B-182345, MAR 4, 1975

B-182345: Mar 4, 1975

Additional Materials:

Contact:

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

 

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

DETERMINATION THAT SECOND LOW OFFEROR IS NONRESPONSIBLE DUE TO LACK OF REQUIRED EQUIPMENT AND ABILITY TO MEET DELIVERY SCHEDULE REPORTED BY PREAWARD SURVEY REPRESENTATIVE. WILL NOT BE QUESTIONED WHERE OFFEROR HAS NOT SHOWN DETERMINATION TO BE UNREASONABLE. OFFEROR WAS AFFORDED AN OPPORTUNITY. CONTRACTING OFFICER IS NOT OBLIGATED TO PERSONALLY INSPECT EQUIPMENT OF OFFEROR OR TO MAKE INDEPENDENT EVALUATION OF SUCH EQUIPMENT. MAY RELY UPON EVALUATION OF SUCH EQUIPMENT CONTAINED IN PREAWARD SURVEY REPORT WHERE THERE IS NO INFORMATION TO CONTRADICT EVALUATION CONTAINED IN REPORT. 3. IT WAS WITHIN DISCRETION OF PROCURING AGENCY UNDER ASPR SEC. 1 907 (1974 ED.). NOT TO DISCUSS DETAILS OF NEGATIVE PREAWARD SURVEY FINDINGS UPON WHICH DETERMINATION OF NONRESPONSIBILITY IS FOUNDED WITH OFFEROR PRIOR TO AWARD.

B-182345, MAR 4, 1975

1. DETERMINATION THAT SECOND LOW OFFEROR IS NONRESPONSIBLE DUE TO LACK OF REQUIRED EQUIPMENT AND ABILITY TO MEET DELIVERY SCHEDULE REPORTED BY PREAWARD SURVEY REPRESENTATIVE, UPON WHICH CONTRACTING OFFICER RELIED IN MAKING DETERMINATION OF NONRESPONSIBILITY UNDER STANDARDS OF ASPR, WILL NOT BE QUESTIONED WHERE OFFEROR HAS NOT SHOWN DETERMINATION TO BE UNREASONABLE. MOREOVER, OFFEROR WAS AFFORDED AN OPPORTUNITY, BUT FAILED, TO DISPEL RESERVATIONS OF PREAWARD SURVEY REPRESENTATIVE PRIOR TO DETERMINATION OF NONRESPONSIBILITY. 2. IN MAKING DETERMINATION OF RESPONSIBILITY, CONTRACTING OFFICER IS NOT OBLIGATED TO PERSONALLY INSPECT EQUIPMENT OF OFFEROR OR TO MAKE INDEPENDENT EVALUATION OF SUCH EQUIPMENT, BUT MAY RELY UPON EVALUATION OF SUCH EQUIPMENT CONTAINED IN PREAWARD SURVEY REPORT WHERE THERE IS NO INFORMATION TO CONTRADICT EVALUATION CONTAINED IN REPORT. 3. FAILURE TO UTILIZE PREAWARD SURVEY REVIEW BOARD TO REVIEW AND APPROVE NEGATIVE PREAWARD SURVEY REPORT DID NOT PREJUDICE UNSUCCESSFUL OFFEROR OR CAST DOUBT ON SUBSEQUENT FINDING OF NONRESPONSIBILITY SINCE PROCURING ACTIVITY UTILIZED PROCEDURES WHICH PROVIDED FOR REVIEW OF REPORT TO ASSURE ACCURACY AND OBJECTIVITY. 4. IT WAS WITHIN DISCRETION OF PROCURING AGENCY UNDER ASPR SEC. 1 907 (1974 ED.) NOT TO DISCUSS DETAILS OF NEGATIVE PREAWARD SURVEY FINDINGS UPON WHICH DETERMINATION OF NONRESPONSIBILITY IS FOUNDED WITH OFFEROR PRIOR TO AWARD. IN ANY EVENT, OFFEROR WAS GIVEN OPPORTUNITY TO RESPOND TO RESERVATIONS OF PREAWARD SURVEYOR WITH RESPECT TO CRUCIAL ISSUE OF RESPONSIBILITY. 5. UNDER ASPR SEC. 3-508.1 (1974 ED.) PROCURING AGENCY NEED NOT NOTIFY OFFEROR OF PROPOSED AWARD TO ANOTHER OFFEROR SINCE CONTRACT WAS NEGOTIATED PURSUANT TO 10 U.S.C. SEC. 2304(A)(6) (1970) FOR SERVICES OUTSIDE UNITED STATES.

ALASKA BARGE & TRANSPORT, INC.:

REQUEST FOR PROPOSALS (RFP) DAJB29-75-R-0009 WAS ISSUED ON AUGUST 21, 1974, BY HEADQUARTERS, SUPPORT GROUP, UNITED STATES MILITARY ASSISTANCE COMMAND, THAILAND (MACTHAI) FOR STEVEDORING SERVICES, PORT OPERATIONS, AND OTHER RELATED SERVICES IN VIETNAM. FOUR FIRMS SUBMITTED OFFERS IN RESPONSE TO THE RFP.

