B-161723, AUG. 1, 1967

B-161723, AUG. 1, 1967

BIDDERS - RESPONSIBILITY - STATE LICENSE COMPLIANCE DECISION TO FAIRFAX FUNERAL HOME, INC., PROTESTING AWARD BY DOVER AIR FORCE BASE OF CONTRACT FOR MORTUARY SERVICES TO RINALDI AND HAYES, INC., A FIRM NOT LICENSED IN DELAWARE. TO REQUIRE THAT THE LOW BIDDER--A DELAWARE CORP.--HAVE A MORTUARY LICENSE FROM DELAWARE WOULD GIVE THE STATE A POWER OR REVIEW OVER THE FED. GOVT. DETERMINATION OF BIDDER "RESPONSIBILITY" AND WOULD FRUSTRATE POLICY OF SELECTING LOWEST REPONSIBIBLE BIDDER PURSUANT TO 10 U.S.C. 2305/C). SINCE PREAWARD SURVEY FOUND BIDDER TO BE A RESPONSIBLE PROSPECTIVE CONTRACTOR AND SBA DETERMINED BIDDER TO BE SMALL BUSINESS NO BASIS EXISTS FOR OBJECTION TO AWARD. MILLER V. ARKANSAS, 352 U.S. 187 B-159723, SEPT. 28, 1966.

TO DOHERTY AND DOHERTY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 5, 1967, PROTESTING, ON BEHALF OF FAIRFAX FUNERAL HOME, INC., T/A COVINGTON MARTIN FUNERAL HOME, AGAINST THE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS NO. F07603-67-B- 0075 TO RINALDI AND HAYES, INC., FOR THE FURNISHING OF MORTUARY SERVICES FROM JULY 1, 1967, TO JUNE 30, 1968, AT DOVER AIR FORCE BASE, DELAWARE.

THE INVITATION FOR BIDS, DATED APRIL 25, 1967, REQUESTED BIDS FROM SMALL BUSINESS CONCERNS ONLY FOR THE CARE OF REMAINS OF MILITARY PERSONNEL, ALL SERVICES TO BE PERFORMED AT DOVER AIR FORCE BASE. SIX BIDS WERE RECEIVED AND OPENED ON MAY 26, 1967. RINALDI AND HAYES, INC., SUBMITTED THE LOWEST BID IN THE ESTIMATED AMOUNT OF $549,494.50. FAIRFAX SUBMITTED THE NEXT LOWEST BID IN THE ESTIMATED AMOUNT OF $607,439.00. AFTER INVESTIGATION AND SURVEY OF ITS CAPABILITIES AND FACILITIES, RINALDI AND HAYES, INC. WAS DETERMINED TO BE THE LOWEST RESPONSIBLE BIDDER, AND THE CONTRACT WAS AWARDED TO IT ON JUNE 9, 1967.

YOU QUESTION THE AWARD OF THE CONTRACT BECAUSE RINALDI AND HAYES DOES NOT HAVE A MORTUARY LICENSE TO OPERATE IN THE STATE OF DELAWARE. YOU ALSO STATE THAT THE PRICE BID BY RINALDI AND HAYES WAS BELOW THE COST OF SERVICES REQUIRED TO BE FURNISHED, AND THEREFORE, YOU DO NOT BELIEVE THAT RINALDI AND HAYES, INC. IS A RESPONSIBLE CONTRACTOR. FURTHER YOU ALLEGE THAT RINALDI AND HAYES WAS NOT A SMALL BUSINESS CONCERN FOR THE PURPOSES OF THIS PROCUREMENT.

GENERAL PROVISION NO. 29, OF THE INVITATION AND RESULTING CONTRACT, PROVIDES:

"THE CONTRACTOR SHALL MEET ALL STATE AND LOCAL LICENSING REQUIREMENTS AND SHALL FURNISH THE HIGHEST QUALITY OF PROFESSIONAL SERVICES. PREPARATION AND TRANSPORTATION OF REMAINS SHALL BE PERFORMED IN ACCORDANCE WITH ALL APPLICABLE FEDERAL, STATE, AND LOCAL HEALTH LAWS, STATUTES, AND REGULATIONS. THE CONTRACTOR SHALL OBTAIN AND FURNISH ALL NECESSARY HEALTH DEPARTMENT AND SHIPPING PERMITS AT NO ADDITIONAL COST TO THE GOVERNMENT AND SHALL INSURE THAT ALL NECESSARY HEALTH DEPARTMENT PERMITS ARE IN ORDER FOR DISPOSITION OF THE REMAINS.'

