B-168034, MAR. 20, 1970

B-168034: Mar 20, 1970

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ADMINISTRATIVE DEBARMENT WHEN CONTRACTING OFFICER DETERMINED LOW BIDDER WAS NONRESPONSIBLE DUE TO PRIOR UNSATISFACTORY SERVICE. BIDDER'S CLAIM THAT SUCH DETERMINATION AMOUNTED TO ADMINISTRATIVE DEBARMENT IS DENIED. WHILE BOMB RACKS ARE ONLY ITEMS BIDDER MANUFACTURERS AND RESTRICTION TO ONE ITEM HAS PREVENTED MANUFACTURER FROM OBTAINING CONTRACTS FROM DOD. SUCH RESTRICTION DOES NOT AMOUNT TO DEBARMENT SINCE ADMINISTRATIVE DETERMINATION OF NONRESPONSIBILITY IS ONLY APPLICABLE TO PRESENT PROCUREMENT. ADMINISTRATIVE DEBARMENT IS IMPOSED FOR DEFINITE PERIOD NOT TO EXCEED 3 YEARS AND OPERATES TO PREVENT ANY CONTRACT AWARDS BY DOD AGENCY DURING THAT PERIOD. BIDDERS- QUALIFICATIONS AS BID EVALUATION FACTOR LOW BIDDER FOR BOMB RACKS WHO WAS DETERMINED NONRESPONSIVE DUE TO PRIOR UNSATISFACTORY PERFORMANCE ATTRIBUTED TO LACK OF TENACITY AND PERSEVERANCE DESPITE ADEQUATE MACHINE FACILITIES.

B-168034, MAR. 20, 1970

BIDDERS--DEBARMENT--ADMINISTRATIVE DEBARMENT WHEN CONTRACTING OFFICER DETERMINED LOW BIDDER WAS NONRESPONSIBLE DUE TO PRIOR UNSATISFACTORY SERVICE, BIDDER'S CLAIM THAT SUCH DETERMINATION AMOUNTED TO ADMINISTRATIVE DEBARMENT IS DENIED. WHILE BOMB RACKS ARE ONLY ITEMS BIDDER MANUFACTURERS AND RESTRICTION TO ONE ITEM HAS PREVENTED MANUFACTURER FROM OBTAINING CONTRACTS FROM DOD, SUCH RESTRICTION DOES NOT AMOUNT TO DEBARMENT SINCE ADMINISTRATIVE DETERMINATION OF NONRESPONSIBILITY IS ONLY APPLICABLE TO PRESENT PROCUREMENT. ADMINISTRATIVE DEBARMENT IS IMPOSED FOR DEFINITE PERIOD NOT TO EXCEED 3 YEARS AND OPERATES TO PREVENT ANY CONTRACT AWARDS BY DOD AGENCY DURING THAT PERIOD. SEE COMP. GEN. DECS. CITED. BIDDERS- QUALIFICATIONS AS BID EVALUATION FACTOR LOW BIDDER FOR BOMB RACKS WHO WAS DETERMINED NONRESPONSIVE DUE TO PRIOR UNSATISFACTORY PERFORMANCE ATTRIBUTED TO LACK OF TENACITY AND PERSEVERANCE DESPITE ADEQUATE MACHINE FACILITIES, MANPOWER AND FINANCES, IS DENIED PROTEST. WHEN BIDDER'S DELINQUENT PERFORMANCE IS ATTRIBUTED TO CAUSES OTHER THAN INADEQUATE CAPACITY OR CREDIT, REFERENCE TO SBA IS EXCUSED AND SINCE DETERMINATION OF BIDDER'S RESPONSIBILITY LIES PRIMARILY WITH CONTRACTING OFFICER GAO WILL NOT QUESTION DETERMINATION UNLESS SHOWN TO BE ARBRITRARY, CAPRICIOUS OR NOT BASED ON SUBSTANTIAL EVIDENCE AND PARTICULARLY WHEN CERTIFICATE OF URGENCY INDICATED NECESSITY FOR IMMEDIATE AWARD. SEE COMP. GEN. DECS. CITED.

TO WACHTEL, WIENER & ROSS:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 1, 1969, WITH ENCLOSURE, PROTESTING ON BEHALF OF THE BORACA CORPORATION (BORACA) THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS (IFB) N00019-69-B- 0214, ISSUED BY THE NAVAL AIR SYSTEMS COMMAND (NAVAIR), WASHINGTON, D. C.

