B-167686, OCT. 14, 1969

B-167686: Oct 14, 1969

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" CONTRACTING OFFICER ON BASIS OF OTHER INFORMATION DETERMINED OFFEROR WAS NONRESPONSIVE UNDER PROPOSED DELIVERY SCHEDULE AND. BECAUSE PROSPECTIVE CONTRACTOR'S PERFORMANCE ABILITY IS PRIMARILY FOR DETERMINATION BY CONTRACTING OFFICER WHO IS NOT OBLIGATED TO ACCEPT FINDINGS OF PREAWARD SURVEY REPORT. GAO WILL NOT QUESTION VALIDITY OF DETERMINATION ABSENT SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS THEREFOR. IT IS NOT WITHIN GAO'S PROVINCE TO QUESTION ADMINISTRATIVE DETERMINATION OF URGENCY OF PROCUREMENT. RECOVERY UNSUCCESSFUL OFFEROR IS NOT ENTITLED TO REIMBURSEMENT FOR EXPENSES INCURRED IN PREPARATION AND SUBMISSION OF PROPOSALS SINCE STATUTES REQUIRING SOLICITATION OF COMPETITIVE OFFERS TO SUPPLY GOVERNMENT'S NEEDS WERE ENACTED FOR BENEFIT OF GOVT.

B-167686, OCT. 14, 1969

BIDDERS--QUALIFICATIONS--PREAWARD SURVEYS--ACCEPTANCE OF FINDINGS IN SPITE OF DCASR'S FAVORABLE RECOMMENDATION OF AWARD TO LOW BIDDER, AFTER PREVIOUS RECOMMENDATION OF "NO AWARD," CONTRACTING OFFICER ON BASIS OF OTHER INFORMATION DETERMINED OFFEROR WAS NONRESPONSIVE UNDER PROPOSED DELIVERY SCHEDULE AND, BECAUSE PROSPECTIVE CONTRACTOR'S PERFORMANCE ABILITY IS PRIMARILY FOR DETERMINATION BY CONTRACTING OFFICER WHO IS NOT OBLIGATED TO ACCEPT FINDINGS OF PREAWARD SURVEY REPORT, GAO WILL NOT QUESTION VALIDITY OF DETERMINATION ABSENT SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS THEREFOR. IT IS NOT WITHIN GAO'S PROVINCE TO QUESTION ADMINISTRATIVE DETERMINATION OF URGENCY OF PROCUREMENT, PARTICULARLY SINCE CERTIFICATE OF URGENCY APPEARS TO CONTAIN SUFFICIENT JUSTIFICATION FOR AVOIDING DELAY OF REFERRAL TO SMALL BUSINESS ADMINISTRATION. BIDS-- PREPARATION--COSTS--RECOVERY UNSUCCESSFUL OFFEROR IS NOT ENTITLED TO REIMBURSEMENT FOR EXPENSES INCURRED IN PREPARATION AND SUBMISSION OF PROPOSALS SINCE STATUTES REQUIRING SOLICITATION OF COMPETITIVE OFFERS TO SUPPLY GOVERNMENT'S NEEDS WERE ENACTED FOR BENEFIT OF GOVT. AND NOT FOR BENEFIT OF PROSPECTIVE CONTRACTORS AND SUCH PROSPECTIVE CONTRACTORS HAVE NO ENFORCEABLE RIGHTS IN EVENT THEY ARE NOT AWARDED CONTRACT. SINCE RECORD DOES NOT ESTABLISH PROCURING ACTIVITY SOLICITED PROPOSALS IN BAD FAITH OR ESTABLISHES ARBITRARY, CAPRICIOUS OR DISCRIMINATORY ACTIONS AGAINST UNSUCCESSFUL FIRM OR BIAS OR FAVORITISM TOWARD SUCCESSFUL OFFEROR, NO LEGAL BASIS EXISTS FOR REIMBURSEMENT OF EXPENSES INCURRED IN PREPARATION AND SUBMISSION OF ITS PROPOSALS.

TO ASECO, INCORPORATED:

REFERENCE IS MADE TO YOUR TELEGRAM OF AUGUST 11, 1969, AND SUPPLEMENTARY LETTERS AND TELEGRAM OF AUGUST 12 AND 19, AND SEPTEMBER 16, 1969, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER REQUEST FOR PROPOSALS (RFP) DSA-100-69-R-1392, ISSUED BY THE DEFENSE PERSONNEL SUPPORT CENTER (DPSC), PHILADELPHIA, PENNSYLVANIA.

