B-170890, NOV. 18, 1970

B-170890, NOV. 18, 1970

BID PROTEST - NEGOTIATIONS - TECHNICAL COMPETENCE - REFERRAL TO SBA DENIAL OF PROTEST AGAINST REJECTION OF PROPOSAL BY TRANS-SONIC, INC., FOR TESTING OF SONOBUOYS, BATHYTHERMOGRAPH TRANSMITTER SETS, ETC., OFFERED UNDER REQUEST FOR PROPOSALS ISSUED BY NAVAL AIR SYSTEMS COMMAND. THE REJECTION OF TRANS-SONICS' PROPOSAL AS TECHNICALLY DEFICIENT WAS NOT ARBITRARY AND CAPRICIOUS IN VIEW OF THE NAVY'S WELL DOCUMENTED EVALUATION OF THE PROPOSAL, IN LIGHT OF WHICH THE REFERRAL OF THE QUESTION OF PROTESTANT'S RESPONSIBILITY AS TO CAPACITY AND CREDIT TO THE SMALL BUSINESS ADMINISTRATION IS NOT NECESSARY.

TO ISRAEL & MANESS:

REFERENCE IS MADE TO YOUR LETTERS DATED OCTOBER 5, 1970 AND NOVEMBER 3, 1970, ON BEHALF OF TRANS-SONICS, INCORPORATED, AND A LETTER DATED SEPTEMBER 23, 1970, FROM TRANS-SONICS, PROTESTING WITH REGARD TO REQUEST FOR PROPOSALS NO. N00019-70-Q-0181 ISSUED BY THE DEPARTMENT OF THE NAVY, NAVAL AIR SYSTEMS COMMAND.

THE SUBJECT SOLICITATION, ISSUED APRIL 28, 1970, REQUESTED QUOTATIONS ON A COST-PLUS-FIXED-FEE BASIS TO PROVIDE SUPPLIES AND SERVICES CONNECTED WITH THE FOLLOWING TASKS AS LISTED ON PAGES 3 AND 4 OF THE RFQ:

"ITEM SUPPLIES OR SERVICES

"1 CONDUCT ENGINEERING TESTING, PREPRODUCTION

SAMPLE TESTING AND PRODUCTION LOT SAMPLE

TESTING FOR QUALITY CONTROL OF SONOBUOYS,

BATHYTHERMOGRAPH TRANSMITTER SETS AND

UNDERWATER SOUND SIGNALS FURNISHED UNDER

NAVAL AIR SYSTEMS COMMAND CONTRACT

"1AA PREPARE AND FURNISH THE FOLLOWING REPORTS:

(A) INDIVIDUAL SAMPLE TEST REPORT

(B) MANUFACTURER'S CONTRACT SUMMARY

(C) WEEKLY REPORTS:

(1) STATUS REPORT

(2) TIME TEST SUMMARY REPORT

(3) SONOBUOY MOVEMENT REPORT

(D) QUARTERLY REPORTS:

(1) TIME TEST SUMMARY

(2) SONOBUOY MOVEMENT REPORT

(E) ANNUAL REPORTS

(1) FACILITY OPERATOR'S REPORT

(2) SUS TECHNICAL DATA ANALYSIS

(SEE ADDENDUM (1), CONTRACT DATA REQUIREMENTS

LIST, DD FORM 1423, ATTACHED HERETO)

"2 PROVIDE SONOBUOY AND BATHYTHERMOGRAPH

TRANSMITTER SET REFURBISHING SERVICES

"3 PROVIDE CREW FOR TWO (2) GOVERNMENT

AIRCRAFT, ONE P-3 AND ONE SP2H.

"4 PROVIDE CREW, MAINTENANCE, BERTHING, FUEL,

AND OTHER SERVICES REQUIRED FOR THE OPERATION

OF ONE (1) AVR (C3241) VESSEL IN THE ST. CROIX,

VIRGIN ISLANDS AREA.

