B-175777, JUN 15, 1972, 51 COMP GEN 810

B-175777, JUN 15, 1972, 51 COMP GEN 810

BIDDERS - DEBARMENT - PROCEDURE - GUIDELINES ESTABLISHED IN COURT

DECISION

TO VOM BAUR, COBURN, SIMMONS & TURTLE, JUNE 15, 1972:

FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF HORNE BROTHERS, INCORPORATED, AGAINST THE AWARD OF CONTRACTS TO OTHER FIRMS UNDER NINE SOLICITATIONS, ISSUED BY THE SUPERVISOR OF SHIPBUILDING, CONVERSION AND REPAIR, UNITED STATES NAVY, PORTSMOUTH, VIRGINIA.

THE NINE SOLICITATIONS, WHICH ARE IDENTIFIED BELOW, CALLED FOR BIDS OR PROPOSALS FOR REPAIR OR CONVERSION WORK ON VARIOUS UNITED STATES NAVY SHIPS. HORNE BROTHERS' UNSOLICITED BID OR PROPOSAL UNDER EACH OF THE SOLICITATIONS WAS REJECTED BECAUSE ON DECEMBER 14, 1971, HORNE BROTHERS WAS PLACED ON THE JOINT CONSOLIDATED LIST OF DEBARRED, INELIGIBLE, OR SUSPENDED CONTRACTORS, IN A SUSPENDED STATUS, AND IT WAS NOT CONSIDERED IN THE BEST INTEREST OF THE GOVERNMENT TO CONSIDER ITS OFFERS.

IN ITS REPORT DATED MAY 17, 1972, THE NAVY HAS FURNISHED THE FOLLOWING RESUME OF THE NINE SOLICITATIONS:

(B) RFP N62678-72-R-0261. THIS RFP WAS ISSUED FOR WORK ON THE USS RIGEL (AF-58) DURING A RESTRICTED AVAILABILITY FROM 15 MARCH 1972 UNTIL 31 MARCH 1972 (ENCLOSURE (1), TAB A). BY LETTER DATED 13 MARCH 1972, THE CONTRACTING OFFICER CANCELLED THIS RFP FOR THE CONVENIENCE OF THE GOVERNMENT (ENCLOSURE (1), TAB B).

(C) RFP N62678-72-R-0273. THIS RFP ALSO CONCERNED WORK ON THE USS RIGEL (AF-58) DURING A RESTRICTED AVAILABILITY, THIS TIME FROM 11 MARCH 1972 UNTIL 2 APRIL 1972 (ENCLOSURE (2), TAB A). JOB ORDER NO. 334/72 DATED 11 MARCH 1972 WAS AWARDED TO R. R. ALLEN, INC., NORFOLK, VIRGINIA (ENCLOSURE (2), TAB C), AND THE WORK THEREUNDER WAS 100% COMPLETE ON 21 APRIL 1972 (ENCLOSURE (10)). PROTESTANT'S UNSOLICITED PROPOSALS UNDER THIS RFP, AND THE ONE DESCRIBED IN (B) ABOVE, WERE REJECTED BY LETTER DATED 10 MARCH 1972 ON THE GROUNDS OF THE ABOVE-DISCUSSED SUSPENSION ACTION (ENCLOSURE (2), TAB D).

(D) RFP N62678-72-R-0303. THIS RFP CONCERNED WORK ON THE USS COLUMBUS (CG-12) DURING A RESTRICTED AVAILABILITY FROM 1 APRIL 1972 UNTIL 15 APRIL 1972 (ENCLOSURE (3), TAB A). JOB ORDER NO. 355/72 DATED 30 MARCH 1972 WAS AWARDED TO ASSOCIATED NAVAL ARCHITECTS, INC., PORTSMOUTH, VIRGINIA (ENCLOSURE (3), TAB C), AND THE WORK THEREUNDER WAS 100% COMPLETE ON 18 APRIL 1972 (ENCLOSURE (10)). PROTESTANT'S UNSOLICITED PROPOSAL WAS REJECTED BY LETTER DATED 30 MARCH 1972 ON THE GROUND OF THE ABOVE- DISCUSSED SUSPENSION ACTION (ENCLOSURE (3), TAB D).

