B-165386, B-165429, NOV. 26, 1968

B-165386, B-165429, NOV. 26, 1968

TO GUARANTEE LOCK COMPANY:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAMS OF OCTOBER 4 AND 14, 1968, AND LETTER OF OCTOBER 10, 1968, PROTESTING THE AWARDS MADE UNDER SOLICITATIONS NOS. DSA500-68-B-4733 AND -5163, BY DEFENSE INDUSTRIAL SUPPLY CENTER (DISC), PHILADELPHIA, PENNSYLVANIA.

INVITATION NO. -4733 WAS ISSUED ON AN UNRESTRICTED BASIS ON MAY 27, 1968, FOR 25,500 HINGED STEEL HASPS, FSN5340-664-1707, TO BE DELIVERED F.O.B. ORIGIN, TRANSPORTATION CHARGES PREPAID BY CONTRACTOR TO THREE NAMED DESTINATIONS. THIRTY-NINE FIRMS WERE SOLICITED AND SEVEN OFFERS WERE RECEIVED AS FOLLOWS:

OFFEROR UNIT PRICE DISCOUNT

------- ---------- -------- GUARANTEE LOCK CO.

$0.1518 2 PERCENT - 30 DAYS LIAB AIRCRAFT PRODUCTS, INC. 0.155 1/2 PERCENT - 20 DAYS MALLIN LOCK MFG. CO., INC. 0.16191 2 PERCENT - 30 DAYS HAGER HINGE CO. 0.20 NET MORRIS HARDWARE CO., INC. 0.209 2 PERCENT 30 DAYS THE S. WEINSTEIN SUPPLY CO. 0.20999 2 PERCENT - 30 DAYS WM. L. BLUMBERG CO., INC. 0.2102 2 PERCENT - 30 DAYS

YOU CERTIFIED IN YOUR BID THAT YOU WERE A SMALL BUSINESS CONCERN, A REGULAR DEALER, AND THAT YOU WERE OFFERING THE PRODUCT OF A SMALL BUSINESS CONCERN. HOWEVER, ALTHOUGH SPECIFICALLY REQUIRED BY THE INVITATION, YOU FAILED TO FURNISH INFORMATION AS TO THE NAME AND LOCATION OF THE MANUFACTURING FACILITY WHERE THE SUPPLIES WOULD BE PRODUCED OR, IF OFFERED FROM STOCK, THE NAME OF THE MANUFACTURING PLANT AND ADDRESS. BIDDERS WERE WARNED, IN THIS CONNECTION, THAT "FAILURE TO FURNISH COMPLETE INFORMATION MAY BE CAUSE FOR REJECTION OF THE OFFER.' WHILE THIS INFORMATION PROPERLY COULD HAVE BEEN FURNISHED AFTER BID OPENING, YOUR BID WAS NOT ENTITLED TO BE CONSIDERED FOR AWARD.

PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-905.4 A PREAWARD SURVEY WAS CONDUCTED OF YOUR CAPABILITIES TO PERFORM UNDER THE TERMS OF THE PROPOSED CONTRACT. THE REPORT OF SURVEY RECOMMENDED THAT NO AWARD BE MADE TO YOUR FIRM. THE BASIS FOR THIS RECOMMENDATION WAS THAT YOU HAD ADVISED A MEMBER OF THE SURVEY TEAM THAT THE ENTIRE QUANTITY OF STEEL HASPS WERE BEING HELD BY YOUR PACKER, THE NUCLEI PACKAGING COMPANY, BROOKLYN, NEW YORK, PENDING RECEIPT OF A CONTRACT. INVESTIGATION BY THE COGNIZANT GOVERNMENT INDUSTRIAL SPECIALIST REVEALED THAT (1) THE STEEL HASPS WERE NOT AVAILABLE AT THE PACKER; AND (2) THAT YOU INTENDED TO SUBCONTRACT WITH THE FERUM COMPANY, BRONX, NEW YORK, BUT THAT YOU WERE UNABLE TO FURNISH ANY QUOTATION FROM FERUM OR ANY ACCEPTABLE EVIDENCE OF YOUR ABILITY TO OBTAIN THE STEEL HASPS IN A TIMELY MANNER. THEREFORE, THE CONTRACTING OFFICER DETERMINED THAT SINCE YOU WERE UNABLE TO DEMONSTRATE AFFIRMATIVELY YOUR RESPONSIBILITY AS A PROSPECTIVE CONTRACTOR, AS REQUIRED BY ASPR 1-902, YOU WERE NONRESPONSIBLE AND THEREFORE NOT ENTITLED TO AN AWARD. UNDER 10 U.S.C. 2305 (C) A BIDDER RESPONDING TO A FORMALLY ADVERTISED INVITATION FOR BID IS ENTITLED TO AN AWARD ONLY IF HE IS A "RESPONSIBLE BIDDER.' IN THIS REGARD, ASPR 1-902 PROVIDES IN PART THAT: "* * * THE AWARD OF A CONTRACT TO A SUPPLIER BASED ON LOWEST EVALUATED PRICE ALONE CAN BE FALSE ECONOMY IF THERE IS SUBSEQUENT DEFAULT, LATE DELIVERIES, OR OTHER UNSATISFACTORY PERFORMANCE RESULTING IN ADDITIONAL PROCUREMENT OR ADMINISTRATIVE COSTS. WHILE IT IS IMPORTANT THAT GOVERNMENT PURCHASES BE MADE AT THE LOWEST PRICE, THIS DOES NOT REQUIRE AN AWARD TO A MARGINAL SUPPLIER SOLELY BECAUSE HE SUBMITS THE LOWEST BID OR OFFER. A PROSPECTIVE CONTRACTOR MUST DEMONSTRATE AFFIRMATIVELY HIS RESPONSIBILITY, INCLUDING, WHEN NECESSARY, THAT OF HIS PROPOSED SUBCONTRACTORS. * * *"

