B-137471, B-137482, DECEMBER 9, 1958, 38 COMP. GEN. 423

B-137471,B-137482: Dec 9, 1958

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BIDDERS ARE ONLY REQUIRED TO ACCOMPANY THEIR BIDS WITH EVIDENCE OF POSSESSION OF A VALID OPERATING CERTIFICATE AND. ALTHOUGH FAILURE TO POSSESS THE SPECIFIC AIRCRAFT OPERATING AUTHORITY PRIOR TO AWARD IS FOR CONSIDERATION IN THE DETERMINATION OF THE BIDDER'S RESPONSIBILITY. SUCH FAILURE DOES NOT MAKE A BID WHICH IS ACCOMPANIED BY EVIDENCE OF A VALID OPERATING PERMIT NONRESPONSIVE. ON THE BASIS OF EVIDENCE WHICH INDICATES THAT SMALL BUSINESS CERTIFICATES OF COMPETENCY WOULD HAVE BEEN ISSUED TO TWO LOW BIDDERS BASED IN PART UPON ADVICE FROM THE CIVIL AERONAUTICS AUTHORITY THAT THE BIDDERS WOULD HAVE BEEN GRANTED AUTHORITY TO OPERATE THE TYPE OF AIRCRAFT USED IN THE PERFORMANCE OF THE CONTRACT.

B-137471, B-137482, DECEMBER 9, 1958, 38 COMP. GEN. 423

CONTRACTS - BIDDERS - QUALIFICATIONS - SMALL BUSINESS CONCERNS - AIRCRAFT OPERATING AUTHORITY - EVIDENCE UNDER AN INVITATION WHICH REQUIRES BIDDERS TO SUBMIT EVIDENCE OF POSSESSION OF A VALID AIRCRAFT OPERATING CERTIFICATE AND, PRIOR TO AWARD, EVIDENCE OF AUTHORIZATION TO OPERATE THE TYPE OF AIRCRAFT TO BE USED IN PERFORMANCE OF THE CONTRACT, BIDDERS ARE ONLY REQUIRED TO ACCOMPANY THEIR BIDS WITH EVIDENCE OF POSSESSION OF A VALID OPERATING CERTIFICATE AND, ALTHOUGH FAILURE TO POSSESS THE SPECIFIC AIRCRAFT OPERATING AUTHORITY PRIOR TO AWARD IS FOR CONSIDERATION IN THE DETERMINATION OF THE BIDDER'S RESPONSIBILITY, SUCH FAILURE DOES NOT MAKE A BID WHICH IS ACCOMPANIED BY EVIDENCE OF A VALID OPERATING PERMIT NONRESPONSIVE. ON THE BASIS OF EVIDENCE WHICH INDICATES THAT SMALL BUSINESS CERTIFICATES OF COMPETENCY WOULD HAVE BEEN ISSUED TO TWO LOW BIDDERS BASED IN PART UPON ADVICE FROM THE CIVIL AERONAUTICS AUTHORITY THAT THE BIDDERS WOULD HAVE BEEN GRANTED AUTHORITY TO OPERATE THE TYPE OF AIRCRAFT USED IN THE PERFORMANCE OF THE CONTRACT, REJECTION OF THE LOW BIDS ON EITHER THE GROUND THAT BIDDERS, PRIOR TO AWARD, DID NOT VOLUNTARILY SUBMIT EVIDENCE OF POSSESSION OF AIRCRAFT OPERATION AUTHORITY OR ON THE GROUND THAT FAILURE TO POSSESS OPERATING AUTHORITY PRIOR TO AWARD WOULD PRECLUDE A DETERMINATION THAT THE BIDDERS WERE RESPONSIBLE BIDDERS IS NOT JUSTIFIED.