BY LETTER DATED SEPTEMBER 9, 1974, THE CONTRACTING OFFICER NOTIFIED THE OFFERORS OF PREAWARD SURVEYS THAT WOULD BE CONDUCTED DURING THE PERIOD OF SEPTEMBER 11 THROUGH SEPTEMBER 17, 1974, AND THE AREAS OF CAPABILITY WHICH WOULD BE EXAMINED. A PREAWARD SURVEY ON ALASKA BARGE & TRANSPORT, INC. (AB&T), WAS CONDUCTED ON SEPTEMBER 16, 1974, BY A QUALITY ASSURANCE REPRESENTATIVE. THE PREAWARD SURVEY REPORT SUBMITTED TO THE CONTRACTING OFFICER RECOMMENDED THAT NO AWARD BE MADE TO AB&T SINCE THE SURVEY REVEALED THAT FIRM WAS UNSATISFACTORY IN THE AREAS OF EQUIPMENT TO PERFORM THE WORK AND ABILITY TO MEET THE REQUIRED SCHEDULE. THESE CONCLUSIONS WERE BASED UPON THE FOLLOWING FINDINGS:

"1) NINE OF THE TEN ELECTRIC FORKLIFTS ARE IDENTIFIED AS 3000 POUND CAPACITY AND DO NOT, THEREFORE, COMPLY WITH THE 4000 POUND CAPACITY REQUIREMENT DETAILED IN THE SPECIFICATIONS. IN ADDITION THE FORKLIFTS WERE FOUND TO BE USED AND THEY DID NOT APPEAR TO BE IN FIRST CLASS OPERATING CONDITION. A MESSAGE WAS RECEIVED FROM AB&T SEATTLE OFFICE *** ATTEMPTING TO REFUTE THE DATE PLATES ON THE FORKLIFTS. AB&T (MR. HICKS) ALSO PRESENTED A PARTS LIST SHOWING MANY PARTS INTERCHANGEABLE ON 3000 POUND TO 6000 POUND CAPACITY FORKLIFTS. AS A RESULT OF THESE ACTIONS A SECOND VISIT WAS MADE TO INSPECT THE FORKLIFTS. THE TESTING WAS LIMITED BECAUSE THE EQUIPMENT WAS IN CUSTOMS WAREHOUSE. ONE FORKLIFT RAISED 3590 POUND BUT AT ONE POINT THE REAR CAME OFF THE GROUND. IT WAS ALSO IMPOSSIBLE TO PERFORM ALL THE FUNCTIONS OF THE FORKLIFTS. THE TEST LOAD WAS TOO HIGH TO RAISE TO MAST LIMITS AND THE LOAD COULD NOT BE CARRIED OR TITLED TO THE LIMITS. DURING THE TEST SEVERE SPARKING WAS EVIDENT EVERY TIME THE FORWARD OR REVERSE MECHANISM WAS ACTIVATED.

"2) THE 15 SPARE BATTERIES ARE NOT ON HAND. AN INVOICE AND SHIPPING INFORMATION MESSAGE *** INDICATES THAT FIVE (ONLY) SPARE BATTERIES WERE SHIPPED FROM SEATTLE ON SEALAND CONTAINER APPROXIMATELY 15 SEPTEMBER 1974. EVEN IF THE FIVE WERE RECEIVED BY 1 OCTOBER 1974 THERE WOULD STILL BE A SHORTAGE OF TEN.

"3) THE CHARGERS WERE NOT READILY AVAILABLE FOR INSPECTION. THE ONLY VISIBLE EVIDENCE WAS SOME SHIPPING CRATES AND THERE WAS NO DATE AVAILABLE ON THE OUTSIDE OF THE CASES. TYPE, OR QUANTITY COULD NOT BE VERIFIED.

"4) THIS EQUIPMENT WAS IN A WAREHOUSE (SEALAND) AND HAD NOT IN FACT BEEN FINALLY CLEARED INTO VIETNAM.

"5) *** MUCH OF THE EQUIPMENT WAS NOT AVAILABLE FOR INSPECTION."

BASED UPON THE REPORT ON SEPTEMBER 23, 1974, THE CONTRACTING OFFICER DETERMINED THAT AB&T, WHO WAS THE SECOND LOW OFFEROR, WAS NONRESPONSIBLE. IN ADDITION, THE LOW OFFEROR, TRIET-TIET SHIPPING AND STEVEDORING AGENCY WAS DETERMINED TO BE NONRESPONSIBLE.

A FIRM-FIXED PRICE REQUIREMENTS CONTRACT WAS AWARDED TO CENTRAL NAVIGATION AND TRADING CO. (CN&T), ON SEPTEMBER 27, 1974, TO BECOME EFFECTIVE ON OCTOBER 1, 1974.