THE ABOVE MENTIONED RFP WAS ISSUED ON FEBRUARY 25, 1969, FOR 1,542,140 M- 1 STEEL HELMETS, TYPE I, WITH DELIVERIES REQUIRED FROM 195 TO 375 DAYS AFTER AWARD. ON MARCH 28, 1969, THE INITIAL CLOSING DATE, FOUR OFFERS WERE RECEIVED, OF WHICH YOURS WAS THE LOWEST IN PRICE. ONE OFFEROR OFFERED AN ACCELERATED DELIVERY SCHEDULE, PURSUANT TO PARAGRAPH 2, PAGE 17, OF THE RFP WHICH STATED, IN PERTINENT PART, THAT "SINCE IMMEDIATE DELIVERY IS URGENTLY DESIRED, THE GOVERNMENT RESERVES THE RIGHT TO MAKE AWARDS ON THE BASIS OF EARLIER DELIVERIES AS DETERMINED TO BE MOST ADVANTAGEOUS TO THE GOVERNMENT * * *.' ACCORDING TO THE ADMINISTRATIVE REPORT THE REASON ACCELERATED DELIVERY SCHEDULES WERE REQUESTED WAS THAT INITIALLY THE PROCUREMENT REQUEST WAS RECEIVED ASKING FOR NEGOTIATION TO BE CONDUCTED UNDER THE AUTHORITY OF PUBLIC EXIGENCY DUE TO AN IMMEDIATE BACKORDER OF 154,700 HELMETS. IT WAS LATER DETERMINED THAT THIS EXIGENCY COULD BE SATISFIED THROUGH THE USE OF THE ACCELERATED DELIVERY SCHEDULE.

AFTER VERIFICATION AND CONFIRMATION OF YOUR OFFER, THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR), DETROIT WAS REQUESTED, ON APRIL 3, TO CONDUCT A PLANT AND FINANCIAL SURVEY OF YOUR FIRM. AS A RESULT OF THE SURVEY IT WAS RECOMMENDED THAT YOUR FIRM NOT RECEIVE THE AWARD BECAUSE OF YOUR LACK OF CAPACITY DUE TO TECHNICAL, PRODUCTION, AND PLANT FACILITIES AND EQUIPMENT DEFICIENCIES, AND YOUR APPARENT INABILITY TO MEET THE DELIVERY SCHEDULE. A REVIEW OF THE SURVEY BY THE PROCURING ACTIVITY REVEALED OTHER QUESTIONABLE AREAS CONCERNING YOUR PRODUCTION PLANNING, WHICH WERE REFERRED BACK TO DCASR, DETROIT. A REPLY WAS RECEIVED FROM DCASR, DETROIT ON MAY 26, 1969. A MEETING WITH YOUR REPRESENTATIVES WAS SCHEDULED FOR JUNE 9, 1969, TO DISCUSS YOUR PRODUCTION PLANNING. HOWEVER, THE MEETING WAS NOT HELD, BECAUSE YOU REPORTED THAT YOU HAD CONCLUDED THAT YOUR OFFER DID NOT PROVIDE FOR CERTAIN CONTINGENCIES AND HAD TO BE REVISED UPWARD, AND THAT YOUR PRODUCTION AND PLANNING WAS SERIOUSLY DEFICIENT. YOU REQUESTED 10 DAYS TO FORMULATE YOUR OFFER. SINCE NEGOTIATIONS WERE REQUIRED TO BE CONDUCTED WITH THE OTHER OFFERORS, ALL FOUR OFFERORS WERE ADVISED BY WIRE THAT THE TIME FOR RECEIPT OF FINAL OFFERS WAS EXTENDED TO JUNE 19, 1969.

ON JUNE 19, 1969, REVISED OFFERS WERE RECEIVED FROM ALL FOUR OFFERORS. YOUR OFFER WAS $4.26 EACH F.O.B. ORIGIN FOR PERFORMANCE IN MICHIGAN, WITH AN ALTERNATE OFFER (SAME REQUIRED DELIVERY SCHEDULE) OF $3.90 EACH F.O.B. ORIGIN, PROVIDED A PROPOSED CANADIAN SUBCONTRACTOR (E. J. STAMPING) WAS PERMITTED TO UTILIZE GOVERNMENT FURNISHED TOOLING TO PERFORM THE STAMPING AND TRIMMING OPERATION. AS A RESULT OF THIS ALTERNATIVE OFFER, IT WAS NECESSARY FOR THE CONTRACTING OFFICER TO OBTAIN PERMISSION FROM HEADQUARTERS, DSA FOR TRANSPORTING SUCH TOOLING TO CANADA (WHICH WAS NOT RECEIVED UNTIL JULY 8, 1969), AND TO CONDUCT A PLANT SURVEY OF E. J. STAMPING. THE PLANT SURVEY OF E. J. STAMPING WAS RECEIVED ON JULY 17, 1969, AND RECOMMENDED AWARD FOR THAT PORTION OF THE CONTRACT WHICH IT WOULD PERFORM. HOWEVER, THIS SURVEY WAS NOT COORDINATED WITH DCASR, DETROIT WHO HAD CONDUCTED THE ORIGINAL SURVEY, AND AN OVERALL RECOMMENDATION COULD NOT BE FURNISHED.

