B-160499, JAN. 6, 1967

B-160499, JAN. 6, 1967

TO VENTILATION CLEANING ENGINEERS, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF DECEMBER 1 AND 2, 1966, PROTESTING THE REJECTION OF YOUR BID BY THE NAVAL AIR STATION, LEMOORE, CALIFORNIA, UNDER INVITATION FOR BIDS NO. N62474 67 C 0617, ISSUED ON OCTOBER 4, 1966.

THE PROCUREMENT IS FOR MAINTENANCE AND SERVICE OF EXHAUST SYSTEMS FILTERS AND HEATERS AT THE UNITED STATES NAVAL AIR STATION, LEMOORE, CALIFORNIA. THREE BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION AND WERE OPENED ON OCTOBER 21, 1966. ALTHOUGH YOU SUBMITTED THE LOW BID THE CONTRACTING OFFICER ON NOVEMBER 14, 1966, DETERMINED THAT YOUR BID SHOULD BE REJECTED BECAUSE YOU WERE NOT A RESPONSIBLE BIDDER. THE DETERMINATION OF NONRESPONSIBILITY WAS MADE PURSUANT TO THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), SECTION 1-900, WHICH PROVIDES, IN PART, THAT A PROSPECTIVE CONTRACTOR MUST HAVE A SATISFACTORY RECORD OF PERFORMANCE TO BE ELIGIBLE AS A RESPONSIBLE CONTRACTOR. IT ALSO PROVIDES THAT PAST UNSATISFACTORY PERFORMANCE DUE TO FAILURE TO APPLY THE NECESSARY TENACITY OR PERSEVERANCE TO DO AN ACCEPTABLE JOB SHALL BE SUFFICIENT TO JUSTIFY A FINDING OF NONRESPONSIBILITY AND, IN THE CASE OF SMALL BUSINESS CONCERNS, SHALL NOT REQUIRE SUBMISSION OF THE CASE TO THE SMALL BUSINESS ADMINISTRATION.

THE CONTRACTING OFFICER REPORTS THAT YOU WERE DETERMINED TO BE NONRESPONSIBLE PRIMARILY BECAUSE OF YOUR PRIOR UNSATISFACTORY PERFORMANCE UNDER CONTRACT NO. NBY 73134,"MAINTENANCE OF AIR HANDLING SYSTEMS, GREASE TRAPS AND WE WELLS AT THE U.S. NAVAL AIR STATION, LEMOORE, CALIFORNIA.' HE ALSO REPORTS THAT YOUR PERFORMANCE WAS ATTRIBUTABLE TO CAUSES OTHER THAN INADEQUATE CAPACITY OR CREDIT. IN ADDITION, HE REPORTS THAT OTHER ACTIVITIES IN THE DEPARTMENT OF DEFENSE AND ONE COMMERCIAL ORGANIZATION WERE INTERVIEWED DURING THE PREAWARD SURVEY TO INVESTIGATE YOUR PERFORMANCE AT THE VARIOUS FACILITIES ADMINISTERED BY THOSE ACTIVITIES. THOSE INTERVIEWS REVEALED A PATTERN OF MARGINAL AND SUBMARGINAL PERFORMANCE IN CONTRACTS INVOLVING SIMILAR WORK. WHILE THE PREAWARD SURVEY INDICATED THAT THE WORK WAS IN SOME CEASE OFFICIALLY RATED SATISFACTORY, THE CONTRACTING OFFICER STATES THAT THE RATING OFFICIALS AT THE LOCATIONS INTERVIEWED INDICATED THAT YOUR PERFORMANCE WAS BARELY ACCEPTABLE. THEY INDICATED THAT, IN CONTRACTS REQUIRING MORE THAN SIMPLE EXHAUST CLEANING, ABNORMAL ADMINISTRATIVE EFFORTS WERE REQUIRED TO OBTAIN MINIMUM CONFORMANCE WITH CONTRACT REQUIREMENTS, THAT IN MANY CASES REWORK WAS REQUIRED, THAT YOU HAD A LARGE TURNOVER IN PERSONNEL AND ALLOWED UNQUALIFIED WORKMEN TO DO MUCH OF YOUR WORK, AND THAT THE SATISFACTORY RATING GIVEN YOUR FIRM WAS MARGINAL.

IN YOUR LETTER OF DECEMBER 1, 1966, AND THE ENCLOSURES THEREWITH, YOU CONTEND THAT YOUR ALLEGED UNSATISFACTORY PERFORMANCE OF CONTRACT NO. NBY 73134 WAS ATTRIBUTABLE TO ERRONEOUS AND AMBIGUOUS SPECIFICATIONS RATHER THAN YOUR FAILURE TO APPLY THE NECESSARY TENACITY OR PERSEVERANCE TO PERFORM AN ACCEPTABLE JOB. YOU SET OUT IN DETAIL CERTAIN FACTS, WHICH WILL NOT BE REPEATED HERE, WHICH YOU CONTEND CLEARLY SHOW THAT PERFORMANCE OF THE CONTRACT WAS DELAYED THROUGH NO FAULT OF YOUR OWN.

