B-174313, JUN 1, 1972

B-174313: Jun 1, 1972

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ITS INSPECTION AREA WAS VISUALLY EXAMINED AND FOUND TO BE DEFICIENT. ITS PRIOR DELIVERY PERFORMANCE WAS PROPERLY CONSIDERED. IS UNABLE TO CONCLUDE THAT THE AGENCY'S DECISION WAS ARBITRARY. INC.: REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 10 AND MARCH 1. PROTESTING A DETERMINATION THAT YOUR FIRM WAS NONRESPONSIBLE AND THEREFORE INELIGIBLE FOR AWARD UNDER INVITATION FOR BIDS (IFB) FPNTN-D1 18934-A-6-4- 71. WAS APPARENTLY LOW ON THE ITEMS ON WHICH YOU BID: 24. YOUR OTHERWISE LOW BID ON ITEM 24 WAS DISPLACED WHEN EVALUATED ON THE BASIS OF THE BUY AMERICAN FACTOR. THE RECORD ALSO INDICATES THAT YOUR BID ON ITEM 39 WAS REJECTED FOR FAILURE TO SUBMIT THE REQUIRED BID SAMPLES. THEREAFTER A PLANT FACILITIES REPORT OF YOUR FIRM WAS REQUESTED AND CONDUCTED TO DETERMINE YOUR ABILITY TO PERFORM IN THE EVENT ITEM 37 SHOULD BE AWARDED TO YOU.

B-174313, JUN 1, 1972

BID PROTEST - NONRESPONSIBILITY - ALLEGED IMPROPER DETERMINATION DECISION DENYING THE PROTEST OF HI-TORQUE MFG. CO; INC; AGAINST A DETERMINATION OF NONRESPONSIBILITY UNDER AN IFB ISSUED BY THE GENERAL SERVICES ADMINISTRATION. PROTESTANT FAILED TO PRODUCE THE REQUESTED GAUGES AND TESTING EQUIPMENT, ITS INSPECTION AREA WAS VISUALLY EXAMINED AND FOUND TO BE DEFICIENT, ITS PRIOR DELIVERY PERFORMANCE WAS PROPERLY CONSIDERED, AND IT PROVIDED NO ASSURANCE THAT SUBCONTRACTOR SERVICES WOULD PROVE TO BE ACCEPTABLE. IN VIEW OF THE FOREGOING, AND SINCE THE CONTRACTOR'S APPLICATION FOR A CERTIFICATE OF COMPETENCY HAD BEEN VOLUNTARILY WITHDRAWN, THE COMP. GEN. IS UNABLE TO CONCLUDE THAT THE AGENCY'S DECISION WAS ARBITRARY, CAPRICIOUS, OR NOT BASED ON SUBSTANTIAL EVIDENCE. 43 COMP. GEN. 257. ACCORDINGLY, THE PROTEST MUST BE DENIED.

TO HI-TORQUE MFG. CO; INC.:

REFERENCE IS MADE TO YOUR LETTERS OF JANUARY 10 AND MARCH 1, 1972, PROTESTING A DETERMINATION THAT YOUR FIRM WAS NONRESPONSIBLE AND THEREFORE INELIGIBLE FOR AWARD UNDER INVITATION FOR BIDS (IFB) FPNTN-D1 18934-A-6-4- 71, ISSUED APRIL 30, 1971, BY THE GENERAL SERVICES ADMINISTRATION (GSA), FEDERAL SUPPLY SERVICE (FSS).

THE SUBJECT IFB SOLICITED BIDS FOR 57 ITEMS OF FSC CLASS - 5120 - WRENCHES, COMBINATION BOX AND OPEN END, NONADJUSTABLE, AND HALF MOON BOX, NONADJUSTABLE. THE IFB REQUIRED THE SUBMISSION OF BID SAMPLES WHICH WOULD BE EVALUATED FOR COMPLIANCE WITH ALL CHARACTERISTICS LISTED IN THE SPECIFICATIONS, AND ADMONISHED THAT NONCONFORMING SAMPLES WOULD RESULT IN REJECTION OF THE BID, AS WOULD FAILURE TO FURNISH SAMPLES BEFORE THE TIME ESTABLISHED FOR BID OPENING.

