B-128810, DEC. 28, 1956

B-128810, DEC. 28, 1956

TO LOCKLEY MACHINE COMPANY:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. ORD-36-038-56 C-553, ISSUED BY FRANKFORD ARSENAL, PHILADELPHIA, PENNSYLVANIA, AND OPENED ON MAY 3, 1956.

THE INVITATION REQUESTED BIDS FOR FURNISHING 2886 CATAPULTS, M3. THE INVITATION PROVIDED FOR A MANDATORY DELIVERY SCHEDULE OF A PILOT LOT, CONSISTING OF FIVE ASSEMBLED UNITS AND 10 COMPLETE BUT UNASSEMBLED UNITS, WITHIN 90 DAYS FROM DATE OF AWARD, A PRODUCTION LOT OF 316 UNITS WITHIN 150 DAYS FROM DATE OF AWARD AND 400 MONTHLY THEREAFTER UNTIL COMPLETION OF THE CONTRACT. BIDDERS WERE REQUIRED TO FURNISH PROCESS SHEETS INDICATING HOW THEY INTENDED TO MANUFACTURE THE ITEM, AS WELL AS THE QUALITY CONTROL MEASURES TO BE TAKEN TO ASSURE THE PRODUCTION OF A QUALITY ITEM.

A TOTAL OF 29 BIDS WERE RECEIVED. ON THE BASIS OF PREAWARD SURVEYS AND THE PROCESS SHEETS SUBMITTED, IT WAS DETERMINED THAT THE SIX LOWEST BIDDERS EITHER COULD NOT MANUFACTURE OR COULD NOT EFFECT DELIVERY IN ACCORDANCE WITH THE MANDATORY DELIVERY SCHEDULE AND, THEREFORE, THEIR BIDS WERE REJECTED. THE AWARD WAS MADE TO THE SEVENTH LOW BIDDER AS BEING THE LOWEST BIDDER CAPABLE OF COMPLYING WITH THE TERMS AND CONDITIONS OF THE INVITATION.

YOU, THE SIXTH LOW BIDDER, PROTEST THE REJECTION OF YOUR BID ON THE BASIS OF THE ADMINISTRATIVE DETERMINATION THAT YOU COULD NOT PRODUCE THE EQUIPMENT IN ACCORDANCE WITH THE REQUIRED DELIVERY SCHEDULE. IT IS STATED THAT YOUR BID WAS SUBMITTED IN GOOD FAITH; THAT IT WAS CLEAR TO YOU THAT YOU COULD EASILY MEET THE SPECIFIED DELIVERY SCHEDULE, AND IT IS BELIEVED THAT IF THE CONTRACTING OFFICER IS PERMITTED TO SUBSTITUTE HIS JUDGMENT FOR YOURS ON TECHNICAL MATTERS OF THIS NATURE, THE ENTIRE COMPETITIVE BID SYSTEM CAN BECOME A SHAM AND A FRAUD.

THE REPORT FURNISHED IN THE MATTER BY THE DEPARTMENT OF THE ARMY SHOWS THAT THIS PROCUREMENT WAS INITIATED BY THE INDUSTRIAL OFFICE FOR CARTRIDGE ACTUATED DEVICES, FRANKFORD ARSENAL, BASED UPON ITS REQUIREMENT FROM THE AIR FORCE FOR M3 CATAPULTS. THE MANDATORY DELIVERY SCHEDULE WAS STIPULATED ON THE BASIS OF FRANKFORD ARSENAL'S COMMITMENT TO THE AIR FORCE AND TOOK INTO CONSIDERATION AN ADEQUATE MANUFACTURING LEAD TIME, WITH THE EXPECTATION THAT AN AWARD COULD BE MADE BY JUNE 1, 1956, BARRING ANY IMPEDIMENT, AND DELIVERY OBTAINED IN ACCORDANCE WITH THE AIR FORCE REQUIREMENTS. DUE TO FRANKFORD ARSENAL'S KNOWLEDGE OF THE TECHNICAL DIFFICULTIES ENCOUNTERED IN THE MANUFACTURE OF CARTRIDGE ACTUATED DEVICES AND THE NECESSITY THAT THEY BE PRODUCED IN STRICT ACCORDANCE WITH THE SPECIFICATIONS, IT WAS DEEMED ADVISABLE FOR FRANKFORD ARSENAL'S INSPECTION SPECIALISTS TO PERFORM JOINT SURVEYS WITH THE VARIOUS ORDNANCE DISTRICTS CONCERNED IN MAKING THE PREAWARD SURVEYS OF THE BIDDERS IN CONTENTION. ORDER TO AID IN THE DETERMINATION OF THE CAPABILITY OF THE BIDDERS TO PRODUCE THE ITEM AND WITHIN THE SCHEDULED TIME, THE SPECIFICATIONS REQUIRED BIDDERS TO SUBMIT WITH THEIR BIDS PROCESS SHEETS INDICATING HOW THEY INTENDED TO MANUFACTURE THE ITEM, AS WELL AS QUALITY CONTROL MEASURES TO BE TAKEN TO ASSURE THE PRODUCTION OF A QUALITY ITEM.

