B-152716, DEC. 5, 1963

B-152716, DEC. 5, 1963

TO REIMERS MISSILE COMPONENTS, INC.:

BY TELEGRAMS DATED OCTOBER 17 AND 23, 1963, AND LETTER DATED OCTOBER 18, 1963, YOU PROTESTED AGAINST THE REJECTION OF YOUR LOW BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. AMC/Z/-01-021-64-518 AND AGAINST THE AWARD MADE TO INTERCONTINENTAL MANUFACTURING COMPANY, INC., WHICH HAD SUBMITTED THE NEXT LOWEST BID.

THE INVITATION, ISSUED ON JULY 8, 1963, BY THE U.S. ARMY MISSILE COMMAND, REQUESTED BIDS FOR FURNISHING A QUANTITY OF BLAST TUBE AND NOZZLE ASSEMBLIES. BIDS WERE OPENED ON AUGUST 19, 1963, AND YOU SUBMITTED THE LOWEST BID IN THE AMOUNT OF $529.18 EACH, AND INTERCONTINENTAL WAS THE NEXT LOWEST BID IN THE AMOUNT OF $568.92 EACH.

IT WAS ADMINISTRATIVELY DETERMINED THAT YOU COULD NOT PROVIDE THE ASSURANCE THAT THE DELIVERY REQUIREMENTS OF THE PROCUREMENT WOULD BE MET IF AWARD WERE MADE TO YOU. THE BASES OF THAT DETERMINATION OF NONRESPONSIBILITY WERE AS FOLLOWS:

1. REIMERS WAS A NEWLY ESTABLISHED ENTERPRISE;

2. REIMERS HAD NO MACHINERY PLACED AND READY FOR OPERATION AND COULD NOT PROVIDE ASSURANCE THAT SUCH MACHINERY COULD BE PLACED IN OPERATION IN TIME TO PRODUCE REQUIRED PRE-PRODUCTION AMPLE;

3. TECHNICALLY QUALIFIED PERSONNEL WERE NOT EMPLOYED AND NO ASSURANCE COULD BE GIVEN THAT THEY WOULD BE AVAILABLE AND TRAINED IN TIME TO MEET THE DELIVERY REQUIREMENTS;

4. REIMERS HAD NO DEMONSTRATED CAPABILITY TO PRODUCE THIS OR SIMILAR ITEMS WHICH REQUIRED A VAST AMOUNT OF EXPERIENCE IN THE PRODUCTION OF ACCEPTABLE BLAST TUBES AND NOZZLE ASSEMBLIES FOR THE HERCULES MISSILE.

IT THUS WAS CONCLUDED THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD BE SERVED BY MAKING AWARD TO INTERCONTINENTAL AS THE MOST QUALIFIED LOW BIDDER. AWARD WAS MADE TO THAT BIDDER ON OCTOBER 16, 1963, IN THE AMOUNT OF $553,559.16.

YOUR PROTEST IS DIRECTED TO THE FAILURE OF THE PROCUREMENT AGENCY TO SUBMIT THE MATTER OF YOUR COMPETENCY AS A PROSPECTIVE GOVERNMENT CONTRACTOR TO THE SMALL BUSINESS ADMINISTRATION (SBA), PRIOR TO REJECTION OF YOUR BID AND AWARD TO INTERCONTINENTAL.

UNDER 15 U.S.C. 637 (B) (7), SBA IS AUTHORIZED TO CERTIFY WITH RESPECT TO THE COMPETENCY, AS TO CAPACITY AND CREDIT, OF ANY SMALL BUSINESS CONCERN TO PERFORM A SPECIFIC GOVERNMENT CONTRACT; AND WHEN SUCH A CERTIFICATION IS ISSUED, IT IS CONCLUSIVE ON THE PROCUREMENT AGENCY.