THIS IFB, DATED JUNE 11, 1969, AS TWICE AMENDED, CALLED FOR THE MANUFACTURE AND DELIVERY OF 654 AERO 20A-1 EJECTOR BOMB RACKS TOGETHER WITH ANCILLARY ITEMS. THE INITIAL DELIVERIES OF EJECTOR BOMB RACKS WERE SCHEDULED TO BE MADE IN JULY 1970.

FOURTEEN BIDS WERE RECEIVED AND OPENED ON AUGUST 15, 1969, AND THE THREE LOWEST BIDS WERE AS FOLLOWS:

FIRM UNIT PRICE

THE BORACA CORPORATION$727.00

Z. J. INDUSTRIES 759.00

PATTY PRECISION PRODUCTS 795.25

BY LETTER OF OCTOBER 1, 1969, YOU FILED A PROTEST ON BEHALF OF BORACA BECAUSE AWARD HAD NOT BEEN MADE TO IT BY SEPTEMBER 30, 1969. YOU ALSO STATED THAT THE GOVERNMENT NEITHER MADE ANY INQUIRIES RELATING TO A PREAWARD SURVEY NOR TO THE RESPONSIVENESS OF BORACA'S BID, AND YOU ALLEGE THAT BORACA WAS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER ENTITLED TO AN AWARD UNDER THE SUBJECT IFB.

ON OCTOBER 8, 1969, THE CONTRACTING OFFICER DETERMINED IN WRITING THAT BORACA, A SMALL BUSINESS CONCERN, WAS NONRESPONSIBLE ON THE BASIS OF ITS PRIOR UNSATISFACTORY PERFORMANCE UNDER TWO PRIME CONTRACTS AND ONE SUBCONTRACT FOR CERTAIN BOMB RACKS. THE COMMANDER, NAVAIR, APPROVED THE CONTRACTING OFFICER'S DETERMINATION OF BORACA'S NONRESPONSIBILITY AS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-705.4 (C) (VI). THE DETERMINATION, WHICH STATES THAT BOTH NAVAIR AND DEFENSE CONTRACT ADMINISTRATION SERVICES PERSONNEL PROVIDED EVERY ASSISTANCE TO BORACA UNDER THE TWO PRIME CONTRACTS IN EFFORTS TO SOLVE BORACA'S PROBLEMS, READS IN PART:

"1. UNDER CONTRACT N00019-68-C-0041 AWARDED TO BORACA CORPORATION 24 JULY 1967 ON THE BASIS OF A FAVORABLE PRE-AWARD SURVEY, INITIAL DELIVERIES OF 758 AERO 20A-1 BOMB RACKS WERE SCHEDULED TO COMMENCE IN NOVEMBER 1967. THE DELIVERY SCHEDULE WAS EXTENDED TO MARCH 1968 AND LATER, TO JULY 1968. AS THE CONTRACTOR FAILED TO MAKE DELIVERY BY 31 JULY 1968, THE CONTRACT WAS TERMINATED FOR DEFAULT ON 1 AUGUST 1968.

"THE PRE-AWARD SURVEY MADE IN ADVANCE OF THE AWARD OF CONTRACT N00019 68- C-0041 INDICATED THAT BORACA HAD ADEQUATE FACILITIES, MANPOWER AND FINANCES TO PERFORM UNDER THE TERMS OF THE CONTRACT. * * * FAILURE OF BORACA TO DELIVER UNDER THIS CONTRACT IS ATTRIBUTED TO A LACK OF TENACITY AND PERSEVERANCE, DESPITE THE EXISTENCE OF ADEQUATE MACHINE FACILITIES, MANPOWER AND FINANCES AS REFLECTED BY THE PRE-AWARD SURVEY. * * * *

"2. CONTRACT N00019-67-C-0074 FOR 926 AERO 20A-1 BOMB RACKS WAS AWARDED TO LINOCHINE PRODUCTS CORPORATION 7 OCTOBER 1966. THIS CONTRACT WAS TERMINATED FOR DEFAULT ON 4 MARCH 1968 FOR FAILURE TO DELIVER EVEN THOUGH THE DELIVERY SCHEDULE HAD BEEN EXTENDED SEVERAL TIMES. BORACA WAS THE SUBCONTRACTOR RESPONSIBLE FOR FURNISHING APPROXIMATELY NINETY PER CENT (90%) OF THE MACHINED COMPONENTS NECESSARY FOR THE MANUFACTURE OF RACKS UNDER THIS CONTRACT. THE MAJOR CAUSE FOR LINOCHINE'S FAILURE TO SUPPLY RACKS WAS THE INABILITY OF BORACA TO SUPPLY COMPONENTS OF REQUIRED QUALITY. THE POOR QUALITY OF MACHINED PARTS IS CONSIDERED THE PRIME CAUSE FOR DEFAULT UNDER BOTH THE LINOCHINE AND BORACA CONTRACTS.