TO THE SECRETARY OF THE AIR FORCE, DECEMBER 9, 1958:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 26, 1958, FROM ASSISTANT SECRETARY GARLOCK, TRANSMITTING FINDINGS OF THE SMALL BUSINESS ADMINISTRATION WITH RESPECT TO THE COMPETENCY OF LOS ANGELES AIR SERVICE, INC., AND S.S.W., INC., D/B/A) UNIVERSAL AIRLINES, TO PERFORM THE SERVICES REQUIRED UNDER ITEMS 6 AND 7 OF IFB NO. 11-626-59 3-CAB, AND REQUESTING OUR ADVICE, IN VIEW OF PROTESTS AGAINST ANY PRESENT CONSIDERATION OF THE BIDS OF THESE COMPANIES FOR CONTRACT AWARDS, RELATIVE TO THE APPROPRIATE ACTION TO BE TAKEN BY YOUR DEPARTMENT WITH RESPECT TO AWARDS PREVIOUSLY MADE UNDER THESE ITEMS OF THE INVITATION.

THE PRESENT QUESTIONS ARISE AS A RESULT OF OUR LETTERS OF OCTOBER 24, 1958, B-137471 AND B-137482, ADVISING YOU OF OUR OPINION THAT THE CONTRACTING OFFICER, IN THE ABSENCE OF A VALID CERTIFICATE OF URGENCY ISSUED PRIOR TO AWARDS UNDER ITEMS 6, 7, AND 9 OF THIS INVITATION, WAS REQUIRED BY REGULATIONS OF THE DEPARTMENT OF DEFENSE AND OF YOUR DEPARTMENT APPLICABLE TO BIDS OF SMALL BUSINESS CONCERNS, TO SUBMIT THE QUESTION OF THE COMPETENCY OF LOS ANGELES AIR SERVICE AND UNIVERSAL AIRLINES TO PERFORM THE SERVICE REQUIRED BY SUCH ITEMS TO THE SMALL BUSINESS ADMINISTRATION. THESE LETTERS FURTHER ADVISED THAT INVESTIGATION BY THIS OFFICE HAD ESTABLISHED THAT SUCH PROCEDURE HAD NOT BEEN FOLLOWED WITH RESPECT TO THE BIDS SUBMITTED BY THESE BIDDERS AND THAT ANY CONCURRENCE BY THIS OFFICE IN THE VALIDITY OF AWARDS WHICH HAD BEEN MADE TO HIGHER BIDDERS ON SUCH ITEMS WOULD DEPEND UPON A PRESENT DETERMINATION BY THE SMALL BUSINESS ADMINISTRATION AS TO WHETHER LOS ANGELES AIR SERVICE AND UNIVERSAL AIRLINES WOULD HAVE BEEN ENTITLED TO CERTIFICATES OF COMPETENCY IF THE CONTRACTING OFFICER, IN LIEU OF REJECTING THEIR BIDS ON THE GROUNDS OF INADEQUATE FINANCES, HAD REFERRED THE QUESTION OF THEIR COMPETENCY, AS TO CAPACITY AND CREDIT, TO THAT AGENCY IN ACCORDANCE WITH REGULATION REQUIREMENTS.

THE RECORD NOW INDICATES THAT THE CONTRACTING OFFICER, PURSUANT TO ASPR 1 -705.6 (B) AND OUR ADVICE OF OCTOBER 24, ASKED THE SMALL BUSINESS ADMINISTRATION TO MAKE DETERMINATIONS OF THE CAPABILITY AND CREDIT OF BOTH BIDDERS TO ADEQUATELY AND FULLY PERFORM THE REQUIRED SERVICES. BY LETTERS DATED NOVEMBER 25 THE SMALL BUSINESS ADMINISTRATION ADVISED YOUR DEPARTMENT THAT IF THE NEGATIVE FACILITIES CAPABILITY REPORTS ON THESE BIDDERS HAD BEEN REFERRED PRIOR TO SEPTEMBER 16, 1958 (THE DATE OF CONTRACT AWARDS TO HIGHER BIDDERS ON ITEMS 6 AND 7), THE SMALL BUSINESS ADMINISTRATION WOULD HAVE ISSUED CERTIFICATES OF COMPETENCY, CERTIFYING THAT UNIVERSAL AIRLINES WAS COMPETENT, AS TO CAPACITY AND CREDIT, TO PERFORM THE ITEM 6 REQUIREMENTS, AND THAT LOS ANGELES AIR SERVICE WAS SIMILARLY COMPETENT TO PERFORM THE ITEM 7 REQUIREMENTS.

