Fabritech, Inc.
Highlights
Fabritech, Inc., a small business, protests the award of a contract to The Purdy Corporation under request for proposals (RFP) No. W58RGZ-04-R-0686, issued by the U.S. Army Aviation and Missile Command (AMCOM) for overhaul of tail rotor gearboxes for the AH-64 helicopter. Fabritech argues that the agency improperly failed to refer the determination of Fabritech's responsibility to the Small Business Administration (SBA) under the certificate of competency (COC) program. Fabritech also asserts that the agency treated it and the awardee unequally in that the agency either failed to verify that the awardee would provide certified parts--as Fabritech was asked to do--or the agency held discussions with the awardee without also holding discussions with Fabritech.
B-298247; B-298247.2, Fabritech, Inc., July 27, 2006
Decision
Shlomo D. Katz, Esq., and Kenneth B. Weckstein, Esq., Epstein, Becker & Green, PC, for the protester.
J. Michael Slocum, Esq., Slocum & Brodie, PC, for The Purdy Corporation, an intervenor.
Vera Meza, Esq., and Amy S. Meredith, Esq., Department of the Army, and John W. Klein, Esq., and Kenneth Dodds, Esq., Small Business Administration, for the agencies.
Kenneth Kilgour, Esq., and Christine S. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Protest challenging rejection of small business protester's offer on the ground that the agency's decision constituted a nonresponsibility determination that should have been referred to the Small Business Administration is sustained where the basis of the agency's determination--that protester would be unable to obtain the required parts--relates directly to the firm's capability to perform the contract.
DECISION
Fabritech, Inc., a small business, protests the award of a contract to The Purdy Corporation under request for proposals (RFP) No. W58RGZ-04-R-0686, issued by the U.S. Army Aviation and Missile Command (AMCOM) for overhaul of tail rotor gearboxes for the AH-64 helicopter. Fabritech argues that the agency improperly failed to refer the determination of Fabritech's responsibility to the Small Business Administration (SBA) under the certificate of competency (COC) program. Fabritech also asserts that the agency treated it and the awardee unequally in that the agency either failed to verify that the awardee would provide certified parts--as Fabritech was asked to do--or the agency held discussions with the awardee without also holding discussions with Fabritech.
BACKGROUND
AMCOM issued the RFP on
With regard to Fabritech's status as an approved source, the agency notified Fabritech by letter dated December 7, 2005, that it was approved as a source of repair and overhaul of the gearboxes provided that Fabritech met several contingencies, including agreeing to purchase all critical safety item (CSI)[2] replacement parts from AMCOM-approved and -tested sources. AR, Tab A, attach. 3, at 2. In a letter to the protester dated
The agency made award to Purdy on April 17. By letter dated April 18, the agency informed Fabritech that its assertion that it was working to become a qualified source for the CSI items does not supply current proof of your ability to meet this requirement and that therefore Fabritech's proposal cannot be considered at this time. AR, Tab A, attach. 10, Letter from the Army to Protester,
DISCUSSION
Fabritech asserts that the agency's rejection of its proposal was based on a determination that Fabritech is not a responsible offeror in view of its perceived inability to obtain the required parts from an approved source, and thus that the Army was required to refer the matter to the Small Business Administration (SBA) pursuant to the certificate of competency (COC) procedures. See 15 U.S.C. sect. 637(b)(7) (2000).
The term responsibility refers to a firm's apparent ability and capacity to perform contract requirements. See Antenna Prods. Corp., B'227116.2,
We agree that the decision to reject Fabritech's proposal constituted a determination of nonresponsibility. The record shows that the reasons given for the agency's rejection relate directly to the protester's ability or capability to perform, and the agency's concerns clearly align with the description in the relevant FAR provisions of elements bearing on responsibility. See FAR sect. 9.104-1(b) (firm must [b]e able to comply with the required or proposed delivery or performance schedule); sect. 9.104-3(a) (the contracting officer shall require acceptable evidence of the prospective contractor's ability to obtain required resources; that evidence normally consists of a commitment or explicit arrangement, that will be in existence at the time of contract award, to rent, purchase, or otherwise acquire the needed facilities, equipment, other resources, or personnel). See also Noah Howden, Inc., B-227979, Oct. 22, 1987, 87-2 CPD para. 386 at 3.
The agency asserts that the decision to reject Fabritech's proposal was based not on a finding of nonresponsibility, but on a finding that the proposal was unacceptable for failure to meet a qualification requirement, and thus there was no requirement for referral to the SBA. The term qualification requirement means a requirement for testing or other quality assurance demonstration that must be completed by an offeror before award of a contract. 10 U.S.C. sect. 2319(a) (2000). In support of its position here, the agency relies on 10 U.S.C. sect. 2319(c)(4), which provides as follows:
Nothing contained in this subsection requires the referral of an offer to the [SBA] pursuant to [15 U.S.C. sect. 637(b)(7)] if the basis for the referral is a challenge by the offeror to either the validity of the qualification requirement or the offeror's compliance with such requirement.
