B-163983, SEPT. 5, 1968

B-163983, SEPT. 5, 1968

TO MANPOWER, CHARLES KIRKWOOD AND ASSOCIATES:

WE REFER TO YOUR TELEGRAM OF APRIL 10, 1968, YOUR LETTER OF JULY 23, 1968, AND A LETTER RECEIVED APRIL 15, 1968, WITH ENCLOSURES, FROM CHARLES KIRKWOOD AND ASSOCIATES PROTESTING ON YOUR BEHALF THE AWARD TO ANY OTHER BIDDER UNDER SOLICITATION NOS. DAJB 29-68-R-0067 AND DAJB 29 68-R-0071 ISSUED BY THE U.S. ARMY PROCUREMENT OFFICE, 9TH LOGISTICAL COMMAND, BANGKOK, THAILAND. BOTH SOLICITATIONS REQUIRED THE PROSPECTIVE CONTRACTORS TO PROVIDE SECURITY GUARD SERVICES FOR WAREHOUSES, COMMISSARY STORES, MOTOR POOLS, AND OTHER SIMILAR U. S. ARMY INSTALLATIONS IN THE BANGKOK AND NONDBURI, THILAND, AREAS.

TWO CLAUSES OF THE SOLICITATIONS, IMPORTANT TO OUR DISCUSSION OF YOUR PROTEST, ARE AS FOLLOWS:

ARTICLE 4, TRAINING, OF THE SOLICITATIONS IN PART, STATED:

"SECURITY GUARD PERSONNEL EMPLOYED TO PERFORM THIS CONTRACT WILL BE TRAINED BY THE CONTRACTOR TO INSURE THAT EACH GUARD IS QUALIFIED TO PERFORM HIS DUTIES COMPETENTLY AND TO MEET EMERGENCIES SPEEDILY AND EFFICIENTLY. THE CONTRACTING OFFICER WILL BE PROVIDED A COPY OF THE PROGRAM OF INSTRUCTION.'

ARTICLE 5, EQUIPMENT, OF THE SOLICITATIONS IN PART, STATED:

"D. COMMUNICATIONS: THE CONTRACTOR SHALL PROVIDE RADIO COMMUNICATIONS FOR USE BY THE GUARD PERSONNEL. GUARD PERSONNEL ASSIGNED TO LOCATIONS WHERE TELEPHONE COMMUNICATIONS ARE NOT AVAILABLE SHALL HAVE A MEANS OF RADIO COMMUNICATIONS PROVIDED TO THEM.'

THE FOLLOWING OFFERS WERE RECEIVED IN RESPONSE TO THE SOLICITATIONS:

SOLICITATION NO. TIME PERIOD NAME PRICE DAJB 29-68-R 0067 DEC. 1, 1967 -

MCFADDEN $195,457.08

JUNE 30, 1968

MANPOWER 101,941.00 DAJB 29-68-R-0071 JULY 1, 1968 -

MCFADDEN 335,000.00

JUNE 30, 1969

MANPOWER 209,000.00

NOTWITHSTANDING YOUR LOWER OFFERS BOTH CONTRACTS WERE AWARDED TO MCFADDEN PROTECTIVE AGENCY, INC., BASED ON THE DETERMINATION OF THE PROCURING ACTIVITY THAT MANPOWER WAS NOT CAPABLE OF SATISFACTORILY PERFORMING THE REQUIRED SECURITY SERVICES.

YOUR PROTEST, AS STATED IN THE LETTER OF APRIL 15, 1968, IS BASED ON THE MAJOR CONTENTION THAT MANPOWER IS A RESPONSIVE BIDDER, IS FULLY CAPABLE OF PERFORMING THE CONTRACTS IN QUESTION, AND THE AWARD TO MCFADDEN THEREFORE VIOLATED THE ARMED SERVICES PROCUREMENT REGULATION.

