B-167767, FEB. 2, 1970

B-167767: Feb 2, 1970

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DETERMINATION OF CONTRACTING OFFICER AT PREAWARD SURVEY THAT LOW BIDDER WAS UNRESPONSIBLE BASED ON UNSATISFACTORY EXPERIENCE UNDER OTHER GOVERNMENT CONTRACTS IS NOT AN ARBITRARY OR CAPRICIOUS DETERMINATION OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. THEREFORE DETERMINATION IS UPHELD. INC.: REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 19. WHICH WAS ISSUED ON MAY 26. WHEN BIDS WERE OPENED UNDER THE SUBJECT IFB THE PROCURING ACTIVITY NOTED THAT YOUR CONCERN HAD SUBMITTED THE LOWEST OFFER. BECAUSE THE CONTRACTING OFFICER COULD NOT READILY MAKE AN AFFIRMATIVE FINDING THAT YOUR COMPANY WAS A RESPONSIBLE FIRM. THE CONTRACTING OFFICER DETERMINED THAT YOUR COMPANY WAS NONRESPONSIBLE AND PREPARED TO MAKE AN AWARD TO THE NEXT LOW RESPONSIBLE BIDDER.

B-167767, FEB. 2, 1970

BID PROTEST--BIDDER RESPONSIBILITY DECISION TO FEDERAL CONTRACTORS, INC; DENYING PROTEST AGAINST REJECTION OF LOW BID FOR PAINTING AT MCCHORD AIR FORCE BASE. DETERMINATION OF CONTRACTING OFFICER AT PREAWARD SURVEY THAT LOW BIDDER WAS UNRESPONSIBLE BASED ON UNSATISFACTORY EXPERIENCE UNDER OTHER GOVERNMENT CONTRACTS IS NOT AN ARBITRARY OR CAPRICIOUS DETERMINATION OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. THEREFORE DETERMINATION IS UPHELD.

TO FEDERAL CONTRACTORS, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 19, 1969, AND SUBSEQUENT CORRESPONDENCE IN WHICH YOU PROTESTED AGAINST THE REJECTION OF YOUR LOW BID UNDER INVITATION FOR BIDS (IFB) NO. F45603-69-B-0179, WHICH WAS ISSUED ON MAY 26, 1969, BY MCCHORD AIR FORCE BASE FOR PAINTING THE EXTERIOR OF CERTAIN BUILDINGS AT THE FACILITY. WHEN BIDS WERE OPENED UNDER THE SUBJECT IFB THE PROCURING ACTIVITY NOTED THAT YOUR CONCERN HAD SUBMITTED THE LOWEST OFFER. BECAUSE THE CONTRACTING OFFICER COULD NOT READILY MAKE AN AFFIRMATIVE FINDING THAT YOUR COMPANY WAS A RESPONSIBLE FIRM, HE REQUESTED THE SEATTLE OFFICE OF THE DEFENSE CONTRACT ADMINISTRATION SERVICES (DCAS) TO PERFORM A PRE-AWARD SURVEY (PAS). THE REPORT RECOMMENDED THAT NO AWARD BE MADE TO YOUR COMPANY BECAUSE OF ITS UNSATISFACTORY PERFORMANCE RECORD UNDER RECENT GOVERNMENT PAINTING CONTRACTS. ADDITIONALLY, THE REPORT STATED THAT INQUIRIES ALSO DISCLOSED UNSATISFACTORY EXPERIENCE WITH YOUR CONCERN UNDER PAINTING CONTRACTS WITH LOCAL GOVERNMENTAL AGENCIES. IN VIEW THEREOF, THE CONTRACTING OFFICER DETERMINED THAT YOUR COMPANY WAS NONRESPONSIBLE AND PREPARED TO MAKE AN AWARD TO THE NEXT LOW RESPONSIBLE BIDDER. ON OCTOBER 28, 1969, THE AIR FORCE ADVISED US IT WAS PROCEEDING WITH AN AWARD BECAUSE THE WAGE RATES APPLICABLE TO THE PROCUREMENT WERE EXPIRING.

