B-166500, MAR. 28, 1969

B-166500, MAR. 28, 1969

TO ELDORADO INSURANCE COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM DATED MARCH 21, 1969, PROTESTING AGAINST THE AWARD OF A CONTRACT BY THE MARITIME ADMINISTRATION TO THE NATIONAL INDEMNITY COMPANY, THE LOW BIDDER, UNDER INVITATION FOR BIDS NO. 17 FOR MARINE PROTECTION AND INDEMNITY INSURANCE COMMENCING APRIL 1, 1969.

THE ANNUAL CONTRACT FOR THIS INSURANCE COMMENCING MIDNIGHT MARCH 31, 1968, WAS THE SUBJECT OF OUR DECISION B-163878, MAY 27, 1968. YOU PROTEST THAT THIS DECISION WAS NOT BASED ON FULL DISCLOSURE OF ALL FACTS AND THAT INVITATION FOR BIDS NO. 17 IS "A DELIBERATE ATTEMPT TO WORK A FRAUD UPON THE UNITED STATES BY ENABLING UNQUALIFIED AND UNLICENSED INSURERS TO OBTAIN THIS CONTRACT BY SUBTERFUGE.' YOUR BASIS FOR THIS CONTENTION APPARENTLY IS THAT UNTIL AWARD OF THE 1968 CONTRACT FOR MARINE PROTECTION AND INDEMNITY INSURANCE TO NATIONAL INDEMNITY COMPANY THAT COMPANY HAD NO EXPERIENCE IN THE UNDERWRITING OF THIS FORM OF INSURANCE AND THAT SUCH LACK OF EXPERIENCE DISQUALIFIED THE COMPANY UNDER SECTION 7 OF THE INVITATION WHICH REQUIRED PRIOR EXPERIENCE AS A QUALIFICATION FOR AWARD.

WITH REGARD TO NATIONAL'S LACK OF EXPERIENCE BEFORE AWARD OF THE 1968 CONTRACT, AND ALSO WITH REGARD TO LICENSES POSSESSED BY NATIONAL, OUR EARLIER DECISION STATED THAT:

"* * * THE MARITIME ADMINISTRATION HAS SATISFIED ITSELF THAT NATIONAL INDEMNITY IS INCORPORATED IN NEBRASKA AND YOU HAVE ACKNOWLEDGED THAT IT IS LICENSED TO DO BUSINESS IN THE DISTRICT OF COLUMBIA AND IN MOST OF THE STATES. FURTHER, THE MARITIME ADMINISTRATION WAS SATISFIED THAT THE COMBINED CAPITAL AND SURPLUS OF THE COMPANY EXCEEDS THE INVITATION REQUIREMENTS AND THAT BROWN AND HAWLEY, INC., AND THE LAW OFFICES OF THEODORE F. TURNER, WHO HAVE ACTED TO THE SATISFACTION OF THE MARITIME ADMINISTRATION ON BEHALF OF INTERSTATE FIRE AND CASUALTY COMPANY, THE PREVIOUS CONTRACTOR, WILL SERVE NATIONAL INDEMNITY AS UNDERWRITING AGENTS AND CLAIMS ADJUSTERS, RESPECTIVELY. ALTHOUGH NATIONAL INDEMNITY HAD NOT WRITTEN MARINE PROTECTION AND INDEMNITY INSURANCE PREVIOUSLY, THE MARITIME ADMINISTRATION WAS SATISFIED THAT IT HAS ENGAGED THE SERVICES OF EXPERIENCED AND QUALIFIED UNDERWRITING AND CLAIMS ORGANIZATIONS. IT IS STATED THAT WHAT NATIONAL INDEMNITY HAS DONE IS NO DIFFERENT THAN WHAT * * * OTHER COMPANIES DO IN UTILIZING THE MARINE OFFICE OF AMERICA FOR THE ADJUSTMENT OF MARITIME CLAIMS. IN ANY EVENT, ON THE BASIS OF THE FOREGOING, THE MARITIME ADMINISTRATION CONCLUDED THAT NATIONAL INDEMNITY WAS FULLY QUALIFIED TO PERFORM THE CONTRACT.

"OUR OFFICE HAS HELD THAT THE AWARD OF A CONTRACT MAY BE LIMITED TO THOSE BIDDERS MEETING SPECIFIED QUALITATIVE AND QUANTITATIVE EXPERIENCE REQUIREMENTS IN A SPECIALIZED FIELD WHERE THE BIDDING CONDITIONS SO PROVIDE AND A DETERMINATION HAS BEEN MADE THAT THE INTERESTS OF THE GOVERNMENT WOULD BE SERVED THEREBY. SEE 37 COMP. GEN. 196 AND ID. 420 AND DECISIONS CITED THEREIN. HOWEVER, IN 39 COMP. GEN. 173, IT WAS INDICATED THAT OUR OFFICE DOES NOT CONDONE THE REJECTION OF BIDS OF RESPONSIBLE BIDDERS BECAUSE AS A TECHNICAL MATTER THEY DO NOT MEET PRESCRIBED EXPERIENCE QUALIFICATIONS. IN THAT CONNECTION, WE HELD IN THAT DECISION AT PAGE 178 THAT -THE STATEMENT OF SUCH QUALIFICATIONS SHOULD NOT BE CONSIDERED AS HAVING THE EFFECT OF TRANSFORMING THE PURELY FACTUAL QUESTION OF RESPONSIBILITY INTO A LEGAL QUESTION OF CONFORMITY TO THE INVITATION.- SEE, ALSO, 45 COMP. GEN. 4.' ADDITIONALLY, ON THE QUESTION OF LICENSING, THE MARITIME ADMINISTRATION HAS ADVISED OUR OFFICE THAT NATIONAL IS LICENSED TO DO BUSINESS IN 44 STATES. ON THE QUESTION OF EXPERIENCE IN THE UNDERWRITING OF MARINE INSURANCE THE MARITIME ADMINISTRATION HAS ADVISED US THAT NATIONAL'S CHARTER AUTHORIZES MARINE UNDERWRITING AND THAT NATIONAL HAS STATED " "THAT THEY HAVE WRITTEN MARINE BUSINESS IN THE PAST FOR OTHERS THAN THE MARITIME ADMINISTRATION.' FINALLY, THE MARITIME ADMINISTRATION HAS ADVISED US THAT NATIONAL QUALIFIES UNDER THE TERMS OF THE INVITATION SECTION 7 WITH REGARD TO ITS COMBINED CAPITAL AND SURPLUS AND THAT NATIONAL IS CONSIDERED TO BE "A RESPONSIBLE BIDDER AND FULLY QUALIFIED TO ADMINISTER THE CONTRACT FOR ANOTHER YEAR.'

ALTHOUGH YOUR TELEGRAMS TO THIS OFFICE AND TO THE MARITIME ADMINISTRATION ALLEGE THAT YOUR PROTEST IS NOT GOVERNED BY OUR EARLIER DECISION, IN OUR OPINION THE PORTIONS OF THAT DECISION QUOTED ABOVE ADEQUATELY ANSWER YOUR PROTEST, PARTICULARLY WITH REGARD TO THE PRIOR EXPERIENCE REQUIREMENT IN INVITATION SECTION 7.

ON THE BASIS OF THE ABOVE CONSIDERATIONS AND IN VIEW OF THE FACT THAT THE MARITIME ADMINISTRATION IS SATISFIED WITH REGARD TO NATIONAL'S RESPONSIBILITY, YOUR PROTEST MUST BE DENIED.