ERKA raises a number of challenges to the agency's evaluation, source selection decision, and determination that ERKA was not responsible. Because, as described below, we find reasonable the agency's negative determination of ERKA's responsibility, we need only address that determination.

The protester complains that the CO's negative determination of ERKA's responsibility ignored the firm's positive performance history on projects in Romania, Iraq, and Africa. See Comments at 27-28. The protester also argues that it was improper for the agency to consider the default termination of the Eagle Family Housing contract because the matter is currently under appeal to the ASBCA. See id. at 26-27. Moreover, the protester asserts that it should not be held accountable for this contract, because it was only a junior member of the joint venture holding that contract. Protest at 15. ERKA also disputes the agency's interpretation of the D&B report that showed that ERKA had a history of making slow payments.

The agency responds that it performed a detailed, documented responsibility analysis consistent with the FAR and considered all the information regarding ERKA that was available to the agency. AR, Tab 2, at 28-30. The agency asserts that there was uncertainty as to whether ERKA could comply with the current delivery schedule based on prior problems with timeliness and its negative performance on several relevant projects, including the termination for default. The agency states that ERKA's projects in Africa, Iraq, and Romania were of little relevance or predated the default termination. The agency also complains that ERKA was offered several opportunities to mitigate risks associated with its past performance record, but that the protester only blamed its joint venture partner and offered excuses for its performance problems. Id.; CO's Statement at 18-19.

In making a negative 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. See International Paint USA, Inc., B-240180, Oct. 30, 1990, 90-2 CPD para. 349 at 3. 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 determination. Colonial Press Int'l, Inc., B-403632, Oct. 18, 2010, 2010 CPD para. 247 at 2. Our review is based on the information available to the contracting officer at the time the determination was made. Acquest Dev. LLC, B-287439, June 6, 2001, 2001 CPD para. 101 at 3.

Here, we find that the CO's negative determination of ERKA's responsibility was reasonable. The contemporaneous record evidences the CO's consideration of all ERKA's past performance and supports her determination that ERKA had performance problems under at least four construction contracts for requirements that were similar to those solicited here. With respect to the Eagle Family Housing contract that was terminated for default, for example, the contractor's performance was found unsatisfactory with regard to quality control, timeliness, cooperation and responsiveness, resource management, jobsite supervision, non-payment of subcontractors, site cleanup, and compliance with safety standards. See, e.g., Tab 25, Final Performance Evaluation, Eagle Family Housing Contract, at 2248-53. The record also shows that with respect to other contracts ERKA was issued numerous non-compliance reports. See id., Tab 20, ERKA Past Performance Information, at 2161-2200 (Fire Training Facility Contract); id. at 2156-57, 2201‑02, 13‑27 (Pavement ID/IQ Contract; Family Housing Electrical Substation Contract).

As described above, the protester had several opportunities to address its performance of the defaulted contract or to explain what efforts the firm would take to mitigate future performance risks. ERKA's responses to the agency's discussions, however, neither demonstrate why it should not be held responsible for the default termination nor provide any statement as to how the firm would mitigate future performance risk to the agency. See id., Tab 14A, First Discussions at 3 and Tab 14B, Second Discussions at 3. To the extent that the protester contends that its positive performance on other projects should have outweighed the negative past performance presented by the defaulted contract and other contracts, this disagreement does not demonstrate that the CO's judgment with respect to the firm's past performance was unreasonable.

With respect to the CO's consideration of the Eagle Family Housing contract, we disagree with the protester that the agency could not properly consider this termination in its responsibility determination because the matter has been appealed to the ASBCA. See MCI Constructors, Inc., B‑240655, Nov. 27, 1990, 90-2 CPD para. 431 at 4. An agency may properly rely upon its reasonable perception of a contractor's inadequate performance even where the contractor disputes the agency's position. See MAC's Gen. Contractor, B-276755, July 24, 1997, 97-2 CPD para. 29 at 3-4.

We also disagree with ERKA that the agency could not consider the protester's performance as a joint venture partner of the Eagle Family Housing contract. See MCI Constructors, supra, at 5 (reasonable for agency to give significant consideration to affiliate's prior performance in assessing contractor's responsibility); Bluff Springs Paper Co., Ltd./R.D. Thompson Paper Prod. Co., Inc. Joint Venture, B-286797.3, Aug. 13, 2001, 2001 CPD para. 160 at 3 (agency generally may consider an individual venturer's performance in assessing joint venture's past performance). In this regard, the record does not support ERKA's assertion that it was only a junior venture partner. Rather, the firm's joint venture agreement for this project shows that ERKA was a 50 percent partner at the time of contract award. See AR, Tab 19, Joint Venture Agreement, at 1-4.

In sum, the record supports the reasonableness of the CO's determination that ERKA was not responsible. Because ERKA was reasonably determined to be nonresponsible, we need not address its remaining protest issues.  (M. Erdal Kamisli Co. Ltd. (ERKA Co., Ltd.), B-403909.2; B-403909.4, February 14, 2011)  (pdf)

BBSSI generally challenges the contracting officer's negative responsibility determination. It specifically asserts that the determination was unreasonable, since it advised the agency that it would perform the contract without any involvement of BBH. Protest at 11-12. Further, the protester asserts that the Cosmelli opinion, as interpreted by the contracting officer, could not form the basis for a reasonable nonresponsibility determination. Supp. Protest, Mar. 12, 2010. BBSSI also asserts that the SOA requirement was a definitive responsibility criterion, which it satisfied. Protest at 9‑13. Finally, the protester asserts that the contracting officer's determination constituted a wrongful de facto debarment. Protest at 19-20.

In making a negative 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 determination. Miklin Corp., B‑236746.2, Jan. 19, 1990, 90-1 CPD para. 72 at 1-2, recon. den., B-236746.3, June 8, 1990, 90-1 CPD para. 540; see, e.g., Blocacor, LDA, B-282122.3, Aug. 2, 1999, 99-2 CPD para. 25. Our review is based on the information available to the contracting officer at the time the determination was made. Acquest Dev. LLC, B-287439, June 6, 2001, 2001 CPD para. 101 at 3.

Here, as indicated above, based on the information available to him, the contracting officer concluded that BBSSI had provided indications that it may have been "a mechanism for [BBH] to submit proposals and to continue to contract with the U.S. Government." SSDD at 001133. In support of this conclusion, the agency supplies a statement by the head of its contract administration office, who states that "the same personnel have simultaneously represented [BBSSI and BBH] on the contracts we have administered there both prior to and during the period in which BBH has been debarred," and that there has been "no differentiation between the operations, insofar as the same key personnel have been identified and have signed documents for contracts with both companies." AR exh. 15a, Declaration of William Thievon, Mar. 4, 2010; see AR exh. 15d (organizational chart showing identical Bilfinger representatives on BBSSI and BBH contracts). The agency asserts that the two firms utilized common facilities and equipment, common and shared employees, including key personnel and management, and common bank accounts and that this resulted in the lack of a practical differentiation between either company in their daily work. AR at 7, 18.

