B-136525, JUL. 10, 1959

B-136525: Jul 10, 1959

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THE REPORT AND RECOMMENDATION OF THE CONTRACTING OFFICER STATES THAT THE BID SUBMITTED BY BONHAM WAS REJECTED UPON A DETERMINATION THAT IT WAS NOT A RESPONSIBLE CONTRACTOR WITHIN THE MEANING OF SECTION 1-307 OF THE ARMED SERVICES PROCUREMENT REGULATION. THE BID WAS REJECTED BECAUSE OF POOR PERFORMANCE ON A THEN CURRENT CONTRACT FOR THE SAME ITEM AND BECAUSE OF THE LACK OF . THE CURRENT CONTRACT REFERRED TO IS NO. IT IS CONTENDED THAT THE ALLEGED POOR PERFORMANCE ON CONTRACT NO. 1689 WAS CAUSED TO A LARGE EXTENT BY POOR ADMINISTRATION OF THE CONTRACT ON THE PART OF GOVERNMENT REPRESENTATIVES. THAT ALTHOUGH THE DELIVERY SCHEDULE WAS EXTENDED FOR THE EXACT PERIOD OF SUCH DELAY IT CREATED A PRODUCTION IMPEDIMENT WHICH CAUSED SIGNIFICANT ADDITIONAL DELAY.

B-136525, JUL. 10, 1959

TO THE SIDRAN SPORTSWEAR, INC.:

WE REFER TO YOUR LETTER OF APRIL 23, 1959, AND PRIOR CORRESPONDENCE, CONCERNING A PROTEST BY THE BONHAM MANUFACTURING COMPANY, INC., OF BONHAM, TEXAS, AGAINST REJECTION OF ITS LOW BID SUBMITTED PURSUANT TO INVITATION NO. QM/CTM/-36-243-58-772.

THE INVITATION, ISSUED APRIL 18, 1958, SOLICITED BIDS FOR 526,590 MAN'S WOOL BLUE SERGE COATS IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-C- 3310A/BSAF), AS AMENDED. THE REPORT AND RECOMMENDATION OF THE CONTRACTING OFFICER STATES THAT THE BID SUBMITTED BY BONHAM WAS REJECTED UPON A DETERMINATION THAT IT WAS NOT A RESPONSIBLE CONTRACTOR WITHIN THE MEANING OF SECTION 1-307 OF THE ARMED SERVICES PROCUREMENT REGULATION. MORE SPECIFICALLY, THE BID WAS REJECTED BECAUSE OF POOR PERFORMANCE ON A THEN CURRENT CONTRACT FOR THE SAME ITEM AND BECAUSE OF THE LACK OF ,KNOW-HOW" AND ADEQUATE PERSONNEL. THE CURRENT CONTRACT REFERRED TO IS NO. DA-36-243 -QM/CTM/-1689, 01-724-C-58 AWARDED TO SIDRAN SPORTSWEAR, INC., ON JANUARY 24, 1958, FOR DELIVERY OF 75,000 MAN'S WOOL BLUE SERGE COATS. THERE APPEARS TO BE NO QUESTION THAT A SUFFICIENT IDENTITY OF INTEREST EXISTS AS TO THE TWO FIRMS SO THAT PERFORMANCE BY SIDRAN MAY PROPERLY BE CONSIDERED IN ASSESSING THE RESPONSIBILITY OF BONHAM.

IN AN ENCLOSURE TO A LETTER OF JANUARY 26, 1959, FROM YOUR ATTORNEY, IT IS CONTENDED THAT THE ALLEGED POOR PERFORMANCE ON CONTRACT NO. 1689 WAS CAUSED TO A LARGE EXTENT BY POOR ADMINISTRATION OF THE CONTRACT ON THE PART OF GOVERNMENT REPRESENTATIVES; THAT THE GOVERNMENT RETARDED AND HAMPERED PRODUCTION UNDER THE CONTRACT BY LATE DELIVERY OF MATERIAL; AND THAT ALTHOUGH THE DELIVERY SCHEDULE WAS EXTENDED FOR THE EXACT PERIOD OF SUCH DELAY IT CREATED A PRODUCTION IMPEDIMENT WHICH CAUSED SIGNIFICANT ADDITIONAL DELAY. IT IS ALLEGED FURTHER THAT DELAY WAS CAUSED BY THE REFUSAL OF THE GOVERNMENT INSPECTOR TO PROMPTLY ADVISE THE CONTRACTOR OF DEFICIENCIES NOTED IN THE PILOT LOT, BY NUMEROUS CHANGES IN SPECIFICATION MADE BY THE GOVERNMENT, BY THE FAILURE OF THE GOVERNMENT TO FURNISH ON TIME A PATTERN FOR SIZE 42L, AND BY THE FAILURE OF THE GOVERNMENT TO PROMPTLY MAKE ALLOWANCES FOR THE DISCREPANCY BETWEEN THE LAPEL AND FINISH SHAPER WORKING PATTERN.

