B-150594, JUN. 20, 1963

B-150594, JUN. 20, 1963

TO THE AEROSPACE RESEARCH CORPORATION:

UNDER DATE OF JANUARY 14, 1963, WE ACKNOWLEDGED THE RECEIPT OF A COPY OF YOUR LETTER DATED JANUARY 7, 1963, TO THE GEORGE C. MARSHALL SPACE FLIGHT CENTER, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION,HUNTSVILLE, ALABAMA, PROTESTING THE AWARDS MADE UNDER REQUEST FOR QUOTATIONS NO. TP 3-83148, DATED SEPTEMBER 6, 1962, COVERING ENVIRONMENTAL QUALIFICATION TESTING OF ELECTRICAL, ELECTRONICS AND ELECTRO-MECHANICAL PARTS AND COMPONENTS OF SPACE VEHICLES. BY A LETTER OF THE SAME DAY WE REQUESTED THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION TO FURNISH OUR OFFICE A FULL REPORT, INCLUDING THE VIEWS OF THE AGENCY CONCERNING YOUR PROTEST, TOGETHER WITH COPIES OF ALL PAPERS AND DOCUMENTS PERTINENT TO A CONSIDERATION OF THE MATTER.

WE RECEIVED FROM THE HONORABLE RICHARD H. POFF, HOUSE OF REPRESENTATIVES, A LETTER DATED JANUARY 9, 1963, WHEREIN REFERENCE WAS MADE TO YOUR LETTER OF JANUARY 7, 1963, TO NASA. ON THE BASIS OF THE STATEMENTS MADE IN YOUR LETTER TO THE EFFECT THAT TWO CONTRACTS WERE AWARDED TO TWO COMPANIES IN HUNTSVILLE, ALABAMA, AT AN AGGREGATE PRICE OF $242,300, ON A COST-PLUS-A- FIXED-FEE BASIS, WHEREIN YOU QUOTED A FIXED PRICE OF $99,366, MR. POFF EXPRESSED THE VIEW THAT THE GENERAL ACCOUNTING OFFICE SHOULD CONDUCT AN APPROPRIATE INVESTIGATION IN ORDER TO ASCERTAIN THE FACTS CONCERNING THE AWARDS.

BY LETTER DATED MARCH 8, 1963, THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION SUBMITTED A REPORT CONCERNING YOUR PROTEST, COMMENTING GENERALLY ON THE MATTERS INVOLVED AND ADVISING THAT UNDER DATE OF DECEMBER 26, 1962, AWARDS WERE MADE TO THE BROWN ENGINEERING COMPANY AND TO THE WYLE LABORATORIES IN THE NEGOTIATED AMOUNTS OF $120,762 AND $120,540, RESPECTIVELY, ON THE BASIS OF ITS DETERMINATION THAT SUCH ACTION WAS IN THE BEST INTERESTS OF THE GOVERNMENT AFTER TECHNICAL AND PRICE CONSIDERATION.

THERE WAS RECEIVED FROM MR. POFF A FURTHER LETTER DATED MARCH 25, 1963, ENCLOSING COPIES OF YOUR LETTERS DATED MARCH 13 AND MARCH 21, 1963, IN THE FORMER OF WHICH YOU COMMENTED AT LENGTH UPON THE STATEMENTS CONTAINED IN THE REPORT SUBMITTED BY NASA UNDER DATE OF MARCH 8, 1963. THEREAFTER, WE FORWARDED TO NASA A COPY OF YOUR LETTER OF MARCH 13,1963, FOR SUCH COMMENT AS THE AGENCY MIGHT WISH TO MAKE CONCERNING THE MATTERS SET FORTH THEREIN. WE HAVE NOW RECEIVED FROM NASA A LETTER DATED MAY 15, 1963, FORWARDING A SUPPLEMENTAL REPORT DATED MAY 2, 1963, BY THE DEPUTY DIRECTOR FOR ADMINISTRATION OF THE SPACE FLIGHT CENTER.

IN THE CITED REQUEST FOR QUOTATIONS PROPOSALS WERE INVITED ON A COST-PLUS -A-FIXED-FEE BASIS FOR FURNISHING PERSONNEL, FACILITIES, AND MATERIALS TO CONDUCT ENVIRONMENTAL QUALIFICATION TESTS ON ELECTRICAL, ELECTRONICS AND ELECTRO-MECHANICAL PARTS AND COMPONENTS OF SPACE VEHICLES, AS MORE FULLY DESCRIBED IN THE SCHEDULE ATTACHED THERETO. UNDER DATE OF OCTOBER 6, 1962, YOU SUBMITTED A PROPOSAL SHOWING AN ESTIMATED COST OF $94,634, PLUS A FIXED-FEE OF $4,737, OR FOR A TOTAL ESTIMATED COST OF $99,366 (APPARENTLY SHOULD HAVE BEEN $99,371).

