TITLE:   Blocacor, LDA, B-282122.3, August 2, 1999
BNUMBER:  B-282122.3
DATE:  August 2, 1999
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Blocacor, LDA, B-282122.3, August 2, 1999

Decision

Matter of: Blocacor, LDA

File: B-282122.3

Date: August 2, 1999

J. Hatcher Graham, Esq., for the protester.

Clarence D. Long, III, Esq., Department of the Air Force, for the agency.

Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office of
the General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Where agency presents a reasonable basis for finding protester
nonresponsible if it had been in line for award, General Accounting Office
will not consider argument regarding technical acceptability of proposal
since protester would not be in line for award even if it prevailed.

DECISION

Blocacor, LDA protests the rejection of its offer and the award of a
contract to Meneses & McFadden, Cartor and VHC Joint Venture under request
for proposals (RFP) No. F61040-99-R-0003, issued by the Department of the
Air Force for demolition of a hospital building and dormitory at Lajes Air
Base, Azores, Portugal. The protester argues that the agency wrongly found
its proposal technically unacceptable based on its failure to submit past
performance and other requested information. Blocacor also argues that the
agency violated the Federal Acquisition Regulation (FAR) by engaging in
discussions with some, but not all, offerors, and that the Air Force
improperly failed to allow a reasonable time for the submission of responses
to its discussion questions and to request another round of best and final
offers (BAFO).

We deny the protest.

BACKGROUND

The RFP provided for award to the offeror whose proposal "meets the
solicitation's minimum criteria for acceptable award at the lowest price."
RFP at 3. Proposals were to be evaluated on the basis of the following
factors:

1. Total overall price of proposal

2. Past performance in providing similar demolition services

  1. Submission of the name and address of a qualified shipping company and
     disposal location for all asbestos and hazardous waste associated with
     the contract.

Id.

Six proposals were received prior to the January 14, 1999 closing date.
Idalecio De Sousa submitted the lowest price, and Blocacor the second
lowest; Meneses & McFadden's price was fourth low. The contracting officer
found that the three lowest-priced offerors had all failed to furnish the
information required by the second and third evaluation factors. He
telephoned each of the three companies the following morning and told them
that they could have until noon that day "to submit clarifications regarding
the missing information." Memorandum of Law at 2. Blocacor did not submit
the requested information. The technical evaluation team determined that
because Blocacor had "failed to submit records of past performance for
similar type of work" and had not submitted the name and location of a
qualified shipping company or disposal location, its offer was
"non-responsive" (i.e., unacceptable). [1] Technical Evaluation Memorandum,
Jan. 18, 1999, at 2. The technical evaluation team also found the offers of
De Sousa and the third low offeror nonresponsive and recommended award to
Meneses & McFadden as the lowest-priced acceptable offeror. On February 17,
1999, a contract was awarded to Meneses & McFadden.

On February 24, De Sousa protested the rejection of its offer and the award
to Meneses & McFadden to our Office. By decision dated April 22, we
dismissed the protest on the ground that De Sousa was otherwise ineligible
for award and thus was not an interested party to protest. [2] Within 10
days of learning that we had determined De Sousa ineligible for award,
Blocacor filed its protest with our Office, arguing that it was now the
lowest-priced offeror otherwise eligible for award, and, as such, was an
interested party to protest. [3]

ANALYSIS

Blocacor argues that its proposal should not have been rejected as
technically unacceptable based on its failure to submit past performance
information and the name of a qualified shipping company and disposal
location because this information bears on its responsibility, and, as such,
could have been submitted after the date set for receipt of proposals. The
Air Force defends its rejection of the protester's proposal as technically
unacceptable and argues that Blocacor would never have been selected for
award in any event because it would not have been found responsible. As
discussed below, we find that the contracting officer had a reasonable basis
for determining Blocacor nonresponsible; accordingly, we need not address
the issue of the technical acceptability of its proposal. [4]

The contracting officer states that if he were required to consider Blocacor
for award, he would find the firm nonresponsible based on its performance
under a prior contract for asbestos abatement, during the course of which
Blocacor dumped asbestos at a site behind an elementary school in the
Azores, in violation of the terms of the contract and federal and local
environmental laws. Declaration of the Lajes Air Base Construction
Contracting Officer, May 26, 1999. According to the Air Force, this illegal
action demonstrates that Blocacor has neither a satisfactory performance
record nor a satisfactory record of integrity and business ethics, as
required for a determination of responsibility by FAR sect.sect. 9.104-1(c), (d).
Memorandum of Law at 8.

