B-156837, AUG. 19, 1965

B-156837, AUG. 19, 1965

TO UNITED ENGINEERING:

IN YOUR TELEGRAM OF MAY 22, 1965, YOU PROTEST ANY OTHER FIRM RECEIVING A CONTRACT PURSUANT TO REQUEST FOR PROPOSALS (RFP) NO. 65 327, ISSUED BY THE UNITED STATES ARMY TANK AUTOMOTIVE CENTER IN WARREN, MICHIGAN, FOR SMOKE REDUCTION MODIFICATION KITS. IN YOUR LETTER OF JUNE 2, 1965, YOU COMPLAIN THAT YOU WERE UNABLE TO OBTAIN QUOTATIONS FROM AMERICAN BOSCH ARMA CORPORATION AND SCHWITZER CORPORATION, ALLEGEDLY SOLE-SOURCE SUPPLIERS WHO MANUFACTURED CRITICAL COMPONENTS OF THE KITS WITH GOVERNMENT-FURNISHED EQUIPMENT, AND THAT CONSEQUENTLY YOUR DESIRE TO EXECUTE THE CONTRACT YOU EXPECTED TO RECEIVE AS A RESULT OF HAVING BEEN THE LOW OFFEROR FOR THE SUBJECT PROCUREMENT WAS BEING FRUSTRATED.

IN REGARD TO YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO ANOTHER FIRM, THE RECORD DISCLOSES THAT A PREAWARD SURVEY OF YOUR COMPANY WAS REQUESTED SHORTLY AFTER PROPOSALS WERE OPENED ON MARCH 11, 1965. THE SURVEY, WHICH WAS CONDUCTED ON THE ASSUMPTION THAT YOU WOULD HAVE NO DIFFICULTY OBTAINING QUOTATIONS FROM SUPPLIERS, SHOWED THAT THE PROCUREMENT ACTIVITY HAD RECENTLY AWARDED THREE CONTRACTS TO UNITED ENGINEERING IN THE AMOUNT OF $107,177.02, AND THAT $53,400 OF PROGRESS PAYMENTS HAD BEEN REQUESTED FOR PERFORMANCE OF THESE CONTRACTS. PROGRESS PAYMENTS WERE NOT AUTHORIZED UNDER THE SUBJECT RFP, AND APPARENTLY YOU WERE UNABLE TO SUPPLY SATISFACTORY EVIDENCE THAT YOU WOULD BE ABLE TO OBTAIN ADDITIONAL FINANCIAL SUPPORT FROM OTHER SOURCES. IN VIEW OF THIS, AND THE FACT THAT FINANCIAL STATEMENTS ON YOUR FIRM REFLECTED A MODEST FOUR FIGURE WORKING CAPITAL, THE PREAWARD SURVEY CONCLUDED THAT YOU WOULD BE FINANCIALLY OVER-EXTENDED IF AWARDED THE PROPOSED CONTRACT, WHICH IS FOR AN AMOUNT IN THE NEIGHBORHOOD OF A HALF MILLION DOLLARS.

ON MAY 14, 1965, THE CONTRACTING OFFICER DECIDED PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION 1-903 THAT UNITED COULD NOT BE DETERMINED TO BE A RESPONSIBLE CONTRACTOR FOR THE SUBJECT PROCUREMENT, AND HE THEREFORE REQUESTED THE SMALL BUSINESS ADMINISTRATION (SBA) TO DETERMINE WHETHER OR NOT A CERTIFICATE OF COMPETENCY (COC) SHOULD BE ISSUED IN THIS CASE. ON MAY 22, YOU SUBMITTED YOUR TELEGRAPHIC PROTEST TO THIS OFFICE, BUT DID NOT AT THAT TIME SET FORTH THE BASIS OF THE PROTEST.

ON MAY 26, THE PROCUREMENT ACTIVITY WAS ADVISED BY SBA THAT YOU HAD WITHDRAWN THE APPLICATION FOR A CERTIFICATE OF COMPETENCY. FURTHER NEGOTIATIONS WERE THEREUPON CONDUCTED WITH THE NEXT LOW OFFEROR, WHICH RESULTED IN AN OFFER SIGNIFICANTLY LOWER THAN YOURS, ON WHICH A CONTRACT HAS BEEN AWARDED.

THE QUESTION AS TO THE QUALIFICATIONS OF A PROPOSED CONTRACTOR IS PRIMARILY THE FUNCTION OF THE PROCUREMENT AGENCY, SUBJECT, IN THE CASE OF A SMALL BUSINESS CONCERN, TO THE AUTHORITY OF SBA TO ISSUE A COC, WHICH THE PROCURING ACTIVITY IS REQUIRED TO ACCEPT AS ESTABLISHING THE FIRM'S CAPACITY AND CREDIT. IN THE ABSENCE OF CONVINCING EVIDENCE OF BAD FAITH OR OBVIOUS ABUSE OF THE ADMINISTRATIVE DISCRETION WE WILL NOT OBJECT TO A DETERMINATION OF NONRESPONSIBILITY BY THE CONTRACTING OFFICER. 37 COMP. GEN. 798, 800. WHERE, AS HERE, THERE APPEARS TO BE AN ADEQUATE BASIS FOR THE CONTRACTING OFFICER'S DECISION THAT THE OFFEROR IS NOT RESPONSIBLE, AND THE OFFEROR HAS WITHDRAWN AN APPLICATION FOR A CERTIFICATE OF COMPETENCY, THEREBY WAIVING ITS RIGHT TO HAVE ITS CAPABILITY DETERMINED BY SBA, THIS OFFICE WILL NOT TAKE EXCEPTION TO THE CONTRACTING OFFICER'S DETERMINATION. SEE B-149307, DATED AUGUST 14, 1962.

