B-156897, JUL. 21, 1965

B-156897: Jul 21, 1965

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WHICH WAS SET ASIDE FOR AWARD TO A SMALL BUSINESS CONCERN. WAS ADVERTISED UNDER INVITATION NO. 01373. BID OPENING WAS SCHEDULED FOR MAY 5. (A) AWARD OF CONTRACT WILL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID. IS MOST ADVANTAGEOUS TO THE GOVERNMENT. 473 WAS LOWEST. YOUR BID WAS REJECTED BY LETTER OF MAY 25. YOU MAKE THE FOLLOWING STATEMENTS: "THE PREVIOUSLY AWARDED CONTRACTS CITED IN THE ENCLOSED LETTER WERE PERFORMED BY THE OLD COMPANY OF MORRIS PARK CONTRACTING CO. WAS ORGANIZED. THE CURRENT CONTRACT AT THE PORT JERVIS POST OFFICE WAS STARTED BY THE PRESENT FIRM. WAS COMPLETED WITH DEFICIENCIES AND IN NEED OF CORRECTION. OUR COMPANY WAS THEN REORGANIZED WITH THE WRITER. SO THAT IT IS THE INTENTION OF THIS COMPANY TO PERFORM ALL PRESENT AND FUTURE JOBS SATISFACTORILY.

B-156897, JUL. 21, 1965

TO MORRIS PARK CONTRACTING CO., INC.:

YOUR LETTER OF MAY 27, 1965, PROTESTS THE REJECTION BY THE GENERAL SERVICES ADMINISTRATION (GSA) OF YOUR BID FOR CONSTRUCTION OF NEW DRIVEWAY ENTRANCES, PROJECT NO. 01373, AT THE UNITED STATES POST OFFICE AND COURTHOUSE, NEWARK, NEW JERSEY.

THE PROCUREMENT, WHICH WAS SET ASIDE FOR AWARD TO A SMALL BUSINESS CONCERN, WAS ADVERTISED UNDER INVITATION NO. 01373, ISSUED APRIL 14, 1965, BY GSA PUBLIC BUILDINGS SERVICE, REGION 2, NEW YORK, NEW YORK. BID OPENING WAS SCHEDULED FOR MAY 5.

PARAGRAPH 10 (A), INSTRUCTIONS TO BIDDERS (CONSTRUCTION CONTRACT), STANDARD FORM 22, PROVIDED AS FOLLOWS:

"10. AWARD OF CONTRACT. (A) AWARD OF CONTRACT WILL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.'

OF THE EIGHT BIDS RECEIVED IN RESPONSE TO THE INVITATION, YOUR BID OF $14,473 WAS LOWEST. HOWEVER, UPON EXAMINATION OF YOUR PERFORMANCE RECORD ON PREVIOUS SIMILAR CONTRACTS FOR GSA, THE CONTRACTING OFFICER ISSUED FINDINGS AND A DETERMINATION ON MAY 21 THAT YOU DID NOT MEET THE STANDARDS PRESCRIBED FOR A RESPONSIBLE BIDDER IN FEDERAL PROCUREMENT REGULATION (FPR) 1-1.310-5 (A) (4). ACCORDINGLY, YOUR BID WAS REJECTED BY LETTER OF MAY 25.

IN SUPPORT OF YOUR POSITION THAT YOU SHOULD BE AWARDED THE CONTRACT AS LOW BIDDER, YOU MAKE THE FOLLOWING STATEMENTS:

"THE PREVIOUSLY AWARDED CONTRACTS CITED IN THE ENCLOSED LETTER WERE PERFORMED BY THE OLD COMPANY OF MORRIS PARK CONTRACTING CO. PRIOR TO ITS INCORPORATION. SUBSEQUENT TO THOSE JOBS THE PRESENT FIRM OF MORRIS PARK CONTRACTING CO., INC. WAS ORGANIZED. THE CURRENT CONTRACT AT THE PORT JERVIS POST OFFICE WAS STARTED BY THE PRESENT FIRM, BEFORE THE WRITER OF THIS LETTER JOINED THE FIRM, AND, DUE TO INTERNAL PROBLEMS WITHIN THE ORGANIZATION, WAS COMPLETED WITH DEFICIENCIES AND IN NEED OF CORRECTION. OUR COMPANY WAS THEN REORGANIZED WITH THE WRITER, A PROFESSIONAL ENGINEER, JOINING THE COMPANY AS THE VICE PRESIDENT. UNDER HIS DIRECTION, WE RETURNED TO THE PORT JERVIS POST OFFICE AND SATISFACTORILY COMPLETED THE CONTRACT.

"IN OTHER WORDS, THE PRESENT FIRM OF MORRIS PARK CONTRACTING CO., INC. HAS ACQUIRED A PROFESSIONAL ATTITUDE WITH ALL OF ITS PRESENT AND FUTURE OPERATIONS, SO THAT IT IS THE INTENTION OF THIS COMPANY TO PERFORM ALL PRESENT AND FUTURE JOBS SATISFACTORILY, DILIGENTLY, AND IN A RESPONSIBLE MANNER.'

IN A REPORT DATED JULY 7, GSA STATES THAT ON FOUR OF SIX CONSTRUCTION CONTRACTS AWARDED TO YOU FROM MARCH 7, 1960, TO OCTOBER 31, 1963, YOUR PERFORMANCE WAS UNSATISFACTORY, AND IN SEVERAL INSTANCES CORRECTIVE ACTION WAS TAKEN ONLY AFTER REPEATED REQUESTS BY THE GOVERNMENT CONTRACTING OFFICERS. ON THE MOST RECENT CONTRACT, NO. GS-OGB-11347, AWARDED ON OCTOBER 31, 1963, FOR A DRIVEWAY EXTENSION PROJECT AT THE UNITED STATES POST OFFICE, PORT JERVIS, NEW YORK, IT IS REPORTED THERE WERE SEVERAL SERIOUS DEFICIENCIES IN YOUR PERFORMANCE, INCLUDING FAILURE TO INSTALL FENCING IN COMPLIANCE WITH THE CONTRACT SPECIFICATIONS, THEREBY NECESSITATING REINSTALLATION; NEGLIGENT INSTALLATION OF CURBING WHICH ENCROACHED ONE FOOT UPON ADJACENT PROPERTY; AND FAILURE OF ASPHALTIC CONCRETE TO MEET THE QUALITY THICKNESS, AND OTHER CONTRACT SPECIFICATIONS, THEREBY REQUIRING ITS REMOVAL AND REPLACEMENT. FURTHERMORE, ALTHOUGH THE CONTRACT COMPLETION DATE WAS EXTENDED FROM DECEMBER 31, 1963, TO SEPTEMBER 2, 1964, ONLY 20 PERCENT OF THE WORK HAD BEEN COMPLETED BY OCTOBER 14, 1964, AND NECESSARY CORRECTIVE WORK WAS NOT COMPLETED UNTIL MAY 1965, AFTER MUCH URGING BY GSA.

FOLLOWING IS A SUMMARY OF THE COMPLAINTS ON THE OTHER THREE CONTRACTS:

ON CONTRACT NO. GS-02B-8812, UNITED STATES POST OFFICE, LARCHMONT, NEW YORK, FOR MASONRY AND ROOF REPAIRS, WORK WAS COMPLETED ONE MONTH LATE ON A 90-DAY PROJECT, AND FAULTY CALKING WORK DISCOVERED UPON INSPECTION WAS REQUIRED TO BE REDONE.

