B-149664, OCT. 3, 1962

B-149664, OCT. 3, 1962

TO CALIFORNIA RENT CAR:

WE REFER TO YOUR LETTERS OF AUGUST 6, 1962, AND AUGUST 15, 1962, PROTESTING AGAINST THE AWARD MADE UNDER INVITATION FOR BIDS NO. SFD 5148- 62, BY THE GENERAL SERVICES ADMINISTRATION.

THE SUBJECT INVITATION WAS ISSUED BY THE GSA, FEDERAL SUPPLY SERVICE, SAN FRANCISCO, CALIFORNIA, ON APRIL 25, 1962, AS A 100 PERCENT SMALL BUSINESS SET-ASIDE, FOR FURNISHING CAR AND TRUCK RENTAL SERVICE AT VARIOUS LOCATIONS FOR THE PERIOD AUGUST 1, 1962, THROUGH JULY 31, 1963. THE BID OPENING WAS HELD ON MAY 17, 1962, AND IT APPEARS THAT YOU WERE THE LOW BIDDER AS TO PRICE FOR THE LOS ANGELES AREA AND SCHEDULE A (SEDANS), SCHEDULE B (COMPACT CARS) AND SCHEDULE C (TRUCKS). HOWEVER, ONE OF THE OTHER BIDDERS, AMERICAN RENT-A-CAR SYSTEM, CHALLENGED YOUR STATUS AS A SMALL BUSINESS ON THE BASIS THAT YOUR FIRM WAS AFFILIATED WITH NATIONAL CAR RENTALS, A LARGE BUSINESS CONCERN. ON JULY 2, 1962, THE SBA, LOS ANGELES REGIONAL OFFICE, NOTIFIED THE CONTRACTING OFFICER THAT YOU WERE LARGE BUSINESS FOR GOVERNMENT PROCUREMENT. YOU APPEALED THIS DETERMINATION AND THE CONTRACTING OFFICE WAS NOTIFIED OF YOUR APPEAL.

HOWEVER, UNDER DATE OF JULY 25, 1962, WHILE THE APPEAL WAS PENDING, AN AWARD WAS MADE FOR SCHEDULES A AND B FOR THE LOS ANGELES AREA TO AMERICAN RENT-A-CAR SYSTEM (THE THIRD LOW BIDDER) AS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER. NO AWARD WAS MADE ON THAT DATE FOR SCHEDULE C. ON SCHEDULES A AND B YOU WERE EVALUATED AT $2306.456 AND $2086.246, RESPECTIVELY, WHILE THE SUCCESSFUL BIDDER WAS EVALUATED AT $2587.469 AND $2222.815, RESPECTIVELY.

ON JULY 27, 1962, THE CONTRACTING OFFICER WAS ADVISED BY THE SBA THAT PURSUANT TO APPEAL YOUR FIRM WAS TO BE CONSIDERED A SMALL BUSINESS FOR GOVERNMENT PROCUREMENT PURPOSES. BY LETTER OF AUGUST 6, 1962, THE SBA ADVISED THE CONTRACTING OFFICER THAT BECAUSE OF YOUR AGREEMENT TO DELETE A PROVISION IN YOUR LICENSING AGREEMENT WITH NATIONAL CAR RENTAL SYSTEMS, THE SBA HAD DETERMINED THAT AS OF THE CLOSE OF BUSINESS JULY 27, 1962, YOUR FIRM IS CONSIDERED A SMALL BUSINESS. THE SBA STATED THAT THIS DETERMINATION WAS NOT RETROACTIVE.

YOU CONTEND THAT THE GSA SHOULD NOT HAVE MADE THE AWARD AT A HIGHER PRICE BEFORE YOUR APPEAL TO SBA WAS FINALLY DECIDED. IN THIS CONNECTION YOU STATE THAT THE DELETION MADE IN YOUR LICENSING AGREEMENT WITH NATIONAL CAR RENTALS WHICH ENABLE YOU TO QUALIFY AS SMALL BUSINESS WAS MINOR. THE DELETED PROVISION STATES AS FOLLOWS:

"* * * AND LICENSEE DOES HEREBY ACCEPT THIS LICENSE AND DOES COVENANTS AND AGREE TO CONDUCT THE VEHICLE RENTING BUSINESS ONLY * * * IN ACCORDANCE WITH THE METHODS, RULES AND REGULATIONS OF THE NATIONAL SYSTEM AS NOW CONSTITUTED, OR AS SUCH METHODS, RULES AND REGULATIONS MAY FROM TIME TO TIME BE AMENDED AND CIRCULATED BY LICENSOR. IT IS AGREED THAT LICENSOR SHALL HAVE THE RIGHT TO CHANGE THE SYSTEM, AND CHANGE OR AMEND THE METHODS, RULES AND REGULATIONS OF SAID SYSTEM UPON GIVING NOTICE THEREOF TO LICENSEE.'

YOU SAY THAT THE ABOVE PROVISION IS STANDARD LANGUAGE IN LICENSING AGREEMENTS AND THAT YOUR FIRM IS NOT CONTROLLED BY ANY OTHER PARTY.

