B-157730, DEC. 14, 1965

B-157730: Dec 14, 1965

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KREBS AND LEVY: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 22. BIDS WERE OPENED ON MAY 27. THE THEN-CURRENT CONTRACT (AF 04 (604/ 2427) FOR PACKING AND CRATING SERVICES AT THIS BASE WAS BEING PERFORMED BY COLONIAL FOR THE PERIOD THROUGH JUNE 14. THE BID OF COLONIAL WAS REJECTED BY THE CONTRACTING OFFICER BECAUSE HE WAS UNABLE TO MAKE AN AFFIRMATIVE DETERMINATION THAT YOUR CLIENT MET THE MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS SET FORTH IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-903. A PROSPECTIVE CONTRACTOR MUST: "/III)HAVE A SATISFACTORY RECORD OF PERFORMANCE * * * "/IV) HAVE A SATISFACTORY RECORD OF INTEGRITY. * * * THE DETERMINATION OF NONRESPONSIBILITY WAS BASED ON REASONS OTHER THAN CAPACITY AND CREDIT.

B-157730, DEC. 14, 1965

TO PARICHAN, KREBS AND LEVY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 22, 1965, WITH ENCLOSURES, PROTESTING, ON BEHALF OF THE COLONIAL VAN AND STORAGE COMPANY, AGAINST THE ACTION OF THE CASTLE AIR FORCE BASE, CALIFORNIA, IN REJECTING THAT COMPANY'S BID SUBMITTED IN RESPONSE TO DEPARTMENT OF THE AIR FORCE INVITATION NO. 04-604-65-63.

THE BASE PROCUREMENT OFFICE, CASTLE AIR FORCE BASE, CALIFORNIA, BY THE REFERRED-TO INVITATION REQUESTED BIDS FOR FURNISHING SERVICES AND SUPPLIES INCIDENT TO THE SHIPMENT OF AUTHORIZED HOUSEHOLD GOODS AND PERSONAL EFFECTS OF MILITARY AND CIVILIAN PERSONNEL DURING THE PERIOD BEGINNING JUNE 15, 1965, AND ENDING JUNE 14, 1966.

BIDS WERE OPENED ON MAY 27, 1965, AND IT APPEARED THAT THE COLONIAL VAN AND STORAGE COMPANY, HEREINAFTER REFERRED TO AS COLONIAL, SUBMITTED THE LOWEST AGGREGATE TOTAL BID IN THE AMOUNT OF $82,225 AND THAT THE SMITH VAN AND STORAGE CO. SUBMITTED THE NEXT LOWEST AGGREGATE TOTAL BID IN THE AMOUNT OF $82,832.50. THE THEN-CURRENT CONTRACT (AF 04 (604/ 2427) FOR PACKING AND CRATING SERVICES AT THIS BASE WAS BEING PERFORMED BY COLONIAL FOR THE PERIOD THROUGH JUNE 14, 1965. HOWEVER, THE BID OF COLONIAL WAS REJECTED BY THE CONTRACTING OFFICER BECAUSE HE WAS UNABLE TO MAKE AN AFFIRMATIVE DETERMINATION THAT YOUR CLIENT MET THE MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS SET FORTH IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-903, WHICH PROVIDES IN RELEVANT PART AS FOLLOWS:

"1-903.1 GENERAL STANDARDS. EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH 1-903, A PROSPECTIVE CONTRACTOR MUST:

"/III)HAVE A SATISFACTORY RECORD OF PERFORMANCE * * *

"/IV) HAVE A SATISFACTORY RECORD OF INTEGRITY; * * *

THE DETERMINATION OF NONRESPONSIBILITY WAS BASED ON REASONS OTHER THAN CAPACITY AND CREDIT. IT RELATED SPECIFICALLY TO COLONIAL'S UNSATISFACTORY PERFORMANCE UNDER CONTRACT NO. AF 04/604/-2427 WHICH WAS CONSIDERED BY THE CONTRACTING OFFICER AS MARGINAL AND WHICH WAS NOT ACCEPTABLE UNDER DEFENSE PROCUREMENT CIRCULAR NUMBER 9, JUNE 18, 1964. IT IS REPORTED THAT AT THE TIME OF THE OPENING OF BIDS THE CONTRACTING OFFICER WAS IN THE PROCESS OF TERMINATING COLONIAL'S CONTRACT FOR DEFAULT; HOWEVER, SINCE THERE REMAINED LESS THAN 30 DAYS UNDER THE CONTRACT, IT WAS DETERMINED TO CONTINUE THE CONTRACT RATHER THAN TO REPROCURE THE SERVICES. ON JUNE 18, 1965, CONTRACT NO. AF 04/604/-2578 WAS AWARDED TO THE SMITH VAN AND STORAGE CO.

