BNUMBER: B-270962; B-270962.2
DATE: May 1, 1996
TITLE: Carter Chevrolet Agency, Inc.
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Matter of:Carter Chevrolet Agency, Inc.
File: B-270962; B-270962.2
Date:May 1, 1996
Robert H. Koehler, Esq., and Lynn T. Burleson, Esq., Patton Boggs,
L.L.P., for the protester.
Seth Binstock, Esq., General Services Administration, for the agency.
Behn Miller, Esq., and Christine S. Melody, Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
1. Protest that agency improperly determined that awardee satisfied a
definitive responsibility criterion requiring it to provide letter of
commitment from automobile manufacturer is denied where the agency
reasonably determined that letter of commitment constituted evidence
of manufacturer's agreement to provide required vehicles in accordance
with the requirements of the solicitation.
2. Protest that agency improperly allowed awardee to demonstrate
compliance with definitive responsibility criterion after time set for
submission of best and final offers is denied since evidence of
compliance with matters of responsibility--such as definitive
responsibility criteria--may be provided any time up to actual award.
3. General Accounting Office will not consider challenges to
contracting officer's affirmative determination of awardee's
responsibility absent evidence of bad faith; protester's contention
that contracting officer improperly failed to further investigate
awardee's responsibility based on protester's unsubstantiated
allegations of impropriety by awardee does not meet this standard.
DECISION
Carter Chevrolet Agency, Inc. protests the award of a contract to
McCombs Fleet Services, Inc. under request for proposals (RFP) No.
FCAP-X2-FLT96-N, issued by the General Services Administration (GSA)
to obtain commercially available two-wheel drive and four-wheel drive
"light" trucks and similar passenger vehicles. Carter contends that
the agency improperly waived a definitive responsibility criterion for
the awardee, and that the contracting officer otherwise improperly
determined McCombs to be a responsible contractor.
We deny the protest.
The RFP was issued on August 18, 1995, and contemplated the award of
multiple firm, fixed-price requirements contracts to the lowest
priced, technically acceptable offeror for each "group" of vehicle
contract line item numbers (CLIN), which were organized in the RFP's
pricing schedule according to vehicle specifications and manufacturer.
At issue in this protest is the award of Group 17, which required
offerors to provide various quantities of two-wheel drive passenger
vans manufactured by General Motors Corporation (GMC).
By the October 4 closing date, McCombs and Carter submitted proposals
for various CLIN vehicle groups; with respect to Group 17, the
protester and McCombs were the sole offerors.
On November 8, the contracting officer issued a facsimile letter to
McCombs advising the firm that several technical deviations in its
offer were unacceptable. On November 17, GSA issued an amendment to
the RFP which revised several of the RFP's vehicle specifications,
established a time for submission of best and final offers (BAFO),
and--of significance to this protest--required all nonmanufacturer
offerors to submit a manufacturer's letter of commitment with their
BAFOs demonstrating that each manufacturer of the proposed vehicles
had committed itself to act as the offeror's source of supply for that
vehicle group.
With its BAFO, McCombs submitted commitment letters from the following
manufacturers: GMC Truck, Pontiac, Jeep, and Ford Motor Company.
Although the commitment letter for Group 17 was submitted by GMC Truck
on a letter specifically addressed to "McCombs Fleet Services," the
commitment letters from the other vehicle manufacturers were addressed
to different entities--i.e., "McCombs Jeep Eagle/Fleet Services" and
"McCombs Pontiac-GMC." On December 7, the contracting officer issued
a letter to McCombs advising it that the commitment letters from Ford,
Jeep, and Pontiac were deficient as they were not addressed to McCombs
by the name on its proposal--McCombs Fleet Services. Additionally,
with respect to the commitment letter from GMC Truck, the contracting
officer advised McCombs that the commitment was deficient because it
"fails to identify the items for which you are submitting an offer and
indicates [vehicle] shortages and a cut-off date."[1] The contracting
officer directed McCombs to verify its BAFO--including correcting the
letters of commitment--by December 11.
On December 13, by means of a facsimile letter, McCombs requested
additional time from the contracting officer to correct its GMC Truck
commitment letter. By facsimile letter dated that same day, the
contracting officer denied this request on the ground that further
delays were not in the government's best interests; the contracting
officer advised the firm that she was referring her questions
regarding the GMC Truck commitment letter--along with other matters
concerning McCombs' ability to perform the contract--to the Small
Business Administration (SBA) for review as a responsibility matter
under that agency's Certificate of Competency (COC) procedures. See
15 U.S.C. sec. 637(b)(7)(A) (1994). The contracting officer also asked
McCombs to extend its offer acceptance period in order to permit the
SBA to complete its COC review.