BY LETTER DATED OCTOBER 3, 1974, TO THE PROCURING ACTIVITY, AB&T REQUESTED THAT IT BE ADVISED AS TO THE SUCCESSFUL OFFEROR AND THE PRICE OFFERED. MACTHAI RESPONDED TO THIS REQUEST ON OCTOBER 4, 1974, BY STATING THAT CN&T WAS THE SUCCESSFUL OFFEROR, THAT ITS PRICE WAS SUBJECT TO FURTHER NEGOTIATION, AND THAT A LETTER CONTRACT HAD BEEN AWARDED TO THAT FIRM WITH A LIMITATION OF $600,000. IN ADDITION, MACTHAI STATED IN ESSENCE THAT AB&T HAD BEEN FOUND TO BE A NONRESPONSIBLE OFFEROR.

BY TELEFAX DATED OCTOBER 3, 1974, AB&T PROTESTED THE AWARD OF THE CONTRACT TO THE PROCURING ACTIVITY AND TO OUR OFFICE.

AB&T CONTENDS THAT THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY IS NOT SUPPORTED BY THE EVIDENCE AND IS GROSSLY ARBITRARY AND CAPRICIOUS. IN SUPPORT OF THIS CONTENTION, AB&T ARGUES THAT (1) CONTRARY TO DETERMINATION OF THE CONTRACTING OFFICER, AB&T'S EQUIPMENT DOES MEET THE REQUIREMENTS OF THE SPECIFICATIONS; (2) THAT THE CONTRACTING OFFICER DID NOT INSPECT OR EVEN VIEW THE FORKLIFTS AND DID NOT APPOINT A BOARD TO REVIEW THE PREAWARD SURVEY REPORT OF THE QUALITY ASSURANCE REPRESENTATIVE; (3) THAT THE PREAWARD SURVEY REPORT ON THE SUCCESSFUL CONTRACTOR - WHICH DISCLOSED DEFICIENCIES CONSIDERED TO BE INSIGNIFICANT - INDICATES THE UNFAIR AND ARBITRARY NATURE OF THE CONTRACTING OFFICER'S ACTIONS WITH REGARD TO AB&T; AND (4) THAT THE CONTRACTING OFFICER DID NOT DISCUSS HIS DETERMINATION OF NONRESPONSIBILITY WITH AB&T OR NOTIFY AB&T OF AWARD UNTIL SPECIFICALLY REQUESTED TO DO SO.

FOR THE REASONS GIVEN BELOW, IT IS OUR POSITION THAT A REASONABLE BASIS EXISTS FOR THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY. OUR STANDARD OF REVIEW OF ALLEGED IMPROPER DETERMINATIONS OF NONRESPONSIBILITY WAS RESTATED RECENTLY IN OUR DECISION IN THE MATTER OF RIOCAR, B-180361, MAY 23, 1974, AS FOLLOWS:

"WE HAVE CONSISTENTLY HELD THAT THE QUESTION OF A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY IS A MATTER FOR DETERMINATION BY THE CONTRACTING OFFICER INVOLVED. 45 COMP. GEN. 4 (1965); 51 COMP. GEN. 439, 443 (1972). OUR OFFICE DOES NOT MAKE INDEPENDENT DETERMINATIONS AS TO A BIDDER'S RESPONSIBILITY TO PERFORM A GOVERNMENT CONTRACT. BECAUSE REASONABLE MEN MAY WELL DISAGREE AS TO A COMPANY'S CAPABILITY TO PERFORM A PARTICULAR CONTRACT, OUR OFFICE HAS ADOPTED THE RULE THAT WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER UNLESS IT IS SHOWN THAT THE DETERMINATION OF NONRESPONSIBILITY WAS MADE IN BAD FAITH OR LACKED ANY REASONABLE BASIS. 37 COMP. GEN. 430 (1957); 49 COMP. GEN. 553 (1970). IN MAKING THE DETERMINATION OF A CONTRACTOR'S ABILITY TO PERFORM A CONTRACT, THE CONTRACTING OFFICER IS VESTED WITH A CONSIDERABLE DEGREE OF DISCRETION, AS WE RECOGNIZED IN 43 COMP. GEN. 228, 230 (1963):

"'DECIDING A PROSPECTIVE CONTRACTOR'S PROBABLE ABILITY TO PERFORM A CONTRACT TO BE AWARDED INVOLVES A FORECAST WHICH MUST OF NECESSITY BE A MATTER OF JUDGMENT. SUCH JUDGMENT SHOULD OF COURSE BE BASED ON FACT AND REACHED IN GOOD FAITH; HOWEVER, IT IS ONLY PROPER THAT IT BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICERS INVOLVED WHO SHOULD BE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, WHO MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES EXPERIENCED IN OBTAINING REQUIRED PERFORMANCE, AND WHO MUST MAINTAIN DAY TO DAY RELATIONS WITH THE CONTRACTOR ON THE GOVERNMENT'S BEHALF. 39 COMP. GEN. 705, 711. ***'"

