B-157764, APR. 8, 1966

B-157764, APR. 8, 1966

TO DENNING AND WOHLSTETTER:

REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 26, 1966, IN WHICH YOU BROUGHT BEFORE THIS OFFICE A PROTEST BY UNIVERSAL VAN-PAC, INC., OF PORT NEWARD, NEW JERSEY, AGAINST THE ACTION OF THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE IN REJECTING ITS LOW BID UNDER INVITATION FOR BIDS NO. MTMTS-30-358-66-4, AS NOT MEETING THE LICENSING REQUIREMENTS OF THE INVITATION. YOU ALSO PROTEST POSSIBLE AWARD OF THE CONTRACT TO THE SECOND LOW BIDDER, WASHINGTON MOVING AND STORAGE COMPANY, INC. (WASHINGTON), OF BRONX, NEW YORK, AS YOU CONTEND THAT FIRM DOES NOT MEET THE INVITATION'S LICENSING REQUIREMENTS.

THE SUBJECT INVITATION WAS ISSUED AS A 100 PERCENT SET-ASIDE FOR SMALL BUSINESS CONCERNS AND REQUESTED BIDS FOR FURNISHING DRAYAGE, PACKING AND SIMILAR SERVICES RELATED TO THE MOVEMENT OF HOUSEHOLD GOODS IN THE NEW YORK METROPOLITAN AREA. THE INVITATION WAS ISSUED BY HEADQUARTERS, EASTERN AREA, MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE, BROOKLYN, NEW YORK, ON JULY 26, 1965, TO COVER A ONE YEAR PERIOD BEGINNING SEPTEMBER 1, 1965. THIS CONTRACT PERIOD WAS AMENDED PRIOR TO BID OPENING TO COVER THE PERIOD OCTOBER 1, 1965, THROUGH SEPTEMBER 30, 1966. ON SEPTEMBER 7, 1965, THE AMENDED BID OPENING DATE, FOUR BIDDERS RESPONDED, WITH UNIVERSAL VAN-PAC SUBMITTING THE LOW BID OF $18,503 AND WASHINGTON THE SECOND LOW BID OF $20,700. UNIVERSAL VAN-PAC CONFIRMED ITS BID BY LETTER OF SEPTEMBER 17, 1965, AND ADVISED THE GOVERNMENT THAT IT INTENDED TO OPERATE UNDER I.C.C. PERMITS ISSUED TO AN AFFILIATED CORPORATION, UNIVERSAL STORAGE WAREHOUSES, OF NEWARK, NEW JERSEY.

BEFORE THE CONTRACT WAS AWARDED, BUT AFTER THE NEW YORK PROCUREMENT DISTRICT, U.S. ARMY, HAD DETERMINED THAT UNIVERSAL VAN-PAC WAS A RESPONSIBLE BIDDER, WHICH DETERMINATION INCLUDED A STATEMENT THAT IT WAS PROPERLY LICENSED, WASHINGTON PROTESTED AGAINST ANY AWARD TO UNIVERSAL VAN -PAC, CONTENDING THAT UNIVERSAL VAN-PAC COULD NOT MEET THE LICENSING REQUIREMENTS OF SPECIAL PROVISION NO. 7 OF THE INVITATION. THIS PROVISION REQUIRED THE BIDDER TO POSSESS CERTAIN CARRIER PERMITS, AS FOLLOWS:

"COMPLIANCE WITH APPLICABLE LAWS.

"THE CONTRACTOR REPRESENTS THAT IT IS A MOTOR CARRIER QUALIFIED UNDER PART II OF THE INTERSTATE COMMERCE ACT (ON INTERSTATE TRAFFIC) AS AMENDED AND LAWS OF THE STATE OF NEW YORK AND NEW JERSEY AND LICENSED TO PERFORM THE SERVICES REQUIRED UNDER THIS CONTRACT, * * *.'

BY LETTER OF OCTOBER 15, 1965, UNIVERSAL VAN-PAC ADVISED THAT IT DID MEET THE LICENSING REQUIREMENTS OF SPECIAL PROVISION NO. 7, SINCE IT WAS A DULY AUTHORIZED AGENT OF UNIVERSAL STORAGE WAREHOUSES, WHICH HELD THE NECESSARY OPERATING PERMITS. INCLUDED IN ITS LETTER WAS EVIDENCE OF UNIVERSAL VAN- PAC'S CLOSE RELATIONSHIP WITH UNIVERSAL STORAGE WAREHOUSES, INCLUDING A COPY OF A SALES AGENT AGREEMENT WHICH CONSTITUTED UNIVERSAL VAN-PAC AS AN AUTHORIZED AGENT OF UNIVERSAL STORAGE WAREHOUSES.

