B-173368, OCT 18, 1971

B-173368, OCT 18, 1971

BID PROTEST - BIDDER RESPONSIBILITY - SMALL BUSINESS DENIAL OF PROTEST ON BEHALF OF ATLANTIC MAINTENANCE, INC., OF MARYLAND AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER AN IFB ISSUED BY THE EAST CENTRAL DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, PHILADELPHIA, PA., FOR JANITORIAL SERVICES AT THE NAVAL AIR DEVELOPMENT CENTER, WARMINSTER, PA. THE DETERMINATION BY THE SMALL BUSINESS ADMINISTRATION THAT BMC SERVICES, INC., THE LOW BIDDER, WAS A QUALIFIED SMALL BUSINESS FOR THIS IFB MUST BE ACCEPTED AS CONCLUSIVE BY THE PROCURING ACTIVITY, 15 U.S.C. 637 (B)(1)(B)(6). FURTHER, THE DETERMINATION THAT A CONTRACTOR IS CAPABLE OF PERFORMING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF FACT THAT IS ACCEPTED BY GAO IN THE ABSENCE OF EVIDENCE CLEARLY SHOWING ERROR, FRAUD OR FAVORITISM. A REVIEW OF THIS RECORD DOES NOT INDICATE THAT THE ADMINISTRATIVE DETERMINATION WAS ERRONEOUS.

TO FRIED, FRANK, HARRIS, SHRIVER & KAMPELMAN:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 22, 1971, AND SUBSEQUENT COMMUNICATIONS WITH ENCLOSURES, PROTESTING ON BEHALF OF YOUR CLIENT, ATLANTIC MAINTENANCE, INC., OF MARYLAND (ATLANTIC), AGAINST THE AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER INVITATION FOR BIDS (IFB) NO. N62472-71-B -4792, DATED MAY 25, 1971, AND ISSUED BY THE EAST CENTRAL DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, PHILADELPHIA, PENNSYLVANIA.

THE SUBJECT IFB SOLICITED BIDS FOR JANITORIAL SERVICES FOR NAVY BUILDINGS AT THE NAVAL AIR DEVELOPMENT CENTER, WARMINSTER, PENNSYLVANIA. THREE BIDS WERE OPENED ON JUNE 17, 1971, REVEALING BMC SERVICES, INC., (BMC) AS THE LOW BIDDER AND YOUR CLIENT AS THE SECOND LOW BIDDER.

BY YOUR LETTER OF JUNE 22, 1971, YOU PROTESTED TO OUR OFFICE THAT BMC LACKED THE REQUISITE RESOURCES, PERSONNEL AND EXPERIENCE TO PERFORM A CONTRACT OF SUCH MAGNITUDE AND COMPLEXITY. ENCLOSED WITH YOUR LETTER WAS A COPY OF A LETTER, ALSO DATED JUNE 22, 1971, TO THE NAVAL AIR DEVELOPMENT CENTER PROTESTING THAT BMC DID NOT QUALIFY AS A SMALL BUSINESS CONCERN UNDER THE PROVISION OF THE IFB WHICH STATED THAT AWARD WOULD BE RESTRICTED TO A SMALL BUSINESS FIRM. THE LETTER REQUESTED THAT THIS SIZE PROTEST BE FORWARDED TO THE APPROPRIATE SMALL BUSINESS ADMINISTRATION REGIONAL OFFICE IN ACCORDANCE WITH ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1- 703(B)(1)(A), FOR A DETERMINATION OF BMC'S SMALL BUSINESS STATUS.

YOUR LETTER OF JULY 2, 1971, ENCLOSED COPIES OF MATERIAL TRANSMITTED TO THE NAVAL FACILITIES ENGINEERING COMMAND, WASHINGTON, D.C., BY WHICH YOU SUPPLEMENTED YOUR PROTEST OF BMC'S SIZE STATUS. INCLUDED WITHIN THE ENCLOSURE WAS A COPY OF BMC'S BALANCE SHEET AS OF DECEMBER 31, 1970, INDICATING THAT BMC HAD SUFFERED A NET DEFICIT OF $62,364.32 FOR THE YEARS ENDING DECEMBER 31, 1969 AND 1970.

YOUR LETTER OF JULY 12, 1971, ENCLOSED A COPY OF YOUR LETTER DATED JULY 12, 1971, TO THE NAVAL AIR DEVELOPMENT CENTER PROTESTING THE REJECTION, BY THE SBA REGIONAL OFFICE IN PHILADELPHIA, OF YOUR SIZE STATUS PROTEST OF JUNE 22, 1971, ON THE BASIS THAT IT WAS NOT A VALID PROTEST UNDER SBA REGULATIONS. IN VIEW OF THE REFUSAL BY THE SBA REGIONAL OFFICE TO MAKE A FORMAL DETERMINATION OF BMC'S SIZE STATUS, YOU REQUESTED THAT YOUR PROTEST ON THAT FIRM'S SIZE STATUS BE RESUBMITTED AND A FORMAL DETERMINATION RENDERED.

