B-181267, NOV 26, 1974

B-181267: Nov 26, 1974

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BIDDER'S PROTEST THAT CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY WAS BASED ON PREAWARD SURVEY WHICH HAD BEEN TAMPERED WITH AND DID NOT REFLECT THE COLLECTIVE JUDGMENTS AND RECOMMENDATIONS OF CONTRACT ADMINISTRATION AGENCY PERFORMING PREAWARD SURVEY BECAUSE. IS WITHOUT MERIT SINCE ASPR DOES NOT PROHIBIT SUBSTITUTION OF PERSONNEL DURING PREAWARD SURVEY. SURVEY WAS CONDUCTED PURSUANT TO ESTABLISHED PROCEDURES. CHANGE OF RECOMMENDATION IN ISOLATED AREA WAS BROUGHT ABOUT BY PROPER RECEIPT AND CONSIDERATION OF ADDITIONAL INFORMATION. 2. PROTEST RELATED TO CONTRACTING OFFICER'S DETERMINATION THAT BIDDER IS NONRESPONSIBLE AND INELIGIBLE FOR AWARD DUE TO FAILURE TO QUALIFY AS A MANUFACTURER WITHIN THE MEANING OF WALSH-HEALEY PUBLIC CONTRACTS ACT AND IMPLEMENTING ASPR PROVISIONS.

B-181267, NOV 26, 1974

1. BIDDER'S PROTEST THAT CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY WAS BASED ON PREAWARD SURVEY WHICH HAD BEEN TAMPERED WITH AND DID NOT REFLECT THE COLLECTIVE JUDGMENTS AND RECOMMENDATIONS OF CONTRACT ADMINISTRATION AGENCY PERFORMING PREAWARD SURVEY BECAUSE, PRIOR TO SUBMISSION OF SURVEY REPORT, FAVORABLE FINDING IN ONE AREA BY ONE SURVEYOR CHANGED TO UNFAVORABLE FINDING BY A DIFFERENT SURVEYOR, IS WITHOUT MERIT SINCE ASPR DOES NOT PROHIBIT SUBSTITUTION OF PERSONNEL DURING PREAWARD SURVEY, SURVEY WAS CONDUCTED PURSUANT TO ESTABLISHED PROCEDURES, AND CHANGE OF RECOMMENDATION IN ISOLATED AREA WAS BROUGHT ABOUT BY PROPER RECEIPT AND CONSIDERATION OF ADDITIONAL INFORMATION. 2. PROTEST RELATED TO CONTRACTING OFFICER'S DETERMINATION THAT BIDDER IS NONRESPONSIBLE AND INELIGIBLE FOR AWARD DUE TO FAILURE TO QUALIFY AS A MANUFACTURER WITHIN THE MEANING OF WALSH-HEALEY PUBLIC CONTRACTS ACT AND IMPLEMENTING ASPR PROVISIONS, WHICH WAS AFFIRMED BY THE DEPARTMENT OF LABOR, IS NOT SUBJECT TO REVIEW BY GAO. RECORD SUPPORTS CONTRACTING OFFICER'S DETERMINATION TO PROCEED WITH AWARD PRIOR TO FINAL REVIEW BY DEPARTMENT OF LABOR. AND, ASPR PERMITS CONTRACTING OFFICER TO BASE DETERMINATION OF NONRESPONSIBILITY ON INFORMATION FROM GOVERNMENT INDUSTRIAL SPECIALIST EVEN THOUGH ON-SITE INSPECTION OF PROTESTER WAS ON MATTER UNRELATED TO IFB.

SOLAR LABORATORIES, INC.:

SOLAR LABORATORIES, INC. (SOLAR) PROTESTS THE REJECTION OF ITS BIDS AND THE SUBSEQUENT AWARDS OF CHEMICAL SUPPLY CONTRACTS TO OTHER BIDDERS UNDER INVITATIONS FOR BIDS (IFB) DSA400-74-B-8178, AND DSA400-74-B 5056, ISSUED BY THE DEFENSE GENERAL SUPPLY CENTER, RICHMOND, VIRGINIA.

