B-168801, APR. 8, 1970

B-168801, APR. 8, 1970

BIDDERS--QUALIFICATIONS--INTEGRITY, ETC.--ADMINISTRATIVE CONSIDERATION UNDER SOLICITATION FOR RELOCATION OF GOVT. OFFICES TO NASSIF BUILDING, UNSUCCESSFUL LOW BIDDER, DETERMINED NONRESPONSIBLE FOR LACK OF INTEGRITY BASED ON MISREPRESENTATION THAT IT HAD COMPLIED WITH INSURANCE REQUIREMENTS OF EARLIER FORRESTAL BUILDING MOVING CONTRACT, PROTESTS AWARD, CONTENDING IT WAS ONLY RESPONSIBLE AND RESPONSIVE LOW BIDDER; HOWEVER, BOTH GAO AND COURTS HAVE HELD THAT BIDDER'S INTEGRITY IS PROPER FOR CONSIDERATION IN DETERMINING RESPONSIBILITY. WHETHER EVIDENCE IS SUFFICIENT TO WARRANT FINDING OF NONRESPONSIBILITY IS PRIMARILY FOR EVALUATION BY PROCURING AGENCY AND GAO WILL NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF CONTRACTING AGENCY.

TO WAGNER MOVING AND STORAGE:

WE AGAIN REFER TO YOUR TELEGRAM DATED JANUARY 14, 1970, PROTESTING AGAINST THE AWARD OF A CONTRACT TO A BIDDER OTHER THAN YOUR FIRM UNDER SOLICITATION NO. 3TTM 691B, ISSUED BY THE GENERAL SERVICES ADMINISTRATION. YOU CONTEND THAT YOUR FIRM WAS THE ONLY RESPONSIBLE AND RESPONSIVE LOW BIDDER.

THE PRESENT SOLICITATION, ISSUED ON NOVEMBER 13, 1969, WAS FOR A MOVING CONTRACT COVERING THE RELOCATION OF GOVERNMENT OFFICES TO THE NASSIF BUILDING IN THE WASHINGTON, D. C. AREA. WHEN BIDS WERE OPENED ON NOVEMBER 18, 1969, YOUR FIRM (WAGNER) WAS THE APPARENT LOW BIDDER. PRIOR TO AWARD, HOWEVER, WAGNER WAS DETERMINED TO BE NONRESPONSIBLE FOR LACK OF INTEGRITY AND AWARD WAS MADE TO THE LOWEST RESPONSIBLE BIDDER UNDER THE SOLICITATION. THE BASES FOR THE DETERMINATION WERE CERTAIN ACTIONS AND REPRESENTATIONS MADE BY WAGNER TO GSA IN CONNECTION WITH A MOVING CONTRACT (HEREAFTER, THE FORRESTAL CONTRACT) PREVIOUSLY AWARDED TO WAGNER ON OCTOBER 31, 1969.

PURSUANT TO PARAGRAPH 9 (2) OF THE FORRESTAL CONTRACT, THE SUCCESSFUL CONTRACTOR WAS REQUIRED, WITHIN THREE DAYS AFTER NOTICE OF AWARD, TO FURNISH GSA WITH EVIDENCE OF INSURANCE PROTECTION FOR WORKMEN'S COMPENSATION COVERAGE SUFFICIENT TO COMPLY WITH THE STATUTORY REQUIREMENTS OF THE DISTRICT OF COLUMBIA. SHORTLY AFTER THE NOVEMBER 18, 1969, BID OPENING FOR SOLICITATION 3TTM 691B, A QUESTION AROSE AS TO WHETHER WAGNER'S COMPENSATION INSURANCE FOR THE FORRESTAL CONTRACT MET THE SPECIFICATIONS OF THAT CONTRACT.

THE GSA REPORT ON THIS MATTER STATES THAT WAGNER WAS THEREAFTER ORALLY ASKED TO FURNISH GSA WITH THE NAME OF ITS INSURANCE COMPANY, THE POLICY NUMBER, AND THE POLICY'S EFFECTIVE DATES. IN EARLY DECEMBER 1969, WAGNER FURNISHED A FORM WHICH INDICATED THAT INSURANCE HAD BEEN OBTAINED FROM THE STATE INSURANCE FUND OF NEW YORK, POLICY A423426-6, EFFECTIVE FOR ONE YEAR FROM SEPTEMBER 25, 1969. BECAUSE REPRESENTATIONS WERE SUBSEQUENTLY MADE TO GSA WHICH RAISED DOUBTS CONCERNING THIS POLICY'S COVERAGE, GSA SENT A LETTER DATED DECEMBER 15, 1969, TO WAGNER REQUESTING WRITTEN CONFIRMATION THAT THE FIRM HAD ADEQUATE INSURANCE COVERAGE AND THAT A COPY OF THE POLICY BE FURNISHED. NO RESPONSE WAS RECEIVED TO THIS LETTER, A LETTER OF DECEMBER 30, 1969, OR TO SEVERAL TELEPHONE REQUESTS.

