B-167393, AUG. 3, 1970

B-167393: Aug 3, 1970

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FINANCIAL QUALIFICATIONS OF PROPOSED CONTRACTOR ARE FOR RESOLUTION BY ADMINISTRATIVE OFFICERS AND IN ABSENCE OF BAD FAITH OR LACK OF REASONABLE BASIS FOR DETERMINATION NO OBJECTION TO DETERMINATION CAN BE MADE. CONNER & CUNEO: REFERENCE IS MADE TO YOUR LETTERS DATED JULY 10. DAHC 15-69-R-0074 WERE ISSUED ON MAY 5. THE FORMER SOLICITATION REQUESTED PROPOSALS ON SEVEN LANGUAGE GROUPS AND THE LATTER WAS A SMALL- BUSINESS SET ASIDE FOR TWO LANGUAGE GROUPS. VOX INSTITUTE OF LANGUAGES RECEIVED BOTH AWARDS BUT WAS DECLARED IN DEFAULT ON THE CONTRACTS ON JULY 25. REPROCUREMENT WAS EFFECTED PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 8-602.6. USING THE PROCEDURES AUTHORIZED BY 10 U.S.C. 2304(A)(2) AND ASPR 3-202 FOR PROCUREMENTS IN WHICH THE PUBLIC EXIGENCY WILL NOT PERMIT DELAY.

B-167393, AUG. 3, 1970

BID PROTEST -- REPROCUREMENT AFTER DEFAULT TERMINATION REJECTION OF PROTEST AGAINST AWARD OF DEFENSE LANGUAGE INSTITUTE TRAINING CONTRACTS TO VOX INSTITUTE OF LANGUAGES AND AGAINST REPROCUREMENT AFTER DEFAULT TO WORLD INSTRUCTION AND TRANSLATION BY DEFENSE SUPPLY AGENCY. INASMUCH AS BOTH ORIGINAL OFFEROR AND REPROCUREMENT OFFEROR SUBMITTED PROPOSALS ON BASIS OF THEIR HAVING ABILITY TO OBTAIN REQUIREMENTS NOTWITHSTANDING THAT SOLICITATION REQUIRED CERTIFICATION THAT THEY HAD STAFF AND FACILITIES, THE AMBIGUITY DID NOT PREJUDICE ANY BIDDERS. IN REPROCUREMENT DIFFERENT RULES APPLY AND CONTRACTING OFFICER HAS MORE LATITUDE SO THAT EVEN A NONRESPONSIVE LOW BID COULD BE ACCEPTED. FINANCIAL QUALIFICATIONS OF PROPOSED CONTRACTOR ARE FOR RESOLUTION BY ADMINISTRATIVE OFFICERS AND IN ABSENCE OF BAD FAITH OR LACK OF REASONABLE BASIS FOR DETERMINATION NO OBJECTION TO DETERMINATION CAN BE MADE. HENCE PROTEST MUST BE DENIED.

TO SELLERS, CONNER & CUNEO:

REFERENCE IS MADE TO YOUR LETTERS DATED JULY 10, 31 AND OCTOBER 10, 1969, ON BEHALF OF CROWELL COLLIER INSTITUTE (CCI), PROTESTING AGAINST THE AWARD OF DEFENSE LANGUAGE INSTITUTE (DLI) LANGUAGE TRAINING CONTRACTS TO VOX INSTITUTE OF LANGUAGES, AND AGAINST REPROCUREMENT AFTER DEFAULT TERMINATIONS FROM WORLD INSTRUCTION AND TRANSLATION (WIT), BY THE DEFENSE SUPPLY SERVICE, WASHINGTON, D. C. (DSS-W).

THE ORIGINAL REQUESTS FOR PROPOSALS (RFP) NO. DAHC 15-69-R-0056 AND NO. DAHC 15-69-R-0074 WERE ISSUED ON MAY 5, 1969. THE FORMER SOLICITATION REQUESTED PROPOSALS ON SEVEN LANGUAGE GROUPS AND THE LATTER WAS A SMALL- BUSINESS SET ASIDE FOR TWO LANGUAGE GROUPS. ON JUNE 26, 1969, VOX INSTITUTE OF LANGUAGES RECEIVED BOTH AWARDS BUT WAS DECLARED IN DEFAULT ON THE CONTRACTS ON JULY 25, 1969, AFTER IT HAD MADE SEVERAL FUTILE ATTEMPTS TO OBTAIN FINANCIAL BACKING. REPROCUREMENT WAS EFFECTED PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 8-602.6, USING THE PROCEDURES AUTHORIZED BY 10 U.S.C. 2304(A)(2) AND ASPR 3-202 FOR PROCUREMENTS IN WHICH THE PUBLIC EXIGENCY WILL NOT PERMIT DELAY. DSS-W PROPOSES TO ASSESS ALL EXCESS COSTS RESULTING FROM REPROCUREMENT AGAINST THE ACCOUNT OF VOX.

