B-166275(3), OCT. 17, 1969

B-166275(3): Oct 17, 1969

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

UNSATISFACTORY WHERE PROTESTANT AND 6 OTHER OFFERORS WERE REJECTED FOR NONRESPONSIBILITY AND PREAWARD SURVEY FOUND PROTESTANT DEFICIENT IN 7 OF 11 TECHNICAL EVALUATING FACTORS. WHICH FINDINGS WERE SUSTAINED BY PREAWARD SURVEY REVIEW BOARD. 000 HIGHER THAN PROTESTANT'S IS DENIED SINCE IT IS RESPONSIBILITY OF CONTRACTING OFFICER TO DETERMINE BIDDER'S RESPONSIBILITY AND SUCH DETERMINATION WILL NOT BE QUESTIONED ABSENT BAD FAITH OR LACK OF SUBSTANTIAL EVIDENCE. CONTRACTING OFFICER IS NOT REQUIRED TO MAKE AWARD SOLELY BECAUSE SUPPLIER SUBMITS LOWEST BID. SINCE CONTRACTING OFFICER DETERMINED PROTESTANT WAS NOT RESPONSIBLE. HE WAS UNDER DUTY NOT TO AWARD CONTRACT TO PROTESTANT. INC.: FURTHER REFERENCE IS MADE TO YOUR LETTERS OF MARCH 14 AND 18.

B-166275(3), OCT. 17, 1969

BIDDERS--QUALIFICATIONS--PREAWARD SURVEYS--UNSATISFACTORY WHERE PROTESTANT AND 6 OTHER OFFERORS WERE REJECTED FOR NONRESPONSIBILITY AND PREAWARD SURVEY FOUND PROTESTANT DEFICIENT IN 7 OF 11 TECHNICAL EVALUATING FACTORS, WHICH FINDINGS WERE SUSTAINED BY PREAWARD SURVEY REVIEW BOARD, PROTEST TO AWARD TO CONTRACTOR AT PRICE OF ALMOST $1,000,000 HIGHER THAN PROTESTANT'S IS DENIED SINCE IT IS RESPONSIBILITY OF CONTRACTING OFFICER TO DETERMINE BIDDER'S RESPONSIBILITY AND SUCH DETERMINATION WILL NOT BE QUESTIONED ABSENT BAD FAITH OR LACK OF SUBSTANTIAL EVIDENCE. MOREOVER, UNDER ARMED SERVICES PROCUREMENT REGULATION 1-902, CONTRACTING OFFICER IS NOT REQUIRED TO MAKE AWARD SOLELY BECAUSE SUPPLIER SUBMITS LOWEST BID. CONSEQUENTLY, SINCE CONTRACTING OFFICER DETERMINED PROTESTANT WAS NOT RESPONSIBLE, HE WAS UNDER DUTY NOT TO AWARD CONTRACT TO PROTESTANT.

TO COSMOS INDUSTRIES, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF MARCH 14 AND 18, 1969, PROTESTING THE AWARD OF A CONTRACT TO ELECTROMAGNETIC TECHNOLOGY CORPORATION UNDER REQUEST FOR PROPOSALS (RFP) NO. DAAA25-69-R-0148, ISSUED BY THE DEPARTMENT OF THE ARMY, FRANKFORD ARSENAL, PHILADELPHIA, PENNSYLVANIA. YOU CONTEND THAT THE AWARD OF THE CONTRACT WAS IN VIOLATION OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) APPENDIX "K" RELATING TO PREAWARD SURVEY PROCEDURES; IN VIOLATION OF ASPR RELATING TO EVALUATION AND SELECTION OF RESPONSIBLE PROSPECTIVE CONTRACTORS; AND IS A DIVERSION OF ALMOST $1,000,000 (IN COMPARISON ONLY TO THE COSMOS QUOTATION) OF GOVERNMENT FUNDS. YOU REQUEST THAT THE AWARD BE SET ASIDE AND THE CONTRACT BE AWARDED TO YOUR COMPANY AS THE LOWEST RESPONSIBLE BIDDER.

A PRESOLICITATION NOTICE WAS ISSUED BY FRANKFORD ARSENAL ON SEPTEMBER 23, 1968, TO 32 POTENTIAL SOURCES FOR CERTAIN REQUIREMENTS IN SUPPORT OF THE 20MM ANTIAIRCRAFT ARTILLERY GUN, XM163 (SELF-PROPELLED) AND XM167 (TOWED). THE PRESOLICITATION NOTICE INCLUDED AN ANNOUNCEMENT OF A PREPROPOSAL CONFERENCE TO BE HELD AT FRANKFORD ARSENAL SHORTLY AFTER THE ISSUANCE OF THE RFP, FOR THE PURPOSE OF PROVIDING PROSPECTIVE OFFERORS WITH AN EXPLANATION AND DISCUSSION OF THE TECHNICAL AND CONTRACTUAL REQUIREMENTS.

