Young & Joe Construction

B-275043 Jan 16, 1997 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights DIGEST Protest is sustained where agency fails to demonstrate reasonable basis for its determination that firm which self-certified as an Indian economic enterprise was not in fact such. The procurement was set aside for eligible Indian economic enterprises pursuant to the Buy Indian Act. Young & Joe's bid was rejected based on the contracting officer's determination that it was not an eligible Indian economic enterprise. BACKGROUND The IFB was issued on June 20. Bidding enterprises were required to certify that they were at least 51 percent Indian-owned. Was the low bidder. Blaze was second low. Young & Joe certified in its bid that it was an eligible Indian economic enterprise. The contracting officer determined that Young & Joe was acting as a front for Agate and did not qualify as an eligible Indian-owned economic enterprise. View Decision Matter of: Young & Joe Construction File: B-275043 Date: January 16, 1997 DIGEST Attorneys DECISION Young & Joe Construction protests the rejection of its bid and the award of a contract to Blaze Construction under invitation for bids (IFB) No. SB-96-0016, issued by the Department of the Interior, Bureau of Indian Affairs (BIA), for road construction on the Salt River Indian Reservation, Arizona. The procurement was set aside for eligible Indian economic enterprises pursuant to the Buy Indian Act, 25 U.S.C. Sec. 47 (1994). Young & Joe's bid was rejected based on the contracting officer's determination that it was not an eligible Indian economic enterprise. Young & Joe disputes that determination. We sustain the protest. BACKGROUND The IFB was issued on June 20, 1996, as a total Buy Indian set-aside. To be considered for award, bidding enterprises were required to 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 enterprise's earnings would accrue to the Indian owners. At the July 31 bid opening, Young & Joe, a partnership comprised of Young & Joe Management Company, an Indian-owned firm (holding a majority interest), and Agate, Inc., a non-Indian firm (holding a minority interest), was the low bidder; Blaze was second low. As required, Young & Joe certified in its bid that it was an eligible Indian economic enterprise. By letter dated August 1, the contracting officer asked Young & Joe to submit information required to establish its responsibility, including its latest financial statements; a list of its past road construction experience; and evidence that it had the necessary production, construction, and technical equipment and facilities, or ability to obtain them. In an August 5 telephone conversation, the contracting officer also requested a copy of Young & Joe's partnership agreement. Young & Joe submitted the requested information the following week. After reviewing the information submitted, the contracting officer determined that Young & Joe was acting as a front for Agate and did not qualify as an eligible Indian-owned economic enterprise. She based this determination on her observations that (1) the financial resources of both the partnership and its Indian owners were limited, meaning that the partnership would be dependent on Agate for the cash to finance performance; (2) it was not clear that the Indian owners would manage the day to day business of the partnership or be involved in management of this particular project; (3) the construction experience of both Young & Joe as a company and of its Indian owners was limited; and (4) Agate would provide the principal place of business and equipment for the project. On September 27, the agency notified Young & Joe that its bid had been rejected. A contract was awarded to Blaze on the same date. ANALYSIS Young & Joe challenges the agency's determination, arguing that the contracting officer lacked a reasonable basis for concluding that it does not qualify as an eligible Indian economic enterprise. 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 qualify as an Indian economic enterprise; and determining the quantum of evidence necessary to establish compliance with the required criteria falls within that broad discretion. Cheyenne, Inc., B-260328, June 2, 1995, 95-2 CPD Para. 117; Arrowhead Constr., Inc./FNF Constr., Inc., B-251707; B-251708, Apr. 19, 1993, 93-1 CPD Para. 334. Consequently, we will defer to the BIA's judgments regarding the status of firms as eligible Indian economic enterprises, unless such judgments are shown to be unreasonable. Calvin Corp., B-245768, Jan. 22, 1992, 92-1 CPD Para. 98.