IT WAS REPORTED BY NASA THAT 107 FIRMS WERE SOLICITED FOR THIS PROCUREMENT AND THAT OUT OF THE 47 PROPOSALS RECEIVED YOUR BID HAD A RELATIVE STANDING OF 14TH AFTER TECHNICAL EVALUATION. THE AGENCY ADVISED THAT IN THE TECHNICAL EVALUATION OF YOUR BID THE MOST SERIOUS DEFICIENCY WAS THE LACK OF ACTUAL EXPERIENCE BY YOUR CONCERN IN ELECTRICAL, ELECTRONICS AND ELECTRIC-MECHANICAL TESTING, AND THAT THIS DEFICIENCY ALONE WOULD HAVE ELIMINATED ANY PROPOSER FROM CONSIDERATION. IT WAS STATED THAT IN A PROCUREMENT OF THIS TYPE REQUIRING A VERY HIGH ORDER OF TECHNICAL COMPETENCE, PRICE IS NOT THE CONTROLLING FACTOR, AND THAT WHILE PRICE IS GIVEN SERIOUS CONSIDERATION, THE ABILITY TO ACCOMPLISH THE WORK IN AN ORDERLY AND TECHNICALLY PROFICIENT MANNER IS EVEN MORE IMPORTANT. IT WAS, THEREFORE, CONSIDERED THAT YOUR QUOTATION COULD NOT HAVE BEEN ACCEPTED IN ANY EVENT, DUE TO THE LOW RANKING OF YOUR BID AFTER TECHNICAL EVALUATION.

IN HIS REPORT DATED FEBRUARY 7, 1963, THE DEPUTY DIRECTOR FOR ADMINISTRATION AT THE SPACE FLIGHT CENTER TOOK THE POSITION THAT IN THE AREA OF "SPACE AND CAPACITY," THE 1,200 SQUARE FEET OF LABORATORY AREA, AS WELL AS THE AVAILABLE TECHNICAL PERSONNEL, WERE INADEQUATE, EVEN USING A PROPOSED THREE-SHIFT OPERATION. IN COMMENTING ON THIS POSITION YOU MADE THE FOLLOWING STATEMENT IN YOUR LETTER OF MARCH 13, 1963:

"THEY ARE EXTREMELY UNFAIR IN THEIR SUGGESTIONS THAT WE DO NOT HAVE ADEQUATE SPACE OR TECHNICIANS. WE MADE NO ELABORATE EFFORT TO CONVINCE THEM THAT SPACE OR TECHNICAL PERSONNEL WERE IN ADEQUATE SUPPLY IN THE ROANOKE AREA BECAUSE WE ARE AWARE THAT THEY DETERMINE THIS BY ON SITE INSPECTION BEFORE AWARDING A CONTRACT.'

IN HIS SUPPLEMENTARY REPORT DATED MAY 2, 1963, THE DEPUTY DIRECTOR FOR ADMINISTRATION GAVE CONSIDERATION TO THE QUOTED STATEMENT AND, IN OUR OPINION, MADE AN ADEQUATE RESPONSE THERETO. WE QUOTE BELOW TWO PARAGRAPHS FROM THE REPORTS OF MAY 2, 1963, THE SAME BEING SELF EXPLANATORY.

"MARSHALL SPACE FLIGHT CENTER'S LETTER OF FEBRUARY 7 DISCUSSED IN SPECIFIC DETAIL THE DEFICIENCIES WHICH RENDERED THE PROTESTING FIRM'S PROPOSAL TECHNICALLY UNACCEPTABLE. THESE DISQUALIFYING DEFICIENCIES WERE STATED TO BE INADEQUATE SPACE, INSUFFICIENT TECHNICAL PERSONNEL, AND INSUFFICIENT COMPANY EXPERIENCE IN THE SPECIFIC TESTING AREAS INVOLVED. THE FIRM'S PROPOSAL AND ITS MARCH 13 LETTER OBVIOUSLY RECOGNIZED THAT ADEQUATE EQUIPMENT, SPACE, AND PERSONNEL WERE NOT AVAILABLE AT THE TIME THE PROPOSAL WAS ADMITTED. THE FIRM'S PROPOSAL STATED DEFICIENCIES IN THE AREA OF EQUIPMENT AND SET FORTH PROPOSED MEANS FOR PROCURING ADDITIONAL EQUIPMENT, INCLUDING ONE MAJOR ITEM OF GOVERNMENT-FURNISHED EQUIPMENT. THE FIRM'S LETTER OF MARCH 13 ENDEAVORS TO SHOW THAT SPACE AND ADDITIONAL PERSONNEL ARE AVAILABLE IN THE ROANOKE AREA, AND GOES FURTHER TO ADD THAT THE FIRM, IN ITS PROPOSAL, MADE NO ELABORATE EFFORT TO SHOW THAT SPACE AND TECHNICAL PERSONNEL WERE IN ADEQUATE SUPPLY BECAUSE THE FIRM WAS AWARE THAT THIS WOULD BE DETERMINED BY SITE INSPECTION BEFORE CONTRACT AWARD. THE QUESTION IS THUS PRESENTED AS TO THE RESPONSIBILITY OF THE GOVERNMENT FOR DETERMINING WHETHER THIS FIRM EITHER HAD SUFFICIENT RESOURCES TO PERFORM, OR COULD OBTAIN THEM.