SINCE ON JULY 23, 1969, IT APPEARED LIKELY THAT VOX WOULD NOT BE ABLE TO OBTAIN ADEQUATE FINANCIAL BACKING, AND SINCE DLI HAD 215 STUDENTS WAITING TO BEGIN TRAINING, DSS-W DECIDED TO HOLD COMPETITIVE DISCUSSIONS FOR THE REPROCUREMENT. THE PROPOSALS SUBMITTED ON THE INITIAL PROCUREMENT WERE REVIEWED AND IT WAS FOUND THAT ONLY TWO SCHOOLS OTHER THAN VOX HAD SUBMITTED OFFERS ON ALL LANGUAGE GROUPS. THESE WERE CCI AND THE INSTITUTE OF MODERN LANGUAGES (IML). BOTH OF THESE FIRMS HAD BEEN CONSIDERED RESPONSIVE AND RESPONSIBLE ON THE INITIAL PROCUREMENT. IN ADDITION, THE PRESIDENT OF WIT HAD CONTACTED AN OFFICIAL OF DLI AND EXPRESSED AN INTEREST IN BIDDING ON ALL GROUPS OF LANGUAGES IN THE EVENT OF A REPROCUREMENT. THE OTHER OFFERORS ON THE ORIGINAL PROCUREMENT WERE SANZ SCHOOL OF LANGUAGES, WHICH BID ON ONLY ONE LANGUAGE GROUP; HISPANO- AMERICAN LANGUAGE SCHOOL, WHICH WITHDREW ITS PROPOSAL STATING ITS INABILITY TO PERFORM; AND MONDINO SCHOOL OF LANGUAGES, INC., WHOSE PROPOSED TEACHING MATERIALS WERE EVALUATED TO BE SO DEFECTIVE AND DEFICIENT THAT DLI OFFICIALS FOUND THE FIRM TECHNICALLY UNQUALIFIED AND NOT CAPABLE OF BECOMING QUALIFIED IN THE LIMITED TIME AVAILABLE FOR REPROCUREMENT. THE PROCURING ACTIVITY'S GOAL WAS TO BEGIN TRAINING ON JULY 28, 1969, OR AS SOON AS POSSIBLE THEREAFTER.

ON JULY 23, 1969, CCI, IML AND WIT WERE CONTACTED AND INVITED TO DISCUSS A POSSIBLE REQUIREMENT WITH DDS-W AND DLI ON JULY 24, 1969. EACH FIRM WAS INFORMED THAT THE REQUIREMENTS WERE SUBSTANTIALLY AS SPELLED OUT IN THE ORIGINAL SOLICITATIONS AND THAT EACH SCHOOL SHOULD BE PREPARED TO DISCUSS HOW SOON IT COULD BEGIN TRAINING, HOW IT PROPOSED TO ACCOMPLISH THE TRAINING, AND HOW MUCH IT WOULD COST.

ON JULY 24, 1969, SEPARATE DISCUSSIONS WERE HELD WITH THE THREE CONTRACTORS. EACH WAS INFORMED THAT NO REQUIREMENT EXISTED AT THAT TIME SINCE VOX HAD NOT BEEN DECLARED IN DEFAULT. EACH FIRM WAS TOLD THAT IF AND WHEN A REQUIREMENT AROSE, DDS-W WOULD HAVE TO MOVE HURRIEDLY USING THE RULES OF PUBLIC EXIGENCY PROCUREMENTS AND BEST PRICES SHOULD BE INITIALLY SUBMITTED. EACH FIRM WAS TOLD THAT ANY RESULTANT CONTRACT WOULD BE SUBSTANTIALLY IN ACCORDANCE WITH THE INITIAL SOLICITATION.

AFTER THE CONTRACTING OFFICER DECLARED VOX IN DEFAULT ON JULY 25, 1969, HE REVIEWED THE PRICES SUBMITTED BY THE THREE FIRMS ON THE REPROCUREMENT BY LANGUAGE GROUP:

LANGUAGE GROUP C.C.I. I.M.L. W.I.T.

AFRICAN $ 316,346 $ 289,420 $ 225,060

E. ASIAN 627,997 518,885 457,955

MIDDLE EAST 373,314 297,475 268,485

S. E. ASIAN 397,894 350,525 289,920

W. EUROPE 707,686 646,650 591,570

W. HEMISPHERE 587,952 526,360 500,910

VIETNAMESE 1,199,998 1,088,450 1,033,260

E. EUROPE NO BID 409,220 383,100

W. ASIATIC NO BID 99,875 87,420

TOTALS $4,211,187* $4,226,860 $3,837,680

*WITHOUT E. EUROPE AND W. ASIATIC

THE CONTRACTING OFFICER, AFTER DISCUSSING THE RISKS INVOLVED WITH RESPONSIBLE OFFICIALS OF DLI AND HAVING RECEIVED THEIR CONCURRENCE, DECIDED THAT AWARD SHOULD GO TO WIT AS THE LOW BIDDER IF WIT WAS DETERMINED TO BE A RESPONSIBLE BIDDER. ON JULY 25, 1969, THE CONTRACTING OFFICER MADE A POSITIVE DETERMINATION OF RESPONSIBILITY AND THE DIRECTOR OF DSS-W DETERMINED THAT A LETTER CONTRACT WAS THE ONLY TYPE OF CONTRACT SUITABLE FOR THE PROCUREMENT. THE CONTRACTING OFFICER ISSUED SUCH A CONTRACT ON JULY 25, 1969. ON JULY 28, 1969, THE CONTRACT WAS ACCEPTED BY WIT AND CLASSES BEGAN ON JULY 29, 1969.

