B-169281, MAY 7, 1970

B-169281: May 7, 1970

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IS NOT SUBJECT TO LEGAL OBJECTION BY COMPTROLLER GENERAL SINCE RESPONSIBILITY OF DETERMINING BIDDERS' QUALIFICATIONS RESTS WITH CONTRACTING OFFICER. SUBJECT TO REVIEW BY DEPARTMENT OF LABOR WHOSE DECISION IS FINAL. E. INDUSTRIES: REFERENCE IS MADE TO THE LETTER OF MARCH 9. WAS FOR A QUANTITY OF TWO PRODUCTION UNIT DEVICES. CERTAIN TECHNICAL INFORMATION IN ACCORDANCE WITH ATTACHED EXHIBITS AND TWO INTERIM REPAIR PARTS SETS WERE ALSO TO BE FURNISHED. BIDS WERE OPENED ON JANUARY 8. ELEVEN BIDS WERE RECEIVED. 574 WAS LOW AND THE TOTAL BID FROM INSTRUTECK CORPORATION OF $53. WAS SECOND LOW. THE REPORT FROM THE CONTRACTING OFFICER STATES THAT A REQUEST FOR A PREAWARD SURVEY ON YOUR CONCERN WAS FORWARDED TO THE DEFENSE CONTRACT ADMINISTRATIVE SERVICES REGION (DCASR).

B-169281, MAY 7, 1970

BIDDERS--QUALIFICATIONS--MANUFACTURER OR DEALER--ADMINISTRATIVE DETERMINATION REJECTION OF LOW BID IN RESPONSE TO INVITATION FOR MORSE CODE COMMUNICATION TRAINERS BASED ON PREAWARD SURVEY THAT DETERMINED BIDDER DID NOT QUALIFY AS MANUFACTURER OR DEALER AS DEFINED BY ASPR 12-603.1 AND AS REQUIRED BY WALSH-HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35-45, IS NOT SUBJECT TO LEGAL OBJECTION BY COMPTROLLER GENERAL SINCE RESPONSIBILITY OF DETERMINING BIDDERS' QUALIFICATIONS RESTS WITH CONTRACTING OFFICER, SUBJECT TO REVIEW BY DEPARTMENT OF LABOR WHOSE DECISION IS FINAL. SEE COMP. GEN. DECS. CITED.

TO C. E. INDUSTRIES:

REFERENCE IS MADE TO THE LETTER OF MARCH 9, 1970, PROTESTING AGAINST THE REJECTION OF YOUR BID UNDER ADVERTISED SOLICITATION NO. N61339-70-B 0022, ISSUED ON DECEMBER 8, 1969, BY THE COMMANDING OFFICER, NAVAL TRAINING DEVICE CENTER, ORLANDO, FLORIDA.

THE PROCUREMENT, A 100 PERCENT SET-ASIDE FOR SMALL BUSINESS CONCERNS, WAS FOR A QUANTITY OF TWO PRODUCTION UNIT DEVICES, 8A8, TRAINERS, MORSE CODE COMMUNICATIONS, INCLUDING ON-SITE INSTALLATION OF ONE UNIT EACH AT THE FLEET TRAINING CENTER AT NEWPORT, RHODE ISLAND, AND AT THE FLEET TRAINING CENTER AT NORFOLK, VIRGINIA. CERTAIN TECHNICAL INFORMATION IN ACCORDANCE WITH ATTACHED EXHIBITS AND TWO INTERIM REPAIR PARTS SETS WERE ALSO TO BE FURNISHED.

BIDS WERE OPENED ON JANUARY 8, 1970, AND ELEVEN BIDS WERE RECEIVED. YOUR TOTAL BID OF $46,574 WAS LOW AND THE TOTAL BID FROM INSTRUTECK CORPORATION OF $53,795.80, WAS SECOND LOW.

THE REPORT FROM THE CONTRACTING OFFICER STATES THAT A REQUEST FOR A PREAWARD SURVEY ON YOUR CONCERN WAS FORWARDED TO THE DEFENSE CONTRACT ADMINISTRATIVE SERVICES REGION (DCASR), NEW YORK, ON JANUARY 20, 1970, SINCE THE CONTRACTING OFFICER HAD NO RECORD OF PREVIOUS PERFORMANCE BY YOUR CONCERN. ON JANUARY 22, 1970, THE PREAWARD SURVEY MONITOR CALLED THE CONTRACT NEGOTIATOR TO ADVISE THAT IN TWO RECENT SURVEYS C. E. INDUSTRIES (CE), WAS FOUND TO BE INELIGIBLE FOR AWARD DUE TO THE FACT THAT THIS CONCERN DID NOT QUALIFY AS A MANUFACTURER UNDER THE WALSH HEALEY PUBLIC CONTRACTS ACT OF JUNE 30, 1946, AS AMENDED, 49 STAT. 2036, 41 U.S.C. 35- 45. THE CONTRACT NEGOTIATOR ADVISED THE PREAWARD SURVEY MONITOR TO PROCEED WITH THE SURVEY SINCE C. E. HAD INDICATED IN A RESUME ATTACHED TO ITS BID THAT C. E. EXPECTED TO RELOCATE BY JANUARY 31, 1970.

