B-134238, JAN. 29, 1958

B-134238, JAN. 29, 1958

TO PENNSYLVANIA TESTING LABORATORY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 8, 1958, RELATIVE TO YOUR PROTEST AGAINST THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 160-306-57, ISSUED ON MARCH 29, 1957, BY THE DEPARTMENT OF THE NAVY, YARDS AND DOCKS SUPPLY OFFICE, PORT HUENEME, CALIFORNIA, FOR THE PROCUREMENT OF ONE COMBINATION DYNAMOMETER TO BE IN ACCORDANCE WITH THE SPECIFICATIONS MADE A PART OF THE INVITATION. THIS PROTEST WAS CONSIDERED IN OUR DECISION TO YOU OF DECEMBER 17, 1957, IN WHICH YOU WERE ADVISED OF CERTAIN INFORMATION FURNISHED IN A REPORT FROM THE DEPARTMENT OF THE NAVY CONCERNING THE SURVEY MADE OF YOUR FACILITIES AND CAPABILITY TO PERFORM THE PROPOSED CONTRACT WORK.

WITH RESPECT TO YOUR SUGGESTION THAT THE NAVY NO LONGER CONSIDERED THE FINANCIAL CONDITION OF YOUR COMPANY AS ONE OF THE REASONS FOR REJECTION OF YOUR BID, WE DID NOT FEEL THAT IT WAS NECESSARY TO DISCUSS THIS FEATURE OF THE CASE SINCE THE REPORT OF SURVEY INDICATED THAT YOU DID NOT POSSESS THE FACILITIES NECESSARY FOR THE MANUFACTURE AND TESTING OF A DYNAMOMETER OF THE TYPE REQUIRED BY THE GOVERNMENT'S SPECIFICATIONS, THAT NO PRELIMINARY WORK TOWARD ITS DESIGN HAD BEEN UNDERTAKEN AND THAT SOURCES OF MATERIALS AND COMPONENTS HAD NOT BEEN TENTATIVELY ESTABLISHED. ALTHOUGH YOU NOW CONTEND THAT YOU HAD ADEQUATE TESTING FACILITIES, NO EVIDENCE HAS BEEN SUBMITTED TO SHOW THAT YOU POSSESSED THE NECESSARY MANUFACTURING FACILITIES OR THAT TENTATIVE SUBCONTRACT ARRANGEMENTS OF A SATISFACTORY NATURE HAD BEEN MADE FOR THE PRODUCTION OF THE DYNAMOMETER WHICH YOU WOULD HAVE BEEN REQUIRED TO FURNISH WITHIN A RELATIVELY SHORT PERIOD OF TIME IF YOUR BID HAD BEEN ACCEPTED.

RATHER, AN ATTEMPT IS MADE TO SHOW THAT THE SUCCESSFUL BIDDER, THE MAXWELL DYNAMOMETER COMPANY, DID NOT POSSESS THE NECESSARY FACILITIES BUT SUBCONTRACTED ITS REQUIREMENTS IN THE MANUFACTURE, DELIVERY AND TEST OF DYNAMOMETERS WHICH IT HAD PREVIOUSLY FURNISHED TO THE NAVY. THE MATTER OF SUBCONTRACTING IS NOT, HOWEVER, BELIEVED TO BE SIGNIFICANT EXCEPT TO THE EXTENT THAT THE NAVY, IN DETERMINING A BIDDER'S CAPABILITY, HAS THE RIGHT TO INQUIRE INTO ANY SUBCONTRACT ARRANGEMENTS TENTATIVELY ESTABLISHED BY THE BIDDER TO INSURE SATISFACTORY PERFORMANCE OF THE PROPOSED GOVERNMENT CONTRACT WORK. THE DEPARTMENT OF THE NAVY HAS REPORTED THAT THE MAXWELL CONTRACT WAS COMPLETED IN SEPTEMBER 1957, AND THAT THE CONTRACT PRICE WAS PAID TO MAXWELL'S ASSIGNEE BANK ON SEPTEMBER 24, 1957. YOU DO NOT STATE ANY REASONS FOR YOUR QUESTIONING THE REPORTED FACT THAT DELIVERY WAS MADE BY THE MAXWELL COMPANY.

RELATIVE TO YOUR CONTENTION THAT YOU HAD SATISFACTORILY PERFORMED PREVIOUS CONTRACTS WITH THE DEPARTMENT OF THE NAVY, THE DEPARTMENTAL REPORT ON YOUR PROTEST STATES THAT PERFORMANCE OF SUCH CONTRACTS WAS GENERALLY UNSATISFACTORY SO FAR AS TIMELY DELIVERIES WERE CONCERNED AND ALSO FROM THE STANDPOINT OF YOUR PRACTICE OF REQUESTING SPECIFICATION WAIVERS AND DEVIATIONS UPON THE AWARD OF THE CONTRACTS. THIS RECORD OF PERFORMANCE MIGHT IN ITSELF HAVE CONSTITUTED A SUFFICIENT CAUSE FOR CONSIDERING THAT YOUR COMPANY DID NOT QUALIFY AS A RESPONSIBLE BIDDER UNDER INVITATION NO. 160-306-57.

CONCERNING YOUR STATEMENT TO THE EFFECT THAT NO AGENCY OF THE GOVERNMENT HAS CHECKED THE VALIDITY OF THE ORIGINAL SURVEY, THE RECORD SHOWS THAT THE SURVEY OF YOUR PLANT WAS MADE BY A REPRESENTATIVE OF THE INSPECTOR OF NAVAL MATERIAL, PHILADELPHIA, PENNSYLVANIA, AND THAT THE DEPARTMENT OF THE NAVY HAS PLACED COMPLETE RELIANCE UPON HIS REPORT. WE DO NOT HAVE THE FACILITIES TO SURVEY BIDDERS' PLANTS AND WE MUST, OF NECESSITY, ASSUME THAT AN ADMINISTRATIVE SURVEY OF A BIDDER'S PLANT HAS BEEN CONDUCTED IN A PROPER MANNER AND THAT THE REPORT OF SURVEY REFLECTS THE TRUE STATUS OF THE BIDDER AT THE PARTICULAR TIME IN THE ABSENCE OF A CLEAR SHOWING TO THE CONTRARY.

ON THE BASIS OF THE REPORTED FACTS OF THE CASE, WE CANNOT CONCLUDE THAT THE AWARD MADE TO THE MAXWELL DYNAMOMETER COMPANY WAS NOT IN THE BEST INTERESTS OF THE UNITED STATES. SINCE THE CONTRACT WITH THAT COMPANY HAS BEEN COMPLETED, AND FOR THE REASONS STATED IN THE LAST PARAGRAPH OF OUR DECISION OF DECEMBER 17, 1957, WE PROPOSE TO TAKE NO FURTHER ACTION IN THE MATTER.