B-164244, JUN. 12, 1968

B-164244: Jun 12, 1968

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LEVI: REFERENCE IS MADE TO YOUR LETTER OF MAY 2. AWARD IS RESTRICTED TO SMALL BUSINESS CONCERNS WHICH. THE FOLLOWING FIVE BIDS WERE OPENED ON APRIL 16. DUNBAR TRANSFER ALLEGED THAT THE THREE LOWEST BIDS ARE NONRESPONSIVE UNDER SECTION 3.03. WAS ASKED TO REPLY TO THIS CONTENTION. STATED THAT (1) IT WAS A SMALL BUSINESS BIDDER. VICTORY POINTED TO THE SMALL BUSINESS DEFINITION SET FORTH IN THE SOLICITATION STATING THAT "NO CONCERN WILL BE DENIED SMALL BUSINESS STATUS FOR THE PURPOSE OF GOVERNMENT PROCUREMENT SOLELY BECAUSE OF ITS CONTRACTUAL RELATIONSHIP WITH A LARGE INTERSTATE VAN LINE. PROVIDED THAT ITS ANNUAL RECEIPTS HAVE NOT EXCEEDED $3. 000 DURING THE CONCERN'S MOST RECENTLY COMPLETED FISCAL YEAR AND PROVIDED FURTHER NO MORE THAN 50 PERCENT OF SUCH ANNUAL RECEIPTS ARE DIRECTLY ATTRIBUTABLE TO THE APPLICANT'S RELATIONSHIP WITH AN INTERSTATE VAN LINE" .

B-164244, JUN. 12, 1968

TO MR. R. A. LEVI:

REFERENCE IS MADE TO YOUR LETTER OF MAY 2, 1968, WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION CONCERNING AWARD UNDER ADVERTISED SOLICITATION NO. B-4865-68.

THE SOLICITATION, ISSUED ON MARCH 22, 1968, COVERS MOVING SERVICES FOR THE RELOCATION OF SCIENTIFIC AND LABORATORY EQUIPMENT FROM THE NATIONAL BUREAU OF STANDARDS' SITE IN WASHINGTON, C., TO NBS'S NEW SITE AT GAITHERSBURG, MARYLAND. AWARD IS RESTRICTED TO SMALL BUSINESS CONCERNS WHICH, UNDER SECTION 3.03 OF THE SPECIFICATIONS, MUST HOLD ALL NECESSARY LICENSES AND AUTHORIZATIONS REQUIRED UNDER FEDERAL AND OTHER LAWS TO PERFORM THE REQUIRED SERVICES.

THE FOLLOWING FIVE BIDS WERE OPENED ON APRIL 16, 1968:

VICTORY VAN CORPORATION $ 9,340.00

M.F. ROCKY MOVING COMPANY 12,757.82

ACE VAN AND STORAGE COMPANY 22,450.00

THE DUNBAR TRANSFER COMPANY 24,795.00

PAN AMERICAN VAN LINES 32,982.60

ON APRIL 17, 1968, DUNBAR TRANSFER ALLEGED THAT THE THREE LOWEST BIDS ARE NONRESPONSIVE UNDER SECTION 3.03, IN THAT NONE OF THESE THREE BIDDERS HOLDS LICENSES FROM THE INTERSTATE COMMERCE COMMISSION (ICC) NECESSARY TO PERFORM THE REQUIRED SERVICES. THE LOW BIDDER, VICTORY VAN, WAS ASKED TO REPLY TO THIS CONTENTION, AND BY LETTER OF APRIL 18, STATED THAT (1) IT WAS A SMALL BUSINESS BIDDER, AND (2) WOULD USE THE OPERATING AUTHORITY OF ALLIED VAN LINES TO ACCOMPLISH THE REQUIRED REMOVAL. IN THIS CONNECTION, VICTORY POINTED TO THE SMALL BUSINESS DEFINITION SET FORTH IN THE SOLICITATION STATING THAT "NO CONCERN WILL BE DENIED SMALL BUSINESS STATUS FOR THE PURPOSE OF GOVERNMENT PROCUREMENT SOLELY BECAUSE OF ITS CONTRACTUAL RELATIONSHIP WITH A LARGE INTERSTATE VAN LINE, PROVIDED THAT ITS ANNUAL RECEIPTS HAVE NOT EXCEEDED $3,000,000 DURING THE CONCERN'S MOST RECENTLY COMPLETED FISCAL YEAR AND PROVIDED FURTHER NO MORE THAN 50 PERCENT OF SUCH ANNUAL RECEIPTS ARE DIRECTLY ATTRIBUTABLE TO THE APPLICANT'S RELATIONSHIP WITH AN INTERSTATE VAN LINE" .

