[Request for Reconsideration]

Two firms requested reconsideration of a GAO decision which dismissed their protest of a Defense Fuel Supply Center (DFSC) determination that they were not financially responsible. GAO initially dismissed the protest because, since the firms were small businesses, they were required to seek a Certificate of Competency (COC) from the Small Business Administration (SBA). GAO subsequently found that the firms did not seek a COC because SBA does not consider protests which involve a foreign product; therefore, GAO reconsidered the matter. Both firms had submitted low offers under requests for proposals for fuel oil. Because the firms appeared to be affiliated with each other, DFSC initiated a series of discussions concerning the firms' financial capabilities. While these discussions were being held, SBA obtained a default judgment against one of the firms as a result of its failure to repay a prior SBA loan. DFSC could not make a positive determination of responsibility with regard to either firm and awarded the contracts to other firms. The protesters argued that this determination was improper and that the bankruptcy filing would add to their ability to complete contractual obligations. In addition, they argued that DFSC should not have taken preexisting debts into account; they were negotiating in good faith; and they disclosed all the information they had concerning ownership and control. So long as a contracting officer has a reasonable basis for determining a bidder to be nonresponsible, GAO will not question that determination. Under the circumstances, GAO found that the contracting officer had a reasonable basis for concluding that the protesters failed to affirmatively establish their responsibility. GAO saw nothing unreasonable with taking into account the bankruptcy of one of the firms when reviewing the financial condition of the other, and it knew of no restriction that would inhibit the Government from protecting its interests as a creditor during the procurement process. Accordingly, the protest was denied.