B-177512, JUN 7, 1974, 53 COMP GEN 931

B-177512: Jun 7, 1974

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CONTRACTS - PROTESTS - CONTRACTING OFFICER'S AFFIRMATIVE RESPONSIBILITY DETERMINATION - GAO REVIEW DISCONTINUED - EXCEPTIONS - FRAUD ALLEGATION OF NONCOMPETITIVE PRACTICES BECAUSE OF COMMUNALITY OF OWNERSHIP AND FINANCIAL INTERESTS BETWEEN TWO BIDDERS IS REFERRED TO DEFENSE SUPPLY AGENCY FOR CONSIDERATION IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-111 AND ASPR 1-600. EXCEPT FOR ACTIONS BY PROCURING OFFICIALS WHICH ARE TANTAMOUNT TO FRAUD. WHICH IS NOT RELEVANT HERE. THE UNION FURTHER STATES THAT BOTH FIRMS HAVE SUBMITTED BIDS ON AT LEAST ONE RECENT SOLICITATION (DSA100-74-B-1223) WHICH HAS YET TO BE AWARDED. THIS OFFICE HAS DISCONTINUED ITS PRIOR PRACTICE OF REVIEWING BID PROTESTS INVOLVING A CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION OF RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR SINCE ANY SUCH DETERMINATION IS LARGELY WITHIN THE DISCRETION OF THE PROCURING OFFICIALS WHO MUST SUFFER ANY DIFFICULTIES EXPERIENCED BY REASON OF THE CONTRACTOR'S NONRESPONSIBILITY.

B-177512, JUN 7, 1974, 53 COMP GEN 931

CONTRACTS - PROTESTS - CONTRACTING OFFICER'S AFFIRMATIVE RESPONSIBILITY DETERMINATION - GAO REVIEW DISCONTINUED - EXCEPTIONS - FRAUD ALLEGATION OF NONCOMPETITIVE PRACTICES BECAUSE OF COMMUNALITY OF OWNERSHIP AND FINANCIAL INTERESTS BETWEEN TWO BIDDERS IS REFERRED TO DEFENSE SUPPLY AGENCY FOR CONSIDERATION IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-111 AND ASPR 1-600. GENERAL OFFICE (GAO) HAS DISCONTINUED PRACTICE OF REVIEWING BID PROTESTS OF CONTRACTING OFFICER'S AFFIRMATIVE RESPONSIBILITY DETERMINATION, EXCEPT FOR ACTIONS BY PROCURING OFFICIALS WHICH ARE TANTAMOUNT TO FRAUD, AND GAO HAS NO AUTHORITY TO ADMINISTRATIVELY DEBAR OR SUSPEND OTHER THAN FOR VIOLATIONS OF DAVIS-BACON ACT, WHICH IS NOT RELEVANT HERE.

IN THE MATTER OF UNITED HATTERS, CAP AND MILLINERY WORKERS INTERNATIONAL UNION, JUNE 7, 1974:

THE UNITED HATTERS, CAP AND MILLINERY WORKERS INTERNATIONAL UNION (HEREINAFTER REFERRED TO AS THE UNION), HAS SUBMITTED CORRESPONDENCE PURPORTING TO ESTABLISH A COMMUNALITY OF OWNERSHIP AND FINANCIAL INTERESTS BETWEEN PROPPER INTERNATIONAL HAT COMPANY AND SOCIETY BRAND HAT COMPANY AND THE OCCURRENCE OF CERTAIN NONCOMPETITIVE PRACTICES. THE UNION REQUESTS THIS OFFICE TO INSTITUTE APPROPRIATE ACTION TO EFFECT IMPOSITION OF PENALTIES UPON THE ABOVE-NAMED CORPORATIONS, TO DENY THEM "FURTHER FRUIT OF THEIR ILLEGAL ASSOCIATION AND COMBINATION" AND TO HOLD THEM INELIGIBLE FOR FUTURE GOVERNMENT CONTRACTS.

THE UNION NOTES THAT ALTHOUGH THIS OFFICE REVIEWED A 1972 PROCUREMENT (IFB NO. DSA100-72-B-1543, ISSUED BY THE DEFENSE SUPPLY AGENCY (DSA)), AND DID NOT FIND AN ADEQUATE BASIS FOR QUESTIONING THE VALIDITY OF THE CONTRACT AWARDED TO PROPPER, WE ADVISED THAT WE WOULD CONSIDER THE MATTER FURTHER UPON THE SUBMISSION OF EVIDENCE SHOWING A COMMUNALITY OF OWNERSHIP OR FINANCIAL INTERESTS BETWEEN THE CORPORATIONS. B-177512, FEBRUARY 23, 1973. THE UNION FURTHER STATES THAT BOTH FIRMS HAVE SUBMITTED BIDS ON AT LEAST ONE RECENT SOLICITATION (DSA100-74-B-1223) WHICH HAS YET TO BE AWARDED.

IN ESSENCE THE CORRESPONDENCE QUESTIONS THE RESPONSIBILITY OF THE ABOVE- NAMED CORPORATIONS AND THEIR ELIGIBILITY FOR CONTRACT AWARDS. HOWEVER, THIS OFFICE HAS DISCONTINUED ITS PRIOR PRACTICE OF REVIEWING BID PROTESTS INVOLVING A CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION OF RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR SINCE ANY SUCH DETERMINATION IS LARGELY WITHIN THE DISCRETION OF THE PROCURING OFFICIALS WHO MUST SUFFER ANY DIFFICULTIES EXPERIENCED BY REASON OF THE CONTRACTOR'S NONRESPONSIBILITY. IF PURSUANT TO THE APPLICABLE REGULATIONS THE CONTRACTING OFFICER FINDS THE PROPOSED CONTRACTOR RESPONSIBLE, WE DO NOT BELIEVE THE FINDING SHOULD BE DISTURBED EXCEPT FOR ACTIONS BY PROCURING OFFICIALS WHICH ARE TANTAMOUNT TO FRAUD. (SEE KECO INDUSTRIES, INC. V. UNITED STATES, DECIDED FEBRUARY 20, 1974, UNITED STATES COURT OF CLAIMS NO. 173-69, WHEREIN THE COURT, IN REVIEWING A DISAPPOINTED BIDDER'S CLAIM FOR BID PREPARATION EXPENSES, OBSERVES THAT CRITERIA FOR DETERMINING BIDDER RESPONSIBILITY "ARE NOT READILY SUSCEPTIBLE TO REASONED JUDICIAL REVIEW.") THE ALLEGATIONS OF NONCOMPETITIVE PRACTICES BECAUSE OF COMMUNALITY OF OWNERSHIP AND FINANCIAL INTERESTS CONCERN MATTERS WHICH ARE PROPERLY FOR CONSIDERATION PURSUANT TO AGENCY DEBARMENT AND SUSPENSION PROCEDURES, AS PROVIDED IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1- 600, AND THE REPORTING PROCEDURES IN ASPR 1-111. THIS OFFICE HAS NO AUTHORITY TO ADMINISTRATIVELY DEBAR OR SUSPEND EXCEPT FOR VIOLATIONS OF THE DAVIS BACON ACT (40 U.S.C. 276A-2) WHICH IS NOT RELEVANT TO THIS CASE.

ACCORDINGLY, WE ARE REFERRING THIS MATTER TO DSA FOR CONSIDERATION AND APPROPRIATE ACTION IN ACCORDANCE WITH THE ABOVE REGULATIONS.