In making a responsibility determination, a contracting officer is vested
with a wide degree of discretion and, of necessity, must rely upon his or
her business judgment in exercising that discretion. Although the
determination must be factually supported and made in good faith, the
ultimate decision appropriately is left to the agency since it must bear the
effects of any difficulties experienced in obtaining the required
performance. For these reasons, we generally will not question a negative
determination of responsibility unless the protester can demonstrate bad
faith on the part of the agency, or a lack of any reasonable basis for the
contracting officer's determination. Miklin Corp., B-236746.2, Jan. 19,
1990, 90-1 CPD para. 72 at 1-2, recon. denied, B-236746.3, June 8, 1990, 90-1
CPD para. 540. Here, since the protester has not alleged bad faith on the part
of the agency, the only issue for our consideration is whether the
contracting officer reasonably found Blocacor nonresponsible based on its
performance under the earlier contract for asbestos abatement.

While, because the protester was not in line for award, the agency never had
to actually make a determination regarding its responsibility, the agency,
as explained above, has submitted a statement that it would have found the
firm nonresponsible, and the parties have addressed the issue in some
detail, including the submission of relevant documents. The record shows
that on April 23, 1998, the Air Force notified Blocacor that hazardous
materials containing asbestos, some of which had originated at the site of
the asbestos abatement project for which Blocacor was the contractor, had
been discovered at a dumpsite behind Lajes Elementary School. [5] Blocacor
responded to the Air Force's letter the same day, denying that any hazardous
materials had been dumped at the site behind the school "by BlocA�or or with
our permission." Letter from BlocA�or to the Air Force at 1 (Apr. 23, 1998).
[6] Blocacor also stated that materials and equipment had been stolen from
the project site. On April 29, the Air Force notified Blocacor that it was
holding it accountable for the asbestos from the project site discovered at
the dumpsite because under the terms of its contract, it was responsible for
all aspects of asbestos disposal, including adequate safeguarding and
security; as corrective action, the Air Force ordered Blocacor to retrieve
from the dumpsite and properly dispose of all asbestos material that it had
previously handled.

On April 30, Blocacor's president asked the Air Force to clarify the kind
and quantity of asbestos material that was to be retrieved and disposed of.
On June 30, the Air Force notified Blocacor that it was still developing a
response to its request for clarification. On August 28, 1998, the
contracting officer informed Blocacor that:

The obvious health hazards and danger to public health associated with
asbestos removal demands that the company entrusted to perform this work
exhibit high standards of business ethics, integrity, and ability. It is now
the opinion of the contracting officer that your failure to ensure proper
asbestos disposal as required under the contract draws into question your
commitment to these standards and your ability to perform this type of work.
Therefore, based upon the above, I hereby withdraw the opportunity for you
to clean up the asbestos discovered at the site. The Government, however,
does reserve the right to demand reimbursement against you for costs
associated with clean-up due to your improper disposal under this contract.

The agency subsequently awarded a separate contract for clean-up of the
dumpsite.

While Blocacor generally denies responsibility for any illegal dumping in
connection with its contract, it offers no support for its position. [7]
Based on its discovery of the tiles from the Blocacor worksite in the dump,
we think that the Air Force reasonably concluded that Blocacor had not
properly handled the hazardous waste from that project. Given the gravity of
the matter, we believe that the Air Force had a reasonable basis to
determine that Blocacor's performance was seriously deficient and that, as a
consequence, the firm was nonresponsible. [8] See FAR sect. 9.104-3(b)
(contractor who recently has been seriously deficient in contract
performance shall be presumed to be nonresponsible).

Accordingly, since Blocacor would have been ineligible for award even if its
proposal had been determined technically acceptable, it is unnecessary for
us to reach the question of whether the determination of technical
unacceptability was proper. Miklin Corp., B-236746.2, supra, at 3.

