B-174679, MAY 25, 1972

B-174679, MAY 25, 1972

BID PROTEST - WALSH-HEALEY ACT - NONRESPONSIBILITY - FAILURE TO GIVE REQUIRED NOTICE CONCERNING THE DENIAL OF A PROTEST OF NATIONAL AVIATION ELECTRONICS, INC., AGAINST ITS REMOVAL FROM CONSIDERATION FOR AWARD, PURSUANT TO THE MANUFACTURER STATUS PROVISIONS OF THE WALSH-HEALEY ACT, 41 U.S.C. 35 45, UNDER AN IFB ISSUED BY THE SAN ANTONIO AIR MATERIEL AREA. NATIONAL WAS DENIED THE OPPORTUNITY TO PRESENT ADDITIONAL EVIDENCE OF ITS ELIGIBILITY BY THE CONTRACTING OFFICER'S FAILURE TO GIVE NOTICE, AS REQUIRED BY ASPR 12-604(A)(2)(III), THAT THE MATTER WAS BEING FORWARDED TO THE DEPARTMENT OF LABOR FOR FINAL DETERMINATION. SECONDLY, SINCE MANUFACTURER STATUS RELATES TO BIDDER RESPONSIBILITY, THE DETERMINATION SHOULD HAVE BEEN MADE AS CLOSE TO THE DATE OF AWARD AS POSSIBLE, ESPECIALLY IN VIEW OF THE 4-MONTH DELAY IN AWARD OF THE SUBJECT CONTRACT. IT IS RECOMMENDED THAT REMEDIAL ACTION BE TAKEN TO PREVENT FUTURE RECURRENCE OF THESE DEFICIENCIES.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER, SPPM, DATED JANUARY 11, 1972, FROM THE DEPUTY CHIEF, CONTRACT MANAGEMENT DIVISION, DIRECTORATE, PROCUREMENT POLICY, DEPUTY CHIEF OF STAFF, SYSTEMS AND LOGISTICS, RESPONDING TO THE PROTEST OF NATIONAL AVIATION ELECTRONICS, INC. (NATIONAL) IN CONNECTION WITH INVITATION FOR BIDS (IFB) F41608-71-B-0522, ISSUED BY THE SAN ANTONIO AIR MATERIEL AREA.

THE GIST OF THE PROTEST IS THAT NATIONAL WAS IMPROPERLY DETERMINED NOT TO BE A MANUFACTURER UNDER THE WALSH-HEALEY ACT, 41 U.S.C. 35-45, AND REMOVED FROM CONSIDERATION FOR AWARD EVEN THOUGH IT WAS THE APPARENT LOW BIDDER UNDER THE ABOVE IFB.

AFTER RECEIVING A NEGATIVE PREAWARD SURVEY ON NATIONAL, THE CONTRACTING OFFICER ADVISED THE FIRM THAT IT WAS NOT QUALIFIED AS A MANUFACTURER SINCE, AS A FIRM NEWLY ENTERING INTO MANUFACTURING ACTIVITY, IT HAD NOT MADE DEFINITE PRIOR ARRANGEMENTS, AS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 12-603.1, FOR NECESSARY PLANT, EQUIPMENT, PERSONNEL, AND FINANCES. THE CONTRACTING OFFICER ALSO ADVISED THAT NATIONAL COULD SUBMIT EVIDENCE CONCERNING ITS ELIGIBILITY AS A MANUFACTURER FOR FURTHER CONSIDERATION. IN THE EVENT, HOWEVER, THAT THE CONTRACTING OFFICER DID NOT CHANGE HIS POSITION AFTER A REVIEW OF THE EVIDENCE, NATIONAL WAS ADVISED THAT THE MATTER WOULD THEN BE FORWARDED TO THE DEPARTMENT OF LABOR FOR FINAL DETERMINATION.

ON JUNE 18, 1971, NATIONAL RESPONDED WITH A LETTER WHICH ASSERTED MATTERS CONTRADICTING THE DEFICIENCIES NOTED BY THE CONTRACTING OFFICER. EVIDENCE WAS SUBMITTED, HOWEVER, WHICH WOULD SUBSTANTIATE NATIONAL'S ASSERTIONS ALTHOUGH IT INDICATED IT WOULD PROVIDE DOCUMENTATION UPON REQUEST. THE CONTRACTING OFFICER DID NOT MAKE SUCH REQUEST, AND, ON THE BASIS OF NATIONAL'S LETTER, REAFFIRMED HIS PRIOR DETERMINATION WITH RESPECT TO THE FIRM'S STATUS. THEREAFTER, THE MATTER WAS FORWARDED TO THE DEPARTMENT OF LABOR FOR FINAL DETERMINATION. NATIONAL WAS NOT ADVISED OF THIS ACTION NOR OF THE DECISION OF THE DEPARTMENT OF LABOR ON JULY 20, 1971, SUSTAINING THE CONTRACTING OFFICER'S DETERMINATION, UNTIL DECEMBER 2, 1971, OR IMMEDIATELY AFTER AWARD TO ANOTHER BIDDER.

