B-157815, JAN. 21, 1966

B-157815, JAN. 21, 1966

TO SHIPLEY, AKERMAN AND PICKETT:

REFERENCE IS MADE TO YOUR PETITION RECEIVED HERE ON OCTOBER 7, 1965, REQUESTING A RULING ON THE PROTEST OF C. F. BUTZ ENGINEERING AGAINST THE FAVORABLE CONSIDERATION OF THE BIDS SUBMITTED BY THE J. V. COMPANY AND S I HANDLING SYSTEMS, INC., UNDER INVITATION FOR BIDS NO. DSA-003 66-4, AND REQUESTING THAT AWARD BE MADE TO C. F. BUTZ ENGINEERING AS THE LOWEST RESPONSIBLE, RESPONSIVE BIDDER.

THE PROCUREMENT WAS INITIATED ON FEBRUARY 2, 1965, UNDER THE TWO-STEP FORMAL ADVERTISING PROCEDURES (PART 5, SECTION II OF THE ARMED SERVICES PROCUREMENT REGULATION) BY THE ISSUANCE OF A REQUEST FOR TECHNICAL PROPOSALS (STEP ONE) TO COVER THE ENGINEERING, FURNISHING AND INSTALLATION OF A MECHANIZED MATERIAL HANDLING SYSTEM AT THE DEFENSE DEPOT OGDEN, OGDEN, UTAH.

IN ORDER TO FACILITATE INTERESTED BIDDERS' UNDERSTANDING OF THE TECHNICAL REQUIREMENTS OF THE REQUEST FOR PROPOSAL, A PRESOLICITATION AND BIDDERS' CONFERENCES WERE HELD ON FEBRUARY 2 AND MARCH 18, 1965, WHEN THE REQUIREMENTS WERE PUBLICLY EXAMINED AND EXPLAINED AND INTERESTED BIDDERS' QUESTIONS ANSWERED. BUTZ ATTENDED ONLY THE SECOND CONFERENCE BUT WAS FURNISHED ALL COMMUNICATIONS AND MATERIAL MADE AVAILABLE TO OTHER FIRMS. THREE TECHNICAL PROPOSALS WERE RECEIVED ON JUNE 2, 1965, FROM BUTZ, S I HANDLING SYSTEMS, AND THE J. V. COMPANY. EACH PROPOSAL, AFTER MINOR CLARIFICATION, WAS DETERMINED TO BE ACCEPTABLE AND THOSE FIRMS THEREBY BECAME ELIGIBLE TO SUBMIT COMPETITIVE BIDS COVERING THEIR ACCEPTED TECHNICAL PROPOSALS.

THE STEP-TWO FORMAL ADVERTISEMENT FOR BIDS WAS ISSUED ON AUGUST 20, 1965, TO THE THREE ELIGIBLE BIDDERS. BIDS WERE OPENED ON SEPTEMBER 21, 1965, AND IT APPEARED THAT BUTZ SUBMITTED THE HIGHEST OVERALL BID AND THAT S I HANDLING SYSTEMS BID WAS THE LOWEST OVERALL BID RECEIVED. IT IS CONTENDED THAT THE BID OF THE LOWEST OVERALL BIDDER IS NONRESPONSIVE FOR SEVERAL REASONS WHICH ARE CONSIDERED BELOW.

