B-152840, JUL. 24, 1964

B-152840, JUL. 24, 1964

TO FRANK DELANEY, ESQUIRE:

REFERENCE IS MADE TO YOUR LETTERS OF MARCH 6 AND APRIL 27, 1964, REQUESTING RECONSIDERATION OF OUR DECISION OF FEBRUARY 20, 1964, B 152840, WHICH DENIED YOUR PROTEST ON BEHALF OF PIERREL, P.A., MILAN, ITALY, AGAINST REJECTION OF ITS OFFER TO SUPPLY A DRUG UNDER REQUEST FOR PROPOSALS DSA 2-3854, ISSUED SEPTEMBER 18, 1963, BY THE DEFENSE SUPPLY AGENCY (DSA).

OUR DECISION OF FEBRUARY 20, 1964, UPHELD A DETERMINATION BY DSA THAT PIERREL WAS NOT A RESPONSIBLE BIDDER. IT WAS FOUND BY DSA THAT NICOLO VISCONTI, PRESIDENT OF PIERREL, ON THE BASIS OF AN INDICTMENT FOR VIOLATION OF 18 U.S.C. 2314 AND OTHER EVIDENCE, WAS LACKING IN INTEGRITY AND THAT SUCH LACK OF INTEGRITY WAS IMPUTABLE TO PIERREL.

YOUR OBJECTIONS TO OUR DECISION WILL BE DISCUSSED IN THE ORDER IN WHICH THEY ARE PRESENTED IN YOUR LETTER OF APRIL 27.

YOU QUESTION WHETHER THE BEST INTEREST OF THE UNITED STATES IS SERVED BY NOT PERMITTING AWARD TO PIERREL SINCE THE GOVERNMENT PRESUMABLY WILL PAY HIGHER PRICES THAN PIERREL'S BID PRICES. WHILE THE PRICE OF GOODS TO BE PURCHASED IS CERTAINLY ONE OF THE MOST IMPORTANT FACTORS IN DEFINING WHAT IS, OR IS NOT, IN THE GOVERNMENT'S BEST INTEREST, IT IS NOT THE ONLY FACTOR. UNDER THE PROCUREMENT LAWS A DETERMINATION OF WHETHER A BIDDER'S OFFER IS THE MOST ADVANTAGEOUS TO THE GOVERNMENT IS NOT MEASURED EXCLUSIVELY IN TERMS OF PRICE BUT INCLUDES OTHER FACTORS, SUCH AS JUDGMENT, SKILL, ABILITY, CAPACITY, AND INTEGRITY. FRIEND V. LEE, 221 F.2D 96. THEREFORE, AND PURSUANT TO THE REQUIREMENT OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1 903.1 THAT A PROSPECTIVE CONTRACTOR HAVE A SATISFACTORY RECORD OF INTEGRITY, THE ADMINISTRATIVE DETERMINATION REGARDING PIERREL'S INTEGRITY, RATHER THAN THE PRICES OFFERED BY PIERREL, CONTROLS THE MATTER OF PIERREL'S ELIGIBILITY FOR AWARD.

REGARDING YOUR STATEMENT THAT PIERREL WAS ADJUDGED RESPONSIBLE BY THE BRITISH GOVERNMENT AFTER SCRUTINY OF THE CHARGES RAISED BY THE UNITED STATES GOVERNMENT AGAINST PIERREL, THIS FACT DOES NOT RELIEVE PROSPECTIVE CONTRACTORS FROM MEETING THE CRITERIA FOR RESPONSIBILITY SPECIFIED IN ASPR 1.903.1 AND 1.903.2 WHICH CONTROL DETERMINATIONS BY THE GOVERNMENT OF THE UNITED STATES AS TO THE FIRMS THAT MAY BE AWARDED CONTRACTS. ACCORDINGLY, THE DECISION OF THE CONTRACTING OFFICIALS OF THE BRITISH GOVERNMENT MAY NOT BE CONSIDERED AS CONTROLLING A FINDING BY THE DSA CONTRACTING OFFICER.