(E) RFP N62678-72-R-0277. THIS RFP CONCERNED WORK ON THE USS SAN DIEGO (AFS-6) DURING A RESTRICTED AVAILABILITY FROM 4 APRIL 1972 UNTIL 1 MAY 1972 (ENCLOSURE (4), TAB A). JOB ORDER NO. 360/72 DATED 30 MARCH 1972 WAS AWARDED TO MOON ENGINEERING COMPANY, INC., NORFOLK, VIRGINIA (ENCLOSURE (4), TAB C), AND AS OF 10 MAY 1972, THE WORK THEREUNDER WAS 90% COMPLETE (ENCLOSURE (10)). PROTESTANT'S UNSOLICITED PROPOSAL WAS REJECTED BY LETTER DATED 30 MARCH 1972 BASED ON THE GROUND OF THE ABOVE DISCUSSED SUSPENSION ACTION (ENCLOSURE (4), TAB D).

(F) RFP N62678-72-R-0301. THIS RFP CONCERNED WORK ON THE USS NEWPORT (LST-1179) DURING A RESTRICTED AVAILABILITY FROM 23 MARCH 1972 UNTIL 9 MAY 1972 (ENCLOSURE (5), TAB A). JOB ORDER NO. 348/72 DATED 23 MARCH 1972 WAS AWARDED TO NORFOLK SHIPBUILDING AND DRYDOCK CORPORATION, NORFOLK, VIRGINIA (ENCLOSURE (5), TAB C), AND THE WORK THEREUNDER WAS 88% COMPLETE AS OF 10 MAY 1972 (ENCLOSURE 10)). PROTESTANT'S UNSOLICITED PROPOSAL WAS REJECTED BY LETTER DATED 24 MARCH 1972 ON THE GROUND OF THE ABOVE-DISCUSSED SUSPENSION ACTION (ENCLOSURE (5), TAB D).

(G) IFB N62678-72-B-0069. THIS IFB CONCERNED WORK ON THE USS INDEPENDENCE (CVA-62) DURING A RESTRICTED AVAILABILITY FROM 23 MARCH 1972 UNTIL 10 APRIL 1972 (ENCLOSURE (6), TAB A). JOB ORDER NO. 346/72 DATED 22 MARCH 1972 WAS AWARDED TO ASSOCIATED NAVAL ARCHITECTS (ENCLOSURE (6,TAB C), AND THE WORK THEREUNDER WAS 100% COMPLETE ON 10 APRIL 1972 (ENCLOSURE (10)). PROTESTANT'S UNSOLICITED BID WAS REJECTED BY LETTER DATED 22 MARCH 1972 ON THE GROUND OF THE ABOVE-DISCUSSED SUSPENSION ACTION (ENCLOSURE (6), TAB D).

(H) IFB N62678-72-B-0070. THIS IFB CONCERNED WORK ON THE USS CORONADO (LPD-11) DURING A RESTRICTED AVAILABILITY FROM 3 APRIL 1972 UNTIL 4 MAY 1972 (ENCLOSURE (7), TAB A). JOB ORDER NO. 358/72 DATED 30 MARCH 1972 WAS AWARDED TO NORFOLK SHIPBUILDING (ENCLOSURE (7), TAB C), AND THE WORK THEREUNDER WAS 90% COMPLETE AS OF 10 MAY 1972 (ENCLOSURE (10)). PROTESTANT'S UNSOLICITED BID WAS REJECTED BY LETTER DATED 28 MARCH 1972 ON THE GROUND OF THE ABOVE-DISCUSSED SUSPENSION ACTION (ENCLOSURE (7), TAB D).

