B-143207, AUG. 9, 1960

B-143207, AUG. 9, 1960

TO SCOBLIONKO AND FRANK:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 13, 1960, ON BEHALF OF MODERN TRANSFER COMPANY, INC. (HEREINAFTER REFERRED TO AS MODERN TRANSFER), PROTESTING THE AWARD MADE BY THE POST OFFICE DEPARTMENT TO MR. JOSEPH B. CONAHAN OF STAR ROUTE CONTRACT BETWEEN HAZLETON, PENNSYLVANIA, AND NORTH JERSEY TRUCK TERMINAL.

THE REPORT FURNISHED BY THE POST OFFICE DEPARTMENT SHOWS THAT THE MODERN TRANSFER OPERATED STAR ROUTE NO. 41331 UNDER A TEMPORARY CONTRACT BEGINNING ON MAY 15, 1959. IN VIEW OF THE FACT THAT TEMPORARY STAR ROUTE CONTRACTS ARE LIMITED TO A YEAR OR LESS, AN ADVERTISEMENT WAS PREPARED INVITING BIDS FOR THIS STAR ROUTE FOR THE PERIOD FROM MAY 16, 1960, TO JUNE 30, 1961. THE ADVERTISEMENT OF STAR ROUTE NO. 41331, NORTH JERSEY TRUCK TERMINAL--- HAZLETON, WAS ISSUED ON MARCH 18, 1960. PAGE 4 OF THE ADVERTISEMENT CONTAINED THE FOLLOWING CLAUSE:

"SPECIAL REQUIREMENT - THE CONTRACTING OFFICER MAY REQUIRE ANY BIDDER UNDER THIS ADVERTISEMENT, AS EVIDENCE OF HIS RESPONSIBILITY, TO SUBMIT WITHIN 48 HOURS OF BEING SO NOTIFIED, PROOF THAT HE HAS SUCCESSFULLY OWNED OR OPERATED A TRANSPORTATION ENTERPRISE OF APPROXIMATELY EQUAL SCOPE AND RESPONSIBILITY TO THAT REQUIRED UNDER THIS ADVERTISEMENT. THE CONTRACTING OFFICER MAY REJECT THE BID OF ANY PERSON WHO, IN THE JUDGMENT OF THE CONTRACTING OFFICER, DOES NOT FURNISH SATISFACTORY INFORMATION WITHIN THE ALLOTTED TIME, AND AWARD A CONTRACT TO THE NEXT LOWEST BIDDER WHOM HE DETERMINES MEETS THE CRITERIA SET FORTH ABOVE.'

THE TEN BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE OPENED ON APRIL 28, 1960. THE SIX LOWEST BIDS FOR CONSIDERATION FOR AWARD WERE AS FOLLOWS: $83,272.80 (JOSEPH B. CONAHAN), $94,930.90, $95,890, $99,630 (MODERN TRANSFER), $99,800, AND $99,990.

SUBSEQUENT TO THE BID OPENING MR. CONAHAN CAME TO THE CONTRACTING OFFICE FOR AN INTERVIEW AND SUBMITTED CERTAIN EVIDENCE AS TO HIS ABILITY TO PERFORM THE REQUIRED SERVICES, INCLUDING HIS ABILITY TO SECURE THE NECESSARY EQUIPMENT. IN ADDITION THERETO, AN INDEPENDENT CHECK WAS MADE OF MR. CONAHAN'S QUALIFICATIONS. BASED ON THE INFORMATION OBTAINED AND FURNISHED BY MR. CONAHAN, IT WAS DETERMINED THAT MR. CONAHAN WAS QUALIFIED TO PERFORM THE REQUIRED SERVICES AND, THEREFORE, HIS LOW BID WAS ACCEPTED ON MAY 31, 1960.

