B-176108, AUG 24, 1972

B-176108, AUG 24, 1972

BID PROTEST - BIDDER RESPONSIBILITY - PENDING LEGAL PROCEEDINGS DENIAL OF PROTEST ON BEHALF OF OJUS INDUSTRIES, INC., AGAINST THE AWARD OF A CONTRACT TO MAC INDUSTRIES, INC., UNDER AN IFB ISSUED BY THE DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO, FOR BARBED CONCERTINA TAPE. THE FACT THAT OJUS HAS INITIATED LEGAL ACTION AGAINST MAC TO PROTECT WHAT IT CONTENDS ARE ITS PROPRIETARY RIGHTS IN CERTAIN MANUFACTURING EQUIPMENT - A MATTER IN WHICH THE GOVERNMENT IS NOT INVOLVED - AFFORDS NO BASIS TO QUESTION THE CONTRACTING OFFICER'S DETERMINATION THAT MAC IS A RESPONSIBLE BIDDER FOR PURPOSES OF THIS PROCUREMENT.

TO MR. DANIEL M. ROSS:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 12, 1972, WITH ENCLOSURES, ON BEHALF OF OJUS INDUSTRIES, INC., REGARDING ITS PROTEST AGAINST ANY AWARD TO MAC INDUSTRIES, INC., UNDER INVITATION FOR BIDS NO. DSA700-72-B-2159, ISSUED BY THE DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO.

THE SUBJECT INVITATION, ISSUED ON APRIL 17, 1972, COVERS A TOTAL QUANTITY OF 94,880 ROLLS OF BARBED CONCERTINA TAPE TOGETHER WITH A LABOR SURPLUS AREA SET-ASIDE FOR AN ADDITIONAL QUANTITY OF 92,852 ROLLS. BIDS WERE OPENED ON MAY 10, 1972, AND THE RECORD INDICATES THAT THE LOW EVALUATED BID ON THE NON-SET-ASIDE PORTION WAS SUBMITTED BY MAC INDUSTRIES.

YOU CONTEND THAT MAC INDUSTRIES IS NOT A RESPONSIBLE BIDDER IN THAT THE FIRM WILL NOT BE ABLE TO COMPLY WITH THE REQUIRED DELIVERY SCHEDULE OF THE CONTRACT WHICH REQUIRES THE DELIVERY OF A FIRST ARTICLE WITHIN 90 DAYS WITH PRODUCTION TO BE COMPLETED WITHIN FIVE MONTHS THEREAFTER. YOU STATE THAT THE PRODUCTION OF CONCERTINA TAPE REQUIRED UNDER THIS INVITATION REQUIRES EXTENSIVE SPECIALIZED FACILITIES NOT AVAILABLE FROM ESTABLISHED SOURCES AND THAT MAC INDUSTRIES INTENDS TO USE NEW EQUIPMENT, THE DESIGNS OF WHICH ARE EXCLUSIVELY OWNED BY OJUS INDUSTRIES. IN THIS REGARD, YOU STATE THAT ON JUNE 9, 1972, OJUS FILED SUIT AGAINST MAC FOR INJUNCTIVE AND OTHER RELIEF IN THE CIRCUIT COURT OF THE SEVENTEENTH JUDICIAL DISTRICT IN AND FOR BROWARD COUNTY, FLORIDA. PARAGRAPH 4(D) OF THE PETITION READS:

"WHILE IN THE EMPLOY OF THE PLAINTIFFS, AS AFORESAID, THE DEFENDANT, MICHAEL CHERUP, HAD ACCESS TO, AND DID ACQUIRE INFORMATION AND KNOWLEDGE OF THE PLAINTIFFS' UNIQUE AND SECRET MANUFACTURING PROCESSES, MACHINERY, AND EQUIPMENT FOR THE MANUFACTURE OF CONCERTINA TAPE. THE SAID DEFENDANT ALSO HAD ACCESS TO, AND ACQUIRED INFORMATION AND KNOWLEDGE PERTAINING TO THE ESTIMATION OF AND FILING OF BIDS FOR UNITED STATES GOVERNMENT CONTRACTS FOR THE MANUFACTURE OF SAID PRODUCT, ALL OF WHICH INFORMATION IS, AND WAS SECRET AND CONFIDENTIAL TO THE PLAINTIFFS." IN VIEW OF THE PENDING LEGAL ACTION, YOU CONTEND THAT THE CONTRACTING OFFICER CANNOT MAKE AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY AS TO MAC INDUSTRIES.

WE HAVE CONSISTENTLY HELD THAT IT IS THE DUTY OF THE CONTRACTING OFFICER TO DETERMINE THE RESPONSIBILITY OF A BIDDER. IN MAKING THE DETERMINATION, THE CONTRACTING OFFICER IS VESTED WITH A CONSIDERABLE DEGREE OF DISCRETION. WE WILL NOT SUBSTITUTE OUR JUDGMENT IN SUCH CASES AND WILL UPHOLD THE CONTRACTING OFFICER'S DETERMINATION OF RESPONSIBILITY UNLESS IT IS SHOWN TO BE ARBITRARY, CAPRICIOUS OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. B-175611, JULY 25, 1972; B-172978, JANUARY 27, 1972. PREAWARD SURVEY OF MAC INDUSTRIES RESULTED IN A RECOMMENDATION OF COMPLETE AWARD TO THAT FIRM. THE PREAWARD SURVEY CONSIDERED THE ADEQUACY OF MAC'S PLANT FACILITIES AND EQUIPMENT AND CONCLUDED THAT THEY WERE SATISFACTORY AND THE CONTRACTING OFFICER DETERMINED THAT MAC INDUSTRIES IS A RESPONSIBLE PROSPECTIVE CONTRACTOR FOR PURPOSES OF THIS PROCUREMENT. FURTHER, MAC HAS CONFIRMED ITS BID PRICES AND DENIED THAT IT PLANNED TO USE EQUIPMENT DESIGNS OWNED BY OJUS AND CONTENDS THAT THE PROPER FORUM TO SETTLE THIS DISPUTE IS IN THE COURTS. WE HAVE REVIEWED AND CONSIDERED THE INFORMATION RELIED UPON BY THE CONTRACTING OFFICER IN MAKING THE DETERMINATION THAT MAC IS A RESPONSIBLE BIDDER FOR PURPOSES OF THE PROCUREMENT AND WE FIND NO BASIS TO QUESTION THAT DETERMINATION. THE FACT THAT OJUS HAS INITIATED LEGAL ACTION AGAINST MAC TO PROTECT WHAT IT CONTENDS ARE ITS PROPRIETARY RIGHTS IN CERTAIN MANUFACTURING EQUIPMENT - A MATTER IN WHICH THE GOVERNMENT IS NOT INVOLVED - AFFORDS NO BASIS FOR OUR OFFICE TO QUESTION THE CONTRACTING OFFICER'S PRIOR DETERMINATION THAT MAC IS A RESPONSIBLE BIDDER FOR PURPOSES OF THIS PROCUREMENT.

ACCORDINGLY, THE PROTEST IS DENIED.