B-172987, AUG 3, 1971

B-172987: Aug 3, 1971

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THE BID WAS REJECTED AFTER THE CONTRACTING OFFICER DETERMINED THAT LOTUS WAS A NONRESPONSIBLE BIDDER. WILL NOT SUBSTITUTE ITS JUDGEMENT AS TO THE RESPONSIBILITY OF A BIDDER FOR THAT OF THE CONTRACTING OFFICER UNLESS IT IS SHOWN BY CONVINCING EVIDENCE THAT THE FINDING WAS ARBITRARY. GAO CAN FIND NO BASIS FOR CONCLUDING THAT THERE WAS AN ABUSE OF ADMINISTRATIVE DISCRETION. RUSSIN AND VECCHI: REFERENCE IS MADE TO YOUR LETTERS OF MAY 15 AND JUNE 9. SEVEN PROPOSALS WERE RECEIVED ON MARCH 21. THE CONTRACTING OFFICER MADE A DETERMINATION AND FINDING THAT THE PROPOSAL RECEIVED FROM THE LOTUS COMPANY WAS NONRESPONSIVE TO THE RFP BECAUSE IT WAS NOT A FIRM OFFER UPON WHICH THE GOVERNMENT COULD ACT.

B-172987, AUG 3, 1971

BID PROTEST - NONRESPONSIBLE BIDDER DENIAL OF PROTEST BY THE LOTUS COMPANY LTD. AGAINST THE REJECTION OF THEIR OFFER UNDER AN RFP ISSUED BY THE U.S. ARMY PROCUREMENT AGENCY, VIETNAM, FOR OPERATION AND MAINTENANCE SERVICE OF HIGH VOLTAGE ELECTRICAL GENERATION AND DISTRIBUTION SYSTEMS IN THE REPUBLIC OF VIETNAM. THE BID WAS REJECTED AFTER THE CONTRACTING OFFICER DETERMINED THAT LOTUS WAS A NONRESPONSIBLE BIDDER. THE COMP. GEN. WILL NOT SUBSTITUTE ITS JUDGEMENT AS TO THE RESPONSIBILITY OF A BIDDER FOR THAT OF THE CONTRACTING OFFICER UNLESS IT IS SHOWN BY CONVINCING EVIDENCE THAT THE FINDING WAS ARBITRARY, CAPRICIOUS OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. IN THIS CASE, GAO CAN FIND NO BASIS FOR CONCLUDING THAT THERE WAS AN ABUSE OF ADMINISTRATIVE DISCRETION.

TO KIRKWOOD, KAPLAN, RUSSIN AND VECCHI:

REFERENCE IS MADE TO YOUR LETTERS OF MAY 15 AND JUNE 9, 1971, WITH ENCLOSURES, PROTESTING AGAINST THE REJECTION OF THE OFFER OF THE LOTUS COMPANY, LTD., SAIGON, VIETNAM, UNDER UNITED STATES ARMY PROCUREMENT AGENCY, VIETNAM (USAPAV) REQUEST FOR PROPOSALS (RFP) NO. DAFB11-72-R 0001, COVERING SERVICES TO OPERATE AND MAINTAIN HIGH VOLTAGE ELECTRICAL GENERATION AND DISTRIBUTION SYSTEMS IN THE REPUBLIC OF VIETNAM.

SEVEN PROPOSALS WERE RECEIVED ON MARCH 21, 1971. ON APRIL 3, 1971, THE CONTRACTING OFFICER MADE A DETERMINATION AND FINDING THAT THE PROPOSAL RECEIVED FROM THE LOTUS COMPANY WAS NONRESPONSIVE TO THE RFP BECAUSE IT WAS NOT A FIRM OFFER UPON WHICH THE GOVERNMENT COULD ACT. BY LETTER DATED APRIL 15, 1971, THE CONTRACTING OFFICER ADVISED LOTUS THAT ITS PROPOSAL WAS BEING REJECTED SINCE IT WAS NONRESPONSIVE TO THE RFP. IN ADDITION, IT HAS BEEN REPORTED THAT IMMEDIATELY AFTER ALL PROPOSALS WERE OPENED, A PREAWARD SURVEY WAS REQUESTED ON ALL OFFERORS; THAT THE PREAWARD SURVEY REPORT ON LOTUS RECOMMENDED THAT NO AWARD BE MADE, AND THAT AS A RESULT OF THIS INFORMATION THE CONTRACTING OFFICER DETERMINED ON JUNE 7, 1971, THAT LOTUS WAS NOT A RESPONSIBLE CONTRACTOR. THE DETERMINATION WAS AS FOLLOWS:

"I HEREBY FIND THAT:

"1. LOTUS CO., LTD., DOES NOT HAVE THE MANPOWER AVAILABLE, NOR PROVEN AVAILABILITY FROM THE INCUMBENT CONTRACTOR OR THE GOVERNMENT OF VIETNAM, TO PERFORM THE REQUIRED SERVICES.

"2. LOTUS CO., LTD., HAS NO PAST EXPERIENCE IN PROVIDING THE TYPE OF SERVICES REQUIRED.

"3. THE ORGANIZATION OF LOTUS CO., LTD., IS INADEQUATE TO MOBILIZE FOR AND MANAGE THE OPERATION OF ALL ARMY LAND BASED HIGH VOLTAGE POWER GENERATION AND DISTRIBUTION SYSTEMS IN RVN WITHIN THE TIME ALLOWED.

"4. LOTUS CO., LTD., BASED ON INFORMATION AVAILABLE, DOES NOT HAVE THE FINANCIAL RESOURCES REQUIRED FOR THE PERFORMANCE OF THE CONTRACT.

