B-163485, AUG. 6, 1968

B-163485: Aug 6, 1968

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THE INVITATION WAS SUB-DIVIDED INTO THREE SCHEDULES AND EIGHT ZONES AND IT APPEARED AFTER BID OPENING ON JANUARY 2. WHICHEVER IS TO THE ADVANTAGE OF THE GOVERNMENT. ITS BID WAS REJECTED AS NONRESPONSIVE TO THE AWARD CLAUSE OF THE INVITATION. CONCLUDED WITH A RECOMMENDATION OF "NO AWARD" ON THE BASIS THAT YOUR WAREHOUSE WAS CONSIDERED TO BE A MAJOR FIRE HAZARD. IT WAS REPORTED THAT EVEN THOUGH YOU HAD ADVANCE NOTICE OF THE VISIT BY THE PREAWARD SURVEY TEAM. THE TEAM FOUND THAT HOUSEHOLD GOODS WERE STORED IN YOUR WAREHOUSE WHILE NUMEROUS FIRE HAZARDS EXISTED. IT WAS NOTED THAT THERE WAS NO FIRE-FIGHTING EQUIPMENT IN THE BUILDING. IT WAS SUBSEQUENTLY DETERMINED THAT MR. WAS ASTRO'S VICE PRESIDENT AND GENERAL MANAGER.

B-163485, AUG. 6, 1968

TO ASTRO VAN-PAK, INC.:

BY TELEGRAM DATED FEBRUARY 2, 1968, THE HONORABLE JOEL T. BROYHILL, HOUSE OF REPRESENTATIVES, PROTESTED, ON YOUR BEHALF, THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. DABC03-68-B 0018, ISSUED BY THE PURCHASING DIVISION, HEADQUARTERS CAMERON STATION, ALEXANDRIA, VIRGINIA. THE INVITATION, ISSUED DECEMBER 1, 1967, SOLICITED BIDS FOR THE PREPARATION AND SHIPMENT OF HOUSEHOLD GOODS AND UNACCOMPANIED BAGGAGE, AND RELATED SERVICES, TO BE PERFORMED DURING CALENDAR YEAR 1968 IN THE WASHINGTON, D.C., METROPOLITAN AREA. THE INVITATION WAS SUB-DIVIDED INTO THREE SCHEDULES AND EIGHT ZONES AND IT APPEARED AFTER BID OPENING ON JANUARY 2, 1968, THAT ASTRO HAD SUBMITTED THE LOWEST BIDS FOR ZONES I, II, AND III OF SCHEDULE I, AND ZONES IV AND V OF SCHEDULE II. PAGE 5 OF THE INVITATION PROVIDED THAT AWARD OF THE CONTRACT WOULD BE MADE IN ACCORDANCE WITH THE PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 22- 603.8 AS FOLLOWS:

"SUBJECT TO THE PROVISIONS CONTAINED HEREIN, AWARD GENERALLY SHALL BE MADE TO A SINGLE BIDDER FOR ALL THE ITEMS, FOR ONE OR MORE ZONES, IN THE INVITATION FOR BIDS; HOWEVER, THE GOVERNMENT RESERVES THE RIGHT TO AWARD ON THE BASIS OF A SCHEDULE OF ITEMS, FOR ONE OR MORE ZONES, WHICHEVER IS TO THE ADVANTAGE OF THE GOVERNMENT. BIDDERS MUST OFFER UNIT PRICES FOR EACH ITEM LISTED, FOR ONE OR MORE ZONES, IN ORDER THAT BIDS MAY BE PROPERLY EVALUATED. FAILURE TO DO SO SHALL BE CAUSE FOR REJECTION OF THE ENTIRE BID. ALSO, BIDDERS FAILING TO GUARANTEE DAILY CAPABILITIES IN THE SPACE PROVIDED IN THIS INVITATION FOR BIDS SHALL BE CONSIDERED NOT RESPONSIVE AND INELIGIBLE FOR AWARD. THE GOVERNMENT RESERVES THE RIGHT TO AWARD SECONDARY CONTRACTS AS STANDBY CONTRACTS AT THE UNIT PRICES OFFERED UNLESS THE BIDDER SPECIFIES OTHERWISE IN ITS BID. ANY BID WHICH STIPULATES MINIMUM CHARGES OR GRADUATED PRICES FOR ANY OR ALL ITEMS SHALL BE REJECTED.' (UNDERSCORING SUPPLIED.)

