B-150318, JUN. 6, 1963
Highlights
TO ELCOM CORPORATION: WE HAVE RECEIVED YOUR LETTER DATED MARCH 4. IN WHICH YOU ALLEGE YOU WERE PLACED IN A NONCOMPETITIVE POSITION APPARENTLY BECAUSE YOUR AGREEMENT WITH YOUR LABOR UNION REQUIRES YOU TO USE CONSTRUCTION LABOR FOR 90 PERCENT OF THE WORK PROCURED UNDER REQUEST FOR PROPOSALS (RFP) FO 4120- 3046-0002. SHOULD HAVE BEEN APPLIED TO THE ENTIRE CONTRACT RATHER THAN TO THE MERE 13 PERCENT STATED IN THE RFP TO BE CONSTRUCTION WORK. YOU HAVE PRESENTED NO FACTS WHICH GIVE US REASON TO QUESTION THIS DETERMINATION. WE HAVE HELD THAT THE CONTRACT STIPULATIONS AUTHORIZED BY THE DAVIS-BACON ACT TEND TO INCREASE THE PRICE PAID BY THE GOVERNMENT. THEREFORE MAY NOT BE INCORPORATED INTO THE CONTRACT UNLESS THE PROVISIONS OF THAT ACT ARE EXPRESSLY APPLICABLE TO SUCH CONTRACT. 20 COMP.
B-150318, JUN. 6, 1963
TO ELCOM CORPORATION:
WE HAVE RECEIVED YOUR LETTER DATED MARCH 4, 1963, IN WHICH YOU ALLEGE YOU WERE PLACED IN A NONCOMPETITIVE POSITION APPARENTLY BECAUSE YOUR AGREEMENT WITH YOUR LABOR UNION REQUIRES YOU TO USE CONSTRUCTION LABOR FOR 90 PERCENT OF THE WORK PROCURED UNDER REQUEST FOR PROPOSALS (RFP) FO 4120- 3046-0002. THEREFORE, YOU CONTEND, THE PROVISIONS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, SHOULD HAVE BEEN APPLIED TO THE ENTIRE CONTRACT RATHER THAN TO THE MERE 13 PERCENT STATED IN THE RFP TO BE CONSTRUCTION WORK.
THE ADMINISTRATIVE AGENCY REPORTS THAT RESPONSIBLE AIR FORCE TECHNICIANS MADE A DETERMINATION, AFTER CAREFUL CONSIDERATION, THAT ONLY 13 PERCENT OF THE WORK TO BE PERFORMED COULD PROPERLY BE CONSIDERED AS CONSTRUCTION WORK. YOU HAVE PRESENTED NO FACTS WHICH GIVE US REASON TO QUESTION THIS DETERMINATION. FURTHERMORE, WE KNOW OF NO STATUTE OR OTHER LAW WHICH REQUIRES THE GOVERNMENT'S UNDERSTANDING OF CONSTRUCTION WORK TO CONCUR WITH THE MEANING AGREED UPON BY A BIDDER AND HIS UNION.
MOREOVER, WE HAVE HELD THAT THE CONTRACT STIPULATIONS AUTHORIZED BY THE DAVIS-BACON ACT TEND TO INCREASE THE PRICE PAID BY THE GOVERNMENT, AND THEREFORE MAY NOT BE INCORPORATED INTO THE CONTRACT UNLESS THE PROVISIONS OF THAT ACT ARE EXPRESSLY APPLICABLE TO SUCH CONTRACT. 20 COMP. GEN. 18. ACCORDINGLY, THE PROVISIONS OF THE DAVIS-BACON ACT ARE NOT APPLICABLE TO ANY PART OF CONTRACT WORK WHICH IS TO BE PERFORMED UNDER A CONTRACT NOT ESSENTIALLY OR SUBSTANTIALLY FOR CONSTRUCTION. 40 COMP. GEN. 565. SINCE 13 PERCENT OF THE WORK UNDER THE CONTRACT IS NOT CONSIDERED A SUBSTANTIAL PART OF THE TOTAL CONTRACT, WE BELIEVE THAT THE PROVISIONS IN THE DAVIS- BACON ACT SHOULD NOT HAVE BEEN INCORPORATED INTO THE SUBJECT CONTRACT. SEE ASPR 12-402.
YOU ALSO ASK WHAT CONSIDERATION WAS GIVEN TO MAKING PARTIAL PAYMENTS TO SMALL BUSINESSES. THE ADMINISTRATIVE AGENCY REPORTS THAT THE POSSIBILITY OF INCLUDING PROGRESS PAYMENT PROVISIONS IN THE RFP WAS CONSIDERED BUT REJECTED BECAUSE OF THE SHORT DELIVERY SCHEDULE. SEE APPENDIX E OF THE ARMED SERVICES PROCUREMENT REGULATION, PARAGRAPHS 503, 505. FURTHERMORE, IT APPEARS THAT THE OPERATION OF THE STATUTE AUTHORIZING PROGRESS PAYMENTS IS DISCRETIONARY WITH THE ADMINISTRATIVE AGENCY AND DOES NOT REQUIRE THE INCLUSION IN THE RFP OF A PROVISION FOR PROGRESS PAYMENTS. SEE 10 U.S.C. 2307 (A), AS AMENDED.