B-175175, APR 12, 1972

B-175175, APR 12, 1972

BID PROTEST - NONRESPONSIBILITY - INADEQUATE FINANCIAL CAPACITY - INSUFFICIENT DATA FOR ISSUANCE OF COC DECISION DENYING THE PROTEST OF PACIFICO ELECTRONICS CO. AGAINST AWARD OF A SMALL BUSINESS SET-ASIDE TO HUNTER MANUFACTURING COMPANY UNDER AN IFB ISSUED BY THE ARMY TANK-AUTOMOTIVE COMMAND, WARREN, MICH. A PRE-AWARD SURVEY CONDUCTED BY DEFENSE CONTRACT ADMINISTRATION OFFICE RECOMMENDED NO AWARD DUE TO PACIFICO'S INABILITY TO OBTAIN A LINE OF CREDIT. FURTHER, THE RECORD INDICATES THAT PROTESTANT FAILED TO SUPPLY THE SMALL BUSINESS ADMINISTRATION WITH SUFFICIENT DOCUMENTATION TO COMPLETE ITS APPLICATION FOR A CERTIFICATE OF COMPETENCY. IN VIEW OF THESE FACTS, IT APPEARS THAT THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY WAS JUSTIFIED AND, ABSENT ANY INDICATION OF BAD FAITH OR LACK OF SUBSTANTIAL EVIDENCE, THE COMP. GEN. FINDS NO LEGAL BASIS TO QUESTION HIS DECISION. ACCORDINGLY, THE PROTEST IS DENIED.

TO PACIFICO ELECTRONICS CO.:

WE REFER TO YOUR LETTER OF MARCH 18, 1972, AND TO COPIES OF YOUR PRIOR CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF CONTRACT NO. DAAE07-72-C- 0088 TO ANOTHER BIDDER BY THE UNITED STATES ARMY TANK AUTOMOTIVE COMMAND (USATACOM), WARREN, MICHIGAN, UNDER INVITATION FOR BIDS NO. DAAE07-72-B- 0043.

THE INVITATION, ISSUED ON SEPTEMBER 14, 1971, COVERED THE PROCUREMENT OF PERSONNEL HEATER KITS AND ADAPTER KITS FOR INSTALLATION OF THE HEATERS IN VEHICLES IN THE FIELD ON AN F.O.B. ORIGIN BASIS. THE PROCUREMENT WAS LIMITED TO SMALL BUSINESS CONCERNS. THE TWO LOW BIDS, AS EVALUATED FOR TRANSPORTATION COSTS TO NAMED DESTINATIONS, WERE THOSE OF YOUR FIRM IN THE AMOUNT OF $465,367.37, AND THE HUNTER MANUFACTURING COMPANY IN THE AMOUNT OF $479,095.04. BECAUSE PACIFICO WAS LOW BIDDER, YOUR FIRM WAS ADVISED BY THE DEFENSE CONTRACT ADMINISTRATION OFFICE, ANAHEIM, CALIFORNIA, THAT A PREAWARD SURVEY WOULD BE REQUIRED. PACIFICO SUCCESSFULLY PASSED THE TECHNICAL CAPABILITY PORTIONS OF THE SURVEY, BUT WAS UNABLE TO ESTABLISH ITS FINANCIAL CAPABILITY DUE TO ITS INABILITY TO OBTAIN A LINE OF CREDIT. ACCORDINGLY, THE DEFENSE CONTRACT ADMINISTRATION OFFICE RECOMMENDED ON NOVEMBER 16, 1971, THAT NO AWARD BE MADE TO PACIFICO. ON NOVEMBER 18 THE CONTRACTING OFFICER DETERMINED IN WRITING THAT PACIFICO WAS NOT A RESPONSIBLE BIDDER WITHIN THE MEANING OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1 903.1(II), AND THE MATTER WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA), LOS ANGELES DISTRICT OFFICE, SO THAT SBA MIGHT DETERMINE WHETHER A CERTIFICATE OF COMPETENCY (COC) SHOULD BE ISSUED TO PACIFICO. BY LETTER OF NOVEMBER 23, 1971, THE SBA OFFICE INFORMED USATACOM THAT PACIFICO WOULD FILE FOR A COC. HOWEVER, BY LETTER OF DECEMBER 7, 1971, THE SBA OFFICE FURTHER ADVISED USATACOM THAT BECAUSE PACIFICO "HAS FAILED TO SUPPLY THIS OFFICE WITH SUFFICIENT DOCUMENTATION TO COMPLETE THE APPLICATION FOR A CERTIFICATE OF COMPETENCY *** THIS OFFICE WILL TAKE NO FURTHER ACTION *** AND WILL CONSIDER THE CASE CLOSED." AWARD WAS SUBSEQUENTLY MADE TO THE SECOND LOW BIDDER ON DECEMBER 14, 1971. BY LETTER OF DECEMBER 16, 1971, PACIFICO APPEALED THE AWARD TO USATACOM.

