B-168976, APR. 17, 1970

B-168976: Apr 17, 1970

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CONTRACTING OFFICER CONCLUDED FIRM WAS NONRESPONSIBLE FOR REASONS OTHER THAN LACK OF CAPACITY OR CREDIT AND. CONTENDING SURVEY TEAM'S MONITOR IS TRYING TO FORCE HIM OUT OF BUSINESS FOR HIRING ENGINEER WHO HAD WORKED FOR DEFAULTING CONTRACTORS. PRODUCTION MANAGER AND PREPARER OF BIDS) IS VESTED WITH TOTAL TECHNICAL CAPABILITIES AND RECORD AND QUALIFICATIONS ARE OF PRIMARY IMPORTANCE. SURVEY REPORT SHOWED FIRM WAS DEFICIENT IN 6 AREAS. INC.: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 22. SINCE IT IS REPORTED THAT THE NEW CUMBERLAND ARMY DEPOT. CONSIDERATION OF YOUR PROTEST AS TO THAT SOLICITATION IS NOT NECESSARY. 10 BIDS WERE OPENED WITH BIDS BEING SUBMITTED ON FOUR BASES. THAT IS. THE SEVERAL LOWEST BIDS WERE AS FOLLOWS: WITH FAA WITHOUT FAA BIDDER ORIGIN DESTINATIONS ORIGIN DESTINATIONS WEST COAST METAL $4.40 $4.66 $4.30 $4.56 MET-FAB.

B-168976, APR. 17, 1970

BIDDERS--QUALIFICATIONS--PREAWARD SURVEYS--SMALL BUSINESS CONCERNS UNSATISFACTORY UNDER ARMY INVITATION UNSUCCESSFUL SMALL-BUSINESS BIDDER PROTESTS BID REJECTION ON BASIS OF NONRESPONSIBILITY. PREAWARD SURVEY RECOMMENDED NO AWARD BECAUSE OF FIRM'S UNSATISFACTORY PERFORMANCE RECORD AND QUESTIONABLE BUSINESS INTEGRITY. CONTRACTING OFFICER CONCLUDED FIRM WAS NONRESPONSIBLE FOR REASONS OTHER THAN LACK OF CAPACITY OR CREDIT AND, PURSUANT TO ASPR 1- 705.4 (C) (V), DID NOT REFER MATTER TO SMALL BUSINESS ADMINISTRATION; HOWEVER, SBA TOOK EXCEPTION AND CONTRACTING OFFICER EXECUTED AMENDMENT WHICH CONCLUDED THAT ORIGINAL NONRESPONSIBILITY DETERMINATION SHOULD BE CANCELED AND DECLARED NULL AND VOID. CONTRACTING OFFICER DETERMINED TO CANCEL INVITATION AND READVERTISE. SEE COMP. GEN. DECS. AND CT. CASE CITED. BIDDERS- QUALIFICATIONS--PREAWARD SURVEYS--CAPABILITIES OF OFFICIALS, ETC. UNSUCCESSFUL BIDDER WHO PROTESTS NAVY'S REJECTION OF BID FOR NONRESPONSIBILITY, CONTENDING SURVEY TEAM'S MONITOR IS TRYING TO FORCE HIM OUT OF BUSINESS FOR HIRING ENGINEER WHO HAD WORKED FOR DEFAULTING CONTRACTORS, OFFERS NO BASIS FOR OBJECTION SINCE ENGINEER (PROTESTANT'S VICE PRESIDENT, ENGINEER, PRODUCTION MANAGER AND PREPARER OF BIDS) IS VESTED WITH TOTAL TECHNICAL CAPABILITIES AND RECORD AND QUALIFICATIONS ARE OF PRIMARY IMPORTANCE; MOREOVER, SURVEY REPORT SHOWED FIRM WAS DEFICIENT IN 6 AREAS. WHILE SURVEY TEAM MAY RECOMMEND FOR OR AGAINST AWARD, ULTIMATE AUTHORITY STILL RESTS WITH CONTRACTING OFFICER. SEE COMP. GEN. DECS. AND CT. CASE CITED.

TO WEST COAST METAL FAB; INC.:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 22, 1970, PROTESTING THE ACTIONS OF THE DEPARTMENTS OF THE ARMY AND THE NAVY IN REJECTING YOUR THREE BIDS SUBMITTED IN RESPONSE TO ARMY INVITATIONS FOR BIDS (IFB'S) NOS. DAAE07-70-B-0932 AND DAAF01-70-B-0125 AND NAVY IFB NO. N00197-70-B 0087.

