B-151829, NOV. 7, 1963

B-151829, NOV. 7, 1963

TO INTERNATIONAL FERMONT:

REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 24, 1963, REQUESTING RECONSIDERATION OF OUR DECISION DATED SEPTEMBER 11, 1963, WHICH DENIED YOUR PROTEST AGAINST THE REJECTION OF YOUR BID AND THE MAKING OF A CONTRACT AWARD TO THE CLARK EQUIPMENT COMPANY, CONSTRUCTION AND MACHINERY DIVISION, BENTON HARBOR, MICHIGAN, UNDER INVITATION FOR BIDS NO. AMC (T) - 11-184-63-474 (A), ISSUED ON APRIL 29, 1963, BY THE U.S. ARMY ENGINEER PROCUREMENT OFFICE, CHICAGO, COVERING A REQUIREMENT FOR 672 TRACTORS CONFORMING TO THE ADVERTISED SPECIFICATIONS.

AS STATED AT PAGE 3 OF THE DECISION DATED SEPTEMBER 11, 1963, THE CONTRACTING OFFICER DETERMINED THAT YOUR FIRM IS NOT A MANUFACTURER AS DEFINED IN SUBSECTION 12-603.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR); THAT YOUR FIRM IS NOT A RESPONSIBLE PROSPECTIVE CONTRACTOR AS MEASURED BY THE STANDARDS OF ASPR 1-903.1 THROUGH 903.4; AND THAT HE COULD NOT MAKE AN AFFIRMATIVE DETERMINATION, AS REQUIRED UNDER ASPR 1-904.0, THAT YOUR FIRM IS RESPONSIBLE WITHIN THE MEANING OF ASPR 1- 902 AND ASPR 1-903.

THE DECISION SET FORTH YOUR VARIOUS CONTENTIONS IN THE MATTER AND A DETAILED ANALYSIS OF THE PERTINENT FACTS AND CIRCUMSTANCES OF THE CASE. IT IS YOUR PRESENT CONTENTION THAT THE DECISION WAS RENDERED WITHOUT SUFFICIENT INVESTIGATION OF THE GROUNDS OF PROTEST. HOWEVER, WE CONSIDER THAT OUR INVESTIGATION WAS OF A SUBSTANTIAL AND THOROUGH NATURE AND THAT, WHILE SOME DISCREPANCIES MAY HAVE EXISTED IN THE FACILITY SURVEY REPORTS, THE ERRORS INVOLVED DO NOT NECESSARILY REQUIRE A CONCLUSION THAT THE ADMINISTRATIVE DETERMINATION OF YOUR LACK OF RESPONSIBILITY WAS NOT BASED UPON REASONABLE GROUNDS OR THAT IT WAS NOT BASED UPON A FULL AND HONEST INVESTIGATION AND CONSIDERATION OF YOUR QUALIFICATIONS FOR PERFORMANCE OF THE PROPOSED CONTRACT.

AT A MEETING IN THIS OFFICE ON SEPTEMBER 19, 1963, YOUR REPRESENTATIVES INDICATED AS THEIR OPINION THAT WE DID NOT MAKE A SUFFICIENT INVESTIGATION OF YOUR ALLEGATIONS OF PREJUDICE ON THE PART OF THE PREAWARD SURVEY TEAM WHICH VISITED YOUR RAMAPO, NEW YORK, PLANT ON JUNE 4, 1963, AND ON THE PART OF THE PROCUREMENT OFFICE. ONE OF THOSE ALLEGATIONS WAS THAT, PRIOR TO THE PREAWARD SURVEY, ONE OF YOUR MAJOR POTENTIAL SUPPLIERS OF COMPONENTS WAS CONTACTED BY TELEPHONE BY A MEMBER OF THE CORPS OF ENGINEERS IN THE CHICAGO AREA WHO WAS SEEKING INFORMATION WHICH WOULD PROVE INTERNATIONAL FERMONT INCAPABLE OF PERFORMANCE. THAT ALLEGATION HAD BEEN INVESTIGATED TO THE POINT OF OBTAINING GENERAL DENIALS FROM CERTAIN MEMBER OF THE PREAWARD SURVEY TEAM AND FROM THE DEPARTMENT OF THE ARMY. IT IS STATED IN YOUR LETTER OF SEPTEMBER 24, 1963, THAT SINCE SEPTEMBER 19 YOU HAVE ASCERTAINED THAT THE PERSON WHO MADE THE ALLEGED TELEPHONE CALL PRIOR TO THE SURVEY WAS A MEMBER OF THE SURVEY TEAM. WE HAD BEEN PREVIOUSLY ADVISED BY A REPRESENTATIVE OF YOUR COMPANY AS TO THE IDENTITY OF THE SUPPLIER INVOLVED.