FIRST, IT IS ALLEGED THAT THE BID OF S I HANDLING SYSTEMS IS NONRESPONSIVE SINCE IT MADE AN AFFIRMATIVE RESPONSE TO THE CONTINGENT FEE REPRESENTATION OF PAGE 2 OF THE INVITATION TO THE EFFECT THAT IT HAD AGREED TO PAY A SELLING AGENCY A FEE CONTINGENT UPON OR RESULTING FROM THE AWARD OF A CONTRACT. IN ACCORDANCE WITH ASPR 1-508.1 (B), S I HANDLING SYSTEMS SUBMITTED A COMPLETED STANDARD FORM 119, CONTRACTOR'S STATEMENT OF CONTINGENT OR OTHER FEES, AND A COPY OF ITS SELLINGREPRESENTATIVE'S AGREEMENT WITH THE HORSLEY COMPANY, THE FIRM TO WHICH THE CONTINGENT FEE WAS TO BE PAID IF S I HANDLING SYSTEMS WERE TO BE AWARDED THE CONTRACT. THIS AGREEMENT REFLECTS THE FACT THAT HORSLEY IS A BONA FIDE SALES REPRESENTATIVE OF THE BIDDER THROUGHOUT UTAH AND IDAHO. IT FURTHER INDICATES THAT THE BUSINESS RELATIONSHIP--- WHICH COMMENCED PRIOR TO THE INSTANT PROCUREMENT--- REPRESENTS A NORMAL COMMERCIAL PRACTICE AND THAT THE RELATIONSHIP WAS NOT ENTERED INTO SOLELY FOR THE PURPOSE OF OBTAINING THE SUBJECT CONTRACT. UNDER ASPR 1-505 CERTAIN FACTORS ARE SET FORTH WHICH ARE DEEMED TO HAVE PROBATIVE VALUE IN DETERMINING WHETHER A CONTINGENT FEE ARRANGEMENT IS EXCEPTED FROM THE PROHIBITION OF THE COVENANT CONTAINED IN CLAUSE 17 OF STANDARD FORM 23-A, GENERAL PROVISIONS (CONSTRUCTION CONTRACT), INCORPORATED INTO, AND MADE A PART OF, THE INVITATION FOR BIDS. THAT CLAUSE READS AS FOLLOWS:

"17. COVENANT AGAINST CONTINGENT FEES

"THE CONTRACTOR WARRANTS THAT NO PERSON OR SELLING AGENCY HAS BEEN EMPLOYED OR RETAINED TO SOLICIT OR SECURE THIS CONTRACT UPON AN AGREEMENT OR UNDERSTANDING FOR A COMMISSION, PERCENTAGE, BROKERAGE, OR CONTINGENT FEE, EXCEPTING BONA FIDE EMPLOYEES OR BONA FIDE ESTABLISHED COMMERCIAL OR SELLING AGENCIES MAINTAINED BY THE CONTRACTOR FOR THE PURPOSE OF SECURING BUSINESS. FOR BREACH OR VIOLATION OF THIS WARRANTY THE GOVERNMENT SHALL HAVE THE RIGHT TO ANNUL THIS CONTRACT WITHOUT LIABILITY OR IN ITS DISCRETION TO DEDUCT FROM THE CONTRACT PRICE OR CONSIDERATION OR OTHERWISE RECOVER, THE FULL AMOUNT OF SUCH COMMISSION, PERCENTAGE, BROKERAGE, OR CONTINGENT FEE.'

IT WILL BE NOTED THAT THE ABOVE CLAUSE AND THE REGULATIONS AT ASPR 1- 505.4 MAKE A SPECIFIC EXCEPTION FROM THE PROHIBITION IN THE CASE OF "BONA FIDE ESTABLISHED COMMERCIAL OR SELLING AGENCIES MAINTAINED BY THE CONTRACTOR FOR THE PURPOSE OF SECURING BUSINESS.' THE FACTORS TO BE APPLIED IN DETERMINING WHETHER SUCH A BONA FIDE RELATIONSHIP EXISTS ARE:

1.THE FEE MUST BE REASONABLE, THAT IS, NOT INEQUITABLE OR EXORBITANT;

2. THE AGENT SHOULD HAVE AN ADEQUATE KNOWLEDGE OF THE PRODUCT BEING PROCURED;

3. THERE SHOULD BE A CONTINUITY OF RELATIONSHIP BETWEEN THE AGENT AND CONTRACTOR;

4.THE AGENT SHOULD BE AN ESTABLISHED CONCERN; AND

5. THE AGENT IS TO BE REGARDED FAVORABLY IF ITS FUNCTIONS INCLUDE THE SOLICITATION OF BOTH COMMERCIAL AND GOVERNMENT BUSINESS.