ANOTHER REVISED OFFER WAS RECEIVED OF $4.30 PER ITEM, WITH AN EARLIER DELIVERY SCHEDULE. TO PERMIT FURTHER NEGOTIATIONS, ADDITIONAL REVISIONS WERE PERMITTED WITH A CUT-OFF DATE OF JULY 2, AND THE LATTER OFFER WAS REDUCED TO $3.94. YOUR OFFER OF $4.26 REMAINED THE SAME, WITH YOUR ALTERNATIVE OFFER STILL AVAILABLE FOR CONSIDERATION.

HOWEVER, ON JULY 18 THE PROCURING ACTIVITY BECAME AWARE, AS A RESULT OF A REPORT FROM THE DIRECTORATE OF SUPPLY, OF AN INCREASINGLY SEVERE CRITICAL SUPPLY POSITION. THE DIRECTORATE OF SUPPLY STATED THAT IT WAS IMPERATIVE THAT DELIVERIES BEGIN AT THE EARLIEST POSSIBLE DATE TO EQUIP COMBAT PERSONNEL WITH THESE ESSENTIAL LIFE AND LIMB ITEMS. CONSEQUENTLY, ON JULY 18 A WIRE WAS SENT TO ALL FIRMS ORIGINALLY SOLICITED, REQUESTING OFFERS BY JULY 25 ON CHANGED DELIVERY REQUIREMENTS; CALLING FOR ITEM 1 (THE EXIGENCY QUANTITY OF 357,000 HELMETS) DELIVERY TO BEGIN 90 DAYS AFTER AWARD AND TO BE COMPLETED 180 DAYS AFTER AWARD, AND ITEM 2, THE REMAINING 1,185,140 HELMETS, DELIVERY TO BEGIN 195 DAYS AFTER AWARD AND BE COMPLETED 330 DAYS AFTER AWARD. IN RESPONSE TO THAT REQUEST YOU QUOTED A PRICE OF $3.90 EACH, AND PARISH DIVISION OF DANA CORPORATION (DANA) OFFERED A PRICE OF $3.94, WITH THE FOLLOWING RESPECTIVE DELIVERY SCHEDULES:

ASECO DANA

90 DAYS - 40,000 EA 90 DAYS - 42,140 EA

100 DAYS - 45,000 EA 120 DAYS - 170,000 EA

120 DAYS - 100,000 EA 150 DAYS - 190,000 EA

150 DAYS - 82,750 EA 180 DAYS - 190,000 EA

180 DAYS - 286,771 EA 210 DAYS - 190,000 EA

210 DAYS - 197,521 EA 240 DAYS - 190,000 EA

240 DAYS - 197,521 EA 270 DAYS - 190,000 EA

270 DAYS - 197,521 EA 300 DAYS - 190,000 EA

300 DAYS - 197,524 EA 330 DAYS - 190,000 EA

330 DAYS - 197,526 EA

ON JULY 28, 1969, A CALL WAS PLACED TO DCASR, DETROIT, REQUESTING A RECOMMENDATION AS TO YOUR ABILITY TO PERFORM UNDER THE ACCELERATED SCHEDULE, TAKING INTO CONSIDERATION THE FAVORABLE SURVEY OF E. J. STAMPING. ON AUGUST 1, 1969, DCASR, DETROIT RECOMMENDED COMPLETE AWARD TO YOUR FIRM UNDER THE ACCELERATED SCHEDULE. HOWEVER, ON JULY 29, 1969, PRIOR TO RECEIPT OF THE DETROIT DCASR RECOMMENDATION, A NEW REQUIREMENT FOR 488,640 HELMETS WAS RECEIVED REQUESTING THAT NEGOTIATIONS BE CONDUCTED TO SECURE DELIVERY AS EARLY AS POSSIBLE DUE TO THE EXISTING PUBLIC EXIGENCY ON THE ITEM. THE PROCURING ACTIVITY TOOK THE POSITION THAT YOUR FIRM COULD NOT MEET THE ACCELERATED SCHEDULE, THIS POSITION HAVING BEEN BASED UPON THE NEGATIVE PRE-AWARD SURVEY OF YOUR FIRM CONDUCTED IN APRIL. IT WAS THE PROCURING ACTIVITY'S VIEW THAT ONLY DANA, WHO WAS CURRENTLY PRODUCING THE ITEM, WAS CAPABLE OF MEETING THE ACCELERATED DELIVERY REQUIREMENTS. ON JULY 29, 1969, DANA WAS SOLICITED FOR AN INDEPENDENT PROPOSAL FOR THESE 488,640 UNITS, AND OFFERED A HIGHER PRICE THAN ITS LAST OFFER ON THE ORIGINAL QUANTITY, WITH DELIVERIES TO COMMENCE IN 90 DAYS AND TO BE COMPLETED IN 210.

