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TELE-SENTRY SEC., INC. v. UNITED STATES DOD

January 23, 1989

TELE-SENTRY SECURITY, INC., Plaintiff,
v.
UNITED STATES DEPARTMENT OF DEFENSE (AIR FORCE), et al., Defendants


Joyce Hens Green, United States District Judge.


The opinion of the court was delivered by: GREEN

JOYCE HENS GREEN, UNITED STATES DISTRICT JUDGE

 Presently pending before the Court are cross-motions for summary judgment filed by plaintiff Tele-Sentry Security, Inc. (TSSI) and defendants United States Department of Defense (Air Force) (hereinafter "DOD"), Secretary of Defense Frank Carlucci, the Small Business Administration (SBA), and SBA Administrator James Abdnor. For the reasons set forth below, defendants' motion will be granted and plaintiff's denied.

 I. Background

 Government agencies considering bids for procurement awards are required by federal regulations to make two independent determinations. They must first find that the firm seeking the contract is a "responsive" bidder; in other words, that the bid submitted complies with the invitation issued by the agency. See 48 C.F.R. § 14.301. In addition, the procurement official must be satisfied that the firm in question is "responsible" and can meet applicable financial and technical standards Id. § 9.104-1.

 Small business concerns seeking to show that they are "responsible" are afforded an additional measure of protection under the Small Business Act of 1958, 15 U.S.C. § 631 et seq. Pursuant to 15 U.S.C. § 637(b)(7)(A), the SBA is empowered to certify that a small business concern is competent to perform a particular procurement contract. The SBA's decision to issue this statement, known as a certificate of competency (COC), is binding upon the procuring agency, which must then award the contract to that firm. Id. § 637(b)(7)(C).

 This case concerns a contract for the repair and maintenance of land mobile radios at Williams Air Force Base in Arizona. On August 10, 1988, DOD issued a bid solicitation for the contract, which was to last for a period of one year with an option to extend for an additional four. When the bids were opened on September 16, 1988, TSSI was the low bidder. *fn1" On November 3, 1988, however, TSSI received a letter from the SBA stating that DOD's contracting officer had determined that TSSI was nonresponsible, and its bid unacceptable, because:

 
1. Your firm's past performance on this requirement was rated less-than satisfactory.
 
2. Your firm failed to demonstrate you have the technical capability to perform.
 
3. Your firm's competency was questioned by [the contracting officer].
 
4. Your firm's on time delivery of service was rated as less-than-satisfactory.

 Administrative Record (AR) 2. The letter also stated SBA would perform an "independent survey of your firm, reviewing both financial and technical capabilities, to determine whether it considers your company to have the requisite competence to meet contractual requirements in a timely manner"; if a favorable decision were made, TSSI would be issued a COC and would be awarded the Williams contract. Id. TSSI was directed to submit a COC application, together with supporting financial and technical documentation, by November 10, 1988.

 After securing the services of an accounting firm, TSSI submitted the required materials, see Complaint, Exhibit B, but on November 28, 1988, SBA denied its application. The agency noted that it had carefully reviewed TSSI's submission but that it did not "find sufficient reasons for reversing the non-responsibility decision of the contracting officer." AR 462. The SBA articulated two reasons for its decision:

 
Specifically, your firm is in reorganization and operating without an approved plan. There is no assurance as to how long your firm can continue to operate. In addition, your firm's past performance is unsatisfactory as evidenced by unresolved surety bond losses ...

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