B-157212, FEB. 11, 1966

B-157212, FEB. 11, 1966

TO VACUUM STANDARDS CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAMS OF JULY 12 AND AUGUST 4, 1965, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER DEPARTMENT OF THE AIR FORCE REQUEST FOR PROPOSALS PR MA-5-01604, ISSUED BY THE MIDDLETOWN AIR MATERIEL AREA, OLMSTED AIR FORCE BASE, PENNSYLVANIA.

THE REQUEST FOR PROPOSALS REQUESTED TECHNICAL AND PRICED PROPOSALS FOR FURNISHING AN ULTRA HIGH VACUUM GAUGE CALIBRATION SYSTEM TO BE MANUFACTURED IN ACCORDANCE WITH PURCHASE DESCRIPTION LPM-159. OF THE SIX PROPOSALS RECEIVED, ONLY THE PROPOSAL OF YOUR FIRM AND THAT OF THE NATIONAL RESEARCH CORPORATION WERE DETERMINED TO BE TECHNICALLY ACCEPTABLE. YOUR FIRM SUBMITTED A PROPOSAL IN THE AMOUNT OF $53,950 AND THE NATIONAL RESEARCH CORPORATION SUBMITTED A PROPOSAL IN THE AMOUNT OF $59,300.

SINCE YOUR COMPANY WAS THE APPARENT LOW BIDDER, THE PROCURING ACTIVITY REQUESTED A PREAWARD SURVEY OF THE FACILITIES OF YOUR CONCERN. THE FACILITY CAPABILITY REPORT INDICATED THAT YOUR FIRM WOULD NOT BE ABLE TO MEET THE DELIVERY SCHEDULES BECAUSE YOU CURRENTLY HAD NO FACILITIES, EQUIPMENT, OR PERSONNEL AND THAT YOU HAD MADE NO DEFINITE ARRANGEMENTS FOR OBTAINING THEM. ALSO, THE FACILITY CAPABILITY REPORT CONTAINED A NEGATIVE FINDING ON BUSINESS PRACTICES. ON THE BASIS OF THIS SURVEY THE CONTRACTING OFFICER CONCLUDED THAT YOU DID NOT MEET THE MINIMUM STANDARDS OF RESPONSIBILITY PRESCRIBED BY PARAGRAPH 1-903 OF THE ARMED SERVICES PROCUREMENT REGULATION. ON JUNE 30, 1965, AWARD WAS MADE TO THE NATIONAL RESEARCH CORPORATION.

BY TELEGRAM DATED JULY 7, 1965, YOUR FIRM PROTESTED THE AWARD TO THE NATIONAL RESEARCH CORPORATION ON THE BASIS THAT YOU WERE NOT GRANTED AN OPPORTUNITY TO APPLY TO THE SMALL BUSINESS ADMINISTRATION FOR A CERTIFICATE OF COMPETENCY (COC). IT IS REPORTED THAT UPON RECEIPT OF YOUR PROTEST THE CONTRACTING OFFICER REQUESTED THE FIELD ACTIVITY TO CONFIRM ITS NEGATIVE FINDING ON BUSINESS PRACTICES AND THAT HE WAS NOTIFIED BY THAT ACTIVITY THAT THE ORIGINAL NEGATIVE FINDING WAS IN ERROR AND THAT THE FINDING SHOULD HAVE BEEN IN THE AFFIRMATIVE. A STOPWORK ORDER WAS THEN ISSUED TO THE NATIONAL RESEARCH CORPORATION AND THE NEGATIVE FACILITY CAPABILITY REPORT ON YOUR FIRM WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) ON JULY 14, 1965, FOR THE POSSIBLE ISSUANCE OF A COC. BY LETTER DATED AUGUST 4, 1965, THE SBA NOTIFIED THE CONTRACTING OFFICER THAT IT HAD ISSUED A COC IN BEHALF OF YOUR FIRM. IN VIEW OF THE FOREGOING ACTION TAKEN BY THE SBA, THE CONTRACTING OFFICER ISSUED A TERMINATION NOTICE TO THE NATIONAL RESEARCH CORPORATION WHICH IMMEDIATELY PROTESTED AGAINST THIS ACTION ON THE BASIS THAT YOUR FIRM WAS NOT AT THE TIME OF THE AWARD A MANUFACTURER WITHIN THE MEANING OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT, 41 U.S.C. 35 (A).