IN ACCORDANCE WITH YOUR SUGGESTION, WE HAVE INTERVIEWED AND SECURED AFFIDAVITS FROM THE FIVE MEMBERS OF THE PREAWARD SURVEY TEAM WHICH CONDUCTED A SURVEY OF YOUR FACILITIES IN RAMAPO, NEW YORK, ON JUNE 4, 1963. THE AFFIDAVIT OF EACH SURVEY TEAM MEMBER DENIES THAT HE CONTACTED AN OFFICIAL OR OTHER REPRESENTATIVE OF THE SUPPLIER INVOLVED AT ANY TIME EITHER BEFORE OR DURING THE SURVEY, CONCERNING THE CAPABILITIES OF INTERNATIONAL FERMONT, OR CONCERNING THE FACILITIES NECESSARY FOR PRODUCTION OF THE TRACTORS. HOWEVER, THE AFFIDAVIT OF MR. R. J. MACLEAY STATES THAT SUBSEQUENT TO THE SURVEY ON JUNE 6, 1963, HE TALKED WITH AN OFFICIAL OF THE SUPPLIER AND THAT LATER ON THE SAME DAY HE CONTACTED THE RESIDENT INSPECTOR FOR THE CORPS OF ENGINEERS AT THAT SUPPLIER'S PLANT. ACCORDING TO SUCH AFFIDAVIT, INFORMATION WAS REQUESTED FROM THE SUPPLIER WITH RESPECT TO HOW MUCH MANUFACTURING SPACE IT USED FOR ASSEMBLY OF MODEL 830M TRACTORS FURNISHED UNDER A PREVIOUS GOVERNMENT CONTRACT WITH THE SUPPLIER, AND WITH RESPECT TO HOW MANY ENGINEERS WERE ENGAGED IN THE PRODUCTION OF THE TRACTORS. THE SUPPLIER REPLIED THAT IT COULD NOT FURNISH AT THE TIME THE INFORMATION REGARDING MANUFACTURING SPACE BUT THAT APPROXIMATELY 100 ENGINEERS, NOT INCLUDING TEST ENGINEERS, WERE ENGAGED IN THE PRODUCTION OF THE TRACTORS UNDER THE GOVERNMENT CONTRACT. ALTHOUGH THOSE WERE THE ONLY QUESTIONS PRESENTED TO THE SUPPLIER'S REPRESENTATIVE, HE VOLUNTEERED THE INFORMATION THAT HIS COMPANY HAD BEEN REQUESTED BY INTERNATIONAL FERMONT TO BID ON AXLES, SHAFT GROUP, TORQUE DIVIDER, GEAR GROUP TRANSFER BOX, UNIVERSAL HITCH AND SEVERAL MISCELLANEOUS ITEMS. THE SUPPLIER'S REPRESENTATIVE FURTHER STATED THAT HIS COMPANY WAS VERY MUCH INTERESTED IN GETTING THIS BUSINESS SINCE IT LOST OUT ON THE BIDDING UNDER THE INVITATION ISSUED IN APRIL 1963, AS IT WAS THE HIGH BIDDER. THE CONTACT WITH THE RESIDENT INSPECTOR FOR THE CORPS OF ENGINEERS WAS MADE FOR THE PURPOSE OF OBTAINING ESTIMATES AS TO THE MANUFACTURING SPACE USED IN THE PRODUCTION UNDER THE PREVIOUS GOVERNMENT CONTRACT. THE INSPECTOR FURNISHED THE FOLLOWING ESTIMATES: 75,000 SQUARE FEET FOR MACHINING AND ASSEMBLY OF COMPONENTS, AND 65,000 SQUARE FEET FOR THE ASSEMBLY OF TRACTORS. NEITHER ESTIMATE INCLUDED STORAGE FOR PARTS AND STEEL.

IT IS APPARENT THAT THE QUESTIONS DIRECTED TO THE SUPPLIER WERE NOT IMPROPER FROM THE STANDPOINT THAT THE DESIRED INFORMATION MIGHT WELL HAVE BEEN TAKEN INTO CONSIDERATION WHEN DETERMINING WHETHER OR NOT YOUR FIRM WAS CAPABLE OF PERFORMING THE CONTRACT TO BE AWARDED PURSUANT TO INVITATION FOR BIDS NO. AMC/T/-11-184-63-474 (A). THE RECORD OTHERWISE SUGGESTS THAT MR. MACLEAY WAS JUSTIFIED IN REQUESTING SUCH INFORMATION, INASMUCH AS ON JUNE 4, 1963, DURING THE SURVEY, YOUR REPRESENTATIVES REPORTEDLY STATED THAT YOUR KEY PERSONNEL HAD VISITED THE SUPPLIER'S PLANT ON JUNE 1, 1963, THAT THEY WERE SHOWN THE PLANT AND ITS FACILITIES, AND THAT THEY DISCUSSED WITH THE SUPPLIER'S PERSONNEL THE POSSIBILITY THAT THE SUPPLIER WOULD FURNISH MANY OF THE MAJOR COMPONENTS FOR THE TRACTOR IF INTERNATIONAL FERMONT WAS THE SUCCESSFUL BIDDER.

