B-166118, MAR. 28, 1969

B-166118: Mar 28, 1969

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THE BASIS OF YOUR PROTEST IS THAT PIRACCI. WHOSE BID PRICE IS LOWEST. IS NOT A RESPONSIBLE BIDDER FOR THE REASONS HEREINAFTER DISCUSSED. WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT. BIDS WERE OPENED AS SCHEDULED. PIRACCI WAS THE LOWEST OF THE FIVE PARTICIPATING BIDDERS BOTH ON THE BASIS OF ITS LUMP SUM BID AND ON THE BASIS OF ITS BID INCLUDING THE ALTERNATES WHICH WERE SELECTED BY THE PROGRAM OFFICIALS. WAS THAT ON JANUARY 30. THE CLIPPINGS INDICATED THAT THE UNITED STATES ATTORNEY HAD INFORMED THE COURT THAT HE WAS AWARE THAT THE DEFENDANT HAD "CIRCUMSTANCES IN MITIGATION" BUT SUCH CIRCUMSTANCES SHOULD BE CONSIDERED AT THE DEFENDANT'S SENTENCING. THAT THE DEFENDANT'S PLEA OF NOLO CONTENDERE WAS NOT ACCEPTED BY THE COURT PENDING A PRE-SENTENCE REPORT ON HIM.

B-166118, MAR. 28, 1969

TO STEPTOE AND JOHNSON:

WE REFER TO YOUR PROTEST BY TELEGRAM DATED FEBRUARY 18 AND BY LETTER DATED FEBRUARY 19, 1969, ON BEHALF OF BALTIMORE CONTRACTORS, INC. (BALTIMORE), AGAINST THE AWARD OF A CONTRACT BY THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW), TO PIRACCI CONSTRUCTION COMPANY, INC. (PIRACCI), FOR THE CONSTRUCTION OF THE APPALACHIAN LABORATORY FOR OCCUPATIONAL RESPIRATORY DISEASES, PROJECT HMA-150, MORGANTOWN, WEST VIRGINIA. THE BASIS OF YOUR PROTEST IS THAT PIRACCI, WHOSE BID PRICE IS LOWEST, IS NOT A RESPONSIBLE BIDDER FOR THE REASONS HEREINAFTER DISCUSSED.

ON DECEMBER 16, 1968, THE ENVIRONMENTAL CONTROL ADMINISTRATION OF THE UNITED STATES PUBLIC HEALTH SERVICE, HEW, ISSUED INVITATION FOR BIDS (IFB) 69-15 REQUESTING BIDS ON THE PROJECT, TO INCLUDE A LUMP SUM BASE BID AND INDIVIDUAL BIDS ON VARIOUS ALTERNATES TO BE SELECTED BY PROGRAM OFFICIALS. STANDARD FORM 22, INSTRUCTIONS TO BIDDERS(CONSTRUCTION CONTRACT), INCLUDED IN THE TERMS OF THE IFB, PROVIDES, IN ACCORDANCE WITH THE REQUIREMENT IN SECTION 303 (B) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 41 U.S.C. 253 (B), AS IMPLEMENTED BY FEDERAL PROCUREMENT REGULATION (FPR) 1-2.101 (D), RELATING TO ADVERTISED PROCUREMENTS, THAT AWARD SHALL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

ON JANUARY 31, 1969, BIDS WERE OPENED AS SCHEDULED. PIRACCI WAS THE LOWEST OF THE FIVE PARTICIPATING BIDDERS BOTH ON THE BASIS OF ITS LUMP SUM BID AND ON THE BASIS OF ITS BID INCLUDING THE ALTERNATES WHICH WERE SELECTED BY THE PROGRAM OFFICIALS.

