B-167782(2), DEC. 2, 1969

B-167782(2): Dec 2, 1969

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WHICH DISCLOSES PROTESTANT (SECOND LOW OFFEROR) WAS DETERMINED NONRESPONSIBLE ON INADEQUACIES IN TECHNICAL ABILITY. NO BASIS IS OFFERED FOR CONSIDERING CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY AS ARBITRARY IN ANY RESPECT. REASONABLENESS OF SUCH DETERMINATION IS FURTHER SUPPORTED BY SMALL BUSINESS ADMINISTRATION'S REFUSAL TO ISSUE CERTIFICATE OF COMPETENCY WHICH IS CONCLUSIVE ON CONTRACTING OFFICER RESPECTING CAPACITY OR CREDIT. AGENCIES HAVE PRIMARY RESPONSIBILITY FOR DETERMINING CONTRACTOR RESPONSIBILITY. GARDNER AND DOTSON: REFERENCE IS MADE TO YOUR TELEGRAM DATED OCTOBER 2. THE REQUEST FOR PROPOSALS WAS ISSUED BY THE SACRAMENTO AIR MATERIEL AREA. THE LOWEST TOTAL PRICE PROPOSAL WAS SUBMITTED BY I.C.E.S.

B-167782(2), DEC. 2, 1969

AWARDS--SMALL BUSINESS CONCERNS--CERTIFICATIONS--DENIAL CONSIDERING RECORD, INCLUDING NEGATIVE RECOMMENDATION IN PREAWARD SURVEY, WHICH DISCLOSES PROTESTANT (SECOND LOW OFFEROR) WAS DETERMINED NONRESPONSIBLE ON INADEQUACIES IN TECHNICAL ABILITY, PRODUCTION CAPABILITY, AND IN OTHER AREAS, AS WELL AS IN FINANCIAL CAPABILITY, NO BASIS IS OFFERED FOR CONSIDERING CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY AS ARBITRARY IN ANY RESPECT; REASONABLENESS OF SUCH DETERMINATION IS FURTHER SUPPORTED BY SMALL BUSINESS ADMINISTRATION'S REFUSAL TO ISSUE CERTIFICATE OF COMPETENCY WHICH IS CONCLUSIVE ON CONTRACTING OFFICER RESPECTING CAPACITY OR CREDIT. MOREOVER, IT HAS CONSISTENTLY BEEN HELD CONTRACTING GOVT. AGENCIES HAVE PRIMARY RESPONSIBILITY FOR DETERMINING CONTRACTOR RESPONSIBILITY, WHICH DETERMINATIONS SHOULD BE ACCORDED FINALITY ABSENT CLEAR SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS THEREFOR.

TO DIBRELL, GARDNER AND DOTSON:

REFERENCE IS MADE TO YOUR TELEGRAM DATED OCTOBER 2, 1969, AND TO SUBSEQUENT LETTERS FROM YOUR FIRM, PROTESTING THE REJECTION OF THE PROPOSAL SUBMITTED BY ALL AMERICAN MAINTENANCE, INCORPORATED, SAN ANTONIO, TEXAS (ALL AMERICAN), AND THE AWARD OF A CONTRACT ON OCTOBER 16, 1969, TO THE CANADIAN COMMERCIAL CORPORATION PURSUANT TO REQUEST FOR PROPOSALS NO. F04606-69-R-0524, DATED MAY 16, 1969, AS AMENDED.

THE REQUEST FOR PROPOSALS WAS ISSUED BY THE SACRAMENTO AIR MATERIEL AREA, DIRECTORATE OF PROCUREMENT AND PRODUCTION, MCCLELLAN AIR FORCE BASE, CALIFORNIA, AS A MULTI-YEAR SOLICITATION FOR THREE YEARS OF INTER SERVICE MAINTENANCE OF A QUANTITY OF 180 T-39 AIRCRAFT. BY JULY 8, 1969, THE LIMITING DATE FOR SUBMISSION OF PROPOSALS, SIX PROPOSALS HAD BEEN RECEIVED. THE LOWEST TOTAL PRICE PROPOSAL WAS SUBMITTED BY I.C.E.S., INCORPORATED, BROWNSVILLE, TEXAS, THE NEXT LOWEST WAS SUBMITTED BY ALL AMERICAN, AND THE THIRD LOWEST WAS SUBMITTED BY NORTHWEST INDUSTRIES LIMITED, EDMONTON, ALBERTA, CANADA. A CONTRACT WAS AWARDED IN THE AMOUNT OF $4,480,447.31 TO THE CANADIAN COMMERCIAL CORPORATION WITH THE UNDERSTANDING THAT THE WORK WOULD BE SUBCONTRACTED TO NORTHWEST INDUSTRIES LIMITED, THE THIRD LOWEST OFFEROR.