THE FOLLOWING STATEMENT APPEARS IN BOLD FACE TYPE ON THE FRONT PAGE OF THE ORIGINAL SOLICITATION:

"BY SUBMISSION OF THIS PROPOSAL THE OFFEROR CERTIFIES THAT HE HAS AN ACADEMIC COORDINATOR, SUFFICIENT QUALIFIED INSTRUCTORS AND LINGUISTS TO MEET THE REQUIREMENTS FOR THE FIRST TWO MONTHS AND ADEQUATE FACILITIES TO MEET THE REQUIREMENTS FOR THE FIRST FOUR MONTHS AS DESCRIBED IN ADDITIONAL SOLICITATION INSTRUCTIONS AND PROVISIONS."

SUBPARAGRAPHS A, B AND D OF PARAGRAPH 31 OF THE RFP READ:

"A. AN OFFEROR WILL NOT BE CONSIDERED RESPONSIBLE UNLESS HE IS REGULARLY ENGAGED IN THE BUSINESS COVERED BY THESE SPECIFICATIONS, POSSESSED OR SATISFACTORY FINANCIAL AND TECHNICAL ABILITY, AND HAS AN ORGANIZATION AND FACILITIES AVAILABLE TO INSURE SATISFACTORY COMPLETION OF THE CONTRACT, AS DETERMINED BY THE CONTRACTING OFFICER.

"B. FOR PRE-AWARD SURVEY PURPOSES ONLY WRITTEN COMMITMENTS, OR OPTIONS OR OTHER WRITTEN EVIDENCE WILL BE ACCEPTABLE AS PROOF OF AVAILABILITY OF CLASSROOM SPACE AND FACILITIES OFFERED.

"D. PRIOR TO THE BEGINNING OF ANY CLASSES, THE OFFEROR SHALL HAVE A LANGUAGE LABORATORY WHICH MEETS THE SPECIFICATIONS SET FORTH IN ARTICLE IX, E. 2. AN OFFEROR WILL NOT BE CONSIDERED RESPONSIBLE UNLESS HE HAS ON HAND OR CAN SHOW POSITIVE EVIDENCE THAT HE CAN OBTAIN, PRIOR TO THE BEGINNING OF CLASSES, THE APPLICABLE MINIMUM LANGUAGE LABORATORY POSITIONS INDICATED BELOW. ... "

ADDITIONALLY, PARAGRAPH 29.D PROVIDED THAT "PRIOR TO RECEIPT OF AWARD" THE OFFEROR SHALL HAVE AVAILABLE SUFFICIENT CLASSROOMS TO ACCOMMODATE THOSE CLASSES WHICH WERE TO BEGIN DURING THE FIRST TWO MONTHS.

YOU CONTEND THAT VOX IN THE ORIGINAL SOLICITATION, AND WIT IN THE RESOLICITATION, MADE A MATERIAL MISREPRESENTATION WHICH INVALIDATED THEIR CONTRACTS INASMUCH AS NEITHER CONCERN HAD THE STAFF AND FACILITIES, AS CERTIFIED AT THE TIME THEY SUBMITTED THEIR PROPOSALS, AND THEREFORE THEIR OFFERS DID NOT COMPLY WITH THE SOLICITATION REQUIREMENTS AND THERE WAS NO MEETING OF MINDS AS TO THOSE REQUIREMENTS.

IT IS EVIDENT FROM THE RFP PROVISIONS QUOTED ABOVE THAT THE SOLICITATION IS AMBIGUOUS AS TO WHETHER IT WAS ESSENTIAL TO THE GOVERNMENT'S NEEDS THAT THE OFFERORS ACTUALLY HAVE THE STAFF AND FACILITIES IN HAND WHEN SUBMITTING THEIR PROPOSALS. IN THE ADMINISTRATIVE REPORT, A COPY OF WHICH WAS FURNISHED YOU, IT IS CLEARLY SHOWN THAT TO CORRECTLY REFLECT THE INTENTIONS OF THE PROCURING ACTIVITY THE CERTIFICATION ON THE FRONT PAGE SHOULD HAVE BEEN THAT THE OFFEROR HAS OR "HAS THE ABILITY TO OBTAIN" THE SPECIFIED REQUIREMENTS, AND WE HAVE BEEN ADVISED THAT THE CERTIFICATION LANGUAGE WILL BE CORRECTED IN FUTURE PROCUREMENTS. IT IS FURTHER REPORTED:

"TO ADHERE TO THE INTERPRETATION THE PROTESTANT PLACES ON THE INTENT OF THE RFP WOULD IN EFFECT HAVE MADE THE PROCUREMENT 'SOLE SOURCE'. THE NUMBER OF FOREIGN LANGUAGE TEACHERS AVAILABLE IS LIMITED IN THE WASHINGTON AREA. AT THE TIME THE GOVERNMENT MUST SOLICIT PROPOSALS IN ORDER TO OBTAIN COMPETITION AND MAKE AN AWARD FOR REQUIREMENTS BEGINNING IN EARLY JULY, THE INCUMBENT CONTRACTOR HAS AN OVERWHELMING ADVANTAGE OVER THE COMPETITION IN THAT THE AREA'S AVAILABLE LABOR FORCE IS IN HIS EMPLOY. HOWEVER, AS CLASSES FINISH TOWARD THE END OF THE FISCAL YEAR, POTENTIAL CONTRACTORS ARE ABLE TO REACH CONTINGENT AGREEMENTS WITH TEACHERS FOR THE NEW FISCAL YEAR. IN PAST YEARS WE REQUIRED THAT LISTS OF TEACHERS BE SUBMITTED WITH PROPOSALS, BUT DISCONTINUED THE PRACTICE WHEN ALMOST IDENTICAL LISTS OF NAMES WERE RECEIVED FROM ALL OFFERORS."

