B-181423, DEC 17, 1974

B-181423: Dec 17, 1974

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DETERMINATION THAT LOW OFFEROR IS NONRESPONSIBLE DUE TO UNSATISFACTORY QUALITY ASSURANCE CAPABILITY REPORTED BY PREAWARD SURVEY TEAM OF DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT. WILL NOT BE DISTURBED OR QUESTIONED WHERE OFFEROR HAS NOT SHOWN DETERMINATION TO BE IN ERROR. IT CANNOT BE CONCLUDED THAT DETERMINATION WAS UNREASONABLE. 2. IT WAS WITHIN DISCRETION COMMITTED TO PROCURING AGENCY BY ASPR SEC. 1- 907 (1973 ED.). NOT TO DISCUSS NEGATIVE PREAWARD SURVEY FINDINGS UPON WHICH DETERMINATION OF NONRESPONSIBILITY IS FOUNDED WITH OFFEROR PRIOR TO AWARD. 3. ALTHOUGH PROTESTER WAS SMALL BUSINESS FIRM. THERE WAS NO REQUIREMENT FOR PROCURING AGENCY TO REFER MATTER OF PROTESTER'S RESPONSIBILITY TO SBA FOR CONSIDERATION UNDER THE CERTIFICATE OF COMPETENCY PROCEDURES SINCE TOTAL AMOUNT OF OFFER WAS LESS THAN $10.

B-181423, DEC 17, 1974

1. DETERMINATION THAT LOW OFFEROR IS NONRESPONSIBLE DUE TO UNSATISFACTORY QUALITY ASSURANCE CAPABILITY REPORTED BY PREAWARD SURVEY TEAM OF DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT, UPON WHICH CONTRACTING OFFICER RELIED IN DETERMINATION OF NONRESPONSIBILITY UNDER STANDARDS OF ASPR, WILL NOT BE DISTURBED OR QUESTIONED WHERE OFFEROR HAS NOT SHOWN DETERMINATION TO BE IN ERROR, AND IT CANNOT BE CONCLUDED THAT DETERMINATION WAS UNREASONABLE. 2. IT WAS WITHIN DISCRETION COMMITTED TO PROCURING AGENCY BY ASPR SEC. 1- 907 (1973 ED.), NOT TO DISCUSS NEGATIVE PREAWARD SURVEY FINDINGS UPON WHICH DETERMINATION OF NONRESPONSIBILITY IS FOUNDED WITH OFFEROR PRIOR TO AWARD. 3. ALTHOUGH PROTESTER WAS SMALL BUSINESS FIRM, THERE WAS NO REQUIREMENT FOR PROCURING AGENCY TO REFER MATTER OF PROTESTER'S RESPONSIBILITY TO SBA FOR CONSIDERATION UNDER THE CERTIFICATE OF COMPETENCY PROCEDURES SINCE TOTAL AMOUNT OF OFFER WAS LESS THAN $10,000. SEE ASPR SEC. 1-705.4(C) (1973 ED.).

S.W. ELECTRONICS AND MANUFACTURING CORP.:

ON MARCH 18, 1974, REQUEST FOR PROPOSALS (RFP) F34601-74-R-5665 WAS ISSUED BY TINKER AIR FORCE BASE, OKLAHOMA FOR A QUANTITY OF RECEIVER MOUNT ASSEMBLIES FOR USE ON THE A-7D AIRCRAFT. OFFERS WERE RECEIVED FROM TWO FIRMS. S.W. ELECTRONICS AND MANUFACTURING CORP. (S.W.), A SMALL BUSINESS CONCERN, WAS LOW WITH AN OFFER OF $6,708.

A PREAWARD SURVEY WAS CONDUCTED BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD), CAMDEN, NEW JERSEY. THE REPORT SUBMITTED BY DCASD TO THE CONTRACTING OFFICER ON MAY 17, 1974, RECOMMENDED THAT NO AWARD BE MADE TO S.W. SINCE THE SURVEY REVEALED THAT S.W. WAS UNSATISFACTORY IN THE AREA OF QUALITY ASSURANCE CAPABILITY.

BASED UPON THE REPORT, THE CONTRACTING OFFICER DETERMINED THAT S.W. WAS A NONRESPONSIBLE OFFEROR. SINCE THE TOTAL AMOUNT OF THE OFFER WAS LESS THAN $10,000, THE CONTRACTING OFFICER DID NOT FORWARD THE MATTER TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CONSIDERATION UNDER THE CERTIFICATE OF COMPETENCY (COC) PROCEDURES.

AWARD WAS MADE TO RCA CORPORATION AND S.W. WAS NOTIFIED OF THE AWARD BY LETTER DATED MAY 30, 1974. BY LETTER DATED JUNE 3, S.W. FILED A PROTEST WITH GAO.

