B-163156, APRIL 11, 1968, 47 COMP. GEN. 539

B-163156, APRIL 11, 1968, 47 COMP. GEN. 539

BIDDERS - QUALIFICATIONS - LICENSE REQUIREMENT - BIDDERS NOT LICENSED PRIOR TO BIDDING THE LICENSE REQUIREMENTS IN A TOTAL SMALL BUSINESS SET-ASIDE INVITATION FOR THE TRANSPORTATION OF HOUSEHOLD EFFECTS AND RELATED SERVICES UNDER THREE DELIVERY SCHEDULES RELATING TO BIDDER RESPONSIBILITY AND NOT TO BID EVALUATION, BIDDERS WHO AT THE TIME OF BID OPENING HAD THE REQUIRED STATE LICENSE FOR THE PERFORMANCE OF ONE SCHEDULE AND INTERSTATE COMMERCE COMMISSION PERMITS PENDING FOR THE OTHER TWO DELIVERY SCHEDULES MAY BE CONSIDERED FOR AWARD OF ALL SCHEDULES. IF COMPLIANCE WITH THE "PERMITS AND LICENSES" CLAUSE OF THE INVITATION HAD BEEN REQUIRED AT THE TIME OF BID OPENING, OR BIDDING PARTICIPATION HAD BEEN LIMITED TO PERMIT HOLDERS, THE RESTRICTIONS DETERMINATIVE NOT OF BIDDER RESPONSIBILITY BUT OF PROCUREMENT RESPONSIBILITY AND CONVENIENCE, A PARTIAL AWARD PENDING ICC OPERATING APPROVAL, IF CONSIDERED NECESSARY, WOULD BE PROPER.

TO THE SECRETARY OF THE ARMY, APRIL 11, 1968:

WE REFER TO A LETTER, WITH ENCLOSURES, DATED FEBRUARY 29, 1968, FROM THE DIRECTOR OF PROCUREMENT AND PRODUCTION, HEADQUARTERS UNITED STATES ARMY MATERIEL COMMAND, WASHINGTON, D.C., FURNISHING OUR OFFICE WITH A REPORT RELATIVE TO THE PROTEST OF LOFTIN'S TRANSFER AND STORAGE CO., INC., AGAINST ANY AWARD OF A CONTRACT TO HUGHES MOVING AND STORAGE COMPANY UNDER INVITATION FOR BIDS NO. DAAH03-68-B-0059, ISSUED BY REDSTONE ARSENAL, HUNTSVILLE, ALABAMA.

THE INVITATION WAS ISSUED AS A TOTAL SMALL BUSINESS SET-ASIDE AND SOLICITED BIDS ON AN INDEFINITE QUANTITY CONTRACT FOR 31 ITEMS CONSISTING OF DRAYAGE, PACKING, UNPACKING AND RELATED SERVICES FOR MOVEMENT OF HOUSEHOLD GOODS AND UNACCOMPANIED BAGGAGE IN CONNECTION WITH TRANSFERS OF MILITARY PERSONNEL FOR THE CALENDAR YEAR 1968 UNDER SCHEDULE I (OUTBOUND SERVICES), SCHEDULE II (INBOUND SERVICES), AND SCHEDULE III (INTRA-CITY AND INTRA-AREA SERVICES). SCHEDULES I AND II INCLUDE SERVICES IN THREE ZONES:

ZONE I REDSTONE ARSENAL AND/OR CITY OF HUNTSVILLE, ALABAMA

ZONE II NOT EXCEEDING 50 MILES FROM CITY LIMITS OF HUNTSVILLE,

ALABAMA

ZONE III EXCEEDING 50 MILES, BUT NOT EXCEEDING 150 MILES FROM CITY

LIMITS OF HUNTSVILLE, ALABAMA

THE INVITATION CONTAINS THE FOLLOWING PROVISIONS PERTINENT TO OUR CONSIDERATION: AWARD (OCT. 1965)

SUBJECT TO THE PROVISIONS CONTAINED HEREIN, AWARD GENERALLY SHALL BE MADE TO A SINGLE BIDDER FOR ALL THE ITEMS, FOR ONE OR MORE ZONES, IN THE INVITATION FOR BIDS; HOWEVER, THE GOVERNMENT RESERVES THE RIGHT TO AWARD ON THE BASIS OF A SCHEDULE OF ITEMS, FOR ONE OR MORE ZONES, WHICHEVER IS TO THE ADVANTAGE OF THE GOVERNMENT. BIDDERS MUST OFFER UNIT PRICES FOR EACH ITEM LISTED, FOR ONE OR MORE ZONES, IN ORDER THAT BIDS MAY BE PROPERLY EVALUATED. FAILURE TO DO SO SHALL BE CAUSE FOR REJECTION OF THE ENTIRE BID. ALSO, BIDDERS FAILING TO GUARANTEE DAILY CAPABILITIES IN THE SPACE PROVIDED IN THIS INVITATION FOR BIDS SHALL BE CONSIDERED NOT RESPONSIVE AND INELIGIBLE FOR AWARD. THE GOVERNMENT RESERVES THE RIGHT TO AWARD SECONDARY CONTRACTS AS STANDBY CONTRACTS AT THE UNIT PRICES OFFERED UNLESS THE BIDDER SPECIFIES OTHERWISE IN ITS BID. ANY BID WHICH STIPULATES MINIMUM CHARGES OR GRADUATED PRICES FOR ANY OR ALL ITEMS SHALL BE REJECTED. PERMITS AND LICENSES (OCT. 1965)