YOU MAINTAIN THAT YOUR FIRM WAS UNABLE TO OBTAIN A LINE OF CREDIT IN TIME TO RECEIVE AWARD OF THE CONTRACT BECAUSE OF OBSTACLES CREATED BY PERSONNEL OF THE DEFENSE CONTRACT ADMINISTRATION OFFICE AND SBA AND CONFUSING AND CONFLICTING INFORMATION GIVEN PACIFICO BY THESE AGENCIES. SPECIFICALLY, IT IS ALLEGED THAT VARIOUS PRESSURES AND DEMANDS EXERTED BY A MEMBER OF THE DEFENSE CONTRACT ADMINISTRATION OFFICE CAUSED PACIFICO'S FINANCIAL NEGOTIATIONS TO BE UNSUCCESSFUL. FURTHER, IT IS CONTENDED THAT ALTHOUGH PACIFICO HAD OBTAINED AN EXTENSION ON NOVEMBER 30 TO CONTINUE ITS FINANCIAL NEGOTIATIONS UNTIL DECEMBER 3 PACIFICO WAS INFORMED ON DECEMBER 1 THAT THE AWARD HAD BEEN CANCELLED. CONSEQUENTLY, PACIFICO ABANDONED ITS NEGOTIATIONS, THEREBY LOSING VALUABLE TIME IN OBTAINING THE NECESSARY CREDIT. WHEN PACIFICO WAS ADVISED ON DECEMBER 3 THAT IT WAS STILL BEING CONSIDERED FOR AWARD, FINANCIAL NEGOTIATIONS WERE RESUMED. THESE WERE CONTINUED UNTIL PACIFICO WAS INFORMED ON DECEMBER 14 THAT AWARD HAD BEEN MADE TO THE HUNTER MANUFACTURING COMPANY. PACIFICO WAS, ALLEGEDLY, FINALLY ABLE TO ESTABLISH A LINE OF CREDIT ON DECEMBER 16. ALSO IT IS ALLEGED THAT SBA MADE NO EFFORT TO ASSIST PACIFICO IN OBTAINING THE NECESSARY FINANCIAL CREDIT, BUT RATHER ADVISED PACIFICO TO DISREGARD ANY APPLICATION FOR A COC BECAUSE IT WOULD HAVE TO FIND PACIFICO FINANCIALLY NONRESPONSIBLE IN ANY CASE. FINALLY, IT IS CONTENDED THAT THE PREAWARD SURVEY WAS INITIATED IMMEDIATELY AFTER PACIFICO WAS NOTIFIED THAT ONE WOULD BE REQUIRED AND THAT THE CUSTOMARY 7-DAY PERIOD ALLOWED TO PREPARE FOR THE SURVEY WAS NOT GIVEN PACIFICO.

WE INITIALLY NOTE THAT THERE IS NO REQUIREMENT FOR A 7-DAY PERIOD DURING WHICH THE PROSPECTIVE CONTRACTOR MAY PREPARE FOR A PREAWARD SURVEY. APPENDIX "K", K-203.1, OF ASPR PROVIDES THAT PREAWARD SURVEYS ARE TO BE CONDUCTED WITHIN THE NORMAL TIME FRAME OF 7 WORKING DAYS AFTER RECEIPT OF THE REQUEST FOR A SURVEY FROM THE PROCUREMENT OFFICE. WE FURTHER NOTE THAT THE ADMINISTRATIVE RECORD INDICATES THAT PADIFICO WAS ADVISED THAT ITS BID HAD BEEN REJECTED BECAUSE IT WAS FOUND TO BE FINANCIALLY NONRESPONSIBLE AND THAT TO APPEAL THIS NONRESPONSIBILITY DETERMINATION IT WOULD BE NECESSARY TO APPLY FOR ISSUANCE OF A COC FROM SBA BY NOVEMBER 30, 1971. PACIFICO WAS LATER ADVISED THAT A COC COULD NOT BE ISSUED, EVEN IF APPLIED FOR, WITHOUT PACIFICO HAVING FIRST RECEIVED A LINE OF CREDIT OR A LOAN. SBA DID NOT CLOSE THE CASE ON NOVEMBER 30, EVEN THOUGH PACIFICO HAD FAILED TO APPLY FOR A COC, BUT INSTEAD HELD IT OPEN UNTIL DECEMBER 8 IN AN ATTEMPT TO ALLOW PACIFICO TO ARRANGE FOR THE NECESSARY CREDIT.

WE HAVE CONSISTENTLY HELD THAT IT IS THE RESPONSIBILITY OF THE CONTRACTING OFFICER TO DETERMINE THE RESPONSIBILITY OF A BIDDER AND THAT SUCH DETERMINATION WILL NOT BE QUESTIONED BY OUR OFFICE IN THE ABSENCE OF A SHOWING OF BAD FAITH OR LACK OF SUBSTANTIAL EVIDENCE. 43 COMP. GEN. 228, 230 (1963); 49 ID. 553, 558 (1970). THE CONTRACTING OFFICER HAD BEFORE HIM AT THE TIME HE MADE AWARD TO THE SECOND LOW BIDDER A PREAWARD SURVEY SHOWING THAT PACIFICO LACKED THE REQUISITE LINE OF CREDIT NEEDED TO PERFORM THE CONTRACT AND A SBA DETERMINATION THAT IT COULD NOT ISSUE PACIFICO A COC BECAUSE THAT FIRM HAD TAKEN NO ACTION TO PROPERLY APPEAL THE FINDING OF NONRESPONSIBILITY MADE BY THE PREAWARD SURVEY TEAM. FOR THESE REASONS, WE FIND NO BASES TO QUESTION THE CONTRACTING OFFICER'S DETERMINATION THAT PACIFICO WAS A NONRESPONSIBLE BIDDER.

YOUR PROTEST IS THEREFORE DENIED.