BNUMBER:  B-280538 
DATE:  October 15, 1998
TITLE: Continental Transport & Moving, Inc., B-280538, October 15,
1998
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Matter of:   Continental Transport & Moving, Inc.

File:        B-280538

Date:        October 15, 1998

Michael Nolan for the protester.
Dennis J. Gallagher, Esq., Department of State, for the agency.
Robert C. Arsenoff, Esq., and Paul I. Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest challenging nonresponsibility determination is denied where 
record provides reasonable basis for contracting officer's conclusion 
that protester's performance record was unsatisfactory based on 
seriously deficient recent past performance. 

DECISION

Continental Transport & Moving, Inc. protests the issuance of purchase 
order
No. S-KZ100-98-M-0376 to Interdean International Movers by the 
Department of State for packing and shipping goods belonging to a 
foreign service officer who was being transferred.  Continental, which 
submitted a lower quotation than Interdean, principally objects to the 
agency's determination that it is nonresponsible.

We deny the protest.

On June 15, 1998, the agency requested Interdean and Continental to 
provide "packing-out" estimates for the effects of a foreign service 
officer who was being transferred from Kazakstan to Cyprus.  Although 
Continental quoted a lower price, the General Services Officer (GSO) 
in charge at the time advised the Embassy Customs and Shipping 
Assistant that Continental was not a responsible offeror because it 
had recently undergone a change in management, fired its chief local 
employee and had not paid its employees in several months.  As a 
result, the assistant telephonically informed Interdean that it would 
receive the purchase order. 

Upon her return to the embassy in Almaty, the present GSO (and 
contracting officer) issued the protested purchase order to Interdean 
on June 29, essentially ratifying the earlier nonresponsibility 
determination.  This protest was filed on July 7 after Continental 
learned that it had not received the purchase order. Subsequently, the 
contracting officer obtained written confirmation of Continental's 
recent financial and performance problems in Almaty.  

Continental raises various issues and questions about the propriety of 
the procurement process; however, the principal focus of our analysis 
is its challenge to the nonresponsibility determination[1] since 
competitive prejudice is an essential element in every viable protest, 
Sytel, Inc., B-277849.2, B-277849.3, Jan. 8, 1998, 98-1 CPD  para.  21 at 
11, and we, therefore, need not consider the other issues if the 
nonresponsibility determination was reasonably based because 
Continental could not have received the purchase order in any event.

Before awarding a contract, a contracting officer must make an 
affirmative determination that the prospective contractor is 
responsible.  Federal Acquisition Regulation (FAR)  sec.  9.103(b).  In the 
absence of information clearly indicating that the prospective 
contractor is responsible, the contracting officer shall make a 
determination of nonresponsibility.  Id.  With regard to a prospective 
contractor's prior performance, the firm must have a satisfactory 
performance record, and a contractor that is, or has recently 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.  FAR
 sec.  9.104-3(b). 

We will not question a nonresponsibility determination absent a 
showing of bad faith by the contracting agency or the lack of any 
reasonable basis for the determination, since the determination is 
essentially a matter of business judgment and encompasses a wide 
degree of discretion.  Schenker Panamericana (Panamï¿½) S.A., B-253029, 
Aug. 2, 1993, 93-2 CPD  para.  67 at 2-3.  The contracting officer may base 
her or his determination upon a reasonable perception of inadequate 
past performance, even where the contractor disputes the agency's 
interpretation of the facts or has appealed an adverse determination.  
Id. at 3.

The agency has detailed confirming evidence which supports its 
nonresponsibility determination in its report on the protest.  The 
first document is a July 17 letter from the Almaty office of 
Sea-Land--a transportation firm from which Continental booked shipping 
containers.  That letter states that a container en route to the U.S. 
was put on hold in Rotterdam because Continental had not paid for two 
previous containers of diplomatic cargo despite numerous and prolonged 
unsuccessful collection attempts.  The second document is a July 20 
letter from a former supervisory employee of Continental who worked 
for the firm from late 1997 until he resigned in June 1998, stating 
that he had not been paid his full salary in any given month, that he 
and the packers who worked for him went for 4 months with no salary at 
all, and that in May 1998 he asked the embassy to pay him $1,000 
directly so that he could pay himself and the packers.  The third 
document is a July 9 account of a Marine officer who had recently been 
packed by Continental in Almaty for a move to Peru reporting that when 
he arrived at his destination and unpacked he discovered that his 
stereo had been stolen and replaced with rocks--a circumstance he 
believed had occurred before the shipment left Kazakstan.