"5 OPERATE AND MAINTAIN THE GOVERNMENT-OWNED

NAVAL INDUSTRIAL RESERVE PLANT AT RUTHERFORD

ISLAND, SOUTH BRISTOL, MAINE, AND THE

NAVAIRSYSCOM DEEP WATER TEST FACILITY AT

ST. CROIX, VIRGIN ISLANDS FOR TWENTY-FOUR

MONTHS (JANUARY 1971 THROUGH DECEMBER 1972)

(ALL CONTRACTORS TO OFFER)

"6 OPERATE AND MAINTAIN THE GOVERNMENT-OWNED

NAVAL INDUSTRIAL RESERVE PLANT AT RUTHERFORD

ISLAND, SOUTH BRISTOL, MAINE AND THE NAVAIRSYSCOM

DEEP WATER TEST FACILITY AT ST. CROIX, VIRGIN

ISLANDS FOR THREE (3) MONTHS (PHASE-IN TRAINING

PERIOD) (OCTOBER 1970 THROUGH DECEMBER 1970)

(ALL CONTRACTORS EXCEPT THE INCUMBENT CONTRACTOR

TO OFFER) (SEE (45) A1 AND 2 ON PAGE 23 OF

QUOTATION INSTRUCTIONS AND CONDITIONS)

"7 CONDUCT ENGINEERING TESTING, PREPRODUCTION ON

SAMPLE TESTING AND PRODUCTION LOT SAMPLE TESTING

FOR QUALITY CONTROL OF AIRBORNE SONAR

CABLES AND WINCHES FURNISHED UNDER NAVAL AIR

SYSTEMS COMMAND CONTRACTS.

"8 CONTRACTOR TO FURNISH A BOAT SUITABLE FOR

PERFORMING PREVIOUS Q-653 BOAT MISSION.

"9 PROVIDE A BACK-UP BOAT FOR THE AVR (C-3241) AT

ST. CROIX, VIRGIN ISLANDS." AMENDMENT NO. 0001 TO THE RFQ DATED JUNE 2, 1970, EXTENDED THE ORIGINAL CLOSING DATE FOR RECEIPT OF PROPOSALS OF JUNE 12, 1970 UNTIL JUNE 25, 1970. TRANS-SONICS SUBMITTED ITS PROPOSAL BY LETTER DATED JUNE 23, 1970, TO THE NAVAL AIR SYSTEMS COMMAND.

BY LETTER DATED AUGUST 20, 1970, THE CONTRACTING OFFICER NOTIFIED TRANS- SONICS THAT FURTHER NEGOTIATION WITH THE COMPANY WAS NOT CONTEMPLATED STATING THAT THEIR PROPOSAL WAS "NOT WITHIN THE COMPETITIVE RANGE, TECHNICAL AND OTHER FACTORS CONSIDERED."

THE RFQ STATED AT PAGE 24 OF THE QUOTATION INSTRUCTIONS AND CONDITIONS THAT "SELECTION OF A CONTRACTOR FOR AWARD WILL BE BASED ON TECHNICAL COMPETENCE, AS EXHIBITED BY THEIR TECHNICAL PROPOSAL, PRICE AND OTHER FACTORS CONSIDERED." IT ALSO STATED:

"THE GOVERNMENT RESERVES THE RIGHT TO DISCUSS WITH OFFERORS THE TECHNICAL ASPECTS OF PROPOSALS SUBMITTED FOR THE PURPOSE OF CLARIFICATION. HOWEVER, THE GOVERNMENT DOES NOT CONTEMPLATE EXERCISING THIS RIGHT WITH RESPECT TO TECHNICAL PROPOSALS WHICH ARE MATERIALLY DEFICIENT OR SUBSTANTIALLY INCOMPLETE.

