B-171300, APR 2, 1971

B-171300: Apr 2, 1971

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ALTHOUGH PROTESTANT WAS IN CURRENT PRODUCTION OF THE REQUIRED ITEMS UNDER A PREVIOUS CONTRACT AND WAS THE LOW OFFEROR ON THE PRESENT RFP. IT WAS NOT GIVEN AN OPPORTUNITY TO SUBMIT A COMPETITIVE BID ON THE SOLE SOURCE PROCUREMENT BECAUSE IT HAD TWICE FAILED FIRST ARTICLE TESTING OF THE SUBJECT ITEM. THE RFP WAS CANCELLED AFTER THE SOLICITATION ACCEPTANCE DATE HAD EXPIRED. AWARD ACTION WITH PROTESTANT COULD STILL HAVE BEEN EXERCISED BY THE OPTION UNDER ITS EXISTING CONTRACT HAD IT PASSED FIRST ARTICLE TESTING. CONCLUDES THAT A REASONABLE EFFORT WAS MADE TO ALLOW PROTESTANT TO QUALIFY FOR THIS AWARD. THE PROTEST IS THEREFORE DENIED. FRANK & KAMPELMAN: WE HAVE CONSIDERED YOUR PROTEST ON BEHALF OF BRAD'S MACHINE PRODUCTS.

B-171300, APR 2, 1971

BID PROTEST - BIDDER RESPONSIBILITY DECISION DENYING PROTEST AGAINST AWARD OF A NEGOTIATED CONTRACT TO EUREKA WILLIAMS COMPANY FOR PRODUCTION OF 8,000 ARMING DEVICES UNDER AN RFP ISSUED BY THE ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY. ALTHOUGH PROTESTANT WAS IN CURRENT PRODUCTION OF THE REQUIRED ITEMS UNDER A PREVIOUS CONTRACT AND WAS THE LOW OFFEROR ON THE PRESENT RFP, IT WAS NOT GIVEN AN OPPORTUNITY TO SUBMIT A COMPETITIVE BID ON THE SOLE SOURCE PROCUREMENT BECAUSE IT HAD TWICE FAILED FIRST ARTICLE TESTING OF THE SUBJECT ITEM. THE RFP WAS CANCELLED AFTER THE SOLICITATION ACCEPTANCE DATE HAD EXPIRED, BUT AWARD ACTION WITH PROTESTANT COULD STILL HAVE BEEN EXERCISED BY THE OPTION UNDER ITS EXISTING CONTRACT HAD IT PASSED FIRST ARTICLE TESTING. THE COMP. GEN. CONCLUDES THAT A REASONABLE EFFORT WAS MADE TO ALLOW PROTESTANT TO QUALIFY FOR THIS AWARD, AND DECISION TO NEGOTIATE ON A SOLE-SOURCE BASIS APPEARS PROPER IN THE CIRCUMSTANCES. THE PROTEST IS THEREFORE DENIED.

TO STRASSER, SPIEGELBERG, FRIED, FRANK & KAMPELMAN:

WE HAVE CONSIDERED YOUR PROTEST ON BEHALF OF BRAD'S MACHINE PRODUCTS, INC., OF GADSDEN, ALABAMA (BMP), AGAINST THE AWARD BY THE ARMY AMMUNITION PROCUREMENT AND SUPPLY AGENCY (APSA) OF CONTRACT NO. DAAA09 71-C-0115 (NO. -0115) ON OCTOBER 30, 1970, TO EUREKA WILLIAMS COMPANY FOR PRODUCTION OF 8,000 ARMING DEVICES.

APSA ISSUED RFP NO. DAAA09-70-R-0206 (RFP NO. -0206) ON MAY 6, 1970, FOR THE ARMING DEVICES. BMP SUBMITTED THE LOW PROPOSAL; EUREKA WILLIAMS SUBMITTED THE ONLY OTHER PROPOSAL.

BMP IS CURRENTLY PRODUCING 31,300 OF THE IDENTICAL ARMING DEVICES FOR $21 EACH UNDER CONTRACT NO. DAAA09-70-C-02471 AWARDED FEBRUARY 16, 1970. THE INITIAL FAILURE OF ARMING DEVICES SUBMITTED BY BMP UNDER THIS CONTRACT TO PASS FIRST ARTICLE TESTS WAS A MAJOR FACTOR IN THE DIFFICULTIES SURROUNDING THE PROCUREMENT IN QUESTION.