YOU CONTEND THAT THE PERFORMANCE OF COLONIAL UNDER THE PREVIOUS CONTRACT WAS IN ACCORDANCE WITH BEST COMMERCIAL PRACTICES AS PROVIDED BY THE CONTRACT AND THAT THE REJECTION OF COLONIAL'S BID UNDER THE INVITATION IN QUESTION WAS UNWARRANTED. YOU ALLEGE THAT COLONIAL HAS MADE APPROXIMATELY 2,000 SHIPMENTS UNDER ITS PREVIOUS CONTRACT AND THAT THERE HAVE BEEN ONLY 35 COMPLAINTS, OF WHICH 10 WERE MISMARKS; THAT SINCE THERE WERE STENCILED FROM GOVERNMENT BILLS OF LADING, THEY WERE DUE TO CIRCUMSTANCES BEYOND COLONIAL'S CONTROL; AND THAT THE REMAINING 25 COMPLAINTS REPRESENT ONLY A LITTLE OVER 1 PERCENT OF THE TOTAL SHIPMENTS. YOU STATE THAT ACCORDING TO THE NATIONAL FURNITURE WAREHOUSEMEN'S ASSOCIATION, 5 PERCENT IS CONSIDERED AVERAGE IN THE BUSINESS.

"WHILE PARAGRAPH SP-2--- "PERFORMANCE"--- OF THE SPECIAL PROVISIONS OF THE PREVIOUS CONTRACT DID PROVIDE THAT THE SERVICES CALLED FOR THEREUNDER SHALL BE PERFORMED IN ACCORDANCE WITH BEST COMMERCIAL PRACTICES, IT SHOULD BE NOTED THAT IT ALSO PROVIDES THAT SUCH SERVICES SHALL BE PERFORMED "TO THE SATISFACTION OF THE CONTRACTING OFFICER.' IT IS EVIDENT FROM THE RECORD THAT THE SERVICES PERFORMED BY COLONIAL WERE NOT TO THE SATISFACTION OF THE CONTRACTING OFFICER AND SUCH FACT IS EVIDENCED BY THE ACTION OF SUCH OFFICER IN ISSUING "SHOW CAUSE NOTICE" DATED MAY 10, 1965, IN WHICH COLONIAL WAS REQUESTED TO SHOW CAUSE WHY THE CONTRACT SHOULD NOT BE TERMINATED FOR UNSATISFACTORY PERFORMANCE.

IT IS PROVIDED AT 10 U.S.C. 2305 (C) THAT CONTRACT AWARDS PURSUANT TO FORMAL ADVERTISING SHALL BE MADE TO "THE RESPONSIBLE BIDDER" WHOSE BID IS RESPONSIVE AND WILL BE MOST ADVANTAGEOUS TO THE UNITED STATES. IT IS WELL SETTLED THAT THE DETERMINATION OF A BIDDER'S RESPONSIBILITY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION, AND OUR OFFICE HAS CONSISTENTLY ADHERED TO THE RULE THAT THE ADMINISTRATIVE DETERMINATION WILL NOT BE QUESTIONED UNLESS ARBITRARY, CAPRICIOUS OR NOT BASED ON SUBSTANTIAL EVIDENCE. 38 COMP. GEN. 131; 37 ID. 430, 435.

THIS RULE HAS BEEN APPLIED ADVERSELY TO A PROSPECTIVE CONTRACTOR NOTWITHSTANDING A CERTIFICATE OF COMPETENCY HAD BEEN ISSUED BY THE SMALL BUSINESS ADMINISTRATION WHERE THE EVIDENCE OF A DEFICIENT MOTIVATION TO DO AN ACCEPTABLE JOB UNDER THE PRIOR ANNUAL CONTRACT CONSISTS OF MINOR FAULTS WHICH CUMULATIVELY RESULT IN UNDULY INCREASING THE GOVERNMENT'S BURDEN OF ADMINISTERING THE CONTRACT. 43 COMP. GEN. 257, 263, 264.

ON THE RECORD BEFORE US, WE CONCLUDE THAT THE CONTRACTING OFFICER'SREFUSAL TO AFFIRMATIVELY FIND YOUR CLIENT RESPONSIBLE FOR THE SUBJECT CONTRACT WAS BASED ON SUBSTANTIAL EVIDENCE THAT SITUATION RESULTING FROM FACTORS NOT INCLUDED IN CAPACITY OR CREDIT EXISTS TO JUSTIFY THE ACTION TAKEN. SEE B-151407, DATED SEPTEMBER 25, 1963, 43 COMP. GEN. 298.