B-143635, SEP. 20, 1960

B-143635: Sep 20, 1960

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COUNSELLOR AT LAW: REFERENCE IS MADE TO YOUR LETTERS OF JULY 27 AND AUGUST 15. THE APPARENT LOW BID WAS SUBMITTED BY YOUR CLIENT AND MCDERMOTT AND GREENE. IT WAS CONCLUDED THAT AN AFFIRMATIVE DETERMINATION THAT A.B.C. ALUMINUM WAS A RESPONSIBLE BIDDER COULD NOT BE MADE SINCE IT DID NOT HAVE A SATISFACTORY RECORD OF PERFORMANCE AND INTEGRITY. THE BID OF YOUR CLIENT WAS REJECTED AND CONTRACT NO. N32-8771 WAS AWARDED TO THE SECOND LOW BIDDER IN THE AMOUNT OF $4. AN AFFIRMATIVE DETERMINATION OF NONRESPONSIBILITY IS REQUIRED TO SUPPORT THE REJECTION OF A BID SUBMITTED BY A BIDDER FOUND TO LACK RESPONSIBILITY. SUCH A DETERMINATION IS NOT REQUIRED WHERE THE RESULTING CONTRACT WILL AMOUNT TO LESS THAN $10.

B-143635, SEP. 20, 1960

TO ABRAHAM N. HORWITZ, COUNSELLOR AT LAW:

REFERENCE IS MADE TO YOUR LETTERS OF JULY 27 AND AUGUST 15, 1960, PROTESTING, ON BEHALF OF THE A.B.C. ALUMINUM MFG. CORP., AGAINST THE REJECTION OF ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 32- 247-60, ISSUED ON MAY 10, 1960, BY THE MILITARY MEDICAL SUPPLY AGENCY (MMSA), DEPARTMENT OF THE NAVY.

THE INVITATION REQUESTED BIDS TO BE OPENED ON MAY 31, 1960, FOR FURNISHING 60 "TRUCK, HAND, SHELF, SURGICAL DRESSING.' THE APPARENT LOW BID WAS SUBMITTED BY YOUR CLIENT AND MCDERMOTT AND GREENE, INC., SUBMITTED THE NEXT LOW BID. HOWEVER, ON THE BASIS OF A THOROUGH REVIEW OF YOUR CLIENT'S RESPONSIBILITY AS A POTENTIAL CONTRACTOR, IT WAS CONCLUDED THAT AN AFFIRMATIVE DETERMINATION THAT A.B.C. ALUMINUM WAS A RESPONSIBLE BIDDER COULD NOT BE MADE SINCE IT DID NOT HAVE A SATISFACTORY RECORD OF PERFORMANCE AND INTEGRITY. ACCORDINGLY, THE BID OF YOUR CLIENT WAS REJECTED AND CONTRACT NO. N32-8771 WAS AWARDED TO THE SECOND LOW BIDDER IN THE AMOUNT OF $4,359.

PURSUANT TO SECTION 1.904-1, ASPR, AN AFFIRMATIVE DETERMINATION OF NONRESPONSIBILITY IS REQUIRED TO SUPPORT THE REJECTION OF A BID SUBMITTED BY A BIDDER FOUND TO LACK RESPONSIBILITY. HOWEVER, SUCH A DETERMINATION IS NOT REQUIRED WHERE THE RESULTING CONTRACT WILL AMOUNT TO LESS THAN $10,000. WHERE, AS HERE, THE PROCUREMENT IS LESS THAN $10,000, IT IS SUFFICIENT THAT THE CONTRACTING OFFICER BASE HIS DETERMINATION OF NONRESPONSIBILITY UPON REASONABLE EVIDENCE DEMONSTRATING THE LACK OF RESPONSIBILITY ON THE PART OF THE BIDDER. OUR REVIEW OF THE ADMINISTRATIVE ACTION TAKEN HERE DOES NOT SHOW THAT THE REJECTION WAS ARBITRARY OR CAPRICIOUS OR NOT SUPPORTED BY FACTUAL EVIDENCE.

A PREAWARD SURVEY MADE OF A.B.C. CAPABILITIES AND FACILITIES SHORTLY PRIOR TO THE OPENING OF BIDS REVEALS THAT YOUR CLIENT'S FINANCIAL ABILITY TO PERFORM WAS QUESTIONABLE; THAT QUANTITY CONTROLS AND INSPECTION PROCEDURES EMPLOYED BY A.B.C. ALUMINUM WERE NOT ACCEPTABLE, AND THAT ITS MANAGEMENT WAS DEFICIENT. FURTHER, IT IS REPORTED THAT WHILE TWO OUT OF THREE CONTRACTS AWARDED TO A.B.C. ALUMINUM WERE COMPLETED SUCCESSFULLY, PERFORMANCE WAS ACCOMPLISHED ONLY AFTER MUCH DIFFICULTY, NECESSITATING MANY PRODUCTION SURVEILLANCE TRIPS, IN-PLANT REJECTIONS AND CONSIDERABLE CORRESPONDENCE. THE THIRD CONTRACT WAS TERMINATED FOR DEFAULT UNDER CIRCUMSTANCES TENDING TO INDICATE QUESTIONABLE BUSINESS PRACTICES.

WE HAVE CONSISTENTLY HELD THAT THE QUESTION AS TO THE QUALIFICATIONS OF A PROPOSED CONTRACTOR IS PRIMARILY THE FUNCTION OF THE PROCUREMENT AGENCY AND, IN THE ABSENCE OF BAD FAITH OR A REASONABLE BASIS FOR THE DETERMINATION AS MADE, WE ARE NOT REQUIRED TO OBJECT TO THE DETERMINATION. 37 COMP. GEN. 798.

IN VIEW THEREOF, AND SINCE A.B.C. ALUMINUM DID NOT MEET THE MINIMUM STANDARDS PRESCRIBED BY SECTION 1.903, ASPR, FOR RESPONSIBLE PROSPECTIVE CONTRACTORS, THERE IS NO ACTION OUR OFFICE MAY TAKE WITH RESPECT TO THE MATTER.