ON FEBRUARY 3, A MEMBER OF CONGRESS ADVISED THE CONTRACTING OFFICER IN A TELEPHONE CONVERSATION OF CERTAIN INFORMATION ABOUT PIRACCI IN PRESS CLIPPINGS FROM TWO BALTIMORE NEWSPAPERS WHICH MIGHT DISQUALIFY PIRACCI FOR AWARD OF THE PROJECT. THE SUBSTANCE OF THE CLIPPINGS, COPIES OF WHICH THE CONGRESSMAN FORWARDED TO THE CONTRACTING OFFICER BY LETTER DATED FEBRUARY 4, WAS THAT ON JANUARY 30, 1969, THE PRESIDENT OF PIRACCI AND THE PRESIDENT OF ANOTHER CONTRACTING FIRM HAD PLEADED NOLO CONTENDERE TO CHARGES BY THE GOVERNMENT IN A FEDERAL DISTRICT COURT THAT EACH DEFENDANT HAD VIOLATED THE TAFT-HARTLEY ACT, 29 U.S.C. 186, BY MAKING PAYMENTS PROHIBITED BY THE ACT TO AN OFFICIAL OF A LABOR UNION WHICH REPRESENTED EMPLOYEES OF THE TWO FIRMS. WITH RESPECT TO PIRACCI ALONE, THE CLIPPINGS INDICATED THAT THE UNITED STATES ATTORNEY HAD INFORMED THE COURT THAT HE WAS AWARE THAT THE DEFENDANT HAD "CIRCUMSTANCES IN MITIGATION" BUT SUCH CIRCUMSTANCES SHOULD BE CONSIDERED AT THE DEFENDANT'S SENTENCING; THAT THE COURT ANNOUNCED THAT IT WOULD HEAR THE DEFENDANT'S PLEA LATER REGARDING THE "EXTREME MITIGATING FACTORS" WHICH MADE HIM DECIDE NOT TO CONTEST THE GOVERNMENT CHARGES; AND THAT THE DEFENDANT'S PLEA OF NOLO CONTENDERE WAS NOT ACCEPTED BY THE COURT PENDING A PRE-SENTENCE REPORT ON HIM. ADDITION, ONE OF THE CLIPPINGS DISCLOSED THAT ON JANUARY 6, 1969, ANOTHER UNION AGENT HAD BEEN CHARGED BY THE GOVERNMENT IN CONNECTION WITH THE SAME OFFENSES WITH DEMANDING AND ACCEPTING PAYMENTS TOTALING $43,000 FROM PIRACCI AND FROM TWO OTHER CONTRACTORS.

THE CONTRACTING OFFICER THEREAFTER MADE A PRE-AWARD SURVEY OF PIRACCI, WHICH INCLUDED CONSIDERATION OF PIRACCI'S RECORD OF PERFORMANCE ON CONTRACTS WITH OTHER GOVERNMENT AGENCIES DATING FROM 1958 TO FEBRUARY 14, 1969, AND CHECKING OF THE LIST OF DEBARRED BIDDERS -- I.E., BIDDERS WHO ARE EXCLUDED FOR A SPECIFIED PERIOD FROM GOVERNMENT CONTRACTING AND SUBCONTRACTING BY AN EXECUTIVE AGENCY PURSUANT TO FPR 1-1.604. THAT REGULATION LISTS CONVICTION OF COMMISSION OF A CRIMINAL OFFENSE IN THE OBTAINING OR ATTEMPTING TO OBTAIN A PUBLIC OR PRIVATE CONTRACT, OR SUBCONTRACT THEREUNDER, OR IN THE PERFORMANCE OF SUCH CONTRACT OR SUBCONTRACT, AS ONE OF THE CAUSES FOR WHICH DEBARMENT MAY BE IMPOSED.

IN A MEMORANDUM DATED FEBRUARY 18 THE CONTRACTING OFFICER SET FORTH THE EXTENT OF HIS REVIEW OF PIRACCI'S PAST PERFORMANCE OF GOVERNMENT CONTRACTS AND THE REPORTS RECEIVED THEREON, WHICH WERE SATISFACTORY; STATED THAT NEITHER PIRACCI NOR ANY OF ITS LISTED SUBCONTRACTORS APPEARED ON THE LIST OF DEBARRED BIDDERS; STATED THAT PIRACCI HAD BEEN INFORMED BY HEW ABOUT POSSIBLE PROBLEMS WITH FOUR OF THE LISTED SUBCONTRACTORS, ALTHOUGH THE GOVERNMENT WAS NOT IN A POSITION TO DISQUALIFY THE SUBCONTRACTORS, AND PIRACCI HAD PROMISED TO CHECK THE MATTER; AND CONCLUDED THAT ON THE BASIS OF THE INFORMATION SET FORTH IN THE MEMORANDUM HE (THE CONTRACTING OFFICER) COULD FIND NOTHING TO PRECLUDE AN AWARD TO PIRACCI.