A DETAILED SYNOPSIS OF THE PROPOSED PROCUREMENT WAS PUBLISHED NATIONWIDE IN THE DEPARTMENT OF COMMERCE BUSINESS DAILY ON SEPTEMBER 27, 1968. THE SYNOPSIS INCLUDED THE ANNOUNCEMENT OF THE PREPROPOSAL CONFERENCE AND INSTRUCTIONS FOR ATTENDANCE. IT EXPRESSED THE GOVERNMENT'S SEARCH FOR ,INTERESTED FIRMS POSSESSING SUPERIOR CAPABILITIES AND EXPERIENCE IN SUCH RELATED FIELDS AS X-BAND MICROWAVE, DOPPLER RADARS, ELECTROMAGNETIC COMPATIBILITY REQUIREMENTS AND DIGITAL HARDWARE EXPERIENCE.'

THE RFP WAS ISSUED ON OCTOBER 3, 1968, PURSUANT TO DETERMINATIONS AND FINDINGS WHICH CITED THE PUBLIC EXIGENCY EXCEPTION IN 10 U.S.C. 2304 (A) (2) AS JUSTIFYING NEGOTIATION. THE RFP WAS ISSUED TO 32 PROSPECTIVE SOURCES AND WAS SUBSEQUENTLY FURNISHED TO OTHER PROSPECTIVE SOURCES WHO RESPONDED TO THE PUBLISHED SYNOPSIS AND OTHER TRADE MEDIA. THE RFP INCLUDED, ON PAGE 1, A "CAVEAT" ADVISING ALL OFFERORS THAT THIS SOLICITATION REPRESENTED THE INITIAL COMPETITIVE PROCUREMENT OF THE ITEMS DESCRIBED IN THE RFP. IN ADDITION, THE RFP DESCRIBED, ON PAGE 39, THE PREAWARD SURVEY FACTORS APPLICABLE TO THIS PROCUREMENT.

THE PREPROPOSAL CONFERENCE WAS HELD AT FRANKFORD ARSENAL ON OCTOBER 17, 1968. OFFERORS ATTENDING THE CONFERENCE WERE PROVIDED WITH A DETAILED EXPLANATION OF THE CONTRACTUAL REQUIREMENTS, PARTICULARLY THE PREPRODUCTION EVALUATION OF TECHNICAL DATA AND THE DESIGN AND PERFORMANCE CHARACTERISTICS OF THE EQUIPMENT -- INCLUDING A DISPLAY OF ACTUAL PRODUCTION UNITS. BY AMENDMENT NO. 003 TO THE RFP, THE CLOSING DATE WAS EXTENDED FROM NOVEMBER 29, 1968, TO DECEMBER 10, 1968.

OF THE 15 OFFERS RECEIVED AND OPENED ON DECEMBER 10, 1968, THE 7 LOWEST OFFERS, AS EVALUATED, ARE AS FOLLOWS:

(1) G.C. DEWEY CORP. $8,718,306.40

(2) COSMOS INDUSTRIES, INC. 8,930,813.46

(3) REPUBLIC ELECTRONICS INDS. 9,073,329.55

(4) POLARAD ELECTRONICS CORP. 9,220,368.04

(5) FREQUENCY ENGINEERING LABS. 9,322,151.51

(6) APPLIED DEVICES CORP. 9,736,655.00

(7) ELECTROMAGNETIC TECHNOLOGY

CORP. 9,845,627.93

THE LOW BID OF THE G.C. DEWEY CORP. WAS REJECTED BECAUSE THE FIRM WAS DETERMINED TO BE NONRESPONSIBLE. ALSO THE BIDS OF YOUR FIRM, REPUBLIC ELECTRONICS, POLARAD, FREQUENCY ENGINEERING LABS AND APPLIED DEVICES CORP. WERE REJECTED BECAUSE THE CONTRACTING OFFICER HAD DETERMINED THAT YOUR FIRM AND THE OTHER COMPANIES WERE NONRESPONSIBLE FOR PURPOSES OF THIS PROCUREMENT. ON FEBRUARY 19, 1969, A CONTRACT WAS AWARDED TO ELECTROMAGNETIC TECHNOLOGY CORP. IN THE AMOUNT OF $9,845,627.93.