SINCE THE REJECTION OF THE BIDS OF THESE COMPANIES WAS BASED PRIMARILY UPON A DETERMINATION THAT THEIR FINANCES WERE INADEQUATE TO PERFORM THE CONTRACTS, THE DETERMINATIONS BY THE SMALL BUSINESS ADMINISTRATION ON NOVEMBER 25 WOULD, IN THE ABSENCE OF ANY OTHER FACTOR REQUIRING FURTHER CONSIDERATION, APPEAR TO BE CONCLUSIVE ON THE QUESTION OF THE ENTITLEMENT OF THESE BIDDERS TO AWARDS UNDER ITEMS 6 AND 7. SEE SECTION 8 (B) (7), PUBLIC LAW 85-536, 72 STAT. 391, 15 U.S.C. 637 (B) (7). HOWEVER, YOUR LETTER OF NOVEMBER 26, AND THE PROTESTS TRANSMITTED THEREWITH, CALL ATTENTION TO THE FOLLOWING PROVISIONS OF THE INVITATION FOR BIDS APPEARING UNDER THE GENERAL HEADING " DESCRIPTIVE DATA TO BE FURNISHED WITH BID: "

A. ALL BIDDERS UNDER THIS IFB ARE REQUIRED TO SUBMIT TO THE GOVERNMENT THE DATA LISTED BELOW. FAILURE OF THE BIDDER TO COMPLETE THE ATTACHMENTS WILL RENDER THE BID NON-RESPONSIVE TO THE IFB.

(3) BIDDERS SHALL EXECUTE A PROPERLY SWORN STATEMENT TO THE EFFECT THAT THEY POSSESS A VALID OPERATING CERTIFICATE FOR THE AIRCRAFT BID IN ACCORDANCE WITH THE RULES, REGULATIONS, AND THE REQUIREMENTS OF THE CIVIL AERONAUTICS ADMINISTRATION PRIOR TO THE AWARD.

(4) BIDDER WILL SUBMIT EVIDENCE TO ESTABLISH THAT IT POSSESSES A VALID OPERATING CERTIFICATE.

NOTE: BIDDER WILL SUBMIT EITHER THE STATEMENT REFERRED TO IN PARAGRAPH 3 OR THE EVIDENCE REFERRED TO IN PARAGRAPH 4.

UNDER THESE PROVISIONS, IT IS CONTENDED BY THE PROTESTING BIDDERS THAT ALL BIDDERS WERE EITHER REQUIRED, AT THE TIME BIDS WERE SUBMITTED, TO POSSESS A VALID CAA OPERATING CERTIFICATE FOR THE TYPE OF AIRCRAFT WITH WHICH THEY PROPOSED TO PERFORM THE CONTRACT, OR TO POSSESS SUCH AUTHORIZATION PRIOR TO THE AWARD OF CONTRACTS, AND THAT FAILURE TO POSSESS SUCH AUTHORIZATION, AT LEAST PRIOR TO THE DATE OF CONTRACT AWARD, WOULD RENDER THE BID NONRESPONSIVE TO THE INVITATION AND PRECLUDE ITS CONSIDERATION FOR AWARD.

AS INDICATED ABOVE, CONTRACT AWARDS UNDER ITEMS 6 AND 7 WERE MADE ON SEPTEMBER 16, AND, WHILE BOTH UNIVERSAL AIRLINES AND LOS ANGELES AIR SERVICE THEN HELD A VALID CAA OPERATING CERTIFICATE AUTHORIZING THE OPERATION OF AIRCRAFT OTHER THAN DC-6 TYPE, NEITHER BIDDER WAS AUTHORIZED ON SEPTEMBER 16 TO OPERATE THE DC-6 TYPE AIRCRAFT ON WHICH THEIR BIDS WERE BASED.

