B-171095, MAY 4, 1971

B-171095: May 4, 1971

Additional Materials:

Contact:

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

 

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

ALTHOUGH THE CONTRACTING OFFICER WAS INITIALLY UNABLE TO MAKE AN AFFIRMATIVE FINDING THAT ECE MET THE MINIMUM STANDARDS OF A RESPONSIBLE. THERE IS NO BASIS FOR PRECLUDING A CONTRACTING OFFICER FROM REEVALUATING A BIDDER'S RESPONSIBILITY BASED ON ADDITIONAL INFORMATION. NOTWITHSTANDING THAT THE MATTER WAS REFERRED TO THE SBA FOR A COC. SUCH CERTIFICATE WAS NEVER ISSUED DUE TO THE CONTRACTING OFFICER'S REEVALUATION. THEREFORE SBA'S ACTIONS ARE IMMATERIAL. BECAUSE THE WAGE RATES INCORPORATED IN THE IFB WERE ABOUT TO EXPIRE. AN AWARD WAS PROPER UNDER ASPR 2-407.8(B)(2) REGARDLESS OF THE PENDING PROTEST. TO VALLEY CONSTRUCTION COMPANY: REFERENCE IS MADE TO YOUR TELEGRAM OF NOVEMBER 10. WHICH WAS ISSUED BY THE DISTRICT ENGINEER.

B-171095, MAY 4, 1971

BID PROTEST - BIDDER RESPONSIBILITY DECISION DENYING PROTEST BY SECOND LOW BIDDER AGAINST AWARD OF CONTRACT TO EAST COAST ENGINEERING (ECE), LOW BIDDER, UNDER AN IFB ISSUED BY ROBINS AFB, FOR CERTAIN ALTERATIONS AND ELECTRICAL REPAIRS. ALTHOUGH THE CONTRACTING OFFICER WAS INITIALLY UNABLE TO MAKE AN AFFIRMATIVE FINDING THAT ECE MET THE MINIMUM STANDARDS OF A RESPONSIBLE, PROSPECTIVE CONTRACTOR, THERE IS NO BASIS FOR PRECLUDING A CONTRACTING OFFICER FROM REEVALUATING A BIDDER'S RESPONSIBILITY BASED ON ADDITIONAL INFORMATION. FURTHER, NOTWITHSTANDING THAT THE MATTER WAS REFERRED TO THE SBA FOR A COC, SUCH CERTIFICATE WAS NEVER ISSUED DUE TO THE CONTRACTING OFFICER'S REEVALUATION. THEREFORE SBA'S ACTIONS ARE IMMATERIAL. ALSO, BECAUSE THE WAGE RATES INCORPORATED IN THE IFB WERE ABOUT TO EXPIRE, AN AWARD WAS PROPER UNDER ASPR 2-407.8(B)(2) REGARDLESS OF THE PENDING PROTEST.

TO VALLEY CONSTRUCTION COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM OF NOVEMBER 10, 1970, AND SUBSEQUENT CORRESPONDENCE CONCERNING YOUR PROTEST UNDER INVITATION FOR BIDS NO. DACA21-71-B-0002, WHICH WAS ISSUED BY THE DISTRICT ENGINEER, U.S. ARMY, SAVANNAH, GEORGIA, ON JULY 24, 1970, FOR ALTERATIONS AND ELECTRICAL REPAIRS TO CERTAIN FACILITIES AT ROBINS AIR FORCE BASE, HOUSTON COUNTY, GEORGIA.

WHEN BIDS WERE OPENED ON SEPTEMBER 15, 1970, THE PROCURING ACTIVITY DETERMINED THAT EAST COAST ENGINEERING (ECE), HAD SUBMITTED THE LOWEST BID FOR THE WORK TO BE AWARDED IN THE AMOUNT OF $1,113,247 AND THAT YOUR COMPANY HAD SUBMITTED THE SECOND LOWEST BID FOR THE WORK IN THE AMOUNT OF $1,161,000. IT WAS ALSO NOTED THAT ECE HAD REPRESENTED ITS BUSINESS STATUS AS AN INDIVIDUAL ORGANIZATION IN PARAGRAPH 3 OF STANDARD FORM 19-B, REPRESENTATIONS AND CERTIFICATIONS, WHICH WAS MADE A PART OF THE COMPANY'S BID, AND THAT JOHN E. MCMICHEN HAD SIGNED ECE'S BID AS OWNER OF THE CONCERN.

SUBSEQUENTLY, ECE CLAIMED THAT IT MADE A MISTAKE IN COMPUTING ITS BID AND SUBMITTED WORKING PAPERS TO THE CONTRACTING OFFICER IN SUPPORT OF THE ALLEGED ERROR. AFTER DISCUSSING THE MATTER WITH THE CONTRACTING OFFICER ECE WITHDREW ITS CLAIM OF MISTAKE IN BID.

THE RECORD ALSO INDICATES THAT THE CONTRACTING OFFICER REQUESTED ECE TO FURNISH DATA TO THE PROCURING ACTIVITY BY SEPTEMBER 30, 1970, CONCERNING ITS FINANCIAL RESOURCES AND CAPACITY TO ACCOMPLISH THE WORK. THE CONTRACTING OFFICER STATES THAT THIS DATA INCLUDED A LIST OF PREVIOUS JOBS, WHICH ECE HAD PRIMARILY PERFORMED AS AN ELECTRICAL SUBCONTRACTOR, AND A COPY OF A JOINT VENTURE AGREEMENT, DATED SEPTEMBER 22, 1970, BETWEEN ECE AND SOUTHERN ELECTRIC COMPANY, INC., A FLORIDA CORPORATION, FOR THE PURPOSE OF PERFORMING ANY CONTRACT AWARDED TO ECE UNDER THE SUBJECT IFB.

