B-174886, APR 10, 1972

B-174886: Apr 10, 1972

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PROTESTANT CONTENDS THAT IT WAS DENIED ICC OPERATING AUTHORITY BECAUSE THE DEPARTMENT OF DEFENSE DID NOT STRONGLY SUPPORT ITS APPLICATION. THERE IS NO EVIDENCE TO INDICATE THAT THE SUPPORT GIVEN BY THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE WAS ANY LESS STRENUOUS THAN THAT GIVEN TO OTHER APPLICANTS UNDER SIMILAR CIRCUMSTANCES. SECURITY ALSO ALLEGES THAT THE AWARD TO LAWRENCE WAS IN VIOLATION OF SECTION C-26 OF THE IFB. IT IS THE OPINION OF THE COMP. THAT COMPLIANCE IN THIS REGARD IS FOR DETERMINATION BY THE CONTRACTING AGENCY AND THE COST OF LIVING COUNCIL AT THE TIME INVOICES ARE SUBMITTED FOR PAYMENT RATHER THAN PRIOR TO CONTRACT AWARD. THE PROTEST IS DENIED. DILLON AND SULLIVAN: FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF SECURITY STORAGE AND VAN LINES.

B-174886, APR 10, 1972

BID PROTEST - FAILURE TO SECURE ICC OPERATING AUTHORITY - ALLEGED NONCOMPLIANCE WITH PRICE STABILIZATION REQUIREMENTS OF SOLICITATION DECISION DENYING THE PROTEST OF SECURITY STORAGE AND VAN LINES, INC., AGAINST THE AWARD OF A CONTRACT TO LAWRENCE TRANSFER AND STORAGE COMPANY UNDER AN IFB ISSUED BY FORT LEE, VA. PROTESTANT CONTENDS THAT IT WAS DENIED ICC OPERATING AUTHORITY BECAUSE THE DEPARTMENT OF DEFENSE DID NOT STRONGLY SUPPORT ITS APPLICATION. HOWEVER, THERE IS NO EVIDENCE TO INDICATE THAT THE SUPPORT GIVEN BY THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE WAS ANY LESS STRENUOUS THAN THAT GIVEN TO OTHER APPLICANTS UNDER SIMILAR CIRCUMSTANCES. SECURITY ALSO ALLEGES THAT THE AWARD TO LAWRENCE WAS IN VIOLATION OF SECTION C-26 OF THE IFB, WHICH REQUIRES BIDDER COMPLIANCE WITH THE PRICE STABILIZATION PROVISIONS OF EXECUTIVE ORDER 11615. IT IS THE OPINION OF THE COMP. GEN. THAT COMPLIANCE IN THIS REGARD IS FOR DETERMINATION BY THE CONTRACTING AGENCY AND THE COST OF LIVING COUNCIL AT THE TIME INVOICES ARE SUBMITTED FOR PAYMENT RATHER THAN PRIOR TO CONTRACT AWARD. B-172664, NOVEMBER 11, 1971. IN VIEW OF THE FOREGOING, THE PROTEST IS DENIED.

TO TODD, DILLON AND SULLIVAN:

FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF SECURITY STORAGE AND VAN LINES, INC. (SECURITY) AGAINST THE AWARD OF A CONTRACT TO LAWRENCE TRANSFER AND STORAGE COMPANY (LAWRENCE) UNDER INVITATION FOR BIDS (IFB) NO. DABB27-72-B-0014, ISSUED ON OCTOBER 8, 1971, BY FORT LEE, VIRGINIA.

THE INSTANT SOLICITATION REQUESTED BIDS FOR THE PACKING AND CRATING OF HOUSEHOLD GOODS AND UNACCOMPANIED BAGGAGE BELONGING TO DEFENSE DEPARTMENT PERSONNEL AT FORT LEE AND CERTAIN COUNTIES OF SOUTHERN AND SOUTHWESTERN VIRGINIA FOR A 12 MONTH PERIOD BEGINNING JANUARY 1, 1972, AND ENDING DECEMBER 31, 1972. ONLY TWO BIDS WERE RECEIVED AND OPENED ON NOVEMBER 8, 1971, FOR ZONE IV, THE ONE UNDER PROTEST. SECURITY SUBMITTED THE LOWEST BID AND AWARD WAS TO BE MADE TO IT CONTINGENT UPON ITS ACQUIRING THE NECESSARY INTERSTATE COMMERCE COMMISSION (ICC) OPERATING-AUTHORITY IN ITS OWN NAME.