ACCORDINGLY, WE FIND NO BAD FAITH ON THE PART OF EITHER VOX OR WIT IN SUBMITTING PROPOSALS ON THE BASIS OF THEIR HAVING THE ABILITY TO OBTAIN THE REQUIREMENTS, OR THAT THERE WAS ANY MISUNDERSTANDING IN SUCH RESPECT BETWEEN THE CONTRACTING PARTIES, OR THAT YOU WERE PREJUDICED IN THE MATTER.

THE CONTRACTING OFFICER DETERMINED THAT THE AVAILABILITY OF FACILITIES AND PERSONNEL WAS A MATTER OF RESPONSIBILITY WHICH COULD BE ESTABLISHED BY EVIDENCE FURNISHED AFTER THE SUBMISSION OF PROPOSALS. WE AGREE WITH THE CONTRACTING OFFICER'S POSITION. THIS OFFICE HAS CONSISTENTLY HELD THAT WHERE THE REQUIREMENT FOR THE SUBMISSION OF INFORMATION IS FOR THE PURPOSE OF DETERMINING THE CAPACITY OR RESPONSIBILITY OF THE OFFEROR, RATHER THAN DETERMINING WHETHER THE PROPERTY OR SERVICES OFFERED CONFORM TO THE GOVERNMENT'S NEEDS AS STATED IN THE SOLICITATION, THE FAILURE OF THE OFFEROR TO SUBMIT SUCH INFORMATION WITH HIS PROPOSAL IS NOT FATAL TO CONSIDERATION OF THE PROPOSAL, INASMUCH AS AN OFFEROR'S CAPACITY OR RESPONSIBILITY MAY BE DETERMINED ON THE BASIS OF INFORMATION SUBMITTED AFTER THE OPENING OF THE PROPOSALS. 39 COMP. GEN. 247 (1959); ID. 881 (1960); 41 ID. 555. THE RESULT IS THE SAME EVEN THOUGH THE OFFERORS ARE WARNED THAT FAILURE TO CONFORM TO DATA SUBMISSION WILL RESULT IN THEIR PROPOSALS BEING DEEMED NONRESPONSIVE. SEE 39 COMP. GEN. 881 (1960); 42 ID. 464 (1963).

IN YOUR LETTER OF OCTOBER 10, 1969, SUBMITTED AFTER YOU EXAMINED THE ADMINISTRATIVE REPORT, YOU PRESENT SEVERAL CONTENTIONS ON CCI'S BEHALF. FIRST, YOU CONTEND THAT IN AWARDING THE REPROCUREMENT CONTRACT TO WIT, THE QUALIFICATIONS SET FORTH IN THE ORIGINAL SOLICITATION SHOULD HAVE BEEN, BUT WERE NOT, FOLLOWED. SECONDLY, YOU CONTEND THAT THE AGENCY DID NOT COMPLY WITH THE REQUIREMENTS WHICH WERE IMPLIEDLY SUGGESTED IN ITS OWN REPORT AS BEING NECESSARY TO QUALIFY FOR AWARD.

THE PROCURING ACTIVITY CONTENDS THAT ANY ALLEGATION OF NONRESPONSIVENESS SHOULD NOT BE CONSIDERED. THE ACTIVITY STATES THAT THEY HAD NO TIME TO PREPARE A WRITTEN SOLICITATION AND THAT THEY REALIZED NO ONE, INCLUDING CCI, COULD BE RESPONSIVE TO THE ORIGINAL SOLICITATIONS ON THE DEFAULTED PROCUREMENTS. THE ACTIVITY STATES THAT IT DID THE BEST IT COULD IN THE TIME AVAILABLE IN SOLICITING THE SCHOOLS BY TELEPHONE, INFORMING EACH ONE ORALLY THAT THE RESULTANT CONTRACT, IF ANY, WOULD BE SUBSTANTIALLY IN ACCORDANCE WITH THE ORIGINAL SOLICITATION FOR THE NON-SET-ASIDE REQUIREMENT. THE ACTIVITY FURTHER ADVISES THAT EACH OFFEROR INDICATED SOME TERMS OF THE ORIGINAL SOLICITATION WOULD HAVE TO BE WAIVED.

