B-151848, SEP. 27, 1963

B-151848, SEP. 27, 1963

TO BMC INDUSTRIES, INCORPORATED:

THIS REFERS TO YOUR LETTERS OF SEPTEMBER 13 AND JULY 22, 1963 PROTESTING AGAINST THE REJECTION OF YOUR BID UNDER INVITATION FOR BIDS NO. AMC (E) 36 -039-63-2725-C4, ISSUED ON MAY 15, 1963 BY THE DEPARTMENT OF THE ARMY.

THE SUBJECT INVITATION COVERED THE TELEGRAPH TERMINAL TH-5 ( ( (TO AND CONVERTER TELEGRAPH TELEPHONE SIGNAL TA-182 ( ( (U TOGETHER WITH AUXILLIARY ITEMS FOR EACH EQUIPMENT. BID OPENING WAS HELD ON JUNE 13, 1963, AND YOU WERE THE LOW BIDDER. THE ARMY DETERMINED THAT YOUR FIRM LACKED THE FINANCIAL CAPABILITY TO BE A RESPONSIBLE BIDDER ON THIS PROCUREMENT; AND ON JUNE 21, 1963, YOUR BID WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION FOR CONSIDERATION OF POSSIBLE ISSUANCE OF A CERTIFICATE OF COMPETENCY. BY LETTER DATED JULY 16, 1963, THE SBA ADVISED THE CONTRACTING OFFICER THAT IT HAD DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY TO YOUR FIRM.

THE ARMY REPORTS THAT FROM THE INITIAL PRODUCTION CONTRACT IN 1953 ON THE TA-182 ( ( (U, A TOTAL OF FIVE CONTRACTS HAD BEEN PLACED FOR THIS EQUIPMENT UP TO DECEMBER, 1960, AT UNIT PRICES RANGING FROM $233.69 ON THE INITIAL CONTRACT TO $119.33. IN DECEMBER, 1960, A SIXTH CONTRACT FOR A QUANTITY OF 16,760 EACH, TA-182 ( ( (U WAS AWARDED TO CALMONT INDUSTRIES AT A UNIT PRICE OF $89.80. IT IS REPORTED THAT YOUR EXPERIENCE ON THIS ITEM STEMS FROM A SUBCONTRACT WITH CALMONT ON THIS PROCUREMENT, WHICH YOU UNDERTOOK ON THE 16,760 UNITS, AT $95 PER UNIT, AND FROM A CONTRACT YOU RECEIVED AS LOW BIDDER IN JUNE, 1961 (INVITATION NO. SC-36-039-61-1477-C4- 51) FOR 5,466 UNITS, AT A UNIT PRICE OF $100.

THE CONTRACTING OFFICER REPORTS THAT ON THE CALMONT CONTRACT (PURCHASE ORDER NO. 21350-PC-61), THE DELIVERY SCHEDULE AS AMENDED CALLED FOR COMPLETE DELIVERY OF THE 16,760 UNITS AS OF JULY 31, 1963; HOWEVER, AS OF JULY 31, 1963 ONLY 12,343 UNITS WERE DELIVERED, AND THE LAST DELIVERY HAD BEEN MADE IN MAY, 1963. ON THE CONTRACT YOU RECEIVED (PURCHASE ORDER NO. 24361-PC-61), THE AMENDED DELIVERY SCHEDULE CALLED FOR DELIVERY OF 5,466 UNITS BY APRIL 30, 1963; IT IS REPORTED, HOWEVER, THAT AS OF AUGUST 31, 1963, YOU HAD DELIVERED A TOTAL OF 4,097 UNITS, AND ONLY 104 UNITS OF THIS TOTAL WERE DELIVERED FROM MAY 1, 1963 THROUGH AUGUST 31, 1963.

THE CONTRACTING OFFICER FURTHER REPORTS THAT YOUR FIRM HAS RECENTLY BEEN INVOLVED IN BANKRUPTCY PROCEEDINGS; AND THAT THE U.S. DISTRICT COURT IN NEW YORK HAS ORDERED YOUR FIRM TO SUBMIT A PLAN OF ARRANGEMENT TO THE COURT. HE CONCLUDES THAT UNDER THE CIRCUMSTANCES, YOUR FIRM CANNOT BE CONSIDERED TO BE A RESPONSIBLE BIDDER.

YOU HAVE SUBMITTED TO US YOUR PROPOSED ARRANGEMENT PLAN; AND YOUR ATTORNEY STATES THAT THE PROPOSED PLAN HAS BEEN APPROVED BY A CREDITORS' COMMITTEE. IT APPEARS THAT YOUR CREDITORS HAVE EXPRESSED A WILLINGNESS TO FURNISH YOU WITH MATERIALS TO ENABLE YOU TO CONTINUE OPERATIONS AND COMPLETE CONTRACTS. IN ADDITION, YOUR BALANCE SHEET REFLECTS A "MERCHANDISE INVENTORY" OF OVER $560,000, WHICH YOU STATE CONSISTS OF MATERIAL THAT CAN BE UTILIZED ON THIS CONTRACT.

IT IS YOUR BELIEF THAT THE GOVERNMENT BEARS A MORAL OBLIGATION TO YOUR FIRM IN THAT YOUR BANKRUPTCY CAME ABOUT SOLELY AS A RESULT OF YOUR EFFORTS TO FURNISH THE GOVERNMENT THE TA-182 AT THE VERY LOW PRICE OF $100. YOU CONCLUDE THAT IN VIEW OF THE RECOVERY WHICH YOUR FIRM IS MAKING, IT SHOULD BE RECOGNIZED AS A RESPONSIBLE BIDDER ON THIS PROCUREMENT.

A DETERMINATION AS THE THE RESPONSIBILITY OF A BIDDER IS A MATTER OF JUDGMENT; AND WE HAVE LONG RECOGNIZED THAT THIS DETERMINATION IS LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE ADMINISTRATIVE AGENCY. SEE B-151834, SEPTEMBER 5, 1963, COPY ENLCOSED. AS THE RECORD SHOWS, THE MATTER OF YOUR RESPONSIBILITY WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION, AND THAT AGENCY DECLINED TO ISSUE YOUR FIRM A CERTIFICATE OF COMPETENCY AS TO CREDIT AND CAPACITY. WE HAVE HELD THAT SUCH DENIAL MUST BE VIEWED AS AN AFFIRMATION OF THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY. B-146205, SEPTEMBER 20, 1961.

THE CONTRACTING OFFICER CONCLUDED FROM THE FACTS OF YOUR PAST PERFORMANCE AND PRESENT UNSETTLED CONDITION, THAT YOUR FIRM WAS NOT A RESPONSIBLE BIDDER. WE CANNOT SAY THAT THIS DETERMINATION CONSTITUTED AN ABUSE OF SOUND ADMINISTRATIVE DISCRETION.

WE DO NOT THINK THAT THE GOVERNMENT WAS RESPONSIBLE FOR YOUR FINANCIAL DIFFICULTIES. THE CONTRACT YOU RECEIVED FROM THE GOVERNMENT FOR THE TA- 182 (YOU ARE A SUBCONTRACTOR UNDER THE CALMONT CONTRACT) WAS AWARDED PURSUANT TO ADVERTISED BIDDING. SINCE YOU WERE FOUND TO BE A RESPONSIBLE BIDDER AT THAT TIME, THE CONTRACTING OFFICER WAS REQUIRED TO MAKE A REWARD TO YOUR FIRM AT THE LOW BID PRICE YOU SUBMITTED.

ON THE BASIS OF THE RECORD, YOUR PROTEST AGAINST THE REJECTION OF YOUR BID IS DENIED.