B-176845(1), DEC 26, 1972

B-176845(1), DEC 26, 1972

BID PROTEST - MISTAKE IN BID - BIDDER'S RESPONSIBILITY - COLLUSION DECISION DENYING THE PROTEST OF KLEEN-RITE JANITORIAL SERVICE, INC., AGAINST AWARD OF A CONTRACT TO EITHER C. G. ASHE ENTERPRISES OR DYNETERIA, INC., UNDER AN IFB ISSUED AT FT. MONROE, VA., FOR CUSTODIAL SERVICES. WHEN A LOW BIDDER CONFIRMS HIS BID PRICE AFTER BEING NOTIFIED OF A POSSIBLE MISTAKE, AND A PRE-AWARD SURVEY DISCLOSES NO EVIDENCE OF POSSIBLE MISTAKE AND INDICATES THAT THE LOW BIDDER IS CAPABLE OF MEETING THE FINANCIAL AND OTHER COMMITMENTS NECESSARY TO COMPLETE A CONTRACT, GAO CANNOT CONCLUDE THAT THE BID PRICE WAS ERRONEOUS OR THAT THE BIDDER DID NOT HAVE SUFFICIENT FINANCIAL RESOURCES. SEE B-171794, MAY 21, 1971. MOREOVER, THE MATTER OF OVERALL RESPONSIBILITY OF A SUCCESSFUL BIDDER IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING OFFICER AND WILL NOT BE QUESTIONED UNLESS CLEARLY ARBITRARY OR WITHOUT ANY REASONABLE SUPPORT. 170130, SEPTEMBER 8, 1970. FURTHERMORE, ASPR 1-115 IS NOT VIOLATED SOLELY BY REASON OF A FRATERNAL RELATIONSHIP BETWEEN THE BIDDERS.

TO FRIED, FRANK, HARRIS, SHRIVER AND KAMPELMAN:

REFERENCE IS MADE TO THE PROTEST OF KLEEN-RITE JANITORIAL SERVICE, INCORPORATED (KLEEN-RITE), AGAINST AWARD TO EITHER C. G. ASHE ENTERPRISES (ASHE) OR DYNETERIA, INCORPORATED, UNDER INVITATION FOR BIDS (IFB) DABB25- 73-B-0001, ISSUED AT FORT MONROE, VIRGINIA, ON JULY 21, 1972, BY THE DEPARTMENT OF THE ARMY.

THE IFB WAS ISSUED FOR THE FURNISHING OF ALL PLANT, LABOR, TOOLS, EQUIPMENT, AND SUPERVISION IN PERFORMANCE OF ALL OPERATIONS TO PROVIDE COMPLETE CUSTODIAL SERVICES IN ADMINISTRATIVE AREAS AT FORT MONROE FOR THE PERIOD SEPTEMBER 1972 THROUGH AUGUST 1973. UPON OPENING AND EVALUATION OF THE BIDS RECEIVED ON AUGUST 22, 1972, ASHE WAS THE APPARENT LOW BIDDER AT $12,908.79 PER MONTH LESS 3 1/2 PERCENT DISCOUNT, DYNETERIA WAS THIRD AT $17,706.21 PER MONTH LESS 18 1/2 PERCENT DISCOUNT, AND KLEEN-RITE WAS FOURTH LOW AT $15,726.83 PER MONTH LESS 8 PERCENT DISCOUNT. THE SECOND LOW BID WAS REJECTED AS NONRESPONSIVE. ON AUGUST 25 A TELEGRAM WAS RECEIVED BY THE CONTRACTING OFFICER FROM YOUR FIRM PROTESTING ON BEHALF OF KLEEN-RITE AGAINST AWARD TO ASHE OR DYNETERIA ON GROUNDS OF RESPONSIVENESS AND RESPONSIBILITY. ON SEPTEMBER 19, 1972, WE WERE ADVISED THAT AWARD WAS BEING MADE TO ASHE BASED UPON A DETERMINATION PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-407.8(B)(3)(III) THAT A PROMPT AWARD WILL BE ADVANTAGEOUS TO THE GOVERNMENT.

