B-160538, B-160540, MAR. 24, 1967

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 28, 1967, FROM YOUR GENERAL COUNSEL, FURNISHING A REPORT ON THE PROTESTS OF METROPOLITAN SECURITY SERVICES, INC., BALTIMORE, MARYLAND, AGAINST THE MAKING OF ANY AWARDS TO EITHER SERVICE ENGINEERS INC. OF WEST PALM BEACH, THE JOHN J. CALLAHAN GUARD AGENCY, OR INVESTIGATIVE BUREAU OF NEW YORK, INC. UNDER INVITATIONS FOR BIDS (IFB) 2PBO-RC-374 AND -375 ISSUED ON NOVEMBER 9, 1966.

THE INVITATIONS REQUESTED BIDS FOR FURNISHING UNIFORMED GUARD SERVICE AT TWO LOCATIONS IN NEW YORK CITY FOR THE PERIOD JANUARY 1 THROUGH DECEMBER 31, 1967. PAGE 7 OF THE INVITATIONS FURTHER PROVIDED:

"CONTRACT PERIOD: THIS CONTRACT WILL EXTEND FROM THE DATE OF NOTICE TO PROCEED FOR ONE (1) YEAR, WITH THE OPTION RESERVED TO THE GOVERNMENT TO: RENEW FOR A PERIOD NOT TO EXCEED ONE ADDITIONAL YEAR, PROVIDED WRITTEN NOTICE OF INTENTION TO RENEW IS FURNISHED TO THE CONTRACTOR AT LEAST SIXTY (60) DAYS BEFORE THE CONTRACT EXPIRES.'

THE TERMS AND CONDITIONS OF INVITATIONS NOS. -374 AND -375 PROVIDED RESPECTIVELY:

"THE BIDDER MUST BE LICENSED AND BONDED UNDER THE LAWS OF THE STATE OF NEW YORK.

"THE BIDDER, IF AWARDED A CONTRACT, IS HEREINAFTER REFERRED TO AS THE CONTRACTOR AGREES TO FURNISH AND MEET THE REQUIREMENTS STIPULATED BELOW:

"7. CONTRACTOR SHALL BE REQUIRED TO HAVE A NEW YORK STATE LICENSE TO CONDUCT THE BUSINESS OF WATCHGUARD OR PATROL AGENCY.

"8. LAWS, ORDINANCES AND FEES.

THE CONTRACTOR SHALL COMPLY WITH LAWS, ORDINANCES AND REGULATIONS (FEDERAL, STATE, COUNTY, CITY OR OTHERWISE) COVERING WORK OF THIS CHARACTER AND SHALL PAY ANY AND ALL FEES INVOLVED.

"9. PERMITS AND RESPONSIBILITY FOR WORK, ETC.

THE CONTRACTOR SHALL, WITHOUT ADDITIONAL EXPENSE TO THE GOVERNMENT, OBTAIN ALL LICENSES AND PERMITS REQUIRED FOR THE PROSECUTION OF THE WORK.

"1. THE CONTRACTOR MUST BE LICENSED AND BONDED UNDER THE LAWS OF THE STATE OF NEW YORK.

"4. CONTRACTOR SHALL BE REQUIRED TO HAVE A NEW YORK STATE LICENSE TO CONDUCT THE BUSINESS OF WATCHGUARD OR PATROL AGENCY.

"5. PERMITS AND RESPONSIBILITY FOR WORK, ETC.: THE CONTRACTOR SHALL CONFORM TO ALL LAWS, REGULATIONS AND ORDINANCES APPLICABLE TO PERFORMANCE OF THE CONTRACT.

"6. LAWS, ORDINANCES AND FEES: THE CONTRACTOR SHALL COMPLY WITH LAWS, ORDINANCES AND REGULATIONS (FEDERAL, STATE, COUNTY, CITY OR OTHERWISE) COVERING WORK OF THIS CHARACTER AND SHALL PAY ANY AND ALL FEES INVOLVED.'

THE INVITATIONS ALSO REQUIRED EACH BIDDER TO SIGN A CERTIFICATE OF ELIGIBILITY THAT:

"THE (BIDDER) IS NOT A PINKERTON DETECTIVE AGENCY, OR A SIMILAR AGENCY, AS CONTEMPLATED BY THE ACT OF MARCH 3, 1893 (5 U.S.C. SEC. 53) NOR AN EMPLOYEE OF SUCH AGENCY.'

