B-179723, MAR 12, 1974

B-179723: Mar 12, 1974

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AGENCY'S DETERMINATION THAT PROTESTER WAS NONRESPONSIBLE. WAS NOT ARBITRARY. WILL NOT BE DISTURBED. NONREFERRAL OF NONRESPONSIBILITY DETERMINATION TO SBA FOR REVIEW IS PROPER WHERE IT WAS DETERMINED THAT IMMEDIATE AWARD WAS NECESSARY TO INSURE URGENTLY NEEDED CONTRACT PERFORMANCE. N66314-73-B-0882 WAS ISSUED ON MAY 31. THE OPENING OF BIDS WAS EXTENDED TO JULY 6. THE WORK ON ITEM 0001 WAS RESCHEDULED TO BEGIN ON AUGUST 28. THE WORK ON ITEM 0002 WAS RESCHEDULED TO BEGIN ON SEPTEMBER 19. THE FOLLOWING THREE TIMELY BIDS WERE RECEIVED: THE ASTRO-PAK CORPORATION. PREAWARD SURVEYS WERE REQUESTED ON ASTRO PAK AND CAL-CHEM. THE CONTRACTING OFFICER DETERMINED THAT CAL-CHEM WAS NONRESPONSIBLE AND THUS REJECTED ITS BID.

B-179723, MAR 12, 1974

AGENCY'S DETERMINATION THAT PROTESTER WAS NONRESPONSIBLE, BASED ON PRE- AWARD SURVEY WHICH FOUND PROTESTER DEFICIENT IN 8 OF 10 AREAS SURVEYED, WAS NOT ARBITRARY, CAPRICIOUS, OR UNSUPPORTED BY SUBSTANTIAL EVIDENCE, AND, THUS, WILL NOT BE DISTURBED. NONREFERRAL OF NONRESPONSIBILITY DETERMINATION TO SBA FOR REVIEW IS PROPER WHERE IT WAS DETERMINED THAT IMMEDIATE AWARD WAS NECESSARY TO INSURE URGENTLY NEEDED CONTRACT PERFORMANCE; ASPR 1-705.4(C)(IV) PERMITS NONREFERRAL IN SUCH CIRCUMSTANCES.

TO CAL-CHEM CLEANING COMPANY, INCORPORATED:

INVITATION FOR BIDS (IFB) NO. N66314-73-B-0882 WAS ISSUED ON MAY 31, 1973, BY THE NAVAL REGIONAL PROCUREMENT OFFICE, OAKLAND, CALIFORNIA, FOR THE PROCUREMENT OF SERVICES AND MATERIALS TO EFFECT A PARTIAL OVERHAUL OF THE USS THOMAS A. EDISON. THE SPECIFICATIONS REQUIRE THE CLEANING AND PRESERVATION OF 100 HIGH PRESSURE AIR FLASKS AND 16 MISSILE TUBE UNDERHATCH PRESSURIZATION MANIFOLDS ON THE VESSEL. BY AMENDMENT DATED JUNE 19, 1973, THE OPENING OF BIDS WAS EXTENDED TO JULY 6, 1973, THE WORK ON ITEM 0001 WAS RESCHEDULED TO BEGIN ON AUGUST 28, 1973, AND TO END ON DECEMBER 31, 1973, AND THE WORK ON ITEM 0002 WAS RESCHEDULED TO BEGIN ON SEPTEMBER 19, 1973, AND TO TERMINATE ON NOVEMBER 26, 1973. THE FOLLOWING THREE TIMELY BIDS WERE RECEIVED: THE ASTRO-PAK CORPORATION, $200,000; HAMILTON-STANDARD, $312,888; AND THE CAL-CHEM COMPANY, $152,630. PREAWARD SURVEYS WERE REQUESTED ON ASTRO PAK AND CAL-CHEM, AND THE RESULTING SURVEY REPORTS RECOMMENDED THAT AWARD BE MADE TO ASTRO-PAK, AND THAT NO AWARD BE MADE TO CAL-CHEM. BASED ON THESE SURVEY REPORTS AND RECOMMENDATIONS, THE CONTRACTING OFFICER DETERMINED THAT CAL-CHEM WAS NONRESPONSIBLE AND THUS REJECTED ITS BID. ALTHOUGH CAL-CHEM QUALIFIED AS A SMALL BUSINESS, THE CONTRACTING OFFICER DETERMINED PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-705.4(C)(IV), THAT THE URGENCY OF THE PROCUREMENT PREVENTED REFERRAL TO THE SMALL BUSINESS ADMINISTRATION (SBA) OF HIS DETERMINATION OF CAL-CHEM'S NONRESPONSIBILITY FOR CERTIFICATE OF COMPETENCY CONSIDERATION. ASTRO-PAK WAS DETERMINED TO BE THE LOW RESPONSIVE, RESPONSIBLE BIDDER, AND AN AWARD WAS MADE TO IT ON AUGUST 27, 1973.

