B-106547, NOV 28, 1951

B-106547, NOV 28, 1951

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 14, 1951, FROM LIEUTENANT COLONEL S.N. BLACK, USAF, ACTING EXECUTIVE OFFICE, DIRECTOR OF FINANCE, FORWARDING A LETTER DATED NOVEMBER 1, 1951, WITH ENCLOSURES, FROM THE CONTRACTING OFFICER AT OKLAHOMA CITY AIR MATERIEL AREA, TINKER AIR FORCE BASE, OKLAHOMA CITY, OKLAHOMA, REQUESTING AN ADVANCE DECISION ON CERTAIN QUESTIONS HEREINAFTER STATED WHICH AROSE AS A RESULT OF THE SOLICITATION OF BIDS FOR THE SALE OF SCRAP MATERIAL.

THE LETTER DATED NOVEMBER 14, 1951, STATES THAT AN URGENT CALL HAD BEEN RECEIVED FROM THE NATIONAL PRODUCTION AUTHORITY REQUESTING AN IMMEDIATE DECISION IN THIS CASE BECAUSE OF THE NEED FOR THE ALUMINUM SCRAP IN CONNECTION WITH THE NATIONAL DEFENSE PROGRAM. ALSO, REQUEST IS MADE THAT THE DECISION WHEN RENDERED AND THE FILE ENCLOSED WITH THE LETTER FROM THE CONTRACTING OFFICER BE FORWARDED DIRECT TO THE CONTRACTING OFFICER AT THE BASE.

THE CONTRACTING OFFICER IS NOT ENTITLED TO A DECISION. 26 COMP. GEN. 993. HOWEVER, IN VIEW OF THE NEED FOR PROMPT ACTION THIS DECISION IS BEING ADDRESSED TO YOU.

IT APPEARS THAT BY INVITATION NO. 34-601-S-52-8, THE CONTRACTING OFFICER, TINKER AIR FORCE BASE, OKLAHOMA CITY, OKLAHOMA, REQUESTED BIDS FOR THE PURCHASE FROM THE UNITED STATES OF AN ESTIMATED QUANTITY OF 500,000 POUNDS OF WRECKED AIRCRAFT OR IRONY ALUMINUM SCRAP, BIDS TO BE OPENED AT 1:00 P.M. CST, OCTOBER 24, 1951. PROSPECTIVE BIDDERS WERE ADVISED IN THE SCHEDULE OF PROPERTY TO BE SOLD THAT IN COMPLIANCE WITH THE PROVISIONS OF CEILING PRICE REGULATION 54 AND AMENDMENT I, DATED OCTOBER 2, 1951, THEY WOULD SUBMIT BIDS IN ONE ONLY OF FOUR CATEGORIES SPECIFIED DEPENDING UPON THE ALUMINUM ALLOY RECOVERY, AND THAT BIDS WOULD BE COMPUTED AS SPECIFIED. NOTICE TO BIDDERS ALSO ATTACHED TO THE INVITATION WHICH EACH BIDDER WAS REQUIRED TO SIGN CONTAINED, AMONG OTHERS, PROVISIONS AS FOLLOWS:

"THE PURCHASER WARRANTS THAT HE IS A DEALER IN ALUMINUM SCRAP WITHIN THE MEANING OF NATIONAL PRODUCTION AUTHORITY ORDER M-22 OR OTHER NPA AUTHORITY.

"BIDDER REPRESENTS THAT HE IS NOT ACTING AS AN AGENT FOR ANYONE ELSE WHO IS ALSO SUBMITTING A BID ON THE SAME LOT OF PROPERTY NOR THAT HE HAS ARRANGED FOR ANOTHER PARTY TO SUBMIT AN ADDITIONAL BID WHICH IS ACTUALLY, THOUGH NOT OPENLY, ON HIS (THE BIDDER'S) BEHALF."

IT IS STATED IN THE LETTER FROM THE CONTRACTING OFFICER THAT OF THE 30 BIDS RECEIVED, 26 WERE COMPUTED IN ACCORDANCE WITH THE INVITATION AND THAT "FOUR BIDDERS UTILIZED AN 'AMOUNT BID PER POUND' UNIT PRICE WHICH REFLECTED CERTAIN ADJUSTMENTS OF THE CEILING PRICE PROVIDED BY CEILING PRICE REGULATION NO. 54, AS AMENDED." IT IS STATED FURTHER THAT AT THE TIME THE BIDS WERE OPENED SEVERAL BIDDERS PRESENTED ORAL PROTESTS AGAINST CONSIDERATION OF THE BIDS WHICH WERE NOT COMPUTED IN ACCORDANCE WITH THE INVITATION AND THAT ORAL PROTESTS WERE RECEIVED FROM BIDDERS WHO ALLEGED THAT THREE OF THE BIDDERS SUBMITTED MULTIPLE BIDS. IN ADDITION, TWO BIDS WERE RECEIVED WITH BID DEPOSITS IN AMOUNTS LESS THAN 20 PERCENT, AND FOUR BIDS RECEIVED WERE CONSIDERED NON RESPONSIVE BECAUSE NEITHER WAS ACCOMPANIED BY THE REQUIRED BID DEPOSIT. HOWEVER, IT WAS STATED THAT "SIMILARITY OF BID FORM PREPARATION GIVES RISE TO BELIEF THAT THEY MAY HAVE BEEN SUBMITTED BY THE SAME PERSON OR FIRM. ***"

