B-170843, JAN 8, 1971

B-170843, JAN 8, 1971

BID PROTEST - BIDDER RESPONSIBILITY DENIAL OF PROTEST OF ACTION MANUFACTURING COMPANY AGAINST THE AWARD OF A NEGOTIATED CONTRACT FOR PRODUCTION AND DELIVERY OF XM434 FUZES ISSUED BY THE EDGEWOOD ARSENAL TO OLIN CORPORATION. PROTESTANT'S CLAIM THAT OLIN LACKED RESPONSIBILITY BECAUSE IT HAD NOT PREVIOUSLY MANUFACTURED A FUZE SIMILAR TO THE XM434 AND THEREFORE WOULD BE UNABLE TO MEET DELIVERY REQUIREMENTS IS BALANCED BY CONTRACTING OFFICER'S FINDINGS THAT OLIN HAS EXTENSIVE EXPERIENCE IN THE PRODUCTION OF FUZES SEVERAL OF WHICH HAVE CHARACTERISTICS SIMILAR TO THE XM434. RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING AGENCY AND WILL NOT BE UPSET ABSENT A FINDING THAT IT WAS ARBITRARY.

TO ACTION MANUFACTURING COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 16, 1970, AND TO SUBSEQUENT CORRESPONDENCE, PROTESTING THE AWARD OF CONTRACT NO. DAAA15 71-C-0080, DATED SEPTEMBER 10, 1970, TO THE OLIN CORPORATION, ENERGY SYSTEMS DIVISION, EAST ALTON, ILLINOIS (OLIN), PURSUANT TO EDGEWOOD ARSENAL REQUEST FOR PROPOSALS NO. DAAA15-71-R-0065, ISSUED AUGUST 10, 1970, FOR THE PRODUCTION AND DELIVERY OF XM434 FUZES.

PROPOSALS WERE REQUESTED FROM FIRMS WHICH APPEARED TO BE CAPABLE OF MEETING THE GOVERNMENT'S REQUIREMENT FOR DELIVERY OF 124,800 XM434 FUZES AT THE RATE OF APPROXIMATELY 25,000 FUZES PER MONTH DURING A PERIOD FROM JANUARY TO MAY 1971 ASSUMING AWARD BY SEPTEMBER 21, 1970.

AFTER RECEIPT OF THE ORIGINAL PROPOSALS, ALTERNATE PROPOSALS WERE REQUESTED BASED UPON ADVANCING THE DELIVERY SCHEDULE BY 30 DAYS. OLIN SUBMITTED THE LOWEST ORIGINAL AND ALTERNATE PROPOSALS; YOUR PROPOSALS WERE THE NEXT LOWEST. CONCURRENT SURVEYS WERE REQUESTED ON THE FACILITIES AND CAPABILITIES OF OLIN AND YOUR COMPANY. OLIN, THE LOW OFFEROR, WAS FOUND RESPONSIBLE AND RECEIVED THE AWARD ON SEPTEMBER 10, 1970, BASED ON THE ORIGINAL PROPOSAL PRICE AND DELIVERY SCHEDULE. SUBSEQUENT TO AWARD, THE CONTRACT WAS MODIFIED TO ACCELERATE DELIVERIES BY 30 DAYS AND TO INCREASE THE UNIT PRICE FROM $4.00 TO $4.07 WITH THE PROVISO THAT THE ORIGINAL PRICE WOULD APPLY TO DELIVERIES NOT MEETING THE ACCELERATED SCHEDULE.

AS REQUIRED UNDER SECTION 1-904.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), THE CONTRACTING OFFICER AFFIRMATIVELY DETERMINED OLIN TO BE RESPONSIBLE WITHIN THE MEANING OF ASPR 1-902, FOR THE PERFORMANCE OF THE PROPOSED CONTRACT. A RESPONSIBLE PROSPECTIVE CONTRACTOR IS DEFINED IN ASPR 1-902 AS 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. TO SUPPORT AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY, THE PROSPECTIVE CONTRACTOR MUST BE FOUND TO HAVE THE ABILITY TO COMPLY WITH THE REQUIRED OR PROPOSED DELIVERY SCHEDULE, THE NECESSARY ORGANIZATION, EXPERIENCE, OPERATIONAL CONTROLS AND SKILLS, OR THE ABILITY TO OBTAIN THEM, AND THE NECESSARY PRODUCTION, CONSTRUCTION, AND TECHNICAL EQUIPMENT AND FACILITIES, OR THE ABILITY TO OBTAIN THEM.