The protester generally does not dispute the information on which the agency based its determination. Rather, it asserts that the information is irrelevant, since it does not "invalidate the very clear and explicit representation in BBSSI's discussion response, whereby it was unequivocally represented that BBSSI would perform on this [contract] without any involvement of BBH." Comments at 25 (emphasis in original).

We find that the extensive information on which the contracting officer relied fully supported the view that BBSSI and BBH were closely related, and the resultant appearance that BBH, a debarred contractor, would be involved in performing the contract, as it had been under prior contracts. Debarred contractors generally may not receive contracts from the government or subcontracts from government contractors, and "are also excluded from conducting business with the Government as agents or representatives of other contractors." FAR sect. 9.405. Further, the FAR prohibits debarred firms from submitting offers for government contracts either directly or "indirectly (e.g., through an affiliate)." FAR sect. 9.403 (definition of "contractor") and sect. 9.405(a) ("contractors" debarred, suspended, or proposed for debarment are excluded from receiving contracts); Detek, Inc., B‑261678, Oct. 16, 1995, 95-2 CPD para. 177 (firm not eligible for award where circumstances indicated that debarred affiliate was attempting to submit offer through affiliated offeror). While BBSSI represented that BBH would not participate in performance, the contracting officer was not required to take BBSSI's representations at face value; he reasonably could rely on the historical and other information evidencing a close working relationship between BBSSI and BBH in concluding that BBH essentially was proposing through BBSSI, and that BBSSI therefore was nonresponsible.

We also find that the contracting officer's concerns about BBSSI's reliance on BBH's SOA was reasonable. SSDD at 001133-34. Based on the Cosmelli opinion, the contracting officer found that BBSSI's use of BBH's SOA further supported the conclusion that BBH would be involved in contract performance and was essentially offering on the solicitation through BBSSI. Id. The protester asserts that its use of BBH's SOA was "simply for the sake of satisfying the ministerial requirement of having a SOA certificate," Protest at 11-12; AR at 3, and reiterates that it intended to perform the contract wholly by itself, without participation by BBH. Again, however, the agency was not bound to accept BBSSI's representations and disregard its SOA arrangement with BBH, together with the other substantial information bearing on the firms' relationship.

The protester asserts that the legal opinion reviewed by the agency could not form the basis for a reasonable nonresponsibility determination due to deficiencies in the agency's acquisition of the opinion, the opinion itself, and the contracting officer's interpretation of the opinion. Comments at 4-21; Supp. Protest, Mar. 12, 2010. In this regard, the protester asserts that the Request for Quotations seeking the legal opinion did not provide sufficient background material, including information setting forth BBSSI's views regarding the legal effect of the SOA. Comments at 4-9, 18-21. We do not agree with BBSSI, however, that the absence of its views from the RFQ diminished the reliability of the opinion.[1] The RFQ adequately described the subject matter the opinion was to address, and there was no requirement that the agency turn the opinion into a vehicle for debate by setting forth BBSSI's views on the matter. Contracting officers generally are entitled to rely on information available to them at the time of a responsibility determination, absent any indication that the information is defective, unsupported, or suspect. M. Matt Durand, LLC, B-401793, Nov. 23, 2009, 2009 CPD para. 241 at 7.

BBSSI also asserts that the agency misinterpreted the legal opinion and that the opinion does not support the contracting officer's conclusions. Comments at 9-11, 15-19. However, BBSSI has not established that the agency's interpretation of the opinion was incorrect or unreasonable. The opinion comments on the law surrounding an SOA, rather than the precise question of one firm's use of another firm's SOA. However, the opinion does indicate that, under the SOA system, a contractor may "prove to have the technical capabilities and the economic and financial standing necessary" to compete for the award of a public contract "by relying on the resources … of other entities, provided that, in such case, the bidder can prove to the contracting authority that it will have in its disposal the resources of such other entities to carry out the works." Cosmelli Opinion at 3-4. The opinion also indicates that "the bidder who intends to avail itself of the third party's resources shall produce … a declaration certifying that it intends to avail itself of the third party's resources in order to meet the necessary requirements … ." Id. at 5. These statements are all reasonably supportive of the contracting officer's conclusion that BBSSI's reliance on BBH's SOA was indicative of an intent to "have at its disposal the resources of [BBH] to carry out the [contract]." SSDD at 001134. The protester has provided no definitive information, other than its own legal opinion, establishing that the law permits it to use another firm's SOA without involving that other firm in performance of the contract.

BBSSI also asserts that the SOA requirement was a definitive responsibility criterion, which it satisfied when it submitted BBH's SOA, and that further examination of the SOA is unwarranted and an improper application of an unstated evaluation factor. Protest at 9-13. This argument is without merit. BBSSI was not found nonresponsible due to failure to meet the solicitation requirement for submission of an SOA; rather, it was found nonresponsible based on the circumstances discussed above and its submission of BBH's SOA. FAR part 9.4.

Finally, the protester asserts that the contracting officer's negative responsibility determination constituted a wrongful de facto debarment, without affording BBSSI the procedural protections of FAR sect. 9.406-1(b). This argument is without merit. A de facto debarment occurs when the government uses nonresponsibility determinations as a means of excluding a firm from government contracting or subcontracting, rather than following the debarment regulations and procedures set forth at FAR subpart 9.4. Firm Erich Bernion GmbH, B-233106, Dec. 28, 1988, 88‑2 CPD para. 632 at 4. A necessary element of a de facto debarment is that an agency intends not to do business with the firm in the future. Id.; Lida Credit Agency, B‑239270, Aug. 6, 1990, 90-2 CPD para. 112 at 3 n.2. The nonresponsibility determination here was based on current information regarding BBSSI and BBH's close business relationship, and BBSSI's use of BBH's SOA. The record does not show that the agency intends to exclude the firm from other procurements based on its specific determination here.  (Bilfinger Berger AG Sede Secondaria Italiana, B-402496, May 13, 2010)  (pdf)

LP challenges the agency’s determination that its proposal was technically unacceptable. The protester also argues that the agency treated the two offerors unequally by conducting a thorough investigation of its manufacturing subcontractor’s facilities, while failing to visit EFI’s production facility.

At the outset, we note that where an agency determines the proposal of a small business such as the protester to be unacceptable under a responsibility-related factor, that is, a factor pertaining to its ability to perform, such as whether it has adequate corporate experience or production equipment and facilities, the determination is essentially one of nonresponsibility, meaning that referral to the Small Business Administration (SBA), which has the ultimate authority to determine the responsibility of small business concerns, is required. Joanell Labs., Inc.; Nu‑Way Mfg. Co., Inc., B-242415.8 et al., Apr. 15, 1992, 92-1 CPD para. 369 at 6; Sanford and Sons Co., B-231607, Sept. 20, 1988, 88-2 CPD para. 266 at 2-3. Where an agency rejects a proposal as technically unacceptable on the basis of factors not related to responsibility as well as responsibility-related ones, referral to the SBA is not required, however. Paragon Dynamics, Inc., B-251280, Mar. 19, 1993, 93-1 CPD para. 248 at 4.