"5. THE VICE-PRESIDENT OF OPERATIONS, MR. W. H. BANCROFT, IS CURRENTLY UNDER INVESTIGATION BASED ON SEVERAL ALLEGED FRAUDULENT ACTIONS UNDERTAKEN BY HIM.

"DETERMINATION

"BASED ON THE ABOVE FINDINGS AND IN ACCORDANCE WITH ASPR-1-904, AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY CANNOT BE MADE, THEREFORE, I HEREBY DETERMINE THAT LOTUS CO., LTD., IS NONRESPONSIBLE AND THAT THEIR RESPONSE TO SOLICITATION DAJB11-72-R-0001 WILL RECEIVE NO FURTHER CONSIDERATION FOR AWARD."

THE RECORD INDICATES THAT NEGOTIATIONS WERE CONDUCTED WITH OTHER OFFERORS AND THAT AFTER COMPLETION OF THE NEGOTIATIONS, IT WAS DETERMINED THAT PACIFIC ARCHITECTS & ENGINEERS HAD SUBMITTED THE LOWEST PROPOSAL. ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 2-407.8(B)(2) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), OUR OFFICE WAS INFORMALLY ADVISED BY THE DEPARTMENT OF THE ARMY, ON JUNE 21, 1971, THAT DUE TO THE URGENT NEED TO CONTINUE THE SERVICES AFTER JUNE 30, 1971, WHEN THE CURRENT CONTRACT EXPIRED, THE CONTRACTING OFFICER WAS AUTHORIZED TO PROCEED WITH AN IMMEDIATE AWARD TO PACIFIC ARCHITECTS & ENGINEERS.

SINCE THE DEPARTMENT OF THE ARMY HAS QUESTIONED THE ACTION OF THE CONTRACTING OFFICER IN DETERMINING THE PROPOSAL OF LOTUS TO BE NONRESPONSIVE TO THE RFP, WE NEED NOT DWELL ON THIS ISSUE, EXCEPT TO EXPRESS OUR AGREEMENT WITH THE DEPARTMENT'S POSITION. NEVERTHELESS, THE QUESTION THAT MUST ALSO BE RESOLVED IS WHETHER THE FACTS AS REPORTED SUPPORT THE DETERMINATION OF THE CONTRACTING OFFICER THAT LOTUS WAS NOT A RESPONSIBLE CONTRACTOR FOR THE IMMEDIATE PROCUREMENT.

ASPR 1-904.1 PRECLUDES AWARDS UNLESS THE CONTRACTING OFFICER FIRST MAKES AN AFFIRMATIVE DETERMINATION THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE UNDER THE CRITERIA SET OUT AT ASPR 1-903. ONE OF THE CRITERIA SET OUT AT ASPR 1-903.2(A)(I) IS THAT A PROSPECTIVE CONTRACTOR MUST "HAVE THE NECESSARY ORGANIZATION, EXPERIENCE, OPERATIONAL CONTROLS AND TECHNICAL SKILLS, OR THE ABILITY TO OBTAIN THEM."

WITH REGARD TO THE DETERMINATIONS OF THE RESPONSIBILITY, OFFICERS IN WHOM THE DISCRETION IS VESTED TO DETERMINE THE RESPONSIBILITY OF BIDDERS OR OFFERORS MUST DETERMINE THE FACTS AND SUCH DETERMINATION CANNOT BE SET ASIDE UNLESS THE ACTION CONSTITUTES AN ABUSE OF DISCRETION. SEE MCQUILLIN, MUNICIPAL CORPORATIONS, 3D ED., VOL. 10, SEC 29.73, AND THE CASES THEREIN CITED; 38 COMP. GEN. 131 (1958); 37ID. 430, 435 (1957); BROWN V CITY OF PHOENIX, 272 P. 2D 358; MCNICHOLS V CITY AND COUNTY OF DENVER, 274 P. 2D 317.

WITH RESPECT TO DETERMINATIONS OF RESPONSIBILITY, OUR OFFICE WILL NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF THE CONTRACTING OFFICERS UNLESS IT IS SHOWN BY CONVINCING EVIDENCE THAT THE FINDING OF NONRESPONSIBILITY WAS ARBITRARY, CAPRICIOUS OR NOT SUPPORTED BY SUBSTANTIAL EVIDENCE, 45 COMP. GEN. 4 (1965); 43 ID. 257 (1963). WE HAVE CAREFULLY REVIEWED AND CONSIDERED THE INFORMATION RELIED UPON BY THE CONTRACTING OFFICER IN MAKING THE DETERMINATION THAT LOTUS WAS NONRESPONSIBLE AND WE FIND NO BASIS UPON WHICH OUR OFFICE WOULD BE JUSTIFIED IN CONCLUDING THAT THERE WAS AN ABUSE OF THE ADMINISTRATIVE DISCRETION. CONSEQUENTLY, WE MAY INTERPOSE NO LEGAL OBJECTION TO THE CONTRACTING OFFICER'S DETERMINATION THAT LOTUS WAS NOT RESPONSIBLE FOR PURPOSES OF THIS PROCUREMENT.

YOU HAVE ALSO QUESTIONED THE ACTION OF THE CONTRACTING OFFICER IN NOTIFYING ALL THE OTHER OFFERORS OF YOUR PROTEST AND REQUESTING THEIR VIEWS ON THE MATTER. SINCE THE ACTION APPEARS TO HAVE BEEN TAKEN IN ACCORDANCE WITH THE PROVISIONS OF ASPR 2-407.8(A)(3), WE SEE NO BASIS FOR AN OBJECTION BY OUR OFFICE.

ACCORDINGLY, THE PROTEST IS DENIED.