B-168209, FEB. 2, 1970

B-168209: Feb 2, 1970

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BIDDER RESPONSIBILITY DECISION TO INTERSTATE MANUFACTURING CORPORATION DENYING PROTEST AGAINST DETERMINATION OF CONTRACTING OFFICER THAT PROTESTANT WAS NOT A RESPONSIBLE BIDDER BY ARMY AVIATION SYSTEMS COMMAND. WAS PROPERLY DETERMINED TO LACK TENACITY AND PERSEVERANCE IN OBTAINING NECESSARY MATERIAL RATHER THAN LACK OF CAPACITY AND CREDIT TO DO THE JOB. SINCE RECORD SUPPORTS CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY IT IS UPHELD. TO INTERSTATE MANUFACTURING CORPORATION: REFERENCE IS MADE TO YOUR TELEGRAM OF OCTOBER 20. A COPY OF WHICH WAS SENT TO THIS OFFICE. THE OPENING TIME AND DATE WAS 2:30 P.M. OF THE FIFTY-NINE (59) SOURCES SOLICITED EIGHT RESPONSES WERE RECEIVED. EVALUATION OF THE BIDS INDICATED THAT YOU WERE THE LOW RESPONSIVE BIDDER.

B-168209, FEB. 2, 1970

BID PROTEST--BIDDER RESPONSIBILITY DECISION TO INTERSTATE MANUFACTURING CORPORATION DENYING PROTEST AGAINST DETERMINATION OF CONTRACTING OFFICER THAT PROTESTANT WAS NOT A RESPONSIBLE BIDDER BY ARMY AVIATION SYSTEMS COMMAND. BIDDER WHO HAD RECORD OF DELINQUENCIES AND DELAYS UNDER GOVERNMENT CONTRACTS BECAUSE OF CONTINUOUS FAILURE OF ONE SUPPLIER--THE ONLY VENDOR FROM WHICH PROTESTANT REQUESTED QUOTATIONS--WAS PROPERLY DETERMINED TO LACK TENACITY AND PERSEVERANCE IN OBTAINING NECESSARY MATERIAL RATHER THAN LACK OF CAPACITY AND CREDIT TO DO THE JOB. SINCE RECORD SUPPORTS CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY IT IS UPHELD.

TO INTERSTATE MANUFACTURING CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF OCTOBER 20, 1969, TO THE U.S. ARMY AVIATION SYSTEMS COMMAND, A COPY OF WHICH WAS SENT TO THIS OFFICE, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER INVITATION FOR BIDS (IFB) DAAJ01-70-B-0047, ISSUED BY THE ABOVE COMMAND.

THE ABOVE INVITATION, ISSUED ON SEPTEMBER 4, 1969, SOLICITED BIDS FOR 1,438 EACH SLING, CARGO, AERIAL DELIVERY, 20 FT. 3 LOOP, ON THE BASIS OF A 100 PERCENT SMALL BUSINESS SET-ASIDE. THE OPENING TIME AND DATE WAS 2:30 P.M. CDST, SEPTEMBER 18, 1969. THE IFB CALLED FOR DELIVERY OF THE ENTIRE QUANTITY WITHIN 90 DAYS AFTER DATE OF RECEIPT OF A WRITTEN NOTICE OF AWARD. OF THE FIFTY-NINE (59) SOURCES SOLICITED EIGHT RESPONSES WERE RECEIVED. EVALUATION OF THE BIDS INDICATED THAT YOU WERE THE LOW RESPONSIVE BIDDER. THE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD), READING, PENNSYLVANIA, WAS REQUESTED AND PERFORMED A PRE-AWARD SURVEY WHICH RESULTED IN A NEGATIVE FINDING BASED ON UNSATISFACTORY SUBCONTRACTING AND PERFORMANCE RECORD, AND INDICATED LACK OF ABILITY TO MEET THE REQUIRED DELIVERY SCHEDULE. BY TELEGRAM OF OCTOBER 20, 1969, TO THE U.S. ARMY AVIATION SYSTEMS COMMAND, A COPY OF WHICH WAS SENT TO THIS OFFICE, YOU LODGED A PROTEST AGAINST AWARD TO ANY OTHER FIRM UNDER IFB DAAJ01-70-B-0047. YOU ALLEGED THE PREAWARD SURVEY WAS BASED ON UNTRUE FACTS AND WAS PREPARED BY A PREJUDICED GOVERNMENT EMPLOYEE.