"3. CONTRACT N00600-67-C-0087 FOR 578 MAU-9A/A BOMB RACKS WAS AWARDED TO BORACA ON 6 SEPTEMBER 1966, WITH DELIVERY OF RACKS TO COMMENCE IN JUNE 1967 AND TO BE COMPLETED IN AUGUST 1968. THIS CONTRACT WAS AWARDED AS A FIFTY PER CENT (50%) SET-ASIDE FOR SMALL BUSINESS. THE OTHER FIFTY PER CENT (50%) WAS AWARDED TO VARO, INC. VARO COMPLETED THEIR CONTRACT ON 23 DECEMBER 1968.

"TO DATE BORACA HAS DELIVERED ONLY 108 MAU-9A/A RACKS UNDER THIS CONTRACT. * * * THE CONTRACTING OFFICER HAS AFFORDED BORACA EVERY POSSIBLE CONSIDERATION IN ORDER TO AVOID TERMINATION AND TO OBTAIN OPERATIONALLY USABLE RACKS. THE CONTRACT SCHEDULE HAS BEEN EXTENDED (SEVERAL TIMES). * * * *

"4. AS IN THE CASE OF THE AERO 20A-1 BOMB RACK, BORACA HAS HAD CONTINUAL PROBLEMS IN ATTEMPTING TO PRODUCE MAU-9A/A RACKS TO THE QUALITY REQUIRED BY THE DRAWINGS AND SPECIFICATIONS. ALTHOUGH THE CONTRACTOR HAS SUBMITTED FOUR LOTS FOR TEST, THREE OF WHICH HAVE BEEN ACCEPTED, NUMEROUS RETESTS WERE NECESSARY AND CONSIDERABLE REWORK WAS REQUIRED ON EACH LOT PRIOR TO ACCEPTANCE BY THE GOVERNMENT. OF MAJOR CONCERN WAS REPEATED FAILURE OF LOT SAMPLES TO PASS THE CRITICAL 'LIFE TEST'. COMPONENT PART FAILURES AND MACHINING ERRORS HAVE BEEN EXTENSIVE AND SERIOUS. THESE FAILURES, IN MANY INSTANCES, HAVE OCCURRED IN SUCCESSIVE LOTS. EVIDENCE OF CONSISTENTLY POOR WORKMANSHIP ON LOTS SUBMITTED TO DATE IS INDICATED IN THE FACT THAT TWO OR THREE SUBMISSIONS FOR EACH LOT WERE REQUIRED BEFORE RACKS PASSED THE MAJOR OPERATIONAL TESTS AND WERE ACCEPTED WITH NUMEROUS DISCREPANCIES SUBJECT TO REINSPECTION AND CORRECTION PRIOR TO RELEASE FOR SHIPMENT. EVEN THOUGH THE GOVERNMENT HAS ACCEPTED RACKS, MANY FAILURES AND MANUFACTURING DISCREPANCIES HAVE BEEN FOUND AND REQUIRED REPAIRS BY THE GOVERNMENT BEFORE USE BY THE FLEET.

"5. THERE IS NO EVIDENCE TO INDICATE ANY UPWARD TREND IN THE QUALITY OF BORACA'S PRODUCTION WHICH WOULD WARRANT THE PLACEMENT OF A CONTRACT FOR ITEMS REQUIRING THE HIGHLY SKILLED MACHINING PRACTICES DEMANDED IN THE PRODUCTION OF BOMB RACKS.

DETERMINATION

"THE BORACA CORPORATION IS DEEMED A NON-RESPONSIBLE CONTRACTOR FOR THE AWARD OF THIS CONTRACT BY VIRTUE OF ITS PERSISTENT FAILURE TO APPLY NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB IN THE MANUFACTURE OF BOMB RACKS UNDER PAST AND CURRENT CONTRACTS."

IN VIEW OF THE FACT THAT BORACA IS A SMALL BUSINESS CONCERN, THE PRIMARY QUESTIONS FOR US TO CONSIDER IN CONNECTION WITH YOUR PROTEST ARE WHETHER THE CONTRACTING OFFICER WAS JUSTIFIED IN DETERMINING THAT BORACA'S PAST RECORD OF PERFORMANCE WAS UNSATISFACTORY AND, IF SO, WHETHER SUCH AN UNSATISFACTORY PERFORMANCE CAN PROPERLY BE ATTRIBUTED TO BORACA'S FAILURE TO APPLY THE NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB.