WITH REGARD TO THE FIRST ARGUMENT RAISED, AB&T CONTENDS THAT THE FORKLIFTS IN QUESTION HAD BEEN MODIFIED TO THE REQUISITE 4,000 POUND CAPACITY PRIOR TO PURCHASE BY AB&T AND THAT BOTH THE QUALITY ASSURANCE REPRESENTATIVE AND THE CONTRACTING OFFICER FAILED TO CONSIDER THE EVIDENCE FURNISHED BY AB&T VERIFYING THAT THE FORKLIFTS WERE MODIFIED. DURING THE CONDUCT OF THE PREAWARD SURVEY, WHEN INFORMED BY AB&T OF THE ALLEGED MODIFICATIONS, THE QUALITY ASSURANCE REPRESENTATIVE REQUESTED THAT AB&T SECURE CONFIRMATION OF THE CAPACITIES OF THE FORKLIFTS FROM THE MANUFACTURER. BY RADIO MESSAGE DATED SEPTEMBER 18, 1974, AB&T RESPONDED TO THIS REQUEST AS FOLLOWS:

"CONFIRMATION OF FORKLIFT CAPACITY FROM THE YALE FACTORY, AS REQUESTED BY MR. JAKE, (THE QUALITY ASSURANCE REPRESENTATIVE) HAS NOT BEEN RECEIVED AS OF THIS DATE AND WE ARE UNCERTAIN AS TO WHETHER OR NOT SUCH CERTIFICATION CAN BE MADE INASMUCH AS THE MANUFACTURER MAY NOT HAVE DOCUMENTATION ON ALL MODIFICATIONS EFFECTED SINCE EQUIPMENT LEFT THE FACTORY.

"WE DO, HOWEVER, WISH TO POINT OUT THAT THE FORKLIFT ASSETS WERE PURCHASED IN THE U.S.A. FOR THE SOLE PURPOSE OF SUPPORTING A VUNG TAU AMMO OPERATION AND WE SPECIFICALLY ORDERED AND HAD SHIPPED APPROPRIATE EQUIPMENT. THE FORKLIFTS WERE TESTED FOR MINIMUM 4,000-POUND CAPACITY PRIOR TO PURCHASE. AFTER PURCHASE FIVE OF THE TEN FORKLIFTS WERE FURTHER MODIFIED BY SHORTENING THE MASTS TO A HEIGHT SUITABLE FOR WORKING IN CONFINED AREAS OF VESSELS SUCH AS REEFERS, DEEP TANKS TWEEN DECKS, ETC. AND AGAIN TESTED TO ENSURE THAT THE MINIMUM 4,000-POUND REQUIREMENT WAS ATTAINED.

"A DATA PLATE IS PLACED ON THE EQUIPMENT IN THE FACTORY BUT THE ACTUAL CAPACITY WILL INCREASE OR DECREASE DEPENDING ON MODIFICATIONS AND MAINTENANCE PERFORMED. HAD WE KNOWN THAT AN OUTDATED DATA PLATE WOULD BE THE SOLE DECIDING FACTOR IN DETERMINING CAPACITY WE COULD HAVE REMOVED THE DATA PLATE, THEREBY LEAVING FIELD TESTS SUCH AS WE HAVE PERFORMED, AS THE DECIDING FACTOR.

"THE FORKLIFTS IN QUESTION WERE SHIPPED FROM THE U.S. IN MID JULY AND HELD IN BOND IN HONG KONG TO DELAY ARRIVAL IN VIETNAM UNTIL MID AUGUST, CONSEQUENTLY, HAVING NOT BEEN CHARGED FOR AT LEAST 60 DAYS, THE BATTERIES HAD LOST MOST OF THEIR EFFICIENCY. IN SPITE OF THIS CONDITION TWO FORKLIFTS WERE TESTED IN THE CUSTOM'S WAREHOUSE AND LIFTED 4,300 POUNDS WITHOUT PROBLEM. AGAIN IN THE AFTERNOON OF 17 SEPTEMBER A FORKLIFT WAS TESTED. WHILE MR. JAKE WAS PRESENT THE FORKLIFT LIFTED 3,700 POUNDS BUT BEFORE THE OPERATOR COULD LIFT THE 4,300-POUND BOXES AS AN EXAMPLE, MR. JAKE STATED THAT FURTHER TESTING WAS NOT NECESSARY.

"WE CERTIFY THAT THE FORKLIFTS FULLY COMPLY WITH THE CONTRACT REQUIREMENTS OF 4,000-POUND CAPACITY AND ABSOLUTELY GUARANTEE THAT THE EQUIPMENT WILL MEET ALL PERFORMANCE REQUIREMENTS OF SUBJECT SOLICITATION.

IN A CONTEMPORANEOUS MEMORANDUM FOR THE RECORD DATED SEPTEMBER 19, 1974, THE QUALITY ASSURANCE REPRESENTATIVE STATED THE FOLLOWING IN RESPONSE TO THE RADIO MESSAGE SENT BY AB&T.

