B-158249, MAR. 11, 1966

B-158249, MAR. 11, 1966

TO TELEDYNE SYSTEMS COMPANY, DUBROW ELECTRONICS INDUSTRIES DIVISION:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF DECEMBER 28, 1965, PROTESTING AGAINST THE REJECTION OF YOUR BID AND THE AWARD OF A CONTRACT TO A COMPANY OTHER THAN YOUR FIRM UNDER DEPARTMENT OF THE NAVY INVITATION FOR BIDS NO. 600-333-66-S, ISSUED BY THE UNITED STATES NAVY PURCHASING OFFICE, WASHINGTON, D.C.

THE INVITATION, ISSUED ON NOVEMBER 15, 1965, REQUESTED BIDS FOR FURNISHING 427 AN/SRC-20 UHF TRANSMITTER RECEIVERS, 100 AN/SRC-21 UHF TRANSMITTER RECEIVERS, 583 AN/URC-9 RADIO SETS AND RELATED AUXILIARY EQUIPMENT AND SPARE PARTS. PROSPECTIVE BIDDERS WERE ADVISED IN THE INVITATION THAT THE EQUIPMENT WAS URGENTLY REQUIRED BY THE OPERATING FLEET; THAT AWARD UNDER THE INVITATION WAS PLANNED FOR NOT LATER THAN DECEMBER 29, 1965; AND THAT FIRST PRODUCTION DELIVERIES WERE SCHEDULED FOR JULY 29, 1966. THE INVITATION CONTAINED A LIQUIDATED DAMAGES PROVISION FOR DELAY IN DELIVERY OF THE REQUIRED ITEMS. THE INVITATION ALSO INCLUDED A REQUIREMENT FOR SUBMISSION OF A PREPRODUCTION MODEL BUT PROVIDED FOR DELETION OF SUCH REQUIREMENT FOR PRIOR PRODUCERS. IT IS REPORTED THAT SINCE THE TIME ALLOWED FOR DELIVERY OF FIRST PRODUCTION QUANTITIES WAS SO SHORT THAT IT DID NOT APPEAR POSSIBLE THAT IT COULD BE MET BY ANY FIRM OTHER THAN A PRIOR PRODUCER, NEW SUPPLIERS WERE REQUIRED TO SUBMIT WITH THEIR BIDS PERT AND MANNING DATA TO SATISFY THE GOVERNMENT THAT THE BIDDER HAD A REALISTIC, FEASIBLE PLAN FOR MEETING THE REQUIREMENTS OF THE CONTRACT.

THE FOLLOWING THREE BIDS WERE RECEIVED AND OPENED ON DECEMBER 1, 1965:

CHART

FIRM TOTAL AMOUNT

DUBROW $5,534,767

STEWART-WARNER ELECTRICS 6,189,169

COLLINS RADIO 8,202,524

ALTHOUGH THE BID OF YOUR FIRM WAS THE LOWEST RECEIVED IT WAS REJECTED BECAUSE THE CONTRACTING OFFICER WAS UNABLE TO MAKE AN AFFIRMATIVE DETERMINATION AS REQUIRED BY PARAGRAPH 1-904.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) THAT YOUR FIRM MET THE MINIMUM STANDARDS FOR A RESPONSIBLE PROSPECTIVE CONTRACTOR AS OUTLINED BY ASPR 1-903.1/II). THAT PROVISION REQUIRES THAT THE PROSPECTIVE CONTRACTOR MUST BE ABLE TO COMPLY WITH THE REQUIRED OR PROPOSED DELIVERY SCHEDULE, TAKING INTO CONSIDERATION ALL EXISTING POSSIBLE COMMITMENTS, COMMERCIAL AS WELL AS GOVERNMENTAL. ON DECEMBER 28, 1965, CONTRACT NO. NOBSR-95140 WAS AWARDED TO STEWART-WARNER ELECTRONICS.

YOU STATE THAT THE AMOUNT OF YOUR BID WAS $657,000 LOWER THAN THE AMOUNT OF THE NEXT LOWEST BID RECEIVED ON THE EQUIPMENT. YOU CONTEND THAT AN AWARD TO A COMPANY OTHER THAN YOUR FIRM IS A VIOLATION OF THE ARMED SERVICES PROCUREMENT REGULATION, ALTHOUGH YOU DO NOT POINT OUT IN WHAT MANNER THE REGULATION IS VIOLATED.