AS TO THE CONTENTION THAT THE INABILITY OF DSA TO DETERMINE WHETHER PIERREL SHOULD BE SUSPENDED PRECLUDES A DETERMINATION OF NONRESPONSIBILITY BASED ON ONE OF THE CAUSES FOR SUSPENSION ENUMERATED IN ASPR 1-605.1, IT SHOULD BE NOTED THAT THE TWO ACTIONS ARE SEPARATE AND DISTINCT. NONRESPONSIBILITY DETERMINATION APPLIES ONLY TO THE SPECIFIC PROCUREMENT FOR WHICH IT IS MADE AND MAY BE FOR CAUSES OTHER THAN THOSE PRESCRIBED IN ASPR 1-605.1, SUCH AS AN UNSATISFACTORY PERFORMANCE RECORD. A SUSPENSION, ON THE OTHER HAND, IS A MORE DRASTIC ACTION AND MAY AFFECT MORE THAN ONE PROCUREMENT. IN ANY EVENT, HOWEVER, WE HAVE BEEN ADVISED THAT DSA HAS SUSPENDED PIERREL AND ITS PRESIDENT IN THE BEST INTERESTS OF THE GOVERNMENT, PENDING THE OUTCOME OF THE CRIMINAL PROCEEDINGS.

YOU STATE THAT THE COPY OF THE NONRESPONSIBILITY DETERMINATION WHICH WAS FURNISHED TO YOU IS UNSIGNED AND THERE IS NO SHOWING THAT THE DETERMINATION WAS MADE BY A DULY AUTHORIZED CONTRACTING OFFICER. ALSO, YOU INFER THAT THE DETERMINATION WAS MADE NOT BY THE CONTRACTING OFFICER BUT BY HIS SUPERVISORY PERSONNEL. DSA REPORTS THAT THE ORIGINAL OF THE DETERMINATION, WHICH WAS PLACED IN THE CONTRACT FILE, BEARS THE HANDWRITTEN SIGNATURE OF THE CONTRACTING OFFICER, WHOSE APPOINTMENT WAS DULY AUTHORIZED PURSUANT TO APPLICABLE PROVISIONS OF THE DEFENSE SUPPLY PROCUREMENT REGULATION (DSPR). IT IS ALSO REPORTED THAT WHILE THE CONTRACTING OFFICER DISCUSSED THE DETERMINATION WITH HIS ADVISORS AT THE DEFENSE MEDICAL SUPPLY CENTER AND DSA, THE DECISION WAS NOT "DIRECTED" BY HIS SUPERVISORY PERSONNEL BUT REFLECTS HIS INDEPENDENT JUDGMENT AFTER CONSIDERATION OF THE AVAILABLE INFORMATION. ON THE RECORD BEFORE US WE HAVE NO REASON TO QUESTION THE ACCURACY OF THIS ADVICE FROM DSA.

WITH RESPECT TO YOUR CONTENTION THAT THE INDICTMENT ALONE DOES NOT WARRANT SUSPENSION OR AN ADVERSE RESPONSIBILITY DETERMINATION, THE DETERMINATION OF PIERREL'S RESPONSIBILITY, AS STATED IN OUR DECISION, WAS BASED ON EVIDENCE OTHER THAN THE INDICTMENT, MOST OF WHICH HAS BEEN MADE AVAILABLE TO YOU. MOREOVER, WHILE WE AGREE THAT AN INDICTMENT, IN AND OF ITSELF, MAY NOT NECESSARILY WARRANT SUSPENSION OF A CONTRACTOR, IT SHOULD BE NOTED THAT THE PROVISIONS OF ASPR 1 605.1 AUTHORIZE THE SUSPENSION OF FIRMS OR INDIVIDUALS SUSPECTED OF COMMITTING CERTAIN ENUMERATED OFFENSES. THE PERIOD OF SUCH SUSPENSION IS TEMPORARY PENDING THE COMPLETION OF INVESTIGATION AND SUCH LEGAL PROCEEDINGS AS MAY ENSUE. SEE ASPR 1-605.2.

