B-169382, JUL. 9, 1970

B-169382, JUL. 9, 1970

CONTRACTS -- BID PROTEST -- BIDDER RESPONSIBILITY DECISION DENYING PROTEST OF BRAD'S MACHINE PRODUCTS, INC., LOW BIDDER, AGAINST AWARD OF CONTRACTS FOR PROJECTILES FOR FRANKFORD ARSENAL, PHILADELPHIA, PA., TO Z-D PRODUCTS DIVISION OF WELLS MARINE, INC., SECOND LOW BIDDER AND HARVEY ALUMINUM, INC., THIRD LOW BIDDER. AN AWARD OF ONE OF TWO CONTRACTS FOR AN URGENTLY NEEDED ITEM TO MEET A LOADING SCHEDULE FOR SOUTHEAST ASIA TO THE SECOND LOW BIDDER MADE AFTER A DELAY OF MORE THAN ONE MONTH IN ORDER TO RESOLVE DOUBTS CONCERNING THE LOW BIDDER'S RESPONSIBILITY IS NOT CONTRARY TO STATUTE AND THERE IS NO EVIDENCE OF ANY CIRCUMVENTION OF SMALL BUSINESS COC PROCEDURE. THE PROTESTANT IN THE INSTANT CASE, AFTER RECEIVING A COC, WAS ISSUED A CONTRACT FOR LESS THAN THE STATED QUANTITY. EXCEPT FOR THE DELAY IN AWARD OF THE SECOND CONTRACT AND THE INTERVENING REDUCTION IN REQUIREMENTS BOTH PROTESTANT AND CONTRACTOR WOULD HAVE RECEIVED AWARDS FOR EQUAL QUANTITIES. IT IS RECOMMENDED THAT ARMY CONSIDER TERMINATING THE CONTRACT TO THE EXTENT OF ONE HALF OF THE CUT BACK AND AWARD THIS QUANTITY TO THE PROTESTANT.

TO BRAD'S MACHINE PRODUCTS, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE CONTRACTS AWARDED BY THE UNITED STATES ARMY, FRANKFORD ARSENAL, PHILADELPHIA, PENNSYLVANIA, PURSUANT TO INVITATION FOR BIDS NO. DAAA25-70-B-0250.

THE SUBJECT INVITATION FOR THE PROCUREMENT OF A STATED QUANTITY OF 7,036,136 20 MM PROJECTILES WAS ISSUED ON OCTOBER 24, 1969, WITH OPENING SCHEDULED FOR NOVEMBER 17, 1969. THE INVITATION INCLUDED THE FOLLOWING PROVISION:

"BIDDERS ARE REQUESTED TO SUBMIT BIDS BASED ON CAPABILITY TO MEET DELIVERY SCHEDULES HEREINAFTER SET FORTH. AT LEAST TWO AWARDS, IN THE STATED AND/OR LESSER QUANTITIES, WILL BE MADE ON THE BASIS OF THE BID OR BIDS RECEIVED ON THE TERMS MOST FAVORABLE TO THE GOVERNMENT, PRICE, DELIVERY AND OTHER FACTORS CONSIDERED INCLUDING MAINTENANCE OF MOBILIZATION BASE. (SEE PAR. 10(C) OF STD FORM 33A)" IN ADDITION, PARAGRAPH 10 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS PROVIDED THAT THE GOVERNMENT RESERVED THE RIGHT TO MAKE AN AWARD FOR A QUANTITY LESS THAN THE QUANTITY OFFERED UNLESS THE OFFEROR SPECIFIED OTHERWISE.

