TITLE:  Colorado Construction Corporation, B-290960, September 6, 2002
BNUMBER:  B-290960
DATE:  September 6, 2002
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Colorado Construction Corporation, B-290960, September 6, 2002

   Decision
    
    
   Matter of:   Colorado Construction Corporation
    
   File:            B-290960
    
   Date:           September 6, 2002
    
   Gary E. DiGrazia, Esq., Goicoechea, DiGrazia, Coyle and Stanton, for the
   protester.
   James L. Weiner, Esq., and Alton E. Woods, Esq., Department of the
   Interior,
   for the agency.
   John L. Formica, Esq., and James A. Spangenberg, Esq., Office of the
   General Counsel, GAO, participated in the preparation of the decision.
   DIGEST
    
   Agency's rejection of a bid submitted in response to a solicitation
   set-aside for Indian economic enterprises is unobjectionable where the
   agency reasonably questioned whether the Native American owner of the
   enterprise would be involved in the daily business management of the
   enterprise and whether the majority of the earnings from the contract
   would accrue to the Native American owner.  
   DECISION
    
   Colorado Construction Corporation protests the rejection of its bid and
   award
   of a contract to Laguna Construction Company under invitation for bids
   (IFB) No. RBH00020006, issued as a total set-aside for Indian-owned and
   controlled firms by the Bureau of Indian Affairs (BIA), Department of the
   Interior, for the removal and disposal of existing bridges, and
   construction of new bridges.  Colorado Construction's bid was rejected by
   the agency because of its determination that Colorado Construction was not
   an eligible Indian economic enterprise. 
    
   We deny the protest.
    
   The IFB was issued as a total set-aside for Indian-owned and controlled
   concerns pursuant to the Buy Indian Act, 25 U.S.C. S: 47 (2000).  To be
   considered for award, the IFB required that bidders certify that they were
   at least 51 percent Indian-owned, that one or more of the Indian owners
   would be involved in daily business management of the enterprise, and that
   the majority of the earnings from the contract would accrue to the Indian
   owners.  IFB at 88-89. 
    
   The agency received six bids by the April 17, 2002 bid opening.  Colorado
   Construction, which submitted the second-low bid of $1,737,800, became the
   apparent low eligible bidder after the low bidder declined the agency's
   request
   to extend its bid acceptance period. 
    
   By letter dated June 3, the contracting officer requested that Colorado
   Construction submit certain information required for the assessment of the
   firm's responsibility.  The contracting officer requested, for example,
   that Colorado Construction provide its articles of incorporation;
   principal place of business and location of equipment yard; evidence that
   it had the production, construction, and technical equipment and
   facilities necessary to complete the project or the ability to obtain
   them; current financial statements; and a list of past road construction
   experience.  Agency Report (AR), Tab 6, Contracting Officer's Letter to
   Colorado Construction (June 3, 2002). 
    
   Colorado Construction responded to the agency's request on June 14. 
   Because of certain issues raised in Colorado Construction's response, the
   contracting officer requested by letter dated June 24 that Colorado
   Construction *submit further documentation* demonstrating its eligibility
   for award as an Indian-owned enterprise.  AR, Tab 11, Contracting
   Officer's Letter to Colorado Construction (June 24, 2002).  Colorado
   Construction responded by letter dated June 26, and after reviewing the
   information, the contracting officer informed Colorado Construction, by
   letter dated July 10, that its bid had been rejected because *[t]he
   documents for Colorado Construction Company provide insufficient evidence
   that the control and daily management of the company lies with an
   Indian-owned enterprise.*[1] 
   AR, Tabs 13 & 15, Colorado Construction's Response to the Agency's Request
   (June 26, 2002); Contracting Officer's Letter to Colorado Construction
   (July 15, 2002).  This protest followed.
    
   Colorado Construction argues that the agency's determination that it was
   ineligible for award was unreasonable.  The protester points out that in
   response to the agency's requests it provided, among other things,
   evidence that the president of the firm owns 51 percent of the firm's
   common stock, is an enrolled member of a Native American tribe, and would
   serve as the superintendent for the project.  The protester also notes
   that *[a]s majority shareholder, [the Native American president of
   Colorado Construction] would be entitled to a majority of the dividends,
   if any.*  Protester's Comments at 6 n.2.
    
    
    
    
   The Buy Indian Act, 25 U.S.C. S: 47, provides as follows:
    
   So far as may be practicable Indian labor shall be employed, and purchases
   of the products . . . of Indian industry may be made in open market in the
   discretion of the Secretary of the Interior.
   The Secretary of the Interior, acting through the BIA Commissioner, has
   broad discretionary authority to implement the Buy Indian Act; defining
   the criteria a firm must meet to be eligible for award under a Buy Indian
   Act set-aside, and determining whether the information provided by the
   firm to establish compliance with those criteria, fall within that broad
   discretion.  We will disturb a BIA conclusion regarding a firm's
   eligibility only where it is shown to be arbitrary, unreasonable, or in
   violation of law or regulation.  Lewis, Oberly, Sloan & Assocs., P.C.,
   B‑266164, Jan. 11, 1996, 96-1 CPD P: 81 at 2. 
    