IN THIS RESPECT, THE INVITATION INFORMED PROSPECTIVE BIDDERS OF THE GOVERNMENT'S ESTIMATED QUANTITIES FOR EACH ZONE WITHIN EACH SCHEDULE, AND REQUIRED THAT BIDDERS GUARANTEE AS TO EACH ZONE THEIR DAILY CAPABILITY, IN POUNDS, WHICH THEY WOULD MEET IF AWARDED THE CONTRACT.

BECAUSE ASTRO FAILED TO STATE ITS GUARANTEED DAILY CAPABILITIES FOR ZONES I AND III OF SCHEDULE I, ITS BID WAS REJECTED AS NONRESPONSIVE TO THE AWARD CLAUSE OF THE INVITATION, QUOTED ABOVE.

AS TO ASTRO'S LOW BIDS FOR ZONE II OF SCHEDULE I AND ZONES IV AND V OF SCHEDULE II, THE CONTRACTING OFFICER REQUESTED ON JANUARY 9, 1968, A PREAWARD SURVEY OF YOUR FACILITIES FOR THE EXPRESS PURPOSE OF ASCERTAINING YOUR RESPONSIBILITY AS A PROSPECTIVE GOVERNMENT CONTRACTOR PURSUANT TO THE REQUIREMENTS OF ASPR 1-904.1. THIS REGULATION PRECLUDES THE AWARD OF A CONTRACT TO A FIRM NOT AFFIRMATIVELY DETERMINED BY THE CONTRACTING OFFICER TO BE A RESPONSIBLE BIDDER FOR THE PURPOSES OF THE ANTICIPATED CONTRACT. THE PREAWARD SURVEY REPORT DATED JANUARY 19, 1968, CONCLUDED WITH A RECOMMENDATION OF "NO AWARD" ON THE BASIS THAT YOUR WAREHOUSE WAS CONSIDERED TO BE A MAJOR FIRE HAZARD. SPECIFICALLY, IT WAS REPORTED THAT EVEN THOUGH YOU HAD ADVANCE NOTICE OF THE VISIT BY THE PREAWARD SURVEY TEAM, THE TEAM FOUND THAT HOUSEHOLD GOODS WERE STORED IN YOUR WAREHOUSE WHILE NUMEROUS FIRE HAZARDS EXISTED, SUCH AS THE PRESENCE OF GASOLINE OPERATED MOTOR VANS, FLAMMABLE LIQUIDS, AND COMPRESSED GAS. ALSO, IT WAS NOTED THAT THERE WAS NO FIRE-FIGHTING EQUIPMENT IN THE BUILDING.

PREDICATED UPON THE NEGATIVE INFORMATION CONTAINED IN THE PREAWARD SURVEY, THE CONTRACTING OFFICER INSTIGATED A FURTHER INQUIRY INTO ASTRO'S ABILITY TO SATISFACTORILY PERFORM THE ADVERTISED SERVICES. IT WAS SUBSEQUENTLY DETERMINED THAT MR. CECIL J. SILLS, PRESIDENT AND OWNER OF SAFEWAY MOVING AND STORAGE COMPANY, WAS ASTRO'S VICE PRESIDENT AND GENERAL MANAGER, AND APPARENTLY THE ONLY OFFICER OF THAT CORPORATION THE SURVEY TEAM FOUND CAPABLE OF ANSWERING QUESTIONS RELATIVE TO THE PAST, PRESENT AND FUTURE OPERATIONS OF ASTRO. MOREOVER, IT IS REPORTED THAT THE MANAGEMENT/OWNERSHIP, OPERATING RIGHT, AND TRANSPORTATION EQUIPMENT OF SAFEWAY HAD BEEN TRANSFERRED TO ASTRO ABOUT A YEAR PRIOR TO THE PREAWARD SURVEY. THE CONTRACTING OFFICER FURTHER REPORTED THAT HIS DETERMINATION THAT ASTRO WAS NOT QUALIFIED TO PERFORM THE CONTRACT WAS PREDICATED ON THE BASIS THAT THE MANAGEMENT OF ASTRO HAD IN THE PAST DEMONSTRATED A LACK OF PERSEVERANCE AND BUSINESS INTEGRITY IN CONNECTION WITH SEVERAL RECENT CONTRACTS AWARDED TO SAFEWAY.

