B-175703(1), JUL 25, 1972

B-175703(1): Jul 25, 1972

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THE FACT THAT TWO OF THE NINE MEMBERS OF THE PREAWARD SURVEY TEAM WERE ASSIGNED TO THE LAKE CITY ARMY AMMUNITION PLANT (LCAAP) IS NOT SUFFICIENT TO SHOW BIAS AGAINST TASKER SINCE THE INSPECTORS WERE EMPLOYEES OF THE AMMUNITION TECHNOLOGY DIVISION. WERE NOT CONTRACTOR PERSONNEL. THE TWO MEN WERE ACTING WITHIN THE SCOPE OF THEIR ASSIGNED DUTIES. THE DETERMINATION OF THE RESPONSIBILITY OF AN OFFEROR IS A MATTER PRIMARILY WITHIN THE JURISDICTION OF THE CONTRACTING OFFICER. GAO WILL NOT QUESTION THAT DETERMINATION UNLESS IT IS ARBITRARY. TO TASKER INDUSTRIES: REFERENCE IS MADE TO YOUR LETTER OF APRIL 11. PROTESTING AGAINST THE DETERMINATION THAT YOUR FIRM WAS NONRESPONSIBLE BY REASON OF ITS INABILITY TO MEET THE REQUIRED DELIVERY SCHEDULE UNDER RFP DAAA25-72-R-0178.

B-175703(1), JUL 25, 1972

BID PROTEST - BIDDER RESPONSIBILITY - PREAWARD SURVEY TEAM - COMPOSITION - POSSIBLE BIAS DENIAL OF PROTEST BY TASKER INDUSTRIES, BERMITE DIVISION, AGAINST A RECOMMENDATION OF NONRESPONSIBILITY MADE BY A PREAWARD SURVEY TEAM ON THE BASIS THAT TASKER COULD NOT MEET THE REQUIRED DELIVERY SCHEDULE UNDER AN FRP ISSUED BY FRANKFORD ARSENAL, PA., FOR THE PROCUREMENT OF 20 MM CANNON AMMUNITION. THE FACT THAT TWO OF THE NINE MEMBERS OF THE PREAWARD SURVEY TEAM WERE ASSIGNED TO THE LAKE CITY ARMY AMMUNITION PLANT (LCAAP) IS NOT SUFFICIENT TO SHOW BIAS AGAINST TASKER SINCE THE INSPECTORS WERE EMPLOYEES OF THE AMMUNITION TECHNOLOGY DIVISION, AND WERE NOT CONTRACTOR PERSONNEL. FURTHER, THE TWO MEN WERE ACTING WITHIN THE SCOPE OF THEIR ASSIGNED DUTIES. THE DETERMINATION OF THE RESPONSIBILITY OF AN OFFEROR IS A MATTER PRIMARILY WITHIN THE JURISDICTION OF THE CONTRACTING OFFICER. GAO WILL NOT QUESTION THAT DETERMINATION UNLESS IT IS ARBITRARY, CAPRICIOUS, OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. THE RECORD HERE CLEARLY SUPPORTS THE DETERMINATION OF THE CONTRACTING OFFICER.

TO TASKER INDUSTRIES:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 11, 1972, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST THE DETERMINATION THAT YOUR FIRM WAS NONRESPONSIBLE BY REASON OF ITS INABILITY TO MEET THE REQUIRED DELIVERY SCHEDULE UNDER RFP DAAA25-72-R-0178, ISSUED AT FRANKFORD ARSENAL, PHILADELPHIA, PENNSYLVANIA.

THE ABOVE-REFERENCED SOLICITATION WAS ISSUED ON OCTOBER 29, 1971, FOR THE PRODUCTION OF 15 MILLION 20MM CARTRIDGES, TP, M55A2 AND 7.5 MILLION 20MM CARTRIDGES, HEI, M56A3. FOLLOWING RECEIPT OF INITIAL PROPOSALS, NEGOTIATIONS WERE CONDUCTED AND BEST AND FINAL OFFERS WERE SUBMITTED ON FEBRUARY 28, 1972.

