B-142401, OCT. 20, 1960

B-142401, OCT. 20, 1960

TO MANHATTAN LIGHTING EQUIPMENT CO., INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 2, AUGUST 5, AND AUGUST 13, 1960, WITH THEIR ENCLOSURES, COMMENTING ON THE CONTRACTS INCLUDED IN THE LIST TRANSMITTED TO YOU WITH OUR LETTER OF JULY 28, 1960, AND CHARGING UNFAIR TREATMENT BY THE GENERAL STORES SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA. THERE HAVE BEEN RECEIVED ALSO YOUR LETTERS OF SEPTEMBER 6, SEPTEMBER 8, AND SEPTEMBER 14 RELATIVE TO THIS MATTER.

IN A REPORT RECEIVED FROM THE OFFICE OF THE SECRETARY OF THE NAVY, COMMENT IS MADE ON YOUR CONTENTIONS AND ON THE EXISTING SITUATION PERTAINING TO AWARDS TO YOUR CORPORATIONS. IT IS STATED THAT DURING THE CALENDAR YEARS 1958-59 YOU WERE AWARDED ELEVEN CONTRACTS BY THE GENERAL STORES SUPPLY OFFICE, ON THREE OF WHICH (27.3 PERCENT) DELIVERIES WERE LATE, AND THAT THE EXPLANATIONS OFFERED BY YOU (SUCH AS DELAYS BY YOUR SUPPLIERS) DID NOT CONSTITUTE VALID REASONS FOR EXCUSING THE DELINQUENCIES.

WITH REFERENCE TO YOUR CONTENTION THAT IT IS IMPROPER TO DENY AWARDS TO YOU ON THE BASIS OF DELINQUENT DELIVERIES UNDER CONTRACTS WITH OTHER MILITARY AGENCIES WHICH CONTINUE TO MAKE AWARDS TO YOU, IT IS STATED THAT, ASSUMING THE CORRECTNESS OF THE STATEMENTS IN YOUR LETTER OF AUGUST 2, 1960, RELATIVE TO THE 27 CONTRACTS LISTED THEREIN, THERE WAS A DELINQUENCY RATE OF 25.9 PERCENT (7 CONTRACTS) AND THAT NONE OF THE REASONS FOR DELINQUENCY STATED BY YOU WERE VALID REASONS FOR EXCUSING THE DELAYS. SUCH CONNECTION, IT IS STATED THAT ADDITIONAL DELINQUENT CONTRACTS FOR WHICH YOU ALLEGED INSPECTION DELAYS WERE NOT INCLUDED IN THE COMPUTATION. IT IS STATED FURTHER THAT YOU NORMALLY REGARD THE CONTRACT PERIOD AS BEGINNING WHEN YOU RECEIVED THE CONTRACT, EVEN THOUGH THE CONTRACT MAY REQUIRE DELIVERY IN A SPECIFIED NUMBER OF DAYS AFTER THE DATE OF THE CONTRACT; ALSO, THAT YOU REGARD THE DATE OF SHIPMENT AS THE COMPLETION DATE, DISREGARDING THE TIME REQUIRED FOR TRANSPORTATION.

THE DEPARTMENT INVITES ATTENTION TO PARAGRAPH 1-905.3 OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH PROVIDES THAT EXISTING INFORMATION WITHIN THE DEPARTMENT OF DEFENSE SHALL BE UTILIZED IN DETERMINING THE RESPONSIBILITY OF PROSPECTIVE CONTRACTORS; ALSO, TO PARAGRAPH 1-904.1 REQUIRING A DETERMINATION AS TO THE RESPONSIBILITY OF A CONTRACTOR ON EACH AND EVERY PURCHASE. IT IS STATED IN THE REPORT, IN SUBSTANCE, THAT EACH CONTRACTING OFFICER MUST MAKE HIS OWN DETERMINATION AS TO RESPONSIBILITY OF BIDDERS ON THE BASIS OF THE INFORMATION AVAILABLE TO HIM AND THE FACT THAT SOME CONTRACTING OFFICERS HAVE MADE AWARDS TO A BIDDER DOES NOT OBLIGATE OTHER CONTRACTING OFFICERS TO DO LIKEWISE. IT MAY BE ADDED THAT THE PROBABILITY OF PROMPT DELIVERY MAY BE MORE IMPORTANT TO SOME PROCUREMENT AGENCIES THAN TO OTHERS AND MORE IMPORTANT TO THE SAME AGENCY IN SOME PROCUREMENTS THAN IN OTHERS.