SINCE YOU FAILED TO DEMONSTRATE AFFIRMATIVELY YOUR RESPONSIBILITY, WE MAY NOT OBJECT TO THE CONTRACTING OFFICER'S REFUSAL TO CONSIDER YOUR LOW BID OR TO THE AWARD MADE TO THE SECOND LOW BIDDER IN THE AMOUNT OF $3,952.50.

IN YOUR LETTER OF OCTOBER 10 YOU STILL MAINTAIN THAT THE STEEL HASPS WERE AND NOW ARE AT NUCLEI PACKING. WHERE THE FACTS AS ADMINISTRATIVELY REPORTED ARE AT VARIANCE WITH THE PROTESTANT'S THE GENERAL ACCOUNTING OFFICE ACCEPTS THE ADMINISTRATIVE REPORT AS CORRECT IN THE ABSENCE OF CONVINCING EVIDENCE THAT THE REPORT IS IN ERROR.

INVITATION NO. -5163 WAS ISSUED AS AN UNRESTRICTED SOLICITATION ON JUNE 17, 1968, FOR 31,000 STEEL HASPS, FSN 5340-664-1707, TO BE DELIVERED F.O.B. ORIGIN, TRANSPORTATION CHARGES PREPAID BY CONTRACTOR TO TWO NAMED DESTINATIONS. BIDS WERE SOLICITED ON THE BASIS OF THREE ALTERNATE DELIVERY SCHEDULES, AS FOLLOWS:

WITHIN NUMBER OF DAYS

ALTERNATE AFTER DATE OF CONTRACT

--------- ---------------------- 1ST

60 2ND

90 3RD 120 THE

INVITATION PROVIDED THAT AWARDS WOULD BE

MADE TO RESPONSIVE AND RESPONSIBLE BIDDERS BASED UPON THE EARLIEST ALTERNATE DELIVERY SCHEDULE OFFERED, PRICE AND OTHER FACTORS CONSIDERED. ON JULY 1, BIDS WERE RECEIVED AND OPENED, AND IT APPEARED THAT TWO BIDS WERE RECEIVED FOR THE FIRST ALTERNATE DELIVERY SCHEDULE; TWO BIDS WERE RECEIVED FOR THE SECOND ALTERNATE DELIVERY SCHEDULE; AND FOUR BIDS WERE RECEIVED FOR THE THIRD ALTERNATE DELIVERY SCHEDULE, AS FOLLOWS:

ALTERNATE DELIVERY

OFFEROR PRICE PER UNIT SCHEDULE

------- -------------- --------------- -- GUARANTEE LOCK CO.

$0.1614 FIRST MALLIN LOCK MFG. CO., INC. 0.1719

FIRST MALLIN LOCK MFG. CO., INC. 0.1629 SECOND WM. L. BLUMBERG CO., INC. 0.2101 SECOND MALLIN LOCK MFG. CO., INC. 0.1548

THIRD MORRIS HARDWARE CO., INC. 0.2097 THIRD THE S. WEINSTEIN SUPPLY CO. 0.20999 THIRD HAGER HINGE CO. 0.22

THIRD

ALTHOUGH YOU SUBMITTED THE LOWEST BID, YOU DID NOT CERTIFY THAT YOU ARE EITHER A MANUFACTURER OR A REGULAR DEALER. YOU DID, HOWEVER, REPRESENT THAT YOU WERE A SMALL BUSINESS CONCERN AND THAT THE SUPPLIES OFFERED WOULD BE MANUFACTURED BY A SMALL BUSINESS CONCERN. AGAIN, HOWEVER, YOU FAILED TO IDENTIFY ANYWHERE IN YOUR BID (THOUGH SPECIFIC REQUEST WAS MADE THEREFOR ON PAGE 10 OF THE INVITATION) WHERE THE STEEL HASPS WOULD BE MANUFACTURED.

