B-161936, NOV. 2, 1967

B-161936, NOV. 2, 1967

BIDDERS - RESPONSIBILITY - PRE-AWARD SURVEY DECISION TO CONTINENTAL CHEMICAL CORP. PROTESTING FACILITY REPORT CONCERNING NONRESPONSIBILITY OF BIDDER FOR AWARD OF CONTRACT FOR VARNISH, SHELLAC, AND FLOOR SEALER BY GSA. PLANT FACILITY REPORT WHICH INDICATED THAT LOW BIDDER IS INCAPABLE OF PERFORMING, DID NOT HAVE QUALITY CONTROL REQUIRED, AND LACKED TEST EQUIPMENT AS WELL AS INFORMATION ON POOR PERFORMANCE UNDER OTHER CONTRACTS SUPPORTS CONTRACTING OFFICER'S DETERMINATION THAT BIDDER IS NOT RESPONSIBLE. ALTHOUGH EACH OF POINTS IN FACILITY REPORT MAY BE CONSIDERED OF NO GREAT CONSEQUENCE IN THE AGGREGATE THEY INDICATE LACK OF CARE AS TO FINAL PRODUCT. THE BIDDER LACKS RESPONSIBILITY IN AREA OF MANAGEMENT NOT IN CREDIT CAPACITY. ALTHOUGH REPORTS OF FIRE INSPECTOR OF CITY AND INSURANCE COMPANY INDICATE BIDDER'S PREMISES WERE IN GOOD HOUSEKEEPING CONDITION THAT GOOD HOUSEKEEPING FOR FIRE PREVENTION IS QUITE DIFFERENT FROM HOUSEKEEPING CONDITION NECESSARY TO PREVENT CONTAMINATION OF CHEMICALS. IN ABSENCE OF EVIDENCE TO OVERCOME PRESUMPTION OF CORRECTNESS OF ADMINISTRATIVE AGENCY REPORT, CONFLICT BETWEEN CLAIMANT AND AGENCY REPORT MUST BE RESOLVED IN FAVOR OF AGENCY REPORT. 37 C.G. 568.

TO CONTINENTAL CHEMICAL CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 23, 1967, AND SUBSEQUENT CORRESPONDENCE CONCERNING YOUR PROTEST IN CONNECTION WITH ITEMS 13 AND 14 OF INVITATION FOR BIDS NO. 99113, ISSUED BY THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, DENVER, COLORADO.

THE INVITATION ISSUED APRIL 24, 1967, WAS FOR A REQUIREMENTS CONTRACT FOR FSC GROUP 80, VARNISH, SHELLAC, AND FLOOR SEALER, FOR THE PERIOD MAY 21, 1967, OR DATE OF AWARD, WHICHEVER WAS LATER, THROUGH MAY 20, 1968. THE APPARENT LOW BIDDER ON ITEMS 13 AND 14 (FLOOR SEALER) WAS DETERMINED TO BE AN INELIGIBLE BIDDER AND CONTINENTAL CHEMICAL BECAME THE APPARENT LOW BIDDER ON THOSE ITEMS.

ON MAY 23, 1967, THE CONTRACTING OFFICER REQUESTED A PLANT FACILITIES REPORT. THE PLANT FACILITIES REPORT DATED JUNE 9, 1967, CONTAINS THE RECOMMENDATION THAT CONTINENTAL CHEMICAL IS ,INCAPABLE OF PERFORMING," STATING THAT "THE BIDDER'S QUALITY CONTROL OVER ITEMS PRODUCED UNDER RECENT GSA CONTRACT HAS BEEN UNSATISFACTORY," AND "LACK OF NECESSARY TEST EQUIPMENT AND INADEQUATE QUALITY CONTROL SYSTEM ARE UNFAVORABLE FACTORS WHICH MAY AFFECT BIDDER'S PERFORMANCE.' BASED ON THE INFORMATION CONTAINED IN THE SURVEY REPORT AND THE APPARENT POOR PERFORMANCE RECORD ON OTHER CONTRACTS, THE CONTRACTING OFFICER FOUND THAT CONTINENTAL WAS NOT A RESPONSIBLE BIDDER.

IN YOUR LETTER OF AUGUST 15, 1967, ISSUE IS TAKEN WITH A NUMBER OF FINDINGS MADE IN THE PLANT FACILITIES REPORT--- SOME FACTUAL AND SOME JUDGMENT FINDINGS. WE NOTE THAT THIS SURVEY WAS MADE NOT ONLY AT THE REQUEST OF THE CONTRACTING OFFICER, REGION 8, BUT ALSO BY REASON OF YOUR LETTER DATED MAY 23, 1967, REQUESTING THAT AN EVALUATION OF YOUR LABORATORY BE MADE BY THE GENERAL SERVICES ADMINISTRATION, CHIEF OF RESEARCH AND TESTING LABORATORY, REGION 5.