WE HAVE BEEN INFORMALLY ADVISED THAT ALTHOUGH YOUR SIZE PROTEST LETTER OF JUNE 22 WAS REJECTED AS NOT BEING A VALID PROTEST, BMC'S SMALL BUSINESS STATUS WAS SUBSEQUENTLY REVIEWED AND A FORMAL DETERMINATION WAS MADE BY THE SBA THAT BMC IS, IN FACT, A SMALL BUSINESS CONCERN FOR REQUIREMENTS SUCH AS THOSE SET OUT IN THE IFB. THE PROVISIONS OF 15 U.S.C. 637(B)(1)(B)(6) REQUIRE THAT SUCH DETERMINATIONS BY SBA, AS TO WHICH BUSINESS ENTERPRISES ARE TO BE DESIGNATED AS SMALL BUSINESS CONCERNS, BE ACCEPTED AS CONCLUSIVE BY THE GOVERNMENT AGENCIES HAVING PROCUREMENT POWERS.

THE NAVAL FACILITIES ENGINEERING COMMAND DETERMINED, ON JULY 30, 1971, THAT THE JANITORIAL SERVICES IN QUESTION WERE URGENTLY REQUIRED. IT WAS STATED THAT ATLANTIC, THE INCUMBENT CONTRACTOR, COULD NOT BE RETAINED AFTER EXPIRATION OF ITS CONTRACT ON JULY 31, 1971, UNTIL THIS PROTEST WAS RESOLVED BY OUR OFFICE, BECAUSE THE SERVICE PROVIDED UNDER THAT CONTRACT WAS SO INADEQUATE THAT A HEALTHFUL AND SANITARY ENVIRONMENT FOR BUILDING OCCUPANTS HAD NOT BEEN MAINTAINED. IN VIEW THEREOF, AND AS AUTHORIZED BY ASPR 2-407.8(B)(3), THE AWARD WAS MADE TO BMC PRIOR TO RESOLUTION OF YOUR PROTEST.

THE RECORD INDICATES THAT, PRIOR TO EXECUTION OF THE CONTRACT WITH BMC, THE NAVAL FACILITIES ENGINEERING COMMAND CAREFULLY CONSIDERED YOUR CONTENTION THAT BMC WAS UNQUALIFIED TO PERFORM THE SUBJECT CONTRACT. INVESTIGATION BY THE OFFICER IN CHARGE REVEALED THAT BMC HAS HAD A NUMBER OF JANITORIAL CONTRACTS BOTH WITH THE FEDERAL GOVERNMENT AND PRIVATE ACCOUNTS, AND REPORTS FROM SOURCES INVESTIGATED REVEALED SATISFACTORY PERFORMANCE OF THOSE CONTRACTS. AFTER WEIGHING ALL THE EVIDENCE, INCLUDING THE COPY OF THE BALANCE SHEET WHICH YOU SUBMITTED, THE COMMAND DETERMINED THAT BMC WAS A RESPONSIBLE FIRM UNDER THE REQUIREMENTS OF ASPR 1-903. THE ADMINISTRATIVE DETERMINATION THAT A CONTRACTOR IS CAPABLE OF PRODUCING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF FACT THAT IS ACCEPTED BY OUR OFFICE IN THE ABSENCE OF EVIDENCE CLEARLY SHOWING THAT THE DETERMINATION WAS BASED ON ERROR, FRAUD OR FAVORITISM. 46 COMP. GEN. 371 (1966).

OUR REVIEW OF THE RECORD DOES NOT ESTABLISH THAT THE AGENCY'S DETERMINATION OF BMC'S RESPONSIBILITY WAS IMPROPER. THE FACT THAT THE BALANCE SHEET FOR BMC MANIFESTS A DEFICIT FOR THE YEARS 1969 AND 1970 DOES NOT NECESSARILY NULLIFY THE COMMAND'S DETERMINATION THAT BMC POSSESSED THE REQUISITE FINANCIAL CAPABILITY TO PERFORM THE SUBJECT CONTRACT. IT IS NOTED THAT MOST OF THE DEFICIT FOR THE TWO-YEAR PERIOD WAS INCURRED DURING THE FIRST YEAR. ADDITIONALLY, THE BALANCE SHEET SHOWS A SUBSTANTIAL WORKING CAPITAL AND IT DOES NOT APPEAR THAT BMC WILL REQUIRE EXTERNAL FINANCING FOR THE PERFORMANCE OF THIS CONTRACT.

ACCORDINGLY, YOUR PROTEST IS DENIED.