B-235241, Aug 8, 1989, 89-2 CPD 114

B-235241, Aug 8, 1989, 89-2 CPD 114

PROCUREMENT - Bid Protests - GAO procedures - Interested parties - Direct interest standards DIGEST: 1. Where protester, as the third low bidder, does not challenge the acceptability of the second low bidder, the protester lacks the necessary direct economic interest to qualify as an interested party eligible to pursue a protest against award to the low bidder. PROCUREMENT - Contractor Qualification - Responsibility - Contracting officer findings - Affirmative determination - GAO review 2. Protest of procuring agency's affirmative determination of responsibility is denied where protester does not show that agency acted in bad faith.

William Dixon Company:

William Dixon Company protests award to Warrensville File & Knife, Inc. (WFK), under invitation for bids (IFB) No. FCEP-AR-89041-S, issued by the General Services Administration for various hand files. Dixon contends that WFK is not a responsible contractor and is thus ineligible for award.

We dismiss the protest in part and deny it in part.

The IFB, issued February 9, 1989, contemplated the award of a 1-year requirements contract for various hand files. The solicitation contained 27 line items and provided for award on an item-by-item basis. Dixon only protests award to WFK of line item nos. 7 through 21, 25 and 26. Bids were received on these items as follows:

Item Nos. 7 through 21 Item No. 25 Item No. 26

WFK $1.00 $8.00 $8.00

Wood-Miller 1.80 17.00 20.50

Dixon 1.90 16.57 23.00

Dixon contends that GSA's affirmative determination of WFK's responsibility was made fraudulently or in bad faith. Dixon argues that under an earlier contract, Contract No. GS-00F-01021 (-01021), for the identical hand files, WFK failed to meet the contract requirements and that GSA knowingly accepted the nonconforming files. Dixon also contends that GSA modified Contract No. -01021 to relax the hardness requirement which WFK was unable to meet. The protester argues that the IFB contains the same specification requirements as Contract No. 01021 and since GSA knows that WFK cannot meet the solicitation requirements its affirmative responsibility determination is tantamount to bad faith.

As a preliminary matter, we find that Dixon is not an interested party to protest award to WFK of line item nos. 7 through 21 and 26. Under our Bid Protest Regulations, 4 C.F.R. Secs. 21.0(a), 21.1(a) (1988), a party must be "interested," that is, must have a direct economic interest in the award of, or failure to award, a contract in order to have its protest considered by our Office. Generally, a party does not have the necessary economic interest where it would not be in line for award even if its protest were sustained. Prison Match, Inc., B-233186, Jan. 4, 1989, 89-1 CPD Para. 8. Here, Dixon is the third low bidder for item nos. 7 through 21 and 26 and does not challenge the acceptability of the second low bidder. Since Dixon would not be in line for award even if its protest of these items were sustained, Dixon is not an interested party, and its protest of award of these line items is dismissed.

Whether WFK can and will meet its contractual obligations if its bid is accepted (i.e., that the firm is "responsible") is a determination within the subjective business judgment of procuring officials and is thus not readily susceptible to our review. Seaward International, Inc., 66 Comp.Gen. 77 (1986), 86-2 CPD Para. 507. n an affirmative responsibility determination unless, as pertains here, the protester makes a showing of fraud or bad faith on the part of procuring officials. /1/

4 C.F.R. Sec. 21.3(m)(5). To make this showing, the protester has a heavy burden of proof, as contracting officials are presumed to act in good faith. Delaware Luggage Co. d/b/a Casecraft, Inc., B-231653, Sept. 13, 1988, 88-2 CPD Para. 234.

Dixon contends that WFK's performance under Contract No. 01021 has been unsatisfactory in that WFK has failed to deliver files in a timely manner and that WFK's files did not meet minimum chromium and carbon requirements and hardness requirements. Accordingly, the issue before us in this case is whether the contracting officer's affirmative determination of responsibility was made with such willful disregard of Dixon's record of prior performance as to constitute bad faith. /2/

The most serious of Dixon's allegations is that GSA modified Contract No. -01021 to relax the file teeth hardness requirement which WFK's files could not meet. Both the IFB and Contract No. -01021 provided in the commercial item description (CID) that the files had to "be hardened to not greater than 68, nor less than 63, on the Rockwell C scale." The solicitation and contract also provided, as an exception to the CID, that the hand files would be subject to a hand prover test to determine file teeth hardness. /3/ Bidders were informed that the hand prover would be of a minimum hardness of 58 on the Rockwell C scale.

GSA states that it modified Contract No. -01021 to clarify that the files would be subject only to the hand prover test and not to other unspecified tests. GSA contends that the hand prover test is adequate to ensure hand file hardness and that other hardness tests are difficult and expensive to perform on small objects such as file teeth.