AFTER EVALUATING THE MATERIAL FURNISHED BY ECE THE CONTRACTING OFFICER WAS UNABLE TO MAKE AN AFFIRMATIVE FINDING THAT THE CONCERN MET THE MINIMUM STANDARDS OF A RESPONSIBLE, PROSPECTIVE CONTRACTOR, ESPECIALLY WITH RESPECT TO ITS FINANCIAL CAPACITY, WHICH ARE SET FORTH IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-903.1 AND 1-903.2 AS FOLLOWS:

"1-903 MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS.

1-903.1 GENERAL STANDARDS. EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH 1-903, A PROSPECTIVE CONTRACTOR MUST:

(I) HAVE ADEQUATE FINANCIAL RESOURCES, OR THE ABILITY TO OBTAIN SUCH RESOURCES AS REQUIRED DURING PERFORMANCE OF THE CONTRACT (SEE DEFENSE CONTRACT FINANCING REGULATIONS, PART 2, APPENDIX E, AND ANY AMENDMENTS THERETO; SEE ALSO 1-904.2 AND 1-905.2; FOR SBA CERTIFICATES OF COMPETENCY, SEE 1-705.4);

(II) BE ABLE TO COMPLY WITH THE REQUIRED OR PROPOSED DELIVERY OR PERFORMANCE SCHEDULE, TAKING INTO CONSIDERATION ALL EXISTING BUSINESS COMMITMENTS, COMMERCIAL AS WELL AS GOVERNMENTAL (FOR SBA CERTIFICATES OF COMPETENCY, SEE 1-705.4);

(III) HAVE A SATISFACTORY RECORD OF PERFORMANCE (CONTRACTORS WHO ARE SERIOUSLY DEFICIENT IN CURRENT CONTRACT PERFORMANCE, WHEN THE NUMBER OF CONTRACTS AND THE EXTENT OF DEFICIENCY OF EACH ARE CONSIDERED, SHALL, IN THE ABSENCE OF EVIDENCE TO THE CONTRARY OR CIRCUMSTANCES PROPERLY BEYOND THE CONTROL OF THE CONTRACTOR, BE PRESUMED TO BE UNABLE TO MEET THIS REQUIREMENT). PAST UNSATISFACTORY PERFORMANCE, DUE TO FAILURE TO APPLY NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB, SHALL BE SUFFICIENT TO JUSTIFY A FINDING OF NONRESPONSIBILITY. (IN THE CASE OF SMALL BUSINESS CONCERNS, SEE 1-705.4(C)(VI) AND 1-905.2.);

(IV) HAVE A SATISFACTORY RECORD OF INTEGRITY (IN THE CASE OF A SMALL BUSINESS CONCERN, SEE 1-705.4(C)(VI).); AND

(V) BE OTHERWISE QUALIFIED AND ELIGIBLE TO RECEIVE AN AWARD UNDER APPLICABLE LAWS AND REGULATIONS, E.G., SECTION XII, PARTS 6 AND 8 (IN THE CASE OF A SMALL BUSINESS CONCERN, SEE 1-705.4(C)(V).).

1-903.2 ADDITIONAL STANDARDS

(A) STANDARDS FOR PRODUCTION, MAINTENANCE, CONSTRUCTION, AND RESEARCH AND DEVELOPMENT CONTRACTS. IN ADDITION TO THE STANDARDS IN 1 903.1, IN PROCUREMENT INVOLVING PRODUCTION, MAINTENANCE, CONSTRUCTION (SEE 18-106), OR RESEARCH AND DEVELOPMENT WORK (AND IN OTHER PROCUREMENT AS APPROPRIATE), A PROSPECTIVE CONTRACTOR MUST:

(I) HAVE THE NECESSARY ORGANIZATION, EXPERIENCE, OPERATIONAL CONTROLS AND TECHNICAL SKILLS, OR THE ABILITY TO OBTAIN THEM (INCLUDING WHERE APPROPRIATE, SUCH ELEMENTS AS PRODUCTION CONTROL PROCEDURES, PROPERTY CONTROL SYSTEM AND QUALITY ASSURANCE MEASURES APPLICABLE TO MATERIALS PRODUCED OR SERVICES PERFORMED BY THE PROSPECTIVE CONTRACTOR AND SUBCONTRACTORS (SEE 1-903.4)); AND

(II) HAVE THE NECESSARY PRODUCTION, CONSTRUCTION, AND TECHNICAL EQUIPMENT AND FACILITIES, OR THE ABILITY TO OBTAIN THEM. WHERE A PROSPECTIVE CONTRACTOR PROPOSES TO USE THE FACILITIES OR EQUIPMENT OF ANOTHER CONCERN, NOT A SUBCONTRACTOR, OR OF HIS AFFILIATE (SEE 2 201(ABII) AND (B)(XVII)), ALL EXISTING BUSINESS ARRANGEMENTS, FIRM OR CONTINGENT, FOR THE USE OF SUCH FACILITIES OR EQUIPMENT SHALL BE CONSIDERED IN DETERMINING THE ABILITY OF THE PROSPECTIVE CONTRACTOR TO PERFORM THE CONTRACT; SEE ALSO 1- 904.2." IN VIEW THEREOF, THE CONTRACTING OFFICER REFERRED THE QUESTION OF THE CAPACITY AND CREDIT OF ECE TO THE ATLANTA REGIONAL OFFICE OF THE SMALL BUSINESS ADMINISTRATION (SBA), BY LETTER OF SEPTEMBER 30, 1970, IN ACCORDANCE WITH ASPR 1 705.4(C).

