B-152007, OCT. 31, 1963

B-152007, OCT. 31, 1963

TO UNITEC CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM DATED JULY 9, 1963, AND SUBSEQUENT CORRESPONDENCE, RELATIVE TO YOUR PROTEST AGAINST THE REJECTION OF YOUR PROPOSAL AND THE MAKING OF A CONTRACT AWARD TO LENKURT ELECTRIC COMPANY, INC., SAN CARLOS, CALIFORNIA, UNDER REQUEST FOR QUOTATIONS NO. 595-63Q, ISSUED MAY 21, 1963, BY THE NAVY PURCHASING OFFICE FOR THE PROCUREMENT OF THE SERVICES OF FIELD TECHNICIANS TO PROVIDE MAINTENANCE AND OPERATION OF THE PUERTO RICO MICROWAVE COMPLEX DURING THE PERIOD JULY 1, 1963, THROUGH JUNE 30, 1964.

THE UNITEC CORPORATION AND LENKURT ELECTRIC COMPANY, INC., SUBMITTED PROPOSALS IN THE RESPECTIVE AMOUNTS OF $239,904 AND $388,480. A THIRD PROPOSAL WAS RECEIVED BUT IT WAS CONSIDERED AS NOT HAVING BEEN RESPONSIVE TO THE GOVERNMENT'S REQUEST. YOUR PROPOSAL WAS REJECTED ON THE BASIS OF THE CONTRACTING OFFICER'S DETERMINATION THAT YOUR COMPANY DID NOT QUALIFY AS A RESPONSIBLE PROSPECTIVE CONTRACTOR FOR THE PARTICULAR WORK AS REQUIRED UNDER THE PROVISIONS OF SECTIONS 1-902 AND 1-903 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR).

THE RECORD INDICATES THAT YOU WERE PERFORMING MAINTENANCE SERVICES FOR THE MICROWAVE NETWORK IN PUERTO RICO DURING THE FALL OF 1962 UNDER AN AIR FORCE CONTRACT. ACTION WAS THEN INITIATED FOR THE DEPARTMENT OF THE NAVY TO ASSUME RESPONSIBILITY FOR THE NETWORK, UTILIZING A NEW ADD EXPANDED SYSTEM WHICH WOULD INCORPORATE SOME ITEMS OF EQUIPMENT WAS PURCHASED FROM AND INSTALLED BY THAT COMPANY, AND A CONTRACT WAS EVENTUALLY AWARDED TO LENKURT ELECTRIC COMPANY, INC., TO PROVIDE THE NECESSARY MAINTENANCE AND OPERATION SERVICES FROM DECEMBER 1962 UNTIL THE END OF THE FISCAL YEAR 1963. IN APRIL 1963 THE NAVY ACTIVITY REQUESTED THE NEGOTIATION OF A SERVICE CONTRACT FOR THE FISCAL YEAR 1964 WHICH BEGAN ON JULY 1, 1963. THE REQUEST FOR QUOTATIONS WAS MADE READY FOR DRAFTING ON MAY 13, 1963, AND THE FORMAL REQUEST WAS MAILED ON MAY 21 WITH A SCHEDULED OPENING DATE OF JUNE 20. THE THREE PROPOSALS WHICH WERE RECEIVED WERE FORWARDED TO COMMUNICATIONS SYSTEM HEADQUARTERS FOR EVALUATION ON JUNE 21 AND A MEETING WITH YOUR REPRESENTATIVES WAS HELD ON JUNE 24. YOUR REPRESENTATIVES WERE NOTIFIED AT SUCH TIME THAT THEIR PRESENTATION DID NOT INDICATE THE TECHNICAL COMPETENCE REQUIRED BY THE SPECIFICATIONS INSOFAR AS THEY PROVIDED THAT: EACH EMPLOYEE MUST HAVE RECEIVED TRAINING AT THE MANUFACTURER'S PLANT ON THE EQUIPMENT INVOLVED TO THE EXTENT THAT HE IS THOROUGHLY FAMILIAR WITH THE THEORY OF OPERATION AND MAINTENANCE OF THE EQUIPMENT AS CERTIFIED BY THE EQUIPMENT MANUFACTURER; OR EACH EMPLOYEE MUST HAVE BEEN ACTUALLY EMPLOYED IN THE MAINTENANCE OF THE EQUIPMENT IN THE FIELD UNDER THE SUPERVISION OF COMPETENT MAINTENANCE PERSONNEL FOR A MINIMUM PERIOD OF THREE MONTHS LEADING TO FULL COMPETENCE IN THE MAINTENANCE OF THE EQUIPMENT IN MEETING THE NO-BREAK OPERATIONAL REQUIREMENTS; OR EACH EMPLOYEE MUST HAVE BEEN ENGAGED IN THE INSTALLATION AND SYSTEM ALIGNMENT AND TEST FOR A SUFFICIENT PERIOD TO DEMONSTRATE PROFICIENCY IN THE OPERATION AND MAINTENANCE OF THE SYSTEM.