IT IS STATED THAT SIX OF THE BIDS RECEIVED WERE ACCOMPANIED BY THE REQUIRED BID DEPOSIT AND WERE CONSIDERED RESPONSIVE BUT THAT IT IS BELIEVED "THAT ONE OR MORE OF THE BIDS MAY REPRESENT MULTIPLE BIDS BY A SINGLE BIDDER: ***" ALSO, IT IS STATED THAT THE BID OF THE OKLAHOMA RUBBER & METAL CO., OKLAHOMA CITY, OKLAHOMA, WAS RECEIVED AT 10:00 A.M. CST, OCTOBER 25, 1951, TOO LATE TO BE CONSIDERED AND THAT SAID BID WAS RETURNED TO THE BIDDER UNOPENED; THAT POST OFFICE CANCELLATION SHOWS THAT THE LETTER WAS POSTMARKED AT 3:30 P.M., CST, OCTOBER 24, 1951; AND THAT THE BIDDER HAS PRESENTED A STATEMENT FROM THE ASSISTANT POSTMASTER, OKLAHOMA CITY, OKLAHOMA, STATING THAT IT IS HIS OPINION THAT THE BID WAS INADVERTENTLY DELAYED IN THE OKLAHOMA CITY POST OFFICE FOR ONE DAY. ADVANCE DECISION IS REQUESTED ON THE FOLLOWING QUESTIONS:

"A. ARE BIDS CONTAINING UNIT AND TOTAL BID PRICES COMPUTED IN A MANNER OTHER THAN THAT PRESCRIBED IN THE INVITATION ACCEPTABLE?

"B. WHAT ACTION SHOULD BE TAKEN REGARDING PROTEST FILED BY OKLAHOMA RUBBER & METAL COMPANY ALLEGING MULTIPLE BIDS BY FIRMS CITED IN PROTEST?

"C. WHAT ACTION IS RECOMMENDED IN CONNECTION WITH SUSPECTED MULTIPLE BIDS ON WHICH FORMAL WRITTEN PROTESTS WERE NOT RECEIVED?

"D. WHAT ACTION SHOULD BE TAKEN IN CONNECTION WITH THE LATE BID SUBMITTED BY OKLAHOMA RUBBER & METAL COMPANY?"

THE QUESTIONS PRESENTED BY THE CONTRACTING OFFICER WILL BE ANSWERED IN THE ORDER IN WHICH THEY APPEAR ABOVE.

