B-180419, APR 8, 1974, 53 COMP GEN 750

B-180419, APR 8, 1974, 53 COMP GEN 750

BIDDERS - RESPONSIBILITY V. BID RESPONSIVENESS - LICENSING-TYPE REQUIREMENTS REJECTION OF LOW BIDDER AS NONRESPONSIVE BECAUSE IT FAILED TO PROVIDE EVIDENCE OF ICC OPERATING AUTHORITY REGARDED BY ARMY AS NECESSARY FOR PERFORMANCE OF PACKING AND CONTAINERIZATION CONTRACT WAS IMPROPER, SINCE LICENSING-TYPE REQUIREMENTS ARE MATTERS OF RESPONSIBILITY. BIDDERS - QUALIFICATIONS - LICENSE REQUIREMENT - ICC CERTIFICATION ICC DECISION IN KINGPAK, INVESTIGATION OF OPERATIONS, 103 M.C.C. 318, REQUIRING MOTOR CARRIERS PROVIDING TRANSPORTATION UNDER CONTRACTS FOR PACKING AND CONTAINERIZATION OF USED HOUSEHOLD GOODS TO HAVE ICC OPERATING AUTHORITY, PERMITS CARRIERS TO ACT AS FREIGHT FORWARDERS OF USED HOUSEHOLD GOODS EXEMPT FROM REQUIREMENT FOR HAVING SUCH AUTHORITY, BUT SINCE BIDDER WAS LOW ONLY ON PORTION OF IFB CALLING FOR SERVICES RELATING TO UNACCOMPANIED BAGGAGE, WHICH IS NOT REGARDED AS USED HOUSEHOLD GOODS, CONTRACTING OFFICER PROPERLY REJECTED BID BECAUSE OF LACK OF ICC OPERATING AUTHORITY. BIDDERS - QUALIFICATIONS - LICENSE REQUIREMENT - TIME FOR COMPLIANCE THERE IS NO BASIS FOR CONCLUDING THAT AWARD WAS IMPROPERLY MADE BECAUSE ARMY DID NOT ALLOW SUFFICIENT TIME FOR ICC TO PROCESS LOW BIDDER'S APPLICATION FOR TEMPORARY AUTHORITY, SINCE AWARD WAS NOT MADE UNTIL 2 MONTHS AFTER APPLICATION WAS FILED WITH ICC.

IN THE MATTER OF VICTORY VAN CORPORATION; COLUMBIA VAN LINES, INC., APRIL 8, 1974:

INVITATION FOR BIDS (IFB) NO. DAHC30-74-B-0026, ISSUED OCTOBER 29, 1973, BY THE UNITED STATES ARMY MILITARY DISTRICT OF WASHINGTON, SOLICITED BIDS FOR PACKING AND CONTAINERIZATION SERVICES INCIDENT TO SHIPMENT OR STORAGE OF PERSONAL PROPERTY BELONGING TO DEPARTMENT OF DEFENSE PERSONNEL. VICTORY VAN CORPORATION (VICTORY) WAS THE LOW BIDDER ON THE PORTION OF THE SCHEDULE CALLING FOR UNACCOMPANIED BAGGAGE SERVICES. COLUMBIA VAN LINES, INCORPORATED (COLUMBIA), THE SECOND LOW BIDDER, PROTESTED AGAINST ANY AWARD TO VICTORY ON THE GROUNDS THAT VICTORY DOES NOT HAVE NECESSARY INTERSTATE COMMERCE COMMISSION (ICC) OPERATING AUTHORITY. VICTORY THEN PROTESTED AGAINST AWARD TO ANY OTHER BIDDER. AWARD WAS MADE TO COLUMBIA DURING THE PENDENCY OF THESE PROTESTS WHEN COLUMBIA, AS THE PRIOR INCUMBENT CONTRACTOR, DECLINED TO ACCEPT FURTHER EXTENSIONS OF ITS CONTRACT.