IN YOUR LETTER OF AUGUST 24, 1972, TO OUR OFFICE, YOU STATE THAT YOU HAVE REASON TO BELIEVE THAT ASHE MADE A MISTAKE IN ITS BID, RESULTING IN AN UNREASONABLY LOW PRICE. YOU ALSO QUESTION THE SUBMISSION OF BIDS BY ASHE AND BY B. D. ASHE, INCORPORATED (ANOTHER BIDDER), THE PRESIDENT OF WHICH IS THE BROTHER OF ASHE'S PRESIDENT, C. G. ASHE. IN YOUR LETTER OF SEPTEMBER 5, 1972, YOU STATE THAT ASHE'S PRICE IS SOME 20 PERCENT LOWER THAN DYNETERIA'S AND KLEEN-RITE'S. YOU CONTEND THAT ASHE CANNOT PERFORM AT ITS BID PRICE WITHOUT INCURRING A SUBSTANTIAL LOSS, AND THAT ASHE'S PRICE INDICATES EITHER THAT ASHE DOES NOT UNDERSTAND THE COMPLEXITY OF THE WORK TO BE PERFORMED UNDER THE CONTRACT OR THAT ASHE MADE A SERIOUS MISTAKE IN COMPUTING ITS BID PRICE. IN EITHER EVENT YOU QUESTION WHETHER ASHE MEETS THE RESPONSIBILITY REQUIREMENTS OF ASPR 1-903.1(I), RELATING TO ADEQUATE FINANCIAL RESOURCES. A QUESTION IS ALSO RAISED AS TO ASHE'S RESPONSIBILITY BASED UPON KLEEN RITE'S INFORMATION THAT ASHE IS PRIMARILY A "GROUNDS MAINTENANCE CONTRACTOR" AND THAT ASHE'S EXPERIENCE IN PERFORMING CUSTODIAL SERVICES CONTRACTS OF ANY CONSEQUENCE IS VIRTUALLY NON-EXISTENT. THEREFORE, YOU BELIEVE THAT ASHE MAY NOT MEET THE REQUIREMENTS OF ASPR 1-903.1(II) AND ASPR 1-903.2(A), RELATING TO THE ABILITY TO COMPLY WITH THE PERFORMANCE SCHEDULE AND HAVING THE NECESSARY ORGANIZATION AND EQUIPMENT, RESPECTIVELY. FINALLY, IN CONNECTION WITH THE RELATIONSHIP BETWEEN C. G. ASHE AND B. D. ASHE, YOU STATE THAT THERE IS A POSSIBILITY OF A VIOLATION OF THE NONCOLLUSIVE BIDDING REQUIREMENTS SET FORTH IN ASPR 1 115, WHICH WOULD PRECLUDE AN AWARD TO ASHE.

ON SEPTEMBER 21, 1972, THIS OFFICE WAS FURNISHED AN ADMINISTRATIVE REPORT PREPARED BY THE DEPARTMENT OF THE ARMY. INCLUDED IN THIS REPORT TO SUPPORT THE DEPARTMENT'S RECOMMENDATION THAT THE PROTEST BE DENIED IS DOCUMENTATION RESPONSIVE TO EACH OF YOUR CONTENTIONS.

BY LETTERS DATED AUGUST 28, 1972, TO THE CONTRACTING OFFICER, MR. C. G. ASHE CONFIRMED AND RECONFIRMED THAT HE HAD REVIEWED HIS BID AND THAT IT WAS CORRECT AND IN ORDER. AS A RESULT OF A PRE-AWARD SURVEY CONDUCTED ON AUGUST 29, 1972, BY THE PROCUREMENT DIVISION, FORT MONROE, IT WAS DETERMINED THAT C. G. ASHE HAS THE FINANCIAL ABILITY, INCLUDING THE BACKING OF VIRGINIA NATIONAL BANK OF HAMPTON, VIRGINIA, TO MEET THE OBLIGATIONS NECESSARY TO PROPERLY PERFORM THE CONTRACT. FURTHERMORE, THE CONTRACTING OFFICER FOUND THE UNIT PRICE OF $.03 PER SQUARE FOOT PER MONTH BID BY ASHE TO BE FAIR AND REASONABLE BASED UPON THE AVERAGE UNIT PRICE PER SQUARE FOOT PER MONTH OF $.041 OBTAINED FROM THE BIDS, THE GOVERNMENT'S ESTIMATE OF $.033 AND THE PREVIOUS CONTRACT OF $.0299, WITH KLEEN-RITE.

