B-170429, DEC. 22, 1970

B-170429: Dec 22, 1970

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MINORITY CONTROLLED BUSINESS ARE WITHOUT MERIT. THAT ZEBRA ADVERTISED IN LOCAL NEWSPAPER TO OBTAIN APPLICANTS TO TRAIN FOR POSITIONS THAT OFFERED OPPORTUNITIES TO ADVANCE TO PRODUCTION AND MANAGERIAL POSITIONS IS NOT SUFFICIENT TO ESTABLISH FRAUD OR FAVORITISM IN THE CONTRACTING AGENCY'S FINDING THAT ZEBRA WAS A RESPONSIBLE BIDDER. WHILE ZEBRA WAS ESTABLISHED THROUGH A SUBSIDIARY OF PEOPLES INVOLVEMENT CORPORATION. THE RECORD DOES NOT INDICATE THAT ZEBRA IS BEING SPONSORED DIRECTLY OR INDIRECTLY. BY THE GOVERNMENT OR THAT FEDERAL FUNDS ARE BEING USED TO SUPPORT ITS ACTIVITIES. INC.: REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 22. THE PROCUREMENT WAS FOR THE PREPARATION AND PRODUCTION OF PUBLICATIONS BY OFFSET PRINTING AND BINDING.

B-170429, DEC. 22, 1970

BID PROTEST - BIDDER RESPONSIBILITY DENIAL OF PROTEST OF DARSEL GRAPHIC ART SERVICES, INC AGAINST THE AWARD OF AN ADVERTISED CONTRACT FOR PRODUCTION OF PUBLICATIONS BY OFFSET PRINTING AND BINDING ISSUED BY THE GODDARD SPACE FLIGHT CENTER TO ZEBRA GRAPHICS, SECOND LOW BIDDER, ON THE BASIS THAT ALLEGATIONS AGAINST ZEBRA ARISING OUT OF ITS STATUS AS A NEW, MINORITY CONTROLLED BUSINESS ARE WITHOUT MERIT. THAT ZEBRA ADVERTISED IN LOCAL NEWSPAPER TO OBTAIN APPLICANTS TO TRAIN FOR POSITIONS THAT OFFERED OPPORTUNITIES TO ADVANCE TO PRODUCTION AND MANAGERIAL POSITIONS IS NOT SUFFICIENT TO ESTABLISH FRAUD OR FAVORITISM IN THE CONTRACTING AGENCY'S FINDING THAT ZEBRA WAS A RESPONSIBLE BIDDER. WHILE ZEBRA WAS ESTABLISHED THROUGH A SUBSIDIARY OF PEOPLES INVOLVEMENT CORPORATION, A NONPROFIT ORGANIZATION WHICH RECEIVED A GRANT FROM THE OEO, THE RECORD DOES NOT INDICATE THAT ZEBRA IS BEING SPONSORED DIRECTLY OR INDIRECTLY, BY THE GOVERNMENT OR THAT FEDERAL FUNDS ARE BEING USED TO SUPPORT ITS ACTIVITIES.

TO DARSEL GRAPHIC ART SERVICES, INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 22, 1970, AS SUPPLEMENTED BY ADDITIONAL MATERIAL PRESENTED ON NOVEMBER 12, 1970, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER INVITATION FOR BIDS (IFB) S- 03202-666 ISSUED ON JUNE 17, 1970, BY GODDARD SPACE FLIGHT CENTER, GREENBELT, MARYLAND.