S.W. CONTENDS (1) THAT THE PREAWARD SURVEY REPORT WAS ARBITRARY AND CAPRICIOUS; (2) THAT S.W. SHOULD HAVE BEEN GIVEN THE OPPORTUNITY TO RESPOND TO THE NEGATIVE PREAWARD SURVEY PRIOR TO AWARD OF THE CONTRACT; AND (3) THAT S.W. SHOULD HAVE BEEN GIVEN THE OPPORTUNITY TO OBTAIN A COC FROM SBA PRIOR TO AWARD OF THE CONTRACT.

DCAS PREAWARD SURVEYS ARE GENERALLY MADE BY A TEAM COMPRISED OF TECHNICAL REPRESENTATIVES IN THE AREAS TO BE SURVEYED. THE RESULTS OF THEIR INDIVIDUAL INVESTIGATIONS ARE COMPILED AND FORWARDED TO A PREAWARD MONITOR, WITH RECOMMENDATIONS IN THEIR RESPECTIVE AREAS. THE PREAWARD FINDINGS AND RECOMMENDATIONS ARE THEN SUBJECTED TO A SUPERVISORY REVIEW AND ULTIMATELY ARE EXAMINED BY A PREAWARD SURVEY BOARD. THE FINAL REPORT SUBMITTED TO THE CONTRACTING OFFICER REPRESENTS THE COLLECTIVE JUDGMENTS AND RECOMMENDATIONS OF THE PARTICULAR DCAS REGION. HOWEVER, THE FINAL DETERMINATION REGARDING THE PROPOSED CONTRACTOR'S RESPONSIBILITY STILL RESTS WITH THE CONTRACTING OFFICER, WHO EVALUATES THE RECOMMENDATIONS CONTAINED IN THE PREAWARD SURVEY REPORT, TOGETHER WITH OTHER INFORMATION AVAILABLE TO HIM.

ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 1-902 AND SEC. 1 903 (1973 ED.) SET FORTH THE GENERAL POLICY AND THE MINUMUM STANDARDS FOR MAKING A DETERMINATION OF RESPONSIBILITY OF PROSPECTIVE CONTRACTORS. UNDER ASPR SEC. 1-902, THE FOLLOWING GUIDANCE IS GIVEN TO THE CONTRACTING OFFICER:

"*** THE CONTRACTING OFFICER SHALL MAKE A DETERMINATION OF NONRESPONSIBILITY IF *** THE INFORMATION *** OBTAINED DOES NOT INDICATE CLEARLY THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE. RECENT UNSATISFACTORY PERFORMANCE, IN EITHER QUALITY OR TIMELINESS OF DELIVERY, WHETHER OR NOT DEFAULT PROCEEDINGS WERE INSTITUTED, IS AN EXAMPLE OF A PROBLEM WHICH THE CONTRACTING OFFICER MUST CONSIDER AND RESOLVE AS TO ITS IMPACT ON THE CURRENT PROCUREMENT PRIOR TO MAKING AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY. ***"

UNDER ASPR SEC. 1-903.1 A PROSPECTIVE CONTRACTOR MUST:

"(II) BE ABLE TO COMPLY WITH THE REQUIRED OR PROPOSED DELIVERY OR PERFORMANCE SCHEDULE, TAKING INTO CONSIDERATION ALL EXISTING BUSINESS COMMITMENTS, COMMERCIAL AS WELL AS GOVERNMENTAL. ***"

THE RESPONSIBILITY OF PROSPECTIVE GOVERNMENT CONTRACTORS IS A QUESTION OF FACT TO BE DETERMINED BY THE CONTRACTING OFFICER BEFORE AN AWARD IS MADE AND NECESSARILY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION. THEREFORE, WE HAVE CONSISTENTLY STATED THAT SUCH DETERMINATIONS WILL NOT BE QUESTIONED UNLESS FOUND TO BE UNREASONABLE. COMP. GEN. 4 (1965); 51 COMP. GEN. 448 (1972) AND B-178596, AUGUST 21, 1973.

