B-238251.2, Dec 6, 1990, 90-2 CPD 461

B-238251.2, Dec 6, 1990, 90-2 CPD 461

PROCUREMENT - Contractor Qualification - Licenses DIGEST: Protest that at time of award, awardee did not have Nuclear Regulatory Commission (NRC) licenses required by solicitation is denied where, in earlier decision, it was recommended that agency determine whether awardee "possesses" licenses that meet requirement, protester did not question that recommendation, and agency relied on the recommendation to allow performance to continue upon determining that awardee was in possession of required licenses.

Attorneys

Stocker & Yale, Inc.:

Stocker & Yale, Inc. protests the award of a requirements contract to Marathon Watch Co., Ltd., under request for proposals (RFP) No. FCGA N3-N- 126-9-13-89, issued by the General Services Administration (GSA) for wrist watches. This is Stocker's second protest of the award to Marathon; in an earlier protest, Stocker argued that Marathon should not have received the award because it did not have Nuclear Regulatory Commission (NRC) licenses required by the solicitation. We sustained Stocker's protest and recommended that GSA determine whether Marathon, on its own, or through its suppliers, possesses licenses that meet the RFP requirements. Stocker & Yale, Inc., B-238251, May 16, 1990, 90-1 CPD Para. 475. Following GSA's determination that Marathon meets the license requirements, Stocker filed this protest, again arguing that Marathon does not have the required licenses. and does not have the required licenses and did not have them at the time of award.

We find that GSA could not have made a reasonable determination that the licenses possessed by Marathon or its suppliers were equivalent to the RFP requirements at the time of award and we therefore sustain the protest.

BACKGROUND

The RFP solicited offers for an estimated total requirement of 24,420 watches, with orders to be placed over a 2-year term from February 1, 1990, until January 31, 1992. Award was to be made to the responsible offeror who submitted the technically acceptable offer with the lowest price on the government's peak monthly requirement as set out in the solicitation. The solicitation indicated that the required watches were to be in accordance with "type 1" of military specification MIL-W-46374E, dated May 31, 1989, which required the watch features to be "self- luminous." This is achieved by placing on the watch dial and hands glass vials containing phosphor with the hydrogen isotope tritium in gas form as an exciter. The military specification also included the following requirement:

"Nuclear Regulatory Commission License. At the time of contract award, contractor must possess a valid U.S. Nuclear Regulatory Commission (NRC) or Agreement State Byproduct Material License which authorizes possession of sufficient elemental tritium to fulfill contract requirements and which authorizes manufacture of radioactive instruments and articles (i.e., watches). The contractor must also possess an NRC license issued pursuant to 10 CFR 32 which authorizes manufacture and distribution to the general public of the contracted watches as license exempt items. A copy of these licenses, with license application package, will be provided to the contracting officer."

The solicitation also indicated that watches proposed must meet prescribed qualification standards before award. While the solicitation itself included no qualification standards, the referenced military specification stated that awards would only be made for products that have been tested and approved for inclusion on the applicable qualified products list (QPL). The military specification indicated that the Army's Armament, Research, Development and Engineering Center at Picatinny Arsenal, New Jersey, was the activity responsible for the QPL.

Three offers were submitted in response to the solicitation. On the closing date for receipt of proposals, none of the watches offered was listed on the QPL maintained by the Army. GSA conducted negotiations and requested best and final offers (BAFOs) from all three firms. The contracting officer found the low offeror to be nonresponsible leaving only Marathon and Stocker in the competition.

After the receipt of BAFOs, the Army's Armament, Research, Development and Engineering Center listed Marathon's watches on the applicable QPL. At that time, the contracting officer found Marathon responsible and capable of performing. According to GSA, the affirmative responsibility determination was based on the inclusion of Marathon's watches on the QPL, Marathon's satisfactory financial condition and a positive plant facilities report on Marathon. Further, although the military specification referenced in the RFP required that copies of the NRC licenses be furnished to the contracting officer, the contracting officer explains that she interpreted this "to require delivery of the license to the office in charge of administering the QPL," at Picatinny Arsenal.

In its initial protest, Stocker argued that Marathon did not have the required NRC licenses and the contracting officer made no determination that Marathon met the license requirements. We agreed with Stocker and sustained the protest. Under the solicitation, GSA as the contracting agency, had the ultimate responsibility to determine whether the awardee had the required licenses. Nonetheless, as we have stated in our prior decision, GSA did not make the required determination. Further, although GSA relied on the Army's inclusion of Marathon's watches on the QPL as the Army's determination that Marathon had the proper licenses, we concluded that the Army also made no specific determination that Marathon itself or its manufacturer had the required licenses.

We recommended that GSA determine whether Marathon, on its own or through its suppliers, possessed licenses that meet the RFP requirements and if not, that GSA terminate Marathon's contract and (since at the time our decision was issued the protester was not on the QPL and thus not eligible for award) resolicit for the requirement, giving appropriate consideration before award to whether the awardee meets the license requirements included in the new solicitation.

