B-180511, APR 23, 1974

B-180511, APR 23, 1974

GAO CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION, BASED ON FINDINGS OF PRIOR SATISFACTORY PERFORMANCE, THAT PROSPECTIVE SUPPLIER OF CREDIT REPORTS IS RESPONSIBLE BIDDER WILL NOT BE DISTURBED SINCE RECORD DOES NOT ESTABLISH THAT DETERMINATION WAS ABUSE OF PROCUREMENT DISCRETION. A CONTENTION THAT CONTRACTOR WILL NOT FURNISH TO GAO CREDIT REPORTS CONFORMING TO SPECIFICATIONS RELATES TO CONTRACT ADMINISTRATION RATHER THAN TO VALIDITY OF AWARD; IN EVENT OF NONCONFORMING PERFORMANCE - WHICH HAS NOT THUS FAR BEEN APPARENT - CORRECTIVE MEASURES AND REMEDIES ARE AVAILABLE UNDER CONTRACT. WHERE NO BASIS IS PRESENTED FOR LEGAL OBJECTION TO AWARD TO LOW RESPONSIVE AND RESPONSIBLE BIDDER, QUESTION OF WHETHER EXCEPTIONS TO SPECIFICATIONS NOTED IN HIGHER BID RENDER IT NONRESPONSIVE IS ACADEMIC ISSUE; TO EXTENT EXCEPTIONS IMPLIEDLY QUESTION ADEQUACY OF SPECIFICATION, ISSUE IS UNTIMELY SINCE PROTEST AGAINST ALLEGED SOLICITATION IMPROPRIETIES WHICH ARE APPARENT PRIOR TO BID OPENING MUST BE FILED PRIOR TO BID OPENING; HOWEVER, PRIOR TO NEXT PROCUREMENT OF CREDIT REPORTS, GAO WILL REVIEW ITS SPECIFICATIONS, AND OBJECTIONS RAISED BY PROTESTER WILL BE GIVEN CONSIDERATION AT THAT TIME.

TO CREDIT BUREAU REPORTS INC.:

WE HAVE CAREFULLY CONSIDERED YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO CREDIT BUREAU OF DECATUR, INC. (CBD), BY OUR OFFICE OF ADMINISTRATIVE PLANNING AND SERVICES (OAPS) UNDER INVITATION FOR BIDS (IFB) NO. 74SS-265A AND 74SS-265B. TO THE EXTENT POSSIBLE, WE HAVE PROCESSED THE PROTEST IN ACCORDANCE WITH OUR BID PROTEST PROCEDURES. HOWEVER, IN VIEW OF THE INVOLVEMENT OF OUR OFFICE AS THE CONTRACTING AGENCY, THE PROTEST CANNOT BE CONSIDERED IN THE SAME LIGHT AS ONE INVOLVING ANOTHER AGENCY. NEVERTHELESS, THE OBJECTIONS RAISED IN YOUR PROTEST, WHICH ESSENTIALLY REST ON A CONTENTION THAT CBD WILL NOT PERFORM THE CONTRACT IN ACCORDANCE WITH THE SPECIFICATIONS, HAVE BEEN CAREFULLY EXAMINED BY STAFF MEMBERS WHO WERE NOT INVOLVED IN THE AWARD OF THE CONTRACT.

