B-182808, JAN 17, 1975

B-182808, JAN 17, 1975

1. PROTEST AGAINST CONTRACT AWARD TO LOW BIDDER BECAUSE BIDDER ALLEGEDLY DOES NOT POSSESS CERTIFICATE TO DO BUSINESS IN WASHINGTON, D.C., AS FOREIGN CORPORATION IS DENIED BECAUSE COMPLIANCE WITH STATE OR LOCAL CERTIFICATE, PERMIT OR LICENSE REQUIREMENTS IS MATTER BETWEEN BIDDER AND STATE OR LOCAL AUTHORITY AND DOES NOT AFFECT DETERMINATION OF BIDDER'S RESPONSIBILITY. BURDEN IS ON BIDDER TO MEET STATE AND LOCAL REGULATORY PROVISIONS AND AGENCY IS NOT REQUIRED TO DETERMINE OR INTERPRET SUCH REQUIREMENTS. 2. GAO WILL NOT CONSIDER PROTEST THAT BIDDER FAILED TO COMPLY WITH EXPRESS IFB REQUIREMENT THAT IT MAINTAIN FACILITIES, EQUIPMENT, AND PLACE OF BUSINESS IN DISTRICT OF COLUMBIA BECAUSE COMPLIANCE WITH THIS REQUIREMENT IS NECESSARY ONLY IF DISTRICT DOES NOT REQUIRE CERTIFICATE OF AUTHORITY TO OPERATE, WHICH IS NOT THE CASE HERE. 3. WHILE ALLEGATION AFTER BID OPENING THAT PROVISION OF IFB VIOLATES FEDERAL PROCUREMENT REGULATIONS IS UNTIMELY, 4 C.F.R. 20.2(A), IT IS NEVERTHELESS FOR CONSIDERATION ON MERITS AS AN ISSUE SIGNIFICANT TO PROCUREMENT PRACTICES AND PROCEDURES. 4 C.F.R. SEC. 20.2(B) (1974). PROVISION OF IFB PERMITTING COMPLIANCE WITH DISTRICT OF COLUMBIA LICENSING REQUIREMENTS AFTER AWARD AND BEFORE PERFORMANCE IS NOT INCONSISTENT WITH FPR REQUIREMENT FOR AFFIRMATIVE DETERMINATION OF BIDDER RESPONSIBILITY BEFORE AWARD AS FPR PERMITS SUCH DETERMINATION ON BASIS THAT BIDDER HAS ABILITY TO COMPLY PRIOR TO TIME PERFORMANCE IS DUE.

OFFICE MOVERS, INCORPORATED:

BY LETTER OF DECEMBER 5, 1974, OFFICE MOVERS, INCORPORATED (OFFICE MOVERS), PROTESTED TO THIS OFFICE AGAINST THE AWARD OF A CONTRACT TO MANAS -SHERDEL TRANSPORT CORPORATION (MANAS-SHERDEL) UNDER INVITATION FOR BIDS (IFB) NO. 3TTM-892, ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA), WASHINGTON, D.C., FOR TRANSPORTATION AND RELATED MOVING SERVICES FOR THE RELOCATION OF THE U.S. DEPARTMENT OF LABOR WITHIN THE DISTRICT OF COLUMBIA (DISTRICT). AS THE BASIS FOR ITS PROTEST, OFFICE MOVERS CONTENDS THAT MANAS-SHERDEL HAS NOT COMPLIED WITH THE IFB'S PERFORMANCE CAPABILITY REQUIREMENTS. ADDITIONALLY, OFFICE MOVERS PROTESTS AGAINST THE PROVISION OF THE IFB PERMITTING THE PROSPECTIVE CONTRACTOR TO DEMONSTRATE ITS PERFORMANCE CAPABILITY AFTER AWARD OF THE CONTRACT AND BEFORE COMMENCEMENT OF PERFORMANCE. WE HAVE BEEN ADVISED BY GSA THAT AN AWARD UNDER THIS SOLICITATION WAS MADE ON JANUARY 9, 1975.