BY PROVISION OF LAW THE SMALL BUSINESS ADMINISTRATION IS AUTHORIZED TO DETERMINE WHICH BUSINESSES ARE TO BE DESIGNATED AS SMALL BUSINESS FOR PURPOSES OF GOVERNMENT PROCUREMENT, AND THESE DETERMINATIONS ARE NOT SUBJECT TO QUESTION BY THIS OFFICE. SEE 38 COMP. GEN. 328, 331.

IT IS INDICATED THAT THE CONTRACT IN FORCE AT THE TIME OF AWARD COVERING VEHICLE RENTAL SERVICE WAS DUE TO EXPIRE ON JULY 31, 1962. ON JULY 25TH, AT THE TIME OF AWARD YOU WERE CONSIDERED TO BE LARGE BUSINESS. OVER TWO MONTHS HAD ALREADY ELAPSED SINCE THE BID OPENING. YOU REGARD THE MATTER WHICH CAUSED THE SBA TO DECLARE YOU A LARGE BUSINESS AS A MERE TECHNICALITY. HOWEVER, IT OBVIOUSLY IS THE VIEW OF SBA THAT THE DELETION MADE IN YOUR LICENSING AGREEMENT WAS A SIGNIFICANT CHANGE. IN ANY EVENT, THE CONTRACTING OFFICER WAS NOT REQUIRED TO DELAY AWARD PENDING YOUR APPEAL OT SBA. SEE C-148911, JULY 12, 1962, COPY ENCLOSED. AT THE TIME HE MADE THE AWARD ON SCHEDULES A AND B YOU WERE INELIGIBLE TO RECEIVE THE AWARD. WE FIND NO BASIS TO QUESTION THE REJECTION OF YOUR BID AS TO SCHEDULES A AND B.

REGARDING THE AWARD MADE TO THE AMERICAN RENT-A-CAR SYSTEM COVERING VEHICLE RENTAL SERVICE AT THE LOS ANGELES AIRPORT, YOU ADVISE THAT THE BIDDER DOES NOT HAVE A PERMIT TO DO BUSINESS AT THAT LOCATION, AND YOU CONTEND THAT ITS FAILURE IN THIS REGARD SHOULD DISQUALIFY IT FOR THE AWARD. THE LOS ANGELES CITY ORDINANCE INVOLVED (ORDINANCE NO. 95789), PROVIDES IN REGARD TO THE LOS ANGELES AIRPORT, IN SECTION 2 (B) AS FOLLOWS:

"NO PERSON SHALL ENGAGE IN ANY BUSINESS OR COMMERCIAL ACTIVITY ON THE AIRPORT WITHOUT FIRST HAVING OBTAINED THE PROPER LEASE OR PERMIT THEREFOR

A "PERSON" IS DEFINED TO INCLUDE A CORPORATION, AND THE SUCCESSFUL BIDDER IS A CORPORATION. THE ORDINANCE DOES NOT DEFINE THE PHRASE "ENGAGE IN ANY BUSINESS OR COMMERCIAL ACTIVITY ON THE AIRPORT.' THE GSA REPORTS THAT AMERICAN RENT-A-CAR DOES NOT MAINTAIN AN OFFICE OR ANY OTHER FACILITY ON THE AIRPORT PREMISES AND NONE IS REQUIRED BY THE CONTRACT. UNDER THE EXISTING PROCEDURE, WHEN A VEHICLE IS REQUIRED FOR OFFICIAL USE BY A GOVERNMENT EMPLOYEE, A REQUEST IS MADE TO THE CONTRACTOR BY THE LOCAL INTERAGENCY MOTOR POOL WHICH PROVIDES THE CONTRACTOR WITH THE TIME OF ARRIVAL OF THE EMPLOYEE AT THE AIRPORT. THE CONTRACTOR THEN DISPATCHES A CAR, PICKS UP THE EMPLOYEE AND RETURNS TO ITS PLACE OF BUSINESS WHERE THE RENTAL TRANSACTION IS CONSUMMATED. IT IS REPORTED FURTHER, THAT THE CITY OF LOS ANGELES DOES NOT APPEAR TO HAVE TAKEN A POSITION AS TO WHETHER THE CONTRACTOR'S ACTIVITY DOES OR DOES NOT CONSTITUTE ENGAGING IN A BUSINESS ON THE AIRPORT. WE ARE ADVISED BY GSA THAT THE CONTRACTOR HAS SO OPERATED WITHOUT INTERFERENCE BY LOCAL AUTHORITIES FOR APPROXIMATELY FIVE YEARS, DURING TWO OF WHICH IT HAS HELD GOVERNMENT CONTRACTS.

BASED ON THE ADMINISTRATIVE ADVICE WE MUST CONCLUDE THAT AMERICAN RENT-A- CAR IS ABLE TO SERVICE THE GOVERNMENT AT THE LOS ANGELES AIRPORT WITHOUT OBTAINING THE LOCAL PERMIT. IN THE EVENT THAT THE CONTRACTOR IS SUBSEQUENTLY REQUIRED TO OBTAIN A PERMIT THERE IS NO APPARENT REASON WHY IT SHOULD NOT BE ABLE TO DO SO. ..END :