B-162849, JAN. 25, 1968

B-162849: Jan 25, 1968

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LOW BIDDER WHO WAS DETERMINED TO BE NONRESPONSIVE BASED ON PREAWARD SURVEY AND UNSATISFACTORY PERFORMANCE UNDER SEVERAL PRIOR CONTRACTS MAY NOT HAVE SUCH DETERMINATION QUESTIONED IN ABSENCE OF SHOWING OF BAD FAITH OR LACK OF SUBSTANTIAL EVIDENCE. SINCE BID WAS UNDER $2. 500 REFERRAL TO SBA FOR CERTIFICATE OF COMPETENCY WAS NOT REQUIRED. ON BASIS OF BELIEF THAT IT WAS ERRONEOUS IS NOT IMPROPER ACTION. RAYMOND PHELPS: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF OCTOBER 31 AND LETTER DATED NOVEMBER 5. THE FOUR BIDS RECEIVED UNDER THE INVITATION WERE OPENED AS SCHEDULED. 424.99 WAS THE LOWEST BID RECEIVED ON THE PROJECT. 044 AND THE GOVERNMENT'S ESTIMATE WAS IN THE AMOUNT OF $5. THAT YOUR BID PRICE WAS CONSIDERABLY LOWER THAN COMPETING BIDS AND THE GOVERNMENT'S ESTIMATE.

B-162849, JAN. 25, 1968

BIDDERS - RESPONSIBILITY - PRIOR UNSATISFACTORY SERVICE DECISION TO RAYMOND PHELPS CONCERNING PROTEST AGAINST REJECTION OF LOW BID FOR REMOVAL AND DISPOSAL OF SUNKEN TANK BARGE AND GASOLINE FROM NORTHPORT HARBOR, LONG ISLAND, N.Y. LOW BIDDER WHO WAS DETERMINED TO BE NONRESPONSIVE BASED ON PREAWARD SURVEY AND UNSATISFACTORY PERFORMANCE UNDER SEVERAL PRIOR CONTRACTS MAY NOT HAVE SUCH DETERMINATION QUESTIONED IN ABSENCE OF SHOWING OF BAD FAITH OR LACK OF SUBSTANTIAL EVIDENCE. SINCE BID WAS UNDER $2,500 REFERRAL TO SBA FOR CERTIFICATE OF COMPETENCY WAS NOT REQUIRED. FACT THAT CONTRACTING OFFICER TRIED TO GET BIDDER TO WITHDRAW BID, AFTER VERIFICATION, ON BASIS OF BELIEF THAT IT WAS ERRONEOUS IS NOT IMPROPER ACTION. SUBSEQUENT EVENTS SUBSTANTIATE GOVT. ACTION IN REJECTING A BID BASED ON RECOVERY OF SALVAGEABLE MATERIAL.

TO MR. RAYMOND PHELPS:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF OCTOBER 31 AND LETTER DATED NOVEMBER 5, 1967, PROTESTING AGAINST THE ACTION OF THE NEW YORK DISTRICT, CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY, IN REJECTING YOUR LOW BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS (IFB) NO. DACW51-68-B-0008.

THE INVITATION REQUESTED BIDS FOR THE REMOVAL AND DISPOSAL OF A SUNKEN TANK BARGE AND ITS CARGO OF APPROXIMATELY 5,000 GALLONS OF GASOLINE FROM NORTHPORT HARBOR, LONG ISLAND, NEW YORK. ON OCTOBER 5, 1967, THE FOUR BIDS RECEIVED UNDER THE INVITATION WERE OPENED AS SCHEDULED. YOUR BID IN THE AMOUNT OF $1,424.99 WAS THE LOWEST BID RECEIVED ON THE PROJECT. THE THREE OTHER BIDS RANGED FROM $3,740.80 TO $6,044 AND THE GOVERNMENT'S ESTIMATE WAS IN THE AMOUNT OF $5,670.

