B-164170, JUN. 11, 1968

B-164170: Jun 11, 1968

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE DUNBAR TRANSFER COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 2. THE SCOPE OF THE WORK WAS DESCRIBED IN THE INVITATION FOR BIDS AS CONSISTING OF THE DEMOLITION OF AN EXISTING BUILDING. PARAGRAPH SP-5C OF THE SPECIAL PROVISIONS PROVIDES THAT IT WILL BE THE RESPONSIBILITY OF THE CONTRACTOR TO MAKE HIS OWN INVESTIGATION OF TRANSPORTATION FACILITIES INCLUDING RAILROADS AND PUBLIC ROADS AND PRIVATE LANDS AND MAKE HIS OWN ARRANGEMENTS FOR THEIR USE. WE ARE ADVISED. WAS INCORPORATED INTO THE INVITATION FOR BIDS BY REFERENCE. PROVIDES THAT THE CONTRACTOR "IS RESPONSIBLE FOR OBTAINING ANY NECESSARY LICENSES AND PERMITS. NINE BIDS WERE RECEIVED AND OPENED ON APRIL 4. 000 WAS SUMBITTED BY THE CORONIS CONSTRUCTION CO.

B-164170, JUN. 11, 1968

TO THE DUNBAR TRANSFER COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 2, 1968, AND YOUR SUPPLEMENTING LETTER OF MAY 6, 1968, WITH ENCLOSURES, PROTESTING THE PROPOSED AWARD OF A CONTRACT FOR THE DISMANTLING OF MACHINERY AND OF A BUILDING AT WATERTOWN ARSENAL, WATERTOWN, MASSACHUSETTS, TO ANY OF THE FOUR BIDDERS WHO SUBMITTED BIDS LOWER THAN THAT SUBMITTED BY YOUR FIRM UNDER INVITATION FOR BIDS NO. DACA33-68-B-0015, ISSUED BY THE DIVISION ENGINEER, NEW ENGLAND DIVISION, CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY, WALTHAM, MASSACHUSETTS.

THE SCOPE OF THE WORK WAS DESCRIBED IN THE INVITATION FOR BIDS AS CONSISTING OF THE DEMOLITION OF AN EXISTING BUILDING, THE DISMANTLING, SALVAGING AND SHIPMENT OF A BALDWIN COMPRESSION TESTING DEVICE, WITH ALL ACCESSORIES, FROM THE TOWER SECTION OF BUILDING 71 OF THE WATERTWON ARSENAL TO THE CORPS OF ENGINEERS WATERWAYS EXPERIMENT STATION FACILITY AT VICKSBURG, MISSISSIPPI. PARAGRAPH SP-5C OF THE SPECIAL PROVISIONS PROVIDES THAT IT WILL BE THE RESPONSIBILITY OF THE CONTRACTOR TO MAKE HIS OWN INVESTIGATION OF TRANSPORTATION FACILITIES INCLUDING RAILROADS AND PUBLIC ROADS AND PRIVATE LANDS AND MAKE HIS OWN ARRANGEMENTS FOR THEIR USE. ALSO, ONE OF THE PROVISIONS OF THE CONTEMPLATED CONTRACT WHICH, WE ARE ADVISED, WAS INCORPORATED INTO THE INVITATION FOR BIDS BY REFERENCE, PROVIDES THAT THE CONTRACTOR "IS RESPONSIBLE FOR OBTAINING ANY NECESSARY LICENSES AND PERMITS, AND FOR COMPLYING WITH ANY APPLICABLE FEDERAL, STATE, AND MUNICIPAL LAWS, CODES AND REGULATIONS, IN CONNECTION WITH THE PROSECUTION OF THE WORK.'

NINE BIDS WERE RECEIVED AND OPENED ON APRIL 4, 1968. THE LOWEST BID IN THE AMOUNT OF $59,000 WAS SUMBITTED BY THE CORONIS CONSTRUCTION CO., INC. THE NEXT THREE LOWEST BIDS IN THE AMOUNTS OF $61,500, $63,648 AND $88,750 WERE SUBMITTED BY THOMAS CONSTRUCTION CORP., JETCO, INC., AND A.P. WHITAKER AND SONS, INC., RESPECTIVELY. THE FIFTH LOWEST BID IN THE AMOUNT OF $96,900 WAS SUBMITTED BY YOUR FIRM. IT IS REPORTED THAT THE CONTRACTING OFFICER IS CONTEMPLATING MAKING AN AWARD OF A CONTRACT TO CORONIS CONSTRUCTION CO., INC., AS THE LOWEST RESPONSIVE BIDDER.

