B-156464, JUN. 21, 1965

B-156464, JUN. 21, 1965

TO INTERCONTINENTAL DYNAMICS CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 1, 1965, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER DEPARTMENT OF THE NAVY INVITATION NO. 383-221-65.

THE AVIATION SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA, BY THE REFERRED- TO INVITATION REQUESTED BIDS FOR FURNISHING STEP-LADDERED QUANTITIES OF VACUUM PRESSURE TEST SETS CONFORMING TO BUREAU OF NAVAL WEAPONS INTERIM SPECIFICATION 63/150 DATED JUNE 15, 1964. THE PROCUREMENT WAS DIVIDED INTO A NON-SET-ASIDE PORTION AND A SMALL BUSINESS SET-ASIDE PORTION.

AT THE BID OPENING IT WAS ANNOUNCED THAT THE FIRST STEP LADDER (A QUANTITY OF 113 UNDER THE NON-SET-ASIDE AND A QUANTITY OF 112 UNDER THE SET-ASIDE) WOULD BE THE QUANTITY AWARDED. SEVEN BIDS WERE RECEIVED AS FOLLOWS:

TABLE

BIDDER UNIT PRICE

FRED K. BAXTER CO. $ 3,655

AEROSONIC CORP. 3,875

INTERCONTINENTAL DYNAMICS CORP. 5,950

BURTON MFG. CO. 6,945

GARRETT MFG. LTD. 8,860

MCDONNELL AIRCRAFT CORP. 9,429

BENDIX CORP. 13,000

IT IS REPORTED THAT THE LOW BID OF FRED K. BAXTER COMPANY WAS REJECTED BECAUSE OF THE COMPANY'S INABILITY TO MEET THE STATUTORY REQUIREMENTS OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT.

IT APPEARS THAT AS A RESULT OF A PREAWARD SURVEY THE CONTRACTING OFFICER DETERMINED THAT THE BID OF THE SECOND LOW BIDDER, AEROSONIC CORPORATION, SHOULD BE REJECTED BECAUSE THE CORPORATION LACKED ADEQUATE CAPACITY AND CREDIT TO PERFORM THE CONTRACT. IN COMPLIANCE WITH THE PROVISIONS OF PARAGRAPH 1-705.6 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), THE MATTER OF AEROSONIC'S RESPONSIBILITY WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CONSIDERATION AS TO WHETHER A CERTIFICATE OF COMPETENCY AS TO ITS CAPACITY AND CREDIT SHOULD BE ISSUED. BY LETTER DATED APRIL 23, 1965, THE SBA NOTIFIED THE PROCUREMENT ACTIVITY THAT ON THIS DATE IT WAS ISSUING A CERTIFICATE OF COMPETENCY IN BEHALF OF THE AEROSONIC CORPORATION. IT IS REPORTED THAT THE DEPARTMENT OF THE NAVY HAS NOW DETERMINED THE BID OF AEROSONIC CORPORATION TO BE VALID AND HAS DECIDED NOT TO APPEAL THE ISSUANCE OF THE CERTIFICATE OF COMPETENCY.

YOU CONTEND THAT THE AEROSONIC CORPORATION CANNOT FURNISH THE REQUIRED VACUUM PRESSURE TESTORS AT ITS BID PRICE; THAT YOU DO NOT BELIEVE THAT AEROSONIC MEETS THE STANDARDS OF RESPONSIBILITY AS SET FORTH IN ASPR 1-902 AND 1-903.2; AND THAT YOU HAVE REASON TO BELIEVE THAT AEROSONIC DOES NOT HAVE THE NECESSARY EXPERIENCE REQUIRED TO FULFILL THE INTENT OF SPECIFICATION NO. 63/150. YOU STATE THAT THE ITEM BEING PROCURED IS A HIGHLY COMPLEX INSTRUMENT WHICH INCORPORATES A HIGH DEGREE OF ACCURACY AND RELIABILITY REQUIREMENTS TO MEET THE SOPHISTICATED AIRCRAFT OF TODAY AND THE FUTURE AND THAT ONLY A MANUFACTURER WITH PROVEN EXPERIENCE CAN ACCOMPLISH THESE REQUIREMENTS. YOU REQUEST THAT AN AWARD FOR THIS EQUIPMENT BE WITHHELD FROM AEROSONIC.

UNDER SECTION 8 (B) (7) OF THE SMALL BUSINESS ACT, AS AMENDED, 15 U.S.C. 637 (B) (7), THE ISSUANCE OF A CERTIFICATE OF COMPETENCY BY SBA IS CONCLUSIVE UPON GOVERNMENT PROCUREMENT OFFICERS WITH RESPECT TO THE COMPETENCY, AS A CAPACITY AND CREDIT, OF ANY SMALL BUSINESS CONCERN TO PERFORM A GOVERNMENT CONTRACT. IN CONSONANCE THEREWITH, ASPR 1-705.6 (B) REQUIRES THAT AN OTHERWISE ACCEPTABLE BID SUBMITTED BY A SMALL BUSINESS CONCERN SHALL NOT BE REJECTED BY REASON OF LACK OF CAPACITY OR CREDIT UNTIL THE MATTER SHALL HAVE BEEN REFERRED TO SBA FOR THE POSSIBLE ISSUANCE OF A CERTIFICATE OF COMPETENCY. THE TERM "CAPACITY" IS DEFINED IN ASPR 1- 705.6 (A) AS MEANING THE OVERALL ABILITY TO MEET QUALITY, QUANTITY, AND TIME REQUIREMENTS OF A PROPOSED CONTRACT AND INCLUDES ABILITY TO PERFORM, ORGANIZATION, EXPERIENCE, TECHNICAL KNOWLEDGE, SKILLS, KNOW-HOW, TECHNICAL EQUIPMENT AND FACILITIES. SBA HAS THE SOLE JURISDICTION TO DETERMINE THE COMPETENCY OF A SMALL BUSINESS BIDDER WHOSE BID HAS BEEN DETERMINED BY THE CONTRACTING OFFICER TO BE NONRESPONSIVE DUE TO LACK OF CAPACITY OR CREDIT. ONCE SBA HAS DETERMINED TO ISSUE A CERTIFICATE OF COMPETENCY, IT IS CONCLUSIVE ON THE CONTRACTING OFFICER SO FAR AS THE BIDDER'S CAPACITY OR CREDIT IS CONCERNED. SEE 38 COMP. GEN. 864; 40 ID. 106.

IN VIEW OF THE CONCLUSIVE CHARACTER OF THE CERTIFICATE OF COMPETENCY AND SINCE WE HAVE NO AUTHORITY TO REVIEW DETERMINATIONS OF THE SMALL BUSINESS ADMINISTRATION, WE FIND NO BASIS FOR QUESTIONING AWARD TO THE AEROSONIC CORPORATION.