IN VIEW OF THE WIDE DISPARITY BETWEEN YOUR BID AND THE NEXT LOWEST BID RECEIVED AND THE GOVERNMENT'S ESTIMATE, THE CONTRACTING OFFICER NOTIFIED YOU BY LETTER DATED OCTOBER 10, 1967, THAT YOUR BID PRICE WAS CONSIDERABLY LOWER THAN COMPETING BIDS AND THE GOVERNMENT'S ESTIMATE, THUS INDICATING A POSSIBLE ERROR IN YOUR BID. IN VIEW THEREOF, VERIFICATION OF YOUR BID PRICE WAS REQUESTED. BY LETTER DATED OCTOBER 12, 1967, YOU CONFIRMED YOUR BID PRICE.

PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-905.4, A PREAWARD SURVEY WAS CONDUCTED OF YOUR CAPABILITIES AS A PROSPECTIVE GOVERNMENT CONTRACTOR AND IT WAS CONCLUDED THAT YOU DID NOT MEET THE MINIMUM STANDARDS OF RESPONSIBILITY PRESCRIBED BY ASPR 1-903 SINCE YOU FAILED TO SATISFACTORILY PERFORM PRIOR GOVERNMENT CONTRACTS. THE SURVEY INDICATED THAT YOU HAD PREVIOUSLY BEEN AWARDED FIVE WRECK REMOVAL CONTRACTS BY THE CORPS OF ENGINEERS; THAT ONLY ONE OF THESE CONTRACTS WAS COMPLETED BY YOU WITHIN THE CONTRACT TIME; THAT THREE CONTRACTS WERE COMPLETED LATE; AND THAT THE LAST CONTRACT WHICH YOU HELD WAS TERMINATED BY THE GOVERNMENT FOR DEFAULT.

BASED ON THE ADVERSE PREAWARD SURVEY, THE CONTRACTING OFFICER DETERMINED THAT YOU WERE NOT A RESPONSIBLE PROSPECTIVE CONTRACTOR AND THEREFORE AWARD COULD NOT BE MADE TO YOU UNDER THE REGULATIONS. FURTHER, SINCE YOUR BID WAS UNDER $2,500, IT WAS CONCLUDED, AND WE AGREE, THAT REFERRAL OF THE MATTER OF YOUR RESPONSIBILITY TO THE SMALL BUSINESS ADMINISTRATION (SBA) WAS NOT REQUIRED IN ACCORDANCE WITH THE CERTIFICATE OF COMPETENCY PROCEDURES PRESCRIBED IN ASPR 1-705.4. ACCORDINGLY, AWARD WAS MADE ON OCTOBER 30, 1967, TO SEAMAN MARINE, AS THE LOWEST RESPONSIBLE, RESPONSIVE BIDDER. IN THIS CONNECTION, IT IS REPORTED THAT ALL WORK WAS COMPLETED BY SEAMAN MARINE ON NOVEMBER 17, 1967, AND THAT IN THE COURSE OF THE WORK, IT WAS FOUND THAT THE SUNKEN TANK BARGE CONTAINED APPROXIMATELY 4,000 GALLONS OF GASOLINE. IT ALSO IS REPORTED THAT THE SUNKEN TANK BARGE WAS FOUND TO BE UNSALVAGEABLE AND WAS TOWED TO AN APPROVED DISPOSAL AREA IN LONG ISLAND SOUND IN THE VICINITY OF EATONS NECK, NEW YORK, WHERE IT WAS SUNK.