ASPR 1-903.1 (II) PROVIDES THAT THE PROSPECTIVE CONTRACTOR MUST BE ABLE TO COMPLY WITH THE REQUIRED OR PROPOSED DELIVERY SCHEDULE, TAKING INTO CONSIDERATION ALL EXISTING BUSINESS COMMITMENTS, COMMERCIAL AS WELL AS GOVERNMENTAL. ASPR 1-903.1 (III), PROVIDES THAT A PROSPECTIVE CONTRACTOR MUST:

" * * * 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) (Y) AND 1-905.2; * * *."

UNDER ASPR 1-903.1 (III) WHEN A BIDDER'S DELINQUENT PERFORMANCE IS ATTRIBUTED TO CAUSES OTHER THAN INADEQUATE CAPACITY OR CREDIT, REFERENCE TO THE SMALL BUSINESS ADMINISTRATION (SBA) IS EXCUSED. 43 COMP. GEN. 257 (1963); B-166969, SEPTEMBER 2, 1969; 49 COMP. GEN. . STATED ANOTHER WAY, FACTORS CONCERNING WHETHER A BIDDER WILL, RATHER THAN CAN, PERFORM NEED NOT BE SUBMITTED TO SBA. 43 COMP. GEN. 298 (1963); B-159062, JULY 20, 1966.

IT IS PROVIDED AT 10 U.S.C. 2305 (C) THAT CONTRACT AWARDS PURSUANT TO FORMAL ADVERTISING SHALL BE MADE TO "THE RESPONSIBLE CONTRACTOR WHOSE BID IS RESPONSIVE AND WILL BE MOST ADVANTAGEOUS TO THE UNITED STATES ***." IS ALSO WELL SETTLED THAT THE DETERMINATION OF A BIDDER'S RESPONSIBILITY LIES PRIMARILY WITH THE CONTRACTING OFFICER (43 COMP. GEN. 228 (1963)), AND SUCH DETERMINATION WILL NOT BE QUESTIONED BY OUR OFFICE UNLESS IT IS SHOWN TO BE ARBITRARY, CAPRICIOUS, OR NOT BASED ON SUBSTANTIVE EVIDENCE. 39 COMP. GEN. 705 (1960); 38 COMP. GEN. 778 (1959). THUS, THE REMAINING QUESTION FOR OUR OFFICE TO DECIDE IS WHETHER THE CONTRACTING OFFICER'S DETERMINATION THAT BORACA IS NONRESPONSIBLE MEETS THE CRITERIA INDICATED. SEE B-164821, SEPTEMBER 12, 1968.

THE CONTRACTING OFFICER BASED HIS ADVERSE DETERMINATION REGARDING BORACA'S RESPONSIBILITY ON THE HISTORY OF BORACA'S PERFORMANCE UNDER THREE CONTRACTS. TWO OF THE CONTRACTS (N00019-68-C-0041 AND N00019-67 C-0074), WHICH COVERED AERO 20A-1 RACKS, WERE TERMINATED BY NAVAIR DUE TO BORACA'S FAILURE, AS PRIME CONTRACTOR UNDER 0041, TO DELIVER RACKS UNDER EXTENDED DELIVERY SCHEDULES AND ALSO BORACA'S FAILURE, AS A SUBCONTRACTOR UNDER 0074, TO SUPPLY COMPONENTS OF REQUIRED QUALITY. AS TO THE THIRD CONTRACT (NO. N00600-67-C-0087), COVERING MAU-9A/A RACKS, AS PREVIOUSLY POINTED OUT DELIVERY WAS ORIGINALLY REQUIRED TO COMMENCE IN JUNE 1967 AND TO BE COMPLETED IN AUGUST 1968. HOWEVER, THE DELIVERY SCHEDULE HAD TO BE EXTENDED BY NAVAIR SEVERAL TIMES, AND THE LAST EXTENSION ON SEPTEMBER 25, 1969, WHICH EXTENDED DELIVERY OF LOT 4 TO OCTOBER 21, 1969, RESULTED IN ASSESSMENT OF A PENALTY OF $5.00 PER UNIT FOR A DELAY CHARGEABLE TO BORACA.

