B-180361, MAY 23, 1974

B-180361, MAY 23, 1974

1. REASONABLE BASIS EXISTED FOR CONTRACTING OFFICER'S DETERMINATION THAT LOW BIDDER WAS NONRESPONSIBLE, WHERE PREAWARD SURVEY TEAM RECOMMENDED "NO AWARD" BE MADE TO PROSPECTIVE CONTRACTOR WHOSE TECHNICAL, PRODUCTION AND FINANCIAL CAPABILITIES, PLANT FACILITIES AND EQUIPMENT, AND TRANSPORTATION WERE DEEMED UNSATISFACTORY, AND WHO WAS CONSIDERED UNABLE TO MEET REQUIRED SCHEDULE. 2. IT WAS WITHIN DISCRETION COMMITTED TO PROCURING AGENCY BY ASPR 1 907, FOR IT NOT TO DISCUSS NEGATIVE PREAWARD SURVEY FINDINGS WITH BIDDER PRIOR TO DETERMINATION OF NONRESPONSIBILITY.

TO RIOCAR:

ON NOVEMBER 5, 1973, INVITATION FOR BIDS (IFB) NO. N66314-74-B-0278, WAS ISSUED BY THE NAVAL REGIONAL PROCUREMENT OFFICE (NRPO), NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA. THE IFB SOLICITED BIDS FOR AN ANNUAL REQUIREMENTS TYPE CONTRACT FOR PACKING, CRATING, AND RELATED SERVICES INVOLVED IN THE MOVEMENT OF HOUSEHOLD GOODS WITHIN VARIOUS COUNTIES LOCATED IN THE SAN FRANCISCO BAY AREA.

THIRTEEN BIDS WERE RECEIVED AND OPENED ON NOVEMBER 26, 1973, AND AFTER EVALUATION, IT WAS DETERMINED THAT RIOCAR WAS THE APPARENT LOW BIDDER FOR SCHEDULE I, AREA I; AND SCHEDULE III, AREAS I AND II. IN ORDER TO MAKE A DETERMINATION OF THE LOW BIDDER'S ABILITY TO PERFORM (RESPONSIBILITY) AS A PROSPECTIVE CONTRACTOR, ON DECEMBER 3, 1973, NRPO REQUESTED THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR), SAN FRANCISCO, CALIFORNIA, TO PERFORM A PREAWARD SURVEY OF RIOCAR. THE SURVEY WAS CONDUCTED BY DCASR-SAN FRANCISCO ON DECEMBER 5.

THE PREAWARD SURVEY TEAM'S REPORT TO THE CONTRACTING OFFICER, DATED DECEMBER 13, 1973, RECOMMENDED THAT THE CONTRACT NOT BE AWARDED TO RIOCAR BECAUSE OF ITS UNSATISFACTORY RATINGS ON THE FOLLOWING FACTORS: (1) TECHNICAL CAPABILITY; (2) PRODUCTION CAPABILITY; (3) PLANT FACILITIES AND EQUIPMENT; (4) FINANCIAL CAPABILITY; (5) TRANSPORTATION; AND (6) ABILITY TO MEET SCHEDULE REQUIREMENTS. IN ADDITION, THE DCASR TEAM CONCLUDED THAT RIOCAR DID NOT THOROUGHLY UNDERSTAND THE SPECIFICATIONS OR PACKAGING REQUIREMENTS, LACKED PERSONNEL EXPERIENCED IN THE TYPE OF WORK CONTEMPLATED BY THE CONTRACT, AND DID NOT HAVE A PUC LICENSE TO HANDLE HOUSEHOLD GOODS OR AN ICC PERMIT TO ENGAGE IN THE TYPE OF BUSINESS REQUIRED BY THE SOLICITATION. ON THE BASIS OF THIS NEGATIVE PREAWARD SURVEY, THE CONTRACTING OFFICER MADE A DETERMINATION THAT RIOCAR WAS NONRESPONSIBLE BECAUSE IT DID NOT MEET THE MINIMUM STANDARDS FOR RESPONSIBLE PROSPECTIVE CONTRACTORS AS SET FORTH IN THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-903. IT IS REPORTED THAT DUE TO THE URGENCY OF THE PROCUREMENT, THE CONTRACTING OFFICER CERTIFIED THAT THE DELAY INCIDENT TO REFERRAL TO THE SMALL BUSINESS ADMINISTRATION (SBA) FOR CONSIDERATION OF THE ISSUANCE OF A CERTIFICATE OF COMPETENCY WOULD BE DETRIMENTAL TO THE INTERESTS OF THE GOVERNMENT AND THAT IT WAS IMPERATIVE THAT AWARD IMMEDIATELY BE MADE. ASPR 1 705.4(C)(IV).