YOU CONTEND THAT IT WAS UNFAIR OF THE CONTRACTING OFFICER TO NOT AWARD THE CONTRACT IN QUESTION TO YOU SINCE YOU WERE THE LOW BIDDER AND WERE CAPABLE OF PERFORMING THE REQUIRED WORK. YOU STATE THAT THE CONTRACTING OFFICER TRIED TO PERSUADE YOU TO WITHDRAW YOUR LOW BID ON THE BASIS THAT IT WAS AN ERRONEOUS BID WHEN COMPARED WITH THE OTHER BIDS AND GOVERNMENT ESTIMATE. YOU ALLEGE THAT THE REASON WHY YOU QUOTED SUCH A LOW PRICE FOR THE JOB WAS THAT BECAUSE YOU WANTED TO OBTAIN FOR YOUR PERSONAL USE THE SUNKEN BARGE WHICH, YOU STATE, WAS WORTH A MINIMUM OF $4,000 TO YOU.

UNDER 10 U.S.C. 2305 (C) CONTRACTS MAY BE AWARDED UNDER ADVERTISED PROCUREMENTS ONLY TO RESPONSIBLE AND RESPONSIVE BIDDERS. CONSISTENT WITH THAT STATUTORY LIMITATION, ASPR 1-904.1 PRECLUDES AWARDS OF THIS KIND UNLESS THE CONTRACTING OFFICER FIRST MAKES AN AFFIRMATIVE DETERMINATION THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE UNDER THE CRITERIA SET OUT IN ASPR 1-903. ONE OF THE CRITERIA, SET OUT AT ASPR 1-903.1 (III), IS THAT A PROSPECTIVE CONTRACTOR TO QUALIFY AS RESPONSIBLE MUST HAVE A SATISFACTORY RECORD OF PERFORMANCE. THE DETERMINATION OF NONRESPONSIBILITY BY THE CONTRACTING OFFICER WAS BASED UPON YOUR UNFAVORABLE RECORD OF PERFORMANCE UNDER PRIOR WRECK REMOVAL CONTRACTS.

WE HAVE CONSISTENTLY HELD THAT IT IS THE RESPONSIBILITY OF THE CONTRACTING OFFICER TO DETERMINE THE RESPONSIBILITY OF A BIDDER (37 COMP. GEN. 430; 38 ID. 248; 39 ID. 468; 43 ID. 228), AND THAT SUCH DETERMINATION WILL NOT BE QUESTIONED BY OUR OFFICE IN THE ABSENCE OF A SHOWING OF BAD FAITH OR LACK OF SUBSTANTIAL EVIDENCE. 39 COMP. GEN. 705; 43 ID. 228. FIND NO BASIS, ON THE RECORD BEFORE US, TO QUESTION THE CONTRACTING OFFICER'S DETERMINATION IN THIS CASE, ESPECIALLY IN VIEW OF ASPR 1-705.4 WHICH PROVIDES THAT REFERRAL TO SBA IS NOT NECESSARY WHERE, AS HERE, THE PROPOSED AWARD IS LESS THAN $2,500.

IN REGARD TO THE ACTION OF THE DISTRICT ENGINEER IN TRYING TO PERSUADE YOU TO WITHDRAW YOUR BID WHICH, NOTWITHSTANDING YOUR VERIFICATION THEREOF, HE BELIEVED TO BE ERRONEOUS, WE ARE OF THE OPINION THAT SUCH ACTION WAS PROPER. SEE ASPR 2-406.3 (E) (2) WHICH PROVIDES FOR BID REJECTION WHEN THERE ARE "INDICATIONS OF ERROR SO CLEAR, AS REASONABLY TO JUSTIFY THE CONCLUSION THAT ACCEPTANCE OF THE BID WOULD BE UNFAIR TO THE BIDDER OR TO OTHER BONA FIDE BIDDERS.' MOREOVER, THE PRESENT RECORD SUBSTANTIATES THAT THE GOVERNMENT'S ACTION IN REJECTING YOUR BID WAS PROPER SINCE IT WAS BASED ON THE RECOVERY OF A SALVAGEABLE BARGE, WHEREAS, LATER EVENTS ESTABLISHED THAT THE BARGE WAS NOT IN FACT SALVAGEABLE.