THE PROCUREMENT DIVISION AT FORT LEE, HAVING BEEN ADVISED BY YOUR FIRM ON DECEMBER 30, 1971, THAT YOUR CLIENT HAD BEEN DENIED ICC OPERATING AUTHORITY, AWARDED THE CONTRACT ON THAT DATE TO LAWRENCE, WHO WAS THE INCUMBENT CONTRACTOR AND THE ONLY OTHER BIDDER FOR ZONE IV.

YOU INDICATE THAT YOUR PROTEST IS PREDICATED IN PART UPON THE GROUND THAT:

" *** THE AWARD IS IN VIOLATION OF SECTION C26 OF THE SOLICITATION NOTICE WHICH REQUIRES THAT THE MAXIMUM LEVEL OF PRICES DOES NOT EXCEED THAT ESTABLISHED UNDER EXECUTIVE ORDER 11615 UNDER WHICH THE PRESIDENT OF THE UNITED STATES ESTABLISHED THE CURRENT PRICE FREEZE."

SECTION C-26 OF THE SOLICITATION PROVIDED:

"STABILIZATION OF PRICES, RENTS, WAGES AND SALARIES:

"(A) BY EXECUTIVE ORDER 11615 DATED AUGUST 15, 1971, THE PRESIDENT STABILIZED PRICES, RENTS, WAGES AND SALARIES. THE CONTRACTOR REPRESENTS THAT TO THE BEST OF HIS KNOWLEDGE AND BELIEF HE IS IN COMPLETE COMPLIANCE WITH EXECUTIVE ORDER 11615. FURTHER, THE CONTRACTOR WARRANTS THAT THE AMOUNTS INVOICED UNDER THIS CONTRACT WILL NOT EXCEED THE LOWER OF (1) THE CONTRACT PRICE, OR (2) THE MAXIMUM LEVELS ESTABLISHED IN ACCORDANCE WITH THE ORDER.

"(B) THE CONTRACTOR AGREES TO INSERT THE SUBSTANCE OF THIS CLAUSE INCLUDING THIS PARAGRAPH (B) IN ALL SUBCONTRACTS FOR SUPPLIES OR SERVICES ISSUED UNDER THIS CONTRACT."

YOU URGE THAT LAWRENCE WAS IN VIOLATION OF THE QUOTED SECTION BECAUSE ITS PRICES UNDER THE CONTESTED PROCUREMENT AVERAGED 53.4 PERCENT OVER THE PRICES IN ITS 1971 CONTRACT, WHICH IS WELL OVER THE PRICE FREEZE GOAL OF 2 1/2 PERCENT.

THE REFERENCED EXECUTIVE ORDER PROVIDES, AMONG OTHER THINGS, IN SECTION 1 THAT PRICES, RENTS, WAGES, AND SALARIES SHALL BE ESTABLISHED FOR A PERIOD OF 90 DAYS FROM THE DATE THEREOF AT LEVELS NOT GREATER THAN THE HIGHEST OF THOSE PERTAINING TO A SUBSTANTIAL VOLUME OF ACTUAL TRANSACTIONS FOR LIKE OR SIMILAR GOODS OR SERVICES.

IN IMPLEMENTATION OF THE ORDER THE ASSISTANT SECRETARY OF DEFENSE (INSTALLATIONS AND LOGISTICS) ISSUED DEFENSE PROCUREMENT CIRCULAR (DPC) NO. 91, AUGUST 20, 1971, REQUIRING PROCURING ACTIVITIES TO INSERT THE SECTION C-26 CLAUSE QUOTED ABOVE IN SOLICITATIONS AND RESULTING CONTRACTS. THE CIRCULAR ALSO PROVIDES THAT, PRIOR TO THE PAYMENT OF INVOICES UNDER EACH CONTRACT, THE CONTRACTOR MUST CERTIFY THAT THE AMOUNTS INVOICED DO NOT EXCEED THE LOWER OF (1) THE CONTRACT PRICE, OR (2) MAXIMUM LEVELS ESTABLISHED IN ACCORDANCE WITH THE ORDER. CONTRACT ADMINISTRATION OFFICES ARE REQUIRED TO FURNISH A COPY OF THE CIRCULAR TO EACH CONTRACTOR, AND INVOICES ARE NOT TO BE PAID UNLESS PROPERLY CERTIFIED. WHETHER THE CONTRACTOR IS IN COMPLIANCE WITH THE PROVISIONS OF EXECUTIVE ORDER 11615 AND THE IMPLEMENTING DPC NO. 91 THEREFORE APPEARS TO BE FOR DETERMINATION BY THE CONTRACTING AGENCY AND THE COST OF LIVING COUNCIL AT THE TIME INVOICES ARE SUBMITTED FOR PAYMENT, RATHER THAN AT THE TIME A BID PRICE IS SUBMITTED AND A CONTRACT IS AWARDED. B-172664, NOVEMBER 11, 1971.

