Protest of Bid Rejection as Nonresponsive

B-195900: Aug 19, 1980

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A firm protested the award of a contract to provide an armed security guard force for the Naval Surface Weapons Center. The invitation for bids (IFB) provided that the contractor be licensed in the State of Maryland and comply with all State and local laws regarding security guards. The record showed that after bid opening, the contracting agency received letters from Maryland State Police advising that four of the firms which had submitted bids, including the low bidder and the protester, had not applied for licenses in Maryland. As a result of this information, the contracting officer found the low bidder to be nonresponsible because it could not obtain the necessary license and permits by the performance date, and forwarded his determination to the Small Business Administration (SBA). The contracting officer also determined that the protester, the next low bidder, was nonresponsible. However, he did not forward that determination to SBA. Instead, the contract was awarded to the incumbent contractor who had the necessary license and permits. The protester contended that it was improperly rejected as nonresponsible because of its failure to hold a Maryland license or to have handgun permits for its guards. The firm argued that matters relating to State licenses are to be resolved between the State and the bidder and do not constitute a proper basis for a nonresponsibility determination. GAO held that: (1) since the IFB contained a specific requirement that the firms be licensed to conduct business as a security agency and a general requirement that local licensing laws be followed, the contracting agency properly determined that the protester was nonresponsible; and (2) the protester's failure to certify its size status in its bid did not excuse the contracting agency's error of not referring the nonresponsibility determination to SBA. Accordingly the protest was sustained, and GAO recommended that the protester be given the opportunity to certify its status as a small business. If it so certifies, the contracting agency should immediately refer the matter to the appropriate SBA officials for the possible issuance of a Certificate of Competency (COC). Further, if a COC is issued and the protester is willing to accept an award for the remaining portion of the contract period, the contract should be terminated for the convenience of the government.