B-133465, SEP. 5, 1957

B-133465: Sep 5, 1957

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

POST OFFICE DEPARTMENT: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 14. PROVIDED THAT THE BID IS STILL OPEN FOR ACCEPTANCE. WAS BRAKES. WERE SUED BY BENDIX WESTINGHOUSE FOR SELLING "COUNTERFEIT" BENDIX-WESTINGHOUSE BRAKE PARTS. JOHNSON WAS ARRESTED FOR SELLING "COUNTERFEIT" VEHICLE PARTS TO THE DEPARTMENT OF THE ARMY AND HAS BEEN HELD IN CONTEMPT OF COURT FOR FAILING TO PRODUCE RECORDS AND BOOKS RELATING TO ARMY SALES. JOHNSON IS NOW VICE-PRESIDENT OF BRAKE CENTER. WAS AWARDED THE CONTRACT FOR BENDIX-WESTINGHOUSE AIR BRAKE UNITS FOR THE 1957 FISCAL YEAR AND THAT THE UNITS FURNISHED UNDER THAT CONTRACT WERE NOT UNSATISFACTORY COMPARED WITH THE UNITS FURNISHED BY OTHERS. OUR OFFICE HAS CONSISTENTLY HELD THAT ALLEGATIONS OF IMPROPER TRADE PRACTICES OR EVEN INDICTMENTS AND CONVICTIONS DO NOT REQUIRE A CONCLUSION THAT THE LOW BIDDER IS THEREBY RENDERED NONRESPONSIBLE.

B-133465, SEP. 5, 1957

TO MR. WILHE KALLIO, CHIEF OF PROCUREMENT, POST OFFICE DEPARTMENT:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 14, 1957, CONCERNING INVITATION TO BID NO. 10, ISSUED BY THE POST OFFICE DEPARTMENT ON APRIL 19, 1957. YOU REQUEST A DECISION WHETHER THE LOW BID OF BRAKE CENTER, INC., FOR FURNISHING BENDIX VACUUM POWER BRAKE REPLACEMENT PARTS AND REPAIR EXCHANGE UNITS IN THE NEW YORK CITY AREA FOR THE FISCAL YEAR 1958, MAY BE REJECTED AND THE AWARD MADE TO THE NEXT LOWEST RESPONSIBLE BIDDER, PROVIDED THAT THE BID IS STILL OPEN FOR ACCEPTANCE.

THE FILE SUBMITTED WITH YOUR LETTER DISCLOSES THAT THE PREDECESSOR IN INTEREST OF BRAKE CENTER, INC., WAS BRAKES, INC., WHICH FIRM, AND ITS PRESIDENT, MR. LAWRENCE H. JOHNSON, WERE SUED BY BENDIX WESTINGHOUSE FOR SELLING "COUNTERFEIT" BENDIX-WESTINGHOUSE BRAKE PARTS, AND THAT MR. JOHNSON WAS ARRESTED FOR SELLING "COUNTERFEIT" VEHICLE PARTS TO THE DEPARTMENT OF THE ARMY AND HAS BEEN HELD IN CONTEMPT OF COURT FOR FAILING TO PRODUCE RECORDS AND BOOKS RELATING TO ARMY SALES. THE RECORD FURTHER SHOWS THAT BRAKES, INC., LOST ITS FRANCHISE AS A DEALER OF BENDIX- WESTINGHOUSE PARTS FOR QUESTIONABLE PRACTICES AND THAT MR. JOHNSON IS NOW VICE-PRESIDENT OF BRAKE CENTER, INC., AND SUBMITTED THE BID IN QUESTION. FINALLY, IT APPEARS THAT BRAKE CENTER, INC., WAS AWARDED THE CONTRACT FOR BENDIX-WESTINGHOUSE AIR BRAKE UNITS FOR THE 1957 FISCAL YEAR AND THAT THE UNITS FURNISHED UNDER THAT CONTRACT WERE NOT UNSATISFACTORY COMPARED WITH THE UNITS FURNISHED BY OTHERS.

OUR OFFICE HAS CONSISTENTLY HELD THAT ALLEGATIONS OF IMPROPER TRADE PRACTICES OR EVEN INDICTMENTS AND CONVICTIONS DO NOT REQUIRE A CONCLUSION THAT THE LOW BIDDER IS THEREBY RENDERED NONRESPONSIBLE, UNLESS IT CAN REASONABLY BE ANTICIPATED FROM THE FACTS PRESENTED THAT THE MANNER IN WHICH THE BIDDER'S OBLIGATIONS UNDER THE CONTRACT ARE CARRIED OUT IS LIKELY TO BE ADVERSELY AFFECTED. IN THE PRESENT CASE, THE INTEGRITY OF MR. JOHNSON, AND THEREFORE OF THE FIRM OF WHICH HE SEEMS TO BE IN CONTROL, IS HIGHLY QUESTIONABLE, AND WHILE THE UNITS FURNISHED BY BRAKE CENTER, INC., UNDER ITS 1957 FISCAL YEAR CONTRACT WERE ACCEPTABLE, YOU STATE THAT THEY WERE NOT UP TO THE STANDARDS EXPECTED BY YOUR DEPARTMENT. ADDITION, YOU EXPRESS CONCERN OVER THE MANNER IN WHICH THE CONTRACT MIGHT BE CARRIED OUT SINCE AN UNANTICIPATED BREAKDOWN OR FAILURE OF PARTS, FROM DEFECTS WHICH COULD NOT BE DETECTED BY INSPECTION, COULD RESULT IN LOSS OF LIFE AND PROPERTY.

IT IS FUNDAMENTAL THAT GOVERNMENT CONTRACTS ENTERED INTO AFTER ADVERTISING FOR BIDS NEED NOT BE AWARDED TO BIDDERS NOT QUALIFIED TO PERFORM THE NECESSARY SERVICES. O-BRIEN V. CARNEY, 6 F.SUPP. 761, 762. AND THE PUBLIC INTEREST REQUIRES THAT SUCH CONTRACTS BE AWARDED ONLY TO THE LOWEST RESPONSIBLE BIDDER IN EACH CASE. HIBBS V. ARENSBERG, 119 A. 727. THE DETERMINATION OF THE QUALIFICATIONS OF BIDDERS IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE OFFICERS CONCERNED AND, IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF REASONABLE FACTUAL BASIS FOR THE DETERMINATION, WE ARE NOT REQUIRED TO OBJECT TO THE ACTION TAKEN THEREON.

ON THE FACTS HERE PRESENTED WE WOULD NOT SAY THAT THERE IS NOT A REASONABLE FACTUAL BASIS FOR A DETERMINATION OF NON-RESPONSIBILITY, AND WOULD THEREFORE MAKE NO OBJECTION SHOULD IT BE DETERMINED ADMINISTRATIVELY TO DISREGARD THE BID OF BRAKE CENTER, INC., AND AWARD THE CONTRACT TO THE NEXT LOWEST RESPONSIBLE BIDDER, PROVIDED THAT THE BID IS STILL OPEN FOR ACCEPTANCE.