IT WAS THE VIEW OF THE PROCURING ACTIVITY THAT SINCE THE EXIGENCY REQUIREMENT COULD BE FILLED BY AN AWARD TO DANA, REVISED OFFERS ON THE ORIGINAL DELIVERY SCHEDULE (TO BEGIN 195 DAYS AND END 375 DAYS AFTER AWARD) COULD BE OBTAINED FROM THE FIRMS ORIGINALLY SOLICITED. ON AUGUST 6, 1969, WIRES WERE SENT TO ALL FIRMS ORIGINALLY SOLICITED REQUESTING REVISED OFFERS BY AUGUST 7, 1969. OFFERS WERE RECEIVED FROM ALL OF THE FOUR ORIGINAL OFFERORS, YOURS REMAINING THE SAME AS PREVIOUSLY STATED UNDER THE ACCELERATED SCHEDULE ($3.90), AND DANA OFFERING A PRICE OF $4.04 FOR DELIVERY COMMENCING IN 195 DAYS, OR $3.94 FOR ITS ACCELERATED SCHEDULE, PROVIDED A CONTRACT WAS AWARDED BY AUGUST 8, 1969. DANA ALSO PROPOSED THAT IF THE 488,640 UNITS WERE AWARDED BY AUGUST 8, 1969, IT WOULD ACCELERATE THE DELIVERIES STATED ABOVE FOR THOSE UNITS AND NEGOTIATE A NEW PRICE FOR BOTH PROPOSALS. THE OTHER TWO OFFERS WERE CONSIDERED TO BE OUT OF THE ZONE OF CONSIDERATION.

ON AUGUST 7, 1969, A RECOMMENDATION WAS FURNISHED TO THE CONTRACTING OFFICER BY THE PRODUCTION DIVISION, DIRECTORATE OF PROCUREMENT AND PRODUCTION, DPSC, THAT AWARD SHOULD NOT BE MADE TO YOUR FIRM BECAUSE (A) BASED ON INFORMATION THEY HAD DEVELOPED, YOUR FIRM WOULD NOT RECEIVE THE STEEL IN SUFFICIENT TIME TO MEET ITS PROPOSED ACCELERATED DELIVERY SCHEDULE. THE BASIS FOR THIS CONCLUSION WAS INFORMATION OBTAINED BY THE PROCUREMENT AGENT WHO HAD CONTACTED YOUR STEEL SUPPLIER (SHARON STEEL CO.) AND HAD BEEN ADVISED THAT ITS QUOTE TO YOUR FIRM WAS APPROXIMATELY 18,000 CIRCLES (1 CIRCLE NEEDED FOR EACH UNIT) TO BE DELIVERED 10 TO 12 WEEKS AFTER ORDER AND 300,000 CIRCLES 90 DAYS AFTER ORDER AND AT THE SAME RATE EACH MONTH THEREAFTER. IT WAS POINTED OUT THAT THIS INFORMATION CONFLICTED WITH THE INFORMATION GIVEN BY YOUR FIRM TO DCASR, DETROIT: I.E., THAT SUFFICIENT STEEL (NOT CIRCLES) FOR 60,000 UNITS WOULD BE SHIPPED BY SHARON SEVEN DAYS AFTER PLACEMENT OF YOUR ORDER AND AN ADDITIONAL SHIPMENT OF STEEL SUFFICIENT FOR 300,000 CIRCLES BEGINNING 90 DAYS AFTER RECEIPT OF YOUR ORDER AND CONTINUING AT THE LATTER RATE EACH MONTH. YOU WOULD HAVE TO PERFORM THE BLANKING OPERATION TO OBTAIN CIRCLES. UNDER THE BEST POSSIBLE SITUATION AND ASSUMING STEEL TO BE AVAILABLE AS REPORTED BY DETROIT DCASR, IT WAS CONCLUDED THAT DELIVERY BY YOUR FIRM ON THE ACCELERATED SCHEDULE WAS PHYSICALLY IMPOSSIBLE; (B) YOUR FIRM HAD NO DEFINITIVE PLANS TO INSURE THAT ADDITIONAL CONTRACTOR FURNISHED TOOLING WOULD BE AVAILABLE TO PERMIT TIMELY PERFORMANCE; (C) YOUR FIRM COULD NOT SET UP FOR PRODUCTION IN A MANNER TO MEET THE REQUIRED DELIVERY SCHEDULE; AND, (D) YOU HAD NO DEFINITIVE PLANS FOR CONDUCTING THE REQUIRED BALLISTIC TESTING. IT WAS NOTED BY THE PRODUCTION DIVISION THAT THE EARLIEST ANY FIRM HAD EVER SET UP AND STARTED PRODUCTION ON THE HELMET WAS 85 DAYS, WITH DELIVERY OF APPROXIMATELY 25,000 HELMETS AT DESTINATION IN 135 DAYS, AND IN THAT INSTANCE THE FIRM INVOLVED HAD AVAILABLE IN-HOUSE AND IN ONE LOCATION HIGHLY SKILLED METALLURGISTS AND AN EXTENSIVE ENGINEERING STAFF. ALSO, IT WAS POINTED OUT THAT ALL FIRMS ENCOUNTER SOME DELAY DUE TO PROBLEMS CONNECTED WITH THE INITIAL DRAWING OPERATION OF THIS HELMET.