(I) IFB N62678-72-B-0071. THIS IFB CONCERNED WORK ON THE USS RICH (DD- 820) DURING A SPLIT AVAILABILITY FROM 31 MARCH 1972 UNTIL 9 APRIL 1972 AND FROM 3 MAY 1972 UNTIL 14 MAY 1972 (ENCLOSURE (8), TAB A). JOB ORDER NO. 349/72 DATED 23 MARCH 1972 WAS AWARDED TO ASSOCIATED NAVAL ARCHITECTS (ENCLOSURE (8), TAB C), AND THE WORK THEREUNDER WAS 84% COMPLETE AS OF 10 MAY 1972 (ENCLOSURE (10)). PROTESTANT'S UNSOLICITED BID WAS REJECTED BY LETTER DATED 24 MARCH 1972 ON THE GROUND OF THE ABOVE-DISCUSSED SUSPENSION ACTION (ENCLOSURE (8), TAB D).

(J) RFP N62678-72-R-0241. THIS RFP CONCERNED WORK ON THE USS DE SOTO COUNTY (LST-1171) DURING A RESTRICTED AVAILABILITY FROM 24 JANUARY 1972 UNTIL 25 MARCH 1972 (ENCLOSURE (9), TAB A). JOB ORDER NO. 279/72 DATED 24 JANUARY 1972 WAS AWARDED TO MOON ENGINEERING COMPANY, NORFOLK, VIRGINIA, (ENCLOSURE (9), TAB C), AND THE WORK THEREUNDER WAS 100% COMPLETE ON 7 APRIL 1972 (ENCLOSURE (10)). IT IS INTERESTING TO NOTE THAT ON THE ABSTRACT OF BIDS UNDER THIS RFP, PROTESTANT'S PROPOSAL WAS SOME $37,381.84 HIGHER THAN THE PROPOSAL OF MOON ENGINEERING (ENCLOSURE (9), TAB B), AND THUS, EVEN IF THIS PROPOSAL HAD NOT BEEN REJECTED BY LETTER DATED 24 JANUARY 1972 BASED ON THE ABOVE-DISCUSSED SUSPENSION ACTION (ENCLOSURE (9), TAB D), IT WOULD NOT HAVE BEEN THE LOW PROPOSAL AND COULD NOT HAVE FORMED THE BASIS FOR AN AWARD.

YOUR PROTEST ON BEHALF OF HORNE IS BASED PRIMARILY UPON TWO CONTENTIONS. FIRST, YOU CONTEND THAT REJECTION OF HORNE'S BIDS AND PROPOSALS WITHOUT A WRITTEN DETERMINATION OF NONRESPONSIBILITY PURSUANT TO PARAGRAPH 1- 904.1(IV) OF THE ARMED SERVICES PROCUREMENT REGULATION, INCLUDING REFERRAL TO THE SMALL BUSINESS ADMINISTRATION FOR REVIEW OF A NEGATIVE DETERMINATION PURSUANT TO ASPR 1-705.4(C)(VI), WAS INVALID. SECOND, YOU CONTEND THAT THE DETERMINATION THAT HORNE LACKS THE NECESSARY INTEGRITY TO BE A GOVERNMENT CONTRACTOR WAS BASED UPON A REGULATION WHICH IS INVALID UNDER APPLICABLE STATUTE AND THE UNITED STATES CONSTITUTION. YOU ARGUE THAT ASPR 1-605, WHICH PROVIDES FOR SUSPENSION OF CONTRACTORS UNDER STATED CIRCUMSTANCES, IS INVALID IN THAT IT FAILS TO PROVIDE FOR NOTICE OR HEARING ON THE CHANGES UPON WHICH THE SUSPENSION IS BASED IN VIOLATION OF THE DUE PROCESS REQUIREMENTS OF THE FIFTH AMENDMENT TO THE CONSTITUTION.

