BNUMBER:  B-272114
DATE:  September 24, 1996
TITLE:  50 State Security Service, Inc.

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Matter of:50 State Security Service, Inc.

File:     B-272114

Date:September 24, 1996

Richard J. Webber, Esq., and Alison J. Micheli, Esq., Arent Fox, for 
the protester.
Maj. Michael J. O'Farrell, Jr., Department of the Army, for the 
agency.
Adam Vodraska, Esq., and James A. Spangenberg, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Contracting officer reasonably found protester nonresponsible where 
the protester failed to promptly provide the necessary proof that it 
would be able to comply with the required performance schedule.

DECISION

50 State Security Service, Inc. protests its rejection as 
nonresponsible under request for proposals (RFP) No. DAHC92-96-R-0039, 
issued by the United States Army Garrison-Panama, for security guard 
services.

We deny the protest.

The RFP, issued April 15, 1996, contemplated the award of a firm, 
fixed-price contract to the lowest priced, technically acceptable 
offeror for a base period of 
4 months (June 1 through September 30, 1996) with 4 option year 
periods extending to December 31, 1999 (when the installations covered 
by the contract are to be turned over to the government of Panama 
under the terms of the Panama Canal Treaty).  The RFP cautioned 
offerors to submit sufficient information to enable the contracting 
officer to fully ascertain each offeror's capability to perform all of 
the requirements contemplated in the RFP.

The agency received 10 proposals by the April 30, 1996, closing date.  
50 State's proposal was one of the four proposals determined by agency 
evaluators to be technically acceptable.  50 State, which was not 
operating in Panama, proposed filling the majority of guard positions 
with incumbent guards.  These guards had been recruited by 50 State's 
proposed general manager for the contract, who was then the general 
manager for an incumbent firm.

On May 7, the contracting officer requested that the four acceptable 
offerors furnish specific information about their capabilities, 
including the "qualification[s] of personnel assigned to the project," 
for a pre-award survey to determine the offerors' responsibility.  
Offerors were told that the requested information must be available 
for the survey and that failure to comply could result in exclusion 
from the competition.
      
The following day (May 8) 50 State's president and proposed general 
manager for the contract met with Army contracting officials in Panama 
to discuss the information requested by the agency.  Before the 
meeting began, one of the contracting officials stated that the 
presence of 50 State's proposed general manager presented a conflict 
of interest because that individual was currently employed by an 
incumbent contractor, who also was competing for this contract.  
Accordingly, 50 State's president asked his proposed general manager 
to leave the meeting, and that individual did not participate further.

The contracting officer's record of the May 8 meeting shows that he 
asked 50 State: "How are your people meeting minimum requirements 
(Bilingual, Experience, Police records)?  Show me files."  The 
contracting officer's record shows that 50 State responded:  "119 
People, list of names cannot be obtained.  Can get in office."  50 
State's president states in an affidavit that the Army ignored his 
offer at the meeting to put together such a list and provide it after 
the meeting.

On May 9, the contracting officer transmitted letters to the offerors 
being considered for award, including 50 State, requesting that they 
provide, by the following day, copies of their business certificates 
to operate as security guard companies in accordance with a specified 
Panamanian government decree, or proof that the certification is being 
obtained and will be in effect on June 1 (which was the commencement 
date for performance of the contract).

50 State responded on May 10 that it had retained a Panamanian lawyer 
and would obtain the necessary business certificate "in a timely 
manner," and that there was a possibility that 50 State would be 
purchasing a Panamanian company that is already certified.  In a 
separate letter dated that same day, 50 State's Panamanian lawyer said 
that he expected the negotiations to purchase the Panamanian security 
firm to be completed by May 17, but that he could not yet divulge 
information about the firm.

The contracting officer rejected 50 State and two of the three other 
offerors as nonresponsible later that day (May 10) and awarded the 
contract to Universal Security, S.A., on May 13.  In response to 50 
State's debriefing request, the agency,   by letter dated May 15, 
listed the reasons 50 State was determined nonresponsible:

     "(a) The feasibility of approach was considered to be too high a 
     risk.  50 State Security Service would be starting a new business 
     in Panama, with no existing workforce in country and could not 
     provide evidence that the required business certificates would be 
     approved by the Government of Panama by the contract award date 
     (contract awarded May 13, 1996).[[1]]

     "(b) The proposal indicated that recruitment had taken place for 
     prospective employees and that in-depth interviews had been 
     conducted.  Moreover, 50 State Security Service had obtained 
     letters of intent from personnel that had been selected.  
     Nonetheless, when asked to provide a list of names of prospective 
     employees, the company was not able to do so nor did it present 
     the letters of intent.

     "(c) The proposal indicated that it would require approximately 
     85 hours of training for entry level applicants before 
     performance.  It was determined that this was too high a risk to 
     be achieved in 18 days (considering no organizational structure 
     existed at time of award to accomplish this).

