B-182552, JAN 28, 1975

B-182552: Jan 28, 1975

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AGREEMENT IS NOT INCORPORATED INTO INVITATION BUT RATHER IS MADE A BASIS FOR SETOFF FOR NONPAYMENT DURING CONTRACT PERFORMANCE. PROCURING ACTIVITY IS UNDER NO LEGAL OBLIGATION TO REQUIRE THAT ALL DUMPING FEES BE PAID PRIOR TO AWARD. 2. QUESTION CONCERNING SUCCESSFUL CONTRACTOR'S PERFORMANCE ON ANOTHER CONTRACT WHICH WAS NOT BROUGHT TO GAO'S ATTENTION UNTIL MORE THAN A MONTH AFTER INITIAL PROTEST IS UNTIMELY. OR AS SOON THEREAFTER AS AWARD WAS MADE THROUGH SEPTEMBER 30. ORIGINALLY THE BID OPENING WAS SCHEDULED FOR SEPTEMBER 25. WAS SUBSEQUENTLY CHANGED TO OCTOBER 15. EIGHT BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION AND AWARD WAS MADE ON THE SAME DAY TO THE LOW BIDDER. THE BASIS OF SQUARE DEAL'S PROTEST IS THAT SHAYNE BROTHERS WAS AN INELIGIBLE BIDDER BECAUSE ANOTHER SUBSIDIARY OF SCA.

B-182552, JAN 28, 1975

1. WHERE BIDDERS AND PROCURING ACTIVITY REACH AGREEMENT DURING PREBID CONFERENCE THAT ALL DUMPING FEES MUST BE PAID BEFORE AWARD, BUT AGREEMENT IS NOT INCORPORATED INTO INVITATION BUT RATHER IS MADE A BASIS FOR SETOFF FOR NONPAYMENT DURING CONTRACT PERFORMANCE, PROCURING ACTIVITY IS UNDER NO LEGAL OBLIGATION TO REQUIRE THAT ALL DUMPING FEES BE PAID PRIOR TO AWARD. 2. QUESTION CONCERNING SUCCESSFUL CONTRACTOR'S PERFORMANCE ON ANOTHER CONTRACT WHICH WAS NOT BROUGHT TO GAO'S ATTENTION UNTIL MORE THAN A MONTH AFTER INITIAL PROTEST IS UNTIMELY.

SQUARE DEAL TRUCKING CO., INC.:

ON SEPTEMBER 11, 1974, THE GOVERNMENT OF THE DISTRICT OF COLUMBIA, DEPARTMENT OF GENERAL SERVICES, BUREAU OF MATERIEL MANAGEMENT, ISSUED INVITATION NO. 0167-AA-23-0-5-RS FOR TRASH COLLECTION AND DISPOSAL SERVICES FOR NCHA AND DISTRICT AGENCIES FOR THE PERIOD OCTOBER 1, 1974, OR AS SOON THEREAFTER AS AWARD WAS MADE THROUGH SEPTEMBER 30, 1975. ORIGINALLY THE BID OPENING WAS SCHEDULED FOR SEPTEMBER 25, 1974, BUT WAS SUBSEQUENTLY CHANGED TO OCTOBER 15, 1974. EIGHT BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION AND AWARD WAS MADE ON THE SAME DAY TO THE LOW BIDDER, SHAYNE BROTHERS, INC., A SUBSIDIARY OF SCA SERVICES, INC. (SCA).

BY LETTER OF OCTOBER 21, 1974, TO THE DEPARTMENT OF ENVIRONMENTAL SERVICES, SQUARE DEAL TRUCKING CO., INC. (SQUARE DEAL), PROTESTED THE AWARD TO SHAYNE BROTHERS. BY LETTER OF OCTOBER 25, 1974, COUNSEL FOR SQUARE DEAL LODGED A PROTEST WITH THIS OFFICE. THE BASIS OF SQUARE DEAL'S PROTEST IS THAT SHAYNE BROTHERS WAS AN INELIGIBLE BIDDER BECAUSE ANOTHER SUBSIDIARY OF SCA, CONRAD'S, WAS IN DEFAULT IN ITS PAYMENT OF DISTRICT DUMPING FEES AND UNDER THE TERMS OF THE INVITATION THIS DEFAULT MADE SHAYNE BROTHERS INELIGIBLE FOR AN AWARD.

