BNUMBER:  B-279093.2 
DATE:  April 20, 1998
TITLE: Goshen Excavators, B-279093.2, April 20, 1998
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Matter of:Goshen Excavators

File:     B-279093.2

Date:April 20, 1998

Geoffrey Drury, Esq., Nania & Drury, for the protester.
Andre Bohdan Prypchan, Esq., Department of the Army, for the agency.
Christine F. Davis, Esq., and James A. Spangenberg, Esq., Office of 
the General Counsel, GAO, participated in the preparation of the 
decision.

DIGEST

Agency properly declined to reverse a nonresponsibility determination 
based on new information presented by the protester after the Small 
Business Administration declined to issue a certificate of competency, 
where the agency reasonably viewed as unpersuasive the protester's 
objections to a negative past performance reference and reasonably 
discounted a positive reference for a contract that was not similar to 
the instant contract.

DECISION

Goshen Excavators protests its rejection as nonresponsible by the 
United States Army Corps of Engineers, Chicago District, under request 
for quotations (RFQ) No. DACW23-97-Q-0136, for seawall protection 
construction work at the Great Lakes Naval Training Center, Fort 
Sheridan, Illinois.

We deny the protest.

The agency received three quotes on September 24, 1997.  Since 
Goshen's lowest-priced quote of $87,600 was in line for selection, the 
contract specialist conducted a preaward survey to assess Goshen's 
responsibility.  On October 30, the contract specialist recommended 
that Goshen be found nonresponsible based upon negative information 
obtained from four contract references, including the Corps's Rock 
Island Illinois District, which issued an unsatisfactory performance 
evaluation of Goshen's performance under a 1994 contract.[1]  The 
information from these references indicated that Goshen did not pay 
subcontractors on time, did not adequately supervise and manage the 
contract work, did not complete the work as scheduled, did not comply 
with government reporting requirements, and did not respond to 
telephone calls.

The contracting officer accepted the recommendation that Goshen was 
nonresponsible.  The contracting officer found particularly 
significant the Rock Island District's criticism of Goshen's control 
of, and timely payment to, subcontractors.  Because this contract and 
the Rock Island contract shared certain features--that is, Goshen, a 
Connecticut business, was located far from the Illinois job site and 
had proposed to subcontract a substantial amount of the contract 
work--the contracting officer viewed Goshen's past problems with 
subcontractors as posing a serious performance risk, such that he 
could not determine Goshen to be responsible.

Because Goshen is a small business concern, the contracting officer 
referred the negative determination to the Small Business 
Administration (SBA) under the certificate of competency (COC) 
procedures.  The contracting officer gave the SBA his responsibility 
determination, the preaward survey report, the negative performance 
evaluation from the Rock Island District, and Goshen's list of 
contract references.[2]  On November 25, SBA declined to issue a COC.

After Goshen was denied a COC, the firm persuaded the contracting 
officer to reconsider his nonresponsibility determination in light of 
additional past performance information supplied by Goshen.  First, 
Goshen disputed the negative performance evaluation by the Rock Island 
District and advised that it was seeking to overturn that evaluation, 
which had been rendered without the protester having an opportunity to 
comment.  In reevaluating Goshen's responsibility, the contracting 
officer confirmed that the Rock Island District had not afforded 
Goshen an opportunity to comment on the negative performance 
evaluation and was withdrawing the evaluation until it investigated 
Goshen's objections.  Nevertheless, because the Rock Island District 
had not issued a new evaluation or indicated any intent to issue a 
satisfactory evaluation, the contracting officer concluded that there 
was no basis to overturn his negative responsibility determination.

Second, Goshen argued that the Corps, during its preaward survey, 
should have contacted a car wash owner who hired Goshen to assist in 
the construction of his facility.  In reevaluating Goshen's 
responsibility, the Corps contacted the car wash owner, who confirmed 
that Goshen's work was satisfactory, but the reference did not resolve 
the Corps's doubts about Goshen's ability to perform the instant 
contract, which the Corps viewed as distinguishable from the car wash 
contract.  The agency observed that the car wash contract was not a 
government contract and did not entail government quality control and 
submittal requirements--requirements that Goshen had not responsibly 
discharged according to some government contract references.  
Furthermore, the car wash contract was a local contract and did not 
alleviate the agency's concern that Goshen lacked the ability to 
oversee contract work at remote performance sites, as in the instant 
case.

The contracting officer concluded that the additional information did 
not justify overturning his original determination that Goshen was 
nonresponsible.  On February 3, the agency made award to the firm 
submitting the next low-priced quote.  This protest followed.

SBA has conclusive authority to determine a small business firm's 
responsibility by issuing or refusing to issue a COC, and we generally 
will not review the SBA's failure to issue a COC, absent a showing of 
possible bad faith on the part of government officials or a failure to 
consider vital information bearing on the firm's responsibility.  4 
C.F.R.  sec.  21.5(b)(2) (1997); Eagle Bob Tail Tractors, Inc., B-232346.2, 
Jan. 4, 1989, 89-1 CPD  para.  5 at 3.  However, where new information 
bearing on a small business concern's responsibility comes to light 
for the first time after denial of a COC, but before award, the 
contracting officer may reconsider his original nonresponsibility 
determination.  Mid-America Eng'g and Mfg., B-247146, Apr. 30, 1992, 
92-1 CPD  para.  414 at 2.  On the other hand, where, after the SBA's denial 
of a COC, no new information is presented to lead the contracting 
officer to determine that the concern is responsible, the contracting 
officer should proceed with award to another appropriately selected 
and responsible firm.  Id.  