EIGHT BIDS WERE RECEIVED IN RESPONSE TO IFB -374 AND TEN BIDS WERE RECEIVED IN RESPONSE TO IFB -375. BIDS UNDER BOTH INVITATIONS WERE OPENED ON DECEMBER 6, 1966, AND THE FIVE LOWEST BIDS UNDER EACH OF THE INVITATIONS WERE AS FOLLOWS:

CHART

IFB -374

COST PER HOUR

BIDDER PER ARMED GUARD

SERVICE ENGINEERS INC. OF WEST PALM BEACH $2.87

METROPOLITAN SECURITY SERVICES INC. 2.877

PLANT SECURITY INC. 2.975

INVESTIGATIVE BUREAU OF NEW YORK, INC. 3.00

MILLS INVESTIGATING AGENCY INC. 3.09

IFB -375

COST PER HOUR

BIDDER PER ARMED GUARD

INVESTIGATIVE BUREAU OF NEW YORK, INC. $2.75

THE JOHN J. CALLAHAN GUARD AGENCY 2.82

SERVICE ENGINEERS INC. OF WEST PALM BEACH 2.83

METROPOLITAN SECURITY SERVICES INC. 2.865

PLANT SECURITY INC. 2.945

EACH OF THE ABOVE BIDDERS EXECUTED THE REQUIRED "DETECTIVE AGENCY" CERTIFICATE. IT IS REPORTED THAT ALL BIDDERS EXCEPT SERVICE ENGINEERS INC. OF WEST PALM BEACH HAVE EXTENDED THE PERIOD FOR ACCEPTANCE OF THEIR BIDS AND THAT AWARDS UNDER BOTH INVITATIONS ARE BEING WITHHELD PENDING A DECISION ON THE MATTER BY THIS OFFICE.

IN ITS LETTERS OF DECEMBER 7, 1966, TO THE GENERAL SERVICES ADMINISTRATION, NEW YORK, NEW YORK, METROPOLITAN SECURITY SERVICES, INC., CONTENDS THAT SERVICE ENGINEERS INC., THE LOW BIDDER UNDER INVITATION NO. -374, IS NOT A QUALIFIED BIDDER BECAUSE THE CORPORATION IS NOT LICENSED UNDER NEW YORK STATE LAWS TO CONDUCT THE BUSINESS OF A WATCH, GUARD OR PATROL AGENCY AND IT CANNOT QUALIFY FOR ISSUANCE OF A LICENSE UNDER NEW YORK STATE LAW PRIOR TO THE STARTING DATE OF THE CONTRACT. SINCE THE RECORD INDICATES THAT THE PERIOD FOR ACCEPTANCE OF THE BID OF SERVICE ENGINEERS, INC. HAS EXPIRED, IT IS NOT NECESSARY FOR OUR OFFICE TO CONSIDER THAT PART OF METROPOLITAN'S PROTEST REGARDING SERVICE ENGINEERS' ELIGIBILITY AS LOW BIDDER TO RECEIVE AN AWARD UNDER IFB -374. SINCE THE BID OF SERVICE ENGINEERS IS NO LONGER FOR CONSIDERATION UNDER IFB -374, THE BID OF METROPOLITAN HAS BECOME THE LOWEST BID RECEIVED IN RESPONSE TO THAT INVITATION.