IN THIS REGARD THE SBA HAS FURNISHED OUR OFFICE WITH A REPORT CONCERNING THE ACTIONS TAKEN BY THE AGENCY IN RESPONSE TO THIS REFERRAL. THE REPORT STATES THAT SBA REPRESENTATIVES CONTACTED ECE AND THE COMPANY SUBMITTED AN APPLICATION FOR A CERTIFICATE OF COMPETENCY (COC) OF THE CONCERN'S CAPACITY AND CREDIT TO SATISFACTORILY ACCOMPLISH THE REQUIREMENTS OF THE IFB. PURSUANT TO SUCH APPLICATION THE SBA INITIATED AN INVESTIGATION OF THE COMPANY'S COMPETENCY TO PERFORM THE CONTRACT.

THE RECORD INDICATES THAT DURING THIS INVESTIGATION SBA REPRESENTATIVES SUGGESTED THAT THE JOINT VENTURE AGREEMENT, NOTED ABOVE, BE AMENDED TO PROVIDE THAT SOUTHERN ELECTRIC COMPANY EXPRESSLY ASSUME RESPONSIBILITY FOR TIMELY COMPLETING PERFORMANCE OF THE CONTRACT, TO BE FINANCIALLY RESPONSIBLE TO ALL SUPPLIERS AND SUBCONTRACTORS, AND TO AUTHORIZE ECE TO CONTRIBUTE ITS SHARE OF ANY CALLS FOR FUNDS UNDER THE AGREEMENT BY MEANS OF A PROMISSORY NOTE. THE SBA STATES THAT IN ACCORDANCE WITH SUCH ADVICE THE JOINT VENTURE AGREEMENT WAS MODIFIED, AS RECOMMENDED, BY AMENDMENTS DATED OCTOBER 21, 1970.

ADDITIONALLY, SBA REPRESENTATIVES SUGGESTED THAT A LETTER BE OBTAINED FROM A BANK ESTABLISHING A $50,000 OPEN LINE OF CREDIT. IN COMPLIANCE WITH THIS SUGGESTION SOUTHERN ELECTRIC COMPANY, OBTAINED A LETTER DATED OCTOBER 21, 1970, FROM THE FLORIDA NATIONAL BANK, IN WHICH THE BANK STATED THAT IT WOULD PROVIDE LOANS TO SOUTHERN ELECTRIC COMPANY, INC., UP TO $50,000 FOR THE PERFORMANCE OF THE PROPOSED CONTRACT.

THE REGIONAL OFFICE CERTIFICATE OF COMPETENCY REVIEW COMMITTEE CONSIDERED THE APPLICATION OF ECE ON OCTOBER 23, 1970, AND RECOMMENDED THAT A COC BE ISSUED. SINCE THE DOLLAR AMOUNT OF THE PROPOSED CONTRACT EXCEEDED THE AMOUNT WHICH HAD BEEN ESTABLISHED IN THE DELEGATED AUTHORITY OF THE REGIONAL DIRECTOR FOR THE ISSUANCE OF A CERTIFICATE OF COMPETENCY, THE FILE WAS FORWARDED TO SBA, WASHINGTON, D.C., FOR A FINAL DECISION ON THE APPLICATION. THE FILE WAS REVIEWED BY AN INDUSTRIAL SPECIALIST, WHO DETERMINED THAT THE APPLICANT HAD THE NECESSARY CAPACITY TO PERFORM, AND BY THE DEPUTY DIRECTOR, OFFICE OF FINANCE, WHO DETERMINED THAT THE APPLICANT HAD THE NECESSARY CREDIT TO PERFORM.

WHILE THE APPLICATION WAS BEING CONSIDERED BY THE SBA, THE CONTRACTING OFFICER DETERMINED ON NOVEMBER 6, 1970, THAT ECE WAS RESPONSIBLE FOR PURPOSES OF THIS PROCUREMENT AND WITHDREW THE REFERRAL OF ECE'S COMPETENCY FROM THE SBA. ACCORDINGLY, THE SBA DID NOT ISSUE A COC TO ECE IN THIS MATTER.

THE CONTRACTING OFFICER STATES THAT HE WAS ABLE TO DETERMINE THAT ECE WAS A RESPONSIBLE CONTRACTOR BASED ON ADDITIONAL INFORMATION WHICH HE OBTAINED AFTER THE QUESTION OF THE COMPETENCY OF ECE HAD BEEN REFERRED TO THE SBA. THIS DATA WAS SET FORTH IN THE DETERMINATION OF THE RESPONSIBILITY OF ECE BY THE CONTRACTING OFFICER IN PERTINENT PART AS FOLLOWS:

"SUBSEQUENT TO THE REQUEST FOR ASSISTANCE FROM THE SMALL BUSINESS ADMINISTRATION MENTIONED ABOVE, INFORMATION HAS BEEN FURNISHED TO ME WHICH DEMONSTRATES THE VAST EXPERIENCE HISTORY OF MR. JOHN E. MCMICHEN, EXTENDING FROM HIS DISCHARGE FROM THE ARMY IN APPROXIMATELY 1947 UP TO THE FORMATION OF EAST COAST ENGINEERING COMPANY IN EARLY 1970. IT IS APPARENT TO ME FROM THIS EXPERIENCE RECORD THAT MR. MCMICHEN HAS BEEN INVOLVED EXTENSIVELY WITH GOVERNMENT SPONSORED PROJECTS, SERVING IN MOST CASES IN A HIGH MANAGERIAL CAPACITY. WHILE SERVING AS DIVISION MANAGER FOR CONSTRUCTION IN THE SOUTHEAST WITH MEVA CORPORATION DURING THE YEARS 1968 THROUGH 1970, MR. MCMICHEN MAINTAINED CONTROL OVER THE ELECTRICAL INSTALLATIONS FOR THE SOUTHEASTERN SIGNAL SCHOOL, AND 7 & 11 EM BARRACKS, FORT GORDON, GEORGIA, MULTI-MILLION DOLLAR PROJECTS WHICH WAS UNDER THE ADMINISTRATIVE SUPERVISION OF THIS DISTRICT.

"MR. BOSTICK OF INDIAN RIVER CONSTRUCTION COMPANY, PRIME CONTRACTOR, ADVISED THAT EAST COAST ENGINEERING WAS PROCEEDING REAL WELL ON THEIR JOB AS SUBCONTRACTOR AT CITY OF THOMPSON, GEORGIA, WATER TREATMENT PLANT. MR. BOSTICK ALSO STATED THAT HE HAD KNOWN MR. MCMICHEN FOR OVER 20 YEARS AND HE CONSIDERED HIM TO BE ONE OF THE BEST PROJECT ENGINEERS IN THE ENTIRE COUNTRY. MR. BOSTICK WAS AN ENGINEER FOR THE CITY OF JACKSONVILLE, FLORIDA, FOR MANY YEARS. DAVID WIDENER, AN OFFICIAL OF SOUTHWIDE CONSTRUCTION COMPANY, INC., ADVISES THAT EAST COAST ENGINEERING, INC., HAD BEEN EMPLOYED BY SOUTHWIDE AS ELECTRICAL SUBCONTRACTOR ON THE BELL AUDITORIUM REMODELING JOB FOR THE CITY OF AUGUSTA, GEORGIA, AND A REHAB AND TRANSFORMER CONTRACT FOR THE POST ENGINEER, FORT STEWART, GEORGIA, AND PERFORMED THEIR WORK IN A SATISFACTORY MANNER.

"EAST COAST ENGINEERING WAS AWARDED A CONTRACT BY THIS DISTRICT ON 30 SEPTEMBER 1970 FOR INCREASED TRANSFORMER CAPACITY, AREA I & II, FAMILY HOUSING, FORT BRAGG, NORTH CAROLINA, IN THE AMOUNT OF $44,447. THE COMPLETION DATE OF THIS CONTRACT IS IN MARCH 1971.

"I AM ADVISED BY MY RESIDENT ENGINEER, FORT GORDON, GEORGIA, THAT EAST COAST ENGINEERING WAS COOPERATIVE AND DID A GOOD JOB AS THE SUBCONTRACTOR FOR THE LINE WORK INCLUDED UNDER A CONTRACT AWARDED TO PRIME CONTRACTOR, A. B. LEE, FAMILY HOUSING IMPROVEMENT PROJECT, WHICH HAS JUST RECENTLY BEEN COMPLETED.

"IN CONSIDERING ADEQUATE FINANCIAL RESOURCES, OR THE ABILITY TO OBTAIN SUCH RESOURCES AS NECESSARY DURING PERFORMANCE OF THE CONTRACT AS REQUIRED UNDER THE MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS, ASPR 1-903.1(I), I CONSIDER THE AGREEMENT BETWEEN EAST COAST AND SOUTHERN ELECTRIC COMPANY, REFERRED TO ABOVE, MORE SIGNIFICANT WHEN DETERMINING THE ABILITY OF EAST COAST ENGINEERING TO OBTAIN FUNDS OR RESOURCES DURING THE PERFORMANCE OF THE WORK UNDER THE CONTRACT.

"IN ARRIVING AT ANY CONCLUSION, THE EXPERIENCE AVAILABLE TO THE APPARENT LOW BIDDER THROUGH ITS CONNECTIONS WITH SOUTHERN ELECTRIC COMPANY WAS ALSO CONSIDERED. UNDER THE AGREEMENT ARRANGEMENT, A TOTAL OF 28 EMPLOYEES WILL BE AVAILABLE FOR THE PERFORMANCE OF THE WORK, EVEN THOUGH EAST COAST'S PRESENT INTENTIONS ARE TO SUBCONTRACT ALL OF THE WORK WITH THE EXCEPTION OF ELECTRICAL CONSTRUCTION. SOUTHERN ELECTRIC WAS FOUNDED APPROXIMATELY 1911, AND, ACCORDING TO AT LEAST TWO SOURCES (W. E. ARNOLD COMPANY, PRIME CONTRACTOR, AND KOGER PROPERTIES), SOUTHERN ELECTRIC IS CONSIDERED ONE OF THE BETTER ELECTRICAL INSTALLERS IN THE COUNTRY.

"INFORMATION HAS BEEN FURNISHED BY MR. DON ROBINSON WITH THE SURETY UNDERWRITERS, INC. (WHO ALSO APPEARS AS ONE OF THOSE WHO ARE APPOINTED ATTORNEY IN FACT ON THE COPY OF THE CERTIFIED COPY OF POWER OF ATTORNEY ATTACHED TO THE BID BOND), THAT THE UNDERWRITERS HANDLES ALL INSURANCE AS REQUIRED BY THE INVITATION AND THAT HIS COMPANY WOULD FURNISH ALL BONDING REQUIREMENTS WHICH INCLUDES PERFORMANCE AND PAYMENT BONDS. THE FLORIDA NATIONAL BANK OF JACKSONVILLE, THROUGH ITS FINANCE COMMITTEE, HAS APPROVED LOANS UP TO $50,000 TO BE USED IN CONNECTION WITH THIS SPECIFIC JOB.