In cases where the contracting officer considers new information 
pertaining to the responsibility of a firm which had been denied a 
COC, our review is limited to whether the contracting officer 
reasonably reassessed the new information.  Eagle Bob Tail Tractors, 
Inc., supra.  Since responsibility determinations are generally within 
the discretion of the agency, which must bear the brunt of any 
difficulties in obtaining the required performance, we will not 
question a nonresponsibility determination unless the protester 
demonstrates bad faith by the agency or the lack of any reasonable 
basis for the determination.  Automated Datatron Inc., 68 Comp. Gen. 
89, 91 (1989), 88-2 CPD  para.  481 at 2-3. 

The protester first argues that the contracting officer should have 
discredited the negative performance evaluation issued by the Rock 
Island District, since the negative evaluation had been withdrawn to 
allow the protester an opportunity to comment.  Goshen argues that it 
apprised the contracting officer of numerous alleged errors in the 
negative performance evaluation, which should have persuaded the 
contracting officer that the Rock Island District would ultimately 
issue a satisfactory performance evaluation.

Although Goshen is of the opinion that the Rock Island District will 
issue a satisfactory performance evaluation, we find, based upon our 
review of the record, that the contracting officer's approach was 
reasonable.  Goshen admitted to the contracting officer that its 
subcontractors on the Rock Island contract complained about late 
payments, which apparently made the subcontractors reluctant to 
perform and caused performance delays.[3]  Goshen also made cursory 
objections to many of the other unsatisfactory ratings issued by the 
Rock Island District, arguing, for example, that the unsatisfactory 
rating of Goshen's professional conduct was simply the agency's 
"opinion."

A prospective contractor that is or recently has been seriously 
deficient in contract performance shall be presumed to be 
nonresponsible unless the contracting officer determines that the 
circumstances were properly beyond the contractor's control or that 
the contractor has taken appropriate corrective action.  Federal 
Acquisition Regulation  sec.  9.104-3(b).  A nonresponsibility 
determination may be based upon the procuring agency's reasonable 
perception of inadequate prior performance, even where the agency did 
not terminate the prior contract for default or the contractor 
disputes the agency's interpretation of the facts or has appealed an 
agency's adverse determination.  See Pittman Mechanical Contractors, 
Inc.--Recon., 70 Comp. Gen. 535, 538 (1991), 91-1 CPD  para.  525 at 4-5; 
Firm Otto Einhaupl, B-241553 et al., Feb. 20, 1991, 91-1 CPD  para.  192 at 
5.  In our view, the contracting officer had sufficient evidence from 
which to conclude that Goshen's performance of the Rock Island 
contract was unsatisfactory, notwithstanding the protester's appeal of 
the negative performance evaluation and its attempts to minimize its 
culpability for the undisputed problems experienced in performing the 
contract.

Goshen also argues that the contracting officer should have reversed 
its nonresponsibility determination based upon the positive reference 
given by the car wash owner.  However, Goshen offers no persuasive 
objection to the agency's judgment that the car wash contract, which 
was not a government contract and which was performed locally, 
provided little assurance of Goshen's ability to meet government 
reporting requirements and to meet deadlines and supervise 
subcontractors at a remote site.  We think that the contracting 
officer reasonably found that this positive reference was offset by 
the negative comments it received pertaining to Goshen's 
responsibility.

Goshen finally protests that the agency should have reconsidered a 
negative reference given by the Corps's New England District, which 
Goshen characterizes as inaccurate in certain respects and 
incompatible with that District's decision to award Goshen subsequent 
contracts.  However, the agency did not receive Goshen's letter 
containing these allegations before it again rejected Goshen as 
nonresponsible.  Thus, the agency had no obligation to further 
investigate this negative reference.  See Eastern Gas & Cylinder 
Servs., Inc., B-237926.2 et al., Feb. 5, 1991, 91-1 CPD  para.  116 at 4-5. 

In sum, the contracting officer reasonably determined that Goshen had 
not presented sufficient information to warrant reversing the prior 
nonresponsibility determination.[4]

The protest is denied.

Comptroller General
of the United States

1. Before completing his preaward survey, the contract specialist 
allegedly advised Goshen that he anticipated making an affirmative 
responsibility recommendation.  Even if the contract specialist made 
this remark, the record is clear that the contract specialist viewed 
Goshen as nonresponsible at the conclusion of the preaward survey.

2. Contrary to the protester's suggestions, the contracting officer 
did not withhold any information from SBA during the COC process; in 
particular, SBA possessed a complete list of the protester's contract 
references.

3. Goshen blamed this situation on a "stalemate" created by the 
agency, which allegedly stalled final payment until performance was 
complete, and the subcontractors, which allegedly stalled performance 
until payments were received.  Goshen said that it would endeavor to 
use more "peaceable" subcontractors on this contract.  

4. As the contracting officer gave SBA the entire file pertaining to 
his initial determination that Goshen was nonresponsible and there is 
no evidence of bad faith, we will not consider the protester's 
allegations pertaining to the initial nonresponsibility determination.  
See Joanell Labs., Inc., B-242415.16, Mar. 5, 1993, 93-1 CPD  para.  207 at 
4.