WASHINGTON CONTENDED THAT UNIVERSAL VAN-PAC WOULD NOT COMPLY WITH THE APPLICABLE LICENSING REQUIREMENTS EVEN IF THE I.C.C. PERMITS AVAILABLE TO UNIVERSAL STORAGE WAREHOUSES ARE TAKEN INTO ACCOUNT, BECAUSE LOCAL INTRASTATE LICENSES ARE THE PROPER LICENSES TO PERFORM THE INTENDED DRAYAGE. THE CONTRACTING OFFICER CONCLUDED THAT UNIVERSAL VAN PAC WAS NOT RESPONSIVE TO SPECIAL PROVISION NO. 7 OF THE INVITATION, AND RECOMMENDED THAT THE PROTEST OF WASHINGTON BE ALLOWED, THEREBY DENYING THE AWARD TO UNIVERSAL VAN-PAC, WHICH POSITION WAS SUPPORTED BY THE STAFF JUDGE ADVOCATE IN ITS OPINION OF OCTOBER 26, 1965.

IN SUPPORT OF ITS CONTENTION THAT IT IS QUALIFIED UNDER SPECIAL PROVISION NO. 7, UNIVERSAL VAN-PAC HAS RELIED ON THE REASONING, AS FOUND IN ITS LETTER OF OCTOBER 15, 1965, THAT:

"1. UNIVERSAL VAN-PAC, INC. IS A DULY AUTHORIZED AGENT FOR UNIVERSAL STORAGE WAREHOUSES, INC., AND AS SUCH HAS THE RIGHT AND PRIVILEGE OF OPERATING UNDER THE AUSPICES OF THEIR INTERSTATE OPERATING AUTHORITY CERTIFICATE NO. MC 75978. A DULY SIGNED AND WITNESSED COPY OF THIS AGENCY AGREEMENT IS HEREWITH ATTACHED AS ENCLOSURE (1).'

BY THE SALES AGENT AGREEMENT IN QUESTION, IN THE PARAGRAPH ENTITLED SALES RIGHTS, UNIVERSAL STORAGE WAREHOUSES ONLY GRANTED TO ITS SALES AGENT, UNIVERSAL VAN-PAC,"* * * THE RIGHT AND PRIVILEGE OF SOLICITING THE TRANSPORTATION OF HOUSEHOLD GOODS AND/OR EXECUTING ORDERS FOR SERVICES THEREFORE, IN THE NAME OF THE COMPANY * * *.' WE MUST THEREFORE CONCLUDE THAT THE AGENCY AGREEMENT BETWEEN THE PRINCIPAL, UNIVERSAL STORAGE WAREHOUSES, AND THE SALES AGENT, UNIVERSAL VAN-PAC, DOES NOT GIVE UNIVERSAL VAN-PAC THE AUTHORITY TO OPERATE EITHER UNDER ITS PRINCIPAL'S INTERSTATE OPERATING AUTHORITY CERTIFICATE M.C.C. 75978 OR UNDER ANY INTERLINE AGREEMENTS ENTERED INTO BY THE PRINCIPAL, INSTEAD, THE AGREEMENT ONLY GRANTS TO UNIVERSAL VAN-PAC THE LIMITED POWER OF A SALES AGENT FOR THE PRINCIPAL TO MAKE CONTRACTS FOR,"THE TRANSPORTATION OF HOUSEHOLD GOODS IN THE NAME OF UNIVERSAL STORAGE WAREHOUSES.'

