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.