B-142055, APRIL 12, 1960, 39 COMP. GEN. 705

B-142055: Apr 12, 1960

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- THAT A BIDDER IS NOT A RESPONSIBLE BIDDER. BASED ON EVIDENCE OF THE BIDDER'S DEFICIENT PERFORMANCE UNDER A RECENT CONTRACT FOR THE SAME ITEM AND HIS FAILURE TO PRODUCE AN ACCEPTABLE MODEL WITHIN THE TIME PRESCRIBED AND ON EVIDENCE OF A SURVEY TEAM WHICH INDICATES THAT THE BIDDER LACKS THE NECESSARY TOOLS AND DOES NOT HAVE ADEQUATE INSPECTION TECHNIQUES TO PERFORM. IS AN ADMINISTRATIVE DETERMINATION WHICH IS BASED ON FACT AND ARRIVED AT IN GOOD FAITH AND. THERE IS NO LEGAL BASIS UPON WHICH OBJECTION TO THE DETERMINATION MAY BE MADE. ALTHOUGH A DEFAULT BY A BIDDER UNDER A PRIOR CONTRACT IS NOT PER SE A SUFFICIENT BASIS FOR THE CONCLUSION THAT THE BIDDER IS NOT A RESPONSIBLE BIDDER. THE CIRCUMSTANCES OF A CONTRACTOR'S FAILURE TO PERFORM PROPERLY AND IN A TIMELY MANNER UNDER AN EARLIER CONTRACT ARE FOR CONSIDERATION IN THE DETERMINATION OF THE BIDDER'S QUALIFICATIONS.

B-142055, APRIL 12, 1960, 39 COMP. GEN. 705

BIDDERS - QUALIFICATIONS - PRIOR UNSATISFACTORY SERVICE AN ADMINISTRATIVE DETERMINATION--- CONFIRMED BY THE SMALL BUSINESS ADMINISTRATION--- THAT A BIDDER IS NOT A RESPONSIBLE BIDDER, BASED ON EVIDENCE OF THE BIDDER'S DEFICIENT PERFORMANCE UNDER A RECENT CONTRACT FOR THE SAME ITEM AND HIS FAILURE TO PRODUCE AN ACCEPTABLE MODEL WITHIN THE TIME PRESCRIBED AND ON EVIDENCE OF A SURVEY TEAM WHICH INDICATES THAT THE BIDDER LACKS THE NECESSARY TOOLS AND DOES NOT HAVE ADEQUATE INSPECTION TECHNIQUES TO PERFORM, IS AN ADMINISTRATIVE DETERMINATION WHICH IS BASED ON FACT AND ARRIVED AT IN GOOD FAITH AND, THEREFORE, THERE IS NO LEGAL BASIS UPON WHICH OBJECTION TO THE DETERMINATION MAY BE MADE. ALTHOUGH A DEFAULT BY A BIDDER UNDER A PRIOR CONTRACT IS NOT PER SE A SUFFICIENT BASIS FOR THE CONCLUSION THAT THE BIDDER IS NOT A RESPONSIBLE BIDDER, THE CIRCUMSTANCES OF A CONTRACTOR'S FAILURE TO PERFORM PROPERLY AND IN A TIMELY MANNER UNDER AN EARLIER CONTRACT ARE FOR CONSIDERATION IN THE DETERMINATION OF THE BIDDER'S QUALIFICATIONS.

TO BERNSTEIN AND KLEINFELD, APRIL 12, 1960:

WE REFER AGAIN TO YOUR LETTERS OF FEBRUARY 17, MARCH 1, AND APRIL 5, 1960, WITH ENCLOSURES, PROTESTING ON BEHALF OF THE ESHELMAN MOTORS CORPORATION AGAINST A DETERMINATION BY THE GENERAL SERVICES ADMINISTRATION TO REJECT THAT FIRM'S BID UNDER INVITATION NO FN-3A 23357-A-12-28-59 ON THE GROUNDS THAT THE FIRM "DOES NOT HAVE THE NECESSARY EXPERIENCE, ORGANIZATION, TECHNICAL QUALIFICATIONS AND FACILITIES TO PERFORM AS CONTRACTOR FOR THE ITEMS CONCERNED.'