ALTHOUGH RINALDI AND HAYES, INC. DID NOT POSSESS A LICENSE TO PERFORM MORTUARY SERVICES IN DELAWARE, IT IS A DELAWARE CORPORATION. UNDER THE INVITATION AND CONTRACT, ALL SERVICES ARE TO BE PERFORMED AT DOVER AIR FORCE BASE OVER WHICH THE FEDERAL GOVERNMENT HAS EXCLUSIVE JURISDICTION. IN VIEW THEREOF, WE DO NOT BELIEVE THAT THE DELAWARE LICENSING REQUIREMENTS ARE APPLICABLE. SEE PACIFIC COAST DAIRY, INC. V. DEPARTMENT OF AGRICULTURE OF CALIFORNIA ET AL., 318 U.S. 285/1943), WHEREIN THE SUPREME COURT HELD THAT CONTRACTS TO BE PERFORMED IN A FEDERAL ENCLAVE CANNOT BE REGULATED BY STATE LAW. ALSO, IN THE CASE OF LESLIE MILLER, INC. V. ARKANSAS, 352 U.S. 187/1956), THE SUPREME COURT HELD THAT A STATE LICENSE REQUIREMENT WHICH CONFLICTED WITH FEDERAL REGULATIONS GOVERNING THE RESPONSIBILITY OF A GOVERNMENT CONSTRUCTION CONTRACTOR WAS INVALID. IN HOLDING THE STATE OF ARKANSAS TO BE WITHOUT JURISDICTION TO ENFORCE ITS LAW AGAINST THE FEDERAL CONTRACTOR, THE COURT STATED:

" * * * SUBJECTING A FEDERAL CONTRACTOR TO THE ARKANSAS-CONTRACTOR LICENSE REQUIREMENTS WOULD GIVE TO THE STATE'S LICENSING BOARD A VIRTUAL POWER OF REVIEW OVER THE FEDERAL DETERMINATION OF RESPONSIBILITY- AND WOULD THUS FRUSTRATE THE EXPRESSED FEDERAL POLICY OF SELECTING THE LOWEST RESPONSIBLE BIDDER. * * * "

THE HOLDING OF THE SUPREME COURT IN THE ARKANSAS CASE IS EQUALLY APPLICABLE TO THE SITUATION HERE INVOLVED. IF RINALDI AND HAYES, INC. WAS SUBJECTED TO THE DELAWARE LICENSING REQUIREMENTS, IT WOULD GIVE THE STATE A POWER OF REVIEW OVER THE FEDERAL GOVERNMENT DETERMINATION OF ,RESPONSIBILITY" AND WOULD FRUSTRATE THE EXPRESSED FEDERAL POLICY OF SELECTING THE LOWEST RESPONSIBLE BIDDER AS PRESCRIBED BY 10 U.S.C. 2305/C). SEE B-159723, SEPTEMBER 28, 1966, WHEREIN THE SAME REASONING WAS APPLIED IN AN IDENTICAL SITUATION WHEREIN THE SAME CONTENTION WAS MADE WITH REFERENCE TO A MORTUARY AWARD TO THE PROTESTANT.

REGARDING THE RESPONSIBILITY OF THE CONTRACTOR, OUR OFFICE HAS HELD CONSISTENTLY THAT THE DETERMINATION OF THE QUALIFICATIONS OF BIDDERS IS PRIMARILY THE FUNCTION OF THE ADMINISTRATIVE OFFICERS CONCERNED, AND IN THE ABSENCE OF ANY SHOWING OF BAD FAITH OR LACK OF REASONABLE FACTUAL BASIS FOR THE DETERMINATION MADE, WE ARE NOT REQUIRED TO OBJECT TO ACTION TAKEN THEREON. 36 COMP. GEN. 42, 46. SINCE A PREAWARD SURVEY WAS MADE AS TO THE CAPABILITY AND THE FINANCIAL CAPACITY OF RINALDI AND HAYES, INC., WHEREIN IT WAS DEMONSTRATED AND FOUND THAT THE BIDDER WAS A RESPONSIBLE PROSPECTIVE CONTRACTOR, OUR OFFICE WILL NOT QUESTION THAT DETERMINATION. FURTHER, THE SMALL BUSINESS ADMINISTRATION HAD DETERMINED THAT RINALDI AND HAYES, INC., WAS A SMALL BUSINESS CONCERN UNDER THIS INVITATION. SUCH A DETERMINATION IS CONCLUSIVE BOTH ON THE PROCUREMENT AGENCY AND OUR OFFICE. SEE 37 COMP. GEN. 679; ASPR 1-705.4/A).

IN VIEW OF THE FOREGOING, NO LEGAL BASIS EXISTS FOR OBJECTING TO THE AWARD MADE TO RINALDI AND HAYES, INC. THE PROTEST IS THEREFORE DENIED.