(A) BIDDER CERTIFIES THAT HE OR HIS SUBCONTRACTOR HAS THOSE VALID PERMITS, OPERATING OR OTHER AUTHORIZATION REQUIRED BY FEDERAL, STATE, OR FOREIGN REGULATORY BODIES TO PERFORM SERVICES CALLED FOR HEREIN.

(B) ICC OPERATING AUTHORITY NUMBER --------------------.

(C) IF ANY AUTHORIZATION IS REVOKED OR WITHDRAWN DURING THE LIFE OF THE CONTRACT, THE CONTRACTOR SHALL IMMEDIATELY NOTIFY THE CONTRACTING OFFICER OF SUCH FACT IN WRITING.

ON DECEMBER 1, 1967, THE BID OPENING DATE, FIVE BIDS WERE RECEIVED, AND THE HUGHES BID WAS RECORDED AS LOW ON SCHEDULES II AND III, AND LOW OVERALL. LOFTIN SUBMITTED ITS BID ON AN ALL OR NONE BASIS AND WAS LOW ON SCHEDULE I AND SECOND LOW OVERALL.

IT APPEARS THAT OPERATIONS WITHIN ALL ZONES UNDER SCHEDULES I AND II REQUIRE ICC APPROVAL AND OPERATIONS UNDER SCHEDULE III REQUIRE AUTHORITY FROM THE ALABAMA PUBLIC SERVICE COMMISSION. WHILE ALL FIVE BIDDERS CLAIMED AUTHORIZATION FROM THE STATE OF ALABAMA QUALIFYING THEM FOR OPERATIONS UNDER SCHEDULE III, LOFTIN BY LETTER DATED DECEMBER 6, 1967, FILED A PROTEST AGAINST ANY AWARD TO HUGHES WITH THE CONTRACTING OFFICER ON THE GROUND THAT IT WAS THE ONLY FIRM POSSESSING THE REQUISITE ICC AUTHORITY NECESSARY FOR OPERATIONS UNDER SCHEDULES I AND II. HOWEVER, THE CONTRACTING OFFICER'S REPORT DATED JANUARY 26, 1968, STATED, IN PERTINENT PART, AS FOLLOWS:

9. SCHEDULES I AND II, ZONES I, II AND III, REQUIRE ICC OPERATING AUTHORITY. LOFTIN'S ICC OPERATING AUTHORITY RESTRICTS HIM TO MOVES NOT IN EXCESS OF 30 MILES FROM THE CITY OF HUNTSVILLE, ALABAMA, AND CONSEQUENTLY DOES NOT QUALIFY HIM FOR ZONES II AND III OF SCHEDULES I AND II. NO OTHER BIDDER HAD ICC OPERATING AUTHORITY PRIOR TO BID OPENING. ALL BIDDERS HAD PROPER ALABAMA PUBLIC SERVICE COMMISSION AUTHORITY FOR SCHEDULE III PRIOR TO BID OPENING.

WE UNDERSTAND THAT AS OF FEBRUARY 16, 1968, LOFTIN WAS GRANTED ICC EMERGENCY TEMPORARY AUTHORITY MC 106743R1 WHICH WOULD QUALIFY THAT FIRM TO PERFORM THE SERVICES SPECIFIED IN BOTH SCHEDULES I AND II UNTIL MARCH 16, 1968. HUGHES WAS ALSO GRANTED, AS OF FEBRUARY 12, 1968, ICC EMERGENCY TEMPORARY AUTHORITY MC 129623R1; AND THERE IS OF RECORD ITS APPLICATION FOR A LONG-TERM TEMPORARY LICENSE MC 129523 SUB 1 TA WHICH WOULD QUALIFY HUGHES TO PERFORM THE SERVICES SPECIFIED IN BOTH SCHEDULES I AND II. WE ARE ADVISED SUCH TEMPORARY AUTHORITIES THROUGH VARIOUS PROCEDURES OF ICC PRACTICE CAN BE EXTENDED THROUGHOUT THE PERIOD OF THE PROPOSED CONTRACT. IT THEREFORE APPEARS THAT BOTH LOFTIN AND HUGHES NOW POSSESS VALID PERMITS OR AUTHORIZATION TO PERFORM SERVICES CALLED FOR UNDER ALL THREE SCHEDULES AND THE VARIOUS ZONES THEREUNDER.