YOU PROTEST THE AWARD ON THE BASIS THAT MODERN TRANSFER WAS THE LOWEST RESPONSIBLE BIDDER QUALIFIED TO DO THE JOB AND ALSO THE LOWEST RESPONSIBLE BIDDER HAVING THE NECESSARY EQUIPMENT AND SUFFICIENT FINANCIAL RESOURCES TO CARRY OUT THE DUTIES AND RESPONSIBILITIES UNDER THE BID REQUIREMENT. IT IS ALLEGED THAT JOSEPH B. CONAHAN WAS NOT THE LOWEST RESPONSIBLE BIDDER IN THAT HE HAD NO PREVIOUS EXPERIENCE AND DOES NOT HAVE THE NECESSARY EQUIPMENT OR SUFFICIENT FINANCIAL RESOURCES TO RENDER THE SERVICES REQUIRED. APPARENTLY IT IS ALSO CONTENDED THAT THE TWO NEXT LOWER BIDDERS WERE NOT QUALIFIED, SINCE IT WOULD BE NECESSARY TO ELIMINATE THEM BEFORE MODERN TRANSFER'S BID WOULD BE FOR CONSIDERATION.

SECTION 429 OF TITLE 39, U.S. CODE, PROVIDES IN PERTINENT PART:

"ALL CONTRACTS FOR CARRYING THE MAIL * * * BE AWARDED TO THE LOWEST RESPONSIBLE BIDDER TENDERING SUFFICIENT GUARANTIES FOR FAITHFUL PERFORMANCE IN ACCORDANCE WITH THE TERMS OF THE ADVERTISEMENT.'

THE QUESTION OF QUALIFICATIONS OF A "RESPONSIBLE" BIDDER HAS BEEN BEFORE THE GENERAL ACCOUNTING OFFICE MANY TIMES. IN ONE SUCH CASE, AFTER DISCUSSING FINANCIAL RESOURCES AS ONE ASPECT OF ,RESPONSIBILITY" IT WAS STATED,"* * * EQUALLY IMPORTANT IS THE QUESTION OF WHETHER THE LOW BIDDER HAS DEMONSTRATED ITS FITNESS AND ABILITY TO SUCCESSFULLY FULFILL THE CONTRACT REQUIREMENTS. IN MAKING AN AWARD AFTER ADVERTISING FOR PROPOSALS, THE PUBLIC INTEREST REQUIRES THAT THE CONTRACT BE AWARDED ONLY TO THE LOWEST RESPONSIBLE BIDDER, AND IN MAKING A DETERMINATION AS TO WHETHER A BIDDER IS RESPONSIBLE, NOT ONLY ARE FEDERAL AND MUNICIPAL OFFICERS REQUIRED TO CONSIDER HIS FINANCIAL RESOURCES, BUT ALSO, THE JUDGMENT, ABILITY, AND INTEGRITY OF THE BIDDER AND TO INQUIRE AS TO HIS FITNESS AND ABILITY SUCCESSFULLY TO FULFILL THE CONTRACT REQUIREMENTS.' 30 COMP. GEN. 235. IN MAKING A DECISION ON THE QUESTION OF RESPONSIBILITY THE CONTRACTING OFFICER MAY TAKE INTO CONSIDERATION THE BIDDER'S FINANCIAL RESOURCES, HIS INTEGRITY, FITNESS, CAPACITY, AND ABILITY TO FULFILL CONTRACT REQUIREMENTS. 34 COMP. GEN. 86. THE DETERMINATION OF THE QUALIFICATIONS OF BIDDERS IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE OFFICERS CONCERNED, AND IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF REASONABLE FACTUAL BASIS THEREFOR, WE CANNOT QUESTION AN ADMINISTRATIVE DETERMINATION AS TO RESPONSIBILITY. 37 COMP. GEN. 756; 38 ID. 131.

