B-146372, SEP. 8, 1961

B-146372: Sep 8, 1961

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BIDS WERE OPENED ON JUNE 20. UNITED DISPOSAL WAS ADVISED BY THE CONTRACTING OFFICER THAT ITS BID WAS REJECTED ON THE BASIS OF AN INVESTIGATION THAT CASTS DOUBT ON ITS RESPONSIBILITY AS A PROSPECTIVE GOVERNMENT CONTRACTOR. UNITED DISPOSAL WAS ADVISED: "IN VIEW OF THE FACT THAT THE UNITED DISPOSAL CORPORATION. DOES NOT HAVE A RECORD OF PERFORMANCE UPON WHICH WE CAN RELY. WE HAVE DETERMINED. AWARD WAS MADE TO SQUARE DEAL ON JUNE 30. WHICH WAS TO BEGIN JULY 1. OUR CLIENT WAS REQUESTED TO. WE HAVE BEEN ADVISED THAT UNITED DISPOSAL CORP. WAS IN VIOLATION OF THE FEDERAL PROCUREMENT REGULATION. THE OFFICIAL REPORT TO US IN THIS MATTER FROM THE TREASURY DEPARTMENT CONTAINS THE FOLLOWING STATEMENTS: "* * * AT NO TIME * * * WAS ANY SUGGESTION MADE THAT THE FIRM SHOULD PROCURE ANY CONTAINERS. * * * THE STATEMENTS IN THE PROTEST THAT THE CORPORATION WAS REQUESTED TO OBTAIN SPECIAL EQUIPMENT AND THAT BETWEEN JUNE 20 AND JUNE 30 THE CORPORATION UNDERWENT DAILY EXAMINATIONS AND INSPECTIONS BY AGENTS OF THE TREASURY DEPARTMENT ARE COMPLETELY FALSE.'.

B-146372, SEP. 8, 1961

TO Y. HILLEL ABRAMS, ESQUIRE:

BY LETTERS DATED JULY 7 AND 26, 1961, WITH ENCLOSURES, YOU PROTESTED AGAINST THE REJECTION OF THE LOW BID SUBMITTED BY THE UNITED DISPOSAL CORPORATION UNDER INVITATION FOR BIDS NO. ASB-52661, ISSUED ON MAY 26, 1961, BY THE TREASURY DEPARTMENT, ADMINISTRATIVE SERVICES, FOR THE REMOVAL OF TRASH FROM THE TREASURY BUILDINGS FOR THE PERIOD JULY 1, 1961, THROUGH JUNE 30, 1962.

BIDS WERE OPENED ON JUNE 20, 1961, AND IT APPEARS THAT UNITED DISPOSAL SUBMITTED THE LOW BID AND THAT SQUARE DEAL TRUCKING CO., INC. SUBMITTED THE NEXT LOWEST BID. HOWEVER, ON JUNE 30, 1961, UNITED DISPOSAL WAS ADVISED BY THE CONTRACTING OFFICER THAT ITS BID WAS REJECTED ON THE BASIS OF AN INVESTIGATION THAT CASTS DOUBT ON ITS RESPONSIBILITY AS A PROSPECTIVE GOVERNMENT CONTRACTOR. SPECIFICALLY, UNITED DISPOSAL WAS ADVISED:

"IN VIEW OF THE FACT THAT THE UNITED DISPOSAL CORPORATION, BEING NEWLY FORMED, DOES NOT HAVE A RECORD OF PERFORMANCE UPON WHICH WE CAN RELY, AND IN VIEW OF THE UNFAVORABLE REPORTS OF YOUR PRIOR BUSINESS PRACTICES, WE HAVE DETERMINED, UNDER SECTION 8 (A) OF THE INVITATION, BID AND AWARD, THAT YOUR BID, ALTHOUGH THE LOW BID, WOULD NOT BE THE MOST ADVANTAGEOUS TO THE GOVERNMENT TO ACCEPT, CONSIDERING ALL THE FACTORS INVOLVED.'

AWARD WAS MADE TO SQUARE DEAL ON JUNE 30, 1961, AS THE LOWEST RESPONSIBLE BIDDER UNDER THE INVITATION.

