B-166275(2), OCT. 17, 1969

B-166275(2), OCT. 17, 1969

BIDDERS--QUALIFICATIONS--PREAWARD SURVEYS--TECHNICAL CAPABILITY WHERE REJECTED BIDDER WAS FOUND BY JOINT PREAWARD SURVEY TEAM TO BE DEFICIENT IN 8 OF 11 TECHNICAL AND CONTRACTUAL FACTORS COMPRISING SURVEY AND FINDINGS WERE SUSTAINED BY PREAWARD SURVEY REVIEW BOARD WHICH RECOMMENDED NO AWARD, NO BASIS IS FOUND FOR QUESTIONING CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY, AS IT IS CONTRACTING OFFICER'S RESPONSIBILITY TO DETERMINE BIDDER'S RESPONSIBILITY AND SUCH DETERMINATION WILL NOT BE QUESTIONED BY GENERAL ACCOUNTING OFFICE IN ABSENCE OF BAD FAITH OR LACK OF SUBSTANTIAL EVIDENCE. BIDDERS-- QUALIFICATIONS--SMALL BUSINESS CONCERNS- NONREFERRAL FOR CERTIFICATION JUSTIFICATION WHERE 6 LOWEST BIDDERS FOR CERTAIN REQUIREMENTS IN SUPPORT OF 20MM ANTIAIRCRAFT ARTILLERY GUN WERE DETERMINED NONRESPONSIBLE BY CONTRACTING OFFICER, AND CONTRACT WAS AWARDED TO 7TH LOW BIDDER, NO BASIS IS FOUND TO QUESTION NONREFERRAL TO SMALL BUSINESS ADMINISTRATION (SBA), SINCE CONTRACTING OFFICER COMPLIED WITH ARMED SERVICES PROCUREMENT REGULATION 1- 705.4 (C) (IV), WHICH PROVIDES THAT REFERRAL NEED NOT BE MADE TO SBA IF CONTRACTING OFFICER CERTIFIES IN WRITING AND HIS CERTIFICATE IS APPROVED BY CHIEF OF PURCHASING OFFICE, THAT AWARD MUST BE MADE WITHOUT DELAY, INCLUDES SUCH CERTIFICATE AND SUPPORTING DOCUMENTATION IN CONTRACT FILE, AND PROMPTLY FURNISHES COPY TO SBA. NEGOTIATION--AWARDS--PRICE ONE FACTOR IN DETERMINATION CONCERNING PROTESTANT REJECTED BIDDER'S CONTENTION THAT GOVERNMENT COULD SAVE $625,000 BY AWARDING CONTRACT TO IT, CONTRACTING OFFICER WAS UNDER DUTY NOT TO AWARD TO PROTESTANT, EVEN THOUGH ITS PRICE WAS LOWER THAN AWARDEE'S AS HE HAD DETERMINED PROTESTANT NOT RESPONSIBLE FOR PURPOSES OF SUBJECT PROCUREMENT; ASPR 1-902 PROVIDES THAT CONTRACT AWARD TO SUPPLIER BASED ON LOWEST EVALUATED PRICE CAN BE FALSE ECONOMY IF SUBSEQUENT UNSATISFACTORY PERFORMANCE RESULTING IN ADDITIONAL COSTS ENSUES, THAT WHILE IT IS IMPORTANT THAT GOVT. PURCHASE BE MADE AT LOWEST PRICE THIS DOES NOT REQUIRE AWARD TO SUPPLIER SOLELY BECAUSE IT SUBMITS LOWEST BID, AND THAT PROSPECTIVE CONTRACTOR MUST AFFIRMATIVELY DEMONSTRATE ITS RESPONSIBILITY. (EGOTIATION--PUBLIC EXIGENCY--PRIORITY DESIGNATION PURCHASES CONCERNING REJECTED BIDDER'S CONTENTION THAT CONTRACTING OFFICER'S ISSUANCE OF CERTIFICATE OF URGENCY AT TIME OF AWARD TO LARGE BUSINESS FIRM WAS MADE ON BASIS OF SOUTH EAST ASIA 02 PRIORITY ALTHOUGH, IN FACT, REQUEST FOR PROPOSALS SHOWED ONLY DO-A5 RATING, PROTESTANT APPARENTLY HAS CONFUSED SEA-02 PRIORITY WITH DO-A5 PRIORITY RATING; SEA 02 PRIORITY IS ISSUE PRIORITY DESIGNATOR USED WITHIN GOVERNMENT TO EXPRESS RELATIVE URGENCY OF PROCUREMENT AND DELIVERY SCHEDULES, WHEREAS DO-A5 PRIORITY RATING IS DESIGNATION RELATED TO ASSIGNMENT OF PRIORITY RATINGS UNDER DEFENSE MATERIALS SYSTEM FOR ACQUISITION OF CERTAIN CRITICAL MATERIALS, AND PROCUREMENT FILE IS ADEQUATELY DOCUMENTED TO ESTABLISH EXISTENCE OF SEA-02 PRIORITY UPON WHICH PROCUREMENT AND DELIVERY SCHEDULE IS BASED.

