B-176682, DEC 4, 1972

B-176682, DEC 4, 1972

BID PROTEST - BIDDER RESPONSIBILITY DECISION DENYING THE PROTEST OF WASTE CONTROL OF FLORIDA, INC., AGAINST THE AWARD OF A CONTRACT TO STANDARD REFUSE, INC., UNDER AN IFB ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND, NAS, JACKSONVILLE, FLA. THE DETERMINATIONS AS TO THE QUALIFICATION OR RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR ARE PRIMARILY FOR RESOLUTION BY THE PROCURING AGENCY, AND ABSENT A SHOWING OF BAD FAITH OR LACK OF REASONABLENESS, GAO WILL NOT QUESTION SUCH DETERMINATIONS. SEE 49 COMP. GEN. 553 (1970). IN THIS INSTANCE, GAO WILL NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF THE PROCURING AGENCY SINCE THE MERE FACT THAT A CORPORATE CONTRACTOR IS NEWLY FORMED SHOULD NOT DETRACT FROM ITS RESPONSIBILITY, SEE 45 COMP. GEN. 4, 7 (1965), NOR IS THE FILING OF CRIMINAL INFORMATION AGAINST EVEN A PRIME CONTRACTOR SUFFICIENT TO WARRANT AN ADVERSE FINDING, SEE 48 COMP. GEN. 769, 772-73 (1969), ESPECIALLY SINCE THE CONTRACTOR HEREIN HAS COMPLIED WITH ALL OF THE CONTRACT REQUIREMENTS THUS FAR.

TO MILAM, MARTIN & ADE:

REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 13, 1972, AND PRIOR CORRESPONDENCE, ON BEHALF OF WASTE CONTROL OF FLORIDA, INC., PROTESTING AGAINST THE AWARD OF A CONTRACT TO STANDARD REFUSE, INC., THE LOW BIDDER, UNDER INVITATION FOR BIDS NO. N62467-72-B-5987, ISSUED BY THE NAVAL FACILITIES ENGINEERING COMMAND, NAVAL AIR STATION, JACKSONVILLE, FLORIDA, FOR GARBAGE, REFUSE AND TRASH COLLECTION AND DISPOSAL.

THE SOLE BASIS FOR THE PROTEST CONCERNS YOUR CONTENTION THAT STANDARD REFUSE DID NOT AND DOES NOT POSSESS THE ABILITY OR CAPABILITY TO PERFORM THE CONTRACT AND, THEREFORE, THE FIRM IS NOT A RESPONSIBLE CONTRACTOR UNDER THE STANDARDS OF RESPONSIBILITY SET OUT IN PARAGRAPH 1 900, ET SEQ., OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR).

IN THIS REGARD, YOU STATE THAT THE NAVY HAS ARBITRARILY AND CAPRICIOUSLY REFUSED TO CONDUCT A THOROUGH INVESTIGATION INTO THE RESPONSIBILITY OF STANDARD REFUSE AND HAS EITHER WILLFULLY OR NEGLIGENTLY IGNORED FACTS CLEARLY SHOWING THAT THE FIRM IS NONRESPONSIBLE. YOUR ALLEGATIONS IN SUPPORT OF THE NONRESPONSIBILITY OF STANDARD REFUSE CAN BE SUMMARIZED AS FOLLOWS: (1) INCORPORATION OF THE FIRM ONLY 5 DAYS BEFORE BID OPENING PRECLUDES POSSESSION OF A REQUISITE SATISFACTORY RECORD OF PERFORMANCE; (2) THE FIRM'S FINANCIAL RESOURCES ARE INADEQUATE; (3) FAILURE OF THE FIRM TO HAVE ACCESS TO AN APPROVED DISPOSAL AREA 24 HOURS A DAY AS REQUIRED; (4) FAILURE OF THE FIRM TO HAVE THE REQUISITE INTEGRITY SINCE THE PRESIDENT OF ITS PRIME SUBCONTRACTOR IS PRESENTLY UNDER INDICTMENT, CITING ASPR 1-605.3(I); (5) NO COMMITMENT TO DEMONSTRATE ABILITY OF THE FIRM TO OBTAIN THE CONTAINERS NECESSARY TO SERVICE THE CONTRACT; AND (6) THE FIRM HAS MADE A MAJOR INVESTMENT IN A WHOLLY OWNED SUBSIDIARY WHICH HAS CONTRACTED FOR SUBSTANTIALLY SIMILAR SERVICES AND THIS, COUPLED WITH A WEAK FINANCIAL POSITION, RAISES A QUESTION AS TO THE FINANCIAL AND MANAGERIAL STRENGTH AND CAPABILITY OF THE FIRM.