UNDER THESE CIRCUMSTANCES, THE CONTRACTING OFFICER ADVISES THAT SINCE NO BIDDER HAD PROPER ICC OPERATING AUTHORITY FOR SCHEDULES I AND II "BEFORE BID OPENING," AND SINCE LOFTIN BID ON AN "ALL OR NONE" BASIS, THERE ARE NO RESPONSIBLE BIDS UNDER THESE SCHEDULES. CONSISTENT WITH THE INVITATION PROVISIONS ENTITLED "AWARD," THE CONTRACTING OFFICER PROPOSES TO AWARD SCHEDULE III TO HUGHES AS THE LOW RESPONSIVE, RESPONSIBLE BIDDER, AND TO AWARD A STANDBY CONTRACT TO DECATUR TRANSFER AND STORAGE COMPANY, AS THE SECOND LOW RESPONSIVE, RESPONSIBLE BIDDER ON THAT SCHEDULE. FURTHER, IT IS RECOMMENDED THAT SCHEDULES I AND II BE CANCELED AND READVERTISED. HOWEVER, THE DIRECTOR OF PROCUREMENT AND PRODUCTION, HEADQUARTERS UNITED STATES ARMY MATERIEL COMMAND, IN HIS REPORT TO THIS OFFICE DISAGREES WITH THE CONTRACTING OFFICER'S POSITION. THE COMMAND MAINTAINS THAT SUCH REQUIREMENT RELATES TO A BIDDER'S RESPONSIBILITY, AND THAT, IN ACCORDANCE WITH 34 COMP. GEN. 175 AND 46 ID. 326, THE CONTRACTING OFFICER MAY PROPERLY CONSIDER THE BIDS OF LOFTIN AND HUGHES WITH RESPECT TO ALL SCHEDULES. WE CONCUR IN THE DIRECTOR OF PROCUREMENT AND PRODUCTION'S CONCLUSION.

THE POSSESSION OF THE NECESSARY PERMITS, OR OPERATING RIGHTS, WAS DETERMINED IN 34 COMP. GEN. 175 TO BE AN ESSENTIAL CONDITION TO A VALID AWARD OF A TRANSPORTATION-SERVICES CONTRACT. SEE, ALSO, KINGPAK, INC., INVESTIGATION OF OPERATIONS, 103 N.C.C. 318, 336-339 (1966), WHEREIN THE INTERSTATE COMMERCE COMMISSION HAS EXPRESSED THE PRINCIPLE THAT FORWARDERS ENGAGED IN THE TYPE OF TRANSPORTATION INVOLVED HERE ARE REQUIRED TO POSSESS APPROPRIATE INTERSTATE AUTHORITY. IN OUR CITED DECISION, WE RECOGNIZED THAT IN VIEW OF THE FOREGOING REQUIREMENT, THE SOLICITATION OF BIDS COULD BE RESTRICTED TO HOLDERS OF THE REQUISITE AUTHORITY. IT WAS ALSO POINTED OUT, HOWEVER, THAT IT WOULD BE PROPER TO SOLICIT BIDS SUBJECT TO COMPLIANCE WITH THE PERMIT REQUIREMENTS. REGARDLESS OF WHETHER PARTICULAR BIDDERS HAVE VALID PERMITS AT THE TIME OF OPENING, THE ESSENTIAL PROBLEM INVOLVED IN THE SOLICITATION OF SERVICES OF THIS NATURE IS THAT "THE ONLY RESPONSIBLE BIDDERS WOULD BE PERMIT HOLDERS" AND THEY MUST CONTINUE TO BE SO. 34 COMP. GEN. 175, 179. IN THIS REGARD, WE HAVE STATED THAT THE PRIMARY PURPOSE OF A LICENSE REQUIREMENT IS TO DETERMINE A BIDDER'S "LEGAL AUTHORIZATION TO PERFORM THE CONTRACT, WHICH IS A MATTER OF RESPONSIBILITY AND IS NOT RELATED TO AN EVALUATION OF THE BID.' COMP. GEN. 326, 329. FURTHER, WITH RESPECT TO THE DETERMINATION OF A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY, IT IS CLEAR THAT THE "CRITICAL TIME IS THE TIME FOR PERFORMANCE, PLUS ANY LEAD-TIME WHICH MAY BE NECESSARY IN THE PARTICULAR CASE.' SEE B-161211, JULY 11, 1967, INVOLVING A CONSIDERATION OF THE NECESSITY OF POSSESSING REQUIRED SECURITY CLEARNESS AT THE TIME OF BID OPENING. ALSO, SEE B-160538, B 160540, DATED MARCH 24, 1967. THE APPLICATION OF THIS PRINCIPLE TO AN ANALOGOUS REQUIREMENT FOR HOLDING NECESSARY LICENSES IS ILLUSTRATED IN 46 COMP. GEN. 326, AS FOLLOWS: IN CASES INVOLVING PROCUREMENTS WE HAVE HELD THAT MATTERS RELATIVE TO THE RESPONSIBILITY OF A BIDDER WHICH DO NOT AFFECT THE PRICE, QUANTITY AND QUALITY OF THE PROCUREMENT AND WHICH ARE NOT PREJUDICIAL TO OTHER BIDDERS MAY BE FURNISHED AFTER BID OPENING. SINCE THE CRITICAL TIME FOR ACTUAL COMPLIANCE WITH A REQUIREMENT CONCERNING RESPONSIBILITY, THE ABILITY TO PERFORM, COULD BE AS LATE AS THE TIME PERFORMANCE IS REQUIRED, WHICH IN THE INSTANT CASE IS WITHIN 10-CALENDAR DAYS AFTER NOTICE OF ACCEPTANCE BY THE GOVERNMENT, AWARD OF A CONTRACT PRIOR TO OBTAINING THE REQUIRED LICENSE IS, IN EFFECT, CONDITIONED UPON THE PURCHASER OBTAINING THE LICENSE. * * *

