BNUMBER:  B-278515 
DATE:  February 9, 1998
TITLE: HAP Construction, Inc., B-278515, February 9, 1998
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Matter of:HAP Construction, Inc.

File:     B-278515

Date:February 9, 1998

Theodore M. Bailey, Esq., for the protester.
Christopher E. Kohler for National Environmental Services Corporation, 
an intervenor.
Sherry Kinland Kaswell, Esq., Department of the Interior, for the 
agency.
Robert C. Arsenoff, Esq., and Paul I. Lieberman, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

1. General licensing requirement is a performance requirement, not a 
definitive responsibility criterion, and need not be satisfied prior 
to award.

2. Protest that awardee did not satisfy various definitive experience 
criteria is denied where record establishes that the contracting 
officer had a reasonable basis for concluding that criteria were met 
prior to award.

DECISION

HAP Construction, Inc. protests the award of a contract to National 
Environmental Services Corporation (NESC) under invitation for bids 
(IFB) No. 1425-97-S1-81-90001, issued by the Bureau of Reclamation, 
Department of the Interior, for certain demolition and construction 
work in the United States Virgin Islands.  HAP principally contends 
that NESC did not satisfy various definitive responsibility criteria 
set forth in the solicitation.

We deny the protest.

BACKGROUND

The IFB, issued on March 6, 1997, was amended four times, and opening 
occurred on July 1.  The specifications called for the removal of a 
catchment basin, the demolition of a hotel complex, and the 
replacement of a dock at Water Island in the Virgin Islands.  In the 
"Foreword" to the solicitation the estimated "cost range" of the 
project was listed as $1,000,001 to $5,000,000.

Section I.66 of the IFB set forth the clause contained in Federal 
Acquisition Regulation (FAR)  sec.  52.236-7, entitled "Permits and 
Responsibilities," which provides in pertinent part: "The Contractor 
shall, without additional expense to the Government, be responsible 
for obtaining any necessary licenses and permits, and for complying 
with any Federal, State, and municipal laws, codes, and regulations 
applicable to the performance of the work."  The clause goes on to 
list various other contractor obligations during the performance of 
the contract.

In addition, IFB section M.2 (a), entitled "Additional Definitive 
Responsibility Criteria--Bureau of Reclamation," required each offeror 
or, if applicable, its subcontractor to have at least 5 years 
experience as a "licensed contractor" in asbestos remediation, 
hazardous material remediation and in building demolition.  Further, 
the clause required each offeror (or subcontractor), to have completed 
in the last 5 years at least three asbestos remediation projects of 
similar magnitude to the current project; at least three hazardous 
remediation projects, with multiple waste streams, of similar 
magnitude to this project; and at least three building demolition 
projects of similar magnitude to this project.

Thirteen bids were received ranging from NESC's low bid of $1,135,659 
to the high bid of $4,537,989; HAP's bid of $3,222,027 was eleventh 
low.  NESC proposed Lepi Enterprises, Inc. as its asbestos removal 
subcontractor, and proposed to do the hazardous materials work and the 
building demolition work itself.  This protest was filed on October 30 
and award was made to NESC on November 26. 

PROTEST AND ANALYSIS

HAP's protest consists of three sets of allegations:  (1) neither NESC 
nor Lepi possessed valid Virgin Island licenses necessary to perform 
the contract prior to award; (2) neither NESC nor Lepi met the 
definitive experience requirements set forth in Section M.2(a); and 
(3) the agency treated HAP unfairly.[1]

Licenses

HAP argues that possession of valid Virgin Islands licenses was a 
definitive responsibility criterion which was required to be satisfied 
prior to award.  The protester further alleges that neither NESC nor 
Lepi had valid Virgin Islands licenses before the November 26 award 
date and, therefore, they were ineligible for award.

Notwithstanding HAP's understanding to the contrary, the IFB did not 
require that the bidders provide evidence of licensing with their 
bids, rather the IFB simply used standard FAR language calling for 
compliance with any applicable licensing requirements during the 
performance of the contract.  A general requirement such as this to 
comply with federal, state or local laws and to obtain necessary local 
licenses does not itself render the requirement a definitive 
responsibility criterion even if local statutes require licenses as a 
precondition to submitting a bid.  International Serv. Assocs., Inc., 
B-253050, Aug. 4, 1993, 93-2 CPD  para.  82 at 3-4.  Rather, the requirement 
is a performance requirement which may be satisfied during contract 
performance and does not affect the decision to award except as a 
general responsibility matter.  Id.; Restec Contractors, Inc., 
B-245862, Feb. 6, 1992, 92-1 CPD  para.  154 at 4.

HAP argues that an answer to a bidder's question contained in 
amendment No. 003 to the IFB concerning licensing converted the 
general requirement into a definitive responsibility requirement.  The 
answer was as follows: ". . . [licensing] will be part of the 
responsibility determination prior to award."  To make this kind of 
performance requirement a definitive responsibility criterion, the 
language of the solicitation must specifically require submission of 
evidence that a bidder meets the requirement prior to award.  Restec 
Contractors, Inc., supra, at 3-4; Honolulu Marine, Inc., B-248380, 
Aug. 6, 1992, 92-2 CPD  para.  87 at 3-4.  The language pointed to by HAP 
merely refers to the general affirmative responsibility determination 
required for any award decision; it does not impose the requirement of 
pre-award submission of licensing documentation necessary to convert 
the licensing requirement into a definitive responsibility criterion.  
Restec Contractors, Inc., 
supra, at 3-4.  Affirmative determinations of general responsibility 
are not reviewable by this Office absent a showing of possible bad 
faith on the part of government officials.  Bid Protest Regulations, 4 
C.F.R.  sec.  21.5(c) (1997).  Although HAP has alleged bad faith in this 
matter, as discussed below, there is no evidence of bad faith on the 
part of the agency.

