B-147887, FEB. 23, 1962

B-147887, FEB. 23, 1962

TO UNITED-MACK:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 4, 1962, TO THE BASE PROCUREMENT OFFICE, MINOT AIR FORCE BASE, NORTH DAKOTA, A COPY OF WHICH YOU TRANSMITTED TO OUR OFFICE, QUESTIONING THE RESPONSIBILITY OF ELECTRONIC AND MISSILE FACILITIES, INCORPORATED, NEW YORK, NEW YORK (HEREINAFTER REFERRED TO AS EMF), AS LOW BIDDER UNDER INVITATION NO. 32- 604-62-34. THERE HAS BEEN RECEIVED, ALSO, FROM HONORABLE BEN F. JENSEN A LETTER DATED JANUARY 2, 1962, WITH ENCLOSURES, RELATIVE TO THE MATTER.

THE INVITATION WAS ISSUED NOVEMBER 16, 1961, REQUESTING BIDS ON ALTERNATE BASES--- TO BE OPENED DECEMBER 21, 1961--- FOR THE CONSTRUCTION OF A 300- UNIT ARMED SERVICES FAMILY HOUSING PROJECT AT MINOT AIR FORCE BASE, NORTH DAKOTA. THE LOW BID IN THE AMOUNT OF $4,867.650 WAS SUBMITTED BY EMF. YOU SUBMITTED THE NEXT LOW BID IN THE AMOUNT OF $4,873,217. YOU PROTEST ANY AWARD TO THE LOW BIDDER AND REQUEST A REVIEW OF ITS PERFORMANCES ON OTHER PROJECTS AND AN EVALUATION AND DETERMINATION OF ITS RESPONSIBILITY, WITH SPECIFIC REFERENCE TO CONSTRUCTION AT THE SUBMARINE BASE, NEW LONDON, CONNECTICUT, DOW AIR FORCE BASE, BANGOR, MAINE, AND MALMSTROM AIR FORCE BASE, MONTANA.

THE DEPARTMENT OF THE AIR FORCE REPORTS THAT VARIOUS CORPORATIONS CONTROLLED BY THE PRESENT MANAGEMENT OF EMF (MESSRS. ARNOLD KAGAN AND NATHAN COHEN) HAVE BID ON MILITARY HOUSING PROJECTS. ONE OF THESE CORPORATIONS, K AND C CONSTRUCTION COMPANY, FORMED A JOINT VENTURE WITH THE WINSTON-MUSS INTERESTS TO BID ON THE PROJECT AT THE NEW LONDON SUBMARINE BASE; AND ANOTHER OF THE CORPORATIONS, URBAN CONSTRUCTION COMPANY, WAS LOW BIDDER ON THE PROJECT AT DOW AIR FORCE BASE, MAINE. THE DEPARTMENT STATES ITS UNDERSTANDING THAT IN BOTH INSTANCES ALL OF THE CORPORATE STOCK WAS SOLD TO THE WINSTON-MUSS INTERESTS AND THAT THE PRESENT MANAGEMENT OF EMF HAD NO PART IN THE PERFORMANCE OF THE CONTRACTS. IT IS REPORTED FURTHER THAT EMF IS NOW ENGAGED ON THE 260-UNIT PROJECT AT MALMSTROM AIR FORCE BASE AND THAT PERFORMANCE TO DATE HAS BEEN RATED AS SATISFACTORY BUT THAT ONLY 3 PERCENT OF THE PROJECT HAD BEEN COMPLETED AT THE TIME OF THE REPORT.

IN YOUR LETTER OF JANUARY 4, 1962, YOU REFERRED TO OUR DECISION OF APRIL 19, 1961, B-144574, TO EMF, IN WHICH WE DECLINED TO OBJECT TO THE ACTION OF THE CORPS OF ENGINEERS IN REJECTING THE LOW BIDS OF EMF UNDER TWO INVITATIONS, THE REJECTIONS HAVING BEEN BASED ON FINDINGS THAT THE LOW BIDDER HAD "DEMONSTRATED A LACK OF RESPONSIBILITY IN THE PERFORMANCE OF MANY FEDERAL PROJECTS.' HOWEVER, IT WILL BE OBSERVED THAT IN OUR DECISION IT WAS STATED, IN SUBSTANCE, THAT THE UNFAVORABLE DETERMINATIONS THERE INVOLVED DID NOT IN THEMSELVES CONSTITUTE ANY GROUND FOR SIMILAR DETERMINATIONS IN THE FUTURE AND THAT EACH DETERMINATION OF RESPONSIBILITY MUST BE BASED ON EXPERIENCE AS OF THE TIME WHEN SUCH DETERMINATION IS MADE.

THE FILE SHOWS THAT THE NEW YORK AIR FORCE CONTRACT MANAGEMENT DISTRICT PERFORMED A FACILITY CAPABILITY REPORT ON EMF. THE REPORT, DATED JANUARY 17, 1962, WAS FAVORABLE AND WAS REVIEWED AND AFFIRMED BY THE FACILITY ADVISORY BOARD. THE DEPARTMENT OF THE AIR FORCE STATES ITS VIEW, BASED IN PART ON CREDIT INFORMATION OBTAINED FROM DUN AND BRADSTREET, INCORPORATED, THAT THE PHYSICAL AND FINANCIAL CAPABILITIES OF EMF ARE SUFFICIENT FOR PERFORMING THE CONSTRUCTION WORK COVERED BY THE SUBJECT INVITATION NO. 32- 604-62-34 IN ADDITION TO THE RESPONSIBILITIES ASSUMED BY IT UNDER OTHER CURRENT CONTRACTS. IN THIS CONVICTION, IT IS REPORTED THAT EMF HAS A CURRENT BACKING OF APPROXIMATELY $19,000,000 ON GOVERNMENT PROJECTS NOW UNDERCONSTRUCTION AND THAT THE CONTINENTAL CASUALTY COMPANY, NEW YORK, HAS ADVISED INFORMALLY THAT IT WOULD FULFILL EMF'S BONDING REQUIREMENTS UP TO $35,000,000 PER YEAR. THEREFORE, THE CONTRACTING OFFICER AT MINOT AIR FORCE BASE HAS RECOMMENDED THAT AWARD BE MADE TO EMF AS LOW BIDDER.

