B-162250, SEP. 21, 1967

B-162250, SEP. 21, 1967

BIDDERS - RESPONSIBILITY - INFORMATION AFTER OPENING DECISION RE PROTEST OF B AND B INDUSTRIAL CATERING SERVICE, INC., AGAINST AWARD BY D.C. ARMORY BD. TO ARASERV, INC. FOR FOOD CONCESSION FOR 3-YEAR PERIOD. A LOW BIDDER WHO, AFTER BID OPENING, FURNISHED INFORMATION CONCERNING ITS EXPERIENCE IN FURNISHING SIMILAR FOOD SERVICES IN THE AREA AS WELL AS IN SURROUNDING LOCATIONS MAY HAVE THE FACT THAT SUCH INFORMATION WAS NOT FURNISHED WITH THE BID WAIVED AS AN INFORMALITY SINCE EXPERIENCE IS A MATTER RELATED TO THE BIDDERS RESPONSIBILITY WHICH IS FOR DETERMINATION OF THE PROCURING AGENCY, AND, THEREFORE THE DETERMINATION TO AWARD THE CONTRACT TO THE LOW BIDDER ON THE BASIS OF THE EXPERIENCE INFORMATION AND ABILITY TO FULFILL REQUIREMENTS NOTWITHSTANDING THE NEAREST COMMISSARY WAS 55 MILES DISTANT FROM THE INSTANT CONTRACT LOCATION WILL NOT BE QUESTIONED.

TO MR. JACOB C. LISH, ATTORNEY AT LAW:

REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF B AND B INDUSTRIAL CATERING SERVICE, INC. (B AND B), AGAINST THE AWARD BY THE DISTRICT OF COLUMBIA ARMORY BOARD OF A CONTRACT TO ARASERV, INC. (ARASERV), FOR OPERATION OF THE FOOD CONCESSIONS AT THE ARMORY FOR A THREE-YEAR PERIOD COMMENCING AUGUST 1, 1967.

ON JULY 5, 1967, THE BOARD MAILED TO SIX PROSPECTIVE BIDDERS, INCLUDING B AND B AND AUTOMATIC RETAILERS OF AMERICA, INC., COPIES OF AN INVITATION FOR BIDS ON THE ARMORY FOOD CONCESSIONS FOR THE FISCAL YEARS 1968 THROUGH 1970. THE CONCESSIONS INCLUDE A CANTEEN, RESTAURANT AND TWO STANDS ON THE MAIN FLOOR OF THE ARMORY AND ONE STAND ON THE LOWER LEVEL, AND THE SERVICES INVOLVE OPERATION OF THE CANTEEN, THE RESTAURANT, SNACK BARS, AND VENDING MACHINES, CATERING FOR SUCH PARTIES AS ARE HELD BY LICENSEES AT THE ARMORY, AND THE SALE OF FOOD AND MERCHANDISE ON THE DRILL HALL FLOOR. THE BID SET INCLUDED A BID FORM PROVIDING FOR QUOTATION BY THE BIDDER OF A PERCENTAGE TO BE PAID TO THE BOARD FROM THE GROSS RECEIPTS OF EACH OF THE VARIOUS OPERATIONS AND A PROPOSED CONTRACT INCLUDING THE SAME PROVISION WITH THE STIPULATION THAT THE PERCENTAGE PAYMENTS WERE TO BE MADE TO THE BOARD ON OR BEFORE THE 10TH DAY OF EACH MONTH AND A REQUIREMENT THAT THE OPERATOR OF THE CONCESSIONS ALSO PAY TO THE BOARD 50 PERCENT OF THE NET PROCEEDS FROM THE VENDING MACHINE OPERATIONS. THE INVITATION INCLUDED THE FOLLOWING PROVISION PERTINENT TO YOUR PROTEST:

"7. BIDS WILL BE CONSIDERED ONLY FROM RESPONSIBLE ORGANIZATIONS OR INDIVIDUALS NOW OR RECENTLY ENGAGED IN THE OPERATION OR MANAGEMENT OF CAFETERIAS, RESTAURANTS OR INDUSTRIAL CATERING SERVICES, COMPARABLE IN SIZE AND KIND TO THAT DESCRIBED HEREIN, WHICH HAVE FURNISHED GOODS UNDER SANITARY CONDITIONS AT REASONABLE PRICES. SUCH BIDDER SHALL FURNISH WITH HIS BID A NARRATIVE STATEMENT LISTING COMPARABLE ESTABLISHMENTS WHICH HE HAS OPERATED OR MANAGED DURING THE LAST TWO YEARS, LOCAL REFERENCES REGARDING CATERING SERVICES NOW BEING SUPPLIED (FRENCH SERVICE, BUFFETS, CABARETS), LOCAL COMMISSARY FACILITIES CAPABLE OF SUPPLYING COMPLETE PARTIES WITH TWENTY-FOUR HOURS NOTICE AS WELL AS SUPPLYING PREPARED MEALS TO THE ARMORY CAFETERIA FOR PUBLIC OR TRADE SHOWS, NUMBER OF SKILLED STAFF MEMBERS TO MEET WITH AND SUGGEST APPROPRIATE MENUS AND LAYOUTS FOR TENANTS OF THE ARMORY BOARD, A GENERAL HISTORY OF HIS OPERATING ORGANIZATION AND EXPERIENCE, AND A STATEMENT OF FINANCIAL INFORMATION. DEMONSTRATED FINANCIAL ABILITY, COMPETENCY IN OPERATING OR MANAGING SIMILAR ESTABLISHMENTS, THE NET WORTH OF THE BIDDER AND THE FINANCIAL TERMS SUBMITTED WILL BE CONSIDERED IN SELECTING THE BID TO BE ACCEPTED. THE RIGHT IS RESERVED TO REJECT ANY AND ALL BIDS.'

ON JULY 20, THE FOUR BIDS RECEIVED BY THE BOARD WERE OPENED AS SCHEDULED. ARASERV, A SUBSIDIARY OF AUTOMATIC RETAILERS OF AMERICA, INC., WITH A BID OFFERING TO PAY TO THE BOARD OUT OF ITS GROSS RECEIPTS SHARES OF 35 PERCENT FROM CANTEEN OPERATIONS, 25 PERCENT FROM RESTAURANT OPERATIONS, 35 PERCENT FROM SNACK BAR AND MISCELLANEOUS OPERATIONS, AND 25 PERCENT FROM CATERING OPERATIONS, OFFERED THE GREATEST RETURN TO THE BOARD, BUT ITS BID WAS NOT ACCOMPANIED BY THE INFORMATION REQUIRED BY PARAGRAPH 7 OF THE INVITATION. HOWEVER, ON THE BASIS THAT SUCH INFORMATION RELATED TO THE MATTER OF THE BIDDER'S RESPONSIBILITY, RATHER THAN THE RESPONSIVENESS OF THE BID, AND COULD THEREFORE BE FURNISHED AFTER BID OPENING, THE BOARD CALLED THE OMISSION TO ARASERV'S ATTENTION AND PROMPTLY RECEIVED FROM ARASERV MATERIAL WHICH WAS CONSIDERED SUFFICIENT TO EVIDENCE ARASERV'S CAPABILITY TO FURNISH THE REQUIRED SERVICES. ACCORDINGLY, ON AUGUST 3, THE CONCESSION CONTRACT WAS AWARDED TO ARASERV, AND THE REMAINING BIDDERS, OF WHOM B AND B WAS ONE, WERE SO NOTIFIED.

YOU ASSERT THAT THE INFORMATION REQUIRED BY PARAGRAPH 7 OF THE INVITATION GOES TO THE VERY HEART OF THE QUESTION OF QUALIFICATION AND RESPONSIBILITY AND, THEREFORE, YOU CONTEND, STRICT CONFORMITY WITH THE REQUIREMENT CANNOT AND SHOULD NOT BE WAIVED; THAT, IN ANY EVENT, ARASERV SHOULD BE DISQUALIFIED BECAUSE COCKEYSVILLE, MARYLAND, THE LOCATION OF ARASERV'S NEAREST COMMISSARY, BEING 55 MILES DISTANT FROM THE ARMORY, CANNOT BE DEFINED AS "LOCAL" AND IS TOO REMOTE FOR PRACTICAL PURPOSES IN THE LIGHT OF TRAFFIC AND WEATHER PROBLEMS; AND THAT THE MATTER OF WHETHER ARASERV CAN PERFORM THE NECESSARY FRENCH, BUFFET, CABARET AND OTHER CATERING SERVICES SHOULD BE CAREFULLY CHECKED SINCE THERE IS NO PROVISION IN THE INVITATION FOR USING SUBCONTRACTORS. FINALLY, YOU URGE THAT IN VIEW OF THE PROXIMITY OF B AND B'S BID TO ARASERV'S BID, THE CRITICAL DIFFERENTIAL BEING 5 PERCENT ON CATERING OPERATIONS, THE MATTERS OF THE BIDDER'S STRICT CONFORMITY TO THE INVITATION AND HIS COMPETENCY ASSUME GREATER SIGNIFICANCE AND WARRANT A FULL INVESTIGATION AND RECONSIDERATION OF THE AWARD IN THE LIGHT OF SUCH INVESTIGATION.