HAP also argues that, since the agency in some cases began to treat 
licensing as a definitive responsibility criterion when it asked firms 
for licenses prior to award, the requirement was converted to one of 
definitive responsibility.  We are unaware of any legal support for 
this position, and the agency's actions merely reflect a response to 
the protest issues raised by HAP in the context of the agency's 
general responsibility determination.

Definitive Responsibility Criteria--Experience

HAP alleges that the contracting officer had insufficient evidence 
prior to award from which to conclude that Lepi and NESC met the 
definitive experience criteria relating to asbestos removal, hazardous 
material removal, and demolition.  In this regard, HAP asserts that 
neither firm had the requisite 5 years experience as a licensed 
contractor and that Lepi's three asbestos projects were not similar in 
magnitude to the Virgin Islands project.

Literal compliance with definitive responsibility criteria is not 
required where there is evidence that an offeror has exhibited a level 
of achievement equivalent to the specified criteria.  Western Roofing 
Serv., B-232666.3, Apr. 11, 1989, 89-1 CPD  para.  368 at 4.  Whether 
sufficient evidence exists to conclude that an offeror has met such a 
criterion is subject to considerable discretion; the relative quality 
of the evidence of compliance is a matter for the judgment of the 
contracting officer and the extent to which investigation may be 
required is a matter for the contracting officer to determine, not 
this Office.  Id. at 3.

HAP's first allegation in this regard is that the contracting officer 
could not reasonably conclude that Lepi had been a licensed asbestos 
contractor for 5 years as required by section M.2 of the IFB[2] based 
solely upon information indicating that the firm was incorporated in 
1986.  In our view, the contracting officer reasonably relied on 
NESC's signed certification that Lepi met the requirement in 
conjunction with the description of the three asbestos projects 
performed by Lepi--in a field requiring licensure--in determining that 
the firm was licensed for at least 5 years notwithstanding that the 
agency did not have copies of Lepi's licenses in its possession prior 
to award.[3]

HAP's second allegation is that Lepi's three described projects were 
not sufficiently similar in scope to the Virgin Islands project, which 
called for the removal of 90,000 square feet of asbestos, because they 
consisted of projects involving between 3,000 and 45,000 square feet 
of asbestos removal.  The agency states that it considered the 
projects sufficiently similar because they all involved the removal of 
friable material under sealed conditions while the Virgin Islands 
project calls for the removable of non-friable material in open-air 
conditions.  Friable asbestos is a form of asbestos that crumbles.  
Because of that property, friable asbestos can easily become airborne 
during renovation/demolition projects.  Accordingly, its removal 
entails specialized procedures and techniques such as sealed negative 
pressurized environments.  Because Lepi's experience is with this more 
complicated removal process, the agency reasonably concluded that this 
experience was equivalent to what was required for the Virgin Islands 
project which involves non-friable asbestos, a less dangerous 
material, which may be removed in an open environment involving less 
complex safety precautions.  While HAP disagrees with this technical 
assessment, we find no basis for disturbing the determination of 
sufficient similarity based on the inherently more dangerous and 
complex nature of the projects from which Lepi's experience was 
derived.

Finally, HAP alleges that since NESC has been in business only since 
1993, the firm does not meet the 5-year licensed experience 
requirements for hazardous material remediation and demolition.  The 
agency based its determination on evidence that NESC's predecessor 
company was in existence since 1988.  HAP argues that both firms still 
exist and there is no evidence that individuals with asbestos 
experience continued with NESC.  As NESC explained, at one point there 
was one firm which performed both railroad and asbestos work which was 
divided into two companies for liability insurance purposes in 1993 
when NESC was created.  Based on this explanation, the contracting 
officer reasonably relied on the 1988 incorporation date of the 
predecessor firm.

Bad Faith

HAP alleges that the agency acted in bad faith by delaying its 
response to an agency-level protest filed on August 24 challenging the 
responsibility of all firms with lower bids than HAP until late in 
1997.  HAP also alleges that the agency unduly delayed the award 
pending continuing efforts to permit NESC to obtain Virgin Islands 
licenses.[4]

What transpired between August 24 and the November 26 award date 
reflects the agency's concerns with HAP's licensing allegations and 
its efforts to ensure that NESC was licensed prior to award.  In fact, 
NESC was not required to possess Virgin Island licenses prior to 
award.  Thus, while the agency engaged in a protracted and unnecessary 
effort to save a considerable amount of money as represented by the 
difference in bid prices in order, in part, to respond to HAP's 
protest, this action provides no basis to conclude that the agency 
acted in bad faith.

The protest is denied.

Comptroller General 
of the United States

1. HAP also protested the responsibility of 11 of the 13 bidders, 10 
of which had submitted bids lower than HAP's.  The only other bidder 
HAP considered responsible was a licensed Virgin Islands contractor 
which submitted the only bid higher than HAP's.

2. HAP also argues that section M.2 requires licensure specifically by 
the Virgin Islands for 5 years.  This argument is entirely without 
foundation because the language of the section imposes no such 
requirement.

3. We note that, following award, the agency obtained licenses from 
Lepi covering the listed projects in NESC's proposal.

4. HAP also alleges that the agency acted improperly and in bad faith 
by accepting a bid well under $3 million, when it had earlier informed 
HAP when canceling an 8(a) acquisition for the project that the work 
could not be performed for under $3 million.  This allegation involves 
a separate procurement action, and is untimely because the IFB at 
issue clearly indicated a cost range of between $1 million and $5 
million.  Allegations of improprieties which are apparent from the 
face of an IFB must be protested prior to bid opening, 4 C.F.R.  sec.  
21.2(a)(1) (1997), and HAP first protested to the agency after bid 
opening.