WITH RESPECT TO THE ACTIONS TAKEN ABOVE, YOU STATE IN YOUR LETTER:

"WE WISH TO CALL TO YOUR ATTENTION THAT OUR CLIENT, UNITED DISPOSAL CORP., SUBMITTED THE LOWEST BID FOR THE PARTICULAR JOB, WHICH WAS TO BEGIN JULY 1, 1961, AND END JUNE 30, 1962. FROM THE DATE OF THE BIDDING, JUNE 20, 1961, TO JUNE 30, 1961, OUR CLIENT WAS REQUESTED TO, AND DID, OBTAIN SPECIAL EQUIPMENT WITH WHICH TO INSURE THE SATISFACTORY PERFORMANCE OF THE JOB IN QUESTION. WE HAVE BEEN ADVISED THAT UNITED DISPOSAL CORP. HAS, DURING THE ABOVE STATED PERIOD OF TIME, UNDERGONE DAILY EXAMINATION AND INSPECTION BY THE AGENTS OF THE TREASURY DEPARTMENT IN ORDER TO OBTAIN SATISFACTORY ASSURANCE OF THE ABILITY OF UNITED DISPOSAL CORP. TO PERFORM IN ACCORDANCE WITH ITS BID. UNITED DISPOSAL CORP., ON ITS PART, FULFILLED EVERY REQUEST MADE OF IT REGARDING THE PURCHASE OF SPECIAL EQUIPMENT FOR THIS PARTICULAR JOB.

"* * * FURTHER, THE FAILURE TO REFER THIS MATTER TO THE SMALL BUSINESS ADMINISTRATION, MY CLIENT BEING A SMALL BUSINESS, WAS IN VIOLATION OF THE FEDERAL PROCUREMENT REGULATION, SECTION 1-1.709.'

THE OFFICIAL REPORT TO US IN THIS MATTER FROM THE TREASURY DEPARTMENT CONTAINS THE FOLLOWING STATEMENTS:

"* * * AT NO TIME * * * WAS ANY SUGGESTION MADE THAT THE FIRM SHOULD PROCURE ANY CONTAINERS. * * * THE STATEMENTS IN THE PROTEST THAT THE CORPORATION WAS REQUESTED TO OBTAIN SPECIAL EQUIPMENT AND THAT BETWEEN JUNE 20 AND JUNE 30 THE CORPORATION UNDERWENT DAILY EXAMINATIONS AND INSPECTIONS BY AGENTS OF THE TREASURY DEPARTMENT ARE COMPLETELY FALSE.'

FURTHERMORE, WE HAVE CONSISTENTLY HELD THAT THE DETERMINATION OF A BIDDER'S RESPONSIBILITY IS PRIMARILY THAT OF THE CONTRACTING AGENCY AND NOT OF THE GENERAL ACCOUNTING OFFICE AND IS BINDING ON OUR OFFICE IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR A REASONABLE BASIS FOR THE DETERMINATION MADE. 33 COMP. GEN. 549; 37 ID. 430; 39 ID. 705.

THE DEPARTMENT FOUND AFTER A THOROUGH INVESTIGATION OF THE BACKGROUND OF THE PRESIDENT OF UNITED DISPOSAL THAT THE INFORMATION DEVELOPED REFLECTED AN UNSATISFACTORY RECORD OF INTEGRITY WHICH IS ONE OF THE STANDARDS OF RESPONSIBILITY WHICH MUST BE MET BY ALL BIDDERS IN ORDER TO QUALIFY AS A RESPONSIBLE PROSPECTIVE GOVERNMENT CONTRACTOR. SEE SECTION 1-1.310-5 (A) (5) OF THE FEDERAL PROCUREMENT REGULATIONS; 39 COMP. GEN. 468; B-136525, SEPTEMBER 23, 1958. SINCE THE FILE BEFORE US REASONABLY SUPPORTS THAT DETERMINATION, WE ARE NOT DISPOSED TO QUESTION THE ACTION TAKEN.

ALTHOUGH SECTION 1-1.709 (B) OF THE FEDERAL PROCUREMENT REGULATIONS REQUIRES THE CONTRACTING OFFICER TO NOTIFY THE SMALL BUSINESS ADMINISTRATION IF IT IS PROPOSED TO REJECT THE BID OF A SMALL BUSINESS CONCERN BECAUSE OF NONRESPONSIBILITY DUE TO A LACK OF "CAPACITY AND CREDIT," THAT REQUIREMENT IS NOT MANDATORY WHERE A BIDDER HAS BEEN FOUND TO BE LACKING IN INTEGRITY. WE HAVE HELD THAT THE TERM "CAPACITY" AS CONTEMPLATED BY THE CERTIFICATE OF COMPETENCY AUTHORITY OF THE SMALL BUSINESS ADMINISTRATION INCLUDES ABILITY TO PERFORM, ORGANIZATION, EXPERIENCE, TECHNICAL KNOWLEDGE, SKILLS,"KNOW-HOW," TECHNICAL EQUIPMENT AND FACILITIES. 38 COMP. GEN. 864. HOWEVER, WE HAVE RECOGNIZED THAT AN UNSATISFACTORY RECORD OF INTEGRITY AND POOR BUSINESS PRACTICES ARE MATTERS SOLELY WITHIN THE CONTRACTING OFFICER'S AUTHORITY AND NOT WITHIN THE SCOPE OF THE CERTIFICATE OF COMPETENCY PROCEDURES. 39 COMP. GEN. 868.