B-172741, JUL 28, 1971

B-172741, JUL 28, 1971

BID PROTEST - BIDDER RESPONSIBILITY - LICENSE REQUIREMENT DECISION DENYING PROTEST OF ALASKA FUEL AND TRANSFER INCORPORATED, THIRD LOW BIDDER, AGAINST AWARD OF CONTRACT TO CMG EQUIPMENT SUPPLY COMPANY, SECOND LOW BIDDER, UNDER IFB ISSUED BY ELMENDORF AIR FORCE BASE, ALASKA, FOR DELIVERY OF AIR FORCE OWNED FUEL ON AND OFF BASE. A LICENSE REQUIREMENT IN AN INVITATION IS A REQUIREMENT CONCERNING THE RESPONSIBILITY OF PROSPECTIVE CONTRACTORS AND IS NOT RELATED TO AN EVALUATION OF THE BID; THEREFORE, CMG'S FAILURE TO POSSESS PROPER STATE LICENSES DID NOT RENDER THEIR BID NONRESPONSIVE. NOR DID IT MAKE CMG A NONRESPONSIBLE BIDDER AS OFF BASE DELIVERIES WERE SUBCONTRACTED TO A LICENSED FIRM, AS PERMITTED, AND PERFORMANCE ON THE BASE, A FEDERAL RESERVATION, DID NOT REQUIRE A STATE LICENSE. THE PROTEST IS CONSEQUENTLY DENIED.

TO ALASKA FUEL AND TRANSFER, INCORPORATED:

REFERENCE IS MADE TO YOUR TELEFAX DATED APRIL 24, 1971, AND SUBSEQUENT CORRESPONDENCE PROTESTING AGAINST THE AWARD OF A CONTRACT TO CMG EQUIPMENT SUPPLY COMPANY UNDER INVITATION FOR BIDS NO. F65501-71-B 2660, ISSUED AT ELMENDORF AIR FORCE BASE, ALASKA.

THE SUBJECT SOLICITATION ISSUED FEBRUARY 23, 1971, WAS A 100 PERCENT SET- ASIDE FOR SMALL BUSINESS CONCERNS. IT CALLED FOR THE DELIVERY OF AIR FORCE OWNED FUEL ON AND OFF ELMENDORF AIR FORCE BASE. THE THREE BIDS RECEIVED WERE AS FOLLOWS:

DENALI FUEL COMPANY $34,681.18

CMG EQUIPMENT SUPPLY $36,226.60

ALASKA FUEL & TRANSFER INCORPORATED $48,517.50

IT IS ADMINISTRATIVELY REPORTED THAT YOU HAD PREVIOUSLY FILED A PROTEST WITH THE AIR FORCE BY LETTER OF MARCH 16, 1971, ALLEGING THAT THE LOW BIDDER, DENALI FUEL COMPANY, WAS NOT A SMALL BUSINESS, AND THAT CMG EQUIPMENT SUPPLY DID NOT HOLD THE PROPER PERMITS AND LICENSES TO SUBMIT A BID. BY LETTER DATED APRIL 14, 1971, THE SMALL BUSINESS ADMINISTRATION (SBA), DETERMINED THAT DENALI FUEL COMPANY WAS NOT QUALIFIED AS A SMALL BUSINESS IN RELATION TO THE SUBJECT PROCUREMENT AND THEREFORE NOT ELIGIBLE FOR AWARD. IT IS FURTHER REPORTED THAT IN THE PROCESS OF QUALIFYING THE SECOND LOW BIDDER, CMG EQUIPMENT SUPPLY, A SECOND REQUEST WAS MADE TO SBA FOR A SIZE DETERMINATION. BY LETTER DATED APRIL 14, 1971, SBA ADVISED THE CONTRACTING OFFICER THAT CMG EQUIPMENT SUPPLY WAS A SMALL BUSINESS CONCERN WITH RESPECT TO THE SUBJECT SOLICITATION.

YOU ALLEGE IN YOUR TELEFAX DATED MAY 3, 1971, THAT CMG EQUIPMENT SUPPLY COMPANY IS AFFILIATED WITH ARTIC NORTH STAR FUEL COMPANY, INCORPORATED, AND IS THEREFORE NOT A SMALL BUSINESS CONCERN. BY LETTER DATED APRIL 1, 1971, TO SBA, THE CONTRACTING OFFICER REQUESTED A DETERMINATION OF SMALL BUSINESS SIZE STATUS FOR CMG EQUIPMENT SUPPLY STATING "THE INDICATIONS IN YOUR LETTER, DATED 25 MARCH 1971, THAT C.M.G. EQUIPMENT SUPPLY MAY BE AFFILIATED WITH ARTIC NORTH STAR FUEL COMPANY HAS NECESSITATED THE CONTRACTING OFFICER'S REQUEST FOR A SIZE DETERMINATION." THEREFORE, IT APPEARS THAT THE ISSUE WAS ALREADY DECIDED BY SBA SINCE POSSIBLE AFFILIATION WITH NORTH STAR FUEL COMPANY WAS THE BASIS FOR REQUESTING SBA'S SIZE DETERMINATION.