THE RECORD BEFORE US ESTABLISHES THAT HORSLEY MET ALL THE CRITERIA LISTED ABOVE, AND IT MAY BE PARTICULARLY POINTED OUT THAT THE AGENCY RELATIONSHIP IS A CONTINUING ONE; THAT HORSLEY IS EXPERIENCED IN THE MATERIAL HANDLING FIELD AS WELL AS IN THE CONVEYOR MANUFACTURING FIELD; THAT ITS FEE IS MOST REASONABLE IN RELATION TO THE VALUE OF THE EXPECTED CONTRACT; AND THAT HORSLEY IS A WELL-ESTABLISHED AGENCY WHICH HAS REPRESENTED ANOTHER FIRM IN RELATED MANUFACTURING ACTIVITIES FOR 20 YEARS.

OUR OFFICE HAS NOT QUESTIONED THE REASONABLENESS OF THESE REGULATIONS WHICH WERE PROMULGATED AS AN IMPLEMENTATION OF 44 CFR 150, PRESCRIBING THE PROCEDURES, PRINCIPLES AND STANDARDS TO BE FOLLOWED BY THE EXECUTIVE AGENCIES OF THE GOVERNMENT IN ADMINISTERING THE CONTINGENT FEE COVENANT. WHILE CERTAIN EARLY COURT DECISIONS (PROVIDENCE TOOL CO. V. NORRIS, 2 WALL. (69 U.S.) 45; BROWN V. GESELLSCHAFT FUR DRAHTLOSE TELEGRAPHIE, M.B.H., 104 F.2D 227; SILVERMAN V. OSBORNE REGISTER CO., 155 F.2D 879), INTERPRETED THE CONTINGENT FEE COVENANT MORE STRICTLY AGAINST THE CONTRACTOR, WE ARE INCLINED TO ACCEPT THE CURRENT REGULATIONS AS IN HARMONY WITH THE GENERAL LINE OF JUDICIAL AUTHORITY AS WELL AS DECISIONS OF THE DEPARTMENTAL BOARDS OF CONTRACT APPEALS WHEREIN THE BONA FIDE AGENCY REQUIREMENT WAS MEASURED AGAINST THE CRITERIA LISTED ABOVE. SEE REYNOLDS V. GOODWIN-HILL CORPORATION, 154 F.2D 553; LE JOHN MANUFACTURING COMPANY, V. WEBB, 222 F.2D 48; BEACH V. ILLINOIS LUMBER MFG. CO., 92 F.SUPP. 564; APPEAL OF METRO ENGINEERING AND MANUFACTURING CO., INC., ASBCA 1495; APPEAL OF STANDARD LOCKNUT AND LOCKWASHER CO., INC., ASBCA 1666; APPEAL OF ALLOY PRODUCTS CORP., WDBCA 1571; APPEAL OF A-B STOVES DIVISION, DETROIT-MICHIGAN STOVE COMPANY, A CORPORATION, ASBCA 1224. UNDER THE REGULATIONS AND DECISIONS CITED, IT CANNOT BE ASSUMED THAT THE SELLING REPRESENTATIVE IS NOT BONA FIDE OR THAT A TRANSACTION IS NOT LEGITIMATE WHEN PERCENTAGE COMMISSIONS ARE INVOLVED. ON THE OTHER HAND, THE GOVERNMENT IS, OF COURSE, CONCERNED WITH THE AMOUNT OF THE COMMISSION- -- HERE IT IS MINIMAL--- A CONTRACTOR PAYS TO ITS SELLING REPRESENTATIVE SINCE THE REASONABLENESS OF THE COMMISSION IS ONE OF THE FACTORS CONSIDERED IN EVALUATING WHETHER THE SELLING REPRESENTATIVE IS IN FACT BONA FIDE AND WHETHER THERE HAS BEEN A VIOLATION OF THE COVENANT AGAINST CONTINGENT FEES. BUT ONCE IT HAS BEEN ESTABLISHED, AS HERE, THAT THE SELLING AGENCY IS A BONA FIDE SALES REPRESENTATIVE OF THE BIDDER AND THAT THERE HAS BEEN NO VIOLATION OF THE COVENANT, NO FURTHER INQUIRY IN THE MATTER IS REQUIRED. 22 COMP. GEN. 124.