TO POLARAD ELECTRONICS CORP.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF FEBRUARY 28, 1969, PROTESTING THE AWARD OF A CONTRACT TO ELECTROMAGNETIC TECHNOLOGY CORPORATION UNDER REQUEST FOR PROPOSALS (RFP) NO. DAAA25-69-R-0148, ISSUED BY THE DEPARTMENT OF THE ARMY, FRANKFORD ARSENAL, PHILADELPHIA, PENNSYLVANIA. YOU REQUEST THAT THE CONTRACT BE CANCELED AND THE AWARD MADE TO YOUR FIRM AS THE LOWEST RESPONSIBLE SMALL BUSINESS OFFEROR AT A PRICE $625,000 LESS THAN THE AWARD PRICE.

A PRESOLICITATION NOTICE WAS ISSUED BY FRANKFORD ARSENAL ON SEPTEMBER 23, 1968, TO 32 POTENTIAL SOURCES FOR CERTAIN REQUIREMENTS IN SUPPORT OF THE 20MM ANTIAIRCRAFT ARTILLERY GUN, XM163 (SELF-PROPELLED) AND XM167 (TOWED). THE PRESOLICITATION NOTICE INCLUDED AN ANNOUNCEMENT OF A PREPROPOSAL CONFERENCE TO BE HELD AT FRANKFORD ARSENAL SHORTLY AFTER THE ISSUANCE OF THE RFP, FOR THE PURPOSE OF PROVIDING PROSPECTIVE OFFERORS WITH AN EXPLANATION AND DISCUSSION OF TECHNICAL AND CONTRACTUAL REQUIREMENTS.

A DETAILED SYNOPSIS OF THE PROPOSED PROCUREMENT WAS PUBLISHED IN THE DEPARTMENT OF COMMERCE BUSINESS DAILY ON SEPTEMBER 27, 1968. THE SYNOPSIS INCLUDED THE ANNOUNCEMENT OF THE PREPROPOSAL CONFERENCE AND INSTRUCTIONS FOR ATTENDANCE. IT EXPRESSED THE GOVERNMENT'S SEARCH FOR "INTERESTED FIRMS POSSESSING SUPERIOR CAPABILITIES AND EXPERIENCE IN SUCH RELATED FIELDS AS X-BAND MICROWAVE, DOPPLER RADARS, ELECTROMAGNETIC COMPATIBILITY REQUIREMENTS AND DIGITAL HARDWARE EXPERIENCE.'