UNDER THE SMALL BUSINESS ACT OF 1958, 15 U.S.C. 632 AND 637(B)(6), THE SMALL BUSINESS ADMINISTRATOR, ACTING THROUGH HIS AGENTS IN THE SMALL BUSINESS ADMINISTRATION, IS EMPOWERED TO PRESCRIBE SMALL BUSINESS SIZE STANDARDS FOR VARIOUS INDUSTRIES AND TO DETERMINE WITHIN ANY INDUSTRY THE CONCERNS WHICH ARE TO BE DESIGNATED SMALL BUSINESS CONCERNS FOR THE PURPOSE OF GOVERNMENT PROCUREMENT. THESE DETERMINATIONS ARE BINDING ON THE PROCUREMENT OFFICIALS OF THE GOVERNMENT. IN VIEW OF THESE PROVISIONS OF LAW, OUR OFFICE CANNOT ORDINARILY QUESTION SUCH DETERMINATIONS.

YOUR CONTENTION THAT CMG EQUIPMENT SUPPLY DID NOT HOLD THE PROPER PERMITS AND LICENSES TO SUBMIT A BID IS BASED ON SPECIAL PROVISION NO. 4, PART II, SECTION J, OF THE INVITATION AS FOLLOWS:

"4. PERMITS AND LICENSES

BIDDER CERTIFIES IN SUBMISSION OF BID HEREUNDER THAT HE (OR ANY SUBCONTRACTOR HE MAY USE) HAS SUCH PERMITS AND LICENSES AS MAY BE REQUIRED BY INTERSTATE REGULATORY AUTHORITIES TO PERFORM THE SERVICES HEREIN INVOLVED. IN THE EVENT OPERATING RIGHTS ARE REVOKED OR WITHDRAWN AT ANY TIME DURING THE LIFE OF THE CONTRACT, THIS CONTRACTOR WILL IMMEDIATELY NOTIFY THE CONTRACTING OFFICER OF SUCH FACT IN WRITING."

THE CONTRACTING OFFICER STATES IN THIS REGARD THAT THE BID DOCUMENTS REQUIRED BIDDERS TO HAVE ALL NECESSARY INTERSTATE LICENSES AND PERMITS PRIOR TO BIDDING. HE STATES FURTHER THAT SINCE ALL OPERATIONS UNDER THE SOLICITATION ARE TO BE INTRASTATE, THE ABOVE-QUOTED REQUIREMENT HAD NO EFFECT ON BIDDERS. IT IS STATED THAT LOCAL LICENSE AND COMMON CARRIERS PERMIT ARE REQUIRED BY THE STATE OF ALASKA BUT ARE NOT A CONTRACT REQUIREMENT AS SUCH. FUEL DELIVERY ON THE BASE WILL NOT REQUIRE A COMMON CARRIERS' PERMIT AND OFF-BASE DELIVERY MAY BE SUBCONTRACTED IF SO DESIRED.

IT IS REPORTED THAT SUBSEQUENT TO THE CONTRACT AWARD TO CMG EQUIPMENT SUPPLY ON APRIL 23, 1971, THE CONTRACTOR EXECUTED A SUBCONTRACT WITH INLET FUEL COMPANY OF ANCHORAGE, A SMALL BUSINESS FIRM, FOR OFF-BASE DELIVERY. CMG EQUIPMENT SUPPLY HAS ALSO APPLIED TO THE ALASKA TRANSPORTATION COMMISSION FOR THEIR OWN PERMIT. IT IS STATED THAT ALL DELIVERIES ARE BEING ACCOMPLISHED IN A SATISFACTORY MANNER.

FURTHERMORE, OUR OFFICE HAS CONSISTENTLY HELD THAT A LICENSE REQUIREMENT IN AN INVITATION IS A REQUIREMENT CONCERNING THE RESPONSIBILITY OF PROSPECTIVE CONTRACTORS - THAT 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. 47 COMP. GEN. 539 (1968), 46 COMP. GEN. 326 (1966). IN THE LATTER CITED CASE, WE STATED THAT THE CRITICAL TIME FOR ACTUAL COMPLIANCE WITH A REQUIREMENT CONCERNING RESPONSIBILITY COULD BE AS LATE AS THE TIME FOR PERFORMANCE PLUS ANY LEAD IN TIME WHICH MAY BE NECESSARY IN THE PARTICULAR CASE. SEE ALSO B-161211, JULY 11, 1967. ADDITIONALLY, WE NOTE THAT STATE LICENSING REQUIREMENTS WOULD NOT BE APPLICABLE TO THE SERVICES TO BE PERFORMED ON ELMENDORF AIR FORCE BASE ITSELF OVER WHICH THE FEDERAL GOVERNMENT HAS EXCLUSIVE JURISDICTION. B-159723, SEPTEMBER 28, 1966. SINCE THE CONTRACTOR HAS SUBCONTRACTED FOR THE OFF-BASE DELIVERY OF FUEL, AND IS NOT RESTRICTED IN DELIVERIES ON THE BASE, WE FIND NO REASON TO QUESTION THE AWARD TO CMG EQUIPMENT SUPPLY FOR FAILURE TO HOLD LICENSES AND PERMITS AT THE TIME OF BID OPENING.

BASED UPON THE PRESENT RECORD, WE FIND NO REASON TO DISTURB THE AWARD TO CMG EQUIPMENT SUPPLY COMPANY. ACCORDINGLY, YOUR PROTEST IS DENIED.