B-174674, MAR 10, 1972

B-174674: Mar 10, 1972

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IT IS NOT IN A POSITION TO ADVISE THE GOVERNMENT WHETHER IT WILL PERFORM IN ITS OWN NAME OR THROUGH A SUBCONTRACTOR AND SHOULD THEREFORE BE DETERMINED NONRESPONSIBLE. CONTINENTAL WILL HAVE THE REQUESTED OPERATING AUTHORITY DURING THE ENTIRE PERIOD OF CONTRACT PERFORMANCE. IT IS WELL-SETTLED THAT TO BE ELIGIBLE FOR A SMALL BUSINESS SET-ASIDE A CONTRACTOR IS ONLY REQUIRED TO CERTIFY IN GOOD FAITH TO BE A SMALL BUSINESS CONCERN AT THE TIME OF AWARD. THE PROTEST IS DENIED. ROSE: FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF AIR VAN LINES. ENTITLED "ICC AUTHORITY FOR CONTRACTORS" PROVIDED: "(A) AN ICC OPERATING AUTHORITY IS REQUIRED FOR PERFORMANCE OF SERVICES UNDER SCHEDULES I. EVEN THOUGH STATE LINES ARE NOT PHYSICALLY CROSSED.

B-174674, MAR 10, 1972

BID PROTEST - NONRESPONSIBILITY - TRANSFER OF LICENSE - SMALL BUSINESS SET-ASIDE DECISION DENYING PROTEST OF AIR VAN LINES, INC. (AVL), AGAINST THE PROPOSED AWARD OF A CONTRACT TO CONTINENTAL VAN LINES, INC., UNDER AN IFB ISSUED BY ELMENDORF AFB, ALASKA. AVL CONTENDS THAT, SINCE CONTINENTAL HAS APPLIED TO THE INTERSTATE COMMERCE COMMISSION FOR TRANSFER OF ITS CURRENT INTERSTATE CARRIER AUTHORITY TO ALLIED VAN LINES, IT IS NOT IN A POSITION TO ADVISE THE GOVERNMENT WHETHER IT WILL PERFORM IN ITS OWN NAME OR THROUGH A SUBCONTRACTOR AND SHOULD THEREFORE BE DETERMINED NONRESPONSIBLE. THE RULING IN EVANSTON FIREPROOF WAREHOUSE-CONTROL-ALLIED VAN LINES, INC., 40 M.C.C. 557, HELD THAT TRANSFERRING CARRIERS BECOME AGENTS OF ALLIED OPERATING UNDER ITS SOLE AUTHORITY. AN INFORMAL ICC OPINION TO THE CONTRARY (KINGPAK, 103 M.C.C. 318) CANNOT BE CONSIDERED CONTROLLING. THE INSTANT CASE, CONTINENTAL WILL HAVE THE REQUESTED OPERATING AUTHORITY DURING THE ENTIRE PERIOD OF CONTRACT PERFORMANCE, WHETHER IN ITS OWN NAME OR AS AN AGENT OF ALLIED, AND THE COMP. GEN. CANNOT AGREE THAT PART II, SECTION F, PARAGRAPH SC-21, OF THE INVITATION REQUIRES A CONTRACTOR TO SPECIFY A SINGLE OPERATING AUTHORITY PRIOR TO AWARD. WITH REGARD TO PROTESTANT'S FURTHER CONTENTION, IT IS WELL-SETTLED THAT TO BE ELIGIBLE FOR A SMALL BUSINESS SET-ASIDE A CONTRACTOR IS ONLY REQUIRED TO CERTIFY IN GOOD FAITH TO BE A SMALL BUSINESS CONCERN AT THE TIME OF AWARD. B-173504, DECEMBER 29, 1971. IN VIEW OF THE FOREGOING, THE PROTEST IS DENIED.

TO NISSEL A. ROSE:

FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF AIR VAN LINES, INC. (AVL) AGAINST THE PROPOSED AWARD OF A CONTRACT TO CONTINENTAL VAN LINES, INC. (CONTINENTAL) UNDER IFB NO. F65501-72-B-1035, ISSUED ON OCTOBER 25, 1971, BY THE ELMENDORF AIR FORCE BASE, ALASKA.

THE INSTANT SOLICITATION REQUESTED BIDS FOR PACKING, CRATING AND MOVING OF HOUSEHOLD GOODS AT ELMENDORF AIR FORCE BASE AND VICINITY FOR A 12 MONTH PERIOD BEGINNING JANUARY 1, 1972, AND ENDING DECEMBER 31, 1972. OF THE FOUR BIDS SUBMITTED AND OPENED ON NOVEMBER 23, 1971, CONTINENTAL SUBMITTED THE LOWEST BID.

