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man was directed to change his supplier for this component and the contractor agreed to comply. The Government records also indicate that as of February 17, 1959, by which time 108 of the vehicles had been shipped to the field, failure of brake systems began to occur. Examination by the Post Office personnel revealed that the brake linkage was incorrectly designed. It was determined by competent Post Office personnel that the Briddell firm, which actually manufactured the vehicle, did not have in its employ an engineer capable of designing a satisfactory brake linkage. To assist Eshelman and Briddell, a two-cylinder vehicle of another manufacture was shipped to the subcontractor's plant to serve as a guide in the redesign of the brake linkage. Four Post Office employees, one automotive engineer and three automotive technicians, were assigned to the Briddell plant to insure that corrections made would continue.

The Post Office Department records further indicate that on or about March 5, 1959, arrangements were made to return to the manufacturer's plant 108 vehicles which had been removed from service in the field due to brake linkage failure. (It may be noted that these 108 vehicles were some of those which subsequently remained at the subcontractor's plant awaiting pickup.) In addition to the foregoing, we were advised that in the latter part of January 1959, it was found that the brake drums for use on the vehicles were being improperly cast and were being finished on a lathe inadequate for the work. These failures were brought to the attention of the subcontractor and the trouble was remedied.

In addition, we have been advised that the following deficiencies have been reported to the Post Office Department up to April 1, 1960, with respect to the Eshelman vehicles produced under the contracts in question: Axles

3 Starter-Generator Body

12 Generator Belts Windshield Rubber

48 Solenoid Side Window Rubber

4 Defective Wiring Rear Window Rubber

1 Batteries Windshield Wiper-Motor


FUEL SYSTEM Rear Door Hinge

8 Rear Compartment Handle &

Gas Tanks

267 Locks 44 Accelerators

113 Curtain Rod 65 Gas Lines

3 Mirrors-Brackets 30 Carburetors

7 Seats ---

Fan Belts

16 Clutch


49 Ignition Switch 29 Engines

15 Flashers 26 Exhaust System

218 Stoplight Switches


58 Horn 6 Shifter Levers

7 Fuses 39 Propeller Shaft, U-Joints

147 Turn Signals 10 Speedometer

27 Headlights 4 Forks


121 Voltage Regulators

9 Wheels Coil


1, 570


4 23 19 5 5

In your letter of April 5 you also contest the position that the warranty service provided under the prior contact has been and remains inadequate. Additionally, you point out that the contractor experienced difficulty in maintaining his service organization because competition was set up by the Post Office Department for work other than warranty replacements. In this connection, it should be noted that the contract required the contractor to establish an organization for the performance of warranty service, but it did not obligate the Government to employ that service organization for nonwarranty work and in the best interest of the Government, the latter type of work was normally awarded on the basis of the lowest cost to the Government.

There may, unfortunately, have been a lack of formal notification by GSA to the contractor as to cases of lack of adequate service. Some difficulty undoubtedly arose from the fact that neither Briddell, the subcontractor, who actually manufactured the vehicles, nor the user, the Post Office Department, was a primary party to the contract; both in effect operated through intermediates so far as formal notification was concerned. In any case, while the failure to make official notification as to lack of adequate warranty service might affect the Government's right to initiate proceedings against the contractor for breach of contract, we do not believe it should be determinative of the question so far as responsibility of the bidder to perform further contracts is concerned.

Even assuming inadequate performance under the past contract, you contend, in an enclosure to your letter of February 17, that the failure to perform satisfactorily under one prior award is an insufficient basis for rejection of a bid. In support of the contention, you cite our decisions at 27 Comp. Gen. 621, 15 id. 149, and 14 id. 313.

In 27 Comp. Gen. 621, we noted at page 625 that the fact of a default by a bidder under a prior contract is not per se a sufficient basis for regarding him as irresponsible with respect to a later procurement. The other decisions noted by you are to the same effect. While we continue to maintain the position that the fact of an earlier default does not of necessity establish a lack of responsibility, we think that the circumstances of the contractor's failure to perform properly and in a timely manner under the earlier contract are for consideration, and in this case we cannot find that the contractor's record under the prior contract, coupled with the facts found by the survey team, do not furnish a reasonable basis for the administrative determination of lack of responsibility.

