B-167536, OCT. 17, 1969

B-167536, OCT. 17, 1969

BIDDERS--QUALIFICATIONS--SECURITY CLEARANCE REJECTION OF LOW BID ON BASIS OF ERRONEOUS INFORMATION THAT REQUIRED INTERIM SECRET FACILITY CLEARANCE COULD NOT BE GRANTED LOW BIDDER TIMELY, AND AWARD TO SECOND LOW BIDDER (ALREADY POSSESSING CLEARANCE) IS SUSTAINED, SINCE SECURITY CLEARANCE REQUIREMENTS ARE MATTERS OF RESPONSIBILITY FOR RESOLUTION BY CONTRACTING OFFICIALS, SUBJECT TO QUESTION ONLY WHERE ARBITRARY, CAPRICIOUS, OR UNSUPPORTED BY SUBSTANTIAL EVIDENCE; CONTRACTING OFFICER'S AWARD IN FACE OF URGENCY, COUPLED WITH ADVICE FROM OFFICE RESPONSIBLE FOR SECURITY INVESTIGATIONS THAT CLEARANCE COULD NOT BE GRANTED FOR UNDETERMINED TIME, WAS REASONABLE UNDER CIRCUMSTANCES; HOWEVER, BECAUSE AWARD WAS MADE TO OTHER THAN LOWEST RESPONSIBLE BIDDER, IT IS SUGGESTED THAT AIR FORCE TAKE EFFECTIVE MEASURES TO PRECLUDE RECURRENCE OF SIMILAR SITUATIONS.

TO GZ PRODUCTS, INC.:

FURTHER REFERENCE IS MADE TO YOUR PROTEST OF THE REJECTION OF YOUR BID UNDER INVITATION FOR BIDS NO. F04606-69-B-0500, ISSUED BY MCCLELLAN AIR FORCE BASE, CALIFORNIA.

THE SUBJECT INVITATION, ISSUED ON MAY 15, 1969, WAS FOR SAFETY EQUIPMENT FOR AN/FPS-35 RADAR SETS. BECAUSE THE SAFETY EQUIPMENT WAS NEEDED TO RELIEVE HAZARDOUS WORKING CONDITIONS ENCOUNTERED IN MAINTENANCE OF THE RADAR SETS, IT WAS DETERMINED BY HEADQUARTERS, SACRAMENTO AIR MATERIEL AREA THAT THE SUBJECT PROCUREMENT WAS URGENT. ALSO, BECAUSE PERFORMANCE OF THE PROPOSED CONTRACT WOULD NECESSITATE CONTRACTOR "ACCESS TO CONTROLLED AREAS AND CUSTODY OF CLASSIFIED DOCUMENTS," THE INVITATION INCLUDED A DD FORM 254,"CONTRACT SECURITY CLASSIFICATION SPECIFICATION," WHICH PUT BIDDERS ON NOTICE THAT A SECRET FACILITY CLEARANCE WOULD BE REQUIRED OF THE SUCCESSFUL BIDDER.

BID OPENING DATE WAS JUNE 2, 1969, AND AT THAT TIME YOUR BID, IN THE AMOUNT OF $22,501, WAS THE LOWEST OF THE THREE BIDS RECEIVED. EXPEDITED PREAWARD SURVEY OF YOUR FIRM WAS INITIATED ON JUNE 2, 1969, AND COMPLETED WITH A RECOMMENDATION FOR AWARD TO YOUR FIRM ON JUNE 12, 1969. BECAUSE GZ PRODUCTS DID NOT POSSESS THE REQUIRED SECRET FACILITY CLEARANCE, NO AWARD COULD BE MADE UNTIL SUCH CLEARANCE WAS GRANTED. ACCORDINGLY, ON JUNE 13, 1969, THE APPROPRIATE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR), THE SAME ACTIVITY WHICH PERFORMED THE PREAWARD SURVEY, WAS REQUESTED BY THE CONTRACTING OFFICIALS TO INITIATE ACTION FOR AN INTERIM SECRET FACILITY CLEARANCE. UPON RECEIPT OF THE REQUEST FOR THE FACILITY CLEARANCE SURVEY, DCASR ESTIMATED THAT IT WOULD COMPLETE ITS SURVEY WITHIN 30 DAYS. ON JULY 11, 1969, HOWEVER, THE DEFENSE INDUSTRIAL SECURITY CLEARANCE OFFICE (DISCO), THE DCASR OFFICE CHARGED WITH THE FACILITY CLEARANCE INVESTIGATION, ADVISED THE CONTRACTING OFFICER THAT BECAUSE OF "INVESTIGATIVE REQUIREMENTS" AN INTERIM CLEARANCE COULD NOT BE GRANTED AND THAT IT WAS UNKNOWN WHEN THE CONTINUING INVESTIGATION FOR A FINAL SECRET CLEARANCE OF GZ PRODUCTS WOULD BE COMPLETED.

