B-143374, B-143403, B-143414, OCT. 6, 1960

B-143374, B-143403, B-143414, OCT. 6, 1960

TO LEWIS P. MAY, ESQUIRE:

REFERENCE IS MADE TO YOUR LETTERS OF JUNE 23, 24 AND 29, 1960, PROTESTING THE REJECTION OF LOW BIDS SUBMITTED BY THE AMBASSADOR LAUNDRY COMPANY OF OAKLAND, CALIFORNIA, PURSUANT TO INVITATIONS FOR BIDS NOS. 228-69943-60, 228-69944-60 AND 228-64889-60, ISSUED BY THE GENERAL SUPPLY DEPOT, NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA. RECEIPT IS ALSO ACKNOWLEDGED OF YOUR LETTER OF AUGUST 26, 1960.

THE BIDS SUBMITTED BY AMBASSADOR WERE REJECTED IN EACH INSTANCE BECAUSE THE CONTRACTING OFFICER COULD NOT MAKE AN AFFIRMATIVE DETERMINATION, AS REQUIRED BY SECTION 1-904.1 OF THE ARMED SERVICES PROCUREMENT REGULATION, THAT THE FIRM WAS A RESPONSIBLE BIDDER. SUCH AFFIRMATIVE DETERMINATION WAS PREVENTED SPECIFICALLY BY THE COMPANY'S POOR PERFORMANCE RECORD UNDER RECENT SPECIFICALLY BY THE COMPANY'S POOR PERFORMANCE RECORD UNDER RECENT CONTRACTS FOR SIMILAR WORK, NAMELY, CONTRACTS NOS. N228/236/34194, N228/296/34196, N228/217/34203 AND N228 34756, WHICH WERE TERMINATED FOR DEFAULT BY NOTICE DATED APRIL 18, 1960, AND MADE EFFECTIVE AS OF MAY 1, 1960. THE RECORD SHOWS THAT AT THE PRESENT TIME THERE IS PENDING BEFORE THE ARMED SERVICES BOARD OF CONTRACT APPEALS THE CONTRACTOR'S APPEAL FROM THE DEFAULT TERMINATIONS AND THE DECISION OF THE CONTRACTING OFFICER THAT THE CONTRACTS WERE PROPERLY TERMINATED FOR DEFAULT.

YOU STATE THAT IF THE TERMINATION OF THE CONTRACTS INVOLVED WAS ARBITRARY AND CAPRICIOUS, THEN THE AWARD OF THE REPLACEMENT CONTRACTS TO OTHER THAN AMBASSADOR AS LOW BIDDER, WAS LIKEWISE ARBITRARY AND CAPRICIOUS.

GOVERNMENT CONTRACTS ENTERED INTO AFTER ADVERTISING FOR BIDS PURSUANT TO SECTION 3 OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, NOW SECTION 2305, TITLE 10, U.S.C. NEED NOT BE AWARDED BIDDERS NOT QUALIFIED TO PERFORM THE NECESSARY SERVICES. THAT SECTION REQUIRES THAT SUCH CONTRACTS BE AWARDED ONLY TO THE LOWEST RESPONSIBLE BIDDER IN EACH CASE. IT SPECIFICALLY PROVIDES THAT AWARDS SHALL BE MADE "TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED.'

WHILE IT LONG HAS BEEN HELD THAT THE LOW BID OF A RESPONSIBLE BIDDER MAY NOT BE REJECTED MERELY BECAUSE SUCH BIDDER HAS DEFAULTED UNDER A PRIOR SIMILAR CONTRACT (15 COMP. GEN. 149), IT IS RECOGNIZED, OF COURSE, THAT THERE MAY BE CASES IN WHICH THE PRIOR DEFAULT OF A BIDDER PROPERLY MAY AND SHOULD BE CONSIDERED IN CONNECTION WITH THE AWARD OF FUTURE GOVERNMENT CONTRACTS AND THAT IN SOME SUCH CASES THE CIRCUMSTANCES MAY JUSTIFY THE ACTUAL REJECTION OF THE BID SUBMITTED BY A DEFAULTING BIDDER. 27 COMP. GEN. 621, 625.

CLEARLY, ONE OF THE FACTORS IN DETERMINING THE RESPONSIBILITY OF A BIDDER IS HIS APPARENT ABILITY TO PERFORM IN ACCORDANCE WITH THE REQUIREMENTS SET OUT IN THE INVITATION. THE DETERMINATION OF THE PROSPECTIVE CONTRACTOR'S ABILITY TO PERFORM IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE OFFICERS CONCERNED, AND IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF REASONABLE BASIS THEREFOR, THERE IS NO BASIS UPON WHICH WE MAY OBJECT. 37 COMP. GEN. 430, 435. THE PROJECTION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT. WHILE SUCH JUDGMENT SHOULD BE BASED ON FACT AND SHOULD BE ARRIVED AT IN GOOD FAITH, IT MUST PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICES INVOLVED, SINCE THEY ARE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, THEY MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY, AND THEY MUST MAINTAIN THE DAY TO DAY RELATIONS WITH THE CONTRACTOR ON BEHALF OF THE GOVERNMENT. FOR THESE REASONS, IT WOULD BE UNREASONABLE TO SUPERIMPOSE THE JUDGMENT OF OUR OFFICE OR ANY OTHER AGENCY OR GROUP ON THAT OF THE CONTRACTING OFFICIALS. IN VIEW THEREOF, AND SINCE THE FINAL DETERMINATION OF AMBASSADOR'S RESPONSIBILITY WILL BE MADE BY THE ARMED SERVICES BOARD OF CONTRACT APPEALS WHEN IT RENDERS ITS DECISION ON AMBASSADOR'S APPEAL FROM THE DEFAULT TERMINATIONS, WE SEE NO PROPER BASIS AT THIS TIME UPON WHICH WE MAY OBJECT TO THE DETERMINATIONS TO REJECT THE AMBASSADOR BIDS.