PAGE 4 OF THE IFB STATES THAT "EACH BIDDER MUST SUBMIT TO THE CONTRACTING OFFICER, PRIOR TO AWARD, VALID EVIDENCE OF AN ICC OPERATING AUTHORITY." PAGE 18 OF THE IFB, UNDER THE HEADING "RESPONSIVENESS," STATES THAT "FAILURE TO FURNISH ICC CERTIFICATE BEFORE AWARD WILL CAUSE REJECTION OF BID." VICTORY HAS ICC OPERATING AUTHORITY FOR MOST OF THE AREA OF PERFORMANCE ENCOMPASSED BY THE SOLICITATION, BUT DOES NOT HAVE SUCH AUTHORITY FOR TWO OF THE OUTLYING COUNTIES WITHIN THAT AREA. VICTORY APPLIED TO THE ICC FOR TEMPORARY AUTHORITY TO OPERATE IN THOSE COUNTIES, AND THE ARMY HAS SUPPORTED THAT APPLICATION. VICTORY ALSO PROPOSED TO FURNISH THE NECESSARY SERVICES IN THOSE TWO COUNTIES BY OPERATING AS A FREIGHT FORWARDER AND USING ANOTHER CARRIER HAVING OPERATING AUTHORITY IN THOSE COUNTIES, WHICH VICTORY VIEWS AS AN ACCEPTABLE METHOD OF PERFORMANCE SINCE PAGE 38 OF THE IFB PROVIDES FOR SUBCONTRACTING WITH "THE PRIOR WRITTEN APPROVAL OF THE CONTRACTING OFFICER." THE ARMY, HOWEVER, VIEWED VICTORY'S BID AS NONRESPONSIVE BECAUSE VICTORY DID NOT HAVE THE REQUISITE OPERATING AUTHORITY IN ITS OWN NAME, AND AWARDED A CONTRACT TO COLUMBIA WHEN IT FELT IT COULD NO LONGER WAIT FOR THE ICC TO ACT ON VICTORY'S APPLICATION FOR EMERGENCY TEMPORARY OPERATING AUTHORITY.

THE ARMY IS NOT CORRECT IN TREATING VICTORY'S BID AS NONRESPONSIVE. THE IFB PROVIDES, BIDDERS HAVE UNTIL DATE OF AWARD TO PROVIDE EVIDENCE OF OPERATING AUTHORITY AND IT IS WELL ESTABLISHED THAT LICENSING-TYPE REQUIREMENTS ARE MATTERS OF RESPONSIBILITY, NOT RESPONSIVENESS. 47 COMP. GEN. 539 (1968); 51 ID. 377 (1971). THEREFORE, THE CONTROLLING ISSUE IS NOT WHETHER VICTORY'S BID WAS NONRESPONSIVE BUT RATHER WHETHER THE ARMY COULD PROPERLY REJECT VICTORY AS A NONRESPONSIBLE BIDDER UNDER THE CIRCUMSTANCES REPORTED HERE.

IN KINGPAK, INCORPORATED, INVESTIGATION OF OPERATIONS, 103 M.C.C. 318 (1966), WHICH WAS UPHELD IN HOUSEHOLD GOODS CARRIERS' BUREAU V. UNITED STATES, 288 F. SUPP. 641 (N.D. CAL. 1968), AFF'D PER CURIAM 393 U.S. 265 (1968), THE ICC HELD THAT LOCAL MOTOR CARRIERS PERFORMING LOCAL TRANSPORTATION IN CONNECTION WITH PACKING AND CONTAINERIZATION SERVICES FOR HOUSEHOLD GOODS WHICH WERE TO MOVE IN INTERSTATE COMMERCE WERE REQUIRED TO HAVE ICC OPERATING AUTHORITY. SUBSEQUENTLY, WE UPHELD PROCUREMENT AGENCY DETERMINATIONS THAT CONTRACTS COULD NOT BE AWARDED TO FIRMS WITHOUT SUCH AUTHORITY. 47 COMP. GEN. 539, SUPRA; B-174735, JUNE 7, 1972; B-178043, JULY 27, 1973. WE HAVE ALSO HELD THAT WHERE A SOLICITATION REQUIRES A BIDDER TO HAVE THE OPERATING AUTHORITY IN ITS OWN NAME, THE BIDDER CANNOT SATISFY THE REQUIREMENT BY SUBCONTRACTING WITH ANOTHER COMPANY HAVING THAT AUTHORITY. 50 COMP. GEN. 753 (1971). IN THAT SAME CASE, HOWEVER, WE RECOGNIZED THAT SUCH A REQUIREMENT COULD BE UNDULY RESTRICTIVE OF COMPETITION IN CASES WHERE POSSESSION OF COMPLETE OPERATING AUTHORITY BY THE BIDDER WAS NOT NECESSARY FOR SATISFACTORY CONTRACT PERFORMANCE.

