B-176715, NOV 10, 1972

B-176715, NOV 10, 1972

BID PROTEST - BIDDER RESPONSIBILITY DECISION DENYING THE PROTEST OF ATLANTIC NAVIGATION COMPANY, LTD., AGAINST REJECTION OF ITS BID BECAUSE IT WAS FOUND NOT TO BE A RESPONSIBLE BIDDER UNDER AN IFB ISSUED BY THE DEPARTMENT OF THE ARMY FOR TWO DIESEL DRIVEN GENERATOR SETS. WHETHER A BIDDER IS TO BE CONSIDERED RESPONSIBLE FOR A PARTICULAR PROCUREMENT IS A QUESTION OF FACT AND, ABSENT EVIDENCE THAT THE DETERMINATION OF A BIDDER'S CAPABILITIES WAS BASED ON ERROR, FRAUD, OR FAVORITISM, GAO WILL ACCEPT THE FINDINGS OF THE CONTRACTING AGENCY. COMP. 371 (1966). IN THIS CASE THE FINDING WAS ADEQUATELY SUPPORTED DUE TO THE LACK OF INFORMATION CONCERNING THE PROTESTANT'S FINANCIAL CAPACITY.

TO ATLANTIC NAVIGATION COMPANY, LTD.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 6, 1972, CONCERNING YOUR PROTEST UNDER INVITATION FOR BIDS NO. DACW51-72-B-0043, ISSUED BY THE DEPARTMENT OF THE ARMY ON APRIL 28, 1972, FOR TWO DIESEL DRIVEN GENERATOR SETS.

WHEN BIDS WERE OPENED ON MAY 10, 1972, IT WAS NOTED THAT YOU HAD SUBMITTED THE LOWEST BID FOR THE REQUIREMENT. ON MAY 11, 1972, THE CONTRACTING OFFICER REQUESTED THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR), NEW YORK, TO MAKE A PREAWARD SURVEY ON YOUR COMPANY TO DETERMINE IF YOU MET THE STANDARDS OF RESPONSIBILITY FOR PROSPECTIVE CONTRACTORS. THE DCASR REPORT ON THE SURVEY OF YOUR CONCERN RECOMMENDED THAT NO AWARD SHOULD BE MADE TO YOU FOR THE REQUIREMENT BECAUSE OF UNACCEPTABLE RATINGS FOR YOUR TECHNICAL, FINANCIAL, AND PRODUCTION CAPABILITIES, PLANT FACILITIES AND EQUIPMENT, PURCHASING AND SUBCONTRACTING, AND LABOR RESOURCE. IN THIS REGARD, THE REPORT NOTED THAT YOU DID NOT HAVE FIRM, WRITTEN COMMITMENTS FROM THE MANUFACTURERS WITH WHOM YOU PROPOSED TO OBTAIN THE ITEMS, AS FOLLOWS:

"PRODUCTION CAPABILITY: UNSATISFACTORY. BIDDER PROPOSES TO BUY ENGINE AND GENERATOR SETS FROM RELIABLE MANUFACTURERS, BUT HAD NO WRITTEN CONFIRMATION RE AVAILABILITY OR TIMELY DELIVERY.

"PLANT FACILITIES & EQUIPMENT: UNSATISFACTORY. BIDDER DESIGNATED H. O. PENN CO., FARMINGDALE, NY, AS ASSEMBLY, INSPECTION, TESTING AND SHIPPING POINT FOR IFB REQUIREMENTS. BUT THERE WAS NO WRITTEN CONFIRMATION THAT FOREGOING WOULD BE DONE PER IFB SPECS.

"PURCHASING & SUBCONTRACTING: UNSATISFACTORY. BIDDER INDICATED HE PLANNED TO BUY ENGINES FROM JOHNSON & TOWERS, BALTO, MD., STANDARD GENERAL MOTORS MODEL 2-53, AND GENERATORS FROM KATO GENERATOR & SWITCHGEAR CO., MANKATO, ILL., THROUGH AREA DISTRIBUTOR GEORGE GREER TECHNICAL SALES, SEAFORD, LI. BUT HE WAS NOT DEFINITIVE ABOUT AVAILABILITY OF CONFIRMATION FROM H. O. PENN RE INSPECTION AND TESTING, INDICATING POOR PLANNING FOR QUALITY PORTION OF BID. IN THE ABSENCE OF CONCRETE EVIDENCE RE BID FACTORS, FIRM QUOTATIONS FROM PLANNED SOURCES, AND DEFINITIVE QA PLANS TO SUPPLY A SATISFACTORY QUALITY PRODUCT, AND BECAUSE OF HIS FAILURE TO SUBMIT TECHNICAL DETAILS, PLANS AND DIAGRAMS WITH HIS BID, THE BIDDER CANNOT ASSURE EITHER A QUALITY PRODUCT OR TIMELY DELIVERY."

ADDITIONALLY, THE REPORT INDICATED THAT DCASR REPRESENTATIVES HAD REPEATEDLY ATTEMPTED, WITHOUT SUCCESS, TO OBTAIN INFORMATION CONCERNING THE FINANCIAL CAPABILITY OF YOUR CONCERN, AS FOLLOWS:

"ON DEC. 29, 1971, IN THE COURSE OF A PRE-AWARD SURVEY, A DUN & BRADSTREET REPORT WAS REQUESTED. SINCE THE ADDRESS GIVEN FOR THE BIDDER WAS A POST OFFICE BOX, NO INVESTIGATION COULD BE MADE.

