B-173384, SEP 2, 1971

B-173384, SEP 2, 1971

BID PROTEST - BIDDER RESPONSIBILITY - UNPROFITABLE BID DECISION DENYING PROTEST AGAINST AWARD OF A CONTRACT TO LOW BIDDER A.R.F. PRODUCTS, INC. UNDER AN IFB ISSUED BY THE WHITE SANDS MISSILE RANGE FOR 125 RADIO COMMAND DESTRUCT RECEIVERS SET ASIDE ENTIRELY FOR SMALL BUSINESS CONCERNS. A PREAWARD SURVEY SHOWED A.R.F. TO HAVE THE REQUIRED TECHNICAL CAPABILITY AND THAT ITS PAY SCALES WERE COMMENSURATE WITH THOSE OF THE ELECTRONIC INDUSTRY IN THE AREA. FURTHER, SUCCESSFUL LOW BIDDER CONFIRMED ITS PRICE AT THE REQUEST OF THE CONTRACTING OFFICER AND THE AWARD MAY NOT BE UPSET SOLELY BECAUSE THE PRICE SUBMITTED MAY BE UNPROFITABLE.

TO BAYSHORE SYSTEMS:

WE REFER TO YOUR LETTERS OF JUNE 21 AND 18, 1971, TO CONGRESSMAN JOEL T. BROYHILL AND THE CONTRACTING OFFICER, RESPECTIVELY, PROTESTING AGAINST AWARD OF A CONTRACT TO A.R.F. PRODUCTS, INC., UNDER INVITATION FOR BIDS NO. DAAD07-71-B-0153, ISSUED BY THE WHITE SANDS MISSILE RANGE, WHITE SANDS, NEW MEXICO.

THE PROTEST CONCERNS THE SECOND STEP OF A TWO-STEP FORMALLY ADVERTISED PROCUREMENT OF 125 RADIO COMMAND DESTRUCT RECEIVERS SET ASIDE ENTIRELY FOR SMALL BUSINESS CONCERNS. BIDS ON THE INVITATION ISSUED IN THE SECOND STEP WERE OPENED ON JUNE 17, 1971. A.R.F. WAS LOW BIDDER WITH A UNIT PRICE OF $750. BAYSHORE SYSTEMS WAS SECOND LOW BIDDER WITH UNIT PRICES OF $1,290 AND $1,344. THEREAFTER, BAYSHORE SYSTEMS PROTESTED AWARD OF A CONTRACT TO A.R.F. ON THE GROUNDS THAT A.R.F. WOULD BE UNABLE TO PERFORM THE CONTRACT AT ITS UNREASONABLY LOW BID PRICE, THAT UNCONFIRMED INFORMATION FROM TRADE SOURCES INDICATED THE LOW BIDDER TO BE GOVERNMENT SUBSIDIZED AND POSSIBLY UTILIZING THE NATIONAL BUREAU OF STANDARDS AND SIMILAR GOVERNMENT FACILITIES, AND THAT A.R.F. IS PAYING SUBSTANDARD WAGES.

ON JUNE 18 THE CONTRACTING OFFICER REQUESTED THE DEFENSE CONTRACT ADMINISTRATION SERVICES OFFICE (DCASO), DENVER, TO CONDUCT A PREAWARD SURVEY OF THE LOW BIDDER. DCASO WAS ALSO REQUESTED TO INVESTIGATE THE ALLEGATIONS RAISED BY BAYSHORE SYSTEMS. THE RESULTS OF THE SURVEY SHOWED A.R.F. TO HAVE THE TECHNICAL CAPABILITY TO PERFORM IN ACCORDANCE WITH THE REQUIRED DELIVERY SCHEDULE. CONCURRENT WITH THE SURVEY, THE CONTRACT ADMINISTRATION OFFICE ALSO RECOMMENDED THAT COMPLETE AWARD BE MADE TO THE LOW BIDDER. THE SURVEY DISCLOSED NO EVIDENCE THAT A.R.F. WAS BEING SUBSIDIZED BY THE GOVERNMENT AND THE PAY SCALES OF A.R.F. EMPLOYEES WERE FOUND TO BE COMMENSURATE WITH THOSE OF THE ELECTRONIC INDUSTRY IN THE DENVER-BOULDER AREA. BECAUSE OF THE RESULTS OF THE PREAWARD SURVEY AND BECAUSE A.R.F. WAS PERFORMING SATISFACTORILY UNDER A CURRENT CONTRACT FOR TRANSPONDERS, THE CONTRACTING OFFICER DETERMINED THAT AWARD OF THE CONTRACT TO A.R.F. AS THE LOWEST RESPONSIBLE BIDDER WOULD BE PROPER.

BECAUSE OF THE DISPARITY BETWEEN A.R.F.'S UNIT BID PRICE AND THOSE OF THE OTHER BIDDERS, THE CONTRACTING OFFICER REQUESTED A.R.F. TO CONFIRM ITS BID PRICE. THIS THE FIRM DID BY TWX AND LETTER, BOTH DATED JUNE 24, 1971.

UNDER THE REPORTED CIRCUMSTANCES, AND SINCE WE ARE AWARE OF NO LEGAL PRINCIPLE ON WHICH AN AWARD MIGHT BE PRECLUDED SOLELY BECAUSE IT IS ALLEGED THAT THE LOW BIDDER MAY HAVE SUBMITTED AN UNPROFITABLE PRICE, NO BASIS EXISTS TO QUESTION AN AWARD TO A.R.F. SEE B-173102, JUNE 29, 1971.

ACCORDINGLY, THE PROTEST IS DENIED.