By facsimile dated December 14, McCombs advised the contracting
officer that it had extended its offer acceptance period, and further
requested the name of the appropriate SBA official to contact
regarding the COC review. On December 19, McCombs submitted a revised
commitment letter from GMC Truck to the contracting officer, as well
as a copy of its registration statement from the state of Texas. The
registration notice showed that McCombs Austin, Inc. was registered to
do business as McCombs Fleet Services.
After receiving this December 19 correspondence, as well as a
pre-award survey affirming McCombs' responsibility and recommending
award to the firm, the contracting officer changed her mind about
referring the issue of McCombs' responsibility to the SBA for COC
review, and instead awarded the contract for Group 17 to McCombs as
the lowest priced, technically acceptable, responsible offeror. On
January 23, 1996, shortly after being advised of the award decision,
Carter filed this protest.
Manufacturer's Letter of Commitment Requirement
As noted above, by means of amendment No. 0003, the RFP incorporated
the following letter of commitment requirement:
"Offeror[s] other than the manufacturer are required to provide
the contracting officer with a letter of commitment from the
manufacturer which will assure the offeror of a source of supply
sufficient to satisfy the government's requirements for the
contract period, or evidence that the offeror will have an
uninterrupted source of supply from which to satisfy the
government's requirements for the contract period. The letter of
commitment must be submitted with your [BAFO]."
In its protest, Carter contends that the amended GMC Truck letter of
commitment submitted by McCombs on December 19 is deficient, and,
consequently, the agency improperly waived a definitive responsibility
criterion for McCombs. First, Carter maintains that because the
letters of commitment from other vehicle manufacturers identified
McCombs by a different name, the enforceability of the awardee's
commitment letter from GMC is questionable. Additionally, the
protester maintains that because McCombs' GMC Truck letter of
commitment was submitted after the time set for submission of BAFOs,
the agency was precluded from accepting the revised letter.
Definitive responsibility criteria are specific and objective
standards established by an agency as a precondition to award that are
designed to measure a prospective contractor's ability to perform the
contract; the criteria limit the class of contractors to those meeting
specified qualitative and quantitative qualifications necessary for
adequate contract performance, e.g., unusual expertise or specialized
facilities. See Federal Acquisition Regulation (FAR) sec. 9.104.2; Gelco
Servs., Inc., B-253376, Sept. 14, 1993, 93-2 CPD para. 163, recon. denied,
B-253376.2, Oct. 27, 1993, 93-2 CPD para. 261. In this case, there is no
dispute by any of the parties that the manufacturer's letter of
commitment clause at issue in this protest constitutes a definitive
responsibility criterion since it establishes a specific and objective
standard to measure the offeror's ability to perform. See Software
City, B-217542, Apr. 26, 1985, 85-1 CPD para. 475 (specification requiring
each offeror of software to obtain a manufacturer's letter of
commitment for each product offered guaranteeing the supply of the
product to the offeror for the term of the contract is a definitive
responsibility criterion).
Where, as here, a protester alleges that a definitive responsibility
criterion has not been satisfied, we will review the record to
ascertain whether evidence of compliance has been submitted from which
the contracting officer reasonably could conclude that the criterion
has been met; generally, a contracting agency has broad discretion in
determining whether offerors meet definitive responsibility criteria
since the agency must bear the burden of any difficulties experienced
in obtaining the required performance. Prime Mortgage Corp., 69 Comp.
Gen. 618 (1990), 90-2 CPD para. 48. The relative quality of the evidence
is a matter within the contracting officer's judgment; however, the
official may only find compliance with the definitive responsibility
criterion based on adequate objective evidence. Tutor-Saliba Corp. et
al., B-255756, Mar. 29, 1994, 94-1 CPD para. 223. Given that the GMC
Truck letter identifies the CLIN, vehicle model number, and guaranteed
minimum quantity of CLIN vehicles which GMC Truck will provide to
McCombs in support of that offeror's Group 17 contract, we think that
the contracting officer reasonably concluded that McCombs satisfied
the manufacturer's letter of commitment requirement here.
While the protester contends that the letters of commitment submitted
by other vehicle manufacturers for non-GMC vehicle groups render the
identity of McCombs ambiguous because they refer to McCombs by a name
different from what appears on its proposal, the record does not
support this contention with respect to the Group 17 contract award.
Simply stated, the GMC Truck letter of commitment for Group 17
specifically identifies McCombs by its proposal name--McCombs Fleet
Services--and guarantees a source of supply for each GMC vehicle
proposed by McCombs in accordance with the terms of the RFP.
Consequently, we see no basis to conclude that the contracting officer
acted unreasonably in determining that McCombs met the letter of
commitment definitive responsibility criterion.
To the extent Carter objects to McCombs' GMC Truck letter of
commitment on the ground that it was submitted and accepted after the
time set for submission of BAFOs, we note that because definitive
responsibility criteria involve matters of responsibility, evidence of
compliance with such provisions may be provided any time up to actual
award. Id.