THE INVITATION WAS ISSUED NOVEMBER 13, 1959, FOR THE PROCUREMENT OF 2,401 THREE-WHEELED 1/4-TON MAIL DELIVERY VEHICLES. WHEN BIDS WERE OPENED ON DECEMBER 28, 1959, IT WAS DETERMINED THAT THE LOW RESPONSIVE BID HAD BEEN SUBMITTED BY ESHELMAN; HOWEVER, FOR THE REASONS SET OUT BELOW IT WAS FOUND THAT THE FIRM WAS NOT QUALIFIED TO PERFORM. SINCE ESHELMAN IS A SMALL BUSINESS, THE SMALL BUSINESS ADMINISTRATION REGIONAL OFFICE WAS NOTIFIED ON FEBRUARY 9, 1960, OF THE GSA FINDING. BY LETTER OF FEBRUARY 18, 1960, THE SMALL BUSINESS ADMINISTRATION ADVISED THAT, AFTER COMPREHENSIVE ANALYSIS OF ALL AVAILABLE INFORMATION, IT DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY ON BEHALF OF THE ESHELMAN CORPORATION.

THE INVITATION, AT PAGE 6, REQUIRES THAT THE SUCCESSFUL BIDDER BE IN A POSITION TO RENDER PROMPT SERVICE IN THE MATTER OF FURNISHING REPLACEMENT PARTS. A TEAM OF QUALIFIED PERSONNEL OF THE GENERAL SERVICES ADMINISTRATION, AFTER MAKING A CAREFUL AND EXTENSIVE INSPECTION AND EVALUATION OF THE FACILITIES OF THE ESHELMAN CORPORATION AND OF THE SUBCONTRACTORS PROPOSED TO BE USED BY THEM IN THE EVENT OF AWARD, CONCLUDED THAT THE ESTABLISHMENT AT THIS TIME OF A DEALER ORGANIZATION WITH THE NECESSARY STOCK OF PARTS AND CAPACITY TO MEET THE FOREGOING REQUIREMENT WOULD BE PROHIBITIVE FROM THE STANDPOINT OF COST. CONNECTION WITH THIS CONCLUSION, THE TEAM NOTED THAT WHILE THE OVERALL SIZE OF THE VEHICLE TO BE PRODUCED IS RELATIVELY SMALL, THE NUMBER OF PARTS INVOLVED APPROXIMATES THAT REQUIRED TO SERVICE AN AMERICAN COMPACT CAR.

THE INVITATION INDICATES THE DESIRE OF THE GOVERNMENT TO HAVE THE VEHICLES PRODUCED AT THE RATE OF 20 PER WORKING DAY. ESHELMAN IN ITS BID OFFERED TO MEET THAT PRODUCTION RATE. THE SURVEY TEAM, CONSIDERING ALL RELEVANT FACTORS, CONCLUDED THAT THE ASSEMBLY FACILITIES PROPOSED FOR USE BY ESHELMAN COULD NOT SUSTAIN THAT PRODUCTION RATE.

PARAGRAPH 5 OF STANDARD FORM 32 MADE A PART OF THE INVITATION, AND WHICH WOULD BECOME PART OF THE RESULTING CONTRACT, PROVIDES IN PART AS FOLLOWS:

(A) ALL SUPPLIES (WHICH TERM THROUGHOUT THIS CLAUSE INCLUDES WITHOUT LIMITATION RAW MATERIALS, COMPONENTS, INTERMEDIATE ASSEMBLIES, AND END PRODUCTS) SHALL BE SUBJECT TO INSPECTION AND TEST BY THE GOVERNMENT,TO THE EXTENT PRACTICABLE AT ALL TIMES AND PLACES INCLUDING THE PERIOD OF MANUFACTURE, AND IN ANY EVENT PRIOR TO ACCEPTANCE.