ASPR 1-705.6 (B) (I) PROVIDES THAT:

"/B) IF A SMALL BUSINESS CONCERN HAS SUBMITTED AN OTHERWISE ACCEPTABLE BID OR PROPOSAL BUT HAS BEEN FOUND BY THE CONTRACTING OFFICER TO BE NONRESPONSIBLE AS TO CAPACITY OR CREDIT, AND IF THE BID OR PROPOSAL IS TO BE REJECTED FOR THIS REASON ALONE, (I) SBA SHALL BE NOTIFIED OF THE CIRCUMSTANCES SO AS TO PERMIT IT TO ISSUE A CERTIFICATE OF COMPETENCY, AND (II) AWARD SHALL BE WITHHELD PENDING EITHER SBA ACTION CONCERNING ISSUANCE OF A CERTIFICATE OF COMPETENCY OR THE EXPIRATION OF FIFTEEN WORKING DAYS AFTER SBA IS SO NOTIFIED, WHICHEVER IS EARLIER, SUBJECT TO THE FOLLOWING:

"/I) THIS PROCEDURE IS NOT MANDATORY WHERE THE CONTRACTING OFFICER CERTIFIES IN WRITING THAT AWARD MUST BE MADE WITHOUT DELAY, AND PROMPTLY ADVISES THE SBA REPRESENTATIVE THEREOF, AND INCLUDES IN THE CONTRACT FILE A STATEMENT SIGNED BY HIM WHICH JUSTIFIES THE CERTIFICATE. A COPY OF THE STATEMENT SHALL BE FURNISHED THE SBA REPRESENTATIVE.'

WHILE YOUR BID WAS REJECTED BECAUSE IT WAS DETERMINED THAT YOU LACKED THE CAPABILITIES TO ASSURE SATISFACTORY TIMELY PERFORMANCE AND ORDINARILY, PURSUANT TO THE ASPR QUOTED ABOVE, THE MATTER WOULD BE SUBMITTED TO SBA FOR CONSIDERATION AS TO WHETHER A CERTIFICATE OF COMPETENCY SHOULD BE ISSUED, THE CONTRACTING OFFICER WAS NOT OBLIGATED TO FOLLOW SUCH PROCEDURE WHEN AWARD WAS REQUIRED TO BE MADE WITHOUT DELAY. PURSUANT TO ASPR 1- 705.6 (B) (I), THE CONTRACTING OFFICER MADE THE FOLLOWING DETERMINATION AND FINDING ON OCTOBER 16, 1963:

"1. IN CONSIDERATION OF INCL. NO. 1 HERETO, SIGNED BY COL. B. N. LUCZAK, PROJECT MANAGER, HERCULES MISSILE SYSTEM WHICH DEALS WITH THE URGENCY OF THE REQUIRED DELIVERY OF BLAST TUBES AND NOZZLE ASSEMBLIES WHICH WILL BE REQUIRED FOR DELIVERY UNDER THE CONTRACT RESULTING FROM IFB AMC (Z) 01-021 -64-518, PARTICULARLY THE FACT THAT TIMELY DELIVERY OF THESE COMPONENTS IS ESSENTIAL AS GOVERNMENT FURNISHED EQUIPMENT TO THE MISSILE PRIME CONTRACTOR FOR INCORPORATION INTO THE HERCULES MISSILES TO MEET DEPARTMENT OF DEFENSE, AND MILITARY ASSISTANCE PROGRAM AND NATO COMMITMENTS, I DETERMINE THAT BECAUSE OF TIME URGENCY, IT IS IN THE BEST INTEREST OF THE GOVERNMENT TO AWARD THE CONTRACT UNDER IFB AMC (Z) 01-021-64-518 TO THE NEXT LOWEST RESPONSIVE, RESPONSIBLE BIDDER.

"2. I HEREBY DETERMINE THAT AWARD OF THE CONTRACT UNDER THIS IFB MUST BE MADE IMMEDIATELY AND ANY FURTHER DELAY THEREOF WILL JEOPARDIZE THE GOVERNMENT'S INTERESTS WHICH REQUIRES POSITIVE ASSURANCE OF MEETING THE AFORESAID COMMITMENTS.