WITH RESPECT TO THE COMPLAINT EXPRESSED IN YOUR LETTER OF JUNE 2, 1965, AS TO YOUR DIFFICULTIES IN OBTAINING THE COMPONENTS REFERRED TO, IT SHOULD BE NOTED THAT ALL OF THE EVENTS LEADING UP TO THE PROCURING ACTIVITY'S DECISION THAT YOUR FIRM WAS INELIGIBLE FOR AWARD, HAD APPARENTLY TRANSPIRED BEFORE RECEIPT OF SUCH COMPLAINT, AND IT DOES NOT APPEAR THAT SUCH ALLEGED DIFFICULTIES HAD ANY CONNECTION WITH THE ADMINISTRATIVE DETERMINATION OF YOUR NONRESPONSIBILITY.

HOWEVER, AFTER INVESTIGATION OF YOUR COMPLAINTS, THE PROCURING ACTIVITY MADE THE FOLLOWING REPORT:

"A. SCHWITZER CORPORATION BY LETTER DATED 24 FEBRUARY 1965, ADVISED UNITED ENGINEERING THAT THEY WERE NOT IN A POSITION TO SUBMIT A QUOTATION BUT INDICATED THAT CONTINENTAL MOTORS CORPORATION COULD SUPPLY THE REFERENCED PART AND WOULD BE IN A POSITION TO SUBMIT ANY INFORMATION REQUIRED. THIS WAS IN FURTHERANCE OF SCHWITZER CORPORATION'S LONGSTANDING POLICY TO SELL ONLY TO ORIGINAL EQUIPMENT MANUFACTURERS. CONTINENTAL MOTORS CORPORATION HAS ADVISED THIS OFFICE THAT THEY INFORMED UNITED ENGINEERING THAT THEY WOULD FURNISH A WRITTEN QUOTE ON RECEIPT OF A LETTER REQUEST BY UNITED ENGINEERING BUT SUCH A REQUEST WAS NOT MADE. UNITED ACKNOWLEDGED THAT THEY UTILIZED A CATALOG PRICE IN QUOTING BUT THE BIDDER DID NOT RECALL WHETHER A FORMAL REQUEST FOR QUOTES WAS MADE TO CONTINENTAL.

"B. AMERICAN BOSCH ARMA CORPORATION IN THEIR CORRESPONDENCE TO UNITED ENGINEERING REQUESTED A FORMAL CONFIRMATION OF UNITED'S REQUEST FOR PRICES AND DELIVERY AND THEN ON 21 MAY 1965 ADVISED THAT THE ITEMS INVOLVED COULD BE PROCURED THROUGH THREE CHANNELS. IN ADDITION, AMERICAN BOSCH FURNISHED THE NAME OF THE LOCAL AGENCY TO BE CONTACTED. MR. CATALDO, PRESIDENT OF UNITED ENGINEERING, COULD NOT RECALL WHETHER THE SOURCE RECOMMENDED BY AMERICAN BOSCH ARMA CORPORATION WAS CONTACTED. IT MIGHT BE NOTED UNITED ENGINEERING SUBMITTED A PROPOSAL ON RFP 65-327 WITHOUT A FIRM PRICE ON APPROXIMATELY FIVE (5) AMERICAN BOSCH ARMA CORPORATION ITEMS. HOWEVER, MR. CATALDO INDICATED THAT SINCE THE ITEMS WERE STOCK ITEMS A CATALOG PRICE WAS UTILIZED.'

THE REPORT ALSO STATES THAT NEITHER AMERICAN BOSCH ARMA NOR SCHWITZER USE GOVERNMENT-OWNED TOOLING TO PRODUCE THE COMPONENT PART IN QUESTION. CONCLUDES THAT THE SUBJECT PARTS ARE LISTED IN MANUFACTURERS' PARTS CATALOGS AND APPEAR TO BE AVAILABLE TO ALL CUSTOMERS.

IN VIEW OF THE ABOVE, AND THE FACT THAT YOUR INELIGIBILITY FOR AWARD WAS DETERMINED INDEPENDENTLY OF YOUR ALLEGED INABILITY TO OBTAIN THE SUBJECT QUOTATIONS, WE FIND NO LEGAL BASIS FOR OBJECTION TO THE CONTRACT AS AWARDED, AND YOUR PROTEST IS THEREFORE DENIED.