULY 29, 1968, A COPY OF WHICH WE FURNISHED TO YOU FOR COMMENT, AND MAY BE SUMMARIZED AS FOLLOWS.

INVITATION FOR BIDS NO. DAAG05-68-B-0432, WAS ISSUED BY THE DEPARTMENT OF THE ARMY SAN FRANCISCO PROCUREMENT AGENCY, ON MAY 24, 1968, AND CALLED FOR FURNISHING ONE SEMITRAILER-MOUNTED CIRCULAR SAWMILL, 60 INCH BLADE, DEISEL ENGINE DRIVEN IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-S-52205A (ME) DATED AUGUST 17, 1966, AS MODIFIED IN THE SCHEDULE OF THE INVITATION FOR BIDS. THE INVITATION PROVIDED FOR THE EVALUATION OF BIDS BY ADDING TO THE BID PRICES THE TRANSPORTATION COSTS BASED ON GUARANTEED WEIGHTS AND THE PORT HANDLING AND OCEAN SHIPPING COSTS. ON THIS BASIS YOUR COMPANY WAS FOUND TO BE THE LOWEST BIDDER WHEN BIDS WERE OPENED ON JUNE 18, 1968. YOUR BID WAS IN THE AMOUNT OF $142,586.03 ADJUSTED TO INCLUDE A $12,000 TELEGRAPHIC REDUCTION TO YOUR ORIGINAL PRICE. MATER MACHINE WORKS, INCORPORATED, SUBMITTED AN EVALUATED BID OF $155,504. THE CONTRACT WAS AWARDED TO MATER MACHINE WORKS ON JUNE 28, 1968, AFTER THE CONTRACTING OFFICER HAD DETERMINED YOUR COMPANY TO BE NON-RESPONSIBLE WITHIN THE MEANING OF ASPR 1-903.1 (III) WHICH PROVIDES: "1-903.1 GENERAL STANDARDS. EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH 1 903, A PROSPECTIVE CONTRACTOR MUST:

* * * * * * * "/III) HAVE A SATISFACTORY RECORD OF PERFORMANCE (CONTRACTORS WHO ARE SERIOUSLY DEFICIENT IN CURRENT CONTRACT PERFORMANCE, WHEN THE NUMBER OF CONTRACTS AND THE EXTENT OF DEFICIENCY OF EACH ARE CONSIDERED, SHALL, IN THE ABSENCE OF EVIDENCE TO THE CONTRARY OR CIRCUMSTANCES PROPERLY BEYOND THE CONTROL OF THE CONTRACTOR, BE PRESUMED TO BE UNABLE TO MEET THIS REQUIREMENT). PAST UNSATISFACTORY PERFORMANCE, DUE TO FAILURE TO APPLY NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB, SHALL BE SUFFICIENT TO JUSTIFY A FINDING OF NONRESPONSIBILITY AND IN THE CASE OF SMALL BUSINESS CONCERNS, SHALL NOT REQUIRE SUBMISSION OF THE CASE TO THE SMALL BUSINESS ADMINISTRATION; SEE 1 705.4 (C) (V) AND 1-905.2.'

WE HAVE HELD (43 COMP. GEN. 298) THAT A DETERMINATION OF NONRESPONSIBILITY OF A SMALL BUSINESS CONCERN ON THE BASIS OF A RECORD OF SUBSTANTIAL DELIVERY DELINQUENCIES WITHOUT REFERRAL TO THE SMALL BUSINESS ADMINISTRATION FOR CERTIFICATION OF THE CONCERN'S CAPACITY AND CREDIT IS UNJUSTIFIED ABSENT A FINDING BASED ON SUBSTANTIAL EVIDENCE THAT THE DELINQUENCIES AROSE OUT OF SOMETHING OTHER THAN CAPACITY AND CREDIT AND, THEREFORE, NOT WITHIN THE SCOPE OF AN SBA CERTIFICATION. IN THE INSTANT CASE, THE CONTRACTING OFFICER MADE THE AWARD TO MATER MACHINE WORKS WITHOUT REFERRING YOUR CASE TO THE SMALL BUSINESS ADMINISTRATION FOR CONSIDERATION OF A CERTIFICATE OF COMPETENCY ON THE BASIS OF A DETERMINATION, CONCURRED IN BY THE SMALL BUSINESS ADVISER, THAT YOUR FIRM FAILED TO DEMONSTRATE IN A TIMELY MANNER THE TENACITY OR PERSEVERANCE REQUIRED TO ACCEPTABLY PERFORM UNDER THE PROPOSED PROCUREMENT.

