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ALLEGED "BUY-IN" THROUGH A BID BELOW COST IS NOT BASIS UPON WHICH TO CHALLENGE AWARD VALIDITY UNLESS LOW BIDDER IS NONRESPONSIBLE. AN EVALUATION PROCESS BY WHICH A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY OR NONRESPONSIBILITY IS DETERMINED. IS NOT REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR). CONTRACTING OFFICER IS ALLOWED TO USE METHODS OTHER THAN PRE-AWARD SURVEY TO DETERMINE RESPONSIBILITY OR NONRESPONSIBILITY. 4. THERE NECESSARILY HAS BEEN AN EVALUATION BY THE CONTRACTING OFFICER THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE BECAUSE UNDER ASPR THE SIGNING OF A CONTRACT MAY BE DEEMED TO BE AN AFFIRMATIVE DETERMINATION BY THE CONTRACTING OFFICER THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE WITH RESPECT TO THE CONTRACT. 5.

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B-191825, JUN 12, 1978

DIGEST: 1. FACT THAT BIDDER MAY INCUR A LOSS BECAUSE HE MUST PAY PREVAILING WAGE RATE DOES NOT PRECLUDE OR PROVIDE A BASIS FOR DISTURBING AN AWARD. 2. ALLEGED "BUY-IN" THROUGH A BID BELOW COST IS NOT BASIS UPON WHICH TO CHALLENGE AWARD VALIDITY UNLESS LOW BIDDER IS NONRESPONSIBLE. HOWEVER, TO THE EXTENT PROTESTER OBJECTS TO CONTRACTING OFFICER'S AFFIRMATIVE DETERMINATION OF RESPONSIBILITY, GAO DOES NOT REVIEW SUCH MATTERS EXCEPT IN CIRCUMSTANCES NOT APPLICABLE HERE. 3. PRE-AWARD SURVEY, AN EVALUATION PROCESS BY WHICH A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY OR NONRESPONSIBILITY IS DETERMINED, IS NOT REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR). CONTRACTING OFFICER IS ALLOWED TO USE METHODS OTHER THAN PRE-AWARD SURVEY TO DETERMINE RESPONSIBILITY OR NONRESPONSIBILITY. 4. WHERE AWARD HAS BEEN MADE, THERE NECESSARILY HAS BEEN AN EVALUATION BY THE CONTRACTING OFFICER THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE BECAUSE UNDER ASPR THE SIGNING OF A CONTRACT MAY BE DEEMED TO BE AN AFFIRMATIVE DETERMINATION BY THE CONTRACTING OFFICER THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE WITH RESPECT TO THE CONTRACT. 5. WHERE PROTEST IS CONCERNED WITH VARIOUS ASPECTS OF PROSPECTIVE CONTRACTOR RESPONSIBILITY THAT CANNOT BE CONSIDERED ON THE MERITS, REQUEST FOR HEARING OR CONFERENCE MUST BE DENIED.

RUSHTON INDUSTRIAL CONSTRUCTION:

RUSHTON INDUSTRIAL CONSTRUCTION (RUSHTON) PROTESTS THE AWARD OF CONTRACT NO. DAAK10-78-C-0159 BY THE ARMY ARMAMENT R&D COMMAND, DOVER, NEW JERSEY. RUSHTON CONTENDS: (1) THAT THE LOW BID IS SO LOW AS TO BE BELOW THE LOW BIDDER'S DIRECT LABOR COSTS INDICATING THAT THE LOW BIDDER'S CALCULATIONS DO NOT TAKE INTO ACCOUNT THE PAYING OF PREVAILING WAGE RATES AS REQUIRED BY THE SOLICITATION, (2) THAT THE LOW BIDDER'S BID IS SO LOW AS TO CONSTITUTE "BUYING IN," (3) THAT THE LOW BIDDER IS NOT A RESPONSIBLE PROSPECTIVE CONTRACTOR, (4) THAT THE CONTRACTING OFFICER FAILED TO MAKE A PRE-AWARD SURVEY OF THE LOW BIDDER, AND (5) THAT THE CONTRACTING OFFICER HAS FAILED TO MAKE AN AFFIRMATIVE DETERMINATION THAT THE PROSPECTIVE CONTRACTOR (LOW BIDDER) IS RESPONSIBLE.