YOUR LETTER OF SEPTEMBER 15, 1970, TO THE CONTRACTING OFFICER ALLEGED THAT YOU WERE THE LOWEST-PRICED QUALIFIED SOURCE OF FUZES MEETING THE FIRST ARTICLE AND PRODUCTION DELIVERY REQUIREMENTS. IT APPEARS YOU WERE NOT THEN AWARE THAT AN AWARD HAD ALREADY BEEN MADE. YOU HAVE INDICATED THAT YOU RECEIVED VERBAL ADVICE OF THE AWARD ON SEPTEMBER 16, 1970, AND THAT FORMAL NOTICE OF THE AWARD WAS FURNISHED BY LETTER DATED SEPTEMBER 15, 1970, WHICH YOU RECEIVED ON SEPTEMBER 17, 1970.

YOUR LETTER OF SEPTEMBER 16, 1970, SET OUT CERTAIN BACKGROUND INFORMATION AND CONTENDED THAT OLIN COULD NOT MEET DELIVERY REQUIREMENTS BECAUSE IT HAD NOT PREVIOUSLY MANUFACTURED A FUZE SIMILAR TO THE XM434. YOU STATED THAT THE XM 434 IS ALMOST IDENTICAL TO THE M412 WHICH ONLY YOUR COMPANY AND THE ZENITH CORPORATION HAD PREVIOUSLY PRODUCED IN QUANTITY; THAT THE M412 AND THE XM434 ARE VERY COMPLEX ITEMS NECESSITATING A GREAT DEAL OF COMPLEX AND HIGHLY SPECIALIZED TOOLING, GAGES AND ELABORATE TEST EQUIPMENT, ALL REQUIRING A MINIMUM OF FOUR TO SIX MONTHS FOR A NEW SOURCE OF SUPPLY TO GENERATE, BUT IMMEDIATELY AVAILABLE TO THE ACTION MANUFACTURING COMPANY; AND THAT IT IS YOUR UNDERSTANDING THAT AT THE OLIN PREAWARD SURVEY NO ENGINEERING REPRESENTATION WAS REQUESTED FROM EITHER THE EDGEWOOD OR PICATINNY ARSENALS.

YOUR LETTER OF SEPTEMBER 28, 1970, INDICATED THAT THE FOLLOWING MATTERS HAD BEEN BROUGHT TO YOUR ATTENTION BY A NUMBER OF SOURCES OF SUPPLY:

(A) YOU WERE ADVISED THAT OLIN HAD CONTACTED A NUMBER OF YOUR SUPPLIERS IN ATTEMPTS TO PLACE ORDERS FOR COMPONENTS, INDICATING OLIN DID NOT HAVE FIRM SOURCES OF SUPPLY AT THE TIME OF THE PREAWARD SURVEY. SOME OF THOSE SUPPLIERS WERE SAID TO HAVE PREVIOUSLY QUOTED OLIN, BUT WERE REFUSING TO ACCEPT ORDERS AT PRICES SUBSTANTIALLY LESS THAN THOSE QUOTED; AND OTHER SUPPLIERS WERE SAID NOT TO HAVE QUOTED OLIN AND WOULD NOT ACCEPT ORDERS AT THE PRICES STIPULATED BY OLIN.

(B) SEVERAL SUPPLIERS INDICATED THEY HAD BEEN TOLD THAT CERTAIN TOOLING IN THEIR POSSESSION BELONGS TO THE GOVERNMENT AND OLIN HAS PERMISSION TO USE IT, WHEREAS THE TOOLING WAS ACTION AND/OR ZENITH OWNED, AND COULD NOT BE USED WITHOUT PROPER AUTHORIZATION.

YOU SUGGESTED THAT IF OLIN WAS TRYING UNSUCCESSFULLY TO PLACE ORDERS, BONA FIDE COMMITMENTS WERE NOT AVAILABLE AT THE TIME OF THE PREAWARD SURVEY, AND TIMELY DELIVERY COULD NOT HAVE BEEN ANTICIPATED. YOU ALSO SUGGESTED THAT A LACK OF FIRM COMMITMENTS WOULD BE ESPECIALLY SIGNIFICANT FOR SPECIAL TOOLING AND TEST EQUIPMENT WHICH WOULD TAKE AT LEAST FOUR TO SIX MONTHS TO OBTAIN.