THE IFB WAS ISSUED DECEMBER 3, 1973. THE FIRST PORTION OF THE SOLICITATION, SPECIFICATION NO. 74SS-265A (TO WHICH THE PROTEST IS DIRECTED), SOLICITED BIDS FOR AN ESTIMATED QUANTITY OF 6,000 CURRENT ASSET AND INCOME REPORTS. THE SPECIFICATIONS FOR THESE REPORTS REQUIRE THAT THE CONTRACTOR FURNISH CURRENT ASSETS AND INCOME REPORTS CONTAINING AVAILABLE INFORMATION AS TO (A) NAMES AND ADDRESSES OF SUBJECT AND SPOUSE; (B) AGE; (C) MARITAL STATUS AND NUMBER OF DEPENDENTS; (D) NAME OF EMPLOYER AND TYPE OF BUSINESS; (E) HOW LONG EMPLOYED AND POSITION HELD; (F) ANY SUITS, JUDGMENTS, OR BANKRUPTCIES; (G) WEEKLY OR MONTHLY INCOME FROM PRESENT EMPLOYMENT, OR A REASONABLE ESTIMATE THEREOF IF ACTUAL INCOME CANNOT BE ASCERTAINED; (H) OTHER INCOME SUCH AS RENTALS, INVESTMENTS, ETC.; (I) INCOME OF OTHERS IN HOUSEHOLD; (J) DOES SUBJECT OWN HOME, RENT, OR BOARD; AND (K) OTHER ASSETS, SUCH AS AUTOMOBILE, REAL PROPERTY, SAVINGS BANK ACCOUNT. IN ADDITION, IF THE SUBJECT IS DECEASED, THE SPECIFICATIONS CALL FOR INFORMATION PERTAINING TO THE ADMINISTRATION OF HIS ESTATE. ALSO, IF THE SUBJECT'S ADDRESS HAS CHANGED, THE CONTRACTOR MUST ASCERTAIN, IF POSSIBLE, THE CURRENT ADDRESS AND FURNISH A REPORT ON THAT BASIS WITHOUT ADDITIONAL CHARGE IF THE NEW ADDRESS IS IN THE SAME CITY OR AN ADJACENT AREA.

FOUR BIDS WERE SUBMITTED IN RESPONSE TO THE INVITATION. THE LOW BID SUBMITTED BY CBD WAS FOUND TO BE RESPONSIVE AND AWARD WAS MADE TO THAT CONCERN ON JANUARY 9, 1974.

YOUR LETTER OF JANUARY 22, 1974, TO OUR OFFICE OBJECTED TO THE AWARD ON THE BASIS THAT CBD IS "*** NOT FURNISHING THE TYPE OF REPORTS AS CALLED FOR UNDER THE SPECIFICATIONS." IN SUPPORT OF YOUR CONTENTION, YOUR LETTERS OF JANUARY 22 AND FEBRUARY 20, 1974, MAKE A NUMBER OF OBSERVATIONS CONCERNING THE PRACTICES OF THE CREDIT REPORTING INDUSTRY WHICH YOU BELIEVE SHOULD BE NOTED. YOU POINT OUT THAT BOTH YOUR CONCERN AND CBD HAVE IN THE PAST MARKETED CREDIT REPORTS TO GAO, AND THAT YOU BOTH ACT AS MARKETING ORGANIZATIONS FOR LOCAL CREDIT BUREAUS. MOREOVER, YOU POINT OUT THAT CREDIT BUREAUS MAKE A NUMBER OF DIFFERENT TYPES OF REPORTS WITH VARYING AMOUNTS OF INFORMATION, AT VARYING PRICES.

YOU STATE THAT THE CONTRACT SPECIFICATIONS REQUIRE A REPORT WHICH IN YOUR TERMINOLOGY WOULD BE DESCRIBED AS A "NO. 12" REPORT AND IN CBD'S TERMINOLOGY AS A "FULL" REPORT. YOU FURTHER STATE THAT TO OBTAIN SUCH REPORTS, THE CONTRACTOR MUST USE ONE OF TWO METHODS. THE FIRST METHOD INVOLVES ORDERING THE REPORTS THROUGH ASSOCIATED CREDIT BUREAUS, INC. (ACB), THE TRADE ASSOCIATION TO WHICH CBD BELONGS; THE SECOND METHOD IS TO ORDER THE REPORTS THROUGH CREDIT SERVICES INTERNATIONAL, INC. (CSI), A DIVISION OF ACB. YOU HAVE SUBMITTED DOCUMENTATION TO SHOW THAT, AT CURRENT PRICES, THE PRICE OF A FULL REPORT OBTAINED THROUGH ACB IS $3.52 (FOR THE UNITED STATES EXCLUDING ALASKA AND HAWAII), AND THAT EACH FULL REPORT OBTAINED THROUGH CSI WILL COST AN AMOUNT GREATER THAN $3.15. YOU STATE THAT THESE PRICES DO NOT INCLUDE ADDITIONAL COSTS SUCH AS LABOR AND POSTAGE. SINCE THE CONTRACT CALLS FOR CBD TO FURNISH FULL REPORTS FOR THE UNITED STATES (EXCLUDING ALASKA AND HAWAII) AT A PRICE OF $3.15 EACH, YOU CONCLUDE THAT, IN VIEW OF THE ABOVE CIRCUMSTANCES, CBD WILL NOT ACTUALLY FURNISH FULL REPORTS.