THE CONTRACTING OFFICER, BY WRITTEN DETERMINATION, REJECTED YOUR LOW BID (UNDER THE FIRST ALTERNATE) BECAUSE OF YOUR NONRESPONSIBILITY IN THE AREAS OF PRODUCTION CAPABILITY, PURCHASING AND SUBCONTRACTING PROCEDURES, PRIOR CONTRACT PERFORMANCE AND ABILITY TO MEET REQUIRED DELIVERY SCHEDULES.

THEREAFTER, CONTRACT NO. DSA500-69-C-2266 WAS AWARDED TO MALLIN LOCK MFG. CO., INC., ON SEPTEMBER 20, 1968, AS THE LOWEST RESPONSIBLE BIDDER UNDER THE FIRST ALTERNATE DELIVERY SCHEDULE IN THE AMOUNT OF $5,328.90. WITH REGARD TO YOUR CAPABILITIES, IT IS REPORTED THAT ON JULY 26, 1968, YOU TELEPHONED MR. J. PAPPAS, PURCHASING AGENT, TO ADVISE "THAT 15,000 PIECES WERE AT THAT MOMENT AT NUCLEI PKG. CO. AND HAD BEEN THERE FOR TEN DAYS.' BY WIRE OF AUGUST 6, 1968, YOU ADVISED THE DEFENSE SUPPLY CENTER AS FOLLOWS:

"PLEASE BE ADVISED THAT THE MATERIALS ON IFB'S 4733 AND 5163 3-1/2 INCH SAFETY HASP IS COMPLETELY MANUFACTURED AND NEEDS ONLY TO BE PACKAGED. ASK THAT THIS TAKE PRECEDENCE OVER PRE-AWARD SURVEY.'

THE STATEMENTS MADE BY YOU IN BOTH YOUR TELEPHONE CONVERSATION OF JULY 26 AND IN TELEGRAM OF AUGUST 6, 1968, WERE NOT INVESTIGATED BY THE CONTRACTING OFFICER BECAUSE THEY WERE SIMILAR TO THE ALLEGATIONS PREVIOUSLY MADE BY YOU TO A MEMBER OF THE SURVEY TEAM WHO REVIEWED YOUR QUALIFICATIONS UNDER INVITATION NO. -4733. IN YOUR TELEGRAM OF AUGUST 6, 1968, YOU STATED THAT THE SUPPLIES OFFERED UNDER INVITATION NOS. -4733 AND -5163 WERE COMPLETELY MANUFACTURED. YET THE REPORT OF SURVEY MADE UNDER INVITATION NO. -5163 MAKES NO REFERENCE TO THE AVAILABILITY OF THE SUPPLIES OFFERED BUT DOES STATE, IN PART, BASED ON A "RE-SURVEY" PERFORMED ON AUGUST 13, 1968, AS FOLLOWS:

"THE BIDDER FURNISHED A QUOTE FROM HIS SUBCONTRACTOR, THE FERUM CO., INC., 815 EAST 136TH STREET, N.Y.C. DATED 9 JULY 1968. THE QUOTE DOES NOT INDICATE THE QUANTITY OR ANY REFERENCE TO THE IDENTITY OF THE ITEM REQUIRED IN THE IFB. NOTWITHSTANDING THE ABOVE, A VISIT WAS MADE TO THE SUBCONTRACTOR'S FACILITY (13 AUGUST 1968) WHEREIN IT WAS ASCERTAINED THAT THE FERUM COMPANY DOES NOT DESIRE NOR WILL THEY PERMIT TECHNICAL INSPECTION AT THEIR FACILITY, NOR WOULD THEY SPECIFICALLY STATE OR SHOW EVIDENCE THAT THEIR ITEM WILL BE IN ACCORDANCE WITH THE TECHNICAL REQUIREMENTS OF PROPOSED PROCUREMENT.'

FURTHER, THE RECORD CONTAINS A LETTER FROM THE FERUM COMPANY DATED JULY 29, 1968, QUOTING DELIVERY TO YOU ON "31,000 EACH 3-1/2" SAFETY HASPS," FERUM NO. 248, WITHIN 30 TO 45 DAYS FROM RECEIPT OF ORDER. THIS INFORMATION IS INCONSISTENT WITH YOUR STATEMENT MADE ON AUGUST 6, 1968, THAT THE STEEL HASPS WERE ON HAND.