THE RECORD UPON WHICH THE CONTRACTING OFFICER BASED HIS DETERMINATION OF NONRESPONSIBILITY MAY BE SUMMARIZED AS FOLLOWS. ONE DAY BEFORE THE AWARD, THE CONTRACTING OFFICER RECEIVED A TELETYPE FROM THE DCAS OFFICE (DCASO, AKRON, OHIO), CONDUCTING A PRE-AWARD SURVEY OF YOUR COMPANY WHICH FURNISHED HIM CERTAIN INFORMATION REGARDING YOUR COMPANY'S PERFORMANCE HISTORY. THE TELETYPE ADVISED THAT YOUR FIRM HAD RECEIVED 14 "NO AWARD" RECOMMENDATIONS DURING THE YEARS 1967 AND 1968; THAT IT HAD NEVER SHIPPED A CONTRACT PER CONTRACT SCHEDULE AND MOST OF YOUR CONTRACTS WERE IN A 120 DAY, OR MORE, DELINQUENT CATEGORY; THAT YOUR FINANCIAL CONDITION HAD CONTINUALLY BEEN VERY QUESTIONABLE AND THAT YOUR FIRM SUFFERED FROM A LACK OF FUNDS; THAT YOU HAD NO OPEN CREDIT AND ALL OF YOUR PROCUREMENTS WERE ON A C.O.D. BASIS; THAT YOU HAD EXHAUSTED ALL POSSIBLE MEANS FOR FINANCIAL ASSISTANCE; AND THAT YOUR CURRENT POSITION WAS THE RESULT OF POOR MANAGEMENT.

ON THE MORNING OF THE FOLLOWING DAY (JUNE 28) THE CONTRACTING OFFICER STATES THAT HE RECEIVED A TELEPHONE CALL FROM YOUR COMPANY PRESIDENT WHO ADVISED HIM THAT LAST MINUTE ARRANGEMENTS HAD BEEN MADE TO HAVE BOGUE ELECTRIC MANUFACTURING COMPANY, PATERSON, NEW JERSEY, PRODUCE THE SAWMILL AS A SUBCONTRACTOR AND HELP FINANCE THE PROPOSED CONTRACT IF AWARDED TO YOU. UPON RECEIPT OF THIS INFORMATION, WHICH WAS LATER CONFIRMED BY TELEGRAM, THE CONTRACTING OFFICER TELEPHONED DCASO, AKRON, AND INQUIRED WHETHER THIS LATE INFORMATION WOULD HAVE ANY EFFECT ON ITS RECOMMENDATION OF NO AWARD TO YOUR FIRM. THE CONTRACTING OFFICER WAS ADVISED THAT SUCH INFORMATION WOULD HAVE NO EFFECT ON THE NEGATIVE RECOMMENDATION AND THAT THE PRIMARY TURNDOWN FACTOR WAS PAST PERFORMANCE WHICH HAD BEEN COMPLETELY UNSATISFACTORY.