SECONDLY, IT IS ALLEGED THAT THE BID OF S I HANDLING SYSTEMS IS NONRESPONSIVE SINCE IT FAILED TO FILL IN ANY OF THE BLANK SPACES IN PARAGRAPH 7, PAGE 2, OF THE INVITATION RESPECTING THE "BUY AMERICAN CERTIFICATE.' THE CLAUSE READS AS FOLLOWS:

"THE BIDDER HEREBY CERTIFIES THAT EACH END PRODUCT, EXCEPT THE END PRODUCTS LISTED BELOW, IS A DOMESTIC SOURCE END PRODUCT (AS DEFINED IN THE CLAUSE ENTITLED "BUY AMERICAN ACT"); AND THAT COMPONENTS OF UNKNOWN ORIGIN HAVE BEEN CONSIDERED TO HAVE BEEN MINED, PRODUCED, OR MANUFACTURED OUTSIDE THE UNITED STATES.'

THE BID OF S I HANDLING SYSTEMS MUST BE REGARDED AS A DOMESTIC BID IN THE ABSENCE OF ANY REPRESENTATION THAT IT INTENDED TO OFFER FOREIGN END PRODUCTS. THE BID DID NOT EXCLUDE ANY END PRODUCTS FROM ITS REPRESENTATION--- RESULTING FROM THE SIGNING OF THE BID DOCUMENT--- TO FURNISH ONLY DOMESTIC END PRODUCTS. ITS OBLIGATION AS RESPECTS THE BUY AMERICAN ACT WAS THUS FIXED AND UNDER THE BUY AMERICAN CLAUSE, INCLUDED AS PART OF THE INVITATION, THE BIDDER UPON ACCEPTANCE OF SUCH A BID WOULD BE BOUND TO FURNISH ONLY DOMESTIC CONSTRUCTION MATERIAL. ASPR 6-204.5.

THIRDLY, YOU REFER TO AN ALLEGED IMPROPER ALTERNATE BID MADE BY S I HANDLING SYSTEMS IN RESPONDING TO ITEM 6 OF THE INVITATION,"AMOUNT TO BE DELETED FROM BID PRICE FOR DELETION OF THE SORTER IN WAREHOUSE 16B.' THE BIDDER INSERTED TWO SEPARATE PRICES TO BE DELETED; ONE IN THE AMOUNT OF $117,990 IF AN AEROJET SORTER WAS ELIMINATED, AND THE OTHER IN THE AMOUNT OF $136,743 IF A SPEAKER SORTER WAS ELIMINATED. OBVIOUSLY, THE QUOTATION OF SEPARATE PRICES FOR DELETION OF TWO DISTINCT SYSTEM COMPONENTS IN ITEM 6, BOTH OF WHICH WERE FULLY RESPONSIVE TO THE GOVERNMENT'S SPECIFICATIONS AND NEEDS, IS NOT A NONRESPONSIVE ALTERNATE BID. SEE 33 COMP. GEN. 499. S I HANDLING SYSTEMS' TECHNICAL PROPOSAL (STEP ONE) OFFERED TO FURNISH EITHER AEROJET GENERAL OR SPEAKER SORTATION COMPANY EQUIPMENT. IN ORDER TO DETERMINE WHAT PRICE REDUCTION WOULD APPLY IF THE SORTER FOR WAREHOUSE 16B WAS DELETED, IT WAS IMPERATIVE FOR THE CONTRACTING OFFICER TO KNOW THE COST FOR EACH TYPE OF SORTER THAT WAS INCLUDED IN THE TOTALS INVOLVING THE TWO SYSTEMS. MOREOVER, AS INDICATED ON THE INVITATION SCHEDULE, THIS BIDDER WAS INSTRUCTED TO SO BID BY THE CONTRACTING OFFICER. UNDER THE TWO -STEP SYSTEM OF ADVERTISING, BIDDERS ARE ALLOWED TO SUBMIT MORE THAN ONE TECHNICAL PROPOSAL SO AS TO PROVIDE THE GOVERNMENT WITH THE BENEFIT OF ENGINEERING CHANGES AND ADVANCES. UNDER THE FIRST STEP HERE, PROPOSERS WERE ENCOURAGED TO SUBMIT MULTIPLE PROPOSALS(ASPR 2-503.1 (A) (X) ). THE SECOND STEP (INVITATION FOR BIDS) ADVISED ELIGIBLE BIDDERS THAT ALTERNATE BIDS ARE NOT PERMISSIBLE "EXCEPT AS CALLED FOR IN THE SCHEDULE.' THE SCHEDULES PERTAINING TO EACH TECHNICAL PROPOSAL STATED THE NEED FOR MULTIPLE PRICING OF DIFFERENT PROPOSALS OR COMPONENTS IN PROPOSALS. SEE, ALSO, THE INVITATION PROVISION ON PAGE 3, QUOTED BELOW. IN ANY EVENT, THIS SITUATION DID NOT INVOLVE THE TYPE OF ALTERNATE BIDDING WHICH IS OBJECTIONABLE; THAT IS, WHERE AN ALTERNATE BID IS, IN EFFECT, NONRESPONSIVE TO THE ADVERTISED REQUIREMENTS. SEE 9 COMP. GEN. 24; 39 ID. 570; CF. 40 COMP. GEN. 70; ID. 688; 36 ID. 102.