SPECIFICALLY, A CONTRACT AWARDED TO SAFEWAY DURING JANUARY 1967, SIMILAR TO THE INSTANT PROCUREMENT, HAD BEEN TERMINATED FOR DEFAULT DUE TO MR. SILLS' EXPRESSED INTENTION NOT TO PERFORM THAT CONTRACT UNTIL HE RECEIVED PAYMENTS UNDER SEVERAL OTHER GOVERNMENT CONTRACTS WHICH WERE BEING WITHHELD PENDING HIS APPEALS BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS (ASBCA) FROM THE CONTRACTING OFFICER'S DECISIONS CONCERNING NEGLIGENT FIRE LOSSES. WE NOTE THAT SUBSEQUENT TO AWARD OF THE PROTESTED CONTRACT, THE BOARD FOUND THAT THE WAREHOUSE FIRE HAD BEEN CAUSED BY THE NEGLIGENT ACTS OF SAFEWAY AND REMANDED THE APPEAL TO THE CONTRACTING OFFICER FOR A DETERMINATION OF THE QUANTUM OF LIABILITY. SEE ASBCA 12167 AND 12401 DATED FEBRUARY 9, 1968. IT APPEARS THAT SAFEWAY'S LIABILITY FOR THE NEGLIGENT LOSS BY FIRE WAS FIXED AT $194,720.24 AND AS OF MAY 7, 1968, NO SETTLEMENT HAS BEEN MADE BY SAFEWAY. FURTHER EVIDENCE OF LACK OF RESPONSIBILITY BY THE COMMON MANAGEMENT OF SAFEWAY AND ASTRO IS REPORTED BY THE CONTRACTING OFFICER AS FOLLOWS: "1. ON 10 JUNE 1963 THE SAFEWAY MOVING AND STORAGE COMPANY WAREHOUSE FACILITIES LOCATED AT 1325 WILKES STREET, ALEXANDRIA, VIRGINIA, WERE INSPECTED BY MEMBERS OF THE JOINT MILITARY HOUSEHOLD GOODS INSPECTION TEAM AND ACCOMPANIED BY MR. C. SILLS. THE FACILITIES WERE RATED SATISFACTORY BUT ONLY AFTER TRASH ON THE SIDE OF THE BUILDING, A FIRE HAZARD, WAS CLEANED UP BY TWO EMPLOYEES OF SAFEWAY AS ASSIGNED BY MR. SILLS. "2. ON 3 OCTOBER 1963 THE WAREHOUSE FACILITIES OF SAFEWAY MOVING AND STORAGE COMPANY LOCATED AT 2040 DUKE STREET, ALEXANDRIA, VIRGINIA, WERE INSPECTED BY MEMBERS OF THE JOINT MILITARY HOUSEHOLD GOODS INSPECTION TEAM, ACCOMPANIED BY MRS. SILLS. THE FOLLOWING DISCREPANCIES WERE NOTED: NO C02 FIRE EXTINGUISHERS WERE LOCATED CONVENIENTLY NEAR THE MAIN SWITCHBOX, NO FIRE-FIGHTING PLAN; NO SMOKING SIGNS WERE NOT POSTED; A MR. WILLIAM KIDD WAS SEEN SMOKING IN THE WAREHOUSE AND IN A VAN NEARBY; PERSONAL PROPERTY OF MEMBERS OF THE DEPARTMENT OF DEFENSE WAS NOT BEING STORED AND CARED FOR PROPERLY. "3. ON 26 MAY 1966 THE WAREHOUSE FACILITIES OF SAFEWAY MOVING AND STORAGE COMPANY LOCATED AT 1325 S. WILKES STREET, ALEXANDRIA, VIRGINIA, WERE INSPECTED BY A HOUSEHOLD GOODS INSPECTOR OF JOINT HOUSEHOLD GOODS SHIPPING