B-154691, OCT. 21, 1964

B-154691, OCT. 21, 1964

TO SOCIETY BRAND HAT COMPANY:

FURTHER REFERENCE IS MADE TO YOUR TELEFAX OF JULY 9, 1964, PROTESTING AWARD OF A CONTRACT TO THE SOUTHLAND MANUFACTURING CORPORATION UNDER INVITATION FOR BIDS NO. 1-64-1195.

THE ABOVE INVITATION, ISSUED BY THE DEFENSE SUPPLY AGENCY, PHILADELPHIA, PENNSYLVANIA, ON MAY 21, 1964, INVITED BIDS FOR A SPECIFIED QUANTITY OF HOT WEATHER FIELD CAPS IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-C- 43225 DATED APRIL 17, 1964, AND DEVIATION LIST DATED APRIL 28, 1964. JUNE 12, 1964, THE DATE FOLLOWING THE SCHEDULED BID OPENING, MR. GERALD COLEMAN, SECRETARY-TREASURER, UNITED HATTERS, CAP AND MILLINERY UNION, INFORMED THE PROCURING ACTIVITY OF A PENDING STRIKE AT THE SOUTHLAND PLANT IN PUERTO RICO. BECAUSE OF THIS DEVELOPMENT THE CONTRACTING OFFICER REQUESTED THAT THE DEFENSE SUPPLY AGENCY CONDUCT A PREAWARD SURVEY. THE NEW YORK REGIONAL OFFICE THEREUPON CHOSE MR. PAUL J. CROWLEY, TO PERFORM THE SURVEY AND INSTRUCTED HIM TO REPORT SPECIFICALLY ON SOUTHLAND'S LABOR DIFFICULTIES.

IN HIS PREAWARD SURVEY REPORT DATED JUNE 24, 1964, THE SURVEYOR NOTED THAT NOT ONLY DID SOUTHLAND LACK SUFFICIENT PERSONNEL BUT THAT HE FOUND NO EVIDENCE INDICATING THAT NECESSARY LABOR WOULD BE AVAILABLE IF THE BIDDER WERE AWARDED THE CONTRACT. THE CONCLUSION THAT SOUTHLAND WOULD NOT BE ABLE TO OBTAIN SUFFICIENT PERSONNEL APPEARS TO BE PREDICATED UPON THE ASSUMPTION THAT THE BIDDER'S ONLY SOURCE OF LABOR WAS THE ECONOMIC DEVELOPMENT ADMINISTRATION LOCATED IN MAYAGUEZ, PUERTO RICO. APPARENTLY, THE ECONOMIC DEVELOPMENT ADMINISTRATOR WOULD NOT REFER EMPLOYEES TO SOUTHLAND BECAUSE OF PENDING LABOR DIFFICULTIES.

AT A CONFERENCE HELD AT THE PROCURING ACTIVITY ON JUNE 29, 1964, MR. MORRIS J. MILSTEIN, PRESIDENT, SOUTHLAND MANUFACTURING CORPORATION, ARGUED THAT THE PRESENT LABOR DIFFICULTY WAS NOT A STRIKE AS SUCH AND EMPHATICALLY DENIED THAT THE ONLY SOURCE OF LABOR READILY AVAILABLE WAS THROUGH USE OF THE EMPLOYMENT SERVICE OF MAYAGUEZ. ON THE CONTRARY IT WAS POINTED OUT THAT SOUTHLAND'S REGULAR SOURCE OF LABOR CAME FROM APPLICANTS DAILY SOLICITING EMPLOYMENT AT THE PLANT ITSELF AND THAT, IF NECESSARY, COMMERCIAL ADVERTISING WAS AVAILABLE TO BRING IN STILL OTHER APPLICANTS. ON A PREVIOUS OCCASION WHEN ADDITIONAL EMPLOYEES WERE NEEDED, A NOTICE TO THAT EFFECT POSTED INSIDE THE PLANT BROUGHT FORTH 100 NEW APPLICANTS. MR. MILSTEIN ASSERTED THAT HAD THE SURVEYOR ADEQUATELY CHECKED OTHER SOURCES OF LABOR IT WOULD HAVE BEEN FOUND THAT SUFFICIENT SKILLED AND UNSKILLED MANPOWER WAS AVAILABLE. IN ORDER TO RELIEVE THE CONTRACTING OFFICER OF ANY DOUBT ABOUT HIS ABILITY TO PRODUCE, MR. MILSTEIN SIGNED A WRITING ENTITLED, "REPRESENTATIONS CONCERNING AVAILABILITY OF LABOR," WHEREIN IT WAS AGREED THAT IF SOUTHLAND WERE AWARDED A CONTRACT ANY DELAY OCCASIONED BY THE PRESENT LABOR DIFFICULTY WOULD BE CONSIDERED INEXCUSABLE.