EIGHT BIDS WERE RECEIVED AND OPENED ON THE DATE SCHEDULED. BRAD'S SUBMITTED THE LOW EVALUATED BID. Z-D PRODUCTS, DIVISION OF WELLS MARINE, INCORPORATED, WAS SECOND LOWEST, AND HARVEY ALUMINUM, INCORPORATED, WAS THIRD LOWEST. SINCE BRAD'S WAS A NEW PROSPECTIVE CONTRACTOR, A PREAWARD SURVEY WAS REQUESTED ON THE OPENING DATE. BOTH Z-D PRODUCTS AND HARVEY ALUMINUM WERE SATISFACTORY CURRENT PRODUCERS AND, THEREFORE, NO SURVEY ON THEM WAS REQUESTED. A JOINT SURVEY OF BRAD'S WAS CONDUCTED BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD) BIRMINGHAM, ALABAMA, AND QUALITY ASSURANCE AND PRODUCTION REPRESENTATIVES FROM FRANKFORD ARSENAL AND LAKE CITY AMMUNITION PLANT. DCASD SUBMITTED AN AFFIRMATIVE REPORT DATED DECEMBER 4, 1969, BUT THE CONTRACTING OFFICER RECEIVED AN UNFAVORABLE REPORT FROM THE OTHER PARTICIPANTS IN THE SURVEY. AFTER A MEETING ON DECEMBER 9, 1969, WITH HIS TECHNICAL STAFF, THE CONTRACTING OFFICER REQUESTED A SURVEY AND REPORT FROM A TECHNICAL REPRESENTATIVE FROM THE MUNITIONS MATERIAL MANAGEMENT DIVISION, RESOURCES BOARD, FRANKFORD ARSENAL. THIS RESULTED IN A FURTHER UNSATISFACTORY REPORT DATED DECEMBER 15, 1969. DCASD WAS ASKED TO RECONSIDER ITS EARLIER FINDINGS AND ON DECEMBER 22, 1969, REAFFIRMED ITS RECOMMENDATION OF AWARD ON THE BASIS THAT BRAD'S HAD CHANGED ITS PRODUCTION PLAN AND INTENDED TO SUBCONTRACT THE NOSE SECTION WITH ALCOA. BY MEMORANDUM DATED DECEMBER 30, 1969, THE MUNITIONS MATERIAL MANAGEMENT DIVISION REAFFIRMED ITS NEGATIVE RECOMMENDATION OF THE 15TH. AFTER FURTHER DISCUSSIONS WITH HIS TECHNICAL ADVISORS, THE CONTRACTING OFFICER ISSUED A WRITTEN DETERMINATION OF BRAD'S NONRESPONSIBILITY ON JANUARY 8, 1970.

IN THE MEANTIME, ON DECEMBER 24, 1969, THE CONTRACTING OFFICER HAD AWARDED A CONTRACT TO Z-D PRODUCTS AS THE SECOND LOW BIDDER FOR 7,036,136 PROJECTILES. THE DECISION TO GO AHEAD WITH AN AWARD TO Z-D PRODUCTS PRIOR TO A FINAL DETERMINATION OF BRAD'S RESPONSIBILITY WAS MADE SINCE THE PROCUREMENT PLAN AND INVITATION CONTEMPLATED TWO AWARDS AND IMMEDIATE AWARD WAS CONSIDERED NECESSARY TO SUPPLY ISSUE PRIORITY DESIGNATOR 02 REQUIREMENTS AND TO AVOID JEOPARDIZING LAKE CITY AMMUNITION PLANT LOADING SCHEDULES FOR SOUTHEAST ASIA.

ON JANUARY 12, 1970, THE CONTRACTING OFFICER MADE A DETERMINATION PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION 1-705.4(C)(IV) THAT THE URGENCY OF THE PROCUREMENT PRECLUDED REFERRAL OF THE MATTER OF BRAD'S RESPONSIBILITY TO THE SMALL BUSINESS ADMINISTRATION FOR CONSIDERATION OF ISSUANCE OF A CERTIFICATE OF COMPETENCY. PRIOR TO THIS DETERMINATION THE CONTRACTING OFFICER REQUESTED AND RECEIVED VERIFICATION OF THE URGENCY FROM THE MUNITIONS MATERIAL MANAGEMENT DIVISION, MUNITIONS PRODUCTION DIVISION, AND HILL AIR FORCE BASE. IN VIEW OF THE URGENCY, AND TO MEET MOBILIZATION REQUIREMENTS, THE CONTRACTING OFFICER BEGAN PROCEDURES TO AWARD A CONTRACT TO THE THIRD LOW RESPONSIVE AND RESPONSIBLE BIDDER, HARVEY ALUMINUM. HOWEVER, THIS ACTION WAS SUSPENDED BY THE UNITED STATES ARMY MATERIEL COMMAND FOR FURTHER CONSIDERATION OF BRAD'S RESPONSIBILITY. AFTER SEVERAL BRIEFINGS AND CONFERENCES, THE MATTER OF BRAD'S RESPONSIBILITY WAS SUBMITTED TO SBA, WHICH ISSUED A COC ON MARCH 16, 1970. IN THE MEANTIME, ON JANUARY 31, 1970, THE ARMY MATERIEL COMMAND ORDERED A CUT BACK OF 1,887,322 IN THE PROJECTILES TO BE PROCURED. THEREFORE, ON MARCH 19, 1970, BRAD'S RECEIVED AN AWARD FOR 5,148,814 PROJECTILES.