THE RFP WAS ISSUED ON OCTOBER 3, 1968, PURSUANT TO DETERMINATIONS AND FINDINGS WHICH CITED THE PUBLIC EXIGENCY EXCEPTION LISTED IN 10 U.S.C. 2304 (A) (2) AS JUSTIFYING NEGOTIATION. THE RFP WAS ISSUED TO 32 PROSPECTIVE SOURCES AND WAS SUBSEQUENTLY FURNISHED TO OTHER PROSPECTIVE SOURCES WHO RESPONDED TO THE PUBLISHED SYNOPSIS AND OTHER TRADE MEDIA. THE RFP INCLUDED, ON PAGE 1, A "CAVEAT" ADVISING ALL OFFERORS THAT THIS SOLICITATION REPRESENTED THE INITIAL COMPETITIVE PROCUREMENT OF THE ITEMS DESCRIBED IN THE RFP. IN ADDITION, THE RFP DESCRIBED, ON PAGE 39, THE PREAWARD SURVEY FACTORS APPLICABLE TO THIS PROCUREMENT.

THE PREPROPOSAL CONFERENCE WAS HELD AT FRANKFORD ARSENAL ON OCTOBER 17, 1968. OFFERORS ATTENDING THE CONFERENCE WERE PROVIDED WITH A DETAILED EXPLANATION OF THE CONTRACTUAL REQUIREMENTS, PARTICULARLY THE PREPRODUCTION EVALUATION FOR THE TECHNICAL DATA AND THE DESIGN AND PERFORMANCE CHARACTERISTICS OF THE EQUIPMENT -- INCLUDING A DISPLAY OF ACTUAL PRODUCTION UNITS. BY AMENDMENT NO. 003 TO THE RFP, THE CLOSING DATE WAS EXTENDED FROM NOVEMBER 29, 1968, TO DECEMBER 10, 1968.

OF THE 15 OFFERS RECEIVED AND OPENED ON DECEMBER 10, 1968, THE SEVEN LOWEST OFFERS, AS EVALUATED, ARE AS FOLLOWS:

(1) G.C. DEWEY CORP. $8,718,306.40

(2) COSMOS INDUSTRIES, INC. 8,930,813.46

(3) REPUBLIC ELECTRONICS INDS. CORP. 9,073,329.55

(4) POLARAD ELECTRONICS CORP. 9,220,368.04

(5) FREQUENCY ENGINEERING LABS. 9,322,151.51

(6) APPLIED DEVICES CORP. 9,736,655.00

(7) ELECTROMAGNETIC TECHNOLOGY CORP. 9,845,627.93

THE LOW BID OF THE G.C. DEWEY CORP. WAS REJECTED BECAUSE THE FIRM WAS DETERMINED TO BE NONRESPONSIBLE. ALSO THE BIDS OF YOUR FIRM, COSMOS INDUSTRIES, INC., REPUBLIC ELECTRONICS, FREQUENCY ENGINEERING LABS., AND APPLIED DEVICES CORP. WERE REJECTED BECAUSE THE CONTRACTING OFFICER HAD DETERMINED THAT YOUR FIRM AND THE OTHER COMPANIES WERE NONRESPONSIBLE FOR PURPOSES OF THIS PROCUREMENT. ON FEBRUARY 19, 1969, A CONTRACT WAS AWARDED TO ELECTROMAGNETIC TECHNOLOGY CORP. IN THE AMOUNT OF $9,845,627.93.

THE GROUNDS FOR YOUR PROTEST AS SET FORTH IN YOUR TELEGRAM ARE AS FOLLOWS:

"1. POLARAD BELIEVES IT TO BE THE LOWEST RESPONSIVE BIDDER AT A PRICE $625,000 LESS THAN THE AWARD PRICE.

"2. THE PROCEDURES APPLICABLE TO SMALL BUSINESS WERE NOT FOLLOWED DESPITE ENCOURAGEMENT BY THE ARSENAL TO MANY SMALL BUSINESSES TO BUY THE MICROFILM FOR $1,300 AND TO ENGAGE IN A COSTLY BIDDING EFFORT.

"3. THE PREJUDICIAL AND HOSTILE MANNER OF THE TECHNICAL REPRESENTATIVES OF THE ARSENAL IN CONDUCTING THE PREAWARD SURVEY WAS SUGGESTIVE OF PRE- JUDGMENT AND COMPLETE LACK OF OBJECTIVITY.