"THE TECHNICAL PROPOSAL SHOULD CLEARLY DEMONSTRATE THAT THE PROSPECTIVE OFFEROR HAS A THOROUGH UNDERSTANDING OF THE REQUIREMENTS AND THE INHERENT TECHNICAL PROBLEMS, AND HAS A VALID AND PRACTICAL SOLUTION FOR SUCH PROBLEMS. STATEMENTS THAT THE PROSPECTIVE OFFEROR UNDERSTANDS, CAN OR WILL COMPLY WITH THE SPECIFICATIONS, AND STATEMENTS PARAPHRASING THE SPECIFICATIONS OR PARTS THEREOF ARE CONSIDERED INADEQUATE. PHRASES SUCH AS 'STANDARD PROCEDURES WILL BE EMPLOYED' OR 'WELL-KNOWN TECHNIQUES WILL BE USED' ARE ALSO INADEQUATE AND UNSATISFACTORY. IT IS RECOGNIZED THAT ALL THE TECHNICAL FACTORS CANNOT BE DETAILED IN ADVANCE, BUT THE TECHNICAL PROPOSAL MUST BE SUFFICIENT TO SHOW HOW IT IS PROPOSED TO COMPLY WITH THE APPLICABLE SPECIFICATIONS, INCLUDING A FULL EXPLANATION OF THE TECHNIQUES AND PROCEDURES TO BE FOLLOWED. DATA PREVIOUSLY SUBMITTED, IF ANY, MAY NOT BE CONSIDERED; HENCE, SUCH DATA SHOULD NOT BE RELIED UPON OR INCORPORATED IN THE TECHNICAL PROPOSAL BY REFERENCE." SECTION 48 OF THE QUOTATION INSTRUCTIONS AND CONDITIONS ENTITLED "CRITERIA, TECHNICAL PROPOSAL, EVALUATION AND BIDDER QUALIFICATION PROVIDED, IN PART, AS FOLLOWS:

"2. EVALUATION

IN ADDITION TO OTHER CRITERIA, THE FOLLOWING

TECHNICAL EVALUATION CRITERIA WILL BE USED.

THIS CRITERIA IS LISTED IN THE ORDER OF

PRIORITY.

A. THE CONTRACTOR'S UNDERSTANDING

OF THE SCOPE OF THE WORK AS

SHOWN BY THE APPROACH PROPOSED.

B. THE AVAILABILITY AND COMPETENCE

OF EXPERIENCED ENGINEERING,

LABORATORY, AND KEY MANAGEMENT

PERSONNEL.

C. THE OVERALL MANAGEMENT OF THE PROPOSED PROGRAM.

D. CONTRACTOR FURNISHED FACILITIES.

E. THE QUALITY CONTROL PROCEDURES OF

THE PROPOSED PROGRAM.

F. CONCEPT AND PLAN FOR LOGISTIC

SUPPORT OF VESSELS, AIRCRAFT AND

SHORE STATIONS."

YOU ALLEGE THAT THE REJECTION OF TRANS-SONICS' PROPOSAL WAS (1) ARBITRARY AND CAPRICIOUS; OR (2) WAS BASED ON A DETERMINATION THAT TRANS-SONICS, A SMALL BUSINESS CONCERN, LACKED THE CAPACITY TO PERFORM THE REQUIREMENTS OF THE CONTRACT. IN THIS REGARD YOU ALLEGE THAT TRANS SONICS HAS THE LEGAL RIGHT TO HAVE QUESTIONS OF ITS CAPACITY TO PERFORM JUDGED AND DETERMINED BY THE SMALL BUSINESS ADMINISTRATION IN A CERTIFICATE OF COMPETENCY PROCEEDING BINDING ON THE PROCURING AGENCY.