WE ARE UNAWARE OF ANY LEGAL PRINCIPLE WHICH WOULD PRECLUDE OR PROVIDE A BASIS FOR DISTURBING AN AWARD MERELY BECAUSE THE SUCCESSFUL BIDDER SUBMITTED A BID BELOW ITS COST. FUTRONICS INDUSTRIES, INC., B-185896, MARCH 10, 1976, 76-1 CPD 169. A.C. ELECTRONICS, INC., B-185553, MAY 3, 1976, 76-1 CPD 295. THIS RULE APPLIES EVEN WHERE A CONTRACTOR MAY INCUR A LOSS IF WAGES AS SET OUT IN THE APPLICABLE WAGE DETERMINATION ARE PAID. INTER-CON SECURITY SYSTEMS, INC., B-189165, JUNE 15, 1977, 77-1 CPD 434. THUS, RUSHTON'S FIRST CONTENTION HAS NO MERIT.

RUSHTON'S SECOND CONTENTION, THAT THE LOW BIDDER'S BID IS SO LOW AS TO CONSTITUTE "BUYING IN," IS DISCOURAGED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) SEC. 1-311 (1976 ED.). HOWEVER, THIS SECTION DOES NOT PRECLUDE THE GOVERNMENT'S ACCEPTANCE OF A BELOW-COST BID. A.R.F. PRODUCTS, INC., B-190166 AND B-190195, NOVEMBER 1, 1977, 77-2 CPD 339. FURTHERMORE, TO PROPERLY REJECT A BID AS BEING EXTREMELY LOW WOULD REQUIRE A DETERMINATION THAT THE BIDDER IS NONRESPONSIBLE. A.R.F. PRODUCTS, INC., SUPRA. INTER-CON SECURITY SYSTEMS, INC., SUPRA. AND THAT RAISES RUSHTON'S THIRD CONTENTION, THAT THE LOW BIDDER IS NOT A RESPONSIBLE PROSPECTIVE CONTRACTOR.

OUR OFFICE DOES NOT REVIEW PROTESTS CONCERNING AFFIRMATIVE DETERMINATIONS OF RESPONSIBILITY, UNLESS EITHER FRAUD IS SHOWN ON THE PART OF THE PROCURING OFFICIALS OR THE SOLICITATION CONTAINS DEFINITIVE RESPONSIBILITY CRITERIA, WHICH ALLEGEDLY HAVE NOT BEEN MET. CENTRAL METAL PRODUCTS, INC., 54 COMP.GEN. 66 (1974), 74-2 CPD 64; WELMETCO, LTD., B-184543, MAY 28, 1976, 76-1 CPD 349. NEITHER EXCEPTION IS ALLEGED IN THIS CASE.

RUSHTON'S FOURTH AND FIFTH CONTENTIONS, THAT THE CONTRACTING OFFICER FAILED TO MAKE A PRE-AWARD SURVEY AND AN AFFIRMATIVE DETERMINATION THAT THE PROSPECTIVE CONTRACTOR WAS RESPONSIBLE, ARE RELATED AND MAY BE DISPOSED OF TOGETHER. A PRE-AWARD SURVEY OF THE LOW BIDDER IS SIMPLY AN EVALUATION PROCESS BY WHICH A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY OR NONRESPONSIBILITY IS DETERMINED. HOWEVER, ASPR SEC. 1-905.4(B) (1976ED.) DOES NOT REQUIRE THAT A PRE-AWARD SURVEY BE CONDUCTED TO MAKE THIS DETERMINATION. BROKEN LANCE ENTERPRISES, INC., B-190228, OCTOBER 18, 1977, 77-2 CPD 301. JULIAN A. MCDERMOTT CORPORATION, B-187705, B-188197, APRIL 18, 1977, 77-1 CPD 266. THE CONTRACTING OFFICER IS ALLOWED TO USE METHODS OTHER THAN A PRE-AWARD SURVEY TO DETERMINE RESPONSIBILITY OR NONRESPONSIBILITY. SINCE AN AWARD HAS ALREADY BEEN MADE BY THE CONTRACTING OFFICER IN THIS CASE, THERE NECESSARILY HAS BEEN AN EVALUATION BY THE CONTRACTING OFFICER THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE BECAUSE THE SIGNING OF A CONTRACT MAY BE DEEMED TO BE AN AFFIRMATIVE DETERMINATION BY THE CONTRACTING OFFICER THAT THE PROSPECTIVE CONTRACTOR IS RESPONSIBLE WITH RESPECT TO THE CONTRACT. HENDRICKS PRINTING COMPANY - REQUEST FOR RECONSIDERATION, B-186590, NOVEMBER 17, 1976, 76-2 CPD 426.

ACCORDINGLY, WE DECLINE TO CONSIDER THE PROTESTER'S CONTENTION ON THE MERITS. IN VIEW OF ALL OF THE ABOVE, THE PROTESTER'S REQUEST FOR A FORMAL HEARING OR CONFERENCE IS ALSO DENIED. CF., PLAZA DE LAS ARMAS, INC., B-188602, JUNE 30, 1977, 77-1 CPD 468.

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