IT APPEARS THAT YOU HAD ATTEMPTED TO RECRUIT WORKERS IN PUERTO RICO BUT THAT ONLY FIVE APPARENTLY EXPERIENCED WORKERS RESPONDED TO AN ADVERTISEMENT PLACED BY YOU IN THE SAN JUAN NEWSPAPER ON JUNE 15. THERE WAS NO ASSURANCE THAT A SUFFICIENT NUMBER OF QUALIFIED WORKERS WOULD BE AVAILABLE TO YOU AND READY TO COMMENCE WORK AT THE MICROWAVE COMPLEX ON JULY 1. YOU ALLEGED THAT SOME OF YOUR PRESENT EMPLOYEES WERE WORKING AT THE SITE IN THE FALL OF 1962 BUT THOSE EMPLOYEES ADMITTEDLY HAD NO RESPONSIBILITY FOR THE OPERATION AND MAINTENANCE OF THE LENKURT EQUIPMENT INSTALLED AT THE SITE DURING THE CHANGE-OVER PERIOD.

YOU CONTEND THAT YOU WERE NOT TREATED FAIRLY IN THE MATTER SINCE YOU COOPERATED FULLY IN THE CHANGE-OVER TO LENKURT EQUIPMENT AND MANAGEMENT DURING THE FALL OF 1962, AND YOU WERE ASSURED AT SUCH TIME THAT YOU WOULD BE AFFORDED AN OPPORTUNITY TO BID ON THE FISCAL YEAR 1964 REQUIREMENTS. YOU COMPLAIN THAT THE CONTRACT WAS NEGOTIATED HURRIEDLY ALTHOUGH THE DEPARTMENT OF THE NAVY HAD MORE THAN SIX MONTHS TO CONSIDER COMPETITIVE PROPOSALS. ALSO, YOU HAVE SUGGESTED THAT THE SPECIFICATIONS WERE UNDULY RESTRICTIVE BECAUSE OF YOUR BELIEF THAT THE LENKURT EQUIPMENT IS NOT SO COMPLEX THAT AN AVERAGE ELECTRONICS TECHNICIAN COULD NOT BECOME WHOLLY FAMILIAR WITH THE SYSTEM WITHIN A RELATIVELY SHORT PERIOD OF TIME, AND YOUR COMPANY HAS ENGAGED IN THE PERFORMANCE OF VARIOUS CONTRACTS WITH THE MILITARY DEPARTMENTS WHICH REQUIRED A CONSIDERABLE DEGREE OF EXPERIENCE IN THE FIELD OF ELECTRONICS. YOU MADE A REQUEST IN AUGUST 1963 TO THE SMALL BUSINESS ADMINISTRATION FOR THE ISSUANCE OF A CERTIFICATE OF COMPETENCY. HOWEVER YOU WERE ADVISED THAT NO ACTION ON SUCH REQUEST WOULD BE TAKEN WHILE YOUR PROTEST AGAINST THE CONTRACT AWARD TO LENKURT ELECTRIC COMPANY, INC., WAS PENDING BEFORE THIS OFFICE.