Other Responsibility Challenges
In early January 1996, Carter contacted the contracting officer and
advised her that several different companies had filed registrations
to use the assumed name of "McCombs Fleet Services." Carter also
advised the contracting officer that one of those entities--McCombs
Austin--had been rejected from GMC's bid assistance program, which
offers "invoice credits" to participating dealers and ultimately
allows them to provide vehicles to the customer at lower prices. In
this regard, the record shows that another entity that was registered
to use the McCombs Fleet Services name--Red McCombs Pontiac-GMC
Truck--had been admitted by GMC to the same bid assistance program
from which McCombs Austin had been rejected.
Carter contends that once the contracting officer received this
information, she was required to further investigate McCombs'
responsibility. Had she done so, Carter contends, the contracting
officer would have discovered numerous FAR violations by the awardee;
specifically, Carter alleges that McCombs improperly entered into a
prohibited contingent fee arrangement with Red McCombs to use that
firm's bid assistance membership in order to offer lower prices, see
FAR sec. 3.401, and that McCombs improperly failed to disclose its
teaming arrangement with Red McCombs in its offer, in contravention of
FAR sec. 9.603. Carter also contends that because McCombs allegedly
relied on assistance from Red McCombs, its Certificate of Independent
Price Determination is false. Alternatively, Carter contends that
McCombs submitted a below-cost offer.
Before awarding a contract, a contracting officer must make an
affirmative determination that the prospective contractor is
responsible. FAR sec. 9.103(b). The determination of a prospective
contractor's responsibility rests principally within the broad
discretion of the contracting officer, who, in making that
determination, must of necessity rely on his or her business judgment.
See Garten-und Landschaftsbau GmbH Frank Mohr, B-237276; B-237277,
Feb. 13, 1990, 90-1 CPD para. 186. While we review an affirmative
responsibility determination where it is shown that it may have been
made in bad faith, see Bid Protest Regulations, 4 C.F.R. sec. 21.5(c)
(1996); Tutor-Saliba Corp. et al., B-255756.2, Apr. 20, 1994, 94-1 CPD para.
268, we find no such showing here.
There is simply no evidence in the record--other than unsubstantiated
speculation--to support Carter's allegations that McCombs has
"teamed," or otherwise colluded in an improper contingent fee
arrangement, with Red McCombs--or any other entity--to obtain contract
award, or otherwise ensure successful performance of the Group 17
contract at its proposed price. As a preliminary matter, we note that
enrollment in a manufacturer's bid assistance program was not a
prerequisite or condition of the solicitation; rather, it is a benefit
which offerors apply for and use, according to their individual needs
and the manufacturer's terms. Apparently, Red McCombs is entitled to
apply an $1800 invoice discount credit to every GMC vehicle price it
proposes in upcoming competitions; without explanation, Carter
contends that McCombs' offered lower prices resulted from the
application of Red McCombs' $1800 vehicle discount. However, absent
some corroborating evidence, such speculation does not constitute a
basis for our Office to question the contracting officer's affirmative
determination of McCombs' responsibility.
The record shows that on December 15, 1995, GSA's Credit and Finance
Division completed a pre-award survey of the offeror's financial
capability which verified that McCombs Fleet Services was the
registered name of McCombs-Austin and further concluded that McCombs
Austin was a responsible legal entity, capable of performing at the
prices it had proposed. After receiving this information, the
contracting officer decided not to further investigate Carter's
allegations of impropriety since no concrete evidence was proffered to
support the charges, and the contracting officer already had reliable,
current information in her possession--the GSA financial survey--which
demonstrated McCombs' responsibility. While Carter may disagree with
the contracting officer's determination of responsibility, that
disagreement does not suffice to show--or even suggest--that the
contracting officer acted in bad faith. See Tutor-Saliba Corp. et
al., B-255756.2, supra. Under these circumstances, we will not review
the agency's affirmative responsibility determination, or otherwise
consider Carter's speculative allegations of impropriety on the
awardee's part.
Carter's alternative claim that McCombs' proposed price represents a
"buy-in" is not a valid basis for protest. An offeror, for various
reasons, in its business judgment, may decide to submit a below-cost
offer, and such an offer is not inherently invalid. Little Susitna,
Inc., B-244228, July 1, 1991, 91-2 CPD para. 6. Whether an awardee can
perform the contract at the price offered is a matter of
responsibility, which as discussed above, we will not review absent a
showing of possible bad faith or that definitive responsibility
criteria have not been met, exceptions that do not apply here. Id.
The protest is denied.
Comptroller General
of the United States
1. The cut-off date pertained to "G model" vehicles, which are not
part of the Group 17 vehicle category.