B-175181(1), JUN 12, 1972

B-175181(1): Jun 12, 1972

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THE CONTRACTING OFFICER'S NEGATIVE DETERMINATION OF A SMALL BUSINESS CONCERN'S RESPONSIBILITY IS SUBJECT TO THE AUTHORITY OF THE SMALL BUSINESS ADMINISTRATION. TO CERTIFY THAT THE BIDDER IS CAPABLE OF PERFORMING THE CONTRACT. THE AWARD OF THE SUBJECT CONTRACT TO A HIGHER BIDDER WAS IMPROPER. DEAN BURCH: THIS IS IN REFERENCE TO YOUR LETTERS OF MARCH 16 AND 31. ENCLOSED IS A COPY OF OUR LETTER OF TODAY TO NAE WHEREIN WE ADVISE THAT SINCE THE CONTRACTING OFFICER PROPOSES TO ENTER INTO A NO-COST TERMINATION OF THE CONTRACT AND TO REVISE THE INVITATION AND AGAIN ASK MANUFACTURERS (INCLUDING NAE) FOR BIDS. THE LETTER INDICATES THAT CONTRACT AWARD INITIALLY WAS NOT MADE TO THE LOW BIDDER (NAE) SINCE THERE WAS A QUESTION REGARDING THAT FIRM'S TECHNICAL CAPABILITIES.

B-175181(1), JUN 12, 1972

BID PROTEST - SBA DETERMINATION OF BIDDER RESPONSIBILITY - BINDING EFFECT CONCERNING THE PROTEST OF NATIONAL AVIATION ELECTRONICS, INC; AGAINST THE AWARD OF A CONTRACT TO A HIGHER BIDDER UNDER AN IFB ISSUED BY THE FEDERAL COMMUNICATIONS COMMISSION. THE CONTRACTING OFFICER'S NEGATIVE DETERMINATION OF A SMALL BUSINESS CONCERN'S RESPONSIBILITY IS SUBJECT TO THE AUTHORITY OF THE SMALL BUSINESS ADMINISTRATION, UNDER SECTION 8(B)(7) OF THE SMALL BUSINESS ACT, PUB. L. 85-536, 15 U.S.C. 637(B)(7), TO CERTIFY THAT THE BIDDER IS CAPABLE OF PERFORMING THE CONTRACT. ACCORDINGLY, THE AWARD OF THE SUBJECT CONTRACT TO A HIGHER BIDDER WAS IMPROPER.

TO MR. DEAN BURCH:

THIS IS IN REFERENCE TO YOUR LETTERS OF MARCH 16 AND 31, 1972, AND TO THE CONTRACTING OFFICER'S LETTER OF MAY 22, 1972, REFERENCE 2800, RELATIVE TO THE PROTEST OF NATIONAL AVIATION ELECTRONICS, INC. (NAE), AGAINST THE CONTRACT AWARD TO A HIGHER BIDDER UNDER INVITATION FOR BIDS NO. 71-58.

ENCLOSED IS A COPY OF OUR LETTER OF TODAY TO NAE WHEREIN WE ADVISE THAT SINCE THE CONTRACTING OFFICER PROPOSES TO ENTER INTO A NO-COST TERMINATION OF THE CONTRACT AND TO REVISE THE INVITATION AND AGAIN ASK MANUFACTURERS (INCLUDING NAE) FOR BIDS, WE CONSIDER THE PROTEST RESOLVED.

WE WISH, HOWEVER, TO BRING TO YOUR ATTENTION AN APPARENTLY ERRONEOUS INTERPRETATION OF PROCUREMENT REGULATIONS, AS INDICATED FROM THE CONTRACTING OFFICER'S LETTER OF MAY 22 AND FROM INFORMAL DISCUSSIONS WITH YOUR COUNSEL, WHICH SHOULD NOT STAND UNCORRECTED. THE LETTER INDICATES THAT CONTRACT AWARD INITIALLY WAS NOT MADE TO THE LOW BIDDER (NAE) SINCE THERE WAS A QUESTION REGARDING THAT FIRM'S TECHNICAL CAPABILITIES, AND THE FINDINGS REQUIRED BY FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.407-2 COULD NOT BE MADE IN GOOD FAITH. IN PERTINENT PART, THIS REGULATION REQUIRES THE CONTRACTING OFFICER, BEFORE AWARDING THE CONTRACT, TO DETERMINE WHETHER THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE.

WHILE WE RECOGNIZE THAT A CONTRACTING OFFICER'S DETERMINATION OF A BIDDER'S RESPONSIBILITY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION, WHERE, AS HERE, THE BIDDER IS A SMALL BUSINESS CONCERN THE CONTRACTING OFFICER'S NEGATIVE DETERMINATION OF THE BIDDER'S CAPACITY OR CREDIT IS SUBJECT TO THE AUTHORITY OF SBA UNDER SECTION 8(B)(7) OF THE SMALL BUSINESS ACT, PUBLIC LAW 85-536, 15 U.S.C. 637(B)(7), TO CERTIFY THAT THE BIDDER IS CAPABLE OF PERFORMING THE CONTRACT. MATTERS CONCERNING A BIDDER'S TECHNICAL CAPABILITIES RELATE TO THE QUESTION OF CAPACITY, AND THEREFORE ARE CLEARLY WITHIN THE PURVIEW OF SBA'S AUTHORITY. SEE FPR 1- 1.708-1 AND 38 COMP. GEN. 864 (1959). AS SUCH, THE DETERMINATION MADE BY SBA REGARDING THE CAPABILITY OF NAE TO SUCCESSFULLY PERFORM THIS CONTRACT WAS BY LAW BINDING UPON THE FEDERAL COMMUNICATIONS COMMISSION, AND THE AWARD TO AEROCOM WAS THEREFORE IMPROPER. SEE 15 U.S.C. 637(B)(7) AND FPR 1 1.708-3.

THE FILE TRANSMITTED WITH YOUR LETTER OF MARCH 16 IS RETURNED.