THE RECORD INDICATES THAT THE CONTRACTING OFFICER'S DETERMINATION THAT YOU ARE NOT A RESPONSIBLE PROSPECTIVE CONTRACTOR FOR PURPOSES OF THIS PROCUREMENT WAS BASED ON A PREAWARD SURVEY OF YOUR CAPABILITIES TO MEET THE DELIVERY REQUIREMENTS OF THIS INVITATION. THIS SURVEY DISCLOSED THAT PRIOR TO THE ISSUANCE OF THIS INVITATION YOUR FIRM WAS AWARDED THREE CONTRACTS FOR FURNISHING THE SAME TYPE OF EQUIPMENT. THE QUANTITIES OF THE MAJOR EQUIPMENT DELIVERABLE UNDER THESE THREE CONTRACTS ARE AS FOLLOWS:

CONTRACT NO. SRC-20 SRC-21 URC-9

NOBSR-91149 166 129 ---

NOBSR-91284 78122 51

NOBSR-93164 333 263 272

577 514 323

EACH OF THE THREE CONTRACTS REQUIRED THAT A PREPRODUCTION MODEL BE SUBMITTED FOR GOVERNMENT APPROVAL PRIOR TO ACCEPTANCE OF PRODUCTION EQUIPMENT. IT IS REPORTED THAT PRIOR TO THE AWARD OF THE LAST CONTRACT, NOBSR-93164, A PREAWARD SURVEY WAS CONDUCTED TO DETERMINE WHETHER YOUR FIRM COULD MEET THE CONTRACT DELIVERY SCHEDULE FOR THE LARGE QUANTITIES OF EQUIPMENT REQUIRED BY THAT CONTRACT. THE SURVEY CONSIDERED YOUR PERSONNEL AND FACILITIES, AND THE THEN CURRENT WORKLOAD, WHICH INCLUDED A LARGE ARMY CONTRACT FOR AN/GRC-19 RADIO EQUIPMENT. ALTHOUGH THE SURVEY DISCLOSED THAT YOUR FIRM'S PERSONNEL AND FACILITIES WERE INADEQUATE, THE SURVEY TEAM CONCLUDED THAT THESE INADEQUACIES WERE REMEDIAL AND THAT OVERALL YOUR CONCERN WAS IN A FAVORABLE POSITION TO MEET THE DELIVERY REQUIREMENTS OF THE INVITATION FOR BIDS. ACCORDINGLY, CONTRACT NO. N0BSR-93164 WAS AWARDED TO YOUR FIRM ON JANUARY 24, 1965. HOWEVER, YOUR FIRM'S SUBSEQUENT PERFORMANCE DID NOT FULFILL THESE EXPECTATIONS. IT IS REPORTED THAT YOUR FIRM EXPERIENCED SERIOUS FINANCIAL AND PRODUCTION PROBLEMS IN PERFORMING THE ARMY CONTRACT, RESULTING IN SUBSTANTIAL DELAYS IN DELIVERY THEREUNDER AND THAT YOUR FIRM WAS ALSO FIVE MONTHS LATE IN DEVELOPING AND SUBMITTING FOR APPROVAL THE PREPRODUCTION MODEL REQUIRED UNDER THE FIRST NAVY CONTRACT, NOBSR-91149, YOUR FIRM SUBMITTING THE MODEL IN OCTOBER 1965, INSTEAD OF MAY 1965.