ANOTHER ALLEGATION OF PREJUDICE WAS DISCUSSED IN THE MEETING OF SEPTEMBER 19, 1963, WHICH CONCERNED THE FACT THAT THE SURVEY MADE OF THE SUCCESSFUL BIDDER'S PLANT WAS CONDUCTED BY A TWO-MAN SURVEY TEAM AND THE REPORT OF SURVEY INDICATED THAT THE BIDDER WOULD HAVE TO ACQUIRE CERTAIN EQUIPMENT AND PERSONNEL FOR PERFORMANCE OF THE PROPOSED CONTRACT. HOWEVER, FOR THE REASONS SET FORTH IN THE DECISION OF SEPTEMBER 11, 1963, ON THAT POINT, WE REMAIN OF THE OPINION THAT THE NECESSITY TO ACQUIRE CERTAIN EQUIPMENT OR PERSONNEL WOULD NOT HAVE AUTOMATICALLY DISQUALIFIED THE BIDDER.

THE FACT THAT WE HAVE RECOGNIZED CERTAIN ERRORS WERE MADE IN THE SURVEY REPORTS ON YOUR COMPANY WAS ALSO DISCUSSED IN THE MEETING OF SEPTEMBER 19, 1963. IT SEEMED TO BE THE IMPRESSION OF YOUR REPRESENTATIVES THAT IF THEY DEMONSTRATED ERROR IN ANY OF THE PRINCIPAL BASES FOR THE DEPARTMENT OF THE ARMY'S FINDING OF NONRESPONSIBILITY, THIS OFFICE IS REQUIRED TO REVERSE THAT FINDING. THIS VIEW OF THE MATTER WAS INDICATED AS BEING SUPPORTED BY STATEMENTS MADE IN OTHER DECISIONS OF THIS OFFICE AND YOU NOW CITE 40 COMP. GEN. 294, WHICH STATES AT PAGE 298 THAT "WHETHER A BIDDER IS, OR IS NOT, CAPABLE OF PRODUCING IN ACCORDANCE WITH THE CONTRACT REQUIREMENTS IS A QUESTION OF FACT AND, IN THE ABSENCE OF EVIDENCE THAT THE DETERMINATION OF A BIDDER'S CAPABILITY WAS BASED UPON ERROR, FRAUD, OR FAVORITISM, THIS OFFICE WILL ACCEPT THE FINDING OF THE CONTRACTING AGENCY.'

WE DO NOT AGREE THAT THIS OR SIMILAR LANGUAGE IN OTHER DECISIONS OF THIS OFFICE CAN REASONABLY BE CONSTRUED AS MEANING THAT WE WOULD REVERSE AN ADMINISTRATIVE DETERMINATION OF NONRESPONSIBILITY IF SUCH DETERMINATION WAS BASED IN PART ON ERRONEOUS INFORMATION AND WE FOUND THAT, DESPITE THE ERRORS INVOLVED, THERE STILL EXISTED SUBSTANTIAL CORRECT EVIDENCE TO SUPPORT THE FINDING. IN SUCH CIRCUMSTANCES, WE WOULD NOT TAKE EXCEPTION TO THE ADMINISTRATIVE DETERMINATION EVEN THOUGH WE MIGHT HAVE REACHED A DIFFERENT CONCLUSION HAD IT BEEN OUR FUNCTION TO MAKE THE INITIAL DETERMINATION OF RESPONSIBILITY. IT IS OUR VIEW THAT THE ADMINISTRATIVE DETERMINATION OF THE QUESTION AS TO THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR IS CONCLUSIVE UNLESS IT IS SHOWN THAT SUCH DETERMINATION WAS NOT BASED ON SUBSTANTIAL EVIDENCE DEMONSTRATING THE BIDDER'S RESPONSIBILITY OR LACK OF RESPONSIBILITY. SEE 38 COMP. GEN. 778, 781.

IN VIEW OF THE FOREGOING, AND SINCE OUR REVIEW OF THE FACTS OF THE CASE HAS DISCLOSED NO PROPER BASIS FOR REACHING A DIFFERENT CONCLUSION FROM THAT REACHED IN THE DECISION DATED SEPTEMBER 11, 1963, REGARDING YOUR PROTEST IN THE MATTER, THAT DECISION IS SUSTAINED.