THE ARMY'S POSITION IN THIS CASE APPARENTLY IS BASED UPON INFORMAL ADVICE PROVIDED TO THE DEPARTMENT OF DEFENSE (DOD) BY AN OFFICIAL OF THE ICC. OCTOBER 22, 1971, IN RESPONSE TO THAT ADVICE, THE COMMANDER OF THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE (MTMTS) SENT THE FOLLOWING MESSAGE TO DOD UNITS:

THE INTERSTATE COMMERCE COMMISSION HAS REQUESTED THAT ALL TRANSPORTATION OFFICERS BE ADVISED OF THE NECESSITY FOR CONTRACTORS INVOLVED IN GOVERNMENT PACKING AND CONTAINERIZATION CONTRACTS TO HOLD APPROPRIATE AUTHORITY FROM THE INTERSTATE COMMERCE COMMISSION. THIS AUTHORITY WILL BE EITHER PROPER OPERATING AUTHORITY AS A CARRIER OR PROPER LICENSING AS A BROKER OF TRANSPORTATION.

ON SEPTEMBER 22, 1972, THE MTMTS COMMANDER NOTIFIED DOD UNITS AS FOLLOWS:

THE INTERSTATE COMMERCE COMMISSION REQUIRES ALL CONTRACTORS INVOLVED IN GOVERNMENT PACKING AND CONTAINERIZATION CONTRACTS TO HOLD IN ITS OWN NAME EITHER ICC OPERATING AUTHORITY AS A CARRIER OR A LICENSE AS A BROKER TO COVER THE TRANSPORTATION OR THE ARRANGING OF THE TRANSPORTATION OF SHIPMENTS MOVING IN INTERSTATE COMMERCE.

AS NOTED ABOVE, THE KINGPAK DECISION HELD THAT CARRIERS PERFORMING TRANSPORTATION SERVICES, THAT IS, ACTUAL MOTOR CARRIER OPERATIONS, MUST POSSESS ICC OPERATING AUTHORITY. HOWEVER, THE ICC IN KINGPAK EXPLICITLY RECOGNIZED THAT UNDER SECTION 402(B)(2) OF THE INTERSTATE COMMERCE ACT, 49 U.S. CODE 1002(B)(2), A FREIGHT FORWARDER OF USED HOUSEHOLD GOODS, AS OPPOSED TO THE COMPANY PERFORMING MOTOR CARRIER OPERATIONS FOR THE FREIGHT FORWARDER, NEED NOT POSSESS ICC OPERATING AUTHORITY. IT FURTHER RECOGNIZED THAT A MOTOR CARRIER HAVING ICC OPERATING AUTHORITY COULD ALSO ACT AS A FREIGHT FORWARDER EXEMPT FROM THE REQUIREMENT FOR HAVING ICC AUTHORITY, SO LONG AS CERTAIN PRACTICES WERE OBSERVED BY THE CARRIER. 103 M.C.C. 318, 333-336. ACCORDINGLY, UNDER KINGPAK IT MAY BE POSSIBLE FOR A CONTRACTOR TO PROVIDE REQUIRED SERVICES TO THE GOVERNMENT BY PERFORMING BOTH MOTOR CARRIER OPERATIONS AND FREIGHT FORWARDING OPERATIONS UNDER THE SAME CONTRACT, WITH ICC OPERATING AUTHORITY REQUIRED OF THE CONTRACTOR FOR THE MOTOR CARRIER OPERATIONS IN WHICH IT WOULD ENGAGE, BUT NOT FOR THE SERVICES IT WOULD PROVIDE AS A FREIGHT FORWARDER OF USED HOUSEHOLD GOODS.