ON APRIL 19, 1968, YOU ASKED THE ICC TO ADVISE YOU AS TO THE AUTHORITY OF THE VARIOUS BIDDERS TO PERFORM THE REQUIRED SERVICES. BY LETTER OF APRIL 26, 1968, THE ICC REPLIED TO THE MATTER AS FOLLOWS:

"ACE VAN AND STORAGE CO., INC., WASHINGTON, C., UNDER MC-35719, HOLDS OPERATING AUTHORITY FROM THE COMMISSION TO TRANSPORT HOUSEHOLD GOODS AS A COMMON CARRIER BETWEEN WASHINGTON, D.C. AND ALL POINTS IN MARYLAND. THE MOVEMENT IN QUESTION WOULD COME WITHIN "HOUSEHOLD GOODS" AUTHORITY. PAN AMERICAN VAN LINES, INCORPORATED, ALSO HAS AUTHORITY BUT ONLY IF THE MOVEMENT IS BY WAY OF NEW YORK, N.Y.

"DUNBAR TRANSFER COMPANY HOLDS A LICENSE AS A BROKER IN MC-130003 UNDER WHICH IT MAY CONTRACT TO RELOCATE LABORATORY AND OFFICE EQUIPMENT AND ASSOCIATED MATERIALS BETWEEN THE POINTS IN QUESTION, ARRANGING WITH AUTHORIZED CARRIERS TO PERFORM THE ACTUAL TRANSPORTATION.

"M.F. ROCKY MOVING COMPANY, AOMP HILL, PA., HOLDS NO OPERATING AUTHORITY FROM THE COMMISSION.

"VICTORY VAN CORPORATION, ALEXANDRIA, VA., LIKEWISE HOLDS NO OPERATING AUTHORITY FROM THE COMMISSION. IN THAT FIRM'S LETTER OF APRIL 18, 1968, WHICH YOU SUBMITTED, IT STATES THAT IT IS AN AGENT OF ALLIED VAN LINES, INC. ALLIED HOLDS OPERATING AUTHORITY TO TRANSPORT HOUSEHOLD GOODS BETWEEN WASHINGTON, D.C. AND ALL MARYLAND POINTS. HOWEVER, THERE IS NOTHING IN THE COPY OF VICTORY'S BID WHICH YOU SUBMITTED TO INDICATE THAT VICTORY BID AS AGENT OF ALLIED. VICTORY ACTING AS ALLIED'S AGENT, MAY ENTER INTO CONTRACTS TO BE PERFORMED BY ALLIED, AND THE LATTER MAY USE VICTORY'S EMPLOYEES AND EQUIPMENT IN CARRYING OUT THE WORK UNDER A LEASE ARRANGEMENT WITH ITS AGENT. BUT VICTORY HOLDS NO MOTOR CARRIER OPERATING AUTHORITY UNDER WHICH IT COULD PERFORM THE TRANSPORTATION IN ITS OWN NAME. NOR MAY IT CONTRACT IN ITS OWN NAME TO PERFORM THE TRANSPORTATION IN QUESTION AND THEN HIRE THE SERVICE OF AN AUTHORIZED CARRIER TO PERFORM THE ACTUAL MOVEMENT. SUCH ARRANGING OF TRANSPORTATION, NOT DONE AS AN AGENT FOR THE AUTHORIZED CARRIER, WOULD CONSTITUTE AN OPERATION AS A BROKER FOR WHICH A BROKER LICENSE FROM THE COMMISSION WOULD BE REQUIRED. SEE AMERICAN MOVERS CONFERENCE - PETITION, 82 M.C.C. 437. VICTORY DOES NOT HOLD SUCH A LICENSE.'

YOU STATE THAT ALTHOUGH VICTORY DID NOT INDICATE IN ITS BID THAT IT WAS AN AGENT OF ALLIED, THIS RELATIONSHIP IS COMMON KNOWLEDGE. THUS YOU ADVISE THAT ALLIED'S MOVING VANS IN THIS AREA SHOW ON THEIR SIDES VICTORY'S NAME AS AN AGENT, AND NBS'S PAST ORDERS WITH VICTORY WERE OFTEN MADE WITH THE UNDERSTANDING OF THIS AGENCY RELATIONSHIP. FOR EXAMPLE, IN A RECENT NBS PURCHASE, VICTORY SIGNED ITS BID AS "VICTORY VAN CORPORATION, AGENT ALLIED VAN LINES, INCORPORATED" .

