B-180467, MAY 13, 1974

B-180467: May 13, 1974

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CONTRACTING OFFICER'S DETERMINATION OF BIDDER'S RESPONSIBILITY BASED ON INFORMATION IN PRE-AWARD SURVEY REPORT ON SAME BIDDER FOR PRIOR PROCUREMENT IS PROPER SINCE INFORMATION CONTAINED THEREIN WAS PREPARED ONLY 6 WEEKS BEFORE AND. BIDDER'S REFUSAL TO FURNISH FINANCIAL DATA TO PRE-AWARD SURVEY TEAM IN CONNECTION WITH PRIOR PROCUREMENT SUBSEQUENTLY CANCELLED DOES NOT ESTABLISH THAT BIDDER WOULD HAVE REFUSED TO FURNISH THE NECESSARY FINANCIAL DATA FOR CURRENT PROCUREMENT IF IT HAD BEEN REQUESTED TO DO SO. DSA500-74-B-2128 WAS ISSUED BY THE DEFENSE INDUSTRIAL SUPPLY CENTER (DISC). WHICH WAS TOTALLY RESTRICTED TO SMALL BUSINESS CONCERNS. 297.08 SHOULD HAVE BEEN ACCEPTED. 1974 THAT ORLOTRONICS WAS NOT A RESPONSIBLE BIDDER WITH RESPECT TO THE SUBJECT PROCUREMENT.

B-180467, MAY 13, 1974

1. CONTRACTING OFFICER'S DETERMINATION OF BIDDER'S RESPONSIBILITY BASED ON INFORMATION IN PRE-AWARD SURVEY REPORT ON SAME BIDDER FOR PRIOR PROCUREMENT IS PROPER SINCE INFORMATION CONTAINED THEREIN WAS PREPARED ONLY 6 WEEKS BEFORE AND, THEREFORE, COULD BE REGARDED AS CURRENTLY VALID INFORMATION WITHIN MEANING OF ASPR 1-905(I)(B). 2. BIDDER'S REFUSAL TO FURNISH FINANCIAL DATA TO PRE-AWARD SURVEY TEAM IN CONNECTION WITH PRIOR PROCUREMENT SUBSEQUENTLY CANCELLED DOES NOT ESTABLISH THAT BIDDER WOULD HAVE REFUSED TO FURNISH THE NECESSARY FINANCIAL DATA FOR CURRENT PROCUREMENT IF IT HAD BEEN REQUESTED TO DO SO. NEVERTHELESS, REASONABLE BASIS EXIST FOR NONRESPONSIBILITY DETERMINATION ON STRENGTH OF PRIOR SURVEY REPORT FINDINGS REGARDING BIDDER'S PAST PERFORMANCE RECORD, PRODUCTION CAPABILITY AND SUBCONTRACTING PROCEDURES.

TO ORLOTRONICS CORP.:

ON DECEMBER 7, 1973, INVITATION FOR BIDS (IFB) NO. DSA500-74-B-2128 WAS ISSUED BY THE DEFENSE INDUSTRIAL SUPPLY CENTER (DISC), PHILADELPHIA, PENNSYLVANIA. THE IFB, WHICH WAS TOTALLY RESTRICTED TO SMALL BUSINESS CONCERNS, SOLICITED BIDS FOR A TOTAL OF 278 EACH, BUSHING, TAPERED, ALUMINUM BRONZE, CONFORMING TO APPLICABLE MILITARY SPECIFICATION FOR DELIVERY WITHIN 120 DAYS AFTER DATE OF AWARD.

ORLOTRONICS CORPORATION (ORLOTRONICS), HAS PROTESTED THE AWARD MADE TO AERO-MISSILE COMPONENTS, INCORPORATED, UNDER THE SUBJECT IFB, CONTENDING THAT ITS LOW BID IN THE AMOUNT OF $3,297.08 SHOULD HAVE BEEN ACCEPTED.

THE CONTRACTING OFFICER DETERMINED ON JANUARY 15, 1974 THAT ORLOTRONICS WAS NOT A RESPONSIBLE BIDDER WITH RESPECT TO THE SUBJECT PROCUREMENT, AND ACCORDINGLY, REJECTED ITS BID.

THE BASIS FOR THE CONTRACTING OFFICER'S DETERMINATION WAS A NEGATIVE PRE- AWARD SURVEY ON ORLOTRONICS DATED DECEMBER 4, 1973, AND PREPARED BY DCASR IN CONNECTION WITH IFB DSA500-74-B-1351, ALSO A SMALL DOLLAR PROCUREMENT OF APPROXIMATELY $4,000, CALLING FOR UNITS OF A SPRING. THIS SURVEY WAS THE BASIS FOR A DETERMINATION OF NONRESPONSIBILITY, MADE ON DECEMBER 13, 1973, IN CONNECTION WITH THE PRIOR PROCUREMENT. THE NEGATIVE DETERMINATION WAS BASED UPON A NUMBER OF FACTORS INCLUDING ORLOTRONICS' PAST PERFORMANCE RECORD, UNSATISFACTORY PURCHASING AND SUBCONTRACTING, POOR PRODUCTION CAPABILITY, POOR ABILITY TO MEET THE REQUIRED DELIVERY SCHEDULES OF 75 DAYS AFTER DATE OF AWARD, AND ITS FINANCIAL CAPABILITY.