IT IS REPORTED FURTHER THAT THE AIR FORCE HAS MADE FINDINGS AND DETERMINATIONS OF THE CURRENT CAPABILITIES OF EMF BASED UPON THE ACTUAL EXPERIENCE OF THE AIR FORCE AND OTHER GOVERNMENT AGENCIES SUBSEQUENT TO APRIL 19, 1961, THE DATE OF OUR REFERRED-TO DECISION.

UNDER DATE OF AUGUST 18, 1961, THE CORPS OF ENGINEERS FURNISHED TO NATIONAL AERONAUTICS AND SPACE ADMINISTRATION A FAVORABLE PREAWARD SURVEY REPORT ON EMF.

IN A TELEGRAM DATED JANUARY 30, 1962, WITH RESPECT TO A PROJECT AT SLIDELL, LOUISIANA, THE FEDERAL AVIATION AGENCY REPORTS THAT IT "WOULD HAVE NO REASON TO REFUSE A CONTRACT AWARD SUCH AS BEING CONSIDERED BY THE AIR FORCE.'

UNDER DATE OF DECEMBER 15, 1961, THE COMMANDER, LORING AIR FORCE BASE, MAINE, COMMENDS EMF FOR OUTSTANDING PERFORMANCE IN COMPLETING A 114-UNIT PROJECT AT THAT BASE TWO MONTHS AHEAD OF SCHEDULE. IT IS REPORTED ALSO THAT EMF HAS SATISFACTORILY COMPLETED THE REHABILITATION AND IMPROVEMENT OF 1,425 UNITS AT LORING AIR FORCE BASE.

THE GENERAL SERVICES ADMINISTRATION STATES IN A LETTER DATED FEBRUARY 1, 1962, THAT EMF'S PERFORMANCE ON A CURRENT BROOKLYN PROJECT HAS BEEN SATISFACTORY.

THE PORTSMOUTH NAVAL SHIPYARD, PORTSMOUTH, NEW HAMPSHIRE, IN A LETTER TO EMF DATED JANUARY 10, 1962, COMMENDS EMF FOR ITS SPLENDID PERFORMANCE WITH RESPECT TO A PROJECT AT THAT SHIPYARD. IN A LETTER DATED FEBRUARY 2, 1962, THE BUREAU OF YARDS AND DOCKS STATES THAT ALTHOUGH SOME DIFFICULTY HAD BEEN ENCOUNTERED UNDER CERTAIN CONTRACTS PERFORMED BY FIVE BERO CONSTRUCTION COMPANY, THE FORMER NAME OF EMF, THERE WAS NO FACTUAL BASIS FOR DISQUALIFYING EMF FROM FUTURE BIDDING.

IN A LETTER DATED JANUARY 31, 1962, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION REPORTS SATISFACTORY PROGRESS BY EMF ON PROJECTS AT GEORGE C. MARSHALL FLIGHT CENTER, HUNTSVILLE, ALABAMA, AND AT LEWIS RESEARCH CENTER, CLEVELAND, OHIO.

THE GOVERNMENT OF THE DISTRICT OF COLUMBIA, DEPARTMENT OF BUILDINGS AND GROUNDS, STATES IN A LETTER DATED FEBRUARY 1, 1962, THAT EMF HAD COMPLETED 55 PERCENT OF A PROJECT ON SCHEDULE AND THAT THE ABILITY AND COOPERATION OF ITS PERSONNEL WERE EXCELLENT.

IT IS STATED IN THE ADMINISTRATIVE REPORT THAT MANY OF EMF'S PAST DEFICIENCIES CONCERNED MORE OR LESS COMPLICATED TECHNICAL CONSTRUCTION PROJECTS, WHEREAS ITS CURRENT HOUSING AND REHABILITATION PROJECTS HAVE BEEN MUCH MORE SUCCESSFUL.

AS STATED IN OUR DECISION OF APRIL 19, 1961,"QUESTIONS PERTAINING TO THE QUALIFICATIONS OF A PROPOSED CONTRACTOR ARE FOR DETERMINATION BY THE PROCURRING AGENCY INVOLVED AND, IN THE ABSENCE OF CONVINCING EVIDENCE OF BAD FAITH OR LACK OF ANY REASONABLE BASIS FOR A PARTICULAR FINDING, THIS OFFICE WOULD NOT BE JUSTIFIED IN OBJECTING TO SUCH DETERMINATION.' VIEW OF THE INFORMATION REPORTED AND SHOWN BY THE FILE IN THE INSTANT MATTER AS ABOVE SET FORTH, THERE IS FOUND NO VALID BASIS FOR OBJECTION BY OUR OFFICE TO AWARD OF THE CONTRACT TO EMF IF DEEMED BY THE ADMINISTRATIVE