IN VIEW OF THE ESTABLISHED RELATIONSHIP BETWEEN VICTORY AND ALLIED, AND OF THE OBVIOUS PRICE ADVANTAGE OFFERED BY THE VICTORY BID (A BID OF $9,340 AS COMPARED TO THE NEXT LOW ACCEPTABLE BID BY ACE AT $22,450), YOU ASK WHETHER VICTORY'S FAILURE TO SIGN ITS BID AS AGENT TO ALLIED MAY BE WAIVED AS A MINOR INFORMALITY. IN THIS CONNECTION, YOU CITE OUR DECISION, B- 158634, DATED MARCH 9, 1966, WHICH ALSO INVOLVED VICTORY'S QUALIFICATION ON A PROPOSED NBS CONTRACT AWARD.

IN B-158634, VICTORY DID SIGN ITS BID AS AGENT TO ALLIED. THE PROTEST ONLY PERTAINED TO VICTORY'S EXPERIENCE. IT WAS CONTENDED THAT VICTORY DID NOT POSSESS THE NECESSARY EXPERIENCE TO PERFORM THE REQUIRED TRANSPORTATION WORK. THE QUESTION WAS RAISED WHETHER ALLIED'S OVERALL EXPERIENCE QUALIFICATION COULD BE CREDITED TO ITS AGENT, VICTORY. BUT WE DID NOT DECIDE THIS QUESTION BECAUSE THE EVIDENCE OF RECORD INDICATED THAT THE VICTORY ORGANIZATION HAD SUFFICIENT EXPERIENCE TO QUALIFY AS A RESPONSIBLE BIDDER IN ITS OWN RIGHT.

OPERATING AUTHORITY IS AN ISSUE IN THIS CASE. ACCORDING TO THE ICC, VICTORY DOES NOT POSSESS THE NECESSARY OPERATING AUTHORITY TO PERFORM THIS CONTRACT IN ITS OWN NAME; BUT ALLIED DOES HOLD SUCH AUTHORITY; AND VICTORY, ACTING AS ALLIED'S AGENT, MAY ENTER INTO THE CONTRACT IN ALLIED'S NAME. IN SHORT, VICTORY IS NOT LEGALLY AUTHORIZED TO ENTER INTO THIS CONTRACT WITH NBS IN ITS OWN NAME AND, THEREFORE, IS NOT A QUALIFIED BIDDER FOR THIS CONTRACT IN ITS OWN NAME UNDER SECTION 3.03 OF THE SPECIAL CONDITIONS OF THE SOLICITATION.

IT COULD BE ARGUED, AS YOU SUGGEST, THAT ALLIED IS THE TRUE PRINCIPAL ON THIS BID, AND VICTORY AN AGENT. WE CANNOT ACCEPT THIS APPROACH FROM A PROCUREMENT STANDPOINT. THERE SHOULD BE NO QUESTION CONCERNING A BIDDER'S TRUE IDENTITY. WE HAVE HELD THAT EVIDENCE OF AN AGENT'S AUTHORITY TO EXECUTE A BID ON BEHALF OF HIS PRINCIPAL MUST ACCOMPANY THE BID. 15 COMP. GEN. 566, B-163132, DATED AUGUST 10, 1960. THIS RULE IS DESIGNED TO PREVENT FRAUDS UPON THE GOVERNMENT.

ACCORDINGLY, WE COULD NOT AUTHORIZE AN AWARD TO VICTORY ON THE BASIS PROPOSED. IN ANY EVENT, WE UNDERSTAND THAT YOU HAVE CANCELLED THE INVITATION AND UNDERTAKEN TO PERFORM THE REQUIRED WORK WITH YOUR OWN FORCES.

ON ANY FUTURE MOVING SERVICE CONTRACTS OF THIS KIND SHOULD YOU CONTEMPLATE A SMALL BUSINESS SET-ASIDE WE RECOMMEND OBTAINING CLARIFICATION FROM THE SMALL BUSINESS ADMINISTRATION AS TO THE SIZE STATUS OF BIDDERS BIDDING AS AGENTS OF LARGE BUSINESS CONCERNS. WE ARE NOT CERTAIN THAT THE SMALL BUSINESS DEFINITION LANGUAGE MENTIONED ABOVE PERMITS A SMALL BUSINESS AWARD TO A CONCERN SUCH AS VICTORY BIDDING AS AN AGENT OF A LARGE BUSINESS CONCERN SUCH AS ALLIED.