IT IS THE NAVY'S POSITION THAT THE SITUATION WITH RESPECT TO THE SUBJECT SOLICITATIONS IS ANALOGOUS TO THAT INVOLVING HORNE BROTHERS REPORTED IN 51 COMP. GEN. *** , (1972), AND THE RATIONALE EXPRESSED THEREIN IS DISPOSITIVE OF THE INSTANT PROTESTS. IN ADDITION, THE NAVY POINTS OUT THAT AS OF THE DATE OF THE PROTEST ONE OF THE SUBJECT SOLICITATIONS WAS CANCELED, THE WORK UNDER FOUR WAS COMPLETED, AND AS OF MAY 10, 1972, THE WORK UNDER THE REMAINING FOUR SOLICITATIONS WAS SUBSTANTIALLY (84 TO 90 PERCENT) COMPLETE.

THE EARLIER DECISION REFERRED TO IN THE PRECEDING PARAGRAPH INVOLVED REJECTION OF HORNE'S LOW BID FOR OVERHAUL OF THE U.S.S. FRANCIS MARION BECAUSE ON DECEMBER 14, 1971, IT HAD BEEN PLACED ON THE JOINT CONSOLIDATED LIST OF DEBARRED, INELIGIBLE, AND SUSPENDED CONTRACTORS, IN A SUSPENDED STATUS, AND IT WAS NOT DETERMINED TO BE IN THE GOVERNMENT'S BEST INTEREST TO CONSIDER ITS BID. IN DENYING HORNE'S PROTEST BASED UPON ESSENTIALLY THE SAME CONTENTIONS AS INVOLVED HERE, WE STATED THE FOLLOWING:

SECTION 1-605.1 OF ASPR PROVIDES THAT AN AGENCY MAY, IN THE INTEREST OF THE GOVERNMENT, SUSPEND A FIRM OR INDIVIDUAL SUSPECTED, UPON ADEQUATE EVIDENCE, OF COMMISSION OF SPECIFIED CRIMES, INCLUDING BRIBERY, OR ANY OTHER OFFENSE INDICATING A LACK OF BUSINESS INTEGRITY OR BUSINESS HONESTY, WHICH SERIOUSLY AND DIRECTLY AFFECTS THE QUESTION OF PRESENT RESPONSIBILITY AS A GOVERNMENT CONTRACTOR. WITH REGARD TO THE PERIOD OF SUSPENSION, ASPR 1-605.2(A) PROVIDES THAT ALL SUSPENSIONS ARE FOR A TEMPORARY PERIOD PENDING COMPLETION OF INVESTIGATION AND SUCH LEGAL PROCEEDINGS AS MAY ENSUE. IT ALSO PROVIDES FOR A LIMIT ON THE PERIOD OF SUSPENSION IN THE EVENT PROSECUTIVE ACTION IS NOT COMMENCED WITHIN A MAXIMUM OF 18 MONTHS.

