B-181076, JUN 5, 1974

B-181076: Jun 5, 1974

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PROTESTER'S DISAGREEMENT WITH CONTRACTING AGENCY'S DETERMINATION THAT LOW BIDDER WHO HAD BEEN IN CHAPTER XI BANKRUPTCY IS RESPONSIBLE CONTRACTOR DOES NOT PROVIDE BASIS FOR GAO CONSIDERING MATTER. DAAA09-74-R-0012 WAS ISSUED BY HEADQUARTERS. OFFERS WERE RECEIVED FROM REDM CORPORATION. ALL FIVE FIRMS WERE CONTACTED BY TELEPHONE AND ADVISED THAT ONLY BULOVA WATCH COMPANY AND REDM CORPORATION WOULD BE AWARDED CONTRACTS UNDER THE SUBJECT RFP. THE RECORD INDICATES THAT WHEN A REPRESENTATIVE OF WILKINSON WAS INFORMED BY A GOVERNMENT CONTRACT SPECIALIST THAT A CONTRACT WOULD BE AWARDED TO REDM. HE EXPRESSED AN INTENT TO PROTEST THE MAKING OF AN AWARD TO THAT FIRM ON THE GROUND THAT THE COMPANY WAS IN CHAPTER XI BANKRUPTCY.

B-181076, JUN 5, 1974

PROTESTER'S DISAGREEMENT WITH CONTRACTING AGENCY'S DETERMINATION THAT LOW BIDDER WHO HAD BEEN IN CHAPTER XI BANKRUPTCY IS RESPONSIBLE CONTRACTOR DOES NOT PROVIDE BASIS FOR GAO CONSIDERING MATTER, SINCE NO FRAUD HAS BEEN ALLEGED OR DEMONSTRATED.

TO WILKINSON MANUFACTURING CO.:

REQUEST FOR PROPOSALS (RFP) NO. DAAA09-74-R-0012 WAS ISSUED BY HEADQUARTERS, UNITED STATES ARMY ARMAMENT COMMAND, DEPARTMENT OF THE ARMY, ROCK ISLAND, ILLINOIS, TO PROCURE FUZE, PD M524A6, MPTS. OFFERS WERE RECEIVED FROM REDM CORPORATION, BULOVA WATCH COMPANY, WILKINSON MANUFACTURING COMPANY, AND TWO OTHER FIRMS. ON MARCH 11, 1974, ALL FIVE FIRMS WERE CONTACTED BY TELEPHONE AND ADVISED THAT ONLY BULOVA WATCH COMPANY AND REDM CORPORATION WOULD BE AWARDED CONTRACTS UNDER THE SUBJECT RFP. THE RECORD INDICATES THAT WHEN A REPRESENTATIVE OF WILKINSON WAS INFORMED BY A GOVERNMENT CONTRACT SPECIALIST THAT A CONTRACT WOULD BE AWARDED TO REDM, HE EXPRESSED AN INTENT TO PROTEST THE MAKING OF AN AWARD TO THAT FIRM ON THE GROUND THAT THE COMPANY WAS IN CHAPTER XI BANKRUPTCY. THE GOVERNMENT CONTRACT SPECIALIST IMMEDIATELY CHECKED THE STATUS OF REDM AND THEN ADVISED WILKINSON BY TELEPHONE THAT REDM HAD BEEN REMOVED FROM CHAPTER XI OF THE BANKRUPTCY COURT.

IN A TELEGRAM DATED MARCH 14, 1974, WILKINSON STATED THAT ACCORDING TO DUN AND BRADSTREET, REDM WAS STILL IN CHAPTER XI OF THE BANKRUPTCY COURT AND HAS NEVER BEEN RELEASED; THAT THE CORPORATION HAS A "NEGATIVE DEFICIT"; AND THAT THE CORPORATION HAS A ZERO CREDIT RATING.

BY LETTER DATED MARCH 20, 1974, THE ARMY RESPONDED TO THE PROTEST. JUSTIFIED THE CONTRACT AWARD ON THE GROUNDS THAT REDM, BY GAINING THE APPROVAL OF THE UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK, OF ITS PROPOSED PLAN OF ARRANGEMENT FOR DEBT PAYMENT ON JULY 31, 1973, HAD IN EFFECT, REMOVED ITSELF FROM CHAPTER XI BANKRUPTCY; THAT THE CORPORATION WAS NOT IN A LOSS POSITION AT THE TIME OF THE PREAWARD SURVEY CONDUCTED PRIOR TO AWARD OF THE CONTRACT; AND THAT THE FACT DUN AND BRADSTREET LISTS REDM AS HAVING NO CREDIT RATING IS NO BASIS FOR STATING THAT THE CORPORATION HAS A ZERO CREDIT RATING.

THE DETERMINATION OF A PROPOSED CONTRACTOR'S RESPONSIBILITY IS LARGELY WITHIN THE DISCRETION OF THE CONTRACTING OFFICER. THE CONTRACTING ACTIVITY MUST HANDLE THE DAY-TO-DAY ADMINISTRATION OF THE CONTRACT AND BEAR THE BRUNT OF ANY DIFFICULTIES EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY. IF, PURSUANT TO THE APPLICABLE REGULATIONS, THE CONTRACTING OFFICER FINDS THE PROPOSED CONTRACTOR RESPONSIBLE, WE DO NOT BELIEVE THE FINDING SHOULD BE DISTURBED EXCEPT ON THE BASIS OF FRAUD. NO FRAUD HAVING BEEN ALLEGED OR DEMONSTRATED, WE MUST DECLINE TO FURTHER CONSIDER THE MATTER.