IN RESPONSE TO YOUR LETTER OF DECEMBER 1, THE OFFICER IN CHARGE OF CONSTRUCTION HAS FURNISHED THE FOLLOWING COMMENTS REGARDING EACH OF YOUR ALLEGATIONS:

"A. FORMAL APPROVAL OF THE CHANGE IN THE SPIDER GEARS WAS PRECEDED BY VERBAL AUTHORITY. THIS IS NOT CONSIDERED TO CONSTITUTE A DELAY IN COOLER OPERATION.

"B. SUBSTITUTIONS FOR THE PRESCRIBED MEDIA WERE, IN EVERY CASE, OF LESSER QUALITY AND OF CHEAPER MATERIAL. VCEI REFUSED TO OFFER AN APPROPRIATE CREDIT. THE SPECIFICATION DID NOT PRESCRIBE A PROPRIETARY ARTICLE. THE CONTRACTOR ORDERED THE MATERIAL IN MARCH AND IT OBVIOUSLY COULD NOT HAVE BEEN RECEIVED AND INSTALLED PRIOR TO THE SPECIFIED DATE OF 1 APRIL. DUE TO A FIRE AT THE FACTORY AND OTHER EXTENUATING FACTORS, THE OICC AUTHORIZED A DELAY UNTIL 10 DAYS AFTER RECEIPT OF MATERIAL FOR COMPLETION OF THE WORK. THIS TIME EXTENSION WAS ACCEPTED BY VCEI. EVAPORATIVE MEDIA WAS DELIVERED ON 11 APRIL; HOWEVER, UNITS WERE NOT OPERATIONAL ON 21 APRIL AS PROMISED.

"C. ERRORS IN DRAWINGS ARE ADMITTED AND A NEGOTIATED PRICE SETTLEMENT MADE. TIME INVOLVED IN CORRECTING THE ERROR WAS ESTIMATED AT 50 MAN HOURS AND COULD NOT BE CONSIDERED AN APPRECIABLE DELAY TO OPERATION OF THE COOLING UNITS.

"D. DIFFICULTIES IN CLEANING OF ROTARY WHEELS WERE ENCOUNTERED AND VCEI MADE A DEFINITE EFFORT TO FIND ACCEPTABLE METHODS WITHOUT SUCCESS. NEGOTIATED CHANGE TO THE CONTRACT WAS MADE TO COMPENSATE THE CONTRACTOR FOR TIME AND MATERIAL EXPENDED. IT IS CONSIDERED THAT TIME EXTENSIONS OF APPROXIMATELY 60 DAYS WERE AUTHORIZED TO COMPENSATE FOR ALL DELAYS CLAIMED BY THE CONTRACTOR. EVEN THOUGH THESE TIME EXTENSIONS WERE GENEROUS AND COVERED MORE TIME THAN NECESSARY, THE CONTRACTOR STILL DID NOT HAVE THE COOLERS OPERATIONAL UNTIL THE MIDDLE OF JULY.

"E. THE COAL TAR APPLICATION SPECIFIED IN THE CONTRACT, WHEN APPLIED IN ACCORDANCE WITH THE MANUFACTURER'S RECOMMENDATIONS WAS ADEQUATE TO ACHIEVE THE DESIRED RESULTS. CONTRACTOR PERSONNEL FAILED TO CLEAN AND PREPARE THE SURFACES PROPERTY, HEAT MATERIAL TO THE PROPER TEMPERATURE OR APPLY IT AS SPECIFIED. IN ADDITION HOLES IN THE PANS DRILLED BY CONTRACTOR PERSONNEL WERE NOT PROPERLY REPAIRED AND REQUIRED REWORK. THESE WERE NOT DELAYS ATTRIBUTABLE TO THE GOVERNMENT.

"F. THE PRIMARY CAUSE OF DELAYS IN ELECTRICAL WORK WAS PROVEN TO BE THE FAILURE OF THE CONTRACTOR TO PROVIDE QUALIFIED WORKMEN AND TEST EQUIPMENT. EVEN WITH A PUBLIC WORKS ELECTRICIAN AVAILABLE TO OPERATE SWITCHES, THE CONTRACTOR'S PERSONNEL WERE UNABLE TO TROUBLE-SHOOT ELECTRICAL PROBLEMS AND CORRECT THEM. AS A RESULT OF DEFICIENCIES IN PERSONNEL CAPABILITIES, GOVERNMENT FACILITIES AND EQUIPMENT WERE DAMAGED. THESE DEFICIENCIES WERE REPEATEDLY BROUGHT TO THE ATTENTION OF THE CONTRACTOR BOTH TO PROTECT GOVERNMENT EQUIPMENT AND CONTRACTOR PERSONNEL.