AT THE APRIL 15, 1974, BID OPENING FOR IFB-8178, SOLAR'S BID OF $6,840.72 WAS THE LOWEST RECEIVED ON ITEMS 0002 THROUGH 0007, WHICH CONSISTED OF 6,600 POUNDS OF OXALIC ACID DIHYDRATE, TECHNICAL. IN ORDER TO MAKE A DETERMINATION REGARDING SOLAR'S ABILITY TO PERFORM THE CONTRACT, THE CONTRACTING OFFICER REQUESTED THAT A PREAWARD SURVEY BE CONDUCTED BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR), NEW YORK. THE PREAWARD SURVEY TEAM'S REPORT TO THE CONTRACTING OFFICER, DATED MAY 6, 1974, RECOMMENDED NO AWARD ON THE BASIS OF UNSATISFACTORY FINDINGS IN THE AREAS OF PLANT FACILITIES AND EQUIPMENT, PURCHASING AND SUBCONTRACTING, QUALITY ASSURANCE CAPABILITY, TRANSPORTATION (PACKING AND PACKAGING), AND THE ABILITY TO MEET THE REQUIRED DELIVERY SCHEDULE.

ARMED SERVICES PROCUREMENT REGULATION (ASPR) SECS. 1-902 AND 1-903 (1973 ED.) SET FORTH THE GENERAL POLICY AND THE MINIMUM STANDARDS FOR MAKING A DETERMINATION OF RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR. UNDER ASPR SEC. 1-903, THE FOLLOWING GUIDANCE IS GIVEN TO THE CONTRACTING OFFICER:

"*** THE CONTRACTING OFFICER SHALL MAKE A DETERMINATION OF NONRESPONSIBILITY IF *** THE INFORMATION *** OBTAINED DOES NOT INDICATE "LEARLY THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE. *** DOUBT AS TO PRODUCTIVE CAPACITY OR FINANCIAL STRENGTH WHICH CANNOT BE RESOLVED AFFIRMATIVELY SHALL REQUIRE A DETERMINATION OF NONRESPONSIBILITY."

CONSEQUENTLY, IN ACCORDANCE WITH THE ABOVE, THE CONTRACTING OFFICER DETERMINED THAT SOLAR WAS A NONRESPONSUBLE BIDDER FOR AWARD PURPOSES. SINCE THE TOTAL AMOUNT OF THE BID WAS LESS THAN $10,000, THE MATTER WAS NOT FORWARDED TO THE SMALL BUSINESS ADMINISTRATION UNDER CERTIFICATE OF COMPETENCY PROCEDURES (ASPR SEC. 1-705.4(C)).

THE SIGNING OF THE CONTRACT WITH THE NEXT LOWEST BIDDER CONSTITUTED AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY PURSUANT TO ASPR SEC. 1 904.1. SEE 51 COMP. GEN. 703, 709 (1972). IN THE ABSENCE OF ANY INDICATIONS OF FRAUD HERE, OUR OFFICE WILL NOT REVIEW THE AFFIRMATIVE DETERMINATION OF RESPONSIBILITY CONSISTENT WITH OUR POLICY (DISCLOSED TO SOLAR IN A DECISION ON AN UNRELATED PROTEST, MATTER OF SOLAR LABORATORIES, INC., B-180920, JUNE 26, 1974) IN WHICH IT WAS STATED THAT:

"*** WE DECIDED *** TO DISCONTINUE THE PRACTICE OF REVIEWING ACTIONS OF CONTRACTING OFFICERS RELATIVE TO AFFIRMATIVE DETERMINATIONS OF RESPONSIBILITY. IT IS OUR POSITION THAT SUCH DETERMINATIONS ARE LARGELY WITHIN THE DISCRETION OF CONTRACTING OFFICERS AND SHOULD NOT BE DISTURBED EXCEPT FOR FRAUD ON THE PART OF SUCH OFFICER."

REGARDING THE DETERMINATION THAT SOLAR WAS A NONRESPONSIBLE BIDDER, WE HAVE CONSISTENTLY HELD THAT SUCH A DETERMINATION IS WITHIN THE CONSIDERABLE DISCRETION OF THE CONTRACTING OFFICER. WHERE THE SUBSTANTIAL EVIDENCE OF RECORD REASONABLY PROVIDES A BASIS FOR THE DETERMINATION, WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER. SEE 51 COMP. GEN., SUPRA; AND 49 ID. 553 (1970).

