B-139377, SEP. 15, 1959

B-139377, SEP. 15, 1959

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 25, 1959, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY (LOGISTICS), REQUESTING RECONSIDERATION OF OUR DECISION OF JUNE 30, 1959, TO YOU, WHEREIN WE HELD THAT THE CERTIFICATE OF COMPETENCY ISSUED BY THE SMALL BUSINESS ADMINISTRATION TO THE MID-STATE CONSTRUCTION COMPANY PURSUANT TO SECTION 8 (B) (7) OF PUBLIC RESPONSIBILITY UNDER INVITATION FOR BIDS NO. ORD-29-040- 59-67, DATED DECEMBER 5, 1958.

WITH RESPECT TO THE STATEMENT IN OUR DECISION THAT "ACTION BY YOUR DEPARTMENT SHOULD BE TAKEN ACCORDINGLY," IT IS STATED BY THE DEPUTY ASSISTANT SECRETARY THAT TERMINATION OF THE RESULTING CONTRACT WITH THE STANDARD CONSTRUCTION COMPANY WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT OR THE DEFENSE EFFORT IN VIEW OF THE FOLLOWING CONSIDERATIONS:

"THE CURRENT CONTRACT IS RELATED TO A CRITICAL DEFENSE PROGRAM; I.E., NIKE-ZEUS. THE FACILITIES BEING CONSTRUCTED ARE SCHEDULED FOR COMPLETION ON OCTOBER 25 TO BE AVAILABLE FOR TESTING IN NOVEMBER OF 1959. THE FACILITIES IN QUESTION WILL BE INTEGRATED INTO A RANGE CHAIN RADAR SYSTEM OF THE FPS-16 RADARS, FOR WHICH THE CONTRACTED FACILITIES ARE REQUIRED. THE RADAR SYSTEM IS EXPECTED TO FURNISH DATA ON ALL MISSILE PROGRAMS AND TO ACCURATELY POSITION MORE PRECISELY OTHER INSTRUMENTATION ON MISSILES IN FLIGHT. EXISTING EQUIPMENT IS INADEQUATE FOR THIS PURPOSE. SINCE THE PROGRAM TIME SCHEDULE IS EXTREMELY CLOSE, ANY POSSIBILITY OF DELAY MUST, AT THIS POINT, BE STUDIOUSLY AVOIDED.

"AT THIS POINT TO SUBSTITUTE THE MID-STATE CONSTRUCTION COMPANY BECAUSE OF THE CERTIFICATE OF COMPETENCY ISSUED TO IT BY THE SMALL BUSINESS ADMINISTRATION, WOULD PERMIT A CONTRACTOR TO UNDERTAKE WORK WHOSE EARLIER PERFORMANCE UNDER CONTRACT AT THE SAME INSTALLATION FOR SUBSTANTIALLY SIMILAR WORK HAS BEEN DETERMINED TECHNICALLY INCOMPETENT AND UNRELIABLE. THIS EARLIER CONTRACT HAS BEEN TERMINATED FOR DEFAULT WITH APPROXIMATELY $40,000 BEING WITHHELD DUE TO ITS FAILURE OR REFUSAL TO CORRECT CRITICAL DEFICIENCIES (29 IN NUMBER) IN THE FORM OF KINKED CABLE. THE DEFICIENCIES MAY WELL HAVE TO BE CORRECTED BY TECHNICAL PERSONNEL OF THE SIGNAL CORPS AND ORDNANCE WITH THE AID OF BELL TELEPHONE COMPANY.

"THE CURRENT CONTRACTOR, STANDARD CONSTRUCTION, HAS COMPLETED APPROXIMATELY SIX PERCENT OF THE CONTRACT WHICH COMPREHENDS (1) REQUISITE SURVEYING AND STAKING, (2) CONSTRUCTION OF A CABLE HUT, (3) THE LAYING OUT OF CABLE MARKERS. REQUIRED EQUIPMENT ON SITE INCLUDES A TRENCHING MACHINE, A CABLE TRAILER, FOUR 2 1/2-TON PICKUP TRUCKS, AND RELATED EQUIPMENT. EN ROUTE TO THE SITE OF PERFORMANCE IS 77,919 FEET OF SPECIAL CABLE FROM THE ANSONIA WIRE AND CABLE COMPANY, ASHTON, RHODE ISLAND, DUE 10 AUGUST 1959. THE BALANCE OF 106,081 FEET WILL BE SHIPPED DURING THE WEEK OF 10 AUGUST. ARRIVAL OF THE CABLE WILL PERMIT FULL SCALE OPERATIONS TO GO FORWARD, AND PARTICULARLY TRENCHING. SINCE THE COST OF THE CABLE IS APPROXIMATELY $190,000 AND THE TOTAL CONTRACT PRICE IS $250,000, IT IS APPARENT THAT THE PREPONDERANT PORTION OF THE CONTRACT HAS BEEN COMPLETED IN TERMS OF DOLLARS COMMITTED. IN ADDITION, A PROGRESS PAYMENT OF $4,500 HAS BEEN MADE TO STANDARD.

"TO TERMINATE THE EXISTING CONTRACT WITH STANDARD AND SUBSTITUTE A NEW CONTRACTOR WILL, BY THE BEST ESTIMATE AVAILABLE, DELAY THE PROJECT BY APPROXIMATELY 120 DAYS. THE AMOUNT OF DELAY WHICH WILL BE EXPERIENCED IF MID-STATE IS SUBSTITUTED FOR STANDARD CANNOT BE ESTIMATED IN LIGHT OF THE FACT THAT THERE IS NO REAL ASSURANCE THAT TECHNICAL EQUIPMENT OR KNOWHOW IS AVAILABLE TO DO THIS WORK.'

ON THE BASIS OF THE FOREGOING FACTS AND CIRCUMSTANCES, YOU ARE ADVISED THAT WE WOULD HAVE NO OBJECTION TO THE CONTINUANCE OF THE CURRENT CONTRACT AS IN THE BEST INTERESTS OF THE GOVERNMENT. THIS CONCLUSION, OF COURSE, SHOULD NOT BE REGARDED AS REPRESENTING A DEPARTURE FROM THE PRINCIPLE LAID DOWN IN OUR DECISION OF JUNE 24, 1959, B-139366.