ON CONTRACT NO. GS-02B-8804, UNITED STATES POST OFFICE, SCARSDALE, NEW YORK, FOR ROOF AND PLASTER WORK AND PAINTING, THE ROOF LEAKED AFTER COMPLETION OF THE WORK; EFFORTS TO HAVE THE LEAK CORRECTED WERE UNSUCCESSFUL UNTIL THE SURETY WAS CONTACTED; AND ULTIMATELY IT WAS NECESSARY TO REMOVE THE FAULTY SECTION AND INSTALL NEW ROOFING. THE CORRECTION OF THE DEFICIENCY, WHICH WAS DELAYED SEVEN MONTHS DUE TO INACTION ON YOUR PART, RESULTED IN SUBSTANTIAL ADDITIONAL ENGINEERING COSTS.

ON CONTRACT NO. GS-02B-7939, FOR A DRIVEWAY EXTENSION AT THE UNITED STATES POST OFFICE, WATERLOO, NEW YORK, A RETAINING WALL WAS ONLY TWO FEET BELOW GRADE RATHER THAN FOUR FEET AS SPECIFIED IN THE CONTRACT. THEREFORE, YOU WERE REQUIRED TO REMOVE THE WALL AND REPLACE IT PROPERLY.

REGARDING THE INCORPORATION OF MORRIS PARK CONSTRUCTION COMPANY, GSA REPORTS THAT THE CORPORATION PRESIDENT, MR. LOUIS URBINATI, WAS THE MAJOR OWNER OF THE OLD FIRM AND THAT THE CORPORATION SECRETARY TREASURER IS JOSEPH URBINATI, THE SON OF LOUIS URBINATI. IT IS THEREFORE GSA'S POSITION THAT, SINCE LOUIS URBINATI HAS RETAINED A DOMINANT POSITION IN THE FIRM, THE CHANGE IN BUSINESS STRUCTURE SHOULD NOT BE REGARDED AS HAVING ELIMINATED THE NECESSITY FOR CONSIDERING ITS POOR PAST PERFORMANCE RECORD.

SECTION 303 (B), FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 41 U.S.C. 253 (B), REQUIRES THAT AWARD BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. THE LANGUAGE QUOTED FROM PARAGRAPH 10 (A) OF THE INSTRUCTIONS TO BIDDERS IS IN ACCORD WITH THE STATUTORY REQUIREMENT.

FPR 1-1.310-4 STATES THAT THE GENERAL POLICY IS TO AWARD CONTRACTS ONLY TO RESPONSIBLE PROSPECTIVE CONTRACTORS. FPR 1-1.310-6 PROVIDES THAT NO CONTRACT SHALL BE AWARDED TO ANY PERSON OR FIRM UNLESS THE CONTRACTING OFFICER HAS FIRST DETERMINED THAT SUCH PERSON OR FIRM IS RESPONSIBLE WITHIN THE MEANING OF THE FPR. WITH RESPECT TO THE STANDARDS WHICH A CONTRACTOR MUST MEET TO QUALIFY AS RESPONSIBLE, FPR 1-1.310-5 (A) (4) READS AS FOLLOWS:

"/4) HAS A SATISFACTORY RECORD OF INTEGRITY, JUDGMENT, AND PERFORMANCE (CONTRACTORS WHICH ARE SERIOUSLY DELINQUENT IN CURRENT CONTRACT PERFORMANCE, CONSIDERING THE NUMBER OF CONTRACTS AND THE EXTENT OF DELINQUENCIES OF EACH, SHALL, IN THE ABSENCE OF EVIDENCE TO THE CONTRARY OR COMPELLING CIRCUMSTANCES, BE PRESUMED TO BE UNABLE TO FULFILL THIS REQUIREMENT); "

THE REGULATIONS ARE IN ACCORD WITH VARIOUS DECISIONS OF OUR OFFICE HOLDING THAT A BIDDER'S PAST PERFORMANCE IS PROPERLY FOR CONSIDERATION IN DETERMINING WHETHER HE IS A RESPONSIBLE BIDDER. 37 COMP. GEN. 756; 39 ID. 705. MOREOVER, IN THE ABSENCE OF A SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR A DETERMINATION OF RESPONSIBILITY, OUR OFFICE IS NOT REQUIRED TO OBJECT TO THE DETERMINATION OF THE CONTRACTING AGENCY. COMP. GEN. 430, 435.