ON DECEMBER 17, 1969, ON THE BASIS OF THE NEGATIVE PRE-AWARD SURVEY, THE CONTRACTING OFFICER MADE A WRITTEN DETERMINATION THAT YOUR FIRM, A SMALL BUSINESS CONCERN, WAS NONRESPONSIBLE BECAUSE OF LACK OF TENACITY AND PERSEVERANCE. THE NEGATIVE PRE-AWARD SURVEY WAS BASED, FOR THE MOST PART, ON YOUR PERFORMANCE AS A SUBCONTRACTOR FOR EDWARD S. FINKLESTEIN, TRUSTEE IN BANKRUPTCY FOR INTERSTATE FORGING AND SUPPLY CORPORATION, ON THREE ARMY CONTRACTS, NOS. DAAE11-67-C-0001, DA23-204-AMC-03973 AND DAAE11-67-C-0008, WHICH WERE INITIALLY AWARDED TO INTERSTATE FORGING AND SUPPLY CORPORATION PRIOR TO ITS BANKRUPTCY, AND CONTRACT NO. N00104-69-D-0052 AWARDED TO YOUR FIRM IN OCTOBER 1968.

IT MUST BE POINTED OUT THAT WHILE THE PRE-AWARD SURVEY DID NOT PLACE A GREAT DEAL OF EMPHASIS ON INTERSTATE FORGING AND SUPPLY CORPORATION'S PERFORMANCE RECORD, THE CONTRACTING OFFICER DID TAKE THAT RECORD INTO CONSIDERATION IN HIS DETERMINATION. THE FACT THAT INTERSTATE FORGING AND SUPPLY CORPORATION AND INTERSTATE MANUFACTURING CORPORATION ARE LEGALLY SEPARATE ENTITIES, DOES NOT NECESSARILY MEAN THAT IN DETERMINING THE RESPONSIBILITY OF ONE IT IS NOT PROPER TO CONSIDER THE PERFORMANCE OF THE OTHER. IT MUST OF NECESSITY DEPEND ON THEIR RELATIONSHIP. THE RECORD INDICATES THAT YOUR FIRM NOT ONLY HAS THE SAME BUSINESS LOCATION AS INTERSTATE FORGING AND SUPPLY CORPORATION, BUT THE SAME OFFICERS AND THAT THE ONLY REAL DIFFERENCE BETWEEN YOUR FIRM AND INTERSTATE FORGING AND SUPPLY CORPORATION IS THE NAME. WE HAVE HELD THAT A CONTRACTING OFFICER WAS JUSTIFIED IN CONSIDERING THE PERFORMANCE RECORD OF A BANKRUPT CORPORATION WHICH WAS UNDER THE MANAGEMENT AND CONTROL OF THE PROTESTANT, WHOSE RESPONSIBILITY WAS BEING QUESTIONED. B-151630, AUGUST 20, 1963. SEE ALSO 39 COMP. GEN. 468 (1959). WE ARE UNABLE TO CONCLUDE THAT THE RELATIONSHIP BETWEEN YOUR FIRM AND INTERSTATE FORGING AND SUPPLY CORPORATION DID NOT JUSTIFY CONSIDERATION BY THE CONTRACTING OFFICER OF THE LATTER CORPORATION'S PERFORMANCE RECORD IN DETERMINING YOUR RESPONSIBILITY.