SOLAR ALLEGES THAT THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY WAS INFLUENCED BY A FINAL PREAWARD SURVEY REPORT WHICH HAD BEEN "TAMPERED WITH." DCASR, NEW YORK, DENIED THAT ANY OF THE INDIVIDUAL SURVEYOR'S REPORTS WERE TAMPERED WITH. IT BELIEVED SOLAR'S CHARGE RESULTED FROM THE FACT THAT, PRIOR TO THE SUBMISSION OF THE PREAWARD SURVEY REPORT TO THE CONTRACTING OFFICER, A SURVEYOR RECOMMENDED AWARD BASED ON HIS FINDINGS IN THE TRANSPORTATION/PACKING AND PACKAGING AREA. HOWEVER, THIS RECOMMENDATION WAS SAID TO HAVE BEEN CHANGED TO NO AWARD BY A DIFFERENT SURVEYOR FOR THAT AREA AFTER THE RECEIPT OF ADDITIONAL INFORMATION BEARING ON SOLAR'S RESPONSIBILITY TO MEET THE IFB'S PACKING AND PACKAGING REQUIREMENTS.

SOLAR MAINTAINS THAT THE AFOREMENTIONED CHANGE IN RECOMMENDATION, NOT MADE BY THE SAME SURVEYOR WHO TOOK PART IN THE PRIOR AFFIRMATIVE FINDINGS OF THAT AREA, IS EVIDENCE OF "TAMPERING" WHICH INVALIDATED THE DETERMINATION OF NONRESPONSIBILITY SINCE THE CONTRACTING OFFICER WAS NOT PROVIDED WITH A REPORT THAT REPRESENTED THE "COLLECTIVE JUDGMENT OF THE NEW YORK REGION." SOLAR CONTENDS THE REQUIREMENT FOR "COLLECTIVE JUDGMENT" WAS ESTABLISHED ON THE BASIS OF ITS INTERPRETATIONS OF THE LANGUAGE IN OUR DECISION INVOLVING ANOTHER UNRELATED SOLAR PROTEST, MATTER OF SOLAR LABORATORIES, INC., B-179731, FEBRUARY 25, 1974, WHEREIN WE STATED:

"WITH REGARD TO THE DCASR PREAWARD SURVEY REPORT, IT IS OUR UNDERSTANDING THAT DCASR PREAWARD SURVEYS, SUCH AS THE ONE HERE INVOLVED, ARE GENERALLY ACCOMPLISHED ON A TEAM BASIS COMPRISED OF TECHNICAL REPRESENTATIVES IN THE AREAS TO BE SURVEYED. THE RESULTS OF THEIR INDIVIDUAL ARE COMPILED AND FORWARDED TO A PREAWARD MONITOR, WITH RECOMMENDATIONS IN THEIR RESPECTIVE AREAS OF ANALYSIS. THE PREAWARD FINDINGS AND RECOMMENDATIONS ARE THEN SUBJECTED TO A SUPERVISORY REVIEW AND ULTIMATELY ARE EXAMINED BY A PREAWARD SURVEY BOARD. THE FINAL REPORT SUBMITTED TO THE CONTRACTING OFFICER REPRESENTS THE COLLECTIVE JUDGMENTS AND RECOMMENDATIONS OF THE NEW YORK REGION."

OUR REVIEW OF THE RECORD INDICATES THAT THE ACTIONS OF THOSE CONDUCTING THE PREAWARD SURVEY UPON WHICH THE CONTRACTING OFFICER RELIED IN DETERMINING SOLAR TO BE NONRESPONSIBLE WERE IN ACCORDANCE WITH THE PROCEDURES ESTABLISHED FOR CONDUCTING PREAWARD SURVEYS. SEE ASPR, APPENDIX K. THE REGULATIONS CONTAIN NO PROHIBITION AGAINST SUBSTITUTING PERSONNEL DURING THE COURSE OF A PREAWARD SURVEY. MOREOVER, THERE IS NO EVIDENCE OF RECORD TO INDICATE THAT THE CHANGE IN RECOMMENDATION IN THAT ISOLATED AREA OF REVIEW WAS BROUGHT ABOUT BY ANYTHING MORE THAN THE PROPER RECEIPT AND CONSIDERATION OF ADDITIONAL INFORMATION. SOLAR'S RELIANCE UPON AN ALLEGED ABSENCE OF "COLLECTIVE JUDGMENT" TO IMPLY ILLEGAL TAMPERING IS WITHOUT MERIT. THE USE OF THAT PHRASE IN THE ABOVE CONTEXT DID NOT IMPOSE A REQUIREMENT FOR, NOR PRECLUDE ANY CHANGES IN EITHER, THE PERSONNEL MAKING INDIVIDUAL AREA SURVEYS, OR IN THEIR FINAL RECOMMENDATIONS PRIOR TO AN AWARD.