A BIDDER WHO PROTESTS ON THE BASIS OF THE ALLEGED NONRESPONSIBILITY OF A LOWER BIDDER COMES TO OUR OFFICE WITH A HEAVY BURDEN OF PROOF. OUR OFFICE HAS CONSISTENTLY TAKEN THE POSITION THAT DETERMINATIONS AS TO THE QUALIFICATION OR RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR ARE PRIMARILY FOR RESOLUTION BY THE PROCURING AGENCIES OF THE GOVERNMENT. THIS IS SO BECAUSE, INTER ALIA, IT IS THE PROCURING AGENCIES WHICH MUST NECESSARILY BEAR THE BRUNT OF LATE DELIVERIES, DEFAULTS OR OTHER UNSATISFACTORY PERFORMANCES RESULTING FROM AWARDS TO NONRESPONSIBLE CONTRACTORS. SUCH BEING THE CASE, ABSENT A SHOWING OF BAD FAITH OR LACK OF ANY REASONABLE BASIS FOR THE DETERMINATION OF RESPONSIBILITY, WE WILL NOT INTERFERE WITH THAT TYPE OF DETERMINATION. SEE B-176318, SEPTEMBER 29, 1972; AND 49 COMP. GEN. 553, 557-558 (1970).

WE HAVE REVIEWED THE DEPARTMENT OF THE NAVY REPORTS TO OUR OFFICE ON THE PROTEST WHICH HAVE PREVIOUSLY BEEN FURNISHED TO YOU. TAKING THE ABOVE STANDARDS INTO ACCOUNT, WE DO NOT FIND THAT THE NAVY EXERCISED BAD FAITH OR DISPLAYED A LACK OF REASON IN MAKING ITS DETERMINATION THAT STANDARD REFUSE WAS AND IS A RESPONSIBLE CONTRACTOR. WHILE THE NAVY MAY OR MAY NOT HAVE CONDUCTED AS THOROUGH AN INVESTIGATION AS YOU WOULD HAVE FELT NECESSARY, THAT DOES NOT DETRACT FROM OUR CONCLUSION THAT THE INVESTIGATION ACTUALLY CONDUCTED BY THE NAVY PROVIDED ADEQUATE SUPPORT FOR A DETERMINATION OF RESPONSIBILITY. MOREOVER, STANDARD REFUSE HAS ADVISED OUR OFFICE THAT IT COMMENCED PERFORMANCE OF THE CONTRACT ON SCHEDULE, IS PERFORMING IN FULL COMPLIANCE, AND HAS COMPLETED ALL PERFORMANCE BOND AND INSURANCE REQUIREMENTS. ON OCTOBER 5, 1972, A REPRESENTATIVE OF THE DEPARTMENT OF THE NAVY ADVISED OUR OFFICE THAT ITS PREAWARD RESPONSIBILITY SURVEY TOOK YOUR ALLEGATIONS INTO ACCOUNT AND VERIFIED THE INFORMATION SUPPLIED BY STANDARD REFUSE.

AS FOR YOUR FIRST ALLEGATION OF NONRESPONSIBILITY, OUR OFFICE HAS HELD THAT THE MERE FACT THAT A CORPORATION BIDDING ON A GOVERNMENT CONTRACT IS NEWLY FORMED SHOULD NOT DETRACT FROM THE RESPONSIBILITY OF THE CORPORATION WHERE ITS MANAGEMENT WAS EXPERIENCED IN SIMILAR PROJECTS, WHICH IS THE CASE HERE. SEE 45 COMP. GEN. 4, 7 (1965); AND 38 ID. 572 (1959), AND CASES CITED THEREIN. ALLEGATION (4) IS WITHOUT MERIT SINCE WE HAVE STATED THAT THE FILING OF CRIMINAL INFORMATION AGAINST EVEN A PRIME CONTRACTOR IS NOT SUFFICIENT TO WARRANT AN ADVERSE RESPONSIBILITY DETERMINATION. SEE 48 COMP. GEN. 769, 772-773 (1969), AND CASES CITED THEREIN; AND ASPR 1- 605.1(I)(C), WHICH APPEARS TO REQUIRE A CRIMINAL CONVICTION BEFORE RESPONSIBILITY WILL BE AFFECTED. WITH RESPECT TO ALLEGATIONS (3) AND (5), THE RECORD FURNISHED BY THE DEPARTMENT OF THE NAVY PROVES THE CONTRARY TO BE TRUE. IN CONCLUSION, CONCERNING ALLEGATIONS (2) AND (6), AFTER REVIEWING THE RECORD, WE BELIEVE THAT WE SHOULD NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF COGNIZANT OFFICIALS OF THE PROCURING AGENCY RESPONSIBLE FOR THE ADMINISTRATION OF THE CONTRACT.

FOR ALL OF THE FOREGOING REASONS, THE PROTEST OF WASTE CONTROL OF FLORIDA, INC., IS DENIED.