B-169570, JUN. 1, 1970

B-169570: Jun 1, 1970

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DISQUALIFIED ON ERRONEOUS BASIS UNSUCCESSFUL BIDDER'S PROTEST THAT CONTRACTING OFFICER FAILED TO TRANSMIT DOCUMENTATION SUPPORTING DETERMINATION OF NONRESPONSIBILITY FOR REASONS OTHER THAN CAPACITY AND CREDIT TO SMALL BUSINESS ADMINISTRATION FOR CERTIFICATE OF COMPETENCY AS PROVIDED BY REGULATIONS IS DENIED FOR DETERMINATION OF NONRESPONSIBILITY WAS BASED ON LACK OF CAPACITY AS SUBSTANTIATED BY PREAWARD SURVEY WHICH RECOMMENDED "NO AWARD" AND. WHILE OFFICER'S FAILURE TO CITE LACK OF CAPACITY IN NOTIFYING BIDDER OF REASON FOR DETERMINATION OF NONRESPONSIBILITY IS REGRETTABLE. INC.: FURTHER REFERENCE IS MADE TO YOUR TELEFAX OF APRIL 15. THE REQUEST FOR QUOTATIONS WAS ISSUED ON FEBRUARY 12.

B-169570, JUN. 1, 1970

BIDDERS--QUALIFICATIONS--CAPACITY, ETC.--DISQUALIFIED ON ERRONEOUS BASIS UNSUCCESSFUL BIDDER'S PROTEST THAT CONTRACTING OFFICER FAILED TO TRANSMIT DOCUMENTATION SUPPORTING DETERMINATION OF NONRESPONSIBILITY FOR REASONS OTHER THAN CAPACITY AND CREDIT TO SMALL BUSINESS ADMINISTRATION FOR CERTIFICATE OF COMPETENCY AS PROVIDED BY REGULATIONS IS DENIED FOR DETERMINATION OF NONRESPONSIBILITY WAS BASED ON LACK OF CAPACITY AS SUBSTANTIATED BY PREAWARD SURVEY WHICH RECOMMENDED "NO AWARD" AND, WHILE OFFICER'S FAILURE TO CITE LACK OF CAPACITY IN NOTIFYING BIDDER OF REASON FOR DETERMINATION OF NONRESPONSIBILITY IS REGRETTABLE, SUCH FAILURE DID NOT AFFECT VALIDITY OF DETERMINATION, NO LEGAL BASIS EXISTING FOR QUESTIONING CONTRACTING OFFICER'S ACTION IN REJECTING OFFER.

TO COLLINS ELECTRONICS, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEFAX OF APRIL 15, 1970, PROTESTING THE REJECTION OF YOUR QUOTATION FOR 452 ELECTRONIC CHOPPERS BY THE DEFENSE ELECTRONICS SUPPLY CENTER, DAYTON, OHIO, UNDER REQUEST FOR QUOTATIONS (PURCHASE REQUESTS NOS. M6080270 AND D0232780).

THE REQUEST FOR QUOTATIONS WAS ISSUED ON FEBRUARY 12, 1970, AND REQUESTED QUOTATIONS ON 452 ELECTRONIC CHOPPERS, FSN 5945-518-6569, COLLINS ELECTRONICS PART NUMBER 102A IN ACCORDANCE WITH HUGHES DRAWING NO. 712399- 1. THE PROCUREMENT WAS NEGOTIATED PURSUANT TO THE PUBLIC EXIGENCY EXCEPTION OF 10 U.S.C. 2304(A)(2). WHEN NEGOTIATIONS WERE CLOSED ON MARCH 20, 1970, THE FINAL NEGOTIATED PRICES WERE:

FIRM UNIT PRICE

JAMES ELECTRONICS INC. $23.75

BRISTOL COMPANY 45.15

COLLINS 19.80

ON MARCH 24, 1970, THE CONTRACTING OFFICER REQUESTED THAT A PREAWARD SURVEY BE CONDUCTED OF YOUR FACILITIES BY THE BALTIMORE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT. BASED UPON THE PREAWARD SURVEY REPORT DATED MARCH 27, 1970, WHICH RECOMMENDED "NO AWARD" TO YOUR FIRM, THE CONTRACTING OFFICER DETERMINED YOUR FIRM TO BE NONRESPONSIBLE FOR PURPOSES OF PERFORMING THE PROPOSED CONTRACT. THE DETERMINATION WAS BASED UPON THE FACT THAT YOUR FIRM WAS FOUND TO BE UNSATISFACTORY AS TO PRODUCTION CAPABILITY, PLANT FACILITIES, QUALITY ASSURANCE CAPABILITY, LABOR RESOURCE, AND AN UNSATISFACTORY PERFORMANCE RECORD. IT WAS ALSO CONCLUDED THAT YOUR FIRM WOULD BE UNABLE TO MEET THE REQUIRED DELIVERY SCHEDULE. APRIL 6, 1970, THE CONTRACTING OFFICER MADE A WRITTEN DETERMINATION THAT YOU WERE NOT A RESPONSIBLE PROSPECTIVE CONTRACTOR FOR PURPOSES OF THE PROCUREMENT.

ON APRIL 6, 1970, THE CONTRACTING OFFICER ISSUED A "NOTICE TO UNSUCCESSFUL OFFERORS" TO YOUR FIRM AND TO THE BRISTOL COMPANY, THE OTHER UNSUCCESSFUL OFFEROR. THE NOTICE TO YOUR FIRM STATED THAT COLLINS HAD BEEN FOUND TO BE NONRESPONSIBLE BECAUSE OF ITS FAILURE TO APPLY THE NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB IN ACCORDANCE WITH PARAGRAPH 1-903.1(III) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). ON THE SAME DAY, THE CONTRACTING OFFICER AWARDED A CONTRACT TO JAMES ELECTRONICS INC. AS THE LOWEST RESPONSIBLE OFFEROR.

YOU PROTEST THAT THE CONTRACTING OFFICER FAILED TO TRANSMIT TO THE SMALL BUSINESS ADMINISTRATION (SBA) REPRESENTATIVE OR NEAREST REGIONAL SBA OFFICE A COPY OF THE DOCUMENTATION SUPPORTING THE DETERMINATION THAT YOUR FIRM WAS NOT A RESPONSIBLE CONCERN FOR REASONS OTHER THAN CAPACITY AND CREDIT, SO AS TO PERMIT SBA TO APPEAL TO THE HEAD OF THE PROCURING AGENCY IN ACCORDANCE WITH DEFENSE PROCUREMENT CIRCULAR NO. 75, DECEMBER 10, 1969 (ASPR 1-705.4(C)(VI)).

ASPR 1-902 PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"PURCHASES SHALL BE MADE FROM, AND CONTRACTS SHALL BE AWARDED TO, RESPONSIBLE PROSPECTIVE CONTRACTORS ONLY. A RESPONSIBLE PROSPECTIVE CONTRACTOR IS ONE WHICH MEETS THE STANDARDS SET FORTH IN 1-903.1 AND 1 903.2, AND SUCH SPECIAL STANDARDS AS MAY BE PRESCRIBED IN ACCORDANCE WITH 1-903.3 AND BY OVERSEAS COMMANDERS. *** DOUBT AS TO PRODUCTIVE CAPACITY OR FINANCIAL STRENGTH WHICH CANNOT BE RESOLVED AFFIRMATIVELY SHALL REQUIRE A DETERMINATION OF NONRESPONSIBILITY."

ASPR 1-903.1 SETS FORTH GENERAL STANDARDS OF RESPONSIBILITY FOR PROSPECTIVE CONTRACTORS, IN PART, AS FOLLOWS:

"GENERAL STANDARDS. EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH 1 903, A PROSPECTIVE CONTRACTOR MUST:

"(II) BE ABLE TO COMPLY WITH THE REQUIRED OR PROPOSED DELIVERY OR PERFORMANCE SCHEDULE, TAKING INTO CONSIDERATION ALL EXISTING BUSINESS COMMITMENTS, COMMERCIAL AS WELL AS GOVERNMENTAL (FOR SBA CERTIFICATES OF COMPETENCY, SEE 1-705.4);

"(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. (IN THE CASE OF SMALL BUSINESS CONCERNS, SEE 1 705.4(C)(VI) AND 1-905.2.);

"(IV) HAVE A SATISFACTORY RECORD OF INTEGRITY (IN THE CASE OF A SMALL BUSINESS CONCERN, SEE 1-705.4(C)(VI).);"