IN A REPORT DATED AUGUST 17, 1967, A COPY OF WHICH WAS FURNISHED TO B AND B PURSUANT TO YOUR REQUEST, THE BOARD REITERATED ITS POSITION THAT THE OMISSION FROM THE ARASERV BID OF THE INFORMATION RELATING TO EXPERIENCE AND QUALIFICATIONS DID NOT RENDER THE BID NONRESPONSIVE, AND THEREFORE COULD BE FURNISHED AFTER BID OPENING. IN SUPPORT OF ITS POSITION, THE BOARD CITED OUR DECISIONS AT 43 COMP. GEN. 77 AND 39 ID. 655, WHICH ENUNCIATE THE PRINCIPLE THAT INFORMATION WHICH GOES TO THE RESPONSIBILITY OF A BIDDER MAY BE SUBMITTED AT ANY TIME BEFORE A DETERMINATION OF RESPONSIBILITY IS MADE EVEN WHEN THE INVITATION REQUIRES THAT THE DATA BE SUBMITTED WITH THE BID AND WARNS THAT FAILURE TO COMPLY MAY RESULT IN REJECTION OF THE BID.

BY LETTER DATED AUGUST 21, THE BOARD FURNISHED SIMILAR ADVICE TO YOU TOGETHER WITH INFORMATION TO THE EFFECT THAT THE LOCAL REFERENCES SUBMITTED BY ARASERV INDICATE THAT ITS SERVICES HAVE BEEN SATISFACTORY, AND THE BOARD CONSIDERED THE LOCATION OF ARASERV'S COMMISSARY FACILITIES AND IS OF THE OPINION THAT THEY ARE ADEQUATE FOR THE PURPOSES OF THE CONTRACT.

WITH RESPECT TO THE LOCAL REFERENCES LISTED BY ARASERV, ADDITIONAL INFORMATION FURNISHED TO OUR OFFICE BY THE BOARD IS TO THE EFFECT THAT THE SERVICES RENDERED BY ARASERV IN THE WASHINGTON, .C., AREA HAVE BEEN VARIED AND EXTENSIVE. FOR EXAMPLE, GEORGE WASHINGTON UNIVERSITY IS REPORTED TO HAVE STATED THAT ARASERV SATISFACTORILY OPERATES TWO CAFETERIAS AT THE UNIVERSITY, SERVING 4,000 MEALS DAILY TO BOTH RESIDENT AND NONRESIDENT STUDENTS; THAT ARASERV CATERS TO FRATERNITY AND SORORITY PARTIES SERVING SPECIAL FOODS SUCH AS ITALIAN DINNERS AND BARBECUES; AND THAT ARASERV ALSO OPERATES VENDING MACHINES WHICH PROVIDE SANDWICHES AND OTHER ITEMS. ADDITION, AMERICAN UNIVERSITY IS REPORTED AS STATING THAT ARASERV SERVES ABOUT 6,000 MEALS PER DAY IN THE UNIVERSITY CAFETERIA AND IN THE STAFF DINING ROOM, WHERE WAITER SERVICE IS PROVIDED; OPERATES A SNACK BAR SERVING APPROXIMATELY 2,500 PERSONS PER DAY AND VENDING MACHINES PROVIDING SANDWICHES AND OTHER ITEMS; AND CATERS TO SPECIAL EVENTS SUCH AS DINNER PARTIES. FINALLY, THE WILSON LINE IS REPORTED TO HAVE STATED THAT IT IS SATISFIED WITH THE FOOD SERVICES PROVIDED BY ARASERV, AND THE DISTRICT OF COLUMBIA PROCUREMENT OFFICER IS REPORTED AS HAVING STATED THAT ARASERV HAS SATISFACTORILY PROVIDED AND SERVED APPROXIMATELY 9,000 MEALS DAILY TO CHILDREN AT THE DISTRICT PLAYGROUNDS UNDER A PROGRAM INAUGURATED THIS PAST SUMMER.