HOWEVER, A SUPPLEMENTAL REPORT DATED DECEMBER 2 FROM THE ASSISTANT SECRETARY INDICATES THAT THE ABOVE-QUOTED SUBSECTION (4) OF THE INVITATION WAS ONLY INTENDED BY YOUR DEPARTMENT TO REQUIRE BIDDERS TO SUBMIT EVIDENCE WITH THEIR BIDS WHICH WOULD ESTABLISH POSSESSION OF A VALID CAA OPERATING CERTIFICATE AT THE TIME OF SUBMISSION, AND THAT IT WAS NOT NECESSARY, FOR PURPOSES OF RENDERING A BID RESPONSIVE UNDER SUBSECTION (4) OF THE INVITATION, THAT THE BIDDERS' OPERATING CERTIFICATE INCLUDE AUTHORIZATION TO OPERATE DC-6 TYPE AIRCRAFT. THE SUPPLEMENTAL REPORT FURTHER ADVISES THAT EVEN THOUGH A BID WAS ACCOMPANIED BY ACCEPTABLE EVIDENCE OF THE POSSESSION OF A VALID OPERATING CERTIFICATE, AND THUS WOULD HAVE BEEN CONSIDERED RESPONSIVE TO THE INVITATION, THE ABSENCE OF AUTHORIZATION TO OPERATE DC-6 AIRCRAFT UNDER SUCH CERTIFICATE WOULD HAVE MADE IT INCUMBENT UPON THE CONTRACTING OFFICER, PRIOR TO AWARD, TO DETERMINE WHETHER THE BIDDER ACTUALLY POSSESSED SUCH ADDITIONAL AUTHORITY, AND TO REJECT THE BID, PRESUMABLY ON THE GROUND THAT THE BIDDER WAS NOT A RESPONSIBLE BIDDER, IN THE EVENT THE BIDDER WAS NOT AUTHORIZED TO OPERATE DC-6 AIRCRAFT AT THAT TIME.

IN VIEW OF SUCH ADVICE, AND IN FURTHER VIEW OF THE DETERMINATIONS BY THE SMALL BUSINESS ADMINISTRATION THAT BOTH LOS ANGELES AIR SERVICE AND UNIVERSAL AIRLINES WOULD HAVE BEEN ISSUED CERTIFICATES OF COMPETENCY IF SUCH HAD BEEN REQUESTED PRIOR TO SEPTEMBER 16, IT WOULD APPEAR NECESSARY THAT THIS OFFICE DECIDE NOT ONLY THE QUESTION OF WHETHER THE BIDS SUBMITTED BY THESE COMPANIES WERE RESPONSIVE TO THE INVITATION, BUT ALSO THE QUESTION OF WHETHER THE DETERMINATIONS WHICH THE SMALL BUSINESS ADMINISTRATION HAVE ADVISED IT WOULD HAVE MADE PRIOR TO THE DATE OF AWARDS IS TO BE CONSIDERED CONCLUSIVE ON THE QUESTION OF WHETHER SUCH BIDDERS ARE TO BE CONSIDERED RESPONSIBLE BIDDERS, NOTWITHSTANDING THEIR FAILURE TO POSSESS CAA OPERATING AUTHORITY FOR DC 6 AIRCRAFT ON OR PRIOR TO THE DATE OF CONTRACT AWARDS.