"G. ERRORS IN DRAWINGS WERE ADMITTED AND AN EQUITABLE ADJUSTMENT IN PRICE NEGOTIATED. AS THE NUMBER OF ERRORS INVOLVED AMOUNTED TO A MINOR PERCENTAGE OF THE TOTAL WORK INVOLVED IT IS INCONCEIVABLE THAT THEY COULD HAVE CONTRIBUTED TO THE DELAYS IN WORK TO THE EXTENT CLAIMED BY THE CONTRACTOR.

"H. THE FAILURE OF THE CONTRACTOR'S COMMUNICATIONS SYSTEM CANNOT BE EXPLAINED. SIMILAR SYSTEMS WORK WHEN THEY ARE INSTALLED AND MAINTAINED PROPERLY. THE FACT REMAINS THAT THE CONTRACTOR NEVER DID HAVE AN EFFICIENT COMMUNICATIONS SYSTEM. THIS CAUSED DELAYS IN ACCOMPLISHMENT OF THE WORK.

"I. CONTRACT ADMINISTRATION HAS BEEN A PROBLEM WITH THIS CONTRACTOR THROUGHOUT THE CONTRACT PERIOD. MORE TIME AND EFFORT HAS BEEN EXPENDED IN ATTEMPTING TO ADMINISTER THIS $72,000 CONTRACT THAN IN THE ADMINISTRATION OF ANY OTHER CONTRACT. A REVIEW OF THE CONTRACT FILE, WHICH INCLUDES CONTRACTORS STATEMENTS THAT HE WILL NOT COMPLY WITH ROUTINE ADMINISTRATIVE REQUEST OF THE OFFICER IN CHARGE, WILL SUBSTANTIATE THE DIFFICULTIES ENCOUNTERED.

"J. INSTANCES ARE NOT CONSIDERED ISOLATED. PERSONNEL QUALIFICATION DEFICIENCIES RESULTED IN DELAYS, POOR WORKMANSHIP AND DAMAGE TO GOVERNMENT EQUIPMENT. INSPECTORS DAILY REPORTS AND CORRESPONDENCE FROM THE OICC SUBSTANTIATE THE FACT THAT WORKMANSHIP WAS EXTREMELY UNSATISFACTORY AND THAT CORRECTION OF UNSATISFACTORY WORK, ALTHOUGH ACCOMPLISHED EVENTUALLY, WAS NOT BY ANY MEANS PROMPT AS REQUIRED BY THE CONTRACT.

"K. ALTHOUGH COOLER MAINTENANCE HAS BEEN ELIMINATED IN THE NEW CONTRACT, IT STILL REQUIRES ELECTRICAL AND MECHANICAL WORK ON ALL EXHAUST FANS AND HANGER DECK HEATERS. THE MAINTENANCE OF THE COOLERS WAS REMOVED FROM THE CONTRACT TO PRECLUDE THE POSSIBILITY OF ANOTHER SEASON WITHOUT ADEQUATE COOLING. THIS MAINTENANCE WILL BE ACCOMPLISHED BY THE USE OF WELL QUALIFIED AND PROPERLY SUPERVISED PERSONNEL OF THE PUBLIC WORKS DEPARTMENT. THE CONTRACT STILL CALLS FOR INSTALLATION OF EVAPORATIVE AND FILTER MEDIA WHICH VCEI FAILED TO INSTALL IN A TIMELY MANNER RESULTING IN THE NEED FOR DEDUCT OF AN ENTIRE ELEMENT CHANGE AND ALSO RESULTING IN REDUCED EFFICIENCY OF THE COOLER OPERATIONS. RESPONSIBLE PERFORMANCE ON THE NEW CONTRACT BY VCEI IS DOUBTFUL IN VIEW OF THEIR PRIOR INEXCUSABLY UNTIMELY PERFORMANCE.