ON JANUARY 28, 1970, THE PROCURING ACTIVITY RECEIVED A TELEGRAM FROM DCASR, NEW YORK, STATING THAT C. E. DID NOT QUALIFY AS A MANUFACTURER UNDER THE WALSH-HEALEY PUBLIC CONTRACTS ACT AND ARMED SERVICES PROCUREMENT REGULATION (ASPR) 12-603.1. THE CITED SECTION OF ASPR STATES THAT A MANUFACTURER AS USED IN ASPR 12-601 IS A PERSON WHO OWNS, OPERATES, OR MAINTAINS A FACTORY OR ESTABLISHMENT THAT PRODUCES ON THE PREMISES THE MATERIALS, SUPPLIES, ARTICLES OR EQUIPMENT REQUIRED UNDER THE CONTRACT AND OF THE GENERAL CHARACTER REQUIRED BY THE SPECIFICATIONS. THE REGULATION FURTHER STATES THAT IN ORDER TO QUALIFY AS A MANUFACTURER, A BIDDER MUST BE ABLE TO SHOW BEFORE THE AWARD THAT HE IS (I) AN ESTABLISHED MANUFACTURER OF THE PARTICULAR GOODS OR GOODS OF THE GENERAL CHARACTER SOUGHT BY THE GOVERNMENT, AND (II) IF HE IS NEWLY ENTERING INTO SUCH MANUFACTURING ACTIVITY, THAT HE HAS MADE ALL NECESSARY PRIOR ARRANGEMENTS FOR SPACE, EQUIPMENT AND PERSONNEL TO PERFORM THE MANUFACTURING OPERATIONS REQUIRED FOR THE FULFILLMENT OF THE CONTRACT.

BASED ON THE RESULTS OF THE PREAWARD SURVEY ON YOUR CONCERN THE CONTRACTING OFFICER DETERMINED THAT C. E. WAS NOT ELIGIBLE FOR AWARD FOR THIS PROCUREMENT. THE PROCURING ACTIVITY RECEIVED A PREAWARD SURVEY DATED FEBRUARY 11, 1970, RECOMMENDING COMPLETE AWARD TO INSTRUTECK CORPORATION AND AWARD WAS MADE TO THAT CONCERN ON FEBRUARY 24, 1970.

YOUR LETTER OF MARCH 9, 1970, STATES THAT THE NEGATIVE DETERMINATION IN THE PREAWARD SURVEY WAS BASED ON THE PREMISES "NOW OCCUPIED BY US". THE LETTER INDICATES THAT YOU WERE NOT SUCCESSFUL IN YOUR TELEPHONIC EFFORT TO TRY TO CLARIFY THE SITUATION WITH DCASR, NEW YORK. PRESUMABLY THIS MEANS THAT YOU CONTEMPLATED THE ACQUISITION OF NEW FACILITIES AND THAT YOU WERE NOT SUCCESSFUL IN RELAYING THIS INFORMATION TO DCASR.

THE WALSH-HEALEY PUBLIC CONTRACTS ACT AUTHORIZES THE SECRETARY OF LABOR TO ADMINISTER ITS PROVISIONS AND ISSUE RULES AND REGULATIONS THEREUNDER. B-166905, JULY 24, 1969. SECTION 29 OF "WALSH-HEALEY PUBLIC CONTRACTS ACT RULINGS AND INTERPRETATION NO. 3", PUBLISHED BY THE DEPARTMENT OF LABOR PROVIDES:

"(2) THE RESPONSIBILITY OF DETERMINING WHETHER OR NOT A BIDDER IS QUALIFIED AS A MANUFACTURER OR AS A REGULAR DEALER UNDER THE PUBLIC CONTRACTS ACT RESTS IN THE FIRST INSTANCE WITH THE CONTRACTING AGENCY. HOWEVER, ANY DECISION WHICH THE CONTRACTING OFFICER MIGHT MAKE IS SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR WHICH IS CHARGED WITH THE ADMINISTRATION OF THE ACT. THE DEPARTMENT OF LABOR MAY DETERMINE THE QUALIFICATIONS OF A BIDDER IN THE FIRST INSTANCE IN THE ABSENCE OF ANY DETERMINATION BY THE CONTRACTING OFFICER."

THIS OFFICE HAS CONCLUDED THAT THE LAW AND REGULATIONS PLACE UPON THE CONTRACTING OFFICER THE RESPONSIBILITY OF DETERMINING A BIDDER'S QUALIFICATIONS AS A MANUFACTURER, SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR, WHOSE DECISION IS FINAL. B-167426, AUGUST 19, 1969, AND CASES CITED THEREIN.

THE PROCEDURES IN EFFECT AT THE TIME OF AWARD TO INSTRUTECK ON FEBRUARY 24, 1970, DID NOT PROVIDE FOR NOTIFICATION TO BIDDERS FOUND INELIGIBLE. THIS HAS BEEN CHANGED AND THE PROCEDURES PRESENTLY IN EFFECT (ASPR 12-604 (A)), PROVIDE THAT BIDDERS SHALL BE NOTIFIED OF AN ADVERSE DETERMINATION BY THE PROCURING CONTRACTING OFFICER AND THE AVAILABILITY TO HIM OF A REVIEW OF SUCH DETERMINATION BY THE DEPARTMENT OF LABOR PRIOR TO AWARD WHERE PRACTICABLE.

IN THE CIRCUMSTANCES THERE IS NO BASIS WHEREBY OUR OFFICE MAY OBJECT TO THE AWARD MADE; ACCORDINGLY, YOUR PROTEST IS DENIED.