THE ADMINISTRATIVE REPORT CONTAINS COPIES OF THE FOLLOWING DOCUMENTS PROVIDING A DETAILED EVALUATION OF EACH OFFEROR'S PROPOSAL: (1) MEMORANDUM OF THE FINDINGS OF THE SOURCE SELECTION EVALUATION BOARD TO THE SOURCE SELECTION ADVISORY COUNCIL DATED JULY 21, 1970; (2) MEMORANDUM OF NIRP SOURCE SELECTION RECOMMENDATIONS FROM THE SOURCE SELECTION ADVISORY COUNCIL TO THE SOURCE SELECTION AUTHORITY DATED JULY 28, 1970; (3) COPY OF THE PROCUREMENT REVIEW BOARD MINUTES DATED AUGUST 14, 1970. ALSO FURNISHED AS PART OF THE ADMINISTRATIVE REPORT WAS A DETAILED PRESENTATION OF BACK-UP DATA DATED OCTOBER 16, 1970, IN SUPPORT OF THE RECOMMENDATIONS OF THE SOURCE SELECTION ADVISORY COUNCIL WITH REGARD TO THE QUOTATION OF TRANS-SONICS; IT SETS FORTH IN DETAIL THE EVALUATION OF TRANS-SONICS' PROPOSAL IN EACH OF SIX AREAS OF EVALUATION LISTED ABOVE. IN VIEW OF THE WELL DOCUMENTED EVALUATION PROCEDURES WHICH WERE ACCOMPLISHED PRIOR TO REJECTION OF TRANS-SONICS' QUOTATION, WE MUST CONCLUDE THAT THE NAVY'S ACTION IN THIS RESPECT WAS NOT ARBITRARY AND CAPRICIOUS.

THE CONTRACTING OFFICER'S LETTER OF AUGUST 20, 1970, REJECTING TRANS SONICS' PROPOSAL ON THE GROUND THAT IT WAS NOT WITHIN A COMPETITIVE RANGE, TECHNICAL AND OTHER FACTORS CONSIDERED COULD GIVE RISE TO THE IMPLICATION THAT THE RESPONSIBILITY OF TRANS-SONICS TO PERFORM THE CONTRACT WAS A FACTOR. YOU REQUEST THAT THIS OFFICE HOLD THAT THE CONTRACTING OFFICER SHOULD HAVE REFERRED THE QUESTION OF RESPONSIBILITY OF TRANS-SONICS TO THE SMALL BUSINESS ADMINISTRATION FOR DETERMINATION UNDER THE CERTIFICATE OF COMPETENCY PROCEDURES.

IN THIS REGARD, WE STATED AT 46 COMP. GEN. 893, 894 (1967) AS FOLLOWS:

"BY ENACTMENT OF SECTION 8(B)(7) OF THE SMALL BUSINESS ACT, 15 U.S.C. 637(B)(7), THE CONGRESS HAS LIMITED THE AUTHORITY OF ADMINISTRATIVE OFFICERS TO MAKE FINAL DETERMINATIONS OF RESPONSIBILITY OF SMALL BUSINESS BIDDERS BY PROVIDING THAT WHERE A SMALL BUSINESS CONCERN IS CERTIFIED BY SBA TO BE A COMPETENT GOVERNMENT CONTRACTOR WITH RESPECT TO CAPACITY AND CREDIT, THE PROCURING OFFICERS OF THE GOVERNMENT MUST ACCEPT SUCH CERTIFICATION AS CONCLUSIVE. HOWEVER, THIS LIMITATION ON THE ADMINISTRATIVE AUTHORITY RELATES ONLY TO DETERMINATIONS OF 'CAPACITY AND CREDIT.' IN THIS CONNECTION, ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-705.4(C), IN RECOGNITION OF THE SBA AUTHORITY, CONTEMPLATES THE REFERRAL TO SBA OF ONLY BIDS OR PROPOSALS OF SMALL BUSINESS CONCERNS WHICH CONTRACTING OFFICERS PROPOSE TO REJECT SOLELY FOR THE REASON THAT THE BIDDERS OR OFFERORS HAVE BEEN FOUND TO BE NONRESPONSIBLE AS TO CAPACITY AND CREDIT *** ."