"THE REQUEST FOR QUOTATIONS CLEARLY MADE IT A RESPONSIBILITY OF PROSPECTIVE PROPOSERS TO SUBMIT INFORMATION SUFFICIENT TO DEMONSTRATE THEIR TECHNICAL CAPABILITIES TO PERFORM THE PROPOSED WORK. AEROSPACE RESEARCH CORPORATION STATES IN ITS LETTER OF MARCH 13 THAT THE FIRM FAILED TO MAKE A REAL EFFORT TO DO THIS. IT IS CONSIDERED UNREASONABLE, IN LIGHT OF THE NUMBER OF PROPOSALS RECEIVED (47) AND THE DEFICIENCIES IN THE FIRM'S PROPOSAL, TO HOLD THE GOVERNMENT RESPONSIBLE FOR CONDUCTING A FACILITY INVESTIGATION TO DEVELOP DATA ON TECHNICAL CAPABILITIES OF THE FIRM AND THE SURROUNDING AREA. IF PRICE ALONE IS TO ASSURE A FIRM AN OPPORTUNITY TO DISCUSS AND CORRECT TECHNICAL DEFICIENCIES, THE GOVERNMENT REASONABLY COULD ANTICIPATE EXTENDED DELAY IN AWARDS AND AN INCREASING NUMBER OF NON-RESPONSIVE PROPOSALS.'

IT HAS BEEN HELD CONSISTENTLY THAT EVEN UNDER STATUTES REQUIRING PROCUREMENT BY FORMAL ADVERTISING, AND AWARD TO THE RESPONSIBLE BIDDER SUBMITTING THE LOW, RESPONSIVE BID, THE DETERMINATION OF RESPONSIBILITY INCLUDES CONSIDERATION OF THE BIDDER'S FINANCIAL RESOURCES, HIS JUDGMENT, SKILL AND INTEGRITY AND HIS ABILITY TO SUCCESSFULLY CARRY OUT THE CONTRACT. OSBORN V. MITTEN, 6 P.2D 902; WILLIS V. HATHAWAY, 117 SO. 89, 94; INGE V. BOARD OF PUBLIC WORKS, 33 SO. 678, 681; STATE V. RICHARDS, 40 P. 210; 26 COMP. GEN. 676; 30 COMP. GEN. 235. THE DETERMINATION OF THE RESPONSIBILITY OF A GIVEN BIDDER IS PRIMARILY A FUNCTION OF THE ADMINISTRATIVE OFFICER CONCERNED AND IS NOT SUBJECT TO QUESTION IN THE ABSENCE OF A SHOWING OF BAD FAITH OR LACK OF REASONABLE FACTUAL BASIS FOR THE DETERMINATION. 37 COMP. GEN. 430, 435; ID. 798.

THE PROCUREMENT IN THIS CASE WAS NOT MADE UNDER FORMAL ADVERTISING PROCEDURES, BUT UNDER STATUTORY AUTHORITY PERMITTING NEGOTIATION, UNDER WHICH THE PROCURING AGENCY IS VESTED WITH A CONSIDERABLY BROADER RANGE OF DISCRETION. WE FIND NOTHING IN THE RECORD IN THIS CASE TO SUPPORT A CONCLUSION THAT THE DETERMINATIONS MADE BY THE SPACE FLIGHT CENTER WERE INFLUENCED BY ANY IMPROPER CONSIDERATIONS OR THAT THEY LACKED A REASONABLE FACTUAL BASIS. WE THEREFORE HAVE NO ALTERNATIVE BUT TO DENY YOUR PROTEST.

IT MAY BE ADDED THAT THE SEVERAL MATTERS SET FORTH IN YOUR LETTER OF MARCH 11, 1963, WERE CONSIDERED BY THE DEPUTY DIRECTOR FOR ADMINISTRATION IN HIS SUPPLEMENTAL REPORT OF MAY 2, 1963. HOWEVER, IN VIEW OF THE FACT THAT THE AGENCY APPEARS, FOR THE REASON STATED ABOVE, TO HAVE BEEN FULLY JUSTIFIED IN REJECTING YOUR BID, IT SEEMS TO BE UNNECESSARY TO REFER HEREIN TO THESE ADDITIONAL MATTERS.