B-153795, JUL. 17, 1964

B-153795, JUL. 17, 1964

TO DITTMORE-FREIMUTH CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 19, 1964, PROTESTING THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 207-9-64 ISSUED BY THE UNITED STATES NAVAL AIR STATION, JACKSONVILLE, FLORIDA. YOU STATE THAT YOU RECEIVED A NOTIFICATION ON FEBRUARY 17, 1964, FROM THE CONTRACTING OFFICER, THAT YOU WERE NOT THE SUCCESSFUL BIDDER, IN SPITE OF THE FACT THAT YOU WERE THE LOW BIDDER ON THE SEALED INVITATION FOR BIDS AND THAT YOU WERE ADVISED THAT THE SURVEY REPORTS TURNED IN TO THE CONTRACTING OFFICER DISQUALIFIED YOUR FIRM BASED ON PAST PERFORMANCE. YOU STATE FURTHER THAT YOU FEEL THE DISQUALIFICATION WAS UNWARRANTED BECAUSE YOUR PERFORMANCE HAS BEEN OUTSTANDING AND THAT IT IS APPARENT THAT ERRONEOUS INFORMATION WAS SUBMITTED TO THE CONTRACTING OFFICER.

INVITATION NO. 207-9-64 REPRESENTS THE REPURCHASE NECESSITATED BY THE TERMINATION OF CONTRACTS WITH DYNASPACE INDUSTRIES, INCORPORATED. THESE CONTRACTS RESULTED FROM AWARD OF INVITATION FOR BIDS NOS. 207-96 63 AND 207-121-63 UNDER WHICH YOU ALSO SUBMITTED BIDS. THE RECORD DISCLOSES THAT A PREAWARD SURVEY OF DITTMORE-FREIMUTH CORPORATION RESULTING FROM ITS BID UNDER INVITATION NO. 207-96-63, INDICATED A QUESTIONABLE RECORD OF PAST PERFORMANCE. BASED ON THE RECOMMENDATION OF THE REQUISITIONING ACTIVITY THE CONTRACTING OFFICER REQUESTED THAT A MORE CURRENT EVALUATION BE MADE TO DETERMINE WHETHER DITTMORE FREIMUTH CORPORATION WAS CAPABLE OF PRODUCING THE HYDROPHONES TO MEET THE REQUIRED DELIVERY DATE.

BASED ON THE INFORMATION CONTAINED IN THE PREAWARD SURVEY, THE CONTRACTING OFFICER CONCLUDED THAT HE COULD NOT MAKE THE AFFIRMATIVE DETERMINATION REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1- 904.1 AS YOUR COMPANY DID NOT HAVE A SATISFACTORY RECORD OF PERFORMANCE; DID NOT HAVE THE NECESSARY ORGANIZATION, EXPERIENCE, OPERATIONAL CONTROLS AND TECHNICAL SKILLS, AND DID NOT HAVE THE NECESSARY TECHNICAL EQUIPMENT AND FACILITIES TO MANUFACTURE THE HYDROPHONES. THE INSPECTOR OF NAVAL MATERIAL, MILWAUKEE, WISCONSIN, REPORTED THAT FIFTY-ONE PERCENT OF YOUR COMPLETED NAVY CONTRACTS IN THE PAST 18 MONTHS WERE DELIVERED LATE, AND THAT THE DELINQUENCY RANGED FROM PERIODS OF ONE WEEK TO ONE YEAR. THE REPORT FURTHER INDICATED THAT FOUR CONTRACTS WERE ALREADY DELINQUENT IN DELIVERY WITH AN EXISTING BACKLOG OF APPROXIMATELY $429,000. ACCORDINGLY, YOUR BID WAS REJECTED FOR FAILURE TO MEET THE REQUIREMENTS OF ASPR 1-903.1 (III) AND 1-903.2 (I) AND (II). THE USRL TYPE H23 HYDROPHONE IS A HIGHLY TECHNICAL ELECTRO-ACOUSTIC REFERENCE STANDARD UTILIZED IN UNDERWATER SOUND RESEARCH WHICH REQUIRES THE HIGHEST OF TECHNICAL SKILL AND WORKMANSHIP DURING MANUFACTURE. PAST PROCUREMENTS HAVE DEMONSTRATED THE NEED FOR ADEQUATE TESTING FACILITIES AND QUALITY CONTROL ASSURANCES. PREVIOUS CONTRACTORS HAVE BEEN DELINQUENT IN DELIVERY BECAUSE OF THESE DEFICIENCIES. THE REJECTION RATE UNDER SUCH CONTRACTS WAS HIGH AND COULD BE DIRECTLY RELATED TO THE LACK OF ADEQUATE PRODUCTION AND QUALITY CONTROLS.

