TITLE:  IPI Graphics, B-286830; B-286838, January 9, 2001
BNUMBER:  B-286830; B-286838
DATE:  January 9, 2001
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IPI Graphics, B-286830; B-286838, January 9, 2001

[Image]Decision

Matter of: IPI Graphics

File: B-286830; B-286838

Date: January 9, 2001

Frederic G. Antoun, Jr., Esq., for the protester.

Roy E. Potter, Esq., Government Printing Office, for the agency.

Aldo A. Benejam, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Agency reasonably determined that protester was nonresponsible based upon
conclusion that protester lacked the capability necessary to perform the
contract where protester failed to demonstrate or provide sufficient
evidence to show that it has adequate production controls and quality
assurance methods to satisfy the quality requirements of the contracts.

DECISION

IPI Graphics, Inc. protests the determinations by the Government Printing
Office (GPO) that it is nonresponsible under two invitations for bids (IFB)
designated as programs Nos. B315-S and C518-S, for various publications for
the National Endowment for the Humanities and the Department of the
Interior. IPI argues that the nonresponsibility determinations lack a
reasonable basis.

We deny the protests.

Both IFBs contemplated the award of a fixed-price requirements contract for
the required printing services. Under program No. B315-S, the contractor is
to provide booklets, guide books, and handbooks, estimated at between 2,000
to 40,000 copies per order from November 1, 2000 through October 31, 2001.
Under program No. C518-S, the contractor is to provide estimated quantities
ranging from 12,000 to 15,000 of a booklet titled "Humanities," on a
bi-monthly basis from December 1, 2000 through November 30, 2001.

The IFBs provided that a quality assurance level II (QL II) standard for
printing and finishing would apply to items produced under the contracts.
Under program No. B315-S, the specifications covered the production of books
and pamphlets requiring such operations as "conventional and electronic
pre-press, color separation, creation of preliminary film, halftone,
duotone, tritone, quadtone, . . . printing on face and back in one to six
colors including four color process inks from film or digital files, paper,
binding, packing, and distribution." Agency Report (AR) B315-S, exh. A, at
4. Under program No.C518-S, the specifications covered the production of a
"self-cover publication requiring such operations as electronic prepress,
color separation, printing in four-color process plus one additional color,
binding, packing, and distribution." Id. C518-S, exh. A, at 5. Both IFBs
advised that in order to determine the responsibility of the prime or any
subcontractor, the government reserved the right to conduct on-site preaward
surveys of the firm's facilities, or require other evidence of technical,
production, managerial, financial, and similar abilities to perform the
contract.

In order to determine IPI's responsibility, the contracting officers (CO)
inquired from the GPO's Quality Assurance Section (QAS) regarding IPI's
ability to produce acceptable QL II work. In addition, with respect to
program No. B315-S, on October 17, 2000, a GPO representative completed a
preaward survey form in which he noted in the remarks section that as of
March 23, 1999, he "recommend[ed] no awards to [IPI] at [QL II] containing
all 4 color process for multi sig- pieces (pamphlet and books) . . ."; he
also specifically recommended "no award" to IPI under the IFB here. AR
B315-S, exh. B, Preaward Survey.

The record shows that IPI had asked that the QAS reassess its recommendation
that IPI not be awarded any work involving QL II. In connection with this
request, the GPO conducted an on-site inspection of IPI's press sheets and
samples at the firm's facility on November 3, 2000. The inspection report
found several defects in IPI's products, including "hickies and spots,"
"register," "type quality and uniformity," "solid or screen tints color
match," and "process control match." AR C518-S, exh. B, Contractor Quality
Level Inspection Report. Based on the results of that inspection, the CO
concluded that IPI had "failed to increase their quality to a [QL II]
level." Id., exh. B, Determinations and Findings, Nov. 13, 2000.

Based on the information provided by the QAS, the preaward survey form, and
the results of the on-site inspection, the COs both independently determined
the firm nonresponsible, and awarded the contracts to the next low bidders.
[1] These protests followed.

As to both nonresponsibility determinations, IPI primarily contends that the
COs improperly failed to request "typical" pre-award surveys, which,
according to IPI, should have included a review of the firm's many other
jobs in progress, past performance, and quality control procedures and
production methodology. In particular, IPI maintains that the
nonresponsibility determinations were unreasonable given that it has been
successfully producing work involving 4-color process for GPO for several
years. In addition, IPI argues that it was unreasonable for the COs to rely
solely on the QAS recommendation (to not award IPI any QL II work) to
determine the firm nonresponsible.

Under the GPO's Printing Procurement Regulation (PPR), the CO must make an
affirmative determination that a firm is responsible before awarding a
contract to that firm. PPR I-5.1. In order to receive a favorable
responsibility rating, an offeror must meet several minimum standards
applicable to the procurement, including having a satisfactory record of
performance regarding both quality and timeliness on previously-awarded
contracts, and possessing, or having the ability to obtain, the necessary
equipment, technical skills, and productive capacity to perform the
contract. Id. I-5.4(d). In addition, the PPR requires that the successful
contractor have adequate production controls and quality assurance methods
to satisfy the quality requirements of the contract. Id. I-5.4(e). The PPR
requires that the CO make a nonresponsibility determination if, based on the
available information, there is no clear indication that the prospective
contractor meets those minimum standards. Id. I-5.6. The CO is required to
determine a firm nonresponsible where there is doubt as to the offeror's
productive capability which cannot be resolved affirmatively. Id.