YOUR FIRM'S BID PROPOSED TO FURNISH FOREIGN SOURCE PRODUCTS, AND WAS APPARENTLY LOW ON THE ITEMS ON WHICH YOU BID: 24, 37 AND 39. HOWEVER, IN ORDER TO COMPLY WITH BUY AMERICAN ACT REQUIREMENTS PERTAINING TO HAND AND MEASURING TOOLS, THE IFB, AT PAGE 14, PROVIDED FOR THE ADDITION OF A 50 PERCENT PRICE EVALUATION FACTOR, EXCLUSIVE OF IMPORT DUTIES, FOR FOREIGN SOURCE END PRODUCTS. ACCORDINGLY, YOUR OTHERWISE LOW BID ON ITEM 24 WAS DISPLACED WHEN EVALUATED ON THE BASIS OF THE BUY AMERICAN FACTOR. THE RECORD ALSO INDICATES THAT YOUR BID ON ITEM 39 WAS REJECTED FOR FAILURE TO SUBMIT THE REQUIRED BID SAMPLES.

THEREAFTER A PLANT FACILITIES REPORT OF YOUR FIRM WAS REQUESTED AND CONDUCTED TO DETERMINE YOUR ABILITY TO PERFORM IN THE EVENT ITEM 37 SHOULD BE AWARDED TO YOU. THAT REPORT CONCLUDED THAT YOU WERE INCAPABLE OF PERFORMING FOR THE FOLLOWING REASONS:

1) YOUR FIRM HAD SUPPLIED ONE OF THE IFB WRENCHES ON CONTRACT GS-00S 81393, MANUFACTURED BY THE SAME JAPANESE SOURCE CONTEMPLATED FOR THE ITEMS UNDER THE INSTANT IFB, AND THE WRENCHES WERE REJECTED FOR WORKMANSHIP AND FINISH. IT IS STATED THAT THERE IS NO EVIDENCE THAT THE WRENCHES TO BE FURNISHED UNDER THE INSTANT IFB WOULD BE DIFFERENT.

2) YOUR QUALITY CONTROL SYSTEM WAS CONSIDERED INADEQUATE BECAUSE YOU WERE NOT EQUIPPED TO DO ALL THE REQUIRED TESTING. SPECIFICALLY, YOU LACKED SUITABLE PLUG GAUGES FOR 1" SIZE AND 1 1/8" SIZE WRENCHES. FURTHERMORE, YOU LACKED A PROFILOMETER FOR MEASURING SURFACE FINISH.

3) YOUR PAST DELIVERY PERFORMANCE WAS CONSIDERED POOR WITH REGARD TO GSA CONTRACTS GS-00S-81393, GS-00S-91125, AND GS-00S-05236.

SUBSEQUENTLY, BY LETTER DATED SEPTEMBER 17, 1971, THE ACTING CHIEF OF THE NONPOWERED HAND TOOLS SECTION, FSS, REPORTED THE UNFAVORABLE PLANT FACILITIES REPORT TO THE SMALL BUSINESS ADMINISTRATION'S (SBA) REGIONAL OFFICE IN NEW YORK CITY, AND REQUESTED ADVICE AS TO WHETHER THE LATTER CONTEMPLATED THE ISSUANCE OF A CERTIFICATE OF COMPETENCY (COC) FOR YOUR FIRM. BY LETTER DATED OCTOBER 8, 1971, THE SBA REGIONAL OFFICE ADVISED THAT YOUR FIRM HAD WITHDRAWN ITS APPLICATION FOR A COC AND THE SBA HAD ACCORDINGLY CLOSED ITS FILE IN THE MATTER.

THE RECORD INDICATES THAT, IN THE MEANTIME, AND ON OCTOBER 4, 1971, MR. FARRUGIA REQUESTED A MEETING WITH FSS PROCUREMENT AND QUALITY CONTROL PERSONNEL. AT A MEETING HELD OCTOBER 13, 1971, MR. FARRUGIA INDICATED KNOWLEDGE OF THE UNFAVORABLE PLANT FACILITIES REPORT, ADMITTED THAT AT THE TIME OF SAID REPORT HE DID NOT POSSESS THE REQUIRED TESTING EQUIPMENT, BUT ADVISED THAT SINCE THEN HE HAD ACQUIRED THE REQUIRED GAUGES AND PROFILOMETER. IT IS REPORTED THAT HE VISITED THE CONTRACTING OFFICER AND SUBMITTED A SURFACE ROUGHNESS GAUGE, AND "GO" AND "NO GO" GAUGES FOR CHECKING WRENCH OPENINGS. THE RECORD REPORTS THAT THE SURFACE ROUGHNESS GAUGE WAS NOT PROPERLY CALIBRATED AND THE "GO" AND "NO GO" GAUGES WERE UNACCEPTABLE BECAUSE THEY WERE SQUARE IN SHAPE AND NOT SUITABLE FOR MEASURING THE BOX END OF WRENCHES. IN RESPONSE TO A CLAIM BY MR. FARRUGIA THAT HIS QUALITY CONTROL SYSTEM HAD BEEN IMPROVED, A SUPPLEMENTAL REPORT FROM THE FSS REGION 2 OFFICE IN NEW YORK CITY, DATED NOVEMBER 22, 1971, REPORTED THAT:

1) YOUR GAUGE INTENDED FOR USE IN MEASURING ONE INCH WRENCH OPENINGS WAS FOUND TO BE 1.152" TO 1.154" ACROSS THE HEXAGON CORNERS WHILE THE APPLICABLE SPECIFICATION REQUIRES OPENINGS TO BE A MINIMUM OF 1.162" ACROSS THE HEXAGON CORNERS. THEREFORE, THE GAUGE SIZE WOULD FAIL TO DETECT NON-CONFORMING MATERIAL.

2) THE NET AVAILABLE SPACE FOR INSPECTION ACTIVITIES WAS CONSIDERED UNACCEPTABLE.

3) IN VIEW THEREOF, THE ORIGINAL EVALUATION FOR DELIVERY OF THE ITEMS REMAINS AS INCAPABLE.

THE RECORD STATES THAT IN VIEW OF THE NECESSITY TO MAKE AN AWARD DUE TO THE TIME ELEMENT INVOLVED, AND OF THE SBA'S RECENT ACTION IN CLOSING THE CASE, A FURTHER REFERRAL TO THE SBA WAS NOT DEEMED PRACTICAL. ACCORDINGLY, A DETERMINATION OF NONRESPONSIBILITY WAS RENDERED, YOUR BID FOR ITEM 37 REJECTED, AND AN AWARD FOR ITEM 37 WAS CONSUMMATED WITH PENDLETON TOOL INDUSTRIES, INC; THE LOW RESPONSIVE, RESPONSIBLE BIDDER, ON DECEMBER 14, 1971. YOU WERE SO ADVISED BY LETTER OF DECEMBER 28, 1971, TOGETHER WITH THE REASONS FOR REJECTION OF YOUR BID.

YOU HAVE PROTESTED THE FINDINGS OF THE SUPPLEMENTAL PLANT FACILITIES REPORT, ALLEGING THAT THE GAUGE INSPECTED AND FOUND INSUFFICIENT MEASURES ONLY THE SIZE OF THE WRENCH AND DIFFERS MATERIALLY FROM THE GAUGE MEASURING CORNER DISTANCE. IT IS CONTENDED THAT THE QUALITY CONTROL REPRESENTATIVE NEVER MENTIONED OR REQUESTED THE GAUGE MEASURING CORNER DISTANCE, AND HAD HE DONE SO THE APPROPRIATE GAUGE WOULD HAVE BEEN PRODUCED.

IT IS FURTHER CONTENDED THAT A PROPOSED CONTRACTOR IS NOT REQUIRED TO POSSESS TOOLING, GAUGES, ETC; PRIOR TO AWARD, AND THEREFORE THE FAILURE TO POSSESS GAUGES DOES NOT CONSTITUTE SUFFICIENT GROUNDS FOR A DETERMINATION OF NONRESPONSIBILITY.

YOU ALSO OBJECT TO THE FINDING THAT YOUR INSPECTION AREA WAS DEFICIENT, SINCE YOU HAVE ALLEGEDLY SUPPLIED PARTS AND ASSEMBLIES OF A MORE CRITICAL NATURE THAN THE WRENCHES WITHOUT PREVIOUS COMPLAINT, EITHER AS TO YOUR INSPECTION SYSTEM ITSELF OR THE ITEMS DELIVERED. IN THIS REGARD, YOU ALSO STATE THAT YOU HAVE PREVIOUSLY SUBMITTED SIMILAR OR IDENTICAL WRENCHES TO GSA LABORATORIES WITHOUT A FAILURE, AND THERE HAVE BEEN NO COMPLAINTS FROM THE ULTIMATE USERS OF THE WRENCHES.