OFFICE, WASHINGTON, D.C. (JHGSOWA), ACCOMPANIED BY MR. SILLS. IT WAS FOUND TO BE UNSATISFACTORY BECAUSE: THERE WERE INADEQUATE LIGHTS IN THE WORKING AREAS; A NO SMOKING RULE WAS NOT CONSPICUOUSLY POSTED; THERE WAS AN INADEQUACY OF FIRE EXTINGUISHERS OF THE PROPER TYPE; NO DEFINITE FIRE-FIGHTING PLAN POSTED; INTERNAL CONTROL OVER LOCKING DEVICES TO PREVENT PILFERAGE WERE LACKING BECAUSE THE ALLEY DOOR WAS NOT SECURE; THERE WAS NO FIRE EXTINGUISHER SUITABLE FOR ELECTRICAL FIRES LOCATED CONVENIENTLY NEAR THE MAIN SWITCHBOX; LOTS OF PERSONAL PROPERTY OF MEMBERS OF THE DEPARTMENT OF DEFENSE WERE INADEQUATELY MARKED TO FACILITATE EASY LOCATION AND IDENTIFICATION; THERE WAS TRASH AND DEBRIS IN THE REAR OF THE BUILDING; THERE WAS NO REGULAR PROGRAM TO CONTROL RODENT AND INSECT INFESTATION; THERE WAS NO RODENT BAIT PLACED THROUGHOUT THE BUILDING; THERE WAS NOT AN ADEQUATE LOCATOR SYSTEM OF PROPERTY CONTAINED WITHIN THESE WAREHOUSE FACILITIES. "THIS FACILITY WAS INSPECTED ON 2 JUNE 1966 BY A JHGSOWA INSPECTOR, ACCOMPANIED BY MR. SILLS, THE OWNER, AND FOUND TO BE SATISFACTORY. "4. ON 16 NOVEMBER 1966 THE WAREHOUSE FACILITIES OF SAFEWAY MOVING AND STORAGE COMPANY LOCATED AT 1325 WILKES STREET, ALEXANDRIA, VIRGINIA, WERE FOUND TO BE UNSATISFACTORY BECAUSE: THERE WAS AN EXCESS ACCUMULATION OF DUST AND TRASH ON THE FLOOR OF THE WAREHOUSE; UPHOLSTERED AND FINISHED FURNITURE WAS NOT PROPERLY PROTECTED, PACKING MATERIAL WAS SCATTERED THROUGHOUT THE WAREHOUSE; FIRE EXTINGUISHERS DATED MARCH 1965 WERE OVERDUE FOR INSPECTION; THERE WAS NO FIRE EXTINGUISHER SUITABLE FOR ELECTRICAL FIRES LOCATED CONVENIENTLY NEAR THE MAIN SWITCHBOX; NEITHER NO SMOKING SIGNS NOR A FIRE-FIGHTING PLAN WAS POSTED. "MR. SILLS WAS INFORMED OF ALL THE ABOVE DISCREPANCIES AND THAT HIS FACILITIES WOULD BE REINSPECTED ON 21 NOVEMBER 1966. ON 21 NOVEMBER 1966 THESE FACILITIES WERE INSPECTED BY AN INSPECTOR FROM JHGSOWA AND WERE STILL FOUND TO BE UNSATISFACTORY BECAUSE: THERE WAS TRASH BY THE DOOR TO BE MOVED AND THE NO SMOKING SIGNS AND THE FIRE-FIGHTING PLAN HAD NOT BEEN POSTED. THIS WAS BROUGHT TO THE ATTENTION OF MR. SILLS BY THE JHGSOWA INSPECTOR. ON 22 NOVEMBER 1966 THE FACILITIES WERE AGAIN INSPECTED BY THE JHGSOWA INSPECTOR ACCOMPANIED BY MR. SILLS AND WERE FOUND TO BE