(E) THE CONTRACTOR SHALL PROVIDE AND MAINTAIN AN INSPECTION SYSTEM ACCEPTABLE TO THE GOVERNMENT COVERING THE SUPPLIES HEREUNDER. RECORDS OF ALL INSPECTION WORK BY THE CONTRACTOR SHALL BE KEPT COMPLETE AND AVAILABLE TO THE GOVERNMENT DURING THE PERFORMANCE OF THIS CONTRACT AND FOR SUCH LONGER PERIOD AS MAY BE SPECIFIED ELSEWHERE IN THIS CONTRACT.

THE SURVEY TEAM FOUND THAT THE BIDDER LACKS THE NECESSARY TOOLS AND RECORDS TO PERMIT THE ESTABLISHMENT OF AN INSPECTION SYSTEM ACCEPTABLE TO THE GOVERNMENT UNDER THE PROVISIONS QUOTED ABOVE. SPECIFICALLY, HARDNESS TEST EQUIPMENT, INSPECTION GAGES, ELECTRONIC TEST TOOLS, HYDRAULIC TEST TOOLS, HEIGHT GAGES, VERNIER CALIPERS, FLUORESCENT PENETRANT OR MAGNETIC PARTICLE TESTING EQUIPMENT, AND RELATED TOOLS WERE NOWHERE IN EVIDENCE IN THE BIDDER'S PLANT. IT WAS FURTHER FOUND THAT THERE IS NO EVIDENCE THAT THE BIDDER HAS EVER KEPT ANY OF THE RECORDS CONSIDERED NECESSARY FOR AN ADEQUATE INSPECTION SYSTEM, INCLUDING THE FOLLOWING: CALIBRATION RECORDS OF HARDNESS TEST MACHINES, INSTRUMENT CALIBRATION RECORDS, PERIODIC TOOL AND GAGE INSPECTION RECORDS, RECEIVING MATERIAL TEST REPORTS, ELECTRICAL EQUIPMENT TEST REPORTS, ELECTRICAL SOLDERING CERTIFICATION REPORTS OR CARDS, PERIODIC FURNACE CERTIFICATION, WELDERS' CERTIFICATION TEST REPORTS OR CARDS, X-RAY TEST REPORTS, SAMPLE REPORTS, PERIODIC WELDING SAMPLE TEST REPORTS, REWORK AND REJECTION REPORTS, MACHINE QUALIFICATION DATA SHEETS, AND CASTING AND FORGING INSPECTION PROCEDURES.

UNDER A PRIOR INVITATION, AN UNFAVORABLE FINDING WAS MADE BY THE GENERAL SERVICES ADMINISTRATION AS TO ESHELMAN'S RESPONSIBILITY, BUT AFTER THE ISSUANCE TO THE FIRM BY THE SMALL BUSINESS ADMINISTRATION OF A CERTIFICATE OF COMPETENCY, A CONTRACT FOR THE PRODUCTION OF 1,622 UNITS OF SIMILAR VEHICLES WAS AWARDED TO ESHELMAN ON JULY 16, 1958. THE QUANTITY WAS INCREASED ON AUGUST 15 TO 1,673 UNITS. IT IS THE POSITION OF THE GOVERNMENT THAT THE ESHELMAN PERFORMANCE UNDER THAT CONTRACT WAS SUCH AS TO REFLECT UNFAVORABLY ON HIS RESPONSIBILITY TO PERFORM A SIMILAR CONTRACT. SPECIFICALLY, IT IS THE GOVERNMENT'S CONTENTION THAT UNDER THAT CONTRACT ESHELMAN DID NOT FURNISH AN ACCEPTABLE PILOT MODEL OR SCHEDULE, DID NOT BEGIN PRODUCTION AT THE TIME CONTEMPLATED, AND COULD NOT MAINTAIN THE PRODUCTION RATE PROVIDED FOR UNDER THE CONTRACT. FURTHER, IT IS THE GOVERNMENT'S POSITION THAT A HIGH INCIDENCE OF COMPONENT FAILURES WAS EXPERIENCED WITH THE VEHICLES DELIVERED UNDER THAT CONTRACT AND THAT THE WARRANTY SERVICE PROVIDED UNDER THE CONTRACT WAS, AND IS, MATERIALLY DEFICIENT.