IT IS YOUR PRIMARY CONTENTION THAT SINCE BRAD'S WAS THE LOW RESPONSIBLE BIDDER AND AWARD WAS MADE IN EXCESS OF THE STATED QUANTITY, THE CONTRACTING OFFICER WAS REQUIRED BY THE PROVISIONS OF 10 U.S.C. 2305(C) TO MAKE AN AWARD TO BRAD'S OF 7,036,136 UNITS. YOU QUESTION THE CONTRACTING OFFICER'S ACTION IN MAKING AN AWARD TO Z-D PRODUCTS PRIOR TO AN AWARD TO BRAD'S AND STATE THAT SUCH ACTION WAS NOT JUSTIFIED TO MEET EXIGENT MOBILIZATION BASE REQUIREMENTS SINCE AN AWARD TO BRAD'S WOULD HAVE ACCOMPLISHED THIS PURPOSE. IN THIS CONNECTION, YOU CONTEND THAT THE ARMY'S REFUSAL TO ACCEPT BRAD'S OFFER IN APRIL 1970 TO ACCELERATE PERFORMANCE IS INCONSISTENT WITH ITS FINDING OF URGENCY FIVE MONTHS EARLIER. YOU ALSO QUESTION THE EXISTENCE OF THE CONFIDENTIAL LETTER OF JANUARY 31, 1970, FROM THE USAMC REFERRED TO IN THE ADMINISTRATIVE REPORT AS ORDERING THE CUT-BACK IN REQUIREMENTS. YOU ALSO CONTEND THAT IF THERE WAS A LEGITIMATE REDUCTION IN REQUIREMENTS THE UNITS REPRESENTING THE REDUCTION SHOULD BE TAKEN FROM Z-D PRODUCTS BY A PARTIAL TERMINATION FOR CONVENIENCE AND ADDED TO BRAD'S CONTRACT OR, IN THE ALTERNATIVE, HALF OF THE CUT-BACK SHOULD BE TAKEN FROM Z-D PRODUCTS AND AWARDED TO BRAD'S. FINALLY, YOU CONTEND THAT AWARD OF THE REDUCED QUANTITY WAS AN ARBITRARY ATTEMPT BY THE CONTRACTING OFFICER TO CIRCUMVENT THE COC ISSUED BY SBA.

