B-172587, JUN 21, 1971

B-172587: Jun 21, 1971

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HAS DETERMINED THAT NO OBJECTION EXISTS TO AN AWARD TO IPSA AS THEIR CORPORATE CHARTER WAS CHANGED TO DISAVOW ANY DETECTIVE WORK AND. TO COMPLY WITH THE "ANTI-PINKERTON LAW" WHICH WAS THE SOURCE OF OBJECTION BY HEW. SECRETARY: REFERENCE IS MADE TO A REPORT DATED APRIL 23. AWARD IS BEING POSTPONED PENDING OUR DECISION. THE IFB WAS ISSUED ON MARCH 9. BIDS WERE OPENED ON MARCH 24. IPSA WAS THE APPARENT LOW BIDDER. THE CONTRACTING OFFICER NOTIFIED IPSA THAT ITS BID WAS BEING REJECTED BECAUSE AWARD TO IT WOULD VIOLATE 5 U.S.C. 3108 (1964 ED. THE BASIS FOR THE CONTRACTING OFFICER'S DECISION WAS THAT IPSA'S ARTICLES OF INCORPORATION. ITS ARTICLES OF INCORPORATION WERE AMENDED ON MARCH 29. WE CONCUR WITH IPSA BECAUSE IT IS SUFFICIENT.

B-172587, JUN 21, 1971

BID PROTEST - BIDDER RESPONSIBILITY - "ANTI-PINKERTON LAW" ADVISING THAT WITH RESPECT TO THE PROTEST OF IPSA INTERNATIONAL, INC., AGAINST AWARD OF CONTRACT TO ANY OTHER FIRM UNDER IFB ISSUED BY HEALTH SERVICES AND MENTAL HEALTH ADMINISTRATION HEW, FOR GUARD SERVICES AT A CERTAIN FACILITY THE COMP. GEN. HAS DETERMINED THAT NO OBJECTION EXISTS TO AN AWARD TO IPSA AS THEIR CORPORATE CHARTER WAS CHANGED TO DISAVOW ANY DETECTIVE WORK AND, THEREBY, TO COMPLY WITH THE "ANTI-PINKERTON LAW" WHICH WAS THE SOURCE OF OBJECTION BY HEW.

TO MR. SECRETARY:

REFERENCE IS MADE TO A REPORT DATED APRIL 23, 1971, FROM THE DIRECTOR OF GENERAL SERVICES RESPONDING TO THE PROTEST OF DONEGAN & RAUTH, ATTORNEYS FOR IPSA INTERNATIONAL, INC. (IPSA), AGAINST THE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS (IFB) NO. 3511-3-24-71. AWARD IS BEING POSTPONED PENDING OUR DECISION.

THE IFB WAS ISSUED ON MARCH 9, 1971, BY THE HEALTH SERVICES AND MENTAL HEALTH ADMINISTRATION, DEPARTMENT OF HEALTH, EDUCATION AND WELFARE, AND COVERED THE PROCUREMENT OF NIGHT GUARD SERVICES AT A PUBLIC HEALTH SERVICE ACTIVITY. BIDS WERE OPENED ON MARCH 24, 1971, AND IPSA WAS THE APPARENT LOW BIDDER. ON MARCH 31, 1971, HOWEVER, THE CONTRACTING OFFICER NOTIFIED IPSA THAT ITS BID WAS BEING REJECTED BECAUSE AWARD TO IT WOULD VIOLATE 5 U.S.C. 3108 (1964 ED., SUPP. V), THE SO-CALLED "ANTI-PINKERTON LAW."

THE BASIS FOR THE CONTRACTING OFFICER'S DECISION WAS THAT IPSA'S ARTICLES OF INCORPORATION, IN EFFECT AT THE TIME OF BID OPENING, ALLOWED IPSA TO CONDUCT BOTH A GUARD SERVICE AND A DETECTIVE SERVICE BUSINESS. IPSA CONTENDS THAT IT HAS NEVER ENGAGED IN DETECTIVE WORK AT ANY TIME AND THAT, IN ANY CASE, ITS ARTICLES OF INCORPORATION WERE AMENDED ON MARCH 29, 1971, TO ELIMINATE ITS AUTHORITY TO ENGAGE IN INVESTIGATION SERVICES. IN THESE CIRCUMSTANCES, IPSA ARGUES THAT AWARD TO IT WOULD NOT VIOLATE 5 U.S.C. 3108, SUPRA.

WE CONCUR WITH IPSA BECAUSE IT IS SUFFICIENT, FOR PURPOSES OF COMPLIANCE WITH THE INSTANT STATUTE, THAT A BIDDER BE WITHOUT AUTHORITY TO CONDUCT DETECTIVE OR INVESTIGATION SERVICES AT THE TIME OF AWARD. B 156424, JULY 22, 1965. IN THIS CONNECTION, WE NOTE THAT SECTION 10-171 OF THE ARIZONA REVISED STATUTES STATES THAT A CORPORATION'S ACTIVITIES ARE LIMITED TO THOSE EXPRESSLY AUTHORIZED BY ITS ARTICLES OF INCORPORATION OR BY THE LAWS UNDER WHICH IT WAS ORGANIZED. SINCE WE HAVE BEEN ADVISED BY THE ARIZONA CORPORATION COMMISSION THAT IPSA FILED THE MARCH 29 AMENDMENT TO ITS ARTICLES OF INCORPORATION WITH THE COMMISSION ON APRIL 6, 1971, IT NOW APPEARS THAT IT LACKS ANY AUTHORITY TO ENGAGE IN THE ACTIVITIES PRESCRIBED BY 5 U.S.C. 3108.

IT IS TRUE, AS STATED IN THE REPORT OF APRIL 23, 1971, THAT THE INTEGRITY OF THE FORMAL ADVERTISING SYSTEM ORDINARILY PRECLUDES THE AMENDMENT OF OFFERS SUBSEQUENT TO BID OPENING. THE AMENDMENT BY IPSA OF ITS ARTICLES OF INCORPORATION AFTER BID OPENING MIGHT BE CONSIDERED AN ANALOGOUS SITUATION. HOWEVER, THE EXTENT TO WHICH THE STATUTORY RESTRICTION IN 5 U.S.C. 3108 SHOULD BE APPLIED TODAY TO THE FURNISHING OF GUARD SERVICES TO THE GOVERNMENT IS AT LEAST NOT FREE FROM DOUBT. SEE 44 COMP. GEN. 564, 568-69 (1965). IN THE CIRCUMSTANCES, THEREFORE, WE WOULD NOT BE REQUIRED TO OBJECT TO AN AWARD TO IPSA.