BNUMBER:  B-265931
DATE:  January 18, 1996
TITLE:  Hellenic Technodomiki, S.A.

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Matter of:Hellenic Technodomiki, S.A.

File:     B-265931

Date:     January 18, 1996

James Marketos, Esq., Lane and Mittendorf LLP, for the protester.
Cynthia Guill, Esq., Department of the Navy, for the agency.
Charles W. Morrow, Esq., and Guy R. Pietrovito, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1.  The procuring agency reasonably determined that a joint venture 
satisfied the solicitation's definitive responsibility criterion that 
a contractor possess a category H license under Greek Law, where one 
venturer under the terms of the joint venture agreement was fully 
responsible for the work and possessed the required category H 
license.

2.  Bid allegedly containing some below-cost line item prices is not 
unbalanced, where the bid is not alleged to contain overstated prices 
for other line items.

DECISION

Hellenic Technodomiki, S.A. protests the award of a contract to 
Themeliodomi, S.A. and Contracting, Ltd., a joint venture, under 
invitation for bids (IFB) No. N62470-94-B-4044, issued by the Naval 
Facilities Engineering Command for construction work in Crete, Greece.  
Hellenic contends that the awardee fails to meet a definitive 
responsibility criterion, and that its low bid price was unreasonable 
and unbalanced.

We deny the protest.

The IFB, which sought a contractor to perform various construction 
projects, contained the following qualification requirement:

     "BIDDER'S QUALIFICATIONS:  Before a bid is considered for award, 
     the low responsive bidder will be requested to submit . . . proof 
     that the firm is of the overall . . . category classification "H" 
     licensed under Greek laws and regulations (Greek Ministry of 
     Environment, Planning and Public works Presidential Decree 368 
     dated 30 November 1994) to undertake the construction of this 
     project.  If the bidder is unable to provide this information it 
     may be considered nonresponsible and will not be further 
     considered for award."

At bid opening, the Navy received 13 bids.  The low bid was submitted 
by Themeliodomi/Contracting, while the next low, responsive bid was 
submitted by Hellenic.  With respect to satisfying the qualification 
requirement, Themeliodomi possessed an H category classification 
license and its joint venturer, Contracting, possessed a Z category 
license.[1]  Their joint venture agreement stated that each party 
would provide the necessary specialized personnel and equipment to 
perform the project, would equally share in any profit or damage, and 
Themeliodomi, by virtue of its H class license, would have full 
responsibility for the project.  Based upon this information, the Navy 
determined that Themeliodomi/Contracting satisfied the bidder's 
qualifications requirement.  

Hellenic protests that the qualification requirement is a definitive 
responsibility criterion which the joint venture does not satisfy 
because only Themeliodomi possesses an overall H class license.  
Specifically, Hellenic asserts that Greek presidential decree 609, 
which is referenced by presidential decree 368, provides the rules for 
bidding on Greek public works projects and states as follows:[2]

     "Joint ventures of firms of the same category are accepted in the 
     bidding unless otherwise provided in the call for tenders.  The 
     joint venturers must all belong to the class which is called out 
     in the bidding.  If so provided in the call for tenders, one of 
     the joint venturers can belong to the class called out, and the 
     others may belong to one or two of the immediately lower classes. 
     In such latter case, the firm or firms must hold at least 75 
     percent of the shares."

Hellenic argues that, under decree 609, the Themeliodomi/Contracting 
joint venture cannot be viewed as holding an H class license, because 
only Themeliodomi possesses an class H license and the venturers have 
equal ownership interest in the joint venture. 

Definitive responsibility criteria are specific and objective 
standards established by an agency as a precondition to award that are 
designed to measure a prospective contractor's ability to perform the 
contract.  See Federal Acquisition Regulation  sec.  9.104.2; T. Warehouse 
Corp., B-248951, Oct. 9, 1992, 92-2 CPD  para.  235.  Here, the parties 
agree that the bidder qualification requirement is a definitive 
responsibility criterion. 

We find that the Navy reasonably concluded that the awardee satisfied 
this requirement.  An agency properly can impute the resources, 
capabilities, and facilities of one venturer of a joint venture in 
order to determine that a joint venture satisfies a definitive 
responsibility criterion, where imputation is compatible with the 
purpose for the requirement.  See Loyola College and NonPublic Educ. 
Servs., Inc., a Joint Venture; Johnson & Wales College, B-205994 et 
al., May 16, 1983, 83-1 CPD  para.  507.  Here, the Navy states that the 
qualification requirement was necessary because of the number of 
construction contractors the Navy has been required to default due to 
insufficient resources and expertise to complete projects in Greece; 
the H class licensing requirement is intended to ensure that the 
agency obtains a contractor with sufficient labor, expertise, 
equipment, management, and resources for the project.  The Navy 
determined that this purpose was satisfied here because Themeliodomi 
holds a class H license and is, by virtue of the joint venture 
agreement, fully responsible for the project.  We find no basis to 
object to this determination.  

The Navy also reasonably determined that presidential decree 609, 
cited by the protester as governing the license classification of 
joint ventures, was not applicable to this procurement.  This decree 
expressly applies to Greek public works and projects; it does not 
apply to procurements of the United States.  While the IFB 
incorporated the general business licensing requirements of decree 368 
and this decree references decree 609, the language of decree 609 
makes it clear that this decree applies only to work being performed 
on Greek public works.  In this regard, the protester has identified 
no other laws or regulations that would require the agency to restrict 
eligible contractors to those that satisfy the requirement applicable 
to firms performing work for the Greek government.

Finally, Hellenic's challenge to the awardee's bid as unbalanced and 
unreasonably low on certain line items provides no basis to object to 
the award, where, as here, there is no evidence or assertion that the 
bid was overstated under other line items.  Before a bid can be 
rejected as unbalanced, it must be found to be both mathematically and 
materially unbalanced, and a bid is only mathematically unbalanced if 
it contains both understated and overstated costs.  See Advanced 
Modular Space, Inc., B-265860, Oct. 6, 1995, 95-2 CPD  para.  168.  
Furthermore, the submission of a below-cost bid is not illegal, and 
the mere fact that a bid includes understated prices does not justify 
rejection of the bid.  Nissho Iwai Am. Corp.; Patterson Pump Co., 
B-254870; B-254870.2, Jan. 24, 1994, 94-1 CPD  para.  34.

The protest is denied.

Comptroller General
of the United States

1. Hellenic asserts that Contracting actually holds an overall license 
below category Z.  However, given our decision that the agency could 
reasonably determine that the joint venture met the overall H 
licensing requirement based upon Themeliodomi's H class license and 
agreement to be fully responsible for the project, this argument is 
irrelevant. 

2. While the Navy and the protester have disputed the literal 
translation of presidential decree 609 from Greek into English, the 
protester agrees that the Navy's translation reflects the substance of 
the decree.  In any event, we have used the protester's translation.