B-174843, MAY 16, 1972

B-174843: May 16, 1972

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THE CONTRACTING OFFICER'S DECISION THAT THE PENDING INDICTMENT AGAINST THE MANAGER WAS NOT SUFFICIENT TO RENDER THE COMPANY INELIGIBLE FOR AWARD DOES NOT APPEAR UNREASONABLE. TO INTERNATIONAL COMADOR: FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 23. GSA REPORTS THAT BIDS FOR THE REQUIREMENT WERE OPENED ON OCTOBER 13. WAS THE LOW BIDDER FOR THE REQUIREMENT AT A PRICE OF $.3039 PER CUBICAL FOOT. THAT YOUR CONCERN WAS THE SECOND LOW BIDDER AT $.31 PER CUBICAL FOOT. WAS LISTED AS A VICE-PRESIDENT OF MAJOR PRODUCTS. THE PLANT FACILITIES OF MAJOR PRODUCTS WERE INVESTIGATED BY GSA QUALITY CONTROL REPRESENTATIVES TO DETERMINE IF SUCH FACILITIES WERE ADEQUATE TO PERFORM THE PROPOSED CONTRACT.

B-174843, MAY 16, 1972

BID PROTEST - DETERMINATION OF LACK OF INTEGRITY - NONRESPONSIBILITY DECISION DENYING THE PROTEST OF INTERNATIONAL COMADOR AGAINST AWARD OF A CONTRACT TO MAJOR PRODUCTS COMPANY, INC., UNDER AN IFB ISSUED BY THE FEDERAL SUPPLY SERVICE, GSA. AN ADMINISTRATIVE DETERMINATION OF LACK OF INTEGRITY, PURSUANT TO FPR 1- 1.310-5(A)(4), MUST BE BASED ON CLEAR AND CONVINCING EVIDENCE. 39 COMP. GEN. 868, 872 (1960). IN THE INSTANT CASE, THE MANAGER'S 13-YEAR OLD CONVICTION CANNOT PROPERLY SERVE AS THE BASIS FOR A DETERMINATION OF NONRESPONSIBILITY. FPR 1-1.310-7. FURTHER, THE CONTRACTING OFFICER'S DECISION THAT THE PENDING INDICTMENT AGAINST THE MANAGER WAS NOT SUFFICIENT TO RENDER THE COMPANY INELIGIBLE FOR AWARD DOES NOT APPEAR UNREASONABLE. IN ANY EVENT, SINCE THE MANAGER'S EMPLOYMENT WITH MAJOR PRODUCTS TERMINATED IN OCTOBER 1971, THERE EXISTS NO BASIS FOR CANCELLING THE SUBJECT AWARD AT THIS TIME AND THE PROTEST MUST BE DENIED.

TO INTERNATIONAL COMADOR:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 23, 1971, AND SUBSEQUENT CORRESPONDENCE, CONCERNING YOUR PROTEST UNDER INVITATION FOR BIDS (IFB) NO. AT/TC 18059, ISSUED BY THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION (GSA), ON SEPTEMBER 9, 1971, FOR A REQUIREMENT OF FSC CLASS 8135-CUSHIONING MATERIAL.

GSA REPORTS THAT BIDS FOR THE REQUIREMENT WERE OPENED ON OCTOBER 13, 1971, AT ITS ATLANTIC REGIONAL OFFICE; THAT MAJOR PRODUCTS COMPANY, INC. (MAJOR PRODUCTS), WAS THE LOW BIDDER FOR THE REQUIREMENT AT A PRICE OF $.3039 PER CUBICAL FOOT; AND THAT YOUR CONCERN WAS THE SECOND LOW BIDDER AT $.31 PER CUBICAL FOOT.

BY LETTER OF OCTOBER 14 TO THE CONTRACTING OFFICER YOU PROTESTED ANY AWARD TO MAJOR PRODUCTS AND CONTENDED, AMONG OTHER THINGS, THAT THE INDIVIDUAL WHO SIGNED MAJOR PRODUCTS' BID IN HIS CAPACITY AS MANAGER, GOVERNMENT SALES, FOR THE FIRM HAD OPEN INDICTMENTS AGAINST HIM IN THE COURT OF COMMON PLEAS, CRIMINAL DIVISION, PHILADELPHIA, PENNSYLVANIA, FOR THEFT OF TRADE SECRETS, BRIBERY OF SERVANTS AND EMPLOYEES, RECEIVING STOLEN PROPERTY, AND CONSPIRACY. YOU ALSO STATED THAT THE MANAGER HAD BEEN CONFINED IN LEWISBURG PENITENTIARY FROM NOVEMBER 28, 1958, UNTIL OCTOBER 26, 1960, FOR CONSPIRACY AND CONVERSION OF GOVERNMENT PROPERTY AND, ACCORDING TO DUN & BRADSTREET, INC., WAS LISTED AS A VICE-PRESIDENT OF MAJOR PRODUCTS.