THE UNSATISFACTORY RATING OF FINANCIAL CAPABILITY RESULTED FROM ORLOTRONICS' FAILURE TO RESPOND TO A REQUEST ON NOVEMBER 26, 1973, BY THE PRE-AWARD SURVEY TEAM TO FURNISH VARIOUS ACCOUNTING STATEMENTS NECESSARY TO ESTABLISH FINANCIAL RESPONSIBILITY. ORLOTRONICS CONTENDS THAT IT FAILED TO PROVIDE THE REQUESTED FINANCIAL INFORMATION BECAUSE IT HAD LEARNED FROM THE BUYER THAT THE SOLICITATION WOULD BE CANCELLED. HOWEVER, THE GOVERNMENT'S BUYER, BY SWORN AFFIDAVIT, HAS DENIED FURNISHING ANY SUCH ADVICE PRIOR TO THE TIME ORLOTRONICS WAS REJECTED AS A NONRESPONSIBLE BIDDER. ALTHOUGH THE SOLICITATION WAS SUBSEQUENTLY CANCELLED, THE PROCURING ACTIVITY REPORTS THAT THE DECISION TO CANCEL WAS MADE ON DECEMBER 18, 1973, AFTER ORLOTRONICS HAD BEEN DETERMINED TO BE NONRESPONSIBLE, SINCE ALL REMAINING BIDS WERE CONSIDERED UNREASONABLE AS TO PRICE. IN THIS CONNECTION, ORLOTRONICS' BID WAS $67 PER UNIT UNDER THAT PROCUREMENT, WHILE THE NEXT HIGH BID WAS $106 PER UNIT. THEREFORE, THE CONTRACTING OFFICER MAINTAINS THAT ORLOTRONICS' REFUSAL IN THE PRIOR PROCUREMENT TO PROVIDE THE REQUESTED DOCUMENTS WHILE THE SURVEY WAS IN PROCESS COULD NOT HAVE BEEN INFLUENCED BY A SUBSEQUENT DECISION TO CANCEL THE SOLICITATION FOR WHICH THE PRE-AWARD SURVEY WAS BEING CONDUCTED.

WE HAVE CONSISTENTLY STATED THAT A CONTRACTING AGENCY IS VESTED WITH A CONSIDERABLE DEGREE OF DISCRETION IN DECIDING THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR TO PERFORM A CONTRACT. IN REVIEWING A CONTRACTING OFFICER'S JUDGMENT THAT A BIDDER IS NONRESPONSIBLE, IT IS OUR DUTY TO DETERMINE WHETHER THE RECORD REASONABLY SUPPORTS THAT JUDGMENT. 45 COMP. GEN. 4, 6-7 (1965).

THE CONTRACTING OFFICER'S DETERMINATION IN THIS CASE WAS BASED UPON A PRE -AWARD SURVEY REPORT ON THE BIDDER PREPARED 6 WEEKS BEFORE THE SUBJECT DETERMINATION WAS MADE IN CONNECTION WITH A PRIOR PROCUREMENT. THE RECORD SHOWS THAT THE SURVEY TEAM HAD RATED ORLOTRONICS UNSATISFACTORY IN THE AREAS OF PAST PERFORMANCE, PURCHASING AND SUBCONTRACTING, PRODUCTION, FINANCES, AND DELIVERY. THE TEAM REPORTED THAT A REVIEW OF ORLOTRONICS' PAST YEAR PERFORMANCE RECORD SHOWED "A TOTAL OF 15 CONTRACTS COMPLETED WITH 5 DELINQUENT - 1 FOR 16-30 DAYS, 3 FOR 30-60 DAYS; AND 1 OVER 60 DAYS. ALL DELINQUENCIES WERE CONTRACTOR RESPONSIBILITY." ORLOTRONICS' UNSATISFACTORY RATINGS IN PRODUCTION CAPABILITY AND PURCHASING AND SUBCONTRACTING WERE RELATED TO THE SURVEY TEAM'S BELIEF THAT THE CONTRACTOR WAS "INCAPABLE OF MEETING SCHEDULE REQUIREMENTS." DELIVERY OF THE PRODUCT WAS ESTIMATED IN 200 DAYS COMPARED TO THE REQUIRED 75 DAYS. FINALLY, THE BIDDER WAS RATED UNSATISFACTORY IN THE AREA OF FINANCES BECAUSE OF ITS REFUSAL TO FURNISH FINANCIAL DATA TO THE SURVEY TEAM. ALTHOUGH THE PRIOR PROCUREMENT CALLED FOR UNITS OF A SPRING RATHER THAN A BUSHING AND REQUIRED DELIVERY IN 75 DAYS RATHER THAN 120 DAYS, THE CONTRACTING OFFICER CONCLUDED THAT THE NEGATIVE SURVEY FINDINGS WERE RELEVANT TO THE INSTANT PROCUREMENT AND CONCLUSIVE AS TO THE BIDDER'S RESPONSIBILITY BECAUSE THE DATE OF THE SURVEY "WAS SO CLOSE AS TO REASONABLY WARRANT THE CONTRACTING OFFICER'S RELIANCE ON THE INFORMATION INCLUDED IN SAID SURVEY."