Continental replied regarding this evidence in its comments on the 
agency report. With respect to the Sea-Land account, in addition to 
suggesting a social relationship between the author of the July 17 
letter and the contracting officer, the protester principally 
characterized the description of events as inaccurate because some of 
the cargo involved was not diplomatic.  The protester did, however, 
admit the arrearage to Sea-Land, explaining that it was due to a 
principal company officer being away on travel for 2 months leaving 
the Almaty office without an American employee.  Further, Continental 
represented that payment had since been made as a result of the 
principal employee's intervention upon his return.  With respect to 
the former supervisor's account, Continental argued that the employee 
had been coerced by the contracting officer, and disputed the actual 
length of service of the employee, the agreed upon salary and the 
allegations that employees had not been paid for 4 months.  The 
protester also maintained that the $1,000 payment by the embassy to 
the employee constituted a violation of Kazakstani labor law.  
Finally, Continental submitted that the Marine officer's speculation 
as to how the theft of his stereo occurred was unsubstantiated and 
submitted a document from Vanipac Carrier, Inc.--another freight 
forwarder with which the protester contracts--stating that it was 
still investigating the incident without any conclusive findings as of 
August 14.

The agency provided additional responses to Continental's position.  
Regarding the Sea-Land arrearage situation, the agency points out that 
the absence of a principal employee for 2 months from Almaty together 
with the lack of competent staff and the consequent nonpayment of 
Sea-Land's bills is indicative of nonresponsibility.  Appended to the 
supplemental report is another document by Sea-Land which states that, 
notwithstanding Continental's representations that payments had been 
made, Sea-Land had no record of the payments.  Regarding the 
supervisory employee, the agency denies coercing the individual and 
reports that, after checking with agency experts, there was no 
violation of local labor law in the direct payment of $1,000 to the 
employee.  Finally, the supplemental report contains a claim for 
stolen and damaged goods in a late 1997 shipment packed by Continental 
in Almaty.  Continental elected not to comment on the supplemental 
agency responses.

This record supports the reasonableness of the agency's position.  In 
the absence of information clearly indicating that Continental was 
responsible, FAR  sec.  9.103(b) calls for a finding of nonresponsibility.  
Here, the Sea-Land arrearage remains unresolved and did not arise from 
circumstances beyond the protester's control.  With regard to the 
supervisory employee's account, the weight of the evidence supports 
his basic contention of underpayment or nonpayment by Continental 
resulting in the agency's direct payment of $1,000 as alleged, and not 
by the protester.  Finally, with respect to claims for stolen and 
damaged goods, the best that can be said for Continental's position 
with regard to the Marine officer's claim is that, pursuant to the 
protester's own evidence, the matter is still under investigation and, 
with regard to the other claim relating to a late 1997 shipment, 
Continental has elected not to respond.[2]  In sum, the record 
reflects recent instances of unsatisfactory performance by Continental 
which provided the contracting officer with a reasonable basis to 
conclude that Continental is nonresponsible.

The protest is denied.

Comptroller General
of the United States

1. Although Continental appears to be a small business, the 
nonresponsibility determination was not referred to the Small Business 
Administration for consideration under its certificate of competency 
program because program eligibility requires that the contract to be 
performed must be performed in the United States.  13 C.F.R.  sec.  
125.5(b)(ii) (1998); see Venusa, Ltd., B-217431, B-217432, Apr. 22, 
1985, 85-1 CPD  para.  458 at 1 n.1.

2. Continental also alludes to bad faith on the part of embassy 
personnel.  The protester's generalized and unsupported allegations 
are not sufficient to support a finding of bad faith which must be 
established by evidence that the agency acted with specific and 
malicious intent to injure the protester.  Schenker Panamericana 
(Panamï¿½) S.A., supra, at 5-6.  In this regard, rather then acting in 
bad faith, the record reflects that the agency has previously 
contracted with Continental and has expressed its clear willingness to 
issue purchase orders to Continental in the future if its present 
performance problems are corrected.