SATISFACTORY. "5. ON 16 MARCH 1967 THE WAREHOUSE FACILITIES OF SAFEWAY MOVING AND STORAGE COMPANY LOCATED AT 1325 WILKES STREET, ALEXANDRIA, VIRGINIA, WERE INSPECTED BY JHGSOWA INSPECTOR ACCOMPANIED BY MR. SILLS AND WERE FOUND TO BE UNSATISFACTORY BECAUSE: TRASH, DEBRIS AND UNCONTROLLED VEGETATION WERE PERMITTED TO ACCUMULATE WITHIN 20 FEET OF THE WAREHOUSE; RUGS, CARPETS AND UPHOLSTERED FURNITURE WAS NOT PROTECTED WITH MOTH PREVENTATIVE WHEN REQUIRED BY THE STORAGE PERIOD; RUGS, CARPETS, AND UPHOLSTERED FURNITURE WAS NOT PLACED IN INDIVIDUAL CONTAINERS OR INDIVIDUALLY WRAPPED AND SECURED WITH PRESSURE-SENSITIVE TAPE OR TWINE WHEN UPHOLSTERED FURNITURE MAY BE PLACED RIGHT-SIDE-UP SO THAT NO ARTICLES TOUCH OR PRESS AGAINST THE UPHOLSTERED; MATTRESSES WERE NOT PROTECTED TO PREVENT DAMAGE; THE FLOORS OF THE WAREHOUSE WERE NOT CLEAN OR FREE OF TRASH AND DEBRIS; TRASH AND DEBRIS WAS NOT NORMALLY REMOVED FROM THE STORAGE AREA EACH DAY; RODENT BAITS WERE NOT PLACED THROUGHOUT THE BUILDING; HOUSEHOLD GOODS WERE STACKED IN THE AISLES FOR A LENGTH OF TIME OTHER THAN FOR MOVING IN AND OUT; DUST, TRASH, PACKING MATERIAL, ETC., WAS ALLOWED TO ACCUMULATE IN OBSCURE PLACES. MR. SILLS WAS ADVISED BY THE JHGSOWA INSPECTOR OF ALL OF THESE DISCREPANCIES AND DEFICIENCIES AND TOLD THAT HIS FACILITIES WOULD BE REINSPECTED ON 24 MARCH 1967. "ON 24 MARCH 1967 THEY WERE REINSPECTED AND FOUND TO BE SATISFACTORY. MR. SILLS, THE OWNER, ACCOMPANIED THE INSPECTOR. "6. ON 27 DECEMBER 1967 THE WAREHOUSE FACILITIES OF ASTRO VAN LINES/ASTRO VAN-PAK, INC., LOCATED AT 5610 SCOVILLE STREET, FALLS CHURCH, VIRGINIA, WERE INSPECTED BY AN INSPECTOR FROM JHGSOWA WITH THE OWNER, MR. JERRY SILLS, AND WERE FOUND TO BE UNSATISFACTORY BECAUSE: THERE WAS A QUESTION OF AREA ALLOCATED TO ASTRO VAN LINES FOR PLANT OPERATION; THERE WAS NO SIGN ON THE BUILDING TO IDENTIFY THE OCCUPANT; THERE WAS NO FIRE- FIGHTING PLAN POSTED; THE FIRE DOOR NEEDED TO BE SECURED TO SEPARATE TWO DIFFERENT COMPANIES WITHIN THE BUILDING; THERE WAS NO FIRE RATING LETTER FROM THE VIRGINIA INSURANCE RATING BUREAU REQUIRED TO MEET DOD ESTABLISHED FIRE PROTECTION STANDARDS AND CRITERIA; NO CERTIFICATE OF OCCUPANCY HAD BEEN OBTAINED FROM THE CITY; THERE WERE NO VEHICLES OR EQUIPMENT AVAILABLE AT THE TIME OF THIS INSPECTION.'