IT IS YOUR CONTENTION THAT THESE ALLEGATIONS OF POOR PERFORMANCE ARE NOT SUPPORTED BY THE EVIDENCE. IN YOUR LETTER OF APRIL 5, 1960, YOU STATE THAT UNDER THE EARLIER CONTRACT THE PILOT MODEL WAS TO BE PRODUCED BY SEPTEMBER 15, 1958; THAT ESHELMAN RECORDS INDICATE THAT THE PILOT MODEL WAS SUCCESSFULLY TESTED BY THE SUBCONTRACTOR, CHARLES D. BRIDELL, INC., ON AUGUST 7, 1958; THAT ESHELMAN ADVISED GSA BY LETTER OF SEPTEMBER 9, 1958, THAT THE PILOT MODEL WOULD BE READY FOR OFFICIAL INSPECTION ON SEPTEMBER 15, 1958. YOU FURTHER STATE THAT THE PILOT MODEL WAS READY ON THE SCHEDULED DATE, WAS EXTENSIVELY TESTED OVER A PERIOD OF SEVERAL WEEKS BY THE GOVERNMENT, AND WAS APPROVED BY THE POST OFFICE DEPARTMENT ON OCTOBER 24, 1958. FORMAL NOTICE OF ACCEPTANCE WAS CONTAINED IN A LETTER FROM GENERAL SERVICES ADMINISTRATION TO THE CONTRACTOR DATED NOVEMBER 14, 1958. YOU CONCLUDE IN THE LIGHT OF THE FOREGOING THAT THE PILOT MODEL WAS READY IN ACCORDANCE WITH THE CONTRACT SCHEDULE.

THE GOVERNMENT RECORDS INDICATE THAT THE POST OFFICE DEPARTMENT WAS FIRST ADVISED THAT A PILOT MODEL WAS READY FOR INSPECTION AT THE PLANT OF THE SUBCONTRACTOR ON SEPTEMBER 4, 1958. UPON ARRIVAL AT THE PLANT, HOWEVER, IT WAS FOUND THAT A COMPLETE MODEL WAS NOT AVAILABLE FOR INSPECTION BUT THAT ONLY A PORTION OF THE VEHICLE AND CERTAIN COMPONENTS COULD BE INSPECTED. NEVERTHELESS, THE INSPECTION MADE OF THE INCOMPLETE VEHICLE REVEALED 15 DEFICIENCIES. POST OFFICE DEPARTMENT PERSONNEL WERE NEXT ADVISED THAT A PILOT MODEL WAS READY FOR INSPECTION AT THE SUBCONTRACTOR'S PLANT ON SEPTEMBER 16, 1958. EXAMINATION OF THE VEHICLE ON THAT DATE DISCLOSED THAT 33 CORRECTIONS WOULD BE REQUIRED BEFORE THE MODEL COULD MEET SPECIFICATION REQUIREMENTS. ON OCTOBER 7, 1958, A PILOT MODEL WAS PRESENTED FOR INSPECTION AT THE SUBCONTRACTOR'S PLANT. THE VEHICLE WAS CAREFULLY EXAMINED BY REPRESENTATIVES OF THE POST OFFICE DEPARTMENT AND ROAD TESTED ON THAT SAME DAY. FOLLOWING THE ROAD TEST IT WAS DETERMINED THAT THE PILOT MODEL WAS ACCEPTABLE SUBJECT TO TWO CORRECTIONS. THUS, IT APPEARS THAT, WHILE UNDER THE TERMS OF THE CONTRACT AN ACCEPTABLE PILOT MODEL WAS REQUIRED TO BE PRESENTED ON OR BEFORE SEPTEMBER 15, 1958, A REASONABLY ACCEPTABLE MODEL WAS NOT AVAILABLE UNTIL OCTOBER 24, AND THAT ACCEPTANCE THEN WAS SUBJECT TO THE PERFORMANCE OF TWO CORRECTIONS.

