B-164767, OCT. 2, 1968

B-164767: Oct 2, 1968

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

KOPP: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 30. ON THE PROJECT FOR THE STATED REASON THAT ITS BID PRICE WAS BASED UPON A BID FROM EVEREADY ELECTRIC COMPANY WHICH BID. IT IS ALLEGED. WOULD HAVE MADE THE BID PRICE OF YOUR CLIENT LOWER THAN THAT OF WILCO IF EVEREADY HAD NOT RENEGED ON AN ALLEGED PROMISE TO SUBMIT A PRICE TO YOUR CLIENT. WILCO IS AN OPERATOR-. THAT EVEREADY HAD TO BID ONLY TO WILCO BECAUSE WILCO -IS A SURE WINNER SO I HAVE TO PLAY WITH HIM ...-" YOU POINTED OUT THAT THE BIDS SUBMITTED CONTAINED A CERTIFICATION THAT . "NO ATTEMPT HAS BEEN MADE OR WILL BE MADE BY THE BIDDER TO INDUCE ANY OTHER PERSON OR FIRM TO SUBMIT OR NOT TO SUBMIT A BID FOR THE PURPOSE OF RESTRICTING COMPETITION.'.

B-164767, OCT. 2, 1968

TO MR. QUENTIN L. KOPP:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 30, 1968, AND PREVIOUS CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF A CONTRACT FOR GENERAL SERVICES ADMINISTRATION (GSA) PROJECT 88012 TO WILCO CONSTRUCTION COMPANY.

YOU PROTESTED AGAINST AN AWARD OF A CONTRACT TO WILCO, THE LOW BIDDER, ON THE PROJECT FOR THE STATED REASON THAT ITS BID PRICE WAS BASED UPON A BID FROM EVEREADY ELECTRIC COMPANY WHICH BID, IT IS ALLEGED, WOULD HAVE MADE THE BID PRICE OF YOUR CLIENT LOWER THAN THAT OF WILCO IF EVEREADY HAD NOT RENEGED ON AN ALLEGED PROMISE TO SUBMIT A PRICE TO YOUR CLIENT. YOU INDICATED THAT, WHEN QUERIED AS TO WHY EVEREADY BID TO WILCO AND NOT TO YOUR CLIENT, A REPRESENTATIVE OF THE COMPANY STATED TO YOUR CLIENT:

"* * * EVEREADY -HAD TO DO THIS'; THAT EVEREADY -HAD TO PLAY WITH WILCO-; THAT -WILCO GETS ALL THE JOBS; WILCO IS AN OPERATOR-; THAT EVEREADY HAD TO BID ONLY TO WILCO BECAUSE WILCO -IS A SURE WINNER SO I HAVE TO PLAY WITH HIM ...-"

YOU POINTED OUT THAT THE BIDS SUBMITTED CONTAINED A CERTIFICATION THAT --

"NO ATTEMPT HAS BEEN MADE OR WILL BE MADE BY THE BIDDER TO INDUCE ANY OTHER PERSON OR FIRM TO SUBMIT OR NOT TO SUBMIT A BID FOR THE PURPOSE OF RESTRICTING COMPETITION.' YOU SUGGESTED THAT THERE WAS EVIDENCE THAT WILCO MAY HAVE MADE A FALSE CERTIFICATION AND THAT ITS BID SHOULD BE REJECTED ON THE GROUND THAT WILCO WAS NOT A RESPONSIBLE BIDDER WITHIN THE MEANING OF FPR SEC. 1-1.310-5 (A) (4), WHICH PROVIDES THAT A RESPONSIBLE BIDDER IS ONE WHO HAS A SATISFACTORY RECORD OF INTEGRITY, JUDGMENT AND PERFORMANCE. FURTHER, YOU SUGGESTED THAT THE INVITATION SHOULD BE CANCELLED ON THE BASIS OF FPR SEC. 1-2.404-1 (B) (6), WHICH PROVIDES FOR CANCELLATION WHEN THE BIDS WERE NOT INDEPENDENTLY ARRIVED AT IN OPEN COMPETITION, WERE COLLUSIVE, OR WERE SUBMITTED IN BAD FAITH.