ASPR 1-705.4(A) PROVIDES, IN PART, AS FOLLOWS:

"SBA HAS STATUTORY AUTHORITY TO CERTIFY THE COMPETENCY OF ANY SMALL BUSINESS CONCERN AS TO CAPACITY AND CREDIT. 'CAPACITY' MEANS THE OVERALL ABILITY OF A PROSPECTIVE SMALL BUSINESS CONTRACTOR TO MEET QUALITY, QUANTITY, AND TIME REQUIREMENTS OF A PROPOSED CONTRACT AND INCLUDES ABILITY TO PERFORM, ORGANIZATION, EXPERIENCE, TECHNICAL KNOWLEDGE, SKILLS, 'KNOW-HOW,' TECHNICAL EQUIPMENT, AND FACILITIES OR THE ABILITY TO OBTAIN THEM. *** "

ASPR 1-705.4(C)(VI) PROVIDES, IN PART, AS FOLLOWS:

"(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 NEAREST SBA REGIONAL OFFICE AND TO THE APPROPRIATE DEPARTMENTAL SMALL BUSINESS ADVISOR IDENTIFIED IN 1-704.2. *** 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. *** "

WE ARE ADVISED THAT THE CONTRACTING OFFICER FAILED TO MAKE OR MAINTAIN AN APPROPRIATE DISTINCTION BETWEEN YOUR FIRM'S NONRESPONSIBILITY BASED ON LACK OF CAPACITY AND NONRESPONSIBILITY BASED ON ITS FAILURE TO APPLY NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB.

WHILE THE CONTRACTING OFFICER STATED THAT THE DETERMINATION OF NONRESPONSIBILITY WAS BASED ON "FAILURE TO APPLY NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB," THE RECORD REVEALS THAT THE PREAWARD SURVEY ON WHICH THE CONTRACTING OFFICER RELIED FOR FACTUAL INFORMATION RECOMMENDED "NO AWARD" ESSENTIALLY ON THE BASIS OF FACTORS RELATING TO YOUR FIRM'S CAPACITY. PARAGRAPH 2 OF THE DETERMINATION OF NONRESPONSIBILITY REFERS TO THE PREAWARD SURVEY AND LISTS THE ABOVE LISTED SIX DEFICIENCIES FROM THE SURVEY WHICH RELATE TO CAPACITY. SUCH BEING THE CASE, THE DETERMINATION OF NONRESPONSIBILITY WAS IN FACT BASED ON LACK OF CAPACITY. WHILE THE FAILURE OF THE CONTRACTING OFFICER TO CITE LACK OF CAPACITY IN THE NOTICE SENT TO YOUR FIRM AS THE REASON FOR THE DETERMINATION OF NONRESPONSIBILITY IS REGRETTABLE, SUCH FAILURE DID NOT AFFECT THE VALIDITY OF THE DETERMINATION.

ASPR 1-705.4(C) PROVIDES THAT FOR PROPOSED AWARDS EXCEEDING $2,500 BUT NOT EXCEEDING $10,000, IT IS WITHIN THE DISCRETION OF THE CONTRACTING OFFICER TO REFER MATTERS OF NONRESPONSIBILITY TO SBA FOR THE POSSIBLE ISSUANCE OF A CERTIFICATE OF COMPETENCY. INASMUCH AS YOUR OFFERED PRICE WAS $8,949, THE CONTRACTING OFFICER EXERCISED HIS DISCRETION NOT TO REFER THE MATTER TO SBA. HE DID, HOWEVER, MAKE A WRITTEN DETERMINATION IN REGARD TO YOUR FIRM'S NONRESPONSIBILITY IN ACCORDANCE WITH THE PROVISIONS OF ASPR 1-904.

CONSIDERING THAT THE DETERMINATION OF NONRESPONSIBILITY WAS BASED ON LACK OF CAPACITY AS SUBSTANTIATED BY THE PREAWARD SURVEY REPORT, WE CONCLUDE THAT NO LEGAL BASIS EXISTS FOR QUESTIONING THE ACTIONS TAKEN BY THE CONTRACTING OFFICER IN REJECTING YOUR OFFER AND IN MAKING AN AWARD TO JAMES ELECTRONICS INC. ..END :