B-170224(1), OCT. 8, 1970

B-170224(1): Oct 8, 1970

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WHO WAS FOUND TO BE UNSATISFACTORY IN PRODUCTIVE CAPACITY AND DELINQUENT IN PERFORMANCE RECORD IN PREAWARD SURVEY. WAS STILL FOUND AFTER A SECOND SURVEY TO HAVE A CONTINUOUS BACKLOG OF DELIQUENT CONTRACTS. WAS PROPERLY CONSIDERED NONRESPONSIBLE. THE PROTEST IS DENIED AND THE ADMINISTRATIVE DETERMINATION OF NONRESPONSIBILITY WILL NOT BE QUESTIONED. INC.: REFERENCE IS MADE TO YOUR LETTER DATED JUNE 18. THE FOUR TIMELY SUBMITTED BIDS WERE: BIDDER ITEM 1 ITEM 2 ALTON IRON WORKS. 144 INCL. *WAIVER OF FIRST ARTICLE OTHER BIDDERS DID NOT OFFER PRICE DECREASE FOR WAIVER SINCE ALTON WAS THE APPARENT LOW BIDDER. A PREAWARD SURVEY WAS CONDUCTED OF THE CAPABILITIES OF YOUR FIRM. THE REPORT STATED: "THE BIDDER'S PERFORMANCE RECORD FROM SEPTEMBER 1969 TO THE PRESENT REVEALED THAT 84 CONTRACTS WERE COMPLETED.

B-170224(1), OCT. 8, 1970

BID PROTEST - BIDDER RESPONSIBILITY - UNSATISFACTORY PERFORMANCE DENIAL OF PROTEST OF ALTON IRON WORKS, INC., LOW BIDDER, AGAINST THE REJECTION OF BID ON BASIS OF A CONTINUOUS DELINQUENCY IN PERFORMANCE OF CONTRACTS, AND THE AWARD TO STEWART-THOMAS INDUSTRIES, INC., THIRD LOW BIDDER, FOR FRAME AND TABLE ASSEMBLY, STEREOPLOTTER, PROJECTION, WITH CHEST AND ASSOCIATED DATA, BY DEFENSE GENERAL SUPPLY CENTER. LOW BIDDER, WHO WAS FOUND TO BE UNSATISFACTORY IN PRODUCTIVE CAPACITY AND DELINQUENT IN PERFORMANCE RECORD IN PREAWARD SURVEY, AND EVEN AFTER AS SBA APPEAL, WAS STILL FOUND AFTER A SECOND SURVEY TO HAVE A CONTINUOUS BACKLOG OF DELIQUENT CONTRACTS, WAS PROPERLY CONSIDERED NONRESPONSIBLE. THUS ON BASIS OF BIDDERS LONG HISTORY OF DELINQUENT PERFORMANCE AND FAILURE TO TAKE EFFECTIVE REMEDIAL ACTION TO ALLEVIATE THE PROBLEMS, THE PROTEST IS DENIED AND THE ADMINISTRATIVE DETERMINATION OF NONRESPONSIBILITY WILL NOT BE QUESTIONED.

TO ALTON IRON WORKS, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 18, 1970, TO THE DEFENSE GENERAL SUPPLY CENTER PROTESTING AGAINST THE AWARD OF A CONTRACT TO STEWART-THOMAS INDUSTRIES, INC., UNDER INVITATION FOR BIDS (IFB) NO. DSA400-70-B-2831. IN ACCORDANCE WITH YOUR REQUEST, YOUR PROTEST HAS BEEN REFERRED TO OUR OFFICE FOR RESOLUTION.

THE IFB COVERED THE PROCUREMENT OF TWO FSN 6675-587-5090 FRAME AND TABLE ASSEMBLY, STEREOPLOTTER, PROJECTION: MULTIPLEX, 32-INCH LENGTH, WITH CHEST, AND ASSOCIATED DATA. AT BID OPENING, THE FOUR TIMELY SUBMITTED BIDS WERE:

BIDDER ITEM 1 ITEM 2

ALTON IRON WORKS, INC. $ 8,975 $ 100

A. C. BALL CO. 10,250 5,250

STEWART-THOMAS INDUSTRIES, INC. 10,389 2,850

*9,880

PROTECTIVE DEVICES MFG. CO. 15,144 INCL.