HERE, HOWEVER, VICTORY WAS THE LOW BIDDER ONLY ON THE PORTION OF THE IFB CALLING FOR UNACCOMPAINED BAGGAGE SERVICES. ALTHOUGH COUNSEL FOR VICTORY CONTENDS THAT THE STATUTORY EXEMPTION OF FREIGHT FORWARDERS OF USED HOUSEHOLD GOODS FROM ICC REGULATION ENCOMPASSES FORWARDERS OF UNACCOMPANIED BAGGAGE, THE DECISIONS OF THE ICC INDICATE OTHERWISE. FOR EXAMPLE, IN ROUTED THRU-PAC, INC., FREIGHT FORWARDER APPLICATION, 332 I.C.C. 352 (1968), AFFIRMED SUB NOM. AMERICAN MOVERS CONFERENCE ET AL V. UNITED STATES, 307 F.SUPP. 74 (C.D. CAL. 1969), THE ICC DISCUSSED UNACCOMPAINED BAGGAGE AS FOLLOWS:

IT IS APPARENT THAT WHILE PERSONAL CLOTHING, SPORTING EQUIPMENT, AND OTHER PERSONAL BELONGINGS OF A HOUSEHOLDER, CONSTITUTE HOUSEHOLD GOODS, SUCH BAGGAGE WHEN MOVING INDEPENDENTLY AND IN AN ENTIRELY SEPARATE MOVEMENT MAY NOT BE SO CLASSIFIED AND HAS TRADITIONALLY REQUIRED AUTHORITY.

SEE ALSO TRANS-AMERICAN WORLD TRANSIT, INC., FREIGHT FORWARDER APPLICATION, 340 I.C.C. 196 (1973). THUS, IT APPEARS THAT VICTORY COULD NOT PROPERLY ENGAGE IN FREIGHT FORWARDING OPERATIONS INVOLVING INDIVIDUAL SHIPMENTS OF UNACCOMPANIED BAGGAGE WITHOUT THE REQUISITE ICC AUTHORITY. SINCE VICTORY DID NOT HAVE ICC AUTHORITY TO OPERATE EITHER AS A MOTOR CARRIER, A NON-EXEMPT FREIGHT FORWARDER, OR TRANSPORTATION BROKER FOR A PORTION OF THE CONTRACT AREA OF PERFORMANCE, THE CONTRACTING OFFICER PROPERLY REFUSED TO MAKE AN AWARD TO VICTORY. B 158634, OCTOBER 6, 1966; B-178043, SUPRA.

VICTORY ALSO CONTENDS THAT AWARD WAS IMPROPERLY MADE BECAUSE THE ARMY DID NOT GIVE THE ICC SUFFICIENT TIME TO CONSIDER VICTORY'S APPLICATION FOR TEMPORARY OPERATING AUTHORITY. IN THIS RESPECT, VICTORY STATES THAT IT REQUESTED, PRIOR TO DECEMBER 1, 1973, THAT THE ARMY SUPPORT VICTORY'S APPLICATION FOR TEMPORARY AUTHORITY, BUT THAT THE ARMY'S STATEMENT OF SUPPORT WAS NOT FURNISHED UNTIL DECEMBER 27. VICTORY ASSERTS THAT SINCE IT NORMALLY TAKES 2 TO 3 MONTHS FOR TEMPORARY AUTHORITY, THE ARMY SHOULD NOT HAVE MADE AN AWARD TO ANOTHER FIRM UNTIL THE ICC HAD A "REASONABLE PERIOD OF TIME" IN WHICH TO ACT. THE RECORD INDICATES THAT AUTHORIZATION TO AWARD A CONTRACT TO COLUMBIA DURING THE PENDENCY OF THE PROTEST WAS REQUESTED ON FEBRUARY 25, 1974. THAT REQUEST WAS GRANTED ON FEBRUARY 27, WHICH WAS 2 MONTHS AFTER VICTORY'S APPLICATION WAS FILED WITH THE ICC. THE RECORD FURTHER INDICATES THAT THE ICC DENIED VICTORY'S APPLICATION ON MARCH 5, 1974. UNDER THESE CIRCUMSTANCES, THERE IS NO BASIS FOR CONCLUDING THAT THE AWARD WAS MADE IMPROPERLY.