IN SUPPORT OF HIS FINDING THAT YOUR FIRM LACKED THE TENACITY AND PERSEVERANCE REQUIRED TO ACCEPTABLY PERFORM UNDER THE PROPOSED PROCUREMENT, THE CONTRACTING OFFICER'S REPORT OUTLINES THE FOLLOWING HISTORY OF PAST AND CURRENT CONTRACTS AWARDED TO YOUR FIRM: "E. REFERENCE FIFTH PARAGRAPH, THE BUYER DID HAVE THE FOLLOWING INFORMATION (PRE-AWARD SURVEY, EXHIBIT NO. 27) RESPECTING THE PROTESTOR'S PAST AND CURRENT PERFORMANCE ON BUILDING SIX (6) MILITARY SAWMILLS, SEMITRAILER-MOUNTED, AND CERTAIN OTHER CONTRACTS; (1) CONTRACT DA-23-195-AMC-00788, AWARDED 15 APRIL 1966, FOR A SAWMILL ESSENTIALLY THE SAME AS THAT UNDER THIS IFB, HAD A REQUIRED DELIVERY DATE OF 30 DECEMBER 1966 AND WAS ACTUALLY DELIVERED 24 APRIL 1968, SIXTEEN (16) MONTHS LATE. THE CONTRACT HAD A DELINQUENT DELIVERY CLAUSE UNDER WHICH PROTESTOR WAS CHARGED $16,000 FOR THE 16 MONTHS LATE DELIVERY. THE TRAILER FOR THIS SAWMILL DID NOT HAVE TO BE BUILT AS IT WAS ALREADY AVAILABLE AT TIME OF AWARD BY REASON OF THE TERMINATION OF CONTRACT DA-23-195-AMC-65-202, FOR ONE (1) EACH SAWMILL, AWARDED MAY 1965, AFTER ONE (1) YEAR FOR NON-DELIVERY OF SAWMILL; (2) CONTRACT DA-11-184-ENG-18082, AWARDED APRIL 1960 FOR FIVE (5) MOBILE SAWMILLS. SUBJECT CONTRACT WAS PERFORMED PRIOR TO DCAS ACTIVATION. OTHER INFORMATION AVAILABLE TO THIS AGENCY ON THIS 1960 CONTRACT. (3) CONTRACT N-174-14658, AWARDED 13 APRIL 1964 FOR ONE (1) EACH, SAWMILL, HAD A MODIFIED DELIVERY DATE OF 29 FEBRUARY 1968 AND HAS NEVER BEEN DELIVERED. PRODUCTION, FABRICATION AND FINAL ASSEMBLY WAS SCHEDULED AT THE SUBCONTRACTOR'S PLANT (AETNA MACHINE), MASSILLON, OHIO NON DELIVERY OF COMPONENT PARTS DELAYED SUBCONTRACTOR'S PRODUCTION. SUBCONTRACTOR DISCONTINUED PRODUCTION UNTIL PROTESTOR RESOLVED PAYMENT DISCREPANCIES FOR PRODUCING A WELDMENT IN LIEU OF A CASTING. IN ADDITION, PROTESTOR HAD NOT RESOLVED ALL DRAWINGS TO THE SATISFACTION OF THE PURCHASING OFFICE. CONTRACT WAS DEFAULTED ON 3 JUNE 1968 FOR NON-DELIVERY OF ITEM; (4) CONTRACT DAAK01-67-C-1127, AWARDED 6 MARCH 1967 FOR THIRTY-FIVE (35) EACH, WOODWORKING LATHES, HAD A REQUIRED DELIVERY DATE OF 6 AUGUST 1967. DESIGN AND ENGINEERING WAS TO BE COMPLETED BY 27 MARCH 1967; ONE PRE-PRODUCTION MODEL WAS TO BE FURNISHED FOR EXAMINATION AND EVALUATION BY 2 JUNE 1967. FABRICATION AND ASSEMBLY WAS TO BE DONE BY PAXSON MACHINES, SALEM, OHIO. PRE PRODUCTION UNIT HAS NOW BEEN APPROVED, WITH BALANCE OF 34 UNITS COMPLETE EXCEPT FOR CLUTCHES AND TAILSTOCKS WHICH ARE YET TO BE PURCHASED. THE MANUALS TO ACCOMPANY THE UNITS WERE NOT APPROVED AT TIME OF SURVEY, 27 JUNE 1968. ESTIMATED COMPLETION DATE IS 15 AUGUST 1968 OR OVER TWELVE (12) MONTHS PAST DELIVERY DATE; (5) CONTRACT DA-11 070-AMC- 1674, AWARDED 30 JUNE 1966 FOR TWO (2) EACH, BAND SAWS, HAD A REQUIRED DELIVERY DATE OF 30 OCTOBER 1966 FOR SEA DESTINATION. CONTRACTOR CHANGED SUBCONTRACTORS DUE TO HEAVY WORKLOAD ON ORIGINAL SUBCONTRACTOR. THE DUE DATE OF 30 OCTOBER 1966 WAS NOT MET, REASONS GIVEN FOR NON-DELIVERY DEEMED INEXCUSABLE. THE REVISED DELIVERY SCHEDULE OF ONE (1) EACH ON 15 NOVEMBER 1966 AND ONE (1) EACH ON 30 NOVEMBER 1966 WAS NOT MET. PROTESTOR FAILED TO FURNISH COMPONENT PARTS TO HIS SUBCONTRACTOR, KING PRINTING AND EQUIPMENT COMPANY. AT TIME OF SURVEY ONE (1) UNIT HAD BEEN PRODUCED, AND REPEATEDLY FAILED TESTING. ESTIMATED CONTRACT COMPLETION, IF TESTING IS SATISFACTORY, WOULD BE 15 JULY 1968 OR OVER TWENTY (20) MONTHS PAST DELIVERY DATE. DELIVERY HAS BEEN EXTENDED TO 23 JULY 1968 BY THE CONTRACTING OFFICER'S LETTER OF 25 MARCH 1968 FOR PURPOSE OF REESTABLISHING THE GOVERNMENT'S RIGHT OF DEFAULT FOR NON-DELIVERY; (6) CONTRACT N600 (61533) 65678, AWARDED 20 JUNE 1966 FOR SEVEN (7) EACH BAND SAWS, HAD A REQUIRED DELIVERY DATE OF 12 SEPTEMBER 1966. THE PROTESTOR CHANGED SUBCONTRACTOR AFTER RECEIPT OF AWARD, WITH THE NEW SUBCONTRACTOR ACKNOWLEDGING RECEIPT OF ORDER ON 12 AUGUST 1966, ON WHICH DATE ONLY 75 PERCENT OF MATERIAL AND COMPONENTS WERE IN-HOUSE AND NONE OF THE UNITS HAD BEEN STARTED SINCE CONTRACTOR WAS STILL MAKING ENGINEERING CHANGES. SHOW CAUSE LETTER ISSUED 16 SEPTEMBER 1966: CONTRACTOR'S RESPONSE OF 30 SEPTEMBER 1966 RELATED REASONS FOR NON-PERFORMANCE, WHICH REASONS WERE NOT CONSIDERED EXCUSABLE AND REQUESTED AMENDED DELIVERY SCHEDULE. ON 5 OCTOBER 1966, MODIFICATION NO. 1 AMENDED DELIVERY SCHEDULE TO COMMENCE DELIVERIES 2 DECEMBER 1966 AT THE RATE OF TWO (2) UNITS PER WEEK UNTIL COMPLETION. NO DELIVERIES WERE MADE ON 2 DECEMBER 1966. NO PRODUCTION DISCERNABLE ON PLANT VISIT OF 9 JANUARY 1967. ONE (1) UNIT COMPLETED BUT REPEATEDLY FAILED TESTING. CONTRACTOR DEFAULTED ON 21 MAY 1968, 20 MONTHS DELINQUENT. (7) CONTRACT AF09 (603) 63365, AWARDED 18 MARCH 1966 FOR SIXTEEN (16) EACH, METAL CUTTING BAND SAWS, HAD A REQUIRED DELIVERY DATE OF 5 JULY 1966. BY 12 MAY 1966, CONTRACTOR DESIGN ENGINEERING WAS 90 PERCENT COMPLETE, PURCHASE ORDERS HAD BEEN PLACED AND SOME DELIVERIES HAD BEEN RECEIVED. ON 26 MAY 1966 CONTRACTOR REQUESTED FINAL INSPECTION AND ACCEPTANCE BE CHANGED TO SUBCONTRACTOR'S PLANT, G AND C MACHINE COMPANY, FRANKLIN, PENNA. DELIVERY NOT MADE BY 5 JULY 1966. DELAY DUE TO ENGINEERING DEPARTMENT UNDER HEAVY WORKLOAD AND SUBCONTRACTOR, G AND C MACHINE COMPANY, UNABLE TO HANDLE ADDITIONAL PRODUCTION AND FABRICATION. A NEW SUBCONTRACTOR, KING PRINTING AND EQUIPMENT COMPANY, WAS NAMED TO FABRICATE THE ITEM. SHOW CAUSE LETTER WAS ISSUED ON 5 AUGUST 1966: CONTRACTOR'S RESPONSE AS TO REASONS FOR DELAY DEEMED NOT EXCUSABLE AND REQUESTED REVISED DELIVERY SCHEDULE OF 18 NOVEMBER 1966. CONTRACTOR ADVISED ON 17 OCTOBER 1966 THAT HE WOULD SHIP ONE (1) MACHINE BY 3 OCTOBER 1966, ONE (1) EACH 1 NOVEMBER AND THREE (3) EACH BALANCE PER WEEK UNTIL COMPLETE. NO MACHINES HAVE BEEN SHIPPED TO DATE OF SURVEY, 27 JUNE 1968 AND CONTRACT DELIVERY SCHEDULE DELINQUENT SINCE 5 JULY 1966. PRODUCTION HAD BEEN LIMITED AT SUBCONTRACTOR'S PLANT DUE TO NONAVAILABILITY OF COMPONENT PARTS TO BE SUPPLIED BY CONTRACTOR. THE SINGLE UNIT PRODUCED TO DATE HAS REPEATEDLY FAILED TESTING. CONTRACTING OFFICER DEFAULTED CONTRACTOR ON 20 JUNE 1968; CONTRACT DELINQUENT TWENTY-FOUR (24) MONTHS.'