IT IS NEXT ALLEGED THAT THE BID OF S I HANDLING SYSTEMS IS NONRESPONSIVE OR THAT THE BIDDER IS NONRESPONSIBLE BECAUSE OF "UNREALISTIC AND UNREASONABLE" PRICES FOR ITEMS SUB 1, SUB 1A, SUB 1B, SUB 1C, SUB 1D, SUB 1E, AND SUB 6. THE PRICES CALLED FOR IN THE SCHEDULE FOR THESE SUBITEMS WERE FOR ADMINISTRATIVE PURPOSES ONLY AND WERE NOT INVOLVED IN THE EVALUATION PROCESS. THEY SHOWED ONLY THE AMOUNTS OF CONSTRUCTION WORK INCLUDED IN THE TOTAL PRICES FOR THE PRINCIPAL ITEMS. MOREOVER, THE REASONABLENESS OF PRICE IS A MATTER OF ADMINISTRATIVE JUDGMENT WHICH WILL NOT BE DISTURBED BY OUR OFFICE UNLESS THE PRICES ARE PATENTLY ERRONEOUS. THERE IS NO SUCH ERROR HERE. SEE 43 COMP. GEN. 680. CONCERNING SUB 6, IT IS APPARENT FROM THE BID ITSELF THAT S I HANDLING SYSTEMS MADE AN ERROR IN QUOTING THE PRICE OF $108,000. THIS PRICE THOUGH ERRONEOUS WAS FOR INFORMATION PURPOSES ONLY AND, IN EFFECT, MEANT THAT THE BIDDER WOULD HAVE NO CONSTRUCTION COSTS IN ITS BID IF ITEM SUB 6 WOULD BE ACCEPTED. THE SUBITEM PRICE WAS DESIGNED ONLY TO SHOW THE RATIO OF CONSTRUCTION COSTS TO SUPPLY COSTS FOR ADMINISTRATIVE USE, AND IT IS CLEAR THAT THE SAME AMOUNT OF CONSTRUCTION WOULD BE REQUIRED WHETHER THE SORTER FURNISHED WAS OF THE AEROJET OR SPEAKER TYPE OR WHETHER THE SORTER IN WAREHOUSE 16B WAS DELETED --- THERE BEING NO CONSTRUCTION WORK INVOLVED IN CONNECTION WITH THE SORTERS. BASED UPON THE EVIDENCE SUBMITTED BY S I HANDLING SYSTEMS AND THE OPINION OF DSA LEGAL COUNSEL, THE BIDDER WAS ALLOWED TO CORRECT ITS BID FOR SUB 6 TO SHOW A ZERO AMOUNT. WE THEREFORE FEEL, IN VIEW OF THE INFORMATIONAL CHARACTER OF THE PRICE FOR SUB 6 AND OF THE FACT THAT SUCH PRICE WAS NOT AN EVALUATION FACTOR, THAT THE CORRECTION WAS PROPER. SEE 41 COMP. GEN. 469.

