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SIX BIDS WERE RECEIVED AND OPENED AND YOU SUBMITTED THE LOWEST BID IN THE AMOUNT OF $10. KANE AND SON DID NOT HAVE A SATISFACTORY RECORD OF INTEGRITY AND JUDGMENT TO QUALIFY AS A RESPONSIBLE PROSPECTIVE CONTRACTOR UNDER THE STANDARDS PRESCRIBED BY PARAGRAPH 1-1.310-5 OF THE FEDERAL PROCUREMENT REGULATIONS. THE DETERMINATION OF NONRESPONSIBILITY WAS BASED ON AN INVESTIGATION WHICH DISCLOSED THAT ON NOVEMBER 6. CRIMINAL INFORMATION NO. 20880 WAS FILED IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA CHARGING S. KANE WERE CHARGED WITH (1) FAILURE TO PAY OVERTIME COMPENSATION FOR WORK IN EXCESS OF 40 HOURS PER WEEK. KANE WAS PLACED ON PROBATION FOR SIX MONTHS. WE ARE ADVISED THAT COUNTS ONE AND THREE WERE DISMISSED BY THE COURT ON MAY 28.

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B-151269, MAY 21, 1963

TO S. KANE AND SON, INC.:

BY LETTER DATED APRIL 9, 1963, WITH ENCLOSURES, YOU PROTESTED AGAINST THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO AN INVITATION ISSUED ON FEBRUARY 15, 1963, BY GENERAL SERVICES ADMINISTRATION, REGION 2, FOR SIDEWALK AND DRIVEWAY REPAIRS, NEW ROOF AND FLOOR COVERING AT THE POST OFFICE AND COURTHOUSE, PHILADELPHIA, PENNSYLVANIA, PROJECT NOS. 00222-119, -121, AND -122.

ON MARCH 12, 1963, SIX BIDS WERE RECEIVED AND OPENED AND YOU SUBMITTED THE LOWEST BID IN THE AMOUNT OF $10,884. HOWEVER, UNDER DATE OF MARCH 20, 1963, REGION 2 REJECTED YOUR BID ON THE BASIS THAT S. KANE AND SON DID NOT HAVE A SATISFACTORY RECORD OF INTEGRITY AND JUDGMENT TO QUALIFY AS A RESPONSIBLE PROSPECTIVE CONTRACTOR UNDER THE STANDARDS PRESCRIBED BY PARAGRAPH 1-1.310-5 OF THE FEDERAL PROCUREMENT REGULATIONS. THE DETERMINATION OF NONRESPONSIBILITY WAS BASED ON AN INVESTIGATION WHICH DISCLOSED THAT ON NOVEMBER 6, 1961, BASED ON AN INVESTIGATION WHICH DISCLOSED THAT ON NOVEMBER 6, 1961, CRIMINAL INFORMATION NO. 20880 WAS FILED IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA CHARGING S. KANE AND SON, A CORPORATION, AND ALEC M. KANE, INDIVIDUALLY, WITH THREE COUNTS OF VIOLATIONS OF THE FAIR LABOR STANDARD ACT, AS AMENDED, 29 U.S.C. 201, ET SEQ. SPECIFICALLY, THE CORPORATION AND ALEC M. KANE WERE CHARGED WITH (1) FAILURE TO PAY OVERTIME COMPENSATION FOR WORK IN EXCESS OF 40 HOURS PER WEEK; (2) FAILURE TO MAKE, KEEP AND PRESERVE PROPER PAYROLL RECORDS; AND (3) FALSIFICATION OF PAYROLL RECORDS. BOTH THE CORPORATION AND ALEC M. KANE ENTERED PLEAS OF GUILTY TO COUNT TWO OF THE INFORMATION. ON JULY 2, 1962, JUDGE ABRAHAM L. FREEDMAN REMITTED A FINE IMPOSED AGAINST THE CORPORATION AND ALEC M. KANE WAS PLACED ON PROBATION FOR SIX MONTHS. WE ARE ADVISED THAT COUNTS ONE AND THREE WERE DISMISSED BY THE COURT ON MAY 28, 1962. PRIOR THERETO, THE CORPORATION MADE RESTITUTION OF $11,339.25 TO 19 EMPLOYEES FOR WAGE UNDERPAYMENTS WHICH ACTION PRESUMABLY WAS TAKEN INTO CONSIDERATION WHEN THE COURT SENTENCED THE DEFENDANTS AND DISMISSED COUNTS ONE AND THREE.

YOUR PROTEST AGAINST THE REJECTION IS BASED ON THE FOLLOWING:

1. THAT THE CORPORATION AND ALEC M. KANE WERE CONVICTED OF MISDEMEANORS;

2. THAT THE EFFECT OF THE REJECTION WAS TO PLACE YOU ON AN INELIGIBLE BIDDERS LIST; AND

3. THAT THE ADMINISTRATIVE DETERMINATION OF NONRESPONSIBILITY WAS BASED ON A DUN AND BRADSTREET REPORT WHICH, CONTRARY TO ITS PRACTICE, ERRONEOUSLY CITED THE MISDEMEANOR CONVICTION.