"PARAGRAPH 3 REFERS TO REMOVAL OF DATA PLATES. HAD THE DATA PLATES BEEN REMOVED OUR FINDINGS WOULD HAVE BEEN UNABLE TO VERIFY CAPACITY. DATA PLATES ARE NOT INSTALLED FOR COSMETIC EFFECT. THEY ARE INTENDED TO VALIDATE THE TYPE OF INFORMATION I WAS SEEKING. WORLDWIDE THEY ARE USED FOR THIS PURPOSE. THEY ARE THE MANUFACTURERS IDENTIFICATION THAT THE EQUIPMENT HAS BEEN INSPECTED, TESTED, AND ACCEPTED FOR THE MODEL SPECIFICATIONS. IT IS ALSO COMMON PRACTICE FOR MANUFACTURERS TO UPDATE DATA PLATES WHEN MODIFICATIONS OCCUR.

"PARAGRAPH 4. I WAS PRESENT IN THE CUSTOMS WAREHOUSE ON THE AFTERNOON OF 17 SEPTEMBER AS STATED. THE PURPOSE OF MY VISIT WAS PRIMARILY TO CHECK ON THE SPARE BATTERIES AND THE SIZE OF THE INSTALLED BATTERIES. MR. HICKS OF AB&T DID TAKE ONE OF THE FORKLIFTS AND LIFT APPROXIMATELY THE WEIGHT MENTIONED. WE WERE IN A RESTRICTED AREA THROUGH THE COURTESY OF VIETNAM OFFICIALS. I SAW THE LIFT. I ALSO SAW THE FORKLIFT BACK END MAKE A SLIGHT JERK UPWARD AT ONE POINT. I SAW EXCESSIVE SPARKING. I DID NOT BELIEVE THAT TESTS CONDUCTED UNDER THE CIRCUMSTANCES COULD BE AS EXTENSIVE AS NECESSARY. I FURTHER WOULD NOT MAKE A JUDGMENT ON TESTS WITHOUT THE YALE TEST CRITERIA FOR 4000 LB FORKLIFTS. I DID STATE THAT I DID NOT DESIRE TO SEE ANY FURTHER TESTS. I AM SORRY IF THAT WAS CONSTRUED AS ACCEPTANCE ON MY PART."

AB&T ARGUES THAT SPARKING IS NORMAL AND THAT IT WAS PREPARED TO FINANCIALLY GUARANTEE THAT THE MODIFICATIONS HAD BEEN MADE. IN ADDITION, THE PROTESTER HAS MADE OTHER ARGUMENTS IN SUPPORT OF ITS CONTENTION THAT THE FORKLIFTS HAVE BEEN MODIFIED TO MEET THE REQUIREMENTS OF THE RFP AND THAT THE REFUSAL OF THE CONTRACTING OFFICER TO RECOGNIZE THIS FACT EVIDENCES ARBITRARY AND CAPRICIOUS BEHAVIOR. THE PROCURING ACTIVITY HAS PROVIDED REFUTATION OF THE ARGUMENTS MADE BY AB&T, REAFFIRMED ITS CONCLUSION THAT THE FORKLIFTS DO NOT MEET THE SPECIFICATIONS AND THAT AB&T HAS NOT PRESENTED SUFFICIENT EVIDENCE TO CONFIRM THAT THE FORKLIFTS HAVE BEEN MODIFIED.

WITH REGARD TO THE 15 SPARE BATTERIES, AB&T CONTENDS THAT THEY WERE EASILY AVAILABLE AND ITS FAILURE TO HAVE THEM ON HAND AFFORDS NO BASIS FOR THE FINDING OF NONRESPONSIBILITY. THE PROCURING ACTIVITY HAS TAKEN THE POSITION THAT EVEN IF THE 5 SPARE BATTERIES, WHICH WERE ON ORDER AT THE TIME OF THE PREAWARD SURVEY, WERE RECEIVED PRIOR TO OCTOBER, THE PROPOSED COMMENCEMENT DATE OF CONTRACT PERFORMANCE, THERE WOULD STILL BE A SHORTAGE OF 10 BATTERIES.