THE ADMINISTRATIVE REPORT PREPARED BY OAPS IN RESPONSE TO YOUR PROTEST INCLUDED COPIES OF CREDIT REPORTS ORDERED BY GAO UNDER THE PREDECESSOR CONTRACT WITH CBD AND FURNISHED TO GAO ON JANUARY 10, 1974, WHICH WERE STATED TO BE IN ACCORDANCE WITH THE CONTRACT SPECIFICATIONS. AT A CONFERENCE ON THE PROTEST HELD ON FEBRUARY 26, 1974, YOU ACKNOWLEDGED THAT THESE ARE "FULL" REPORTS. HOWEVER, YOU CONTENDED THAT THE PRICES WHICH CBD MUST PAY TO ITS SUPPLIERS FOR THESE FULL REPORTS WERE RAISED IN MID- JANUARY 1974 TO THE LEVELS DESCRIBED ABOVE. YOU HAVE STATED THAT YOUR OBJECTION IS NOT THAT THE AWARD IS INVALID BECAUSE CBD CANNOT PROFITABLY PERFORM THE CONTRACT AT THE PRICE BID; RATHER, YOU CONTEND THESE CIRCUMSTANCES ARE PERSUASIVE EVIDENCE THAT CBD WILL NOT LIVE UP TO ITS OBLIGATIONS UNDER THE CONTRACT.

IN ADDITION, YOU HAVE POINTED OUT THAT A "FULL" REPORT REQUIRES THAT THE LOCAL BUREAU INSURE THAT ALL INFORMATION IN-FILE ON THE SUBJECT IS BROUGHT UP TO DATE - A PARTICULARLY IMPORTANT CONSIDERATION IN THAT GAO'S PURPOSE IN ORDERING REPORTS IS TO OBTAIN INFORMATION ON DELINQUENT DEBTORS. YOU BELIEVE THE CONTRACTOR IS ORDERING LOWER PRICED TYPES "E" AND "H" REPORTS FROM THE LOCAL BUREAUS. IN PREPARING SUCH REPORTS, THE LOCAL BUREAUS DO NOT VERIFY THAT ALL INFORMATION IS CURRENT. THUS, WHEN GAO RECEIVES REPORTS FROM THE CONTRACTOR WHICH LACK CERTAIN INFORMATION, IT WILL NOT KNOW IF THE INFORMATION WAS ACTUALLY UNAVAILABLE OR IF NO ATTEMPT WAS MADE TO DEVELOP IT. MOREOVER, YOU BELIEVE INFORMATION ON SOME REPORTS CONCERNING SUBJECTS' ESTIMATED INCOME IS NOT BEING FURNISHED BY THE LOCAL BUREAUS BUT IS BEING ADDED IN BY CBD.

IN CONCLUSION, YOU STATE THAT IF GAO IS WILLING TO ACCEPT REPORTS NOT INCLUDING ALL OF THE INFORMATION CALLED FOR IN THE SPECIFICATIONS, YOU CAN FURNISH SUCH REPORTS AT A PRICE SUBSTANTIALLY LOWER THAN CBD'S AND THAT YOU SHOULD BE GIVEN THE OPPORTUNITY TO DO SO.