THE RECORD BEFORE THIS OFFICE INDICATES THAT REPRESENTATIVES OF THE U.S. ARMY PROCUREMENT OFFICE, BANGKOK, THAILAND, CONDUCTED AN INTERVIEW AND SURVEY TO DETERMINE WHETHER MANPOWER WAS CAPABLE OF PERFORMING THE GUARD SERVICE CONTRACTS. IN AN INTERVIEW WITH YOUR MANAGER, MR. SARIPUTRA, IT WAS ESTABLISHED THAT THE PROSPECTIVE GUARD PERSONNEL WOULD BE WORKING ON OTHER JOBS IN ADDITION TO THEIR GUARD POSITIONS. THE PROPER PERFORMANCE OF GUARD SERVICES IN THAILAND WAS CONSIDERED VITAL DUE TO THE SENSITIVITY OF U.S. DUTY FREE PRIVILEGES AND THE SCARCITY OF AMERICAN MERCHANDISE. SINCE THAILAND RAISES SUBSTANTIAL REVENUES FROM IMPORT DUTIES, A CONSIDERABLE LOSS OF DUTY FREE ITEMS FROM THESE AMERICAN FACILITIES WOULD HAVE AN UNFAVORABLE IMPACT ON THE THAI ECONOMY. CONSEQUENTLY, THE EMPLOYMENT OF A FULL TIME, WELL-TRAINED GUARD FORCE WAS CONSIDERED IMPERATIVE. THE FACT THAT YOU PLANNED THE USE OF PERSONNEL WHO WOULD ALSO BE EMPLOYED ON OTHER JOBS WAS THEREFORE ONE OF THE CONSIDERED REASONS FOR NOT AWARDING THE CONTRACT TO YOU.

THE INTERVIEW WITH MR. SARIPUTRA FURTHER REVEALED THAT FURNISHING A RADIO COMMUNICATION SYSTEM, AS REQUIRED BY ARTICLE 5 OF THE SOLICITATION, WAS NOT CONSIDERED, NOR WAS THERE ANY PLAN AS TO WHAT WOULD BE REQUIRED OR HOW TO IMPLEMENT SUCH A SYSTEM.

IN ADDITION TO THE PERSONAL INTERVIEW WITH MR. SARIPUTRA, A SURVEY WAS CONDUCTED OF YOUR COMPANY. THE REPORT OF THE CONTRACTING OFFICER STATED:

"IT IS EVIDENT FROM THIS SURVEY AND DISCUSSION THAT MANPOWER COMPANY, LTD. (THAILAND) (I) DOES NOT HAVE CURRENT COMPREHENSION OR CAPABILITY TO PROVIDE THE LEVEL OF MANAGEMENT CONSIDERED ESSENTIAL TO FURNISH ADEQUATE SERVICES; (II) HAS NO CURRENT ORGANIZATIONAL PLAN TO PRECLUDE PILFERAGE AND INCIDENTS GENERATED BY ACTION OR INACTION OF SECURITY GUARDS; (III) CONTINUES TO PROPOSE WAGES BELOW THE CURRENT STANDARDS IN COUNTRY FOR PERSONNEL OF THE TYPE AND QUALIFICATIONS NECESSARY FOR THE SERVICES INVOLVED; (IV) HAS NO PLAN FOR TIMELY FURNISHING A RADIO COMMUNICATION SYSTEM; (V) HAS DEVELOPED NO ADEQUATE PROGRAM OF INSTRUCTION OR TRAINING AND NO WRITTEN PROCEDURES EXCEPT A COPY OF MANPOWER'S MANUAL ON GUARD SERVICES WHICH CAN AT MOST BE A GUIDE; (VI) CONTENDS THAT GUARD PERSONNEL HOLDING OTHER REGULAR FULL TIME POSITIONS COULD PERFORM ADEQUATE SERVICES UNDER THE REQUIREMENTS; (VII) THE DIVERSIFICATION OF MANPOWER'S SERVICES WOULD PRECLUDE PROPER EMPHASIS ON THIS CONTRACT BECAUSE OF OTHER CONTRACTS FOR OTHER TYPES OF SERVICES PROVIDED BY THE COMPANY.

"BASED ON THE ABOVE INFORMATION IT IS RECOMMENDED THAT MANPOWER COMPANY, LTD. BE CONSIDERED NOT CURRENTLY QUALIFIED TO PERFORM THE REQUIRED SERVICES.'