   The agency rejected Colorado Construction's bid, after considering that
   firm's submissions, based on its determinations that there was
   insufficient evidence that the Native American president of Colorado
   Construction would be involved in the daily management of the enterprise
   and that he would receive the majority of the earnings of the project, as
   was required for the firm to be eligible for award.  Specifically, the
   agency concluded that, despite the assertions of the protester, *the
   control, experience, and financial responsibility appears to be with
   Canyon Construction Company, a non-Indian entity.*  Contracting Officer's
   Statement at 5.  This determination was based on a number of factors. 
    
   For example, the information submitted by Colorado Construction
   established that although Colorado Construction had existed for more than
   8 years, it had not been *awarded any projects to date,* and, with the
   exception of $500 cash, had no assets (such as equipment, materials,
   furniture, or real estate).  AR, Tabs 9e & 9f, Colorado Construction's
   Financial Statement and Completed Experience Questionnaire. 
   The record also evidenced that the initial incorporators and directors of
   Colorado Construction were not Native Americans (and currently own Canyon
   Construction), and that the Native American president of Colorado
   Construction was issued a certificate of stock for 51 percent of the
   firm's common stock and was designated president of Colorado Construction
   on March 20, 2002--less than 1 month before
   bid opening.  The remaining 49 percent of the firm's common stock is held
   by the secretary of Colorado Construction (one of the firm's initial
   incorporators and directors), and this individual is also an owner of
   Canyon Construction. 
   AR, Tab 13a, Minutes of Special Meeting of Stockholders of Colorado
   Construction Corporation; Contracting Officer's Statement at 4. 
    
   With regard to the relationship between Colorado Construction and Canyon
   Construction, the contracting officer also found that although Colorado
   Construction's bid provided only a post office box and no physical
   address, the physical address determined to be Colorado Construction's is
   at a building which bears the name of Canyon Construction (as well as
   certain other businesses), but not of Colorado Construction.  Contracting
   Officer's Statement at 2.  The contracting officer adds that Colorado
   Construction's facsimile responses to the agency's queries bear the name
   and telephone number of Canyon Construction, and that the Agreement of
   Indemnity issued by Colorado Construction's surety was signed by the
   owners of Canyon Construction as well as the secretary of Colorado
   Construction and its Native American president.  Contracting Officer's
   Statement at 4; AR, Tab 3, Agreement of Indemnity. 
    
   The contracting officer also found that consistent with Colorado
   Construction's statement that it had not been awarded any projects, the
   firm's completed experience questionnaire states, with regard to work
   performed for cities, counties, states, and the federal government, that
   in each instance the work had been performed *[u]nder the banner of Canyon
   Construction.*  AR, Tab 9f, Colorado Construction's Completed Experience
   Questionnaire.  The questionnaire also stated that the secretary and
   Native American president of Colorado Construction *are owners and
   employees of Canyon Construction . . . .*  This representation was
   consistent with the resume of the Native American president of Colorado
   Construction, which stated that he is currently employed by Canyon
   Construction.
    
   The contracting officer noted that although Colorado Construction claimed
   that its Native American president would serve as the *Project
   Superintendent* and *makes all construction decisions and controls
   Colorado Construction Corporation,* his resume indicated that he had
   worked on only one bridge construction project, and did not specify what
   his responsibilities were with regard to that project.  Contracting
   Officer's Statement at 2; AR, Tabs 9, 9h & 13, Colorado Construction's
   Letter to the Agency (June 14, 2002); Colorado Construction's Letter to
   the Agency (June 26, 2002).  The agency also points out that according to
   the documents submitted by Colorado Construction, Canyon Construction
   would *make available personnel for technical consultation and advise as
   necessary,* and that Colorado Construction's non-Native American secretary
   (and an owner of Canyon Construction) *serves as the office manager which
   includes payroll, taxes, permits, contracts, subcontracts, hiring,
   interviews, billings, accounts payable, etc.*  Contracting Officer's
   Statement at 3; AR, Tabs 9d & 13, Canyon Construction's Letter to Colorado
   Construction (June 14, 2002); Colorado Construction's Letter to the Agency
   (June 26, 2002).
    
   As already noted, BIA has broad discretion to determine the quantum of
   evidence necessary to establish compliance with the criteria that a firm
   must meet to be eligible for award under the Buy Indian Act.  Although
   Colorado Construction complies technically with the eligibility criteria
   established by BIA and thus the
   Buy Indian Act, we agree with the agency that the record, as detailed
   above, provided a reasonable basis to doubt whether the Native American
   president of
    
    
    
   Colorado Construction would in fact participate in the daily business
   management
   of the enterprise and whether the majority of the earnings from the
   contract would accrue to the president.  American Eagle Indus., Inc.;
   Yellowhorse, Joint Venture,
   B-255251; B-255251.2, Feb. 22, 1994, 94-1 CPD P: 128 at 6.  Thus, we find
   no basis to object to the rejection of Colorado Construction's bid.
    
   The protest is denied.
    
   Anthony H. Gamboa
   General Counsel
    

   ------------------------

   [1] The record reflects that the agency was satisfied that the president
   of Colorado Construction, who is an enrolled member of a Native American
   tribe, met the definition of *Indian* as required.