IN HIS LETTER OF FEBRUARY 28, 1967, YOUR GENERAL COUNSEL STATES THAT IT IS HIS OPINION THAT METROPOLITAN IS NOT ENTITLED TO RECEIVE AN AWARD UNDER IFB -374 BECAUSE THAT FIRM DID NOT HAVE A WATCH, GUARD OR PATROL AGENCY LICENSE AT THE TIME BIDS WERE OPENED NOR WHEN THE CONTRACT PERIOD WAS TO HAVE BEGUN, JANUARY 1, 1967. IT IS REPORTED THAT A WATCH, GUARD AND PATROL AGENCY LICENSE WAS ISSUED TO METROPOLITAN ON JANUARY 19, 1967, BY THE STATE OF NEW YORK. YOUR GENERAL COUNSEL ALSO STATES THAT SINCE METROPOLITAN WAS NOT QUALIFIED TO PERFORM THE CONTRACT AT THE TIME IT BID, AT THE TIME OF BID OPENING, OR AT THE TIME WHEN THE WORK CONTEMPLATED BY THE INVITATION WAS TO HAVE COMMENCED, IT IS NOT BELIEVED THAT AWARD SHOULD BE MADE TO THAT FIRM MERELY BECAUSE OF THE CIRCUMSTANCE THAT IT RECEIVED A LICENSE ON JANUARY 19, 1967. IT IS POINTED OUT FURTHER THAT THE MAKING OF A CONTRACT HAS BEEN DELAYED BEYOND JANUARY 1 ONLY BY REASON OF THE FIRM'S PROTEST AND THE TIME NEEDED FOR ITS CONSIDERATION. ALSO, IT APPEARS TO BE THE OPINION OF YOUR AGENCY THAT THE COMPETITIVE BIDDING PROCESS AND THE CONDUCT OF THE GOVERNMENT'S BUSINESS COULD BE SERIOUSLY UNDERMINED IF A BIDDER WERE PERMITTED TO DELAY AWARD OF A CONTEMPLATED CONTRACT LONG ENOUGH TO PERMIT ITSELF TO QUALIFY FOR THAT AWARD. IN SUPPORT THEREOF, TWO DECISIONS OF OUR OFFICE ARE CITED AS BEING RELEVANT. ONE OF THE CITED DECISIONS, 40 COMP. GEN. 550, INVOLVED A LOW BIDDER WHO WAS NOT ABLE TO SELF-CERTIFY HIMSELF AS A SMALL BUSINESS CONCERN BECAUSE OF SIZE AT THE TIME OF SUBMISSION OF A BID FOR A TOTAL SET-ASIDE PROCUREMENT, BUT WHO, PRIOR TO AWARD, AS A RESULT OF A CHANGE IN THE DEFINITION OF SMALL BUSINESS, BECAME A SMALL BUSINESS. WE HELD THAT THE BIDDER HAD SUBMITTED A BID WHICH WAS NONRESPONSIVE ON ITS FACE, AND TO PERMIT AN AWARD TO SUCH A BIDDER ON THE BASIS OF A SUBSEQUENT EVENT CURING THE DEFICIENCY WOULD BE DETRIMENTAL TO THE EFFECTIVENESS OF THE SMALL BUSINESS SET-ASIDE PROCEDURE AND POSSIBLY PREJUDICIAL TO THE INTERESTS OF OTHER LARGE CONCERNS WHO DID NOT SUBMIT BIDS BUT COULD HAVE QUALIFIED UNDER THE CHANGED DEFINITION. THE OTHER CITED DECISION, 41 COMP. GEN. 47, INVOLVED A SITUATION WHERE THE LOW BIDDER CERTIFIED ITSELF AS A SMALL BUSINESS CONCERN ALTHOUGH IT WAS ON NOTICE PRIOR TO THE SUBMISSION OF ITS BID THAT ITS SIZE STATUS WAS SUBJECT TO QUESTION BY THE SMALL BUSINESS ADMINISTRATION. AFTER THE BIDS WERE OPENED, THE BIDDER TOOK AFFIRMATIVE ACTION (REALIGNMENT OF ITS STOCK) FOR THE SOLE PURPOSE OF MEETING THE SMALL BUSINESS SIZE CRITERIA, THEREBY QUALIFYING FOR AWARD. WE HELD THAT THE AWARD TO THE BIDDER WAS NOT PROPER BECAUSE THE BIDDER HAD NOT UTILIZED THE SELF-CERTIFICATION PROCEDURE PRUDENTLY AS REQUIRED BY THE SMALL BUSINESS ACT AND ALSO BECAUSE THE STOCK REALIGNMENT AFTER BID OPENING GAVE IT A SECOND COMPETITIVE OPPORTUNITY TO THE DISADVANTAGE OF OTHER BIDDERS.

ALTHOUGH IT IS RECOGNIZED BY YOUR AGENCY THAT THESE DECISIONS ARE NOT ENTIRELY "ON ALL FOURS" WITH THE SITUATION IN THE PRESENT PROTEST CONCERNING INVITATION NO. -374, IT IS OBSERVED THAT BOTH DECISIONS DID DISAPPROVE AWARDS TO INELIGIBLE FIRMS WHICH THEREAFTER BECAME QUALIFIED TO RECEIVE AN AWARD PRIOR TO THE ACTUAL DATE OF AWARD. ON THE BASIS OF THE FOREGOING RATIONALE, IT IS RECOMMENDED THAT AWARD BE MADE TO PLANT SECURITY, INC., THE THIRD LOWEST BIDDER UNDER INVITATION NO. -374 APPARENTLY BECAUSE THAT BIDDER HAS A WATCH, GUARD AND PATROL AGENCY LICENSE AND WAS SO LICENSED BY THE STATE OF NEW YORK AT THE TIME OF THE BID OPENING.

