B-176814, MAR 9, 1973

B-176814, MAR 9, 1973

BID PROTEST - BID SUBMITTAL BY AFFILIATED FIRM - BIDDER RESPONSIBILITY DECISION AFFIRMING THE PRIOR DENIAL OF THE PROTEST OF BUILDING MAINTENANCE CORPORATION AGAINST AWARD OF A CONTRACT TO G & C CONSTRUCTION COMPANY UNDER AN IFB ISSUED BY THE NATIONAL INSTITUTES OF HEALTH, BETHESDA, MD. A BIDDER IS NOT DEEMED NONRESPONSIBLE MERELY DUE TO THE SUBMISSION OF A BID BY AN AFFILIATED COMPANY IN RESPONSE TO THE SAME IFB. 39 COMP. GEN. 892 (1960). IT HAS NOT BEEN SHOWN THAT THIS PRACTICE IN THIS CASE WAS EITHER IMPROPER, NOT IN GOOD FAITH, OR CONTRARY TO THE GOVERNMENT'S BEST INTERESTS.

TO BUILDING MAINTENANCE CORPORATION:

THIS IS IN REGARD TO YOUR LETTER OF NOVEMBER 30, 1972, IN WHICH YOU REQUEST RECONSIDERATION OF OUR DECISION B-176814, DATED NOVEMBER 16, 1972, WHEREIN WE DENIED YOUR PROTEST AGAINST AWARD OF A CONTRACT TO G & C CONSTRUCTION CORPORATION (G & C), WHICH YOU CONTENDED WAS A NONRESPONSIBLE BIDDER.

AS THE BASIS FOR THE EARLIER PROTEST, YOU POINTED OUT THE G & C WAS AFFILIATED WITH ROUBEN AND JANEIRO, INCORPORATED, AND CONTENDED THAT THE TWO CORPORATIONS HAD BEEN SUBMITTING "HIGH-LOW" BIDS ON GOVERNMENT CONTRACTS FOR THE PAST SEVERAL YEARS. WE FOUND, HOWEVER, THAT BASED ON THE RECORD BEFORE US THERE WAS NO REASON TO QUESTION THE ADMINISTRATIVE DETERMINATION THAT G & C HAD THE REQUISITE INTEGRITY TO QUALIFY FOR THE AWARD. WE POINTED OUT THAT G & C'S AFFILIATE HAD NOT SUBMITTED A BID. ADDITIONALLY, WE NOTED THAT "IT IS NOT UNUSUAL FOR BIDS TO BE SUBMITTED ON A SINGLE PROCUREMENT BY TWO OR MORE COMPANIES COMMONLY OWNED AND/OR CONTROLLED, CITING 39 COMP. GEN. 892 (1960).

HOWEVER, YOU CONTEND THAT "IT IS NOT IN THE BEST INTEREST OF THE GOVERNMENT TO CONDONE THIS TYPE OF PRACTICE". APPARENTLY, YOU ARE REFERRING TO THE A FORMENTIONED PRACTICE OF ALLOWING BIDS TO BE SUBMITTED ON A SINGLE PROCUREMENT BY TWO OR MORE COMPANIES COMMONLY OWNED AND/OR CONTROLLED.