IT IS NEXT ALLEGED THAT S I HANDLING SYSTEMS BID A ZERO FIGURE FOR SUB 2 THEREBY RENDERING ITS BID NONRESPONSIVE APPARENTLY BECAUSE IT DID NOT COMPLY WITH THE INVITATION PROVISION ON PAGE 3 OF THE INVITATION. THAT PROVISION READS AS FOLLOWS:

"ANY BID NOT OFFERING PRICES ON ALL ALTERNATE TECHNICAL PROPOSALS AND ON ALL DELETIVE ITEMS WILL BE CONSIDERED NON-RESPONSIVE.'

THE QUOTATION OF A ZERO FIGURE FOR THIS DELETIVE SUBITEM COMPLIED WITH THE FOREGOING PROVISION SINCE THE QUOTATION CONSTITUTES A ZERO PRICE FOR DELETION OF 1 TO 17 TRANSPORTER DOCKS. WE ARE ADVISED THAT THE ELIMINATION OF TRANSPORTER DOCKS NEED NOT AFFECT THE CONSTRUCTION WORK UNLESS A PARTICULAR PROPOSAL WAS DESIGNED SO AS TO DICTATE OTHERWISE. S I HANDLING INDICATED IN ITS PROPOSAL THAT IT CONTEMPLATED USING EXISTING DOOR OPENINGS AND HENCE WOULD HAVE NO CONSTRUCTION COSTS TO DEDUCT IF THE DOCKS WERE ELIMINATED. IN OTHER WORDS, THE BIDDER OFFERED TO DEDUCT NOTHING FROM ITS BID PRICE ON ACCOUNT OF THE DELETION OF DOCKS SINCE IT NEVER INTENDED BY ITS PROPOSAL TO INCUR CONSTRUCTION COSTS FOR DOCKS. CF. B-157454, NOVEMBER 1, 1965, 45 COMP. GEN. - . YOU FURTHER STATE THAT S I HANDLING--- A SMALL BUSINESS CONCERN--- SOUGHT TO HAVE SUBSTANTIAL PORTIONS OF THE WORK PERFORMED BY LARGE BUSINESS CONCERNS. THE INVITATION AUTHORIZED SMALL BUSINESS BIDDERS TO UTILIZE THE PRODUCTS AND SERVICES OF LARGE BUSINESS CONCERNS TO THE EXTENT NECESSARY TO COMPLY WITH THE TECHNICAL REQUIREMENTS OF THE PROCUREMENT, PROVIDED PARTICIPATION BY THE SMALL BUSINESS BIDDER OR OTHER SMALL BUSINESS CONCERNS TO THE EXTENT NECESSARY TO COMPLY WITH THE TECHNICAL REQUIREMENTS OF THE PROCUREMENT, PROVIDED PARTICIPATION BY THE SMALL BUSINESS BIDDER OR OTHER SMALL BUSINESS CONCERNS MEETS THE FOLLOWING MINIMA:

"A. PROPOSED DESIGN TO BE COMPLETED BY THE BIDDER, UTILIZING ITS OWN PERSONNEL AND DESIGN CAPABILITY OR THAT OF OTHER SMALL BUSINESS FIRMS; OR

