B-161198, MAY 25, 1967

B-161198, MAY 25, 1967

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

BY LETTER DSAH-G OF MAY 8, 1967, THE ASSISTANT COUNSEL FURNISHED A REPORT ON THE PROTEST OF THE DINATALE FLOORS, INC., UNDER INVITATION FOR BIDS DSA -400-67-B-2980.

THE INVITATION ISSUED NOVEMBER 1, 1966, SOLICITED BIDS FOR FURNISHING 304 WOOD PLATFORM WAREHOUSE TRAILERS. THE INVITATION CALLED FOR DELIVERY OF SOME TRAILERS BY MARCH 6, 1967, AND THE BALANCE BY MARCH 20, 1967. STATED THAT THE DELIVERY REQUIREMENTS WERE BASED ON THE ASSUMPTION THAT THE GOVERNMENT WOULD MAKE AWARD BY DECEMBER 19, 1966. BIDS WERE OPENED AS SCHEDULED ON NOVEMBER 28, 1966. SIX BIDS WERE RECEIVED, EACH PROVIDING FOR AN ACCEPTANCE PERIOD OF 21 DAYS, APPARENTLY RELYING ON THE ASSUMPTION THAT THE AWARD WOULD BE MADE BY DECEMBER 19, 1966. OF THE SIX BIDS RECEIVED, THE BID FROM DINATALE FLOORS, INC., WAS THE LOWEST.

DESPITE THE FACT THAT BIDS WERE OPENED THE END OF NOVEMBER 1966, AND THE INVITATION INDICATED THE POSSIBILITY OF AN AWARD BY DECEMBER 19, 1966, THE CONTRACTING OFFICER MADE NO REQUEST FOR A PREAWARD SURVEY ON DINATALE UNTIL JANUARY 25, 1967, AND THE SURVEY WAS NOT CONDUCTED UNTIL FEBRUARY 17, 1967. FURTHER, ALTHOUGH THE NEGATIVE SURVEY REPORT WAS RECEIVED ON FEBRUARY 20, 1967, NO ACTION WAS TAKEN ON THIS REPORT WHEN A REPRESENTATIVE OF THE DEPARTMENT OF THE NAVY, A USER OF A PORTION OF THE TRAILERS, ADVISED ON MARCH 9, 1967, THAT "ALL MEASURES SHOULD BE TAKEN TO EXPEDITE THIS ITEM AS MATERIAL IS NOW URGENTLY REQUIRED," NOR WHEN SUPPLY PERSONNEL AT THE DEFENSE SUPPLY AGENCY CENTER ADVISED ON MARCH 10, 1967, THAT AN OUT-OF-STOCK POSITION HAD BEEN REACHED FOR THE ITEM AND THAT STOCK REPLENISHMENT WAS REQUIRED IMMEDIATELY. THE DELAY IN PROCESSING THE BIDS IS ATTRIBUTED TO AN EXTREMELY HEAVY WORKLOAD IN ALL OF THE OFFICES CONCERNED AND THE PRIORITY OF OTHER ITEMS PREVIOUSLY KNOWN TO BE URGENTLY REQUIRED.

FOLLOWING RECEIPT OF THE LAST NOTIFICATION OF THE IMMEDIATE NEED FOR TRAILERS, THE CONTRACTING OFFICER ON MARCH 10, 1967, DETERMINED THAT, BASED UPON PREAWARD SURVEY FINDINGS, DINATALE WAS NOT RESPONSIBLE AND THAT AWARD UNDER THE INVITATION SHOULD BE MADE WITHOUT DELAY AND WITHOUT REFERRAL TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR ISSUANCE OF A CERTIFICATE OF COMPETENCY. IT IS REPORTED THAT ON THE SAME DAY ADMINISTRATIVE ACTIONS WERE INITIATED PREPARATORY TO AN AWARD TO THE SECOND LOW BIDDER. THESE ACTIONS ARE REPORTED TO HAVE CONSUMED 12 WORKING DAYS UNTIL MARCH 28, 1967, AT WHICH TIME THE PROPOSED AWARD TO THE SECOND LOW BIDDER WAS PROCESSED FOR APPROVAL, THE LATTER BEING ACCOMPLISHED ON MARCH 31, 1967. THE INVITATION PROVIDED FOR EXTENDING THE TIME FOR DELIVERY BY THE NUMBER OF CALENDAR DAYS THE CONTRACT WAS AWARDED AFTER DECEMBER 19, 1966. THE CONTRACT AWARD PROVIDES FOR DELIVERY OF ALL ITEMS BY JUNE 16, 1967.