WHEN A LOW BIDDER CONFIRMS HIS BID PRICE AFTER BEING NOTIFIED OF A POSSIBLE MISTAKE AND A PRE-AWARD SURVEY DISCLOSES NO EVIDENCE OF POSSIBLE MISTAKE AND INDICATES THAT THE LOW BIDDER IS CAPABLE OF MEETING FINANCIAL AND OTHER COMMITMENTS NECESSARY TO COMPLETE A CONTRACT, THERE IS NO BASIS FOR OUR OFFICE TO CONCLUDE THAT THE BID PRICE WAS COMPUTED ERRONEOUSLY OR THAT THE BIDDER LACKS THE NECESSARY FINANCIAL RESOURCES TO PERFORM THE CONTRACT. SEE B-171794, MAY 21, 1971; B-175979, JULY 26, 1972.

WITH RESPECT TO YOUR CONTENTION THAT ASHE MAY NOT BE RESPONSIBLE WITHIN ASPR 1-903.1(II) AND ASPR 1-903.2(A), IT WAS DETERMINED AS A RESULT OF THE PRE-AWARD SURVEY THAT ASHE HAS PERSONNEL WITHIN ITS ORGANIZATION TO PROVIDE THE NECESSARY SUPERVISION AND EXPERTISE TO PERFORM IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE SOLICITATION. IN ADDITION, IT WAS DETERMINED THAT SINCE THE MAJORITY OF PERSONNEL OTHER THAN SUPERVISORS ARE PART-TIME EMPLOYEES, THE EMPLOYEES PRESENTLY EMPLOYED BY KLEEN-RITE ARE AVAILABLE TO ASHE; THAT THESE EMPLOYEES ARE EXPERIENCED, HAVING WORKED FOR KLEEN-RITE FOR AS MUCH AS THREE YEARS; AND THAT THE COMPANY HAS ADEQUATE EQUIPMENT AND SUPPLIES ON HAND TO PERFORM AS REQUIRED.

OUR OFFICE HAS CONSISTENTLY HELD THAT THE MATTER OF THE OVERALL RESPONSIBILITY OF THE SUCCESSFUL BIDDER TO PERFORM THE RESULTING CONTRACT IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING OFFICER, WHOSE DECISION WILL NOT BE QUESTIONED UNLESS CLEARLY ARBITRARY OR WITHOUT ANY REASONABLE SUPPORT. B-170130, SEPTEMBER 8, 1970. ALTHOUGH YOU REPORT THAT ASHE'S EXPERIENCE IN PERFORMING CUSTODIAL SERVICE CONTRACTS IS VIRTUALLY NON- EXISTENT, WE FIND THAT THE RECORD SUPPORTS THE CONTRACTING OFFICER'S DETERMINATION OF ASHE'S RESPONSIBILITY.

AS TO YOUR CLAIM THAT THERE IS A POSSIBLE VIOLATION OF ASPR 1-115, C. G. ASHE'S LETTER OF AUGUST 28, 1972, CONTAINS A STATEMENT THAT OTHER THAN THE FRATERNAL RELATIONSHIP THERE IS NO CONNECTION BETWEEN C. G. ASHE AND B. D. ASHE; THAT THE BID WAS PREPARED INDEPENDENTLY BY C. G. ASHE WITHOUT DISCUSSION WITH OR ASSISTANCE, OR ANY OTHER ELEMENT OF CONSIDERATION, FROM B. D. ASHE; AND THAT THE BID WAS SUBMITTED IN ACCORDANCE WITH THE TERMS OF THE SOLICITATION. FURTHERMORE, C. G. ASHE'S SIGNED BID CONTAINED THE CERTIFICATE OF INDEPENDENT PRICE DETERMINATION PRESCRIBED FOR INCLUSION BY ASPR 1-115. IN THESE CIRCUMSTANCES, WE FIND NO MERIT TO KLEEN-RITE'S ALLEGATION OF A POSSIBLE VIOLATION OF THIS REGULATION BASED SOLELY UPON THE FRATERNAL RELATIONSHIP BETWEEN THESE TWO INDIVIDUALS AND WITHOUT ANY OTHER SUPPORT.

ACCORDINGLY, THE PROTEST OF KLEEN-RITE AGAINST THE AWARD TO ASHE IS DENIED. IN VIEW THEREOF, THERE IS NO NEED TO CONSIDER KLEEN-RITE'S PROTEST AGAINST AWARD TO DYNETERIA. ENCLOSED IS A COPY OF OUR LETTER OF TODAY TO THE SECRETARY OF THE ARMY CONCERNING ASHE'S PRIOR EXPERIENCE.