BNUMBER:  B-251398.2
DATE:  January 26, 1996
TITLE:  Wackenhut International, Inc./Instituto di Viglanza
Citta'
di Roma S.r.l (Mettronotte)--a joint venture

**********************************************************************

Matter of:     Wackenhut International, Inc./Instituto di Viglanza 
Citta'
               di Roma S.r.l (Mettronotte)--a joint venture

File:     B-251398.2

Date:     January 26, 1996

Richard J. Webber, Esq., and Tenley A. Carp., Esq., Arent Fox, for the 
protester.
William J. Guidice, for United Mondialpol International S.r.l., a 
subsidiary of United International Investigative Services, an 
interested party.
Kathleen D. Martin, Esq., Department of State, for the agency.
Mary G. Curcio, Esq., and John M. Melody, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Firm that submitted a proposal in response to solicitation to provide 
security services for United States Embassy in Italy was ineligible 
for award of 5-point preference reserved for United States persons or 
qualified joint venture persons, under section 136 of the Foreign 
Relations Authorization Act for Fiscal Years 1991 and 1992, where the 
firm is incorporated in Italy, the Italian and American owners of the 
corporation are not jointly and severally liable for contract 
performance. 

DECISION

Wackenhut International Inc./Instituto di Viglanza Citta' di Roma 
S.r.l. (Mettronotte)--a joint venture protests the award of a contract 
to United Mondialpol International S.r.l. (UMI) under solicitation No. 
11/92, issued by the U.S. Embassy, Rome, Italy, for security guard 
services.  The protester asserts that the award to UMI was improper 
because UMI improperly was determined eligible for a 5-point 
evaluation preference reserved for United States persons and qualified 
joint venture persons.

We sustain the protest.

The solicitation provided that technical factors were worth 60 points, 
price was worth 40 points, and that 5 points were to be awarded to 
firms that qualified as United States offerors.  During the course of 
the procurement, the agency issued   13 amendments, held three rounds 
of discussions, and requested and received 3 best and final offers 
(BAFO).  Following the final evaluation, UMI's BAFO with 104.93 points 
and Wackenhut/Instituto's with 104.42 points were the highest-rated 
proposals.  Both offerors' proposals were awarded the 5-point United 
States offeror preference.  The agency awarded the contract to UMI 
based on its high score.  

Wackenhut/Instituto protests that UMI does not qualify as a United 
States person or qualified joint venture person and that, 
consequently, the agency improperly awarded UMI the 5-point 
preference.  Since UMI's total score was only .51 points higher, 
Wackenhut/Instituto maintains that without the 5 points awarded UMI's 
proposal Wackenhut/Instituto's proposal would be the highest rated and 
in line for award.  

The preference in question is awarded pursuant to section 136 of the 
Foreign Relations Authorization Act for Fiscal Years 1991 and 1992, as 
amended, 22 U.S.C.  sec.  4864(c)(7) (1994), which provides that the State 
Department should

     "give preference to United States persons and qualified United 
     States joint venture persons where such persons are price 
     competitive to the non-United States persons bidding on the 
     contract, are properly licensed by the host government, and are 
     otherwise qualified to carry out all terms of the contract."
    
A United States person is defined as a person which, among other 
things, is incorporated or legally organized under the laws of the 
United States.  22 U.S.C.  sec.  4864(d)(1)(A).  A qualified joint venture 
person is defined as a joint venture in which a United States person 
or persons owns at least 51 percent of the assets of the joint 
venture.  22 U.S.C.  sec.  4864(d)(2).  

Under the solicitation, offerors wishing to qualify for the 5-point 
preference for United States persons or joint venture persons were 
required to submit, with their proposal, a "Statement of 
Qualifications for Purposes of Obtaining Preference as a U.S. Person."  
The statement of qualifications form defines a joint venture as:

     "a formal or de facto association of two or more persons or 
     entities to carry out a single business enterprise for profit, 
     for which purpose they combine their property, money, effects, 
     skill, and knowledge.  To be acceptable, all members of a joint 
     venture must be jointly and severally liable for full performance 
     and resolution of matters arising out of the contract."  

