B-167182, JUL. 30, 1969

B-167182, JUL. 30, 1969

BID PROTEST - BIDDER RESPONSIBILITY DECISION DENYING PROTEST OF WELDON L. MOORE, JR., AGAINST REJECTION OF LOW BID FOR REAL ESTATE MANAGEMENT CONTRACT WITH FEDERAL HOUSING ADMINISTRATION IN DALLAS, TEXAS. DETERMINATION THAT LOW BIDDER LACKED RESPONSIBILITY ON BASIS OF EXPERIENCE IN COMPARABLE SIZED PROJECTS MUST BE REGARDED AS BASED ON REASONABLE GROUNDS AND SUPPORTED BY ADEQUATE INVESTIGATION. THEREFORE, OBJECTION TO AWARD TO SECOND LOW BIDDER WHO WAS DETERMINED TO BE FULLY QUALIFIED TO PERFORM IS NOT WARRANTED.

TO MR. WELDON L. MOORE, JR.:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JUNE 2, 1969, PROTESTING THE REJECTION OF YOUR LOW BID UNDER INVITATION FOR BIDS NO. 69-609, ISSUED MAY 9, 1969, BY THE FEDERAL HOUSING ADMINISTRATION, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, WITH A VIEW TOWARD ENTERING INTO A REAL ESTATE MANAGEMENT CONTRACT FOR A TERM OF ONE YEAR, SUBJECT TO RENEWAL FROM YEAR TO YEAR, COVERING THE PROPERTY KNOWN AS 21 TURTLE CREEK SQUARE, DALLAS, TEXAS, AND IDENTIFIED BY FHA PROJECT NO. 112-00038. THAT PROPERTY CONSISTS OF A 22-STORY LUXURY TYPE APARTMENT WITH 367 RENTAL LIVING UNITS, 44 RESIDENTIAL UNITS IN A SEPARATE BUILDING AND 29 COMMERCIAL FACILITIES.

BIDS WERE SOLICITED FROM FIVE MANAGEMENT FIRMS FOUND TO BE QUALIFIED AND CAPABLE OF RENDERING THE REQUIRED SERVICES. BIDS WERE TO BE SUBMITTED ON THE BASIS OF A PERCENTAGE OF THE GROSS INCOME OF THE PROJECT, AND SERVICES WERE TO COMMENCE ON JUNE 1, 1969. FIVE BIDS WERE RECEIVED AND OPENED, AS SCHEDULED, ON MAY 23, 1969. FOUR OF THE BIDS WERE RECEIVED FROM FIRMS ORIGINALLY REQUESTED TO SUBMIT BIDS, AND YOU SUBMITTED THE OTHER BID. YOU HAD REQUESTED THAT A COPY OF THE INVITATION BE SENT TO YOU ON THE DATE THAT THE INVITATION WAS ISSUED.

YOUR BID WAS THE LOWEST OF THE FIVE BIDS RECEIVED. YOU OFFERED TO PERFORM THE REQUIRED SERVICES ON THE BASIS THAT YOU WOULD BE PAID 1.38 PERCENT OF THE GROSS RENTAL INCOME OF THE PROJECT. THE NEXT LOWEST BID, WHICH QUOTED 1.74 PERCENT OF GROSS RENTAL INCOME, WAS SUBMITTED BY MR. R. V. WORKS, SR., OF DALLAS, TEXAS, AND THAT BID WAS ACCEPTED ON MAY 29, 1969, FOLLOWING A DETERMINATION BY THE CONTRACTING OFFICER THAT YOU COULD NOT BE CONSIDERED TO BE A RESPONSIBLE PROSPECTIVE CONTRACTOR FOR THE PERFORMANCE OF THE PARTICULAR SERVICES UNDER THE STANDARDS FOR DETERMINING RESPONSIBILITY AS SET FORTH IN SUBPART 1-1.310-5 OF THE FEDERAL PROCUREMENT REGULATIONS, WHICH PROVIDES IN PART AS FOLLOWS:

"/A) IN ORDER TO QUALIFY AS RESPONSIBLE, A PROSPECTIVE CONTRACTOR MUST, IN THE OPINION OF THE CONTRACTING OFFICER, MEET THE FOLLOWING STANDARDS AS THEY RELATE TO THE PARTICULAR PROCUREMENT UNDER CONSIDERATION:

"/2) HAS THE NECESSARY EXPERIENCE, ORGANIZATION, TECHNICAL QUALIFICATIONS, SKILLS, AND FACILITIES, OR HAS THE ABILITY TO OBTAIN THEM (INCLUDING PROBABLE SUBCONTRACTOR ARRANGEMENTS); "

YOU STATED IN YOUR LETTER OF JUNE 2, 1969, THAT YOU WERE ABLE TO SUBMIT A LOW BID BASED ON THE FACT THAT YOU HAVE BEEN A TENANT OF 21 TURTLE CREEK SQUARE FOR SOME FOUR YEARS AND HAVE AN INTEGRAL KNOWLEDGE OF THE MANAGERIAL, PERSONNEL, MAINTENANCE, LEASING AND REPAIR PROBLEMS OF THE PARTICULAR PROJECT. YOU STATED THAT YOUR OFFICE AND RESIDENCE ARE IN THE BUILDING, THAT YOU CAN HANDLE THE PROJECT CHEAPER THAN ANYONE ELSE, THAT EITHER YOU OR A MEMBER OF YOUR STAFF WOULD BE IN A BETTER POSITION TO CONSIDER ANY IMMEDIATE PROBLEM WHICH MIGHT ARISE THAN IF YOU OPERATED FROM A DOWNTOWN DALLAS OFFICE, AND THAT YOU HAVE HAD EXPERIENCE WITH OVER 3,000 APARTMENT UNITS. YOU ALSO STATED THAT THE AWARD TO THE SECOND LOWEST BIDDER IS RESULTING IN A LOSS TO THE GOVERNMENT OF MANY THOUSANDS OF DOLLARS.

IT IS REPORTED BY THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT THAT, SINCE THE DEPARTMENT HAD NO KNOWLEDGE OF YOUR REAL ESTATE EXPERIENCE, THE FEDERAL HOUSING ADMINISTRATION CONDUCTED A REVIEW OF YOUR QUALIFICATIONS SUBSEQUENT TO YOUR REQUEST TO BID ON THE PROPOSED REAL ESTATE MANAGEMENT CONTRACT AND THAT, BASED UPON THE INFORMATION FURNISHED TO THE CONTRACTING OFFICER PRIOR TO THE MAKING OF AN AWARD TO MR. R. V. WORKS, SR., THE CONTRACTING OFFICER DETERMINED THAT YOU WERE NOT QUALIFIED.