IN YOUR LETTER OF APRIL 5, YOU ALSO ALLEGE THAT THE EXTENTION OF TIME FOR COMPLETION OF THE CONTRACT GRANTED UNDER AMENDMENT NO. 1, WHICH INCLUDED A REDUCTION OF THE PRODUCTION RATE FROM 20 TO 12 VEHICLES PER DAY, WAS REQUIRED NOT BY THE INABILITY OF THE CONTRACTOR TO MEET THE ORIGINAL CONTRACT REQUIREMENTS BUT BY THE CHANGES AND MODIFICATIONS IMPOSED BY THE POST OFFICE DEPARTMENT FROM TIME TO TIME AND FORMALLY INCORPORATED INTO THE CONTRACT BY AMENDMENT NO. 1.

WITH RESPECT TO THE REASON FOR THE REDUCTION IN THE PRODUCTION RATE, ESHELMAN WAS ADVISED BY LETTER OF APRIL 20, 1959, FROM THE GSA, THAT:

YOU HAD PREVIOUSLY REQUESTED THAT THE PRODUCTION SCHEDULE BE REVISED TO MORE NEARLY MEET THE CAPACITY OF YOUR SOURCE. ALTHOUGH TWENTY (20) VEHICLES PER DAY IS REQUIRED BY THE TERMS OF THE CONTRACT THE GOVERNMENT IS WILLING TO MODIFY THE CONTRACT TO REQUIRE A MINIMUM OF SEVENTY-TWO (72) VEHICLES PER WEEK (12 PER DAY FOR 6 DAYS), WHICH WOULD APPEAR TO BE MORE REALISTIC UNDER THE CIRCUMSTANCES OF YOUR PRODUCTION FACILITIES.

IT SEEMS CLEAR FROM THE FOREGOING THAT THE RATE WAS REDUCED SOLELY TO ARRIVE AT A QUANTITY MORE COMPATIBLE WITH THE CONTRACTOR'S CAPABILITY.

IT IS FURTHER STATED IN YOUR LETTER OF APRIL 5, 1960, THAT IN ANY CASE, SINCE IT APPEARED THAT THE GOVERNMENT DID NOT HAVE THE FACILITIES TO PICK UP IN A TIMELY MANNER VEHICLES PRODUCED UNDER THE CONTRACT, THE PRODUCTION RATE COULD NOT BE CONSIDERED A LIMITING FACTOR. IN SUPPORT OF THE POSITION THAT THE GOVERNMENT COULD NOT ABSORB THE COMPLETED VEHICLES AS PRODUCED, YOU CITE CORRESPONDENCE FROM THE CONTRACTOR SHOWING THAT ON JUNE 8, 1959, THERE WERE 202 VEHICLES ON HAND AWAITING GOVERNMENT PICKUP, 229 ON JUNE 15, 219 ON JUNE 22, 235 ON JUNE 29, 224 ON JULY 6, 107 ON AUGUST 24, AND 157 ON AUGUST 17.

WE HAVE BEEN ADVISED BY THE POST OFFICE DEPARTMENT THAT THE VEHICLES IN QUESTION WERE NOT THOSE WHICH HAD BEEN FRESHLY PRODUCED BUT WERE, ON THE CONTRARY, VEHICLES WHICH HAD BEEN RETURNED FOR REWORK BECAUSE OF ORIGINAL DEFICIENCIES, AND THE "PICKING UP" OF THOSE VEHICLES DOES NOT ACCURATELY REFLECT THE GOVERNMENT'S ABILITY TO ABSORB VEHICLES AT THE CONTRACT RATE.

WITH RESPECT TO FAILURES OF COMPONENTS ON THE VEHICLES PRODUCED BY ESHELMAN UNDER THE EARLIER CONTRACT, YOU CONCEDE IN YOUR LETTER OF APRIL 15 THAT THE ORIGINAL FRONT FORKS FAILED AND HAD TO BE REPLACED, BUT YOU POINT OUT THAT THIS WAS DONE AT NO COST TO THE GOVERNMENT. YOU FURTHER CONCEDE THAT THE ORIGINAL GAS TANKS REQUIRED REPLACEMENT BUT YOU POINT OUT THAT THIS WAS ALSO DONE AT NO COST TO THE GOVERNMENT, THAT THE TANKS WERE PRODUCED BY A LARGE AND REPUTABLE CONCERN AND THAT THE DIFFICULTIES EXPERIENCED WITH THE ORIGINAL TANKS WERE NOT ANTICIPATED EITHER BY THE CONTRACTOR, THE TANK MANUFACTURER, OR THE GOVERNMENT. WITH RESPECT TO THE ALLEGED FAILURES IN SUCH COMPONENT PARTS AS BRAKE DRUMS, UNIVERSAL JOINTS, AND FLEXIBLE TUBINGS, YOU STATE THAT THE CONTRACTOR WAS NEVER ADVISED OF ANY UNDUE DIFFICULTY.