United International Investigative Services, Inc. (UIIS), a U.S. 
corporation, and Mondialpol Roma S.p.a., an Italian corporation, 
formed a joint venture with the name United Mondialpol International, 
Ltd. and, as a joint venture, submitted an offer executed by William 
J. Guidice, Managing Director of the joint venture, in response to the 
solicitation by the February 28, 1994, due date for initial proposals.  
Between the time this initial proposal was submitted and the time the 
first BAFO was submitted in September 1994, UIIS and Mondialpol had 
joined to form an Italian corporation with the name United Mondialpol 
International S.r.l..[1]  The Application for Registration with the 
Civil Court of Rome shows that the Deed of Incorporation was drawn up 
on April 18, 1994, and approved by the Court of Rome on June 3, 1994.  
Documents submitted with the protest show that UIIS contributed 51 
percent of the funds, and Mondialpol 49 percent, to start the 
corporation. 

The September 1994 BAFO was not submitted in the name of the joint 
venture United Mondialpol International, Ltd.; it was submitted in the 
name of the newly formed Italian corporation UMI, which was identified 
as a subsidiary of UIIS, and was signed by Mr. Guidice as managing 
director of UMI.  Subsequent BAFOs were also submitted in the name of 
UMI, which was awarded the contract based on its high point score, 
which included the 5-point preference.  

UMI is incorporated in Italy, under Italian law.  Therefore, it does 
not qualify as a United States person under 22 U.S.C.  sec.  4864(d)(1)(A) 
and is not entitled to the 5-point preference.  Nor can UMI be 
considered a qualified joint venture person inasmuch as UMI is not a 
joint venture of UIIS and Mondialpol, but is an Italian S.r.l. 
corporation, in which UIIS and Mondialpol are the shareholders.

It appears that the agency accepted UMI's representation that UMI was 
also a joint venture of UIIS and Mondialpol to determine that firm was 
entitled to the 5-point preference.  However, even assuming that an 
Italian S.r.l. corporation can also be considered a joint venture, UMI 
was not a qualified joint venture person under the definition provided 
in the solicitation.  In this regard, under the joint venture person 
definition, to be a qualified joint venture, both joint venturers must 
have joint and several liability for full performance and resolution 
of all matters arising out of the contract.   Since both UIIS' and 
Mondialpol's liability therefore is limited to their respective 
investments in UMI, neither firm satisfies the joint and several 
liability requirement to be considered a qualified joint venture.  
Further, there is no indication in the UMI BAFOs that UIIS and 
Mondialpol are jointly and severally liable.  The BAFO was signed by 
Mr. Guidice as managing director of UMI, which the BAFO indicated was 
a subsidiary of UIIS.  While Mr. Guidice is also the president and 
sole shareholder of UIIS, he did not sign the offer on behalf of UIIS.  
Further, none of the BAFOs was signed on behalf of Mondialpol.  

Since UMI does not meet the definition of a United States person or a 
United States qualified joint venture person, it should not have been 
awarded the 5-point preference.  Because UMI's score without the 
preference is 99.93 points, lower than Wackenhut/Instituto's score of 
104.42, and the agency based the award on the point scores, 
Wackenhut/Instituto was the proper awardee.

We recommend that the agency terminate UMI's contract for the 
convenience of the government, and make award to Wackenhut/Instituto 
for the remaining portion of the contract, presuming that the 
protester is otherwise qualified.  We also find that 
Wackenhut/Instituto is entitled to recover its protest costs, 
including reasonable attorneys' fees.  Wackenhut/Instituto should 
submit its claim for these costs directly to the agency within 60 days 
of receiving this decision.  4 C.F.R.  sec.  21.6(f)(1) (1995).

The protest is sustained.

Comptroller General
of the United States

1. Under Italian law, an Italian corporation with S.r.l. status limits 
the liability of its shareholders to the amount they have invested in 
the company.  See Martindale-Hubbell International Law Digest, 1995, 
Italy Law Digest at page 4.