B-198857, DEC 15, 1980

B-198857: Dec 15, 1980

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DIGEST: FACT THAT AWARDEE HAD PERFORMANCE DIFFICULTIES ON PRIOR CONTRACTS AND WAS DEFAULTED ON ONE OF THEM DOES NOT ESTABLISH THAT AFFIRMATIVE DETERMINATION OF RESPONSIBILITY WAS FRAUDULENT SINCE PRIOR DEFAULT DOES NOT PRECLUDE AFFIRMATIVE DETERMINATION AND CONTRACTING OFFICER CONSIDERED CIRCUMSTANCES OF PRIOR PERFORMANCE AND RELIED ON RECOMMENDATIONS OF PRE-AWARD SURVEY IN EXERCISING BROAD DISCRETION TO FIND AWARDEE RESPONSIBLE. SEAWARD ALLEGES THAT INTERTRADE HAS A POOR PERFORMANCE RECORD ON PREVIOUS GOVERNMENT CONTRACTS FOR SIMILAR REQUIREMENTS AND THAT IT IS UNABLE TO MANUFACTURE A PRODUCT WHICH MEETS CONTRACT SPECIFICATIONS. SEAWARD CONTENDS THAT THE CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION OF INTERTRADE'S RESPONSIBILITY UNDER THE STATED CIRCUMSTANCES IS SO GROSSLY ERRONEOUS THAT IT IS TANTAMOUNT TO FRAUD.

B-198857, DEC 15, 1980

DIGEST: FACT THAT AWARDEE HAD PERFORMANCE DIFFICULTIES ON PRIOR CONTRACTS AND WAS DEFAULTED ON ONE OF THEM DOES NOT ESTABLISH THAT AFFIRMATIVE DETERMINATION OF RESPONSIBILITY WAS FRAUDULENT SINCE PRIOR DEFAULT DOES NOT PRECLUDE AFFIRMATIVE DETERMINATION AND CONTRACTING OFFICER CONSIDERED CIRCUMSTANCES OF PRIOR PERFORMANCE AND RELIED ON RECOMMENDATIONS OF PRE-AWARD SURVEY IN EXERCISING BROAD DISCRETION TO FIND AWARDEE RESPONSIBLE.

SEAWARD INTERNATIONAL, INC.:

SEAWARD INTERNATIONAL, INC. (SEAWARD) PROTESTS THE AWARD OF A CONTRACT TO INTERTRADE INDUSTRIES (INTERTRADE) UNDER INVITATION FOR BIDS (IFB) NO. N0014-80-B-0336 ISSUED BY THE DEPARTMENT OF THE NAVY FOR THE MANUFACTURE AND SUPPLY OF MARINE FENDERS. SEAWARD ALLEGES THAT INTERTRADE HAS A POOR PERFORMANCE RECORD ON PREVIOUS GOVERNMENT CONTRACTS FOR SIMILAR REQUIREMENTS AND THAT IT IS UNABLE TO MANUFACTURE A PRODUCT WHICH MEETS CONTRACT SPECIFICATIONS. SPECIFICALLY, SEAWARD BELIEVES THAT INTERTRADE'S DEFAULT AND DELINQUENCIES ON THREE PRIOR CONTRACTS CLEARLY INDICATE THAT FIRM'S NONRESPONSIBILITY. FURTHER, SEAWARD CONTENDS THAT THE CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION OF INTERTRADE'S RESPONSIBILITY UNDER THE STATED CIRCUMSTANCES IS SO GROSSLY ERRONEOUS THAT IT IS TANTAMOUNT TO FRAUD.

THE RECORD SHOWS THAT THE CONTRACTING OFFICER REQUESTED A PRE-AWARD SURVEY OF INTERTRADE ON MARCH 14, 1980. A RECOMMENDATION FOR AWARD WAS MADE BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES MANAGEMENT AREA (DCASMA), SANTA ANA, ON MARCH 31, 1980. HOWEVER, IN LIGHT OF A SEAWARD LETTER TO THE NAVY DATED MARCH 25, 1980, WHICH QUESTIONED INTERTRADE'S RESPONSIBILITY BY CITING THREE ALLEGEDLY DELINQUENT CONTRACTS, THE CONTRACTING OFFICER REFERRED SEAWARD'S LETTER TO DCASMA FOR INVESTIGATION AND AN UPDATED PRE-AWARD SURVEY. THE CONTRACTING OFFICER ALSO CONTACTED THE CONTRACTING OFFICERS FOR THE THREE CONTRACTS CITED BY SEAWARD AND REQUESTED REPORTS ON INTERTRADE'S PAST PERFORMANCE.

