B-143313, SEP. 14, 1960

B-143313: Sep 14, 1960

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TO HOL-GAR MANUFACTURING CORPORATION: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF JUNE 24. YOUR BID WAS SECOND LOW. YOU PROTEST AN AWARD UNDER THE INVITATION TO KURZ AND ROOT COMPANY ON THE BASIS THAT THE COMPANY IS NOT A RESPONSIBLE MANUFACTURER OF GENERATOR EQUIPMENT AS REQUIRED BY THE PROVISIONS OF THE INVITATION AND OF THE ARMED SERVICES PROCUREMENT REGULATION. IT IS ALLEGED THAT THE COMPANY. COULD NOT SATISFACTORILY COMPLY WITH REQUIREMENTS AND AFTER AN EXTENDED DELAY THE PRIME CONTRACTOR WAS FINALLY COMPELLED TO CANCEL THE ORDER. THE RECORD SHOWS THAT SUBSEQUENT TO THE OPENING OF THE BIDS A PRE AWARD SURVEY WAS MADE OF KURZ AND ROOT COMPANY AND IT WAS DETERMINED THAT THE COMPANY WAS A RESPONSIBLE BIDDER AND CAPABLE OF PERFORMING IN ACCORDANCE WITH THE TERMS OF THE INVITATION.

B-143313, SEP. 14, 1960

TO HOL-GAR MANUFACTURING CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF JUNE 24, 1960, PROTESTING AN AWARD OF A CONTRACT TO KURZ AND ROOT COMPANY UNDER INVITATION FOR BIDS NO. DA-ENG-11-184-60-AF-721 ISSUED BY THE U.S. ARMY ENGINEER PROCUREMENT OFFICE, CHICAGO, ILLINOIS.

THE INVITATION REQUESTED BIDS FOR FURNISHING 10 KW GENERATOR SETS. KURZ AND ROOT COMPANY SUBMITTED THE LOWEST BID RECEIVED IN RESPONSE TO THE INVITATION, AND YOUR BID WAS SECOND LOW.

YOU PROTEST AN AWARD UNDER THE INVITATION TO KURZ AND ROOT COMPANY ON THE BASIS THAT THE COMPANY IS NOT A RESPONSIBLE MANUFACTURER OF GENERATOR EQUIPMENT AS REQUIRED BY THE PROVISIONS OF THE INVITATION AND OF THE ARMED SERVICES PROCUREMENT REGULATION. IT IS ALLEGED THAT THE COMPANY, AS A SUBCONTRACTOR TO PACIFIC MERCURY FOR 10 KW GENERATORS FOR THE GOVERNMENT, COULD NOT SATISFACTORILY COMPLY WITH REQUIREMENTS AND AFTER AN EXTENDED DELAY THE PRIME CONTRACTOR WAS FINALLY COMPELLED TO CANCEL THE ORDER.

THE RECORD SHOWS THAT SUBSEQUENT TO THE OPENING OF THE BIDS A PRE AWARD SURVEY WAS MADE OF KURZ AND ROOT COMPANY AND IT WAS DETERMINED THAT THE COMPANY WAS A RESPONSIBLE BIDDER AND CAPABLE OF PERFORMING IN ACCORDANCE WITH THE TERMS OF THE INVITATION. YOUR ALLEGATIONS THAT A SUBCONTRACT THE COMPANY HELD FROM PACIFIC MERCURY FOR 10 KW GENERATORS WAS CANCELED DUE TO ITS INABILITY TO COMPLY WITH REQUIREMENTS IS DENIED BY THE COMPANY. IT IS STATED THAT THE DELAY WAS DUE TO CHANGES AND THAT THE GENERATORS IN QUESTION ARE BEING FURNISHED TO PACIFIC MERCURY. AS TO THIS AND YOUR OTHER SPECIFIC ALLEGATIONS WITH RESPECT TO THE INABILITY OF KURZ AND ROOT COMPANY TO RENDER SATISFACTORY PERFORMANCE IT IS REPORTED AS FOLLOWS:

"1. INVITATION NO. DA-ENG-11-184-59-AF-680 COVERING 10 KW GENERATOR SETS WAS AWARDED TO PACIFIC MERCURY ELECTRONICS, INC., JOPLIN, MISSOURI ON PURCHASE ORDER NO. 88-AF-45344-34. KURZ AND ROOT CO. IS A SUB-CONTRACTOR UNDER THIS CONTRACT FURNISHING THE GENERATORS TO PACIFIC MERCURY. THERE IS NO CONTRACTUAL AGREEMENT BETWEEN THE GOVERNMENT AND KURZ AND ROOT CO. MR. ANDERSON, CHIEF ENGINEER OF PACIFIC MERCURY HAS ADVISED THIS OFFICE, PURSUANT TO TELEPHONE REQUEST, THAT KURZ AND ROOT CO. WERE RE-WORKING THE GENERATOR IN ORDER TO GET GREATER EFFICIENCY WITH A LARGER SAFETY FACTOR. HE FURTHER STATED THEY HAD NOT NOR WAS IT THEIR INTENTION TO CANCEL THEIR CONTRACT WITH KURZ AND ROOT CO. FOR THE REQUIRED GENERATORS.