"4. THE BASIS FOR DISREGARDING POLARAD'S LOWER QUOTATION WAS FOUNDED ON AN EVALUATION FACTOR NOT CLEARLY SET FORTH IN THE RFQ IE AN UNREASONABLE EMPHASIS ON RADAR DESIGN STAFF AVAILABLE.

"5. THE ISSUANCE OF A CERTIFICATE OF URGENCY BY THE CONTRACTING OFFICER AT THE TIME OF AWARD TO A LARGE BUSINESS FIRM ON THE BASIS THAT SOUTH EAST ASIA PRIORITY 02 WAS SET FORTH IN THE RFQ, WHEN IN ACTUALITY THE RFP SHOWED ONLY A DO-A5 RATING.'

THE RECORD SHOWS THAT A JOINT DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD), NEW YORK/FRANKFORD ARSENAL PREAWARD SURVEY WAS CONDUCTED AT POLARAD'S FACILITY ON JANUARY 15, 16 AND 17, 1969. WE ARE ADVISED THAT THE FRANKFORD ARSENAL TECHNICAL PARTICIPANTS WERE PROFESSIONALLY QUALIFIED AND WERE TECHNICALLY FAMILIAR WITH THE EQUIPMENT AND ITS EVOLUTION FROM RESEARCH AND DEVELOPMENT THROUGH CURRENT PRODUCTION.

THE JOINT PREAWARD SURVEY TEAM FOUND POLARAD TO BE DEFICIENT IN EIGHT OF 11 FACTORS COMPRISING THE SURVEY. THESE FINDINGS WERE SUSTAINED BY THE PREAWARD SURVEY REVIEW BOARD AT THE DCASD, NEW YORK, IN ITS FEBRUARY 14, 1969, REPORT WHEREIN THEY RECOMMENDED "NO AWARD.' ACCORDINGLY, THE CONTRACTING OFFICER DETERMINED POLARAD TO BE "NONRESPONSIBLE" AND EXECUTED A WRITTEN DETERMINATION TO THAT EFFECT ON FEBRUARY 14, 1969.

ON FEBRUARY 17, 1969, THE BOARD OF AWARDS AT FRANKFORD ARSENAL REVIEWED THE PROPOSED PROCUREMENT AND CONCURRED IN THE RECOMMENDATION FOR AWARD TO ELECTROMAGNETIC TECHNOLOGY CORP., AS THE LOWEST RESPONSIVE AND RESPONSIBLE OFFEROR. REVIEW AND APPROVAL OF THE PROPOSED AWARD BY THE HEAD OF THE PROCURING ACTIVITY (UNITED STATES ARMY WEAPONS COMMAND) WAS ACCOMPLISHED ON FEBRUARY 18, 1969. AWARD WAS MADE TO ELECTROMAGNETIC TECHNOLOGY CORP. ON FEBRUARY 19, 1969, AND NOTICES TO UNSUCCESSFUL OFFERORS WERE ISSUED ON FEBRUARY 20, 1969.

WITH RESPECT TO YOUR CONTENTION THAT PROCEDURES APPLICABLE TO SMALL BUSINESS WERE NOT FOLLOWED, WE NOTE THAT THE RFP WAS ISSUED UNDER AN SEA- 02 URGENCY PRIORITY. ON FEBRUARY 5, 1969, THE CONTRACTING OFFICER REQUESTED THE USING AGENCY TO ADVISE WHETHER THE PROGRAM WAS STILL URGENT. ON FEBRUARY 11, 1969, THE USING AGENCY REAFFIRMED THE URGENCY OF THE PROCUREMENT. A WRITTEN STATEMENT SETTING FORTH THE REASONS FOR NONREFERRAL TO THE SMALL BUSINESS ADMINISTRATION (SBA) WAS MADE PART OF THE CONTRACT FILE IN ACCORDANCE WITH THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-705.4 (C) (IV). THAT SUBSECTION PROVIDES: "A REFERRAL NEED NOT BE MADE TO THE SBA IF THE CONTRACTING OFFICER CERTIFIES IN WRITING AND HIS CERTIFICATE IS APPROVED BY THE CHIEF OF THE PURCHASING OFFICE, THAT THE AWARD MUST BE MADE WITHOUT DELAY, INCLUDES SUCH CERTIFICATE AND SUPPORTING DOCUMENTATION IN THE CONTRACT FILE, AND PROMPTLY FURNISHES A COPY TO THE SBA. * * *" SINCE THE CONTRACTING OFFICER COMPLIED WITH THE ABOVE-CITED SUBSECTION, WE FIND NO BASIS TO QUESTION THE NONREFERRAL TO SBA. SEE B-163967, SEPTEMBER 26, 1968.