A CAREFUL EXAMINATION OF ASPR SEC. 1-902 (1974 ED.) DISCLOSES THAT ANY DOUBT CAUSED BY LACK OF THE REQUISITE EQUIPMENT (OR OTHER CRITERIA), WHICH CANNOT BE RESOLVED AFFIRMATIVELY, REQUIRES A DETERMINATION OF NONRESPONSIBILITY. THE QUALITY ASSURANCE REPRESENTATIVE PROVIDED AB&T WITH THE OPPORTUNITY TO SECURE CONFIRMATION OF THE CAPACITY OF THE FORKLIFTS IN QUESTION, AND DID NOT CONSIDER THE CONFIRMATION SUBMITTED TO BE ADEQUATE. ACCORDINGLY, HE SAW NO SUFFICIENT BASIS UPON WHICH TO CHANGE THE CONCLUSION CONCERNING THEIR CAPACITY. IN VIEW OF THE ABOVE, WE AGREE WITH THE CONTRACTING OFFICER'S DETERMINATION TO RELY UPON THE QUESTIONABLE PERFORMANCE CAPABILITIES OF THE FORKLIFTS, AS DETAILED IN THE PREAWARD SURVEY REPORT. WE ATTACH PARTICULAR SIGNIFICANCE TO THE FAILURE OF THE FORKLIFTS TO CONTAIN DATA PLATES ATTESTING TO THE REQUISITE LIFTING CAPACITY. THIS, IN ADDITION TO THE FAILURE OF AB&T TO HAVE SECURED 15 SPARE BATTERIES AS REQUIRED, OR TO PROVIDE ADEQUATE ASSURANCES THAT IT HAD THE ABILITY TO OBTAIN THE REQUISITE EQUIPMENT BY THE DATE UPON WHICH PERFORMANCE WAS TO BEGIN, SUPPORTS THE CONTRACTING OFFICER'S DOUBTS ABOUT AB&T'S ABILITY TO PERFORM THE CONTRACT SATISFACTORILY. WHILE AB&T HAS EXPRESSED THE OPPOSITE VIEW, SUCH ASSURANCE ALONE WITHOUT SUFFICIENT EVIDENCE CONTRADICTING THE BASIS OF THE DETERMINATION AFFORDS NO GROUNDS TO DISTURB THE NEGATIVE FINDINGS MADE. CONSEQUENTLY, ON THE BASIS OF THE PRESENT RECORD, GAO CANNOT CONCLUDE THAT THE DETERMINATION OF AB&T'S LACK OF RESPONSIBILITY WAS UNREASONABLE, AND THEREFORE, THE DETERMINATION WILL NOT BE DISTURBED OR QUESTIONED. SEE MATTER OF SOLAR LABORATORIES, INC., B -179731, FEBRUARY 25, 1974; AND MATTER OF CONTRACT MAINTENANCE, INC.; MERCHANTS BUILDING MAINTENANCE COMPANY, B-181581, OCTOBER 8, 1974. AB&T'S SECOND ARGUMENT CONCERNS THE CONDUCT OF THE PREAWARD SURVEY. AB&T ARGUES THAT THE CONTRACTING OFFICER DID NOT INSPECT, OR EVEN VIEW THE FORKLIFTS. THE PROTESTER APPEARS TO BE CONTENDING THAT THE CONTRACTING OFFICER SHOULD HAVE CONDUCTED HIS OWN INDEPENDENT EVALUATION OF THE EQUIPMENT OFFERED RATHER THAN RELYING ON THE FINDINGS OF THE PREAWARD SURVEY REPORT. MAKING A DETERMINATION OF RESPONSIBILITY, THE CONTRACTING OFFICER IS ENTITLED TO RELY UPON THE RESULTS OF A PREAWARD SURVEY. ASPR SEC. 1-905.4 (1974 ED.). THE CONTRACTING OFFICER IS REQUIRED TO EVALUATE THE RECOMMENDATIONS CONTAINED IN THE PREAWARD SURVEY REPORT, TOGETHER WITH OTHER INFORMATION AVAILABLE TO HIM IN MAKING HIS FINAL DETERMINATION REGARDING THE PROPOSED CONTRACTOR'S RESPONSIBILITY. THE RECORD EVIDENCES THAT THE CONTRACTING OFFICER ACCEPTED AND RELIED UPON THE REPORT BECAUSE THERE WAS NO INFORMATION TO CONTRADICT THE FINDINGS CONTAINED THEREIN. THESE CIRCUMSTANCES, THERE WAS NO OBLIGATION ON THE PART OF THE CONTRACTING OFFICER TO EITHER PERSONALLY INSPECT THE FORKLIFTS IN QUESTION, OR TO MAKE AN INDEPENDENT EVALUATION OF AB&T'S EQUIPMENT.

AB&T ARGUES THAT NO PREAWARD SURVEY BOARD REVIEWED THE REPORT OF THE QUALITY ASSURANCE REPRESENTATIVE. ASPR APPENDIX K "PRE-AWARD SURVEY PROCEDURES" (1974 ED.) PROVIDES FOR THE ESTABLISHMENT OF A PREAWARD SURVEY REVIEW BOARD FOR THE PURPOSE OF REVIEWING AND APPROVING SURVEY REPORTS PRIOR TO TRANSMITTAL TO THE PURCHASING OFFICE. ASPR, APPENDIX K, SEC. 203.4 (1974 ED.). A PREAWARD SURVEY BOARD WAS NOT UTILIZED IN THIS PROCUREMENT. THE FOLLOWING EXPLANATION OF THE FAILURE TO UTILIZE A BOARD IS OFFERED BY THE PROCURING ACTIVITY:

"*** DUE TO THE SIZE OF THE STAFF OF THIS ACTIVITY, A PRE-AWARD SURVEY BOARD IS NOT CONVENED. HOWEVER, APPROPRIATE REVIEWS BY THE TECHNICAL SUPPORT BRANCH (PRICING, QUALITY ASSURANCE AND PROPERTY ADMINISTRATION) AND LEGAL COUNSEL ARE OBTAINED AFTER WHICH A BOARD OF AWARDS IS CONVENED AND COLLECTIVELY REVIEWS ALL PERTINENT ASPECTS OF THE PROCUREMENT PRIOR TO GIVING ITS RECOMMENDATION (AWARD/NO AWARD) TO THE CONTRACTING OFFICER. A FINAL CHECK, THE COMPLETE FILE IS REVIEWED AND APPROVED BY THE CHIEF OF THE ACTIVITY BEFORE THE CONTRACT IS SIGNED BY THE CONTRACTING OFFICER. ALL THE ABOVE ACTIONS WERE COMPLETED AND ALL APPROVALS WERE OBTAINED IN THE INSTANT CONTRACT. ***"

