To view the matter otherwise we must conclude that the railroad had notice not only that the material in the cars was to be used for purposes of construction, but that it must also infer that if the shipment were not accomplished an emergency would arise, which the consignee would be unable to bridge by obtaining replacement material within a sufficient time via rail to permit completion of the construction before the bad weather season for construction sets in, and, therefore, would be forced to stop construction with resulting damages, or if the replacement material were so procured and construction continued under adverse weather conditions the additional costs incident thereto would minimize or equal the expense of shipping the replacement material by air transportation. Such a view, we think, would place an unreasonable burden on the carrier, and if followed to a reasonable conclusion could be said to apply to every breach of a similar contract of carriage, regardless of how early in the construction season of the year it was accepted for transportation, or the character and intended use of the construction material being shipped.

If such an urgent condition existed, it should have been communicated to the Alaska Railroad, and the importance of prompt delivery of the shipment and the unusual consequences of delay impressed upon it so that it could, if deemed necessary, protect itself by special precaution against failure in transportation and delivery, or to enable it to decline the shipment if, by reason of the unusual conditions, it did not care to assume the responsibility therefor. The record in this case indicates that the Alaska Railroad had no such notice of the urgency or special conditions incident to erection of the antenna material, so as to impose upon it, without its consent, any special liability. Woonsocket Mach. & Press Co. v. New York, N.H. & H.R. Co., 131 N.E. 461; Alton R. Co. v. Oklahoma Furniture Mfg. Co., 122 P.2d 152; Stoltz v. Converse, 172 P. 2d 78; Lambert v. Jefferson, 36 So. 2d 594. Cf. Adams Express Co. v. Allen, 100 S.E. 473; Zizzo v. Railway Express Agency, 131 F. Supp 326; Dale Truck Line v. R. & M. Well Servicing & Drilling Co., 286 S.W. 2d 446.

Accordingly, it is our view that the damages under consideration could not have been within the contemplation of the parties when the steel antenna material was accepted for transportation. Neither do we believe that they were the proximate result of the delay in transportation. The damages not falling under the definition of general damages in the cases and authority cited above we conclude, therefore, that the Alaska Railroad is not liable for payment of the subrogated claim of the Air Force in the sum of $16,196.54.

A

copy of this decision is being furnished to the General Manager

of the Alaska Railroad.

[B-142055]

Bidders-Qualifications-Prior Unsatisfactory Service

An administrative determination-confirmed by the Small Business Administration-that a bidder is not a responsible bidder, based on evidence of the bidder's deficient performance under a recent contract for the same item and his failure to produce an acceptable model within the time prescribed and on evidence of a survey team which indicates that the bidder lacks the necessary tools and does not have adequate inspection techniques to perform, is an administrative determination which is based on fact and arrived at in good faith and, therefore, there is no legal basis upon which objection to the determination may be made.

Although a default by a bidder under a prior contract is not per se a sufficient basis for the conclusion that the bidder is not a responsible bidder, the circumstances of a contractor's failure to perform properly and in a timely manner under an earlier contract are for consideration in the determination of the bidder's qualifications.

To Bernstein & Kleinfeld, April 12, 1960:

We refer again to your letters of February 17, March 1, and April 5, 1960, with enclosures, protesting on behalf of the Eshelman Motors Corporation against a determination by the General Services Administration to reject that firm's bid under Invitation No. FN-3A-23357A-12-28-59 on the grounds that the firm "does not have the necessary experience, organization, technical qualifications and facilities to perform as contractor for the items concerned."

The invitation was issued November 13, 1959, for the procurement of 2,401 three-wheeled 1/4-ton mail delivery vehicles. When bids were opened on December 28, 1959, it was determined that the low responsive bid had been submitted by Eshelman; however, for the reasons set out below it was found that the firm was not qualified to perform. Since Eshelman is a small business, the Small Business Administration Regional Office was notified on February 9, 1960, of the GSA finding. By letter of February 18, 1960, the Small Business Administration advised that, after comprehensive analysis of all available information, it declined to issue a Certificate of Competency on behalf of the Eshelman Corporation.

The invitation, at page 6, requires that the successful bidder be in a position to render prompt service in the matter of furnishing replacement parts. A team of qualified personnel of the General Services Administration, after making a careful and extensive inspection and evaluation of the facilities of the Eshelman Corporation and of the subcontractors proposed to be used by them in the event of award, concluded that the establishment at this time of a dealer organization with the necessary stock of parts and capacity to meet the foregoing requirement would be prohibitive from the standpoint of cost. In connection with this conclusion, the team noted that while the overall size of the vehicle to be produced is relatively small, the number of parts involved approximates that required to service an American compact car.

The invitation indicates the desire of the Government to have the vehicles produced at the rate of 20 per working day. Eshelman in its bid offered to meet that production rate. The survey team, considering all relevant factors, concluded that the assembly facilities proposed for use by Eshelman could not sustain that production rate.

Paragraph 5 of Standard Form 32 made a part of the invitation, and which would become part of the resulting contract, provides in part as follows:

(a) All supplies (which term throughout this clause includes without limitation raw materials, components, intermediate assemblies, and end products) shall be subject to inspection and test by the Government, to the extent practicable at all times and places including the period of manufacture, and in any event prior to acceptance.

(e) The Contractor shall provide and maintain an inspection system acceptable to the Government covering the supplies hereunder. Records of all inspection work by the Contractor shall be kept complete and available to the Government during the performance of this contract and for such longer period as may be specified elsewhere in this contract.

