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B-160597, JUN. 13, 1967

B-160597 Jun 13, 1967
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INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST REJECTION OF YOUR BID BY THE PURCHASING DIVISION. WHICH IS THE SUBJECT OF YOUR LETTERS DATED MARCH 3 AND APRIL 21. THE LETTERS DATED APRIL 21 WERE DELIVERED BY YOU ON MAY 25. THE SUBJECT INVITATION WAS ISSUED ON OCTOBER 31. BIDS WERE OPENED AS SCHEDULED ON NOVEMBER 29. YOU WERE THE LOW BIDDER ON SCHEDULE II. CONTRACTS FOR THESE SERVICES WERE AWARDED TO OTHER BIDDERS AS A RESULT OF THE CONTRACTING OFFICER'S DETERMINATION PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1- 904.1 THAT YOU WERE NOT A RESPONSIBLE PROSPECTIVE CONTRACTOR WITHIN THE MEANING OF ASPR 1-903.1 (III). WHICH PROVIDES THAT A PROSPECTIVE CONTRACTOR MUST: "HAVE A SATISFACTORY RECORD OF PERFORMANCE (CONTRACTORS WHO ARE SERIOUSLY DEFICIENT IN CURRENT CONTRACT PERFORMANCE.

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B-160597, JUN. 13, 1967

TO AETNA VAN LINES, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST REJECTION OF YOUR BID BY THE PURCHASING DIVISION, HEADQUARTERS, CAMERON STATION, DEPARTMENT OF THE ARMY, UNDER INVITATION FOR BIDS NO. DABG-03-67-B 0016, WHICH IS THE SUBJECT OF YOUR LETTERS DATED MARCH 3 AND APRIL 21, 1967, AND A TELEGRAM DATED MARCH 2, 1967, FROM CONGRESSMAN JOEL T. BROYHILL. THE LETTERS DATED APRIL 21 WERE DELIVERED BY YOU ON MAY 25.

THE SUBJECT INVITATION WAS ISSUED ON OCTOBER 31, 1966, TO PROCURE SERVICES AND MATERIALS UNDER THREE SCHEDULES FOR THE PREPARATION AND MOVING OF HOUSEHOLD GOODS AND UNACCOMPANIED BAGGAGE, AND FOR OTHER RELATED SERVICES, FOR A ONE-YEAR PERIOD. BIDS WERE OPENED AS SCHEDULED ON NOVEMBER 29, 1966, AND YOU WERE THE LOW BIDDER ON SCHEDULE II, ZONES IV AND V, AND ON SCHEDULE III, ZONE I. HOWEVER, CONTRACTS FOR THESE SERVICES WERE AWARDED TO OTHER BIDDERS AS A RESULT OF THE CONTRACTING OFFICER'S DETERMINATION PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1- 904.1 THAT YOU WERE NOT A RESPONSIBLE PROSPECTIVE CONTRACTOR WITHIN THE MEANING OF ASPR 1-903.1 (III), WHICH PROVIDES THAT A PROSPECTIVE CONTRACTOR MUST:

"HAVE A SATISFACTORY RECORD OF PERFORMANCE (CONTRACTORS WHO ARE SERIOUSLY DEFICIENT IN CURRENT CONTRACT PERFORMANCE, WHEN THE NUMBER OF CONTRACTS AND THE EXTENT OF DEFICIENCY OF EACH ARE CONSIDERED, SHALL, IN THE ABSENCE OF EVIDENCE TO THE CONTRARY OR CIRCUMSTANCES PROPERLY BEYOND THE CONTROL OF THE CONTRACTOR, BE PRESUMED TO BE UNABLE TO MEET THIS REQUIREMENT). PAST UNSATISFACTORY PERFORMANCE, DUE TO FAILURE TO APPLY NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB, SHALL BE SUFFICIENT TO JUSTIFY A FINDING OF NONRESPONSIBILITY AND IN THE CASE OF SMALL BUSINESS CONCERNS, SHALL NOT REQUIRE SUBMISSION OF THE CASE TO SMALL BUSINESS DMINISTRATION; SEE 1-705.4 (C) (V) AND 1 905.2"

THE POLICY UNDERLYING THIS REQUIREMENT IS STATED IN ASPR 1-902 FOLLOWS:

"1-902 GENERAL POLICY. PURCHASES SHALL BE MADE FROM, AND CONTRACTS SHALL BE AWARDED TO, RESPONSIBLE PROSPECTIVE CONTRACTORS ONLY. A RESPONSIBLE PROSPECTIVE CONTRACTOR IS ONE WHICH MEETS THE STANDARDS SET FORTH IN 1- 903.1 AND 1-903.2, AND SUCH SPECIAL STANDARDS AS MAY BE PRESCRIBED IN ACCORDANCE WITH 1-903.3 AND BY OVERSEAS COMMANDERS. THE AWARD OF A CONTRACT TO A SUPPLIER BASED ON LOWEST EVALUATED PRICE ALONE CAN BE FALSE ECONOMY IF THERE IS SUBSEQUENT DEFAULT, LATE DELIVERIES, OR OTHER UNSATISFACTORY PERFORMANCE RESULTING IN ADDITIONAL PROCUREMENT OR ADMINISTRATIVE COSTS. WHILE IT IS IMPORTANT THAT GOVERNMENT PURCHASES BE MADE AT THE LOWEST PRICE, THIS DOES NOT REQUIRE AN AWARD TO A MARGINAL SUPPLIER SOLELY BECAUSE HE SUBMITS THE LOWEST BID OR OFFER. A PROSPECTIVE CONTRACTOR MUST DEMONSTRATE, AFFIRMATIVELY HIS RESPONSIBILITY, INCLUDING WHEN NECESSARY, THAT OF HIS PROPOSED SUBCONTRACTORS. THE CONTRACTING OFFICER SHALL MAKE A DETERMINATION OF NONRESPONSIBILITY IF, AFTER COMPLIANCE WITH 1-905 AND 1-906, THE INFORMATION THUS OBTAINED DOES NOT INDICATE CLEARLY THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE. RECENT UNSATISFACTORY PERFORMANCE, IN EITHER QUALITY OR TIMELINESS OF DELIVERY, WHETHER OR NOT DEFAULT PROCEEDINGS WERE INSTITUTED, IS AN EXAMPLE OF A PROBLEM WHICH THE CONTRACTING OFFICER MUST CONSIDER AND RESOLVE AS TO ITS IMPACT ON THE CURRENT PROCUREMENT PRIOR TO MAKING AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY. DOUBT AS TO PRODUCTIVE CAPACITY OR FINANCIAL STRENGTH WHICH CANNOT BE RESOLVED AFFIRMATIVELY SHALL REQUIRE A DETERMINATION OF NONRESPONSIBILITY.'

AT THE TIME BIDS WERE OPENED THE CONTRACTING OFFICER WAS COGNIZANT OF YOUR PERFORMANCE UNDER THE CURRENT CONTRACT NO. DA 44-109-MDW-2975, FOR PACKING AND CRATING HOUSEHOLD GOODS AND UNACCOMPANIED BAGGAGE, WHICH HE DESCRIBES AS FOLLOWS:

"* * * AETNA'S PERFORMANCE UNDER THE CONTRACT WAS UNSATISFACTORY WITH DELINQUENCIES AND OTHER DEFICIENCIES GOING BACK TO JUNE 1966. THIS WAS FIRST CALLED TO THE ATTENTION OF THE CONTRACTING OFFICER IN A MEMORANDUM OF THE JOINT HOUSEHOLD GOODS SHIPPING OFFICE, ACTING AS CONTRACTING OFFICER'S REPRESENTATIVE, ON 29 JULY 1966. BECAUSE OF FORTY DELINQUENCIES AND OTHER COMPLAINTS, FULL TIME ASSIGNMENT OF AN INSPECTOR WAS REQUIRED TO CORRECT THE RESULT OF POOR MANAGEMENT (EX F). CAPTAIN HENRY J. HIGGINS, THEN CONTRACTING OFFICER, PERSONALLY DISCUSSED THE MATTER WITH MR. WALTER HODGES, PRESIDENT OF AETNA. ALL POSSIBLE ASSISTANCE, INCLUDING HELP WITH MANAGERIAL PROBLEMS, WAS OFFERED AT THAT TIME, BUT MR. HODGES FELT THAT THE DIFFICULTIES COULD THEN BE CLEARED UP (EX G). ALTHOUGH THERE WAS A TEMPORARY IMPROVEMENT, DELINQUENCY REPORTS (EX H-1 THRU H-27) AND COMPLAINTS FROM OWNERS ABOUT POOR PACKING (EXAMPLES EX I-1 THRU I-3) CONTINUED TO BE RECEIVED. ALTHOUGH NOTIFIED BY THE HOUSEHOLD GOODS OFFICE OF THE DEFICIENCIES, AETNA NEITHER PREVENTED THEM FROM OCCURRING NOR SOUGHT ASSISTANCE WITH ITS PROBLEMS.'