The CO is vested with broad discretion in exercising his or her business
judgment in making a nonresponsibility determination. Document Printing
Serv., Inc., B-256654, B-257051, July 8, 1994, 94-2 CPD para. 13 at 3. Our
Office generally will not disturb a nonresponsibility determination unless a
protester can show either that the procuring agency had no reasonable basis
for the determination or that it acted in bad faith. Id. In our review of
nonresponsibility determinations, we consider only whether the negative
determination was reasonably based on the information available to the CO at
the time it was made. Id. at 4. Based on our review of the record here, we
think that the nonresponsibility determinations are reasonably supported.

The COs' determinations that IPI is nonresponsible were primarily based on
their independent finding that IPI lacked adequate production controls and
quality assurance methods to satisfy the quality requirements of the
programs at issue. Specifically, in their sworn declarations in response to
these protests, the COs state that they were aware that IPI had limited
capabilities to produce some types of QL II work, and were also aware that
IPI had on several occasions failed to produce acceptable QL II work that
warranted removal of a long-standing QAS recommendation that the firm not be
awarded that type of work. See ARs B315-S and C518-C, exhs. E, COs'
Declarations. The COs further state that their independent inquiries to the
QAS revealed that IPI had recently requested that its 4-color capabilities
be reevaluated, and that office confirmed that IPI had recently failed to
produce acceptable full 4-color work as called for under both programs at
issue here.

The CO under program No. B315-S states that given the complexity of the work
covered by that program, he was particularly concerned with IPI's continued
inability to produce acceptable samples of full coverage 4-color process
work, or pass press sheet inspections--operations covered by that program.
Similarly, the CO for program No. C518-S states that based on the
information provided by GPO's QAS-including that IPI had failed to
demonstrate its capability to perform the work required by that program as
recently as during the on-site inspection conducted on November 3, 2000--he
determined that IPI was nonresponsible.

In our view, the COs' nonresponsibility determinations are reasonably
supported by the record. The IFBs imposed a quality assurance standard of
Level II for the publications, which IPI concedes is an essential element of
meeting the minimum contract requirements. Further, contrary to IPI's
contentions, the specifications for both programs call for operations that
include 4-color processing. The record further shows that the COs were aware
that IPI had limited capabilities to perform QL II work, and this was
confirmed by the GPO's QAS which has recommended that the firm not be
awarded any QL II work. Moreover, an on-site inspection of press sheets and
samples recently conducted at IPI's facilities found that IPI had failed to
improve its quality to the required QL II level, and specifically concluded
that IPI "will not meet the standards required for . . .Program [C]518-S."
AR C518-S, exh. B, Contractor Quality Level Inspection Report, Nov. 3, 2000.

The record further shows that although IPI has requested that the GPO
reassess the QAS's recommendation that the firm not be awarded QL II work,
the firm has been unable to demonstrate to GPO's satisfaction that it can
produce work of the required quality. Contrary to IPI's argument, therefore,
the record clearly shows that in reaching their determinations, the COs did
not rely solely on the QAS's recommendation, but also considered the firm's
failure to produce acceptable QL II work during an on-site inspection. In
sum, we conclude that based on the information available to them at the time
showing that IPI lacked adequate production controls and quality assurance
methods required by the respective programs, the COs reasonably determined
that IPI was nonresponsible.

IPI's argument that the COs improperly failed to conduct "typical" preaward
surveys because they failed to consider the firms performance on other
projects, is without merit. A preaward survey is not a legal prerequisite to
a responsibility determination; COs have broad discretion concerning whether
to conduct such surveys and may use, as was done here, other information
available to them concerning a firm's responsibility. See Mail Boxes Etc.,
B-281487, Feb. 16, 1999, 99-1 CPD para. 37 at 4. In any event, given the QAS's
longstanding recommendation that IPI not be awarded any QL II work, and in
view of the fact that IPI failed the GPO's recent on-site inspection of
press sheet and samples supplied by IPI, we fail to see, and IPI does not
explain, how consideration of IPI's performance on other jobs could have
overcome both COs' doubts raised by IPI's failure to meet the quality
standards established by the programs at issue here.

The protests are denied.

Anthony H. Gamboa

Acting General Counsel

Notes

1. While IPI's business size status is not clear from the record, even if
the protester is a small business concern, GPO was not required to refer the
nonresponsibility determinations to the Small Business Administration
because GPO, as a legislative branch agency, is not subject to the referral
requirements of the Small Business Act, 15 U.S.C. sect. 637(b)(7) (1994). See
Fry Communications, Inc., B-207605, Feb. 1, 1983, 83-1 CPD para. 109 at 2-5.