IN YOUR LETTER OF DECEMBER 29, IN RESPONSE TO THE ADMINISTRATIVE REPORT, YOU STATE THAT THE TWO CONTRACTS (CONTRACT NOS. N00019-68-C 0041 AND N00019-67-C-0074), WHICH WERE TERMINATED BY NAVAIR SHOULD HAVE BEEN TERMINATED FOR CONVENIENCE OF THE GOVERNMENT AND THAT BOTH OF THESE TERMINATIONS HAVE BEEN APPEALED TO THE ARMED SERVICES BOARD OF CONTRACT APPEALS (HEREAFTER REFERRED TO AS THE BOARD). IT IS YOUR CONTENTION THAT SINCE THE BOARD HAS NOT YET DETERMINED WHETHER THE GOVERNMENT WAS JUSTIFIED IN TERMINATING THESE CONTRACTS FOR DEAFULT, THE DEFAULTS SHOULD NOT BE CONSIDERED IN ANY DETERMINATION OF BORACA'S RESPONSIBLILITY.

CONCERNING THIS MATTER, THIS OFFICE HAS HELD THAT A TERMINATION FOR DEFAULT, PROPERLY SUSTAINED BY FINDING OF FACT, IS A PROPER MATTER FOR CONSIDERATION IN DETERMINING THE RESPONSIBILITY OF A BIDDER, NOTWITHSTANDING A PENDING APPEAL FROM SUCH TERMINATION. 43 COMP. GEN. 323, 325-326 (1963); B-155903, APRIL 9, 1965; ALSO, SEE B-157055, MAY 4, 1967. IN THE PRESENT CASE, THE DELAY IN DELIVERIES UNDER CONTRACT NO. N00019-68-C-0041 AND THE INABILITY OF BORACA, AS A SUBCONTRACTOR UNDER CONTRACT NO. N00019-67-C-0074, TO SUPPLY COMPONENTS OF A REQUIRED QUALITY IN A TIMELY MANNER ARE RELEVANT TO THE MATTER OF BORACA'S RESPONSIBILITY AND THE FACT THAT THE MERITS OF YOUR CONTENTIONS WITH RESPECT THERETO HAVE NOT BEEN FINALLY ADJUDICATED WOULD NOT PRECLUDE THEIR BEING CONSIDERED AS PART OF THE BIDDER'S RECORD.

CONCERNING THE THIRD CONTRACT (CONTRACT NO. N00600-67-C-0087) RELIED ON BY THE CONTRACTING OFFICER AS A BASIS FOR HIS ADVERSE DETERMINATION, YOU, IN YOUR LETTER OF DECEMBER 29, STATE, IN RESPONSE TO PARAGRAPH 3 OF THE DIRERMINATION OF NONRESPONSIBILITY, THAT:

"CONTRACT NO. N00600-67-C-0087 HAS BEEN CITED AS THE REASON FOR THE BORACA CORPORATION HAVING DEMONSTRATED LACK OF 'TENACITY AND PERSEVERANCE'. THE FOLLOWING HAS BEEN SET OUT AS EXAMPLES:

"(A) ACCELERATING THE DELIVERY SCHEDULE TO WAIVE THE REQUIREMENT OF FIRST ARTICLE TESTING. THERE APPEARS NOTHING IN THIS EXAMPLE TO INDICATE THAT THE BORACA CORPORATION LACKED 'TENACITY AND PERSEVERANCE'.

"(B) DELIVERY SCHEDULE EXTENDED BECAUSE OF 'DRAWING CHANGES IMPOSED BY THE GOVERNMENT'. THIS IS A GOVERNMENT ACTION AND DOES NOT DEMONSTRATE A LACK OF 'TENACITY OR PERSEVERANCE'.

"(C) EXTENSION OF THE DELIVERY SCHEDULE BECAUSE OF DRAWING CHANGE IMPOSED BY THE GOVERNMENT.

"(D) EXTENSION OF THE DELIVERY SCHEDULE BECAUSE OF REQUESTED CLARIFICATION OF THE DRAWINGS. THE GOVERNMENT CONSIDERED THE REQUEST SUFFICIENTLY IMPORTANT TO CLARIFY THE MATTER AND EXTEND THE DELIVERY SCHEDULE. THIS DOES NOT DEMONSTRATE A LACK OF 'TENACITY OR PERSEVERANCE'.

"(E) EXTENSION OF THE DELIVERY SCHEDULE TO CORRECT DEFICIENCIES. THIS WAS A PERIOD OF 9 DAYS AND COULD NOT POSSIBLY BE CONSIDERED AS INDICATING A LACK OF 'TENACITY' OR 'PERSEVERANCE'.