A PREAWARD SURVEY OF YOUR FIRM WAS CONDUCTED ON MARCH 7-8, 1972, BY A TEAM OF GOVERNMENT EXPERTS AND SPECIALISTS FROM THE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD), VAN NUYS, CALIFORNIA, FRANKFORD ARSENAL, AND LAKE CITY ARMY AMMUNITION PLANT (LCAAP), A GOVERNMENT-OWNED CONTRACTOR-OPERATED (GOCO) FACILITY. IT WAS CONCLUDED IN THE PREAWARD SURVEY REPORT THAT BERMITE COULD NOT MEET THE REQUIRED DELIVERY SCHEDULE, AND IT WAS THEREFORE RECOMMENDED TO THE CONTRACTING OFFICER THAT NO AWARD BE MADE TO YOUR FIRM. THE RFP WAS SUBSEQUENTLY CANCELED AND THE REQUIREMENT WAS ALLOCATED TO LCAAP.

THE SPECIFIC GROUND OF YOUR PROTEST IS THAT THE CONTRACTING OFFICER'S DETERMINATION THAT YOUR FIRM WAS NONRESPONSIBLE WAS ERRONEOUS, IN THAT IT WAS BASED UPON THE REPORT OF A PREAWARD SURVEY TEAM WHICH WAS BIASED IN FAVOR OF LCAAP AND WHICH FAILED TO GIVE ADEQUATE CONSIDERATION TO YOUR FIRM'S PRIOR EXTENSIVE PRODUCTION OF 20MM AMMUNITION AND RELATED FUZES.

PRELIMINARILY, HOWEVER, YOU OBSERVE THAT UPON RECEIPT OF THE INSTANT RFP YOU ADVISED THE CONTRACTING OFFICER THAT YOU WOULD NOT SUBMIT A PROPOSAL IF LCAAP WAS BEING SOLICITED SINCE YOU CONSIDERED THE OPERATOR OF THAT PLANT TO ENJOY AN UNFAIR COMPETITIVE ADVANTAGE OVER YOUR FIRM. YOU STATE THAT YOU WERE INFORMED BY THE CONTRACTING OFFICER "THAT A PROPOSAL WOULD NOT BE SUBMITTED BY LAKE CITY AAP ALTHOUGH THE PRICE PROPOSALS RECEIVED FROM PRIVATE INDUSTRY WOULD BE COMPARED WITH THE COSTS EXPERIENCED AT LAKE CITY AAP." YOU IMPLY THAT THE SUBSEQUENT AWARD OF THIS REQUIREMENT TO LCAAP SHOWS THAT A PROPOSAL UNDER THE INSTANT RFP WAS SOLICITED FROM AND SUBMITTED BY LCAAP, CONTRARY TO THE ADVICE GIVEN YOU BY THE CONTRACTING OFFICER.

THE CONTRACTING OFFICER INFORMED PROSPECTIVE OFFERORS OF THE FORTHCOMING RFP BY MESSAGE OF OCTOBER 18, 1971, WHICH STATED IN PART:

"AWARD WILL BE MADE TO PRIVATE INDUSTRY OR GOCO FACILITY ON THE BASIS OF LOWEST OUT-OF-POCKET COST."

THE RFP WAS ISSUED UNDER COVER OF A SHEET ENTITLED "INFORMATION TO OFFERORS," WHICH SPECIFICALLY ADVISED OFFERORS TO "SEE NOTE UNDER SECTION D-7 REGARDING EVALUATION." THE NOTE PROVIDED:

"THIS IS TO INFORM ALL OFFERORS THAT THE PROCUREMENT AGAINST WHICH THIS SOLICITATION HAS BEEN ISSUED WILL BE AWARDED ON THE BASIS OF THE LOWEST OUT OF POCKET COST TO THE GOVERNMENT. THIS DETERMINATION WILL BE MADE BY COMPARING THE LOWEST PRICES RECEIVED UNDER THIS SOLICITATION WITH THE LOWEST OUT OF POCKET COST AVAILABLE AT GOCO FACILITIES."