CONTRACTS N207/62190/-19753 AND N207/62190/-19759 (WITH DYNASPACE INDUSTRIES) WERE BASED ON A FAVORABLE PREAWARD SURVEY AND THE NECESSITY FOR TERMINATION HAS ALREADY RESULTED IN A DELAY OF APPROXIMATELY 11 MONTHS. CONSIDERING THIS DELAY, TOGETHER WITH PAST PROCUREMENT HISTORY OF THE ITEM AND THE NEGATIVE PREAWARD SURVEY MADE ON YOUR COMPANY IT WAS ADMINISTRATIVELY CONCLUDED THAT THE INTERESTS OF THE GOVERNMENT REQUIRED THE REJECTION OF YOUR BID ON THE GROUNDS CITED. IT WAS FURTHER CONCLUDED THAT THE EXCEPTIONS OF ASPR 1-705.6 (B) (IV) WERE APPLICABLE IT BEING FOUND THAT YOUR UNSATISFACTORY RECORD OF PERFORMANCE UNDER ASPR 1-903.1 (III) WAS NOT DUE SOLELY TO INADEQUATE CAPACITY OR CREDIT. THEREFORE THE SMALL BUSINESS ADMINISTRATION WAS NOT REQUIRED TO CERTIFY AS TO THE CAPACITY AND CREDIT OF YOUR COMPANY PRIOR TO REJECTION OF YOUR BID.

IT IS PROVIDED AT 10 U.S.C. 2305 (C) THAT CONTRACT AWARDS PURSUANT TO FORMAL ADVERTISING SHALL BE MADE TO "THE RESPONSIBLE BIDDER" WHOSE BID IS RESPONSIVE AND WILL BE MOST ADVANTAGEOUS TO THE UNITED STATES.

IT IS WELL SETTLED THAT THE DETERMINATION OF A BIDDER'S RESPONSIBILITY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION, AND OUR OFFICE HAS CONSISTENTLY ADHERED TO THE RULE THAT THE ADMINISTRATIVE DETERMINATION WILL NOT BE QUESTIONED UNLESS BASED ON SUBSTANTIAL EVIDENCE. 38 COMP. GEN. 131; 37 COMP. GEN. 430, 435. IT ALSO HAS BEEN SETTLED BY NUMEROUS DECISIONS OF OUR OFFICE AND OF COURTS, BOTH STATE AND FEDERAL, THAT RESPONSIBILITY AS USED IN STATUTORY ENACTMENTS REQUIRING AWARD OF PUBLIC CONTRACTS TO THE LOWEST RESPONSIBLE BIDDER, EMBRACES NOT MERELY PECUNIARY ABILITY AND PHYSICAL CAPABILITY TO PERFORM, BUT ALSO MORE PERSONAL ATTRIBUTES OR INTEGRITY, WHICH HAVE BEEN VARIOUSLY STATED AS THE BIDDER'S "SUITABILITY FOR THE TASK, AND THOSE QUALITIES HE MUST NECESSARILY HAVE IN ORDER TO BE ABLE TO PERFORM THE CONTRACT" (BEST V. CITY OF OMAHA, (NEB.) 293 N.W. 116); "SKILL, JUDGMENT, AND INTEGRITY NECESSARY TO A FAITHFUL PERFORMANCE OF THE CONTRACT" (WILLIAMS V. CITY OF TOPEKA, (KANS.) 118 PAC. 864, 38 LRA (NS) 672; "ABILITY TO PROMPTLY, FAITHFULLY, AND CONSCIENTIOUSLY PERFORM THE WORK" (STATE V. RICHARDS, (MONT.) 40 PAC. 210, 28 LRA 298; "PROMPTNESS, FAITHFULNESS AND CAPACITY AND ABILITY TO DO WORK" (WILSON V. CITY OF NEW CASTLE (PA.) 152 A. 102.

THE DETERMINATION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT. WHILE SUCH JUDGMENT SHOULD BE BASED ON FACT AND SHOULD BE ARRIVED AT IN GOOD FAITH, IT MUST PROPERLY BE LEFT PRIMARILY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICES INVOLVED OR IN APPROPRIATE CASES THE SMALL BUSINESS ADMINISTRATION. IN THIS CASE IT APPEARS THAT THE EVIDENCE RELATING TO THE REASONS CITED FOR REJECTING YOUR BID IS SUFFICIENT TO SUPPORT THE ACTION TAKEN AND IN VIEW THEREOF WE SEE NO PROPER BASIS AT THIS TIME UPON WHICH WE MAY OBJECT TO THAT DETERMINATION.