WITH REFERENCE TO INVITATION NO. -375, IT IS REPORTED THAT INVESTIGATIVE BUREAU OF NEW YORK, INC., THE LOWEST BIDDER, DID NOT POSSESS A NEW YORK STATE WATCH, GUARD AND PATROL AGENCY LICENSE AT THE TIME OF THE BID OPENING OR AT THE TIME PERFORMANCE WAS CONTEMPLATED TO HAVE BEGUN, BUT THAT SUCH BIDDER IS NOW QUALIFIED SINCE IT RECEIVED THE NECESSARY LICENSE ON JANUARY 17, 1967. IT IS THEREFORE BELIEVED THAT AWARD SHOULD BE MADE TO THAT BIDDER. YOUR AGENCY DISTINGUISHES ITS POSITION HERE FROM THAT ADVANCED UNDER INVITATION NO. -374 ON THE BASIS THAT INVESTIGATIVE BUREAU TOOK NO ACTION UNDER INVITATION NO. 375 WHICH RESULTED IN ITS BECOMING QUALIFIED PRIOR TO THE DATE OF AWARD, WHEREAS, METROPOLITAN IS NOW QUALIFIED TO RECEIVE AN AWARD UNDER INVITATION NO. -374 ONLY BY REASON OF THE FACT THAT THE DELAY IN MAKING AN AWARD STEMMED DIRECTLY FROM ITS OWN PROTEST AGAINST AWARD TO ANY OTHER BIDDER.

IN SUPPORT OF THE RECOMMENDATION THAT AWARD BE MADE TO INVESTIGATIVE BUREAU, REFERENCE IS MADE TO OUR DECISION REPORTED AT 42 COMP. GEN. 219 WHERE WE HELD, QUOTING THE SYLLABUS:

"A LOW BIDDER WHO, AS A RESULT OF A PROTEST TO HIS SELF CERTIFICATION AS A SMALL BUSINESS CONCERN FOR A 100 PERCENT SET-ASIDE PROCUREMENT, WAS DETERMINED BY THE SMALL BUSINESS ADMINISTRATION TO BE QUALIFIED AS A SMALL CONCERN ON THE BASIS OF NEW SIZE STANDARDS WHICH HAD BEEN CHANGED AFTER BID OPENING BUT BEFORE AWARD WAS PROPERLY AWARDED THE CONTRACT SINCE THE BIDDER'S CERTIFICATION WAS MADE IN GOOD FAITH AND HIS QUALIFICATION UNDER THE NEW SIZE STANDARDS IN EFFECT ON THE DATE OF AWARD WAS NOT THE RESULT OF ANY ACTION BY THE BIDDER AFTER BID OPENING.'

WE BELIEVE THAT THE PROTESTS HERE INVOLVED MUST BE RESOLVED WITHOUT RESORT TO THE ABOVE-CITED DECISIONS. THE INVITATIONS CONSIDERED IN THOSE DECISIONS SPECIFICALLY PROVIDED THAT BIDS RECEIVED FROM FIRMS WHICH ARE NOT SMALL BUSINESS CONCERNS SHALL BE CONSIDERED "NONRESPONSIVE.' IT IS AXIOMATIC THAT A NONRESPONSIVE BID MAY NOT, AFTER OPENING, BE CHANGED OR ALTERED BY THE BIDDER TO MAKE IT COMPLY WITH THE MANDATORY PROVISIONS OF AN INVITATION. HERE, WE ARE CONCERNED WITH ,RESPONSIBILITY," NOT "RESPONSIVENESS.' IN THE CITED DECISIONS, WE HELD, IN EFFECT, THAT RESPONSIVENESS MAY NOT BE GAINED THROUGH THE EFFORTS OF THE BIDDER AFTER OPENING. SUCH IS NOT THE SITUATION HERE WHERE RESPONSIBILITY MAY BE FINALLY ACHIEVED UP TO THE DATE OF AWARD.

WE AGREE THAT THE PROVISIONS RESPECTING THE NECESSITY FOR NEW YORK STATE LICENSES DO NOT IMPOSE BID RESPONSIVENESS REQUIREMENTS BUT THAT SUCH PROVISIONS AFFECT THE RESPONSIBILITY OF BIDDERS. IT IS RECOGNIZED THAT THE TIME FOR SUBMISSION OF EVIDENCE OF A BIDDER'S RESPONSIBILITY IS GOVERNED BY THE TIME WHEN PERFORMANCE IS REQUIRED. 39 COMP. GEN. 655. UNDER THESE INVITATIONS, CONTRACT PERFORMANCE IS NOT REQUIRED PRIOR TO THE DATE OF NOTICE TO PROCEED IS ISSUED EVEN THOUGH A SPECIFIC DATE MAY BE CONTEMPLATED BY THE INVITATION AS THE BEGINNING DATE OF PERFORMANCE. WE, THEREFORE, ATTACH NO PARTICULAR SIGNIFICANCE TO THE FACT THAT THE PROTESTS MAY HAVE DELAYED AN AWARD BEYOND JANUARY 1, 1967.

