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 22 U.S.C.  4864(c)(3):  Price preference for U. S. persons and qualified U. S. joint venture persons.

Comptroller General - Key Excerpts

The agency asserts that the insufficient financial information did not preclude a finding that WII was eligible for the preference because it was not restricted solely to the information submitted by offerors in making its eligibility determination. In this regard, the agency points to its regulations, which provide that, although qualifications will be determined "primarily" on the basis of information submitted in the offeror's Statement of Qualifications, "the Government may, at its discretion, rely on information contained elsewhere in the offeror's proposal or obtained from other sources." Department of State Acquisition Regulation (DOSAR) 652.237-73(c). Thus, in finding that WII possessed the requisite business volume, the agency turned to other information, specifically, other contracts that WII had performed for the agency. In this regard, the agency reasoned as follows: "While specific figures for gross business volume of WII as [an] entity separate from parent Wackenhut Corporation cannot be extracted from consolidated business statements, payments made to WII joint ventures under Embassy contracts are plainly more than sufficient to meet the business volume requirement." Agency Report (AR), Tab 3, at 2. While we agree with the agency that it could rely on other available information, the record does not support the agency's conclusion. Although WII's questionnaire includes evidence of 18 security guard contracts with an annual, combined contract value in excess of the new contract's value, WII performed most of these contracts as a joint venturer with another entity. Since these contracts are performed overseas by the foreign joint venture partner using locally-hired personnel, it is reasonable to infer that some significant portion of the contract payments flow to the foreign joint venture partner. Inasmuch as WII is the entity seeking eligibility as a U.S. person, only that portion of the annual contract value flowing to WII is relevant to the determination. However, there is nothing in the record to indicate how much of that annual value qualifies as WII's under the question 5 definition of "total business volume." For example, the contracts with the largest annual values--$1 million to6.9 million--were performed as joint ventures with various of WII's foreign joint venture partners such as Group 4 Falck (Canada) Ltd., Wackenhut SA (Ivory Coast), Wackenhut Jamaica Ltd., Wackenhut U.K. Ltd., and Group 4 Falck Korea. WII Questionnaire, attach. 1 & 2. Other contracts were performed without WII as a partner at all, including those performed by Wackenhut Security Hellas (Greece), Wackenhut El Salvador (El Salvador), and Serenos Victoria (Venezuela). Id. Only two contracts were performed by WII alone--Gambia and Mozambique--and their combined annual value, even over 3 years, is less than the new contract value. Id. While the requirements for establishing the requisite business volume are plainly stated in the questionnaire, nothing in the record indicates that the agency made any attempt to identify that information for WII; it did not calculate what portion of the payments to the joint venture represented WII income. Likewise, although WII intervened in this protest, it has provided no information to establish what portion of the identified contract value represented gross income or receipts reported by WII on its federal income tax returns. Absent some information indicating that the identified annual value of WII's joint venture contracts represents such taxable income for WII, there was no basis for the agency to conclude that the firm met the business volume requirement. Accordingly, we sustain the protest on this basis. (Inter-Con Security Systems, Inc., B-295352; B-295352.2, February 8, 2005) (pdf)

Comptroller General - Listing of Decisions

For the Government For the Protester
  Inter-Con Security Systems, Inc., B-295352; B-295352.2, February 8, 2005 (pdf)
  Inter-Con Security Systems, Inc., B-290493; B-290493.2, August 14, 2002


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