YOUR LETTER OF AUGUST 22, 1968, IN WHICH YOU FURNISHED US YOUR COMMENTS ON THE CONTRACTING OFFICER'S REPORT DOES NOT DISPUTE THE ACCURACY OF THE REPORT BUT MERELY APPEARS TO INDICATE THAT THE FACTS SET FORTH IN THE REPORT ARE IRRELEVANT BECAUSE THE FACTS REPORTED CONCERN NORTHEAST OHIO MACHINE BUILDERS WHEREAS ARRANGEMENTS HAD BEEN MADE TO SUBCONTRACT THE PROCUREMENT TO BOGUE ELECTRIC MANUFACTURING COMPANY. IN OUR OPINION THE RECORD OF YOUR FIRM'S PERFORMANCE HISTORY AS SET FORTH IN THE CONTRACTING OFFICER'S REPORT IS RELEVANT AND MATERIAL REGARDLESS OF THE EXTENT OF YOUR INTENDED SUBCONTRACTING OR THE IDENTITY OF YOUR PROPOSED SUBCONTRACTOR. THE GOVERNMENT MUST LOOK CHIEFLY TO ITS PRIME CONTRACTORS WITH WHOM IT IS IN PRIVITY FOR PERFORMANCE OF ITS CONTRACTS AND THE FACT THAT YOUR INTENDED SUBCONTRACTOR MAY BE FULLY RESPONSIBLE CANNOT BE HELD TO CURE A FINDING OF NONRESPONSIBILITY ON YOUR PART.

