B-170102(1), DEC. 2, 1970

B-170102(1): Dec 2, 1970

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WHERE A PRE-AWARD SURVEY INDICATES A LACK OF PROTESTANT'S CAPACITY AND CREDIT AND SUCH DETERMINATION OF NON RESPONSIBILITY IS FORWARDED TO THE SBA FOR A CERTIFICATE OF COMPETENCY (COC) PROCEEDING. IT IS PROPER FOR THE CONTRACTING OFFICER TO WITHDRAW SUCH MATTER FROM SBA CONSIDERATION UPON COMPETENT ADVICE OF URGENCY IF THE DETERMINATION OF URGENCY IS NOT USED AS A BASIS TO AVOID THE COC PROCEDURE. AN AFFIRMATIVE FINDING BY SBA REGIONAL OFFICE IS ADVISORY AND NOT BINDING ON THE CONTRACTING OFFICER WHEN SUCH FINDING CONCERNS A CONTRACT IN EXCESS OF THE MAXIMUM LIMIT FOR WHICH A REGIONAL OFFICE COULD ISSUE A COC WITHOUT REFERRAL TO SBA. THE ACTION OF THE CONTRACTING OFFICER WAS NOT IMPROPER IN WAITING FOR A FORMAL UPDATE ON THE PREAWARD SURVEY UNDER APPLICABLE ASPR PROVISIONS.

B-170102(1), DEC. 2, 1970

BID PROTEST - DETERMINATION OF URGENCY DENIAL OF PROTEST BY LOW BIDDER, FOREST SCIENTIFIC, INC. AGAINST FINDING LACK OF CAPACITY AND CREDIT BY OGDEN AIR MATERIAL AREA, HILL AIR FORCE BASE, UTAH IN CONNECTION WITH CONTRACT FOR DRIVE ASSEMBLIES AND AWARDS TO MAXSON ELECTRONICS CORPORATION AND D.V.A. CORPORATION. WHERE A PRE-AWARD SURVEY INDICATES A LACK OF PROTESTANT'S CAPACITY AND CREDIT AND SUCH DETERMINATION OF NON RESPONSIBILITY IS FORWARDED TO THE SBA FOR A CERTIFICATE OF COMPETENCY (COC) PROCEEDING, IT IS PROPER FOR THE CONTRACTING OFFICER TO WITHDRAW SUCH MATTER FROM SBA CONSIDERATION UPON COMPETENT ADVICE OF URGENCY IF THE DETERMINATION OF URGENCY IS NOT USED AS A BASIS TO AVOID THE COC PROCEDURE. AN AFFIRMATIVE FINDING BY SBA REGIONAL OFFICE IS ADVISORY AND NOT BINDING ON THE CONTRACTING OFFICER WHEN SUCH FINDING CONCERNS A CONTRACT IN EXCESS OF THE MAXIMUM LIMIT FOR WHICH A REGIONAL OFFICE COULD ISSUE A COC WITHOUT REFERRAL TO SBA, WASHINGTON. FURTHER, THE ACTION OF THE CONTRACTING OFFICER WAS NOT IMPROPER IN WAITING FOR A FORMAL UPDATE ON THE PREAWARD SURVEY UNDER APPLICABLE ASPR PROVISIONS. THERE BEING NO IMPROPRIETY IN THE CONTRACTING OFFICER'S ACTS NOR ULTIMATE PREJUDICE TO THE PROTESTANT THE PROTEST MUST BE DENIED.

TO FOREST SCIENTIFIC, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 15, 1970, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD OF CONTRACTS UNDER INVITATION FOR BIDS (IFB) NO. F42600-70-B-1760, ISSUED BY THE OGDEN AIR MATERIEL AREA, HILL AIR FORCE BASE, UTAH.