WE HAVE BEEN ADVISED BY THE ARMY THAT THE FOREGOING INSPECTIONS WERE CONDUCTED DURING THE COURSE OF PERFORMANCE UNDER SEVERAL CONTRACTS AND THAT SUCH INSPECTIONS ARE REQUIRED IN THIS TYPE OF CONTRACT.

IN VIEW OF THE FOREGOING, THE CONTRACTING OFFICER DETERMINED PURSUANT TO ASPR 1-902 THAT ASTRO WAS A NONRESPONSIBLE BIDDER FOR THE PURPOSES OF THIS PROCUREMENT, AND ON FEBRUARY 1, 1968, AWARDS WERE MADE TO THE NEXT LOWEST, RESPONSIBLE BIDDERS.

THE RECORD SHOWS THAT ON FEBRUARY 20, 1968, THE QUESTION OF ASTRO'S RESPONSIBILITY WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CONSIDERATION UNDER THE CERTIFICATE OF COMPETENCY PROCEDURES. SEE ASPR 1- 705.4 (C). HOWEVER, ON MAY 1, 1968, BEFORE SBA HAD COMPLETED ITS REVIEW, THE REFERRAL WAS WITHDRAWN BY THE CONTRACTING OFFICER. THE RECORD INDICATES THAT THE WITHDRAWAL WAS PREDICATED UPON A DETERMINATION BY THE CONTRACTING OFFICIALS THAT THE ORIGINAL REFERRAL WAS IMPROPER SINCE THE CONTRACT HAD ALREADY BEEN AWARDED AND SINCE THE FINDING OF NONRESPONSIBILITY WAS BASED UPON FACTORS OTHER THAN THOSE RELATING TO CAPACITY AND CREDIT. IN THIS REGARD, SEE ASPR 1-705.4 (C) (VI) WHICH PROVIDES: "A DETERMINATION BY A CONTRACTING OFFICER THAT A SMALL BUSINESS CONCERN IS NOT RESPONSIBLE FOR REASONS OTHER THAN DEFICIENCIES IN CAPACITY OR CREDIT (E.G., LACK OF INTEGRITY, BUSINESS ETHICS, OR PERSISTENT FAILURE TO APPLY NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB -- NOT WHETHER THE BIDDER CAN PERFORM BUT WHETHER HE WILL PERFORM) MUST BE SUPPORTED BY SUBSTANTIAL EVIDENCE DOCUMENTED IN THE CONTRACT FILES. THESE FACTORS OF RESPONSIBILITY ARE NOT COVERED BY THE CERTIFICATE OF COMPETENCY PROCEDURE, BUT ARE FOR DETERMINATION BY THE CONTRACTING OFFICER ALONE.' WITH RESPECT TO YOUR BID SUBMITTED FOR ZONES I AND III OF SCHEDULE I WHEREIN YOU FAILED TO STATE YOUR GUARANTEED DAILY CAPACITIES, 10 U.S.C. 2305 (C) -- THE LAW GOVERNING PROCUREMENT BY FORMAL ADVERTISING -- PROVIDES, IN PART, THAT "AWARDS SHALL BE MADE * * * BY GIVING WRITTEN NOTICE TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED.' THE AWARD PROVISIONS OF THE INVITATION, AS QUOTED ABOVE, WERE INCLUDED PURSUANT TO ASPR 22-603. THIS REGULATION REQUIRES THAT THE AWARD PROVISIONS "BE INSERTED IN ALL INVITATIONS FOR BIDS FOR FORMALLY ADVERTISED CONTRACTS FOR THE PREPARATION OF HOUSEHOLD GOODS FOR SHIPMENT, STORAGE AND INTRA CITY OR INTRA-AREA MOVEMENT.' SINCE THE REGULATORY REQUIREMENT FOR A STATED "GUARANTEED DAILY CAPACITY" WAS PREDICATED UPON A NEED BY THE GOVERNMENT TO KNOW THE EXTENT OF SERVICES WHICH THE RESPONDING BIDDER IS OFFERING SO THAT SECONDARY CONTRACTS MAY BE AWARDED FOR SERVICES IN EXCESS OF THE GUARANTEED DAILY CAPACITY, THE FAILURE OF YOUR FIRM TO COMPLY WITH THE INVITATION IN THIS RESPECT RENDERED ITS BID NONRESPONSIVE AND THEREFORE INELIGIBLE FOR CONSIDERATION. MOREOVER, STATEMENTS OF GUARANTEED DAILY CAPACITY WOULD CONSTITUTE CONTRACT OBLIGATIONS TO ACCEPT AND PERFORM SERVICES UP TO SUCH STATED GUARANTEES.