THE PROCUREMENT WAS FOR THE PREPARATION AND PRODUCTION OF PUBLICATIONS BY OFFSET PRINTING AND BINDING, AND WAS TOTALLY SET ASIDE FOR SMALL BUSINESS CONCERNS. IN RESPONSE TO THE INVITATION, THE FOLLOWING FOUR BIDS WERE RECEIVED AND OPENED ON JULY 17, 1970:

THORION INDUSTRIES CORPORATION $139,202.21

ZEBRA GRAPHICS $144,227.55

DARSEL GRAPHIC ART SERVICES, INC. $165,938.27

ACROMAT CORPORATION $240,031.92

YOUR ALLEGATION CONCERNING THE LOW BIDDER IS THAT THORION INDUSTRIES CORPORATION (THORION), DOES NOT POSSESS THE NECESSARY EQUIPMENT AND FACILITIES TO SUCCESSFULLY PERFORM THE WORK REQUIRED UNDER THE SOLICITATION. IN THIS CONNECTION, THE PROCURING ACTIVITY CONDUCTED A PREAWARD SURVEY OF THORION AND CONCLUDED THAT THORION NOT ONLY LACKED THE NECESSARY EQUIPMENT AND FACILITIES, BUT ALSO LACKED THE FINANCIAL RESOURCES TO PERFORM THE WORK. IT WAS THEREFORE DETERMINED THAT THORION WAS NOT A RESPONSIBLE CONTRACTOR FOR THE AWARD. IN ACCORDANCE WITH NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA), PROCUREMENT REGULATIONS 1.705-4, THE MATTER OF THORION'S CAPACITY AND CREDIT WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION (SBA) REGIONAL OFFICE IN PHILADELPHIA, WHICH DECLINED TO ISSUE A CERTIFICATE OF COMPETENCY TO THORION. ACCORDINGLY, AS YOU CONTEND, THORION IS NOT ELIGIBLE FOR THE AWARD.

YOU ALSO SET FORTH A NUMBER OF ALLEGATIONS TO ESTABLISH THAT THE SECOND- LOW BIDDER, ZEBRA GRAPHICS, DOES NOT QUALIFY AS A RESPONSIBLE CONTRACTOR.

FIRST, YOU CONTEND THAT ZEBRA GRAPHICS LACKED TRAINED AND EXPERIENCED PRODUCTION AND MANAGERIAL PERSONNEL NECESSARY FOR THE PERFORMANCE OF THE CONTRACT. YOU BASE THE CONTENTION ON AN ADVERTISEMENT IN A LOCAL NEWSPAPER ON APRIL 2, 1970, IN WHICH ZEBRA GRAPHICS OFFERED TO TRAIN APPLICANTS FOR A NUMBER OF POSITIONS IN PRINTING AND RELATED OPERATIONS FOR ITS NEW PRINTING PLANT. WE ARE ADVISED THAT THE ADVERTISEMENT FOLLOWED A CUSTOMARY PRACTICE OF GROWING BUSINESS ENTERPRISES TO RECRUIT QUALIFIED PERSONNEL TO PERFORM THE VARIOUS JOBS REQUIRED, WHILE AT THE SAME TIME INDICATING THAT THERE WERE OPPORTUNITIES FOR GROWTH, THROUGH TRAINING FOR HIGHER LEVEL POSITIONS. IN ANY EVENT THE PROCURING ACTIVITY CONDUCTED A PREAWARD SURVEY OF ZEBRA GRAPHICS ON AUGUST 12, 1970, WHICH CONCLUDES THAT ZEBRA GRAPHICS HAS THE EXPERIENCED PERSONNEL, FACILITIES AND EQUIPMENT REQUIRED TO PERFORM THE CONTRACT.

OUR OFFICE HAS CONSISTENTLY HELD THAT THE DETERMINATION OF A BIDDER'S OVERALL RESPONSIBILITY IS PRIMARILY A FUNCTION OF THE CONTRACTING AGENCY AND NOT OF THE GENERAL ACCOUNTING OFFICE. 38 COMP. GEN. 131 (1958); 33 ID. 549 (1954). WHETHER A BIDDER IS, OR IS NOT, CAPABLE OF PRODUCING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF FACT AND, UNLESS IT IS CLEARLY ESTABLISHED THAT THE DETERMINATION OF A BIDDER'S CAPABILITIES WAS BASED ON ERROR, FRAUD, OR FAVORITISM, NONE OF WHICH ARE EVIDENCED IN THE PRESENT CASE, OUR OFFICE WILL ACCEPT THE FINDINGS OF THE CONTRACTING AGENCY. 40 COMP. GEN. 294. WE HAVE ALSO STATED THAT THE PROJECTION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT, WHICH, WHILE IT SHOULD BE BASED ON FACT AND ARRIVED AT IN GOOD FAITH, MUST BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICERS 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, WE HAVE HELD THAT IT WOULD BE UNREASONABLE TO SUPERIMPOSE THE JUDGMENT OF OUR OFFICE ON THAT OF THE CONTRACTING OFFICIALS. 39 COMP. GEN. 705, 711 (1960).