WITH RESPECT TO THE EVIDENCE OF OPERATING AUTHORITY WHICH BIDDERS WERE REQUIRED TO SUBMIT WITH THEIR BIDS UNDER THE ABOVE-QUOTED SUBSECTION (4) OF THE INVITATION, CONSIDERING THE LANGUAGE OF THAT SUBSECTION, WE CANNOT DISAGREE WITH YOUR INTERPRETATION THAT SUCH PROVISION REQUIRED NO MORE THAN THAT THE BID ACCOMPANIED BY EVIDENCE OF THE POSSESSION OF A VALID OPERATING CERTIFICATE, AND IS NOT REQUIRED TO BE READ, IN CONJUNCTION WITH SUBSECTION (3), TO REQUIRE THAT BIDS BE ACCOMPANIED BY EVIDENCE OF AUTHORIZATION TO OPERATE THE TYPE OF AIRCRAFT WITH WHICH THE BIDDER PROPOSED TO PERFORM THE CONTRACT. IT FOLLOWS THAT A BID WHICH WAS ACCOMPANIED BY ACCEPTABLE EVIDENCE OF THE POSSESSION OF A VALID OPERATING CERTIFICATE PROPERLY MAY BE CONSIDERED RESPONSIVE TO THE REQUIREMENTS OF THE INVITATION IN THAT RESPECT AND, WHILE A FAILURE BY SUCH BIDDER TO POSSESS ADDITIONAL OPERATING AUTHORITY PRIOR TO AWARD WOULD APPEAR PROPER FOR CONSIDERATION IN DETERMINING THE BIDDERS' RESPONSIBILITY, SUCH FAILURE WOULD NOT, IN THE ABSENCE OF A SPECIFIC PROVISION TO THAT EFFECT IN THE INVITATION, CONSTITUTE A VALID GROUND FOR DECLARING THE BID NONRESPONSIVE.

ACCORDINGLY, SINCE THE BID SUBMITTED BY UNIVERSAL AIRLINES WAS ACCOMPANIED BY EVIDENCE OF POSSESSION OF A VALID OPERATING CERTIFICATE, THE FACT THAT SUCH CERTIFICATE DID NOT INCLUDE AUTHORIZATION TO OPERATE DC -6 AIRCRAFT WOULD NOT, IN ITSELF, CONSTITUTE A VALID GROUND FOR DECLARING THE BID RESPONSIVE.

WITH RESPECT TO THE BID SUBMITTED BY LOS ANGELES AIR SERVICE, REPEATED EXAMINATIONS OF THE ORIGINAL BID FILE HAVE FAILED TO REVEAL THAT SUCH BID INCLUDED ANY REFERENCE TO, OR EVIDENCE ESTABLISHING, POSSESSION OF A VALID OPERATING CERTIFICATE AND, IN THE ABSENCE OF CONCLUSIVE EVIDENCE TO THE CONTRARY, IT MUST BE CONCLUDED THAT THE BID DID NOT COMPLY WITH THE REQUIREMENTS OF SUBSECTION (4) OF THE INVITATION. THERE REMAINS FOR DETERMINATION, THEREFORE, THE QUESTION OF WHETHER THIS BID MAY BE CONSIDERED RESPONSIVE WHEN CONSIDERED WITH RESPECT TO THE ALTERNATE METHOD OF PROVING OPERATING AUTHORITY WHICH IS SET OUT IN SUBSECTION (3) OF THE INVITATION.