PREAWARD SURVEYS WERE CONDUCTED AS A MEANS OF ASSISTING THE CONTRACTING OFFICER IN DETERMINING WHETHER EACH OF THE THREE LOWEST OFFERORS COULD BE CONSIDERED A RESPONSIBLE PROSPECTIVE CONTRACTOR FOR THE T-39 AIRCRAFT MAINTENANCE PROGRAM. THE CONTRACTING OFFICER DETERMINED THAT NEITHER C.E.S., INCORPORATED, NOR ALL AMERICAN COULD BE CONSIDERED RESPONSIBLE UNDER THE APPLICABLE STANDARDS IN THE REQUEST FOR PROPOSALS AND IN SECTION 1, PART 9, OF THE ARMED SERVICES PROCUREMENT REGULATIONS (ASPR), BUT THAT NORTHWEST INDUSTRIES LIMITED COULD BE CONSIDERED RESPONSIBLE UNDER SUCH STANDARDS. HOWEVER, BEFORE MAKING AN AWARD TO THE CANADIAN COMMERCIAL CORPORATION IN ACCORDANCE WITH THE CANADIAN PURCHASES PROVISIONS OF PART 5, SECTION 6, ASPR, WHERE IT IS PROPOSED TO ACCEPT A BID OR PROPOSAL SUBMITTED BY A CANADIAN CONCERN, THE SOUTHWEST AREA OFFICE OF THE SMALL BUSINESS ADMINISTRATION AT DALLAS, TEXAS, WAS AFFORDED AN OPPORTUNITY TO EXAMINE PERTINENT RECORDS FOR THE PURPOSE OF DETERMINING WHETHER CERTIFICATES OF COMPETENCY (COC) SHOULD BE ISSUED IN FAVOR OF THE TWO LOWEST OFFERORS WHICH APPEARED TO BE SMALL BUSINESS CONCERNS FOR GOVERNMENT PROCUREMENT PURPOSES. A COC IS CONCLUSIVE ON THE CONTRACTING OFFICER WITH RESPECT TO CAPACITY OR CREDIT. IN EACH CASE, THE SMALL BUSINESS ADMINISTRATION DECLINED TO ISSUE A COC.

I.C.E.S., INCORPORATED, PROTESTED THE POSSIBLE REJECTION OF ITS PROPOSAL ON THE GROUND THAT THE REQUEST FOR PROPOSALS WAS NOT AMENDED, FOLLOWING A CONFERENCE WHICH WAS HELD AT THE PROCUREMENT OFFICE ON JUNE 16, 1969, TO PROVIDE FOR PROGRESS PAYMENTS UNDER THE CONTRACT. A SIMILAR PROTEST WAS PRESENTED ON BEHALF OF ALL AMERICAN IN THE TELEGRAM DATED OCTOBER 2, 1969, AND THE CONTENTIONS MADE IN SUBSEQUENT LETTERS FROM YOUR FIRM ARE SUBSTANTIALLY SIMILAR TO THOSE MADE BY I.C.E.S., AFTER ITS ORIGINAL PROTEST IN THE MATTER WAS SUBMITTED. FOR THE REASONS SET FORTH IN OUR DECISION OF TODAY ON THE PROTEST OF I.C.E.S., INCORPORATED (COPY ENCLOSED), WE DO NOT AGREE THAT THE ACTION TAKEN BY THE CONTRACTING OFFICER REGARDING THE PROGRESS PAYMENT QUESTION WAS CONTRARY TO APPLICABLE REGULATIONS, OR THAT THE REFUSAL OF THE SMALL BUSINESS ADMINISTRATION TO ISSUE CERTIFICATES OF COMPETENCY IN FAVOR OF THE TWO LOWEST OFFERORS WAS BASED ENTIRELY ON A BELIEF THAT NEITHER OF THE TWO SMALL BUSINESS CONCERNS POSSESSED OR HAD THE ABILITY TO OBTAIN THE NECESSARY FINANCIAL RESOURCES TO PERFORM THE PROPOSED CONTRACT IN A SATISFACTORY MANNER. ALSO, AS INDICATED IN THE DECISION, WE FIND NO BASIS FOR TAKING THE POSITION THAT THE AWARD WAS IMPROPER BECAUSE IT WAS MADE TO A CANADIAN CORPORATION INSTEAD OF TO A FIRM LOCATED IN THE UNITED STATES.

THE RECORD BEFORE US, INCLUDING THE PREAWARD SURVEY REPORT ON ALL AMERICAN, DISCLOSES THAT THE FIRM WAS DETERMINED TO BE NONRESPONSIBLE, NOT BECAUSE OF A LACK OF FINANCIAL CAPABILITY, BUT PURSUANT TO THE NEGATIVE RECOMMENDATION IN THE PREAWARD SURVEY REPORT BASED ON INADEQUACIES IN THE FOLLOWING AREAS: TECHNICAL ABILITY, PRODUCTION CAPABILITY, PLANT FACILITIES AND EQUIPMENT, PURCHASING AND SUBCONTRACTING, PLANT SAFETY, LABOR RESOURCES, PERFORMANCE RECORD AND ABILITY TO MEET THE REQUIRED SCHEDULE.

