L St~~~~~~~P-THE COMPTROLLER GENERAL

DECIBION . OF THE UNITEO STATESft ~W A S HI NG T ON, D. C . 2 0 54 8

FILE: B-193773 DATE: August 2, 19 9 C

MATTER OF: U.S. Eagle, Inc.; Reliable BuildingMaintenance Company

DIGEST:

1. Compliance with special experience requirementsaffected responsibility of bidder and not respon-siveness of submitted bid; hence referral to SmallBusiness Administration (SBA) of question of smallbusiness' compliance with requirements was appropriateunder certificate of competency (COC) procedure.

2. Statement of representative of small business con-cern that concern did not meet minimum experiencerequirements did not excuse referral of questionof bidder's compliance with requirements to SBAunder COC procedure since: (a) procurement regulationmandates referral and does not contain exceptionfor situations where bidder offers subjectiveopinion that it does not comply with requirements;(b) after referral to SBA bidder actively soughtCOC; and (c) bidder's subjective judgment on com-pliance with requirements is not decisive sinceresolution of question of compliance requiresknowledge of legal precedent.

3. GAO perceives no denial of procedural fairness inprotest against SBA COC decision notwithstandingSBA's refusal to disclose to protester specificrationale for decision since: (a) Bid ProtestProcedures, 4 C.F.R. part 20 (1979), generallyafford protester and interested parties a reasonableopportunity to present their positions; (b) protesterhas not specifically requested release of rationalefrom SBA; and (c) protester and interested partieshave been furnished copies of Army's summary ofSBA rationale.

4. GAO's review standard concerning protest of issuanceof COC involving compliance with special experiencerequirements is limited to fraud on part of SBAor to failure of SBA to consider vital infor-mation. Since protesters' arguments are concernedwith information which was of record before SBA

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and because protesters have not shown fraud on SBA'spart, GAO cannot question SBA's issuance of COC orArmy's concurrence in issuance.

U.S. Eagle, Inc. (Eagle), has protested the d b

Department of the Army's referral to the Small BusinessAdministration (SBA) of the question of the competencyof Pacific Coast Utilities Servicing Inc. (Pacific), asmall business, to perform the requirements of invitationfor bids (IFB) DAKFOl-78-B-0302 for "hospital housekeepingservices," Letterman Army Medical Center, Presidio rof San Francisco, California. Eagle questions theSBA rationale (as summarized by the Army) for findingPacific to be competent for the procurement andalso complains of the Army's acquiescence in theSBA's competency decision. For the reasons set forthbelow, we deny Eagle's protest.

Background

The IFB, issued in August 1978, provided that theservices would be furnished under the supervision andtraining of an "executive housekeeper" who was to haveachieved certain minimum levels of education and ex-perience including "* * * at least two years experienceas the executive housekeeper or his primary assistantwithin the past five years in a hospital of more than200,000 sq. ft." The IFB also set forth an "offeror'sexperience" requirement, as follows:

"TP 1.13 OFFEROR'S EXPERIENCE: Theminimum acceptable period of experience inconducting a hospital housekeeping programis twelve (12) months of hospital servicewithin the prior thirty-six (36) months.This service must have been obtained at amaximum of two (2) hospital sites. Inorder to be considered acceptable, thecited experience must have been for theentire period certified at each site forthe four (4) areas of surgery, recovery,labor and delivery, and infant nursery.Additional experience in the following

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areas is considered beneficial, but not man-datory, nor can it be substituted for theabove-cited four (4) areas. These areasare: emergency rooms, intensive care,cardiac catheterization, and isolation."

Of the seven bids opened on October 23, 1978, twobids were rejected because of bid bond deficiencies.Of the remaining bids, Pacific's bid was the lowest;Eagle's bid was second lowest.

The contracting officer reports that on November 6he requested a preaward survey on Pacific to determinewhether the company was a responsible concern especiallyconsidering the experience requirement set forth in theIFB. While the survey was being made, Eagle protestedto the Army any award to Pacific on the grounds that thecompany did not possess the necessary experience; byletter of December 8, Eagle also filed a protest withour Office.

After the survey was made of the company, thesurvey team recommended to the contracting officer thatno award be made because the team found (as reported bythe contracting officer) that "Pacific did not meet theexperience requirement of a minimum of 12 months specializedexperience within the last 36 months."