YOU CONTEND THAT THE BIDS SUBMITTED BY THE FOUR LOWEST BIDDERS ARE NONRESPONSIVE TO THE INVITATION FOR BIDS BECAUSE THE BIDDERS ARE NEITHER LICENSED BROKERS NOR PROPERLY CERTIFIED MOTOR CARRIERS IN ACCORDANCE WITH THE RULES AND REGULATIONS OF THE INTERSTATE COMMERCE COMMISSION (ICC) AND, THEREFORE, CANNOT LEGALLY PERFORM THE TOTAL WORK CALLED FOR UNDER THE SPECIFICATIONS. YOU ALLEGE THAT IN ORDER TO LEGALLY ARRANGE FOR OR PERFORM THE TRANSPORTATION SERVICES CALLED FOR UNDER THE SPECIFICATIONS THE CONTRACTOR MUST BE A MOTOR CARRIER CERTIFICATED OR LICENSED BY ICC UNDER 49 U.S.C. 303 (A) OR A LICENSED MOTOR TRANSPORTATION BROKER UNDER 49 U.S.C. 311 (A). YOU STATE THAT THE FACT THAT TRANSPORTATION IS ANCILLARY OR INCIDENTAL TO THE OVERALL CONTRACT IS NOT CONTROLLING. IN SUPPORT OF YOUR CONTENTION YOU CITE AMERICAN RED BALL TRANSIT CO., INC. V MCLEAN TRUCKING CO., INC., 67 M.C.C. 305 (1956) AS CONFIRMED IN MOVERS CONFERENCE OF AMERICA-PETITION FOR DECLARATORY ORDER, 82 M.C.C. 437 (1960). IN THESE CASES ICC HELD THAT A PERSON WHO BIDS ON A GOVERNMENT CONTRACT FOR THE MOVING OF HOUSEHOLD GOODS, AND WHO PREPARED THE HOUSEHOLD GOODS FOR MOVEMENT, BUT PURCHASED THE MOTOR CARRIER TRANSPORTATION FROM A CARRIER POSSESSING THE REQUIRED ICC OPERATING AUTHORITY (HAVING NONE OF ITS OWN) WAS ILLEGALLY ACTING AS A BROKER IN THE ABSENCE OF A LICENSE ISSUED BY ICC.

IN THIS REGARD, YOU ADVISE THAT IN 1966 YOUR FIRM SUBMITTED THE LOWEST BIDS UNDER INVITATIONS FOR BIDS NOS. 4600 AND 4615, COVERING THE RELOCATION OF PORTIONS OF THE FACILITIES OF THE NATIONAL BUREAU OF STANDARDS, DEPARTMENT OF COMMERCE, FROM ITS WASHINGTON, D.C., SITE TO ITS NEW SITE AT GAITHERSBURG, MARYLAND, AND THAT YOUR BIDS WERE REJECTED BECAUSE ICC HAD ADVISED THE CONTRACTING OFFICER THAT YOUR FIRM DID NOT HOLD THE REQUISITE LICENSE TO OPERATE AS A MOTOR CARRIER OR AS A BROKER. YOU POINT TO THE FACT THAT OUR OFFICE SUSTAINED THE REJECTION OF YOUR LOW BID IN DECISION OF OCTOBER 6, 1966, B-158634, TO YOUR FIRM. YOU THEREFORE BELIEVE THAT SINCE THE BIDS OF YOUR FIRM WERE PREVIOUSLY REJECTED FOR THE REASON THAT YOU DID NOT HOLD THE REQUIRED LICENSE, THE BID OF CORONIS CONSTRUCTION CO., INC., A GENERAL CONTRACTOR, UNDER THE INVITATION IN QUESTION LIKEWISE SHOULD BE REJECTED SINCE IT DOES NOT HOLD THE REQUISITE ICC LICENSES TO OPERATE AS A MOTOR CARRIER OR BROKER. YOU ALSO MAKE THE SAME ALLEGATIONS AS TO THE NEXT THREE LOWEST BIDDERS UNDER THE INVITATION FOR BIDS.