"(F) THE DELIVERY SCHEDULE WAS ADJUSTED FOR WHICH BORACA PAID $5,780.00. CONSIDERATION WAS GIVEN FOR THE EXTENSION AND, THEREFORE, SHOULD NOT BE HELD AGAINST THE CONTRACTOR ON FUTURE PROCUREMENTS.

"(G) THE DELIVERY SCHEDULE WAS AGAIN EXTENDED AND CONSIDERATION GIVEN FOR THE EXTENSION; THEREFORE, SUCH EXTENSIONS SHOULD NOT BE HELD AGAINST THE CONTRACTOR AT THIS TIME.

"(H) THE DELIVERY SCHEDULE WAS EXTENDED PARTLY BECAUSE OF EXCUSABLE CAUSES FOR DELAY WHICH DO NOT INDICATE A LACK OF 'TENACITY' OR. PERSEVERANCE'. CONSIDERATION WAS GIVEN FOR ANY OTHER EXTENSIONS." FAIL TO UNDERSTAND HOW THE FACT THAT CONSIDERATION WAS GIVEN FOR EXTENSIONS OF DELIVERY SCHEDULES UNDER CONTRACT NO. N00600-67-C-0087 WOULD PRECLUDE CONSIDERATION BY THE CONTRACTING OFFICER OF THE FAILURES TO MEET THE ORIGINAL DELIVERY DATES AS RELEVANT TO BORACA'S RESPONSIBILITY. THE FACT THAT THE CONTRACTING OFFICER FELT THAT IT WAS IN THE GOVERNMENT'S BEST INTEREST TO GRANT THE EXTENSIONS DOES NOT CHANGE THE FACT THAT BORACA FAILED TO DELIVER IN ACCORDANCE WITH THE ORIGINAL DELIVERY SCHEDULE, AND BORACA'S AGREEMENT TO FURNISH CONSIDERATION FOR THE EXTENSIONS WOULD APPEAR TO SHOW RECOGNITION OF THE LACK OF EXCUSABLE CAUSE FOR THE DELAYS. THESE FAILURES ARE RELEVANT TO AND PROPERLY FOR CONSIDERATION BY THE CONTRACTING OFFICER IN HIS DETERMINATION OF BORACA'S RESPONSIBILITY. HAVE HELD THAT LACK OF TENACITY AND PERSEVERANCE MAY CONSIST OF MINOR FAULTS WHICH CUMULATIVELY RESULT IN UNDULY INCREASING THE GOVERNMENT'S BURDEN OF ADMINISTERING THE CONTRACT. 43 COMP. GEN. 257 (1963); B 163860, AUGUST 14, 1968. WHILE IT APPEARS THAT BORACA WAS NOT RESPONSIBLE FOR THE EXTENSIONS UNDER N00600-67-C-0087 RESULTING FROM DRAWING CHANGES AND CLARIFICATIONS, THE RECORD STILL SHOWS A SUBSTANTIAL NUMBER OF DELINQUENCIES WHICH CAN BE ATTRIBUTED TO BORACA.

EVEN THOUGH MOST OF THE DELINQUENCIES CITED FOR THE THREE CONTRACTS MAY NOT HAVE BEEN SERIOUS IF CONSIDERED INDIVIDUALLY, WE ARE OF THE OPINION THAT THE NUMBER AND FREQUENCY OF DELAYS DID INCREASE THE BURDEN OF ADMINISTERING THESE CONTRACTS. ADDITIONALLY, THE RECORD APPEARS TO ESTABLISH THAT WHILE BORACA HAS THE NECESSARY CAPACITY AND CREDIT TO DO AN ACCEPTABLE JOB, IT HAS HAD CONTINUAL PROBLEMS IN ATTEMPTING TO PRODUCE BOMB RACKS TO THE QUALITY REQUIRED BY THE GOVERNMENT'S SPECIFICATIONS. THE CONSISTENTLY POOR WORKMANSHIP ON THE BOMB RACKS SUBMITTED, WHICH WAS EVIDENCED BY FAILURE OF LOT SAMPLES TO PASS THE CRITICAL "LIFE TESTS," APPEARS TO INDICATE AN UNWILLINGNESS ON THE PART OF BORACA TO COMPLETE AN ACCEPTABLE JOB. IN THE CIRCUMSTANCES, IT IS OUR VIEW THAT THE PRESENT RECORD IS ADEQUATE TO SUPPORT THE DETERMINATION BY THE CONTRACTING OFFICER OF BORACA'S NONRESPONSIBILITY FOR REASONS OTHER THAN CAPACITY OR CREDIT, WHICH WAS APPROVED BY NAVAIR. THEREFORE, WE ARE UNABLE TO CONCLUDE THAT BORACA'S DISQUALIFICATION FOR AWARD WAS ARBITRARY, CAPRICIOUS, OR UNSUPPORTED BY SUBSTANTIAL EVIDENCE. B-160499, JANUARY 6, 1967,