"THE TOOLS AND EQUIPMENT AVAILABLE TO EAST COAST ENGINEERING IS CONSIDERED TO BE MORE THAN ADEQUATE FOR THE ELECTRICAL INSTALLATION. SUBCONTRACTORS FOR OTHER PORTIONS, SUCH AS CATWALKS AND LADDERS, WILL FURNISH THEIR OWN TOOLS AND EQUIPMENT NECESSARY FOR PERFORMANCE.

"EAST COAST SUBMITTED AN ITEMIZED PROGRESS CHART WITH A MONTHLY CASH FLOW PROJECTION SCHEDULE DEMONSTRATING THEIR PLAN FOR FINANCING AND PERFORMING THE WORK.

"FROM THE FOREGOING INFORMATION, I DEEM THAT EAST COAST ENGINEERING, MARTINEZ, GEORGIA, APPARENT LOW BIDDER, TO BE RESPONSIBLE AND CAPABLE OF SATISFACTORY PERFORMANCE OF THE CONTRACT."

IN VIEW OF THE CONTRACTING OFFICER'S FINDING OF RESPONSIBILITY, AND SINCE THE WAGE RATES FOR THE PROCUREMENT WERE TO EXPIRE ON DECEMBER 3, 1970, THE DEPARTMENT OF THE ARMY ADVISED OUR OFFICE ON NOVEMBER 27, 1970, THAT IT WAS MAKING AN AWARD TO ECE WITHOUT AWAITING OUR DECISION ON YOUR PROTEST. YOU MAINTAIN THAT THE CONTRACTING OFFICER IMPROPERLY ACCEPTED A COC FROM THE SBA EVEN THOUGH THE OFFICER HAD ORIGINALLY DETERMINED THAT ECE WAS NONRESPONSIBLE FOR THIS PROCUREMENT; THAT ECE FAILED TO REVEAL THE EXISTENCE OF ANY JOINT VENTURE IN ITS BID IN VIOLATION OF ASPR 7-602.32; THAT THE CONTRACTING OFFICER COULD NOT HAVE FOUND ECE RESPONSIBLE EXCEPT FOR THE COMPANY'S AFFILIATION WITH SOUTHERN ELECTRIC; THAT THE CONTRACTING OFFICER WAS PRECLUDED BY ASPR 1 904.2(A) FROM CONSIDERING SUCH AFFILIATION IN DETERMINING ECE'S RESPONSIBILITY; THAT ECE LACKS THE EXPERIENCE AND TECHNICAL CAPACITY TO PERFORM THE CONTRACT; AND THAT THE CONTRACTING OFFICER WAS NOT JUSTIFIED IN MAKING AN AWARD TO ECE ON DECEMBER 2, 1970, IN VIEW OF YOUR PENDING PROTEST.

YOU HAVE ALSO ALLEGED THAT THE SBA ACTED IMPROPERLY WITH RESPECT TO ECE'S APPLICATION FOR A CERTIFICATE OF COMPETENCY BY TAKING AFFIRMATIVE ACTIONS TO MAKE ECE RESPONSIBLE. IN THIS CONNECTION YOU STATE THAT THE SBA OBTAINED FORBEARANCE COMMITMENTS FROM SUPPLIERS AND SUBCONTRACTORS WITHOUT WHICH THE BIDDER COULD NOT COMPLETE THE CONTRACT; AND THAT THE SBA OBTAINED NEW SOURCES OF CREDIT FOR THE BIDDER.

IN VIEW OF THESE ALLEGATIONS YOU MAINTAIN THAT ECE'S CONTRACT SHOULD BE CANCELED AND AN AWARD MADE TO YOUR CONCERN.

WITH RESPECT TO YOUR CONTENTION THAT THE CONTRACTING OFFICER IMPROPERLY ACCEPTED A COC FROM THE SBA EVEN THOUGH THE OFFICER HAD FORMALLY FOUND ECE TO BE NONRESPONSIBLE, THE RECORD CLEARLY INDICATES THAT SBA DID NOT, AT ANY TIME, ISSUE A COC FOR ECE. INSTEAD, THE CONTRACTING OFFICER'S DETERMINATION THAT ECE IS A RESPONSIBLE BIDDER APPEARS TO HAVE BEEN BASED UPON ADDITIONAL INFORMATION WHICH CAME TO HIS ATTENTION SUBSEQUENT TO THE REFERRAL TO SBA. WE ARE NOT AWARE OF ANY BASIS FOR PRECLUDING A CONTRACTING OFFICER FROM REEVALUATING A BIDDER'S RESPONSIBILITY UNDER SUCH CIRCUMSTANCES.

WITH RESPECT TO YOUR ALLEGATION THAT ECE FAILED TO REVEAL THE EXISTENCE OF ANY JOINT VENTURE IN ITS BID, IN VIOLATION OF THE PROCUREMENT REGULATION, THE RECORD SHOWS THAT THE JOINT VENTURE AGREEMENT WAS ENTERED INTO AFTER BID OPENING. IN VIEW OF THIS CIRCUMSTANCE, WE PERCEIVE NO LEGAL BASIS FOR QUESTIONING THE ORGANIZATIONAL STATUS WHICH ECE REPRESENTED IN ITS BID PRIOR TO BID OPENING.

