B-160133, FEB. 21, 1967

B-160133, FEB. 21, 1967

TO TOMASELLO, CAMPBELL AND DUNLAP:

FURTHER REFERENCE IS MADE TO THE PROTEST OF WINDER AIRCRAFT CORPORATION OF FLORIDA AGAINST REJECTION OF ITS BID AND CANCELLATION OF INVITATION FOR BIDS (IFB) NO. 04-606-66-178, ISSUED BY THE DEPARTMENT OF THE AIR FORCE, HEADQUARTERS SACRAMENTO AIR MATERIEL AREA, MCCLELLAN AIR FORCE BASE, CALIFORNIA.

THE ABOVE IFB SOLICITED BIDS FROM 14 FIRMS FOR FURNISHING 41 GLASS WINDSHIELD PANEL ASSEMBLIES FOR F-84 AIRCRAFT. TWO BIDS WERE RECEIVED, THE LOW BID IN THE AMOUNT OF $13,964.60 BEING SUBMITTED BY LIBBEY OWENS- FORD GLASS CO., AND THE BID OF WINDER AIRCRAFT BEING IN THE AMOUNT OF $28,325. THE LOW BID WAS DETERMINED TO BE NONRESPONSIVE DUE TO ITS FAILURE TO MEET THE DELIVERY REQUIREMENTS OF THE INVITATION, AND THE CONTRACTING OFFICER, FOLLOWING A PREAWARD SURVEY, DETERMINED THAT WINDER AIRCRAFT WAS NONRESPONSIBLE AND REJECTED ITS BID. HE THEN CANCELLED THE INVITATION AND NEGOTIATED THE PROCUREMENT, UNDER THE AUTHORITY OF 10 U.S.C. 2304 (A) (10), WITH LIBBEY-OWENS-FORD AT ITS ORIGINAL BID PRICE AND UPON ITS AGREEMENT TO MEET THE ORIGINAL REQUIRED DELIVERY SCHEDULE.

YOU HAVE PROTESTED THIS ACTION ON THE GROUND THAT THE DETERMINATION OF NONRESPONSIBILITY WAS NOT JUSTIFIED AND THAT AWARD SHOULD HAVE BEEN MADE TO WINDER. YOU POINT OUT THAT WINDER'S FACILITIES AND PROSPECTIVE PERFORMANCE WERE CONSIDERED TO BE UNSATISFACTORY IN THE AREAS OF TECHNICAL CAPACITY, FINANCIAL CAPACITY, PURCHASING AND ACCOUNTING, QUALITY ASSURANCE CAPABILITY, TRANSPORTATION, PERFORMANCE RECORD, AND ABILITY TO MEET THE REQUIRED SCHEDULE, AND IT IS YOUR CONTENTION THAT WINDER'S ALLEGED DEFICIENCIES IN THESE AREAS COULD NOT AFFECT THE CONTRACT PERFORMANCE, SINCE WINDER HAD SUBCONTRACTED FOR THE ITEMS WITH A REPUTABLE SUBCONTRACTOR AND THE CONTRACT WAS FINANCIALLY GUARANTEED BY THE SEMINOLE BANK OF TAMPA. YOU THEREFORE REQUEST THAT DAMAGES BE AWARDED TO WINDER IN THE AMOUNT OF THE CONTRACT PRICE, LESS THE COST OF THE SUBCONTRACTOR ITEMS.

BOTH 10 U.S.C. 2305 (C) AND SECTION 1-902 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PROVIDE THAT CONTRACTS SHALL BE AWARDED ONLY TO RESPONSIBLE PROSPECTIVE CONTRACTORS, AND AN AFFIRMATIVE DETERMINATION BY THE CONTRACTING OFFICER OF A BIDDER'S RESPONSIBILITY IS A PREREQUISITE TO A CONTRACT AWARD. SECTIONS 1-903, ET SEQ. OF ASPR SET FORTH THE STANDARDS OF RESPONSIBILITY WHICH MUST BE MET AND THE PROCEDURES FOR SECURING THE NECESSARY EVIDENCE THAT PROSPECTIVE CONTRACTORS, INCLUDING ANY SUBCONTRACTORS, CAN MEET SUCH STANDARDS. THESE STANDARDS RELATE, IN THE MAIN, TO TECHNICAL ABILITY, FINANCIAL STRENGTH AND THE NECESSARY PRODUCTIVE CAPACITY TO MEET THE QUALITY AND QUANTITY REQUIREMENTS OF THE PROCUREMENT AND TO MAKE DELIVERY WITHIN THE AGREED TIME. ASPR 1-902 PROVIDES THAT A PROSPECTIVE CONTRACTOR MUST DEMONSTRATE AFFIRMATIVELY HIS RESPONSIBILITY, INCLUDING, WHEN NECESSARY, THAT OF HIS PROPOSED SUBCONTRACTORS, AND THAT ANY DOUBT AS TO PRODUCTIVE CAPACITY OR FINANCIAL STRENGTH WHICH CANNOT BE RESOLVED AFFIRMATIVELY SHALL REQUIRE A DETERMINATION OF NONRESPONSIBILITY BY THE CONTRACTING OFFICER.