THE DEPARTMENT OF THE AIR FORCE DISAGREES WITH YOUR CONTENTION THAT THE PROCUREMENT IN QUESTION WAS CONDUCTED IN A MANNER TO UNFAIRLY FAVOR BIG BUSINESS TO THE DETRIMENT OF SMALL BUSINESS CONCERNS. THE DEPARTMENT NOTES THAT THE REQUEST FOR PROPOSALS WAS AMENDED, AT THE SUGGESTION OF A POTENTIAL SMALL BUSINESS PROPOSER, TO REDUCE THE QUALIFICATION REQUIREMENTS AS TO HANGER SPACE, AND THAT ALL AMERICAN AND I.C.E.S., INCORPORATED, WERE INCLUDED IN THE INITIAL SOLICITATION OF MAY 16, 1969.

THE REPORT OF SURVEY ON RESPONSIBILITY SHOWS THAT ALL AMERICAN DID NOT HAVE A FIRM COMMITMENT FROM A CONSULTING ENGINEER WHEN PLANS WERE PRESENTED ON PROPOSED PERFORMANCE AND THAT NO SATISFACTORY EVIDENCE WAS PROVIDED TO SHOW THAT THE ENGINEERING CAPABILITY REQUIREMENTS COULD BE MET.

THE PREAWARD SURVEY REPORT RATING WAS UNSATISFACTORY WITH RESPECT TO PRODUCTION CAPABILITY AND PLANT FACILITIES AND EQUIPMENT FOR VARIOUS REASONS. ALL AMERICAN'S PROJECTED PLANNING CALLED FOR DISASSEMBLING OF PARTS OF THE AIRCRAFT, REMOVAL OF ENGINES, STRIPPING AND CLEANING IN AN OUTSIDE AREA. THIS PROCEDURE WAS IN CONFLICT WITH THE REQUIREMENTS OF AMENDMENT NO. 0002, DATED JUNE 11, 1969, PARAGRAPH A.2, TO THE REQUEST FOR PROPOSALS. ALL AMERICAN DID NOT ESTABLISH THAT IT POSSESSED OR COULD READILY OBTAIN ALL OF THE TOOLS AND EQUIPMENT NEEDED TO PERFORM THE PROPOSED CONTRACT SATISFACTORILY. WHEN AN INVESTIGATION DISCLOSED THAT SOME OF ITS DESIGNATED SUBCONTRACTORS WERE NOT AWARE OF THE REQUIRED WORK SPECIFICATIONS AND THE INTENDED USE OF THEIR FACILITIES FOR SPECIALIZED WORK, SUCH AS ENGINE BURNER CAN AND BUCKET WHEELS REPAIR, OVERHAUL AND REPAIR OF LANDING GEAR AND COMPONENTS, ALL AMERICAN ALSO RECEIVED AN UNSATISFACTORY RATING ON PURCHASING AND SUBCONTRACTING. PLANT SAFETY WAS RATED UNSATISFACTORY FOR VARIOUS REASONS INCLUDING A DETERMINATION THAT FIRST AID FIRE EXTINGUISHERS WERE INSUFFICIENT IN NUMBER AND WERE IMPROPERLY CLASSED FOR THE TYPE OF EXPOSURES. LABOR RESOURCES WERE RATED UNSATISFACTORY BASED UPON A DETERMINATION THAT MINIMUM MANPOWER REQUIREMENTS COULD NOT BE MET.

PERFORMANCE RECORD AND ABILITY TO MEET DELIVERY SCHEDULE WERE ALSO RATED UNSATISFACTORY IN VIEW OF DEFICIENCIES ALREADY NOTED AND ALL AMERICAN'S DELINQUENCY UNDER A CURRENT NAVY CONTRACT. LATE DELIVERIES UNDER THE NAVY CONTRACT APPEARED TO BE ATTRIBUTABLE TO A FAILURE TO EMPLOY THE NECESSARY MANAGEMENT CONTROLS IN CONNECTION WITH THE ORDERING OF SUPPLIES OR PARTS AND NECESSARY FOLLOW-UP ACTIONS WITH RESPECT THERETO.

AS STATED IN OUR DECISION TO I.C.E.S., INCORPORATED, WE HAVE CONSISTENTLY HELD THAT THE CONTRACTING AGENCIES OF THE GOVERNMENT HAVE THE PRIMARY RESPONSIBILITY FOR DETERMINING WHETHER A PROSPECTIVE CONTRACTOR IS RESPONSIBLE AND THE ADMINISTRATIVE DETERMINATION SHOULD BE ACCORDED FINALITY IN THE ABSENCE OF A CLEAR SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS THEREFOR. WE HAVE NO BASIS FOR CONSIDERING IN THIS CASE THAT THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY ON THE PART OF ALL AMERICAN WAS ARBITRARY IN ANY RESPECT, AND THE REASONABLENESS OF SUCH DETERMINATION IS SUPPORTED BY THE FACT THAT THE SMALL BUSINESS ADMINISTRATION DECLINED TO ISSUE A COC.