IN THE INSTANT CASE, AN INVESTIGATION AS TO THE RESPONSIBILITY OF THE LOW BIDDER WAS CONDUCTED, THE INFORMATION OBTAINED THEREBY WAS CONSIDERED, AND ON THE BASIS THEREOF THE CONTRACTING OFFICER CONCLUDED THAT THAT BIDDER WAS "RESPONSIBLE" WITHIN THE CONTEMPLATION OF THE APPLICABLE STATUTE. WHILE IT MIGHT BE INFERRED FROM THE "SPECIAL REQUIREMENT" PROVISION OF THE INVITATION THAT OWNERSHIP OR OPERATION OF A COMPARABLE TRANSPORTATION ENTERPRISE WOULD BE NECESSARY TO ESTABLISH A BIDDER'S RESPONSIBILITY, THE PROVISION DOES NOT MAKE SUCH EXPERIENCE MANDATORY, AND IT IS STATED BY THE POST OFFICE DEPARTMENT THAT THE PROVISION WAS NOT SO INTENDED.

IF WE WERE REQUIRED TO CONSTRUE THE PROVISION AS A MANDATORY EXPERIENCE REQUIREMENT, WE WOULD HAVE TO QUESTION ITS VALIDITY, IN VIEW OF THE EXPRESS DETERMINATION IN THIS CASE THAT MR. CONAHAN MEETS THE STATUTORY REQUIREMENT OF "RESPONSIBILITY.' WHILE WE HAVE IN A NUMBER OF CASES UPHELD PROVISIONS RESTRICTING THE ELIGIBILITY OF BIDDERS ON THE BASIS OF CLEARLY STATED REQUIREMENTS OF EXPERIENCE OR OTHER QUALIFICATIONS, SUCH REQUIREMENTS WERE SUSTAINED AS EXPRESSING DELIBERATE ADMINISTRATIVE DETERMINATIONS, BASED ON EXPERT JUDGMENT, THAT NO CONTRACTOR NOT MEETING THEM COULD REASONABLY BE EXPECTED TO PERFORM THE CONTRACT SATISFACTORILY. WHERE THERE HAS APPEARED SUBSTANTIAL GROUND FOR CONCLUDING THAT THE EFFECT OF SUCH REQUIREMENTS IS TO EXCLUDE BIDDERS WHO WOULD OTHERWISE BE REGARDED AS RESPONSIBLE, WE HAVE HELD THEM TO BE UNDULY RESTRICTIVE OF COMPETITION. SEE 39 COMP. GEN. 173. WE HAVE ALSO HELD THAT PROVISIONS OF AN INVITATION INCONSISTENT WITH APPLICABLE STATUTORY REQUIREMENTS MUST BE REJECTED. 39 COMP. GEN. 695.

IN GENERAL, WE BELIEVE THAT THE TESTS OF RESPONSIBILITY IN CONNECTION WITH THE AWARD OF PUBLIC CONTRACTS HAVE BEEN SO THOROUGHLY AND ADEQUATELY DECLARED BY THE COURTS THAT ATTEMPTS TO PRESCRIBE IN ADVANCE PARTICULAR ELEMENTS OR QUALIFICATIONS TO BE APPLIED IN A PARTICULAR CASE ARE MORE LIKELY TO HINDER THAN TO HELP. IF SUCH REQUIREMENTS ARE MADE MANDATORY THEY MUST MEET THE TEST OF REASONABLENESS; IF MERELY PERMISSIVE THEY TEND TO ENCOURAGE ARBITRARY DETERMINATIONS, BY STRICT APPLICATION IN ONE CASE AND WAIVER IN ANOTHER IN THE SUBJECTIVE DISCRETION OF THE CONTRACTING OFFICIAL. SEE IN THIS CONNECTION, 39 COMP. GEN. 247.

WE ARE ADVISED THAT MR. CONAHAN'S SERVICES UNDER THE CONTRACT AWARDED HAVE BEEN SATISFACTORY. SINCE THE AWARD TO HIM WAS BASED UPON A DETERMINATION THAT HE MET THE LEGAL STANDARDS OF A RESPONSIBLE BIDDER, WE FIND NO REASON TO OBJECT TO THE AWARD MADE.