THE RECORD INDICATES THAT BY LETTER DATED NOVEMBER 15, 1965, THE BUREAU OF SHIPS, THE USING ACTIVITY, ADVISED YOUR FIRM THAT YOU WERE NOT BEING INVITED TO SUBMIT A BID ON THE PROCUREMENT COVERED BY INVITATION FOR BIDS NO. 600-333-66'S (IFB-66-S), THE INVITATION IN QUESTION, AND THAT A BID SET WAS NOT BEING SENT TO YOU BECAUSE THE BUREAU WAS OF THE OPINION THAT YOUR FIRM COULD NOT MEET THE URGENT DELIVERY REQUIREMENTS OF IFB-66-S, IN VIEW OF YOUR EXISTING COMMITMENTS, PARTICULARLY UNDER CONTRACTS NOS. NOBSR -91149, -91284 AND -93164. THE BUREAU ALSO STATED THAT IF YOU DISAGREE WITH ITS EVALUATION OF YOUR SITUATION AND YOU DESIRED TO SUBMIT A BID, THAT YOUR FIRM SHOULD SUBMIT TO THE BUREAU MATERIAL TO AFFIRMATIVELY DEMONSTRATE YOUR ABILITY TO MEET ALL EXISTING COMMITMENTS AS WELL AS THE DELIVERY REQUIREMENTS OF THIS INVITATION FOR BIDS. IN REPLY YOU ADVISED THE BUREAU THAT, AMONG OTHER THINGS, IT WAS YOUR BELIEF "THAT WITH A MODEST INCREASE IN FACILITIES AND ADDED PRODUCTION PERSONNEL WHICH COULD BE PROVIDED WELL WITHIN THE SEVEN MONTHS ANTICIPATED BETWEEN TARGET DATE OF AWARD AND FIRST PRODUCTION DELIVERIES, WE ARE CAPABLE OF MEETING THE DELIVERY REQUIREMENTS.' BY LETTER DATED NOVEMBER 18, 1965, THE BUREAU ADVISED YOU THAT YOUR LETTER OF NOVEMBER 17 HAD PROVIDED NO INFORMATION THAT COULD BE A BASIS FOR MODIFYING THE BUREAU'S EARLIER JUDGMENT REGARDING YOUR FIRM'S CAPABILITIES BUT THAT A BID SET WAS BEING MADE AVAILABLE TO YOUR FIRM. AFTER RECEIVING YOUR LETTER OF DECEMBER 20, 1965, THE BUREAU CONVENED A CONTRACT AWARD REVIEW PANEL TO CONSIDER ALL THE AVAILABLE INFORMATION AND THAT PANEL CONCLUDED THEREFROM THAT YOUR FIRM DID NOT HAVE THE CAPACITY TO SATISFACTORILY PERFORM THE CONTRACT AND MEET THE DELIVERY SCHEDULES SPECIFIED IN IFB-66-S. THE RECORD INDICATES THAT THE DIRECTOR OF CONTRACTS, BUREAU OF SHIPS, CONCURRED IN THE CONCLUSION REACHED BY THE PANEL.

ONE OF THE SIGNIFICANT FACTORS IN DETERMINING THE RESPONSIBILITY OF A BIDDER IS HIS APPARENT ABILITY TO PERFORM IN ACCORDANCE WITH THE REQUIREMENTS SET OUT IN THE INVITATION. SUCH ABILITY IS FOR DETERMINATION PRIMARILY BY THE CONTRACTING AGENCY AND ABSENT A SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS THEREFOR, WE WILL NOT QUESTION THE VALIDITY OF THE DETERMINATION. 37 COMP. GEN. 430, 435. DECIDING A PROSPECTIVE CONTRACTOR'S PROBABLE ABILITY TO PERFORM A CONTRACT TO BE AWARDED INVOLVES A FORECAST WHICH MUST OF NECESSITY BE A MATTER OF JUDGMENT. SUCH JUDGMENT SHOULD OF COURSE BE BASED ON FACT AND REACHED IN GOOD FAITH; HOWEVER, IT IS ONLY PROPER THAT IT BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICERS INVOLVED WHO SHOULD BE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, WHO MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES EXPERIENCED IN OBTAINING REQUIRED PERFORMANCE AND WHO MUST MAINTAIN DAY-TO-DAY RELATIONS WITH THE CONTRACTOR ON THE GOVERNMENT'S BEHALF. 39 COMP. GEN. 705, 711.

ACCORDINGLY, AND SINCE THERE APPEARS TO HAVE BEEN A REASONABLE BASIS FOR THE ADMINISTRATIVE ACTION TAKEN IN THE MATTER, WE WOULD NOT BE JUSTIFIED IN DISTURBING THE AWARD OF THE CONTRACT IN THE CASE.