SINCE THERE WAS NO INFORMATION AVAILABLE ON THE CAPABILITY OF WINDER AIRCRAFT, THE CONTRACTING OFFICER REQUESTED THAT A PRE-AWARD SURVEY BE PERFORMED BY THE DEFENSE SUPPLY AGENCY, DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD), ORLANDO, FLORIDA. IN THE COURSE OF THE SURVEY MAJOR DWIGHT J. HATCHER, CAPTAIN OF THE PRE-AWARD SURVEY TEAM, PRESENTED A WRITTEN REQUEST TO WINDER DATED APRIL 12, 1966, FOR NECESSARY INFORMATION CONCERNING ITS GOVERNMENT AND COMMERCIAL CONTRACTS, BALANCE SHEETS AND OPERATING STATEMENTS, AND HOW PERFORMANCE WOULD BE CARRIED OUT BOTH BY WINDER AND BY LAMINATED GLASS CORPORATION, WHICH HAD BEEN NAMED BY WINDER AS SUBCONTRACTOR FOR 80 PERCENT OF THE WORK. WINDER WAS NOTIFIED THAT THIS INFORMATION MUST BE SUBMITTED NO LATER THAN APRIL 19, 1966. BECAUSE OF THE HIGH PERCENTAGE OF SUBCONTRACTING INDICATED ABOVE, DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR), DETROIT, WAS REQUESTED ON APRIL 12, 1966, TO MAKE A PRE-AWARD SURVEY OF LAMINATED GLASS CORPORATION.

THE RECORD SHOWS THAT WINDER DID NOT FURNISH THE NECESSARY INFORMATION BY APRIL 19, AS REQUESTED. HOWEVER, SOME OF IT WAS INCLUDED IN SUBSEQUENT LETTERS AND CONSIDERED BY THE SURVEY TEAM, BUT FROM ALL AVAILABLE EVIDENCE IT WAS CONCLUDED BY THE TEAM THAT THERE WERE SERIOUS DEFICIENCIES, IN THAT (1) WINDER WAS UNABLE TO ESTABLISH ITS TECHNICAL CAPABILITY BY CLEARLY IDENTIFYING AND SHOWING ITS UNDERSTANDING OF THE OPERATIONS REQUIRED BY THE SPECIFICATIONS FOR THE 20 PERCENT OF THE WORK WHICH WAS NOT TO BE SUBCONTRACTED; (2) NO CURRENT FINANCIAL STATEMENTS WERE FURNISHED, THE LATEST BEING FOR THE PERIOD ENDING OCTOBER 30, 1962, WHICH INDICATED A VERY POOR FINANCIAL CONDITION, AND NO CURRENT INDICATIONS BEING FURNISHED THAT THIS CONDITION HAD IMPROVED; AND (3) WINDER HAD NO PLANS ON HOW IT WOULD PERFORM THE NECESSARY QUALITY CONTROL, AS REQUIRED BY THE CONTRACT INSPECTION CLAUSE, TO ASSURE SPECIFICATION COMPLIANCE. ON THE BASIS OF THE INFORMATION DEVELOPED BY THE SURVEY TEAM, THE INDUSTRIAL SPECIALIST, QUALITY ASSURANCE SPECIALIST AND FINANCIAL ANALYST ALL RECOMMENDED A "NO AWARD," WHICH RECOMMENDATION WAS CONCURRED IN BY THE PRE-AWARD MONITOR.

DURING THE SURVEY OF LAMINATED GLASS CORPORATION, DCASR, DETROIT, WAS ADVISED BY AN OFFICER OF THAT CORPORATION THAT THE PRIME BIDDER HAD NOT FURNISHED DRAWINGS OR SPECIFICATIONS AND THAT HE WAS THEREFORE UNAWARE OF THE REQUIREMENTS OR TECHNICAL ASPECTS OF THE PROCUREMENT AND UNTIL HE COULD MAKE A STUDY OF SAME HE WAS IN NO POSITION TO DETERMINE THE FEASIBILITY OF MANUFACTURING THE ITEM. IN FACT, THE SURVEY TEAM'S PLANT VISIT WAS STATED TO BE THE FIRST INDICATION TO LAMINATED GLASS THAT IT WAS BEING CONSIDERED AS A SUBCONTRACTOR. IN THE CIRCUMSTANCES, NO DETERMINATION OF RESPONSIBILITY COULD BE MADE AND THE SURVEY TEAM RECOMMENDED "NO AWARD.'