WHEN INFORMED OF THE REJECTION OF ITS BID BY LETTER DATED SEPTEMBER 7, 1973, CAL-CHEM PROTESTED TO THIS OFFICE BY LETTER DATED SEPTEMBER 9, 1973. CAL-CHEM STATED THAT IT DID HAVE THE CAPABILITY TO PERFORM THE SERVICES IN QUESTION, THAT IT WAS THE LOW BIDDER, AND THAT IT SHOULD HAVE RECEIVED THE AWARD. THE SUBSTANCE OF CAL-CHEM'S PROTEST IS THAT IT HAS THE CAPABILITY AND THE EXPERTISE TO PERFORM THIS CONTRACT. IT STATES THAT IN THE PAST IT HAS SATISFACTORILY CLEANED AND CHEMICALLY PROCESSED COMPONENTS AND PARTS TO SPECIAL AND HIGH LEVELS OF CLEANLINESS. CAL-CHEM CONTENDS THAT IT IS SATISFYING MILITARY TECHNICAL ORDERS AND SPECIFICATIONS FOR A DIVERSE RANGE OF CUSTOMERS, INCLUDING THE GOVERNMENT.

FOR REASONS DISCUSSED BELOW, THE PROTEST IS DENIED.

IN ITS REPORT TO THIS OFFICE THE NAVY STATES THAT AS THE RESULT OF A TECHNICAL REVIEW OF THE CAL-CHEM BID BY THE REQUIRING ACTIVITY, IT WAS CONCLUDED THAT THE PROTESTER DID NOT UNDERSTAND THE SCOPE OF THE JOB AND THAT ITS BID DID NOT MEET ALL THE REQUIREMENTS OF THE IFB. THIS REVIEW REPORT POINTED OUT THAT CAL-CHEM FAILED TO PROVIDE THE DETAILED PROCEDURE, EQUIPMENT LIST, AND MANNING PLAN AS REQUIRED BY THE SPECIFICATIONS; THAT CAL-CHEM DID NOT SUBMIT THE REQUIRED LIST OF PAINTS AND HYDROSTATIC TEST EQUIPMENT TO BE USED; THAT CAL-CHEM FAILED TO DELINEATE ITS FIBER OPTIC BORE SCOPE; AND THAT CAL-CHEM PROVIDED NO ASSURANCE THAT ITS INTERNAL SERVICE PROCEDURES WOULD CONFORM TO THE SPECIFIED PROCEDURES. ALTHOUGH THE REQUIRING ACTIVITY RECOMMENDED REJECTION OF CAL-CHEM'S BID, THE CONTRACTING OFFICER DECIDED TO FIRST OBTAIN A PREAWARD SURVEY.

THE PREAWARD SURVEY TEAM RATED THE PROTESTER UNSATISFACTORY IN EIGHT OF THE TEN AREAS INVESTIGATED, AND THE PRE-AWARD SURVEY REVIEW BOARD APPROVED THE SURVEY AS SUBMITTED. THE PROTESTER WAS NOT CONSIDERED TECHNICALLY CAPABLE BECAUSE IT DID NOT OBTAIN AND REVIEW THE DRAWINGS REQUIRED TO ASSESS THE JOB'S TECHNICAL REQUIREMENTS AND BECAUSE IT DID NOT APPEAR TO BE TECHNICALLY KNOWLEDGEABLE OF THE CHEMICALS SPECIFIED. CAL-CHEM'S PRODUCTION CAPABILITY WAS UNSATISFACTORY BECAUSE IT HAD NOT PREPARED PRODUCTION CONTROLS AND SCHEDULING, BECAUSE ITS MANNING PLAN AS SUBMITTED DID NOT EXHIBIT THE REQUIRED DETAILED BREAKDOWN, AND BECAUSE CAL-CHEM DID NOT POSSESS WRITTEN PROCEDURES WHICH CONFORMED TO THOSE SPECIFIED IN SECTION F OF THE IFB. IN RELATION TO PURCHASING AND SUBCONTRACTING, THE SURVEY TEAM REPORTED THAT NO FIRM QUOTES OR CONTRACTS WERE ESTABLISHED BY THE PROTESTER FOR CHEMICALS, PAINTS AND VARIOUS OTHER MATERIALS NECESSARY TO FABRICATE SPECIAL EQUIPMENT. AN EXAMINATION OF THE INFORMATION PROVIDED RELATING TO CAL-CHEM'S PERFORMANCE RECORD INDICATED THAT WHILE IT HAD SOME EXPERIENCE IN SEVERAL AREAS OF THE REQUIRED WORK, CAL-CHEM HAD NEVER BEFORE PERFORMED ALL OF THE TASKS OR SIMILAR WORK ON A SHIP. ADDITION, NEGATIVE DETERMINATIONS WERE MADE WITH RESPECT TO ACCOUNTING SYSTEM, SECURITY CLEARANCE, LABOR RESOURCES, AND ABILITY TO MEET THE PERFORMANCE SCHEDULE. THE NAVY CONTENDS THAT THE PREAWARD SURVEY WAS THOROUGH AND ACCURATE, AND THAT THE CONTRACTING OFFICER ACTED PROPERLY WHEN HE DETERMINED THE PROTESTER TO BE NONRESPONSIBLE ON THE BASIS THEREOF.