IN THIS REGARD YOU STATE THAT THE CONTRACTING OFFICER FAILED TO EVALUATE EACH JOINT VENTURER AS A SEPARATE ENTITY AS REQUIRED BY OUR DECISION B- 153144, JUNE 4, 1964. BY THIS STATEMENT WE INFER THAT YOU MEAN THE CONTRACTING OFFICER WAS PRECLUDED FROM RELYING UPON THE PROVISIONS OF THE JOINT VENTURE AGREEMENT IN DETERMINING THE RESPONSIBILITY OF ECE.

IN THE ABOVE CITED DECISION OUR OFFICE CRITICIZED THE FAILURE OF A PROCURING ACTIVITY TO SUBSTANTIATE THE ASSERTIONS AN INDIVIDUAL BIDDER MADE WITH RESPECT TO GUARANTEES OF FINANCIAL ASSISTANCE AND SUPPORT WHICH WERE ALLEGEDLY MADE BY ANOTHER CONCERN TO THE BIDDER. WE HELD THAT, AT A MINIMUM, A THOROUGH EVALUATION SHOULD BE MADE WHERE A BIDDER CERTIFIES THAT IT IS AN INDIVIDUAL ORGANIZATION, YET THE BIDDER INDICATES THAT IT WILL PERFORM THE PROPOSED CONTRACT IN CONJUNCTION WITH ANOTHER FIRM. HOWEVER, THE DECISION DID NOT STATE THAT IT WOULD BE IMPROPER FOR THE CONTRACTING OFFICER TO CONSIDER COMMITMENTS OF SUPPORT FROM A THIRD PARTY SO LONG AS THE ACTIVITY HAD DETERMINED THAT SUCH COMMITMENTS WERE FIRM.

IN THE INSTANT CASE WE CANNOT CONCLUDE THAT THE PROCURING ACTIVITY FAILED TO THOROUGHLY EVALUATE THE JOINT VENTURE AGREEMENT BETWEEN THE PARTIES. IN THIS REGARD OUR OFFICE HAS BEEN FURNISHED A COPY OF THE JOINT VENTURE AGREEMENT BETWEEN ECE AND SOUTHERN ELECTRIC, AS AMENDED. THE AGREEMENT SPECIFICALLY REFERS TO THE PROPOSED CONTRACT AND STATES THAT SOUTHERN ELECTRIC IS EXPRESSLY ASSUMING RESPONSIBILITY FOR TIMELY COMPLETING PERFORMANCE OF THE CONTRACT, AND RESPONSIBILITY FOR PAYMENT OF ALL SUPPLIERS AND SUBCONTRACTORS. ADDITIONALLY, WE NOTE THAT THE AGREEMENT IS SIGNED BY THE VICE-PRESIDENT OF SOUTHERN ELECTRIC SO THAT THERE WOULD NOT APPEAR TO BE ANY DOUBT THAT THE SIGNER WAS LEGALLY AUTHORIZED TO BIND SOUTHERN ELECTRIC TO THE AGREEMENT. IN VIEW THEREOF, WE CANNOT CONCLUDE THAT THE PROCURING ACTIVITY WAS PRECLUDED FROM CONSIDERING THE PROVISIONS OF THE AGREEMENT IN DETERMINING WHETHER ECE POSSESSED ADEQUATE FINANCIAL RESOURCES, EXPERIENCE AND TECHNICAL SKILLS, OR THE ABILITY TO OBTAIN THEM, IN ACCORDANCE WITH THE PROVISIONS OF ASPR 1-903, QUOTED ABOVE.

WITH RESPECT TO YOUR ALLEGATION THAT THE CONTRACTING OFFICER WAS PRECLUDED FROM RELYING ON THE PROVISIONS OF THE JOINT VENTURE AGREEMENT IN DETERMINING THE RESPONSIBILITY OF ECE BECAUSE THE CONCERNS ARE AFFILIATES AND ASPR 1-904.2(A) SPECIFIES THAT AFFILIATES ARE TO BE CONSIDERED SEPARATE ENTITIES IN DETERMINING WHETHER THE ONE OF THEM WHICH IS TO PERFORM THE CONTRACT IS RESPONSIBLE, ASPR 2-201(A), SECTION BII), SETS FORTH THE DEFINITION OF AFFILIATED CONCERNS IN PERTINENT PART AS FOLLOWS:

"BUSINESS CONCERNS ARE AFFILIATES OF EACH OTHER WHEN EITHER DIRECTLY OR INDIRECTLY (I) ONE CONCERN CONTROLS OR HAS THE POWER TO CONTROL THE OTHER, OR (II) A THIRD PARTY CONTROLS OR HAS THE POWER TO CONTROL BOTH." THERE IS NOTHING IN THE RECORD TO INDICATE THAT ECE AND SOUTHERN ELECTRIC COMPANY ARE AFFILIATES WITHIN THE MEANING OF THE ABOVE REGULATION. THIS REGARD THE JOINT VENTURE AGREEMENT DOES NOT DEMONSTRATE IN ITSELF THAT EITHER ECE OR SOUTHERN ELECTRIC HAD THE DIRECT OR INDIRECT CONTROL, OR POWER TO CONTROL, OF THE OTHER CONCERN. IN VIEW THEREOF, THE PROVISIONS OF ASPR 1-904.2(A) ARE NOT APPLICABLE TO THE CIRCUMSTANCES OF THE SUBJECT CASE AND WE PERCEIVE NO BASIS FOR QUESTIONING THE PROPRIETY OF THE AWARD FOR THIS REASON.