TO OBTAIN A THOROUGH AND CURRENT REVIEW OF YOUR PERFORMANCE BEFORE MAKING A DECISION ON THE QUESTION OF YOUR RESPONSIBILITY, THE CONTRACTING OFFICER REQUESTED A PRE-AWARD SURVEY PURSUANT TO ASPR 1 905.4. IN THEIR REPORT DATED DECEMBER 15, 1966, THE SURVEY OFFICIALS RECOMMENDED NO AWARD BECAUSE YOU DID NOT HAVE ADEQUATE MOVING VANS AND FACILITIES FOR THE SUBJECT CONTRACT AND BECAUSE THEY CONCLUDED THAT YOUR PERFORMANCE UNDER THE THEN CURRENT CONTRACT WAS UNSATISFACTORY. THEIR CONCLUSION CONCERNING UNSATISFACTORY PERFORMANCE WAS BASED ON DELINQUENCY REPORTS NUMBERING WELL OVER 400 THEN ON FILE WITH THE PURCHASING DIVISION, CAMERON STATION. SUBSEQUENT TO THE PRE-AWARD SURVEY, DELINQUENCY REPORTS CONTINUED. THESE CIRCUMSTANCES, THE CONTRACTING OFFICER WAS UNABLE TO FIND THAT YOU HAD THE SATISFACTORY RECORD OF PERFORMANCE REQUIRED OF A PROSPECTIVE CONTRACTOR UNDER APPLICABLE REGULATIONS. BECAUSE OF THE NATURE AND FREQUENCY OF THE DELINQUENCIES, HE CONCLUDED THAT YOUR UNSATISFACTORY PERFORMANCE WAS NOT ATTRIBUTABLE TO A LACK OF CAPACITY OR CREDIT AND, THEREFORE, REJECTED YOUR BID WITHOUT REFERRAL TO THE SMALL BUSINESS ADMINISTRATION. SEE ASPR 1-903.1 (III) AND 1-705.4 (C) (5).

IT IS YOUR CONTENTION THAT YOUR OVERALL RECORD OF PERFORMANCE UNDER THE PRIOR CONTRACT WAS SATISFACTORY AND THAT YOUR EQUIPMENT AND FACILITIES ARE ADEQUATE FOR PERFORMANCE OF THE SERVICES YOU BID ON. WITH REGARD TO YOUR PRIOR PERFORMANCE, YOU HAVE SUBMITTED YOUR COPIES OF THE DELINQUENT LISTS WITH APPROPRIATE NOTATIONS FROM YOUR RECORDS FOR EACH TRANSACTION THEREON. OF THE APPROXIMATE 500 DELINQUENCIES LISTED, YOU INDICATE THAT ABOUT 150 WERE EITHER CANCELLED, LATE BECAUSE CAMERON STATION DID NOT TIMELY ISSUE THE GOVERNMENT BILL OF LADING, OR THE CARRIER DID NOT MAKE PICKUPS WHEN REQUESTED. YOU SHOW A FEW TRANSACTIONS AS HAVING BEEN PICKED UP AND SHIPPED AS REQUIRED. YOUR RECORDS SHOW THE REMAINING 300 OR SO WERE EITHER PICKED UP OR SHIPPED LATE, OR BOTH, WITHOUT ANY APPARENT JUSTIFICATION THEREFOR. FINALLY, YOU POINT OUT THAT IN VIEW OF THE NUMBER OF JOBS HANDLED UNDER THE PREVIOUS CONTRACT, OVER 5300, THE NUMBER OF DELINQUENCIES AND COMPLAINTS WERE A RELATIVELY INSIGNIFICANT INDICATION OF THE QUALITY OF YOUR PERFORMANCE.

THE DETERMINATION OF A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY IS PRIMARILY THE FUNCTION OF THE CONTRACTING OFFICER, AND IS NECESSARILY A MATTER OF JUDGMENT INVOLVING A CONSIDERABLE DEGREE OF DISCRETION. WHERE SUCH DETERMINATION IS BASED UPON SUBSTANTIAL EVIDENCE AND IS NEITHER ARBITRARY NOR CAPRICIOUS, WE SEE NO BASIS TO SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER. SEE 45 COMP. GEN. 4; 43 ID. 257; 39 ID. 705, 711. IN THE INSTANT CASE, ALTHOUGH YOU HAVE DISPUTED THE VALIDITY OF AND RESPONSIBILITY FOR MANY OF THE REPORTED DELINQUENCIES, THERE ARE STILL A VERY LARGE NUMBER OF UNDISPUTED DELINQUENCIES WHICH OCCURRED ON A CONTINUOUS BASIS OVER A LONG PERIOD OF TIME. IT IS OUR OPINION THAT THE NUMBER OF UNEXCUSED DELINQUENCIES IS SUFFICIENT TO SUPPORT THE CONTRACTING OFFICER'S DETERMINATION THAT YOUR RECORD OF PERFORMANCE WAS UNSATISFACTORY.

ACCORDINGLY, THERE IS NO BASIS UPON WHICH OUR OFFICE MAY OBJECT TO THE ADMINISTRATIVE ACTION IN THIS CASE. WITH RESPECT TO FUTURE PROCUREMENTS, THE DETERMINATION OF YOUR FIRM'S RESPONSIBILITY WILL HAVE TO BE BASED ON THE CIRCUMSTANCES AS OF THAT TIME. YOUR COPIES OF THE DELINQUENT LISTS ARE RETURNED AS REQUESTED.

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