THE RECORD INDICATES THAT SUBSEQUENT TO INTERSTATE FORGING AND SUPPLY CORPORATION'S BANKRUPTCY, IT WAS DECIDED THAT THE BEST COURSE OF ACTION WOULD BE TO ASSIGN THE CONTRACTS TO THE TRUSTEE IN BANKRUPTCY AND HE, IN TURN, WOULD SUBCONTRACT WITH YOUR FIRM. THIS ACTION WAS AGREED TO BY THE CONTRACTING OFFICER IN THE BELIEF THAT YOUR FIRM HAD RESOLVED ITS FINANCIAL DIFFICULTIES. HOWEVER, YOUR FIRM CONTINUED THE SAME PATTERN OF DELINQUENCIES EXPERIENCED WITH INTERSTATE FORGING AND SUPPLY CORPORATION, WHICH IS SUBSTANTIATED BY THE FOLLOWING: CONTRACT NO. DA23-204-AMC-03973, WAS AWARDED TO INTERSTATE FORGING AND SUPPLY CORPORATION IN FEBRUARY 28, 1968, FOR A QUANTITY OF 1,260 EACH FSN 1670-242-9196, BAG, CARGO, AIR DELIVERY, TYPE A-22 WITH DELIVERY TO BE COMPLETED BY OCTOBER 6, 1966. SEVERAL EXTENSIONS OF THE DELIVERY SCHEDULES FOR THE ENTIRE QUANTITY WERE GRANTED, INCLUDING TWO TO YOUR FIRM. BY JULY 16, 1969, THE DATE OF THE LAST EXTENSION, YOUR FIRM HAD ONLY SHIPPED 402 ITEMS AND IT WAS NOT UNTIL OCTOBER 1969, THAT THE BALANCE OF 858 WERE SHIPPED, SOME OF WHICH WERE REJECTED DUE TO NUMEROUS DEFICIENCIES.

CONTRACT NO. DAAE11-67-C-0008 WAS AWARDED TO INTERSTATE FORGING AND SUPPLY CORPORATION ON JULY 7, 1966, FOR A QUANTITY OF 38,700 EACH FSN 1670 -753-3790, SLING, CARGO, AERIAL DELIVERY, 9 FT. LONG, 2 LOOP AND A QUANTITY OF 3,192 EACH, FSN 1670-753-3631, SLING, CARGO, AERIAL DELIVERY, 9 FT. LONG, 3 LOOP, DELIVERY TO BE COMPLETED MAY 13, 1968, FOR THE 38,700 QUANTITY AND JULY 17, 1967, FOR THE 3,192 UNITS. SEVERAL EXTENSIONS IN THE DELIVERY SCHEDULE WERE GRANTED, INCLUDING TWO TO YOUR FIRM, AND AS OF OCTOBER 22, 1969, THE CONTRACT HAD STILL NOT BEEN COMPLETED.

CONTRACT DAAE11-67-C-0001 WAS AWARDED TO INTERSTATE FORGING AND SUPPLY CORPORATION ON JULY 13, 1966, FOR A QUANTITY OF 3,590 EACH FSN 1670-242- 9169, BAG, CARGO, AERIAL DELIVERY, TYPE A-22, DELIVERY TO BE COMPLETED BY DECEMBER 19, 1967. ON THIS CONTRACT THE CONTRACTING OFFICER OVERRODE A NEGATIVE PRE-AWARD SURVEY BY DCASD, READING, ON THE BASIS OF INTERSTATE FORGING AND SUPPLY CORPORATION'S REPRESENTATION THAT IT WOULD MEET THE DELIVERY. SUBSEQUENT EVENTS PROVED OTHERWISE, SINCE IT WAS DEEMED NECESSARY FOR THE CONTRACTING OFFICER TO GRANT SEVERAL EXTENSIONS OF THE DELIVERY, TWO BEING GIVEN TO YOUR FIRM, AND THE CONTRACT WAS NOT COMPLETED UNTIL OCTOBER 10, 1969. CONCERNING CONTRACT N00104-69-D-0052, WHICH YOU DECIDED TO SUBCONTRACT, DELIVERY WAS REQUIRED BY JUNE 11, 1969, BUT FINAL DELIVERY WAS NOT COMPLETED UNTIL NOVEMBER 1969.