The protester contends that by deleting the Rockwell C hardness requirements in the contract GSA in effect relaxed the hardness requirements to 59 on the Rockwell C scale. Dixon argues that the modification was necessary to allow WFK's files to pass the contract hardness requirements. The record, however, does not support Dixon's contentions. Test reports of WFK's files, which were submitted by the protester, show that WFK's files exceeded a Rockwell C hardness of 63 and, thus, met the contract requirements. Furthermore, GSA states that WFK's files passed the hand prover test required by the contract.

Regarding the current solicitation, GSA states that it has no intention of modifying the IFB to delete the language requiring the contractor to supply files of a Rockwell hardness of between 63 and 68. In this regard, the record shows that WFK will certify on a per lot basis that its files meet the solicitation hardness requirements, and the files will be subject to the hand prover test as required by the solicitation. While Dixon argues that the solicitation's hand prover test is inadequate to insure that the files are of the required hardness, we will not question an agency's determination of the type and amount of testing necessary to ensure product compliance with specifications absent a clear showing that the determination was arbitrary and capricious.

Lunn Industries, Inc., B-210747, Oct. 25, 1983, 83-2 CPD Para. 491. such showing has been made here.

The record also does not support Dixon's allegations regarding WFK's timely performance of Contract No. -01021. GSA states that the delay in WFK's delivery was due to conflicting laboratory reports involving approval of pre-production samples. Ultimately, these samples were sent to 3 different laboratories for testing of chromium and carbon content, and 2 of the 3 laboratories found that WFK's samples met the contract requirements. GSA considered WFK's delivery delay to be excusable. any event, as noted above, recent unsatisfactory performance does not necessarily require a determination that a contractor is not responsible. Jay Fran Corp., B-217145, supra.

The record shows that the affirmative determination of WFK's responsibility was based on a preaward award survey report (PAS) finding WFK to be technically and financially capable of performing the contract, and on the opinion of the contracting officer, who was familiar with WFK's performance under Contract No. -01021 for the supply of the identical hand files and who regarded WFK's prior performance as satisfactory. On this record, we see no basis for concluding that GSA unreasonably found that WFK could meet the contract requirements, much less that GSA acted in bad faith in making award to WFK.

Dixon also argues that WFK has not complied with solicitation requirements regarding certifications of equal employment opportunity (EEO) and affirmative action. The solicitation contained the standard clauses set forth in FAR Secs. 52.222-22 and 52.222-25 which require a bidder to represent that (1) it either has or has not participated in contracts subject to EEO and affirmative action requirements, and (2) that it has or has not submitted compliance reports and/or developed and filed an affirmative action plan. Compliance with these affirmative action requirements is a matter of a bidder's responsibility. Singer Furniture Co., B-231915, July 14, 1988, 88-2 CPD Para. 53.

Dixon states that WFK has improperly represented that it has not participated in a prior contract subject to EEO and affirmative action requirements when Contract No. -01201 was subject to these requirements. Dixon also points out that WFK has represented that it has not submitted EEO compliance reports or developed and filed an affirmative action plan. Dixon contends that WFK's failure to comply with these requirements renders it nonresponsible. We disagree.

The PAS indicated that WFK was in compliance with the EEO requirements, and GSA has informed us that the contracting officer was not aware of any EEO or affirmative action complaints or violations. Also, the PAS indicated that WFK has only 11 employees. The requirement that contractors develop and file an affirmative action plan and submit EEO compliance reports does not apply to nonconstruction contractors which employ less than 50 employees. See 41 C.F.R. Secs. 60-1.7(a), 60-2.1(a) (1988). Thus, these requirements do not apply to WFK. Accordingly, we have no basis to question GSA's affirmative determination of responsibility regarding these matters.

The protest is dismissed in part and denied in part.

/1/ We will also review protests of affirmative responsibility determinations where there is a showing that the solicitation contained definitive responsibility criteria that may not have been met. See Nations, Inc., B-220935.2, Feb. 26, 1986, 86-1 CPD Para. 203.

/2/ In this regard, we note that recent unsatisfactory performance does not automatically require a determination that a contractor is nonresponsible. See Jay Fran Corp., B-217145, Jan. 2, 1985, 85-1 CPD Para. 8. Rather, it is simply one of several factors the contracting officer should take into account in considering a prospective contractor's responsibility. See Turbine Engine Services-- Request for Reconsideration, 64 Comp.Gen. 639 (1985), 85-1 CPD Para. 721.

/3/ The hand prover test is a commonly used test to measure the hardness of metal file teeth. This test involves drawing a sample file across the surface of the hand prover, which is a block of file steel of known hardness. If the file cuts the surface of the hand prover, then it is harder than the hardness of the hand prover.