IN VIEW OF THIS RECOMMENDATION IT WAS DECIDED BY THE CONTRACTING OFFICER THAT HE COULD NOT MAKE AN AFFIRMATIVE DETERMINATION THAT YOUR FIRM WAS A RESPONSIBLE PROSPECTIVE CONTRACTOR WITHIN THE MEANING OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-902 AND IN ACCORDANCE WITH THE MINIMUM STANDARDS FOR SUCH CONTRACTORS AS SET FORTH IN ASPR 1 903, SINCE YOU COULD NOT MAKE DELIVERY OF THESE CRITICALLY NEEDED ITEMS IN LESS THAN THE NORMAL LEAD TIME OF 195 DAYS. CONSEQUENTLY, IN ACCORDANCE WITH ASPR 1-904 YOU WERE DETERMINED TO BE NONRESPONSIBLE FOR DELIVERY IN ACCORDANCE WITH YOUR PROPOSED ACCELERATED DELIVERY SCHEDULE. SINCE THERE WAS AN IMMEDIATE AND COMPELLING NEED TO AWARD THIS CONTRACT IN ORDER TO INSURE THE EARLIEST POSSIBLE DELIVERY, THE PROCEDURE SET OUT IN ASPR 1-705.4 FOR REFERRAL OF REJECTIONS OF SMALL BUSINESS FIRMS TO SBA FOR CONSIDERATION OF THE ISSUANCE OF A CERTIFICATE OF COMPETENCY WAS NOT FOLLOWED. ON AUGUST 8, 1969, THE CONTRACTING OFFICER EXECUTED A CERTIFICATE OF URGENCY PURSUANT TO ASPR 1-706.4 (C) (IV), AND MADE AWARD TO DANA FOR 1,542,140 HELMETS.

IN SUMMARY, THE SITUATION IN WHICH THE PROCURING ACTIVITY FOUND ITSELF WAS THAT IT HAD OFFERS FROM DANA FOR 488,640 HELMETS AT $4.28 F.O.B. ORIGIN FOR A TOTAL OF $2,091,379.20, AND FOR 1,542,140 UNITS (WITH ACCELERATED DELIVERY) AT $3.94 F.O.B. ORIGIN FOR A TOTAL OF $6,076,031.60, BOTH REQUIRING ACCEPTANCE BY AUGUST 8. AFTER AUGUST 8, 1969, DANA'S PRICE AND DELIVERY WOULD CHANGE TO $4.04 EACH F.O.B. ORIGIN FOR 1,542,140 HELMETS FOR A TOTAL OF $6,230,245.60, WITHOUT ACCELERATED DELIVERIES. SINCE YOUR FIRM WAS CONSIDERED NONRESPONSIBLE FOR AN AWARD REQUIRING DELIVERIES PRIOR TO 195 DAYS, AND SINCE BOTH YOU AND DANA HAD INITIALLY RESTRICTED YOUR OFFERS TO AN ALL OR NONE AWARD, AND WOULD NOT CHANGE THIS LIMITATION, THERE WAS NO POSSIBILITY OF SPLITTING THE BASIC AWARD BY AWARDING THE EMERGENCY QUANTITY TO DANA AND THE BALANCE TO YOUR FIRM. CONSEQUENTLY, THE CONTRACTING OFFICER DETERMINED THAT THE BEST INTERESTS OF THE GOVERNMENT AS TO BOTH PRICE AND EARLY DELIVERY REQUIRED ACCEPTANCE OF DANA'S ACCELERATED DELIVERY OFFER, WHICH RESULTED IN A SAVING ON THE URGENT REQUIREMENT IN EXCESS OF THE SAVING WHICH WOULD HAVE BEEN REALIZED BY AWARD TO YOU WITHOUT ACCELERATED DELIVERY.

DANA WAS DETERMINED TO BE RESPONSIBLE FOR DELIVERIES IN ACCORDANCE WITH ITS ACCELERATED DELIVERY OFFER, BECAUSE (A) IT HAD ON HAND SUFFICIENT STEEL CIRCLES AND OTHER MATERIAL TO MANUFACTURE AND DELIVER THE INITIAL DELIVERY REQUIREMENT OF 42,140 BY 90 DAYS AFTER AWARD (THIS MATERIAL RESULTED FROM AN OVER-ORDERING UNDER DANA'S CURRENT CONTRACT); (B) REQUIRED TOOLING AND EQUIPMENT WAS SET UP AND IN PRODUCTION; (C) STEEL CIRCLES REQUIRED FOR ALL SUBSEQUENT DELIVERIES WOULD BE AVAILABLE FROM SHARON TO INSURE TIMELY DELIVERY. ACCORDINGLY, IT WAS DETERMINED THAT DANA WAS A RESPONSIBLE PROSPECTIVE CONTRACTOR WITHIN THE MEANING OF ASPR 1 -902 AND 1-903, AND AWARD WAS MADE TO DANA FOR 1,542,140 HELMETS ON AUGUST 8, 1969.