AMENDMENT 0001 TO THE SOLICITATION DELETED THE ABOVE-QUOTED PROVISION AND REPLACED IT WITH THE FOLLOWING STATEMENT:

"PRICES SUBMITTED WILL BE COMPARED FOR REASONABLENESS WITH GOCO OUT OF- POCKET COSTS. EVALUATION FACTORS WILL INCLUDE FIRST ARTICLE, DISCOUNTS, TRANSPORTATION (GFM INBOUND AND END ITEM DESTINATION), ABNORMAL MAINTENANCE AT GOCO PLANT, SUPPORT SERVICES, AND ANNUAL MAINTENANCE OF FACILITIES LAID AWAY OR TO BE LAID AWAY AS A RESULT OF THIS PROCUREMENT."

SUCH A COMPARISON WAS MADE, AND ON THE BASIS THEREOF THE INSTANT RFP WAS CANCELED AND THE REQUIREMENT WAS ALLOCATED TO LCAAP. WHILE THE PROPRIETY OF THIS METHOD OF EVALUATION IS UNDER PROTEST BY ANOTHER OFFEROR, WE DO NOT INTERPRET YOUR CORRESPONDENCE AS PROTESTING THIS EVALUATION METHOD, BUT AS REFLECTING THE MISTAKEN BELIEF THAT LCAAP HAD SUBMITTED A PROPOSAL UNDER THE INSTANT RFP. IN ANY EVENT, THE EVALUATION PROCEDURE WAS SET FORTH IN THE RFP AND ANY PROTEST ALLEGING THAT IT WAS IMPROPER SHOULD HAVE BEEN FILED PRIOR TO THE CLOSING DATE FOR RECEIPT OF PROPOSALS. 4 CFR SEC 20.2(A).

WE AGREE WITH THE ADMINISTRATIVE POSITION THAT THE SOLICITATION ADVISED OFFERORS THAT GOCO PLANTS SUCH AS LCAAP WOULD NOT SUBMIT PROPOSALS UNDER THE RFP, BUT THAT COMPARISON WOULD BE MADE WITH THE COSTS BEING EXPERIENCED AT SUCH PLANTS IN DETERMINING WHETHER TO MAKE AWARD TO A PRIVATE OR GOCO PLANT. THERE IS NO INDICATION OF RECORD THAT THE CONTRACTING OFFICER MADE ANY REPRESENTATIONS CONTRARY TO THIS ADVICE. MUST THEREFORE REJECT THE IMPLICATION IN YOUR LETTER OF APRIL 11 THAT THE CONTRACTING OFFICER MISREPRESENTED TO YOUR FIRM THE CONDITIONS UNDER WHICH YOU WOULD COMPETE UNDER THE INSTANT PROCUREMENT.

THE FIRST BASIS UPON WHICH YOU PROTEST THE CONTRACTING OFFICER'S DETERMINATION THAT YOUR FIRM WAS NONRESPONSIBLE IS THAT THE:

"*** DECISION WAS BASED UPON AN OPINION IMPOSED ON THE GOVERNMENT'S PRE- AWARD SURVEY TEAM BY REPRESENTATIVES FROM (LCAAP) WHO, BY THE VERY NATURE OF THEIR ASSIGNMENTS, MUST BE BIASED IN FAVOR OF (LCAAP)."

THE PREAWARD SURVEY TEAM CONSISTED OF INDUSTRIAL, TRAFFIC MANAGEMENT AND PACKAGING SPECIALISTS AND SAFETY AND QUALITY CONTROL REPRESENTATIVES FROM DCASD-VAN NUYS; TWO INDUSTRIAL SPECIALISTS FROM FRANKFORD ARSENAL; AND AN INDUSTRIAL SPECIALIST AND A QUALITY CONTROL SPECIALIST FROM LCAAP. THUS, 2 OF THE 9 MEMBERS OF THE TEAM WERE FROM LCAAP. THESE REPRESENTATIVES WERE NOT EMPLOYEES OF THE LCAAP OPERATING CONTRACTOR, BUT GOVERNMENT EMPLOYEES WHOSE ASSIGNMENT HAS BEEN EXPLAINED BY THE ARMY AS FOLLOWS:

"SINCE THE 1950'S, THE ENGINEERING GROUP NOW KNOWN AS THE AMMUNITION TECHNOLOGY DIVISION (ATD), LOCATED AT LCAAP, AND BEING GOVERNMENT EMPLOYEES HAVE PERFORMED CERTAIN ENGINEERING FUNCTIONS FOR STANDARD 20MM AMMUNITION. THE GROUP HAS PERFORMED ENGINEERING IN SUPPORT OF PRODUCTION, OF WHICH PERFORMING PRE-AWARD SURVEYS IS AN INTEGRAL PART. SINCE 1964 THIS ACTIVITY HAS BEEN PERFORMED UNDER THE PROGRAMMING AND TECHNICAL CONTROL OF FRANKFORD ARSENAL. BECAUSE OF THESE ASSIGNMENTS, THE ATD AT LCAAP HAS BEEN STAFFED AND HAS MAINTAINED THE COMPETENCE TO PEFORM THE ENGINEERING FUNCTIONS. FRANKFORD ARSENAL HAS BEEN STAFFED AND HAS MAINTAINED THE COMPETENCE TO MANAGE THE PROGRAM AND SUPERVISE THE ACTIVITY. ALTHOUGH THERE ARE INDIVIDUALS AT FRANKFORD ARSENAL WITH AN ENGINEERING BACKGROUND WHICH WOULD SUPPORT THE COMPETENCE TO PERFORM THE ENGINEERING FUNCTION IN A PRE-AWARD SURVEY, IT HAS BEEN THE PRACTICE TO UTILIZE REPRESENTATION FROM (ATD) TO ASSIST IN PRE-AWARD SURVEYS IN CONFORMANCE WITH THEIR ASSIGNED MISSION. ***"

IT WOULD THEREFORE APPEAR THAT THE PARTICIPATION IN THE PREAWARD SURVEY BY THE TWO INDIVIDUALS FROM ATD WAS WITHIN THEIR ASSIGNED DUTIES. WE DO NOT BELIEVE THAT BIAS IS ESTABLISHED BY THE MERE FACT THAT ATD IS LOCATED AT LCAAP. FURTHERMORE, YOU HAVE PRESENTED NO EVIDENCE, AND OUR INDEPENDENT EXAMINATION OF THE PREAWARD SURVEY REPORT DOES NOT REVEAL, THAT THESE INDIVIDUALS "IMPOSED" THEIR VIEWS ON OTHER TEAM MEMBERS. ACCORDINGLY, WE FIND NO MERIT IN YOUR CONTENTION THAT THE RECOMMENDATION IN THE DCASD PREAWARD SURVEY REPORT THAT "NO AWARD" BE MADE TO YOUR FIRM WAS THE RESULT OF THE IMPOSITION UPON OTHERS OF BIASED VIEWS HELD BY THE ATD TEAM MEMBERS.

HOWEVER, BY LETTER OF TODAY TO THE SECRETARY OF THE ARMY, COPY ENCLOSED, WE SUGGEST THAT CONSIDERATION BE GIVEN IN THE FUTURE TO THE APPOINTMENT OF ALL PREAWARD SURVEY TEAM MEMBERS FROM FACILITIES NOT IN POSSIBLE COMPETITION WITH THE CONCERN BEING SURVEYED, IN ORDER TO PRECLUDE EVEN THE APPEARANCE OF PARTIALITY.

THE SECOND BASIS OF YOUR PROTEST IS THAT THE DETERMINATION OF NONRESPONSIBILITY FOR INABILITY TO MEET THE REQUIRED DELIVERY SCHEDULE WAS ERRONEOUS IN VIEW OF THE FACT THAT BERMITE HAD PREVIOUSLY PRODUCED OVER 100 MILLION ROUNDS OF 20MM AMMUNITION AND OVER 30 MILLION RELATED M505A3 FUZES. THE INSTANT REQUIREMENT CONTAINED A SOUTHEAST ASIA (SEA) "02" ISSUE PRIORITY DESIGNATOR. IN VIEW OF THE URGENT NEED FOR THESE SUPPLIES, THE RFP DELIVERY SCHEDULE REQUIRED DELIVERY OF A "FIRST ARTICLE" FOR APPROVAL 45 DAYS AFTER AWARD OF CONTRACT AND REQUIRED THE CONTRACTOR TO REACH MAXIMUM PRODUCTION CAPACITY OF APPROXIMATELY 2 MILLION UNITS PER MONTH 90 DAYS AFTER CONTRACT AWARD.