WHILE WE FIND NO PROVISION IN THE INVITATION OR CONTRACT DOCUMENTS THAT WOULD PROHIBIT THE DISTRICT FROM AWARDING A CONTRACT TO A BIDDER WHO IS IN DEFAULT IN PAYMENT OF DISTRICT DUMPING FEES, THE RECORD INDICATES THAT THE QUESTION OF DUMPING FEES WAS DISCUSSED DURING A PREBID CONFERENCE HELD ON SEPTEMBER 30, 1974. ACCORDING TO THE MINUTES OF THAT MEETING, IT WAS AGREED BY ALL OF THE ATTENDEES THAT PREVIOUS DUMPING FEES MUST BE PAID PRIOR TO AWARD. HOWEVER, THIS AGREEMENT WAS NOT INCORPORATED INTO THE INVITATION AS A PREREQUISITE FOR CONTRACT AWARD. THE ONLY REFERENCE TO PAYMENT OF DUMPING FEES WAS ADDED TO THE INVITATION BY ADDENDUM NO. 4, DATED OCTOBER 4, 1974, WHICH STATES:

"D. CONTRACTORS PROVIDING SERVICE UNDER THIS CONTRACT WHO FAIL TO PAY THEIR BILLED DUMPING FEES WITHIN SIXTY (60) DAYS FROM THE DATE OF BILLING BY THE DISTRICT OF COLUMBIA GOVERNMENT, WILL BE CAUSE FOR THE DEPARTMENT OF ENVIRONMENTAL SERVICES TO WITHHOLD FROM THE CONTRACTOR ON HIS MONTHLY PAYMENT FOR SERVICES UNDER THIS CONTRACT, THE AMOUNT EQUAL TO THE DELINQUENT PAYMENT OF DUMPING FEES OWED BY THE CONTRACTOR."

WE KNOW OF NO REASON WHY THE PROCURING ACTIVITY WOULD BE UNDER A LEGAL OBLIGATION TO INCORPORATE THE PREBID CONFERENCE AGREEMENT INTO THE INVITATION. IN THIS REGARD, THE COMPLAINT BY COUNSEL FOR SQUARE DEAL, IN HIS LETTER OF DECEMBER 5, 1974, THAT THE AGREEMENT WAS NOT INCORPORATED INTO THE INVITATION IS A MATTER WHICH, UNDER OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS (SEE 4 C.F.R. SEC. 20.2 (1974); ALSO, SEE 2620.16 J2 OF THE DISTRICT OF COLUMBIA MATERIEL MANAGEMENT MANUAL), SHOULD HAVE BEEN RAISED PRIOR TO BID OPENING AND IS, THEREFORE, UNTIMELY. THERE WAS NO PROVISION IN THE INVITATION PROHIBITING AWARD TO A CONTRACTOR WHO OWED DUMPING FEES. RATHER, PROVISION WAS MADE FOR SETTING OFF SUCH UNPAID FEES AGAINST PAYMENTS BECOMING DUE UNDER THE CONTRACT. IN THE CIRCUMSTANCES, WE FIND NO BASIS TO CONCLUDE THAT THE EXISTENCE OF THE UNPAID FEES PRECLUDED AWARD.

IN ADDITION TO THE PROVISION COVERING PAYMENT OF DUMPING FEES, QUOTED ABOVE, PARAGRAPH 22, ON PAGE 15, OF THE INVITATION PROVIDED AS FOLLOWS:

"22. RECOVERY OF DEBTS OWED THE DISTRICT

THE BIDDER HEREBY AGREES THAT THE DISTRICT OF COLUMBIA MAY USE ALL OR ANY PORTION OF ANY CONSIDERATION OR REFUND DUE HIM UNDER THE PRESENT CONTRACT TO SATISFY IN WHOLE OR PART, ANY DEBT ARISING OUT OF A PRIOR TRANSACTION."

THUS, IT WOULD APPEAR THAT THE PROCURING ACTIVITY HAS AMPLE MEANS TO COLLECT ITS DUMPING FEES.