THE CONTRACTING OFFICER PROVIDED FINDINGS OF FACT IN SUPPORT OF HIS DETERMINATION OF NONRESPONSIBILITY ON YOUR PART SO FAR AS CONCERNED THE NECESSITY FOR CONTRACTING WITH A PERSON OR FIRM HAVING THE NECESSARY EXPERIENCE, FINANCIAL RESOURCES AND INTEGRITY TO MANAGE A PROJECT OF THE SIZE AND COMPLEXITY OF THE 21 TURTLE CREEK SQUARE PROJECT. IN REGARD TO THE QUESTION WHETHER YOU POSSESSED THE NECESSARY EXPERIENCE, THE FINDINGS OF FACT SET FORTH THAT IN AN EXPERIENCE STATEMENT OF MAY 28, 1969, YOU LISTED SEVEN APARTMENTS PROJECTS AND ADVISED THAT YOU HAVE BEEN A PART OF THE MANAGEMENT COMPANY OR HAVE MANAGED SUCH PROJECTS "ON MY OWN SINCE BEGINNING MY MANAGEMENT COMPANY.' OF THE SEVEN PROJECTS LISTED, A 20-UNIT APARTMENT LOCATED AT 3505 GASTON, DALLAS, TEXAS, WAS LISTED AS OWNED BY YOU. HOWEVER, THE CONTRACTING OFFICER STATED THAT THE BEST INFORMATION AVAILABLE TO THE FEDERAL HOUSING ADMINISTRATION WAS THAT IN ALL OTHER LISTED PROJECTS YOU SERVED AS AN EMPLOYEE OF THE MANAGEMENT FIRMS AND DID NOT HAVE DIRECT MANAGEMENT RESPONSIBILITY. THE CONTRACTING OFFICER ALSO STATED THAT, NOTWITHSTANDING YOUR MANAGEMENT RELATIONSHIP TO THOSE OTHER PROJECTS, NONE OF THE PROJECTS COMPARE IN SIZE OR COMPLEXITY WITH THE 21 TURTLE CREEK SQUARE PROJECT, AND THAT THIS INCLUDES THE 1,562 UNIT WHERRY HOUSING PROJECT SHOWN ON THE LIST WHICH IS A LOW COST MILITARY HOUSING PROJECT.

OUR OFFICE HAS CONSISTENTLY TAKEN THE POSITION THAT THE QUESTION AS TO THE RESPONSIBILITY OF A PROSPECTIVE GOVERNMENT CONTRACTOR IS PRIMARILY FOR CONSIDERATION AND DETERMINATION BY THE ADMINISTRATIVE AGENCY CONCERNED, AND THAT WE SHOULD NOT QUESTION ANY SUCH DETERMINATION IN THE ABSENCE OF A CLEAR SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS FOR THE CONCLUSION REACHED. IN OUR CONSIDERATION OF THE REPORTED FACTS AND CIRCUMSTANCES OF THIS CASE THERE HAS BEEN FOUND NO SUFFICIENT BASIS FOR CONCLUDING THAT THE DETERMINATION OF YOUR LACK OF RESPONSIBILITY, AS RELATED TO THE PROPOSED CONTRACT FOR THE MANAGEMENT OF A PROJECT OF THE SIZE AND COMPLEXITY OF THE 21 TURTLE CREEK SQUARE PROJECT, WAS NOT BASED UPON REASONABLE GROUNDS OR THAT IT WAS NOT BASED UPON AN ADEQUATE INVESTIGATION OF YOUR QUALIFICATIONS.

CONSISTENT WITH THE PROVISIONS OF SUBSECTION 253 (B) OF TITLE 41, U.S.C. THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS PROVIDE AT PARAGRAPH 8 THAT THE CONTRACT "WILL BE AWARDED TO THE LOWEST RESPONSIBLE BIDDER COMPLYING WITH CONDITIONS OF THE INVITATION FOR BIDS, PROVIDED HIS BID IS REASONABLE AND IT IS TO THE INTEREST OF THE UNITED STATES TO ACCEPT IT.' YOUR BID COULD NOT HAVE BEEN ACCEPTED UNLESS THE CONTRACTING OFFICER DETERMINED AFFIRMATIVELY THAT YOU WERE RESPONSIBLE AND, SINCE IN HIS JUDGMENT HE COULD NOT REASONABLY MAKE ANY SUCH AFFIRMATIVE DETERMINATION OF RESPONSIBILITY ON YOUR PART, IT IS OUR OPINION THAT, REGARDLESS OF POSSIBLE SAVINGS WHICH MIGHT HAVE BEEN EFFECTED BY AN AWARD TO YOU, WE WOULD NOT BE WARRANTED IN TAKING EXCEPTION TO THE AWARD WHICH WAS MADE TO THE SECOND LOWEST BIDDER WHO WAS FOUND TO BE FULLY QUALIFIED TO PERFORM THE REQUIRED REAL ESTATE MANAGEMENT SERVICES.