YOU, THEREFORE, PROTEST AGAINST THE AWARD MADE TO THE NEXT LOW BIDDER IN THE AMOUNT OF $10,897.

BEFORE CONSIDERING THE MERITS OF THESE CONTENTIONS, IT WOULD APPEAR TO BE PROPER TO CONSIDER THE NECESSITY FOR DETERMINATING A BIDDER'S RESPONSIBILITY, AND THE PROPRIETY OF CONSIDERING A BIDDER'S INTEGRITY IN MAKING SUCH DETERMINATION.

UNDER SECTION 303 (B) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, 41 U.S.C. 253 (B), CONTRACTING AGENCIES ARE REQUIRED TO AWARD FORMALLY ADVERTISED CONTRACTS ONLY TO RESPONSIBLE BIDDERS, AND IT IS WELL ESTABLISHED BY DECISIONS OF THE COURTS AND OF THIS OFFICE THAT A BIDDER'S INTEGRITY IS A PROPER MATTER FOR CONSIDERATION IN DETERMINING A BIDDER'S RESPONSIBILITY. O-BRIEN V. CARNEY, 6 F.SUPP. 761, 762; ARTHUR VENNERI CO. V. PATERSON HOUSING AUTHORITY, 149 A. 2D 228, 234, AND CASES CITED THEREIN; KAYFIELD CONSTRUCTION CORP. V. MORRIS, 225 N.Y.S. 2D 507; 30 COMP. GEN. 235, 238; 39 ID. 868. CONSIDERATION OF A BIDDER'S INTEGRITY IS MADE MANDATORY UPON THE NONDEFENSE AGENCIES OF THE GOVERNMENT BY THE PROVISIONS OF SECTION 1 1.310-5 (A) (5) OF THE FEDERAL PROCUREMENT REGULATIONS, WHICH PROVIDE THAT A PROSPECTIVE CONTRACTOR MUST, IN THE OPINION OF THE CONTRACTING OFFICER, HAVE A SATISFACTORY RECORD OF INTEGRITY IN ORDER TO QUALIFY AS A RESPONSIBLE BIDDER. THERE CAN BE NO DOUBT THAT A PLEA OF GUILTY TO A MISDEMEANOR IS IDENTICAL TO A CONVICTION FOR COMMISSION OF THE SAME OFFENSE BASED UPON PROOF OF THE SAME ACTS. WHILE THE OFFENSE HAS BEEN TERMED A "MISDEMEANOR," THE COURTS HAVE REGARDED THAT OFFENSE AS A "CRIMINAL OFFENSE.' SEE 10 WORDS AND PHRASES 105.

WHETHER EVIDENCE OF 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 WELL DIFFER IN SUCH EVALUATION, THIS 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 UPON SUBSTANTIAL EVIDENCE DEMONSTRATING THE BIDDER'S LACK OF RESPONSIBILITY. 36 COMP. GEN. 42; 37 ID. 798; 38 ID. 131; ID. 778; 39 ID. 468; CF. 39 ID. 868. ON THE PRESENT RECORD, WE MUST CONCLUDE THAT THERE WAS SUBSTANTIAL EVIDENCE TO SUPPORT THE DETERMINATION THAT S. KANE AND SON, INC., LACKS THE INTEGRITY OF A RESPONSIBLE BIDDER BECAUSE OF THE CONVICTION OF A MISDEMEANOR RELATING TO LABOR STANDARDS.

CONCERNING CONTENTION 2 ABOVE, YOU ARE ADVISED THAT THE RECORD BEFORE US DOES NOT INDICATE THAT S. KANE AND SON HAS BEEN DEBARRED OR OTHERWISE DETERMINED TO BE INELIGIBLE FOR AWARD OF FUTURE GOVERNMENT CONTRACTS. THAT CONNECTION, SEE PARAGRAPH 1-1.605 (B) (6) OF THE FEDERAL PROCUREMENT REGULATIONS PRESCRIBING THE PROCEDURES WHICH MUST PRECEDE A FINAL DECISION OF DEBARMENT.

WITH RESPECT TO CONTENTION 3 ABOVE, THE REPORT FURNISHED US BY THE PROCUREMENT AGENCY ESTABLISHES THAT THE INFORMATION RELATING TO THE MATTER OF YOUR INTEGRITY RESULTED FROM INDEPENDENT INVESTIGATIONS CONDUCTED BY THE GENERAL SERVICES ADMINISTRATION. THE RECORD BEFORE US DOES NOT CONTAIN A DUN AND BRADSTREET REPORT OR ANY INDICATION THAT SUCH A REPORT WAS USED AS A BASIS FOR THE ACTION TAKEN HERE.

UNDER THE CIRCUMSTANCES, WE CONCLUDE THAT THE REJECTION OF YOUR BID, PURSUANT TO THE ADMINISTRATIVE DETERMINATION MADE UNDER PARAGRAPH 1-1.310 OF THE FEDERAL PROCUREMENT REGULATIONS, WAS A PROPER EXERCISE OF DISCRETION ON THE PART OF THE CONTRACTING AGENCY. ACCORDINGLY, YOUR PROTEST IS DENIED. SEE, IN THIS CONNECTION, DECISIONS OF OUR OFFICE B- 150791, B-150861, APRIL 25, 1963.

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