ADDITIONALLY, YOU CONTEND THAT ZEBRA GRAPHICS DID NOT HAVE THE NECESSARY EQUIPMENT INSTALLED AT THE TIME OF BID OPENING AS REQUIRED BY ARTICLE 5D OF THE INVITATION'S SCHEDULE, WHICH STATES:

"DUE TO THE NATURE OF THE WORK AND THE TIME REQUIREMENTS DEEMED NECESSARY TO ADEQUATELY RESPOND TO OUR MANY OVERNIGHT PRINTING DEADLINES AND DUPLICATING PROBLEMS, AWARD MAY BE MADE ONLY TO CONTRACTORS WITH PRODUCTION EQUIPMENT AND FACILITIES LOCATED WITHIN A 25 MILE RADIUS OF THE GODDARD SPACE FLIGHT CENTER AT THE TIME OF BID OPENING." (UNDERSCORING SUPPLIED.) CONTRARY TO YOUR CONTENTION, INFORMATION OBTAINED BY NASA FROM ZEBRA GRAPHICS INDICATES THAT THE FIRM STARTED TO INSTALL ITS EQUIPMENT ON, OR ABOUT, JUNE 1, 1970, AND COMPLETED INSTALLATION ON JULY 1, 1970, WHICH WAS MORE THAN TWO WEEKS PRIOR TO THE OPENING OF BIDS ON JULY 17, 1970.

YOU FURTHER ALLEGE THAT ZEBRA GRAPHICS IS INDIRECTLY A GOVERNMENT SPONSORED COMPANY. YOU APPARENTLY ARE OF THE VIEW THAT IT WOULD BE IMPROPER FOR THE GOVERNMENT TO CONTRACT WITH ZEBRA GRAPHICS UNDER SUCH CIRCUMSTANCES. IT IS REPORTED THAT PEOPLES INVOLVEMENT CORPORATION (PIC), A NONPROFIT ORGANIZATION, RECEIVED A SPECIAL IMPACT PROGRAM GRANT FROM THE OFFICE OF ECONOMIC OPPORTUNITY. SUBSEQUENTLY, THE BOARD OF DIRECTORS OF PIC FORMED A PROFIT-MAKING SUBSIDIARY CALLED PEOPLE'S DEVELOPMENT CORPORATION (PDC) FOR THE PURPOSE OF PROMOTING NEW BUSINESSES. ONE OF THE NEW BUSINESSES ESTABLISHED BY PDC WAS ZEBRA GRAPHICS. WHILE IT APPEARS THAT PDC WAS FORMED BY AN ORGANIZATION WHICH HAD RECEIVED A FEDERAL GRANT, THE RECORD DOES NOT INDICATE THAT ZEBRA GRAPHICS IS BEING SPONSORED, DIRECTLY OR INDIRECTLY, BY THE GOVERNMENT OR THAT FEDERAL FUNDS ARE BEING USED IN ANY WAY TO SUPPORT THE ACTIVITIES OF ZEBRA GRAPHICS OR ITS PARENT COMPANY, PDC.