Here, while it is clear from the record that the agency determination of technical unacceptability was based in large part on concerns pertaining to the manufacturing capabilities of the protester’s proposed subcontractor, which are responsibility-related, it is also apparent that those concerns were not the only basis for the determination of technical unacceptability; as a consequence, we conclude that the determination of technical unacceptability was not essentially one of nonresponsibility requiring referral to the SBA. In particular, LP’s final proposal failed to demonstrate compliance with the RFP requirement that the dimensions of the proposed luminaires not exceed the dimensions of the legacy fixtures. While the protester furnished an acceptable response to the agency discussion letter notifying it that four of its proposed luminaires exceeded the allowable dimensions, LP did not incorporate this response into its final revised proposal; rather, LP’s final proposal repeated the information contained in its initial proposal. Given that LP’s final proposal did not demonstrate compliance with the solicitation requirement pertaining to fixture dimensions, we think that the evaluators reasonably determined it technically unacceptable under the design and performance subfactor. See Capitol CREAG LLC, B-294958.4, Jan. 31, 2005, 2005 CPD para. 31 at 7-8.

We also think that the evaluators had a reasonable basis for determining the protester’s proposal unacceptable under the logistic support subfactor. The solicitation provided for the evaluation of the offeror’s ability to furnish repair and replacement parts under this subfactor. In its initial proposal, LP furnished the following information regarding its capability to provide replacement parts:

Hubbell has agreed to release spare parts which would include LED boards, LED Ballasts, Fluorescent Ballasts, Lids, Latches and screws through electrical distribution in key strategic NAVY based areas around the United States.

LP Initial Proposal at 80. In its initial evaluation, the evaluation team found this response to be acceptable. During discussions, however, LP replaced Hubbell as its manufacturing subcontractor, without making any corresponding revisions to its approach to furnishing replacement parts. That is, LP’s final proposal still identified Hubbell as the source for its spare parts. We think that the evaluators reasonably determined unacceptable the protester’s proposed approach of relying upon Hubbell as its source for spare parts for fixtures that Hubbell was not manufacturing.

Turning then to the protester’s complaint that the agency treated the two offerors unequally by conducting a site visit to its manufacturing subcontractor’s facilities, but failing to inspect EFI’s production facilities, the agency explains that it had concerns regarding the protester’s, but not EFI’s, production capabilities. To the extent that the protester argues that the agency should have had concerns regarding EFI’s production capabilities, it is essentially challenging the agency’s affirmative determination of EFI’s responsibility, and absent conditions not present here, we will not consider a protest challenging such a determination. Bid Protest Regulations, 4 C.F.R. sect. 21.5(c) (2009).  (Light-Pod, Inc., B-401739; B-401739.2, November 12, 2009) (pdf)

ESCO protests the reasonableness of the cash-flow assessment that the Navy performed to determine ISL’s financial ability to perform at the proposed price of $.06. Specifically, the protester argues that the Navy’s cash-flow analysis was improperly premised on the assumption that ISL would generally work on only one ship at a time (and thereby incur the estimated upfront costs of performance sequentially), although ISL’s own proposed schedule stated otherwise. ESCO also argues that the Navy’s cash-flow analysis was improperly computed, thereby underestimating the total upfront costs that ISL was likely to incur in advance of any scrap sale proceeds. Since the total upfront costs that ISL would incur were substantially higher than the offeror’s documented line of credit, ESCO argues, the Navy’s determination that ISL possessed the financial ability to perform the task order at the price proposed was materially flawed.

The record shows that the Navy evaluators recognized both the substantial price disparity between the ISL and ESCO proposals, and that ISL would not be receiving any significant payment from the agency as part of performance of the awarded task order (i.e., task order payments could not finance the offeror’s performance). In light thereof, in order to ensure that ISL was “financially responsible at the price [it] proposed,” AR, Tab 13, Evaluation Report, at 15, the Navy evaluators decided to conduct a cash-flow analysis of ISL and determine whether the offeror possessed sufficient financial resources to cover the total estimated upfront costs of towing and dismantling the ships in advance of any returns on scrap sale.

The Navy’s cash-flow assessment of ISL was based on information that the agency possessed regarding the dismantling of a similarly sized ship, the ex-Camden. The evaluators assumed that the contractor would incur 10 percent of total dismantling costs, as well as the estimated towing costs, before it would begin to realize any cash inflow from scrap. The evaluators then made the following calculations:
 

Id.

After completing this computation, the Navy found ISL to be financially responsible at the price proposed. Specifically, the evaluators concluded, “The contractor stated that they were free of debt and has an unused and revolving credit line of $[DELETED]. Whereas, their proposed schedule plans staggered start dates for each ship, this should be sufficient to cover expenses.” Id.

The Navy’s determination that ISL’s financial resources were sufficient to meet estimated total upfront costs was premised on the assumption that ISL would incur the estimated upfront costs sequentially (i.e., that ISL’s staggered start dates for each ship would result in the estimated upfront costs for each ship not occurring simultaneously). Contrary to the agency’s assumption, however, ISL’s proposal included a work schedule indicating that the three ships essentially would be towed and dismantled simultaneously: the towing and dismantling of the ex-Saipan was to occur from May 6, 2009, to July 7, 2010; the towing the dismantling of the ex-Austin was to occur from June 3, 2009, to April 21, 2010; and the towing and dismantling of the ex-Fort Fisher was to occur from June 3, 2009, to July 7, 2010. AR, Tab 7, ISL Proposal, exh. 1, 3-Ship Work Schedule. Moreover, ISL’s schedule indicated that the towing of all three ships would occur before the point in time at which the Navy estimated that ISL would begin to realize returns on the sales of scrap from any ship.[5] Id. As computed by the Navy, the upfront costs for all three ships total $3,037,300, substantially higher than ISL’s $[DELETED] line of credit.

Further, in computing the dismantling costs that ISL would incur before realizing the sale of any scrap, the Navy utilized an average dismantling cost of $126 per ton. This figure was apparently derived by dividing the dismantling costs for the ex-Camden by its tonnage ($2,611,617 / 20,717 = $126).[6] ESCO Comments, July 10, 2009, exh. 2, ex-Camden Cost Report Summary, at 1. In fact, the $2,611,617 figure represented only the direct dismantling costs for the ex-Camden, and did not include the contractor’s costs for hazardous waste services, overhead, and general and administrative (G&A) expenses. Id.; Contracting Officer’s Statement, Aug. 28, 2009, at 3. (The agency does not dispute that ISL’s dismantling work for the three ships here would also include costs for hazardous waste services, overhead, and G&A expenses.) As the total dismantling costs for the ex-Camden were actually $5,240,792, ESCO Comments, July 10, 2009, exh. 2, ex-Camden Cost Report Summary, at 1, the average cost is $252 per ton ($5,240,792 / 20,717 = $252). Using this per ton figure, the upfront dismantling costs computed by the Navy as part of ISL’s cash-flow assessment were understated by a total of $567,980, thereby resulting in an adjusted total estimated upfront cost for all three ships of $3,605,280.