FOLLOWING RECEIPT OF NOTIFICATION OF THE FILING OF YOUR PROTEST WITH OUR OFFICE, WHICH WE ASSUME IS PREMISED ON LACK OF RESPONSIBILITY ON THE PART OF PIRACCI BY REASON OF THE CRIMINAL CHARGES FILED BY THE GOVERNMENT AGAINST HIM, THE CONTRACTING OFFICER SOLICITED LEGAL ADVICE IN THE MATTER FROM THE HEW LEGAL STAFF. IN A MEMORANDUM DATED MARCH 7, THE CONTRACTING OFFICER RELATED THAT HE HAD DISCUSSED IN DETAIL WITH THE LEGAL STAFF THE NATURE OF PIRACCI'S OFFENSE, THE RELATIONSHIP OF THE OFFENSE TO THE CONVICTION SUBSEQUENTLY OBTAINED BY THE GOVERNMENT OF THE UNION OFFICIAL INVOLVED, THE STANDARDS OF RESPONSIBILITY PRESCRIBED IN THE FPR FOR PROSPECTIVE GOVERNMENT CONTRACTORS, AND THE MATTER OF PIRACCI'S INTEGRITY IN THE LIGHT OF THE MEANING OF THE TERM AS USED IN THE FPR AND AS INTERPRETED IN DECISIONS OF OUR OFFICE. ON THE BASIS OF SUCH DISCUSSION AND OF HIS PRE-AWARD SURVEY OF PIRACCI, THE CONTRACTING OFFICER STATED IN HIS MARCH 7 MEMORANDUM THAT HE REAFFIRMED HIS CONCLUSION THAT PIRACCI IS A RESPONSIBLE BIDDER. THE CONTRACTING OFFICER'S DETERMINATION HAS BEEN APPROVED BY THE ADMINISTRATOR, CONSUMER PROTECTION AND ENVIRONMENTAL HEALTH SERVICE, WHO IS THE HEAD OF THE PROCURING ACTIVITY.

THE RECORD MADE AVAILABLE TO OUR OFFICE INCLUDES A MEMORANDUM DATED MARCH 6 FROM HEW'S LEGAL STAFF TO THE HEAD OF THE PROCURING ACTIVITY, WHICH SETS FORTH THE FACTS RELATING TO PIRACCI'S STATUTORY INFRACTIONS. ONLY THE PORTIONS OF THE MEMORANDUM WHICH ARE PERTINENT TO OUR DECISION ON YOUR PROTEST WILL BE DISCUSSED HEREIN.

AS OF MARCH 5, 1969, PIRACCI'S PLEA OF NOLO CONTENDERE TO THE CHARGE OF VIOLATING THE TAFT-HARTLEY ACT HAD NOT BEEN ACCEPTED BY THE COURT INASMUCH AS THE PRE-SENTENCE INVESTIGATION INITIATED BY THE UNITED STATES ATTORNEY HAD NOT BEEN COMPLETED. HEW CONCEDES, HOWEVER, THAT BY HIS PLEA PIRACCI HAS IN EFFECT ADMITTED THE VIOLATIONS CHARGED, EACH OF WHICH THE ACT MAKES A MISDEMEANOR. HEW FURTHER CONCEDES THAT THE VIOLATIONS BY PIRACCI'S PRESIDENT MAY BE IMPUTED TO THE CORPORATION (39 COMP. GEN. 468, 471), AND NOTES, IN THIS REGARD, THAT THE CRIMINAL INFORMATION FILED BY THE GOVERNMENT STATES THAT THE PRESIDENT ACTED IN THE INTEREST OF THE CORPORATION IN MAKING THE ILLEGAL PAYMENTS.