PART II, SECTION F, PARAGRAPH SC-21 OF THE INVITATION, ENTITLED "ICC AUTHORITY FOR CONTRACTORS" PROVIDED:

"(A) AN ICC OPERATING AUTHORITY IS REQUIRED FOR PERFORMANCE OF SERVICES UNDER SCHEDULES I, II & III OF THIS CONTRACT, EVEN THOUGH STATE LINES ARE NOT PHYSICALLY CROSSED. THE EXCEPTION TO THIS REQUIREMENT IS WHEN A LOCAL HAUL IS PERFORMED WHOLLY WITHIN THE PRESCRIBED COMMERCIAL ZONE. ICC AUTHORITY IS NOT REQUIRED. GENERALLY, THE ZONES IN THE UNIFORM CONTRACTS ARE NOT SYNONYMOUS WITH THE ICC PRESCRIBED COMMERCIAL ZONES.

(B) A CONTRACTOR'S PERFORMANCE AS IT PERTAINS TO DRAYAGE OF SHIPMENTS WITHIN THE CONTRACT AREA IS LIMITED TO THE SCOPE OF HIS ICC OPERATING AUTHORITY. HOWEVER, IF A CONTRACTOR DOES NOT HAVE SUCH AUTHORITY WITHIN HIS OWN RIGHT, UNDER PRESENT POLICY, A SUBCONTRACTOR WHO HAS THE PROPER ICC AUTHORITY MAY BE USED FOR FURNISHING TRANSPORTATION SERVICES.

(C) THEREFORE, A BIDDER TO BE CONSIDERED RESPONSIBLE MUST FURNISH EVIDENCE OF THIS ICC AUTHORITY PRIOR TO AWARD."

THE BASIS OF YOUR PROTEST ON BEHALF OF AVL IS THAT CONTINENTAL IS NOT A RESPONSIBLE BIDDER WITHIN THE MEANING OF THE REGULATIONS AND CITED DECISIONS OF OUR OFFICE, SINCE CONTINENTAL HAS MADE APPLICATION TO THE INTERSTATE COMMERCE COMMISSION FOR TRANSFER OF ITS CURRENT INTERSTATE CARRIER AUTHORITY TO ALLIED VAN LINES (ALLIED). YOU CONTEND THAT IN ORDER TO QUALIFY AS A RESPONSIBLE BIDDER, A BIDDER MUST BE ABLE TO FURNISH THE GOVERNMENT, PRIOR TO AWARD, WITH THE OPERATING AUTHORITY UNDER WHICH THE CONTRACT WILL BE PERFORMED. SINCE THE TRANSFER TO ALLIED MAY TAKE PLACE ANYTIME DURING THE CONTRACT PERFORMANCE PERIOD, YOU CONTEND THAT CONTINENTAL IS NOT IN A POSITION TO ADVISE THE GOVERNMENT PRIOR TO AWARD, WHETHER IT WILL PERFORM IN ITS OWN NAME, OR THROUGH A SUBCONTRACTOR.

THE REPORT FURNISHED OUR OFFICE BY THE DEPARTMENT OF THE AIR FORCE UNDER DATE OF JANUARY 19 INDICATES THAT CONTINENTAL HAS MADE APPLICATION TO TRANSFER ITS INTERSTATE OPERATING AUTHORITY TO ALLIED. IF AND WHEN THE TRANSFER IS APPROVED, CONTINENTAL WOULD BECOME THE AGENT OF ALLIED, UTILIZING ALLIED'S AUTHORITY TO ENGAGE IN THE INTERSTATE TRANSPORTATION OF HOUSEHOLD GOODS THROUGHOUT THE UNITED STATES, INCLUDING ALASKA, IN WHICH EVENT CONTINENTAL APPARENTLY WOULD NOT BE REQUIRED TO SUBCONTRACT FOR THE REFERENCED SERVICES.

HOWEVER, YOUR CLIENT BY LETTER DATED JANUARY 27, 1972, IN RESPONSE TO THE POSITION OF THE AIR FORCE STATES:

"ON NOVEMBER 10, 1970, ALLIED VAN LINES, INC. PETITIONED THE INTERSTATE COMMERCE COMMISSION FOR AN INTERPRETIVE ORDER. THE PETITION, ASSIGNED DOCKET NUMBER MC-C-7147, SOUGHT APPROVAL OF THE ARRANGEMENT WHEREIN AN ALLIED AGENT UTILIZED ALLIED'S AUTHORITY TO PERFORM PACKING AND CRATING CONTRACTS. THE MATTER WAS DISCONTINUED AT ALLIED'S REQUEST. SINCE THAT TIME, THE INTERSTATE COMMERCE COMMISSION BUREAU OF OPERATIONS HAS EXPRESSED A VIEW THAT THE 'USE' OF A PRINCIPAL'S OPERATING AUTHORITY BY AN AGENT WAS NOT PERMISSIBLE. FURTHER, THAT APPROPRIATE ICC OPERATING IN THE AGENT'S OWN NAME WAS REQUIRED TO HANDLE PACKING AND CRATING CONTRACTS.