THE POST OFFICE DEPARTMENT ADVISES THAT AS EARLY AS JANUARY 23, 1959, VEHICLES DELIVERED TO THE ALEXANDRIA, VIRGINIA, POST OFFICE FOR USE IN SPRINGFIELD, VIRGINIA, EXPERIENCED CRACKED HUBS ON REAR BRAKE ASSEMBLIES. IMMEDIATELY AFTER THIS SITUATION DEVELOPED, IT IS REPORTED A MEETING WAS HELD WITH ESHELMAN AND HIS SUBCONTRACTOR AND ESHELMAN WAS DIRECTED TO CHANGE HIS SUPPLIER FOR THIS COMPONENT AND THE CONTRACTOR AGREED TO COMPLY. THE GOVERNMENT RECORDS ALSO INDICATE THAT AS OF FEBRUARY 17, 1959, BY WHICH TIME 108 OF THE VEHICLES HAD BEEN SHIPPED TO THE FIELD, FAILURE OF BRAKE SYSTEMS BEGAN TO OCCUR. EXAMINATION BY THE POST OFFICE PERSONNEL REVEALED THAT THE BRAKE LINKAGE WAS INCORRECTLY DESIGNED. WAS DETERMINED BY COMPETENT POST OFFICE PERSONNEL THAT THE BRIDDELL FIRM, WHICH ACTUALLY MANUFACTURED THE VEHICLE, DID NOT HAVE IN ITS EMPLOY AN ENGINEER CAPABLE OF DESIGNING A SATISFACTORY BRAKE LINKAGE. TO ASSIST ESHELMAN AND BRIDDELL, A TWO CYLINDER VEHICLE OF ANOTHER MANUFACTURE WAS SHIPPED TO THE SUBCONTRACTOR'S PLANT TO SERVE AS A GUIDE IN THE REDESIGN OF THE BRAKE LINKAGE. FOUR POST OFFICE EMPLOYEES, ONE AUTOMOTIVE ENGINEER AND THREE AUTOMOTIVE TECHNICIANS, WERE ASSIGNED TO THE BRIDDELL PLANT TO INSURE THAT CORRECTIONS MADE WOULD CONTINUE.

THE POST OFFICE DEPARTMENT RECORDS FURTHER INDICATE THAT ON OR ABOUT MARCH 5, 1959, ARRANGEMENTS WERE MADE TO RETURN TO MANUFACTURER'S PLANT 108 VEHICLES WHICH HAD BEEN REMOVED FROM SERVICE IN THE FIELD DUE TO BRAKE LINKAGE FAILURE. (IT MAY BE NOTED THAT THESE 108 VEHICLES WERE SOME OF THOSE WHICH SUBSEQUENTLY REMAINED AT THE SUBCONTRACTOR'S PLANT AWAITING PICKUP). IN ADDITION TO THE FOREGOING, WE WERE ADVISED THAT IN THE LATTER PART OF JANUARY 1959, IT WAS FOUND THAT THE BRAKE DRUMS FOR USE ON THE VEHICLES WERE BEING IMPROPERLY CAST AND WERE BEING FINISHED ON A LATHE INADEQUATE FOR THE WORK. THESE FAILURES WERE BROUGHT TO THE ATTENTION OF THE SUBCONTRACTOR AND THE TROUBLE WAS REMEDIED.