SINCE IT IS REPORTED THAT THE NEW CUMBERLAND ARMY DEPOT, HARRISBURG, PENNSYLVANIA, HAS AWARDED A CONTRACT TO YOUR FIRM UNDER IFB NO. DAAE07 70- B-0932, CONSIDERATION OF YOUR PROTEST AS TO THAT SOLICITATION IS NOT NECESSARY.

THE ROCK ISLAND ARSENAL, ROCK ISLAND, ILLINOIS, BY IFB NO. DAAF01-70 B- 0125, ISSUED ON SEPTEMBER 5, 1969, REQUESTED BIDS FOR FURNISHING 7,483 MOTOR VEHICLE MAINTENANCE AND STORAGE TRESTLES. ON OCTOBER 31, 1969, 10 BIDS WERE OPENED WITH BIDS BEING SUBMITTED ON FOUR BASES, THAT IS, WITH AND WITHOUT FIRST ARTICLE APPROVAL (FAA) AND F.O.B. ORIGIN AND F.O.B. DESTINATION. THE SEVERAL LOWEST BIDS WERE AS FOLLOWS:

WITH FAA WITHOUT FAA BIDDER ORIGIN DESTINATIONS ORIGIN DESTINATIONS WEST COAST METAL $4.40 $4.66 $4.30 $4.56 MET-FAB; INC. 5.86 6.55 5.85 6.54 MIDWEST SPECIALTY

6.18 6.68 6.18 6.68 EVER-TITE MFG. CO. 6.37 6.87

6.35 6.85

SINCE NO PREVIOUS EXPERIENCE EXISTED BETWEEN WEST COAST AND THE ROCK ISLAND ARSENAL, THE CONTRACTING OFFICER ON NOVEMBER 17, 1969, REQUESTED THE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD), ANAHEIM, CALIFORNIA, TO PERFORM A PREAWARD SURVEY OF YOUR FACILITIES. IN A REPORT DATED DECEMBER 3, 1969, DCASD, ANAHEIM, RECOMMENDED THAT NO AWARD BE MADE TO WEST COAST UPON THE BASIS OF YOUR FIRM'S UNSATISFACTORY PERFORMANCE RECORD AND QUESTIONABLE BUSINESS INTEGRITY. IN VIEW OF THIS RECOMMENDATION, THE CONTRACTING OFFICER CONCLUDED THAT WEST COAST WAS NONRESPONSIBLE FOR REASONS OTHER THAN LACK OF CAPACITY OR CREDIT AND, ACCORDINGLY, PURSUANT TO PARAGRAPH 1-705.4 (C) (V) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) DID NOT REFER THE MATTER TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CERTIFICATE OF COMPETENCY CONSIDERATION. IT IS REPORTED, HOWEVER, THAT DUE TO ADMINISTRATIVE DELAYS, A WRITTEN DETERMINATION OF YOUR FIRM'S RESPONSIBILITY WAS NOT EXECUTED UNTIL DECEMBER 23, 1969, AND THAT IN THE INTERIM, DUE TO THE IMPENDING DECEMBER 30, 1969, EXPIRATION DATE OF ALL BIDS, ROCK ISLAND ARSENAL BY TELEGRAM DATED DECEMBER 16, 1969, REQUESTED ALL BIDDERS EXCEPT WEST COAST TO EXTEND THE PERIOD FOR ACCEPTANCE OF THEIR BIDS TO JANUARY 30, 1970. COPIES OF THE CONTRACTING OFFICER'S DETERMINATION AS TO THE NONRESPONSIBILITY OF WEST COAST WERE SENT TO THE DIRECTOR, PROCUREMENT & PRODUCTION, U.S. ARMY COMMAND, FOR APPROVAL AND TO SBA FOR ITS INFORMATION.

BY LETTER DATED DECEMBER 30, 1969, TO THE ROCK ISLAND ARSENAL, YOU INDICATED THAT IF AN EXTENSION OF THE PERIOD FOR ACCEPTANCE OF YOUR BID WAS REQUIRED BEYOND THE DECEMBER 30, 1969, EXPIRATION DATE, A PRICE INCREASE WOULD BE NECESSARY. YOU RAISED NUMEROUS QUESTIONS REGARDING THE GOVERNMENT'S FAILURE TO REQUEST AN EXTENSION OF YOUR BID ACCEPTANC PERIOD, THE NECESSITY OF AN EXTENSION, THE REASONABLENESS OF THE REQUESTED INCREASE, AND THE VALIDITY OF THE PREAWARD SURVEY.

