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B-154006, JUL. 14, 1964

B-154006 Jul 14, 1964
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MAIDA: REFERENCE IS MADE TO LETTERS OF APRIL 20. YOUR CLIENT WAS ADVISED BY THE CONTRACTING OFFICER THAT HIS BID WAS REJECTED. YOU STATE THAT YOUR CLIENT DID NOT HAVE SUFFICIENT NOTICE THAT THE SBA WOULD CONDUCT AN INVESTIGATION SO THAT HE COULD SUPPLY FULL INFORMATION WITHIN THE REQUIRED TIME. IT IS UNFORTUNATE IF THERE WAS NOT ENOUGH TIME FOR YOUR CLIENT TO COMPILE ALL THE INFORMATION HE WOULD HAVE LIKED TO SUBMIT TO SBA FOR ITS CONSIDERATION. THE SBA HAS ONLY FIFTEEN DAYS WITHIN WHICH TO MAKE A DETERMINATION AS TO WHETHER A COC SHALL ISSUE (SEE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-705.6) AND IT MUST NECESSARILY FOLLOW PROCEDURES WHICH WILL PERMIT IT TO OPERATE WITHIN THAT LIMITED TIME PERIOD.

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B-154006, JUL. 14, 1964

TO MR. ROBERT C. MAIDA:

REFERENCE IS MADE TO LETTERS OF APRIL 20, 1964, FROM YOU AND YOUR CLIENT, ALBERT C. RONDINELLI, AND TO YOUR LETTERS OF JUNE 18 AND 25, 1964, REGARDING THE REJECTION OF THE LOW BIDS SUBMITTED BY MR. RONDINELLI UNDER INVITATION FOR BIDS ENG-30-075-63-43, -64-4, AND -64 20 ISSUED BY THE U.S. ARMY ENGINEER DISTRICT, NEW YORK.

REGARDING THE LOW BID SUBMITTED BY YOUR CLIENT UNDER INVITATION -63 43, ISSUED IN SEPTEMBER 1962, SINCE THE CONTRACTING OFFICER ENTERTAINED DOUBT THAT YOUR CLIENT, MR. RONDINELLI, HAD THE FINANCIAL ABILITY OR ORGANIZATION NECESSARY TO ACCOMPLISH THE WORK, HE SUBMITTED THE MATTER TO THE SMALL BUSINESS ADMINISTRATION (SBA) AND YOUR CLIENT FILED AN APPLICATION FOR A CERTIFICATE OF COMPETENCY (COC). THE SBA BASED ON AN ANALYSIS OF ALL AVAILABLE INFORMATION DECLINED TO ISSUE A COC. NOVEMBER 16, 1962, YOUR CLIENT WAS ADVISED BY THE CONTRACTING OFFICER THAT HIS BID WAS REJECTED.

OUR OFFICE HAS REGARDED THE REFUSAL OF THE SBA TO ISSUE A COC IN A GIVEN CASE AS PERSUASIVE ON THE MATTER OF RESPONSIBILITY. SEE B 136545, FEBRUARY 10, 1959, AND B-152080, OCTOBER 9, 1963.

YOU RECOGNIZE THAT THE "CORPS OF ENGINEERS DID PROPERLY FOLLOW THE REQUIREMENTS OF THE ARMED FORCES PROCUREMENT REGULATIONS" IN REFERRING THE MATTER TO THE SBA, BUT YOU STATE THAT YOUR CLIENT DID NOT HAVE SUFFICIENT NOTICE THAT THE SBA WOULD CONDUCT AN INVESTIGATION SO THAT HE COULD SUPPLY FULL INFORMATION WITHIN THE REQUIRED TIME. IT IS UNFORTUNATE IF THERE WAS NOT ENOUGH TIME FOR YOUR CLIENT TO COMPILE ALL THE INFORMATION HE WOULD HAVE LIKED TO SUBMIT TO SBA FOR ITS CONSIDERATION; HOWEVER, THE SBA HAS ONLY FIFTEEN DAYS WITHIN WHICH TO MAKE A DETERMINATION AS TO WHETHER A COC SHALL ISSUE (SEE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-705.6) AND IT MUST NECESSARILY FOLLOW PROCEDURES WHICH WILL PERMIT IT TO OPERATE WITHIN THAT LIMITED TIME PERIOD.