IN PART, YOUR CONTENTIONS RAISE A QUESTION AS TO WHETHER CBD WAS A RESPONSIBLE PROSPECTIVE CONTRACTOR. IN THIS REGARD, THE SUPERVISORY CONTRACT SPECIALIST STATES IN THE ADMINISTRATIVE REPORT:

"AFTER A CAREFUL EVALUATION OF ALL BIDS, THE LOW BID SUBMITTED BY CBD WAS SELECTED. I RECOMMENDED THAT THE AWARD BY THE CONTRACTING OFFICER BE MADE TO THAT FIRM. CBD HAS HAD THIS CONTRACT BEFORE AND ACCORDING TO THE USERS OF THE REPORTS IN OUR TRANSPORTATION AND CLAIMS DIVISION THE REPORTS WERE SATISFACTORY AND MET THE SPECIFICATIONS. I DID NOT NOTE ANY EXCEPTIONS ON THE BID SUBMITTED BY CBD AND SINCE THEY HAVE PERFORMED SATISFACTORILY UNDER A PRIOR CONTRACT USING THESE SPECIFICATIONS, I CONSIDERED THEIR BID THE LOW RESPONSIVE AND RESPONSIBLE BID."

THIS RECOMMENDATION WAS ADOPTED BY THE CONTRACTING OFFICER. RESPONSIBILITY IS A QUESTION OF FACT TO BE RESOLVED BY THE CONTRACTING OFFICER AND NECESSARILY INVOLVES THE EXERCISE OF A CONSIDERABLE RANGE OF JUDGMENT AND DISCRETION. IN THIS CASE, NO CONVINCING EVIDENCE WAS PRESENTED TO ESTABLISH THAT A GAO CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION OF A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY CONSTITUTED AN ABUSE OF PROCUREMENT DISCRETION.

MOREOVER, YOUR ALLEGATION THAT CBD WILL NOT PERFORM THE CONTRACT IN ACCORDANCE WITH THE SPECIFICATIONS BEARS PRIMARILY UPON THE MATTER OF PROPER CONTRACT ADMINISTRATION RATHER THAN THE VALIDITY OF THE AWARD ITSELF. B-169844, JULY 28, 1970; 46 COMP. GEN. 123, 132 (1966). WHETHER THE GOODS OFFERED CONFORM TO CONTRACT SPECIFICATIONS IS A QUESTION OF FACT TO BE DETERMINED BY THE CONTRACTING AGENCY. B-179831, FEBRUARY 4, 1974, AND DECISIONS CITED THEREIN.

AT THE CONFERENCE ON THE PROTEST, GAO PERSONNEL CONCERNED WITH THE ADMINISTRATION OF THE CONTRACT EXPRESSED THE VIEW THAT IN THE SHORT TIME THE PRESENT CONTRACT HAS BEEN IN EFFECT, PERFORMANCE PROBLEMS HAVE NOT BEEN EVIDENT. THE CONTRACTOR, IN A LETTER DATED FEBRUARY 25, 1974, RESPONDING TO THE PROTEST, STATES THAT IN ITS VIEW THE PERFORMANCE EXCEEDS THE REQUIREMENTS OF THE SPECIFICATIONS. IN ADDITION, IT HAS BEEN NOTED THAT THE CONTRACT ALLOWS GAO TO ORDER FREE SUPPLEMENTAL REPORTS WHEN INITIAL REPORTS ARE FOUND TO BE UNSATISFACTORY. ANOTHER REMEDY AVAILABLE TO THE GOVERNMENT IS TERMINATION OF THE CONTRACT FOR DEFAULT, IF NECESSARY. IN SHORT, WE BELIEVE THAT CAREFUL CONTRACT ADMINISTRATION WILL ENSURE THAT PERFORMANCE CONFORMS TO THE SPECIFICATIONS. YOUR EXPECTATIONS THAT THE CONTRACTOR WILL NOT PERFORM DO NOT FURNISH A LEGAL BASIS FOR OBJECTION TO THE AWARD.