GSA MADE INQUIRY OF WILCO WITH RESPECT TO THE MATTER AND WILCO SUBMITTED A LETTER STATING THAT IT USED A QUOTATION FROM EVEREADY IN THE PREPARATION OF THE BID; THAT, ALTHOUGH IT UNDERSTOOD THAT EVEREADY BID ONLY TO WILCO, THE DECISION TO DO SO WAS THAT OF EVEREADY ALONE; AND THAT WILCO IN NO WAY INFLUENCED THE DECISION. IN VIEW THEREOF, AND BECAUSE WILCO AND EVEREADY HAD SATISFACTORY PERFORMANCE RECORDS ON PAST CONTRACT PERFORMANCE FOR GSA, WILCO WAS DETERMINED TO BE A RESPONSIBLE CONTRACTOR BY GSA AND A CONTRACT FOR THE PROJECT WAS AWARDED TO IT.

YOU HAVE EXPRESSED DISSATISFACTION WITH THE DETERMINATION BECAUSE YOUR CLIENT WAS NOT INTERVIEWED REGARDING THE CONVERSATION WITH THE EVEREADY REPRESENTATIVE AND BECAUSE YOU BELIEVE YOUR CLIENT'S EVIDENCE WOULD HAVE SHOWN THAT EVEREADY FAILED TO KEEP ITS PROMISE TO BID TO YOUR CLIENT BECAUSE IT WAS INDUCED BY WILCO TO DO SO.

OUR OFFICE HAS LONG TAKEN THE POSITION THAT IT IS WITHOUT AUTHORITY TO DETERMINE BIDDER RESPONSIBILITY. THAT IS AN ADMINISTRATIVE FUNCTION OF EACH CONTRACTING OFFICE. HOWEVER, WE REVIEW DETERMINATIONS OF RESPONSIBILITY TO SEE THAT THEY HAVE A FACTUAL BASIS AND ARE NOT ARBITRARY.

ESSENTIALLY, IN THIS CASE, YOU SUGGESTED THAT WILCO WAS NOT RESPONSIBLE BECAUSE IT ENTERED INTO A COLLUSIVE ARRANGEMENT WITH EVEREADY WHEREBY THE LATTER COMPANY WOULD BID TO WILCO ALONE. HOWEVER, AS INDICATED ABOVE, WILCO HAS CATEGORICALLY DENIED SUCH AN ARRANGEMENT. FURTHER, THE STATEMENTS YOU ATTRIBUTE TO EVEREADY DO NOT ESTABLISH THAT WILCO ACTUALLY ENTERED INTO AN AGREEMENT WITH EVEREADY THAT THE LATTER COMPANY WOULD ONLY BID TO WILCO. RATHER THE STATEMENTS INDICATE THAT EVEREADY WAS INFLUENCED IN ITS DECISION TO BID ONLY TO WILCO BECAUSE OF THE LATTER'S SUCCESS IN OBTAINING GOVERNMENT CONTRACTS. CERTAINLY IN DECIDING TO WHOM IT WILL SUBMIT A BID, A SUBCONTRACTOR IS ENTITLED TO CONSIDER THE PROSPECTS OF THE PRINCIPAL BIDDER'S SUCCESS AND THE OPPORTUNITY FOR FUTURE BUSINESS FROM THAT BIDDER BY DEALING WITH IT. THAT IS A LEGITIMATE BUSINESS INTEREST. IT IS OBSERVED THAT YOU CONCEDE THAT "FEDERAL PROCUREMENT REGULATIONS DO NOT REQUIRE THAT A SUBCONTRACTOR SUBMIT BIDS TO ALL OF THE GENERAL CONTRACTORS, OR INDEED TO ANY OF THEM.'

IN THE FACE OF WILCO'S DENIAL OF HAVING ANY PART IN EVEREADY'S DECISION TO BID TO WILCO ALONE, ANY STATEMENTS THAT YOUR CLIENT MAY HAVE BEEN PREPARED TO MAKE REGARDING HIS CONVERSATION WITH THE EVEREADY REPRESENTATIVE WOULD NOT HAVE ANY SUBSTANTIAL BEARING ON THE MATTER.

IN THE CIRCUMSTANCES, THE ADMINISTRATIVE DETERMINATION THAT WILCO IS A RESPONSIBLE CONTRACTOR AND THAT THE AWARD FOR THE PROJECT SHOULD BE MADE TO IT DOES NOT APPEAR TO HAVE BEEN IMPROPER. ACCORDINGLY, YOUR PROTEST IS DENIED.