TURNING NOW TO THE PROPOSITION THAT METROPOLITAN IS NOT NOW ENTITLED TO AN AWARD BECAUSE IT DELAYED AWARD BY REASON OF ITS PROTESTS LONG ENOUGH TO PERMIT ITSELF TO QUALIFY FOR THAT AWARD, WE NOTE THAT SECTION 1-2.407-8 OF THE FEDERAL PROCUREMENT REGULATIONS SPECIFICALLY RECOGNIZES THE RIGHT OF BIDDERS TO OBJECT, FOR GOOD AND VALID REASONS, TO THE AWARD OF CONTRACTS TO COMPETING FIRMS. WE DO NOT REGARD THE PROTESTS OF METROPOLITAN AS FRIVOLOUS OR WITHOUT MERIT; IT PROTESTED AGAINST THE CONSIDERATION OF CERTAIN BIDS ON THE BASIS THAT THE BIDDERS WERE NOT LEGALLY ELIGIBLE FOR AWARD. THESE PROTESTS GENERATED ADMINISTRATIVE ACTION NECESSARY TO DETERMINE COMPLIANCE WITH THE ANTI-PINKERTON STATUTE (5 U.S.C 53). THE EXERCISE OF THE LONG ESTABLISHED AND RECOGNIZED RIGHT OF PROTEST BEFORE AWARD SHOULD NOT OPERATE TO THE PREJUDICE OF THE PROTESTER. CONCERNING ,DELAY," THE RECORD BEFORE US NEITHER AFFIRMS NOR DENIES THAT METROPOLITAN TIMELY FILED AN APPLICATION FOR A NEW YORK STATE LICENSE. WE CANNOT SAY THAT METROPOLITAN PROTESTED TO GAIN TIME FOR THE ISSUANCE OF A LICENSE OR THAT, ABSENT ITS PROTESTS, AWARDS WOULD HAVE BEEN ACCOMPLISHED BEFORE THE LICENSE WAS ISSUED. UNDER ALL THESE CIRCUMSTANCES, WE FIND NO BASIS TO DENY THE PROTESTS BECAUSE THE LICENSE NECESSARY TO METROPOLITAN'S ELIGIBILITY AS A RESPONSIBLE BIDDER WAS OBTAINED DURING THE PERIOD SUBSEQUENT TO THE PROTESTS BUT BEFORE AWARD. SINCE METROPOLITAN IS AUTHORIZED UNDER ITS ARTICLES OF INCORPORATION TO CONDUCT AND OPERATE A GENERAL GUARD AND WATCH SERVICE, AND SINCE IT IS NOW LICENSED BY THE STATE TO PROVIDE SUCH SERVICES, THAT BIDDER NOW APPEARS TO BE THE LOWEST ELIGIBLE BIDDER UNDER INVITATION NO. -374 AND, AS SUCH, WOULD BE ENTITLED TO AN AWARD IF OTHERWISE PROPER. SEE 41 COMP. GEN. 819.

CONCERNING INVITATION NO. -375, THE RECORD SHOWS THAT THE LOW BIDDER, INVESTIGATIVE BUREAU OF NEW YORK, INC., IS THE SUBSIDIARY OF A CORPORATION WHICH IS A LICENSED PRIVATE INVESTIGATOR, THAT THE ARTICLES OF INCORPORATION OF INVESTIGATIVE BUREAU AUTHORIZE IT TO ENGAGE IN THE BUSINESS OF A PRIVATE DETECTIVE OR INVESTIGATOR, BUT THAT INVESTIGATIVE BUREAU IS NOW LICENSED BY THE STATE TO PERFORM ONLY WATCH, GUARD AND PATROL SERVICES. IT THUS APPEARS THAT THIS BIDDER IS NOT NOW AUTHORIZED BY THE STATE TO ENGAGE IN THE TYPE OF BUSINESS ACTIVITY PROHIBITED BY 5 U.S.C. 53. SEE 41 COMP. GEN. 819; 44 ID. 564. ACCORDINGLY, AND SINCE INVESTIGATIVE BUREAU IS THE LOWEST, ELIGIBLE BIDDER UNDER INVITATION NO. - 375, AWARD TO THAT BIDDER WOULD SEEM TO BE IN ORDER PROVIDED SUCH ACTION IS PROPER IN OTHER RESPECTS.