IN CONSIDERING THE MERITS OF YOUR CONTENTIONS IT MUST BE BORNE IN MIND THAT DIFFERENT RULES APPLY UNDER A REPROCUREMENT CONTRACT THAN UNDER AN INITIAL PROCUREMENT. THUS, ASPR 8-602.6 ALLOWS THE CONTRACTING OFFICER EXTREME LATITUDE ON REPROCUREMENT. IN B-150973, MARCH 18, 1963, WE STATED IN THIS REGARD:

"AS TO THE NECESSITY TO MINIMIZE DAMAGES, THE CONTRACTING AGENCY HAS REPORTED THAT THE CONTRACT TO BE AWARDED IS A REPLACEMENT FOR A CONTRACT PREVIOUSLY DEFAULTED. IN SUCH A SITUATION, THE PURCHASE MADE IS FOR THE ACCOUNT OF THE DEFAULTED CONTRACTOR AND THE STATUTORY REQUIREMENT THAT CONTRACTS BE LET AFTER COMPETITIVE BIDDING IS NOT UNDERSTOOD BY OUR OFFICE TO APPLY. WHEN COMPETITIVE BIDDING IS NOT REQUIRED BY STATUTE AND THE PUBLIC AUTHORITY VOLUNTARILY ADVERTISES FOR BIDS, IT CAN REJECT ALL BIDS AND ENTER INTO PRIVATE NEGOTIATIONS WITH ONE OF THE BIDDERS IN ORDER TO SECURE A LOWER BID. 43 AM. JUR., PUBLIC WORKS AND CONTRACTS, SECTION 49.

"FURTHER, IN THE CASE OF THE REPLACEMENT OF DEFAULTED CONTRACTS, THE GOVERNMENT IS UNDER AN OBLIGATION TO MITIGATE THE DAMAGES OF THE DEFAULTING CONTRACTOR WHENEVER POSSIBLE. IN ALABAMA SHIRT & TROUSER CO. V UNITED STATES, 121 CT. CL. 313, THE COURT FOUND THAT THE GOVERNMENT FAILED TO MITIGATE DAMAGES WHEN IT AWARDED A REPLACEMENT CONTRACT TO THE SOLE BIDDER THAT RESPONDED TO A TELEGRAPHIC INVITATION FOR BIDS SENT TO 117 FIRMS WHEN IT POSSIBLY COULD HAVE REPURCHASED FROM OTHER MANUFACTURERS AT A LESSER COST THAN THAT STIPULATED IN THE REPLACEMENT CONTRACT." ADDITION, THIS OFFICE HAS HELD THAT ON REPROCUREMENT EVEN A NONRESPONSIVE LOW BID COULD BE ACCEPTED DUE TO THE LATITUDE PROVIDED BY ASPR FOR A REPROCUREMENT CONTRACT. B-154650, AUGUST 12, 1964.

IN REGARD TO YOUR SECOND CONTENTION THAT THE PROCURING ACTIVITY DID NOT COMPLY WITH THE REQUIREMENTS FOR QUALIFYING WHICH ARE IMPLIEDLY SUGGESTED BY ITS OWN REPORT, YOU HAVE EMPHASIZED THAT THE ACTIVITY APPARENTLY CONSIDERED IT A SIGNIFICANT CRITERION THAT THE OFFEROR BE A REGULAR DEALER, HAVE FINANCIAL STABILITY, HAVE AVAILABLE CLASS SCHEDULES AND TEACHERS, AND HAVE A FIRM COMMITMENT FOR FACILITIES. IN REGARD TO WIT'S BEING A REGULAR DEALER YOU CITE THE ADMINISTRATIVE REPORT WHICH STATES "THAT W.I.T. HAS BEEN IN BUSINESS SINCE APRIL 15, 1968, ORIGINALLY AT 2309 WILSON BOULEVARD, ARLINGTON, VIRGINIA, AND NOW AT 8011 LEWINSVILLE ROAD, MCLEAN, VIRGINIA." YOU CLAIM THIS ASSERTION IS ERRONEOUS IN THAT THE PRESIDENT OF WIT WAS IN THE EMPLOY OF THE CROWELL COLLIER INSTITUTE ON APRIL 15, 1968, AND THAT WIT HAS NOT BEEN IN THE BUSINESS OF LANGUAGE TRAINING, TO YOUR KNOWLEDGE, SINCE THAT DATE OR SINCE ANY DATE OTHER THAN THE FIRST DAY OF CLASSES UNDER THE AWARDED CONTRACT. YOU STATE YOU WERE UNABLE TO LOCATE ANY RECORD OF WIT BEING IN BUSINESS AT 2309 WILSON BOULEVARD, ARLINGTON, VIRGINIA, AND TO YOUR KNOWLEDGE THE OTHER CITED ADDRESS (8011 LEWINSVILLE ROAD, MCLEAN, VIRGINIA), IS THE HOME ADDRESS OF WIT'S PRESIDENT. YOU ADVISE THAT YOU HAVE BEEN UNABLE TO LOCATE ANY RECORD OF WIT'S INCORPORATION AND IN REQUESTING A D&B REPORT YOU WERE INFORMED THAT IT WAS IMPOSSIBLE TO LOCATE ANY INFORMATION WITH RESPECT TO THE FIRM. YOU STATE YOU HAVE BEEN ADVISED THAT THE AWARDED LANGUAGE TRAINING CONTRACT IS THE FIRST CONTRACT EVER RECEIVED BY WIT AND THAT THE ADMINISTRATIVE REPORT FAILS TO OUTLINE ANY SUCH CONTRACTS OR EVEN AN INDIVIDUAL TUTORING ARRANGEMENT PERFORMED BY WIT PRIOR TO THE AWARD OF THE CONTRACT.