THE SPECIFIC PROVISION OF THE IFB IN ISSUE IS PARAGRAPH 20 OF THE GENERAL PROVISIONS (TRANSPORTATION CONTRACTS), ENTITLED PERFORMANCE CAPABILITY. THIS PARAGRAPH PROVIDES IN PERTINENT PART AS FOLLOWS:

"(B) IF THE MOVE SPECIFIED HEREIN IS TO BE PERFORMED BY THE CONTRACTOR AS A CARRIER WHOLLY WITHIN THE BORDERS OF ONE STATE OR THE DISTRICT OF COLUMBIA (I.E., AN INTRASTATE MOVE), THE CONTRACTOR SHALL, WHEN REQUIRED BY THE STATE OR THE DISTRICT OF COLUMBIA IN WHICH THE MOVE IS TO TAKE PLACE, HAVE OBTAINED AND HOLD APPROPRIATE AND CURRENT OPERATING AUTHORITY FROM SUCH JURISDICTION, IN THE FORM OF A CERTIFICATE, PERMIT, OR EQUIVALENT LICENSE TO OPERATE, OR IF NO SUCH AUTHORITY TO OPERATE IS REQUIRED BY THE STATE OR THE DISTRICT OF COLUMBIA IN WHICH THE MOVE IS TO TAKE PLACE, THEN THE CONTRACTOR AS CARRIER SHALL MAINTAIN FACILITIES, EQUIPMENT, AND A BUSINESS ADDRESS WITHIN THE JURISDICTION IN WHICH THE MOVE IS TO TAKE PLACE; PROVIDED, THAT IF THE MOVE IS TO ORIGINATE AND/OR TERMINATE WITHIN AN AREA OF ONE STATE, OR THE DISTRICT OF COLUMBIA, WHICH COMPRISES A PART OF A RECOGNIZED COMMERCIAL ZONE (SEE 49 CFR PART 1048), WHOSE BOUNDARIES ENCOMPASS PORTIONS OF MORE THAN ONE STATE OR THE DISTRICT OF COLUMBIA, IT SHALL BE SUFFICIENT IF THE CONTRACTOR AS CARRIER MAINTAINS FACILITIES, EQUIPMENT, AND A BUSINESS ADDRESS WITHIN THE COMMERCIAL ZONE AND HOLDS APPROPRIATE OPERATING AUTHORITY, IF REQUIRED, FROM THE JURISDICTION WITHIN WHICH HE MAINTAINS SUCH FACILITIES, EQUIPMENT, AND BUSINESS ADDRESS.

"(D) THERE SHALL BE COMPLIANCE WITH THE APPLICABLE REQUIREMENTS OF THIS CLAUSE AT LEAST 14 DAYS BEFORE THE DATE ON WHICH PERFORMANCE OF THE CONTRACT SHALL COMMENCE UNDER THE TERMS AND CONDITIONS HEREIN SPECIFIED: EXCEPT THAT, IF THE PERIOD FROM THE DATE OF AWARD OF THE CONTRACT TO THE DATE THAT PERFORMANCE SHALL COMMENCE IS LESS THAN 28 DAYS, THE CONTRACTOR NEED ONLY COMPLY WITH THE APPLICABLE REQUIREMENTS OF THIS CLAUSE MIDWAY BETWEEN THE TIME OF AWARD AND THE TIME OF COMMENCEMENT OF PERFORMANCE."

PURSUANT TO FEDERAL PROCUREMENT REGULATIONS SEC. 1-7.703-20 (1964 ED. AMEND. 131), THIS CLAUSE IS REQUIRED TO BE INCLUDED IN EACH MOVING CONTRACT INVOLVING THE RELOCATION OF A FEDERAL OFFICE.