WHILE BOTH SUBSECTIONS (3) AND (4), AS QUOTED ABOVE, HAVE BEEN PLACED IN THE INVITATION UNDER THE GENERAL HEADING OF " DESCRIPTIVE DATA TO BE FURNISHED WITH BID," WE ARE OF THE OPINION THAT A DETERMINATION OF A BIDDER'S LEGAL AUTHORIZATION TO PERFORM A CONTRACT INVOLVES PRIMARILY A QUESTION OF WHETHER THE BIDDER IS QUALIFIED TO PERFORM THE CONTRACT. THUS, THE PURPOSE TO BE SERVED BY REQUIRING BIDDERS TO SUBMIT EVIDENCE OF THEIR AUTHORITY TO OPERATE THE AIRCRAFT ON WHICH THEIR BID WAS BASED WAS TO ENABLE THE CONTRACTING OFFICER TO DETERMINE IF THE BIDDER WAS A RESPONSIBLE BIDDER. UNDER THE CIRCUMSTANCES, A PROVISION, SUCH AS SUBSECTION (3), WHICH IS INCLUDED IN THE INVITATION UNDER THE GENERAL HEADING OF " DESCRIPTIVE DATA TO BE FURNISHED WITH BID" MUST BE STRICTLY CONSTRUED AND, TO THE EXTENT THAT THE SPECIFIC LANGUAGE MAY CONFLICT WITH SUCH GENERAL HEADING THE FORMER MUST GOVERN. ACCORDINGLY, WHERE SUBSECTION (4) REQUIRES THE SUBMISSION OF EVIDENCE WITHOUT REFERENCE TO TIME, IT IS REASONABLE TO ASSUME THAT SUCH EVIDENCE IS REQUIRED BY THE GENERAL HEADING TO ACCOMPANY THE BID. CONVERSELY, THE INCLUSION OF THE PHRASE "PRIOR TO AWARD" IN THE REQUIREMENT SET OUT IN SUBSECTION (3) MUST BE CONSTRUED AS A LIMITATION OF THE GENERAL HEADING UNDER WHICH A BIDDER, WHO DID NOT HAVE DC-6 OPERATING AUTHORITY AT THE TIME OF BID SUBMISSION, COULD QUALIFY BY EXECUTING A SWORN STATEMENT, AT ANY TIME PRIOR TO AWARD, THAT HE POSSESSED A VALID OPERATING CERTIFICATE FOR SUCH AIRCRAFT. AUTHORITY TO OPERATE DC-6 AIRCRAFT IS SUPPLEMENTAL TO THE "VALID OPERATING CERTIFICATE" CONTEMPLATED UNDER SUBSECTION (4) AND, IN THE ABSENCE OF AN INTERPRETATION OF SUBSECTION (3) WHICH WOULD PERMIT BIDDERS ADDITIONAL TIME BETWEEN BID OPENING AND AWARD TO SECURE SUCH ADDITIONAL AUTHORITY, ITS INCLUSION IN THE INVITATION IS MEANINGLESS. IN VIEW THEREOF, IT IS OUR OPINION THAT BIDDERS COULD COMPLY WITH THE REQUIREMENTS OF THE INVITATION BY EITHER SUBMITTING WITH THEIR BIDS EVIDENCE OF POSSESSION OF A VALID OPERATING CERTIFICATE, WHICH NEED NOT INCLUDE AUTHORITY TO OPERATE DC-6 AIRCRAFT, OR BY SUBMITTING A BID WHICH DID NOT INCLUDE EVIDENCE OF THE POSSESSION OF SUCH CERTIFICATE BUT WAS SUPPLEMENTED, PRIOR TO AWARD, BY A SWORN STATEMENT THAT THE BIDDER POSSESSED A VALID OPERATING CERTIFICATE FOR DC-6 AIRCRAFT. IT FOLLOWS THAT THE FAILURE OF LOS ANGELES AIR SERVICE TO SUBMIT EVIDENCE OF OPERATING AUTHORITY WITH ITS BID IS INSUFFICIENT, IN ITSELF, TO RENDER THE BID NONRESPONSIVE TO THE INVITATION.

THERE REMAINS FOR DETERMINATION THE QUESTION OF WHETHER THE FAILURE OF BOTH LOS ANGELES AIR SERVICE AND UNIVERSAL AIRLINES TO POSSESS CAA AUTHORITY TO OPERATE DC-6 AIRCRAFT PRIOR TO THE AWARD OF CONTRACTS ON SEPTEMBER 16 WOULD PRECLUDE CONSIDERATION OF THEIR BIDS FOR CONTRACT AWARDS.

