Protest of Nonresponsibility Determination

B-196780: Mar 28, 1980

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A firm protested a contracting agency's determination that it was nonresponsible. Although the firm's proposal was technically acceptable, the agency made the determination because it believed the integrity of the firm's manager was questionable, and the firm would not replace him. The agency attempted to upgrade two marginally acceptable bids and made award to one of the bidders at the time it decided to reject the protester. Federal Procurement Regulations require that no small firm may be precluded from award because of nonresponsibility without referral of the matter to the Small Business Administration for a final disposition under the certificate of competency (COC) procedures. Since the failure of the agency to make this referral was improper, it was held that referral should be made and, if a COC issued, the contract should be terminated and the protester awarded the remaining portion of the contract. It was also held that a further deficiency may have occurred during the procurement since the proposal of one offeror was acceptable and two marginally acceptable proposals were included in negotiations, but a fourth bidder which was originally rejected was not also included in the discussions. The protest was sustained.