B-175502, JUL 26, 1972

B-175502: Jul 26, 1972

Additional Materials:

Contact:

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

 

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

THE DETERMINATION OF BIDDER RESPONSIBILITY IS A MATTER FOR ADMINISTRATIVE CONSIDERATION BY EACH CONTRACTING OFFICER AND IN THE CASE OF SMALL BUSINESSES IS FOR FURTHER CONSIDERATION BY THE SMALL BUSINESS ADMINISTRATION AS REGARDS A FIRM'S CAPACITY AND CREDIT. GAO CANNOT CONCLUDE THAT THE CONTRACTING OFFICER'S REJECTION OF NATIONAL LOCK'S BID IS WITHOUT BASIS IN FACT ALTHOUGH SBA FOUND PROTESTANT TO BE NONRESPONSIBLE FOR REASONS OTHER THAN THOSE OF THE CONTRACTING OFFICER. AWARD OF A CONTRACT TO ANOTHER BIDDER WAS MADE ON JUNE 22. A PREAWARD SURVEY WAS MADE OF YOUR FIRM BY GSA. THE CONTRACTING OFFICER CONSIDERED THAT ALTHOUGH YOUR FIRM WAS HAVING MONETARY PROBLEMS. ITS FINANCIAL STATUS WAS SATISFACTORY.

B-175502, JUL 26, 1972

BID PROTEST - DETERMINATION OF RESPONSIBILITY - ALTERNATE BASES DENIAL OF PROTEST BY THE NATIONAL LOCK BOX COMPANY, AGAINST THE REJECTION OF THEIR BID UNDER AN IFB ISSUED BY THE GENERAL SERVICES ADMINISTRATION, FOR SECURITY FILING CABINETS. THE DETERMINATION OF BIDDER RESPONSIBILITY IS A MATTER FOR ADMINISTRATIVE CONSIDERATION BY EACH CONTRACTING OFFICER AND IN THE CASE OF SMALL BUSINESSES IS FOR FURTHER CONSIDERATION BY THE SMALL BUSINESS ADMINISTRATION AS REGARDS A FIRM'S CAPACITY AND CREDIT. IN THIS CASE, GAO CANNOT CONCLUDE THAT THE CONTRACTING OFFICER'S REJECTION OF NATIONAL LOCK'S BID IS WITHOUT BASIS IN FACT ALTHOUGH SBA FOUND PROTESTANT TO BE NONRESPONSIBLE FOR REASONS OTHER THAN THOSE OF THE CONTRACTING OFFICER.

TO NATIONAL LOCK BOX COMPANY, INC.:

WE REFER TO YOUR LETTER OF MAY 16, 1972, AND PRIOR CORRESPONDENCE, PROTESTING THE REJECTION OF YOUR BID FOR ITEM NO. 7 (SECURITY FILING CABINETS) UNDER INVITATION FOR BIDS (IFB) NO. FPNFO-S1-42147-A-12-2-71, ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA). DUE TO AN URGENT NEED FOR THE SECURITY FILING CABINETS, AWARD OF A CONTRACT TO ANOTHER BIDDER WAS MADE ON JUNE 22, 1972, NOTWITHSTANDING THE PROTEST.

AFTER THE OPENING OF BIDS, A PREAWARD SURVEY WAS MADE OF YOUR FIRM BY GSA. AS A RESULT OF THE SURVEY, THE CONTRACTING OFFICER CONSIDERED THAT ALTHOUGH YOUR FIRM WAS HAVING MONETARY PROBLEMS, ITS FINANCIAL STATUS WAS SATISFACTORY, BUT THAT ITS PRODUCTION CAPACITY WAS UNSATISFACTORY. THE CONTRACTING OFFICER REFERRED THE MATTER TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CONSIDERATION UNDER THE CERTIFICATE OF COMPETENCY (COC) PROCEDURES. SBA DECIDED THAT YOUR FIRM HAD SATISFACTORY PRODUCTION CAPABILITY, BUT THAT IT LACKED FINANCIAL RESPONSIBILITY IN THAT IT WAS BEING OPERATED ON A DEFICIT NET WORTH BASIS AND WAS SUFFERING SUBSTANTIAL LOSSES. A COC WAS THEREFORE DENIED. AT THE REQUEST OF YOUR FIRM AND WITH THE CONCURRENCE OF GSA, SBA RECONSIDERED ITS COC DENIAL BASIS. SBA PROVIDED YOUR FIRM WITH AN OPPORTUNITY TO FURNISH AN UNCONDITIONAL FINANCIAL COMMITMENT FROM ANOTHER SOURCE TO BOLSTER YOUR FINANCIAL STATUS. NONE WAS FURNISHED AND THE COC WAS AGAIN DENIED. THEREAFTER, THE CONTRACTING OFFICER DETERMINED THAT YOUR FIRM WAS NOT A RESPONSIBLE BIDDER.

YOU STATE THAT BEFORE THE MATTER WAS EVER SUBMITTED TO SBA, YOU OFFERED TO FURNISH THE CONTRACTING OFFICER A FINANCIAL COMMITMENT FROM ANOTHER SOURCE AND YOU WERE ADVISED BY THE CONTRACTING OFFICER THAT IT WAS NOT NECESSARY. YOU CONTEND THAT SUCH ACTION BY THE CONTRACTING OFFICER WAS SO ARBITRARY AS TO REQUIRE THE DETERMINATION OF NONRESPONSIBILITY TO BE UPSET. HOWEVER, IT APPEARS THAT EVEN IF THE CONTRACTING OFFICER DENIED YOU SUCH AN OPPORTUNITY, YOU WERE SUBSEQUENTLY PROVIDED WITH SUCH OPPORTUNITY BY SBA AND WERE UNABLE TO COMPLY. IN THE CIRCUMSTANCES, WE FIND NO PREJUDICE TO YOUR FIRM IN THIS REGARD. IN ANY EVENT, THE DETERMINATION OF BIDDER RESPONSIBILITY IS A MATTER FOR ADMINISTRATIVE CONSIDERATION BY EACH CONTRACTING OFFICER AND IN THE CASE OF SMALL BUSINESSES IS FOR FURTHER CONSIDERATION BY SBA WITH RESPECT TO A PROSPECTIVE CONTRACTOR'S CAPACITY AND CREDIT WHEN THE CONTRACTING OFFICER MAKES A NEGATIVE FINDING. IN THAT CONNECTION, OUR OFFICE HAS LONG RECOGNIZED THAT WHEN A BIDDER'S APPLICATION FOR ISSUANCE OF A COC IS DENIED BY SBA, THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY MUST BE REGARDED AS HAVING BEEN AFFIRMED BY SBA. 174672, JANUARY 31, 1972. FURTHER, ALTHOUGH SBA CONSIDERED YOUR FIRM NONRESPONSIBLE ON A DIFFERENT BASIS THAN FOUND BY THE CONTRACTING OFFICER INITIALLY, IN VIEW OF THE SBA FINDING, WE ARE UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER'S SUBSEQUENT DETERMINATION IS WITHOUT BASIS IN FACT.

ACCORDINGLY, THE PROTEST IS DENIED.