IN THE INSTANT CASE, IT APPEARS THAT TRANS-SONICS' PROPOSAL WAS TECHNICALLY DEFICIENT. SECTION "A" OF THE EVALUATION CRITERIA, "THE CONTRACTOR'S UNDERSTANDING OF THE SCOPE OF THE WORK AS SHOWN BY THE APPROACH PROPOSED", DOES NOT APPEAR TO INVOLVE A DETERMINATION OF CAPACITY BUT RATHER IS A TECHNICAL EVALUATION OF THE PROPOSAL. THE MEMORANDUM DATED OCTOBER 16, 1970, SUPPLYING BACKUP DATA IN SUPPORT OF THE RECOMMENDATION OF THE SOURCE SELECTION ADVISORY COUNCIL WITH REGARD TO TRANS-SONICS' QUOTATION CONTAINS A DETAILED ANALYSIS OF TRANS SONICS' PROPOSAL NOTING DEFICIENCIES IN EACH AREA OF EVALUATION. WE HAVE BEEN INFORMALLY ADVISED THAT ALL THE CRITICISMS SET FORTH IN THIS MEMORANDUM WERE CONSIDERED IN THE INITIAL EVALUATION, BUT WERE SUMMARIZED IN THE ADVISORY COUNCIL'S REPORT WITHOUT THE SPECIFIC DETAIL CONTAINED IN THE OCTOBER 16, 1970, MEMORANDUM. IN ITS ANALYSIS OF TRANS-SONICS' UNDERSTANDING OF THE SCOPE OF THE WORK AS SHOWN BY THE APPROACH PROPOSED, IT IS STATED "THE OFFEROR DID NOT MEET MINIMUM ACCEPTABLE STANDARDS IN THIS AREA DUE TO TECHNICALLY INADEQUATE PROPOSALS FOR TESTING AN/SSQ-53 DIFAR SONOBUOYS AND SONAR CABLES." SEVERAL SPECIFIC CRITICISMS OF TRANS- SONICS' PROPOSALS ARE LISTED IN SUPPORT OF THIS CONCLUSION. IN THIS AREA OF EVALUATION, TRANS-SONICS WAS RATED LOWEST AMONG THE THREE PROPOSALS RECEIVED AND WAS SIGNIFICANTLY BELOW THE MINIMUM ACCEPTABLE STANDARD; IT RECEIVED A NUMERICAL RATING OF LESS THAN 1/2 OF THAT RECEIVED BY AN ACCEPTABLE PROPOSAL. IN VIEW OF THE VERY LOW RATING GIVEN TRANS-SONICS ON THE TECHNICAL MERIT OF ITS PROPOSAL, WE WOULD NOT FEEL JUSTIFIED IN CRITIZING THE NAVY'S REJECTION OF THE QUOTATION AS NOT BEING WITHIN A COMPETITIVE RANGE.

YOU CORRECTLY ALLEGE THAT DETERMINATIONS AS TO CAPACITY TO PERFORM THE REQUIREMENTS OF THE CONTRACT ARE FACTORS WHICH MUST BE JUDGED BY THE SMALL BUSINESS ADMINISTRATION IN ACCORDANCE WITH OUR DECISION, 46 COMP. GEN. 893 (1967) QUOTED ABOVE. HOWEVER, IN VIEW OF THE FACT THAT TRANS-SONICS' PROPOSAL COULD BE SAID NOT TO BE WITHIN A COMPETITIVE RANGE TECHNICALLY, IT WAS NOT NECESSARY FOR THE CONTRACTING OFFICER TO INSTITUTE THE CERTIFICATE OF COMPETENCY PROCEDURES. HAD IT NOT BEEN JUSTIFIABLE TO REJECT TRANS-SONICS' PROPOSAL ON A TECHNICAL EVALUATION BASIS, IT WOULD HAVE BEEN NECESSARY FOR QUESTIONS DEALING WITH TRANS SONICS' CAPACITY TO BE DETERMINED BY THE SMALL BUSINESS ADMINISTRATION.

ACCORDINGLY, FOR THE REASONS STATED, YOUR PROTEST IS DENIED.