IN ADDITION TO THE ALLEGATION CONCERNING THE DUMPING FEES, OTHER GROUNDS FOR SQUARE DEAL'S PROTEST WERE BROUGHT TO OUR ATTENTION BY THE ADMINISTRATIVE REPORT FURNISHED THIS OFFICE UNDER COVER LETTER DATED NOVEMBER 25, 1974. THE REPORT INCLUDED A LETTER DATED OCTOBER 30, 1974, ADDRESSED TO THE MAYOR OF THE DISTRICT OF COLUMBIA, WHEREIN SQUARE DEAL STATES THAT SUBSEQUENT TO BID OPENING IT INFORMED THE BUREAU OF MATERIEL MANAGEMENT (HEREAFTER THE BUREAU) THAT, IN ITS (SQUARE DEAL'S) OPINION, SHAYNE BROTHERS WAS NOT A QUALIFIED, RESPONSIBLE BIDDER BECAUSE OF ITS PERFORMANCE RECORD ON A RECENT MONTGOMERY COUNTY SCHOOL CONTRACT AND BECAUSE IT HAD FAILED TO PAY DUMPING FEES DUE FROM A SUBSIDIARY COMPANY (WHICH IN ACTUALITY WAS NOT A SUBSIDIARY OF SHAYNE BROTHERS, BUT SCA). SQUARE DEAL WENT ON TO STATE THAT THE BUREAU IMMEDIATELY MADE AWARD TO SHAYNE BROTHERS IN ORDER TO MAKE INEFFECTUAL THEIR PROTEST, WHICH WAS FILED ON THE FOLLOWING BUSINESS DAY, OCTOBER 21, 1974. WE ASSUME FROM THE LATTER STATEMENT THAT THE DISCUSSION WITH THE BUREAU WAS ON FRIDAY, OCTOBER 18.

FIRST OF ALL, IT SHOULD BE POINTED OUT THAT WHILE THE QUESTION OF THE DUMPING FEES WAS BROUGHT TO OUR ATTENTION IN SQUARE DEAL'S OCTOBER 21 LETTER, A COPY OF WHICH WAS FURNISHED THIS OFFICE, NO MENTION WAS MADE OF SHAYNE BROTHER'S PERFORMANCE ON THE MONTGOMERY COUNTY SCHOOL CONTRACT. THE FIRST TIME THAT THE LATTER POINT WAS BROUGHT DIRECTLY TO OUR ATTENTION WAS IN A LETTER DATED DECEMBER 5, 1974, FROM COUNSEL FOR SQUARE DEAL. THUS, IT WOULD APPEAR THAT THIS ASPECT OF SQUARE DEAL'S PROTEST IS ALSO UNTIMELY. SEE 4 C.F.R. SEC. 20.2 (1974) AND SECTION 2620.16 J2 OF THE DISTRICT OF COLUMBIA MATERIEL MANAGEMENT MANUAL.

REGARDING THE QUESTION OF WHETHER THE PROCURING ACTIVITY DID, IN FACT, MAKE THE AWARD IMMEDIATELY IN ORDER TO RENDER INEFFECTUAL ANY PROTEST THAT SQUARE DEAL MIGHT LODGE, SECTION 2620.16 J4(A) OF THE ABOVE MANUAL REQUIRES THAT:

"A. WHEN NOTICE IS GIVEN THE BUREAU OF MATERIEL MANAGEMENT THAT A PROTEST HAS BEEN FILED WITH THE GENERAL ACCOUNTING OFFICE, AWARD SHALL NOT BE MADE PRIOR TO A RULING ON THE PROTEST BY THE COMPTROLLER GENERAL, UNLESS THERE HAS FIRST BEEN FURNISHED TO THE GENERAL ACCOUNTING OFFICE A WRITTEN FINDING BY THE MATERIEL MANAGEMENT OFFICER, D.C. HIS DEPUTY, (OR EQUIVALENT), SPECIFYING THE FACTORS WHICH WILL NOT PERMIT A DELAY IN THE AWARD UNTIL ISSUANCE OF A RULING BY THE COMPTROLLER GENERAL."

HOWEVER, THE RECORD IN THE PRESENT CASE INDICATES THAT AWARD WAS MADE ON OCTOBER 15, SOME 3 DAYS PRIOR TO SQUARE DEAL'S DISCUSSION WITH THE BUREAU. THUS, IT WOULD APPEAR THAT AT THE TIME OF THE AWARD THE BUREAU DID NOT KNOW OF SQUARE DEAL'S PROTEST AND WAS UNDER NO OBLIGATION TO WITHHOLD THE AWARD FROM SHAYNE BROTHERS.

FOR THE ABOVE REASONS, SQUARE DEAL'S PROTEST IS DENIED.