BECAUSE OF THE URGENCY OF THE PROCUREMENT, THE CONTRACTING OFFICER, PURSUANT TO PARAGRAPH 2-404.2 (G) OF THE ARMED SERVICES PROCUREMENT REGULATION, REJECTED YOUR LOW BID ON THE BASIS THAT SINCE AN ITERIM SECRET FACILITY CLEARANCE COULD NOT BE OBTAINED TIMELY, HE COULD NOT AFFIRMATIVELY DETERMINE THAT YOU WERE A RESPONSIBLE BIDDER. IN VIEW OF THE UNCERTAINTY OF WHEN OR IF GZ PRODUCTS WOULD RECEIVE A SECURITY CLEARANCE, AND THE FACT THAT BIDS WOULD EXPIRE ON JULY 28, 1969, APPROVAL TO MAKE AWARD TO THE NEXT LOW BIDDER WAS GRANTED BY THE CHIEF, COMMODITIES PROCUREMENT DIVISION, DIRECTORATE OF PROCUREMENT AND PRODUCTION, HEADQUARTERS, SACRAMENTO AIR MATERIEL AREA. SEE B-161211, JULY 11, 1967.

AWARD WAS MADE TO THE NEXT LOW BIDDER ON JULY 16, 1969, IN THE AMOUNT OF $25,078, OR $2,577 MORE THAN THE BID OF GZ PRODUCTS. THE SUCCESSFUL BIDDER ALREADY HAD A SECRET CLEARANCE. ON JULY 22, 1969, HOWEVER, NOTIFICATION WAS RECEIVED BY THE CONTRACTING OFFICER THAT DISCO HAD GRANTED AN INTERIM SECRET FACILITY CLEARANCE EFFECTIVE THAT DATE TO YOUR FIRM. THE FILE FURNISHED TO OUR OFFICE BY THE DEPARTMENT OF THE AIR FORCE IS SILENT CONCERNING THE REASONS WHY THE ISSUANCE OF THE INTERIM CLEARANCE WAS EFFECTED AFTER ADVICE TO THE CONTRARY WAS PROVIDED TO THE CONTRACTING OFFICER LESS THAN 2 WEEKS BEFORE AND WHY THE CONTINUING POSSIBILITY OF AN INTERIM CLEARANCE WAS NOT COMMUNICATED TO THE CONTRACTING OFFICER UNTIL AFTER THE CLEARANCE INVESTIGATION HAD BEEN COMPLETED AND THE CLEARANCE GRANTED.

YOUR PROTEST CONTENDS, ESSENTIALLY, THAT THE IMMINENT CONCLUSION OF THE DISCO INTERIM CLEARANCE INVESTIGATION OF GZ PRODUCTS SHOULD HAVE BEEN COMMUNICATED TO THE CONTRACTING OFFICER IN TIME TO FORESTALL THE AWARD OF A CONTRACT TO THE SECOND LOW BIDDER.

AS A GENERAL RULE, INVITATION REQUIREMENTS FOR SECURITY CLEARANCES ARE MATTERS OF RESPONSIBILITY, THE RESOLUTION OF WHICH ARE DISCRETIONARY ACTS ON THE PART OF THE CONTRACTING OFFICIALS, SUBJECT TO QUESTION BY OUR OFFICE ONLY WHERE ARBITRARY, CAPRICIOUS, OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. E-161211 SUPRA; B-159469, MARCH 22, 1967. IN OUR OPINION, THE ACTION OF THE CONTRACTING OFFICER IN MAKING AWARD TO THE SECOND LOW BIDDER IN THE FACE OF THE COMPELLING URGENCY, COUPLED WITH UNAMBIGUOUS ADVICE FROM THE OFFICE CHARGED WITH THE RESPONSIBILITY OF CONDUCTING SECURITY INVESTIGATIONS THAT CLEARANCE COULD NOT BE GRANTED GZ PRODUCTS FOR AN UNDETERMINED TIME, WAS REASONABLE UNDER THE CIRCUMSTANCES. WE, THEREFORE, CONCLUDE THAT THE AWARD IS NOT SUBJECT TO LEGAL OBJECTION. IN THIS REGARD, SEE THE INDUSTRIAL SECURITY REGULATION (D/D DIRECTIVE 5220.22R) AND THE IMPLEMENTING REGULATIONS AT AIR FORCE REGULATION 205-4.

WE REALIZE, HOWEVER, THAT BECAUSE OF A LACK OF EFFECTIVE COMMUNICATIONS, A CONTRACT AWARD WAS MADE TO OTHER THAN THE LOWEST, RESPONSIBLE BIDDER; ACCORDINGLY, WE ARE SUGGESTING TO THE SECRETARY OF THE AIR FORCE THAT EFFECTIVE MEASURES BE TAKEN TO PRECLUDE A RECURRENCE OF FUTURE SIMILAR SITUATIONS.