B-146426, SEP. 20, 1961

B-146426, SEP. 20, 1961

TO MR. JUAN SALSAS SABATER:

REFERENCE IS MADE TO YOUR LETTER OF JULY 11, 1961, PROTESTING THE ACTION OF THE UNITED STATES ARMY PROPERTY DISPOSAL OFFICER AT CHINON, FRANCE, IN AWARDING A CONTRACT TO ANOTHER BIDDER WHOSE BID FOR ITEMS 4 THROUGH 50 OF INVITATION NO. DA-EUC-91-640-S-61-12 WAS LOWER THAN YOUR BID.

THE PROPERTY DISPOSAL OFFICER, IN A STATEMENT DATED JUNE 27, 1961, ADVISED THAT YOUR BID WAS REJECTED WHEN IT WAS DETERMINED THAT YOUR NAME APPEARED ON THE LIST OF DEBARRED BIDDERS. THE RECORD SHOWS THAT THE REQUEST FOR DEBARMENT ORIGINATED AT THE UNITED STATES ARMY GENERAL DEPOT, KAISERSLAUTERN, AS A RESULT OF YOUR FAILURE TO PERFORM IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF CONTRACT NO. DA-/S/-91-569 EUC-393 WHICH WAS AWARDED TO YOUR FIRM AT GENTBURGGE, BELGIUM, ON DECEMBER 16, 1959. THE TERMS AND CONDITIONS OF THAT CONTRACT REQUIRED YOUR FIRM TO REMOVE APPROXIMATELY 450 SHORT TONS OF FERROUS SCRAP METAL WHICH WAS TO BE GENERATED BY THE DISPOSAL ACTIVITY DURING THE PERIOD JANUARY 1 THROUGH JUNE 30, 1960.

THE CHIEF OF THE PROCUREMENT AFFAIRS BRANCH, KAISERSLAUTERN, REPORTED THAT YOU REMOVED APPROXIMATELY 50 SHORT TONS OF SCRAP METALIN THE EARLY PART OF JANUARY, 1960. ON JANUARY 20 AND FEBRUARY 3, 1960, YOU WERE NOTIFIED BY TELEGRAM TO REMOVE ADDITIONAL QUANTITIES OF SCRAP WHICH HAD ACCUMULATED. DESPITE THE TELEGRAPHIC NOTICE AND REPEATED TELEPHONE CALLS FROM THE DISPOSAL OFFICER, YOU DID NOT COMPLY WITH THE TERMS OF THE CONTRACT BY REMOVING THE MATERIAL. WHEN YOU DISREGARDED THE REQUESTS TO REMOVE THE MATERIAL, YOU CAUSED ADDITIONAL EXPENSE AND INCONVENIENCE TO THE GOVERNMENT BY FORCING THE USE OF OTHER STORAGE AREAS. ON FEBRUARY 9, 1960, WHEN IT BECAME APPARENT THAT YOU DID NOT INTEND TO HONOR YOUR CONTRACTUAL OBLIGATIONS, THE GOVERNMENT TERMINATED THE CONTRACT. SUBSEQUENTLY, THE MATERIAL WAS RESOLD AT A LOWER PRICE AND THE LOSS ON THE RESALE WAS CHARGED TO YOUR FIRM.

THE DISPOSAL OFFICER CONCLUDED THAT YOUR BREACH OF CONTRACT CONSTITUTED A WILLFUL FAILURE TO PERFORM IN ACCORDANCE WITH THE REQUIREMENTS IN A CONTRACT, WHICH IS ONE OF THE CAUSES FOR DEBARMENT SET FORTH IN PARAGRAPH 1-604.1 OF THE ARMED SERVICES PROCUREMENT REGULATION. DEBARMENT PROCEEDINGS WERE STARTED AND YOU WERE ADVISED BY LETTER OF MARCH 9, 1960, THAT YOU HAD THIRTY DAYS AFTER RECEIPT OF THE LETTER TO PRESENT INFORMATION ON YOUR BEHALF. ACCORDING TO THE REGISTRY RECEIPT, YOU RECEIVED THE LETTER OF MARCH 9 ON MARCH 14, 1960. THE THIRTY-DAY PERIOD PASSED WITHOUT FURTHER ACTION ON YOUR PART. YOU WERE NOTIFIED BY LETTER OF APRIL 20, 1960, THAT AS A RESULT OF YOUR FAILURE TO PERFORM IN ACCORDANCE WITH THE TERMS OF CONTRACT NO. DA-/S/ 91-569-EUC-393, YOU WERE DEBARRED FROM ENTERING INTO FURTHER CONTRACTUAL RELATIONS WITH

AGENCIES OF THE UNITED STATES GOVERNMENT FOR A PERIOD OF TWO YEARS ENDING APRIL 22, 1962.

