B-146205, SEP. 20, 1961

B-146205, SEP. 20, 1961

TO THE ACCURATE MICROFILM CO., INC.:

WE REFER TO YOUR TELEGRAM OF JUNE 21, 1961, AND LETTER OF JUNE 28, 1961, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. 33-601-61-247.

THE INVITATION WAS ISSUED BY THE PROCUREMENT DIVISION, WRIGHT PATTERSON AIR FORCE BASE, DAYTON, OHIO, REQUESTING BIDS FOR FURNISHING SUPPLIES AND SERVICES THROUGH MAY 21, 1962, FOR THE PREPARATION OF GOVERNMENT-FURNISHED 35 MM. ROLL MICROFILM INTO COMPLETED APERTURE CARDS. BIDS WERE REQUESTED ON A PRICE PER CARD FOR A TOTAL OF 4,830,000 COMPLETED APERTURE CARDS.

NINE BIDS WERE RECEIVED AND OPENED ON APRIL 24, 1961. ACCURATE MICROFILM COMPANY, INC., SUBMITTED THE LOWEST BID PRICE AT ?0582 PER APERTURE CARD AND P-M ASSOCIATES, INC., SUBMITTED THE SECOND LOW BID AT ?063895. THE OTHER BIDS RANGED FROM ?07346 TO ?063895. THE OTHER BIDS RANGED FROM ?07346 TO ?17367 PER CARD.

A SURVEY WAS CONDUCTED TO DETERMINE THE CAPABILITY OF ACCURATE MICROFILM, THE LOW BIDDER, TO PERFORM THE PROPOSED CONTRACT. THE SURVEY TEAM CONCLUDED THAT THE LOW BIDDER LACKED THE NECESSARY FINANCIAL RESOURCES, PRODUCTION AND ENGINEERING FACILITIES TO SUCCESSFULLY PERFORM THE PROPOSED CONTRACT. THE MATTER WAS THEN REFERRED TO THE SMALL BUSINESS ADMINISTRATION TO PERMIT IT TO CONSIDER THE ISSUANCE OF A CERTIFICATE OF COMPETENCY (COC). IN REPLY, THE PROCURING OFFICE WAS ADVISED BY SBA THAT IT HAD DECLINED TO ISSUE A COC TO THE LOW BIDDER. THE CONTRACTING OFFICER THEN DETERMINED THAT ACCURATE MICROFILM, INC., WAS NOT A RESPONSIBLE BIDDER ON THIS PROCUREMENT AND THE CONTRACT WAS THEREAFTER AWARDED TO THE SECOND LOW BIDDER, P-M ASSOCIATES.

YOU PROTEST ON THE BASIS THAT YOU ARE CAPABLE OF PERFORMING THIS CONTRACT AND FURTHER, THAT YOU OFFERED TO FURNISH AN INSURANCE COMPANY PERFORMANCE BOND IN THE FULL AMOUNT OF THE CONTRACT, WHICH OFFER WAS REFUSED.

THE INVITATION DID NOT REQUIRE BIDDERS TO OFFER PERFORMANCE BONDS. SECTION 10-103.1 (A) OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES THAT "PERFORMANCE BONDS WILL NOT BE USED AS A SUBSTITUTE FOR DETERMINATIONS OF CONTRACTOR RESPONSIBILITY AS REQUIRED BY SECTION I, PART 9.' IT IS WELL ESTABLISHED THAT UNDER STATUTES REQUIRING AWARD TO THE LOWEST RESPONSIBLE BIDDER, PUBLIC OFFICIALS ARE NOT LIMITED IN THEIR SELECTION TO THE LOWEST BID BY REASON OF THE FACT THE BIDDER HAS FURNISHED A PERFORMANCE BOND. AS STATED IN 43 AM.JUR., PUBLIC WORKS AND CONTRACTS, PAR. 43,

"THE PUBLIC INTEREST IS BETTER SUBSERVED AND PROMOTED BY FAITHFUL PERFORMANCE BY THE CONTRACTOR THAN BY RESORT TO INDEMNITY, SINCE IN THE VERY NATURE OF THINGS SUCH REMEDY IS INADEQUATE AND TOO OFTEN ENTAILS LITIGATION, EXPENSIVE DELAYS, AND DAMAGES WHICH CANNOT BE ADEQUATELY MEASURED OR COMPENSATED.'

WE DO NOT REGARD A PERFORMANCE BOND AS A SATISFACTORY SUBSTITUTE FOR FAITHFUL PERFORMANCE OF THE CONTRACT AND ACCORDINGLY, THE OFFER TO FURNISH SUCH BOND DOES NOT MAKE A BIDDER RESPONSIBLE WITHIN THE MEANING OF THE APPLICABLE STATUTE AND REGULATIONS.

IN YOUR CASE, THE RECORD SHOWS THAT A SURVEY TEAM INVESTIGATED YOUR PRODUCTION FACILITIES AND FINANCIAL RESOURCES, AND IT REPORTED THAT YOU LACKED THE ABILITY TO SUCCESSFULLY PERFORM THE CONTRACT. THE SBA DECLINED TO ISSUE YOU A COC. IN THIS RESPECT, WE HAVE STATED THAT A NEGATIVE FINDING WITH RESPECT TO THE RESPONSIBILITY OF A BIDDER TO PERFORM A CONTRACT IS PARTICULARLY PERSUASIVE WHERE THE MATTER HAS BEEN REFERRED TO THE SBA AND IT HAS REFUSED TO ISSUE A COC TO THE BIDDER. SEE B-136545, FEBRUARY 10, 1959. IT MUST BE CONCLUDED THEREFORE, THAT THE REJECTION OF YOUR BID WAS PROPER.