BY FIRST INDORSEMENT DATED JANUARY 9, 1970, THE DIRECTOR, PROCUREMENT & PRODUCTION, U.S. ARMY WEAPONS COMMAND, APPROVED THE REJECTION OF THE BID OF WEST COAST WITHOUT REFERRAL TO SBA. HOWEVER, BY LETTER DATED JANUARY 6, 1970, SBA ADVISED THE CONTRACTING OFFICER THAT IT WAS TAKING EXCEPTION TO HIS DETERMINATION AS TO THE NONRESPONSIBILITY OF WEST COAST. IT IS REPORTED THAT AFTER AN EXTENSIVE REVIEW OF ALL DOCUMENTS RELATIVE TO THE SUBJECT PROCUREMENT, THE CONTRACTING OFFICER CONCLUDED, UPON THE ADVICE OF THE OFFICE OF CHIEF COUNSEL, U.S. ARMY WEAPONS COMMAND, THAT HIS ORIGINAL DETERMINATION AS TO THE NONRESPONSIBILITY OF WEST COAST DID NOT SATISFY THE REQUIREMENTS OF ASPR 1-705.4 (C) (VI), WHICH REQUIRES THAT A DETERMINATION BY A CONTRACTING OFFICER THAT A SMALL BUSINESS CONCERN IS NOT RESPONSIBLE PURSUANT TO ASPR 1-903.1 (III) AND (IV) MUST BE SUPPORTED BY SUBSTANTIAL EVIDENCE DOCUMENTED IN THE CONTRACT FILES.

ACCORDINGLY, THE CONTRACTING OFFICER EXECUTED A DETERMINATION OF NONRESPONSIBILITY AMENDMENT WHICH CONCLUDED, AMONG OTHER THINGS, THAT HIS ORIGINAL DETERMINATION OF DECEMBER 23, 1969, AS TO THE NONRESPONSIBILITY OF WEST COAST SHOULD BE CANCELED AND DECLARED TO BE NULL AND VOID. CONCURRENT WITH SUCH DECISION, THE CONTRACTING OFFICER ALSO CONCLUDED THAT WEST COAST HAD BEEN PREJUDICED BY THE GOVERNMENT'S ACTIONS; THAT WEST COAST'S ATTEMPTED BID EXTENSION OF DECEMBER 30, 1969, WAS NOT TIMELY RECEIVED; AND THAT IT COULD NOT BE RESURRECTED BECAUSE IT WAS PREDICATED UPON A PRICE INCREASE WHICH COULD NOT BE CONSIDERED BY THE CONTRACTING OFFICER IN MAKING AN AWARD.

ON FEBRUARY 4, 1970, THE CONTRACTING OFFICER DECIDED THAT IFB NO. 0125 SHOULD BE CANCELED AND THAT THE PROCUREMENT, WHICH WOULD INCLUDE A SUBSTANTIAL ADDITIONAL QUANTITY OF UNITS, BE READVERTISED. BY LETTER DATED FEBRUARY 16, 1970, THE CONTRACTING OFFICER ADVISED YOUR FIRM AND OTHER INTERESTED CONCERNS THAT IFB -0125 WAS BEING CANCELED BECAUSE ALL BIDDERS HAD ALLOWED THE ACCEPTANCE PERIOD FOR THEIR BIDS TO EXPIRE AND THAT YOUR FIRM AND THE OTHER CONCERNS WOULD BE GIVEN AN OPPORTUNITY TO SUBMIT A BID UNDER THE NEW SOLICITATION.

IN THE CIRCUMSTANCES, IT IS OUR VIEW THAT THE EVIDENCE OF RECORD AFFORDS A REASONABLE BASIS FOR THE CANCELLATION OF ARMY IFB NO. -0125 BY THE PROCUREMENT ACTIVITY.

IN REGARD TO YOUR ALLEGATIONS OF PREJUDICE ON THE PART OF DCASD PREAWARD SURVEY TEAM EMPLOYEES, THE DEPARTMENT OF THE ARMY STATES THAT IT HAS NO INFORMATION WITH WHICH TO REPLY TO SUCH ALLEGATIONS. SINCE THE RECORD INDICATES THAT THE CONTRACTING OFFICER ULTIMATELY REJECTED THE FINDINGS OF THE PREAWARD SURVEY TEAM, WE DO NOT BELIEVE IT NECESSARY TO FURTHER PURSUE THE MATTER.