AS A RESULT OF A PREAWARD SURVEY OF BMP CONDUCTED WITH REFERENCE TO RFP NO. -0206, IT WAS RECOMMENDED THAT THE CONTRACT NOT BE AWARDED TO BMP. THE NEGATIVE REPORT STATED THAT BMP DID NOT HAVE PRODUCTION CAPABILITY FOR ADDITIONAL WORK, THAT IT DID NOT HAVE FACILITIES TO INSURE THE QUALITY OF ITS PRODUCTION, THAT PLANT FACILITIES AND EQUIPMENT WERE INADEQUATE, AND THAT ITS PERFORMANCE RECORD FOR SIMILAR PRODUCTS AND FOR CURRENT PRODUCTION OF THE IDENTICAL ARMING DEVICES DID NOT JUSTIFY ITS CONTENTION THAT IT COULD FULFILL THE REQUIREMENTS OF OTHER CONTRACTS. THIS DECISION WAS BASED IN PART ON THE FAILURE OF BMP'S ARMING DEVICE TO PASS THE FIRST ARTICLE TEST ON MAY 18 UNDER ITS CURRENT CONTRACT AND IN PART ON ITS APPARENT INABILITY TO PRODUCE THE PRINCIPAL PART OF THE ARMING DEVICE WITHIN THE SCHEDULE FOR THE NEW PROPOSAL.

ON JULY 8 THE APSA CONTRACTING OFFICER MADE A DETERMINATION THAT BMP WAS NONRESPONSIBLE FOR AWARD OF THE CONTRACT UNDER RFP NO. -0206 ACCORDING TO THE STANDARDS OF ASPR 1-902 AND 1-904. THE FOLLOWING LANGUAGE FROM 1-902 ASPR WAS PARTICULARLY NOTED:

" *** RECENT UNSATISFACTORY PERFORMANCE, IN EITHER QUALITY OR TIMELINESS OF DELIVERY, WHETHER OR NOT DEFAULT PROCEEDINGS WERE INSTITUTED, IS AN EXAMPLE OF A PROBLEM WHICH THE CONTRACTING OFFICER MUST CONSIDER AND RESOLVE AS TO ITS IMPACT ON THE CURRENT PROCUREMENT PRIOR TO MAKING AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY. *** "

SINCE BMP IS A SMALL BUSINESS CONCERN, THE PROCEDURES SET OUT IN ASPR 1- 705.4 CONCERNING A REFERRAL TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR A CERTIFICATE OF COMPETENCY ARE APPLICABLE. THESE PROCEDURES CAN BE WAIVED UNDER PROVISO (IV) OF THAT SECTION WHEN THE CONTRACTING OFFICER CERTIFIES IN WRITING THAT THE AWARD MUST BE MADE WITHOUT DELAY AND THIS CERTIFICATE IS APPROVED BY THE CHIEF OF THE PURCHASING OFFICE.

THE PROCUREMENT OF THE ARMING DEVICES WAS DESIGNATED AS URGENT. ON JULY 9 THE CUSTOMER FOR THE PROCUREMENT, THE DEPARTMENT OF THE NAVY, VERIFIED THE URGENCY FOR IMMEDIATE PRODUCTION OF THE ARMING DEVICES ON ACCOUNT OF PROSPECTIVE SHORTAGES OF THE ITEM IN ITS ASSEMBLY LINES. THEREFORE, THE CONTRACTING OFFICER ISSUED A REQUEST FOR WAIVER OF SBA CERTIFICATE OF COMPETENCY PROCEEDINGS ON ACCOUNT OF URGENCY AND PRESENTED IT FOR THE REQUIRED APPROVAL. HOWEVER, THE REQUEST WAS DENIED ON JULY 14.