THE IFB COVERED THE PROCUREMENT OF 477,709 DRIVE ASSEMBLIES ATU35A/B WITH 50 PERCENT OF THE PROCUREMENT BEING SET ASIDE FOR AWARD TO LABOR SURPLUS AREA CONCERNS. FOREST SCIENTIFIC, INC., WAS DETERMINED AT THE TIME OF BID OPENING TO BE THE LOW RESPONSIVE BIDDER ON THE TOTAL QUANTITY WITH A BID OF $566,085.17. HOWEVER, DUE TO A NEGATIVE PREAWARD SURVEY REPORT, INDICATING A LACK OF CAPACITY AND CREDIT, NO AWARD WAS MADE TO FOREST SCIENTIFIC. INSTEAD, A DETERMINATION OF NONRESPONSIBILITY WAS FORWARDED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CERTIFICATE OF COMPETENCY (COC) PROCEEDINGS. THEREAFTER, THE FOLLOWING EVENTS OCCURRED AS REPORTED BY THE PROCUREMENT ACTIVITY:

"11 MAY 1970 -RECEIVED LETTER FROM SBA REGIONAL OFFICE STATING THAT

THEIR FINDING ON FOREST SCIENTIFIC'S CAPABILITIES IS

AFFIRMATIVE, AND THAT AWARD SHOULD BE MADE DIRECT TO

FOREST SCIENTIFIC (PRESUMABLY IN LIEU OF SBA'S ISSUANCE

OF A COC.) (THE SBA LETTER DATED MAY 8, 1970, WAS

ACTUALLY COUCHED IN LESS MANDATORY LANGUAGE, TO WIT:

"THE ABOVE INFORMATION CONFIRMS OUR CONVERSATION AND IS

FURNISHED FOR YOUR CONSIDERATION TOWARDS A POSSIBLE

DIRECT AWARD.")

"12 MAY 1970 -LETTER SENT TO DCAS (DEFENSE CONTRACT ADMINISTRATION

SERVICES), GARDEN CITY REQUESTING A SUPPLEMENTAL

UP-DATED PAS (PREAWARD SURVEY) ON FOREST SCIENTIFIC.

"13 MAY 1970 -RECEIVED TELEPHONE CALL FROM DCAS (CONFIRMED LATER BY

LETTER) THAT UP-DATED PAS ON FOREST SCIENTIFIC WOULD NOT

BE COMPLETED UNTIL 17 JUNE 1970.

"14 MAY 1970 -SENT LETTER TO THE D/MM (DIRECTORATE OF MATERIEL

MANAGEMENT) HIGHLIGHTING THE DELAYS AND PROBLEMS

ENCOUNTERED, AND REQUESTING INFORMATION ON WHAT EFFECT

THE DELAY WOULD HAVE ON LOGISTICS SUPPORT.

"25 MAY 1970 -MESSAGE SENT TO DCAS, GARDEN CITY REGARDING THE

URGENCY, AND STATING THAT THE 17 JUNE 1970 COMPLETION

DATE ON UP-DATING THE PAS IS EXCESSIVE. MESSAGE

REQUESTED EXPEDITED ACTION ON THE MATTER. (EARLIER IN

THE DAY THE DEFENSE CONTRACT ADMINISTRATION SERVICES

ASSISTANT PREAWARD SURVEY MONITOR ADVISED THE

CONTRACTING OFFICER BY TELEPHONE THAT EVEN IF ALL

MATTERS OF CAPACITY WERE RESOLVED IN FOREST SCIENTIFIC'S

FAVOR, A NEGATIVE PREAWARD SURVEY UPDATE AND

RECOMMENDATION OF NO AWARD WOULD STILL BE FORTHCOMING

BECAUSE OF FOREST SCIENTIFIC'S FINANCIAL SITUATION WHICH

REMAINED UNCHANGED.)

" 1 JUNE 1970 -RECEIVED URGENT JUSTIFICATION FROM D/MM. PURCHASE

REQUEST UP-GRADED TO 'URGENT.'

" 4 JUNE 1970 -RECEIVED REPLY FROM DCAS THAT THE 17 JUNE 1970

COMPLETION DATE CANNOT BE SHORTENED.

"12 JUNE 1970 -FACED WITH THE ABOVE INFORMATION AND THE PROBABILITY OF

FURTHER DELAYS IF CERTIFICATE OF COMPETENCY PROCEEDINGS

WERE CONTINUED, THE DECISION WAS MADE TO WITHDRAW THE

COC ACTION AND MAKE AWARD TO THE NEXT LOW BIDDER. COC

PROCEEDINGS WERE WITHDRAWN. (ACTUALLY, THE

DETERMINATION OF URGENCY APPEARS TO HAVE BEEN SIGNED AND

APPROVED ON JUNE 11, 1970. THE ONLY ACTION OF JUNE 12

APPEARS TO BE THE ADVICE TO SBA THAT CONTRACTS HAD BEEN

AWARDED AND FURTHER COC ACTION WAS NOT REQUIRED.)"