Because of this information, the contracting officerfound that Pacific was not a responsible concern on Decem-ber 18, 1978. Shortly after this date, Pacific mailed aDecember 26 protest to our Office. The letter stated the"failure of Pacific to technically satisfy the [IFBexperience requirement] does not render Pacific's bidnon-responsive or Pacific a non-responsible bidder."

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By letter of January 9, 1979, the contractingofficer referred the question of Pacific's competency toperform the contract to SBA "pursuant to [Defense AcquisitionRegulation] DAR S 1-705.4" which provides:

"1-705.4 Certificates of Competency

"(a) SBA has statutory authority to certifythe competency of any small business concernas to all elements of responsibility including,but not limited to, capability, competency,capacity, credit, integrity, perseverance, andtenacity except regulatory requirements underthe jurisdiction of other Federal agencies.Contracting officers shall accept SBAcertificates of competency as conclusive ofa prospective contractor's responsibility * * *

* * * * *

b(c) If a bid or proposal of a smallbusiness concern is to be rejected becausethe contracting officer has determined the concernto be nonresponsible, the matter shall be referredto the appropriate SBA field office having theauthority to process the referral in the geo-graphical area involved."

The documents forwarded to the SBA clearly revealedthat the only reason the contracting officer foundPacific to be not responsible was the concern's failureto meet the IFB experience requirement.

On learning of the referral, Pacific withdrew itsprotest before our Office.

Thereafter, in late February 1979, the SBA informedthe Army that it had certified Pacific to be competentto perform the contract in question. There was noindication, however, in the SBA's letter to the Armyas to the reasoning or findings which led the SBA toconclude that Pacific was "competent" with respect tothe IFB's experience requirement. Thus, the Armyspecifically requested SBA to furnish it with "allcopies of significant data developed by [the SBA con-cerning its decision]."

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While the Army's request was pending at SBA, wereceived a February 15 letter of protest from Eaglethat the Army had improperly referred the question ofPacific's competency to the SBA; and that SBA had no"jurisdiction to pass on the matter as Pacific * * *does not have the experience required"; and that "SBAcannot waive the specifications."

By letter of March 19, the SBA forwarded the re-quested documents to the Army with the restrictionthat "these documents are not to be disclosed to Eagleor any other person or entity outside the Government."To our knowledge, Eagle has not contested this restric-tion by filing a request-for the documents from SBA--the agency having primary interest in the documents.

In May of this year, the Army forwarded its reporton Pacific's February 15 protest.

The Army's report noted that the "contracting officerhas elected to abide by SBA's [issuance of the competencycertificate to Pacific] on the basis of information [con-tained in the March 19 SBA letter to the Army]." TheArmy further observed:

"With regard to the [SBA] determination madein this case we observe that the file showsthat Pacific has performed custodial servicessince 1961 and has had a long record ofsatisfactory performance. However, its lasthospital housekeeping contract is said to beabout five years ago (1973-1974). Althoughit may be available in the SEA files, theadministrative report does not reflect thespecific experience in months and/or yearsat named hospitals relied on by the SEA inreaching its determination that Pacific satis-fies the specific experience criteria of operat-ing a hospital housekeeping program for 12 ofthe previous 36 months (TP 1.13). The file alsodoes not reflect how the officers of the corporationpossess such experience or its equivalent. In

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fact, Mr. Ellis, the President of Pacific,ina letter to the Procurement Division of 8 November1978, stated that 'we find that our most recentcorporate experience does not fall within thethree (3) years limit, although we can and domeet all other requested requirements.'

"It is our view, however,that qualifications ofMr. Redfern, the Executive Housekeeper who willbe hired by Pacific, are considered sufficientto satisfy the experience requirements of TP 1.13.It is observed that Mr. Redfern has had seven (7)years' experience as an Executive Housekeeper.In this connection the Executive Housekeeper isthe most important person working under the contract.He acts for the contractor, supervises and trains thehousekeeping employees and insures effective com-pliance with all the provisions in the contract. Assuch it is our view that in this instance, it is notimproper to consider the experience of the ExecutiveHousekeeper in examining the contractor's overallexperience level. Thus we consider that Pacificsatisfies the definitive experience criteria setout in TP 1.13."