"B. THE COSTS THAT THE FIRM INCURS ON ACCOUNT OF MANUFACTURE OF THE NECESSARY EQUIPMENT UTILIZING ITS OWN PRODUCTION CAPABILITY OR THE CAPABILITY OF OTHER SMALL BUSINESS FIRMS IS OVER 30 PERCENT OF THE COSTS OF ALL THE EQUIPMENT TO BE PROVIDED UNDER THE CONTRACT; OR

"C. INSTALLATION OF THE EQUIPMENT TO BE ACCOMPLISHED BY THE BIDDER, USING ITS OWN CAPABILITY AND PERSONNEL OR THE CAPABILITY AND PERSONNEL OF OTHER SMALL BUSINESS FIRMS; OR

"D. PERFORM WITH ITS OWN PERSONNEL A COMBINATION OF THE TASKS SET FORTH UNDER A, B, AND C ABOVE. THE INTENDED COMBINATION OF TASKS AND THE NAMES OF THE PROSPECTIVE SUB-CONTRACTORS FOR THOSE TASKS SHALL BE STATED IN THE INVITATION, TOGETHER WITH A CERTIFICATION THAT THE COSTS THE FIRM WILL INCUR ON ACCOUNT OF ITS OWN CONTRIBUTION OR IN CONJUNCTION WITH OTHER SMALL BUSINESSES WILL AMOUNT TO NO LESS THAN 20 PERCENT OF THE CONTRACT PRICE.'

THE RECORD BEFORE US SHOWS THAT S I HANDLING SYSTEMS WILL CLEARLY PERFORM MORE THAN THE ABOVE MINIMUM WORK REQUIREMENTS, AND THAT THE BIDDER HAS CORRECTLY CERTIFIED TO THE EXTENT OF SUBCONTRACTING AS TO BOTH LARGE AND SMALL BUSINESS CONCERNS.

THE LOW BID AND PROPOSAL OF S I HANDLING WAS THOROUGHLY EVALUATED BY GOVERNMENT TECHNICAL EXPERTS WITH THE RESULT THAT IT WAS DETERMINED TO BE RESPONSIVE TO THE GOVERNMENT'S REQUIREMENTS. IN ACCORDANCE WITH WELL- ESTABLISHED PRECEDENT, WE WILL NOT QUESTION SUCH DETERMINATION. 30 COMP. GEN. 179; 37 ID. 763; 38 ID. 190; 40 ID. 35; 41 ID. 510. WE FIND NO BASIS TO QUESTION THE RESPONSIBILITY OF S I HANDLING SYSTEMS SINCE IT IS SUPPORTED BY A PREAWARD SURVEY WHICH DEMONSTRATES THE CAPACITY AND FINANCIAL ABILITY OF THE BIDDER. IN THE ABSENCE OF ANY BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE ADMINISTRATIVE FINDING OF RESPONSIBILITY, WE WILL REGARD SUCH FINDING AS CONCLUSIVE. 37 COMP. GEN. 430; 38 ID. 131; ID. 778.

WE HAVE CONSIDERED THE VARIOUS AUTHORITIES CITED BY YOU IN SUPPORT OF THE PROTEST BUT, IN THE ABSENCE OF PROOF SHOWING SPECIFIC FACTS TENDING TO ESTABLISH THAT AN AWARD TO S I HANDLING SYSTEMS WOULD BE CONTRARY TO LAW OR IMPLEMENTING REGULATION, THE PRINCIPLES CITED BY YOU ARE NOT APPLICABLE.

WE ARE ADVISED THAT CONTRACT NO. DSA-003-14 DATED NOVEMBER 19, 1965, WAS AWARDED TO S I HANDLING SYSTEMS IN THE TOTAL AMOUNT OF $1,739,434,OR SUBSTANTIALLY LESS THAN THAT OFFERED BY BUTZ IN ITS BID. THAT PORTION OF THE PROTEST WHICH DEALT WITH THE BID OF THE J. V. COMPANY WAS NOT CONSIDERED HERE SINCE THE BID OF THAT FIRM WAS NOT CONSIDERED TO BE IN LINE FOR AWARD SUBSEQUENT TO BID EVALUATIONS.