YOU CONTENDED THAT THIS DETERMINATION WAS BASED ON ERRONEOUS DATA AND ALSO REFLECTED THE BIAS OF CERTAIN PROCUREMENT OFFICIALS TOWARD YOUR COMPANY. IN SUPPORT OF THESE ALLEGATIONS YOU HAVE SUBMITTED A COPY OF THE INVESTIGATIVE REPORT OF LT. COLONEL L. A. WILLIAMS DATED MAY 27, 1969, CONCERNING YOUR PERFORMANCE UNDER THREE OF THE EIGHT CONTRACTS WHICH ARE LISTED IN THE CONTRACTING OFFICER'S NONRESPONSIBILITY DETERMINATION. THESE CONTRACTS WERE AWARDED TO YOUR COMPANY FOR PAINTING CERTAIN FACILITIES AT FORT LEWIS, WASHINGTON, AND HAD ALSO BEEN CITED AS A BASIS FOR FINDING YOUR CONCERN NONRESPONSIBLE FOR PURPOSES OF AN EARLIER PROCUREMENT. ALTHOUGH LT. COLONEL WILLIAMS CONCLUDED THAT AVAILABLE EVIDENCE SUBSTANTIATED SOME OF YOUR CHARGES, HE FOUND THAT YOUR PERFORMANCE UNDER THESE CONTRACTS AT FORT LEWIS, WASHINGTON, WAS SUFFICIENTLY DEFICIENT, WITHOUT REFERENCE TO THE MATTERS REPORTED BY YOU, TO JUSTIFY A DETERMINATION THAT YOUR COMPANY WAS NONRESPONSIBLE FOR PURPOSES OF THE EARLIER PROCUREMENT. IN THIS REGARD, LT. COLONEL WILLIAMS HAS CHARACTERIZED THE QUALITY OF YOUR PERFORMANCE UNDER THE FORT LEWIS CONTRACTS AS FOLLOWS:

"THE CONTRACTOR'S PERFORNACE, TO DATE HAS BEEN POOR IN MANAGEMENT AND SCHEDULING, CLEAN UP, AND COOPERATION, AND AT TIMES HE HAS VIOLATED THE SPECIFICATIONS AND BEEN REQUIRED TO REDO THIS WORK."

WITH RESPECT TO THE COMMENTS WHICH YOU SUBMITTED TO OUR OFFICE IN A LETTER DATED OCTOBER 22, 1969, IN REGARD TO YOUR PERFORMANCE UNDER THE OTHER CONTRACTS WHICH WERE CITED IN THE CONTRACTING OFFICER'S NONRESPONSIBILITY DETERMINATION, THE PROCURING ACTIVITY HAS INVESTIGATED YOUR ASSERTIONS AT OUR REQUEST. THIS INVESTIGATION REVEALED THAT CERTAIN STATEMENTS MADE IN THE PAS CONCERNING YOUR PERFORMANCE UNDER STATE OF WASHINGTON AND CITY OF SEATTLE CONTRACTS WERE ERRONEOUS. IN THIS REGARD, THE CONTRACTING OFFICER HAS ADVISED US IN PERTINENT PART AS FOLLOWS:

"STATEMENT: FEDERAL CONTRACTORS AS A SUCCESSOR TO MORGAN, INC; FOR A PORT OF SEATTLE CONTRACT.

"RESPONSE: INFORMATION REGARDING FEDERAL CONTRACTORS BEING A SUCCESSOR TO MORGAN, INC; RESULTED FROM AN IMPRESSION GIVEN MR. MINER OF DCASD BY MR. WEBBER. TO THE BEST OF MR. MINER'S RECOLLECTION, HE WAS ADVISED THAT FEDERAL CONTRACTORS 'TOOK OVER' THE PERSONNEL, PLANT AND EQUIPMENT OF MORGAN, INC. THE PORT OF SEATTLE HAS NO RECORD OF FEDERAL CONTRACTORS AS A PARTY TO THIS CONTRACT.

"STATEMENT: CONTRACTS WITH SEATTLE SCHOOL DISTRICT NOT COMPLETED ON TIME.