A. THE SCHEDULE OF PROPERTY TO BE SOLD SPECIFIED FOUR CATEGORIES EACH OF WHICH GAVE THE OPS CEILING PRICE PER POUND BASED ON THE ALUMINUM ALLOY RECOVERY F.O.B. SHIPPING POINT. FOR INSTANCE, FOR AN ALUMINUM ALLOY RECOVERY OF AT LEAST 85 PERCENT THE OPS CEILING PRICE WAS STATED AS $.0875 PER POUND, FOR AN ALUMINUM ALLOY RECOVERY OF AT LEAST 70 PERCENT BUT LESS THAN 85 PERCENT THE OPS CEILING PRICE WAS STATED AS $.0850 PER POUND, FOR AN ALUMINUM ALLOY RECOVERY OF AT LEAST 50 PERCENT BUT LESS THAN 70 PERCENT THE OPS CEILING PRICE WAS STATED AS $.080 PER POUND, AND FOR AN ALUMINUM ALLOY RECOVERY OF AT LEAST 40 PERCENT BUT LESS THAN 50 PERCENT THE OPS CEILING PRICE WAS STATED AS $.0725 PER POUND. BIDDERS WERE REQUIRED TO MULTIPLY THE PRICE BID BY THE PERCENTAGE OF ALUMINUM RECOVERY ESTIMATED BY THE BUYER TIMES THE TOTAL ESTIMATED QUANTITY OF 500,000 POUNDS ADVERTISED FOR SALE. THE FOUR BIDDERS REFERRED TO BY THE CONTRACTING OFFICER AS HAVING FAILED TO COMPUTE THEIR BIDS IN STRICT ACCORDANCE WITH THE FORMULA SPECIFIED MULTIPLIED THE OPS CEILING PRICE BY THE BIDDERS' ESTIMATED PERCENTAGE OF RECOVERY AND THEN MULTIPLIED THE PRODUCT BY THE TOTAL QUANTITY ADVERTISED IN ORDER TO OBTAIN THE TOTAL AMOUNT BID. IN OTHER WORDS, INSTEAD OF QUOTING THE CEILING PRICE FOR THE CATEGORY, THE FOUR BIDDERS QUOTED A LESSER PRICE REPRESENTING 85 PERCENT OF THE SPECIFIED CEILING PRICE. THIS METHOD OF COMPUTING THE PRICE BID RESULTED IN THE SAME TOTAL AMOUNT BID AS WOULD HAVE BEEN THE CASE HAD THE BIDDERS FOLLOWED THE PRESCRIBED FORMULA. THEREFORE, THE ONLY DEVIATION FROM THE PRESCRIBED FORMULA WAS IN STATING THE UNIT PRICE QUOTED BY THESE BIDDERS. IF THE BIDS ARE OTHERWISE PROPER FOR CONSIDERATION AND IF THE BIDDERS SHOULD CONSENT IN WRITING BEFORE AWARD TO SUBSTITUTE THE APPLICABLE CEILING PRICE FOR THE LESSER PRICE QUOTED, THE SAID BIDS AS CHANGED MAY BE CONSIDERED ALONG WITH THE OTHER BIDS FOR THE PURPOSE OF MAKING AWARD.

B. THE PROTEST FILED BY THE OKLAHOMA RUBBER & METAL COMPANY ALLEGED MULTIPLE BIDDING BY THREE BIDDERS ALL LOCATED IN TULSA, OKLAHOMA. IT WAS STATED IN THE LETTER OF PROTEST THAT:

"I REFER TO BIDDERS AS FOLLOWS:

"STANDARD ALUMINUM CORPORATION, TULSA, OKLA.

STANDARD MAGNESIUM CORP. TULSA, OKLA.

PIPE LINE MAINTENANCE CO. TULSA, OKLA.

"THESE FIRMS HAVE NO DIVISION OF RECORDS, SAME PERSONNEL AND OWNERS ARE OFFICERS OF THE COMPANIES, ONE AND SAME COMPANY LOCATED SAME YARD, ALL MATERIAL ARE PURCHASED FOR EACH OTHERS BENEFIT AND IT IS COMMON KNOWLEDGE AMONGST THE TRADE THAT THESE THREE COMPANIES WORK IN CONJUNCTION WITH EACH OTHER.

"BELIEVE IT IS UNFAIR THAT THREE COMPANIES BID WHEN IN REALITY ONE IS SUFFICIENT. THEY HAVE THREE CHANCES AGAINST MY ONE IS THE REASON TWO OF THEIR FIRMS SHOULD BE ELIMINATED FROM THE LIST OF BIDDERS."

A CAREFUL EXAMINATION OF THE BIDS IN QUESTION REVEALS THAT THE STANDARD ALUMINUM COMPANY (NOT CORPORATION) GAVE ITS ADDRESS AS 322 SOUTH 25TH WEST AVENUE, TULSA, OKLAHOMA. THE BID WAS SIGNED ON BEHALF OF THE COMPANY BY JOSEPH LOWELL, PRESIDENT. THE BID OF THE STANDARD MAGNESIUM CORPORATION WAS SIGNED ON BEHALF OF THE CORPORATION BY RICHARD L. MARTIN, VICE- PRESIDENT. THE ADDRESS GIVEN IS POST OFFICE BOX 1424, TULSA, OKLAHOMA. THE BID OF THE PIPELINE MAINTENANCE COMPANY WAS SIGNED ON BEHALF OF THE COMPANY BY ITS PRESIDENT, ROGER M. WHEELER, AND THE ADDRESS GIVEN IS 320 SOUTH 25TH WEST AVENUE, TULSA, OKLAHOMA. NO EVIDENCE WAS PRESENTED IN SUPPORT OF THE PROTEST. ON THE CONTRARY, ALL THREE BIDDERS HAVE CONTENDED IN WRITING THAT THEIR STATEMENTS WERE CORRECT.