In additional enclosures to your letters of February 17 and March 1, it is variously noted that Eshelman now has more plant space and a larger engineering staff than were available to the firm under the prior contract. It is also noted that an independent engineering con



cern has concluded that Eshelman has the ability to perform the new procurement on schedule.

Clearly, one of the factors in determining the responsibility of a bidder is his apparent ability to perform in accordance with the requirements set out in the invitation. The determination of the prospective contractor's ability to perform is primarily the function of the administrative officers concerned, and in the absence of any showing of bad faith or lack of reasonable basis therefor, there is no basis upon which we may object. 37 Comp. Gen. 430, 435. The projection of a bidder's ability to perform if awarded a contract is of necessity a matter of judgment. While such judgment should be based on fact and should be arrived at in good faith, it must properly be left largely to the sound administrative discretion of the contracting offices involved, since they are in the best position to assess responsibility, they must bear the major brunt of any difficulties experienced by reason of the contractor's lack of ability, and they must maintain the day to day relations with the contractor on behalf of the Government. For these reasons, it would be unreasonable to superimpose the judgment of our Office or any other agency or group on that of the contracting officials. In view thereof, and of the apparent substantial basis for the conclusion of the contracting agency as to the responsibility of the Eshelman firm—which has, in effect, been confirmed by the Small Business Administration-we see no legal basis upon which we may properly object to the determination to reject the Eshelman bid.

[B-141775] Military Personnel-Gratuities—Reenlistment Bonus

— One-Year Enlistment Extensions

Although two one-year enlistment extensions by Navy members could not be combined to be considered a voluntary extension of an enlistment for two or more years for purposes of the reenlistment bonus authorized under section 208(e) (2) of the Career Compensation Act of 1949, in view of the precise definition of "reenlistment," the substantive change from the act of August 22, 1912, when 10 U.S.C. 5539(b) was enacted into law to permit all extensions of an enlistment to be considered one continuous extension, requires the conclusion that two one-year extensions of a member's enlistment constitute a reenlistment for a reenlistment bonus under section 208 of the Career Compensation Act of 1949.

To J. T. Pyron, Department of the Navy, April 18, 1960:

By second endorsement dated January 20, 1960 (NCAS202), the Comptroller of the Navy forwarded your letter of December 14, 1959, with enclosures, in which you request an advance decision as to the propriety of crediting the pay account of Salvador Aleguas, Jr., 424 00 33, AT2, USN, with a reenlistment bonus in the amount of $40. Your request for decision has been assigned Department of Defense Military Pay and Allowance Committee Submission No. DO-N-4737. It appears from enclosure (3) submitted with your letter that the member enlisted in the Regular Navy for four years on July 12, 1954; that he voluntarily extended his enlistment for a one-year period on July 11, 1958; and that on July 11, 1959, he again voluntarily extended his enlistment for a one-year period. Photostatic copy of NAV Form 546 (enclosure (3)) provides for adjusting the enlisted man's pay account, incident to the extension of July 11, 1959, by crediting him with reenlistment bonus in the amount of $40 under section 207 of the Career Compensation Act of 1949, as amended, 37 U.S.C. 238. You request a decision as to whether the member is entitled to elect to receive reenlistment bonus under section 208 of the Career Compensation Act of 1949, 37 U.S.C. 239, as added by the act of July 16, 1954, 68 Stat. 489, 37 U.S.C. 239(e) (2), in which event you say he would not be entitled to any reenlistment bonus incident to the extension of July 11, 1959, since under the provisions of paragraph 044075, Navy Comptroller Manual, two one-year extensions do not constitute a “reenlistment” under section 208, but would be entitled to a reenlistment bonus as for his first reenlistment upon his subsequent discharge and reenlistment, or whether he must accept the $40 bonus under section 207. In the latter event, upon his next reenlistment the bonus would be computed on the basis of a second reenlistment.