ON MAY 31 OR JUNE 1, 1956, AN INSPECTOR FROM THE FRANKFORD ARSENAL, TOGETHER WITH INSPECTORS FROM THE PITTSBURGH ORDNANCE DISTRICT, VISITED YOUR PLANT AND INTERVIEWED REPRESENTATIVES OF YOUR COMPANY CONCERNING THE PROPOSED METHOD OF MANUFACTURE AND QUALITY CONTROL MEASURES. ON OR ABOUT JUNE 6, 1956, THE INSPECTOR ORALLY ADVISED FRANKFORD ARSENAL THAT FROM WHAT HE HAD BEEN SHOWN AND SAW, YOU WERE NOT CAPABLE OF MANUFACTURING THE CATAPULTS IN ACCORDANCE WITH THE CONDITIONS OF THE INVITATION. HOWEVER, THE PITTSBURGH ORDNANCE DISTRICT ON JUNE 14, 1956, ADVISED FRANKFORD ARSENAL THAT IT RECOMMENDED YOU FOR THE AWARD. IN VIEW OF THE PRIOR REPORT THAT YOU WERE NOT CAPABLE OF PERFORMING, THIS RECOMMENDATION WAS QUESTIONED AND PITTSBURGH ORDNANCE DISTRICT WAS REQUESTED TO SUBMIT THE DATA TO THE ARSENAL FOR THEIR EVALUATION. UPON RECEIPT TO SUBMIT THE DATA TO THE ARSENAL FOR THEIR EVALUATION. UPON RECEIPT OF DATA, THE PROCESS SHEETS WERE REFERRED TO THE INDUSTRIAL OFFICE FOR CARTRIDGE ACTUATED DEVICES FOR EVALUATION AND IT BECAME APPARENT THAT THERE WERE A NUMBER OF OMISSIONS AND INCOMPLETELY PLANNED OPERATIONS. THESE POINTS WERE DISCUSSED OVER THE TELEPHONE WITH ENGINEERING PERSONNEL AT THE PITTSBURGH ORDNANCE DISTRICT, AND AN AGREEMENT WAS REACHED THAT THE PITTSBURGH ORDNANCE DISTRICT WOULD IMMEDIATELY CONTACT YOU AND OBTAIN FURTHER CLARIFICATION OF YOUR PROCESS SHEETS. ON JUNE 20, 1956, REPRESENTATIVES OF THE PITTSBURGH ORDNANCE DISTRICT DELIVERED TO FRANKFORD ARSENAL YOUR SUPPLEMENTARY OR REVISED PROCESS SHEETS. AS A RESULT OF DISCUSSIONS WITH THE ENGINEERS AT FRANKFORD ARSENAL A RECOMMENDATION WAS MADE BY THE CHIEF, INDUSTRIAL OFFICE FOR CARTRIDGE ACTUATED DEVICES, THAT YOU WERE NOT CAPABLE OF PRODUCING THE CATAPULTS IN ACCORDANCE WITH THE APPLICABLE DRAWINGS AND SPECIFICATIONS. THIS RECOMMENDATION WAS BASED UPON A FINDING THAT WHEN IT BECAME EVIDENT TO YOU THAT THE PROPOSED METHOD OF MANUFACTURING WAS UNSATISFACTORY, MAJOR CHANGES WITH RESPECT TO TOOLING AND TYPES OF MACHINE TOOLS WOULD BE REQUIRED AND THAT THE CHANGES WOULD INVOLVE ADDITIONAL LABOR MONEY, AND MATERIALS BEFORE CORRECTION COULD BE MADE AND THE RESULTING DELAY WOULD MAKE IT IMPOSSIBLE FOR YOU TO MEET THE DELIVERY SCHEDULE. THE PITTSBURGH ORDNANCE DISTRICT CONCURRED IN SUCH FINDINGS AND WITHDREW THEIR ORIGINAL RECOMMENDATION.

THE SMALL BUSINESS ADMINISTRATION, TO WHOM YOU HAD APPLIED FOR A CERTIFICATE OF COMPETENCY, WAS KEPT ADVISED OF THE PROCEEDINGS AND ON THE BASIS OF THE NEW EVALUATION WAS REQUESTED TO PROCEED WITH ITS SURVEY OF YOUR COMPANY. ON JULY 6, 1956, THE SMALL BUSINESS ADMINISTRATION ADVISED FRANKFORD ARSENAL THAT ON THE BASIS OF ITS ANALYSIS OF THE CASE CONDITIONS PRESENT DID NOT JUSTIFY ISSUANCE OF A CERTIFICATE OF COMPETENCY, DUE TO LACK OF ASSURANCE THAT YOUR COMPANY COULD MEET THE REQUIRED DELIVERY SCHEDULE.