IN A LETTER DATED APRIL 19, 1968, TO OUR OFFICE, THE CORONIS CONSTRUCTION CO., INC., THE LOWEST BIDDER UNDER THE INVITATION, PROTESTED THE ACTION OF THE CONTRACTING OFFICER IN WITHHOLDING THE AWARD OF A CONTRACT TO IT PENDING THE RESOLUTION OF YOUR PROTEST BY OUR OFFICE. CORONIS CONTENDS THAT THE PROVISIONS OF THE INVITATION FOR BIDS AND THE TECHNICAL SPECIFICATIONS DO NOT REQUIRE THAT A BIDDER POSSESS AN ICC LICENSE AS A BROKER OF TRANSPORTATION BY MOTOR CARRIER. ALSO, CORONIS ALLEGES THAT THE PORTION OF WORK WHICH, YOU ALLEGE, MUST BE PERFORMED BY A LICENSED TRANSPORTATION BROKER REPRESENTS ONLY A MINOR PORTION OF THE OVERALL WORK. IN A LETTER OF MAY 1, 1968, TO THE CONTRACTING OFFICER, CORONIS STATES THAT IT WOULD BE WILLING TO PERFORM THE ,TRANSPORTATION" PHASE OF THE WORK BY UTILIZING RAILROAD CARS, BOXCARS, OR PIGGYBACK AND THAT IT WOULD PERFORM THE WORK WITHIN ALL GOVERNING LAWS AND REGULATIONS.

IN ITS REPORT TO OUR OFFICE, THE CORPS OF ENGINEERS, DEPARTMENT OF THE ARMY, REFERS TO THE AMERICAN RED BALL TRANSIT CO. AND MOVERS CONFERENCE OF AMERICA CASES AND ADVISES THAT ALTHOUGH THERE ARE SOME SIMILARITIES BETWEEN THOSE CASES AND THE INSTANT CASE, THESE SIMILARITIES ARE CONSIDERED BY THAT OFFICE AS NOT BEING DETERMINATIVE OF THE ISSUE AT HAND. IT WAS POINTED OUT BY THAT OFFICE THAT THE BASIS OF THE ICC DECISION WAS ITS FINDING THAT REGARDING THE INTERPRETATION OF THE BROKERAGE PROVISIONS OF THE INTERSTATE COMMERCE ACT, THE UNDERLYING PURPOSE OF THE CONTRACT IN QUESTION WOULD CONTROL THE ISSUE; THAT THE COMMISSION FOUND AT PAGE 444 OF THE MOVERS CONFERENCE CASE THAT THE CONTRACTOR HAD ONLY A "SHORT-TERM, TRANSPORTATION-ORIENTATED RELATIONSHIP WITH A RELOCATING AGENCY; " AND THAT THE COMMISSION HAD STRESSED THEREIN THAT THE MOST IMPORTANT PART OF THE CONTRACT WAS THE ARRANGEMENT FOR THE TRANSPORTATION OF THE PROPERTY. ALSO, ON PAGE 445 OF THE MOVERS CONFERENCE CASE, THE COMMISSION HAD EMPHASIZED THE "INDISPENSABLE" NATURE OF THE SERVICE IN ARRANGING FOR TRANSPORTATION.