"2. REQUEST FOR PROPOSAL NO. ENG-11-184-/NEG-59-AF-498) COVERING 30 KW GENERATOR SETS WAS AWARDED TO KURZ AND ROOT CO. ON PURCHASE ORDER NO. 88- AF-45749-07. DUE TO MANY SPECIFICATION CHANGES ORDERED BY THE GOVERNMENT WHICH CHANGES EXCUSABLY DELAYED CONTRACTOR IN CONNECTION WITH ITS PERFORMANCE OF THIS CONTRACT, A SUPPLEMENTAL AGREEMENT WAS ENTERED INTO CHANGING THE DELIVERY SCHEDULE TO START DECEMBER 1960, COMPLETE JUNE 1961. THIS EXTENSION OF TIME TO WHICH CONTRACTOR WAS ENTITLED BY REASON OF THE GOVERNMENT'S ORDERED SPECIFICATION CHANGES REMOVED THIS CONTRACT FROM ITS DELINQUENT STATUS.

"THERE IS NO DELINQUENCY IN CONNECTION WITH PURCHASE ORDER NO. 88-AF 46506-07 COVERING 5 KW GENERATOR SETS AWARDED TO KURZ AND ROOT CO. UNDER THIS CONTRACT THE PREPRODUCTION UNIT SHALL BE READY FOR TEST AND TESTING THEREOF COMMENCED NOT LATER THAN 3 DECEMBER 1960. PRODUCTION UNITS ARE SCHEDULED IN THE CONTRACT TO START 21 FEBRUARY 1961, COMPLETE 18 NOVEMBER 1961.

"3. THIS OFFICE HAS NO KNOWLEDGE OF "EXTENSIVE MODIFICATIONS" TO GENERATOR SETS FURNISHED BY KURZ AND ROOT. THE ONLY KNOWN "RETROFIT KITS" TO BE FURNISHED ARE THOSE APPLICABLE TO PURCHASE ORDER NOS. 88 AF-42980-07 AND 88-AF-42983-07 FOR 45 KW, 60 CYCLE GENERATOR SETS AND WERE NECESSITATED BY A SPECIFICATION DEFICIENCY.'

THE QUESTION OF QUALIFICATIONS OF A "RESPONSIBLE" BIDDER HAS BEEN BEFORE THE GENERAL ACCOUNTING OFFICE MANY TIMES. IN ONE SUCH CASE, 30 COMP. GEN. 235, AFTER DISCUSSING FINANCIAL RESOURCES AS ONE ASPECT OF "RESPONSIBILITY" IT WAS STATED---

"* * * EQUALLY IMPORTANT IS THE QUESTION OF WHETHER THE LOW BIDDER HAS DEMONSTRATED ITS FITNESS AND ABILITY TO SUCCESSFULLY FULFILL THE CONTRACT REQUIREMENTS. IN MAKING AN AWARD AFTER ADVERTISING FOR PROPOSALS, THE PUBLIC INTEREST REQUIRES THAT THE CONTRACT BE AWARDED ONLY TO THE LOWEST RESPONSIBLE BIDDER, AND IN MAKING A DETERMINATION AS TO WHETHER A BIDDER IS RESPONSIBLE, NOT ONLY ARE FEDERAL AND MUNICIPAL OFFICERS REQUIRED TO CONSIDER HIS FINANCIAL RESOURCES, BUT ALSO, THE JUDGMENT, ABILITY, AND INTEGRITY OF THE BIDDER AND TO INQUIRE AS TO HIS FITNESS AND ABILITY SUCCESSFULLY TO FULFILL THE CONTRACT REQUIREMENTS.'

IN MAKING A DECISION ON THE QUESTION OF RESPONSIBILITY THE CONTRACTING OFFICER MAY TAKE INTO CONSIDERATION THE BIDDER'S FINANCIAL RESOURCES, HIS INTEGRITY, FITNESS, CAPACITY, AND ABILITY TO FULFILL CONTRACT REQUIREMENTS. 34 COMP. GEN. 86. 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 THEREFOR, WE CANNOT QUESTION AN ADMINISTRATIVE DETERMINATION AS TO RESPONSIBILITY. 37 COMP. GEN. 756; 38 ID. 13.

IN THE INSTANT CASE THE RECORD SHOWS THAT AN INVESTIGATION AS TO THE RESPONSIBILITY OF THE LOW BIDDER WAS CONDUCTED, WHICH INCLUDED CONSIDERATION OF YOUR ALLEGATIONS AS TO ITS NONRESPONSIBILITY, AND THE CONTRACTING OFFICER CONCLUDED THAT THE BIDDER WAS RESPONSIBLE WITHIN THE CONTEMPLATION OF THE APPLICABLE STATUTES AND REGULATIONS.

IN THE CIRCUMSTANCES, THERE IS NO LEGAL BASIS UPON WHICH WE COULD QUESTION THE AWARD MADE IN THIS CASE.