B-175343, MAY 12, 1972

B-175343, MAY 12, 1972

BID PROTEST - NONRESPONSIBILITY - SBA REFERRAL DECISION DENYING THE PROTEST OF APPLIED DEVICES CORPORATION AGAINST AWARD OF A CONTRACT TO EMERSON ELECTRIC CO., UNDER AN IFB ISSUED BY THE ARMY MISSILE COMMAND, REDSTONE ARSENAL, ALA. THE CONTRACTING OFFICER HAS CONSIDERABLE DISCRETION WITH REGARD TO DETERMINATIONS OF BIDDER RESPONSIBILITY AND HIS DECISION WILL NOT BE QUESTIONED UNLESS IT IS SHOWN TO BE ARBITRARY, CAPRICIOUS, OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. 45 COMP. GEN. 4 (1965). SINCE THE INSTANT DETERMINATION OF NONRESPONSIBILITY APPEARS JUSTIFIED AND WAS AFFIRMED BY THE SBA'S REFUSAL TO ISSUE A CERTIFICATE OF COMPETENCY, THE PROTEST MUST BE DENIED.

TO APPLIED DEVICES CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEFAX DATED MARCH 2, 1972, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER INVITATION FOR BIDS (IFB) NO. DAAH01-72-B-0001, ISSUED BY THE UNITED STATES ARMY MISSILE COMMAND, REDSTONE ARSENAL, ALABAMA.

STEP ONE OF THE SOLICITATION WAS ISSUED ON AUGUST 2, 1971, TO 35 PROSPECTIVE BIDDERS FOR PROCUREMENT OF MISSILE GUIDANCE SETS, OPTICAL SIGHTS, AND TRAVERSING UNITS. YOUR FIRM WAS ONE OF SEVEN FIRMS WHICH SUBMITTED A TECHNICAL PROPOSAL BY SEPTEMBER 16, 1971. EVALUATION OF PROPOSALS WAS COMPLETED ON OCTOBER 27, 1971, AND STEP TWO OF THE SOLICITATION WAS ISSUED ON NOVEMBER 5, 1971.

BIDS WERE OPENED ON DECEMBER 20, 1971, AND THE RECORD INDICATES THAT YOUR FIRM WAS THE LOWEST BIDDER. THEREFORE, THE CONTRACTING OFFICER REQUESTED THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR), NEW YORK, TO CONDUCT A PREAWARD SURVEY OF YOUR FIRM. ON JANUARY 19, 1972, THE PREAWARD SURVEY BOARD RECOMMENDED DENIAL OF AWARD TO YOUR FIRM DUE TO UNSATISFACTORY (1) FINANCIAL CAPABILITY AND (2) ABILITY TO MEET REQUIRED SCHEDULE. THEREAFTER, ON JANUARY 26, 1972, THE CONTRACTING OFFICER, PURSUANT TO STANDARDS ESTABLISHED BY PARAGRAPH 1 903 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), DETERMINED YOUR FIRM TO BE NONRESPONSIBLE IN THE FOLLOWING AREAS: (1) FINANCIAL CAPABILITY; (2) ABILITY TO MEET REQUIRED SCHEDULE; AND (3) TECHNICAL ABILITY. IN ADDITION TO THE FINDINGS BY THE PREAWARD SURVEY TEAM, THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY WAS BASED UPON THE FINDINGS THAT THE PRICE BID BY YOUR FIRM WOULD RESULT IN A LOSS CONTRACT. THE CONTRACTING OFFICER REPORTS THAT YOUR FIRM HAS A V-LOAN WHICH IS GUARANTEED BY THE DEPARTMENT OF THE NAVY AND THE LOAN AGREEMENT PROVIDES THAT YOUR FIRM NOT ENTER INTO ANY LOSS CONTRACT.