"3. IN ADDITION TO THE FOREGOING DELAY OF AWARD UNDER THIS IFB WOULD SERIOUSLY ENDANGER THE LOSS OF GOVERNMENT FUNDS BECAUSE OF LIABILITY FOR THE CURRENT FIXED PRICE CONTRACT FOR WHICH THESE COMPONENTS ARE REQUIRED FOR ASSEMBLY INTO HERCULES MISSILES.

"4. I HEREBY DETERMINE, THEREFORE, IN ACCORDANCE WITH ASPR 1705.6B (I) THAT I AM UNABLE TO AFFORD THE OPPORTUNITY TO SMALL BUSINESS ADMINISTRATION TO CONSIDER THE ISSUANCE OF A CERTIFICATE OF COMPETENCY WITH REGARD TO THE BID OF REIMERS MISSILE COMPONENTS, INC., PRESENTLY THE LOW BIDDER. SUCH A CERTIFICATE OF COMPETENCY WOULD BE ESSENTIAL PRIOR TO ANY FINDING BY ME THAT THAT BIDDER WAS A RESPONSIBLE BIDDER FOR THE FOLLOWING REASONS:

A. THE PRESENT LOW BIDDER DOES NOT HAVE IN BEING A FACILITY CONSIDERED CAPABLE OF PRODUCING THE REQUIRED ITEMS.

B. THE POSSIBILITY OF THIS BIDDER BEING ABLE TO RECRUIT AND TRAIN COMPETENT PERSONNEL WITHIN THE CRITICAL TIME FRAME REQUIRED IS DOUBTFUL.

C. A VAST AMOUNT OF EXPERIENCE HAS BEEN PROVEN TO BE ESSENTIAL TO THE PRODUCTION OF BLAST TUBES AND NOZZLE ASSEMBLIES FOR THIS SYSTEM BY PAST EXPERIENCE FOR THIS ITEM AND SIMILAR MISSILE ITEMS FOR WHICH THIS COMMAND HAS HAD OVER FIVE YEARS OF EXPERIENCE.

"5. IN VIEW OF THE FOREGOING AND BECAUSE OF THE CRITICAL IMMUTABLE REQUIREMENT THAT AN ACCEPTABLE INITIAL PRODUCTION SAMPLE MADE FROM THE SAME TOOLS, PRODUCTION SET-UP, PROCESS, VENDOR SPECIFICATIONS AND DRAWINGS, MATERIALS AND CONTROLS USED FOR PRODUCTION MATERIAL MUST BE DELIVERED WITHIN 90 DAYS AFTER AN AWARD OF THE CONTRACT, I AM FORCED TO DETERMINE THAT TIME WILL NOT PERMIT REQUEST OF A CERTIFICATE OF COMPETENCY WHICH IS ESSENTIAL TO QUALIFY THE LOW BIDDER HEREIN AS A RESPONSIBLE BIDDER AND AWARD OF THIS CONTRACT WILL BE MADE AS NOTED ABOVE FORTHWITH.'

IT LONG HAS BEEN AN ESTABLISHED RULE OF OUR OFFICE THAT THE DETERMINATION OF THE CAPABILITIES OF A BIDDER--- INDEPENDENT OF THE AUTHORITY OF SBA TO ISSUE A CERTIFICATE OF COMPETENCY--- IS PRIMARILY A RESPONSIBILITY AND FUNCTION OF THE PROCUREMENT AGENCY, AND IN THE ABSENCE OF BAD FAITH OR LACK OF REASONABLE FACTUAL BASIS FOR THE DETERMINATION, WE WILL NOT OBJECT TO THE DETERMINATION MADE. 38 COMP. GEN. 248. THE RECORD BEFORE US AMPLY SUPPORTS THE DETERMINATION OF URGENCY AND THAT THE AWARD MADE TO INTERCONTINENTAL WILL ASSURE CONTINUOUS UNINTERRUPTED PRODUCTION OF THE ASSEMBLIES WHICH MUST BE FINALLY FURNISHED AS GOVERNMENT-FURNISHED EQUIPMENT TO THE MISSILE CONTRACTOR IN ORDER TO MINIMIZE DELAYS AND ANY RESULTING EXCESS COSTS TO THE GOVERNMENT.

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