NATIONAL CONTENDS THAT, CONTRARY TO ASPR 12-604(A)(2)(III), THE CONTRACTING OFFICER NEVER GAVE NOTICE THAT THE MATTER WAS BEING FORWARDED TO THE DEPARTMENT OF LABOR AND THAT AS A CONSEQUENCE, NATIONAL WAS UNABLE TO PURSUE ITS ADMINISTRATIVE REMEDIES WITH THAT DEPARTMENT. SECONDLY, NATIONAL CONTENDS, IN EFFECT, THAT ITS MANUFACTURER STATUS SHOULD HAVE BEEN DETERMINED AS CLOSE AS POSSIBLE TO THE TIME OF AWARD AND THAT HAD THIS BEEN DONE, THE CONTRACTING OFFICER'S DETERMINATION WOULD HAVE BEEN DIFFERENT, SINCE BY THAT TIME THE CONTRACTING OFFICER HAD BEEN ADVISED THAT FIRM ARRANGEMENTS HAD BEEN MADE IN THOSE AREAS PREVIOUSLY NOTED AS DEFICIENT. WE NOTE HERE THAT NATIONAL WAS NOT NOTIFIED THAT AWARD HAD BEEN MADE UNTIL DECEMBER 2, 1971, SOME FOUR MONTHS AFTER THE DEPARTMENT OF LABOR'S DECISION.

ON THESE FACTS, WE HAVE BY LETTER OF TODAY (COPY ENCLOSED) DENIED THE PROTEST ON THE GROUNDS THAT THE PRESENT POSTURE OF THE PROCUREMENT AND OUR INABILITY TO DETERMINE NATIONAL'S STATUS AS A MANUFACTURER PRECLUDE FURTHER ACTION BY OUR OFFICE IN THIS MATTER.

WE DO NOT, HOWEVER, CONCUR WITH SEVERAL OF THE PROCEDURES USED BY THE CONTRACTING OFFICER IN THIS CASE. ASPR 12-604(A)(2)(III) REQUIRED THAT NATIONAL BE NOTIFIED THAT THE QUESTION OF ITS MANUFACTURER STATUS HAD BEEN SENT TO THE DEPARTMENT OF LABOR FOR FINAL DETERMINATION. THIS WAS NOT DONE. ALTHOUGH WE CAN ONLY SPECULATE AS TO THE SUBSTANTIVE EFFECT THIS FAILURE HAD ON THAT DETERMINATION, THE FACT REMAINS THAT NATIONAL WAS DENIED THE OPPORTUNITY TO PRESENT ITS VIEWS OR ADDITIONAL INFORMATION TO THE AGENCY WHICH WAS THE ULTIMATE ARBITER OF ITS ELIGIBILITY.

SECONDLY, MANUFACTURER STATUS, BEING A MATTER OF A FIRM'S ELIGIBILITY FOR AWARD, MAY BE DETERMINED AT A TIME SUBSEQUENT TO BID OPENING BUT PRIOR TO AWARD. SEE 41 COMP. GEN. 591 (1962). IN THIS REGARD, IT IS A FACTOR IN THE DETERMINATION OF RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR. SEE ASPR 1-903.1(V). RESPONSIBILITY SHOULD BE MEASURED WITH RESPECT TO THE TIME OF AWARD RATHER THAN AN EARLIER TIME. 41 COMP. GEN. 302 (1961). THEREFORE, INFORMATION RELATING TO FINANCIAL RESOURCES AND PERFORMANCE CAPABILITY, MATTERS UPON WHICH NATIONAL WAS DEEMED NOT TO HAVE MADE FIRM COMMITMENTS, SHOULD HAVE BEEN OBTAINED ON AS CURRENT A BASIS AS POSSIBLE IN RELATION TO THE DATE OF AWARD. THIS WAS NOT DONE.

WHILE WE DO NOT ASCRIBE THE DELAY IN THE AWARD OF THE CONTRACT TO THE CONTRACTING OFFICER (OR TO ANY ACTION ON THE PART OF NATIONAL), WE BELIEVE NONETHELESS THAT IT WAS INCUMBENT UPON THE CONTRACTING OFFICER, AFTER A DELAY OF SOME FOUR MONTHS, TO ASCERTAIN THE CURRENT STATUS OF NATIONAL AS A MANUFACTURER.

AS WE DO NOT BELIEVE THAT THE FOREGOING PRACTICES COMPORT WITH THE STANDARDS OF SOUND PROCUREMENT POLICY, WE ARE BRINGING THIS MATTER TO YOUR ATTENTION SO THAT REMEDIAL ACTION MAY BE TAKEN TO PREVENT THE FUTURE RECURRENCE OF THESE DEFICIENCIES.