SINCE YOUR FIRM IS A SMALL BUSINESS, THE CONTRACTING OFFICER REFERRED THE QUESTION OF THE CAPACITY AND CREDIT OF YOUR FIRM TO THE SMALL BUSINESS ADMINISTRATION (SBA), REGION II, BY LETTER OF JANUARY 26, 1972, IN ACCORDANCE WITH ASPR 1-705.4(C). SBA HAS FURNISHED OUR OFFICE WITH A REPORT CONCERNING THE ACTIONS TAKEN BY THE AGENCY IN RESPONSE TO THIS REFERRAL. SBA REPORTS THAT ITS REGION II PERFORMED AN EXTENSIVE ANALYSIS OF YOUR FIRM AND CONCLUDED THAT THE FINDINGS OF THE DCASR SURVEY TEAM APPEARED TO BE JUSTIFIED. BY LETTER OF FEBRUARY 25, 1972, TO THE CONTRACTING OFFICER, SBA DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY TO YOUR FIRM AND YOU WERE ADVISED OF THIS DECISION. A PREAWARD SURVEY OF EMERSON ELECTRIC CO., SECOND LOW BIDDER, WAS CONDUCTED BY DCASR, ST. LOUIS, AND ON FEBRUARY 11, 1972, THE PREAWARD SURVEY BOARD RECOMMENDED AWARD TO EMERSON ELECTRIC. THE ARMY MISSILE COMMAND DETERMINED THAT AN IMMEDIATE AWARD OF THE CONTRACT PRIOR TO RESOLUTION OF THE PROTEST WAS IMPERATIVE. HENCE, WITH THE AUTHORIZATION OF THE DEPUTY FOR MATERIEL ACQUISITION, OFFICE OF THE ASSISTANT SECRETARY OF THE ARMY, A CONTRACT WAS AWARDED TO EMERSON ELECTRIC ON MARCH 10, 1972.

IN YOUR PROTEST TO OUR OFFICE, YOU REQUESTED AN OPPORTUNITY TO PROVIDE FURTHER INFORMATION REGARDING THE FINANCIAL STATUS OF YOUR FIRM WHICH YOU BELIEVED WOULD CHANGE THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY REGARDING YOUR FIRM. THE RECORD INDICATES THAT ON MARCH 6, 1972, YOUR FIRM PRESENTED ADDITIONAL INFORMATION TO THE CONTRACTING OFFICER WHICH WAS CONSIDERED AND DETERMINED TO BE INSUFFICIENT TO ALTER THE DETERMINATIONS OF NONRESPONSIBILITY ALREADY MADE.

WE HAVE CONSISTENTLY HELD THAT IT IS THE DUTY OF THE CONTRACTING OFFICER TO DETERMINE THE RESPONSIBILITY OF A BIDDER. IN MAKING THE DETERMINATION THE CONTRACTING OFFICER IS VESTED WITH A CONSIDERABLE DEGREE OF DISCRETION. WE WILL NOT SUBSTITUTE OUR JUDGMENT IN SUCH CASES AND WILL UPHOLD THE CONTRACTING OFFICER'S DETERMINATION OF RESPONSIBILITY UNLESS IT IS SHOWN TO BE ARBITRARY, CAPRICIOUS OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. SEE 45 COMP. GEN. 4 (1965); 43 ID. 257 (1963). WE HAVE CAREFULLY REVIEWED AND CONSIDERED THE INFORMATION RELIED UPON BY THE CONTRACTING OFFICER IN MAKING THE DETERMINATION THAT YOUR FIRM IS NOT A RESPONSIBLE BIDDER FOR PURPOSES OF THE PROCUREMENT. WE FIND NO BASIS UPON WHICH OUR OFFICE WOULD BE JUSTIFIED IN CONCLUDING THAT THERE WAS AN ABUSE OF ADMINISTRATIVE DISCRETION. FURTHER, WE HAVE HELD THAT THE DETERMINATION OF SBA NOT TO ISSUE A CERTIFICATE OF COMPETENCY IS AN AFFIRMATION OF THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY. SEE B-174510, JANUARY 13, 1972..

ACCORDINGLY, YOUR PROTEST IS DENIED.