IT IS INCONTROVERTIBLE THAT UNIVERSAL VAN-PAC BID ON THE CONTRACT FOR DRAYAGE SERVICES IN ITS OWN NAME, AND NOT IN THE NAME OF UNIVERSAL STORAGE WAREHOUSES. THIS IS MADE APPARENT BY AN EXAMINATION OF THE BID OFFERED BY UNIVERSAL VAN-PAC, FOR THE NAME AND ADDRESS OF UNIVERSAL VAN-PAC AND THE SIGNATURES OF ITS OFFICERS ARE INSERTED WHEREVER APPLICABLE THROUGHOUT THE ENTIRE BID AND ITS AMENDMENTS, WHILE THE NAME OF UNIVERSAL STORAGE WAREHOUSES DOES NOT APPEAR IN THE BID. WE MUST THEREFORE CONCLUDE THAT UNIVERSAL VAN-PAC DID NOT ACT WITHIN THE SCOPE OF ITS AGENCY AGREEMENT WITH UNIVERSAL STORAGE WAREHOUSES IN SUBMITTING ITS BID IN THE INSTANT PROCUREMENT.

SINCE UNIVERSAL VAN-PAC ACTED BEYOND THE SCOPE OF ITS POWERS AS A SALES AGENT WHEN IT BID TO FURNISH THE DRAYAGE SERVICES HERE IN QUESTION IN ITS OWN NAME, WE SEE NO VALID BASIS UPON WHICH IT MAY BE CONTENDED THAT THE OPERATING AUTHORITY GRANTED TO UNIVERSAL STORAGE WAREHOUSES WOULD BE AVAILABLE TO UNIVERSAL VAN-PAC UNDER THE TERMS OF THE AGENCY AGREEMENT TO PERFORM A CONTRACT WHICH IS NOT WITHIN THE SCOPE OF CONTEMPLATION OF THE SALES AGENT AGREEMENT. ALL THAT HAS BEEN SHOWN IS THAT UNIVERSAL VAN-PAC BID ON A CONTRACT IN A MANNER WHICH WAS OUTSIDE THE SCOPE OF THE SALES AGENT AGREEMENT, BUT NO LEGAL BASIS FOR ENDOWING UNIVERSAL VAN-PAC WITH THE OPERATING AUTHORITIES OF UNIVERSAL STORAGE WAREHOUSES BY VIRTUE OF SAID SALES AGENT AGREEMENT HAS BEEN DEMONSTRATED.

SINCE WE FIND NO LEGAL BASIS GIVING UNIVERSAL VAN-PAC ACCESS TO THE OPERATING RIGHTS OF UNIVERSAL STORAGE WAREHOUSES, WE MUST AGREE WITH THE FINDING OF THE CONTRACTING OFFICER THAT THE BID OF UNIVERSAL VAN PAC DOES NOT COMPLY WITH SPECIAL PROVISION NO. 7, IN WHICH THE BIDDER REPRESENTED THAT IT IS A QUALIFIED MOTOR CARRIER UNDER THE INTERSTATE COMMERCE ACT AND THE COMPARABLE STATE LAWS.

WITH REGARD TO THE TEMPORARY OPERATING AUTHORITY ISSUED FEBRUARY 25, 1966, BY THE INTERSTATE COMMERCE COMMISSION, NO. MC 127798 SUB 1 TA, GRANTING UNIVERSAL VAN-PAC THE AUTHORITY FOR 180 DAYS TO TRANSPORT HOUSEHOLD GOODS WHICH HAVE A PRIOR OR SUBSEQUENT MOVEMENT WITHIN A 70 MILE RADIUS OF NEW YORK, NEW YORK, IT IS APPARENT THAT 180 DAYS IS NOT SUFFICIENT TO COVER THE REMAINING PERIOD OF THE CONTRACT. ASSUMING, WITHOUT DECIDING, THAT SUCH AUTHORITY IS PROPERLY FOR CONSIDERATION IN DETERMINING WHETHER UNIVERSAL VAN-PAC IS PROPERLY LICENSED, WE FIND NO LEGAL BASIS TO CONCLUDE THAT THE COMMISSION WILL AUTOMATICALLY EXTEND THE 180 DAY OPERATING AUTHORITY BEYOND THE CONTRACT PERIOD PENDING A FULL HEARING DUE TO A CROWDED DOCKET AT THE COMMISSION. THEREFORE, AS IT HAS BEEN SHOWN THAT THE TEMPORARY AUTHORITY IS SUFFICIENT TO COVER THE FULL TERM OF THE CONTRACT, WE CANNOT CONCLUDE THAT SUCH AUTHORITY WOULD MEET THE LICENSING REQUIREMENTS OF SPECIAL PROVISION NO. 7.