THE REPORT COMMENTS THAT YOUR LABORATORY HAS SOME TEST EQUIPMENT ON HAND TO PERFORM THE REQUIRED SPECIFICATION TESTS, BUT "IN ITS PRESENT CONDITION THE EQUIPMENT IS NOT CONSIDERED ACCEPTABLE FOR ACCURATE OPERATION.' THIS CONNECTION, THE REPORT STATES THAT YOU HAD NO TEMPERATURE HUMIDITY CONTROL ROOM ON HAND; THAT YOU HAVE A CENTRIFUGE MACHINE BUT NO PARTS FOR IT; NO STANDARDS TO ADJUST YOUR GLOSS METER TO; NO COLOR STANDARDS ON HAND; NO VISCOSITY STANDARDS ON HAND; NO WEIGHT PER GALLON CUP ON HAND; NO FLASH POINT TESTER; NO FILM APPLICATORS OR ELECTRIC FAN ON HAND, ET CETERA. IN YOUR AUGUST 15 LETTER YOU STATE THAT WHILE YOU HAD NO 100 ML. GRADUATE TUBE FOR USE WITH THE CENTRIFUGE MACHINE, YOU DID HAVE 50 ML. GRADUATES WHICH COULD BE USED; THAT ALTHOUGH YOU HAD NO TEMPERATURE HUMIDITY CONTROL ROOM, YOU WOULD USE YOUR OFFICE AREA WHICH IS TEMPERATURE CONTROLLED; THAT THE PARTS FOR THE CENTRIFUGE MACHINE CONSISTED ONLY OF AN INEXPENSIVE CONICAL TUBE AND AS TO THE STANDARD FOR THE GLOSS METER, THIS INVOLVED ONLY $6.30.

YOU ALSO OBJECT TO THE FINDING OF THE SURVEY GROUP THAT YOUR "HOUSEKEEPING" IS POOR. IN THIS CONNECTION YOU HAVE SUBMITTED TWO FORMS-- - ONE EXECUTED BY AN INSPECTOR OF THE TERRE HAUTE FIRE DEPARTMENT, AND THE OTHER BY AN INSURANCE COMPANY REPRESENTATIVE INDICATING THAT YOUR PREMISES WERE IN GOOD HOUSEKEEPING CONDITION. IT MAY BE OBSERVED AT THIS POINT THAT "GOOD HOUSEKEEPING" FOR PURPOSES OF FIRE PREVENTION AND FIRE INSURANCE IS QUITE DIFFERENT FROM THAT HOUSEKEEPING REQUIRED IN THE MIXING AND MANUFACTURING OF CHEMICALS. IN THE LATTER FIELD WE BELIEVE THE EMPHASIS TO BE ON EFFORTS TO PREVENT CONTAMINATION OF THE CHEMICALS AS WELL AS FIRE PREVENTION.

THE GIST OF YOUR ARGUMENT IS THAT THE FACILITY REPORT EVIDENCES AN INTENT TO DOWNGRADE YOUR ESTABLISHMENT. YOU ALSO STATE THAT YOUR RECORDS DO NOT AGREE WITH THE GOVERNMENT REPORTS IN CONNECTION WITH THE NUMBER AND FREQUENCY OF REJECTED AND DELINQUENT DELIVERIES.

IN OUR RECENT DECISION TO YOU, B-161339, DATED SEPTEMBER 25, 1967, WE ADVISED THAT THE QUESTION OF RESPONSIBILITY IS A MATTER AS TO WHICH SECTIONS 1-1.310-1 THROUGH 11 OF THE FEDERAL PROCUREMENT REGULATIONS REQUIRE THE CONTRACTING OFFICER TO MAKE AN AFFIRMATIVE DETERMINATION THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE WITHIN THE MEANING OF THE CITED SECTIONS. IT IS THE GENERAL RULE THAT THE QUESTION AS TO RESPONSIBILITY AND CAPABILITY OF A BIDDER ON A PROPOSED GOVERNMENT CONTRACT IS A MATTER PRIMARILY FOR DETERMINATION BY THE CONTRACTING AGENCY AND SUCH DETERMINATION WHEN MADE WILL NOT BE QUESTIONED BY THE COURTS OR OUR OFFICE, IN THE ABSENCE OF FRAUD OR THE LACK OF A REASONABLE BASIS FOR THE DETERMINATION. ALTHOUGH EACH OF THE POINTS MADE BY THE PLANT FACILITIES REPORT MAY BE CONSIDERED AS OF NO GREAT CONSEQUENCE, IN THE AGREGATE THEY MAY BE CONSIDERED AS INDICATING A GENERAL LACK OF CARE AS TO THE FINAL PRODUCT. THIS TIES IN WITH THE POINT MADE IN OUR EARLIER DECISION, CITED ABOVE, OF LACK OF RESPONSIBILITY, NOT IN CREDIT OR CAPABILITY, BUT IN THE GENERAL AREA OF MANAGEMENT.

HERE, YOU DISPUTE THE FACTS UPON WHICH THE CONTRACTING OFFICER APPARENTLY BASED HIS DETERMINATION OF NONRESPONSIBILITY. YOU MAY BE ADVISED IN THIS CONNECTION THAT WHEN THERE IS A CONFLICT BETWEEN THE STATEMENT OF A CLAIMANT AND THE REPORT OF THE ADMINISTRATIVE OFFICE, IT IS A LONG ESTABLISHED RULE OF OUR OFFICE TO ACCEPT THE LATTER, IN THE ABSENCE OF EVIDENCE SUFFICIENTLY CONVINCING TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF. SEE 37 COMP. GEN. 568.

WE CANNOT CONCLUDE ON THE BASIS OF THE RECORD BEFORE US OR THE ALLEGATIONS MADE BY YOU THAT THE DETERMINATION MADE BY THE CONTRACTING OFFICER IN THIS MATTER WAS INDUCED BY FRAUD OR THAT THERE WAS NOT A REASONABLE BASIS FOR HIS CONCLUSION.