WE BELIEVE THAT THE POSITION EXPRESSED IN THE CITED CASE IS CONTROLLING HERE. WITH REGARD TO THE LANGUAGE OF THE "PERMITS AND LICENSES" CLAUSE, IT MAY BE ACKNOWLEDGED THAT A TECHNICAL READING OF PARAGRAPH (A) OF THE CLAUSE WOULD SUPPORT AN INFERENCE THAT THE REQUISITE PERMITS WERE REQUIRED AT THE TIME OF BID OPENING. HOWEVER, IT IS OUR OPINION THAT SUCH OVER- LITERAL INTERPRETATION IS NOT JUSTIFIED SINCE THE PURPOSE OF THE LICENSE REQUIREMENT IS TO DETERMINE A MATTER OF RESPONSIBILITY. IN THIS REGARD, THERE IS NO SUGGESTION IN THE INVITATION THAT THE FAILURE TO COMPLY WITH THE PERMIT CERTIFICATION REQUIREMENT AT THE TIME OF BID OPENING WOULD PRECLUDE FURTHER CONSIDERATION OF THE BID BECAUSE IT WAS NONRESPONSIVE. ALSO, IN THE ABSENCE OF A SPECIFIC STATEMENT IN THE INVITATION TO THE CONTRARY, WE WOULD NOT BE JUSTIFIED IN VIEWING THE CLAUSE AS LIMITING PARTICIPATION TO PERMIT HOLDERS. IN ANY EVENT, IT HAS BEEN OUR POSITION THAT WHEN QUESTIONS OF A POTENTIAL CONTRACTOR'S RESPONSIBILITY ARE INVOLVED, SPECIFIC ADVICE IN AN INVITATION THAT NONCOMPLIANCE WITH A QUALIFICATION REQUIREMENT MAY RESULT IN REJECTION OF THE BID IS NOT NECESSARILY DETERMINATIVE OF THE QUESTION OF RESPONSIBILITY. SEE 39 COMP. GEN. 655, 658, AND CASES CITED THEREIN.

ON THE BASIS OF THE FOREGOING, EVEN IF WE VIEW THE INVITATION REQUIREMENT INVOLVED HERE AS FIXING THE TIME OF COMPLIANCE AS OF THE DATE OF BID OF THE REQUESTED SERVICES, AND IS A MATTER OF PROCUREMENT RESPONSIBILITY AND CONVENIENCE. IN THIS REGARD, WE WOULD NOT BE REQUIRED TO OBJECT TO A DETERMINATION BY THE CONTRACTING OFFICER THAT THE PROCUREMENT COULD NOT BE DELAYED PENDING ICC CONSIDERATION OF REQUESTS FOR OPERATING AUTHORITY, AND THAT A PARTIAL AWARD MUST BE MADE PROMPTLY. HOWEVER, SINCE THE PROCURING ACTIVITY'S TIME REQUIREMENTS APPARENTLY DID NOT REQUIRE SUCH ACTION, WE BELIEVE THAT FURTHER CONSIDERATION OF THE BIDS CONSISTENT WITH THIS DECISION WOULD BE PROPER UNDER THE REPORTED CIRCUMSTANCES.