THE NAVAL ORDNANCE STATION, LOUISVILLE, KENTUCKY, BY IFB NO. N00197 70-B- 0087, SOLICITED BIDS UNDER ITEMS 1 AND 2 FOR FURNISHING SPECIFIED QUANTITIES OF ROCKET SHIPPING AND STORAGE CONTAINERS. THE INVITATION WAS A 100-PERCENT SMALL BUSINESS SET-ASIDE. YOUR FIRM SUBMITTED THE LOWEST BID ON ITEM 1 BUT NOT ON ITEM 2. THE NEXT LOWEST BID ON ITEM 1 WAS SUBMITTED BY THE ROIS MANUFACTURING CO.

INASMUCH AS THE CONTRACTING OFFICER DID NOT HAVE AVAILABLE SUFFICIENT INFORMATION UPON WHICH TO BASE A DETERMINATION THAT WEST COAST COULD MEET THE MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS AS SET FORTH IN ASPR 1-903.1, A PREAWARD SURVEY OF YOUR FACILITIES WAS REQUESTED. THE SURVEY, CONDUCTED BY TECHNICAL PERSONNEL OF DCASD, ANAHEIM, CALIFORNIA, RECOMMENDED THAT "NO AWARD" BE MADE TO WEST COAST BECAUSE OF UNSATISFACTORY RATINGS IN SIX AREAS: TECHNICAL CAPABILITY, PRODUCTION CAPABILITY, PERFORMANCE RECORD, ABILITY TO MEET REQUIRED DELIVERY SCHEDULE, FINANCIAL CAPABILITY, AND PURCHASING AND SUBCONTRACTING. AFTER EVALUATING THE DCASD PREAWARD SURVEY TEAM'S REPORT TO THE CONTRACTING OFFICER, THE DCASD REVIEW BOARD RECOMMENDED THAT "NO AWARD" BE MADE TO WEST COAST.

ASPR 1-705.4 (C) PROVIDES THAT IF A SMALL BUSINESS CONCERN IS TO BE REJECTED SOLELY FOR LACK OF CAPACITY OR CREDIT, THE MATTER MUST BE REFERRED TO SBA TO PERMIT IT TO EVALUATE THE RESPONSIBILITY FACTOR IN ACCORDANCE WITH ITS OWN PROCEDURES. ASPR 1-705.4 (A) FURTHER PROVIDES THAT THE RESULTS OF THE SBA INVESTIGATION ARE CONCLUSIVE UPON THE CONTRACTING OFFICER AS TO A PROSPECTIVE CONTRACTOR'S CAPACITY OR CREDIT. SINCE WEST COAST IS A SMALL BUSINESS AND THE NEGATIVE PREAWARD SURVEY CONCERNED CAPACITY AND CREDIT, THE MATTER WAS ACCORDINGLY SUBMITTED TO SBA. BY LETTER DATED FEBRUARY 27, 1970, SBA INFORMED THE PROCURING AGENCY THAT WEST COAST HAD DECLINED TO FILE FOR A CERTIFICATE OF COMPETENCY. THE LETTER FROM SBA CONCLUDED WITH THE ADVICE THAT IT WOULD TAKE NO FURTHER ACTION AND WOULD CONSIDER THE CASE CLOSED. SINCE WEST COAST DECLINED TO FILE FOR THE CERTIFICATE OF COMPETENCY, THE ADMINISTRATIVE OFFICIALS HAD NO ALTERNATIVE BUT TO REJECT YOUR BID BECAUSE OF THE DETERMINATION OF YOUR NONRESPONSIBILITY.