ON JUNE 11, 1970, CONTRACTS WERE AWARDED TO MAXSON ELECTRONICS CORPORATION (NON-SET-ASIDE PORTION), WHICH HAD COMPLETED DELIVERY OF THE SAME ITEM IN APRIL 1970, AND TO DVA CORPORATION (SET-ASIDE PORTION), WHICH WAS CURRENTLY PRODUCTING THE ITEM.

IN ITS LETTER OF JUNE 15, 1970, FOREST SCIENTIFIC POINTS OUT THAT ON MAY 28, 1970, THE PROCUREMENT ACTIVITY REQUESTED AN EXTENSION OF ITS OFFER UNTIL AUGUST 1, 1970, AND THAT IT COMPLIED WITH THAT REQUEST. FURTHER, IN PROTESTING THE DECISION TO MAKE IMMEDIATE AWARD ON THE BASIS OF URGENCY PURSUANT TO PARAGRAPH 1-705.4(C)(IV) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), FOREST SCIENTIFIC CONTENDS THAT AWARD COULD HAVE BEEN MADE ON MAY 8 WHEN SBA GAVE NOTICE OF ITS AFFIRMATIVE FINDINGS. THE IMPLICATION IN THIS CONTENTION IS THAT THE PROCUREMENT ACTIVITY UNREASONABLY DELAYED MATTERS TO CREATE THE URGENT SITUATION IN ORDER TO CIRCUMVENT THE COC PROCEDURES AND JUSTIFY AWARDS TO OTHER FIRMS. FOREST SCIENTIFIC ALSO MAKES THE FOLLOWING CONTENTION:

"IN OUR DISCUSSIONS WITH MR. JARRARD AND MR. ROHMER IT WAS INDICATED THAT THE MAU 87 COUPLER HAD TO BE BOUGHT IMMEDIATELY BECAUSE THEY HAVE THE 514,000 DRIVE ASSEMBLIES (ATU 35/B) ON HAND TO FULFILL THAT REQUIREMENT SO THAT THE URGENCY FOR THE 477,709 PARTS ON PROTESTED CONTRACT COULD NOT BE NEEDED AT THIS TIME, AS AN URGENCY PROCUREMENT UNDER DECIDED ASPR REGULATIONS. ***"

PURSUANT TO OUR REQUEST FOR A RESPONSE TO THIS CONTENTION, THE PROCUREMENT ACTIVITY STATES:

"SUBJECT: PROTEST FOREST SCIENTIFIC IFB F42600-70-B-1760. *** MR FRAN JARRARD IS CHIEF OF SMALL BUSINESS AND CONTRACTOR RELATIONS OFFICE. JAY ROHMER IS CHIEF, AIR MUNITIONS BRANCH, COMMODITIES PROCUREMENT DIVISION. BOTH ARE AIR FORCE EMPLOYEES IN THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, HILL AFB, UTAH. NEITHER RECALLS THIS EXACT CONVERSATION AS QUOTED. APPARENTLY MR SAGINARIO, PRESIDENT, FOREST SCIENTIFIC, INC, MISUNDERSTOOD THE CONVERSATION ON IFB F42600-70 B-1760 AND CONNECTED THE REQUIREMENT FOR THE ATU-35 WITH AN ADDITIONAL REQUIREMENT WE HAD AT THAT TIME FOR THE MAU-87. THIS IS INCORRECT BECAUSE, AS INDICATED IN PARAGRAPH 5 OF THE CONTRACTING OFFICER'S STATEMENT TO THE PROTEST TO GAO OF 15 JUNE 1970 ON THIS IFB, THE REQUIREMENT FOR 477,709 ATU-35 DRIVE ASSEMBLIES WAS URGENTLY NEEDED TO FULFILL WORLD-WIDE *** COMMITMENTS. DELIVERY WAS NEEDED BEGINNING OCTOBER 1970, NOTWITHSTANDING THE STATUS OF THE MAU-87 COUPLER."