THE ESTABLISHED RULE IS THAT TWO OR MORE CORPORATIONS ARE SEPARATE AND DISTINCT ENTITIES AND ARE TO BE REGARDED AS SUCH, ALTHOUGH THE SAME INDIVIDUALS ARE THE INCORPORATORS OF, OR OWN STOCK IN, THE SEVERAL CORPORATIONS, AND EVEN THOUGH SUCH CORPORATIONS MAY HAVE THE SAME OFFICERS, UNLESS IT CAN BE SHOWN BY APPROPRIATE EVIDENCE THAT RECOGNITION OF THE SEPARATE CORPORATE ENTITIES WILL PROMOTE FRAUD, WRONG OR INJUSTICE, OR WILL CONTRAVENE PUBLIC POLICY. 18 C.J.S. 374, 385; 13 AM. JUR. 160, AND THE NUMEROUS CASES THERE CITED. ACCORDINGLY, UNLESS FURTHER INFORMATION IS DEVELOPED SHOWING THAT THE STATEMENTS MADE IN ACCORDANCE WITH THE BID REQUIREMENT ARE INCORRECT OR THAT THEY WERE SUBMITTED FOR THE PURPOSE OF DECEIVING THE GOVERNMENT ALL THREE BIDS SHOULD BE CONSIDERED FOR THE PURPOSE OF MAKING AWARD.

C. A CAREFUL EXAMINATION OF THE BIDS INVOLVED DOES NOT REVEAL ANY EVIDENCE OF MULTIPLE BIDDING. WHILE THE CAPITAL SMELTING AND REFINING COMPANY AND THE CAPITAL COMPRESSED STEEL COMPANY ON THE ONE HAND AND B. LEFTON & SONS AND LEFTON INDUSTRIAL CORPORATION ON THE OTHER HAND GAVE THE SAME ADDRESSES, NO TWO OF THESE BIDS WERE SIGNED BY THE SAME OFFICIAL. THIS OFFICE, OF COURSE, HAS NO FIRST-HAND KNOWLEDGE AS TO WHETHER THERE WAS MULTIPLE BIDDING IN THESE CASES. THERE IS NOTHING TO SHOW THAT THE CONTRACTING OFFICER, OR OTHER OFFICIAL OF THE GOVERNMENT MADE ANY INQUIRY OR INVESTIGATION FOR THE PURPOSE OF ASCERTAINING THE TRUE FACTS INVOLVED. THE BIDDERS SIGNED THE NOTICE TO BIDDERS AS REQUIRED AND UNLESS FACTS ARE DEVELOPED WHICH SHOW THAT THEIR STATEMENTS ARE INCORRECT THE SAID BIDS SHOULD BE CONSIDERED FOR PURPOSES OF MAKING AWARD.

D. THE ASSISTANT POSTMASTER, OKLAHOMA CITY, CERTIFIES THAT MR. L.B. FINKELSTEIN, OF THE OKLAHOMA RUBBER & METAL CO. WENT TO THE POSTMASTER'S OFFICE IN THAT CITY ON OCTOBER 25, 1951, AND PRESENTED AN ENVELOPE WHICH HE ALLEGED HE MAILED AT THAT POST OFFICE AT 8:30 P.M. ON OCTOBER 23, 1951. IT WAS STATED FURTHER THAT "HOWEVER THE ENVELOPE IS POST MARKED AT THIS OFFICE SHOWING OCTOBER 24, 3:30 P.M." ALSO, IT WAS STATED THAT:

"WHILE WE ARE UNABLE DEFINITELY TO DETERMINE THE CAUSE OF THE MISHANDLING, WE HAVE NO REASON TO DOUBT MR. FINKELSTEIN'S STATEMENT. BELIEVE THAT THE LETTER WAS BY MISTAKE PLACED WITH OTHER MAIL OF A CIRCULAR NATURE AND WAS NOT RETURNED TO THE LETTER SECTION UNTIL THE AFTERNOON OF THE DAY FOLLOWING MAILING."

IT THUS IS APPARENT THAT THE CONCLUSION THAT THE BID WAS MISPLACED IN THE POST OFFICE FOR ALMOST A DAY WAS NOT BASED UPON ANY DEFINITE EVIDENCE OTHER THAN MR. FINKELSTEIN'S ALLEGATIONS WHICH, OF COURSE, BEING SELF SERVING, ARE NOT CONCLUSIVE. IN THE ABSENCE OF ANY CONCRETE EVIDENCE FROM THE POST OFFICE OR OTHERWISE SUPPORTING THE ALLEGATION, THIS OFFICE WOULD NOT BE JUSTIFIED IN ACCEPTING THE EX PARTE STATEMENT OF MR. FINKELSTEIN IN DISREGARD OF THE POST MARK ON THE ENVELOPE. HENCE, THE BID OF THE OKLAHOMA RUBBER & METAL COMPANY SHOULD BE DISREGARDED.

THE ENCLOSURES WITH THE CONTRACTING OFFICER'S LETTER ARE FORWARDED HEREWITH.