FINALLY, IT IS IMPLIED THAT SINCE ALL PARTS REQUIRED FOR THIS BID ARE IN STOCK, AND SINCE THE SAMPLES SUBMITTED WITH THE BID HAD BEEN ACCEPTED, THE FINDINGS OF THE PLANT FACILITIES REPORTS ARE DEVOID OF EITHER MERIT OR RELEVANCE TO YOUR ABILITY TO PERFORM THE CONTEMPLATED CONTRACT.

THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR IS A QUESTION OF FACT TO BE DETERMINED BY THE CONTRACTING AGENCY, AND NECESSARILY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION. THE FUNCTION OF OUR OFFICE IS TO REVIEW SUCH EXERCISES OF ADMINISTRATIVE DISCRETION TO INSURE THAT IT HAS BEEN EXERCISED WITHIN PROPER LIMITS. SPECIFICALLY, IT IS OUR DUTY TO DETERMINE, FROM THE RECORD BEFORE US, WHETHER THE INFORMATION AND DATA RELIED UPON BY THE CONTRACTING OFFICIALS WOULD REASONABLY SUPPORT THEIR FINDING. 45 COMP. GEN. 4, 6 (1965). IN THIS REGARD, IT SHOULD BE NOTED THAT WE HAVE ADOPTED THE RULE THAT WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICIALS UNLESS IT CAN BE SHOWN BY CONVINCING EVIDENCE THAT THE FINDING OF NONRESPONSIBILITY WAS ARBITRARY, CAPRICIOUS, OR NOT BASED ON SUBSTANTIAL EVIDENCE. 43 COMP. GEN. 257; 38 COMP. GEN. 778, 781.

FEDERAL PROCUREMENT REGULATIONS (FPR) 1-1.12 SETS FORTH MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS. IN PERTINENT PART, 1-1.1203- 2(A)(2) REQUIRES THAT THE FIRM POSSESS NECESSARY TECHNICAL EQUIPMENT AND FACILITIES, OR THE ABILITY TO OBTAIN THEM. FPR 1-1.1203 2(A)(1) SETS FORTH THE PREREQUISITE, INTER ALIA, OF ADEQUATE PRODUCTION CONTROL PROCEDURES AND QUALITY ASSURANCE MEASURES, OR THE ABILITY TO OBTAIN THEM. FPR 1-1.1203-4 REQUIRES, WHERE SUCH EQUIPMENT AND FACILITIES ARE LACKING, THAT ACCEPTABLE EVIDENCE OF THE ABILITY TO OBTAIN THEM MUST EITHER BE REPRESENTED IN THE CONTRACTOR'S CURRENT OPERATIONS, OR BE SUPPORTED BY A COMMITMENT OR EXPLICIT ARRANGEMENT, IN EXISTENCE AT THE TIME THE CONTRACT IS TO BE AWARDED, FOR THEIR ACQUISITION.

WITH REGARD TO FINDINGS OF NONRESPONSIBILITY OF SMALL BUSINESS FIRMS (AS YOUR FIRM APPEARS TO BE), FPR 1-1.708-2(A) REQUIRES THAT THE SBA BE NOTIFIED SO AS TO PERMIT THE ISSUANCE OF A COC. THE AWARD SHALL BE WITHHELD PENDING EITHER SBA ISSUANCE OF A COC OR THE EXPIRATION OF 15 WORKING DAYS AFTER SBA IS SO NOTIFIED, WHICHEVER IS EARLIER.