IN VIEW OF THE ORAL AND WRITTEN REPRESENTATIONS CONCERNING THE AVAILABILITY OF LABOR THE CONTRACTING OFFICER FELT COMPELLED TO RESOLVE THE ISSUE AND REQUESTED A SECOND PREAWARD SURVEY. BASED ON A FAVORABLE REPORT A CONTRACT WAS THEREUPON AWARDED TO SOUTHLAND.

IT IS YOUR CONTENTION THAT SINCE THERE WAS SOME DOUBT AS TO THE BIDDER'S ABILITY TO PERFORM, AWARD SHOULD NOT HAVE BEEN MADE TO SOUTHLAND. SUPPORT OF YOUR POSITION OUR ATTENTION IS DIRECTED TO DEFENSE PROCUREMENT CIRCULAR NO. 9 (JUNE 18, 1964) WHEREIN IT IS SUGGESTED THAT AWARDS SHOULD NOT BE MADE TO MARGINAL PRODUCERS. WHILE WE WOULD READILY AGREE THAT THE GENERAL POLICY STATED IN SECTION 1-902 OF DEFENSE PROCUREMENT CIRCULAR NO. 9 APPEARS WELL FOUNDED AND SHOULD BE FOLLOWED BY THE VARIOUS PROCUREMENT ACTIVITIES, WE ARE UNABLE TO AGREE THAT THERE WAS ANY VIOLATION OF THAT POLICY IN THE PRESENT SITUATION. ANY DOUBT CONCERNING SOUTHLAND'S ABILITY TO PRODUCE WAS EFFECTIVELY OVERCOME AFTER THE CONTRACTING OFFICER RECEIVED THE SECOND PREAWARD SURVEY REPORT. IN THIS CONNECTION, WE WISH TO DRAW ATTENTION TO AN UNPUBLISHED DECISION OF THIS OFFICE B-153642, DATED APRIL 30, 1964, WHEREIN SE SAID:

"THE DETERMINATION OF A BIDDER'S RESPONSIBILITY IS THE FUNCTION OF EACH CONTRACTING OFFICER AS HE PASSES UPON THE BIDS RECEIVED FOR AN AWARD TO BE MADE BY HIM. THE REGULATIONS AUTHORIZE THE CONTRACTING OFFICER TO CONSIDER INFORMATION FROM EVERY AND ANY SOUCE THAT HE CONSIDERS PROPER AND NECESSARY IN THE CIRCUMSTANCES. THE PROJECTION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT. WHILE SUCH JUDGMENT SHOULD BE BASED ON FACT AND SHOULD BE ARRIVED AT IN GOOD FAITH, IT MUST PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICERS INVOLVED SINCE THEY ARE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, THEY MUST BEAR THE BRUNT OF ANY DIFFICULTY EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY AND THEY MUST MAINTAIN THE DAY-TO-DAY RELATIONS WITH THE CONTRACTOR ON BEHALF OF THE GOVERNMENT. FOR THESE REASONS, IT WOULD BE UNREASONABLE TO SUPERIMPOSE THE JUDGMENT OF OUR OFFICE OR ANY OTHER AGENCY OR GROUP ON THAT OF THE CONTRACTING OFFICIALS IN ANY CASE IN WHICH THERE APPEARS TO BE A SUBSTANTIAL BASIS FOR THE ACTIONS OF THOSE OFFICIALS * * *.'

ACCORDINGLY, SINCE SOUTHLAND MANUFACTURING WAS THE LOW BIDDER, AND THE DETERMINATION OF ITS RESPONSIBILITY WAS REACHED AFTER A THOROUGH CONSIDERATION OF ALL AVAILABLE FACTS, THERE IS NO LEGAL BASIS UPON WHICH WE COULD OBJECT TO THE AWARD IN QUESTION. SEE OUR DECISION B 131286, DATED JUNE 14, 1957.