REFA International, Inc.

REFA International, Inc. BNUMBER: B-274849; B-275140 DATE: January 7, 1997 TITLE: REFA International, Inc. ********************************************************************** Matter of:REFA International, Inc. File: B-274849; B-275140 Date:January 7, 1997 Joe Hardin for the protester. John P. Patkus, Esq., Defense Logistics Agency, for the agency. Marie Penny Ahearn, Esq., David A. Ashen, Esq., and John M. Melody, Esq., Office of the General Counsel, GAO, participated in the preparation of the decision. DIGEST Protest that agency unreasonably delayed review of protester's application for qualified suppliers list (QSL) is denied where delay was related to agency's concerns (1) that there may be an identity between the protester and a contractor that had been debarred on the basis of lack of business integrity, and (2) whether the protester's products were traceable to a QSL manufacturer or supplier. DECISION REFA International, Inc. (REFA) protests the award of two purchase orders for class 3 threaded fasteners--to L & M Enterprises, Inc. under request for quotations (RFQ) No. SP0500-96-Q-KZ52, and to ASC Industries under RFQ No. SP0500-96-T-HJ08--issued by the Defense Industrial Supply Center (DISC), Defense Logistics Agency. REFA argues that DISC improperly denied the firm an opportunity to compete under the RFQs by failing promptly to consider the firm's request for approval as a qualified source for the screws. We deny the protests. DISC issued the RFQs on June 17 and August 30, 1996, respectively. Both RFQs provided that only manufacturers/suppliers on the qualified suppliers list (QSL) for class 3 threaded fasteners (which are used primarily for aerospace applications) would be eligible for award. DLA rejected REFA's low quotes on both RFQs because the firm was not on the QSL at the time of the awards. The agency made award to L & M under the first RFQ on September 14, and to ASC under the second RFQ on October 10, as the next low quoters on the QSL. BACKGROUND REFA had submitted an initial application for the QSL (including a quality assurance (QA) manual), dated March 20, 1996. After review of the application, DISC determined that the firm was not in compliance with certain QSL criteria (as contained in the QSL Criteria and Provisions for Class 3 Threaded Fasteners, dated February 15, 1996), including requirements for (1) product traceability, i.e., "[a] documented system . . . which unequivocally indicates that the distributor's products have been produced by a customer approved manufacturer"; (2) lot control and marking, i.e., ensuring lot identification, segregation and traceability, and that product lots are not commingled; and (3) periodic review of the quality control manual to ensure procedures are kept current with ongoing operations and regulatory requirements. By letter dated May 2, the agency notified REFA of the specific areas of noncompliance and that its application would be held without action pending corrective action. REFA responded by submitting a revised QA manual with a letter dated May 22. The Defense Contract Management Command (DCMC) subsequently conducted (on June 11) an on-site survey of REFA, and generally concluded (in a report dated June 21) that REFA had "a system for adequately maintaining lot control and traceability." However, DISC determined that the survey report was inadequate because, notwithstanding DISC's specific request, DCMC had not verified that REFA complied with certain QSL criteria, including the requirements to assure product traceability to the manufacturer and lot control and marking with no commingling. DISC thus concluded that additional information was necessary. Identity On July 18, DISC requested that DCMC delay a resurvey of REFA pending a determination as to whether quotes submitted in the name of REFA in fact were being submitted by a debarred contractor, M-F Services, Inc. In this regard, as noted by DCMC in its June survey report and in a prior January 1996 pre-award survey report, in 1995 REFA had purchased the inventory and other assets of M-F Services, which had been debarred for lack of business integrity after its president was convicted of conspiracy in connection with defrauding DISC on government contracts. DCMC noted that REFA's president previously had served as international sales manager for M-F Services, REFA's vice-president of finance had served as secretary-treasurer, and REFA's quality manger had worked in quality assurance at M-F Services. DISC's concern arose from the fact that it had received REFA quotes on M-F Services's letterhead. After being advised of DISC's concern, REFA responded (by letter dated July 25) that while it had purchased the assets and certain liabilities of M-F Services, Inc. and the right to the name "M-F Services," it had not acquired "the name M-F Services, Inc.