AS TO THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO ZONE III OF SCHEDULE I AND ZONES IV AND V OF SCHEDULE II, IT IS WELL SETTLED THAT THE DETERMINATION OF A BIDDERS' 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. COMP. GEN. 131. SEE ALSO 39 COMP. GEN. 705, 711, WHEREIN THE RATIONALE FOR THIS RULE IS SET FORTH AS FOLLOWS: "* * * THE PROJECTION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT. 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 MAJOR BRUNT OF ANY DIFFICULTIES 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. * * *" MOREOVER, WE STATED, AT 39 COMP. GEN. 468, 471, THAT: ,* * * WHILE IT IS TRUE THAT A CORPORATION GENERALLY IS TO BE VIEWED AS SEPARATE AND DISTINCT FROM ITS STOCKHOLDERS, IT IS EQUALLY TRUE THAT A CORPORATION CAN OPERATE ONLY THROUGH THE INDIVIDUALS WHO, AS OFFICERS, DIRECTORS, OR STOCKHOLDERS, CONTROL THE ACTIVITIES, POLICIES, AND MANAGEMENT OF THE CORPORATION. FOLLOWS THAT THE INTEGRITY OF A CORPORATION CAN BE NO GREATER THAN THE INTEGRITY OF THE INDIVIDUALS WHO CONTROL ITS OPERATION. * * *"

IT THEREFORE FOLLOWS THAT CONSIDERATION OF THE PERSEVERANCE AND BUSINESS INTEGRITY OF A CORPORATION MAY BE RELATED TO KEY INDIVIDUALS WHO EXERCISE ANY SUBSTANTIAL DEGREE OF MANAGEMENT OR CONTROL OVER THE DAY-TO-DAY OPERATIONS OF THAT CORPORATION. HENCE, A FINDING OF LACK OF PERSEVERANCE AND BUSINESS INTEGRITY IN THE PERSON WHO WILL CONTROL THE OPERATIONS OF THE CORPORATE BIDDER DURING THE CONTEMPLATED PERIOD OF CONTRACT PERFORMANCE MAY BE CONSIDERED A SUFFICIENT BASIS TO SUPPORT A DETERMINATION THAT THE CORPORATION IS NOT A RESPONSIBLE BIDDER.