*WAIVER OF FIRST ARTICLE

OTHER BIDDERS DID NOT OFFER PRICE DECREASE FOR WAIVER

SINCE ALTON WAS THE APPARENT LOW BIDDER, A PREAWARD SURVEY WAS CONDUCTED OF THE CAPABILITIES OF YOUR FIRM. THAT PREAWARD SURVEY DATED MARCH 3, 1970, RECOMMENDED THAT NO AWARD BE MADE TO ALTON ON THE BASIS OF UNSATISFACTORY PRODUCTION CAPABILITY, PERFORMANCE RECORD, AND LACK OF ABILITY TO MEET THE REQUIRED DELIVERY SCHEDULE. WITH RESPECT TO ALTON'S PERFORMANCE RECORD, THE REPORT STATED:

"THE BIDDER'S PERFORMANCE RECORD FROM SEPTEMBER 1969 TO THE PRESENT REVEALED THAT 84 CONTRACTS WERE COMPLETED; OF THESE 44 WERE DELINQUENT FROM 1 WEEK TO 4 MONTHS. THE 44 DELINQUENT COMPLETED CONTRACTS, REFERRED TO ABOVE, WOULD HAVE BEEN GREATER HAD NOT THE CONTRACTOR RECEIVED RESCHEDULING ON OTHER DELINQUENT CONTRACTS. HAD THESE CONTRACTS NOT BEEN RESCHEDULED, THE CONTRACTOR WOULD HAVE BEEN DELINQUENT ON AN ADDITIONAL 7 COMPLETED CONTRACTS DURING THIS PERIOD. AT PRESENT, DCASD-GARDEN CITY IS ADMINISTERING 113 CONTRACTS WITH THIS BIDDER, OF WHICH 17 ARE PRESENTLY IN DELINQUENT STATUS. THE MAJORITY OF THE CONTRACTS ARE ON SCHEDULE SINCE NO DELIVERIES ARE REQUIRED AT THIS TIME. IT IS TO BE NOTED THAT THE 17 DELINQUENT CONTRACTS ARE AGAINST THOSE CONTRACTS WHICH BECAME DUE FOR DELIVERY AND AS SUCH IT CAN BE ESTABLISHED THAT THE CONTRACTOR IS 75% DELINQUENT AGAINST HIS CONTRACTUAL DUE DATE DELIVERIES. FIFTEEN (15) OF THE ABOVE 17 DELINQUENT CONTRACTS ARE DUE TO LATE VENDOR AND SUBCONTRACTOR DELIVERIES; THE BALANCE OF 2 ARE DUE TO DISCREPANCIES IN GOVERNMENT DRAWINGS.

"PERSONNEL FROM DCASD-GARDEN CITY HAVE CONTINUALLY WORKED WITH THE CONTRACTOR IN TRYING TO IMPROVE HIS FOLLOW-UP PROCEDURES AND METHODS WHICH WOULD ALLOW FOR BETTER PERFORMANCE. HOWEVER, ALTHOUGH CONTRACTOR HAS INDICATED EFFORT MADE TOWARD THIS OBJECTIVE, THE RECORD OF POOR PERFORMANCE CONTINUES TO NEGATE CONTRACTOR'S CLAIMS."

AS A CONSEQUENCE OF THE PREAWARD SURVEY, THE CONTRACTING OFFICER FOUND THAT ALTON'S UNSATISFACTORY PERFORMANCE RESULTED FROM A LACK OF TENACITY OR PERSEVERANCE AND DETERMINED THAT ALTON WAS NONRESPONSIBLE PURSUANT TO PARAGRAPH 1-903.1(III) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). THIS DETERMINATION WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) IN ACCORDANCE WITH ASPR 1-705.4(C)(VI), AND SBA APPEALED THE DETERMINATION ON THE GROUND THAT ANY QUESTION CONCERNING ALTON'S ABILITY TO PERFORM CAME UNDER THE CATEGORY OF CAPACITY, NOT TENACITY OR PERSEVERANCE.

AS A RESULT OF THE SBA APPEAL, A RESURVEY WAS CONDUCTED OF YOUR FIRM. THOSE AREAS WHICH WERE FOUND TO BE UNSATISFACTORY AT THE TIME OF THE ORIGINAL PREAWARD SURVEY WERE AGAIN FOUND TO BE UNSATISFACTORY AND AGAIN NO AWARD TO ALTON WAS RECOMMENDED. THE RESURVEY REPORT STATES THAT AS OF APRIL 17, 1970, 13 NEW CONTRACT DELINQUENCIES HAD BEEN INCURRED BY ALTON. MOREOVER, AS OF MAY 18, 1970, OF THE 96 ALTON CONTRACTS UNDER SURVEILLANCE, NINE WERE IN A DELINQUENT STATUS. MANY OF THESE DELINQUENCIES WERE CAUSED BY PRODUCTION PROBLEMS AND LATE RECEIPT OF MATERIAL FROM VENDORS AND SUBCONTRACTORS. ALTHOUGH THE MAJORITY OF THE CONTRACTS WERE ON SCHEDULE BY VIRTUE OF THE FACT THAT NO DELIVERIES WERE REQUIRED AT THAT TIME, FURTHER DELINQUENCIES WERE EXPECTED IN VIEW OF ALTON'S PAST HISTORY. THE REPORT CONTINUES AS FOLLOWS:

"THE CONTRACTOR'S PERFORMANCE RECORD FOR THE PAST SIX MONTHS REVEALS THAT 91 CONTRACTS WERE COMPLETED OF WHICH 38 (APPROXIMATELY 40%) WERE COMPLETED IN A DELINQUENT STATUS RANGING FROM ONE WEEK TO FOUR MONTHS LATE. THE NUMBER OF DELINQUENT CONTRACTS WOULD HAVE BEEN GREATER HAD NOT THE CONTRACTOR REQUESTED RESCHEDULING.

"THE RECORDS OF THIS OFFICE ALSO REVEAL THAT THE CONTRACTOR HAS CONTINUALLY MAINTAINED A DELINQUENCY RATE OF FROM 40 TO 60% FOR ANY GIVEN SIX MONTH PERIOD FOR THE PAST FEW YEARS."

THE RESURVEY REPORT ENDS WITH THE CONCLUSION THAT THE MINOR IMPROVEMENT IN ALTON'S CURRENT PERFORMANCE IS CONSIDERED TO BE INSIGNIFICANT.

IN ADDITION TO THE FOREGOING, THE RECORD INDICATES THAT ALTON HAS HAD A CONTINUAL DELINQUENCY PROBLEM WITH RESPECT TO ITS PERFORMANCE FROM AS EARLY AS 1966 TO THE PRESENT. THERE IS ALSO EVIDENCE INDICATING THAT SEVERAL MEETINGS WERE HELD BETWEEN DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD) GARDEN CITY PERSONNEL AND PERSONNEL OF ALTON WHERE ATTEMPTS WERE MADE, APPARENTLY WITHOUT SUCCESS, TO AGREE ON SOLUTIONS TO ALTON'S DELINQUENCY PROBLEM. WE NOTE TOO, THAT WHILE ALTON ADVISED DCASD PERSONNEL IN EARLY 1969, THAT IT HAD OBTAINED A NCR 36 MODULAR ACCOUNTING MACHINE TO CONTROL THE FLOW OF JOB ORDERS, DUE INS AND DUE OUTS WITH DATES OF DELIVERY, IN AN ATTEMPT TO REDUCE ITS DELINQUENCY POSITION, THE DCASD INDUSTRIAL SPECIALIST FOUND THE MACHINE, AT VARIOUS TIMES, EITHER IDLE OR PERFORMING A FUNCTION OTHER THAN THE ABOVE MENTIONED. IN ANY EVENT, THE ADDITION OF THIS MACHINE DOES NOT APPEAR TO HAVE ELIMINATED ALTON'S PROBLEMS IN THIS AREA. AS A FINAL MATTER, IT APPEARS THAT THE INDUSTRIAL SPECIALIST ON SEVERAL OCCASIONS OFFERED TO ASSIST ALTON IN EXPEDITING DELIVERIES FROM DELINQUENT VENDORS BUT THAT THESE OFFERS WERE REFUSED.

RECOGNIZING THAT THE DETERMINATION OF A BIDDER'S RESPONSIBILITY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE DISCRETION, IT IS THE POSITION OF OUR OFFICE THAT ADMINISTRATIVE DETERMINATIONS OF NONRESPONSIBILITY WILL NOT BE QUESTIONED UNLESS ARBITRARY, CAPRICIOUS, OR NOT BASED ON SUBSTANTIAL EVIDENCE. SEE B-169474, AUGUST 4, 1970, AND DECISIONS CITED THEREIN. VIEW OF ALTON'S LONG HISTORY OF DELINQUENT PERFORMANCE AND ITS FAILURE TO TAKE EFFECTIVE REMEDIAL ACTION TO ALLEVIATE ITS VENDOR PROBLEMS, WE CANNOT CONCLUDE THAT THE DETERMINATION OF THE CONTRACTING OFFICER IS SUBJECT TO OBJECTION BY OUR OFFICE.

ACCORDINGLY, YOUR PROTEST IS DENIED.