The Comptroller of the Navy has pointed out that we held in 32 Comp. Gen. 290 that two succeeding one-year extensions of an enlistment in the Navy or Marine Corps should be viewed as a reenlistment for the aggregate period of the extensions for the purpose of reenlistment bonus under section 207, the decision being based, in part, on the act of August 22, 1912, as amended, 34 U.S.C. 184 (1952 Ed.), which provided that enlisted men of the Navy and Marine Corps who extended the term of their enlistment as there authorized should receive the same pay and allowances as though regularly discharged and immediately reenlisted. Also, it was pointed out that in 34 Comp. Gen. 615, we said that since section 207 did not contain specific language defining a reenlistment, it was proper to consider the provisions of the 1912 act, for Navy and Marine Corps personnel in connection with that section. However, since the word “reenlistment” was expressly defined in section 208(e) of the Career Compensation Act of 1949, as amended, 37 U.S.C. 239(e) as including “a voluntary extension of an enlistment for two or more years," it was further stated in that decision that unless a single extension was for two or more years it should not be regarded as a reenlistment under section 208. Finally, the Comptroller of the Navy directed attention to the codification of the act of August 22, 1912, by the act of August 10, 1956, 70A Stat. 320, as 10 U.S.C.5539, subsection (b) of which reads as follows:

A member who extends his enlistment under this section is entitled to the same pay and allowances as though he had reenlisted. For the purpose of determining entitlement to reenlistment bonus and to travel and transportation allowances upon discharge, all such extensions of an enlistment are considered one continuous extension. [Italics supplied.]

As indicated above, our decision of May 19, 1955, 34 Comp. Gen. 615, and the later decision of January 17, 1956, 35 Comp. Gen. 403, held that an extension of an enlistment for one year could not be combined with another extension of the enlistment so as to be considered a "voluntary extension of an enlistment for two or more years” to come within the definition of a reenlistment contained in section 208(e) (2), 37 U.S.C. 239(e) (2). Those decisions are deemed to have been proper in view of the precise definition of “reenlistment” contained in section 208, as it is not considered that the language of the 1912 act required the conclusion that a one-year extension and a further extension constituted a voluntary extension for two or more years.”

The above-quoted subsection 5539(b) of Title 10 of the U.S. Code now provides, however, that for the purpose of determining entitlement to reenlistment bonus, all extensions of an enlistment under that section are considered "one continuous extension.” While section 49 of the act of August 10, 1956, 70A Stat. 640, states that, in reenacting Title 10 of the United States Code, it was the legislative purpose to restate the law without substantive change, it nevertheless seems apparent that subsection 5539(b) represents a substantive change from the provisions of the 1912 law. Under the present provision that "all such extensions of an enlistment are considered one continuous extension,” it seems clear that the two one-year extensions of the member's enlistment constituted a reenlistment within the contemplation of section 208.

Accordingly, if Aleguas elects to receive reenlistment bonus under section 208, it is concluded that he is entitled to be paid a bonus under that section, if otherwise proper, computed on the basis of a reenlistment for two years on the effective date of the extension of July 11, 1959.

[B–139174 ] Military Personnel Transportation — Automobiles Brokers' Fees

Customs brokers' fees which are paid by members of the uniformed services for effecting the entry of their privately owned automobiles in foreign countries after transoceanic shipment at Government expense, under 10 U.S.C. 6157 (Navy) or 10 U.S.C. 4748 (Army), may not be regarded as a part of the ocean transportation cost nor may customs services be regarded as within the term "shipping services” in section 901 of the Merchant Marine Act, 1936, as amended, 46 U.S.C. 1241, which does not include services after the automobiles are unloaded at destination; therefore, reimbursement to the members of such charges is not authorized.

To W. F. Harbin, Department of the Navy, April 20, 1960:

By second endorsement dated October 23, 1959, the Comptroller of the Navy forwarded your letter of September 18, 1959, with enclo

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