B-164391, AUG. 16, 1968

B-164391, AUG. 16, 1968

TO SMITH, CURRIE AND HANCOCK:

FURTHER REFERENCE IS MADE TO THE PROTEST MADE ON BEHALF OF SAM P. WALLACE AND COMPANY, INCORPORATED, DALLAS, TEXAS, AGAINST THE AWARD OF A CONTRACT BY THE UNIVERSITY OF SOUTH ALABAMA TO ANOTHER BIDDER UNDER AN ADVERTISEMENT FOR BIDS COVERING THE PROPOSED CONSTRUCTION OF A CENTRAL UTILITIES PLANT FOR THE UNIVERSITY AT MOBILE, ALABAMA (HEFA PROJECT 5/4/- 00036-0, DHUD PROJECT PFL ALA 145-PHASE II).

YOU INDICATED THAT THE CONSTRUCTION PROJECT INVOLVES THE USE OF FEDERAL FUNDS, THAT THE LOW BID WAS SUBMITTED BY SAM P. WALLACE AND COMPANY, INCORPORATED, AND THAT IT WAS PROPOSED BY THE UNIVERSITY OF SOUTH ALABAMA TO AWARD A CONTRACT TO THE SECOND LOWEST BIDDER BECAUSE YOUR CLIENT DID NOT HAVE A CURRENT LICENSE FOR CONSTRUCTION WORK IN THE STATE OF ALABAMA. YOU ALSO INDICATED THAT IT IS YOUR CLIENT'S POSITION THAT ITS PREVIOUS ALABAMA LICENSE HAD BEEN REVOKED BECAUSE OF POLITICAL INFLUENCE OR OTHER WRONGFUL REASONS.

WE HAVE RECEIVED A REPORT IN THE MATTER FROM THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE. THE REPORT SHOWS THAT SIX BIDS RANGING FROM $2,187,000 TO $2,641,000 WERE RECEIVED, THAT YOUR CLIENT SUBMITTED THE LOWEST BID AND THAT THE SECOND LOWEST BID, IN THE TOTAL AMOUNT OF $2,299,422, WAS SUBMITTED BY THE DONAGHEY PLUMBING AND HEATING COMPANY. AFTER OPENING OF BIDS ON MAY 3,1968, IT WAS DETERMINED THAT YOUR CLIENT WAS NOT A LICENSEE UNDER THE PROVISIONS OF TITLE 46, CHAPTER 4, CODE OF ALABAMA, AND THE LOW BID WAS REJECTED IN ACCORDANCE WITH THAT PART OF SECTION 77 OF TITLE 46 WHICH MAKES IT A MISDEMEANOR FOR AN OWNER, ARCHITECT OR ENGINEER TO RECEIVE OR CONSIDER A BID FROM ANYONE NOT PROPERLY LICENSED BY THE STATE LICENSING BOARD FOR GENERAL CONTRACTORS. CONTRACT AWARD WAS MADE TO THE DONAGHEY PLUMBING AND HEATING COMPANY AND THE CONTRACT WAS EXECUTED ON MAY 24, 1968.

THE DEPARTMENTAL REPORT SETS FORTH THAT, WHILE THE PROPOSED CONSTRUCTION CONCERNS A TITLE I PROJECT UNDER THE HIGHER EDUCATION FACILITIES ACT OF 1963, PUBLIC LAW 88-204, 77 STAT. 363, IT IS FEDERALLY ASSISTED PROJECT AND NOT ONE OF DIRECT FEDERAL CONSTRUCTION. THE REPORT STATES THAT THERE IS NO INDICATION THAT LICENSURE OF CONTRACTORS IN ALABAMA IS SO RESTRICTIVE AS TO UNREASONABLY INHIBIT THE LIKELIHOOD OF ACHIEVING TRULY COMPETITIVE BIDDING, THAT THERE IS ALSO NO INDICATION THAT YOUR CLIENT WAS IMPROPERLY DENIED A LICENSE, THAT THE UNIVERSITY OF SOUTH ALABAMA COMPLIED WITH ALL APPLICABLE REQUIREMENTS OF THE TITLE I GRANT PROGRAM, AND THAT THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE ACCORDINGLY CONCURRED IN THE AWARD OF THE CONTRACT TO THE DONAGHEY PLUMBING AND HEATING COMPANY.