WE FIND NO EVIDENCE THAT THE DETERMINATION OF NONRESPONSIBILITY WAS IN ERROR OR WAS UNREASONABLE. THEREFORE, WE FIND NO REASON TO QUESTION THE AWARD TO THE NEXT LOWEST BIDDER.

SOLAR ALSO SUBMITTED THE LOWEST BID FOR 7785 DRUMS OF FERRIC CHLORIDE, ANHYDROUS, TECHNICAL, UNDER IFB DSA400-74-B-5056. HOWEVER, THE CONTRACTING OFFICER CONCLUDED THAT SOLAR WAS A NONRESPONSIBLE BIDDER AND INELIGIBLE FOR AWARD SINCE A NEGATIVE PREAWARD SURVEY REVEALED THAT SOLAR FAILED TO QUALIFY AS A MANUFACTURER UNDER THE WALSH HEALEY PUBLIC CONTRACT ACT (ACT) 41 U.S.C. SEC. 35-45 (1970), AND ASPR SEC. 12-603.1. ACCORDANCE WITH ASPR SEC. 12-604(A)(2)(III), THE CONTRACTING OFFICER FORWARDED THE SUBSEQUENT PROTEST OF SOLAR ON THE MATTER TO THE DEPARTMENT OF LABOR FOR A FINAL DETERMINATION. HOWEVER, PURSUANT TO A DETERMINATION AND FINDING BY THE CONTRACTING OFFICER CITING ASPR SEC. 12-604(A)(5)(I), AN AWARD ON THE BASIS OF URGENCY WAS MADE TO THE NEXT LOW BIDDER PRIOR TO THE RESOLUTION OF THE PROTEST BY THE DEPARTMENT OF LABOR.

SOLAR PROTESTS (1) PROPRIETY OF THE CONTRACTING OFFICER'S CONCLUSION THAT SOLAR DID NOT QUALIFY AS A MANUFACTURER SINCE HE RELIED ON INFORMATION FROM A GOVERNMENT INDUSTRIAL SPECIALIST WHOSE ON-SITE VISIT TO SOLAR WAS ON A MATTER UNRELATED TO IFB-5056; AND (2) THE MAKING OF THE AWARD PRIOR TO A FINAL DECISION BY THE DEPARTMENT OF LABOR.

WHETHER A BIDDER QUALIFIES AS A MANUFACTURER UNDER THE ACT AND IMPLEMENTING ASPR PROVISIONS, AND THEREFORE, IS ELIGIBLE TO RECEIVE AN AWARD, IS THE RESPONSIBILITY OF THE CONTRACTING AGENCY SUBJECT TO FINAL REVIEW BY THE DEPARTMENT OF LABOR. SEE B-179509, B-179518, NOVEMBER 6, 1973. SUBSEQUENT TO THE AWARD OF THE CONTRACT, THE DEPARTMENT OF LABOR, AFTER REVIEWING THE EVIDENCE SUBMITTED BY THE CONRACTING OFFICER, DETERMINED SOLAR TO HAVE BEEN INELIGIBLE AS A MANUFACTURER WITHIN THE MEANING OF THE ACT AND ASPR REGULATIONS. WE HAVE NO AUTHORITY TO REVIEW THE DETERMINATION OF THE DEPARTMENT OF LABOR. SEE B-179509, 179518, SUPRA. IN OUR VIEW, THE RELIANCE BY THE CONTRACTING OFFICER ON THE INFORMATION OF THE INDUSTRIAL SPECIALIST HERE WAS IN ACCORDANCE WITH EXISTING REGULATIONS. SEE ASPR SEC. 1-905.4(A) AND 1 905.3(III). AND, THE DETERMINATION AND FINDING ADEQUATELY JUSTIFIES THE AWARD PRIOR TO THE FINAL DETERMINATION BY THE DEPARTMENT OF LABOR "TO ALLEVIATE THE OUT OF STOCK POSITION (OF THE DRUMS) AND TO FILL EXISTING BACK ORDERS FOR URGENT REQUIREMENTS."

ACCORDINGLY, THE PROTESTS ARE DENIED.