ON OCTOBER 26, 1971, THE PLANT FACILITIES OF MAJOR PRODUCTS WERE INVESTIGATED BY GSA QUALITY CONTROL REPRESENTATIVES TO DETERMINE IF SUCH FACILITIES WERE ADEQUATE TO PERFORM THE PROPOSED CONTRACT. THE REPORT OF THAT INVESTIGATION STATES THAT THE COMPANY USED A PORTION OF A BUILDING OPERATED BY THE FLORIDA CORRUGATING CORPORATION; THAT IT HAD THREE ADMINISTRATIVE EMPLOYEES, UP TO TEN UNSKILLED, PARTTIME EMPLOYEES, AND FOUR PRODUCTION MACHINES IN GOOD CONDITION; AND THAT QUALITY CONTROL PROCEDURES, TESTING FACILITIES, PLANT SPACE, EMPLOYEES AND EQUIPMENT ON HAND WERE ADEQUATE FOR SATISFACTORILY PERFORMING THE CONTRACT.

GSA REPORTS THAT THE CONTRACTING OFFICER SUBSEQUENTLY FOUND MAJOR PRODUCTS WAS A RESPONSIBLE PROSPECTIVE CONTRACTOR FOR THE REQUIREMENT, BASED UPON THE ABOVE DATA, AS WELL AS INFORMATION THAT THE CONCERN HAD A PREVIOUS RECORD OF SATISFACTORY PERFORMANCE AND A CURRENTLY SATISFACTORY FINANCIAL POSITION.

IN VIEW OF THIS DETERMINATION, AND SINCE MAJOR PRODUCTS WAS OTHERWISE CONSIDERED ELIGIBLE FOR THE CONTRACT, AN AWARD TO THAT CONCERN WAS MADE ON DECEMBER 7, 1971.

SHORTLY AFTER AWARD YOU WERE ADVISED BY GSA THAT IT HAD NO REASONABLE BASIS TO DENY AWARD TO MAJOR PRODUCTS SINCE ITS MANAGER HAD NOT, TO GSA'S KNOWLEDGE, BEEN SUSPENDED FROM QUOTING ON SOLICITATIONS ISSUED BY ANY PURCHASING OFFICE OF THE GOVERNMENT; THAT SUSPENSION WAS CONSIDERED TO BE A DRASTIC ACTION; THAT MAJOR PRODUCTS HAD THE FINANCIAL RESOURCES, PLANT CAPACITY, AND TECHNICAL ABILITY TO MEET THE GOVERNMENT'S REQUIREMENTS; AND THAT THE GOVERNMENT COULD BE ADEQUATELY PROTECTED AGAINST ACTS OF MISCONDUCT BY CAREFUL CONTRACT ADMINISTRATION.

YOU NOW STATE THAT THE CONTRACTING OFFICER IMPROPERLY LIMITED HIS INQUIRY OF MAJOR PRODUCTS' RESPONSIBILITY BY FAILING TO CONSIDER THE EFFECT OF THE PRISON RECORD AND PENDING INDICTMENTS OF ITS MANAGER ON THE INTEGRITY OF THAT CONCERN.

IN A STATEMENT DATED APRIL 4, 1972, THE CONTRACTING OFFICER FURTHER REPORTS THAT HE CONSIDERED THE ALLEGATIONS YOUR CONCERN SUBMITTED REGARDING THE CHARACTER OF THE MANAGER AS FOLLOWS:

"POINT 2 REGARDING A PRIOR CRIMINAL CONVICTION AND PENDING INDICTMENTS AGAINST MR. *** WAS CONSIDERED, AND ALTHOUGH THIS WOULD SEEM TO BEAR OUT THE ALLEGATIONS AS TO MR. *** UNSAVORY CHARACTER AND PREVIOUS ALLEGED CRIMINAL ACTIVITIES, MR. *** HAD SERVED THE IMPOSED SENTENCE FOR THE PREVIOUS CONVICTION, AND THE PENDING CHARGES WERE UNPROVEN. ALTHOUGH MR. WITTE ALLEGED THAT MR. *** WAS VICE PRESIDENT OF MAJOR PRODUCTS, INC., ALL OTHER INFORMATION AVAILABLE TO THE C. O., INCLUDING THE CAPACITY IN WHICH MR. *** SIGNED THE BID AND THE PLANT FACILITIES REPORT, SHOWED MR. *** WAS ONLY AN EMPLOYEE OF MAJOR PRODUCTS WHOSE CHARACTER COULD NOT BE IMPUTED TO THE ENTIRE FIRM, WHICH HAD A PREVIOUS RECORD OF SATISFACTORY PERFORMANCE, A CURRENT SATISFACTORY FINANCIAL POSITION, AND A CURRENT SATISFACTORY PLANT FACILITIES REPORT.

"MR. *** APPEARED TO BE AN EMPLOYEE WHOSE DUTIES RELATED TO GOVERNMENT SALES. MR. *** PAST RECORD, AND CURRENT DIFFICULTIES WERE CONSIDERED, BUT IT WAS FELT THAT MR. *** WAS MERELY AN EMPLOYEE WHO EXERCISED NO CONTROL OVER THE CORPORATION. CONSEQUENTLY, IT WAS FELT THAT MR. *** CONDUCT COULD NOT BE CONSIDERED AS CHARACTERISTIC OF THE ENTIRE CORPORATION AND WOULD NOT PROPERLY SERVE AS A BASIS FOR A DETERMINATION OF NONRESPONSIBILITY FOR THE CORPORATION."