CONTRACTS ENTERED INTO AFTER FORMAL ADVERTISING ARE REQUIRED TO BE AWARDED UNDER 10 U.S.C. 2305 (B) TO THE "RESPONSIBLE BIDDER" WHOSE BID CONFORMS TO THE INVITATION AND WILL BE MOST ADVANTAGEOUS TO THE UNITED STATES. A RESPONSIBLE CONTRACTOR UNDER ASPR 1-903.1 (IV) MUST HAVE A SATISFACTORY RECORD OF PERFORMANCE, AND A SERIOUS DELINQUENCY IN CURRENT CONTRACT PERFORMANCE MAY REQUIRE A PRESUMPTION THAT THE CONTRACTOR DOES NOT HAVE SUCH SATISFACTORY RECORD. (THE MATERIAL IN ASPR 1-903.1 (IV) WAS AT THE TIME OF BID REJECTION FOUND IN SUBSTANTIALLY SIMILAR FORM AT ASPR 1 -307.) WE HAVE HELD THAT A HISTORY OF DELINQUENT PERFORMANCE UNDER PRIOR CONTRACTS IS A PROPER BASIS FOR DETERMINING THAT A BIDDER IS NOT RESPONSIBLE. 37 COMP. GEN. 798; ID. 756.

AS INDICATED ABOVE, IT APPEARS TO BE YOUR CONTENTION THAT ANY DEFICIENCY IN PERFORMANCE, INCLUDING DELAY, UNDER CONTRACT NO. 1689 WAS CAUSED BY GOVERNMENT REPRESENTATIVES, AND THAT IF THE GOVERNMENT HAD PROPERLY FULFILLED ITS OBLIGATIONS UNDER THE CONTRACT SIDRAN WOULD HAVE BEEN ABLE TO PERFORM SATISFACTORILY AND IN ACCORDANCE WITH THE PRESCRIBED DELIVERY SCHEDULE.

CONTRACT NO. 1689 INCORPORATED, BY REFERENCE, STANDARD FORM 32 (NOVEMBER 1949 EDITION) WHICH PROVIDES AT PARAGRAPH 12:

"12. DISPUTES

"EXCEPT AS OTHERWISE PROVIDED IN THIS CONTRACT, ANY DISPUTE CONCERNING A QUESTION OF FACT ARISING UNDER THIS CONTRACT WHICH IS NOT DISPOSED OF BY AGREEMENT SHALL BE DECIDED BY THE CONTRACTING OFFICER, WHO SHALL REDUCE HIS DECISION TO WRITING AND MAIL OR OTHERWISE FURNISH A COPY THEREOF TO THE CONTRACTOR. WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF SUCH COPY, THE CONTRACTOR MAY APPEAL BY MAILING OR OTHERWISE FURNISHING TO THE CONTRACTING OFFICER A WRITTEN APPEAL ADDRESSED TO THE SECRETARY, AND THE DECISION OF THE SECRETARY OR HIS DULY AUTHORIZED REPRESENTATIVE FOR THE HEARING OF SUCH APPEALS SHALL BE FINAL AND CONCLUSIVE: PROVIDED, THAT IF NO SUCH APPEAL IS TAKEN, THE DECISION OF THE CONTRACTING OFFICER SHALL BE FINAL AND CONCLUSIVE. IN CONNECTION WITH ANY APPEAL PROCEEDING UNDER THIS CLAUSE, THE CONTRACTOR SHALL BE AFFORDED AN OPPORTUNITY TO BE HEARS AND TO OFFER EVIDENCE IN SUPPORT OF ITS APPEAL. PENDING FINAL DECISION OF A DISPUTE HEREUNDER, THE CONTRACTOR SHALL PROCEED DILIGENTLY WITH THE PERFORMANCE OF THE CONTRACT AND IN ACCORDANCE WITH THE CONTRACTING OFFICER'S DECISION.'