AS INDICATED ABOVE, OUR DECISIONS OF OCTOBER 24, ADVISED YOU THAT THE CONTRACTING OFFICER WAS WITHOUT AUTHORITY TO REJECT THESE BIDS ON THE GROUND OF INADEQUATE FINANCES WITHOUT FIRST REFERRING THE QUESTION OF THE BIDDERS' COMPETENCY, AS TO CAPACITY AND CREDIT, TO THE SMALL BUSINESS ADMINISTRATION, AND FURTHER ADVISED THAT OUR CONCURRENCE IN THE VALIDITY OF THE AWARDS TO HIGHER BIDDERS RESULTING FROM SUCH UNAUTHORIZED REJECTIONS WOULD BE DEPENDENT UPON A DETERMINATION BY THE SMALL BUSINESS ADMINISTRATION AS TO WHETHER THESE BIDDERS WOULD HAVE BEEN ISSUED CERTIFICATES OF COMPETENCY IF THE CONTRACTING OFFICER HAD ADHERED TO THE REQUIREMENTS OF APPLICABLE REGULATIONS AND, PRIOR TO THE AWARD OF CONTRACTS ON SEPTEMBER 16, REFERRED THESE MATTERS TO THE SMALL BUSINESS ADMINISTRATION. SUCH PROCEDURE WAS INTENDED TO PLACE THESE LOW BIDDERS IN ESSENTIALLY THE SAME POSITION, FOR PURPOSES OF BID EVALUATION, AS THEY OCCUPIED PRIOR TO THE UNAUTHORIZED REJECTION OF THEIR BIDS, AND THE DETERMINATIONS OF THE SMALL BUSINESS ADMINISTRATION ON NOVEMBER 25, ADVISING THAT CERTIFICATES OF COMPETENCY WOULD HAVE BEEN ISSUED TO THESE BIDDERS IF REQUESTED PRIOR TO SEPTEMBER 16, MUST BE VIEWED IN THAT LIGHT. IN THIS CONNECTION, THE SMALL BUSINESS ADMINISTRATION HAS FURTHER ADVISED THIS OFFICE THAT THEIR DETERMINATIONS OF NOVEMBER 25 ARE TO BE INTERPRETED AS APPLYING TO THE BIDDERS' COMPETENCY TO PERFORM THE CONTRACT REQUIREMENTS AS OF OCTOBER 1, SINCE CONTRACT PERFORMANCE WAS NOT SCHEDULED TO BEGIN UNTIL THAT DATE, AND THAT SUCH DETERMINATIONS WERE BASED IN PART UPON ADVICE FROM CAA THAT THE BIDDERS, ALTHOUGH NOT AUTHORIZED TO OPERATE DC-6 AIRCRAFT ON SEPTEMBER 16 COULD AND WOULD HAVE BEEN GRANTED SUCH AUTHORITY PRIOR TO OCTOBER 1 IF A REQUEST TO THAT EFFECT HAD BEEN MADE UPON CAA. SUCH INFORMATION IS MORE THAN SUBSTANTIATED BY TELEGRAMS NOW ON FILE IN THIS OFFICE FROM THE CIVIL AERONAUTICS ADMINISTRATION AT BURBANK, CALIFORNIA, ADVISING THAT LOS ANGELES AIR SERVICE HAD PHYSICAL POSSESSION OF A DC-6 AIRCRAFT ON SEPTEMBER 15 AND THIS AIRCRAFT COULD HAVE BEEN LISTED ON THEIR CERTIFICATE AS OF THAT DATE IF IT HAD BEEN REQUIRED OR NECESSARY, AND THAT UNIVERSAL AIRLINES WAS QUALIFIED AND COULD HAVE BEEN AUTHORIZED AND APPROVED AS OF SEPTEMBER 10 UNDER THEIR OPERATING CERTIFICATE TO ENGAGE IN AIR TRANSPORTATION ACTIVITIES UTILIZING DC-6 TYPE AIRCRAFT. IT WOULD THEREFORE APPEAR THAT THE QUESTION OF WHETHER THE BIDDERS COULD BE CONSIDERED AS QUALIFIED, WITH RESPECT TO CAA OPERATING AUTHORITY FOR DC-6 AIRCRAFT, TO PERFORM THE SERVICES REQUIRED UNDER ITEMS 6 AND 7, WOULD HAVE BEEN CONSIDERED, DECIDED AFFIRMATIVELY, AND INCORPORATED INTO CERTIFICATES OF COMPETENCY ISSUED BY THE SMALL BUSINESS ADMINISTRATION IF THE MATTER HAD BEEN REFERRED TO THAT AGENCY PRIOR TO SEPTEMBER 16.