WHILE THE CONSIDERABLE DELAY RESULTING IN THE CREATION OF THE EXIGENCY AS TO THESE HELMETS WAS UNFORTUNATE, IT APPEARS THAT THE DELAY WAS CAUSED, IN LARGE MEASURE, BY (A) YOUR OFFERING AN EXCEEDINGLY LOW INITIAL PRICE ($3.275), WHICH YOU IMMEDIATELY AFFIRMED, BUT LATER STATED WAS TOO LOW; (B) THE NEGATIVE PRE-AWARD SURVEY BY DCASR, DETROIT, WHICH WAS NOT COMPLETED UNTIL APRIL 21, 1969; (C) THE REVIEW BY THE PROCURING ACTIVITY OF THIS SURVEY REVEALING QUESTIONABLE AREAS RELATIVE TO YOUR PRODUCTION PLANNING, WHICH OF NECESSITY HAD TO BE SENT BACK TO DETROIT DCASR TO BE CLEARED UP, WHICH WAS NOT DONE UNTIL MAY 26, 1969. IT WAS NOT UNTIL JUNE 19, 1969, THAT YOU MET WITH PROCURING ACTIVITY PERSONNEL TO DISCUSS THESE QUESTIONABLE AREAS, AT WHICH TIME YOU INTRODUCED A NEW FACTOR FOR CONSIDERATION BY MAKING AN OFFER SUBJECT TO THE USE OF GOVERNMENT TOOLING BY A CANADIAN SUBCONTRACTOR (E. J. STAMPING). AS A RESULT OF THIS NEW OFFER IT WAS NECESSARY TO OBTAIN PERMISSION FROM HEADQUARTERS, DSA TO TRANSPORT THIS TOOLING TO CANADA, WHICH WAS NOT OBTAINED UNTIL JULY 8, 1969. ALSO, IT WAS NECESSARY TO CONDUCT A PLANT SURVEY OF E. J. STAMPING, THE RESULTS OF WHICH WERE NOT RECEIVED BY THE PROCURING ACTIVITY UNTIL JULY 17, 1969.

IN REGARD TO THE QUESTION OF YOUR RESPONSIBILITY, IT IS NOTED THAT THE PRE-AWARD SURVEY OF YOUR FIRM, CONDUCTED IN APRIL BY DCASR, DETROIT, RECOMMENDED AGAINST AWARD TO YOUR FIRM, WHILE ON AUGUST 1, 1969, DCASR RECOMMENDED COMPLETE AWARD TO YOUR FIRM OF 1,542,140 HELMETS REQUIRING DELIVERY TO BEGIN 90 DAYS AFTER DATE OF AWARD. HOWEVER, IN SPITE OF THIS FAVORABLE RECOMMENDATION THE CONTRACTING OFFICER ON THE BASIS OF OTHER INFORMATION DETERMINED THAT YOU WERE NONRESPONSIBLE FOR DELIVERY IN ACCORDANCE WITH THE PROPOSED ACCELERATED DELIVERY SCHEDULE. OF COURSE THE CONTRACTING OFFICER IS UNDER NO OBLIGATION TO ACCEPT THE FINDINGS OF THE PRE-AWARD SURVEY REPORT, SINCE THE PRE-AWARD SURVEY IS ONLY ONE OF NUMEROUS SOURCES OF INFORMATION UPON WHICH HE MAY RELY IN MAKING HIS RESPONSIBILITY DETERMINATION. ASPR 1-905.3 STATES:

"1-905.3 SOURCES OF INFORMATION. INFORMATION REGARDING THE RESPONSIBILITY OF PROSPECTIVE CONTRACTORS SHALL BE SOUGHT AMONG THE FOLLOWING SOURCES:

(I) THE JOINT CONSOLIDATED LIST OF DEBARRED, INELIGIBLE, AND SUSPENDED CONTRACTORS (SEE 1-601).