THE PURPOSE OF A PREAWARD SURVEY REVIEW BOARD IS TO PROVIDE FOR A REVIEW OF THE PREAWARD SURVEY REPORTS SO AS TO ASSURE THE ACCURACY AND OBJECTIVITY OF THE REPORT. IT IS OUR POSITION THAT THIS PURPOSE WAS ACHIEVED BY THE UTILIZATION OF THE PROCEDURE DETAILED ABOVE AND THAT THE FAILURE TO USE A BOARD IN THIS INSTANCE IN NO WAY PREJUDICED AB&T OR CAST DOUBT ON THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY.

THE THIRD ARGUMENT RAISED BY AB&T CONCERNS THE PROCURING ACTIVITY'S DISPARATE TREATMENT OF THE SUCCESSFUL CONTRACTOR, CN&T, AND AB&T. AS RECOGNIZED BY AB&T, GAO NO LONGER ENTERTAINS PROTESTS AGAINST AFFIRMATIVE DETERMINATIONS OF RESPONSIBILITY, ABSENT ALLEGATIONS OF FRAUD. HOWEVER, AB&T CONTENDS THAT A COMPARISON OF THE PREAWARD SURVEY REPORTS OF THE TWO FIRMS SHOWS THAT THE DEFICIENCIES OF CN&T WERE IMPROPERLY TREATED AS LESS SIGNIFICANT THAN THOSE OF AB&T AND THAT THIS EVIDENCES PREJUDICIAL TREATMENT OF AB&T.

AB&T QUESTIONS THE CONCLUSION CONTAINED IN CN&T'S PREAWARD SURVEY REPORT THAT CN&T WAS FOUND SATISFACTORY AND RECOMMENDED FOR AWARD EVEN THOUGH, AS NOTED IN THE REPORT, THAT FIRM DID NOT HAVE UNITED STATES MARINE CARGO SPECIALISTS, AS REQUIRED BY THE SPECIFICATIONS. AB&T CONCLUDES THAT THERE MUST HAVE BEEN "A WAIVER OR A NEGOTIATION AWAY OF THESE EXTREMELY CRITICAL REQUIREMENTS."

IN ADDITION, AB&T MAINTAINS THAT CN&T DOES NOT HAVE ALL OF THE EQUIPMENT REQUIRED UNDER THE RFP. AB&T ACKNOWLEDGES THAT ASPR PERMITS PROOF THAT REQUIRED CAPABILITY CAN BE OBTAINED TO ASSURE TIMELY PERFORMANCE AND THAT IT IS NOT NECESSARY THAT SUCH CAPABILITY BE ON HAND PRIOR TO CONTRACT AWARD, BUT QUESTIONS WHY THIS STANDARD WAS NOT APPLIED TO AB&T.

IN RESPONSE TO THESE ALLEGATIONS, THE CONTRACTING OFFICER STATES THE FOLLOWING:

"*** CN&T DID HAVE IN ITS EMPLOY, SINCE FEBRUARY 1974, TWO SPECIALISTS AND HAD ADVISED DURING NEGOTIATIONS IN WHICH PRICES, TERMS AND CONDITIONS WERE DISCUSSED (ALL OFFERORS WERE AFFORDED THE SAME OPPORTUNITY AND PARTICIPATED) THAT ONE ADDITIONAL SPECIALIST, (RETIRED USN LCDR MCMASTERS) WOULD BE AVAILABLE FOR WORK ON 1 OCTOBER 1974 IF IT RECEIVED AWARD. ASPR 1-903.2 STATES IN PART THAT A PROSPECTIVE CONTRACTOR MUST (II) HAVE THE NECESSARY PRODUCTION, CONSTRUCTION AND TECHNICAL EQUIPMENT AND FACILITIES OR THE ABILITY TO OBTAIN THEM. A COMPARISON BETWEEN THE ABILITY TO OBTAIN THE ONE SPECIALIST MENTIONED ABOVE AND TEN 4,000 POUND FORKLIFTS IN A PERIOD OF 11 - 12 DAYS IS NOT VALID, NOR IS THE ALLEGATION THAT THE GOVERNMENT WAIVED OR NEGOTIATED AWAY THE REQUIREMENTS. ***"

WE ARE IN AGREEMENT WITH THE POSITION OF THE PROCURING ACTIVITY. ALTHOUGH CN&T DID NOT HAVE ON HAND ONE SPECIALIST AND SOME OF THE EQUIPMENT REQUIRED AT THE TIME THE PREAWARD SURVEY WAS CONDUCTED, THE PROCURING ACTIVITY DETERMINED THAT IT DID HAVE THE ABILITY TO OBTAIN TIMELY SUCH PERSONNEL AND EQUIPMENT. AS WE DISCUSSED ABOVE, THE PROCURING ACTIVITY HAD NO SIMILAR BASIS FOR CONCLUDING THAT AB&T HAD THE ABILITY TO OBTAIN 4,000 POUND CAPACITY FORKLIFTS BY THE DATE OF CONTRACT AWARD.