WE HAVE NOT BEEN FURNISHED DETAILED INFORMATION CONCERNING THE CIRCUMSTANCES UNDER WHICH A PREVIOUS LICENSE OF YOUR CLIENT WAS REVOKED BY THE STATE LICENSING BOARD. HOWEVER, THE ATTORNEY FOR THE UNIVERSITY OF SOUTH ALABAMA HAS INDICATED IN HIS REPORT THAT HE WAS ADVISED THAT YOUR CLIENT FAILED TO FURNISH A FINANCIAL STATEMENT OR SOME OTHER DOCUMENT WHICH HAD BEEN REQUESTED BY THE STATE LICENSING BOARD. IF SO, IT DOES NOT APPEAR THAT THE REVOCATION OF THE LICENSE WAS DUE TO ANY POLITICAL INFLUENCE OR OTHER WRONGFUL MEANS OF ATTEMPTING TO PREVENT YOUR CLIENT FROM PERFORMING CONSTRUCTION WORK IN THE STATE OF ALABAMA BUT, RATHER, TO YOUR CLIENT'S FAILURE, INADVERTENTLY OR OTHERWISE, TO SUBMIT INFORMATION TO THE BOARD WHICH THE BOARD CONSIDERED TO BE NECESSARY TO DETERMINE WHETHER THE THEN EXISTING LICENSE SHOULD BE ALLOWED TO REMAIN IN EFFECT. THE ATTORNEY FOR THE UNIVERSITY ALSO INDICATED HE WAS ADVISED BY THE STATE LICENSING BOARD THAT YOUR CLIENT KNEW THAT IT DID NOT HAVE A LICENSE, THAT THE BOARD HAD ACTED IN GOOD FAITH AND THAT NOTHING FURTHER COULD BE DONE. IN RESPONSE TO A REQUEST FOR FORMAL ADVICE IN REGARD TO THE QUESTION WHETHER YOUR CLIENT POSSESSED A VALID LICENSE, THE UNIVERSITY WAS ADVISED BY TELEGRAM DATED MAY 16, 1968, FROM THE EXECUTIVE SECRETARY OF THE LICENSING BOARD, THAT YOUR CLIENT "IS NOT LICENSED BY THIS BOARD * * * NOR DO THEY HAVE AN APPLICATION FOR LICENSE ON FILE AS OF THIS TE.'

ALTHOUGH A GRANT OF FEDERAL FUNDS IS INVOLVED IN CONNECTION WITH THE PROPOSED CONSTRUCTION WORK, IT IS APPARENT FROM THE REPORT OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE THAT THE GRANT WAS NOT MADE SUBJECT TO ANY CHANGE IN THE LAW OF THE STATE OF ALABAMA REGARDING THE MATTER OF AWARDING CONTRACTS FOR CONSTRUCTION WORK OR THE LICENSING OF GENERAL CONTRACTORS. WE HAVE NO REASON TO QUESTION THE STATEMENT IN THE REPORT OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE THAT THERE IS NO INDICATION THAT YOUR CLIENT WAS IMPROPERLY DENIED A LICENSE. SINCE AN AWARD OF A CONTRACT TO YOUR CLIENT APPARENTLY WOULD HAVE CONSTITUTED A VIOLATION OF SECTION 77 OF TITLE 46, CHAPTER 4, CODE OF ALABAMA, THERE APPEARS TO BE NO BASIS UPON WHICH WE WOULD BE WARRANTED IN TAKING THE POSITION THAT THE BID OF YOUR CLIENT SHOULD NOT HAVE BEEN REJECTED.

ACCORDINGLY, THE PROTEST MADE TO OUR OFFICE IN THE MATTER IS HEREBY DENIED.