The record shows that the Navy’s decision to perform a cash-flow assessment was done “to ensure that ISL [was] financially responsible at the price they proposed.”[7] AR, Tab 13, Agency Evaluation Report, at 14. Responsibility is a contract formation term that refers to the ability of a prospective contractor to perform the contract for which it has submitted an offer; by law, a contracting officer must determine that an offeror is responsible before awarding it a contract. See 41 U.S.C. sect. 253b(c), (d); FAR sect. 9.103(a), (b); Advanced Tech. Sys., Inc., B-296493.6, Oct. 6, 2006, 2006 CPD para. 151 at 5. Consistent with this statutory and regulatory framework, once an offeror is determined to be responsible and is awarded a contract, there is no requirement that an agency make additional responsibility determinations during contract performance. Advanced Tech. Sys., Inc., supra. While there likewise exists no requirement that an agency conduct an additional responsibility determination when placing a task order under an ID/IQ contract, see FAR sect. 16.505, neither is an agency precluded from doing so, as the Navy chose to do here.

Since the determination of whether a particular contractor is responsible is largely a matter within the contracting officer’s discretion, our Office, as a general matter, will not consider a protest challenging an affirmative determination of responsibility, except under limited, specified circumstances--where it is alleged that definitive responsibility criteria in the solicitation were not met or evidence is identified that raises serious concerns that, in reaching a particular responsibility determination, the contracting officer unreasonably failed to consider available relevant information or otherwise violated statute or regulation. 4 C.F.R. sect. 21.5(c); Greenleaf Constr. Co., Inc., B-293105.18, B-293105.19, Jan. 17, 2006, 2006 CPD para. 19 at 13-14. This includes protests where, for example, the protester offers specific evidence that the contracting officer may have ignored information that, by its nature, would be expected to have a strong bearing on whether the awardee should be found responsible. Greenleaf Constr. Co., Inc., supra, at 14 (contracting officer ignored known information and instead based his determination of the awardee’s financial responsibility on information known to be inaccurate); Southwestern Bell Tel. Co., B-292476, Oct. 1, 2003, 2003 CPD para. 177 at 8-10 (contracting officer failed to consider serious, credible information regarding awardee’s record of integrity and business ethics in making his responsibility determination). We think the circumstances here warrant our review of the reasonableness of agency’s responsibility determination regarding ISL.

As set forth above, the Navy’s determination that ISL had sufficient financial resources to cover estimated upfront costs for all three ships was premised on the assumption that ISL would incur the estimated upfront costs sequentially (i.e., that ISL’s staggered start dates for each ship would result in the estimated upfront costs for each ship not occurring simultaneously). In making this assumption, the Navy ignored the information in ISL’s own proposal which clearly indicated that the offeror planned to tow and dismantle the three ships simultaneously, and would thereby incur the estimated upfront costs for each ship largely simultaneously. This erroneous assumption was key to the contracting officer’s affirmative responsibility determination. When it is corrected to account for ISL’s plan to service the ships simultaneously, it appears from the record that, using the Navy’s own method of calculation, ISL does not in fact have adequate financial resources to cover the estimated upfront costs of all three ships simultaneously. For example, ISL’s schedule indicates that the firm plans to tow all three ships before the point in time at which the Navy estimated that ISL would begin to realize returns on the sales of scrap from any ship. The towing expenses estimated by the Navy alone total $2,469,280, substantially more than the financial resources that the agency’s analysis deemed available to cover the estimated upfront costs (a $[DELETED] line of credit). In addition, the Navy’s analysis underestimated by half the upfront dismantling costs that ISL would occur for each ship. When corrected, at the point in time at which the Navy estimated that ISL would first begin to realize returns on the sales of scrap, the contractor would have total upfront costs of approximately $3,153,838--towing costs of $2,469,280 plus $684,558 in upfront dismantling costs for the ex-Saipan.

Subsequent to the filing of the ESCO protest, the Navy presented additional, new information that purportedly supports its financial responsibility determination of ISL--for example, that ISL would realize profits from its recent completion of another ship-dismantling contract. Contracting Officer’s Statement, Aug. 28, 2009, at 3. The record clearly reflects that the agency did not consider this information in its evaluation of ISL’s financial responsibility. To the extent the Navy now asserts that its conclusion regarding ISL’s financial responsibility should be based on this information, we give this post hoc justification little weight. See Boeing Sikorsky Aircraft Support, B-277263.2, B-277263.3, Sept. 29, 1997, 97-2 CPD para. 91 at 15.

In sum, we conclude that by ignoring what ISL actually proposed and instead basing his determination of financial responsibility on information contradictory to what the offeror has proposed, the contracting officer unreasonably failed to consider available relevant information and ignored information that, by its nature, would be expected to have a strong bearing on whether the awardee should be found responsible. As a result, we sustain the challenge to the affirmative responsibility determination.  (ESCO Marine, Inc., B-401438, September 4, 2009)  (pdf)

The Navy found that GDMA had not demonstrated that it would satisfy the licensing requirement for doing business in the Northern Mariana Islands and rejected GDMA's quotation. Award was made to Ambyth, and this protest followed.

GDMA contends that the Navy improperly rejected the firm's quotation where GDMA had relied upon the Navy's previous assurances that its business arrangement with [DELETED] would satisfy the licensing requirement. In this regard, GDMA argues that "a bidder is entitled to rely on interpretations provided by Government officials who lead the bidder to reasonably regard what they say as being authoritative." Comments at 9, citing, North Coast Elec. Co.--Recon., B-202208, Nov. 4, 1981, 81-2 CPD para. 382 at 4 GDMA argues that the Navy should have either amended the solicitation to notify offerors that the Navy's interpretation of the business license requirement had changed, or provided GDMA with an opportunity to modify its quotation.

We do not agree with GDMA that this protest concerns the agency's interpretation, or a change in its interpretation, of the solicitation. Here, the RFQ unambiguously required firms to satisfy licensing requirements to conduct business in the Northern Mariana Islands, see RFQ at 26‑27, and GDMA does not dispute that it is required to satisfy the business licensing requirements of the Northern Mariana Islands. Rather, GDMA's complaint concerns the application of this unambiguous requirement to GDMA's quoted relationship with [DELETED]. Although the Navy initially believed that GDMA's proposed business arrangement would satisfy the licensing requirement, the Navy did not--contrary to the protester's arguments--subsequently change its interpretation of the solicitation's requirement, rather it simply learned that GDMA's quoted business relationship was not acceptable to the government of the Northern Mariana Islands.

