B-169323, JUN. 11, 1970

B-169323, JUN. 11, 1970

CONTRACTS--AWARDS--SMALL BUSINESS CONCERNS--CERTIFICATIONS--GENERAL ACCOUNTING OFFICE REFERRAL BECAUSE LOW BIDDER PROTESTING TERMINATION FOR CONVENIENCE OF NAVY CONTRACT, AWARDED ON BASIS OF FAVORABLE PREAWARD SURVEY BUT TERMINATED BEFORE PERFORMANCE WAS COMMENCED, UPON NAVSEC FINDING PROTESTANT WAS NOT CAPABLE OF ACCOMPLISHING CONTRACT, WAS DEPRIVED, AS SMALL BUSINESS CONCERN, OF RIGHT TO HAVE MATTER REFERRED TO SMALL BUSINESS ADMINISTRATION FOR CONSIDERATION OF ISSUANCE OF CERTIFICATE OF COMPETENCY, MATTER WAS SO REFERRED BY GAO. SINCE SMALL BUSINESS ADMINISTRATION FOUND COMPANY NOT COMPETENT AS TO CAPACITY TO PERFORM CONTRACT, SUCH DETERMINATION IS CONSIDERED PERSUASIVE OF BIDDER'S LACK OF CAPACITY AND PROTEST IS DENIED. SEE COMP. GEN. DECS. CITED.

TO VENTILATION CLEANING ENGINEERS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 10, 1970, PROTESTING THE TERMINATION FOR CONVENIENCE OF CONTRACT N66314-70-C-1093 AWARDED TO YOUR COMPANY BY THE NAVAL REGIONAL PROCUREMENT OFFICE, OAKLAND, CALIFORNIA.

YOUR COMPANY WAS THE LOW BIDDER FOR THE CONTRACT. DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT, ANAHEIM, MADE A PREAWARD SURVEY OF YOUR COMPANY AND RECOMMENDED AWARD TO IT.UPON APPROVAL OF SUCH ACTION BY THE NAVAL SHIPYARD, AWARD WAS MADE TO YOUR COMPANY ON JANUARY 29, 1970.

SUBSEQUENTLY, BEFORE ANY CONTRACT WORK COMMENCED, THE PROJECT OFFICER EXPRESSED DOUBT AS TO THE CAPABILITY OF YOUR COMPANY TO SATISFACTORILY PERFORM THE CONTRACT. THE PHILADELPHIA DIVISION, NAVSEC, WAS REQUESTED TO PERFORM AN INVESTIGATION OF THE PERFORMANCE CAPABILITIES OF YOUR COMPANY. THE PHILADELPHIA DIVISION DETERMINED THAT YOUR COMPANY WAS NOT CAPABLE OF ACCOMPLISHING THE CONTRACT AND, AS A RESULT OF THESE FINDINGS, THE CONTRACT WAS TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT ON MARCH 4, 1970.

AN AWARD OF A REPLACEMENT CONTRACT WAS MADE AS A RESULT OF A SOLICITATION OF QUOTATIONS FROM SEVERAL FIRMS.

THE RECORD INDICATES THAT YOUR COMPANY IS A SMALL BUSINESS CONCERN. WHEN A CONTRACTING OFFICER PROPOSES TO REJECT THE BID OF A SMALL BUSINESS CONCERN FOR LACK OF CAPACITY OR CREDIT, THE SMALL BUSINESS CONCERN GENERALLY IS ENTITLED TO HAVE THE MATTER REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CONSIDERATION OF THE ISSUANCE OF A CERTIFICATE OF COMPETENCY. SINCE YOUR COMPANY WAS DEPRIVED OF THAT OPPORTUNITY BECAUSE IT WAS NOT DETERMINED TO LACK CAPABILITY UNTIL AFTER THE CONTRACT WAS AWARDED, OUR OFFICE REFERRED THE MATTER OF YOUR COMPANY'S COMPETENCY AS TO CAPACITY AND CREDIT TO PERFORM THE CONTRACT TO THE SBA. THAT AGENCY HAS ADVISED US THAT IT HAS DETERMINED THAT YOUR COMPANY IS NOT COMPETENT AS TO CAPACITY TO PERFORM THE CONTRACT. OUR OFFICE CONSIDERS THE DETERMINATION OF THE SBA AS PERSUASIVE OF A BIDDER'S LACK OF CAPACITY. 39 COMP. GEN. 705 (1960) AND 47 ID. 360 (1968).

IN VIEW OF THE SBA DETERMINATION THAT YOUR COMPANY DOES NOT HAVE THE NECESSARY CAPACITY, THE TERMINATION ACTION DOES NOT APPEAR TO HAVE BEEN INAPPROPRIATE.