SECOND PROTEST

In response to our decision, in a memorandum dated July 11, 1990, GSA's contracting officer stated that she had "determined that Marathon, on its own, or through its suppliers, possesses licenses that meet the RFP requirements." The contracting officer states that in making that determination she relied on a July 6 letter from the Chief of the Army activity which developed the military specification and is responsible for maintaining the QPL.

In its current protest, Stocker argues in general that GSA still has not properly determined that Marathon has the licenses required by the solicitation and that Marathon in fact does not meet the license requirements. Stocker also argues that the solicitation required possession of licenses "at the time of award" and that GSA cannot rely on any licenses issued to Marathon by the NRC after that date.

A provision such as that incorporated into the solicitation here, that requires the awardee to possess specific licenses at the time of award, is a definitive responsibility criterion, compliance with which is a necessary prerequisite to contract award. /1/ Stocker & Yale, Inc., B-238251, supra. An offeror need not meet the specific letter of the definitive responsibility requirement but it must exhibit a level of achievement equivalent to or in excess of the requirement in order to be considered to have satisfied the requirement. Prime Mortgage Corp., B-238680.2, July 18, 1990, 69 Comp.Gen. ***, 90-2 CPD Para. 48. The agency's determination that the requirement has been met must be based upon objective evidence. id.

GSA states in its protest report that its determination was based upon five documents: (1) NRC registration No. NR-446-S-102-S of mb microtec, the firm which supplies tritium-filled vials for Marathon's watches; (2) the Swiss government authorization for the use of the vials by Gallet SA, the firm which manufactures the watches for Marathon; (3) Marathon's NRC license No. 54-28526-02 which, according to GSA, authorizes Marathon to possess the hydrogen isotope tritium in mb-microtec vials; (4) Marathon's NRC license No. 31-23758-01E, which authorizes Marathon to distribute watches with a limit on the level of radioactivity allowed per watch of 3.5 millicurie; and (5) a subsequent Marathon NRC license, No. 54-28526- 01E which authorizes distribution of watches containing a radioactivity level of 30 millicuries. /2/

While we do not disagree with GSA that Marathon and its suppliers now substantially conform with the RFP licensing requirements, a significant portion of the evidence upon which GSA relies was not in existence in December 1989, when the contract was awarded to Marathon. Specifically, Marathon's NRC license, which permits it to possess the tritium in the mb- microtec vials, was not issued until May 21, 1990, and Marathon's initial distribution license-- which was not sufficient to cover compliant watches -- was issued on May 4, 1990, and not amended to cover watches with the required radioactivity level until August 14. Thus, there is still no objective evidence that Marathon or its suppliers as of the date of award had any type of license whatsoever that could reasonably be considered as meeting the RFP requirement for an NRC license which authorized distribution of the watches. /3/ Since a responsibility determination cannot be based upon information submitted after award and an offeror must establish compliance with definitive responsibility criteria prior to that time, Vulcan Eng'g Co., B-214595, Oct. 12, 1984, 84-2 CPD Para. 403, and GSA's determination here was based in significant part on post-award data, it cannot be supported and we therefore sustain the protest.

GSA reports that it has numerous backorders for the watches. The contract has a 2-year term, from February 1, 1990, until January 31, 1992; we recommend that the contract be terminated after 1 year of performance, on January 31, 1991, or considering the backorders, as soon thereafter as practicable. We do not recommend that award be made to Stocker because at the time of award to Marathon it too was ineligible as it was not on the QPL. Should the agency recompete its remaining requirements, it should insure that whatever license requirements are included in the new solicitation are met prior to award.

In our prior decision issued several months after the award to Marathon, we recommended that GSA determine whether the awardee "possesses" the required licenses. We recognize that the use of the word "possesses" could have led GSA to consider licenses issued after award in following our recommendation. That would not be proper because, as we have stated above, a definitive responsibility requirement must be met at the time of award. Since the protester did not question this ambiguity in a timely request for reconsideration and since we may have misled the agency, we do not award Stocker the costs of filing and pursuing the protest.

/1/ Marathon argues that only the initial portion of the license requirement pertaining to the possession of tritium and the watch manufacture must be met at the time of award while the second portion concerning distribution may be satisfied after award. Neither GSA nor the Army has recognized this division and since both aspects represent necessary elements of the offeror's ability to perform, we do not think the awardee's reading of the requirement is reasonable. In fact, by identifying the entire license requirement as a definitive responsibility criterion in our first decision, we recognized that the award date is a material element of the requirement. Stocker & Yale, Inc., B-238251, supra; see also Cumberland Sound Pilots Assoc.-- Recon., B-229642.2, June 14, 1988, 88-1 CPD Para. 567.

/2/ The RFP specifications called for watches to have an activity level of 25 millicures.

/3/ There is some indication in the record of the initial protest that Marathon had "applied" for a "distribution license" at the time of award and that in the interim it intended to rely on a "distribution license" possessed by Gallet. We can find nothing in the record which could be reasonably interpreted as a Gallet distribution license and the mere application for an NRC distribution license does not, in our view, constitute possession of the license itself as illustrated by the fact that Marathon did not have an adequate distribution license until almost 8 months after award.