AS TO YOUR VIEW THAT IT IS IMPROPER TO REJECT YOUR BIDS ON THE BASIS OF DELINQUENT DELIVERIES IN 1958 AND 1959 ALTHOUGH CERTAIN AWARDS MADE TO YOU DURING 1960 WERE AHEAD OF SCHEDULE, THE DEPARTMENT STATES THAT DURING THE EARLY PART OF 1960 YOUR MOST RECENT PERFORMANCE RECORD WAS WITH REFERENCE TO 1958 AND 1959 CONTRACTS AND THAT CERTAIN CONTRACTS WERE AWARDED TO YOU IN LATE 1959 AND EARLY 1960, THE FIRST OF WHICH (NO. N155-50791) WAS COMPLETED 26 DAYS LATE ALTHOUGH OTHER CONTRACTS AWARDED TO YOU DURING THAT PERIOD HAVE BEEN COMPLETED ON TIME. IT IS REPORTED THAT A RECENT SURVEY OF YOUR CURRENT PERFORMANCE RECORD SHOWS IT TO BE IMPROVING ALTHOUGH NOT YET REGARDED AS SATISFACTORY.

AS WE HAVE STATED IN NUMEROUS LETTERS TO YOU (SEE FOR EXAMPLE OUR LETTER OF OCTOBER 10, 1960, B-143637, RELATIVE TO YOUR BIDS UNDER INVITATIONS NOS. IFB-155-/7-2/-1994-60, IFB-155-/7-6/-1924-60 AND IFB 155-/7-3/-2790- 60) WE HAVE HELD CONSISTENTLY THAT THE QUESTION OF QUALIFICATIONS OF A PROSPECTIVE CONTRACTOR PRIMARILY IS FOR DETERMINATION BY THE ADMINISTRATIVE OFFICERS CONCERNED AND SUCH DETERMINATION WILL NOT BE QUESTIONED BY US IN THE ABSENCE OF A CLEAR SHOWING OF BAD FAITH OR LACK OF A REASONABLE FACTUAL BASIS THEREFOR. 39 COMP. GEN. 468; 38 ID. 31; ID. 778; 37 ID. 430; ID. 676; ID. 798; 36 ID. 42. A CONSISTENT PERFORMANCE RECORD OF DELINQUENCY IN A CONSIDERABLE PROPORTION OF CONTRACTS AWARDED TO A CONTRACTOR WELL MIGHT BE REGARDED AS JUSTIFYING REJECTION OF MOST OF ITS LOW BIDS UNLESS AND UNTIL ITS RECORD IMPROVES, EVEN THOUGH MANY OF THE DELAYS IN DELIVERY MAY BE SMALL. FAIRNESS TO OTHER BIDDERS AND THE NEEDS OF THE PROCURING AGENCY REQUIRE THAT BIDS SHOULD BE SUBMITTED WITH THE INTENTION AND THE ABILITY TO MAKE DELIVERIES AS SPECIFIED IN THE INVITATION.

IN THE INSTANT MATTER, WE NOTE THAT--- AS ALSO STATED IN OUR LETTER OF AUGUST 10, 1960, ABOVE MENTIONED--- RECENTLY IMPROVED DELIVERIES BY YOUR CORPORATION HAVE RESULTED IN THE AWARD OF SEVERAL CONTRACTS TO YOU. THE INTEREST OF BOTH THE GOVERNMENT AND YOUR CORPORATION, IT IS HOPED THAT YOUR CURRENT AND FUTURE PERFORMANCE RECORD WILL BE SUCH AS TO WARRANT THE CONTINUED AWARD OF CONTRACTS TO YOU AT ALL TIMES WHEN YOU SUBMIT THE LOWEST RESPONSIVE BIDS.