MOREOVER, THE PROCUREMENT ACTIVITY CONTENDS THAT THE 514,000 ITEMS REFERRED TO BY FOREST SCIENTIFIC ARE NOT, IN FACT, DRIVE ASSEMBLIES BUT MAU-87 GOVERNORS. IN VIEW OF THE FOREGOING, WE CAN ONLY CONCLUDE THAT THERE EXISTS A DISPUTE OF FACT WITH RESPECT TO THE EXISTENCE OF THE ALLEGED CONVERSATION AS WELL AS TO ITS CONTENTS. IN SUCH CIRCUMSTANCES, THE ADMINISTRATIVE REPORT WILL BE DEEMED CORRECT ABSENT SUBSTANTIAL EVIDENCE TO THE CONTRARY. 40 COMP. GEN. 178, 180 (1960).

A CONTRACTING OFFICER MAY, UPON COMPETENT ADVICE OF URGENCY, WITHDRAW FROM SBA CONSIDERATION A PREVIOUSLY REFERRED MATTER OF RESPONSIBILITY. 157090, SEPTEMBER 30, 1965. THERE MUST, HOWEVER, BE CONFORMANCE WITH THE PROCEDURAL REQUIREMENTS OF ASPR 1-705.4(C)(IV) AND THE DETERMINATION OF URGENCY MAY NOT BE USED AS A BASIS TO AVOID THE COC PROCEDURES. B-168278, MARCH 30, 1970, 49 COMP. GEN. . IN THE INSTANT CASE, IT APPEARS THAT REQUIRED PROCEDURES WERE COMPLIED WITH. MOREOVER, FROM THE RECORD BEFORE US, WE CONCLUDE THAT THERE WAS A VALID BASIS FOR THE URGENCY DETERMINATION AND THAT SUCH DETERMINATION WAS NOT USED TO CIRCUMVENT THE COC PROCEDURE.

AS AN INITIAL MATTER, WE NOTE THAT THE SBA ADVICE OF MAY 8 TO THE PURCHASING ACTIVITY WAS GIVEN BY AN SBA REGIONAL OFFICE. SUCH NOTICE IS REQUIRED BY ASPR 1-705.4(E) IN CASES, SUCH AS THIS, WHERE THE MATTER IS REFERABLE TO SBA, WASHINGTON, FOR APPROVAL PRIOR TO ISSUANCE OF A COC. ARE INFORMALLY ADVISED BY SBA THAT REFERRAL WAS REQUIRED IN THIS INSTANCE BECAUSE THE CONTRACT FOR WHICH FOREST SCIENTIFIC WAS BEING CONSIDERED EXCEEDED $250,000, THE MAXIMUM LIMIT FOR WHICH THE REGIONAL SBA OFFICE COULD, WITHOUT REFERRAL, ISSUE A COC UNDER SBA NATIONAL DIRECTIVE 615-1B. FINAL DETERMINATION OF WHETHER OR NOT TO ISSUE A COC RESTED, THEREFORE, WITH SBA, WASHINGTON, AND NOT THE REGIONAL SBA OFFICE. THE FACT THAT THE SBA REGIONAL OFFICE GIVING ADVICE AS TO ITS AFFIRMATIVE FINDINGS WITH RESPECT TO THE ISSUANCE OF A COC DID NOT HAVE FINAL AUTHORITY TO ISSUE A COC DISTINGUISHES THIS CASE FROM B-168278, SUPRA, WHICH INVOLVED SBA, WASHINGTON, ADVICE OF A COC ISSUANCE. THE SBA ADVICE OF MAY 8 WAS, THEN, ADVISORY ONLY AND NOT BINDING ON THE CONTRACTING OFFICER. CONSEQUENTLY, WHILE WE AGREE WITH THE CONTENTION THAT THE CONTRACTING OFFICER COULD HAVE, IN VIEW OF THE SBA'S ADVICE, MADE AWARD TO FOREST SCIENTIFIC AT THAT TIME, HE WAS NOT OBLIGATED TO DO SO.WE CANNOT SAY, THEN THAT HIS ACTION IN THIS REGARD WAS IMPROPER.