UNDER THE PROVISIONS OF SECTION 8 (B) (7) OF THE SMALL BUSINESS ACT, AS AMENDED BY PUBLIC LAW 85-536, 72 STAT. 391, A CERTIFICATE OF COMPETENCY BECOMES CONCLUSIVE UPON PROCURING AGENCIES WITH RESPECT TO QUESTIONS INVOLVING THE CAPACITY OR CREDIT OF A BIDDER TO PERFORM A SPECIFIC CONTRACT, AND PROCURING AGENCIES ARE AUTHORIZED TO AWARD A CONTRACT WITHOUT REQUIRING THE BIDDER TO MEET ANY OTHER REQUIREMENTS AS TO CAPACITY AND CREDIT. IT IS THEREFORE OUR OPINION THAT THE ISSUANCE OF A CERTIFICATE OF COMPETENCY WITH RESPECT TO BOTH LOS ANGELES AIR SERVICE AND UNIVERSAL AIRLINES PRIOR TO SEPTEMBER 16 WOULD HAVE BEEN CONCLUSIVE ON THE QUESTION OF WHETHER THESE BIDDERS SHOULD HAVE BEEN CONSIDERED QUALIFIED, WITH RESPECT TO CAA AUTHORIZATION TO OPERATE DC-6 AIRCRAFT, AND THAT YOUR DEPARTMENT WOULD NOT HAVE BEEN JUSTIFIED, SUBSEQUENT TO ISSUANCE OF CERTIFICATES OF COMPETENCY, TO REJECT THEIR BIDS ON EITHER THE GROUND THAT FAILURE, PRIOR TO THE DATE ON WHICH IT WAS NECESSARY TO MAKE CONTRACT AWARDS, TO VOLUNTARILY SUBMIT WORN STATEMENTS THAT THEY POSSESSED AUTHORITY TO OPERATE DC-6 AIRCRAFT RENDERED THEIR BIDS NONRESPONSIVE TO THE INVITATION FOR BIDS, OR ON THE GROUND THAT THEIR FAILURE TO POSSESS SUCH OPERATING AUTHORITY PRIOR TO AWARD WOULD PRECLUDE DETERMINATION THAT THE BIDDERS WERE RESPONSIBLE BIDDERS.

IN VIEW OF THE ABOVE WE MUST CONCLUDE THAT REJECTION OF THE BIDS SUBMITTED BY UNIVERSAL AIRLINES ON ITEM 6 AND LOS ANGELES AIR SERVICE ON ITEM 7 WAS ERRONEOUS AND THAT THE CONTRACTING OFFICER WAS, THEREFORE, WITHOUT AUTHORITY ON SEPTEMBER 16 TO AWARD CONTRACTS BASED UPON HIGHER BID PRICES ON THESE ITEMS TO CAPITOL AIRWAYS, INC., AND TO COASTAL CARGO COMPANY, 1 INC. ACCORDINGLY, CANCELLATION OF SUCH AWARDS SHOULD BE ACCOMPLISHED BY YOUR DEPARTMENT AT THE EARLIEST PRACTICABLE DATE, YOUR ATTENTION BEING INVITED TO THE FACT THAT WE HAVE TODAY DISALLOWED THE PROTEST BY GENERAL AIRWAYS, INC., AGAINST REJECTION OF ITS LOW BID ON ITEM 7.

THE ENCLOSURES RECEIVED WITH THE ASSISTANT SECRETARY'S LETTERS OF DECEMBER 2 ARE RETURNED.