"L. IT WAS THE STATED OPINION OF THE CONTRACTOR THAT AS THE COOLERS HAD BEEN IN OPERATION WHEN SECURED, IT SHOULD ONLY BE NECESSARY TO TURN THEM ON TO OBTAIN SATISFACTORY CONTRACT PERFORMANCE. ANY MECHANICAL EQUIPMENT NEGLECTED FOR A PERIOD OF SEVERAL MONTHS CANNOT BE EXPECTED TO PERFORM ADEQUATELY WITHOUT SERVICING. THE SPECIFICATIONS OUTLINED THE SERVICING REQUIRED AND THE REPEATED FAILURE OF THE COOLING UNITS TO PERFORM SATISFACTORILY IS A REFLECTION OF THE CONTRACTOR'S LACK OF DILIGENCE IN PROSECUTING THE WORK EVEN AFTER REPEATED TIME EXTENSIONS WERE GRANTED BY THE OICC.

"M. DELAY IN NEGOTIATION OF NECESSARY CHANGES TO THE CONTRACT UNTIL THE CONCLUSION OF THE CONTRACT IS GENERALLY THE RESULT OF THE CONTRACTOR'S REFUSAL TO SUBMIT TIMELY CLAIMS WITH SUFFICIENT MONETARY BREAKDOWN OF THE ELEMENTS TO PERMIT REVIEW. THE STATED ATTITUDE OF THE CONTRACTOR WAS THAT THE OFFICER IN CHARGE MUST ACCEPT HIS PRICES OR THEY WOULD BE THE SUBJECT OF A DISPUTE.

"N. PROBLEM AREAS WERE RECOGNIZED AND NATURALLY CLARIFIED AND CORRECTED IN THE NEW CONTRACT SPECIFICATIONS. IT WOULD BE OUTLANDISH TO BELIEVE THAT A RESPONSIBLE GOVERNMENT OFFICE WOULD ISSUE ANY DOCUMENT WHICH IT KNEW TO BE IN ERROR AND HAD THE OPPORTUNITY TO CORRECT.'

IT IS PROVIDED AT 10 U.S.C. 2305 (C) THAT CONTRACT AWARDS PURSUANT TO FORMAL ADVERTISING SHALL BE MADE TO "THE RESPONSIBLE BIDDER" WHOSE BID IS RESPONSIVE AND WILL BE MOST ADVANTAGEOUS TO THE UNITED STATES. ALSO, IT IS WELL SETTLED THAT THE DETERMINATION OF A BIDDER'S RESPONSIBILITY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF DISCRETION, AND OUR OFFICE HAS CONSISTENTLY ADHERED TO THE RULE THAT THE ADMINISTRATIVE DETERMINATION WILL NOT BE QUESTIONED UNLESS ARBITRARY, CAPRICIOUS OR NOT BASED ON SUBSTANTIAL EVIDENCE. 39 COMP. GEN. 705; 38 ID. 131; 38 ID. 778; 37 ID. 430, 435.

THIS RULE HAS BEEN APPLIED WHERE THE EVIDENCE OF A DEFICIENT MOTIVATION TO DO AN ACCEPTABLE JOB CONSISTS OF MINOR FAULTS WHICH CUMULATIVELY RESULT IN UNDULY INCREASING THE GOVERNMENT'S BURDEN OF ADMINISTERING THE CONTRACT. 43 COMP. GEN. 257. WE HAVE CAREFULLY REVIEWED THE ENTIRE RECORD IN THE INSTANT CASE AND WE THINK THAT THERE WAS A REASONABLE BASIS FOR THE DETERMINATION AS MADE BY THE CONTRACTING OFFICER.

THE CONTRACTING OFFICER HAS BASED HIS DETERMINATION ON THE HISTORY OF YOUR PERFORMANCE UNDER APPROXIMATELY 12 CONTRACTS. THE RECORD, TAKEN AS A WHOLE, ESTABLISHES THAT YOU HAVE THE NECESSARY CAPACITY AND CREDIT TO DO AN ACCEPTABLE JOB; HOWEVER, ON THOSE CONTRACTS THAT INVOLVE THE MORE COMPLEX AIR-CONDITIONING MAINTENANCE AND EXHAUST CLEANING, IT APPEARS THAT YOU WERE UNWILLING TO APPLY SUFFICIENT DILIGENCE TO DO AN ACCEPTABLE JOB. WHILE SOME OF THE DEFICIENCIES NOTED IN YOUR RECORD OF PERFORMANCE MAY HAVE BEEN MINOR WHEN CONSIDERED INDIVIDUALLY, THE CUMULATIVE EFFECT WAS TO UNDULY INCREASE THE BURDEN OF ADMINISTRATION FROM THE GOVERNMENT'S STANDPOINT. SUCH RECORD IS, WE THINK, ADEQUATE TO SUPPORT A DETERMINATION OF YOUR NONRESPONSIBILITY BY THE CONTRACTING OFFICER. THEREFORE, WE CANNOT CONCLUDE THAT YOUR DISQUALIFICATION WAS ARBITRARY, CAPRICIOUS OR UNSUPPORTED BY SUBSTANTIAL EVIDENCE.