B-237067, Oct 4, 1989, 89-2 CPD 311

B-237067: Oct 4, 1989

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PROCUREMENT - Socio-Economic Policies - Small businesses - Responsibility - Competency certification - GAO review DIGEST: Protest that Small Business Administration (SBA) improperly refused to issue a certificate of competency is dismissed where protester fails to make a showing of possible fraud or bad faith on the part of the SBA which is a prerequisite for review of SBA's action by the General Accounting Office (GAO) under GAO's Bid Protest Regulations. Contends that GSA and the Small Business Administration (SBA) have acted fraudulently or in bad faith in denying it this contract. The COC was denied because of the firm's unsatisfactory performance on past and current contracts and because Action Building's principal was convicted of polluting state waters during the performance of a private contract.

B-237067, Oct 4, 1989, 89-2 CPD 311

PROCUREMENT - Socio-Economic Policies - Small businesses - Responsibility - Competency certification - GAO review DIGEST: Protest that Small Business Administration (SBA) improperly refused to issue a certificate of competency is dismissed where protester fails to make a showing of possible fraud or bad faith on the part of the SBA which is a prerequisite for review of SBA's action by the General Accounting Office (GAO) under GAO's Bid Protest Regulations.

Action Building Systems, Inc.:

Action Building Systems, Inc., protests the rejection of its bid under invitation for bids (IFB) No. GS-09P-89-KSC-0117, issued by the General Services Administration (GSA). The protester, a small business and the low bidder under the IFB, contends that GSA and the Small Business Administration (SBA) have acted fraudulently or in bad faith in denying it this contract.

We dismiss this protest.

The contracting officer determined Action Building nonresponsible based on the firm's unsatisfactory performance of past and current contracts. The contracting officer referred the determination to the SBA for consideration under SBA's certificate of competency (COC) procedures. The COC was denied because of the firm's unsatisfactory performance on past and current contracts and because Action Building's principal was convicted of polluting state waters during the performance of a private contract.

Action Building asserts the SBA is acting in bad faith because it agreed under a previous COC proceeding that once the principal's probation ended, "the problem would be resolved," and now, after the individual's probation has ended, the SBA continues to rely on the conviction. Action Building also states that it provided the SBA with "ample evidence" to refute GSA's findings concerning its performance and that GSA continues to exercise options on other Action Building contracts.

Our Office generally does not review SBA decisions to issue or refuse to issue a COC, since the SBA, not this Office, has statutory authority to review a contracting officer's finding of nonresponsibility and then to determine conclusively a small business concern's responsibility. therefore limit our review of the COC process to instances in which the protester makes a showing of possible fraud or bad faith on the part of procurement officials. 4 C.F.R. Sec. 21.3(m)(3) (1989); David Boland, Inc., B-221845, May 23, 1986, 86-1 CPD Para. 484. In this connection, we require the protester to allege facts that reasonably indicate the government actions complained of were improperly motivated. See Vanguard Indus., Inc., B-233490.2, Dec. 21, 1988, 88-2 CPD Para. 615.

In our view, the protester has not made the requisite showing of possible bad faith or fraud on the part of the SBA officials. The protester concedes that its principal was convicted of a misdemeanor. We do not think it is bad faith if the SBA in reviewing a firm's nonresponsibility continues to consider the company principal's criminal conviction even after the principal's probation has ended. Further, the protester indicates that it presented evidence regarding its contract performance to the SBA and that the SBA, after considering this evidence, found the record supported the agency's conclusions. Disagreement with the SBA decision simply does not establish that the SBA's action was improperly motivated. Finally, the fact that GSA has exercised options on existing contracts with the protester does not indicate that a particular nonresponsibility determination and COC denial are motivated by bad faith- - responsibility determinations are made on a case by case basis by individuals exercising what is essentially business judgment, and other judgments made by other people concerning the exercise if options have no bearing on the responsibility decisions.

We dismiss the protest.