OFFICE MOVERS INITIALLY CONTENDS THAT AS THIS CONTRACT IS TO BE PERFORMED ENTIRELY WITHIN THE DISTRICT OF COLUMBIA, MANAS-SHERDEL DOES NOT POSSESS APPROPRIATE OPERATING AUTHORITY FROM THE DISTRICT BECAUSE IT IS NOT A DISTRICT OF COLUMBIA CORPORATION AND IT DOES NOT HOLD A CERTIFICATE OF AUTHORITY TO TRANSACT BUSINESS IN THE DISTRICT, CITING DISTRICT OF COLUMBIA CODE SEC. 29-933 (1973). THE PROTESTER CONSIDERS THIS CERTIFICATE TO BE REQUIRED BY THE IFB, AND THEREFORE ARGUES THAT OFFICE MOVERS DOES NOT MEET THE REQUIREMENTS OF PARAGRAPH 20(B) AND ITS BID CANNOT BE ACCEPTED.

THE CERTIFICATE IN QUESTION IS NOT REQUIRED BY THE UNITED STATES GOVERNMENT AS A FEDERAL PREREQUISITE TO AWARD, BUT RATHER IS NECESSARY FOR OPERATION OF A FOREIGN CORPORATION IN THE DISTRICT. AS SUCH, THIS REQUIREMENT IS ESSENTIALLY THE SAME AS THE CERTIFICATE REQUIREMENTS OF THE SEVERAL STATES. A STATE REQUIREMENT FOR PERMITS, LICENSES AND CERTIFICATES IS CONSIDERED TO BE A MATTER OF A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY, AND MORE SPECIFICALLY TO RELATE TO ITS ELIGIBILITY TO RECEIVE, AND AUTHORIZATION TO PERFORM, THE CONTRACT IN QUESTION. MATTER OF PAUL'S LINE, INCORPORATED, ET AL., B-179605, FEBRUARY 7, 1974; 53 COMP. GEN. 36, 38 (1973). AS A RULE, WHETHER THE CONTRACTOR COMPLIES WITH STATE AND LOCAL LICENSING REQUIREMENTS IS A MATTER BETWEEN THE CONTRACTOR AND THE APPROPRIATE STATE OR LOCAL AUTHORITY, B 176801, NOVEMBER 22, 1972, AND DOES NOT AFFECT THE DETERMINATION OF THE CONTRACTOR'S RESPONSIBILITY, 51 COMP. GEN. 377 (1971), EXCEPT IN CIRCUMSTANCES WHERE THE SOLICITATION MAY SPECIFICALLY REQUIRE THAT A KNOWN LICENSE, PERMIT, OR CERTIFICATE BE SECURED AS A PREREQUISITE TO AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY. 53 COMP. GEN. 51 (1973). THUS, WE HAVE HELD THAT A BIDDER'S FAILURE TO SECURE A CERTIFICATE OF AUTHORITY TO OPERATE IN A STATE AS A FOREIGN CORPORATION DOES NOT NECESSARILY REQUIRE THAT THE BIDDER BE DECLARED NONRESPONSIBLE. B-174216, MARCH 24, 1972.

IN THIS INSTANCE, PARAGRAPH 20(B) OF THE IFB, A REQUIRED PROVISION IN ALL MOVING CONTRACTS, SEEKS TO INSURE THAT THE BIDDER IS PROPERLY AUTHORIZED AND COMPETENT TO PERFORM THE CONTRACT, FPR SEC. 1-7.703-20 (1964 ED. AMEND. 131), AND WAS NOT DESIGNED SPECIFICALLY FOR THIS IFB. THE EFFECT OF THIS PROVISION IS TO PLACE THE BURDEN ON THE CONTRACTOR TO MEET APPLICABLE STATE AND LOCAL REGULATORY REQUIREMENTS, AND GSA SHOULD NOT BE COMPELLED TO DETERMINE WHAT THESE REQUIREMENTS MAY BE, OR TO INTERPRET THEM. RATHER, THE BURDEN OF DETERMINING THE EXISTENCE OF, AND COMPLIANCE WITH, APPLICABLE STATE AND LOCAL REQUIREMENTS IS IMPOSED ON THE CONTRACTOR. MATTER OF PAUL'S LINE, INCORPORATED, ET AL., B 179605, SUPRA.COMPLIANCE WITH THESE REQUIREMENTS IS, WE BELIEVE, A MATTER BETWEEN MANAS-SHERDEL AND THE DISTRICT OF COLUMBIA. ACCORDINGLY, MANAS-SHERDEL'S POSSESSION OF THE CERTIFICATE IN QUESTION NEED NOT BE A CONSIDERATION IN THE AWARD OF THE CONTRACT.

