B-154045, JUL. 15, 1964

B-154045: Jul 15, 1964

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TO CHANDLER WRECKING CO.: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED APRIL 24. TWO BIDS WERE RECEIVED AND OPENED ON APRIL 6. THE LOWEST BID WAS SUBMITTED BY THE FRIENDLY WRECKING COMPANY AND IT OFFERED TO PERFORM THE DEMOLITION WORK FOR THE SUM OF $1. THE ONLY OTHER BID WAS SUBMITTED BY YOUR FIRM AND YOU OFFERED TO PERFORM THE WORK FOR THE SUM OF $11. IT IS REPORTED THAT ALTHOUGH THE FRIENDLY WRECKING COMPANY'S BID PRICE OF $1. 845 WAS REASONABLY CLOSE TO THE GOVERNMENT'S ESTIMATE OF $2. THE COMPANY'S REPRESENTATIVE WAS CONTACTED WITH REGARD THERETO AND FOR CONFIRMATION OF ITS CAPABILITY OF PERFORMING THE WORK COVERED BY THE SPECIFICATIONS AT THE PRICE QUOTED BECAUSE OF THE WIDE DISPARITY BETWEEN THE COMPANY'S QUOTATION AND THAT OF YOUR FIRM AND THAT UPON RECEIVING ASSURANCES.

B-154045, JUL. 15, 1964

TO CHANDLER WRECKING CO.:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED APRIL 24, 1964, PROTESTING AGAINST THE ACTION OF THE GENERAL SERVICES ADMINISTRATION IN AWARDING A CONTRACT FOR THE DEMOLITION OF CERTAIN BUILDINGS TO THE FRIENDLY WRECKING COMPANY, MEMPHIS, TENNESSEE.

THE GENERAL SERVICES ADMINISTRATION, PUBLIC BUILDINGS SERVICE, MEMPHIS, TENNESSEE, BY REQUEST FOR QUOTATIONS NO. 4-29-34 SOLICITED BIDS FOR FURNISHING ALL LABOR, TOOLS, EQUIPMENT AND MATERIAL NECESSARY FOR THE DEMOLITION OF TWO EXISTING BUILDINGS, BILLBOARD AND SUPPORTING STRUCTURES AT THE UNITED STATES POST OFFICE AND COURT HOUSE, JACKSON, TENNESSEE, IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATIONS. TWO BIDS WERE RECEIVED AND OPENED ON APRIL 6, 1964. THE LOWEST BID WAS SUBMITTED BY THE FRIENDLY WRECKING COMPANY AND IT OFFERED TO PERFORM THE DEMOLITION WORK FOR THE SUM OF $1,845. THE ONLY OTHER BID WAS SUBMITTED BY YOUR FIRM AND YOU OFFERED TO PERFORM THE WORK FOR THE SUM OF $11,800.

IT IS REPORTED THAT ALTHOUGH THE FRIENDLY WRECKING COMPANY'S BID PRICE OF $1,845 WAS REASONABLY CLOSE TO THE GOVERNMENT'S ESTIMATE OF $2,000, THE COMPANY'S REPRESENTATIVE WAS CONTACTED WITH REGARD THERETO AND FOR CONFIRMATION OF ITS CAPABILITY OF PERFORMING THE WORK COVERED BY THE SPECIFICATIONS AT THE PRICE QUOTED BECAUSE OF THE WIDE DISPARITY BETWEEN THE COMPANY'S QUOTATION AND THAT OF YOUR FIRM AND THAT UPON RECEIVING ASSURANCES, THE ACTING BUILDINGS MANAGER IN MEMPHIS, TENNESSEE, WITH THE APPROVAL OF THE REGIONAL OFFICE, AWARDED THE CONTRACT TO THE FRIENDLY WRECKING COMPANY ON APRIL 13, 1964.

UPON LEARNING THAT THE FRIENDLY WRECKING COMPANY HAD BEEN AWARDED THE CONTRACT FOR THE DEMOLITION WORK, YOUR FIRM INFORMED THE PUBLIC BUILDINGS SERVICE THAT SUCH COMPANY WAS NOT A LEGITIMATE BUSINESS CONCERN, THAT THE COMPANY HAD GONE INTO BANKRUPTCY ON PRIOR OCCASIONS, AND THAT IT WAS NOT FINANCIALLY RESPONSIBLE. IT ALSO APPEARS THAT YOUR FIRM COMPLAINED TO THE SMALL BUSINESS ADMINISTRATION THAT THE COMPANY WAS NOT A LEGITIMATE BUSINESS CONCERN.

YOUR PROTEST TO OUR OFFICE, ALLEGING PREVIOUS FORECLOSURE AND SALE OF THE FRIENDLY WRECKING COMPANY'S ASSETS AND ITS FAILURE TO OBTAIN CITY, COUNTY AND STATE LICENSES, IN EFFECT, QUESTIONS THE VALIDITY OF THE CONTRACTING OFFICER'S DETERMINATION THAT SUCH COMPANY IS A "RESPONSIBLE" BIDDER.

IN REGARD TO YOUR ALLEGATIONS, THE ADMINISTRATIVE OFFICE IN ITS LETTER OF JUNE 11, 1964, MAKES THE FOLLOWING COMMENTS---

"WITH RESPECT TO THE ALLEGATION OF FORECLOSURE SALE OF THE ASSETS OF THE FRIENDLY WRECKING COMPANY IN AUGUST OF 1963, ATTENTION IS DIRECTED TO THE FACT THAT AS OF MARCH 1964 WHEN QUOTATIONS WERE SOLICITED, THE FRIENDLY WRECKING COMPANY APPEARED TO HAVE SUFFICIENT EQUIPMENT TO BE ABLE TO PERFORM THE PROSPECTIVE CONTRACT.