DURING THE MONTH OF FEBRUARY 1969, THE RECORD SHOWS, PIRACCI WAS A WITNESS FOR THE GOVERNMENT IN THE TRIAL OF THE PRINCIPAL UNION OFFICIAL TO WHOM PIRACCI HAS BEEN CHARGED WITH MAKING THE ILLEGAL PAYMENTS IN QUESTION. THE UNION OFFICIAL WAS CONVICTED AS A RESULT OF SUCH PROCEEDINGS OF THREE VIOLATIONS OF THE TAFT-HARTLEY ACT AND OF THREE VIOLATIONS OF THE HOBBS ACT, 18 U.S.C. 1951. THE HOBBS ACT MAKES INTERFERENCE WITH COMMERCE BY EXTORTION OR ATTEMPTED EXTORTION, OR BY VIOLENCE OR THREATS OF VIOLENCE, A FELONY, AND THE CONVICTIONS WHICH WERE OBTAINED THEREUNDER RELATED TO EXTORTION FROM TWO CONTRACTORS OTHER THAN PIRACCI AND ATTEMPTED EXTORTION FROM ANOTHER CONTRACTOR. SUBSEQUENT TO THE TRIAL, HOWEVER, THE UNITED STATES ATTORNEY ADVISED HEW THAT THE SAME UNION OFFICIAL HAD BEEN INDICATED UNDER THE HOBBS ACT FOR EXTORTION OF PAYMENTS FROM PIRACCI, BUT THE CHARGE IS YET TO BE TRIED.

AN EXCERPT FROM THE OFFICIAL TRANSCRIPT OF THE COURT PROCEEDINGS AGAINST THE UNION OFFICIAL INCLUDES TESTIMONY BY PIRACCI UNDER QUESTIONING BY BOTH THE UNITED STATES ATTORNEY AND THE ATTORNEY FOR THE DEFENSE. PIRACCI TESTIFIED THAT HE HAD MADE TWO PAYMENTS TO THE DEFENDANT, ONE IN SEPTEMBER 1967 AND ANOTHER IN JULY OR AUGUST 1968, UNDER CIRCUMSTANCES WHICH PIRACCI DESCRIBED AS A "SHAKEDOWN," IN ORDER TO AVOID HARASSMENT OF PIRACCI ON A GOVERNMENT CONSTRUCTION PROJECT IN MARYLAND; THAT SUCH HARASSMENT, PIRACCI BELIEVED, WOULD INVOLVE OVERTURNING OF TRUCKS AND WALKOUT OF WORKERS, AMONG OTHER ACTIONS; THAT PIRACCI HAD DENIED MAKING SUCH PAYMENTS WHEN QUESTIONED BY GOVERNMENT INVESTIGATORS IN 1967 AND AGAIN WHEN TESTIFYING BEFORE A FEDERAL GRAND JURY IN SEPTEMBER 1968; AND THAT PIRACCI HAD RETRACTED HIS DENIALS AND ADMITTED HAVING COMMITTED PERJURY IN SEPTEMBER WHEN HE MADE A SECOND APPEARANCE BEFORE THE GRAND JURY IN NOVEMBER 1968. THE TRANSCRIPT ALSO INCLUDES A STATEMENT BY THE UNITED STATES ATTORNEY WHICH QUOTES A STATEMENT BY THE GOVERNMENT AT THE NOVEMBER GRAND JURY APPEARANCE OF PIRACCI TO THE EFFECT THAT THE PERJURY AND EARLIER DENIAL BY PIRACCI TO GOVERNMENT INVESTIGATORS OF KNOWLEDGE OF THE ILLEGAL PAYMENTS HAD BEEN MOTIVATED BY PIRACCI'S FEAR AND CONCERN FOR HIMSELF, FOR HIS FAMILY, AND FOR HIS BUSINESS.

PIRACCI FURTHER TESTIFIED THAT HIS DECISION TO COOPERATE WITH THE GOVERNMENT BY TELLING THE TRUTH TO THE GRAND JURY WAS MADE WITH THE REALIZATION THAT, WHILE HE WOULD NOT BE CHARGED WITH PERJURY IN CONNECTION WITH HIS FIRST APPEARANCE BEFORE THE GRAND JURY, HE WOULD HAVE TO FACE CHARGES OF VIOLATING THE TAFT-HARTLEY ACT. THE UNITED STATES ATTORNEY MADE STATEMENTS CORROBORATING PIRACCI'S STATEMENTS IN THIS REGARD.