IN LETTER OF NOVEMBER 7, 1963, THE CONTRACTING OFFICER ADVISED MR. RONDINELLI THAT HIS BID UNDER INVITATION -64-20 WAS REJECTED BECAUSE IT WAS DEEMED THAT HE DID NOT MEET THE MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS. SUCH DETERMINATION WAS BASED UPON HIS PERFORMANCE IN CONNECTION WITH TWO OTHER CONTRACTS. THE LETTER STATED THAT UNDER A CONTRACT AT HIGHLANDS AIR FORCE BASE THERE WAS A FAILURE TO MEET THE COMPLETION SCHEDULE, INADEQUATE EFFECTIVENESS IN SUPERVISION AND UNSATISFACTORY QUALITY IN WORK, AND UNDER A CONTRACT AT MANASSAS AIR FORCE STATION THERE WAS UNSATISFACTORY WORK, OFF SCHEDULING AND A REFUSAL TO MEET WITH THE CORPS OF ENGINEERS OFFICE IN VIRGINIA TO DISCUSS CORRECTION OF DELINQUENT PERFORMANCE.

THE CONTRACTING OFFICER DID NOT SUBMIT THE MATTER TO SBA BECAUSE HE BELIEVED THE EVIDENCE DEMONSTRATED A LACK OF PERSEVERANCE AND INTEGRITY IN CONNECTION WITH CONTRACT PERFORMANCE AND WAS NOT WITHIN THE SCOPE OF THE SBA CERTIFICATION WHICH RUNS TO CAPACITY AND CREDIT. HOWEVER, IT IS INDICATED BY THE OFFICE OF THE CHIEF OF ENGINEERS, WITH WHICH WE AGREE, THAT THE EVIDENCE IN SUPPORT OF THE CONCLUSION THAT MR. RONDINELLI LACKS "PERSEVERANCE, TENACITY AND INTEGRITY" IS INADEQUATE TO SUSTAIN THAT CONCLUSION. THEREFORE, THE MATTER APPEARS TO HAVE BEEN ONE THAT PROPERLY SHOULD HAVE BEEN REFERRED TO SBA FOR CONSIDERATION FOR A COC. THIS CONTRACT FOR WHICH YOUR CLIENT WAS BIDDING UNDER INVITATION -64-20 WAS COMPLETED AND ACCEPTED ON FEBRUARY 12, 1964, SO THAT NO ACTION COULD BE TAKEN AT THIS TIME TO RECTIFY THE SITUATION.

WITH REGARD TO INVITATION -64-4, THE RECORD SHOWS THAT BIDS WERE OPENED ON JANUARY 15, 1964, AND THAT ON JANUARY 28, 1964, FOLLOWING A PRE-AWARD SURVEY, THE CONTRACTING OFFICER IN A TELEPHONE CALL WITH YOUR CLIENT INVITED HIM TO COME TO HIS OFFICE TO DISCUSS YOUR CLIENT'S RESPONSIBILITY, AND WHEN YOUR CLIENT REFUSED HE ADVISED HIM THAT THE AWARD WAS NOT BEING MADE TO HIM BECAUSE OF UNSATISFACTORY WORK FOR THE NORFOLK AND NEW YORK DISTRICTS AND BECAUSE IT WAS QUESTIONABLE THAT HE WOULD BE ABLE TO OBTAIN THE NECESSARY BONDS FOR THE WORK. MR. RONDINELLI PROMPTLY PROTESTED THE ACTION AND THE NEW YORK DISTRICT ON FEBRUARY 5, 1964, SENT THE PROTEST FORWARD TO THE CHIEF OF ENGINEERS, WASHINGTON, D.C., THROUGH THE NORTH ATLANTIC DIVISION ENGINEER. ON MARCH 6, THE OFFICE OF THE CHIEF OF ENGINEERS RETURNED THE CASE TO THE NORTH ATLANTIC DIVISION CONCLUDING AFTER LEGAL REVIEW THAT THE CASE SHOULD BE REFERRED TO SBA FOR ITS CONSIDERATION. THE DIVISION ENGINEER INDORSED THE MATTER OVER TO THE DISTRICT ENGINEER ON MARCH 10. IN PREPARING THE MATTER FOR SUBMISSION TO SBA, THE DISTRICT ENGINEER DISCOVERED FOR THE FIRST TIME THAT YOUR CLIENT HAD USED THE ORIGINAL PAGE BF-1 ISSUED WITH THE INVITATION, WHICH LIMITED THE TIME FOR ACCEPTANCE OF THE BID TO 30 DAYS, INSTEAD OF THE AMENDED BF-1 PAGE, WHICH PROVIDED FOR A 60-DAY ACCEPTANCE PERIOD, AND THAT YOUR CLIENT'S BID AND BID BOND HAD THEREFORE EXPIRED BY THEIR OWN TERMS ON FEBRUARY 14. THE MATTER WAS DISCUSSED WITH YOUR CLIENT AND WHEN HE PERSISTED IN HIS PROTEST THE MATTER WAS AGAIN REFERRED TO THE OFFICE OF THE CHIEF OF ENGINEERS. THE CONTRACTING OFFICER PURSUANT TO INSTRUCTIONS FROM THAT OFFICE AWARDED THE CONTRACT ON APRIL 6 TO THE NEXT LOW BIDDER AND ADVISED YOUR CLIENT THAT HIS PROTEST AS TO RESPONSIBILITY WAS RENDERED ACADEMIC AS A RESULT OF THE EXPIRATION OF THE BID AND BID BOND.