PURSUANT TO ASPR 1-902 AND 1-904.1, A CONTRACTING OFFICER CANNOT AWARD A CONTRACT TO AN INDIVIDUAL OR FIRM UNTIL HE FIRST MAKES A DETERMINATION THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE. TO BE DETERMINED RESPONSIBLE, A PROSPECTIVE CONTRACTOR MUST BE ABLE TO COMPLY WITH THE PROPOSED OR REQUIRED DELIVERY SCHEDULE AND MUST HAVE A SATISFACTORY RECORD OF PERFORMANCE AND INTEGRITY. ASPR 1-903.1. MOREOVER, HE MUST HAVE ADEQUATE FINANCIAL RESOURCES, THE NECESSARY ORGANIZATION, EXPERIENCE, OPERATIONAL CONTROLS AND TECHNICAL SKILLS, AND THE NECESSARY PRODUCTION, CONSTRUCTION, AND TECHNICAL EQUIPMENT AND FACILITIES, OR THE ABILITY TO OBTAIN THEM. ASPR 1-903.2. THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR IS A QUESTION OF FACT TO BE DETERMINED BY THE CONTRACTING OFFICER AND NECESSARILY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION. WHERE THERE IS NO CONVINCING EVIDENCE THAT THIS DETERMINATION WAS ARBITRARY, CAPRICIOUS, OR NOT BASED ON SUBSTANTIAL EVIDENCE, WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER. 51 COMP. GEN. 703, 709 (1972); B-173915, DECEMBER 21, 1971. IN MAKING A DETERMINATION OF RESPONSIBILITY, THE CONTRACTING OFFICER IS ENTITLED TO RELY ON THE RESULTS OF A PREAWARD SURVEY. ASPR 1-905.4(A). BASED ON OUR REVIEW OF THE PREAWARD SURVEY OF CAL-CHEM, WE BELIEVE IT JUSTIFIED THE CONTRACTING OFFICER'S DETERMINATION THAT CAL-CHEM WAS NOT RESPONSIBLE. ACCORDINGLY, THERE IS NO BASIS FOR OUR OFFICE TO OBJECT TO THE CONTRACTING OFFICER'S ACTION IN DECLARING CAL-CHEM NONRESPONSIBLE. B 176342, JANUARY 3, 1973.

IN REFERENCE TO THE CONTRACTING OFFICER'S NONREFERRAL OF HIS DETERMINATION OF NONRESPONSIBILITY TO THE SBA FOR THE POSSIBLE ISSUANCE OF A CERTIFICATE OF COMPETENCY (COC), ASPR 1-705.4(C)(IV) PROVIDES THAT REFERRAL NEED NOT BE MADE WHERE THE AWARD MUST BE MADE WITHOUT DELAY; PROVIDING THAT THE DETERMINATION IS CERTIFIED IN WRITING, IS APPROVED BY THE CHIEF OF THE PURCHASING OFFICE, THE CONTRACT FILE INCLUDES SUCH CERTIFICATION AND SUPPORTING DOCUMENTATION, AND A COPY IS PROMPTLY FURNISHED TO THE SBA. THE SURVEY RESULTS OF CAL-CHEM WERE RETURNED TO THE CONTRACTING OFFICE ON AUGUST 27, 1973, ONE DAY BEFORE CONTRACT PERFORMANCE WAS REQUIRED TO BEGIN. REFERRAL OF THIS DETERMINATION OF NONRESPONSIBILITY, MADE ON AUGUST 27, 1973, TO THE SBA WOULD HAVE REQUIRED DELAYING CONTRACT PERFORMANCE UNTIL THE SBA COULD HAVE RULED ON THE MATTER. AS A DELAY IN CLEANING THE AIR FLASKS WOULD HAVE CAUSED A DELAY IN COMPLETION OF THE OVERHAUL ITSELF, RESULTING IN A COST OF APPROXIMATELY $100,000 PER WEEK, WE BELIEVE THAT THE REQUISITE URGENCY HAS BEEN SHOWN. MOREOVER, WE NOTE THAT THE CERTIFICATE OF URGENCY WAS APPROVED BY THE CHIEF OF THE PROCUREMENT OFFICE, AND THAT THE REGIONAL SBA OFFICE WAS INFORMED OF THIS ACTION AND INDICATED ITS APPROVAL. THEREFORE, WE CANNOT OBJECT TO THE CONTRACTING OFFICER'S DECISION NOT TO REFER THE MATTER TO THE SBA. B-179025, OCTOBER 26, 1973; B-179073, SEPTEMBER 24, 1973.

ACCORDINGLY, THE PROTEST IS DENIED.