B-172061, FEB 22, 1972
Highlights
A HIGH STANDARD OF PROOF IS REQUIRED. ALTHOUGH THE PRINCIPLE FACTORS UPON WHICH THE CONTRACTING OFFICER RELIED IN MAKING HIS DETERMINATION MAY HAVE BEEN INAPPROPRIATE. YOU CONTEND THAT THE CONTRACTING OFFICER'S DETERMINATION THAT LSI WAS NOT RESPONSIBLE WAS ARBITRARY. IN SUPPORT OF THE CLAIM YOU CITE CASES IN THE COURT OF CLAIMS IN WHICH UNSUCCESSFUL BIDDERS SOUGHT DAMAGES FROM THE UNITED STATES ON THE BASIS THAT THE REJECTIONS OF THEIR BIDS BY THE CONTRACTING OFFICERS WERE ARBITRARY AND CAPRICIOUS. THE COURT OF CLAIMS ESTABLISHED THE FOLLOWING STANDARD FOR SUCH RECOVERIES: "IT GOES WITHOUT SAYING THAT NOT EVERY UNSUCCESSFUL BIDDER IS ENTITLED TO RECOVER THE COST OF PUTTING IN HIS BID. BEFORE THE BIDS WERE INVITED OR LATER CONCEIVED.
B-172061, FEB 22, 1972
BID PROTEST - NONRESPONSIBILITY - ARBITRARY AND CAPRICIOUS REJECTION DECISION DENYING THE PROTEST OF LEAR SIEGLER, INC. (LSI), AGAINST AWARD OF A CONTRACT TO THE AERO CORPORATION UNDER AN RFQ ISSUED BY ROBINS AFB, GA., FOR THE INSPECTION AND REPAIR OF C-130 AIRCRAFT. IN CASES WHERE A REJECTED BIDDER ALLEGES ARBITRARY AND CAPRICIOUS ACTION BY THE CONTRACTING OFFICER, A HIGH STANDARD OF PROOF IS REQUIRED. HEYER PRODUCTS COMPANY, INC. V UNITED STATES, 135 CT. CL. 63, 71 (1956); KECO INDUSTRIES, INC. V UNITED STATES, 192 CT. CL. 773, 784 (1970). ALTHOUGH THE PRINCIPLE FACTORS UPON WHICH THE CONTRACTING OFFICER RELIED IN MAKING HIS DETERMINATION MAY HAVE BEEN INAPPROPRIATE, THE COMP. GEN. HAS PREVIOUSLY HELD THAT CONFLICTING EVIDENCE MUST BE LEFT TO THE CONTRACTING OFFICER'S DISCRETION. 45 COMP. GEN. 4 (1965). SUCH EVIDENCE EXISTED IN THE INSTANT CASE WITH RESPECT TO LSI'S LACK OF FIXED FACILITY EXPERIENCE AND THE ALLEGED INADEQUACY OF ITS KEY MANAGEMENT. ACCORDINGLY, THE STANDARD OF PROOF REQUIRED BY THE HEYER AND KECO CASES HAS NOT BEEN MET AND THE PROTEST MUST BE DENIED.
TO MR. ROBERT SHERIFFS MOSS:
WE REFER TO YOUR LETTER 2376 OF FEBRUARY 8, 1972, AND PRIOR CORRESPONDENCE, REQUESTING RECONSIDERATION OF DECISION B-172061 OF AUGUST 24, 1971, WHICH DENIED THE PROTEST OF LEAR SIEGLER, INC. (LSI), AGAINST THE AWARD OF A CONTRACT TO THE AERO CORPORATION UNDER REQUEST FOR QUOTATIONS (RFQ) NO. F09603-71-Q-0138, ISSUED BY WARNER ROBINS AIR MATERIEL AREA, ROBINS AIR FORCE BASE, GEORGIA, FOR INSPECTION AND REPAIR OF A NUMBER OF C-130 AIRCRAFT.