THERE THUS AROSE THE QUESTION WHETHER YOUR FIRM COULD BE CONSIDERED A PROPER SOURCE OF SUPPLY WITHIN THE MEANING OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT AND IMPLEMENTING REGULATIONS. PARAGRAPH 12-603.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PROVIDES THAT IN ORDER TO QUALIFY AS A MANUFACTURER, A BIDDER MUST BE ABLE TO SHOW BEFORE AWARD THAT HE IS (I) AN ESTABLISHED MANUFACTURER OF THE PARTICULAR GOODS OR GOODS OF THE GENERAL CHARACTER SOUGHT BY THE GOVERNMENT, AND (II) IF HE IS NEWLY ENTERING IN SUCH MANUFACTURING ACTIVITY, THAT HE HAS MADE ALL NECESSARY PRIOR ARRANGEMENTS FOR SPACE, EQUIPMENT AND PERSONNEL TO PERFORM THE MANUFACTURING OPERATIONS REQUIRED FOR THE FULFILLMENT OF THE CONTRACT. PARAGRAPH 2-404.2 THEREOF IMPOSES UPON ALL PROCUREMENT OFFICIALS THE DUTY TO REJECT ANY BID WHICH FAILS TO CONFORM TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION AND, IN THAT CONNECTION, THE OBLIGATION TO DETERMINE THE ELIGIBILITY OF ANY BIDDER UNDER THE ABOVE-QUOTED REGULATION, SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR. PURSUANT THERETO THE CONTRACTING OFFICER FOUND YOUR FIRM TO BE NOT QUALIFIED AS A MANUFACTURER AT THAT TIME FOR THE PURPOSES OF THE PROCUREMENT INVOLVED BASED UPON THE PREAWARD SURVEY. UPON REVIEW THAT FINDING WAS AFFIRMED BY THE DEPARTMENT OF LABOR, WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS, IN ITS LETTER OF JANUARY 21, 1966, TO YOUR ATTORNEY, MR. PAUL J. FOLEY.

OUR OFFICE DOES NOT CONSIDER THAT IT HAS ANY AUTHORITY TO REVIEW DETERMINATIONS AS TO WHETHER PARTICULAR FIRMS ARE REGULAR DEALERS OR MANUFACTURERS UNDER THE WALSH-HEALEY ACT. B-147620, JANUARY 22, 1962. RATHER, WE HAVE CONSIDERED THAT SUCH DETERMINATIONS REST WITH THE CONTRACTING OFFICER SUBJECT TO THE REVIEW OF THE DEPARTMENT OF LABOR WHICH HAS THE FINAL AUTHORITY. B-148715, JUNE 25, 1962, AND B-155387, NOVEMBER 25, 1964.

IN VIEW OF THE FINDING OF THE CONTRACTING OFFICER THAT YOU DID NOT QUALIFY AS A MANUFACTURER FOR PURPOSES OF THIS PROCUREMENT, WHICH FINDING WAS AFFIRMED BY THE DEPARTMENT OF LABOR, AND THE PREAWARD RESULTS, NO AUTHORITY EXISTED FOR MAKING AN AWARD TO YOU AS A PROSPECTIVE RESPONSIBLE CONTRACTOR. SEE ASPR 1-903.1 (V) WHICH LIMITS AWARD OF SUPPLY CONTRACTS TO BIDDERS WHO ARE DETERMINED TO BE MANUFACTURERS OF OR REGULAR DEALERS IN THE SUPPLIES UNDER PROCUREMENT.

IN VIEW OF THE FOREGOING, WE MUST CONCLUDE THAT THE AWARD MADE TO THE NATIONAL RESEARCH CORPORATION IS NOT SUBJECT TO LEGAL OBJECTION BY OUR OFFICE.