     "(d) During the evaluation period, 50 State Security Service 
     indicated that it was negotiating to purchase a licensed security 
     company in Panama.  However, it provided no evidence that any 
     financial arrangements had been made or letter of intent from the 
     licensed security company existed."[[2]]

     "Even though 50 State Service's proposal was technically 
     acceptable and the company has a good record of past performance, 
     the risks involved in not having the proper number of trained 
     security guards in place by midnight on 31 May 1996 was the 
     deciding factor.  Tremendous loss of government property and 
     great risk to government personnel could occur if the delivery 
     schedule was not met.  In accordance with [Federal Acquisition 
     Regulation] Part 9, a prospective contractor must present 
     acceptable evidence of its ability to obtain required resources.  
     At the time of contract award, the contracting officer determined 
     that a mere statement indicating all required resources would be 
     in place, was not sufficient to override the tremendous risk 
     involved."

50 State protested the nonresponsibility determination to our Office 
on May 22.  Notwithstanding 50 State's protest, the Army authorized 
the awardee to commence performance of the contract based on urgent 
and compelling circumstances.

50 State argues that it was not given a reasonable opportunity to 
demonstrate its responsibility and that each of the grounds upon which 
the Army based its nonresponsibility determination was unreasonable.  
50 State asserts that it should have received award and, had it become 
apparent as the performance date approached that 50 State would be 
unable to perform as proposed, the contracting officer could have 
extended the incumbent contracts and taken whatever contractual 
actions regarding 50 State he deemed appropriate.

The Army explains that the current solicitation consolidates the guard 
duties covered by eight existing contracts that expired May 31, some 
of which could not be extended further, and that the contractor is 
also to assume critical new security responsibilities not covered by 
existing contracts.  The contracting officer states that his 
nonresponsibility determination considered the critical nature of the 
guard services as well as the limited time--18 days--remaining prior 
to the commencement of contract performance.  With time running out, 
the Army asserts that the contracting officer made a reasonable 
business decision to find 50 State nonresponsible, and to award the 
contract to Universal in order to permit Universal adequate time to 
prepare to begin performance on June 1, 1996. 
 
Contracts may only be awarded to responsible prospective contractors.  
Federal Acquisition Regulation (FAR)  sec.  9.103(a).  To be determined 
responsible, a prospective contractor must, among other standards, be 
able to comply with the required performance schedule and have the 
necessary organization, experience, operational controls, and 
technical skills, or the ability to obtain them.  FAR  sec.  9.104-1(b) and 
(e); Schwendener/Riteway Joint Venture, B-250865.2, Mar. 4, 1993, 93-1 
CPD  para.  203.  Except to the extent that a prospective contractor has 
sufficient resources or proposes to perform the contract by 
subcontracting, the contracting officer should require acceptable 
evidence of the prospective contractor's ability to obtain required 
resources.  Acceptable evidence normally consists of a commitment or 
explicit arrangement, that will be in existence at the time of 
contract award, to rent, purchase, or otherwise acquire the needed 
facilities, equipment, other resources, or personnel.  FAR  sec.  
9.104-3(b).

The burden is on a prospective contractor to demonstrate affirmatively 
its responsibility.  FAR  sec.  9.103(c).  In the absence of information 
clearly indicating that the prospective contractor is responsible, the 
contracting officer must make a determination of nonresponsibility.  
FAR  sec.  9.103(b); Theodor Arndt GmbH & Co., B-237180, Jan. 17, 1990, 
90-1 CPD  para.  64.  A nonresponsibility determination is a matter of 
business judgment within the discretion of the contracting officer; we 
generally will not question a negative determination of responsibility 
unless the protester can demonstrate bad faith on the agency's part or 
a lack of any reasonable basis for the determination.  TAAS-Israel 
Indus., Inc., B-251789.3, Jan. 14, 1994, 94-1 CPD  para.  197.  While a 
contracting officer should give an offeror a reasonable opportunity to 
offer relevant information with respect to responsibility issues if 
time permits, we have also recognized that a procuring activity is not 
required to delay an award indefinitely while an offeror attempts to 
cure the causes for its nonresponsibility.  See Tomko, Inc., 63 Comp. 
Gen. 218 (1984), 84-1 CPD  para.  202; Schwendener/Riteway Joint Venture, 
supra.

As indicated, the contracting officer's fundamental concern with 50 
State was that it may not have a sufficient number of qualified guards 
in place when performance under the contract began on June 1 to ensure 
the protection of personnel and property, given that the existing 
contracts were expiring or did not cover the work.  The solicitation 
clearly established June 1 as the date on which contract performance 
commenced, and thus it should have been reasonably apparent to 
50 State and the other offerors that within the month following the 
April 30 closing date the agency needed to evaluate proposals and make 
an award with sufficient lead time for the awardee to prepare for 
contract performance.  Further, in light of the Army's May 7 expedited 
scheduling of the pre-award survey meeting; the discussion at the May 
8 meeting, which 50 State personnel traveled to Panama to attend; and 
the Army's May 9 request for proof of the required certification, to 
be provided by the following day, it should have also been reasonably 
apparent to 50 State that any additional information showing its 
responsibility was needed immediately as award was imminent--only 3 
weeks remained before the commencement of contract performance.  