AT THE SAME TIME, REPRESENTATIVES OF THE PURCHASING AGENCIES DECIDED TO DELAY FURTHER ACTION ON THE PROCUREMENT OF 8,000 MORE ARMING DEVICES UNTIL THE COMPLETION OF THE SECOND FIRST ARTICLE TEST OF BMP'S PRODUCT UNDER CONTRACT NO. -0247. IT WAS AGREED THAT IF THE BMP PRODUCT SHOULD PASS THE TEST, THE PROCUREMENT OF THE ADDITIONAL 8,000 ARMING DEVICES WOULD BE ACCOMPLISHED BY EXERCISING THE OPTION OF THE BMP CONTRACT, BUT THAT IF THE BMP PRODUCT SHOULD FAIL THE SECOND FIRST ARTICLE TEST, THE OPTION WOULD BE EXERCISED IF THE SBA ISSUED A COC. OTHERWISE THE ITEM WOULD BE PROCURED FROM EUREKA WILLIAMS. APSA INDICATES THAT IT PREFERRED TO EXERCISE THE OPTION UNDER CONTRACT NO. -0247 BECAUSE OF THE PRICE ADVANTAGE.

BMP'S ARMING DEVICES FAILED THE FIRST ARTICLE TEST FOR A SECOND TIME ON JULY 22. APSA THEN CONSIDERED DEFAULT PROCEEDINGS AGAINST BMP. THE PROCURING AGENCY ISSUED A "SHOW CAUSE" LETTER ON AUGUST 13 TO WHICH THE PRESIDENT OF BMP RESPONDED ON AUGUST 21 THAT THE DELAY IN PRODUCTION WAS CAUSED BY DEFICIENT TECHNICAL DATA IN THE CONTRACT. AGENCY ENGINEERS CONCLUDED THAT THE TECHNICAL REQUIREMENTS OF THE CONTRACT WERE SUFFICIENTLY DETAILED. THEY RECOMMENDED THAT THE CONTRACT SHOULD BE TERMINATED IF BMP WAS UNABLE TO MASTER THE TECHNICAL DATA, BUT THAT THE CONTRACTOR SHOULD BE ALLOWED TO MAKE A THIRD SUBMISSION FOR FIRST ARTICLE TEST.

REPRESENTATIVES OF BMP, AGENCY CONTRACTING OFFICERS, AND TECHNICAL EXPERTS HELD A MEETING SEPTEMBER 10 - 11 AT WHICH TIME BMP AGREED TO PRODUCE THE ARMING DEVICES ACCORDING TO THE SPECIFICATIONS, AS CONFIRMED IN A LETTER OF SEPTEMBER 17, 1970, FROM THE CONTRACT ADMINISTRATOR FOR BMP. IT WAS AGREED ON SEPTEMBER 29 THAT A THIRD SUBMISSION BY BMP FOR FIRST ARTICLE TEST WAS IN THE BEST INTEREST OF THE GOVERNMENT, WITH THE DELIVERY SCHEDULE APPROPRIATELY AMENDED. THE ARMING DEVICES SUBMITTED BY BMP UNDER CONTRACT NO. -0247 FINALLY PASSED THE FIRST ARTICLE TEST ON THE THIRD ATTEMPT ON NOVEMBER 27, 1970.

MEANWHILE THE DEPARTMENT OF THE NAVY CONTINUED TO PRESS FOR TERMINATION OF THE BMP CONTRACT ON ACCOUNT OF THE URGENCY OF THE PROCUREMENT. WHEN APSA OFFICIALS DECIDED NOT TO TERMINATE THE CONTRACT, THEY DECIDED AT THE SAME TIME TO NEGOTIATE WITH EUREKA WILLIAMS FOR PROCUREMENT OF THE ADDITIONAL 8,000 ARMING DEVICES SO THAT ANOTHER SOURCE WOULD BE AVAILABLE FOR PRODUCTION OF THE ARMING DEVICES IF BMP AGAIN FAILED TO QUALIFY ITS PRODUCT. THE CONTRACT WAS NEGOTIATED ON A SOLE-SOURCE BASIS WITH EUREKA WILLIAMS AS THE ONLY KNOWN PRODUCER WHICH WOULD DELIVER THE DEVICES ON SHORT NOTICE FOR AN URGENT PROCUREMENT. THIS NEGOTIATION RESULTED IN CONTRACT NO. -0115, AWARDED OCTOBER 30, 1970, BY LETTER CONTRACT AT A UNIT CEILING PRICE OF $32.50.