Finally, the Army requested our Office "to express itsopinion as to whether it will assume jurisdiction * * *to assure that the evidence used by the SBA to supportits determination satisfies the definitive criteriaset out in a solicitation, especially where the SBAdecision overrules a contracting officer's nonrespon-sibility determination."

The day before the Army transmitted its report toour Office, we issued a decision which involved asimilar factual situation to that of the present pro-test, namely: SBA issuance of a certificate of competency(COC) to a bidder who had previously been found to benonresponsible for failure to comply with a specialexperience standard. That decision, J. Baranelloand Sons, 58 Comp. Gen. , B-192221, May 9, 1979,79-1 CPD 322, was made available to the involved partiesfor their comments.

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Analysis

The issues Eagle raises about the propriety ofthe Army's referral of the question of Pacific's com-petency to the SBA are resolved through reference tothe applicable DAR provisions, noted above, whichdemonstrate, in our view, the propriety of the referral.

First of all, there can be no question that theexperience requirement relates to the concept of re-sponsibility which, as commonly understood, relatesto a proposed contractor's apparent ability or capacityto perform the contract's requirements. For example,DAR § 1-903.2(a)(i) (DAC #76-15, June 1978) lists"experience" as an additional standard of responsibilityfor appropriate procurements. In this perspective,"experience"--or any other element of responsibility--hasnothing to do with a bidder's commitment to performthe Government's work requirements which involvesthe concept of responsiveness.

Whether Pacific met the experience requirementwas, thus, a matter of responsibility which, under DAR§ 1-705.4(c), noted above, had to be referred to SBAby mandate of existing regulation. Moreover, the referralprovision in question does not contain an exception forthose situations in which the small business concern,as here, does not initially question the adverse finding.On this point, we note, in response to argument made byEagle, that, although Pacific initially stated it "didnot satisfy the minimum [offeror's] experience require-ment," the company did not object to the referral of thequestion of its competency to SBA; moreover, Pacificactively sought a COC from SBA after the referral hadbeen made. Finally, it is obvious that bidders' subjectivejudgments as to whether they are responsible are notdecisive--nor should they be--since the resolutionof responsibility questions requires knowledge of legalprecedent. Thus, we find the referral of the question ofPacific's competency to be appropriate under existingprocedures.

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Next, Eagle argues that SBA's refusal to discloseits documents which support the Pacific COC affects"due process rights" in its protest before our Office.We have refuted similar arguments in prior decisions.As we stated in Systems Research Laboratories, Inc.,Reconsideration, B-186842, May 5, 1978, 78-1 CPD 341:

"SRL argues that data not releasable tothe protester or another interested party forrebuttal must be rejected as evidence tosupport the case and that to do otherwiseis to deny the procedural due process rightsof the nonproponent. We do not agree withSRL's assessment of our treatment of suchcases under our Bid Protest Procedures.

"The resolution of bid protests by thisOffice is an administrative procedure dis-tinct from the conduct of litigation in thecourts. Our bid protest authority is basedupon our authority to adjust and settleaccounts and to certify balances in theaccounts of accountable officers under31 U.S.C. §§ 71, 74 (1970). * * * Neitherof these sections prescribes the form orprocedure in which bid protests are to beresolved. We are of the view that to what-ever extent due process is required underthese sections, procedures affording theprotester and interested parties a reasonableopportunity to present their case are asatisfactory and fair method. * * * Further-more, we do not consider it necessary tosatisfy due process requirements in admin-istrative proceedings of this nature thata party be apprised of all of the informationin the record. * * *

"Our Bid Protest Procedures are intendedto provide fair and equitable proceduralstandards for the protection of all partiesto a protest. Notice of the protest isrequired to be given to all bidders or pro-posers which appear to have a 'substantial

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and reasonable prospect of receiving an awardif the protest is denied.' 4 C.F.R. § 20.3(a)(1977). The agency is required to submit areport responsive to the protest to thisOffice with copies to the protester andinterested parties. 4 C.F.R. § 20.2(c)(1977). The protester and interested partiesare entitled to examine and comment on theagency report. 4 C.F.R. § 20.3(d) (1977).