IN ADDITION, WE HAVE BEEN ADVISED THAT THE FOLLOWING DEFICIENCIES HAVE BEEN REPORTED TO THE POST OFFICE DEPARTMENT UP TO APRIL 1, 1960, WITH RESPECT TO THE ESHELMAN VEHICLES PRODUCED UNDER THE CONTRACTS IN QUESTION: CHART AXLES---------------------------- 3 STARTER GENERATOR---- --- 29 BODY----------------------------- 12 GENERATOR BELTS-------- 4 WINDSHIELD RUBBER--------------- 48 SOLENOID------ --------- 23 SIDE WINDOW RUBBER------------- 4 DEFECTIVE WIRING---- -- 19 REAR WINDOW RUBBER ------------- 1BATTERIES--------------- 5 WINDSHIELD WIPER--- MOTOR------ 24 REAR DOOR HINGE---------------- 8 FUEL SYSTEM REAR COMPARTMENT HANDLE AND GAS TANKS--- ---------- 267

LOCKS------------------------ 44 ACCELERATORS------------ 113 CURTAIN ROD --------------------- 65 GAS LINES-------------- 3 MIRRORS--- BRACKETS---- --------- 30 CARBURETORS------------- 7 SEATS---------------------------- 4 FAN BELTS-------------- 16

CLUTCH------------------ 19

ELECTRICAL SYSTEM BRAKES------------------ 49 IGNITION SWITCH------------ ----- 29 ENGINES----------------- 15 FLASHERS---- -------------------- 26 EXHAUST SYSTEM--------- 218 STOPLIGHT SWITCHES-------------- 5 TRANSMISSIONS----------- 58 HORN---------- ------------------ 6 SHIFTER LEAVERS-------- 7 FUSES-------------- ------------- 39 PROPELLER SHAFT,

U-JOINTS------------ 147 TURN SIGNALS--------- ---------- 10 SPEEDOMETER- ------------ 27 HEADLIGHTS--------------- ------- 4 FORKS----------------- -- 48 VOLTAGE REGULATORS---------- --- 9 WHEELS------------------ 121 COIL ----------------------------- 4 ----

TOTAL------------1,570

IN YOUR LETTER OF APRIL 5 YOU ALSO CONTEST THE POSITION THAT THE WARRANTY SERVICE PROVIDED UNDER THE PRIOR CONTRACT HAS BEEN AND REMAINS INADEQUATE. ADDITIONALLY, YOU POINT OUT THAT THE CONTRACTOR EXPERIENCED DIFFICULTY IN MAINTAINING HIS SERVICE ORGANIZATION BECAUSE COMPETITION WAS SET UP BY THE POST OFFICE DEPARTMENT FOR WORK OTHER THAN WARRANTY REPLACEMENTS. IN THIS CONNECTION, IT SHOULD BE NOTED THAT THE CONTRACT REQUIRED THE CONTRACTOR TO ESTABLISH AN ORGANIZATION FOR THE PERFORMANCE OF WARRANTY SERVICE, BUT IT DID NOT OBLIGATE THE GOVERNMENT TO EMPLOY THAT SERVICE ORGANIZATION FOR NONWARRANTY WORK AND IN THE BEST INTEREST OF THE GOVERNMENT, THE LATTER TYPE OF WORK WAS NORMALLY AWARDED ON THE BASIS OF THE LOWEST COST TO THE GOVERNMENT.

THERE MAY, UNFORTUNATELY, HAVE BEEN A LACK OF FORMAL NOTIFICATION BY GSA TO THE CONTRACTOR AS TO CASES OF LACK OF ADEQUATE SERVICE. SOME DIFFICULTY UNDOUBTEDLY AROSE FROM THE FACT THAT NEITHER BRIDDELL, THE SUBCONTRACTOR, WHO ACTUALLY MANUFACTURED THE VEHICLES, NOR THE USER, THE POST OFFICE DEPARTMENT, WAS A PRIMARY PARTY TO THE CONTRACT; BOTH IN EFFECT OPERATED THROUGH INTERMEDIATES SO FAR AS FORMAL NOTIFICATION WAS CONCERNED. IN ANY CASE, WHILE THE FAILURE TO MAKE OFFICIAL NOTIFICATION AS TO LACK OF ADEQUATE WARRANTY SERVICE MIGHT AFFECT THE GOVERNMENT'S RIGHT TO INITIATE PROCEEDINGS AGAINST THE CONTRACTOR FOR BREACH OF CONTRACT, WE DO NOT BELIEVE IT SHOULD BE DETERMINATIVE OF THE QUESTION SO FAR AS RESPONSIBILITY OF THE BIDDER TO PERFORM FURTHER CONTACTS IS CONCERNED.