WHILE OFFICE MOVERS ALSO ARGUES THAT MANAS-SHERDEL HAS NOT COMPLIED WITH PARAGRAPH 20(B) BECAUSE IT DOES NOT MAINTAIN FACILITIES, EQUIPMENT, OR A BUSINESS ADDRESS WITHIN THE DISTRICT, THIS REQUIREMENT APPLIES ONLY IF THE DISTRICT DOES NOT REQUIRE SOME FORM OF AUTHORITY TO OPERATE. AS THE DISTRICT DOES IN FACT REQUIRE A FOREIGN CORPORATION TO OBTAIN A CERTIFICATE OF AUTHORITY TO OPERATE, THE REQUIREMENT DOES NOT APPLY AND THIS ASPECT OF THE PROTEST IS WITHOUT MERIT.

FINALLY, OFFICE MOVERS ARGUES THAT PARAGRAPH 20(D) OF THE IFB VIOLATES FPR SECS. 1-1.310-4 AND 1-1.310-6 (1964 ED.), WHICH CONCERN BIDDER RESPONSIBILITY, BECAUSE IT PERMITS THE PROSPECTIVE CONTRACTOR TO DEMONSTRATE COMPLIANCE WITH PARAGRAPH 20(B) AFTER AWARD OF THE CONTRACT AND BEFORE COMMENCEMENT OF PERFORMANCE. THUS, IT IS ARGUED THAT PARAGRAPH 20(D) IS VOID AND UNENFORCEABLE. FPR SEC. 1-1.310 (1964 ED.) PRESENTLY RESERVED AND DOES NOT CONTAIN THE PROVISION REFERRED TO; HOWEVER, IT APPEARS FROM THE LETTER OF COUNSEL FOR OFFICE MOVERS THAT THE PROVISIONS REFERRED TO ARE FPR SECS. 1-1.1202(A) AND 1-1.1204 1(A) (1964 ED. AMEND. 95), WHICH REQUIRE, INTER ALIA, THAT NO AWARD BE MADE UNTIL THE CONTRACTING OFFICER FIRST MAKES AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY.

AS THIS ARGUMENT IS MADE WELL AFTER NOVEMBER 14, 1974, THE DATE OF BID OPENING, IT IS UNTIMELY PURSUANT TO SECTION 20.2(A) OF OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS, WHICH PROVIDES THAT PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN ANY TYPE OF SOLICITATION SHALL BE FILED IN GAO PRIOR TO BID OPENING. 4 C.F.R. SEC 20.2(A) (1974). NEVERTHELESS, WE WILL CONSIDER THIS ARGUMENT ON ITS MERITS BECAUSE WE BELIEVE IT RAISES ISSUES SIGNIFICANT TO PROCUREMENT PRACTICES AND PROCEDURES. 4 C.F.R. SEC. 20.2(B) (1974). WHILE THE APPLICABLE REGULATIONS REQUIRE THAT A PROSPECTIVE CONTRACTOR MUST MEET CERTAIN MINIMUM STANDARDS OF RESPONSIBILITY AS SET FORTH THEREIN, THEY ALSO PERMIT AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY ON THE BASIS OF A FINDING THAT THE PROSPECTIVE CONTRACTOR HAS THE ABILITY TO COMPLY THEREWITH. THUS LITERAL COMPLIANCE BEFORE AWARD IS NOT REQUIRED SO LONG AS IT IS DETERMINED THAT THE BIDDER HAS THE CAPABILITY TO COMPLY BEFORE PERFORMANCE IS DUE. THEREFORE, WE DO NOT AGREE THAT ANY INCONSISTENCY EXISTS BETWEEN THE IFB PROVISION AND THE CITED REGULATION.