FROM THE FACTS SET FORTH, THERE IS NO QUESTION BUT THAT THE PERFORMANCE RECORD OF THE MORRIS PARK CONSTRUCTION COMPANY AS OF APRIL 1965, THE TIME THE INVITATION FOR BIDS ON THE NEWARK PROJECT WAS ISSUED, WAS POOR, THE COMPLETION OF THE WORK ON THE PORT JERVIS PROJECT ALREADY BEING 16 MONTHS LATE. SUCH EVIDENCE, IN OUR OPINION, WOULD HAVE BEEN SUFFICIENT TO SUPPORT THE CONTRACTING OFFICER'S FINDINGS AND DETERMINATION THAT THE UNINCORPORATED COMPANY WAS NOT A RESPONSIBLE BIDDER WITHIN THE MEANING OF THE PROCUREMENT REGULATIONS. THE QUESTION FOR OUR DETERMINATION, THEREFORE, IS WHETHER THE INCORPORATION OF THE COMPANY SUBSEQUENT TO THE AWARD OF THE CONTRACTS ON WHICH THE ORIGINAL FIRM WAS DELINQUENT HAS SO CHANGED THE STRUCTURE OF THE BUSINESS THAT THE CORPORATION SHOULD NOT BE CHARGED WITH THE DELINQUENCIES ATTRIBUTABLE TO THE ORIGINAL FIRM.

WHILE YOU URGE AS A BASIS FOR YOUR ENTITLEMENT TO AWARD OF THE NEWARK PROJECT CONTRACT THE ADDITION TO THE COMPANY STAFF OF A PROFESSIONAL ENGINEER IN THE OFFICE OF VICE PRESIDENT AND THE ACQUISITION OF A "PROFESSIONAL ATTITUDE," THE FACT REMAINS THAT THE PRESIDENT OF THE CORPORATION, WHO WAS ALSO THE MAJOR OWNER OF THE PREDECESSOR COMPANY DURING THE PERIOD OF ITS DELINQUENT CONTRACT PERFORMANCE HISTORY, CONTINUES TO OCCUPY A POSITION FROM WHICH IT APPEARS REASONABLE TO CONCLUDE THAT HE WILL EXERCISE CONTROL OVER ITS AFFAIRS. IN VIEW THEREOF, AND IN VIEW OF THE CLOSE RELATIONSHIP OF THE CORPORATION'S SECRETARY- TREASURER TO THE CORPORATION PRESIDENT, WE SEE NO BASIS UPON WHICH A CONCLUSION WOULD EITHER BE REQUIRED OR JUSTIFIED THAT ALL FACTORS WHICH MAY HAVE CONTRIBUTED TO THE FIRM'S PAST POOR PERFORMANCE HAVE EITHER THEN CORRECTED OR REMOVED BY THE CHANGES RESULTING FROM INCORPORATION.

IN THE CIRCUMSTANCES, WE MUST CONCUR WITH THE VIEW OF THE CONTRACTING AGENCY THAT THE PERFORMANCE RECORD OF THE UNINCORPORATED COMPANY WAS A PROPER MATTER FOR CONSIDERATION IN DETERMINING THE RESPONSIBILITY OF THE PRESENT CORPORATION. ACCORDINGLY, WE FIND NO LEGAL BASIS TO QUESTION THE ADMINISTRATIVE DETERMINATION THAT YOU DO NOT MEET THE STANDARDS PRESCRIBED BY THE REGULATIONS FOR A RESPONSIBLE BIDDER, AND YOUR PROTEST AGAINST THE CONSEQUENT REJECTION OF YOUR BID IS THEREFORE DENIED.