IN ANY EVENT, IT APPEARS THAT MOST, IF NOT ALL, OF THE CONTRACTS SUMMARIZED IN THE ABOVE EXCERPT FROM THE CONTRACTING OFFICER'S REPORT INVOLVED THE SUBCONTRACTING OF PRODUCTION, FABRICATION OR ASSEMBLY OF THE EQUIPMENT CALLED FOR AND THE DIFFICULTIES ENCOUNTERED IN PERFORMANCE APPEAR TO HAVE BEEN CAUSED LARGELY BY PRIME CONTRACTOR MANAGEMENT DECISIONS OR BY DELAYS IN DELIVERY OF COMPONENTS OR MATERIALS TO THE SUBCONTRACTORS BY YOUR COMPANY. FINALLY, IT SHOULD BE NOTED THAT THE PRE- AWARD SURVEY ACTIVITY REFUSED TO CHANGE ITS NEGATIVE AWARD RECOMMENDATION UPON LEARNING THAT YOU INTENDED TO SUBCONTRACT THE WORK TO BOGUE ELECTRIC. BASED UPON THE RECORD BEFORE US, WE CANNOT CONCLUDE THAT SUCH REFUSAL WAS UNWARRANTED. NOR CAN WE CONCLUDE THAT THE CONTRACTING OFFICER'S NEGATIVE DETERMINATION CONCERNING YOUR FIRM'S TENACITY OR PERSEVERANCE UNDER ASPR 1-903.1 (III) WAS BASED ON OTHER THAN SUBSTANTIAL EVIDENCE. THERE WAS NO REQUIREMENT THAT YOUR CASE BE SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION FOR THE ISSUANCE OF A COC SINCE THE SUBSTANTIAL PERFORMANCE DELINQUENCIES WERE NOT CAUSED BY A LACK OF CAPACITY AND CREDIT AND THE CONTRACTING OFFICER DID NOT ERR WHEN HE AWARDED THE CONTRACT TO MATER MACHINE WORKS WITHOUT FIRST DOING SO. HAVE ALSO REVIEWED AND CONSIDERED YOUR SUBSTANTIVE ASSERTIONS: (1) THAT THE ENGINEERING DRAWINGS AND TECHNICAL DATA ON THE CONTRACT ITEM ARE PROPRIETARY TO YOUR PRESIDENT AND MAY NOT BE USED, (2) THAT MATER MACHINE WORKS, AS SHOWN BY YOUR EXPERIENCE, CANNOT PRODUCE THE SAWMILL FOR ITS BID PRICE AND WITHIN ITS DELIVERY SCHEDULE, AND (3) THAT THE CONTRACTING OFFICER MAY NOT HAVE REQUIRED A COMPLETE PRE-AWARD SURVEY OF MATER AS HE DID IN YOUR CASE.