THE LAST CONTENTION RAISED BY AB&T CONCERNS THE FAILURE OF THE CONTRACTING OFFICER TO DISCUSS THE DETERMINATION OF NONRESPONSIBILITY WITH AB&T OR ADVISE AB&T OF THE PROPOSED AWARD. WHILE AB&T CONCEDES THAT SUCH DISCUSSION AND NOTIFICATION MAY NOT HAVE BEEN REQUIRED, THE FAILURE TO DISCUSS THE NEGATIVE PREAWARD SURVEY OR TO NOTIFY AB&T OF AWARD, IT IS ALLEGED, CONTRAVENES THE DICTATES OF "ORDINARY FAIRNESS." IN THIS REGARD, ASPR SEC. 1-907 (1974 ED.) PERMITS PREAWARD DATA TO BE DISCUSSED WITH A PROSPECTIVE CONTRACTOR "AS DETERMINED NECESSARY BY THE PURCHASING OFFICE," PRIOR TO MAKING A DETERMINATION OF RESPONSIBILITY. SINCE THE LANGUAGE OF THIS REGULATION IS PERMISSIVE, RATHER THAN MANDATORY, THE CONTRACTING OFFICER'S DETERMINATION NOT TO DISCUSS THE NEGATIVE PREAWARD SURVEY WITH AB&T DOES NOT APPEAR TO HAVE BEEN AN IMPROPER EXERCISE OF THE DISCRETION GRANTED BY REGULATION. WITH REGARD TO THE CONTRACTING OFFICER'S FAILURE TO NOTIFY AB&T OF THE PROPOSED AWARD, ASPR SEC. 3-508.1 (1974 ED.) DOES NOT REQUIRE THAT PREAWARD NOTICE TO UNACCEPTABLE OFFERORS BE GIVEN WHERE, AS HERE, THE CONTRACT IS NEGOTIATED PURSUANT TO 10 U.S.C. SEC. 2304(A)(6) (1970) FOR SERVICES OUTSIDE THE UNITED STATES.

WE SEE NO BASIS FOR CONCLUDING THAT THE FAILURE OF THE CONTRACTING OFFICER TO ACT IN A MANNER WHICH APPLICABLE REGULATIONS DO NOT REQUIRE CAN BE CONSTRUED AS CONTRAVENING THE DICTATES OF FAIRNESS. IN ANY EVENT, THERE CAN BE NO QUESTION THAT, WITH RESPECT TO THE CRUCIAL MATTER OF FORKLIFT CAPACITY, AB&T WAS GIVEN AMPLE OPPORTUNITY TO RESPOND TO THE PREAWARD SURVEY REPRESENTATIVE'S RESERVATIONS PRIOR TO THE DETERMINATION OF NONRESPONSIBILITY.

IN ADDITION TO ARGUMENTS IN SUPPORT OF ITS PROTEST DISCUSSED ABOVE, AB&T HAS PUT FORTH MANY OTHER ARGUMENTS AND HAS CITED COURT CASES AND GAO DECISIONS IN SUPPORT OF ITS POSITION THAT THE DETERMINATION OF NONRESPONSIBILITY WAS ERRONEOUS. SOME OF THESE ARGUMENTS ARE AS FOLLOWS: THAT THE CONTRACTING OFFICER'S ACTIONS COMPEL THE INFERENCE THAT THERE NEVER WAS ANY INTENT TO CONSIDER AB&T'S OFFER; THAT, IN LIGHT OF THE COST OF ALL OTHER RESOURCES REQUIRED FOR PERFORMANCE OF THE CONTRACT, THE PROCURING ACTIVITY HAS PLACED UNDUE EMPHASIS UPON THE FORKLIFTS AND BATTERIES; THAT THE FORKLIFTS WERE PURCHASED SPECIFICALLY FOR USE IN PERFORMING THE CONTRACT; THAT THE OCTOBER 4, 1974, RESPONSE OF THE PROCURING ACTIVITY IS INCONSISTENT WITH THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY; THAT AB&T'S EXTENSIVE EXPERIENCE IN THE AREA OF STEVEDORING AND RELATED SERVICES WAS NOT TAKEN INTO ACCOUNT.

WE HAVE CONSIDERED THESE ARGUMENTS AS WELL AS THE AGENCY'S RESPONSE AND CONCLUDE THAT THEY FAIL TO SUPPORT AB&T'S CONTENTION THAT THE CONTRACTING OFFICER ACTED IN OTHER THAN A REASONABLE MANNER.

FOR THE REASONS SET FORTH ABOVE, THE PROTEST OF AB&T IS DENIED.