THE CONTRACTING OFFICER DENIES YOUR CONTENTION THAT SMALL BUSINESS WAS ENCOURAGED "TO BUY THE MICROFILM FOR $1,300 AND TO ENGAGE IN A COSTLY BIDDING EFFORT.' THE TECHNICAL DATA PACKAGE WAS AVAILABLE TO ALL PROSPECTIVE OFFERORS UPON PAYMENT OF A DEPOSIT OF $1,300, AND PAGE 42 OF THE RFP INDICATES THAT THIS DEPOSIT WAS REFUNDABLE TO ALL CONCERNS WHO SUBMITTED A TIMELY PROPOSAL IN GOOD FAITH. WE ARE ADVISED THAT THE CONTRACTING OFFICER HAS DIRECTED THE REFUND OF THESE DEPOSITS AND REFUNDS HAVE BEEN ACCOMPLISHED.

THE RECORD FAILS TO SUPPORT YOUR CONTENTION THAT THE TECHNICAL REPRESENTATIVES OF THE ARSENAL CONDUCTED THE PREAWARD SURVEY IN A MANNER SUGGESTING PREJUDGMENT AND COMPLETE LACK OF OBJECTIVITY AS WELL AS HOSTILITY. WE ARE ADVISED THAT PERSONNEL WHO CONDUCTED THE PREAWARD SURVEY ARE RESPONSIBLE AND FAIR-MINDED EMPLOYEES INTERESTED PRIMARILY IN DETERMINING WHETHER THE OFFEROR HAD THE ABILITY, CAPACITY, AND THE SKILLS REQUIRED TO PERFORM THE CONTRACT. ALSO, WE ARE ADVISED THAT THE PREAWARD SURVEY TEAM WAS COMPOSED OF SELECTED PEOPLE FROM DCASD AND SELECTED TECHNICAL PEOPLE FROM THE FRANKFORD ARSENAL, ALL OF WHOM ARE EXPERIENCED IN CONDUCTING PREAWARD SURVEYS.

THE PREAWARD SURVEY REVIEW BOARD OF DCASD, NEW YORK RECOMMENDED THAT NO AWARD BE MADE TO POLARAD BECAUSE IT FOUND YOUR FIRM TO BE UNSATISFACTORY AS TO TECHNICAL CAPABILITY, PRODUCTION CAPABILITY, PLANT FACILITIES, PURCHASING AND SUBCONTRACTING, QUALITY ASSURANCE CAPABILITY, LABOR RECORD, PERFORMANCE RECORD, AND THE ABILITY TO MEET THE REQUIRED SCHEDULE. VIEW THEREOF, WE CANNOT AGREE WITH YOUR CONTENTION THAT POLARAD WAS FOUND NONRESPONSIBLE ON AN EVALUATION FACTOR NOT CLEARLY SET FORTH IN THE RFP, I.E., AN UNREASONABLE EMPHASIS ON THE RADAR DESIGN STAFF AVAILABLE. THE RFP WAS QUITE SPECIFIC IN SETTING FORTH, ON PAGE 39, THE EVALUATION FACTORS AND REPEATEDLY EMPHASIZED THE NECESSITY FOR RADAR DESIGN EXPERIENCE. WE ARE ADVISED THAT AT A PREPROPOSAL CONFERENCE HELD ON OCTOBER 17, 1968, AT WHICH POLARAD WAS PRESENT, ATTENTION WAS INVITED TO THE REQUIREMENTS FOR THE PREAWARD SURVEY. IN ADDITION, ANSWERS WERE PROVIDED IN DEPTH TO NUMEROUS QUESTIONS RAISED ON VARIOUS TECHNICAL AND CONTRACTUAL ASPECTS OF THE RFP.