OUR OFFICE HAS CONSISTENTLY TAKEN THE POSITION THAT CONTRACTING AGENCIES MUST OBSERVE CERTAIN SAFEGUARDS AND LIMITATIONS IN THE USE OF NONSTATUTORY DEBARMENTS. THE CONDITIONS AND CAUSES FOR DEBARMENT AS SET FORTH IN SUBPART 1-600 OF THE ARMED SERVICES PROCUREMENT REGULATION ARE LARGELY A COLLECTION OF CIRCUMSTANCES IN WHICH WE HAVE CONCURRED IN DEBARMENT ACTIONS.

WE HAVE CAREFULLY REVIEWED THE RECORD IN THIS MATTER AND IT IS OUR OPINION THAT DEBARMENT ACTION WAS UNDERTAKEN IN STRICT COMPLIANCE WITH THE PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION. WHEN YOU REFUSED TO PERFORM IN ACCORDANCE WITH THE TERMS OF THE SCRAP CONTRACT YOU WERE NOTIFIED OF THE PROPOSED DEBARMENT AND WERE AFFORDED A THIRTY DAY PERIOD IN WHICH TO PRESENT INFORMATION ON YOUR BEHALF. YOU DID NOT TAKE ADVANTAGE OF THE OPPORTUNITY TO DEFEND YOUR ACTIONS AND THERE WAS NO INFORMATION TO REBUT THE CONCLUSION THAT YOUR BREACH OF THE CONTRACT WAS A WILLFUL FAILURE TO PERFORM IN ACCORDANCE WITH THE REQUIREMENTS OF THE CONTRACT. WE BELIEVE THAT ALL THE SAFEGUARDS REQUIRED BY OUR OFFICE WERE OBSERVED IN THIS DEBARMENT ACTION. FURTHERMORE, THE ARMED SERVICES PROCUREMENT REGULATION AUTHORIZES DEBARMENT FOR A PERIOD OF THREE YEARS BUT IN VIEW OF THE NATURE OF YOUR BREACH OF THE SCRAP CONTRACT, IT IS OUR OPINION THAT A TWO-YEAR PERIOD OF DEBARMENT IS REASONABLE FOR THE PURPOSE OF PROTECTING THE INTERESTS OF THE UNITED STATES GOVERNMENT.

THE STATEMENT IN YOUR LETTER OF JUNE 10, 1961, TO THE COMMANDER IN CHIEF, U.S. ARMY, EUROPE, THAT THE SCRAP CONTRACT WAS SOLD TO ANOTHER SCRAP DEALER DOES NOT PROVIDE A BASIS FOR YOUR CONCLUSION THAT YOUR FIRM WAS THEREBY RELIEVED OF FURTHER RESPONSIBILITIES IN THE MATTER. THE RECORD DISCLOSES THAT SALE OF THE SCRAP TO ANOTHER DEALER TOOK PLACE AFTER YOUR REFUSAL TO REMOVE THE SCRAP AND THE SALE WAS, IN FACT, MADE NECESSARY BY YOUR BREACH OF CONTRACT.

YOU HAVE PROTESTED THAT DEBARMENT OF YOUR FIRM IN GENTBURGGE SHOULD NOT APPLY TO YOUR FIRM IN BARCELONA. HOWEVER, IN ORDER TO PROTECT THE INTERESTS OF THE GOVERNMENT, DEBARMENT IS NOT LIMITED TO THE COMPANY DEBARRED BUT ALSO INCLUDES THE NAMES OF INDIVIDUALS WHO ARE PROPRIETORS OR RESPONSIBLE OFFICERS OF THE DEBARRED FIRM. THE DEBARMENT PROCEDURE WOULD BE RENDERED COMPLETELY INEFFECTIVE IF THE OFFICERS OF A DEBARRED COMPANY COULD EVADE THE OPERATION OF DEBARMENT BY DISSOLUTION OF THE COMPANY IN ONE LOCATION AND FORMATION OF A DIFFERENT COMPANY IN ANOTHER LOCATION. THE FACT THAT YOUR FIRM IN GENTBURGGE NO LONGER EXISTS AND YOU ARE NOW DOING BUSINESS IN BARCELONA DOES NOT REMOVE YOUR NAME FROM THE DEBARRED BIDDERS LIST.

SINCE IT IS OUR OPINION THAT THE DEBARMENT ACTION AGAINST YOU WAS PROPER, WE HAVE NO BASIS UPON WHICH TO OBJECT TO THE ACTION OF THE PROPERTY DISPOSAL OFFICER AT CHINON, FRANCE, IN REJECTING YOUR BID WHEN IT WAS DETERMINED THAT YOU WERE THE INDIVIDUAL WHOSE NAME APPEARED ON THE DEBARRED BIDDERS LIST. ACCORDINGLY, YOUR PROTEST IS DENIED.