IN A 1934 DECISION OF OUR OFFICE, 14 COMP. GEN. 168, IT WAS DETERMINED THAT NO BIDDER SHOULD BE PERMITTED THE ADVANTAGE OF DOUBLE BIDDING AND THAT BIDS SUBMITTED BY TWO CORPORATIONS, ONE OF WHICH WAS OWNED AND CONTROLLED BY THE OTHER, SHOULD NOT BE CONSIDERED IN THE MAKING OF A CONTRACT AWARD. THAT DECISION WAS MODIFIED BY DECISION 39 COMP. GEN. 892 (1960) IN WHICH IT WAS HELD THAT THE BIDS OF A CORPORATION AND AN AFFILIATED CONCERN SUBMITTED IN RESPONSE TO THE SAME INVITATION FOR BIDS WERE NOT REQUIRED TO BE REJECTED BECAUSE OF SUCH AFFILIATION. THE SUBJECT OF THE SUBMISSION OF SEPARATE BIDS BY AFFILIATED CONCERNS HAS BEEN CONSIDERED IN SEVERAL SUBSEQUENT DECISIONS OF OUR OFFICE, INCLUDING B- 166291, APRIL 16, 1969, AND IT MAY BE STATED THAT SINCE THE TIME OF RENDERING THE DECISION, 39 COMP. GEN. 892, IT HAS BEEN OUR POSITION THAT THE SUBMISSION OF SEPARATE BIDS BY AFFILIATED CONCERNS IS NOT PROHIBITED BY LAW. B-167725, OCTOBER 3, 1969; B-169165, APRIL 17, 1970. THEREFORE, THE MERE FACT OF AFFILIATION WOULD NOT RENDER BIDS RECEIVED FROM COMPANIES WITH THIS RELATIONSHIP ILLEGAL OR NONRESPONSIVE.

AS WE NOTED IN THE DECISION OF NOVEMBER 16, 1972, THE INTEGRITY OF A BIDDER IS PROPERLY FOR CONSIDERATION IN DETERMINING HIS RESPONSIBILITY. IN THIS CONNECTION, AS WE HAVE PREVIOUSLY STATED IN 39 COMP. GEN. 892, 894 (1960):

*** A CONTRACTING OFFICER WOULD BE JUSTIFIED IN REJECTING MORE THAN ONE BID SUBMITTED BY A PERSON, OR BY TWO OR MORE AFFILIATED COMPANIES, WHERE SUCH BIDDING WAS RESORTED TO FOR THE PURPOSE OF CIRCUMVENTING THE REQUIREMENTS OF A STATUTE ***; WHERE AN UNFAIR ADVANTAGE MAY BE GAINED IN CASES OF AN AWARD THROUGH THE DRAWING OF LOTS; OR IN ANY OTHER INSTANCE WHERE MULTIPLE BIDDING IS PREJUDICIAL EITHER TO THE UNITED STATES OR TO BIDDERS.

ADDITIONALLY, IN ORDER FOR A BIDDER TO WITHDRAW HIS BID, AND THUS PERHAPS ALLOW AN AFFILIATE TO RECEIVE AWARD AT A HIGHER BID PRICE, HE MUST SHOW, ON THE BASIS OF CLEAR AND CONVINCING EVIDENCE, THAT A MISTAKE IN BID WAS MADE. SEE PARAGRAPH 2-406.3(A)(1) OF THE ARMED SERVICES PROCUREMENT REGULATION; PARAGRAPH 1-2.406-3(A)(1) OF THE FEDERAL PROCUREMENT REGULATIONS; B-164910, OCTOBER 25, 1968.

YOU ALSO STATE THAT G&C DID NOT ACT IN GOOD FAITH WHEN IT CERTIFIED IN ITS BID THAT IT HAD NO AFFILIATES AND WAS NOT OWNED OR CONTROLLED BY A PARENT COMPANY.

THE CERTIFICATION TO WHICH YOU REFER RELATES ONLY TO WHETHER G&C IS OWNED OR CONTROLLED BY A PARENT COMPANY. G&C CERTIFIED THAT IT IS NOT. ALTHOUGH YOU HAVE ASSERTED THAT G&C HAS AFFILIATED WITH ANOTHER FIRM IN CONNECTION WITH SOME PROCUREMENTS, YOU HAVE PRESENTED NO EVIDENCE THAT ITS CERTIFICATION IN THE INSTANT PROCUREMENT WAS FALSE.

IN ACCORDANCE WITH THE FOREGOING, OUR DECISION OF NOVEMBER 16, 1972, IS AFFIRMED.