YOU CONTEND THAT THE ISSUANCE OF A CERTIFICATE OF URGENCY AT THE TIME OF AWARD WAS MADE ON THE BASIS OF AN SEA-02 PRIORITY ALTHOUGH, IN FACT, THE RFP SHOWED ONLY A DO-A5 RATING. IT APPEARS THAT POLARAD HAS CONFUSED THE SEA-02 PRIORITY WITH THE DO-A5 PRIORITY RATING. THE SEA 02 PRIORITY IS AN ISSUE PRIORITY DESIGNATOR USED WITHIN THE GOVERNMENT TO EXPRESS THE RELATIVE URGENCY OF PROCUREMENT AND DELIVERY SCHEDULES, WHEREAS THE DO-A5 PRIORITY RATING IS A DESIGNATION RELATED TO THE ASSIGNMENT OF PRIORITY RATINGS UNDER THE DEFENSE MATERIALS SYSTEM FOR THE ACQUISITION OF CERTAIN CRITICAL MATERIALS. THE PROCUREMENT FILE IS ADEQUATELY DOCUMENTED TO ESTABLISH THE EXISTENCE OF AN SEA-02 PRIORITY UPON WHICH THE PROCUREMENT AND DELIVERY SCHEDULE IS BASED.

ALTHOUGH YOU CONTEND THAT THE GOVERNMENT COULD SAVE $625,000 BY AWARDING THE CONTRACT TO POLARAD, WE DRAW YOUR ATTENTION TO ASPR 1-902 WHICH STATES IN PERTINENT PART AS FOLLOWS:

"* * * THE AWARD OF A CONTRACT TO A SUPPLIER BASED ON LOWEST EVALUATED PRICE ALONE CAN BE FALSE ECONOMY, IF THERE IS A SUBSEQUENT DEFAULT, LATE DELIVERIES, OR OTHER UNSATISFACTORY PERFORMANCE RESULTING IN ADDITIONAL PROCUREMENT OR ADMINISTRATIVE COSTS. WHILE IT IS IMPORTANT THAT GOVERNMENT PURCHASE BE MADE AT THE LOWEST PRICE, THIS DOES NOT REQUIRE AN AWARD TO A SUPPLIER SOLELY BECAUSE HE SUBMITS THE LOWEST BID OR OFFER. PROSPECTIVE CONTRACTOR MUST DEMONSTRATE AFFIRMATIVELY HIS RESPONSIBILITY,

SINCE THE CONTRACTING OFFICER DETERMINED THAT YOUR FIRM WAS NOT RESPONSIBLE FOR PURPOSES OF THIS PROCUREMENT, HE WAS UNDER A DUTY NOT TO AWARD TO YOUR FIRM EVEN THOUGH YOUR PRICE WAS LOWER THAN THAT OF ELECTROMAGNETIC TECHNOLOGY CORPORATION.

WE HAVE CONSISTENTLY HELD THAT IT IS THE RESPONSIBILITY OF THE CONTRACTING OFFICER TO DETERMINE THE RESPONSIBILITY OF A BIDDER AND THAT SUCH DETERMINATION WILL NOT BE QUESTIONED BY OUR OFFICE IN THE ABSENCE OF BAD FAITH OR LACK OF SUBSTANTIAL EVIDENCE. 37 COMP. GEN. 430; 38 ID. 248; 39 ID. 228. WE FIND NO BASIS ON THE RECORD BEFORE US TO QUESTION THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY IN THIS CASE.