IT IS CORRECT THAT ALLIED WITHDREW THE REFERENCED PETITION. HOWEVER, THE INFORMAL OPINION (NO. M-12789-70) OF THE ICC'S BUREAU OF OPERATIONS MENTIONED ABOVE PREDATED THE PETITION OF ALLIED, THE OPINION HAVING BEEN SIGNED ON OCTOBER 22, 1970. WHILE THE INFORMAL OPINION, FOLLOWING THE HOLDING IN KINGPAK, 103 M.C.C. 318, DID STATE THAT ICC OPERATING AUTHORITY WAS REQUIRED IN PACK AND CRATE CONTRACTS, AND THAT AN AGENT MUST HOLD SUCH AUTHORITY IN ITS OWN NAME, THERE DOES NOT APPEAR TO BE ANY FORMAL OPINION OF THE ICC WHICH WOULD HAVE THE EFFECT OF OVERRULING EVANSTON FIREPROOF WAREHOUSE-CONTROL-ALLIED VAN LINES, INC., 40 M.C.C. 557. THAT CASE HELD, AMONG OTHER THINGS, THAT CARRIERS TRANSFERRING THEIR LICENSES TO ALLIED WOULD NO LONGER BE "MOTOR CARRIERS" OF HOUSEHOLD GOODS, SINCE THEY WOULD HAVE NO OPERATING AUTHORITY, AND THAT ALLIED WOULD OWN THE SOLE OPERATING AUTHORITY. THEREFORE, THEY WOULD BE AGENTS OF ALLIED OPERATING UNDER ITS AUTHORITY.

SINCE IT WOULD APPEAR THAT CONTINENTAL ITSELF WILL PERFORM THE CONTRACT, AND WILL HAVE ALL OF THE OPERATING AUTHORITY REQUIRED OF IT AT THE TIME OF AWARD AND THROUGHOUT THE PERIOD OF CONTRACT PERFORMANCE, EITHER IN ITS OWN NAME OR AS AGENT OF ALLIED, WE ARE UNABLE TO AGREE WITH YOUR CONTENTION THAT CONTINENTAL MUST SPECIFY, PRIOR TO AWARD, A SINGLE OPERATING AUTHORITY UNDER WHICH THE CONTRACT WILL BE PERFORMED. IT IS THEREFORE OUR OPINION THAT CONTINENTAL MEETS THE REQUIREMENTS OF PARAGRAPH SC-21.

YOUR CLIENT ALSO ASSERTS:

" *** IF ALLIED WERE TO HAVE BID FOR THE CONTRACT, WE ASSUME THEIR BID WOULD HAVE BEEN REJECTED AS THEY WOULD NOT HAVE MET THE SMALL BUSINESS RESTRICTION OF THE SOLICITATION, AS ALLIED'S ANNUAL REVENUES EXCEED $100,000,000.00. OTHER BUSINESSES ARE PRECLUDED FROM PARTICIPATING IN THE CONTRACT IN QUESTION DUE TO THEIR AFFILIATION WITH AN OTHER THAN SMALL BUSINESS CONCERN.

"IF THE CONTRACT IS AWARDED TO CONTINENTAL WITH THE DEFINITE POSSIBILITY OF THE LOSS OF THEIR REQUIRED OPERATING AUTHORITY DURING THE CONTRACT PERIOD, AWARD WILL FOR ALL PRACTICAL PURPOSES BE MADE TO 'BIG BUSINESS'. WE FEEL THAT THE CONTRACT SHOULD BE AWARDED TO A SMALL BUSINESS CONCERN."

WE HAVE CONSISTENTLY HELD THAT A BIDDER, TO BE ELIGIBLE FOR AWARD OF A SMALL BUSINESS SET-ASIDE PROCUREMENT, IS REQUIRED TO HAVE CERTIFIED IN GOOD FAITH TO BE A SMALL BUSINESS CONCERN AT THE TIME OF BID OPENING AND TO BE A SMALL BUSINESS CONCERN AT THE TIME OF AWARD. 46 COMP. GEN. 898 (1967); B-173504, DECEMBER 29, 1971. THEREFORE, IF AWARD IS MADE TO CONTINENTAL, A SMALL BUSINESS CONCERN, PRIOR TO THE LICENSE TRANSFER, THE AWARD LIMITATIONS OF THE SMALL BUSINESS SET-ASIDE WILL HAVE BEEN MET.

CONSEQUENTLY, YOUR PROTEST ON BEHALF OF ALLIED VAN LINES MUST BE DENIED, AND WE ARE BY SEPARATE LETTER OF TODAY ADVISING THE SECRETARY OF THE AIR FORCE THAT AWARD MAY BE MADE TO CONTINENTAL IF IT IS OTHERWISE ENTITLED THERETO.