IF THE BIDDER IS A SMALL BUSINESS CONCERN, THE CONTRACTING OFFICER'S DETERMINATION OF RESPONSIBILITY IS SUBJECT, SO FAR AS CONCERNS CAPACITY AND CREDIT, TO THE REVIEW AUTHORITY OF SBA UNDER SECTION 8 (B) (7) OF THE SMALL BUSINESS ACT, PUBLIC LAW 85-536, 15 U.S.C. 637 (B) (7). IN 37 COMP. GEN. 798, WE HELD THAT THE CERTIFICATION OF A FIRM AS TO CAPACITY AND CREDIT BY SBA IS CONCLUSIVE ONLY INSOFAR AS IT CONFLICTS WITH A DETERMINATION BY THE CONTRACTING OFFICER AS TO THOSE FACTORS. IF A BIDDER IS FOUND NOT TO BE RESPONSIBLE BECAUSE OF A LACK OF PERSEVERANCE AND BUSINESS INTEGRITY, A CERTIFICATE OF COMPETENCY, BEING LIMITED TO CAPACITY AND CREDIT, WOULD NOT BE DETERMINATIVE OF THE AWARD TO BE MADE. SEE ALSO, 38 COMP. GEN. 289, AND ID. 864. IN THE LATTER DECISION WE HELD THAT THE TERM "CAPACITY" IN SECTION 8 (B) (7) OF THE SMALL BUSINESS ACT REFERS TO THE OVERALL ABILITY OF PROSPECTIVE SMALL BUSINESS CONTRACTORS TO MEET THE QUALITY, QUANTITY, AND TIME REQUIREMENTS OF A PROCUREMENT; AND THAT A CERTIFICATE OF COMPETENCY IS CONCLUSIVE UPON THE PROCURING ACTIVITY AS TO ELEMENTS OF RESPONSIBILITY RELATING TO THE CONTRACTOR'S ABILITY TO PERFORM, EXPERIENCE, SKILL,"KNOW-HOW," TECHNICAL KNOWLEDGE, ETC. IT SHOULD BE NOTED THAT THE PROVISIONS OF ASPR 1-705.4 (A) ARE IN ACCORD WITH THE ABOVE DECISION AS TO THE MEANING OF THE TERM "CAPACITY.' THAT REGULATION READS AS FOLLOWS:

"/A) SBA HAS STATUTORY AUTHORITY TO CERTIFY THE COMPETENCY OF ANY SMALL BUSINESS CONCERN AS TO CAPACITY AND CREDIT. -CAPACITY- MEANS THE OVERALL ABILITY OF A PROSPECTIVE SMALL BUSINESS CONTRACTOR TO MEET QUALITY, QUANTITY, AND TIME REQUIREMENTS OF A PROPOSED CONTRACT AND INCLUDES ABILITY TO PERFORM, ORGANIZATION, EXPERIENCE, TECHNICAL KNOWLEDGE, SKILLS, -KNOW-HOW,- TECHNICAL EQUIPMENT, AND FACILITIES OR THE ABILITY TO OBTAIN THEM. CONTRACTING OFFICERS SHALL ACCEPT SBA CERTIFICATES OF COMPETENCY AS CONCLUSIVE OF A PROSPECTIVE CONTRACTOR'S CAPACITY (SEE 1-903.1 (II) AND 1- 903.2) AND CREDIT (SEE 1-903.1 (I) (, * * *"

IN SHORT, THE CERTIFICATE OF COMPETENCY IS CONCLUSIVE AS TO WHETHER THE BIDDER CAN PERFORM. IF THE CONTRACTING OFFICER DETERMINES A BIDDER TO BE NONRESPONSIBLE FOR REASONS NOT GOING TO THE CERTIFICATE OF COMPETENCY -- FACTORS RELATING TO WHETHER THE BIDDER WILL RATHER THAN WHETHER HE CAN PERFORM -- THE MATTER NEED NOT BE REFERRED TO SBA.

IN YOUR CASE, THE RECORD SHOWS A HISTORY OF A LACK OF PERSEVERANCE AND BUSINESS INTEGRITY NOT RELATED TO FACTORS INCLUDED IN CAPACITY OR CREDIT, AND ESTABLISHES A SUFFICIENT JUSTIFICATION TO SUPPORT THE DETERMINATION OF ASTRO'S NONRESPONSIBILITY.

THEREFORE, AND IN VIEW OF THE FACT THAT THE ADMINISTRATIVE ACTIONS TAKEN WERE PROPER UNDER THE REPORTED CIRCUMSTANCES, OUR OFFICE WOULD NOT BE WARRANTED IN QUESTIONING THE AWARDS MADE. ACCORDINGLY, YOUR PROTEST IS DENIED.