From our review of the record, we find reasonable the agency's rejection of GDMA's quotation where the agency was informed by an official of the Northern Mariana Islands that the firm's quoted business relationship would not satisfy the Island's business licensing requirements, and where GDMA did not otherwise show that the firm would satisfy the licensing requirements. Although the protester contends that the official in the Liaison Office of the Northern Mariana Islands, who rendered the judgment that GDMA's quoted business arrangement would not be acceptable, was not a lawyer or qualified to provide such an opinion, that official heads an office that, as noted above, is "the single point of contact and clearinghouse on all matters relative to the U.S. Military and Veterans Affairs in the [Northern Mariana Islands]." We find no merit to GDMA's argument that the Navy could not reasonably rely upon this judgment. Moreover, the record shows that, before rejecting the firm's quotation, the Navy informed GDMA that the Northern Mariana Islands did not accept the firm's quoted business relationship with [DELETED] and provided GDMA with a an opportunity to "fix" its quoted relationship to satisfy the licensing requirements.

We also do not agree with GDMA's apparent belief that the firm could simply rely upon the Navy's assurances that GDMA's quoted business relationship with [DELETED] would satisfy the licensing requirements of the Northern Mariana Islands. Whether or not the contractor satisfies the Island's business licensing requirements is a matter to be decided by the Northern Mariana Islands, and not ultimately by the Navy. Here, the Northern Mariana Islands, through its Liaison Office, stated that GDMA's quoted business relationship with [DELETED], as GDMA's agent, would not satisfy the Island's licensing requirements. Our authority to review the reasonableness of the Navy's reliance upon that judgment does not include reviewing the reasonableness of the judgment of the Northern Mariana Islands.  (Glenn Defense Marine-Asia PTE, Ltd., B-401480, August 17, 2009)  (pdf)

As noted above, the contracting officer rejected Melbourne’s offer on the ground that it was “nonresponsive” to the SFO requirements. Notwithstanding the contracting officer’s characterization, the requirement at issue concerns the offeror’s responsibility, not the technical acceptability of its offer. In this regard, as indicated by the heading under which the requirement was listed--“Evidence of Capability to Perform,” SFO para. 3.16--the requirement concerns the offeror’s ability to perform the contract, rather than the acceptability of its offer. Acquest Dev. LLC, B-287439, June 6, 2001, 2001 CPD para. 101 at 5; Tomasz/Shidler Inv. Corp., B-250855, B-250855.2, Feb. 23, 1993, 93-1 CPD para. 170 at 6. An offeror who is found nonresponsible is not eligible for award. FAR sect. 9.103; Specialty Marine, Inc., B-292053, May 19, 2003, 2003 CPD para. 106 at 3. We will not question an agency’s nonresponsibility determination unless the record shows that it lacks a reasonable basis. Aulson & Sky Co., B‑290159, May 21, 2002, 2002 CPD para. 87 at 5.

Here, Melbourne argues that it was unreasonable for GSA to reject its offer for failing to include the required commitment of funds letter given that it had furnished a commitment of funds letter in connection with a concurrent GSA procurement handled by the same contracting officer for the lease of space for the Internal Revenue Service (IRS). The protester argues that GSA should have recognized based on its submission of the commitment of funds letter for the IRS procurement that it had the financial capability to perform the contract here.

We disagree. The SFO here required evidence of at least a conditional commitment of funds in an amount necessary to prepare the space solicited--thus, clearly, the letter of commitment needed to demonstrate the conditional availability of funds for this project. The letter that Melbourne furnished in connection with the IRS procurement did not demonstrate the availability of funds for the SSA project--rather, it specified that the bank had approved a $2 million loan to finance the IRS Melbourne project. Thus, given that the firm failed to furnish the evidence required by the SFO regarding commitment of funds for the project at issue, we see no basis to question the agency’s decision to reject Melbourne’s offer.  (Melbourne Commerce, LLC, B-400049.2, January 9, 2009) (pdf)

It is well established that licensing-type requirements are matters of responsibility, not responsiveness. Victory Van Corp.; Columbia Van Lines, Inc., B-180419, Apr. 8, 1974, 74-1 CPD para. 178 at 2. We have held that a solicitation requiring a bidder to obtain a specific license or permit concerns the bidder’s responsibility (i.e., its ability to perform), rather than bid responsiveness (i.e., its promise to perform). See Midwest Sec. Agency, Inc., B-222424, Apr. 7, 1986, 86-1 CPD para. 345 at 2 (evidence of having appropriate security guard licenses or of having applied for them is matter concerning responsibility); Carolina Waste Sys., Inc., B-215689.3, Jan. 7, 1985, 85‑1 CPD para. 22 at 2 (evidence of state certification of a waste disposal site is a matter of responsibility). Much like a license or permit, a solicitation term requiring submission of information to a responsible third-party agency (i.e., not the procuring agency) for approval prior to contract performance is also a matter of responsibility. See Astro-Med, Inc., B-232633, Dec. 22, 1988, 88-2 CPD para. 619 at 3 (solicitation requiring Food and Drug Administration approval to become a registered supplier of medical devices prior to performance pertains to responsibility). Here, by signing the DUA and including it in its bid submission to GPO, the bidder is merely indicating a readiness to apply for approval from CMS to use CMS data; approval itself can be given at any time prior to data disclosure. Thus, we find the DUA requirement goes only to the bidder’s ability to perform (i.e., the bidder’s responsibility) and that SourceLink should have been provided a reasonable opportunity to provide a completed DUA prior to award. Therefore, GPO’s rejection of SourceLink’s bid as nonresponsive was improper. (SourceLink Ohio, LLC, B-299258, March 12, 2007) (pdf)