YOU ALLEGE THAT THE PREAWARD MONITOR OF THE DCASD SURVEY TEAM WHICH CONDUCTED A SURVEY OF YOUR FIRM'S FACILITIES FOR PURPOSES OF THIS PROCUREMENT HAS ABUSED HIS AUTHORITY. YOU STATE THAT THE MONITOR IS TRYING TO FORCE YOUR FIRM OUT OF BUSINESS BECAUSE IT HAS HIRED AN ENGINEER WHO PREVIOUSLY WORKED FOR PACIFIC SOUTHWEST METALS CO; A COMPANY WHICH HAD DEFAULTED ON A NUMBER OF GOVERNMENT CONTRACTS. YOU POINT OUT THAT THE MONITOR HAS FAILED TO TAKE INTO CONSIDERATION THE FACT THAT YOUR FIRM HAS SATISFACTORILY PERFORMED THREE PREVIOUS GOVERNMENT CONTRACTS. YOU STATE THAT YOU HAVE EXAMINED COPIES OF SEVERAL NEGATIVE SURVEY REPORTS ON YOUR FIRM AND THAT SUCH REPORTS POINT OUT THAT THE ENGINEER PREVIOUSLY EMPLOYED BY PACIFIC SOUTHWEST METALS WAS THE CAUSE OF THAT COMPANY'S FAILURE.

THE RECORD INDICATES THAT THE ENGINEER THAT WAS PREVIOUSLY EMPLOYED BY PACIFIC SOUTHWEST METALS IS NOW VICE PRESIDENT OF YOUR FIRM AND THAT HE IS ALSO YOUR COMPANY'S ENGINEER, PRODUCTION MANAGER, AND THE INDIVIDUAL WHO PREPARES YOUR COMPANY'S BIDS. IT WAS THE FINDING OF THE PREAWARD SURVEY TEAM THAT THE QUALIFICATIONS OF THE PRESIDENT AND SECRETARY-TREASURER OF YOUR FIRM TO PERFORM ON PRODUCTION PROCUREMENTS ARE SERIOUSLY LACKING, AND THAT THE TOTAL TECHNICAL CAPABILITY RESTS WITH YOUR VICE PRESIDENT WHO ALSO ACTS AS YOUR ENGINEER. SINCE YOUR COMPANY'S TECHNICAL AND OTHER CAPABILITIES ARE, IN ESSENCE, VESTED IN THIS PARTICULAR ENGINEER, HIS QUALIFICATIONS ARE CONSIDERED TO BE A MATTER OF PRIMARY IMPORTANCE TO A DETERMINATION OF RESPONSIBILITY. SINCE AT THE TIME OF THE SURVEY THE RECORD INDICATED THAT YOUR ENGINEER HAD BEEN IN YOUR EMPLOY FOR A PERIOD OF ONLY 7 MONTHS, WE DO NOT THINK IT WAS IMPROPER FOR THE SURVEY TEAM TO CONSIDER HIS RECORD WITH OTHER FIRMS. INSOFAR AS YOUR CONTENTIONS ARE AT VARIANCE WITH THE FACTS AS ADMINISTRATIVELY REPORTED, OUR OFFICE IS BOUND BY THE WELL-SETTLED RULE THAT PROHIBITS ANY INTERFERENCE WITH ADMINISTRATIVE DETERMINATIONS OF RESPONSIBILITY IN THE ABSENCE OF A CLEAR SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS THEREFOR. 37 COMP. GEN. 430 (1957); 43 ID. 298 (1963); ZEPHYR AIRCRAFT CORPORATION V. UNITED STATES, 122 CT. CL. 523 (1952).

WHILE A SURVEY TEAM MAY RECOMMEND FOR OR AGAINST AN AWARD TO A PROSPECTIVE CONTRACTOR, THE ULTIMATE AUTHORITY AS TO WHETHER TO GRANT OR DENY AN AWARD STILL RESTS WITH THE CONTRACTING OFFICER WHO EVALUATES THE RECOMMENDATIONS CONTAINED IN THE PREAWARD SURVEY, TOGETHER WITH OTHER INFORMATION AVAILABLE TO HIM, IN RENDERING A FINAL DETERMINATION REGARDING A PROPOSED CONTRACTOR'S RESPONSIBILITY. B-160649, AUGUST 7, 1967; B- 160562, JULY 26, 1967.

THEREFORE, IN VIEW OF THE PREAWARD SURVEY REPORT SHOWING THAT YOUR FIRM WAS DEFICIENT IN SIX AREAS, ONE OF WHICH WAS THE ABILITY TO MEET THE REQUIRED DELIVERY SCHEDULE, AND AS YOUR FIRM DID NOT AVAIL ITSELF OF THE OPPORTUNITY AFFORDED BY LAW AND REGULATION TO HAVE SBA CONSIDER THE MATTER OF ITS COMPETENCY TO PERFORM THE PROCUREMENT, WE FIND NO LEGAL BASIS TO QUESTION THE REJECTION OF YOUR BID UNDER NAVY IFB NO. 0087.