ACCORDINGLY, THE PROTEST OF UNIVERSAL VAN-PAC AGAINST REJECTION REJECTION OF ITS BID MUST BE DENIED.

IN VIEW OF THE FOREGOING, WE CAN PROCEED TO CONSIDERATION OF UNIVERSAL VAN-PAC'S PROTEST AGAINST AN AWARD TO WASHINGTON, THE SECOND LOWEST BIDDER. THIS PROTEST IS BASED UPON THE CONTENTION THAT WASHINGTON ALSO DID NOT MEET THE LICENSING REQUIREMENTS OF SPECIAL PROVISION NO. 7, BECAUSE THE DRAYAGE SERVICES CONTEMPLATED UNDER THE INVITATION ARE PART OF A CONTINUOUS FLOW IN FOREIGN COMMERCE, AND FOR THAT PORTION OF THE GOODS WHICH ARE TRANSPORTED INTO OR OUT OF POINTS IN NEW YORK BEYOND THE NEW YORK CITY COMMERCIAL ZONE AS DEFINED BY INTERSTATE COMMERCE COMMISSION, WASHINGTON NEEDS I.C.C. INTERSTATE AUTHORITY IN ORDER TO MEET THE CONDITIONS OF SPECIAL PROVISION NO. 7, INSTEAD OF THE NEW YORK STATE INTRASTATE AUTHORITY WHICH IT DOES POSSESS.

IN THIS CONNECTION WE NOTE THAT THE OPINION OF THE STAFF JUDGE ADVOCATE DATED OCTOBER 26, 1965, AND THE REPORT OF THE CONTRACTING OFFICER DATED OCTOBER 27, 1965, IN COMMENTING ON THIS PROTEST, CONCLUDE THAT STATE AND LOCAL CERTIFICATES OF PUBLIC CONVENIENCE ARE SUFFICIENT TO SATISFY SPECIAL PROVISION NO. 7. IT IS THE OPINION OF THE STAFF JUDGE ADVOCATE THAT THE MOTOR CARRIAGE INVOLVED IN THIS PROCUREMENT CONTEMPLATED THE PICKING UP OF HOUSEHOLD GOODS FROM THE MILITARY OCEAN TERMINAL, BROOKLYN, AND DELIVERING THE SAME TO THE INDIVIDUAL PRIVATE RESIDENCES THROUGHOUT THE CONTRACT AREA, AND SUCH MOVEMENT IS AN ENTIRELY SEPARATE AND DISTINCT MOVEMENT FROM THE EARLIER OCEAN CARRIAGE OF THE HOUSEHOLD GOODS. ACCORDING TO THIS VIEW, WHICH APPEARS TO HAVE BEEN FOLLOWED IN PREVIOUS CONTRACTS OF THIS NATURE, THE CARRIAGE DOES NOT MEET THE CRITERIA FOR FOREIGN COMMERCE OF BEING ONE CONTINUOUS UNBROKEN MOVEMENT, BUT IS, INSTEAD, A SERIES OF SEPARATE MOVEMENTS UNDER SEPARATE BILLS OF LADING.

TO THE BEST OF OUR KNOWLEDGE, THE INTERSTATE COMMERCE COMMISSION HAS NOT RULED DEFINITIVELY ON THIS MATTER. IN VIEW OF THE LONG STANDING ADMINISTRATIVE PRACTICE TO REQUIRE ONLY INTRASTATE AUTHORITY TO PERFORM CONTRACTS OF THIS NATURE WE MUST AGREE WITH THE POSITION OF THE AGENCY UNTIL SUCH TIME AS THE COMMISSION, WITH ITS POWER TO CONDUCT FACTUAL HEARINGS AND ITS STATUTORY DUTY TO REGULATE COMMERCE, RULES TO THE CONTRARY. SEE OUR DECISION OF MARCH 13, 1957, B-130391, IN WHICH WE HELD THAT A DIFFERENCE IN POLICY BETWEEN TWO OF THE ARMED SERVICES REGARDING OPERATING AUTHORITY OF MOTOR CARRIERS WAS A MATTER OF ADMINISTRATIVE DISCRETION. WE ARE THEREFORE ADVISING THE DEPARTMENT OF THE ARMY THAT YOUR PROTEST PRESENTS NO VALID OBJECTION TO AN AWARD TO WASHINGTON ..END :