ON JULY 11, 1956, THE ENTIRE FILE WAS SUBMITTED TO THE BOARD OF AWARDS, FRANKFORD ARSENAL, WHICH CONSISTED OF FOUR MEMBERS, WHO REVIEWED THE VARIOUS TRANSACTIONS AND CONCURRED IN THE RECOMMENDATION THAT THE AWARD BE MADE TO THE SEVENTH LOW BIDDER. HOWEVER, A TELEPHONE CALL WAS RECEIVED FROM THE SMALL BUSINESS ADMINISTRATION, WASHINGTON, D.C., ON JULY 12, 1956, ADVISING THAT YOU HAD SUBMITTED ADDITIONAL FACTS AND HAD REQUESTED REVIEW OF ITS REFUSAL TO ISSUE A CERTIFICATE OF COMPETENCY TO YOUR COMPANY AND REQUESTED THAT A CONFERENCE BE ARRANGED BETWEEN REPRESENTATIVES OF FRANKFORD ARSENAL, THE SMALL BUSINESS ADMINISTRATION AND YOUR COMPANY, FOR PRESENTING THE ADDITIONAL FACTS. THE MEETING WAS HELD ON JULY 13, 1956, AND IT IS REPORTED THAT YOUR REPRESENTATIVES STATED THAT IN VIEW OF ADDITIONAL PLANNING, TIMELY ACQUISITION OF NEW EQUIPMENT AND ADDITIONAL SUBCONTRACTING, THEY WERE PREPARED TO EDIT AND CHANGE THE PROCESS SHEETS. APPARENTLY ONE MAJOR CHANGE WAS THE PROPOSAL TO ACQUIRE A CRI DAN, MODEL B, THREADING MACHINE. THE REVISED PROCESS SHEETS WERE REVIEWED BY THE ENGINEERING PERSONNEL OF THE ARSENAL, BUT THEY STILL WERE OF THE OPINION THAT YOU HAD NOT DEMONSTRATED THAT YOU HAD THE ABILITY TO PRODUCE THE CATAPULTS IN ACCORDANCE WITH THE REQUIRED DELIVERY SCHEDULE. ACCORDINGLY, ON JULY 17, 1956, THE AWARD WAS MADE TO THE LOWEST BIDDER WHO WAS BELIEVED CAPABLE OF PRODUCING THE ITEMS IN ACCORDANCE WITH THE REQUIREMENTS AND CONDITIONS OF THE INVITATION.

THE GENERAL IMPORTANCE OF THE CATAPULTS AND THE URGENT NEED FOR PROMPT INITIAL DELIVERIES APPEARS TO BE SUCH AS TO WARRANT THE CLAUSE CONTAINED IN THE INVITATION REQUIRING THE BIDDER TO SHOW HIS QUALIFICATIONS PRIOR TO AWARD IN ORDER TO AVOID ANY DELAY IN FURNISHING THE ITEM. UNDER THE REQUIREMENT THE BURDEN IS UPON THE BIDDER TO SATISFY THE GOVERNMENT THAT IT HAS THE PERSONNEL, EQUIPMENT, EXPERIENCE, AND ABILITY NOT ONLY TO MANUFACTURE THE ITEM, BUT ALSO TO EFFECT DELIVERY WITHIN THE TIME SPECIFIED. THE SELECTION OF A RESPONSIBLE BIDDER AFTER CONSIDERING THE QUALIFICATIONS OF THE VARIOUS BIDDERS IS, OF COURSE, THE RESPONSIBILITY OF THE CONTRACTING AGENCY. SEE IN THIS CONNECTION, THE RESPONSIBILITY OF THE CONTRACTING AGENCY. SEE IN THIS CONNECTION O-BRIEN V. CARNEY, 6 F.SUPP. 761. IN THE INSTANT CASE THE INVESTIGATION MADE BY THE ADMINISTRATIVE OFFICE APPEARS TO HAVE BEEN RATHER EXTENSIVE AND YOU WERE GIVEN SEVERAL OPPORTUNITIES TO MODIFY YOUR PROPOSED METHOD OF PRODUCING THE ITEMS. FURTHERMORE, AN INDEPENDENT AGENCY, THE SMALL BUSINESS ADMINISTRATION, DID NOT BELIEVE THAT YOU HAD DEMONSTRATED THAT YOU COULD PRODUCE THE ITEMS IN ACCORDANCE WITH THE MANDATORY DELIVERY SCHEDULE.

ACCORDINGLY, SINCE WE CANNOT FIND THAT THE DECISION OF THE ADMINISTRATIVE OFFICIALS WAS WITHOUT SUBSTANTIAL GROUND, THERE IS NO LEGAL BASIS UPON WHICH WE WOULD BE JUSTIFIED IN QUESTIONING THE ..END :