A REVIEW OF THE CONTRACT FILE INDICATES THAT BY LETTER OF APRIL 1, 1958, YOU REQUESTED AN EXTENSION OF ONE MONTH AND 28 DAYS IN THE DELIVERY SCHEDULE BECAUSE OF THE DELAY BY THE GOVERNMENT IN FURNISHING THE SIZE 42L PATTERN. YOUR REQUEST FOR THE EXTENSION WAS DENIED BY LETTER OF APRIL 15, 1958, FROM THE CONTRACTING OFFICER. THERE IS NO INDICATION THAT THE DETERMINATION WAS APPEALED WITHIN THE TIME AND IN THE MANNER PRESCRIBED. SUCH LETTER CONSTITUTES A FINDING OF FACT BY THE CONTRACTING OFFICER WHICH MUST BE CONSIDERED AS FINAL AND CONCLUSIVE IN THE ABSENCE OF AN APPEAL. -138352, APRIL 14, 1959; JOHN ARBORIO, INC. V. UNITED STATES, 110 C.CLS. 432; ARNOLD M. DIAMOND V. UNITED STATES, 98 C.CLS. 493. FAILURE TO PURSUE THE ADMINISTRATIVE REMEDY PRESCRIBED BY PARAGRAPH 13 RENDERS THE CONTRACTING OFFICER'S DETERMINATION CONCLUSIVE EVEN IF IT IS ASSUMED THAT SUCH DETERMINATION WAS ARBITRARY, CAPRICIOUS, OR SO GROSSLY ERRONEOUS AS TO IMPLY BAD FAITH. UNITED STATES V. HOLPUCH CO., 328 U.S. 234; UNITED STATES V. BLAIR, 321 U.S. 730; UNITED STATES V. SMITH, 152 FED.SUPP. 322. SINCE THE FINDING WAS NOT APPEALED PURSUANT TO PARAGRAPH 12, THE CITED AUTHORITIES REQUIRE THAT IT BE ACCEPTED AS CORRECT. THEREFORE, WE MUST REGARD IT AS SUFFICIENT, WITHOUT CONSIDERATION OF THE MERITS OF YOUR OTHER CONTENTIONS, TO SUPPORT THE DETERMINATION OF THE CONTRACTING OFFICER AS TO LACK OF RESPONSIBILITY. 37 COMP. GEN. 798; ID 756.

WE NOTE, IN ADDITION, THAT ON JULY 23, 1958, THE GOVERNMENT AND THE CONTRACTOR ENTERED INTO A SUPPLEMENTAL AGREEMENT, CITED AS MODIFICATION NO. 4, WHEREBY THE DELIVERY SCHEDULE WAS EXTENDED UPON THE PAYMENT BY THE CONTRACTOR TO THE GOVERNMENT OF $1,500. A SIMILAR SUPPLEMENTAL AGREEMENT, DESIGNATED AS MODIFICATION NO. 6, WAS ENTERED INTO ON SEPTEMBER 10, 1958, IN CONSIDERATION OF PAYMENT BY THE CONTRACTOR TO THE GOVERNMENT OF $3,050. BOTH MODIFICATIONS CONTAIN THE FOLLOWING RECITATIONS:

"WHEREAS, CONTRACTOR HAS FAILED TO MEET THE ABOVE-RECITED DELIVERY SCHEDULE; AND

"WHEREAS, CONTRACTOR'S DELINQUENCY IS NOT EXCUSABLE; AND * * *.'

WE ARE AWARE THAT THE CONTRACTOR BY LETTER OF NOVEMBER 7, 1958, ADVISED THE THEN CONTRACTING OFFICER THAT NOTWITHSTANDING THE EXECUTION OF THE AFORESAID MODIFICATIONS THE ABOVE QUOTED RECITATIONS WERE CONSIDERED TO BE CONTRARY TO FACT. NEVERTHELESS, THE FAILURE TO APPEAL THE FACTUAL DETERMINATIONS UNDERLYING THE MODIFICATIONS, AS PROVIDED IN PARAGRAPH 12 OF STANDARD FORM 32, APPEARS TO REQUIRE THAT SUCH DETERMINATIONS BE REGARDED AS CONCLUSIVE OF THE MATTER.

IN ACCORDANCE WITH THE FOREGOING WE MUST CONCLUDE THAT THERE HAS BEEN PRESENTED NO LEGAL BASIS UPON WHICH WE MAY OBJECT TO THE REJECTION OF THE BONHAM MANUFACTURING COMPANY'S BID UNDER INVITATION NO. QM/CTM/-36-243-58- 772.