IN YOUR LETTER OF DECEMBER 29, YOU ALSO ALLEGE THAT THE CONTRACTING OFFICER'S DETERMINATION THAT BORACA WAS NONRESPONSIBLE AMOUNTED, IN EFFECT, TO AN ADMINISTRATIVE DEBARMENT, SINCE THE ONLY ITEMS MANUFACTURED BY BORACA ARE BOMB RACKS. WE DO NOT AGREE WITH THIS CONTENTION. WHILE IT MAY WELL BE THAT BORACA, BY RESTRICTION OF ITS MANUFACTURING TO ONE ITEM, HAS EFFECTIVELY PREVENTED ITSELF FROM OBTAINING, FOR THE TIME BEING, ANY CONTRACTS WITH NAVAIR, THIS DOES NOT AMOUNT TO A DEBARMENT, SINCE THE CONTRACTING OFFICER'S DETERMINATION IS APPLICABLE ONLY TO THE PRESENT PROCUREMENT. 43 COMP. GEN. 257, 264 (1963); ID. 387, 390 (1963). ADMINISTRATIVE DEBARMENT, ON THE OTHER HAND, IS IMPOSED FOR A DEFINITE PERIOD, NOT TO EXCEED THREE YEARS, AND OPERATES TO PREVENT ANY CONTRACT AWARDS DURING THAT PERIOD BY ANY AGENCY OF THE DEPARTMENT OF DEFENSE. ALTHOUGH THE LANGUAGE OF ASPR 1-903.1 (III), RELATING TO THE MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS (QUOTED ABOVE), IS SIMILAR TO THE LANGUAGE OF ASPR 1-604.1 (II) (B), STATING GROUNDS FOR DEBARMENT, IN OUR DECISION OF AUGUST 8, 1963, 43 COMP. GEN. 140 (1963), WE STATED, IN PERTINENT PART, THAT:

"WE DID NOT HOLD, OR INTEND TO HOLD, IN OUR MAY 21, DECISION THAT OUR 'CONCURRENCE' EXTENDED BEYOND THAT PARTICULAR PROCUREMENT. IN CONSIDERING THIS AND SIMILAR CASES INVOLVING DISCRETIONARY DETERMINATIONS OF NONRESPONSIBILITY, OUR OFFICE HAS BEEN MOST CAREFUL NOT TO CHARACTERIZE OUR CONCURRENCES OF NONRESPONSIBILITY DETERMINATIONS AS DE FACTO DEBARMENTS. * * * AS A GENERAL RULE, A PRIOR ADMINISTRATIVE DETERMINATION OF NONRESPONSIBILITY IS NOT DETERMINATIVE OF A SUBSEQUENT QUESTION OF RESPONSIBILITY."

IN YOUR LETTER OF DECEMBER 29, YOU ALSO CONTEND THAT THE PROCEDURES OUTLINED IN DEFENSE PROCUREMENT CIRCULAR (DPC) NO. 75 (ITEM V), DATED DECEMBER 10, 1969, SHOULD HAVE BEEN FOLLOWED. DPC NO. 75 STATES, IN PERTINENT PART, THAT:

"(VI) A DETERMINATION BY A CONTRACTING OFFICER THAT A SMALL BUSINESS CONCERN IS NOT RESPONSIBLE PURSUANT TO 1-903.1 (III) AND (IV), MUST BE SUPPORTED BY SUBSTANTIAL EVIDENCE DOCUMENTED IN THE CONTRACT FILES. THESE FACTORS OF RESPONSIBILITY ARE NOT COVERED BY THE CERTIFICATE OF COMPETENCY PROCEDURE, BUT ARE FOR DETERMINATION BY THE CONTRACTING OFFICER, AND APPROVAL BY THE HEAD OF THE PROCURING ACTIVITY OR HIS DESIGNEE. CONCURRENT WITH THE CONTRACTING OFFICER'S SUBMISSION OF SUCH DETERMINATION OF NONRESPONSIBILITY TO THE HEAD OF THE PROCURING ACTIVITY OR HIS DESIGNEE FOR APPROVAL, THE CONTRACTING OFFICER SHALL TRANSMIT A COPY OF THE DOCUMENTATION SUPPORTING THE DETERMINATION THAT A SMALL BUSINESS CONCERN IS NOT RESPONSIBLE FOR REASONS OTHER THAN DEFICIENCIES IN CAPACITY OR CREDIT TO THE ASSIGNED SBA REPRESENTATIVE OR TO THE SBA REGIONAL OFFICE AND TO THE APPROPRIATE DEPARTMENTAL SMALL BUSINESS ADVISOR IDENTIFIED IN 1 -704.2. THE DOCUMENTATION TRANSMITTED TO THE SBA SHALL INCLUDE: TWO COPIES OF THE SOLICITATION, AND ONE COPY OF THE PREAWARD SURVEY FINDINGS, PERTINENT TECHNICAL AND FINANCIAL INFORMATION, THE ABSTRACT OF BIDS, IF AVAILABLE, AND OTHER PERTINENT INFORMATION WHICH SUPPORTED THE CONTRACTING OFFICER'S DETERMINATION OF NONREPONSIBILITY FOR REASONS OTHER THAN CAPACITY AND CREDIT. THE SBA OFFICE RECEIVING THE DOCUMENTATION SHALL, WITHIN FIVE WORKING DAYS, NOTIFY THE CONTRACTING OFFICER IN WRITING OF THE SBA'S INTENT TO APPEAL TO THE HEAD OF THE PROCURING ACTIVITY OR HIS DESIGNEE WITH INFORMATION AND RECOMMENDATIONS WHICH WOULD MATERIALLY BEAR ON ANY APPROVAL ACTION BEING CONSIDERED BY THE HEAD OF THE PROCURING ACTIVITY OR HIS DESIGNEE. WITHIN TEN DAYS OF THE SBA'S WRITTEN NOTIFICATION TO THE CONTRACTING OFFICER, THE SBA SHALL PRESENT TO THE HEAD OF THE PROCURING ACTIVITY OR HIS DESIGNEE THE APPEAL IN WRITING. SUCH APPEAL SHALL CONTAIN THE BASIS FOR THE SBA POSITION, AND INCLUDE STATEMENTS FROM THE SMALL BUSINESS CONCERN AS TO TENACITY, INTEGRITY AND PERSEVERANCE AND HOW DEFICIENCIES NOTED IN THE CONTRACTING OFFICER'S DETERMINATION HAVE BEEN OR WILL BE ELIMINATED. AFTER CONSIDERATION OF THE APPEAL, THE DECISION BY THE HEAD OF THE PROCURING ACTIVITY OR HIS DESIGNEE SHALL BE FINAL. IF THE CONTRACTING OFFICER DOES NOT RECEIVE NOTIFICATION WITHIN FIVE WORKING DAYS SPECIFIED ABOVE THAT THE SBA INTENDS TO APPEAL, IT SHALL BE DEEMED THAT THE SBA DOES NOT INTEND TO FILE SUCH AN APPEAL. THE PROCEDURES OF 1-705.4 (C) (IV) APPLY IF THE AWARD MUST BE MADE WITHOUT DELAY."

IT IS NOTED THAT DPC NO. 75 WAS NOT PUBLISHED UNTIL APPROXIMATELY TWO MONTHS AFTER THE CONTRACTING OFFICER'S DETERMINATION. IT WAS DURING THE PERIOD BETWEEN THE DETERMINATION AND PUBLICATION OF DPC NO. 75 THAT THE ADMINISTRATIVE REPORT AND FILE WAS PREPARED AND SUBMITTED TO THIS OFFICE IN CONNECTION WITH BORACA'S PROTEST. THE QUESTION WHETHER THE PROCEDURES PRESCRIBED BY DPC NO. 75 SHOULD HAVE BEEN COMPLIED WITH BEFORE THE AWARD WAS MADE DOES NOT ARISE, SINCE THE LAST SENTENCE OF ITEM V OF DPC NO. 75 STATES THAT "THE PROCEDURES OF 1 705.4 (C) (IV) APPLY IF THE AWARD MUST BE MADE WITHOUT DELAY." A CERTIFICATE OF URGENCY PURSUANT TO THE CITED SECTION, INDICATING THE SPECIFIC REASONS WHY THE AWARD HAD TO BE MADE WITHOUT THE DELAY INCIDENT TO REFERRAL TO SBA, WAS ISSUED ON JANUARY 8, 1970, AND WE FIND NO LEGAL BASIS FOR QUESTIONING THE CERTIFICATE.