B-153759, MAY 7, 1964

B-153759: May 7, 1964

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INC.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED MARCH 20. THE SECOND LOW BIDDER WAS MAMBA ENGINEERING. AN AFFIRMATIVE DETERMINATION THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE WITHIN THE MEANING OF 1-902 AND 1-903. PREAWARD SURVEY WAS CONDUCTED BY THE DISTRICT ENGINEER WHICH SURVEY RESULTED IN A NEGATIVE REPORT BASED ON FINDINGS THAT YOUR CORPORATION DID NOT POSSESS ADEQUATE FINANCIAL RESOURCES. ON THE BELIEF THAT YOU WERE NOT CAPABLE OF MEETING THE SCHEDULE RATE OF PROGRESS AND OF ASSURING COMPLETION OF THE JOB AS SCHEDULED. ALL REPORTS INDICATED THAT YOUR FIRM DOES NOT HAVE THE MANAGEMENT CAPABILITY TO COORDINATE AND SUPERVISE A JOB OF THIS SIZE. AWARD WAS MADE TO THE SECOND LOW BIDDER.

B-153759, MAY 7, 1964

TO R. E. LEE ELECTRIC CO., INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED MARCH 20, 1964, PROTESTING THE REJECTION BY THE CORPS OF ENGINEERS OF YOUR LOW BID UNDER INVITATION FOR BIDS NO. ENG-08-176-64-12, ISSUED BY THE U.S. ARMY ENGINEER DISTRICT, CANAVERAL, MERRITT ISLAND, FLORIDA.

THE INVITATION REQUESTED BIDS--- TO BE OPENED FEBRUARY 14, 1964--- FOR CONSTRUCTION OF ELECTRICAL DISTRIBUTION SYSTEMS ALTERATIONS AND ADDITIONS AT AIR FORCE MISSILE TEST CENTER, PATRICK AIR FORCE BASE, FLORIDA. YOU SUBMITTED THE LOW BID IN THE AMOUNT OF $1,119,180.79. THE SECOND LOW BIDDER WAS MAMBA ENGINEERING, INC., IN THE AMOUNT OF $1,217,588.06.

ARMED SERVICES PROCUREMENT REGULATION 1-904.1 REQUIRES THAT NO PURCHASE SHALL BE MADE FROM, AND NO CONTRACT SHALL BE AWARDED TO ANY, PERSON OR FIRM UNLESS THE CONTRACTING OFFICER FIRST MAKES, SIGNS AND PLACES IN THE CONTRACT FILE, AN AFFIRMATIVE DETERMINATION THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE WITHIN THE MEANING OF 1-902 AND 1-903. PREAWARD SURVEY WAS CONDUCTED BY THE DISTRICT ENGINEER WHICH SURVEY RESULTED IN A NEGATIVE REPORT BASED ON FINDINGS THAT YOUR CORPORATION DID NOT POSSESS ADEQUATE FINANCIAL RESOURCES, A SATISFACTORY RECORD OF PERFORMANCE ON PREVIOUS GOVERNMENT CONTRACTS AND THE NECESSARY ORGANIZATION TO PERFORM A CONTRACT OF THIS SIZE, AND ON THE BELIEF THAT YOU WERE NOT CAPABLE OF MEETING THE SCHEDULE RATE OF PROGRESS AND OF ASSURING COMPLETION OF THE JOB AS SCHEDULED. ALL REPORTS INDICATED THAT YOUR FIRM DOES NOT HAVE THE MANAGEMENT CAPABILITY TO COORDINATE AND SUPERVISE A JOB OF THIS SIZE.

THEREAFTER YOU APPLIED FOR A CERTIFICATE OF COMPETENCY FROM THE SMALL BUSINESS ADMINISTRATION BUT IN A LETTER DATED MARCH 17, 1964, TO THE CORPS OF ENGINEERS, MERRITT ISLAND, FLORIDA, THE ACTING REGIONAL DIRECTOR, SMALL BUSINESS ADMINISTRATION, STATED THAT THE AGENCY DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY TO YOU FOR THIS PROCUREMENT, BASED ON A COMPREHENSIVE ANALYSIS OF ALL AVAILABLE INFORMATION. SUBSEQUENTLY, IN ORDER TO AVOID FURTHER DELAY, AWARD WAS MADE TO THE SECOND LOW BIDDER.

IT IS WELL ESTABLISHED BOTH BY DECISIONS OF THE COURTS AND OUR OFFICE, THAT AN ADMINISTRATIVE DETERMINATION OF THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR IS CONCLUSIVE UNLESS IT IS SHOWN THAT SUCH DETERMINATION WAS NOT BASED ON SUBSTANTIAL EVIDENCE DEMONSTRATING THE BIDDER'S LACK OF RESPONSIBILITY.

THE PROJECTION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT. FRIEND V. LEE, 221 F.2D 96. WHILE SUCH JUDGMENT SHOULD BE BASED ON FACT AND SHOULD BE ARRIVED AT IN GOOD FAITH, IT MUST PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICES INVOLVED SINCE THEY ARE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, THEY MUST BEAR THE BRUNT OF ANY DIFFICULTY EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY AND THEY MUST MAINTAIN THE DAY-TO-DAY RELATIONS WITH THE CONTRACTOR ON BEHALF OF THE GOVERNMENT. FOR THESE REASONS IT WOULD BE UNREASONABLE TO SUPERIMPOSE THE JUDGMENT OF OUR OFFICE OR ANY OTHER AGENCY OR GROUP ON THAT OF THE CONTRACTING OFFICIALS IN ANY CASE IN WHICH THERE APPEARS TO BE A SUBSTANTIAL BASIS FOR THE ACTIONS OF THOSE OFFICIALS. THE FACTS SHOWN BY THE FILE IN THE INSTANT MATTER INDICATE THAT THERE WAS A SUBSTANTIAL BASIS FOR THE ACTIONS OF THE ADMINISTRATIVE OFFICERS IN REJECTING YOUR BID AND THAT SUCH ACTIONS WERE TAKEN IN GOOD FAITH, AFTER CAREFUL CONSIDERATION, FOR THE PURPOSE OF SERVING THE BEST INTERESTS OF THE GOVERNMENT. WE HAVE HELD THAT THE REFUSAL OF THE SMALL BUSINESS ADMINISTRATION TO ISSUE A CERTIFICATE OF COMPETENCY TO A SMALL BUSINESS BIDDER MUST BE REGARDED AS PERSUASIVE WITH RESPECT TO THE COMPETENCY OR CREDIT OF THE BIDDER CONCERNED. 39 COMP. GEN. 705. WHEN THE ISSUANCE OF A CERTIFICATE OF COMPETENCY IS DENIED, THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY MUST BE REGARDED AS HAVING BEEN AFFIRMED.

IN THE CIRCUMSTANCES, NO LEGAL BASIS EXISTS FOR DISTURBING THE ACTION OF THE ADMINISTRATIVE OFFICIALS AND THUS THERE IS NO PROPER BASIS FOR OBJECTION BY OUR OFFICE TO THEIR AWARD OF THE PROCUREMENT TO ANOTHER BIDDER. 37 COMP. GEN. 430, 435.