BMP ASSERTS THAT, EVEN THOUGH IT IS CURRENTLY PRODUCING THE IDENTICAL ARMING DEVICES FOR APSA AND WAS THE LOW OFFEROR ON RFP NO. -0206, IT WAS GIVEN NO OPPORTUNITY TO SUBMIT A COMPETITIVE BID ON THE SOLE-SOURCE PROCUREMENT WITH EUREKA WILLIAMS.

BMP ALSO PROTESTS THAT APSA DID NOT FOLLOW OTHER PROCEDURES REQUIRED FOR NEGOTIATION OF PROCUREMENTS. IT SAYS THAT THE AGENCY FAILED TO MAKE A FINDING OF UNACCEPTABILITY ON ACCOUNT OF NONRESPONSIBILITY WHICH WOULD JUSTIFY THE DETERMINATION NOT TO AWARD THE CONTRACT TO BMP AS LOW BIDDER ON RFP NO. -0206. IT ALSO CONTENDS THAT APSA DID NOT REQUEST FROM SBA A CERTIFICATE OF COMPETENCY FOR BMP. IT PROTESTS THAT APSA DEALT ONLY WITH EUREKA WILLIAMS ON THE LAST PROCUREMENT IN ORDER TO AVOID A DETERMINATION ON RFP NO. -0206.

THE RECORD SHOWS, HOWEVER, THAT WHILE APSA HAD INITIATED PROCEEDINGS WHICH MIGHT HAVE RESULTED IN A FINDING THAT BMP WAS NONRESPONSIBLE FOR AWARD OF A CONTRACT ON RFP -0206, THE REQUEST FOR A COC FROM SBA WAS DELAYED IN ANTICIPATION OF THE RESULTS OF A SECOND FIRST ARTICLE TEST WHICH, IF IT HAD BEEN SUCCESSFUL, MIGHT HAVE QUALIFIED BMP FOR AWARD OF THE ADDITIONAL 8,000 ARMING DEVICES. IT IS REPORTED THAT RFP NO. -0206 WAS CANCELLED AFTER THE SOLICITATION ACCEPTANCE DATE HAD EXPIRED AND IT WAS DETERMINED THAT ANY FURTHER AWARD ACTION WITH BMP WOULD HAVE BEEN BY EXERCISE OF THE OPTION UNDER THE EXISTING BMP CONTRACT AT $21 PER UNIT RATHER THAN BY A NEW PROCUREMENT AT A HIGHER PRICE. THUS, EVEN AFTER APSA CEASED TO CONSIDER THE PROPOSALS UNDER RFP NO. -0206, IT STILL SOUGHT TO AWARD A CONTRACT FOR THE 8,000 ARMING DEVICES TO BMP AT THE LOWER AVAILABLE PRICE. WE THEREFORE MUST CONCLUDE THAT A REASONABLE EFFORT HAD BEEN MADE TO ALLOW BMP TO QUALIFY FOR THE AWARD OF THE ADDITIONAL UNITS FIRST UNDER RFP NO. -0206 AND LATER UNDER THE OPTION TO ITS EXISTING CONTRACT. THE DECISION BY APSA TO NEGOTIATE ON A SOLE-SOURCE BASIS WITH EUREKA WILLIAMS APPEARS REASONABLE IN THE CIRCUMSTANCES AND THIS OFFICE FINDS NO REASON TO OBJECT TO THE AWARD OF CONTRACT NO. -0115. SEE 44 COMP. GEN. 590 (1965).

WE AGREE THAT THE AGENCY SHOULD HAVE GIVEN THE PROPOSERS OFFICIAL NOTICE OF THE CANCELLATION OF RFP NO. -0206. HOWEVER, THE NEGOTIATION OF THIS PROCUREMENT INDICATES THAT BMP SHOULD HAVE BEEN AWARE THAT ITS PROPOSAL WAS NOT ACCEPTED BECAUSE OF THE DIFFICULTY IT WAS EXPERIENCING IN PRODUCING THE ARMING DEVICES UNDER THE EXISTING CONTRACT. WE DO NOT REGARD THE FAILURE TO NOTIFY BMP OF THE CANCELLATION OF RFP NO. -0206 AS A SERIOUS PROCEDURAL DEFECT IN THIS CASE. B-161513, JULY 24, 1967; B- 164648, DECEMBER 16, 1968.

ACCORDINGLY, THE PROTEST OF BMP AGAINST THE AWARD OF CONTRACT NO. 0115 IS DENIED.