GAO will not consider protests challenging affirmative determinations of responsibility except under limited, specified circumstances--where it is alleged that definitive responsibility criteria in the solicitation were not met or evidence is identified that raises serious concerns that, in reaching a particular responsibility determination, the contracting officer unreasonably failed to consider available relevant information or otherwise violated statute or regulation. Bid Protest Regulations, 4 C.F.R. sect. 21.5(c) (2006); American Printing House for the Blind, Inc., B-298011, May 15, 2006, 2006 CPD para. 83 at 5-6; Government Contracts Consultants, B-294335, Sept. 22, 2004, 2004 CPD para. 202 at 2. This includes protests where, for example, the protest includes specific evidence that the contracting officer may have ignored information that, by its nature, would be expected to have a strong bearing on whether the awardee should be found responsible. Universal Marine & Indus. Servs., Inc., B-292964, Dec. 23, 2003, 2004 CPD para. 7 at 2; Verestar Gov’t Servs. Group, B-291854, B-291854.2, Apr. 3, 2003, 2003 CPD para. 68 at 4. Here, Alutiiq has not alleged that definitive responsibility criteria were not met and, as detailed below, its only evidence that the contracting officer failed to consider available relevant evidence in determining the awardees responsible is the speculation that TW, Chenega SPS, and Doyon did not price their proposals independently. This is not, in our view, a proffer of evidence sufficient to raise serious concerns that the contracting officer ignored relevant information in making her responsibility determinations. The record indicates that the contracting officer inquired into Doyon’s and Santa Fe’s reliance on CIS and gave reasonable consideration to the information the protester contends she failed to review. See Triple H Servs., B-298248, B-298248.2, Aug. 1, 2006, 2006 CPD para. 115 at 3. Likewise, with respect to Chenega SPS and TW, the contracting officer reasonably considered the information the protester contends she failed to review; accordingly, there simply is no evidence showing that the contracting officer ignored the information on which the protester bases its challenge to the affirmative determinations of responsibility. Moreover, the facts relied on by the protester here--that Doyon and Santa Fe had a common subcontractor, and that Chenega SPS and Chenega IS (TW’s subcontractor) have common corporate ownership--do not constitute information that would be expected to have a strong bearing on whether the awardees should be found responsible, as required to trigger our review under 4 C.F.R. sect. 21.5(c). Universal Marine & Indus. Servs., Inc., supra; Verestar Gov’t Servs. Group, supra. In this regard, the requirement that competing concerns prepare their offers independently and without consultation with each other does not preclude competitors from proposing common subcontractors. McCombs Fleet Servs., B-278330, Jan. 16, 1998, 98-1 CPD para. 24 at 4; Ross Aviation, Inc., B-236952, Jan. 22, 1990, 90-1 CPD para. 83 at 2-3. Alutiiq has presented no evidence, beyond its mere speculation, that Doyon’s and Santa Fe’s reliance on CIS for various technical aspects of their proposals must have also resulted in the offerors exchanging price information, and we will not assume that this was the case. Ross Aviation, Inc., supra, at 3. Similarly, with respect to Chenega SPS and TW, it is important to note that there are two different Chenegas involved here--Chenega SPS, which was an offeror, and Chenega IS, which TW proposed as its subcontractor--that are “sister subsidiaries” of the same parent corporation, Chenega Corporation. The fact that two offerors, or an offeror and a second offeror’s subcontractor, have common corporate ownership is not by itself sufficient to establish that the offerors failed to price their proposals independently, and where, as here, a protester presents no other evidence, beyond mere speculation, showing that competitors did not arrive at their prices independently, we will not assume otherwise. See McCombs Fleet Servs., supra, at 4. (Alutiiq Global Solutions, B-299088; B-299088.2, February 6, 2007) (pdf)

The nonresponsibility determination here was reasonable. The record shows that, at the time the CO made her determination, Gray had performed late on 7 of 215 orders for the previous 3 months, for a 3 percent delinquency rate. While, as the protester notes, this is not a large number in absolute terms, the agency took a practical view of the delinquencies; it notes that, had the protester been performing the GAO contract during the previous year--in which there were 337 orders--its delinquency rate would have resulted in 11 late orders. Agency Report (AR), Tab 2, Denial of Agency-Level Protest, at 2. Moreover, the agency was concerned that Grays performance history demonstrated a recent upward trend in late deliveries. AR, Tab6, Findings and Determination. In this regard, of the recent late jobs, Gray was late on 2 of 70 jobs, or 3 percent, in July, 4 of 75 jobs, or 5 percent, in September, and 1 of 10 jobs, or 10 percent, for the first half of October. AR, Tab 5. Considering that GAO Bluebooks are time critical in nature, with an extremely tight schedule with a 2 to 3 day turnaround, the agency determined that Grays recent record of delinquencies brought its ability to timely perform all jobs under this contract into question. AR, Tab 6, Findings and Determination. We find no basis for objecting to this determination. Gray alleges that McDonalds delinquency rate was similar to its own, and concludes that the agency unfairly applied a different, more stringent standard in assessing Grays responsibility. This argument is without merit. While the awardee indeed had a recent record of delinquencies similar to Grays, the agency considered McDonalds perfect record of timely performance as the incumbent GAO Bluebook contractor to be more probative of its ability to perform the new contract than its performance of other, unrelated contracts. We find nothing unreasonable in the agenc'ys according determinative weight to McDonalds performance of the same requirement as that under the IFB. Neither did this constitute application of a different standard; rather, the different responsibility determinations resulted from the fact that the two firms were not similarly situated with regard to past performance.  (Gray Graphics Corporation, B-295421, February 18, 2005) (pdf)

As explained below, however, information regarding the awardees ability to obtain the license is not the type of information that would be expected to have a strong bearing on the awardees responsibility here, so that any contention that the agency failed to consider such information is not sufficient to trigger review by our Office of the agency's responsibility determination. As a general matter, under North Carolina law, a general contractors license is required for the construction of any building, highway, public utilities, grading or any improvement or structure, where the cost of the undertaking is thirty thousand dollars ($30,000) or more . . . N.C. Gen. Stat. 87-1 (2004). Here, the agency maintains that the RFP's requirements are primarily for facility maintenance services, not construction. Specifically, according to the agency, only one area out of the 21 areas described in the statement of work could potentially involve construction work. While Transcontinental asserts generally that the majority of the employees and the value of the work orders are primarily construction in nature, the protester does not explain how, or what part of, the work qualifies as construction under North Carolina law, Protesters Comments at 2-3, and the requirements, on their face, do not suggest that construction work will be required to any significant extent, if at all. In fact, the term construction is not used to describe any of the required services under the RFP; rather, virtually all of the requirements are described as repair, inspection, or maintenance activities. Responsibility ultimately concerns the contracting officers judgment as to a firms ability to perform the work and whether the firm has sufficient integrity for the government to rely on its representations and agreement to perform. See generally FAR subpart 9.1. Because the work under the RFP was not primarily for construction--rather, construction appears to be encompassed, if at all, under only one of the 21 requirements set forth in the RFP it is reasonable to regard the license requirement, as argued by the agency, as having little bearing on Call Henrys ability to perform the required work. As a result, the protesters contention that the agency failed to consider information regarding the awardees ability to obtain the license does not satisfy the threshold requirement for our review of the agency's responsibility determination under 4 C.F.R. 21.5(c). (Transcontinental Enterprises, Inc., B-294765, November 30, 2004) (pdf)

We find that the CO's negative determination of Daisung's responsibility was reasonable. The CO based his determination on the findings from the detailed, yearlong AAA and CID investigations, including, for example, sworn statements by the AAA auditors, dated February 10 and 18, 2004, interviews with Daisung repair shop personnel, dated May 13 and 14, 2003, an interview with the president of Daisung, affirmed by him as true on November 4, 2003, and photographs taken during the unscheduled visit to the Daisung facility. AR, Tab 5, Final CID Report, exhs. 8, 12, 14, and 2G. We have reviewed these documents, and find they contain information from which the CO reasonably could conclude that Daisung's conduct under its recent contract raises serious doubt as to the company's integrity. Specifically, as noted above, the investigators found that Daisung, among other things, did not properly renovate mattresses by inspecting and replacing worn filling with new filling, improperly switched mattress covers, and improperly billed at the higher price work performed on the lower-priced mattresses. Additionally, the record contains more than one statement by Daisung representatives confirming that Daisung employees replaced the blue-striped mattress covers with the more expensive flowered covers. AR, Tab 5, Final CID Report, exh. 2G, Interviews with Repair Shop Personnel, at 4, 9. For example, when one Daisung representative was asked what happened to the "old, blue and white striped mattresses that the units turn in," the auditors reported that he responded, "the mattress contractor takes and renovates them into the yellow-flowered kind ...." AR, Tab 5, Final CID Report, exh.2G, at 4. CID report information such as this properly may be used as the basis for a nonresponsibility determination, without the need for the contracting officer to conduct an independent investigation to substantiate the accuracy of the report. Energy Mgmt. Corp. , B-234727, July 12, 1989, 89-2 CPD 38 at 4; Becker and Schwindenhammer, GmbH , B-225396, Mar. 2, 1987, 87-1 CPD 235 at 4. The contracting officer's determination was reasonable given the information provided by AAA and CID. (Daisung Company, B-294142, August 20, 2004) (pdf)