CONCERNING YOUR ALLEGATION THAT SOME INDIVIDUAL (UNNAMED) IN THE DCASD OFFICE SUBMITTED "UNSUFFICIENT, UNTRUE, AND PREJUDICED" INFORMATION OR FACTS IN THE PRE-AWARD SURVEY REPORT TO THE CONTRACTING OFFICER, WE FIND NO EVIDENCE TO SUBSTANTIATE THIS ALLEGATION. ON THE CONTRARY, THE UNFAVORABLE REPORT WAS CONCURRED IN BY FIVE REPRESENTATIVES OF THE READING DISTRICT, AND THERE IS EVIDENCE THAT THE PRODUCTION RECORDS OF AT LEAST THREE OF THE CONTRACTS, UPON WHICH THE NEGATIVE PRE-AWARD SURVEY WAS BASED, HAVE ALWAYS BEEN AVAILABLE TO THE CONTRACTING OFFICER AND THAT HE HAD PERSONAL KNOWLEDGE OF THE PROBLEMS ARISING FROM DELINQUENCIES OCCURRING SINCE THE INCEPTION OF THESE CONTRACTS.

THUS, THE ONLY QUESTION REMAINING IS WHETHER THE CONTRACTING OFFICER WAS JUSTIFIED IN HIS DETERMINATION THAT YOUR PAST RECORD OF PERFORMANCE WAS UNSATISFACTORY AND, IF SO, WHETHER SUCH UNSATISFACTORY PERFORMANCE CAN PROPERLY BE ATTRIBUTED TO YOUR FAILURE TO APPLY THE NECESSARY TENACITY AND PERSEVERANCE TO DO AN ACCEPTABLE JOB.

SECTION 1-903.1 (II) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 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), RELIED UPON BY THE CONTRACTING OFFICER IN HIS DETERMINATION, PROVIDES THAT A PROSPECTIVE CONTRACTOR MUST:

"(III) 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) (V) AND 1-905.2."

THE DETERMINATION OF A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY IS PRIMARILY THE FUNCTION OF THE CONTRACTING OFFICER, AND IS NECESSARILY A MATTER OF JUDGMENT INVOLVING A CONSIDERABLE DEGREE OF DISCRETION. WHERE SUCH DETERMINATION IS BASED UPON SUBSTANTIAL EVIDENCE AND IS NEITHER ARBITRARY NOR CAPRICIOUS, WE WILL NOT UNDERTAKE TO SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER. 39 COMP. GEN. 705 (1960).

A CAREFUL REVIEW OF THE RECORD INDICATES THAT ONE OF THE PRIMARY CAUSES FOR THE DELINQUENCIES UNDER THE ABOVE MENTIONED CONTRACTS WAS THE CONTINUOUS FAILURE OF ONE SUPPLIER, THE ONLY VENDOR FROM WHICH YOU REQUESTED QUOTATIONS, TO TIMELY SUPPLY AN ADEQUATE QUANTITY OF CANVAS OR WEBBING. NO EXPLANATION IS OFFERED AS TO WHY YOU DID NOT CHANGE VENDORS, EXCEPT A SUGGESTION OF POSSIBLE FINANCIAL LIMITATIONS WHICH IMPAIRED YOUR PURCHASING AND SUBCONTRACTING EFFORTS. HOWEVER, THE RECORD TAKEN AS A WHOLE APPEARS ADEQUATE TO SUPPORT A CONCLUSION THAT YOU HAVE THE CAPACITY AND CREDIT TO DO THE JOB, AND THAT YOUR UNSATISFACTORY PERFORMANCE ON THE ABOVE CONTRACTS WAS DUE TO REASONS OTHER THAN THOSE SOLELY RELATED TO YOUR FINANCIAL STATUS AND PHYSICAL CAPABILITY TO PERFORM, SUCH AS LACK OF TENACITY AND PERSEVERANCE IN OBTAINING NECESSARY MATERIAL. SUCH RECORD IS, WE THINK, ADEQUATE TO SUPPORT THE CONTRACTING OFFICER'S DETERMINATION THAT YOU WERE NOT A RESPONSIBLE BIDDER UNDER THE STANDARDS SET FORTH IN THE ABOVE CITED PORTIONS OF ASPR.