WITH RESPECT TO YOUR ALLEGATION THAT THE SBA ACTED IMPROPERLY WITH RESPECT TO ECE'S APPLICATION FOR A CERTIFICATE OF COMPETENCY, THE SBA DENIES THAT ITS REPRESENTATIVES CONTACTED PROPOSED SUPPLIERS TO OBTAIN FORBEARANCE COMMITMENTS AND OBTAINED NEW SOURCES OF CREDIT FOR ECE AS YOU CONTEND. BASED ON OUR REVIEW WE CANNOT CONCLUDE THAT THE RECORD SUPPORTS YOUR CONTENTIONS IN THIS RESPECT.

ON THE OTHER HAND, SBA ADMITS THAT IT SUGGESTED THE JOINT VENTURE AGREEMENT BE MODIFIED, AS NOTED ABOVE, AND THAT A LETTER OF CREDIT BE OBTAINED FROM A BANK. THE AGENCY STATES THAT THESE SUGGESTIONS WERE MADE PURSUANT TO PARAGRAPH 2D OF SBA NATIONAL DIRECTIVE 615-1B, DATED APRIL 30, 1970, WHICH PROVIDES:

"SBA SHOULD ASSIST THE APPLICANT IN DEVELOPING THE DOCUMENTATION REQUIRED TO ESTABLISH A SHOWING OF COMPETENCY. SBA SHOULD POINT OUT APPARENT DEFICIENCIES IN CAPACITY AND CREDIT AND REQUIRE MORE DETAILED EXPLANATION AND DOCUMENTATION FOR BETTER PRESENTATION *** ."

IN THIS CONNECTION SECTION 2(A) OF THE SMALL BUSINESS ACT, AS AMENDED, 15 U.S.C. 631(A), PROVIDES IN PERTINENT PART:

" *** IT IS THE DECLARED POLICY OF THE CONGRESS THAT THE GOVERNMENT SHOULD AID, COUNSEL, ASSIST, AND PROTECT, INSOFAR AS IS POSSIBLE, THE INTERESTS OF SMALL-BUSINESS CONCERNS IN ORDER TO PRESERVE FREE COMPETITIVE ENTERPRISE, TO INSURE THAT A FAIR PROPORTION OF THE TOTAL PURCHASES AND CONTRACTS OR SUBCONTRACTS FOR PROPERTY AND SERVICES FOR THE GOVERNMENT (INCLUDING BUT NOT LIMITED TO CONTRACTS OR SUBCONTRACTS FOR MAINTENANCE, REPAIR, AND CONSTRUCTION) BE PLACED WITH SMALL BUSINESS ENTERPRISES, TO INSURE THAT A FAIR PROPORTION OF THE TOTAL SALES OF GOVERNMENT PROPERTY BE MADE TO SUCH ENTERPRISES, AND TO MAINTAIN AND STRENGTHEN THE OVERALL ECONOMY OF THE NATION."

IN VIEW OF THE FOREGOING, AND SINCE SBA DID NOT ISSUE A COC, IT IS OUR OPINION THAT SBA'S ACTIONS' ARE IMMATERIAL IN DETERMINING THE MERITS OF YOUR PROTEST.

WITH RESPECT TO YOUR ALLEGATION THAT IT WAS IMPROPER FOR THE CONTRACTING OFFICER TO MAKE AN AWARD TO ECE ON DECEMBER 2, 1970, BECAUSE OF THE PENDENCY OF YOUR PROTEST, ASPR 2-407.8(B)(2) PROVIDES IN PERTINENT PART AS FOLLOWS:

"(2) WHERE A PROTEST HAS BEEN RECEIVED BEFORE AWARD, THE VIEWS OF THE OFFICE OF THE COMPTROLLER GENERAL REGARDING THE PROTEST SHOULD BE OBTAINED BEFORE AWARD WHENEVER SUCH ACTION IS CONSIDERED TO BE DESIRABLE. WHERE IT IS KNOWN THAT A PROTEST AGAINST THE MAKING OF AN AWARD HAS BEEN LODGED DIRECTLY WITH THE COMPTROLLER GENERAL, A DETERMINATION TO MAKE AWARD UNDER (3) BELOW MUST BE APPROVED AT AN APPROPRIATE LEVEL ABOVE THAT OF THE CONTRACTING OFFICER, IN ACCORDANCE WITH DEPARTMENTAL PROCEDURES. WHILE AWARD NEED NOT BE WITHHELD PENDING FINAL DISPOSITION BY THE COMPTROLLER GENERAL OF A PROTEST, A NOTICE OF INTENT TO MAKE AWARD IN SUCH CIRCUMSTANCES SHALL BE FURNISHED THE COMPTROLLER GENERAL, AND FORMAL OR INFORMAL ADVICE SHOULD BE OBTAINED CONCERNING THE CURRENT STATUS OF THE CASE PRIOR TO MAKING THE AWARD.

(3) WHERE A WRITTEN PROTEST AGAINST THE MAKING OF AN AWARD IS RECEIVED, AWARD SHALL NOT BE MADE UNTIL THE MATTER IS RESOLVED, UNLESS THE CONTRACTING OFFICER DETERMINES THAT:

(I) THE ITEMS TO BE PROCURED ARE URGENTLY REQUIRED; OR

(II) DELIVERY OR PERFORMANCE WILL BE UNDULY DELAYED BY FAILURE TO MAKE AWARD PROMPTLY; OR

(III) A PROMPT AWARD WILL OTHERWISE BE ADVANTAGEOUS TO THE GOVERNMENT.