IN THE REQUEST FOR RECONSIDERATION, YOU CONTEND THAT THE CONTRACTING OFFICER'S DETERMINATION THAT LSI WAS NOT RESPONSIBLE WAS ARBITRARY, CAPRICIOUS, NOT SUPPORTED BY SUBSTANTIAL EVIDENCE, AND ERRONEOUS AS A MATTER OF LAW. YOU THEREFORE CLAIM AS DAMAGES FOR LSI THE COST OF PREPARING A PROPOSAL, MAKING ARRANGEMENTS FOR ADDITIONAL FACILITIES FOR THE CONTRACT, AND PROCESSING THE PROTEST. IN SUPPORT OF THE CLAIM YOU CITE CASES IN THE COURT OF CLAIMS IN WHICH UNSUCCESSFUL BIDDERS SOUGHT DAMAGES FROM THE UNITED STATES ON THE BASIS THAT THE REJECTIONS OF THEIR BIDS BY THE CONTRACTING OFFICERS WERE ARBITRARY AND CAPRICIOUS. IN THE DECISION IN HEYER PRODUCTS COMPANY, INC. V UNITED STATES, 135 CT. CL. 63, 71 (1956), THE COURT OF CLAIMS ESTABLISHED THE FOLLOWING STANDARD FOR SUCH RECOVERIES:
"IT GOES WITHOUT SAYING THAT NOT EVERY UNSUCCESSFUL BIDDER IS ENTITLED TO RECOVER THE COST OF PUTTING IN HIS BID. RECOVERY CAN BE HAD IN ONLY THOSE CASES WHERE IT CAN BE SHOWN BY CLEAR AND CONVINCING PROOF THAT THERE HAS BEEN A FRAUDULENT INDUCEMENT FOR BIDS, WITH THE INTENTION, BEFORE THE BIDS WERE INVITED OR LATER CONCEIVED, TO DISREGARD THEM ALL EXCEPT THE ONES FROM BIDDERS TO ONE OF WHOM IT WAS INTENDED TO LET THE CONTRACT, WHETHER HE WAS THE LOWEST RESPONSIBLE BIDDER OR NOT. IN OTHER WORDS, IT MUST BE SHOWN THAT BIDS WERE NOT INVITED IN GOOD FAITH, BUT AS A PRETENSE TO CONCEAL THE PURPOSE TO LET THE CONTRACT TO SOME FAVORED BIDDER, OR TO ONE OF A GROUP OF PREFERRED BIDDERS, AND WITH THE INTENT TO WILFULLY, CAPRICIOUSLY, AND ARBITRARILY DISREGARD THE OBLIGATION TO LET THE CONTRACT TO HIM WHOSE BID WAS MOST ADVANTAGEOUS TO THE GOVERNMENT."
IN DENYING THE GOVERNMENT'S MOTION FOR SUMMARY JUDGMENT IN KECO INDUSTRIES, INC. V UNITED STATES, 192 CT. CL. 773, 784 (1970), THE COURT EMPHASIZED THE STANDARD AS FOLLOWS:
"IT MUST BE POINTED OUT THAT THE STANDARD OF PROOF TO BE APPLIED IN CASES WHERE ARBITRARY AND CAPRICIOUS ACTION IS CHARGED SHOULD BE A HIGH ONE. FINAL DECISIONS SHOULD BE BASED ON THE PARTICULAR CIRCUMSTANCES OF EACH CASE. IT WILL REMAIN FOR PLAINTIFF TO MEET THIS HIGH STANDARD BY PROVING TO THE COMMISSIONER THAT SUCH ARBITRARY AND CAPRICIOUS ACTION AS ALLEGED DID IN FACT EXIST."
IN OUR AUGUST 24 DECISION WE QUOTED ON PAGE 9 FROM OUR DECISION 45 COMP. GEN. 4 (1965) TO THE EFFECT THAT WHERE THERE EXISTS CONFLICTING EVIDENCE WITH RESPECT TO A BIDDER'S RESPONSIBILITY, IT IS THE CONTRACTING OFFICER'S PREROGATIVE TO WEIGH THE EVIDENCE AND DECIDE THE ISSUE. WE CONCLUDED THAT SUCH CONFLICTING EVIDENCE EXISTED IN THE INSTANT CASE AND THAT THE MATTER OF LSI'S LACK OF FIXED FACILITY EXPERIENCE, AS WELL AS THE ALLEGED INADEQUACY OF ITS KEY MANAGEMENT, WAS BEFORE THE CONTRACTING OFFICER WHEN HE MADE HIS NONRESPONSIBILITY DETERMINATION EVEN THOUGH HE APPARENTLY RELIED PRIMARILY ON OTHER REASONS WHICH MAY HAVE BEEN "INAPPROPRIATE." WHILE THE SIGNIFICANCE OF THESE NEGATIVE ELEMENTS BROUGHT OUT IN THE PREAWARD SURVEY CLEARLY IS ARGUABLE, PARTICULARLY IN VIEW OF THE INITIAL FAVORABLE SURVEY, THE FACT REMAINS THAT THEY WERE A PART OF THE RECORD FOR CONSIDERATION BY THE CONTRACTING OFFICER AND THAT, AS OUR LETTER TO THE SECRETARY OF THE AIR FORCE STATED, THEIR EXISTENCE PROVIDED SUFFICIENT SUPPORT FOR THE CONTRACTING OFFICER'S NONRESPONSIBILITY DETERMINATION SO THAT A DECISION BY OUR OFFICE THAT SUCH DETERMINATION WAS ARBITRARY OR CAPRICIOUS WOULD NOT BE WARRANTED.
WE ARE UNABLE TO CONCLUDE ON THE BASIS OF THE RECORD THAT THE DETERMINATION OF THE CONTRACTING OFFICER WAS ARBITRARY AND CAPRICIOUS UNDER THE STANDARD REQUIRED IN THE HEYER AND KECO CASES, THEREFORE, THE CLAIM FOR DAMAGES IS DENIED.