YOU HAVE PROTESTED THAT YOUR CLIENT WAS NOT AFFORDED AN OPPORTUNITY FOR A HEARING IN CONNECTION WITH HIS PROTEST ON HIS RESPONSIBILITY. YET THE RECORD SHOWS THAT WHEN YOUR CLIENT WAS INVITED TO SPEAK WITH THE CONTRACTING OFFICER REGARDING THE MATTER OF RESPONSIBILITY ON JANUARY 28, HE DECLINED THE INVITATION. IN THAT CONNECTION, ASPR 1-907 PROVIDES THAT IN MAKING A DETERMINATION OF RESPONSIBILITY, INFORMATION RELATIVE THERETO MAY BE DISCUSSED WITH THE PROSPECTIVE CONTRACTOR AS NECESSARY. HOWEVER, OUTSIDE OF SUCH PROVISION, THERE IS NO PROVISION IN THE PROCUREMENT REGULATIONS REQUIRING THAT THERE BE ADMINISTRATIVE HEARINGS, INFORMAL OR OTHERWISE, TO ASCERTAIN THE BIDDER'S RESPONSIBILITY. THEREFORE, THE FACT THAT THERE WAS NO HEARING ON THE MATTER IS NOT CONSIDERED MATERIAL. FURTHER, IT IS SPECULATIVE THAT THE ADMINISTRATIVE AGENCY WOULD HAVE ARRIVED AT ANY DIFFERENT DETERMINATION OF RESPONSIBILITY IF SUCH HEARING HAD BEEN PROVIDED AT ANY STAGE IN THE TRANSMISSION THROUGH CHANNELS. AND SUCH A NEGATIVE FINDING CONTINUING, THERE IS NO ASSURANCE THAT THE SBA WOULD HAVE OVERRIDDEN THE DETERMINATION OF NONRESPONSIBILITY.

REGARDING THE ADMINISTRATIVE RELIANCE UPON THE EXPIRATION OF THE BID ACCEPTANCE PERIOD, INASMUCH AS THE PROTEST WAS FILED PRIOR TO EXPIRATION OF THE BID, WE THINK THAT THE ADMINISTRATIVE OFFICE SHOULD HAVE AFFORDED MR. RONDINELLI THE OPPORTUNITY TO HAVE HIS RESPONSIBILITY DETERMINED BY THE SBA RATHER THAN SUMMARILY REJECTING HIS BID. SEE B-154236, JUNE 26, 1964. HOWEVER, IN VIEW OF THE LAPSE OF TIME SINCE THE CONTRACT WAS AWARDED AND THE FACT THAT THE SUCCESSFUL CONTRACTOR UNDOUBTEDLY HAS COMMENCED PERFORMANCE, WE DO NOT BELIEVE IT WOULD BE APPROPRIATE TO DISTURB THE AWARD THAT WAS MADE.

AS TO YOUR CLAIM FOR COSTS IN THE PREPARATION OF THE BID FOR INVITATION - 64-4 AND THE LOSS OF PROFIT IN NOT RECEIVING AN AWARD UNDER THAT INVITATION, THE COURTS HAVE HELD THAT AN UNSUCCESSFUL BIDDER IS NOT ENTITLED TO RECOVER DAMAGES FOR FAILURE TO CONTRACT WITH HIM. HEYER PRODUCTS COMPANY, INC. V. UNITED STATES, 140 F.SUPP. 406, AND AUTHORITIES CITED THEREIN.

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