The survey team found that the bidder lacks the necessary tools and records to permit the establishment of an inspection system acceptable to the Government under the provisions quoted above. Specifically, hardness test equipment, inspection gages, electronic test tools, hydraulic test tools, height gages, vernier calipers, fluorescent penetrant or magnetic particle testing equipment, and related tools were nowhere in evidence in the bidder's plant. It was further found that there is no evidence that the bidder has ever kept any of the records considered necessary for an adequate inspection system, including the following: calibration records of hardness test machines, instrument calibration records, periodic tool and gage inspection records, receiving material test reports, electrical equipment test reports, electrical soldering certification reports or cards, periodic furnace certification, welders' certification test reports or cards, X-Ray test reports, sample reports, periodic welding sample test reports, rework and rejection reports, machine qualification data sheets, and casting and forging inspection procedures.

Under a prior invitation, an unfavorable finding was made by the General Services Administration as to Eshelman's responsibility, but after the issuance to the firm by the Small Business Administration of a Certificate of Competency, a contract for the production of 1,622 units of similar vehicles was awarded to Eshelman on July 16, 1958. The quantity was increased on August 15 to 1,673 units. It is the position of the Government that the Eshelman performance under that contract was such as to reflect unfavorably on his responsibility to perform a similar contract. Specifically, it is the Government's contention that under that contract Eshelman did not furnish an acceptable pilot model on schedule, did not begin production at the time contemplated, and could not maintain the production rate provided for

under the contract. Further, it is the Government's position that a high incidence of component failures was experienced with the vehicles delivered under that contract and that the warranty service provided under the contract was, and is, materially deficient.

It is your contention that these allegations of poor performance are not supported by the evidence. In your letter of April 5, 1960, you state that under the earlier contract the pilot model was to be produced by September 15, 1958; that Eshelman records indicate that the pilot model was successfully tested by the subcontractor, Charles D. Briddell, Inc., on August 7, 1958; that Eshelman advised GSA by letter of September 9, 1958, that the pilot model would be ready for official inspection on September 15, 1958. You further state that the pilot model was ready on the scheduled date, was extensively tested over a period of several weeks by the Government, and was approved by the Post Office Department on October 24, 1958. Formal notice of acceptance was contained in a letter from General Services Administration to the contractor dated November 14, 1958. You conclude in the light of the foregoing that the pilot model was ready in accordance with the contract schedule.

The Government records indicate that the Post Office Department was first advised that a pilot model was ready for inspection at the plant of the subcontractor on September 4, 1958. Upon arrival at the plant, however, it was found that a complete model was not available for inspection but that only a portion of the vehicle and certain components could be inspected. Nevertheless, the inspection made of the incomplete vehicle revealed 15 deficiencies. Post Office Department personnel were next advised that a pilot model was ready for inspection at the subcontractor's plant on September 16, 1958. Examination of the vehicle on that date disclosed that 33 corrections would be required before the model could meet specification requirements. On October 7, 1958, a pilot model was brought to the District of Columbia for inspection and it was determined on that same day that 29 changes were needed to bring the vehicle up to specification requirements. Finally, on October 24, a pilot model was presented for inspection at the subcontractor's plant. The vehicle was carefully examined by representatives of the Post Office Department and road tested on that same day. Following the road test it was determined that the pilot model was acceptable subject to two corrections. Thus, it appears that, while under the terms of the contract an acceptable pilot model was required to be presented on or before September 15, 1958, a reasonably acceptable model was not available until October 24, and that acceptance then was subject to the performance of two corrections.

In your letter of April 5, you also allege that the extension of time for completion of the contract granted under Amendment No. 1, which

included a reduction of the production rate from 20 to 12 vehicles per day, was required not by the inability of the contractor to meet the original contract requirements but by the changes and modifications imposed by the Post Office Department from time to time and formally incorporated into the contract by Amendment No. 1.

With respect to the reason for the reduction in the production rate, Eshelman was advised by letter of April 20, 1959, from the GSA, that:

You had previously requested that the production schedule be revised to more nearly meet the capacity of your source. Although twenty (20) vehicles per day is required by the terms of the contract the Government is willing to modify the contract to require a minimum of seventy-two (72) vehicles per week (12 per day for 6 days), which would appear to be more realistic under the circumstances of your production facilities.

It seems clear from the foregoing that the rate was reduced solely to arrive at a quantity more compatible with the contractor's capability. It is further stated in your letter of April 5, 1960, that in any case, since it appeared that the Government did not have the facilities to pick up in a timely manner vehicles produced under the contract, the production rate could not be considered a limiting factor. In support of the position that the Government could not absorb the completed vehicles as produced, you cite correspondence from the contractor showing that on June 8, 1959, there were 202 vehicles on hand awaiting Government pickup, 229 on June 15, 219 on June 22, 235 on June 29, 224 on July 6, 107 on August 24, and 157 on August 17.

We have been advised by the Post Office Department that the vehicles in question were not those which had been freshly produced but were, on the contrary, vehicles which had been returned for rework because of original deficiencies, and the "picking up" of those vehicles does not accurately reflect the Government's ability to absorb vehicles at the contract rate.

With respect to failures of components on the vehicles produced by Eshelman under the earlier contract, you concede in your letter of April 5 that the original front forks failed and had to be replaced, but you point out that this was done at no cost to the Government. You further concede that the original gas tanks required replacement but you point out that this was also done at no cost to the Government, that the tanks were produced by a large and reputable concern and that the difficulties experienced with the original tanks were not anticipated either by the contractor, the tank manufacturer, or the Government. With respect to the alleged failures in such component parts as brake drums, universal joints, and flexible tubings, you state that the contractor was never advised of any undue difficulty.

The Post Office Department advises that as early as January 23, 1959, vehicles delivered to the Alexandria, Virginia, Post Office for use in Springfield, Virginia, experienced cracked hubs on rear brake assemblies. Immediately after this situation developed, it is reported a meeting was held with Eshelman and his subcontractor and Eshel