IN REBUTTAL, ORLOTRONICS POINTS OUT THAT THE PRIOR PROCUREMENT WAS SUBSEQUENTLY CANCELLED AND STATES THAT ITS REFUSAL TO FURNISH FINANCIAL DATA FOR THAT PROCUREMENT WAS DUE TO ITS CANCELLATION AND NOT BECAUSE THE BIDDER WAS FINANCIALLY NONRESPONSIBLE. ORLOTRONICS CONTENDS THAT EACH PROCUREMENT SHOULD "STAND ON ITS OWN MERITS" AND THAT THE BIDDER SHOULD HAVE BEEN JUDGED ON ITS ABILITY TO FURNISH THE MATERIAL REQUIRED BY THE INSTANT PROCUREMENT.

WE BELIEVE THAT THE SURVEY TEAM REPORT WAS PERTINENT HERE AND THAT ITS VALIDITY HAS NOT BEEN SUCCESSFULLY CHALLENGED. ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-905.1(B) REQUIRES MAXIMUM PRACTICABLE USE OF CURRENTLY VALID INFORMATION. ALTHOUGH 1-905.2 PROVIDES THAT INFORMATION REGARDING FINANCIAL RESOURCES AND PERFORMANCE CAPABILITY SHALL BE OBTAINED ON AS CURRENT A BASIS AS FEASIBLE WITH RELATION TO THE AWARD DATE, WE THINK THAT THE INFORMATION OBTAINED IN CONNECTION WITH A PRIOR PROCUREMENT ONLY 6 WEEKS BEFORE THE SUBJECT DETERMINATION WAS MADE WAS CURRENTLY VALID INFORMATION WHICH COULD BE CONSIDERED BY THE CONTRACTING OFFICER. FURTHERMORE, ALTHOUGH THE PRIOR PROCUREMENT WAS UNRELATED TO THE INSTANT PROCUREMENT, WE HAVE NO BASIS TO DISAGREE WITH THE CONTRACTING OFFICER'S JUDGMENT THAT THE FINDINGS CONTAINED IN THE SURVEY REPORT WERE RELEVANT TO THE INSTANT PROCUREMENT.

IN REACHING THIS CONCLUSION WE ARE NOT UNMINDFUL OF ORLOTRONICS' EXPLANATION AS TO WHY IT REFUSED TO FURNISH FINANCIAL DATA TO THE SURVEY TEAM FOR THE PRIOR PROCUREMENT.

ALTHOUGH WE DO NOT FIND ORLOTRONICS' EXPLANATION OF ITS REFUSAL TO FURNISH THE REQUESTED INFORMATION VERY CONVINCING IN VIEW OF THE REPORTED FACTS, WE ACKNOWLEDGE THE POSSIBILITY THAT ORLOTRONICS MIGHT HAVE BEEN WILLING TO FURNISH THE NECESSARY FINANCIAL DATA TO THE AGENCY FOR THIS PROCUREMENT IF IT HAD BEEN REQUESTED TO DO SO BY THE CONTRACTING OFFICER. HOWEVER, THE RECORD SHOWS THAT ORLOTRONICS WAS FOUND DEFICIENT IN PRODUCTION CAPABILITY, PAST PERFORMANCE, AND SUBCONTRACTING PROCEDURES AS WELL AS IN THE FINANCIAL AREA. THEREFORE, EVEN IF WE DISREGARD THE FACT THAT ORLOTRONICS WAS FOUND TO BE FINANCIALLY NONRESPONSIBLE BECAUSE OF ITS PRIOR REFUSAL TO FURNISH FINANCIAL DATA, WE THINK THE RECORD CONTAINS AMPLE SUPPORT FOR THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILTY BASED ON ALL THE INFORMATION CONTAINED IN THE SURVEY REPORT.

ACCORDINGLY, THE PROTEST IS DENIED.