(II) FROM THE PROSPECTIVE CONTRACTOR -- INCLUDING REPRESENTATION AND OTHER INFORMATION CONTAINED IN OR ATTACHED TO BIDS AND PROPOSALS; REPLIES TO QUESTIONNAIRES FINANCIAL DATA, SUCH AS BALANCE SHEETS, PROFIT AND LOSS STATEMENTS, CASH FORECASTS, FINANCIAL HISTORY OF THE CONTRACTOR AND AFFILIATED CONCERNS; CURRENT AND PAST PRODUCTION RECORDS PERSONNEL RECORDS; AND LISTS OF TOOLS, EQUIPMENT, AND FACILITIES; WRITTEN STATEMENTS OR COMMITMENTS CONCERNING FINANCIAL ASSISTANCE AND SUBCONTRACTING ARRANGEMENTS; AND ANALYSES OF OPERATIONAL CONTROL PROCEDURES. WHERE IT IS CONSIDERED NECESSARY BY THE CONTRACTING OFFICER TO PREVENT PRACTICES PREJUDICIAL TO FAIR AND OPEN COMPETITION OR FOR OTHER REASONS, PROSPECTIVE CONTRACTORS MAY BE REQUIRED TO SUBMIT AFFIDAVITS CONCERNING THEIR ABILITY TO MEET ANY OF THE MINIMUM STANDARDS SET FORTH IN 1-903, AND COMPANY OWNERSHIP AND CONTROL (SEE 2 201 (A) (XXIII) ).

(III) EXISTING INFORMATION WITHIN THE DEPARTMENT OF DEFENSE -- INCLUDING RECORDS (E.G., 1-908) ON FILE AND KNOWLEDGE OF PERSONNEL WITHIN THE PURCHASING OFFICE MAKING THE PROCUREMENT, OTHER PURCHASING OFFICES, RELATED ACTIVITIES, CONTRACT ADMINISTRATION OFFICES, AUDIT ACTIVITIES, AND OFFICES CONCERNED WITH CONTRACT FINANCING.

(IV) PUBLICATIONS -- INCLUDING CREDIT RATINGS, TRADE AND FINANCIAL JOURNALS, BUSINESS DIRECTORIES AND REGISTERS.

(V) OTHER SOURCES -- INCLUDING SUPPLIERS, SUBCONTRACTORS AND CUSTOMERS OF THE PROSPECTIVE CONTRACTOR; BANKS AND FINANCIAL COMPANIES; COMMERCIAL CREDIT AGENCIES; GOVERNMENT DEPARTMENTS AND AGENCIES; PURCHASING AND TRADE ASSOCIATIONS; BETTER BUSINESS BUREAUS AND CHAMBERS OF COMMERCE.' THE ABILITY OF A PROSPECTIVE CONTRACTOR TO PERFORM IS FOR DETERMINATION PRIMARILY BY THE CONTRACTING AGENCY AND ABSENT A SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS THEREFORE, WE WILL NOT QUESTION THE VALIDITY OF THE DETERMINATION. 37 COMP. GEN. 430. SEE 38 COMP. GEN. 248; ID. 131, 133, ID. 778. IN 43 COMP. GEN. 228, 230, WE STATED: "DECIDING A PROSPECTIVE CONTRACTOR'S PROBABLE ABILITY TO PERFORM A CONTRACT TO BE AWARDED INVOLVES A FORECAST WHICH MUST OF NECESSITY BE A MATTER OF JUDGMENT. 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.'

IN VIEW OF THE FOREGOING, WE FIND NO BASIS IN THE PROCUREMENT RECORD TO DISTURB THE DETERMINATION OF NONRESPONSIBILITY.

CONCERNING THE CERTIFICATE OF URGENCY, IT APPEARS TO CONTAIN SUFFICIENT JUSTIFICATION FOR AVOIDING THE DELAY OF REFERRAL TO SBA. MOREOVER, WE HAVE REPEATEDLY HELD THAT IT IS NOT WITHIN THE PROVINCE OF THIS OFFICE TO QUESTION ADMINISTRATIVE DETERMINATIONS OF URGENCY OF PROCUREMENT. 157997, FEBRUARY 18, 1966. B-161441, JUNE 30, 1967. SEE 38 COMP. GEN. 248.

REGARDING THE QUESTION RAISED BY YOUR TELEGRAM OF SEPTEMBER 16, 1969, RELATIVE TO REIMBURSEMENT FOR EXPENSES INCURRED IN THE PREPARATION AND SUBMISSION OF YOUR PROPOSALS, IT MUST BE POINTED OUT THAT THE STATUTES REQUIRING SOLICITATION OF COMPETITIVE OFFERS TO SUPPLY THE GOVERNMENT'S NEEDS WERE ENACTED FOR THE BENEFIT OF THE GOVERNMENT AND NOT FOR THE BENEFIT OF PROSPECTIVE CONTRACTORS. B 160110, DECEMBER 1, 1966. ALSO SEE B-161290, SEPTEMBER 14, 1967. THE COURTS HAVE THEREFORE CONSISTENTLY HELD THAT SUCH PROSPECTIVE CONTRACTORS HAVE NO ENFORCEABLE RIGHTS IN THE EVENT THEY ARE NOT AWARDED THE CONTRACT. SEE PERKINS V LUKENS STEEL COMPANY, 310 U.S. 113; COLORADO PAVING COMPANY V MURPHY, 78 F. 28; AND HEYER PRODUCTS COMPANY, INC., V UNITED STATES, 135 CT. CL. 63. IN THE HEYER PRODUCTS CASE THE COURT STATED THE RULE AS FOLLOWS:

"IT GOES WITHOUT SAYING THAT NOT EVERY UNSUCCESSFUL BIDDER IS ENTITLED TO RECOVER THE COST OF PUTTING IN HIS BID. RECOVERY CAN BE HAD IN ONLY THOSE CASES WHERE IT CAN BE SHOWN BY CLEAR AND CONVINCING PROOF THAT THERE HAS BEEN A FRAUDULENT INDUCEMENT FOR BIDS, WITH THE INTENTION, BEFORE THE BIDS WERE INVITED OR LATER CONCEIVED, TO DISREGARD THEM ALL EXCEPT THE ONES FROM BIDDERS TO ONE OF WHOM IT WAS INTENDED TO LET THE CONTRACT, WHETHER HE WAS THE LOWEST RESPONSIBLE BIDDER OR NOT. IN OTHER WORDS, IT MUST BE SHOWN THAT BIDS WERE NOT INVITED IN GOOD FAITH, BUT AS A PRETENSE TO CONCEAL THE PURPOSE TO LET THE CONTRACT TO SOME FAVORED BIDDER, OR TO ONE OF A GROUP OF PREFERRED BIDDERS, AND WITH THE INTENT TO WILFULLY, CAPRICIOUSLY, AND ARBITRARILY DISREGARD THE OBLIGATION TO LET THE CONTRACT TO HIM WHOSE BID WAS MOST ADVANTAGEOUS TO THE GOVERNMENT.'

WE DO NOT BELIEVE THAT THE RECORD IN THIS CASE ESTABLISHES THAT THE PROCURING ACTIVITY SOLICITED PROPOSALS FROM THE PROSPECTIVE CONTRACTORS IN BAD FAITH, OR ESTABLISHES ANY ARBITRARY, CAPRICIOUS OR DISCRIMINATORY ACTIONS BY THAT ACTIVITY AGAINST YOUR FIRM OR BIAS OR FAVORITISM TOWARDS DANA.

IN VIEW OF THE FOREGOING, WE CAN CONCEIVE OF NO LEGAL BASIS ON WHICH YOUR FIRM MIGHT OBTAIN REIMBURSEMENT FOR EXPENSES INCURRED IN THE PREPARATION AND SUBMISSION OF ITS PROPOSALS.

YOUR TELEGRAM OF SEPTEMBER 16, ALSO RAISED THE QUESTION OF A REVIEW OF THE OFFICIAL FILE PERTAINING TO THE PRE-AWARD SURVEY. ASPR 1-907, RELATING TO DISCLOSURE OF PRE-AWARD SURVEY DATA, READS IN PERTINENT PART, 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 10 BY INDIVIDUALS, FIRMS, OR TRADE ORGANIZATIONS (SEE 1-329.3 (C) (5) ). * * * 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.' THE ABOVE REGULATION RESTRICTS THE DISCLOSURE OF INFORMATION OBTAINED FROM A PRE AWARD SURVEY TO ANYONE OUTSIDE THE GOVERNMENT. AS TO WHY THE CONTRACTING OFFICER DID NOT DISCUSS THE PRE- AWARD SURVEY DATA WITH YOU PRIOR TO THE ISSUANCE OF HIS DETERMINATION, AS PROVIDED FOR BY ASPR 1 907, IT IS NOTED THAT THE LANGUAGE OF ASPR 1-907 IS PERMISSIVE IN THIS REGARD. ACCORDINGLY, BY THE TIME THE PROCURING ACTIVITY HAD RECEIVED A REPLY FROM DCASR TO ITS JULY 28 REQUEST FOR A RECOMMENDATION AS TO YOUR ABILITY TO PERFORM UNDER THE ACCELERATED SCHEDULE, THE PROCUREMENT HAD BECOME EXTREMELY CRITICAL. THUS, THE CONTRACTING OFFICER'S ELECTION TO PROCEED WITH THE ISSUANCE OF HIS DETERMINATION WITHOUT DISCUSSING THE PRE-AWARD SURVEY WITH YOU DOES NOT APPEAR TO HAVE BEEN AN IMPROPER EXERCISE OF THE DISCRETION GRANTED TO HIM BY THE REGULATION. MOREOVER, IT IS NOTED WITH RESPECT TO THE APRIL PRE- AWARD SURVEY, THAT THE PROCURING ACTIVITY HAD SCHEDULED A MEETING WITH YOU FOR JUNE 9, 1969, TO DISCUSS CERTAIN QUESTIONABLE AREAS REVEALED BY A REVIEW OF THE SURVEY. IT IS ASSUMED THAT OTHER ASPECTS OF THE SURVEY COULD HAVE BEEN DISCUSSED AT THIS MEETING IF YOU HAD BEEN ABLE TO ATTEND.