WITH RESPECT TO THE FIRST ASSERTION THE CONTRACTING OFFICER STATES THAT THE SAWMILL IS BEING PURCHASED PURSUANT TO MILITARY SPECIFICATION MIL-S- 52205A (ME) DATED AUGUST 17, 1966, AS MODIFIED IN THE SOLICITATION. THIS MILITARY SPECIFICATION, HE STATES, PROVIDES ALL THE INFORMATION AND DATA NECESSARY TO MANUFACTURE THE CONTRACT ITEM WITH NO REFERENCE TO ANY DATA OR PROPRIETARY INFORMATION BELONGING TO YOU. MOREOVER, ON THE PRIOR CONTRACTS, IT IS REPORTED THAT YOU WERE REQUIRED TO MANUFACTURE THE SAWMILL IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATION AND NOT ACCORDING TO A SPECIFICATION WHICH YOU HAD DEVELOPED.

IN REGARD TO YOUR ASSERTIONS NUMBERED (2) AND (3) ABOVE, THE CONTRACTING OFFICER REPORTS THAT A FULL PRE-AWARD SURVEY WAS PERFORMED ON MATER AND A RECOMMENDATION FOR COMPLETE AWARD ON ALL ASPECTS WAS RECEIVED. IT IS FURTHER REPORTED THAT THIS PRE-AWARD SURVEY FOUND THAT MATER WAS FULLY CAPABLE OF MEETING THE 180 DAY DELIVERY SCHEDULE AND THAT MATER'S DELIVERY DATE TO MEET PRODUCTION BY PROCUREMENT OF MATERIALS AND PURCHASED PARTS AND THROUGH SUBCONTRACTING HAD BEEN VERIFIED.

UNDER THE LAWS AND REGULATIONS GOVERNING FORMALLY ADVERTISED PROCUREMENTS CONTRACTS MUST BE AWARDED TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER. IN THE INSTANT CASE, MATER WAS DETERMINED TO BE RESPONSIVE AND RESPONSIBLE UNDER APPLICABLE STANDARDS GOVERNING SUCH DETERMINATIONS AND THE FACT THAT YOU DO NOT BELIEVE THAT MATER CAN MEET THE DELIVERY SCHEDULE AT ITS BID PRICE CONSTITUTES NO BASIS FOR INVALIDATING THE CONTRACT.