B-171108, APR 6, 1971

B-171108: Apr 6, 1971

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CONCLUDED AS DEI HAD PERFORMED SATISFACTORILY IN THE PAST YEAR AND WAS CONTINUALLY MANUFACTURING EQUIPMENT COVERED IN CONTRACT FOR INVENTORY THAT DEI WAS RESPONSIBLE. PRIOR DETERMINATION OF NONRESPONSIBILITY BY NAVY SHIPS SYSTEMS COMMAND DID NOT PRECLUDE A FINDING OF RESPONSIBILITY BY NASA WHERE PROCUREMENTS WERE NOT COMPARABLE IN TERMS OF SIZE OR TYPE. TO MICRODYNE CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 2. THREE BIDS WERE RECEIVED AS FOLLOWS: BIDDER AMOUNT TERMS MICRODYNE CORPORATION $211. WITH PARTICULAR REFERENCE TO THE MINIMUM STANDARD REQUIRING PROSPECTIVE CONTRACTORS TO HAVE ADEQUATE FINANCIAL RESOURCES TO PERFORM THE CONTRACT. YOU HAVE IDENTIFIED FIVE SUPPLIERS WHO ARE STATED TO HAVE EITHER PLACED DEI ON A C.O.D.

B-171108, APR 6, 1971

BID PROTEST - BIDDER RESPONSIBILITY DECISION DENYING PROTEST OF MICRODYNE CORPORATION, HIGH BIDDER, AGAINST AWARD OF CONTRACT TO DEFENSE ELECTRONICS DIVISION OF DEI INDUSTRIES, INC., LOW BIDDER FOR 18 TELEMETRY RECEIVERS UNDER IFB ISSUED BY NATIONAL AERONAUTICS AND SPACE ADMINISTRATION, WALLOPS STATION, VIRGINIA. PROTESTANT CONTENDS BASED ON DETERMINATION BY NAVY SHIP SYSTEMS COMMAND THAT DEI DOES NOT POSSESS SUFFICIENT FINANCIAL CAPACITY TO CONTRACT. NASA CONSIDERED DEI'S CAPACITY, AND CONCLUDED AS DEI HAD PERFORMED SATISFACTORILY IN THE PAST YEAR AND WAS CONTINUALLY MANUFACTURING EQUIPMENT COVERED IN CONTRACT FOR INVENTORY THAT DEI WAS RESPONSIBLE. PRIOR DETERMINATION OF NONRESPONSIBILITY BY NAVY SHIPS SYSTEMS COMMAND DID NOT PRECLUDE A FINDING OF RESPONSIBILITY BY NASA WHERE PROCUREMENTS WERE NOT COMPARABLE IN TERMS OF SIZE OR TYPE.

TO MICRODYNE CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 2, 1971, AND PRIOR CORRESPONDENCE CONCERNING YOUR PROTEST AGAINST AN AWARD OF A CONTRACT TO DEFENSE ELECTRONICS DIVISION OF DEI INDUSTRIES, INCORPORATED (DEI), UNDER INVITATION FOR BIDS NO. P-2206, ISSUED ON OCTOBER 6, 1970, BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA), WALLOPS STATION, WALLOPS ISLAND, VIRGINIA.

THE INVITATION REQUESTED BIDS FOR 18 TELEMETRY RECEIVERS WITH DIVERSITY COMBINERS AND ACCESSORIES. AT THE PRESCRIBED BID OPENING TIME ON OCTOBER 20, 1970, THREE BIDS WERE RECEIVED AS FOLLOWS:

BIDDER AMOUNT TERMS

MICRODYNE CORPORATION $211,500 24% IN 20 DAYS

SCIENTIFIC-ATLANTA, INC. $174,988 NET

DEFENSE ELECTRONICS $149,730 NET

YOU PROTEST AN AWARD TO DEI, THE LOW BIDDER, ON THE BASIS THAT IT DOES NOT MEET THE MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS, AS SET FORTH UNDER NASA PROCUREMENT REGULATIONS, WITH PARTICULAR REFERENCE TO THE MINIMUM STANDARD REQUIRING PROSPECTIVE CONTRACTORS TO HAVE ADEQUATE FINANCIAL RESOURCES TO PERFORM THE CONTRACT. IN SUPPORT OF THE CONTENTION YOU REFER TO COURT ACTIONS, SETTLED AND PENDING, AGAINST DEI FOR AMOUNTS CLAIMED TO BE DUE, AND YOU HAVE IDENTIFIED FIVE SUPPLIERS WHO ARE STATED TO HAVE EITHER PLACED DEI ON A C.O.D. BASIS OR HAVE REFUSED TO TRANSACT BUSINESS IN ANY MANNER UNTIL EXISTING CLAIMS HAVE BEEN SATISFIED. YOU ALSO REFER TO THE FACT THAT DEI'S WHOLLY-OWNED SUBSIDIARY, CHALLENGER STEEL PRODUCTS CORPORATION, HAS CONSENTED TO ITS ADJUDICATION AS A BANKRUPT; AND THAT THE NAVY SHIPS SYSTEMS COMMAND DETERMINED DEI TO BE NONRESPONSIBLE IN CONNECTION WITH ONE OF ITS PROCUREMENTS.

THE REPORT FURNISHED BY NASA SHOWS THAT THE CONTRACTING OFFICER CONSIDERED THE INFORMATION FURNISHED BY YOU, PUBLISHED FINANCIAL PROBLEMS OF DEI AND INFORMATION FURNISHED BY DEI; AND THAT HE CHECKED WITH OTHER AGENCIES CONCERNING DEI'S PERFORMANCE UNDER ITS CURRENT CONTRACTS. BASED UPON ALL THE EVIDENCE THE CONTRACTING OFFICER DETERMINED THAT DEI WAS A RESPONSIBLE POTENTIAL CONTRACTOR, PARTICULARLY WITH REGARD TO FINANCIAL CAPABILITY TO PERFORM THIS SPECIFIC CONTRACT WHICH COVERS EQUIPMENT THAT DEI HAS SUPPLIED IN SUBSTANTIAL QUANTITIES DURING THE PAST YEAR AND IS CONTINUALLY MANUFACTURING FOR STOCK AS STANDARD INVENTORY. THE CONTRACTING OFFICER'S FINDING WAS CONCURRED IN BY NASA HEADQUARTERS.

AS STATED IN OUR DECISION REPORTED IN 46 COMP. GEN. 371, 372 (1966):

" *** WE HAVE CONSISTENTLY HELD THAT WHETHER A BIDDER IS, OR IS NOT, CAPABLE OF PRODUCING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF FACT AND, IN THE ABSENCE OF EVIDENCE THAT A DETERMINATION OF A BIDDER'S CAPABILITY WAS BASED UPON ERROR, FRAUD OR FAVORITISM, OUR OFFICE WILL ACCEPT THE FINDINGS OF THE CONTRACTING AGENCY."

WE DO NOT BELIEVE THAT THE CITED NAVY SHIPS SYSTEMS COMMAND PROCUREMENT AND THE PROCUREMENT AT ISSUE ARE COMPARABLE IN TERMS OF SIZE OR TYPE. SEE NO INCONSISTENCY, THEREFORE, IN FINDING DEI RESPONSIBLE WITH RESPECT TO THE CURRENT NASA PROCUREMENT AND NOT RESPONSIBLE FOR THE NAVY SOLICITATION. IN ANY CASE, WE HAVE HELD THAT A DETERMINATION OF RESPONSIBILITY IS NOT NECESSARILY DEFECTIVE BECAUSE IT IS INCONSISTENT WITH A CONTRARY DETERMINATION CONCERNING THE SAME FIRM. 39 COMP. GEN. 468, 472 (1959).

ON THE BASIS OF THE RECORD BEFORE US WE HAVE NO REASON TO QUESTION THE CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION REGARDING DEI'S FINANCIAL CAPABILITY TO PERFORM IF AWARDED THE CONTRACT. ACCORDINGLY, YOUR PROTEST AGAINST THE PROPOSED AWARD TO DEI MUST BE DENIED.