"RESPONSE: CONTACTED MR. CARL ANDERSEN AT THE SEATTLE SCHOOL DISTRICT REGARDING THIS STATEMENT. HE STATED THAT NO VIOLENCE OF THE TYPE OR MAGNITUDE DESCRIBED WAS ENCOUNTERED DURING THE PERFORMANCE OF THIS CONTRACT. ABNORMAL RAIN WAS ENCOUNTERED IN AUGUST 1968 AND PERFORMANCE WAS EXTENDED TO 1969. WORK UNDER THIS CONTRACT HAS BEEN COMPLETED; HOWEVER, THE CONTRACT IS STILL OPEN BECAUSE FEDERAL CONTRACTORS HAVE NOT SIGNED THE AGREEMENT ALLOWING CREDIT TO THE CONTRACTING AGENCY FOR THE EXTENSION OF TIME. MR. ANDERSEN FURTHER STATED THAT BODILY PAINTING CORPORATION WAS A SUBCONTRACTOR UNDER FEDERAL CONTRACTORS; HOWEVER, HE COULD NOT CONFIRM OR DENY THAT BODILY WAS THE CAUSE OF THE PROBLEMS.

"STATEMENT: THAT FEDERAL CONTRACTORS WAS NOT DEFAULTED AND WORK WAS COMPLETED BY THE BONDING COMPANY.

"RESPONSE: MR. ANDERSEN STATES THAT THE CONTRACT IN QUESTION WAS REFERRED TO THE BONDING COMPANY FOR ACTION WHEN THE CONTRACTOR BECAME DELINQUENT IN PERFORMANCE. THE BONDING COMPANY EXERTED EFFORTS WHICH RESULTED IN FEDERAL CONTRACTORS INC; COMPLETING THE CONTRACT. THE CONTRACT WAS NOT COMPLETED BY THE BONDING COMPANY AS STATED IN THE PRE AWARD SURVEY.

"STATEMENT: UNSATISFACTORY EXPERIENCE AT THE UNIVERSITY OF WASHINGTON.

"RESPONSE: MR. NICK JOHNSON, PURCHASING AGENT FOR THE UNIVERSITY OF WASHINGTON, REPORTS THAT FEDERAL CONTRACTORS HAD BEEN AWARDED ONE CONTRACT FOR APPROXIMATELY $3400.00. PERFORMANCE UNDER THE CONTRACT WAS REASONABLY SATISFACTORY. THE COMMENT REGARDING UNSATISFACTORY EXPERIENCE WITH THE CONTRACTOR RESULTED FROM A SUBSEQUENT BID WHICH FEDERAL CONTRACTORS INC; CLAIMED ERROR IN BID. DIFFICULTIES AND DELAYS WERE ENCOUNTERED BY THE PURCHASING ACTIVITY IN OBTAINING DOCUMENTATION REGARDING THE BID ERROR. FEDERAL CONTRACTORS WAS FINALLY ALLOWED TO WITHDRAW HIS BID. FEDERAL CONTRACTORS HAS NOT BEEN REMOVED FROM THE UNIVERSITY OF WASHINGTON'S BIDDERS' LIST."

IN VIEW OF THESE DISCREPANCIES THE CONTRACTING OFFICER ASKED THE PAS MONITOR WHETHER ANOTHER SURVEY SHOULD BE TAKEN. THE MONITOR INFORMED THE CONTRACTING OFFICER THAT AN ADDITIONAL SURVEY WOULD NOT CHANGE THE NEGATIVE RECOMMENDATION PREVIOUSLY SUBMITTED. THIS JUDGMENT WAS APPARENTLY BASED ON THE CHARACTER OF YOUR PERFORMANCE UNDER THE THREE CONTRACTS AT FORT LEWIS AND INSOFAR AS THE CONTRACTING OFFICER'S INVESTIGATION CONFIRMED THE CONCLUSIONS OF THE PAS WITH REGARD TO THE QUALITY OF YOUR PERFORMANCE UNDER THE OTHER CONTRACTS SET FORTH IN THE SURVEY. IN THIS REGARD THE CONTRACTING OFFICER HAS ADVISED OUR OFFICE OF HIS FINDINGS AS FOLLOWS:

"STATEMENT: UNSATISFACTORY PERFORMANCE AT WASHINGTON STATE UNIVERSITY.