RESPONSIBILITY HAS BEEN DEFINED AS INCLUDING, AMONG OTHER THINGS, ORGANIZATION, TECHNICAL EXPERIENCE, KNOWLEDGE, SKILLS,"KNOW-HOW," TECHNICAL EQUIPMENT, AND FACILITIES. 38 COMP. GEN. 864. WHILE OUR OFFICE RECOGNIZES THAT INVITATIONS MAY, WHEN THE GOVERNMENT'S INTEREST WILL BE SERVED THEREBY, INCLUDE EXPERIENCE REQUIREMENTS OR A REQUIREMENT THAT A BIDDER HAVE FACILITIES LOCATED IN A CERTAIN AREA, WE HAVE POINTED OUT THAT SUCH REQUIREMENTS RELATE TO A BIDDER'S RESPONSIBILITY, NOT THE RESPONSIVENESS OF A BID; THAT THE INCLUSION IN AN INVITATION OF LANGUAGE INDICATING THAT FAILURE TO MEET SUCH REQUIREMENTS MAY CAUSE REJECTION OF A BID CANNOT OPERATE TO TRANSFORM THE PURELY FACTUAL QUESTION OF RESPONSIBILITY INTO A LEGAL QUESTION OF CONFORMITY TO THE INVITATION; AND THAT REJECTION OF A LOW BID THEREFORE MAY NOT BE BASED MERELY ON THE FAILURE OF A BIDDER TO MEET THE LITERAL REQUIREMENTS OF SUCH PROVISIONS BUT NECESSITATES A SPECIFIC DETERMINATION, BASED UPON THE QUALIFICATIONS OF SUCH BIDDERS, THAT HE IS NOT A "RESPONSIBLE" BIDDER. SEE 45 COMP. GEN. 4 AND DECISIONS THEREIN CITED RELATING TO EXPERIENCE REQUIREMENTS AND B 146323, SEPTEMBER 18, 1961, AND B-147728, JANUARY 31, 1962,RELATING TO REQUIREMENTS THAT A CONTRACTOR'S FACILITIES BE LOCATED IN A SPECIFIC AREA. IN LINE WITH SUCH DECISIONS, WE MUST CONCUR WITH THE POSITION OF THE BOARD THAT THE INFORMATION REQUESTED BY THE INVITATION CONCERNING RECENT CATERING AND OTHER EXPERIENCE AND THE LOCATION OF COMMISSARY FACILITIES, RELATING AS IT DOES TO A BIDDER'S CAPABILITY TO PERFORM THE CONTRACT IN QUESTION, WAS SUCH AS COULD BE PROPERLY FURNISHED AFTER BID OPENING. THE WAIVER OF THE REQUIREMENT THAT THE INFORMATION BE FURNISHED WITH THE BID WAS THEREFORE A PROPER ACTION ON THE PART OF THE BOARD.

WITH RESPECT TO THE EVALUATION OF THE INFORMATION CONCERNING ARASERV'S QUALIFICATIONS, WHICH WAS RECEIVED BY THE BOARD AFTER THE BID OPENING, IT IS OUR VIEW THAT SINCE SUCH INFORMATION INDICATES THAT THE OPERATIONS CONDUCTED BY ARASERV IN THE WASHINGTON, D.C., AREA ARE NOT ONLY EXTENSIVE AND PROVIDE THE VARIOUS TYPES OF SERVICES REQUIRED UNDER THE ARMORY CONCESSIONS CONTRACT BUT ARE ALSO SATISFACTORY, THE LOCATION OF ARASERV'S COMMISSARY MORE THAN 50 MILES FROM WASHINGTON APPARENTLY HAS NOT ADVERSELY AFFECTED ARASERV'S ABILITY TO FULFILL ITS COMMITMENTS. ACCORDINGLY, IT IS OUR FURTHER VIEW THAT THE BOARD'S DETERMINATION THAT ARASERV WAS A RESPONSIBLE BIDDER FOR THE PURPOSE OF PERFORMING THE CONCESSIONS CONTRACT WAS NOT WITHOUT A SUBSTANTIAL BASIS, AND WE THEREFORE FIND NO LEGAL BASIS TO QUESTION THE AWARD TO ARASERV.