THE AGENCY STATES THAT WHEN IT QUESTIONED WIT ABOUT ITS STATUS AS A REGULAR DEALER, THE AGENCY WAS INFORMED BY WIT'S PRESIDENT THAT HE HAD BEEN TEACHING AND SUPERVISING THE TEACHING OF LANGUAGES FOR MANY YEARS AND WAS HEAD OF A LANGUAGE DEPARTMENT AT CCI BEFORE GOING INTO BUSINESS FOR HIMSELF. THE AGENCY DESIRED WRITTEN CONFIRMATION CONCERNING THE CORPORATION AND THE RECORD INDICATES THAT ON JULY 25, 1969, THE PRESIDENT OF WIT SIGNED THE FOLLOWING STATEMENT: "WORLD INSTRUCTION AND TRANSLATION, INC. HAS BEEN REGULARLY ENGAGED IN TEACHING OF FOREIGN LANGUAGES SINCE 15 APRIL 1968 AT 2309 WILSON BLVD., ARLINGTON, VIRGINIA, AND IS NOW SO REGULARLY ENGAGED AT 8011 LEWINSVILLE RD., MCLEAN, VIRGINIA."

SINCE THE ONLY REFERENCE TO "REGULAR DEALER" IN THE RFP WAS APPLICABLE ONLY IF THE CONTRACT WAS FOR SUPPLIES IN EXCESS OF $10,000, WE ARE CONSTRAINED TO THE VIEW THAT USE OF THE TERM IN THE ADMINISTRATIVE REPORT RELATED SOLELY TO THE CONTRACTING OFFICER'S DETERMINATION THAT WIT WAS A RESPONSIBLE BIDDER. BOTH THE AMOUNT AND THE TYPE OF EVIDENCE NEEDED TO SUPPORT THAT DETERMINATION WAS THEREFORE WITHIN THE DISCRETION OF THE CONTRACTING OFFICER. HAVING RECEIVED THE SIGNED STATEMENT BY WIT'S PRESIDENT AND SINCE NO SPECIFIC OBJECTION WAS MADE PRIOR TO AWARD ON THIS ISSUE, WE CANNOT SAY THE AGENCY WAS REMISS IN NOT FURTHER QUESTIONING WIT CONCERNING ITS STATUS AS AN OFFEROR REGULARLY ENGAGED IN THE LANGUAGE TRAINING BUSINESS.

IN REGARD TO YOUR CONTENTION THAT THE AGENCY INCORRECTLY DETERMINED WIT WAS FINANCIALLY STABLE SO AS TO PERFORM THIS CONTRACT, YOU STATE THAT THE AGENCY RELIED ON THE WRITTEN STATEMENT BY ONE WILLIAM SIKORA THAT HE WAS PLACING HIS FINANCIAL SUPPORT BEHIND WIT. YOU STATE THAT YOUR COPY OF THE ADMINISTRATIVE REPORT DID NOT CONTAIN THIS STATEMENT, BUT YOU QUESTION WHETHER A STATEMENT PLEDGING "FINANCIAL SUPPORT" AFFORDS THE GOVERNMENT ANY RIGHTS AGAINST MR. SIKORA SHOULD WIT, LIKE ITS PREDECESSOR, VOX, FAIL. YOU CLAIM THERE IS NO EVIDENCE SUBMITTED WITH THE AGENCY REPORT SHOWING THE GOVERNMENT IS PROTECTED IN THE EVENT THAT MR. SIKORA, LIKE THE FINANCIAL "SUPPORTER" OF VOX, SHOULD CHOOSE TO WITHDRAW HIS SUPPORT.

THE PROCURING ACTIVITY REPORT INDICATES THAT THE ACTIVITY WAS CONCERNED AND WANTED ASSURANCES AS TO WIT'S FINANCIAL STATUS. THEREFORE, ON JULY 24, 1969, WHEN MR. SIKORA'S ATTORNEY STATED HE WAS AUTHORIZED TO INFORM THE AGENCY THAT MR. SIKORA WOULD MAKE AVAILABLE TO WIT WHATEVER AMOUNT WAS NECESSARY TO PERFORM THE CONTRACT, A WRITTEN CONFIRMATION OF SUCH BACKING WAS REQUESTED. ON JULY 25, MR. MICHAEL, WIT'S DIRECTOR, INFORMED THE AGENCY THAT A LETTER FROM MR. SIKORA HAD BEEN PLACED ON A PLANE IN NEW JERSEY. MR. MICHAEL MET THE PLANE IN WASHINGTON AND DELIVERED THE LETTER TO THE ACTIVITY ON THAT SAME DAY.