THE STATUTE GOVERNING THE PROCUREMENT, 10 U.S.C. 2305(C), REQUIRES AWARD TO BE MADE WITH REASONABLE PROMPTNESS TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. ALTHOUGH THE FOREGOING STATUTE CONTEMPLATES AWARD AT THE LOWEST PRICE, IT ALSO REQUIRES AWARD BE MADE TO A RESPONSIVE AND RESPONSIBLE BIDDER. ASPR 1 904.1 PROVIDES THAT NO CONTRACT SHALL BE AWARDED TO ANY FIRM UNLESS THE CONTRACTING OFFICER HAS FIRST MADE A WRITTEN AFFIRMATIVE DETERMINATION OF ITS RESPONSIBILITY WITHIN THE MEANING OF ASPR 1-902. ON DECEMBER 18, 1969, THE CONTRACTING OFFICER MADE SUCH A DETERMINATION WITH RESPECT TO Z-D PRODUCTS. HE WAS UNABLE TO MAKE THE SAME FINDING WITH RESPECT TO BRAD'S AND ON DECEMBER 24, 1969, CONCLUDED THAT CIRCUMSTANCES REQUIRED THE AWARD OF AT LEAST ONE OF THE TWO CONTRACTS CONTEMPLATED UNDER THE INVITATION. AS STATED ABOVE, THESE CIRCUMSTANCES WERE THE MEETING OF ISSUE PRIORITY DESIGNATOR 02 REQUIREMENTS, URGENT MOBILIZATION BASE NEEDS AND LAKE CITY AMMUNITION PLANT LOADING SCHEDULES FOR SOUTHEAST ASIA. IN THIS CONNECTION, WE NOTE THAT THE DELIVERY SCHEDULE CALLED FOR IN THE INVITATION CONTEMPLATED AWARD BY NOVEMBER 28, 1969, AND THIS DATE HAD BEEN EXCEEDED BY ALMOST ONE MONTH IN AN EFFORT TO RESOLVE DOUBTS AS TO BRAD'S RESPONSIBILITY BEFORE THE AWARD WAS MADE TO Z-D PRODUCTS. IN THESE CIRCUMSTANCES, WE ARE UNABLE TO CONCLUDE THAT THE AWARD WAS CONTRARY TO THE GOVERNING STATUTE.

WE FIND NO EVIDENCE IN THE RECORD BEFORE US TO SUPPORT YOUR CONTENTION THAT THE CONTRACTING OFFICER ATTEMPTED TO CIRCUMVENT THE SMALL BUSINESS COC PROCEDURE. THE CERTIFICATE DATED JANUARY 12, 1970, EMBODYING THE CONTRACTING OFFICER'S DETERMINATION OF NONREFERRAL DUE TO URGENCY PURSUANT TO ASPR 1-705.4(C)(IV) IS SUPPORTED BY MEMORANDA FROM THE ACTING CHIEF, MUNITIONS MATERIAL MANAGEMENT DIVISION, THE ACTING CHIEF, MUNITIONS PRODUCTION DIVISION, RESPECTIVELY, AND A TELEGRAM FROM HILL AIR FORCE BASE, COPIES OF WHICH WERE FURNISHED YOU. IN ADDITION, THERE IS NO BASIS FOR YOUR CONTENTION THAT THE CONTRACTING OFFICER ARBITRARILY REDUCED THE AWARD TO BRAD'S TO CIRCUMVENT THE COC SINCE WE REQUESTED AND RECEIVED A COPY OF THE CONFIDENTIAL LETTER DATED JANUARY 31, 1970, REDUCING THE QUANTITY AS STATED IN THE ADMINISTRATIVE REPORT.

IN THESE CIRCUMSTANCES, THERE IS NO BASIS FOR OUR OFFICE TO INTERPOSE LEGAL OBJECTION TO THE CONTRACTS AS AWARDED. HOWEVER, WE BELIEVE THE CIRCUMSTANCES JUSTIFY CONSIDERATION OF YOUR ALTERNATIVE REQUEST FOR A PARTIAL TERMINATION FOR CONVENIENCE OF Z-D PRODUCT'S CONTRACT. SEE B 168958, MAY 28, 1970. EXCEPT FOR THE DELAY IN AWARD OF THE SECOND CONTRACT TO BRAD'S AND THE INTERVENING REDUCTION IN REQUIREMENTS, BOTH FIRMS WOULD HAVE RECEIVED AWARD FOR EQUAL QUANTITIES AS CONTEMPLATED BY THE PROCUREMENT PLAN AND INVITATION. THEREFORE, WE ARE RECOMMENDING TO THE SECRETARY OF THE ARMY THAT HE GIVE CONSIDERATION TO TERMINATING THE Z- D PRODUCTS CONTRACT TO THE EXTENT OF ONE HALF OF THE CUT-BACK AND AWARD OF THIS QUANTITY (943,661) TO BRAD'S. ..END :