"A protester or other party denied accessto documents furnished to this Office by anagency may seek disclosure of those documentsunder the provisions of the FOIA. Where, ashere, the records sought to be disclosed areagency records, we have held that this Officeis without authority under the FOIA to deter-mine what records must be released and the pro-tester must make application to the agency forrelease of the documents. * * * Once a partyhas sought disclosure from the agency andbeen denied, his sole remedy is by suit inthe United States District Court. * * *A protester may make and we may honor arequest that our Office withhold action onthe protest during the pendency of an FOIArequest. * * * Where a request to withholdaction is denied by our Office, the partymay still seek reconsideration of our decisionon the protest on the basis of new informationobtained through its FOIA request. 4 C.F.R.§ 20.9 (1977).

"We think that this procedures affords allparties both reasonable notice and an opportunityto be heard and we are satisfied that theseprocedures are fair. * * * In these circum-stances, we perceive no denial of proceduralfairness * * *."

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In any event, Eagle and Pacific have been furnishedwith a copy of the Army's summary of the SBA's rationalefor the COC decision. This summary reveals, to some extent,the SBA position. Thus, Eagle has some knowledge of SBA'sreasoning for issuing the COC; this fact further undercuts,as a practical matter, Eagle's "lack of due process" argument.Moreover, Eagle has not, to our knowledge, requested thedocuments in question from the SBA.

Next, Eagle makes several arguments as to why SBA'sdecision as summarized by the Army is erroneous, why theArmy has erroneously concurred in the SBA's decision,why the Army's concurrence departs from practice onprior procurements and why fairness to bidders demandsthat the decision not be given effect. All thesearguments are directly or indirectly premised onthe assumption that our review standard of the SBAdecision would be the same as if we were reviewing thequestion of a bidder's compliance with a special experiencerequirement where the SBA was not involved. Eagle's premiseis erroneous.

In the Baranello decision, supra, which also in-volved the question of a small business' compliancewith a special experience requirement, we concludedthat where "no question of fraud is involved (in SBA'sissuance of a COC], [GAO's role in reviewing a protestagainst the COC's issuance] would be limited to suggestingthat the procuring agency reconsider its decision ifthe record indicates that certain vital informationbearing on a small business bidder's responsibilityhad not been considered by SBA." Although Eagle attemptsto distinguish Baranello from the present case mainlythrough an argument which contrasts the difference inthe wording of the experience clauses involved, we con-clude that Baranello is applicable to the present caseto the extent it announces the standard of our Officein reviewing a protest against the SBA's issuance ofa COC for a procurement which required a bidder to meetcertain minimum experience requirements.

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Essentially, therefore, our review of the issuanceof the COC is limited under Baranello to fraud on thepart of SBA, which has been neither alleged nor shownhere, or to failure of the SBA to consider vital informationbearing on Pacific's responsibility. Eagle does notcite any information which the SBA failed to considerand does not argue that SBA was unaware of the experiencerequirement; instead, Eagle merely makes arguments aboutinformation which was of record before SBA. Thus,Eagle's arguments are irrelevant to our review standardand will not be further considered.

Since under our review standards we cannot questionthe SBA's decision, we also cannot question the Army'sconcurrence in that decision.

In response to Army's request for an opinion on whetherwe will especially review SBA COC decisions concerningbidders' compliance with special experience requirements,we note that the review standard for SBA COC decisionsas announced in Baranello and in this decision willafford some review of these decisions. Given the pres-ent COC scheme, however, we are prohibited from any moreintensive review.

Reliable Building Maintenance Company Protest

Reliable Building Maintenance Company (Reliable)has also protested the SBA's COC decision and the Army'sconcurrence in the decision. Essentially, Reliable says itfelt it would not comply with the special experiencerequirements; consequently, the company did not bid forthe contract. Further, Reliable argues that the SBAdecision here effectively allows a deviation from theserequirements and should not be permitted.

We view these arguments as closely related to theones advanced by Eagle. Specifically, Reliable iscontesting the reasonableness of the SBA decision butdoes not show that the decision was the result of fraudor that the SBA failed to take into consideration vitalinformation bearing on Pacific's competency. As notedabove, we cannot question the SPA's decision under thesereview standards.

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-Protest denied.

for the Comptrolle neralof the United States