ASPR 1-705.4 (C) PROVIDES THAT IF A BID OF A SMALL BUSINESS CONCERN IS TO BE REJECTED SOLELY BECAUSE THE CONTRACTING OFFICER HAS DETERMINED THE CONCERN TO BE NONRESPONSIBLE AS TO CAPACITY OR CREDIT, THE MATTER SHALL BE REFERRED TO THE SBA. HOWEVER, IT IS PROVIDED FURTHER THAT A REFERRAL NEED NOT BE MADE IF THE CONTRACTING OFFICER CERTIFIES IN WRITING THAT THE AWARD MUST BE MADE WITHOUT DELAY.

THE LETTER OF MAY 8 FROM THE ASSISTANT COUNSEL STATES THAT THE LAPSE OF TIME BETWEEN THE DECISION NOT TO REFER THE MATTER TO SBA AND THE AWARD WAS NEARLY SUFFICIENT TO HAVE PERMITTED A REFERRAL TO SBA. IT APPEARS, HOWEVER, THAT THE TIME LAPSE WAS ACTUALLY ENOUGH FOR A REFERRAL TO SBA, SINCE 15 WORKING DAYS ELAPSED FROM MARCH 10 TO MARCH 31. ASPR 1-705.4 (C) PROVIDES THAT AN AWARD SHALL BE WITHHELD FOR 15 WORKING DAYS TO ENABLE SBA TO DETERMINE WHETHER A CERTIFICATE OF COMPETENCY SHOULD BE ISSUED. IN ANY EVENT, THE MAY 8 LETTER ADVISED THAT THE DEFENSE SUPPLY AGENCY CENTERS HAVE BEEN CAUTIONED THAT ALTHOUGH A PROCUREMENT IS URGENT, WHERE A SMALL BUSINESS BIDDER IS DETERMINED NONRESPONSIBLE FOR LACK OF CAPACITY OR CREDIT, THE SBA SHOULD BE GIVEN AN OPPORTUNITY TO CONSIDER ISSUING A CERTIFICATE OF COMPETENCY IN ANY CASE WHERE THE TIME NECESSARY TO PREPARE AND MAKE AN AWARD TO ANOTHER BIDDER IS SUFFICIENT TO PERMIT SUCH ACTION. SUCH NOTICE TO THE CENTERS SHOULD HELP TO PRECLUDE RECURRENCE OF THIS SITUATION.

HOWEVER, WE OBSERVE ALSO THAT DESPITE THE FACT THAT THE INVITATION INDICATED THAT THERE MIGHT BE A PERIOD AS SHORT AS 21 DAYS FOR THE CONSIDERATION OF BIDS, FIVE MONTHS ELAPSED FROM THE DATE OF THE INVITATION TO THE DATE THE CONTRACT WAS AWARDED ON THE BASIS OF URGENCY WITHOUT COMPLETE COMPLIANCE WITH THE SMALL BUSINESS PROCEDURES. WE BELIEVE THAT APPROPRIATE MEASURES SHOULD BE TAKEN TO SIGNIFICANTLY REDUCE THE TIME CONSUMED IN THE ADMINISTRATIVE CONSIDERATION OF BIDS AS TO PRESERVE THE PROCEDURAL RIGHTS OF SMALL BUSINESS BIDDERS.

WHILE WE RECOGNIZE THAT IN VIEW OF THE DECLARED IMMEDIATE NEED FOR THE PLATFORM TRAILERS, IT WOULD NOT BE IN THE INTEREST OF THE GOVERNMENT TO SUBJECT THE PROCUREMENT TO FURTHER DELAY AT THIS TIME, WE TRUST THAT THE SITUATION DISCUSSED HERE WILL NOT BE REPEATED.