ASPR 1-705.4(E) PROVIDES THAT PRIOR TO FINAL SBA ACTION THE CONTRACTING OFFICER WILL BE PROVIDED AN OPPORTUNITY TO MEET OR COMMUNICATE WITH SBA FIELD OFFICE REPRESENTATIVES AND FURNISH THEM WITH NEW OR ADDITIONAL INFORMATION ON THE CASE. PERSONNEL FROM THE SURVEYING ACTIVITY MAY ALSO BE IN ATTENDANCE AND THE PURPOSE OF THE MEETING IS TO RESOLVE ANY DIFFERENCES BETWEEN SBA AND THE MILITARY DEPARTMENTS. IF RESOLUTION IS NOT EFFECTED THEN THE PROVISIONS OF ASPR 1-705.4(F) APPLY. BASICALLY THIS PROVISION PROVIDES A METHOD OF APPEAL FROM THE TENTATIVE DECISION OF SBA TO ISSUE A COC AND IT MAY CULMINATE IN ANOTHER CONFERENCE BETWEEN SBA, WASHINGTON, AND REPRESENTATIVES OF THE DEPARTMENT OF DEFENSE. IT IS NOTEWORTHY, HOWEVER, THAT NEITHER OF THESE PROVISIONS STATE TIME LIMITATIONS WITH RESPECT TO WHEN THE INITIAL MEETING MUST BE HELD OR WHEN THE APPEAL, IF ANY, MUST BE COMPLETED.

THE RECORD INDICATES THAT THE PURPOSE OF THE PROCUREMENT ACTIVITY'S REQUEST OF MAY 12 FOR AN UPDATED PREAWARD SURVEY WAS TO SUBSTANTIATE SBA'S FINDINGS AND PROVIDE A BASIS FOR A UNIFIED DEPARTMENT OF DEFENSE POSITION. SINCE THIS ACTION WOULD BE UNNECESSARY IF THE PROCUREMENT ACTIVITY INTENDED TO ACCEDE TO THE SBA POSITION, THE OBVIOUS INFERENCE IS THAT THE PROCUREMENT ACTIVITY WAS PREPARING TO GO TO CONFERENCE WITH SBA AS IT WAS ENTITLED TO DO. MOREOVER, EVEN THOUGH THE PROCUREMENT ACTIVITY WAS INFORMALLY ADVISED ON MAY 25 THAT A NEGATIVE UPDATE OF THE PREAWARD SURVEY WOULD BE FORTHCOMING, WE CANNOT SAY ITS FAILURE TO CONFER WITH SBA AT THIS DATE, BUT INSTEAD WAIT FOR A FORMAL UPDATE, WAS AN ABUSE OF DISCRETION.

ADDITIONALLY, BASED ON COORDINATION WITH THE SMALL BUSINESS SPECIALIST, THE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT, GARDEN CITY, IT WAS SUBSEQUENTLY DETERMINED THAT COMPLETION OF THE COC PROCEDURE WOULD TAKE A MINIMUM OF 14 WORKING DAYS AFTER SBA RECEIVED THE PROCUREMENT ACTIVITY'S REQUEST TO CONTINUE. PRESUMABLY, THIS TIME FRAME CONTEMPLATED COMPLETION OF THE COC PROCEDURES AT THE SBA REGIONAL LEVEL SINCE THE REPORT CONTINUES, "IN THE EVENT A RECOMMENDATION FOR AWARD IS RECEIVED FROM SBA, WASHINGTON, D. C., IT IS ESTIMATED THAT THE EARLIEST DATE THAT AN AWARD CAN BE MADE TO FOREST SCIENTIFIC IS 1 AUGUST WITH RESULTING CONTRACTUAL DELIVERY REQUIREMENTS TO BEGIN IN DECEMBER."

GIVEN EVEN THE TIME FRAME OF 14 WORKING DAYS FROM MAY 25, IT SEEMS CLEAR THAT THE COC PROCEDURES WOULD NOT HAVE BEEN COMPLETED PRIOR TO JUNE 1 WHEN THE PROCUREMENT ACTIVITY WAS NOTIFIED THAT THE PROCUREMENT WAS URGENTLY NEEDED. IN VIEW OF THIS, WE CANNOT CONCLUDE THAT THE FAILURE TO REQUEST A CONFERENCE ON MAY 25 WAS AN ACTION ULTIMATELY PREJUDICIAL TO FOREST SCIENTIFIC OR, GENERALLY, THAT ANY OF THE ACTIONS TAKEN BY THE PROCUREMENT ACTIVITY HAD SUCH EFFECT.

ACCORDINGLY, YOUR PROTEST IS DENIED.