IN YOUR LETTER OF MARCH 14, 1969, YOU RAISE VARIOUS QUESTIONS CONCERNING THE MANNER IN WHICH THE PREAWARD SURVEY WAS CONDUCTED. IN GENERAL, YOU CONTEND THAT THE AWARD OF THE CONTRACT WAS IN VIOLATION OF ASPR APPENDIX "K" RELATING TO PREAWARD SURVEY PROCEDURES. THESE QUESTIONS WERE CONSIDERED AND ANSWERED IN DETAIL IN THE CONTRACTING OFFICER'S ADMINISTRATIVE REPORT DATED APRIL 11, 1969, WHICH HAS BEEN FURNISHED TO YOUR ATTORNEY. WE AGREE WITH THE ADMINISTRATIVE POSITION IN THIS REGARD AND, THUS, THERE IS NO NEED TO DISCUSS THIS ASPECT OF YOUR PROTEST.

THE RECORD SHOWS THAT A JOINT DEFENSE CONTRACT ADMINISTRATION SERVICES DIVISION (DCASD), NEW YORK/FRANKFORD ARSENAL PREAWARD SURVEY WAS CONDUCTED AT COSMOS' FACILITY ON DECEMBER 19 AND 20, 1968. WE ARE ADVISED THAT THE FRANKFORD ARSENAL TECHNICAL PARTICIPANTS WERE PROFESSIONALLY QUALIFIED AND WERE TECHNICALLY FAMILIAR WITH THE EQUIPMENT AND ITS EVOLUTION FROM RESEARCH AND DEVELOPMENT THROUGH CURRENT PRODUCTION.

THE JOINT PREAWARD SURVEY TEAM FOUND COSMOS TO BE DEFICIENT IN THE FOLLOWING SEVEN OF THE 11 FACTORS COMPRISING THE SURVEY:

A. TECHNICAL CAPABILITY

B. PRODUCTION CAPABILITY

C. PLANT FACILITIES AND EQUIPMENT

D. PURCHASING AND SUBCONTRACTING

E. QUALITY ASSURANCE CAPABILITY

F. LABOR RESOURCE

G. ABILITY TO MEET REQUIRED SCHEDULE

THESE FINDINGS WERE SUSTAINED BY THE PREAWARD SURVEY REVIEW BOARD AT DCASD, NEW YORK IN ITS JANUARY 24, 1969, REPORT AND RECOMMENDATION OF "NO AWARD.' ACCORDINGLY, THE CONTRACTING OFFICER DETERMINED COSMOS TO BE "NONRESPONSIBLE" AND EXECUTED A WRITTEN DETERMINATION TO THAT EFFECT ON FEBRUARY 14, 1969.

ON FEBRUARY 17, 1969, THE BOARD OF AWARDS AT FRANKFORD ARSENAL REVIEWED THE PROPOSED PROCUREMENT AND CONCURRED IN THE RECOMMENDATION FOR AWARD TO ELECTROMAGNETIC TECHNOLOGY CORP., AS THE LOWEST RESPONSIVE AND RESPONSIBLE OFFEROR. REVIEW AND APPROVAL OF THE PROPOSED AWARD BY THE HEAD OF THE PROCURING ACTIVITY (UNITED STATES ARMY WEAPONS COMMAND) WAS ACCOMPLISHED ON FEBRUARY 18, 1969. AWARD WAS MADE TO ELECTROMAGNETIC TECHNOLOGY CORP. ON FEBRUARY 19, 1969. NOTICES TO UNSUCCESSFUL OFFERORS WERE ISSUED ON FEBRUARY 20, 1969.

ALTHOUGH YOU CONTEND THAT THE GOVERNMENT WOULD HAVE SAVED $893,638.88 BY AWARDING THE CONTRACT TO COSMOS, WE DRAW YOUR ATTENTION TO ASPR 1-902 WHICH STATES IN PERTINENT PART AS FOLLOWS:

"* * * 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 SUPPLIER SOLELY BECAUSE HE SUBMITS THE LOWEST BID OR OFFER. PROSPECTIVE CONTRACTOR MUST DEMONSTRATE AFFIRMATIVELY HIS RESPONSIBILITY,

SINCE THE CONTRACTING OFFICER DETERMINED THAT YOUR FIRM WAS NOT RESPONSIBLE, HE WAS UNDER A DUTY NOT TO AWARD TO YOUR FIRM EVEN THOUGH YOUR PRICE WAS LOWER THAN THAT OF ELECTROMAGNETIC TECHNOLOGY CORPORATION.

WE HAVE CONSISTENTLY HELD THAT IT IS THE RESPONSIBILITY OF THE CONTRACTING OFFICER TO DETERMINE THE RESPONSIBILITY OF A BIDDER AND THAT SUCH DETERMINATION WILL NOT BE QUESTIONED BY OUR OFFICE IN THE ABSENCE OF BAD FAITH OR LACK OF SUBSTANTIAL EVIDENCE. 37 COMP. GEN. 430; 38 ID. 248; 39 ID. 468; 43 ID. 228. WE FIND NO BASIS ON THE RECORD BEFORE US TO QUESTION THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY IN THIS CASE.