B-158609, APR. 20, 1966

B-158609: Apr 20, 1966

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FRANK HUNTER: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 18. YOUR BID WAS THE LOWEST OF NINE RECEIVED UNDER THE INVITATION. AS FOLLOWS: "THE AWARD OF A CONTRACT TO A SUPPLIER BASED ON LOWEST EVALUATED PRICE ALONE CAN BE FALSE ECONOMY IF THERE IS SUBSEQUENT DEFAULT. WHILE IT IS IMPORTANT THAT GOVERNMENT PURCHASES BE MADE AT THE LOWEST PRICE. PARAGRAPH 1-903.1 (III) IS THE SPECIFIC SECTION OF THE REGULATION UPON WHICH THE CONTRACTING OFFICER PREDICATED HER DECISION OF NONRESPONSIBILITY. A PROSPECTIVE CONTRACTOR MUST: "/III) HAVE A SATISFACTORY RECORD OF PERFORMANCE (CONTRACTORS WHO ARE SERIOUSLY DEFICIENT IN CURRENT CONTRACT PERFORMANCE. WHEN THE NUMBER OF CONTRACTS AND THE EXTENT OF DEFICIENCY OF EACH ARE CONSIDERED.

B-158609, APR. 20, 1966

TO MR. FRANK HUNTER:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 18, 1966, WHEREIN YOU PROTESTED THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 04-607-66-26, THAT SOLICITED BIDS FOR THE ALTERATION OF BUILDING NO. 747, AT NORTON AIR FORCE BASE, CALIFORNIA.

YOUR BID WAS THE LOWEST OF NINE RECEIVED UNDER THE INVITATION, HOWEVER, BASED ON YOUR PAST RECORD OF PERFORMANCE THE CONTRACTING OFFICER DETERMINED THAT YOU DID NOT MEET THE MINIMUM STANDARDS FOR RESPONSIBLE CONTRACTORS AS SET FORTH IN THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-903.1 (III), BECAUSE OF YOUR FAILURE TO APPLY THE NECESSARY TENACITY AND PERSEVERANCE TO DO AN ACCEPTABLE JOB.

ASPR, PARAGRAPH 1-902, GENERALLY EXPLAINS THE REASONS UNDERLYING THE CONTRACTING OFFICER'S ACTIONS, AND READS, IN PERTINENT PART, AS FOLLOWS:

"THE AWARD OF A CONTRACT TO A SUPPLIER BASED ON LOWEST EVALUATED PRICE ALONE CAN BE FALSE ECONOMY IF THERE IS SUBSEQUENT DEFAULT, LATE DELIVERIES, OR OTHER UNSATISFACTORY PERFORMANCE RESULTING IN ADDITIONAL PROCUREMENT OR ADMINISTRATIVE COSTS. WHILE IT IS IMPORTANT THAT GOVERNMENT PURCHASES BE MADE AT THE LOWEST PRICE, THIS DOES NOT REQUIRE AN AWARD TO A MARGINAL SUPPLIER SOLELY BECAUSE HE SUBMITS THE LOWEST BID OR OFFER. A PROSPECTIVE CONTRACTOR MUST DEMONSTRATE AFFIRMATIVELY HIS RESPONSIBILITY, * * *.'

ASPR, PARAGRAPH 1-903.1 (III) IS THE SPECIFIC SECTION OF THE REGULATION UPON WHICH THE CONTRACTING OFFICER PREDICATED HER DECISION OF NONRESPONSIBILITY. IT READS 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 (CONTRACTORS WHO ARE SERIOUSLY DEFICIENT IN CURRENT CONTRACT PERFORMANCE, WHEN THE NUMBER OF CONTRACTS AND THE EXTENT OF DEFICIENCY OF EACH ARE CONSIDERED, SHALL, IN THE ABSENCE OF EVIDENCE TO THE CONTRARY OR CIRCUMSTANCES PROPERLY BEYOND THE CONTROL OF THE CONTRACTOR,BE PRESUMED TO BE UNABLE TO MEET THIS REQUIREMENT). PAST UNSATISFACTORY PERFORMANCE, DUE TO FAILURE TO APPLY NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB, SHALL BE SUFFICIENT TO JUSTIFY A FINDING OF NONRESPONSIBILITY, * * *.'

