B-177174, FEB 27, 1973

B-177174, FEB 27, 1973

BID PROTEST - RESPONSIBILITY - SBA DETERMINATIONS DENIAL OF PROTEST BY JANKE AND COMPANY, INC., AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER AN IFB ISSUED BY THE NAVAL AIR ENGINEERING CENTER, PHILADELPHIA, PA. THE DETERMINATION OF A PROSPECTIVE CONTRACTOR'S ABILITY TO PERFORM A CONTRACT IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE AGENCY INVOLVING A MATTER OF JUDGMENT. IN THE ABSENCE OF BAD FAITH OR LACK OF SUBSTANTIAL GROUNDS FOR THE ADMINISTRATIVE DETERMINATION, THERE IS NO BASIS FOR LEGAL OBJECTION BY GAO. SEE 45 COMP. GEN. 4 (1965). FURTHERMORE, THE REFUSAL OF THE SBA TO ISSUE A COC MUST BE REGARDED AS PERSUASIVE WITH RESPECT TO THE COMPETENCY OF A BIDDER, AND THE DENIAL THEREOF AS AN AFFIRMATION OF THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY. SEE B- 176591, OCTOBER 18, 1972. ALSO, GAO HAS NO AUTHORITY TO REVIEW DETERMINATIONS OF THE SBA OR REQUIRE IT TO ISSUE A CERTIFICATE OF COMPETENCY. SEE B-176684, OCTOBER 2, 1972.

TO JANKE AND COMPANY, INCORPORATED:

WE REFER TO YOUR LETTER OF SEPTEMBER 30, 1972, AND SUBSEQUENT CORRESPONDENCE, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER INVITATION FOR BIDS (IFB) NO. N00156 72-B -0357, ISSUED BY THE NAVAL AIR ENGINEERING CENTER, PHILADELPHIA, PENNSYLVANIA.

THE SOLICITATION WAS ISSUED ON MAY 12, 1972, FOR PROCUREMENT OF DEMOUNTABLE ACOUSTIC ENCLOSURES FOR TESTING TURBOJET FAN ENGINES. THE SPECIFICATIONS REQUIRE THE FABRICATION FROM HEAVY ALUMINUM OF LARGE COMPONENT CHAMBERS HOUSING TUBING AND BAFFLE PLATES THAT WHEN ASSEMBLED AND INSTALLED MEASURE APPROXIMATELY 120 FEET LONG, 22 FEET WIDE AND AT THE HIGHEST LEVEL STAND 25 FEET. BIDS WERE OPENED ON JULY 14, 1972, AND YOUR FIRM, AT AN EVALUATED PRICE OF $1,645,241.45, WAS THE LOW BIDDER. THE NEXT LOW BID, AT $1,645,418.81 WAS SUBMITTED BY LUDWIG HONOLD MANUFACTURING COMPANY.

THE PREAWARD SURVEY WAS CONDUCTED AT YOUR PLANT BY A JOINT TEAM OF NAVAL AIR ENGINEERING CENTER (NAVAIRENGCEN) PERSONNEL AND THE DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD), SPRINGFIELD, NEW JERSEY. THE REPORT OF THE JOINT SURVEY TEAM RECOMMENDED TO THE CONTRACTING OFFICER THAT NO AWARD BE MADE TO YOUR FIRM. THE FINDINGS WERE THAT, ALTHOUGH YOUR FIRM PROVIDED SATISFACTORY EVIDENCE OF CAPABILITY IN CERTAIN AREAS, YOU WERE DEFICIENT IN ABILITY TO PRODUCE AND DELIVER ON TIME. THEREAFTER, THE CONTRACTING OFFICER, PURSUANT TO THE REQUIREMENT OF PARAGRAPH 1-705.4 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), REFERRED THE ISSUE OF CAPACITY TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CONSIDERATION OF THE ISSUANCE OF A CERTIFICATE OF COMPETENCY (COC). THE DISTRICT OFFICE OF SBA, NEWARK, NEW JERSEY, RECOMMENDED THE ISSUANCE OF A COC AND THE SBA REGIONAL OFFICE FOR NEW YORK CONCURRED IN THE RECOMMENDATION. HOWEVER, IN ACCORDANCE WITH SBA REGULATIONS CONCERNING PROCUREMENTS IN EXCESS OF $250,000 (13 CFR 124.8 16), THE RECOMMENDATION WAS SUBMITTED FOR REVIEW TO THE ASSOCIATE ADMINISTRATOR FOR PROCUREMENT AND MANAGEMENT ASSISTANCE, WASHINGTON, D. C. BY LETTER DATED SEPTEMBER 22, 1972, THE COGNIZANT WASHINGTON OFFICE ADVISED THE CONTRACTING OFFICER THAT "BASED ON A COMPREHENSIVE ANALYSIS OF ALL AVAILABLE INFORMATION, THIS AGENCY HAS DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY IN THIS INSTANCE." AWARD WAS MADE TO THE SECOND LOW BIDDER ON OCTOBER 6, 1972.