THE AGENCY, WHICH INADVERTENTLY FAILED TO INCLUDE A COPY OF MR. SIKORA'S LETTER WITH THE ADMINISTRATIVE REPORT, HAS NOW FURNISHED US A COPY OF THIS LETTER, A COPY OF WHICH WE FORWARDED TO YOUR FIRM. MR. SIKORA, WHO IS A VICE PRESIDENT AND MAJOR SHAREHOLDER IN WIT STATED IN THE LETTER THAT HE HAD INSTRUCTED HIS BANK (PEOPLES NATIONAL BANK) TO OPEN AN ACCOUNT IN THE NAME OF SAID CORPORATION AND HAVE FUNDS DEPOSITED THEREIN NECESSARY TO START AND CARRY ON OPERATIONS OF THE SAID COMPANY. THE PROCURING ACTIVITY ALREADY WAS IN POSSESSION OF A FINANCIAL STATEMENT BY A CERTIFIED PUBLIC ACCOUNTANT ON MR. SIKORA, WHICH INDICATED HE OWNED A CONTROLLING INTEREST IN 10 CORPORATIONS AND AS OF DECEMBER 31, 1968, HAD A VERY SUBSTANTIAL NET WORTH.

THE PROCURING ACTIVITY ALSO EXAMINED WIT'S CORPORATE STRUCTURE AND DETERMINED THE FIRM'S OFFICERS APPEARED TO BE MEN OF RESPONSIBILITY. ADDITION TO MR. MICHAEL AND MR. SIKORA, THE TREASURER OF THE CORPORATION IS AN OFFICER IN THE PEOPLES NATIONAL BANK IN NEW JERSEY AND THE SECRETARY IS AN ATTORNEY IN THE SAME STATE.

QUESTIONS CONCERNING THE FINANCIAL QUALIFICATIONS OF A PROPOSED CONTRACTOR ARE FOR RESOLUTION PRIMARILY BY THE ADMINISTRATIVE OFFICERS CONCERNED. IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE DETERMINATION OF FINANCIAL RESPONSIBILITY, WHICH WE DO NOT FIND HERE, WE ARE NOT JUSTIFIED IN OBJECTING TO A DETERMINATION MADE ON THIS QUESTION BY THE ADMINISTRATIVE AGENCY. SEE 37 COMP. GEN. 430 (1957); 36 ID. 42 (1956).

YOU HAVE ALSO MENTIONED THE FACT THAT THE AGENCY REPORT MAKES A PLAIN MISSTATEMENT THAT "WIT WAS BETTER PREPARED TO BEGIN THAN CCI OR IML." YOU CLAIM CCI HAD ALL TEACHERS NECESSARY FOR PERFORMANCE (WITH THE EXCEPTION OF MONGOLIAN AND AFRIKAANS) AND WAS PREPARED TO BEGIN CLASSES IMMEDIATELY. YOU CLAIM THE AGENCY MISSTATEMENT MAY BE ATTRIBUTED TO ANOTHER SPECIFIC MISSTATEMENT IN THE ADMINISTRATIVE REPORT THAT CCI "COULD BEGIN CLASSES IN ALL LANGUAGES EXCEPT AFRIKAANS AND MONGOLIAN BY 0800, 28 JULY, IF AWARD IS MADE BY CLOSE OF BUSINESS 25 JULY. IF AWARD IS MADE LATER - TRAINING COULD START ONE WEEK LATER. (ADM. REP. 9)." YOU CLAIM CCI IN FACT ADVISED DSS-W REPRESENTATIVES THAT IT COULD BEGIN ON JULY 28, 1969, AND THAT, IF AWARD WAS MADE LATER, TRAINING WOULD BE POSTPONED COMMENSURATELY (AWARD ONE DAY LATER, TRAINING TO BE INITIATED ONE DAY LATER).

ALTHOUGH IT IS POSSIBLE THAT THERE WAS A MISUNDERSTANDING AS TO WHEN CCI STATED IT COULD BEGIN PERFORMANCE, WE DO NOT SEE HOW ANY SUCH MISUNDERSTANDING COULD AFFECT THE VALIDITY OF THE AWARDED CONTRACT, IN THAT THERE IS ENTIRELY LACKING ANY EVIDENCE OF BAD FAITH ON THE AGENCY'S PART, OR ANY EVIDENCE THAT EXCEPT FOR THIS MISUNDERSTANDING WIT WOULD NOT HAVE RECEIVED THE CONTRACT AWARD.

YOU HAVE ALSO CONTENDED THAT "THE AGENCY APPARENTLY CONSIDERED 'A FIRM COMMITMENT' FOR FACILITIES TO BE A CRITERIA FOR QUALIFICATION." YOU CITE FROM PAGE 12 OF THE REPORT WHICH STATES: "W.I.T. SUBMITTED A FIRM COMMITMENT FOR THE SPACE (DATED JULY 25, 1969) FROM MR. PAUL POMPONIO OF NATIONAL REALTY AND CONSTRUCTION CO." YOU EMPHASIZE THAT MR. POMPONIO'S LETTER OF JULY 25, 1969, MERELY STATES THAT "THIS IS TO CONFIRM THAT WE HAVE THREE FLOORS AVAILABLE FOR RENTAL TO YOU (WIT) IN OUR POMPONIO PLAZA BUILDING" AND SUCH A STATEMENT IN YOUR OPINION MEANS NOTHING MORE THAN MR. POMPONIO HAS SOME SPACE FOR RENT.