YOU ALSO MADE REFERENCE TO YOUR PREVIOUS CONTRACT FOR STEEL HASPS WHICH WAS AWARDED TO YOU ON OCTOBER 12, 1967. IT IS REPORTED THAT DELIVERY UNDER THIS CONTRACT WAS COMPLETED ON APRIL 5, 1968, OR APPROXIMATELY 85 DAYS LATE, DUE TO INEXCUSABLE DELAYS BY YOUR SUBCONTRACTOR, THE FERUM COMPANY.

YOUR BIDS UNDER BOTH INVITATIONS WERE REJECTED FOR THE REASON THAT YOU WERE NOT CONSIDERED TO BE A RESPONSIBLE BIDDER AS DEFINED BY ASPR 1-902 AND 1-903. THESE SECTIONS SET FORTH THE GENERAL POLICY, STANDARDS, AND REQUIREMENTS FOR MAKING A DETERMINATION OF RESPONSIBILITY OF PROSPECTIVE CONTRACTORS. IN MAKING AN AWARD AFTER ADVERTISING FOR BIDS, ONLY RESPONSIBLE BIDDERS MAY BE CONSIDERED FOR AWARD. CONTRACTING OFFICERS IN MAKING DETERMINATION OF RESPONSIBILITY ARE REQUIRED TO CONSIDER THE BIDDERS' CAPABILITIES AND THEIR FITNESS AND ABILITY TO SUCCESSFULLY PERFORM CONTRACT REQUIREMENTS. 26 COMP. GEN. 676. WHILE YOU REFER TO PAST CONTRACTS SUCCESSFULLY COMPLETED, WE ARE ADVISED THAT YOU WERE DELINQUENT IN PERFORMANCE. THE PREAWARD SURVEY REPORT UNDER INVITATION NO. -5163 STATES THAT: "OF THE FOURTEEN (14) CONTRACTS COMPLETED DURING THE PAST EIGHTEEN (18) MONTHS THE BIDDER HAS BEEN DELINQUENT ON NINE (9). HE IS USUALLY DELINQUENT BECAUSE OF LATE RECEIPT OF MATERIAL FROM SUPPLIER PACKAGING PROBLEMS AT PACKERS AND IGNORING CONTRACT INSPECTION REQUIREMENTS BY SHIPPING WITHOUT GOVERNMENT INSPECTION. * * *"

WE HAVE CONSISTENTLY TAKEN THE POSITION THAT THE QUESTION AS TO THE QUALIFICATIONS OF A PROSPECTIVE CONTRACTOR PRIMARILY IS FOR DETERMINATION BY THE PROCUREMENT OFFICERS CONCERNED. THE QUESTION OF A PROSPECTIVE CONTRACTOR'S PROBABLE APPLICATION OF SUFFICIENT TENACITY AND PERSEVERANCE TO ASSURE COMPLIANCE WITH A REQUIRED DELIVERY SCHEDULE, AND WHETHER THE PROSPECTIVE CONTRACTOR MEETS OTHER MINIMUM STANDARDS OF RESPONSIBILITY, INVOLVES A FORECAST WHICH MUST OF NECESSITY BE A MATTER OF JUDGMENT. HARRY FRIEND V FREDERICK B. LEE, 221 F.2D 96. SUCH JUDGMENT SHOULD, OF COURSE, BE BASED ON FACT AND REACHED IN GOOD FAITH; HOWEVER, IT IS ONLY PROPER THAT IT BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICERS INVOLVED WHO SHOULD BE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, WHO MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES EXPERIENCED IN OBTAINING REQUIRED PERFORMANCE, AND WHO MUST MAINTAIN DAY- TO-DAY RELATIONS WITH THE CONTRACTOR ON THE GOVERNMENT'S BEHALF. BECAUSE REASONABLE MEN MAY WELL DISAGREE IN SUCH EVALUATION, OUR OFFICE HAS ADOPTED THE RULE THAT WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING AGENCY UNLESS IT IS SHOWN THAT THE AGENCY'S DETERMINATION WAS NOT BASED ON SUBSTANTIAL EVIDENCE DEMONSTRATING THE BIDDER'S LACK OF RESPONSIBILITY. 39 COMP. GEN. 468, 472. ON THE BASIS OF THE PRESENT RECORD, WE CONCLUDE THAT THE DETERMINATIONS OF YOUR LACK OF RESPONSIBILITY ARE NOT SUBJECT TO LEGAL OBJECTION. 43 COMP. GEN. 228.