ADDITIONALLY, YOU ALLEGE THAT VOLT INFORMATION SCIENCES, INC. (VOLT), A LARGE BUSINESS FIRM UNDER CONTRACT WITH PDC, REPRESENTED ZEBRA GRAPHICS AT THE BID OPENING AND, THEREFORE, YOU SUGGEST THAT THERE MIGHT BE A VIOLATION IN ZEBRA GRAPHIC'S CERTIFICATION THAT "HE HAS NOT EMPLOYED OR RETAINED ANY COMPANY OR PERSON OTHER THAN A FULL TIME, BONA FIDE EMPLOYEE WORKING SOLELY FOR THE OFFEROR TO SOLICIT OR SECURE THIS CONTRACT."

IN REGARD TO THIS COVENANT AGAINST CONTINGENT FEE ARRANGEMENTS, SUBPART 1 -1.500 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) STATES, IN PERTINENT PART, THAT:

" *** THE REQUIREMENTS OF THIS SUBPART HAVE AS THEIR OBJECTIVE THE PREVENTION OF IMPROPER INFLUENCE IN CONNECTION WITH THE OBTAINING OF GOVERNMENT CONTRACTS, THE ELIMINATION OF ARRANGEMENTS WHICH ENCOURAGE THE PAYMENT OF INEQUITABLE AND EXORBITANT FEES BEARING NO REASONABLE RELATIONSHIP TO THE SERVICES ACTUALLY PERFORMED, AND THE PREVENTION OF UNWARRANTED EXPENDITURE OF PUBLIC FUNDS WHICH INEVITABLY RESULTS THEREFROM. THE METHODS USED TO ACHIEVE THESE OBJECTIVES ARE THE REQUIREMENT FOR DISCLOSURE OF THE DETAILS OF ARRANGEMENTS UNDER WHICH AGENTS REPRESENT CONCERNS IN OBTAINING GOVERNMENT CONTRACTS, AND THE PROHIBITING, BY USE OF THE COVENENT AGAINST CONTINGENT FEES, OF CERTAIN TYPES OF CONTRACTOR-AGENT ARRANGEMENTS."

IT IS REPORTED THAT PDC ENTERED INTO A ONE-YEAR CONTRACT WITH VOLT TO PROVIDE MANAGEMENT ASSISTANCE AND TRAINING FOR THE NEWLY ESTABLISHED ZEBRA GRAPHICS PRINTING ORGANIZATION. IN THE ABSENCE OF ANY EVIDENCE OF RECORD INDICATING THAT VOLT WAS RETAINED FOR THE PURPOSE OF SECURING THE SUBJECT CONTRACT, OR OTHER GOVERNMENT CONTRACTS, FOR ZEBRA GRAPHICS, WE CANNOT CONCLUDE THAT THE FIRM'S CERTIFICATION WAS IMPROPER.

YOU ALSO CONTEND THAT ZEBRA GRAPHICS WILL PURCHASE ITS PRODUCTION SUPPLIES FROM A GENERAL SERVICES ADMINISTRATION (GSA) SUPPLY SCHEDULE AT PRICES WITH WHICH PRIVATE INDUSTRY CANNOT COMPETE. WE ARE ADVISED BY COGNIZANT PERSONNEL OF BOTH NASA AND GSA THAT THEY ARE NOT AWARE OF ANY ARRANGEMENT WHEREBY ZEBRA GRAPHICS HAS BEEN AUTHORIZED TO PURCHASE SUCH SUPPLIES FROM THE GSA SUPPLY SCHEDULE. IN THE ABSENCE OF EVIDENCE TO CORROBORATE YOUR UNSUPPORTED CONTENTION, THE RECORD BEFORE US PROVIDES NO BASIS FOR CONCLUDING THAT ZEBRA GRAPHICS HAD AN UNFAIR COMPETITIVE ADVANTAGE OVER OTHER BIDDERS.

THE REMAINING POINTS RAISED IN YOUR PROTEST CONCERNING YOUR ACHIEVEMENTS IN MINORITY HIRING AND TRAINING, DO NOT APPEAR TO PRESENT ANY LEGAL ISSUES PERTAINING TO THE PROPRIETY OF THE PROPOSED AWARD TO ZEBRA GRAPHICS.

FOR THE ABOVE REASONS, YOUR PROTEST IS DENIED.