THE CONTRACTING OFFICER AGREES THAT THE XM434 IS ALMOST IDENTICAL TO THE M412 WHICH ONLY YOUR COMPANY AND THE ZENITH CORPORATION HAD PREVIOUSLY MANUFACTURED IN QUANTITY, AND THAT THE XM434 IS A RELATIVELY COMPLEX ITEM. HOWEVER, HE CONTENDS THAT PRODUCTION OF THE XM434 FUZE IS NOT BEYOND THE CAPABILITIES OF ANY REASONABLY COMPETENT AND EXPERIENCED SOURCE IN THE MANUFACTURE OF PYROTECHNIC AND FUZE ITEMS AND ASSEMBLIES. THE CONTRACTING OFFICER ALSO REFERS TO THE FACT THAT AN EDGEWOOD ARSENAL PRODUCT QUALITY SPECIALIST PARTICIPATED IN THE OLIN PREAWARD SURVEY, AND HIS REPORT LISTS VARIOUS MATTERS CONSIDERED IN FINDING OLIN A RESPONSIBLE PROSPECTIVE CONTRACTOR FOR THE PROCUREMENT.

IT IS REPORTED THAT OLIN HAS HAD EXTENSIVE EXPERIENCE IN THE PRODUCTION OF FUZES AND FUZE COMPONENTS, INCLUDING THE PRODUCTION OF MARK 52 DETONATING FUZES, WHICH HAVE FEATURES AND DESIGN CHARACTERISTICS SIMILAR TO THOSE OF THE XM434. MUCH OF THE TOOLING AND EQUIPMENT UTILIZED BY OLIN IN THE PRODUCTION OF THE MARK 52 IS AVAILABLE FOR USE UNDER THE XM434 FUZE CONTRACT. OLIN HAS SUPPLIED PRIMERS TO BOTH THE ZENITH CORPORATION AND THE ACTION MANUFACTURING COMPANY IN PRIOR PROCUREMENTS OF THE M412 FUZE; AND, AT THE TIME OF THE PREAWARD SURVEY, SEPTEMBER 3 AND 4, 1970, OLIN HAD OBTAINED FIRM QUOTES WITHIN REQUIRED SCHEDULES ON ALL COMPONENTS OF THE XM434 FUZE.

WITH RESPECT TO THE STATEMENTS IN YOUR LETTER OF SEPTEMBER 28, 1970, THE CONTRACTING OFFICER RESPONDS AS FOLLOWS:

"THE PROTESTOR'S LATEST CHARGES ARE NOT CORRECT. THE FOLLOWING ARE REPLIES SERIATIM TO SUCH CHARGES:

"A. *** COPIES OF FIRM QUOTATIONS FROM OLIN CORPORATION'S SOURCES OF SUPPLY AS WELL AS QUOTATIONS FROM BACKUP SOURCES WERE SUBMITTED TO THE DCASR PREAWARD SURVEY TEAM DURING THE SURVEY CONDUCTED AT OLIN'S FACILITIES. FIRM PURCHASE ORDERS WERE ALSO REVIEWED BY THE CONTRACTING OFFICER AND DCASR REPRESENTATIVES DURING THE LATER POST-AWARD CONFERENCE ON 30 SEPTEMBER 1970.

"B. *** TO THE BEST OF MY KNOWLEDGE BASED ON CONVERSATIONS WITH OLIN OFFICIALS, OLIN MADE NO REPRESENTATION TO ANY SUPPLIER CONCERNING OWNERSHIP OF SPECIAL TOOLING. THE MAJORITY OF SUPPLIERS BEING UTILIZED BY OLIN DID NOT PREVIOUSLY SUPPLY PARTS FOR THE MANUFACTURE OF M412 FUZE.

THE CONTRACTING OFFICER ALSO ASSERTS THAT THERE IS NO QUESTION ABOUT THE COMPETENCE OF THE MEMBERS OF THE TEAM WHICH CONDUCTED THE PRE-AWARD SURVEY AT THE OLIN FACILITY. TEAM MEMBERS HAD CONDUCTED MANY SURVEYS AT THE OLIN FACILITY FOR FUZE REQUIREMENTS. IN ADDITION, THE EDGEWOOD ARSENAL PRODUCT QUALITY SPECIALIST WHO PARTICIPATED IN THE SURVEY IS THOROUGHLY FAMILIAR WITH THE XM434 FUZE AND THE TEST REQUIREMENTS FOR THE ITEM.

OUR OFFICE HAS CONSISTENTLY TAKEN THE POSITION THAT THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING AGENCY AND THE DETERMINATION SHOULD BE ACCORDED FINALITY ABSENT A CLEAR SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS THEREFOR. IT DOES NOT APPEAR THAT THE CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION OF RESPONSIBILITY WAS ARBITRARY IN ANY RESPECT.

IN THE CIRCUMSTANCES, WE FIND NO BASIS IN THE PRESENT RECORD FOR TAKING EXCEPTION TO THE AWARD OF CONTRACT NO. DAAA15-71-C-0080 TO OLIN. YOUR PROTEST, THEREFORE, IS DENIED.