THE HEW LEGAL MEMORANDUM CITES, IN CONNECTION WITH THE DETERMINATION WHETHER PIRACCI MEETS THE ,SATISFACTORY RECORD OF INTEGRITY, JUDGMENT, AND PERFORMANCE" REQUIREMENT AS A STANDARD OF RESPONSIBILITY SET FORTH IN FPR 1-1.310-5 (A) (4), THE STATEMENTS IN 43 COMP. GEN. 257,260, AND IN WARREN BROTHERS ROADS COMPANY V UNITED STATES, 173 CT. CL. 714, 720 (1965), THAT INTEGRITY MEANS "NOT WHETHER THE BIDDER CAN PERFORM, BUT WHETHER HE WILL PERFORM.'

WITH RESPECT TO PIRACCI'S OFFENSES UNDER THE TAFT-HARTLEY ACT, IT IS URGED THAT THE CRIME SHOULD BE JUDGED NOT IN ISOLATION BUT IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH IT WAS COMMITTED. SUCH JUDGMENT, IN HEW'S OPINION, SHOULD ENCOMPASS THE FACT THAT THE PAYMENTS WERE EXTORTED FROM PIRACCI, AS WELL AS THE "CIRCUMSTANCES IN MITIGATION" WHICH THE UNITED STATES ATTORNEY HAS RECOMMENDED BE CONSIDERED AT THE TIME SENTENCE IS IMPOSED ON PIRACCI. ACCORDINGLY, AND ON THE BASIS THAT PIRACCI HAS A RECORD OF SATISFACTORY PERFORMANCE OF OTHER GOVERNMENT CONTRACTS, IT IS CONCLUDED THAT PIRACCI'S VIOLATIONS OF THE STATUTE DO NOT INDICATE THAT THE PIRACCI CONSTRUCTION COMPANY WILL NOT BE ABLE TO PERFORM SATISFACTORILY THE CONTRACT FOR THE MORGANTOWN PROJECT AND DO NOT REQUIRE A DETERMINATION THAT IT LACKS INTEGRITY AND IS NOT A RESPONSIBLE BIDDER.

WITH REFERENCE TO PIRACCI'S FALSE STATEMENTS PRIOR TO NOVEMBER 1968 CONCERNING THE OFFENSES IN QUESTION, HEW EMPHASIZES PIRACCI'S RECANTATION OF HIS PERJURY IN HIS SECOND APPEARANCE BEFORE THE GRAND JURY AND THE RECOMMENDATION BY THE UNITED STATES ATTORNEY TO THAT JURY THAT PIRACCI NOT BE INDICATED FOR PERJURY.

IN ADDITION TO THE FOREGOING, HEW CITES IN SUPPORT OF ITS POSITION THE HOLDING IN 39 COMP. GEN. 868 THAT BOTH THE ASPR (ARMED SERVICES PROCUREMENT REGULATION) AND THE FPR, AS WELL AS THE DECISIONS OF OUR OFFICE, CONTEMPLATE THAT THE ADMINISTRATIVE DETERMINATION OF LACK OF INTEGRITY OR BUSINESS ETHICS SHALL BE BASED ON CLEAR AND CONVINCING EVIDENCE DEMONSTRATING SUCH DEFICIENCIES ON THE PART OF THE BIDDER. ACCORDINGLY, AND ON THE BASIS THAT THE DISCRETION VESTED IN A CONTRACTING AGENCY IN DETERMINING THE RESPONSIBILITY OF A BIDDER IS SO BROAD THAT OPPOSITE DETERMINATIONS BY DIFFERENT CONTRACTING OFFICERS WITH RESPECT TO THE RESPONSIBILITY OF THE SAME BIDDER, FOR THE SAME KIND OF PROCUREMENT AND WITH REFERENCE TO THE SAME SET OF FACTS HAVE BEEN UPHELD BY OUR OFFICE (43 COMP. GEN. 228, 230-231), THE LEGAL STAFF RECOMMENDS THAT PIRACCI'S BID NOT BE REJECTED FOR LACK OF RESPONSIBILITY.