IF AWARD IS MADE UNDER (I), (II), OR (III) ABOVE, THE CONTRACTING OFFICER SHALL DOCUMENT THE FILE TO EXPLAIN THE NEED FOR AN IMMEDIATE AWARD, AND SHALL GIVE WRITTEN NOTICE OF THE DECISION TO PROCEED WITH THE AWARD TO THE PROTESTER AND, AS APPROPRIATE, TO OTHERS CONCERNED."

IN THIS CONNECTION THE RECORD, AS NOTED ABOVE, SHOWS THAT ON NOVEMBER 27, 1970, OUR OFFICE WAS ADVISED BY A REPRESENTATIVE OF THE OFFICE OF THE ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS AND LOGISTICS) THAT THE DEPARTMENT NEEDED TO MAKE AN AWARD PRIOR TO DECEMBER 3, 1970, BECAUSE THE WAGE RATES INCORPORATED IN THE SUBJECT IFB WERE TO EXPIRE ON THAT DAY. ASPR 18-704.2, WAGE DETERMINATIONS, PROVIDES THAT DETERMINATIONS ARE EFFECTIVE FOR 120 CALENDAR DAYS FROM THE DATE OF ISSUANCE AND ARE VOID FOR INCORPORATION INTO CONTRACTS AWARDED AFTER THAT PERIOD. IT HAS NOT BEEN THE POLICY OF THE DEPARTMENT OF LABOR TO GRANT EXTENSIONS OF WAGE RATE DETERMINATIONS, AND IF AN EXTENSION OF THE SUBJECT WAGE RATES HAD BEEN REQUESTED BY THE PROCURING ACTIVITY, THE DEPARTMENT OF LABOR MAY WELL HAVE DENIED SUCH REQUEST. IN THAT EVENT THE PROCURING ACTIVITY WOULD HAVE BEEN REQUIRED BY ASPR 18 704.2(A)(5) TO CANCEL THE IFB IF AN AWARD HAD NOT BEEN MADE PRIOR TO DECEMBER 3, 1970.

IN VIEW OF THE POSSIBILITY THAT IT MAY HAVE BEEN NECESSARY TO CANCEL THE PROCUREMENT HAD AN AWARD NOT BEEN MADE ON DECEMBER 2, AND SINCE THE ARMY DID COMPLY WITH THE PROVISIONS OF ASPR 2-407(B)(2) QUOTED ABOVE, WE SEE NO VALID BASIS ON WHICH TO QUESTION THE DETERMINATION OF THE ARMY TO PROCEED WITH AN AWARD DESPITE THE PENDING PROTEST.

WHETHER A BIDDER IS, OR IS NOT, CAPABLE OF PRODUCING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF FACT, AND ABSENT EVIDENCE THAT THE DETERMINATION OF A BIDDER'S CAPABILITIES WAS BASED ON ERROR, FRAUD, OR FAVORITISM, OUR OFFICE WILL ACCEPT THE FINDINGS OF THE CONTRACTING AGENCY. 46 COMP. GEN. 371, 372 (1966).

WE HAVE ALSO HELD 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 PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICERS INVOLVED. SINCE CONTRACTING OFFICERS 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. IT IS ALSO WELL SETTLED THAT THE CRITICAL TIME FOR DETERMINING THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR IS THE TIME OF AWARD, AND THAT ALL INFORMATION AVAILABLE TO THE CONTRACTING OFFICER AT THAT TIME SHOULD BE CONSIDERED IN MAKING SUCH DETERMINATION, RATHER THAN ONLY THE INFORMATION AVAILABLE AT BID OPENING. 41 COMP. GEN. 302 (1961).

YOUR FINAL OBJECTION TO THE FINDING OF ECE'S RESPONSIBILITY IS THE ALLEGED LACK OF THE CONCERN'S EXPERIENCE ON GOVERNMENT CONTRACTS. IN THIS REGARD THE CONTRACTING OFFICER STATES THAT ECE HAD COMPLETED WORK IN A SATISFACTORY MANNER AS A SUBCONTRACTOR FOR THE REHABILITATION AND TRANSFORMER CONTRACT AT FORT STEWART, GEORGIA; THAT THE COMPANY SATISFACTORILY PERFORMED AS A SUBCONTRACTOR FOR LINE WORK UNDER A FAMILY HOUSING PROJECT AT FORT GORDON, GEORGIA; AND THAT THE COMPANY WAS AWARDED CONTRACT ON SEPTEMBER 30, 1970, BY THE CORPS OF ENGINEERS TO INCREASE TRANSFORMER CAPACITY AT FORT BRAGG, NORTH CAROLINA. IN VIEW OF THIS DATA WE ARE UNABLE TO CONCLUDE THAT THE CONCERN LACKS TECHNICAL EXPERIENCE FOR THE CONTRACT, AS YOU ALLEGE.

BASED UPON OUR REVIEW OF THE OTHER DATA SET FORTH IN THE CONTRACTING OFFICER'S DETERMINATION, AS NOTED ABOVE, WE FIND NO BASIS UPON WHICH OUR OFFICE WOULD BE JUSTIFIED IN CONCLUDING THAT THERE WAS AN ABUSE OF THE ADMINISTRATIVE DISCRETION EXERCISED IN DETERMINING THAT ECE WAS A RESPONSIBLE PROSPECTIVE CONTRACTOR IN ACCORDANCE WITH THE STANDARDS SET FORTH IN ASPR 1-903.