WHILE IT IS TRUE, AS YOU CONTEND, THAT THE PROCEDURES LACK CERTAIN ELEMENTS WHICH MAY BE CONSIDERED NECESSARY BY A COURT IN ORDER TO AFFORD DUE PROCESS IN THE MORE SEVERE DEBARMENT ACTION, WHICH WAS INVOLVED IN THE GONZALEZ CASE, SUPRA, AS A GENERAL RULE, TEMPORARY OR LIMITED SUSPENSION FOR A REASONABLE TIME BY WAY OF SUCH SUMMARY ACTION AS PROVIDED FOR IN THIS REGULATION DOES NOT OF ITSELF RESULT IN A DENIAL OF DUE PROCESS. SEE GONZALEZ V. FREEMAN, 334 F.2D 570, 579, (1964); OPP COTTON MILLS V. ADMINISTRATOR, 312 U.S. 126 152-153, (1941), AND R. A. HOLIMAN & CO. V. SECURITIES AND EXCHANGE COMMISSION, 299 F.2D 127, 131-133, CERT. DENIED, 370 U.S. 911 (1962). WE NOTE THAT CERTAIN SAFEGUARDS ARE INCLUDED IN THE REGULATION. FOR EXAMPLE, SUSPENSION MUST BE BASED UPON ADEQUATE EVIDENCE, NOT MERE ACCUSATION; IN ASSESSING THE ADEQUACY OF THE EVIDENCE, CONSIDERATION MUST BE GIVEN TO HOW MUCH CREDIBLE INFORMATION IS AVAILABLE, ITS REASONABLENESS IN VIEW OF SURROUNDING CIRCUMSTANCES, CORROBORATION OR LACK THEREOF, AND INFERENCES WHICH MAY BE DRAWN FROM THE EXISTENCE OR ABSENCE OF AFFIRMATIVE FACTS; AND THE ASSESSMENT OF THE EVIDENCE INCLUDES AN EXAMINATION OF BASIC DOCUMENTS, SUCH AS CONTRACTS, INSPECTION REPORTS, AND CORRESPONDENCE. MOREOVER, THE REGULATION PROVIDES THAT THE SUSPENSION MAY BE MODIFIED AND CONTRACTS MAY BE AWARDED IF IT IS DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT. IN VIEW OF THE FOREGOING, AND SINCE THE MATTER IS PRESENTLY BEFORE THE COURTS, WE DO NOT BELIEVE IT PROPER FOR OUR OFFICE TO QUESTION THE VALIDITY OF THE REGULATION.

ALTHOUGH THE NOTICE OF SUSPENSION DID NOT ALLEGE COMMISSION OF ONE OF THE SPECIFIC CRIMINAL ACTS NAMED IN THE REGULATION, IT STATED THAT THE SUSPECTED GRATUITIES AND FAVORS WERE CONSIDERED INDUCEMENTS OR IRREGULARITIES INDICATING A "LACK OF BUSINESS INTEGRITY." IN THIS REGARD, THE REGULATION PROVIDES FOR SUSPENSION NOT ONLY WHERE COMMISSION OF A SPECIFIC CRIME IS SUSPECTED, BUT OF "ANY OTHER OFFENSE INDICATING A LACK OF BUSINESS INTEGRITY OR BUSINESS HONESTY." WE DO NOT BELIEVE IT IS NECESSARY TO DECIDE AT THIS TIME WHETHER THE WORD "OFFENSE" SHOULD BE READ TO MEAN "CRIMINAL OFFENSE." SUFFICE IT TO SAY THAT THE EVIDENCE UPON WHICH THE SUSPENSION WAS BASED WAS ALSO THE BASIS FOR CONVENING THE SPECIAL GRAND JURY TO CONTINUE THE INVESTIGATION RESULTING ON APRIL 24, 1972, IN A 21-COUNT CRIMINAL INDICTMENT. INCLUDED IN THE INDICTMENT ARE CHARGES THAT NAVY INSPECTORS WERE BRIBED WITH "TANKS OF GASOLINE, LIQUOR AND OTHER THINGS OF VALUE." THE INDICTMENT APPEARS SUFFICIENT TO ESTABLISH THAT THERE WAS ADEQUATE EVIDENCE OF CRIMINAL OFFENSES TO SATISFY THE STANDARDS OF THE REGULATION.

FURTHERMORE, IT IS OUR VIEW THAT REJECTION OF HORNE'S BID WITHOUT MAKING A DETERMINATION OF NONRESPONSIBILITY PURSUANT TO ASPR SECTION I, PART 9, WAS A PROPER ACTION. ASPR 1-605 PROVIDES THAT PLACING AN INDIVIDUAL OR FIRM ON THE CONSOLIDATED LIST IS FOR THE PURPOSE OF PROTECTING THE INTEREST OF THE GOVERNMENT AND NOT FOR THE PURPOSE OF PUNISHMENT. PROTECT THE INTEREST OF THE GOVERNMENT, ASPR 1-603(A) PROVIDES:

"TYPE D INCLUDES CONCERNS WHICH HAVE BEEN SUSPENDED UNDER THE CONDITIONS SET FORTH IN 1-605. CONCERNS UNDER TYPE D LISTINGS SHALL NOT BE AWARDED CONTRACTS OR SOLICITED FOR BIDS OR PROPOSALS, EXCEPT WHERE THE SECRETARY CONCERNED OR HIS AUTHORIZED REPRESENTATIVE DETERMINES IT TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO MAKE AN EXCEPTION FOR A PARTICULAR PROCUREMENT OR WHERE THE LISTING INDICATES THAT THE SUSPENSION DOES NOT APPLY TO SALES CONTRACTS OR TO PROCUREMENT CONTRACTS."

ALSO, SECTION 1-605.3(III) PROVIDES FOR THE NOTICE OF SUSPENSION TO CONTAIN LANGUAGE TO THE SAME EFFECT. BY CLEAR TERMS THE REGULATION PROHIBITS THE AWARD OF A CONTRACT TO A SUSPENDED INDIVIDUAL OR FIRM EXCEPT IN THE ONE SITUATION WHERE THE SECRETARY CONCERNED OR HIS DESIGNEE DETERMINES IT TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO MAKE AN EXCEPTION FOR A PARTICULAR PROCUREMENT. IN THESE CIRCUMSTANCES, TO REQUIRE A WRITTEN DETERMINATION OF NONRESPONSIBILITY PURSUANT TO APPLICABLE REGULATIONS WOULD SERVE NO USEFUL PURPOSE.

AT THE TIME OF OUR EARLIER DECISION, LITIGATION WAS PENDING IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA (CIVIL ACTION NO. 289- 72). ON APRIL 13, 1972, THE DISTRICT COURT GRANTED HORNE'S MOTION FOR A PRELIMINARY INJUNCTION, ORDERING CESSATION OF PERFORMANCE OF THE WORK BY ANOTHER CONTRACTOR PENDING A DECISION BY OUR OFFICE. ON MAY 17, 1972, UPON THE GOVERNMENT'S MOTION FOR STAY PENDING APPEAL BEFORE THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA (CIVIL ACTION NO. 72- 1392), THE COURT FOUND THAT HORNE WAS NOT LIKELY TO PREVAIL ON THE MERITS AND REVERSED THE DISTRICT COURT'S ORDER. HOWEVER, THE COURT OF APPEALS NOTED THAT THERE ARE "SERIOUS AND FUNDAMENTAL QUESTIONS REGARDING THE FAIRNESS OF PROCEDURES UTILIZED BY THE GOVERNMENT IN SUSPENDING CONTRACTORS." IN THIS CONNECTION, THE COURT STATED THAT WHILE A TEMPORARY SUSPENSION NOT TO EXCEED 1 MONTH WITHOUT AN OPPORTUNITY FOR A HEARING MAY BE ACCEPTABLE, THE PROTRACTED SUMMARY SUSPENSION PERMISSIBLE UNDER ASPR 1- 605 COULD NOT BE SUSTAINED. THE COURT NOTED, HOWEVER, THAT THERE ARE CIRCUMSTANCES WHERE THE GOVERNMENT NEED NOT AFFORD THE CONTRACTOR A HEARING WITHIN 1 MONTH OF THE SUSPENSION, CITING AS AN EXAMPLE, THE SITUATION WHERE SUCH A PROCEEDING MAY PREJUDICE AN ACTION BY PREMATURELY "TIPPING" THE GOVERNMENT'S ENTIRE CASE. NEVERTHELESS, THE COURT INDICATED THAT IT MAY NOT CONDONE THE FAILURE TO AFFORD A HEARING EVEN IN THAT SITUATION SINCE THE "ADEQUATE EVIDENCE" SHOWING NEEDED TO SUSTAIN A SUSPENSION WOULD NOT NECESSARILY HAVE THE LATTER RESULT SINCE IT REQUIRES SOMETHING LESS THAN THE EVIDENCE NEEDED IN A SUCCESSFUL CRIMINAL PROSECUTION.