THE RESPONSES FROM THE THREE CONTRACTING OFFICERS INDICATED THAT ON ONE CONTRACT ANY DISSATISFACTION THAT WAS ENCOUNTERED WITH THE MATERIAL COULD NOT BE ATTRIBUTED TO INTERTRADE, THE SECOND CONTRACT WAS TERMINATED FOR DEFAULT BUT THE PRODUCT INVOLVED WAS SIGNIFICANTLY DIFFERENT FROM THAT INVOLVED IN THE PRESENT CASE, AND UNDER THE THIRD CONTRACT THE PROBLEMS THAT OCCURRED WERE RESOLVED. SUBSEQUENTLY, DCASMA'S UPDATED REPORT AFFIRMED THE PRIOR RECOMMENDATION OF AWARD. INTERTRADE WAS THEN AWARDED THE CONTRACT.

IN REGARD TO SEAWARD'S CONTENTION THAT INTERTRADE IS NOT QUALIFIED TO MANUFACTURE AND SUPPLY THE PRODUCT REQUIRED BY THE CONTRACT, OUR OFFICE HAS CONSISTENTLY TAKEN THE POSITION THAT THE QUESTION AS TO THE QUALIFICATIONS OF A PROSPECTIVE CONTRACTOR IS PRIMARILY FOR DETERMINATION BY THE PROCUREMENT OFFICERS CONCERNED. 52 COMP.GEN. 783, 789 (1973). WHETHER A BIDDER IS CAPABLE OF PERFORMING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF JUDGMENT. IN 43 COMP.GEN. 228, 230 (1963), OUR OFFICE STATED THE FOLLOWING IN REGARD TO THE BROAD DISCRETION VESTED IN THE CONTRACTING OFFICER:

"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 ***."

BECAUSE OF THIS BROAD DISCRETION VESTED IN CONTRACTING OFFICERS, IT IS OUR OFFICE'S POLICY NOT TO REVIEW PROTESTS OF AFFIRMATIVE DETERMINATIONS OF RESPONSIBILITY, EXCEPT IN CERTAIN CIRCUMSTANCES NOT APPLICABLE HERE, UNLESS POSSIBLE FRAUD BY PROCURING OFFICIALS IS SHOWN. SEMCO, B-192623, OCTOBER 16, 1978, 78-2 CPD 28. IN THIS REGARD, THE COURTS HAVE ALSO RECOGNIZED THAT RESPONSIBILITY DETERMINATIONS ARE BASED IN LARGE MEASURE ON THE GENERAL BUSINESS JUDGMENT OF THE PROCURING OFFICIALS AND, BEING SUBJECTIVE, ARE NOT READILY SUSCEPTIBLE OF REASONED REVIEW. KECO INDUSTRIES V. UNITED STATES, 492 F.2D 1200, 1205 (CT.CL. 1974).

IN THE PRESENT CASE, WE FIND THAT SEAWARD HAS NOT MET ITS BURDEN OF PROOF WITH RESPECT TO ITS ALLEGATION OF CONDUCT ON THE PART OF PROCURING OFFICIALS WHICH IS TANTAMOUNT TO FRAUD. THE RECORD SHOWS THAT THE CONTRACTING OFFICER MERELY EXERCISED THE BROAD DISCRETION VESTED IN HIM IN RELYING UPON THE TWO POSITIVE RECOMMENDATIONS AND DETERMINING THAT INTERTRADE WAS RESPONSIBLE. IN THIS REGARD, WE POINT OUT THAT ALTHOUGH INTERTRADE MAY HAVE DEFAULTED ON A PRIOR CONTRACT, THAT BY NO MEANS CONCLUSIVELY PRECLUDES IT FROM FUTURE AWARDS. THE H.R. PINES CORPORATION, B-182323, APRIL 14, 1975, 75-1 CPD 224. DEFAULT IS ONLY ONE FACTOR TO BE CONSIDERED IN DETERMINING BIDDER RESPONSIBILITY. MARS SIGNAL LIGHT COMPANY, B-193942, MARCH 7, 1979, 79-1 CPD 164.

ACCORDINGLY, WE CONCLUDE THAT THERE IS NO LEGAL BASIS TO QUESTION THE PROPRIETY OF THE AWARD OF THE CONTRACT TO INTERTRADE, AND SEAWARD'S PROTEST AGAINST SUCH AWARD IS THEREFORE DENIED.