S.W. CONTENDS THAT THE PREAWARD SURVEY TEAM GAVE NO CONSIDERATION TO ITS PREVIOUS EXPERIENCE IN MANUFACTURING IDENTICAL EQUIPMENT FOR THE AIR FORCE AND OTHER GOVERNMENT AGENCIES. HOWEVER, THE RECORD SHOWS THAT THE SURVEY TEAM DID TAKE INTO ACCOUNT S.W.'S PAST PERFORMANCE OF GOVERNMENT CONTRACTS. THE SURVEY TEAM FOUND THAT, WITH REFERENCE TO CONTRACT N00383- 73-C-3309, S.W. HAD ISSUED A LETTER OF INTENT CONCERNING QUALITY ASSURANCE IN FEBRUARY 1973, AND HAD NOT FULFILLED ITS COMMITMENTS IN ACCORDANCE WITH THE TERMS OF THAT LETTER. IN ADDITION, WITH REFERENCE TO CONTRACT DAAB05- 73-C-1008, THE SURVEY TEAM FOUND THAT QUALITY ASSURANCE AND STAFF PERSONNEL HAD DETERMINED THAT THE WRITTEN PROCEDURES FOR THIS CONTRACT WERE INADEQUATE AND ISSUED A QUALITY DEFICIENCY RECORD IN JANUARY 1974. AS OF THE DATE OF THE PREAWARD SURVEY HERE, ON MAY 15, 1974, S.W. HAD NOT SUBMITTED ITS REVISED PROCEDURES FOR REVIEW OR ANSWERED THE QUALITY DEFICIENCY RECORD. FURTHERMORE, THE SURVEY TEAM FOUND THAT, IN FEBRUARY 1974, THE METROLOGY SPECIALIST RECOMMENDED THAT CORRECTIVE ACTION BE TAKEN TO IMPROVE S.W.'S CALIBRATION SYSTEM AND THAT S.W. FAILED TO TAKE ADEQUATE CORRECTIVE ACTION.

A CAREFUL EXAMINATION OF ASPR SEC. 1-902 DISCLOSES THAT ANY DOUBT CAUSED BY PAST PERFORMANCE (OR OTHER CRITERIA), WHETHER OR NOT RESULTING IN A DEFAULT TERMINATION, WHICH CANNOT BE RESOLVED AFFIRMATIVELY, REQUIRES A DETERMINATION OF NONRESPONSIBILITY. IN LIGHT OF S.W.'S PAST PERFORMANCE RECORD AS DETAILED ABOVE, WE CAN UNDERSTAND HOW A CONTRACTING OFFICER MIGHT HAVE HAD DOUBTS ABOUT S.W.'S ABILITY TO PERFORM THE IMMEDIATE CONTRACT SATISFACTORILY. WHILE S.W. HAS EXPRESSED THE OPPOSITE VIEW, SUCH ASSURANCE ALONE WITHOUT SUFFICIENT EVIDENCE CONTRADICTING THE BASIS OF THE DETERMINATION AFFORD NO GROUNDS TO DISTURB THE NEGATIVE FINDINGS MADE. CONSEQUENTLY, ON THE BASIS OF THE PRESENT RECORD, GAO CANNOT CONCLUDE THAT THE DETERMINATION OF S.W.'S LACK OF RESPONSIBILITY WAS UNREASONABLE, AND THEREFORE, THE DETERMINATION WILL NOT BE DISTURBED OR QUESTIONED. SEE MATTER OF SOLAR LABORATORIES, INC., B-179731, FEBRUARY 25, 1974; AND MATTER OF CONTRACT MAINTENANCE, INC.; MERCHANTS BUILDING MAINTENANCE COMPANY; B-181581, OCTOBER 8, 1974.

S.W. CONTENDS THAT IT SHOULD HAVE BEEN GIVEN THE OPPORTUNITY TO RESPOND TO THE NEGATIVE PREAWARD SURVEY PRIOR TO AWARD OF THE CONTRACT. ASPR SEC. 1-907 (1973 ED.) PERMITS PREAWARD DATA TO BE DISCUSSED WITH A PROSPECTIVE CONTRACTOR "AS DETERMINED NECESSARY BY THE PURCHASING OFFICE," PRIOR TO MAKING A DETERMINATION OF RESPONSIBILITY. SINCE THE LANGUAGE OF THIS REGULATION IS PERMISSIVE, RATHER THAN MANDATORY, THE CONTRACTING OFFICER'S DETERMINATION NOT TO DISCUSS THE PREAWARD SURVEY WITH S.W. DOES NOT APPEAR TO HAVE BEEN AN IMPROPER EXERCISE OF THE DISCRETION GRANTED HIM BY THE REGULATION. IT SHOULD BE NOTED THAT, THE PROCURING AGENCY FURNISHED S.W. WITH A COPY OF THE PREAWARD SURVEY REPORT SUBSEQUENT TO AWARD AND THAT S.W. HAS DECLINED TO SUBMIT ANY COMMENTS ON THIS REPORT TO OUR OFFICE.

IN ADDITION, S.W. CONTENDS THAT IT SHOULD HAVE BEEN GIVEN THE OPPORTUNITY TO SEEK A COC PRIOR TO AWARD OF THE CONTRACT. ALTHOUGH S.W. IS A SMALL BUSINESS CONCERN, THE CONTRACTING OFFICER WAS NOT REQUIRED TO REFER THE MATTER OF S.W.'S NONRESPONSIBILITY TO THE SBA UNDER THE COC PROCEDURES SINCE THE TOTAL AMOUNT OF THE OFFER WAS LESS THAN $10,000. SEE ASPR SEC. 1-705.4(C) (1973 ED.).

FOR THE REASONS SET FORTH ABOVE, THE PROTEST OF S.W. IS DENIED.