IN OUR REVIEW OF THE CASE, THERE HAS BEEN FOUND NO SUBSTANTIAL BASIS FOR ANY CONTENTION THAT YOU WERE NOT GIVEN A FULL OPPORTUNITY TO BID ON THE FISCAL YEAR 1964 REQUIREMENTS. YOU HAD APPROXIMATELY 30 DAYS IN WHICH TO SUBMIT A PROPOSAL AND WE DO NOT AGREE THAT THE NECESSITY FOR ENTERING INTO A CONTRACT ON OR BEFORE JUNE 30 MADE IT IMPOSSIBLE FOR THE DEPARTMENT OF THE NAVY TO MAKE A PROPER EVALUATION OF THE PROPOSALS SUBMITTED AND TO DETERMINE THE CAPABILITIES OF EACH OFFEROR. THE SPECIFICATIONS MADE IT DIFFICULT FOR ANY FIRM OTHER THAN LENKURT ELECTRIC COMPANY, INC., TO QUALIFY AS A RESPONSIBLE PROSPECTIVE CONTRACTOR. HOWEVER, YOU SUBMITTED A PROPOSAL AND ATTEMPTED TO OBTAIN COMMITMENTS FROM A SUFFICIENT NUMBER OF FORMER OR ACTIVE EMPLOYEES OF THE LENKURT COMPANY TO WORK UNDER YOUR SUPERVISION ON AND AFTER JULY 1. APPARENTLY THE SPECIFICATIONS WERE NOT MORE RESTRICTIVE THAN NECESSARY, CONSIDERING THAT THE WORK INVOLVED IS OF A SPECIALIZED NATURE AND THE GOVERNMENT COULD NOT HAVE TAKEN THE CHANCE THAT COMPLETELY EXPERIENCED PERSONNEL WOULD NOT BE WORKING AT THE MICROWAVE COMPLEX 24 HOURS A DAY BEGINNING AS OF MIDNIGHT, JUNE 30.

THE QUESTION OF YOUR RESPONSIBILITY AS TO CAPACITY AND CREDIT WAS NOT REFERRED TO THE SMALL BUSINESS ADMINISTRATION BEFORE MAKING THE CONTRACT AWARD FOR THE STATED REASONS THAT THE SERVICES BEING OBTAINED WERE URGENTLY REQUIRED AND PERFORMANCE WOULD BE UNDULY DELAYED BY FAILURE TO MAKE AN AWARD PROMPTLY AND WITHOUT DELAY. UNDER OTHER CIRCUMSTANCES, THE CONTRACTING OFFICER WOULD HAVE BEEN REQUIRED UNDER THE PROVISIONS OF SUBSECTION 1-705.6, ASPR, TO REFER THE MATTER TO THE SMALL BUSINESS ADMINISTRATION FOR CONSIDERATION AND WITHHOLD CONTRACT AWARD ACTION FOR A PERIOD OF 15 DAYS OR UNTIL SUCH TIME AS THE SMALL BUSINESS ADMINISTRATION HAD DECIDED WHETHER OR NOT TO ISSUE A CERTIFICATE OF COMPETENCY,"WHICHEVER IS EARLIER.'

IT IS UNFORTUNATE THAT THE REQUEST FOR PROPOSALS WAS NOT PREPARED SUFFICIENTLY IN ADVANCE TO HAVE PERMITTED THE RECEIPT AND CONSIDERATION OF PROPOSALS EARLIER THAN JUNE 20, SO THAT, IF THE CONTRACTING OFFICER BELIEVED THAT A PARTICULAR SMALL BUSINESS CONCERN COULD NOT QUALIFY AS TO CAPACITY AND CREDIT, THE CONTRACT AWARD COULD HAVE BEEN WITHHELD FOR A PERIOD OF 15 DAYS FOR ACTION BY THE SMALL BUSINESS ADMINISTRATION. HOWEVER, IT DOES NOT APPEAR THAT THE DEPARTMENT OF THE NAVY UNREASONABLY DELAYED THE PREPARATION OF THE SPECIFICATIONS OR OTHERWISE ATTEMPTED TO CIRCUMVENT THE CERTIFICATE OF COMPETENCY PROVISIONS OF THE SMALL BUSINESS ACT AND THE IMPLEMENTING ADMINISTRATIVE REGULATIONS.

APART FROM THE AUTHORITY OF THE SMALL BUSINESS ADMINISTRATION TO ISSUE A CERTIFICATE OF COMPETENCY, THE DETERMINATION OF THE CAPABILITIES OF A BIDDER IS PRIMARILY THE FUNCTION OF THE PROCUREMENT AGENCY, AND IN THE ABSENCE OF BAD FAITH OR LACK OF A REASONABLE FACTUAL BASIS FOR THE DETERMINATION WE WILL NOT OBJECT TO THE DETERMINATION AS MADE. 38 COMP. GEN. 248. THE RECORD OF THIS CASE FAILS TO SHOW OTHER THAN THAT THE DEPARTMENT OF THE NAVY ACTED IN GOOD FAITH AND IT APPEARS ALSO THAT THE REJECTION OF YOUR PROPOSAL WAS BASED UPON REASONABLE GROUNDS.

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR TAKING EXCEPTION TO THE CONTRACT AS AWARDED TO LENKURT ELECTRIC COMPANY, INC., AND YOUR PROTEST IN THE MATTER TO THIS OFFICE MUST BE, AND IS, DENIED.