THE REPORT ALSO INDICATES THAT MANPOWER FAILED TO MEET THE STANDARDS SET FORTH IN SUBSECTION 1-903.4 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WHICH STATES: "* * * ACCEPTABLE EVIDENCE OF HIS ABILITY TO OBTAIN- SUCH THINGS AS RESOURCES, EQUIPMENT, FACILITIES, AND PERSONNEL, (SEE 1- 903.1 (I) AND 1-903.2) SHALL NORMALLY BE A COMMITMENT OR EXPLICIT ARRANGEMENT, WHICH WILL BE IN EXISTENCE AT THE TIME THE CONTRACT IS TO BE AWARDED, FOR THE RENTAL, PURCHASE OR OTHER ACQUISITION OF SUCH RESOURCES, EQUIPMENT, FACILITIES, OR PERSONNEL.'

THE ABOVE REGULATION SETS FORTH MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS. SUCH RESPONSIBILITY HAS BEEN DEFINED AS INCLUDING, AMONG OTHER THINGS, ORGANIZATION, TECHNICAL EXPERIENCE, KNOWLEDGE, SKILLS,"KNOW-HOW," TECHNICAL EQUIPMENT, AND FACILITIES. SEE 45 COMP. GEN. 4, 7.

IN DETERMINING THE VALIDITY OF THE ADMINISTRATIVE FINDING THAT MANPOWER WAS NOT QUALIFIED TO PERFORM THE CONTRACT, I.E., WAS NOT A RESPONSIBLE BIDDER, WE MUST LOOK TO THE INFORMATION AND DATA RELIED UPON BY THE CONTRACTING OFFICER AND DECIDE WHETHER SUCH DETERMINATION IS SUPPORTED BY SUBSTANTIAL EVIDENCE. SEE 38 COMP. GEN. 778. THE DETERMINATION OF THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR IS PRIMARILY A FUNCTION OF THE CONTRACTING AGENCY, AND IS QUESTIONED BY OUR OFFICE ONLY UPON A SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR SUCH DETERMINATION. SEE 43 COMP. GEN. 257, 262; 38 ID. 131, 133; 37 ID. 430, 435. IT IS CLEAR FROM THE ABOVE THAT THE SURVEY AND INTERVIEW TOGETHER CONSTITUTED A SPECIFIC FINDING, SUPPORTED BY SUBSTANTIAL EVIDENCE THAT MANPOWER WAS NOT ABLE TO PERFORM THE CONTRACT AS PRESCRIBED BY THE SOLICITATIONS.

YOU FURTHER ALLEGE THAT THE PROCEDURE IN AWARDING THE CONTRACTS IN QUESTION APPEARS TO BE IN VIOLATION OF ASPR 2-407.9 (A), 2-407.9 (B), AND 2-408.1. SECTION 2-407.9 (A) OF THE REGULATION, IN PART, STATES:

"A. GENERAL. CONTRACTING OFFICER SHALL CONSIDER ALL PROTESTS OR OBJECTIONS TO THE AWARD OF A CONTRACT WHETHER SUBMITTED BEFORE OR AFTER AWARD.' CONCERNING THE POSSIBILITY OF VIOLATION OF THE ABOVE SECTION, THE CONTRACTING OFFICER RESPONDED "* * * I CATEGORICALLY AND EMPHATICALLY STATE THAT AT NO TIME DID MANPOWER PROTEST THE AWARD TO ME EXPRESSLY OR IMPLIEDLY, AND I WAS NEVER MADE AWARE OF ANY PROTEST TO ANY PERSONS OF THIS OFFICE OR OTHERS.' SINCE NO PROTEST WAS COMMUNICATED TO THE CONTRACTING OFFICER IT FOLLOWS THAT THE PROCEDURAL REQUIREMENTS FOR PROCESSING PROTESTS, AS SET OUT IN ASPR 2-407.9 (B), WERE NOT VIOLATED. FURTHERMORE, YOUR ALLEGATION OF VIOLATION OF ASPR 2 408.1, REGARDING NOTIFICATION OF UNSUCCESSFUL BIDDERS, WOULD APPEAR TO BE WITHOUT MERIT SINCE NEGOTIATED PROCUREMENTS IN OFFSHORE PROCUREMENTS WHICH ONLY FOREIGN SOURCES ARE SOLICITED ARE SPECIFICALLY EXCEPTED FROM SUCH REQUIREMENT BY ASPR 3-508.1 (III).