THE RECORD INDICATES THAT THE ORIGINAL PLANT FACILITIES REPORT REVEALED, AND MR. FARRUGIA PURPORTEDLY CONCEDED, THAT YOU DID NOT POSSESS THE SUBJECT GAUGES AND PROFILOMETER AT THE TIME OF THE PLANT FACILITIES REPORT WAS RENDERED; NOR DOES THE RECORD INDICATE THE EXPLICIT ARRANGEMENT TO OBTAIN THEM CONTEMPLATED BY FPR 1-1.1203-4. THE RECORD REVEALS THAT AT THE TIME THE SUPPLEMENTAL PLANT FACILITIES REPORT WAS MADE, AT YOUR REQUEST, YOU WERE REQUESTED TO PRODUCE THE GAUGES AND TESTING EQUIPMENT YOU INTENDED TO USE FOR EXAMINATION OF ONE INCH WRENCHES IF AWARDED THE CONTRACT. IT IS REPORTED THAT YOU FAILED TO PRODUCE A GAUGE SUFFICIENT TO MEASURE OPENINGS FROM CORNER TO CORNER. WE NOTE YOUR CONTENTION THAT YOU COULD HAVE PRODUCED SUCH A GAUGE IF SPECIFICALLY SO REQUESTED, AND WHILE ANY MISUNDERSTANDING THAT MAY HAVE ENSUED FROM THE REQUEST TO PRODUCE THE GAUGES YOU INTENDED TO USE IS INDEED UNFORTUNATE, WE ARE UNABLE TO CONCLUDE, UNDER THE FACTS PRESENTED BY THE RECORD, THAT THERE WAS NOT A FACTUAL AND REASONABLE BASIS FOR THE CONCLUSION THAT YOU LACKED SUCH A GAUGE OR AN ARRANGEMENT TO ACQUIRE IT. THEREFORE, WE CANNOT CONCLUDE THAT THE FINDING WAS ARBITRARY OR CAPRICIOUS.

WITH REGARD TO THE FINDING THAT YOUR INSPECTION AREA WAS DEFICIENT, THE PROCURING OFFICIALS ARE VESTED WITH CONSIDERABLE DISCRETION IN MAKING SUCH JUDGMENTS. SINCE THIS FINDING WAS MADE UPON A VISUAL EXAMINATION OF YOUR INSPECTION AREA, AND THE RECORD HAS DOCUMENTED THE REASONS FOR THE FINDING, NAMELY DEFICIENT SPACE DIMENSIONS AND CONGESTION, WE ARE UNABLE TO CONCLUDE THAT THE FINDING CONSTITUTED THE ABUSE OF DISCRETION THAT WOULD PERMIT US TO SUBSTITUTE OUR JUDGMENT FOR THAT OF THE QUALITY CONTROL REPRESENTATIVE.

NOR CAN IT BE MAINTAINED THAT YOUR PAST PERFORMANCE WAS NOT CONSIDERED, FOR THE PLANT FACILITIES REPORT INDICATES THAT YOUR POOR DELIVERY PERFORMANCE ON THE THREE REFERENCED PRIOR CONTRACTS WAS A CONTRIBUTORY FACTOR IN THE DETERMINATION NOT TO RECOMMEND YOUR FIRM FOR THE AWARD. (SEE FPR 1-1.1203-1(C)).

WE DO NOT CONSIDER AS MERITORIOUS YOUR CONTENTION THAT SATISFACTORY PERFORMANCE OF THE CONTRACT IS NECESSARILY ASSURED BY THE FACT THAT THE SAMPLES FOR ITEM 37 SUBMITTED WITH YOUR BID WERE ACCEPTED, OR BY THE FACT THAT ALL PARTS REQUIRED FOR THE PERFORMANCE OF THE CONTRACT ARE ALLEGEDLY IN STOCK. IT IS NOTED THAT THE STOCK ON HAND WAS TO BE SUBMITTED TO A SUBCONTRACTOR TO BE STRIPPED AND PLATED. IN THIS REGARD, IT IS FURTHER NOTED THAT ONE OF THESE IFB TYPE WRENCHES SUPPLIED UNDER CONTRACT GS-00S- 81393 WAS REPORTEDLY REJECTED FOR WORKMANSHIP AND FINISH. THEREFORE, THERE IS NO CONCLUSIVE ASSURANCE THAT THE WORKMANSHIP AND FINISH TO BE PERFORMED BY YOUR SUBCONTRACTOR WOULD BE ACCEPTABLE TO THE PROCURING ACTIVITY.

IN VIEW OF THE FOREGOING, IT CANNOT BE CONCLUDED THAT THE RECORD DID NOT CONTAIN REASONABLE FACTUAL BASES TO SUPPORT THE DETERMINATION OF NONRESPONSIBILITY, AND SINCE THE AWARD TO PENDLETON TOOL INDUSTRIES, INC; WAS MADE ONLY AFTER YOU WITHDREW YOUR APPLICATION TO SBA FOR A COC AND AFTER A DETERMINATION THAT TIME WOULD NOT PERMIT A SECOND SUBMISSION TO SBA, WE MUST CONCLUDE THAT SUCH AWARD WAS PROPER UNDER FPR 1-1.708-2(A).

ACCORDINGLY, YOUR PROTEST MUST BE DENIED.