Because, as explained above, we conclude that the basis of the agency's decision relates to responsibility, not compliance with a qualification requirement,[4] the statutory exception to the requirement for referral to the SBA in 10 U.S.C. sect. 2319(c)(4) does not apply. This conclusion is consistent with our cases addressing the distinction between findings relating to compliance with qualification requirements and those relating to an offeror's responsibility.[5] See Stevens Tech. Servs., Inc., B-250515 et al., May 17, 1993, 93-1 CPD para. 385 at 10 (exception to referral requirement is not applicable where the solicitation qualification requirements relate to the firm's capability to perform rather than product testing or specification compliance); Goodyear Tire & Rubber Co., B- 247363.6, Oct. 23, 1992, 92-2 CPD para. 315 at 7 (the ability of an offeror to supply a qualified product--but not whether a product was properly qualified--concerns the offeror's responsibility).
The agency also asserts that the dispute here is not whether the protester is capable of performance, which the agency concedes would be a responsibility determination, but rather relates to the agency's concern regarding the protester's proposed method of performance, which can--and in this case did--render the proposal unacceptable. Specifically, the protester's current inability to meet the requirements of the solicitation and technical documentation rendered the protester's proposal technically unacceptable, the agency argues.
The agency distinguishes the protester's proposed ways to perform the solicitation requirements from its capabilities, citing Capital CREAG LLC, B-294958.4,
Further, the agency fails to point to any provision in the RFP calling for consideration of an offeror's approach to obtaining parts as part of a technical evaluation of the offer. On the contrary, as noted above, the RFP was amended to change the original basis for award--which provided for award to the offeror whose proposal was found to offer the best value to the government--to provide for award to the responsive and responsible offeror whose proposal was evaluated at the lowest total cost to the government.
The agency also asserts that since Fabritech is not yet an approved source, the agency is precluded from making award to the firm. In support of this argument, the agency points to the following statutory provision, which in relevant part states as follows:
[T]he head of the contracting activity for an aviation critical safety item [may] enter into a contract for the procurement, modification, repair, or overhaul of such item only with a source approved by the design control activity in accordance with section 2319 of title 10, United States Code.
National Defense Authorization Act for Fiscal Year 2004, Pub. L. No. 108-136, sect. 802(b)(2), 117 Stat. 1392, 1540 (2003), reprinted in 10 U.S.C.A. sect. 2302 note. See also DFARS sect. 209.270-3(a) (implementing regulation).
The agency argues that since Fabritech has not demonstrated to the agency's satisfaction that it has the ability to obtain required parts from a qualified source, it has not met a qualification requirement; the firm therefore cannot be an approved source for the part, and the agency thus may not award a contract to the firm. The premise of the agency's argument here is flawed, however, because, as explained in detail above, the requirement on which the argument is based--Fabritech's ability to obtain required parts from other sources--is not a qualification requirement. As a result, any concern about the protester's ability in this area does not relate to a qualification requirement and does not trigger application of the statute limiting contracts for CSIs to approved sources.
In sum, because the agency made a responsibility determination without referring the matter to the SBA, the protest is sustained.
The protester also argues that the agency either conducted discussions with the awardee and not with the protester or failed to verify that the awardee would provide certified parts, and thereby applied relaxed solicitation requirements to the awardee. The contracting officer asserts that part of the confusion regarding whether the awardee had offered to comply with the RFP requirements was caused by agency misclassification of a part, and that the awardee has, in fact, satisfied the agency that the awardee will purchase parts from approved sources.
RECOMMENDATION
We recommend that, consistent with this decision, the matter be referred to the SBA for review under the COC procedures. If the SBA issues a COC and Fabritech is otherwise in line for award, the agency should terminate the award to Purdy and make award to Fabritech. We also recommend that Fabritech be reimbursed the reasonable costs of filing and pursuing the protest, including reasonable attorneys' fees. 4 C.F.R. sect. 21.8(d)(1) (2006). Fabritech should submit its certified claim for costs, detailing the time expended and costs incurred, directly to the agency within 60 days of receiving this decision.
The protest is sustained.
Gary L. Kepplinger
General Counsel
[1] As originally issued, the RFP provided for award to the offeror whose proposal was found to offer the best value to the government based on three evaluation criteria, technical, past performance, and price. Under the technical factor, proposals were to be evaluated on a pass/fail basis based on whether the offeror demonstrated that it had or would have access to special tools and equipment specified in the RFP. Agency Report (AR), Tab A, attach. 1, RFP at 54.
[2] An aviation CSI is a part, an assembly, installation equipment, launch equipment, recovery equipment, or support equipment for an aircraft or aviation weapon system if the part, assembly, or equipment contains a characteristic any failure, malfunction, or absence of which could cause
(1) A catastrophic or critical failure resulting in the loss of or serious damage to the aircraft or weapon system;
(2) An unacceptable risk of personal injury or loss of life; or
(3) An uncommanded engine shutdown that jeopardizes safety.
Defense Federal Acquisition Regulation Supplement (DFARS) sect. 209.270-2.
[3] In a post-protest filing to our Office, the contracting officer describes responsibility as a poor choice of words, and suggests that the intent was to evaluate Fabritech's ability to comply with the contingencies outlined in the
[4] FAR sect. 9.206-2 requires that the contracting officer insert FAR sect. 52.209-1 in solicitations that are subject to a qualification requirement. That clause, which does not appear in this RFP, supplies notice to offerors that a qualification requirement applies and furnishes additional detail about the means to meet the requirement. We have held that where, as here, FAR sect. 52.209-1 is not expressly incorporated in a solicitation, an agency may not enforce any qualification requirements. Gentex Corp., B-271381,
[5] We asked the SBA for its views on this issue; by letter dated