B-164836(1), AUG 17, 1971

B-164836(1): Aug 17, 1971

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ARE MATTERS OF RESPONSIBILITY WITHIN THE PROVINCE OF THE CONTRACTING AGENCY. TO CREDIT SERVICE BUREAU: THIS IS IN REPLY TO YOUR LETTER DATED JUNE 11. THE CONTRACTOR WILL BE PAID $4 FOR EACH ANTECEDENT REPORT. FOUR BIDS WERE RECEIVED AS FOLLOWS: CREDIT SERVICE INCORPORATED $4.40 PER UNIT CREDIT BUREAU INCORPORATED OF GEORGIA $5.50 PER UNIT CREDIT BUREAU REPORTS INCORPORATED $5.50 PER UNIT MERCHANTS CREDIT BUREAU $1.00 PER YEAR. WHICH IS IN VIOLATION OF FLORIDA'S CIVIL AND CRIMINAL LAWS. YOU ALSO CONTEND THAT THE BIDDER IS UNABLE TO PROVIDE BOTH ANTECEDENT REPORTS FROM OTHER CREDIT BUREAUS THROUGHOUT THE UNITED STATES AND CREDIT INFORMATION FROM MOST LEADING LOCAL STORES. IT APPEARS FROM THE RECORD THAT THE LICENSE FOR MERCHANTS CREDIT BUREAU IS IN THE NAME OF MIAMI SERVICE BUREAU.

B-164836(1), AUG 17, 1971

BID PROTEST - BIDDER RESPONSIBILITY - UNPROFITABLE BID DECISION DENYING PROTEST AGAINST AWARD OF A CONTRACT TO MERCHANTS CREDIT BUREAU UNDER AN IFB ISSUED BY THE FEDERAL HOUSING ADMINISTRATION FOR FACTUAL DATA (CREDIT) REPORTS COVERING INDIVIDUALS IN THE MIAMI, FLORIDA AREA. WHETHER THE SUCCESSFUL BIDDER HOLDS A VALID BUSINESS LICENSE AND CAN PROVIDE ANTECEDENT CREDIT REPORTS, ARE MATTERS OF RESPONSIBILITY WITHIN THE PROVINCE OF THE CONTRACTING AGENCY. FURTHER, THE COMP. GEN. HAS HELD THAT AN AWARD MAY NOT BE PRECLUDED MERELY BECAUSE THE LOW BIDDER HAS SUBMITTED AN UNPROFITABLE PRICE.

TO CREDIT SERVICE BUREAU:

THIS IS IN REPLY TO YOUR LETTER DATED JUNE 11, 1971, AND SUBSEQUENT CORRESPONDENCE, PROTESTING THE PROPOSED AWARD TO ANOTHER BIDDER OF A CONTRACT FOR FACTUAL DATA (CREDIT) REPORTS COVERING INDIVIDUALS WITHIN THE METROPOLITAN AREA OF MIAMI, FLORIDA, UNDER FEDERAL HOUSING ADMINISTRATION (FHA) INVITATION FOR BIDS NO. HPMC-FHA-002-72.

THE INVITATION PROVIDES FOR SUBMISSION OF BIDS ON A UNIT PRICE FOR EACH BASIC FACTUAL DATA REPORT FURNISHED AS REQUESTED DURING THE PERIOD JULY 1, 1971 - JUNE 30, 1972, AND SPECIFIES THAT IN ADDITION TO THE BID PRICE FOR EACH BASIC REPORT, THE CONTRACTOR WILL BE PAID $4 FOR EACH ANTECEDENT REPORT, $2.25 FOR SUPPLEMENTAL REPORTS COVERING TRADE REFERENCES, AND $1 FOR SUPPLEMENTAL REPORTS COVERING EMPLOYMENT.

IN RESPONSE TO THE INVITATION, FOUR BIDS WERE RECEIVED AS FOLLOWS:

CREDIT SERVICE INCORPORATED $4.40 PER UNIT

CREDIT BUREAU INCORPORATED OF GEORGIA $5.50 PER UNIT

CREDIT BUREAU REPORTS INCORPORATED $5.50 PER UNIT

MERCHANTS CREDIT BUREAU $1.00 PER YEAR, WITHOUT

REGARD TO UNITS

YOU PROTEST THE PROPOSED AWARD TO MERCHANTS CREDIT BUREAU ON SEVERAL BASES. FIRST, YOU STATE THE BIDDER HAS BEEN OPERATING FOR A NUMBER OF YEARS WITHOUT AN OCCUPATIONAL LICENSE, WHICH IS IN VIOLATION OF FLORIDA'S CIVIL AND CRIMINAL LAWS. YOU ALSO CONTEND THAT THE BIDDER IS UNABLE TO PROVIDE BOTH ANTECEDENT REPORTS FROM OTHER CREDIT BUREAUS THROUGHOUT THE UNITED STATES AND CREDIT INFORMATION FROM MOST LEADING LOCAL STORES. YOU FURTHER STATE THAT THE PROPOSED CONTRACTOR OPERATES BOTH CREDIT REPORTING AND BAD DEBT COLLECTION SERVICES.