"RESPONSE: MR. BRUCE RUTHERFORD, DIRECTOR OF PHYSICAL PLANT WSU WAS CONTACTED REGARDING THE ABOVE STATEMENT. HE STATED THAT THE CONTRACT IN QUESTION IS NOT NOW COMPLETE AND THAT NO WORK HAS BEEN PERFORMED ON THE CONTRACT SINCE SEPTEMBER 1968. HE REPORTS THAT THE CONTRACTOR DID NOT AGGRESSIVELY PURSUE THE CONTRACT DURING THE SUMMER OF 1968 AND THE SCHOOL HAD TO ISSUE A STOP WORK ORDER IN SEPTEMBER IN ORDER TO USE THE CLASSROOMS TO BE PAINTED. IN JUNE OF 1969, FEDERAL CONTRACTORS SENT ONE MAN TO THE JOB SITE. HE WAS THERE ONE DAY AND LEFT. AS A RESULT, NO WORK WAS PERFORMED DURING THE SUMMER OF 1969. FEDERAL CONTRACTORS WAS ADVISED THAT THEY WOULD NOT BE ALLOWED TO WORK DURING THE CHRISTMAS VACATION 1969. WORK AREAS WERE AVAILABLE AND THE CONTRACTOR WAS NOT DELAYED BY THE SCHOOL ACCORDING TO MR. RUTHERFORD.

"STATEMENT: TWO CONTRACTS AT FAIRCHILD AFB.

"RESPONSE: MR. NISSEN, BASE PROCUREMENT OFFICER AT FAIRCHILD AFB, STATES THAT THE STATEMENT BY FEDERAL CONTRACTORS IS ESSENTIALLY CORRECT. LIQUIDATED DAMAGES WERE ASSESSED ON BOTH CONTRACTS DUE TO LATE COMPLETION. STATEMENTS CONTAINED IN LETTER, BPRS/NISSEN, 15 AUG 69 STILL APPLIES, WITH THE EXCEPTION THAT FURTHER INVESTIGATION DISCLOSED THAT NO VIOLATION OF THE DAVIS-BACON ACT OCCURRED UNDER THE CONTRACT AND THE INVESTIGATION HAS BEEN DROPPED.

"STATEMENT: UNSATISFACTORY PERFORMANCE FOR GSA.

"RESPONSE: CONTACTED MR. ART RIEHL AT GENERAL SERVICES ADMINISTRATION WHO ADVISED THAT INFORMATION CONTAINED IN THE PRE-AWARD SURVEY IS CORRECT. MR. RIEHL CONFIRMS THAT NO LIQUIDATED DAMAGES WERE ASSESSED ON THIS CONTRACT. (PRE-AWARD SURVEY DID NOT INDICATE THAT LIQUIDATED DAMAGES WERE ASSESSED). CONTRACTOR CREDITED TO THE GOVERNMENT $300.00 FOR WORK NOT COMPLETED. MR. RIEHL WAS UNABLE TO COMMENT ON THE ALUMINUM DOOR BECAUSE HE HAD NO KNOWLEDGE OF THE CIRCUMSTANCES."

UNDER 10 U.S.C. 2305 (C) AWARD OF A CONTRACT MAY BE MADE ONLY TO A RESPONSIBLE BIDDER, AND SECTION 1-902 OF THE ARMED SERVICES PROCUREMENT REGULATION REQUIRES AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY BY THE CONTRACTING OFFICER PRIOR TO AN AWARD. IT IS WELL SETTLED THAT A BIDDER'S RECORD OF INTEGRITY AND CONTRACT PERSEVERANCE MAY BE CONSIDERED IN DETERMINING WHETHER HE IS, IN FACT, A RESPONSIBLE BIDDER. 39 COMP. GEN. 468 (1959). SINCE THE DETERMINATION OF A BIDDER'S RESPONSIBILITY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION, OUR OFFICE HAS CONSTANTLY MAINTAINED THAT THE ADMINISTRATIVE DETERMINATION OF NONRESPONSIBILITY WILL NOT BE QUESTIONED UNLESS ARBITRARY, CAPRICIOUS, OR NOT SUPPORTED BY SUBSTANTIAL GROUNDS. 36 COMP. GEN. 42 (1956).

ON THE RECORD PRESENT IN THIS CASE WE DO NOT FEEL THAT WE WOULD BE JUSTIFIED IN HOLDING THE CONTRACTING OFFICER'S DETERMINATION TO BE ARBITRARY OR CAPRICIOUS OR NOT SUPPORTED BY SUBSTANTIAL GROUNDS.

WITH RESPECT TO THE ERRONEOUS INFORMATION INCLUDED IN THE PAS REPORT WE ARE TODAY ADVISING THE SECRETARY OF THE AIR FORCE THAT ACTION SHOULD BE TAKEN TO PREVENT USE OF THIS INFORMATION IN FUTURE PROCUREMENTS.