LASTLY, WE NOTE THAT YOUR BID TOOK FIVE SPECIFIC EXCEPTIONS TO THE TERMS OF THE SOLICITATION. YOU HAVE EXPLAINED THAT YOU WOULD NOT AGREE TO FURNISH ESTIMATED INCOMES (UNLESS THE INFORMATION WAS PROVIDED BY THE SUBJECT'S EMPLOYER), WOULD NOT SHOW OTHER INCOME SUCH AS RENTALS, INVESTMENTS, OR OTHER ASSETS, AND WOULD NOT FURNISH INCOME FOR OTHERS IN HOUSEHOLD (OTHER THAN SUBJECT'S SPOUSE). YOU BELIEVE THAT UNDER THE FAIR CREDIT REPORTING ACT, 15 U.S.C. 1681, ET SEQ., FURNISHING SUCH INFORMATION POSSIBLY INVOLVES "INVESTIGATIVE" REPORTING AND IS NOT IN ACCORD WITH THE BEST PRACTICES OF THE CREDIT REPORTING INDUSTRY. IN ADDITION, YOU TOOK EXCEPTION TO THE REQUIREMENT THAT RETURN REPORTS BE POSTMARKED WITHIN 10 DAYS. YOU BELIEVE THIS TIME LIMIT IS UNREALISTICALLY SHORT AND POINT OUT THAT A SUBSTANTIAL NUMBER OF THE CBD SAMPLE REPORTS INCLUDED IN THE ADMINISTRATIVE REPORT EXCEEDED THE 10-DAY LIMIT. FINALLY, YOU OFFERED A BID ON AN ADDITIONAL TYPE OF REPORT NOT CALLED FOR BY THE IFB - A "NO RECORD" REPORT. YOU HAVE EXPLAINED THAT WHERE LOCAL BUREAUS CANNOT DEVELOP ENOUGH INFORMATION TO MAKE A REPORT, THEY SOMETIMES CHARGE A LESSER RATE FOR REPORTING THAT THERE IS NO RECORD. IF BIDDING IS ALLOWED ON THIS BASIS, THE CONTRACTOR COULD PASS ON THIS SAVINGS TO THE GOVERNMENT. YOUR BID OFFERED TO FURNISH SUCH REPORTS TO GAO AT A UNIT PRICE OF $0.92 FOR THE UNITED STATES EXCLUDING ALASKA AND HAWAII.

THE QUESTION OF WHETHER YOUR BID WAS RESPONSIVE IS ACADEMIC SINCE IT WAS NOT LOW AND, AS INDICATED PREVIOUSLY, NO BASIS HAS BEEN PRESENTED FOR LEGAL OBJECTION TO THE AWARD TO CBD AS THE LOW RESPONSIBLE, RESPONSIVE BIDDER. MOREOVER, IT APPEARS THAT YOUR OBJECTIVE IN MAKING THE FIVE SPECIFIC EXCEPTIONS WAS TO CALL INTO QUESTION THE ADEQUACY OF THE SPECIFICATIONS. IN THIS LIGHT, THIS PORTION OF THE PROTEST MUST BE REGARDED AS UNTIMELY AND NOT FOR CONSIDERATION, SINCE PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN THE SOLICITATION APPARENT PRIOR TO BID OPENING MUST BE FILED PRIOR TO BID OPENING. SEE 4 CFR 20.2(A); B 177928, MARCH 7, 1973. HOWEVER, PRIOR TO THE NEXT PROCUREMENT OF CREDIT REPORTS, THE SPECIFICATIONS WILL BE REVIEWED AND THE POINTS YOU HAVE RAISED WILL BE TAKEN INTO CONSIDERATION AT THAT TIME.

IN VIEW OF THE FOREGOING, THE PROTEST IS DENIED.