Our Office generally will not consider a protest challenging an affirmative determination of responsibility, except under limited exceptions, because the determination that a particular contractor is capable of performing a contract is largely committed to the contracting officer’s (CO) discretion. 4 C.F.R. § 21.5(c) (2004). We recently revised our Regulations in this regard to add as a specified exception protests “that identify evidence raising serious concerns that, in reaching a particular responsibility determination, the [CO] unreasonably failed to consider available relevant information or otherwise violated statute or regulation.” Id. We explained in the preamble to the revision that it was “intended to encompass protests where, for example, the protest includes specific evidence that the contracting officer may have ignored information that, by its nature, would be expected to have a strong bearing on whether the awardee should be found responsible. 67 Fed. Reg. 79,833, 79,834 (2002); see Verestar Gov’t Servs. Group, B‑291854, B-291854.2, Apr. 3, 2003, 2003 CPD ¶ 68 at 4. The record shows that the Corps was aware of most of the evidence about the connection between these companies by the time it decided to award to Compton. For example, the cover of the Corps’s preaward survey indicates that Mike Pence is Compton’s point of contact. In addition the survey indicates that Mike Pence was a co-founder and principal of Compton since its founding in 1992, and that for over 25 years he has been an officer of the Pence Company. Finally, the preaward survey recognized that principals of Compton were involved in other Corps construction projects, and the record shows that their involvement was while working for the Pence Company; in fact, the preaward survey drew favorable conclusions about the earlier involvement of Compton’s principals in these projects. AR, Tab 6, at 4. The record also shows that the Corps verified that Compton was listed on SBA’s website listing small businesses eligible to represent themselves as HUBZone concerns. Although the Corps might not have recognized that the telephone and fax numbers listed on the website were Mr. Compton’s home telephone, and the fax machine at the Pence Company, the e‑mail address identified on that website was, as indicated earlier, hwpence@infi.net. In sum, while the record shows that Compton was, and is, closely affiliated with the Pence Company, we see no evidence that Compton was hiding its affiliation with the Pence Company, or that the Corps was unaware of that affiliation, or failed to give it reasonable consideration in the responsibility determination. See Universal Marine & Indus. Servs., Inc. , B-292964, Dec. 23, 2003, 2004 CPD ¶ 7 at 4. (Wild Building Contractors, Inc., B-293829, June 17, 2004) (pdf)

In this regard, the record shows that prior to issuing the purchase order to CMC as the apparent successful vendor, the agency contacted the firm to confirm its understanding of the RFQ’s requirements, particularly regarding replacement parts, sanding, refinishing, reupholstering, laminating, and painting, as well as the required timelines for the work. Contracting Officer’s Statement of Facts at 3. Further, the record shows that the contracting officer noted that CMC’s web site did not mention specific furniture refinishing work. She also noted, however, that it showed that the firm does business in a wide variety of fields, including supplying institutional interior products and services involving furniture and furnishings, food service equipment, construction services and marine products. The firm’s web site also demonstrated that much of its business involved CMC’s representation of specialized firms performing various contract requirements. The contracting officer reasoned that, as an experienced prime contractor, CMC would likely be able to obtain additional technical capability by subcontracting a substantial amount of the work in accordance with the RFQ’s allowance to do so. Moreover, CMC confirmed for the contracting officer that it had recently performed furniture refinishing work for the Department of the Navy aboard vessels in port. Noting CMC’s receipt of government contracts, and the fact that the firm holds an FSS contract (although not for furniture refinishing services), the contracting officer also recognized that other government agencies had affirmatively determined the firm to be responsible. Given all of the supporting information available to the contracting officer, it is clear from the record that not only did the contracting officer indeed consider the information TRT argues was ignored, but that its significance was reasonably considered in conjunction with the overall information she obtained supporting the firm’s responsibility. (The Refinishing Touch, B-293562; B-293562.2; B-293562.3, April 15, 2004) (pdf)

The extent to which the contracting officer was aware of the allegations against Adelphia’s principals and parent company is neither documented in the record nor explained by the agency. Nevertheless, we believe that the contracting officer’s general recognition that there were allegations of misconduct concerning Adelphia is not alone sufficient to establish that the contracting officer reasonably assessed the awardee’s record of integrity and business ethics. In fact, the contracting officer’s statements in response to the protester’s comments suggest that he may not have known relevant facts concerning Adelphia’s integrity and business ethics. That is, the contracting officer appears to argue that members of the Rigas family could not have any influence over Adelphia because these family members had resigned their positions as corporate officers and that “their status as stockholders was and is basically irrelevant.” Contracting Officer’s Affidavit at 2. However, significant evidence has been presented by the protester to show that Rigas family members continued (and continue today) to own a controlling interest in Adelphia due to their majority ownership of class B (voting interest) stock. Moreover, the record supports the protester’s assertion that some amount of “debtor-in-possession” financing has been provided to the awardee by Adephia Communications Corporation, the entity charged by the SEC with fraudulent conduct. Despite the apparent relevance of the potential control and influence of these Rigas family members and of Adelphia Communications Corporation, the record establishes that the contracting officer did not consider the extent of the Rigas family members’ stock ownership in Adelphia, and what influence or control over the awardee this ownership interest accorded them. Also, the record indicates that the contracting officer did not consider, nor was he apparently aware of, the relationship between the awardee and Adelphia Business Solutions (doing business as TelCove).