ON JANUARY 13, 1970, WAGNER WAS NOTIFIED BY TELEGRAM THAT IT MIGHT NOT RECEIVE THE AWARD UNDER SOLICITATION 3TTM 691B (THE NASSIF CONTRACT) BECAUSE OF ITS FAILURE TO REPLY TO THE QUESTIONS REGARDING ITS INSURANCE COVERAGE UNDER THE FORRESTAL CONTRACT. ON JANUARY 14, GSA ASCERTAINED FROM THE STATE INSURANCE FUND OF NEW YORK THAT THE POLICY ISSUED TO WAGNER DID NOT COVER THE FIRM'S EMPLOYEES EMPLOYED OUTSIDE OF NEW YORK TO WORK OUTSIDE OF THAT STATE. ON JANUARY 15, MR. MARIANI, A PARTNER IN THE FIRM, CALLED THE GSA REGIONAL COUNSEL AND GAVE ASSURANCES THAT WAGNER HAD OBTAINED AND THAT THERE HAD BEEN IN EFFECT THROUGHOUT THE PERFORMANCE OF THE FORRESTAL CONTRACT AN ENTIRELY ADEQUATE POLICY FOR WORKMEN'S COMPENSATION INSURANCE. MR. MARIANI ALSO ADVISED THAT A COPY OF THAT POLICY WOULD BE MAILED TO THE REGIONAL COUNSEL THAT DAY. LATER THAT SAME DAY, MR. WARREN WAGNER FURNISHED THE REGIONAL COUNSEL WITH SUBSTANTIALLY THE SAME INFORMATION.

ON JANUARY 16, GSA RECEIVED AN ENVELOPE FROM WAGNER CONTAINING A POLICY ISSUED BY THE COSMOPOLITAN MUTUAL INSURANCE COMPANY (COSMOPOLITAN) COVERING THE PERIOD FROM JULY 22, 1969, TO JULY 22, 1970. SINCE THIS POLICY CONTAINED AN "ALL STATES ENDORSEMENT" IT APPEARED TO SATISFY THE WORKMEN'S COMPENSATION INSURANCE REQUIREMENTS OF THE FORRESTAL CONTRACT AND THE REGIONAL COUNSEL SO NOTIFIED THE CONTRACTING OFFICER. SUBSEQUENTLY, THE REGIONAL COUNSEL CHECKED ON THE POLICY WITH COSMOPOLITAN AND WAS ADVISED THAT ALTHOUGH THE POLICY HAD IN FACT BEEN ISSUED, IT HAD BEEN CANCELLED ON SEPTEMBER 3, 1969, AFTER THE CARRIER HAD BEEN ADVISED BY WAGNER THAT IT HAD NOT ORDERED AND DID NOT WANT THE POLICY. COSMOPOLITAN FURTHER RELATED THAT WAGNER HAD REFUSED A DEMAND TO RETURN THE POLICY. VIEW OF THIS DEVELOPMENT, THE REGIONAL COUNSEL ADVISED MR. WARREN WAGNER THAT IF A TOTALLY SATISFACTORY EXPLANATION WAS NOT MADE BY JANUARY 23, 1970, HE WOULD RECOMMEND THAT WAGNER NOT RECEIVE THE NASSIF AWARD. WHEN NO EXPLANATION WAS RECEIVED, WAGNER WAS DETERMINED TO BE NONRESPONSIBLE AND AWARD WAS MADE TO ANOTHER BIDDER ON JANUARY 26, 1970.

THE DETERMINATION OF NONRESPONSIBILITY WAS BASED ON THE REPRESENTATION MADE BY WAGNER THAT IT HAD COMPLIED WITH THE INSURANCE COVERAGE REQUIREMENTS OF THE FORRESTAL CONTRACT WHEN IN FACT IT HAD NOT. GSA FELT THAT THE MISREPRESENTATION AS TO INSURANCE COVERAGE, WHETHER THE RESULT OF AN ATTEMPT TO DELIBERATELY MISLEAD OR NEGLIGENCE, DID IN FACT MISLEAD THE GSA REGIONAL OFFICIALS AND WAS SUFFICIENT TO DEMONSTRATE A LACK OF INTEGRITY ON WAGNER'S PART SO AS TO SUPPORT A DETERMINATION OF NONRESPONSIBILITY.

BOTH OUR OFFICE AND THE COURTS HAVE HELD THAT A BIDDER'S INTEGRITY IS A PROPER MATTER FOR CONSIDERATION IN DETERMINING HIS RESPONSIBILITY. 165250, SEPTEMBER 25, 1968, AND CASES CITED THEREIN. IN CONSONANCE WITH THESE DECISIONS IS SECTION 1-1.310-5 (A) (4) OF THE FEDERAL PROCUREMENT REGULATIONS WHICH REQUIRES CIVILIAN AGENCIES OF THE GOVERNMENT TO CONSIDER A BIDDER'S INTEGRITY IN ARRIVING AT A DETERMINATION CONCERNING HIS RESPONSIBILITY.

WHETHER EVIDENCE AS A BIDDER'S LACK OF INTEGRITY IS SUFFICIENT TO WARRANT A FINDING IN ANY PARTICULAR CASE THAT THE BIDDER IS NOT RESPONSIBLE IS A MATTER PRIMARILY FOR EVALUATION BY THE PROCURING AGENCY, AND BECAUSE REASONABLE MEN MAY DIFFER IN SUCH EVALUATION, OUR OFFICE HAS ADOPTED THE RULE THAT WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING AGENCY UNLESS IT IS SHOWN THAT THE AGENCY'S DETERMINATION WAS NOT BASED ON SUBSTANTIAL EVIDENCE DEMONSTRATING THE BIDDER'S LACK OF RESPONSIBILITY OR WAS ARBITRARY OR CAPRICIOUS. 39 COMP. GEN. 468, DECEMBER 23, 1959; 36 ID. 42, JULY 16, 1956; 48 ID. , B-165915, JUNE 5, 1969; B-164508, AUGUST 6, 1968.

ON THE BASIS OF THE RECORD BEFORE US, WE ARE UNABLE TO SAY THAT THE EVIDENCE WAS INSUFFICIENT TO SUPPORT THE CONTRACTING OFFICER'S DECISION THAT WAGNER WAS A NONRESPONSIBLE PROSPECTIVE CONTRACTOR. ACCORDINGLY, YOUR PROTEST IS DENIED.