IN THE LIGHT OF THIS ANALYSIS, THE CORPS OF ENGINEERS IS OF THE OPINION THAT THE PROPOSED CONTRACT IS NOT "TRANSPORTATION ORIENTATED" AS WAS THE SITUATION IN THE MOVERS CONFERENCE CASE, BUT THAT TRANSPORTATION IS BUT A MINOR, INCIDENTAL ASPECT OF A CONTRACT FOR THE DISMANTLING OF MACHINERY AND A BUILDING. THE CONTRACTING OFFICER HAD ADVISED THAT DISCUSSIONS WITH REPRESENTATIVES OF THE ICC DISCLOSES CONFLICTING OPINIONS AS TO THE APPLICABILITY OF THE AMERICAN RED BALL TRANSIT CO. AND MOVERS CONFERENCE CASES TO THE PRESENT PROJECT. IN VIEW OF THE CONFLICTING OPINIONS OF REPRESENTATIVES OF THE ICC AS TO WHETHER THE CONTRACTOR ON THE PROJECT IN QUESTION IS REQUIRED TO HAVE A BROKER'S LICENSE FOR TRANSPORTATION BY MOTOR AND THE FACT THAT THE SUBJECT INVITATION FOR BIDS DOES NOT COVER THE RELOCATION OF AN AGENCY AS WAS THE CASE IN THE AMERICAN RED BALL TRANSIT CO. AND MOVERS CONFERENCE CASES, WE CANNOT STATE CATEGORICALLY THAT THE POSITION OF THE CORPS OF ENGINEERS IS PATENTLY ERRONEOUS. ALSO, IN VIEW OF THE ENTIRE RECORD, IT WOULD APPEAR TO BE REASONABLE TO VIEW THE TRANSPORTATION ASPECTS OF THE PROCUREMENT AS "CASUAL" OR "OCCASIONAL" ON THE PART OF THE PROSPECTIVE CONTRACTOR UNDER THE EXEMPTIVE PROVISIONS OF 49 U.S.C. 303 (B) (9). ALTERNATIVELY, EVEN IF THE TRANSPORTATION ASPECTS OF THE WORK MAY BE VIEWED AS SOMETHING MORE THAN "CASUAL" OR "OCCASIONAL," WE NOTE THAT CORONIS IS WILLING TO UTILIZE RAILROAD SERVICE, IN WHICH CASE THE ISSUE OVER A BROKER'S LICENSE WOULD BE ACADEMIC SINCE NONE WOULD BE NEEDED TO AUTHORIZE DEALINGS WITH RAILROADS.

IN REGARD TO OUR DECISION OF OCTOBER 6, 1966, B-158634, CITED BY YOU, THE FACTS IN THAT CASE ARE DISTINGUISHABLE FROM THOSE PRESENT HERE. IN THAT DECISION, THE CONTRACTING OFFICER WAS FORMALLY ADVISED BY THE ICC THAT YOUR FIRM DID NOT HOLD ICC AUTHORITY SUCH AS A MOTOR CARRIER OR BROKER'S LICENSE TO PERFORM THE REQUISITE ADVERTISED SERVICES FOR RELOCATING PORTIONS OF GOVERNMENT FACILITIES FROM WASHINGTON, D.C. TO GAITHERSBURG, MARYLAND. THE INVITATIONS INVOLVED THERE CONTEMPLATED "MOVING" CONTRACTS AND ALL BIDDERS WERE WARNED TO SECURE NECESSARY LICENSES AND AUTHORIZATIONS AT THE TIME OF BID SUBMISSION. IN THE INSTANT PROCUREMENT, THE TRANSPORTATION OF GOODS IS NOT THE SOLE PURPOSE OF THE CONTRACT BUT ONLY A PART OF A LARGER PROJECT OF DEMOLITION. ALSO, THE SUCCESSFUL CONTRACTOR -- NOT ALL BIDDERS -- HAS THE RESPONSIBILITY TO OBTAIN NECESSARY PERMITS AND LICENSES.

WE RECOGNIZE, OF COURSE, THAT ICC UNDER ITS ADVERSARY PROCEEDINGS COULD WELL DETERMINE THAT PERFORMANCE OF THE TRANSPORTATION ASPECTS OF THE PROJECT WAS CONTRARY TO MOTOR CARRIER PROVISIONS OF THE INTERSTATE COMMERCE ACT, AS AMENDED. BUT THE RESPONSIBILITY FOR SUCH PERFORMANCE RESTS WITH THE SUCCESSFUL BIDDER WHO IS LEGALLY OBLIGATED TO PERFORM ALL WORK IN ACCORDANCE WITH THE SPECIFICATIONS. SINCE THE CENTRAL ISSUE HERE IS THE SCOPE OF TRANSPORTATION SERVICES TO BE PERFORMED WHICH, IN THE CONSIDERED OPINION, OF THE CORPS OF ENGINEERS, IS MINOR AND INCIDENTAL TO THE DEMOLITION ASPECTS OF THE PROCUREMENT, WE FIND NO SUBSTANTIAL, OVERRIDING CONSIDERATIONS WHICH WOULD COMPEL US TO OBJECT TO AN AWARD OF A CONTRACT TO CORONIS.