IT APPEARS FROM THE RECORD THAT THE LICENSE FOR MERCHANTS CREDIT BUREAU IS IN THE NAME OF MIAMI SERVICE BUREAU, INC. THE LATTER COMPANY WAS IDENTIFIED IN THE BID OF MERCHANTS CREDIT BUREAU AS THE BIDDER'S PARENT COMPANY. AFTER INQUIRING WITH THE MIAMI, DADE COUNTY AND FLORIDA STATE LICENSING AUTHORITIES, FHA HAS REPORTED THAT IT WAS ADVISED THAT ONLY ONE LICENSE IS ISSUED PER BUSINESS, AND AS LONG AS THE PARENT COMPANY HOLDS A VALID LICENSE AN ADDITIONAL LICENSE IS NOT REQUIRED FOR MERCHANTS CREDIT BUREAU.

YOU ALSO QUESTION WHETHER THE BIDDER IS ABLE TO PROVIDE ANTECEDENT CREDIT REPORTS AND CREDIT INFORMATION FROM MOST LEADING LOCAL STORES. MERCHANTS CREDIT BUREAU HAS CERTIFIED THAT IT HAS SIGNED SERVICE AGREEMENTS WITH ALL REQUIRING ASSOCIATED CREDIT BUREAUS OF AMERICA (ACBA), AND THAT IT HAS ARRANGEMENTS WITH 2,000 COOPERATING CREDIT REPORTING AGENCIES TO PROVIDE ANTECEDENT INFORMATION. IN ADDITION, FHA STATES THAT THE LOW BIDDER'S ABILITY TO PERFORM UNDER THE CONTRACT HAS BEEN DEMONSTRATED AS A FORMER CONTRACTOR AND THAT DURING THE YEARS IT HAS NOT BEEN A CONTRACT SOURCE, REPORTS SUBMITTED BY MERCHANTS CREDIT BUREAU HAVE BEEN TESTED FREQUENTLY AND IN SIGNIFICANT NUMBERS TO ASSURE THAT THE REPORTS WERE IN ACCORDANCE WITH FHA SPECIFICATIONS. FHA STATES THAT THE FIRM'S REPORTS HAVE PROVEN TO BE CONSISTENTLY SATISFACTORY AND RELIABLE.

WE HAVE NOTED YOUR STATEMENT THAT THE PROPOSED CONTRACTOR OPERATES BOTH CREDIT REPORTING AND BAD DEBT COLLECTING SERVICES WHICH, YOU CONTEND, PROVIDES IT WITH AN OPPORTUNITY TO SECURE PAYMENTS, FROM APPLICANTS FOR FHA INSURED LOANS, ON BILLS WHICH MIGHT BE EITHER JUSTLY DUE OR NOT OWING IN ORDER TO RECEIVE A CLEAR RECORD ON THE FHA MORTGAGE REPORT. IN THIS CONNECTION, FHA ADVISES THAT IT IS NOT AN UNCOMMON PRACTICE AMONG CREDIT REPORTING BUREAUS TO PERFORM BOTH CREDIT REPORTING AND DEBT COLLECTION SERVICES. THE TERMS OF THE CONTRACT (PARAGRAPH 9(B) OF THE SPECIFICATIONS), HOWEVER, PRECLUDE THE CONTRACTING PARTIES FROM USING FHA APPLICATIONS FOR MORTGAGE INSURANCE AS A MEANS OF EFFECTING COLLECTION OF DELINQUENT ACCOUNTS. ANY CONTRACTOR FOLLOWING THIS PRACTICE WOULD BE SUBJECT TO CONTRACT TERMINATION.

IN OUR OPINION, ALL OF THE ABOVE-CONSIDERED OBJECTIONS RAISED BY YOUR PROTEST RELATE TO THE QUESTION OF WHETHER THE LOW BIDDER IS RESPONSIBLE. THE RECORD BEFORE US SHOWS THAT FHA HAS CONSIDERED THE QUESTION OF THE RESPONSIBILITY OF MERCHANTS CREDIT BUREAU AND HAS CONCLUDED THAT THE FIRM IS A RESPONSIBLE BIDDER, NOTWITHSTANDING YOUR CONTENTIONS. IN CONSIDERING SUCH PROTESTS WE HAVE CONSISTENTLY HELD THAT DETERMINATIONS OF RESPONSIBILITY ARE PRIMARILY A FUNCTION OF THE AGENCY CONCERNED AND, IN THE ABSENCE OF CLEAR EVIDENCE OF BAD FAITH OR LACK OF A REASONABLE BASIS THEREFOR, THERE IS NO LEGAL BASIS FOR OBJECTION BY THIS OFFICE. 39 COMP. GEN. 705 (1960). IN THE PRESENT CASE WE DO NOT BELIEVE WE WOULD BE JUSTIFIED IN QUESTIONING THE ADMINISTRATIVE DETERMINATION OF RESPONSIBILITY.

FINALLY, WE HAVE NOTED YOUR APPARENT DISBELIEF THAT THE GOVERNMENT WOULD SERIOUSLY CONSIDER THIS LOW BID, HOWEVER, WE KNOW OF NO LEGAL PRINCIPLE WHICH WOULD PRECLUDE THE ACCEPTANCE OF SUCH AN OFFER UNDER THE CIRCUMSTANCES OF THIS CASE. WE HAVE HELD THAT AN AWARD MAY NOT BE PRECLUDED MERELY BECAUSE THE LOW BIDDER SUBMITTED AN UNPROFITABLE PRICE. SEE B-169465, JUNE 19, 1970, AND CASES CITED THEREIN.

ACCORDINGLY, WE HAVE NO OBJECTION TO THE PROPOSED AWARD TO THE LOW BIDDER, AND YOUR PROTEST IS THEREFORE DENIED.