AFTER BEING NOTIFIED THAT ITS BID WAS REJECTED AND THAT AWARD HAD BEEN MADE TO THE NEXT LOW BIDDER, RIOCAR REQUESTED THAT NRPO FURNISH IT WITH A COPY OF THE PREAWARD SURVEY REPORT. INFORMED BY NRPO THAT IT WOULD NOT RELEASE A COPY OF THE REPORT, A REPRESENTATIVE OF RIOCAR AND THE PROCURING AGENCY MET ON JANUARY 2, 1974 TO DISCUSS THE NEGATIVE FINDINGS OF THE PREAWARD SURVEY TEAM.

ON THE SAME DAY, RIOCAR PROTESTED TO OUR OFFICE AGAINST THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY, AND ALLEGED THAT NRPO HAD IMPROPERLY REFUSED TO PROVIDE IT WITH A COPY OF THE PREAWARD SURVEY REPORT. IN SUBSEQUENT CORRESPONDENCE, COUNSEL TO RIOCAR ARGUED THAT THE REASONS UNDERLYING THE DETERMINATION OF NONRESPONSIBILITY WERE CONTRARY TO FACT, AND THAT EVEN ASSUMING SOME OF THE DEFICIENCES MENTIONED IN THE REPORT WERE SUPPORTABLE BY FACT, HAD THE SURVEY AND DECISION TO AWARD THE CONTRACT BEEN MADE WITH REASONABLE DILIGENCE, THERE WOULD HAVE BEEN ADEQUATE TIME WITHIN WHICH TO CORRECT SUCH DEFICIENCIES IN RIOCAR'S FACILITIES PRIOR TO THE DATE THE CONTRACT WAS SCHEDULED TO COMMENCE, JANUARY 1, 1974.

WE HAVE CONSISTENTLY HELD THAT THE QUESTION OF A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY IS A MATTER FOR DETERMINATION BY THE CONTRACTING OFFICER INVOLVED. 45 COMP. GEN. 4 (1965); 51 COMP. GEN. 439, 443 (1972). OUR OFFICE DOES NOT MAKE INDEPENDENT DETERMINATIONS AS TO A BIDDER'S RESPONSIBILITY TO PERFORM A GOVERNMENT CONTRACT. BECAUSE REASONABLE MEN MAY WELL DISAGREE AS TO A COMPANY'S CAPABILITY TO PERFORM A PARTICULAR CONTRACT, OUR OFFICE HAS ADOPTED THE RULE THAT WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING OFFICER UNLESS IT IS SHOWN THAT THE DETERMINATION OF NONRESPONSIBILITY WAS MADE IN BAD FAITH OR LACKED ANY REASONABLE BASIS. 37 COMP. GEN. 430 (1957); 49 COMP. GEN. 553 (1970). MAKING THE DETERMINATION OF A CONTRACTOR'S ABILITY TO PERFORM A CONTRACT, THE CONTRACTING OFFICER IS VESTED WITH A CONSIDERABLE DEGREE OF DISCRETION, AS WE RECOGNIZED IN 43 COMP. GEN. 228, 230 (1963):

"DECIDING A PROSPECTIVE CONTRACTOR'S PROBABLE ABILITY TO PERFORM A CONTRACT TO BE AWARDED INVOLVES A FORECAST WHICH MUST OF NECESSITY BE A MATTER OF JUDGMENT. SUCH JUDGMENT SHOULD OF COURSE BE BASED ON FACT AND REACHED IN GOOD FAITH; HOWEVER, IT IS ONLY PROPER THAT IT BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICERS INVOLVED WHO SHOULD BE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, WHO MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES EXPERIENCED IN OBTAINING REQUIRED PERFORMANCE, AND WHO MUST MAINTAIN DAY TO DAY RELATIONS WITH THE CONTRACTOR ON THE GOVERNMENT'S BEHALF. 39 COMP. GEN. 705, 711. ***"

AFTER A CAREFUL EXAMINATION OF THE ENTIRE RECORD, INCLUDING THE PREAWARD SURVEY REPORT AND THE MATERIAL SUBMITTED BY RIOCAR'S COUNSEL, WE ARE OF THE OPINION THAT IT HAS NOT BEEN SHOWN THAT THE CONTRACTING OFFICER'S DETERMINATION OF NONRESPONSIBILITY WAS THE PRODUCT OF BAD FAITH OR LACKING A REASONABLE BASIS.