BY LETTER DATED MARCH 13, 1969, THE ACTING ASSISTANT SECRETARY FOR ADMINISTRATION, HEW, HAS INFORMED OUR OFFICE THAT IN VIEW OF THE CONTRACTING OFFICER'S FAVORABLE DETERMINATION OF RESPONSIBILITY WITH RESPECT TO PIRACCI AND OF THE SUBSEQUENT APPROVAL OF SUCH DETERMINATION BY THE HEAD OF THE PROCURING ACTIVITY, IT IS THE INTENTION OF HEW TO AWARD THE CONTRACT TO PIRACCI UNLESS ADVISED TO THE CONTRARY BY OUR OFFICE.

THERE IS NO QUESTION BUT THAT THE INTEGRITY OF A BIDDER IS A PROPER MATTER FOR CONSIDERATION IN DETERMINING HIS RESPONSIBILITY IN CONNECTION WITH THE PERFORMANCE OF A GOVERNMENT CONTRACT. 39 COMP. GEN. 468, 470, AND COURT CASES AND DECISIONS OF OUR OFFICE THEREIN CITED. THE REQUIREMENT IN FPR 1-1.310-5 OF A SATISFACTORY RECORD OF INTEGRITY AS ONE OF THE STANDARDS WHICH A PROSPECTIVE GOVERNMENT CONTRACTOR MUST MEET IS CONSISTENT THEREWITH. WHILE A PLEA OF NOLO CONTENDERE IS NOT, IN THE CRIMINAL LAW, ATTENDED WITH ALL THE SAME CONSEQUENCES AS A CONVICTION, WE HAVE CONSIDERED IT AS ADEQUATE TO JUSTIFY A DETERMINATION OF NON- RESPONSIBILITY. 39 COMP. GEN. 468, 469. THE QUESTION FOR DETERMINATION THEREFORE IS WHETHER SUCH FACTORS PER SE REQUIRE SUCH A DETERMINATION.

FPR 1-1.601 CAUTIONS THAT THE IMPOSITION OF DEBARMENT SHOULD BE FOR THE PURPOSE OF PROTECTING THE INTERESTS OF THE GOVERNMENT AND NOT FOR PUNISHMENT. FPR 1-1.604 (B) (2) REQUIRES THAT THE DECISION TO DEBAR BE MADE WITHIN THE DISCRETION OF THE PARTICULAR EXECUTIVE AGENCY AND BE RENDERED IN THE BEST INTERESTS OF THE GOVERNMENT AND SPECIFICALLY AUTHORIZES THE AGENCY TO CONSIDER ALL MITIGATING FACTORS IN DETERMINING THE SERIOUSNESS OF THE OFFENSE, FAILURE, OR INADEQUACY OF PERFORMANCE, AND IN DECIDING WHETHER DEBARMENT IS WARRANTED. SUCH PROVISIONS DO NOT REQUIRE THE AGENCY TO DEBAR A CONTRACTOR EVEN UPON CONVICTION OF THE OFFENSES SPECIFIED IN FPR 1-1.604 (A) BUT MERELY AUTHORIZE SUCH ACTION IN THE PUBLIC INTEREST UPON APPROVAL BY THE HEAD OF THE AGENCY OR HIS AUTHORIZED REPRESENTATIVE.

