B-171838, APR 15, 1971

B-171838: Apr 15, 1971

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CONTRACTING AUTHORITY'S DETERMINATION OF PROTESTANT'S NONRESPONSIBILITY WAS JUSTIFIED AND CONFIRMED BY THE FAILURE OF THE SBA TO ISSUE A CERTIFICATE OF COMPETENCY. INCORPORATED: REFERENCE IS MADE TO YOUR CORRESPONDENCE OF FEBRUARY 4 AND 12. THE INVITATION FOR BIDS WAS ISSUED ON JULY 16. BIDS WERE OPENED AT THE DESIGNATED DATE. FIVE BIDS WERE RECEIVED. THE TWO LOWEST BIDDERS WERE REJECTED ON THE BASIS OF NONRESPONSIBILITY. A PRE-AWARD SURVEY OF YOUR COMPANY WAS THEN CONDUCTED. THE MATTER WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA). YOU CONTEND THAT YOU HAVE THE FACILITIES. YOU PRESENT A BRIEF HISTORY OF THE GROWTH OF YOUR COMPANY AND POINT OUT THAT YOU HAVE MOVED FROM CALIFORNIA TO RENO.

B-171838, APR 15, 1971

BID PROTEST - BIDDER RESPONSIBILITY - SMALL BUSINESS SET ASIDE DENIAL OF PROTEST OF ATRONIX, INC., THIRD LOW BIDDER, AGAINST THE DETERMINATION OF NONRESPONSIBILITY IN CONNECTION WITH AN IFB ISSUED BY NAVY ELECTRONICS SUPPLY OFFICE, GREAT LAKES, ILLINOIS, FOR ANTENNAE. CONTRACTING AUTHORITY'S DETERMINATION OF PROTESTANT'S NONRESPONSIBILITY WAS JUSTIFIED AND CONFIRMED BY THE FAILURE OF THE SBA TO ISSUE A CERTIFICATE OF COMPETENCY.

TO ATRONIX, INCORPORATED:

REFERENCE IS MADE TO YOUR CORRESPONDENCE OF FEBRUARY 4 AND 12, 1971, IN WHICH YOU PROTEST A FAILURE TO DETERMINE YOUR COMPANY RESPONSIBLE UNDER INVITATION FOR BIDS NO. N00126-71-B-0017, ISSUED BY THE UNITED STATES NAVY ELECTRONICS SUPPLY OFFICE, GREAT LAKES, ILLINOIS.

THE INVITATION FOR BIDS WAS ISSUED ON JULY 16, 1970, AS A SMALL BUSINESS SET-ASIDE FOR A QUANTITY OF ANTENNAS. BIDS WERE OPENED AT THE DESIGNATED DATE, AUGUST 17, 1970. FIVE BIDS WERE RECEIVED, AND YOUR COMPANY SUBMITTED THE THIRD LOW BID. THE TWO LOWEST BIDDERS WERE REJECTED ON THE BASIS OF NONRESPONSIBILITY. A PRE-AWARD SURVEY OF YOUR COMPANY WAS THEN CONDUCTED. THE SURVEYING ACTIVITY RECOMMENDED THAT NO AWARD BE MADE TO YOUR COMPANY. IN ACCORDANCE WITH ASPR 1-704.5, THE MATTER WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA), SAN FRANCISCO, FOR A DETERMINATION AS TO WHETHER A CERTIFICATE OF COMPETENCY (COC) SHOULD BE ISSUED. ALTHOUGH THE SBA SAN FRANCISCO OFFICE ADVISED THE CONTRACTING OFFICER THAT IT INTENDED TO ISSUE A COC, UPON A MORE THOROUGH INVESTIGATION REQUESTED BY THE NAVY, THE SBA DECLINED TO ISSUE A COC TO YOUR FIRM.