AS TO THE FACT THAT THE SUCCESSFUL OFFEROR, CHARLES PFIZER AND CO., ON THE PROCUREMENT UNDER RFQ DSA 2-3854 WAS CONSIDERED RESPONSIBLE ALTHOUGH IT WAS UNDER INDICTMENT FOR VIOLATION OF THE ANTI-TRUST LAWS AT THE TIME OF THE CONTRACT AWARD, SUCH FACT DOES NOT AFFECT THE DETERMINATION OF RESPONSIBILITY IN PIERREL'S CASE, SINCE EACH CASE IS SEPARATE AND DISTINCT. ALSO, DSA REPORTS THAT, AS CONTRASTED WITH OFFENSES SUCH AS LARCENY OR THE TRANSPORTING OR RECEIVING OF STOLEN PROPERTY, ALLEGED VIOLATIONS OF THE ANTI-TRUST LAWS HAVE NOT GENERALLY BEEN CONSIDERED BY THE DEPARTMENT OF DEFENSE AS A BASIS FOR A DETERMINATION OF NONRESPONSIBILITY ALTHOUGH EACH CASE IS CONSIDERED INDIVIDUALLY. IN THAT CONNECTION SEE ASPR 1-605.1 (I) (B). IT IS FURTHER REPORTED THAT AFTER CAREFUL CONSIDERATION OF THE INDICTMENT INVOLVING CHARLES PFIZER AND CO., IT WAS DETERMINED THAT THE COMPANY WAS RESPONSIBLE. ALTHOUGH WE RECOGNIZE THAT VIOLATIONS OF THE ANTI TRUST LAWS ARE A SERIOUS MATTER INVOLVING, IN SOME CASES, THE IMPOSITION OF CRIMINAL SANCTIONS AND THAT SUCH VIOLATIONS, AS RECOGNIZED BY ASPR 1-605.1 (I) (B), MAY WARRANT SUSPENSION, WE ARE UNABLE TO CONCLUDE, IN THIS INSTANCE, THAT THE DETERMINATION IN FAVOR OF PFIZER'S RESPONSIBILITY WAS ARBITRARY, CAPRICIOUS, OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. IN THAT REGARD, 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 IT IS ARBITRARY, CAPRICIOUS OR NOT BASED ON SUBSTANTIAL EVIDENCE. 38 COMP. GEN. 131; 37 ID. 430. THEREFORE, WHILE YOU RAISE VARIOUS QUESTIONS AS TO THE MERITS OF THE EVIDENCE CONSIDERED BY DSA IN MAKING ITS DETERMINATION THAT PIERREL WAS NOT RESPONSIBLE, WE ARE UNABLE TO CONCLUDE THAT THERE WAS NO SUBSTANTIAL EVIDENCE TO SUPPORT THE NONRESPONSIBILITY DETERMINATION OR THE SUBSEQUENT SUSPENSION ACTION.

AS TO ANY CONSTITUTIONAL LAW QUESTIONS THAT MAY BE INVOLVED, IT IS OUR POLICY, AS AN ARM OF THE CONGRESS, NOT TO QUESTION THE CONSTITUTIONALITY OF LAWS ENACTED BY THE CONGRESS. THEREFORE, UNTIL THE COURTS HAVE HELD THAT A PARTICULAR STATUTE OR STATUTORY PROVISION IS UNCONSTITUTIONAL, WE DEEM IT OUR DUTY TO APPLY THE LAWS ACCORDING TO THE INTENT OF THE CONGRESS AND TO LEAVE TO THE JUDICIARY THE RESOLUTION OF ANY QUESTIONS REGARDING THE CONSTITUTIONALITY OF STATUTES. CONSISTENT WITH THAT POLICY, WE FEEL THAT THE QUESTIONS YOU RAISE CONCERNING VIOLATION BY DSA OF ANY CONSTITUTIONAL RIGHTS OF EITHER PIERREL OR NICOLO VISCONTI, IF, IN FACT, SUCH RIGHTS EXIST, ARE FOR DETERMINATION BY THE COURTS.