ON APRIL 21, 1966, MR. JOEL T. HENRY, PRESIDENT OF WINDER AIRCRAFT, INFORMED THE CONTRACTING OFFICER BY TELEPHONE THAT HE PROPOSED TO SUBSTITUTE PITTSBURGH PLATE GLASS COMPANY AS CONTRACTOR, BUT THAT HE HAD THAT DAY BEEN ADVISED BY MAJOR HATCHER THAT THE PROPOSED SUBSTITUTION WOULD RENDER HIS BID NONRESPONSIVE AND THAT THE INFORMATION REQUESTED ON APRIL 12 NEED NOT BE FURNISHED. THERE IS NO RECORD OF ANY SUCH STATEMENT BY MAJOR HATCHER, BUT THE FILE DOES CONTAIN A LETTER DATED MAY 23, 1966, FROM THE CHIEF, DCASD, ORLANDO, TO MR. HENRY, ADVISING HIM THAT NO REPRESENTATIVE OF DCASD, ORLANDO, COULD HAVE CONCLUDED OR STATED THAT WINDER WAS "NONRESPONSIVE TO THE BID," SINCE THIS IS A DECISION THAT ONLY THE BUYER CAN MAKE. IN ANY EVENT, WHILE THE ABOVE CONVERSATIONS TOOK PLACE ON APRIL 21 AFTER THE DUE DATE FOR THE REQUESTED INFORMATION, THE RECORD SHOWS THAT MR. HENRY WAS INFORMED BY THE CONTRACTING OFFICER ON THAT SAME DAY THAT HIS PRIMARY CONCERN WAS NOT WHERE THE SUPPLIES WERE OBTAINED BUT THAT THE MATERIAL FURNISHED MEET THE SPECIFICATIONS, AND THAT THE ADDITIONAL INFORMATION FURNISHED BY WINDER IN RESPONSE TO THE SURVEY TEAM'S REQUEST WAS CONSIDERED BOTH BY THE SURVEY TEAM AND BY THE CONTRACTING OFFICER BEFORE THE DECISION TO REJECT THE BIDS WAS REACHED.

THE DETERMINATION OF THE QUALIFICATIONS OF A PROSPECTIVE CONTRACTOR IS PRIMARILY THE RESPONSIBILITY OF THE CONTRACTING AGENCY, AND IN THE ABSENCE OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE DETERMINATION, WE WOULD NOT BE JUSTIFIED IN QUESTIONING THE JUDGMENT OF THE CONTRACTING OFFICER. 38 COMP. GEN. 131; 37 ID. 798; ID. 430, 435. ON THE PRESENT RECORD, WE MUST CONCLUDE THAT THE ACTION OF THE CONTRACTING OFFICER WAS BASED ON SUBSTANTIAL GROUNDS AND IN ACCORD WITH PERTINENT STATUTES, REGULATIONS AND DECISIONS OF THIS OFFICE.

THE NEGOTIATION OF THE CONTRACT WITH LIBBEY-OWENS-FORD APPEARS TO HAVE BEEN FULLY JUSTIFIED. THE AUTHORITY INVOKED BY THE CONTRACTING OFFICER IS 10 U.S.C. 2304 (A) (10), WHICH PROVIDES THAT CONTRACTS FOR PROPERTY OR SERVICES FOR WHICH IT IS IMPRACTICABLE TO OBTAIN COMPETITION MAY BE NEGOTIATED, AND ASPR 3-210.2 (III), WHICH LISTS AS ILLUSTRATIVE OF A CIRCUMSTANCE WITH RESPECT TO WHICH THIS AUTHORITY TO NEGOTIATE MAY BE USED, A CASE WHERE NO RESPONSIVE BID HAS BEEN RECEIVED FROM A RESPONSIBLE BIDDER AFTER PUBLIC ADVERTISING. SINCE ONLY TWO BIDS WERE RECEIVED OUT OF 14 FIRMS SOLICITED, AND ONE OF THOSE WAS MORE THAN TWICE AS HIGH AS THE OTHER AND NEARLY THREE TIMES AS HIGH AS THE GOVERNMENT'S ESTIMATE OF $10,627.36, THE IMPRACTICABILITY OF OBTAINING COMPETITION APPEARS TO HAVE BEEN ADEQUATELY ESTABLISHED.

IN CONCLUSION, IT LONG HAS BEEN RECOGNIZED THAT IN CONNECTION WITH THE AWARDING OF PUBLIC CONTRACTS NO BIDDER ACQUIRES AN ABSOLUTE RIGHT TO AN AWARD OF PUBLIC BUSINESS BUT, RATHER, THE PUBLIC INTEREST IS FIRST FOR CONSIDERATION IN THE MAKING OF SUCH AWARD. SEE O-BRIEN V. CARNEY, 6 F.SUPP. 761; FRIEND V. LEE, 221 F.2D 96; 26 COMP. GEN. 49. ALSO, THE COURTS HAVE HELD THAT AN UNSUCCESSFUL BIDDER IS NOT ENTITLED TO RECOVER DAMAGED FOR FAILURE TO CONTRACT WITH HIM. HAYER PRODUCTS COMPANY, INC. V. UNITED STATES, 140 F.SUPP. 409, AND AUTHORITIES CITED THEREIN. FOR THE REASONS STATED ABOVE, WE SEE NO VALID BASIS FOR DISTURBING THE AWARD AS MADE, AND THE PROTEST MUST BE DENIED.