Based upon this record, we find that the contracting officer simply assumed that Adelphia had an adequate record of integrity and business ethics. This assumption appears to have been based upon the award recommendation of the pre-award survey, which did not address in any way Adelphia’s integrity or business ethics. In any event, the record does not establish that the contracting officer obtained sufficient information to decide, or for that matter even considered, Adelphia’s record of integrity and business ethics. In the absence of any consideration of the involvement, control or influence of the indicted Rigas family members and Adelphia Communications Corporation in the awardee, the contracting officer’s statements of general awareness of alleged misconduct on the part of the Rigas family members and Adelphia Communications Corporation is not sufficient to show that the contracting officer’s affirmative determination of responsibility is reasonable. Compare Impresa Construzioni Geom. Domenico Garufi v. United States, 52 Fed. Cl. 421, 428 (2002) (agency failed to reasonably consider questions concerning an awardee’s integrity and business ethics) with Verestar Gov’t Servs. Group, supra (agency specifically and reasonably considered questions concerning the awardee’s integrity and business ethics in making its responsibility determination). (Southwestern Bell Telephone Company, B-292476, October 1, 2003) (pdf)

In sum, the record establishes that the contracting officer had before him the adverse information that Verestar asserts he failed to consider. More important, the record is also clear that the contracting officer specifically considered the significance of this information in conjunction with other information that he obtained and which he viewed as ameliorating the concerns and risks that had been raised, whereupon the contracting officer made the considered affirmative determination that WorldCom was responsible and could perform. Accordingly, in light of the developed record, the protest does not raise a serious concern that the contracting officer unreasonably failed to consider relevant information or otherwise violated statute or regulation.  (Verestar Government Services Group, B-291854; B-291854.2, April 3, 2003)  (pdf)

Here, it is beyond dispute that the contracting officer had a reasonable basis to find XO nonresponsible prior to the bankruptcy filing. The only new element to which XO points with respect to the bankruptcy filing is the stand-alone plan. This was an alternative, fallback plan to the long promised and long-delayed Forstmann and TELMEX plan, a plan which the contracting officer, in his nonresponsibility determination, had reasonably concluded was unlikely to succeed. Further, the fallback stand-alone plan on its face depends on a series of uncertain contingencies and approvals. In this regard, it is noteworthy that to date, nearly four months after the filing, XO's bankruptcy reorganization plan has not yet been approved. In our view, the contracting officer was not obligated to parse the financial minutiae of XO's fallback bankruptcy restructuring plan as part of his nonresponsibility determination. On the contrary, where the record reflects that the contracting officer is cognizant of the alleged effects of a proposed reorganization plan and does not reference them as part of his nonresponsibility determination, we view this as merely indicating that the contracting officer gives the plan little weight. Harvard Interiors Mfg. Co., supra, at 6. Further, where, as here, the court has not yet given approval to the plan, and there is no indication of when, or if, the court would approve any of the proposed reorganization plans, the agency may reasonably give little or no weight to the proposed plan and to any associated favorable financial projections by the offeror. Id. Accordingly, the bankruptcy filing including the alternative stand-alone fallback restructuring plan provides no basis to call into question the reasonableness of the contracting officer's nonresponsibility determination.  (XO Communications, Inc., B-290981, October 22, 2002)

While the mere fact that a bidder files a petition in bankruptcy under Chapter 11 of the Bankruptcy Act does not require a finding of nonresponsibility, bankruptcy may nevertheless be considered as a factor in determining that a particular bidder is nonresponsible. Wallace & Wallace, Inc.; Wallace & Wallace Fuel Oil, Inc.--Recon., B-209859.2, B-209860.2, July 29, 1983, 83-2 CPD ¶ 142 at 5. Indeed, while not required, a contracting officer may reasonably view bankruptcy as something other than a favorable development. Id. at 5, n.1; see Harvard Interiors Mfg. Co., supra, at 6 (proposed reorganization plan that is unapproved at the time of award, and financial projections based on the plan, do not necessitate an affirmative responsibility determination). The risks to the government arising from the firm’s bankruptcy proceedings were a significant part of the contracting officer’s stated justification for her nonresponsibility determination. The protester has not shown that these risks were not significant or that the agency’s consideration of the risks associated with the protester’s bankruptcy proceedings was unreasonable.  (Global Crossing Telecommunications, Inc., B-288413.6; B-288413.10, June 17, 2002 (pdf))

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. See Blocacor, LDA, B-282122.3, Aug. 2, 1999, 99-2 CPD ¶ 25 at 4. We generally will not question a negative determination of responsibility unless the protester can demonstrate a lack of any reasonable basis for the contracting officer’s determination. Id. Here, Aulson has failed to make the required showing.   (Aulson & Sky Company, B-209159, May 21, 2002  (pdf))

Matters of an offeror’s integrity, such as involvement in criminal activities, generally concern the offeror’s responsibility.  Federal Acquisition Regulation (FAR) § 9.104-1(d); see Coast Waste Mgmt., Inc., B-251167.3, June 10, 1993, 93-1 CPD ¶ 460 at 4. However, in a negotiated procurement, an agency generally may incorporate traditional responsibility criteria as technical evaluation criteria, and then evaluate proposals under that criterion according to the rules established for technical evaluations. McLaughlin Research Corp., B-247118, May 5, 1992, 92-1 CPD ¶ 422 at 4. The question here, then, is whether the nulla osta statement requirement was converted into a technical evaluation matter that warranted rejecting Lotos’s proposal as unacceptable. There is nothing in the RFP indicating that the agency intended to convert the nulla osta statement into a matter of technical acceptability. Rather, it is fairly clear from the RFP that the agency viewed the entire CCIAA certification as a responsibility matter.  (A.I.A. Costruzioni S.P.A., B-289870, April 24, 2002) (pdf)

Standard asserts that it was improper for the agency to base its nonresponsibility determination on Standard's performance on contract Nos. 0621-S and 477-716, because neither of these contracts concerned performance at its Kirksville facility. In this regard, according to Standard, GPO has traditionally determined a bidder's responsibility based on its performance at the offered production facility. This argument is without merit. First, since past practice lacks the force and effect of law, GPO was not bound by its alleged prior approach to determining responsibility. See BMY, Div. of Harsco Corp., B-233081, B-233081.2, Jan. 24, 1989, 89-1 CPD para. 67 at 6 (internal agency policy not binding on agency because it lack force and effect of law). There is no other reason why the agency could not consider Standard's past performance at facilities other than that proposed for this contract. Considering such past performance information is not precluded by GPO's Printing Procurement Regulation (PPR) (see Ch. 1, sect. 5, para. 5(2), (4)), and it obviously is well within an agency's discretion to consider any relevant past performance information in determining a firm's responsibility. While performance at the same facility well may be the most relevant kind of past performance information, the manner in which a firm has carried out its contractual obligations at other facilities also is relevant to predicting whether it will satisfactorily perform the new contract.  See BMY, Div. of Harsco Corp., supra (contracting officer properly considered delinquent contract performance at different facility in finding firm nonresponsible).  (The Standard Register Company, B-289579, March 5, 2002).  

In this regard, although EPA previously determined that Laucks lacked the technical capability to meet the IFB requirements and thus was not responsible, after reopening the IFB to make additional awards, it found that Laucks now has the technical capability to meet the IFB requirements and thus is responsible. An agency can and should reverse a previous nonresponsibility determination based on additional information brought to its attention prior to award. Henry Spen & Co., Inc., B-183164, Jan. 27, 1976, 76-1 CPD para. 46 at 4.  (American Technical & Analytical Services, Inc., B-282277.5, May 31, 2000)

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.  (Blocacor, LDA, B-282122.3, August 2, 1999)