HOWEVER, THE COURT MADE THE FOLLOWING OBSERVATION:

THERE MAY BE CIRCUMSTANCES WHERE SUBSTANTIAL GOVERNMENT INTERESTS WOULD BE PREJUDICED EVEN BY A DISCLOSURE OF ENOUGH FACTS TO SHOW "ADEQUATE EVIDENCE" FOR THE SUSPENSION. IN THAT EVENT, HOWEVER, THE GOVERNMENT MAY NOT SIMPLY IGNORE THE INTERESTS OF THE CONTRACTOR. RATHER, AN APPROPRIATE OFFICIAL OF THE GOVERNMENT, ONE VESTED WITH SUFFICIENT DISCRETIONARY POWER, MUST MAKE A FORMAL DETERMINATION THAT SIGNIFICANT INJURY WOULD RESULT IF A HEARING WERE TO BE HELD. THE CONTRACTOR'S PROTECTION WOULD LIE IN A DELIBERATED DETERMINATION BY AN OFFICIAL WITH DISCRETION, AND HE WOULD NOT BE CONSIGNED TO THE JUGGERNAUT OF RULES AS THEY NOW STAND, WHICH DO NOT EVEN MAKE ROOM FOR THE POSSIBILITY OF A LEGITIMATE INTEREST IN AN OPPORTUNITY FOR THE CONTRACTOR TO BE HEARD. MOREOVER, THERE REMAINS THE POSSIBILITY OF A COURT ACTION CHALLENGING AS ARBITRARY THE DETERMINATION TO DENY THE PROCEEDING. A COURT CONCERNED WITH A REAL POSSIBILITY OF ABUSE OF DISCRETION - I.E., OF A SUSPENSION MADE WITHOUT "ADEQUATE EVIDENCE" AGAINST THE CONTRACTOR - WOULD HAVE LATITUDE TO CONSIDER THE PROBLEM WITHOUT COURTING INJURY TO THE GOVERNMENT'S LEGITIMATE INTERESTS, BY INSPECTION IN CAMERA OF AT LEAST SOME OF THE EVIDENCE HELD BY THE GOVERNMENT.

THE COURT OF APPEALS HAS NOW SPOKEN ON THE QUESTION OF THE VALIDITY OF A SUSPENSION PURSUANT TO ASPR 1-605. HOWEVER, THE COURT'S RULING CAME AFTER REJECTION OF HORNE'S BIDS AND PROPOSALS BECAUSE OF ITS SUSPENDED STATUS, THE AWARDS UNDER THE SUBJECT SOLICITATIONS, AND COMPLETION OF MOST, IF NOT ALL, OF THE WORK UNDER THE CONTRACTS. IN THE CIRCUMSTANCES, WE FIND NO BASIS FOR REMEDIAL ACTION WITH RESPECT TO THE PROTESTED PROCUREMENTS. HOWEVER, IT IS OUR VIEW THAT THE VALIDITY OF HORNE'S CONTINUED SUSPENSION AND REJECTION OF ITS BIDS OR PROPOSALS WILL DEPEND UPON CONFORMANCE WITH THE GUIDELINES ESTABLISHED IN THE COURT'S DECISION AND WE ARE SO ADVISING THE SECRETARY OF THE NAVY. IN THIS CONNECTION, IT SHOULD BE NOTED THAT THE COURT SPECIFICALLY STATED IN FOOTNOTE 8 THAT IT WAS NOT DISCUSSING THE RIGHTS OF SUSPENDED CONTRACTORS IN THE USUAL POST INDICTMENT SITUATION, WHICH IS NOW HORNE'S SITUATION.

ACCORDINGLY, HORNE'S PROTEST IS DENIED.