TURNING TO THE CONTENTION THAT DAMAGES SHOULD BE AWARDED TO COMPENSATE FOR YOUR FAILURE TO RECEIVE THE AWARD, IT WOULD APPEAR THAT THERE IS PRECEDENT FOR SUCH ACTION ONLY WHEN THE GOVERNMENT PROCUREMENT OFFICIALS DELIBERATELY INTEND TO LET THE CONTRACT TO A PREDETERMINED CONTRACTOR EVEN THOUGH THAT CONTRACTOR DID NOT MAKE THE LOWEST RESPONSIVE OFFER. SEE B- 150158, DECEMBER 6, 1963. SINCE WE FAIL TO FIND ANY EVIDENCE THAT YOUR PROPOSALS WERE NOT CONSIDERED AND REJECTED ON THEIR MERITS, WE SEE NO BASIS ON WHICH A CLAIM FOR DAMAGES COULD PROPERLY BE ALLOWED.

CONCERNING THE ALLEGATION IN YOUR LETTER OF JULY 23, 1968, THAT THE U.S. GOVERNMENT IS BEING SEVERELY OVERCHARGED FOR THE SERVICES PROVIDED, THE DETERMINATION OF WHETHER A BID PRICE IS, OR IS NOT, REASONABLE IS A MATTER PRIMARILY FOR DETERMINATION BY THE CONTRACTING AGENCY. IN THIS CONNECTION THE U.S. COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA HAS SAID:

"CONTRACTING OFFICERS OF THE FEDERAL GOVERNMENT HAVE THE DUTY TO SELECT THE CONTRACT MOST ADVANTAGEOUS TO THE GOVERNMENT AND ADVANTAGE IS NOT MEASURED EXCLUSIVELY IN TERMS OF PRICE; IT INCLUDES OTHER FACTORS SUCH AS JUDGMENT, SKILL, ABILITY.' FRIEND V LEE, 221 F.2D 96, 100.

TO THE SAME EFFECT, SEE ASPR 1-902, WHICH PROVIDES THAT CONTRACTS SHALL BE AWARDED ONLY TO RESPONSIBLE PROSPECTIVE CONTRACTORS. IN VIEW THEREOF, THERE WAS NO REQUIREMENT TO AWARD THE CONTRACT TO YOU ON THE BASIS OF PRICE ALONE, WHEN YOUR COMPANY WAS FOUND TO BE INCAPABLE OF PERFORMING THE CONTRACT FOR GUARD SERVICES AS REQUIRED BY THE SOLICITATIONS. IN THIS CONNECTION, IT SHOULD BE NOTED THAT THE CONTRACT PRICE UNDER SOLICITATION NO. DAJB 29-68-R-0067 WAS ONLY $176,808.31, WHICH WAS LATER INCREASED TO $195,457.08, RATHER THAN $303,000.00 AS ALLEGED IN YOUR LETTER OF APRIL 15. THE ERROR IN THE LETTER APPEARS TO BE ATTRIBUTABLE TO THE FACT THAT THE SOLICITATION AS ORIGINALLY ISSUED WAS TO COVER THE PERIOD FROM DECEMBER 1, 1967, TO JUNE 30, 1968, AND ALL OF FISCAL YEAR 1969. SUBSEQUENTLY, THE PROCURING AGENCY MADE KNOWN TO ALL OFFERORS THAT THE AWARDS WOULD BE MADE ONLY FOR THE DECEMBER 1, 1967, TO JUNE 30, 1968, AND MCFADDEN DECREASED ITS PROPOSED CONTRACT PRICE TO CONFORM TO THE SHORTER TIME PERIOD.