THE RECORD INDICATES THAT THE PROCURING ACTIVITY WAS CONCERNED WITH THE QUESTION AS TO WHO HELD THE LEASE TO THE 6TH, 7TH AND 8TH FLOORS OF THE POMPONIO PLAZA BUILDING, SINCE BOTH VOX AND WIT HAD PROPOSED TO USE THIS LOCATION FOR PERFORMANCE OF THE CONTRACT. FOR THIS REASON, MR. POMPONIO WAS CONTACTED BY THE PROCURING ACTIVITY ON JULY 24, 1969, TO DETERMINE WHICH FIRM HELD THE LEASE FOR THIS LOCATION. MR. POMPONIO SAID HE BELIEVED VOX HAD BREACHED THEIR SIGNED LEASE AGREEMENT AND THEREFORE HIS COMPANY, NATIONAL REALTY AND CONSTRUCTION CO., INC., COULD LEASE THE FLOORS TO SOMEONE ELSE, BUT AS OF THAT DATE HE HAD TAKEN NO ACTION AGAINST VOX AND HAD NOT OBTAINED LEGAL ADVICE. AS A RESULT OF THIS CONVERSATION, THE PROCURING ACTIVITY ON JULY 25, 1969, FELT THAT WIT SHOULD OBTAIN A BINDING AGREEMENT WITH NATIONAL REALTY FOR THE FACILITY BEFORE CONTRACT AWARD, AND THE KIND OF ASSURANCE MR. MICHAEL NEEDED TO GET THE AWARD WAS DISCUSSED WITH MR. POMPONIO WHO SAID HE WOULD GIVE WIT A FIRM WRITTEN COMMITMENT.

THE LETTER FROM MR. POMPONIO TO WIT DATED AND SIGNED JULY 25, 1969, AND FOR WHICH THE PROCURING ACTIVITY DETERMINED WIT HAD RECEIVED A FIRM COMMITMENT FOR THE SPACE READS AS FOLLOWS:

"GENTLEMEN:

"THIS IS TO CONFIRM THAT WE HAVE THREE FLOORS AVAILABLE FOR RENTAL TO YOU IN OUR POMPONIO PLAZA BUILDING, 1800 NORTH KENT STREET, ARLINGTON, VIRGINIA.

"THE 7TH FLOOR IS COMPLETELY PARTITIONED AND AVAILABLE FOR IMMEDIATE OCCUPANCY SO THAT YOU SECURE A CONTRACT WITH THE UNITED STATES GOVERNMENT. THE 6TH AND 8TH FLOORS CAN BE PARTITIONED TO YOUR REQUIREMENTS AND AVAILABLE NOT LATER THAN SEPTEMBER 1, 1969."

SINCE THE CONTRACT WAS AWARDED ON JULY 25, 1969, WE CONSIDER THIS LETTER DATED THE SAME DATE TO BE SUFFICIENT EVIDENCE OF WIT'S ABILITY TO OBTAIN SPACE FACILITIES AND FOR THE AGENCY TO ASSUME THAT WIT COULD IMMEDIATELY HAVE A LEASE FOR THIS SPACE UPON THE RECEIVING OF THE CONTRACT AWARD.

IN REGARD TO THE OBTAINING OF THE ASSURANCE THAT WIT COULD HAVE A LEASE TO THE 6TH, 7TH AND 8TH FLOORS OF THE POMPONIO PLAZA BUILDING YOU HAVE STATED:

"IN CONNECTION WITH THIS LAST CRITERIA, WE NOTE THAT REPRESENTATIVES OF THE DEFENSE SUPPLY SERVICE WENT OUT OF THEIR WAY TO ASSIST WIT IN MEETING EVEN THE RELAXED CRITERIA FOR QUALIFICATION. IT IS CERTAINLY NOT A USUAL FUNCTION OF PROCUREMENT OFFICIALS TO ASSIST OFFERORS IN OBTAINING COMMITMENTS OR LETTERS FROM THIRD PARTIES, WHICH ARE ESSENTIAL TO THEIR QUALIFICATION FOR AWARD CONSIDERATION. TAB R NOTES THE CONTACT BETWEEN AGENCY REPRESENTATIVES AND MR. POMPONIO TO DISCUSS 'THE KIND OF ASSURANCE MR. MICHAEL NEEDED TO GET THE AWARD.' AFTER SOME DISCUSSION AND APPARENTLY PERSUASION, MR. POMPONIO AGREED TO GIVE A SO-CALLED COMMITMENT, WHICH APPARENTLY TURNED OUT TO BE THE 'SPACE AVAILABLE' LETTER OF JULY 25, 1969."

WE FIND NOTHING IN THE RECORD ON WHICH TO CONCLUDE THAT THE PROCURING ACTIVITY COMMITTED SOME MATERIAL IMPROPRIETY IN ATTEMPTING TO ASSURE ITSELF THAT THE PROPOSED CONTRACTOR COULD OBTAIN THE SPACE HE PROPOSED TO USE UNDER THE CONTRACT. WE NOTE YOU HAVE CITED NO PROCUREMENT REGULATIONS THE AGENCY VIOLATED IN THIS REGARD, AND WE FEEL THE DISCUSSIONS BY THE AGENCY CONCERNING WIT'S SPACE ARRANGEMENTS WERE NOT LEGALLY OBJECTIONABLE UNDER THE CIRCUMSTANCES.

FOR THE REASONS STATED, YOUR PROTEST IS DENIED.