YOU CONTEND THAT YOU HAVE THE FACILITIES, CAPABILITY AND FINANCIAL RESOURCES TO SUCCESSFULLY PERFORM THE CONTRACT AND YOU QUESTION THE SURVEYING ACTIVITY'S OBJECTIVITY IN ARRIVING AT ITS RECOMMENDATION. YOU PRESENT A BRIEF HISTORY OF THE GROWTH OF YOUR COMPANY AND POINT OUT THAT YOU HAVE MOVED FROM CALIFORNIA TO RENO, NEVADA. YOU REPORT THAT YOUR NEW FACILITIES CONTAIN 7,000 SQUARE FEET OF WORK AREA PLUS 3,000 SQUARE FEET OF OFFICE AND ENGINEERING SPACE, THAT THE FACILITY PROVIDES AN AIR- CONDITIONED SEMI-DUST FREE ENVIRONMENT WITH GOOD LIGHTING IN THE ASSEMBLY AND QUALITY CONTROL AREAS. YOU POINT OUT THAT PRIOR PRE-AWARD SURVEYS IN YOUR OLD LESS ADEQUATE FACILITIES WERE FAVORABLE EVEN THOUGH YOU HAD NO FULL-TIME EMPLOYEES AND ALL WORK WAS PERFORMED AT NIGHT BY THE PARTNERS. YOU ALSO NOTE THAT CONTRACTS PREVIOUSLY AWARDED WERE COMPLETED ON OR AHEAD OF SCHEDULE.

THE CONTRACTING AGENCY REPORTS THAT AS OF JANUARY 12, 1971, SIX OF THE TEN CONTRACTS CURRENTLY BEING PERFORMED BY YOUR COMPANY WERE IN A DELINQUENT STATUS. IN ADDITION, WE ARE INFORMED THAT SINCE JANUARY, 1970, THERE HAVE BEEN 37 PRE-AWARD SURVEYS OF YOUR COMPANY: FIFTEEN HAVE BEEN AFFIRMATIVE, 20 HAVE BEEN NEGATIVE AND YOU WITHDREW TWO PROPOSALS.

AS A RESULT OF A PRE-AWARD SURVEY ON OCTOBER 14, 1970, REFLECTING YOUR CURRENT FACILITIES AND TOOLING, IT WAS DETERMINED THAT YOUR COMPANY WAS UNSATISFACTORY IN THE FOLLOWING AREAS:

A. TECHNICAL CAPABILITY

B. PRODUCTION CAPABILITY

C. PLANT FACILITIES AND EQUIPMENT

D. FINANCIAL CAPABILITY

E. PURCHASING AND SUBCONTRACTING

F. QUALITY ASSURANCE CAPABILITY

G. ABILITY TO MEET REQUIRED SCHEDULE

THIS OFFICE HAS RECOGNIZED THAT IT IS A BASIC FUNCTION OF THE CONTRACTING OFFICER TO DETERMINE THE RESPONSIBILITY OF THE PROSPECTIVE CONTRACTOR. CONSISTENT THEREWITH, AN ADMINISTRATIVE DETERMINATION OF NONRESPONSIBILITY WILL NOT BE QUESTIONED BY OUR OFFICE IN THE ABSENCE OF SHOWING BAD FAITH OR LACK OF A REASONABLE BASIS. 39 COMP. GEN. 705 (1960). IN THE CITED DECISION WE STATED ON PAGE 711:

"THE PROJECTION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT. WHILE SUCH JUDGMENT SHOULD BE BASED ON FACT AND SHOULD BE ARRIVED AT IN GOOD FAITH, IT MUST PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICES INVOLVED, SINCE THEY ARE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, THEY MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY, AND THEY MUST MAINTAIN THE DAY TO DAY RELATIONS WITH THE CONTRACTOR ON BEHALF OF THE GOVERNMENT. FOR THESE REASONS, IT WOULD BE UNREASONABLE TO SUPERIMPOSE THE JUDGMENT OF OUR OFFICE OR ANY OTHER AGENCY OR GROUP ON THAT OF THE CONTRACTING OFFICIALS."

FURTHER, WE HAVE CONSISTENTLY HELD THAT REFUSAL BY THE SBA TO ISSUE A COC MUST BE VIEWED AS AN AFFIRMATION OF THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY. 43 COMP. GEN. 228, 231 (1963). NOR IS IT THE FUNCTION OF OUR OFFICE TO REVIEW SBA DETERMINATIONS OR TO REQUIRE ISSUANCE OF A COC. SEE B-153446, MAY 8, 1964.

IN VIEW OF THE FOREGOING, AND SINCE THE RECORD INDICATES THERE WAS SUBSTANTIAL EVIDENCE TO SUPPORT THE NEGATIVE DETERMINATIONS OF BOTH THE CONTRACTING AGENCY AND THE SBA, YOUR PROTEST MUST BE DENIED.