"EARLIER THIS MONTH, IN THE COURSE OF ANOTHER PRE-AWARD SURVEY, A D&B REPORT WAS REQUESTED, GIVING AS THE ADDRESS, PENINSULA MARINE, 72-46 THURSBY AVE., ROCKAWAY BEACH, N.Y. (THE ADDRESS SHOWN IN SECTION 5 - PLANT AND LOCATION - OF DD FORM 1524). THE D&B REPORT RECEIVED WAS ON PENINSULA MARINE SERVICE CORP; NO REPORT FOR THE BIDDER.

"IN CONNECTION WITH THE SUBJECT CASE, ANOTHER REQUEST FOR A REPORT WAS MADE, GIVING AS THE ADDRESS, 17 BATTERY PLACE, ROOM 1143, NEW YORK CITY. TO DATE, NO REPORT HAS BEEN RECEIVED.

"ON MAY 12, 1972, A LETTER WAS SENT TO THE BIDDER REQUESTING FINANCIAL STATEMENTS AND OTHER COLLATERAL INFORMATION TO DEMONSTRATE FINANCIAL CAPABILITY. THIS WAS FOLLOWED BY A TELEPHONE CALL ON MAY 16, 1972. MR. CANNIZZO WAS NOT IN, BUT WORD WAS LEFT FOR HIM TO CALL BACK. MR. CANNIZZO DID NOT RETURN THE CALL, NOR WERE FINANCIAL STATEMENTS SUBMITTED.

"IN CONNECTION WITH PRIOR PRE-AWARD SURVEYS - EARLIER THIS MONTH AND IN DECEMBER 1971 - LETTERS WERE SENT AND NUMEROUS PHONE CALLS MADE, BUT FINANCIAL INFORMATION WAS NOT SUBMITTED.

"IN THE ABSENCE OF ANY FINANCIAL INFORMATION, THE ANALYST HAS NO ALTERNATIVE BUT TO RECOMMEND NO AWARD."

IN VIEW OF THIS REPORT, THE CONTRACTING OFFICER DETERMINED ON MAY 25, 1972, THAT YOUR CONCERN WAS NOT A RESPONSIBLE PROSPECTIVE CONTRACTOR FOR THE PROCUREMENT UNDER THE GENERAL STANDARDS FOR RESPONSIBLE CONTRACTORS WHICH ARE SET FORTH IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1- 903.1 IN PERTINENT PART:

"1-903.1 GENERAL STANDARDS. EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH 1-903, A PROSPECTIVE CONTRACTOR MUST:

(I) HAVE ADEQUATE FINANCIAL RESOURCES, OR THE ABILITY TO OBTAIN SUCH RESOURCES AS REQUIRED DURING THE PERFORMANCE OF THE CONTRACT ***

(II) BE ABLE TO COMPLY WITH THE RQUIRED OR PROPOSED DELIVERY OR PERFORMANCE SCHEDULE, TAKING INTO CONSIDERATION ALL EXISTING BUSINESS COMMITMENTS, COMMERCIAL AS WELL AS GOVERNMENTAL ***."

SUBSEQUENTLY, THE CONTRACTING OFFICER MADE AN AWARD FOR THE REQUIREMENT TO HENRY KNESE, INC., THE SECOND LOWEST BIDDER, ON MAY 26, 1972.

YOU STATE THAT YOU HAD FIRM COMMITMENTS WITH MANUFACTURERS FOR THE ITEMS IN QUESTION, AND YOU THEREFORE MAINTAIN THAT YOUR CONCERN WAS RESPONSIBLE FOR THE PROCUREMENT.

WHETHER A BIDDER IS TO BE CONSIDERED RESPONSIBLE FOR A PARTICULAR PROCUREMENT IS A QUESTION OF FACT AND, ABSENT EVIDENCE THAT THE DETERMINATION OF A BIDDER'S CAPABILITIES WAS BASED ON ERROR, FRAUD, OR FAVORITISM, OUR OFFICE WILL ACCEPT THE FINDINGS OF THE CONTRACTING AGENCY. 46 COMP. GEN. 371 (1966). BASED ON OUR REVIEW OF THE RECORD, AS NOTED ABOVE, WE BELIEVE THE CONTRACTING OFFICER'S FINDING THAT YOU COULD NOT BE CONSIDERED A RESPONSIBLE PROSPECTIVE CONTRACTOR WAS ADEQUATELY SUPPORTED BY THE LACK OF INFORMATION CONCERNING YOUR FIRM'S FINANCIAL CAPACITY, EVEN IF WE ASSUME, FOR THE PURPOSE OF DISCUSSION, THAT YOU HAD BINDING COMMITMENTS FROM THE MANUFACTURERS IN QUESTION. IN VIEW THEREOF, YOUR PROTEST MUST BE DENIED.

YOU ALSO REQUEST THAT THE RECORDS OF THE CORPS OF ENGINEERS UNDER IFB DACW01-72-B-0036 BE INSPECTED FOR FINANCIAL INFORMATION. IN THIS REGARD, THE BID PROTEST JURISDICTION OF THIS OFFICE IS CONCERNED WITH THE LEGAL PROPRIETY OF THE AWARD, OR THE PROPOSED AWARD, OF A SPECIFIC GOVERNMENT CONTRACT. SINCE YOU STATE THAT YOU DO NOT WISH TO CONTEST THE AWARD UNDER IFB -0036, YOUR REQUEST CANNOT BE CONSIDERED UNDER OUR BID PROTEST AUTHORITY. WHILE WE MUST THEREFORE DENY YOUR REQUEST FOR OUR OFFICE TO INSPECT THESE RECORDS, YOU MAY WISH TO ASK THE CORPS DIRECTLY FOR RELEASE OF THIS INFORMATION.