THE PREAWARD SURVEY TEAM WAS WELL AWARE OF BERMITE'S PRIOR PRODUCTION OF 20MM AMMUNITION, AND FOUND YOUR FIRM'S TECHNICAL AND PRODUCTION CAPABILITY TO BE SATISFACTORY. HOWEVER, BERMITE COMPLETED ITS LAST CONTRACT FOR 20MM ROUNDS IN 1959, AND THE MAJOR PORTION OF ITS PRODUCTION EQUIPMENT HAS BEEN IN STORAGE SINCE THEN. IT WAS THE OPINION OF THE PREAWARD SURVEY TEAM THAT THIS EQUIPMENT WOULD REQUIRE EXTENSIVE MODIFICATION AND COMPLETE RETOOLING TO PROCESS THE BID ITEM. ADDITIONALLY, EXTENSIVE MODIFICATION AND OVERHAUL OF THE FACILITIES WERE REQUIRED AT THE AREA SELECTED FOR THE BALLISTIC TEST FIRING RANGE.

IN ORDER TO BRING YOUR PLANT FROM A LOW STATE OF READINESS TO FULL PRODUCTION, EXTENSIVE DESIGN, FABRICATION, TOOLING AND DEBUGGING OF MACHINERY, MODIFICATION TO FACILITIES, AND SETUP OF A PRODUCTION LINE WOULD BE REQUIRED. EVEN IF THESE TASKS WERE TO BE PERFORMED ON A THREE SHIFT DAY, AS YOU PROPOSED, THE PREAWARD SURVEY TEAM CONCLUDED THAT THE REQUIRED DELIVERY SCHEDULE COULD NOT BE MET. THE TEAM CONSIDERED BERMITE TO HAVE THE TECHNICAL CAPABILITY TO BECOME AN ACCEPTABLE PRODUCER IF GIVEN SUFFICIENT LEAD TIME, WITH A GRADUATED PRODUCTION BUILDUP AND DELIVERY SCHEDULE. HOWEVER, IT WAS THEIR CONCLUSION THAT THE DELIVERY REQUIREMENTS FOR THESE AMMUNITION ITEMS DID NOT PERMIT A LONGER LEAD TIME AND GRADUATED PRODUCTION BUILDUP. THEREFORE, THE CONTRACTING OFFICER, PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION 1-903.1(II), DETERMINED YOUR FIRM TO BE NONRESPONSIBLE FOR LACK OF ABILITY TO MEET THE REQUIRED DELIVERY SCHEDULE.

WE HAVE CONSISTENTLY HELD THAT IT IS THE DUTY OF THE CONTRACTING OFFICER TO DETERMINE THE RESPONSIBILITY OF AN OFFEROR. IN MAKING THE DETERMINATION THE CONTRACTING OFFICER IS VESTED WITH A CONSIDERABLE DEGREE OF DISCRETION. WE WILL NOT SUBSTITUTE OUR JUDGMENT IN SUCH CASES UNLESS THE CONTRACTING OFFICER'S DETERMINATION IS SHOWN TO BE ARBITRARY, CAPRICIOUS OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. SEE 45 COMP. GEN. 4 (1965); 43 ID. 257 (1963). WE HAVE CAREFULLY REVIEWED AND CONSIDERED THE INFORMATION RELIED UPON BY THE CONTRACTING OFFICER IN MAKING THE DETERMINATION THAT YOUR FIRM IS NOT A RESPONSIBLE OFFEROR FOR PURPOSES OF THE INSTANT PROCUREMENT. WE FIND NO BASIS UPON WHICH OUR OFFICE WOULD BE JUSTIFIED IN CONCLUDING THAT THERE WAS AN ABUSE OF ADMINISTRATIVE DISCRETION.

ACCORDINGLY, YOUR PROTEST IS DENIED.