WHILE WE HAVE STATED THAT IN EVALUATING THE INTEGRITY OF A PROSPECTIVE GOVERNMENT CONTRACTOR FOR THE PURPOSE OF DETERMINING HIS RESPONSIBILITY THERE MAY BE APPLIED THE CAUSES FOR DEBARMENT WHICH ARE ENUMERATED IN THE APPLICABLE PROCUREMENT REGULATIONS, WE HAVE POINTED OUT THAT EACH CASE MUST BE EVALUATED IN THE LIGHT OF THE PARTICULAR CIRCUMSTANCES INVOLVED, 39 COMP. GEN. 868, 872, AND AS HEW HAS NOTED WE HAVE STRESSED THAT THE EVIDENCE ON WHICH THE DETERMINATION OF LACK OF INTEGRITY IS MADE SHOULD BE CLEAR AND CONVINCING. 39 COMP. GEN. 468, 472. ADDITIONALLY, WE HAVE CONSISTENTLY HELD THAT THE DETERMINATION OF A BIDDER'S OVERALL RESPONSIBILITY TO PERFORM A CONTRACT IS TO BE MADE BY THE CONTRACTING AGENCY, AND OUR OFFICE THEREFORE WILL ACCEPT A CONTRACTING AGENCY'S DETERMINATION THAT A BIDDER IS A RESPONSIBLE BIDDER UNLESS IT IS SHOWN THAT THE AGENCY'S DETERMINATION WAS ARBITRARY, CAPRICIOUS, FRAUDULENT, OR WITHOUT SUBSTANTIAL BASIS IN FACT. 37 COMP. GEN. 430, 435; 39 COMP. GEN. 468, 471; 46 COMP. GEN. 123, 126; ID. 371, 372; ID. 651, 658.

THE RECORD ESTABLISHES THAT PIRACCI'S ACTION TO MAKE AMENDS FOR HIS ACTIONS HERE IN QUESTION BY MAKING A SECOND APPEARANCE BEFORE THE FEDERAL GRAND JURY AND TESTIFYING TO THE TRUTH OF THE ILLEGAL TRANSACTIONS WITH THE UNION OFFICIAL WHO WAS INDICATED BY THE GRAND JURY OCCURRED PRIOR TO THE ISSUANCE OF THE IFB FOR THE MORGANTOWN PROJECT. THE RECORD ALSO SHOWS THAT HIS TESTIMONY AS A VOLUNTARY WITNESS FOR THE GOVERNMENT IN THE SUBSEQUENT CRIMINAL PROCEEDINGS AGAINST THE UNION OFFICIAL WAS GIVEN AFTER THE BID OPENING AND WITH KNOWLEDGE THAT SUCH ACTION WOULD INVOLVE SELF- INCRIMINATION. IN ADDITION, THE RECORD INDICATES THAT FOR A PERIOD OF MORE THAN TEN YEARS PIRACCI HAS PERFORMED VARIOUS GOVERNMENT CONTRACTS SATISFACTORILY AND THAT, OUTSIDE OF THE OCCURRENCE DURING SUCH PERIOD OF THE OFFENSES OUTLINED ABOVE AND THE RELATED OFFENSES OF MAKING FALSE STATEMENTS TO GOVERNMENT INVESTIGATORS AND COMMITTING PERJURY BEFORE THE GRAND JURY, WHICH MATTERS HAVE BEEN RECTIFIED AS STATED PREVIOUSLY, THERE IS NO EVIDENCE OF RECORD OF ANY FACTOR WHICH MIGHT CAST ASPERSION ON PIRACCI'S INTEGRITY. FURTHER, HEW HAS NOT IMPOSED DEBARMENT AGAINST PIRACCI FOR THE OFFENSES IN QUESTION. SUCH FACTORS, WE BELIEVE, WERE PROPERLY CONSIDERED BY HEW IN DETERMINING WHETHER PIRACCI IS LACKING IN INTEGRITY.

IN THE CIRCUMSTANCES, THE CONTRACTING OFFICER'S CONCLUSION THAT PIRACCI IS A RESPONSIBLE BIDDER FOR THE PURPOSE OF THIS PROCUREMENT WOULD APPEAR TO BE JUSTIFIED BY THE RECORD AND MUST BE REGARDED AS A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION. WARREN BROTHERS ROADS COMPANY V UNITED STATES, SUPRA. ACCORDINGLY, WE SEE NO ADEQUATE BASIS ON WHICH TO OFFER ANY OBJECTION TO AWARD TO PIRACCI AS THE LOWEST RESPONSIBLE BIDDER, IF THE BID IS OTHERWISE ACCEPTABLE. YOUR PROTESTIS THEREFORE DENIED.