A SATISFACTORY RECORD OF INTEGRITY IS A REQUIREMENT WHICH PROSPECTIVE CONTRACTORS MUST MEET UNDER FEDERAL PROCUREMENT REGULATIONS (FPR) 1 1.310- 5(A)(4) IN ORDER TO QUALIFY AS RESPONSIBLE BIDDERS. WHILE WE HAVE RECOGNIZED THAT CIRCUMSTANCES WHICH WOULD JUSTIFY DEBARMENT OR SUSPENSION UNDER THE PROCUREMENT REGULATIONS MIGHT WELL AFFORD A BASIS FOR A FINDING OF NONRESPONSIBILITY ON THE PART OF A BIDDER (B-150791, APRIL 25, 1963), WE HAVE STRESSED THAT AN ADMINISTRATIVE DETERMINATION OF LACK OF INTEGRITY MUST BE BASED ON CLEAR AND CONVINCING EVIDENCE DEMONSTRATING SUCH DEFICIENCIES ON THE PART OF THE BIDDER. SEE 39 COMP. GEN. 868, 872 (1960). FURTHERMORE, WE HAVE CONSISTENTLY MAINTAINED THAT WE WILL ACCEPT THE DETERMINATION OF A BIDDER'S RESPONSIBILITY, UNLESS IT IS SHOWN THAT THE AGENCY'S DETERMINATION LACKED A SUBSTANTIAL BASIS. B-166118, MARCH 28, 1969.

IN THIS REGARD, WE BELIEVE THE ALLEGED CONVICTION OF THE MANAGER FOR THE ABOVE OFFENSES MIGHT HAVE WARRANTED, FOR A REASONABLE PERIOD OF TIME THEREAFTER, A FINDING OF NONRESPONSIBILITY FOR LACK OF INTEGRITY WITH RESPECT TO BOTH THE MANAGER AND ANY FIRM IN WHICH HE HELD A POSITION OF AUTHORITY. NEVERTHELESS, THE ALLEGED EVENTS HAPPENED MORE THAN THIRTEEN YEARS AGO AND, THEREFORE, CANNOT BE CONSIDERED INFORMATION OF A CURRENT NATURE ON WHICH RESPONSIBILITY DETERMINATIONS MUST BE BASED. SEE FPR 1- 1.310-7.

WE HAVE ALSO NOTED THAT AN INDICTMENT FOR SERIOUS OFFENSES OF THE TYPE ALLEGEDLY COMMITTED BY THE MANAGER, IN AND OF ITSELF, MAY NOT NECESSARILY WARRANT SUSPENSION OF A CONTRACTOR. SEE B-152840, JULY 24, 1964. ACCORDINGLY, AND RECOGNIZING THE CONSIDERABLE DISCRETION VESTED IN THE CONTRACTING OFFICER IN DETERMINING A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY, WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER UNREASONABLY DETERMINED THAT THE PENDING INDICTMENTS AGAINST THE MANAGER AND HIS POSITION WITH THE CONCERN WERE NOT SUFFICIENT TO MAKE MAJOR PRODUCTS NONRESPONSIBLE FOR THIS PROCUREMENT. IN THIS CONNECTION, GSA STATES THAT IT ASKED THE ORLANDO OFFICE OF DUN & BRADSTREET, INC. (D&B), ABOUT THE LISTING OF THE MANAGER AS VICE PRESIDENT OF MAJOR PRODUCTS IN ITS JULY 1, 1971, REPORT ON THE CONCERN; THAT IT WAS ADVISED THE INDIVIDUAL WHO PREPARED D&B'S REPORT WAS NO LONGER WITH THE COMPANY; AND THAT D&B'S FILES CONTAIN NO BACKGROUND INFORMATION ON THE REPORT WHICH COULD CLARIFY THE BASIS FOR LISTING THE MANAGER AS VICE-PRESIDENT OF MAJOR PRODUCTS.

IN ANY EVENT, GSA REPORTS THAT IT RECENTLY CONTACTED CHARLES J. BYRNE, VICE-PRESIDENT, MAJOR PRODUCTS, WHO STATED THAT THE MANAGER'S EMPLOYMENT WITH THE CONCERN ENDED IN OCTOBER 1971; THAT THE INDIVIDUAL WAS NOT AN OFFICER OF THE FIRM; AND THAT HE HELD NO STOCK INTEREST IN THE COMPANY. IN VIEW THEREOF, AND EVEN IF WE WERE TO ASSUME THAT THE MANAGER'S CONDUCT AND POSITION WITH THE CONCERN SHOULD HAVE REQUIRED THE CONTRACTING OFFICER TO FIND MAJOR PRODUCTS TO BE NONRESPONSIBLE IN OCTOBER 1971, WE PERCEIVE NO BASIS FOR CANCELLING THE SUBJECT AWARD AT THIS TIME.

FOR THE REASONS SET FORTH ABOVE, YOUR PROTEST MUST BE DENIED.