EVEN ASSUMING INADEQUATE PERFORMANCE UNDER THE PAST CONTRACT, YOU CONTEND, IN AN ENCLOSURE TO YOUR LETTER OF FEBRUARY 17, THAT THE FAILURE TO PERFORM SATISFACTORILY UNDER ONE PRIOR AWARD IS AN INSUFFICIENT BASIS FOR REJECTION OF A BID. IN SUPPORT OF THE CONTENTION, YOU CITE OUR DECISIONS AT 27 COMP. GEN. 621, 15 ID. 149, AND 14 ID. 313.

IN 27 COMP. GEN. 621, WE NOTED AT PAGE 625 THAT THE FACT OF A DEFAULT BY A BIDDER UNDER A PRIOR CONTRACT IS NOT PER SE A SUFFICIENT BASIS FOR REGARDING HIM AS IRRESPONSIBLE WITH RESPECT TO A LATER PROCUREMENT. THE OTHER DECISIONS NOTED BY YOU ARE TO THE SAME EFFECT. WHILE WE CONTINUE TO MAINTAIN THE POSITION THAT THE FACT OF AN EARLIER DEFAULT DOES NOT OF NECESSITY ESTABLISH A LACK OF RESPONSIBILITY, WE THINK THAT THE CIRCUMSTANCES OF THE CONTRACTOR'S FAILURE TO PERFORM PROPERLY AND IN A TIMELY MANNER UNDER THE EARLIER CONTACT ARE FOR CONSIDERATION, AND IN THIS CASE WE CANNOT FIND THAT THE CONTRACTOR'S RECORD UNDER THE PRIOR CONTRACT, COUPLED WITH THE FACTS FOUND BY THE SURVEY TEAM, DO NOT FURNISH A REASONABLE BASIS FOR THE ADMINISTRATIVE DETERMINATION OF LACK OF RESPONSIBILITY.

IN ADDITIONAL ENCLOSURES TO YOUR LETTERS OF FEBRUARY 17 AND MARCH 1, IT IS VARIOUSLY NOTED THAT ESHELMAN NOW HAS MORE PLANT SPACE AND A LARGER ENGINEERING STAFF THAN WERE AVAILABLE TO THE FIRM UNDER THE PRIOR CONTRACT. IT IS ALSO NOTED THAT AN INDEPENDENT ENGINEERING CONCERN HAS CONCLUDED THAT ESHELMAN HAS THE ABILITY TO PERFORM THE NEW PROCUREMENT ON SCHEDULE.

CLEARLY, ONE OF THE FACTORS IN DETERMINING THE RESPONSIBILITY OF A BIDDER IS HIS APPARENT ABILITY TO PERFORM IN ACCORDANCE WITH THE REQUIREMENTS SET OUT IN THE INVITATION. THE DETERMINATION OF THE PROSPECTIVE CONTRACTOR'S ABILITY TO PERFORM IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE OFFICERS CONCERNED, AND IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS THEREFOR, THERE IS NO BASIS UPON WHICH WE MAY OBJECT. 37 COMP. GEN. 430, 435. 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 OFFICES INVOLVED, SINCE THEY ARE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, THEY MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES 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 VIEW THEREOF, AND OF THE APPARENT SUBSTANTIAL BASIS FOR THE CONCLUSION OF THE CONTRACTING AGENCY AS TO THE RESPONSIBILITY OF THE ESHELMAN FIRM--- WHICH HAS, IN EFFECT, BEEN CONFIRMED BY THE SMALL BUSINESS ADMINISTRATION--- WE SEE NO LEGAL BASIS UPON WHICH WE MAY PROPERLY OBJECT TO THE DETERMINATION TO REJECT THE ESHELMAN BID.