YOU TAKE ISSUE WITH MOST OF THE ADVERSE FINDINGS OF THE CONTRACTING AGENCY. IN THIS CONNECTION, YOU DISAGREE WITH THE CONCLUSION STATED BY THE CONTRACTING OFFICER IN HIS REPORT TO THIS OFFICE THAT YOUR ESTIMATE OF 22,000 MAN-HOURS WAS TOTALLY OUT OF LINE WITH THE GOVERNMENT ESTIMATE OF 100,000 MAN-HOURS FOR THE PROJECT. IT IS YOUR CONTENTION THAT THE GOVERNMENT ESTIMATE OF MAN-HOURS IS UNREALISTIC BECAUSE THE PRICE BASED THEREON FOR LABOR ALONE WOULD BE $1,500,000 (A MINIMAL LABOR, INCLUDING OVERHEAD AND G&A, OF $15 TIMES 100,000 MAN-HOURS). TO THIS AMOUNT WOULD BE ADDED THE COST OF MATERIAL AND PROFIT, MAKING THE TOTAL PRICE OVER $2.6 MILLION, WHEREAS BOTH YOU AND HONOLD BID APPROXIMATELY $1.6 MILLION. WHILE YOUR ARGUMENT THAT THE GOVERNMENT ESTIMATE OF 100,000 MAN-HOURS IS UNREALISTIC IS CONVINCING, IN VIEW OF THE LABOR COSTS INVOLVED IN SUCH AN ESTIMATE, WE ARE UNABLE TO REACH THE SAME CONCLUSION WITH REGARD TO THE ADMINISTRATIVE JUDGMENT IN THE OTHER AREAS WHERE YOU WERE DETERMINED DEFICIENT, THAT IS, PRODUCTION CAPABILITY, PLANT FACILITIES AND EQUIPMENT, AND ABILITY TO MEET THE REQUIRED DELIVERY SCHEDULE. WE HAVE EXAMINED THE PREAWARD SURVEY REPORT, AND THE ADVERSE CONCLUSIONS IN THESE AREAS ARE DOCUMENTED. IN ADDITION, THE SBA STATED THE FOLLOWING REASONS FOR DECLINING TO ISSUE A COC:

1. THE FIRM HAS FAILED TO SUBMIT PRODUCTION PLANS THAT ADEQUATELY DEMONSTRATE THE ABILITY TO PRODUCE THE REQUIRED ITEM TO SCHEDULE.

2. THE FIRM HAS NOT GIVEN FULL CONSIDERATION TO THE CAPITAL EQUIPMENT NECESSARY TO PRODUCE THE ITEMS.

3. THE PLANT IS NOT EQUIPPED TO MANUFACTURE, HANDLE AND ERECT WELDMENTS OF THIS SIZE.

4. THE FIRM'S PAST EXPERIENCE IS NOT CLOSELY RELATED TO THE ITEM COVERED BY THE PROPOSED PROCUREMENT.

5. JANKE & COMPANY, INC., IN THEIR PRESENTATION DID NOT SATISFACTORILY INDICATE HOW THEY WOULD MANUFACTURE PANEL ASSEMBLIES TO MEET THE RELATIVELY CRITICAL TOLERANCES AND INTERCHANGEABILITY REQUIREMENTS OF THE PROCUREMENT.

OUR OFFICE HAS CONSISTENTLY HELD THAT THE DETERMINATION OF A PROSPECTIVE CONTRACTOR'S ABILITY TO PERFORM A CONTRACT IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE AGENCY INVOLVING A MATTER OF JUDGMENT. IN THE ABSENCE OF BAD FAITH OR LACK OF SUBSTANTIAL GROUNDS FOR THE ADMINISTRATIVE DETERMINATION, THERE IS NO BASIS FOR LEGAL OBJECTION BY OUR OFFICE. SEE 45 COMP. GEN. 4 (1965). FURTHERMORE, WE HAVE HELD THAT THE REFUSAL OF THE SBA TO ISSUE A COC MUST BE REGARDED AS PERSUASIVE WITH RESPECT TO THE COMPETENCY OF A BIDDER, AND THE DENIAL THEREOF AS AN AFFIRMATION OF THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY. SEE B-176591, OCTOBER 18, 1972. ALSO, WE HAVE NO AUTHORITY TO REVIEW DETERMINATIONS OF THE SBA OR REQUIRE IT TO ISSUE A CERTIFICATE OF COMPETENCY. SEE B-176684, OCTOBER 2, 1972.

IN THE CIRCUMSTANCES, YOUR PROTEST AGAINST THE REJECTION OF YOUR BID IS DENIED.