The protest is denied.

Comptroller General
of the United States

Notes

1. Although the agency refers to the protester's proposal as
"nonresponsive," the concept of responsiveness is not applicable to
negotiated procurements. Where a proposal submitted under a negotiated
procurement fails to meet a material requirement of the RFP, it must
ultimately be rejected as unacceptable, not as nonresponsive. Henry G.
Kirschenmann, Jr., B-239114, July 23, 1990, 90-2 CPD para. 63 at 2 n.1.

2. In our decision, Idalecio De Sousa, B-282122, Apr. 22, 1999, recon.
denied, B-282122.4, May 20, 1999, we found that De Sousa was otherwise
ineligible for award because it had no proposal available for consideration
at the time of award, having revoked its original offer by attempting to
replace it with a revised one, which could not be considered.

3. The agency argued in a preliminary request for dismissal that Blocacor's
protest, filed on May 3, was untimely because it was not received by our
Office within 10 days after the protester's February 18 debriefing. We
denied the request for dismissal, agreeing with Blocacor that until De Sousa
was declared ineligible for award, the protester had not been an interested
party to protest because De Sousa, whose proposal had been declared
unacceptable for the same reasons as its own and whose price was lower,
would have been in line for award ahead of it were Blocacor's protest to be
sustained. See Kato Corp.--Recon., B-250605.2, Mar. 19, 1993, 93-1 CPD para. 246
at 5.

4. With regard to the other arguments raised by the protester, Blocacor is
not an interested party to complain about the agency's failure to conduct
discussions with offerors other than itself since it suffered no prejudice
as a result of the agency's action. See Norfolk Shipbuilding & Drydock
Corp., B-248549, B-248549.2, Aug. 26, 1992, 92-2 CPD para. 127 at 3-4. Further,
we will not consider the protester's arguments that the agency improperly
failed to allow a reasonable time for the submission of responses to its
discussion questions and to request another round of BAFOs because they were
not raised in a timely manner. The protester was informed on the morning of
January 15 that it would be given until noon that day to submit the
information missing from its proposal; if it wished to protest the length of
time that it was given to respond and/or the fact that the agency had not
called for another round of BAFOs, it was required to do so at the latest
within 10 days after that date, or by January 25. See Bid Protest
Regulations, 4 C.F.R. sect. 21.2(a)(2) (1999); Merck & Co., Inc., B-248655, May
19, 1992, 92-1 CPD para. 454 at 3. Since the protester instead waited until over
3 months later to raise these arguments, they will not be considered.

5. Although the type of materials found at the dumpsite which were believed
to come from the site of the Blocacor contract was not identified in the
contemporaneous documentation, the Air Force noted in a memorandum to our
Office dated July 6, 1999, that "[t]ests were conducted and it was found
that the tiles dumped illegally were from the Blocacor site."

6. We note that the record is inconsistent in the spelling of the
protester's name, varying between the Portuguese spelling, "BlocA�or," and
an Americanized version, "Blocacor"; in our decision, we have used
"Blocacor" unless the particular document cited used the Portuguese.

7. The language in Blocacor's April 23 letter to the Air Force--in which it
states that "[n]o hazardous materials from this contract [were] taken to the
site behind the Lajes Elementary school by BlocA�or or with our
permission"--suggests that, rather than disputing that illegal dumping
occurred, Blocacor's position is that any such dumping occurred without its
permission. The Air Force points out that, as the contractor on the project,
Blocacor was responsible for all disposal of hazardous materials from the
site.

8. The April 29, June 30, and August 28 letters from the Air Force are
addressed to "Construlages (Blocacor)," which apparently refers to
Construlages, LDA and Blocacor, LDA, two companies headed by the same
president and sharing the same address. At different points in its protest
submissions, Blocacor appears to suggest that Construlages, not Blocacor,
was the company accused of illegal dumping by the local government
authorities in the Azores. Blocacor offers no evidence to support this
assertion, however. Further, despite the form of address used in the Air
Force letters, it is clear from those letters and Blocacor's responses that
both parties understood that the illegal dumping at issue concerned
Blocacor's contract.