THE GROUNDS UPON WHICH THE CONTRACTING OFFICER BASED THE DECISION ARE SPECIFICALLY SPELLED OUT IN A MEMORANDUM DATED SEPTEMBER 24, 1966, WHICH IS A PART OF THE ADMINISTRATIVE REPORT, AND READS, IN PART, AS FOLLOWS:

"2. SPECIFIC EXAMPLES OF INDIFFERENT PERFORMANCE ARE:

"A. HE DID NOT MAINTAIN SPECIFIED SUPERVISION OVER HIS WORK. DURING HIS FREQUENT ABSENCES FROM THE JOB SITE, HE DID NOT HAVE A COMPETENT SUPERINTENDENT OVERSEEING THE WORK. FURTHER, IT WAS DIFFICULT TO CONTACT HIM WHEN THE INSPECTOR AND CONTRACTING OFFICER HAD PROBLEMS WHICH REQUIRED EARLY DECISION.

"B. THE LACK OF ADEQUATE SUPERVISION RESULTED IN POOR SCHEDULING OF SUB- CONTRACTORS SO THAT THE VARIOUS ITEMS OF WORK WERE NOT COMPLETED IN REQUIRED SEQUENCE. THIS RESULTED IN DELAYS AND REQUIRED UNNECESSARY WORK- AROUNDS.

"C. BECAUSE OF INDIFFERENT WORKMANSHIP, PRE-FINAL INSPECTIONS GENERALLY DISCLOSED MANY DEFICIENCIES AND UNCOMPLETED ITEMS REQUIRING CORRECTION.

"D. THE FOLLOWING TABULATION OF ACTUAL VS. SCHEDULED COMPLETION DATES IS AN INDICATOR OF HIS PERFORMANCE LEVEL:

TABLE

PROJECT SCHEDULED ACTUAL NOR-55-3

20 JUN 3 JUL NOR-31-3 29 JUN 18 SEP

NOR-78-5 6 AUG NOT FINISHED NOR-157-0

4 JUN 23 JUL

"E. THE CONTRACTORS INCOMPETENCY AND LACK OF TECHNICAL CAPABILITY WAS PARTICULARLY EVIDENT ON PROJECTS INVOLVING MECHANICAL EQUIPMENT.

"3. ALL OF THE FOREGOING RESULT IN THE EXPENDITURE OF ADDITIONAL INSPECTOR EFFORT AND TIME. BECAUSE OF THE PERFUNCTORY QUALITY OF HIS WORK, MORE AND CLOSER CONSTRUCTION SURVEILLANCE IS REQUIRED THAN FOR A MORE COMPETENT AND CONSCIENTIOUS CONTRACTOR. CONTRACT TIME OVERRUNS ALSO REQUIRE ADDED INSPECTOR TIME.'

A DETERMINATION OF RESPONSIBILITY IS PRIMARILY THE FUNCTION OF THE CONTRACTING OFFICER, AND IS NECESSARILY A MATTER OF JUDGMENT INVOLVING CONSIDERABLE RANGE OF DISCRETION. WHERE SUCH DETERMINATION IS BASED UPON SUBSTANTIAL EVIDENCE THERE IS NO VALID BASIS UPON WHICH WE MAY SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER. 39 COMP. GEN. 705; ZEPHYR AIRCRAFT CORPORATION V. UNITED STATES, 122 CT.CL. 523.

IN REGARD TO YOUR COMPLAINT THAT THE CONTRACTING OFFICER PARTIALLY BASED HER DECISION ON A RECORD OF DELINQUENCIES DATING BACK TO RECENTLY "COMPLETED, ACCEPTED, AND DEAD CONTRACTS," YOUR ATTENTION IS INVITED TO ASPR 1-903.1 (III), CITED ABOVE, WHICH SPECIFICALLY STATES THAT SUCH EVIDENCE IS VALID AND SHALL BE TAKEN INTO CONSIDERATION BY THE CONTRACTING OFFICER. ALSO ASPR 1-905.1/A) AND (B) PROVIDE THAT THE CONTRACTING OFFICER MUST MAKE MAXIMUM USE OF ALL INFORMATION THAT IS CURRENTLY VALID.

IN OUR OPINION THE INFORMATION THE CONTRACTING OFFICER HAD BEFORE HER WAS SUFFICIENT TO SUPPORT THE DETERMINATION THAT YOU WERE NOT A RESPONSIBLE BIDDER UNDER THE STANDARDS SET FORTH IN THE ABOVE CITED PORTIONS OF ASPR.

IN THE CIRCUMSTANCES NO LEGAL BASIS EXISTS FOR DISTURBING THE ADMINISTRATIVE ACTION TAKEN.