"WITH RESPECT TO THE ALLEGATION THAT THE FRIENDLY WRECKING COMPANY WAS NOT A BONA FIDE FIRM ENGAGED IN THE BUSINESS OF SALVAGE AND WRECKING BECAUSE IT HAD NOT OBTAINED CITY, COUNTY AND STATE LICENSES, ATTENTION IS DIRECTED TO THE DECISION OF THE COMPTROLLER GENERAL NO. B 125577 OF OCTOBER 11, 1955. IN THAT OPINION IT WAS STATED THAT "NO GOVERNMENT CONTRACTING OFFICER IS COMPETENT TO PASS UPON THE QUESTION WHETHER A PARTICULAR LOCAL LICENSE OR PERMIT IS LEGALLY REQUIRED FOR THE PROSECUTION OF FEDERAL WORK, AND FOR THIS VERY REASON THE MATTER IS MADE THE RESPONSIBILITY OF THE CONTRACTOR.' AS A CONSEQUENCE, THE QUESTION OF APPLICABILITY OF STATE AND LOCAL LICENSES TO PERFORMANCE OF FEDERAL GOVERNMENT CONTRACTS IS LEFT TO THE CONTRACTOR FOR DETERMINATION, EITHER BY AGREEMENT WITH LOCAL OFFICIALS OR BY JUDICIAL DETERMINATION IF NECESSARY. SECTION 6 OF THE SPECIFICATIONS INVOLVED HERE IS APPLICABLE ONLY TO THOSE LICENSES AND PERMITS DETERMINED TO BE REQUIRED BY EITHER OF THE FOREGOING METHODS. IF THE CONTRACTING OFFICER WERE TO REQUIRE A PROSPECTIVE CONTRACTOR TO SECURE ALL LICENSES REQUIRED BY STATE STATUTE OR MUNICIPAL ORDINANCE IN ORDER TO QUALIFY AS A RESPONSIBLE BIDDER ELIGIBLE FOR AWARD OF THE CONTRACT, IT WOULD CONSTITUTE AN ADVANCE DETERMINATION BY A GOVERNMENT EMPLOYEE THAT ALL SUCH LICENSES WERE LEGALLY REQUIRED FOR THE PROSECUTION OF THE FEDERAL WORK, CONTRARY TO THE ABOVE-QUOTED GAO DECISION.

"SECONDLY, IT WILL BE NOTED THAT THE FRIENDLY WRECKING COMPANY WAS NOT ONLY HOLDING ITSELF OUT TO THE PUBLIC, VIA THE TELEPHONE DIRECTORY, AS A FIRM REGULARLY ENGAGED IN SALVAGE AND WRECKING, BUT ALSO THAT THE CONTRACTING OFFICER SATISFIED HIMSELF THAT THE FRIENDLY WRECKING COMPANY HAD BOTH THE EQUIPMENT FOR, AND EXPERIENCE IN, THE FIELD OF DEMOLITION WORK.

"FOR THE FOREGOING REASONS, IT IS BELIEVED THAT THE CONTRACTING OFFICER HAD AMPLE BASIS FOR FINDING THE FRIENDLY WRECKING COMPANY TO BE RESPONSIBLE, AND THAT THE AWARD WAS PROPERLY MADE TO THE LOW BIDDER.

"CONCERNING THE ALLEGATION OF THE FRIENDLY WRECKING COMPANY'S NON COMPLIANCE WITH THE STATE WORKMEN'S COMPENSATION INSURANCE REQUIREMENTS, THE MEMPHIS BUILDINGS MANAGER HAS VERIFIED THAT THE FRIENDLY WRECKING COMPANY HAS BEEN AND IS CARRYING WORKMEN'S COMPENSATION INSURANCE AND THAT IT IS ALSO CARRYING PUBLIC LIABILITY INSURANCE. THEREFORE, THERE APPEARS TO BE NO SUBSTANCE TO THE ALLEGATION OF NON-COMPLIANCE.'

AWARD PURSUANT TO FORMAL ADVERTISING MAY BE MADE ONLY TO THAT RESPONSIBLE BIDDER WHO HAS SUBMITTED THE LOWEST ACCEPTABLE BID. IT HAS LONG BEEN RECOGNIZED THAT THE BIDDER'S RESPONSIBILITY IS PRIMARILY FOR DETERMINATION BY THE CONTRACTING OFFICE. 38 COMP. GEN. 131; 33 COMP. GEN. 549. THE RECORD PRESENTED IN THIS CASE ESTABLISHES THAT THE DETERMINATION AS TO THE RESPONSIBILITY OF THE LOW BIDDER WAS MADE BY THE CONTRACTING AGENCY AFTER THOROUGH CONSIDERATION OF THE BIDDER'S QUALIFICATIONS. IN THE ABSENCE OF EVIDENCE OF CAPRICIOUS OR ARBITRARY ACTION, WE ARE REQUIRED TO ACCEPT THE ADMINISTRATIVE DETERMINATION THAT THE SUCCESSFUL BIDDER IS CAPABLE OF PERFORMING IN ACCORDANCE WITH THE TERMS OF HIS BID AND THE INVITATION. THAT CONNECTION, IT IS REPORTED THAT AS OF JUNE 1, 1964, APPROXIMATELY 90 PERCENT OF THE CONTRACT WORK HAD BEEN COMPLETED BY THE FRIENDLY WRECKING COMPANY AND THAT THE WORK HAS BEEN SATISFACTORY.