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
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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.