Specifically, the contracting officer at those times sought evidence 
that 50 State possessed, or could at least obtain, a work force 
meeting the minimum qualifications listed in the RFP and promised in 
50 State's proposal.  In the May 7 notification of the pre-award 
survey, the contracting officer requested that information on the 
qualifications of personnel be made available, and at the May 8 
meeting, asked 50 State:  "How are your people meeting minimum 
requirements (Bilingual, Experience, Police records)?  Show me files."  
Despite the contracting officer's explicit request that information on 
the qualifications of personnel be available for the pre-award survey, 
50 State did not bring any such documentation with it to the meeting, 
and despite the contracting officer's actual request for such 
information at the May 8 meeting, 50 State did not then provide such 
information or offer to supply the requested information on 
qualifications after the meeting.  Indeed, while the RFP required that 
documentation showing the qualifications of all proposed personnel be 
submitted by the awardee prior to the commencement of contract 
performance, 50 State has never provided such evidence that any of its 
proposed guards met the minimum qualifications.[3]  

Thus, it clearly was incumbent on 50 State, in order to receive the 
award, to respond promptly to the contracting officer's request for 
acceptable evidence of the firm's ability to obtain the necessary 
resources to meet the performance schedule.  Under such circumstances, 
the agency acted reasonably in finding 50 State nonresponsible for 
failure to promptly demonstrate its responsibility.  See Dock Express 
Contractors, Inc., B-227865.3, Jan. 13, 1988, 88-1 CPD  para.  23; Roarda, 
Inc., 
B-204524.5, May 7, 1982, 82-1 CPD  para.  438.

50 State argues that it was not given a meaningful opportunity to 
demonstrate its responsibility because its proposed general manager, 
who had recruited the necessary personnel, was excluded from 
participating in the May 8 pre-award survey meeting, and because the 
Army did not ask 50 State to submit a list of names of prospective 
employees and letters of intent.

However, the record evidences that even had 50 State's proposed 
general manager been allowed to participate in the May 8 meeting, he 
could have only provided his recollection of the names of some of the 
guards he recruited and his assurances that the guards were committed 
to working for 50 State.  Although the president of 50 State alleges 
that his offer to compile a list of guards and provide it to the Army 
after the meeting was ignored by contracting officials, and that 
contracting officials did not ask for letters of intent, it was 
incumbent upon 50 State to provide such information on its own 
initiative regarding its capability to obtain the requisite personnel 
to meet the performance schedule, since it is the burden of the 
offeror to affirmatively demonstrate its responsibility.  Theodor 
Arndt GmbH & Co., supra.  
50 State never did provide a list of proposed guards or show that 
those guards were committed to working for 50 State and has not 
demonstrated in its protest that it ever had such evidence available.  
More significantly, merely supplying a list of proposed guards would 
have been insufficient to satisfy the agency's request that 
50 State provide evidence that the proposed guards would be qualified 
by the 
June 1 commencement date. 

50 State asserts that, had it been asked, it could have provided more 
information about its arrangements with the Panamanian security firm 
it was negotiating to purchase, which would have provided another 
source of guard personnel.  However, 50 State did not inform the Army 
that such an arrangement was even contemplated until its May 10 
response to the contracting officer's request for the required 
business certificate.  As indicated above, it should have been 
apparent to 50 State that any additional information showing its 
responsibility, such as a letter of intent from the Panamanian 
security firm, needed to be provided immediately to the contracting 
officer.  

Given the agency's need for information pertaining to the availability 
of qualified guards in light of the rapidly approaching contract 
commencement date, and in view of the failure of 50 State to promptly 
provide the necessary proof of responsibility as required by FAR  sec.  
9.103(c), the contracting officer's decision to find 50 State 
nonresponsible was reasonable.  Theodor Arndt GmbH & Co., supra.

The protest is denied.

Comptroller General
of the United States

1. The contracting officer's request for proof of the required 
business certificate indicated that the certification procedure would 
take at least a month after the filing of the application with the 
Panamanian government.  Neither 50 State nor its Panamanian lawyer 
indicated in their responses when 50 State had filed its application, 
nor has 50 State produced any such evidence during the course of this 
protest.

2. Although it was not mentioned in the proposal, 50 State indicated 
on May 10, in responding to the contracting officer's request for 
proof of the required business certificate, that there was a 
possibility it would be purchasing a controlling interest in a 
licensed Panamanian security firm, whose identity 50 State did not 
reveal.  As described above, 50 State's Panamanian lawyer mentioned 
that he expected the negotiations to be completed by May 17, a week 
later.

3. Although 50 State is relying primarily on incumbent guards, the 
record indicates that the previous contractors were performing to a 
variety of different standards, and thus it is not certain that all 
the incumbent guards would have met the qualifications set out in this 
RFP.  Even if the incumbent guards already met the qualifications, 50 
State was also proposing other guards, but provided no acceptable 
evidence that these individuals were also qualified.