RIOCAR ALSO ALLEGES THAT THE PREAWARD SURVEY WAS NOT MADE WITH REASONABLE DILIGENCE SO AS TO AFFORD THE PROTESTER ADEQUATE TIME WITHIN WHICH TO CORRECT DEFICIENCIES IN ITS FACILITIES. ASPR 1-907 PERMITS PREAWARD DATA TO BE DISCUSSED WITH A PROSPECTIVE CONTRACTOR "AS DETERMINED NECESSARY BY THE PURCHASING OFFICE", PRIOR TO MAKING A DETERMINATION OF RESPONSIBILITY. WE UNDERSTAND RIOCAR TO ARGUE THAT DILATORINESS IN OBTAINING A PREAWARD SURVEY REPORT PRECLUDED THE POSSIBILITY OF DISCUSSING DEFICIENCIES WITH RIOCAR AT A TIME WHEN THEY COULD HAVE BEEN CORRECTED PRIOR TO AWARD.

WITHIN A WEEK OF BID OPENING, NRPO REQUESTED DCASR-SAN FRANCISCO TO CONDUCT A PREAWARD SURVEY OF RIOCAR. DCASR-SAN FRANCISCO COMPLIED WITH ASPR 1-905.4(B), WHICH CONTEMPLATES A NORMAL TIME FRAME OF SEVEN WORKING DAYS AFTER RECEIPT OF A REQUEST FOR CONDUCTING A SURVEY AND SUBMITTING A REPORT. THE SURVEY REPORT WAS RECEIVED ON DECEMBER 13, 1973, AT WHICH TIME NRPO INFORMED SBA THAT IT WAS NOT REFERRING RIOCAR FOR A CERTIFICATE OF COMPETENCY BECAUSE AN URGENT NEED FOR THE SERVICES COMPELLED AWARD TO BE MADE WITHOUT FURTHER DELAY. RIOCAR HAS NOT QUESTIONED THE VALIDITY OF THIS DETERMINATION.

UNDER THESE CIRCUMSTANCES, WE ARE UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER WAS DILATORY IN OBTAINING INFORMATION UPON WHICH TO DETERMINE RIOCAR'S RESPONSIBILITY. AS TO THE FACT THAT THE CONTRACTING OFFICER DID NOT DISCUSS THE PREAWARD SURVEY DATA WITH RIOCAR PRIOR TO THE ISSUANCE OF HIS DETERMINATION OF NONRESPONSIBILITY, IT IS TO BE NOTED THAT THE LANGUAGE OF ASPR 1-907 IS PERMISSIVE IN THIS REGARD. ACCORDINGLY, AND SINCE THERE WAS AN URGENT NEED FOR THESE SERVICES AT THE TIME THE SURVEY REPORT WAS RECEIVED, THE CONTRACTING OFFICER'S ACTION IN PROCEEDING WITH AWARDS TO OTHER BIDDERS WITHOUT DISCUSSING THE SURVEY REPORT WITH RIOCAR DOES NOT APPEAR TO HAVE BEEN AN IMPROPER EXERCISE OF THE DISCRETION GRANTED HIM BY THE REGULATION.

THE PROCURING ACTIVITY DECLINED TO FURNISH RIOCAR A COPY OF THE PREAWARD SURVEY REPORT. HOWEVER, AS EXPRESSLY CONTEMPLATED BY ASPR 1 907 AND 2- 408, THE NRPO BUYER MET WITH RIOCAR'S SALES MANAGER AFTER AWARD AND THOROUGHLY DISCUSSED THE FINDINGS OF THE PREAWARD SURVEY TEAM. RIOCAR WAS THEREFORE ADVISED OF THE REASONS FOR ITS REJECTION IN THE MANNER PRESCRIBED BY REGULATION.

IN VIEW OF THE FOREGOING, RIOCAR'S PROTEST IS DENIED.