REGULATIONS HAVE BEEN ISSUED (6 CODE OF FEDERAL REGULATIONS (CFR) 101.1, ET SEQ.) SETTING FORTH THE GUIDELINES TO BE FOLLOWED IN PRICE AND WAGE MATTERS. THEREFORE, SHOULD YOU CONTINUE TO BE OF THE VIEW THAT INVOICES SUBMITTED BY LAWRENCE ARE IN VIOLATION OF THE WAGE-PRICE FREEZE, YOU MAY REPORT THE ALLEGED VIOLATION TO THE INTERNAL REVENUE SERVICE. SEE 6 CFR 300.516.

YOU ALSO PROTEST ON THE GROUND THAT THE APPLICATION OF SECURITY FOR EMERGENCY TEMPORARY ICC OPERATING AUTHORITY WAS DENIED BECAUSE THE DEPARTMENT OF DEFENSE DID NOT STRONGLY SUPPORT ITS APPLICATION.

UNDER ARMY REGULATION 55-355, CHAPTER 105, PARAGRAPH 105001 (9-15 69), THE COMMANDER OF THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE (MTMTS) IS GIVEN WIDE DISCRETION IN DETERMINING THE COURSE OF ACTION TO BE TAKEN BY THE DEPARTMENT OF DEFENSE IN PROCEEDINGS BEFORE THE ICC INVOLVING CARRIERS' OPERATING AUTHORITY. WE ARE SATISFIED FROM THE RECORD THAT THE TRANSPORTATION DIVISION AT FORT LEE SUBMITTED TO MTMTS ALL OF THE DATA REQUIRED UNDER THE CIRCUMSTANCES TO ENABLE MTMTS, THROUGH THE OFFICE OF THE JUDGE ADVOCATE GENERAL, TO FILE THE SUPPORTING STATEMENT IN SUPPORT OF SECURITY'S APPLICATION FOR ICC OPERATING AUTHORITY. IN THIS CONNECTION, THERE IS NO EVIDENCE THAT THE SUPPORT GIVEN THE APPLICATION OF SECURITY BY MTMTS WAS ANY LESS STRENUOUS THAN THAT GIVEN OTHER APPLICANTS UNDER SIMILAR CIRCUMSTANCES.

THE RECORD ALSO REFLECTS THAT THE ORIGINAL SUSPENSE DATE OF DECEMBER 3, 1971, WHICH WAS SET FOR SECURITY TO ACQUIRE THE APPROPRIATE AUTHORITY, WAS EXTENDED UNTIL DECEMBER 30, 1971, SOME TWO DAYS BEFORE CONTRACT COMMENCEMENT. WHILE IT IS REGRETTABLE THAT YOUR CLIENT AS LOW BIDDER DID NOT MEET ALL OF THE MINIMUM STANDARDS REQUIRED FOR AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY, WE CAN SEE NO VALID BASIS TO CONCLUDE IN THE INSTANT CASE THAT THE DEPARTMENT SHOULD HAVE TAKEN MORE VIGOROUS ACTION IN SECURITY'S BEHALF BEFORE THE ICC, IT HAVING DONE AS MUCH FOR SECURITY IN THIS INSTANCE AS IT ORDINARILY DOES ON BEHALF OF ANY OTHER BIDDER ON INITIAL APPLICATIONS BEFORE THE ICC.

UNDER THESE CIRCUMSTANCES THERE IS NO LEGAL BASIS TO OBJECT TO THE AWARD AS MADE TO LAWRENCE, AND YOUR PROTEST ON BEHALF OF SECURITY IS THEREFORE DENIED.