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B-204037, DEC 14, 1981

B-204037 Dec 14, 1981
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IS APPROPRIATE FOR OUR REVIEW UNDER THE RULE ANNOUNCED IN OPTIMUM SYSTEMS. JONES IS DOE'S ON SITE CONTRACTOR FOR COST-TYPE CONSTRUCTION PROJECTS AT THE HANFORD COMPANY WHICH CONDUCTED THE PROCUREMENT. MOTLEY IS A NONUNION WASHINGTON. J.A.JONES IS DOE'S ON SITE CONTRACTOR CONTRACTOR. THE CONTRACT WAS AWARDED TO THE SECOND-LOW BIDDER. MOTLEY ARGUES THAT J.A.JONES RELIED ON A STRICT PROHIBITION AGAINST AWARD OF THE CONTRACT TO A NONUNION BIDDER AS THE BASIS FOR REJECTION OF ITS LOW BID AND THIS ACTION WAS IMPROPER ON A CONTRACT AWARDED FOR THE GOVERNMENT. WE MUST DETERMINE WHETHER THIS IS THE TYPE OF SUBCONTRACTOR PROTEST WE WILL CONSIDER UNDER OUR DECISION IN OPTIMUM SYSTEMS. WE FIND THIS QUESTION IS CONTROLLED BY OUR DECISION IN C-E AIR PREHEATER CO.

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B-204037, DEC 14, 1981

DIGEST: 1. A PROTEST AGAINST A PROCUREMENT CONDUCTED BY A PRIME CONTRACTOR, ACTING AS A DEPARTMENT OF ENERGY COST-TYPE CONSTRUCTION MANAGER, IS APPROPRIATE FOR OUR REVIEW UNDER THE RULE ANNOUNCED IN OPTIMUM SYSTEMS, INC., 54 COMP.GEN. 767 (1975), 75-1 CPD 166. 2. PRIME CONTRACTOR MAY REASONABLY DETERMINE A BIDDER ON A SUBCONTRACT TO BE NONRESPONSIBLE ON THE BASIS OF THE BIDDER'S REPRESENTATIONS THAT IT DOES NOT INTEND TO CONFORM TO THE PRIME CONTRACTOR'S LABOR POLICIES AS REQUIRED BY THE SOLICITATION.

MOTLEY CONSTRUCTION COMPANY, INC.:

MOTLEY CONSTRUCTION COMPANY, INC. (MOTLEY), HAS FILED A PROTEST AGAINST THE REJECTION OF ITS LOW BID FOR A CONSTRUCTION PROJECT AT THE DEPARTMENT OF ENERGY'S (DOE) FACILITY IN HANFORD, WASHINGTON. J.A. JONES IS DOE'S ON SITE CONTRACTOR FOR COST-TYPE CONSTRUCTION PROJECTS AT THE HANFORD COMPANY WHICH CONDUCTED THE PROCUREMENT. THE J.A.JONES' LABOR POLICIES AND TO AVOID "ENGAGING IN ANY ACTIVITIES *** LIKELY TO CAUSE A STRIKE, WORK STOPPAGE *** OR WHICH MIGHT SUBJECT J.A.JONES TO LIABILITY IN ANY ARBITRATION OR COURT PROCEEDING." (MOTLEY HAS FURNISHED AN AFFIDAVIT TO THE EFFECT THAT IT DID NOT READ THIS PROVISION.) MOTLEY IS A NONUNION WASHINGTON. J.A.JONES IS DOE'S ON SITE CONTRACTOR CONTRACTOR. J.A.JONES ADVISED MOTLEY OF THE SUBCONTRACTING RESTRICTION AND THE REQUIREMENT IN THE SOLICITATION QUOTED ABOVE AND INQUIRED WHETHER MOTLEY WOULD SIGN A "COMPLIANCE AGREEMENT" WITH THE ON-SITE UNIONS. MOTLEY REFUSED TO TAKE ANY ACTION TO ACCOMMODATE THE UNIONS. J.A.JONES DETERMINED MOTLEY TO BE NONRESPONSIBLE BECAUSE THE JOB REQUIRED WORKING CLOSELY ALONGSIDE A UNION CONTRACTOR AND, IN J.A.JONES' JUDGMENT, MOTLEY'S EMPLOYMENT POLICIES WOULD LEAD TO LABOR PROBLEMS. THE CONTRACT WAS AWARDED TO THE SECOND-LOW BIDDER.

MOTLEY ARGUES THAT J.A.JONES RELIED ON A STRICT PROHIBITION AGAINST AWARD OF THE CONTRACT TO A NONUNION BIDDER AS THE BASIS FOR REJECTION OF ITS LOW BID AND THIS ACTION WAS IMPROPER ON A CONTRACT AWARDED FOR THE GOVERNMENT.

AS A THRESHOLD MATTER, WE MUST DETERMINE WHETHER THIS IS THE TYPE OF SUBCONTRACTOR PROTEST WE WILL CONSIDER UNDER OUR DECISION IN OPTIMUM SYSTEMS, INC., 54 COMP.GEN. 767 (1975), 75-1 CPD 166. WE FIND THIS QUESTION IS CONTROLLED BY OUR DECISION IN C-E AIR PREHEATER CO., INC., B-194119, SEPTEMBER 14, 1979, 79-2 CPD 197, IN WHICH DOE CONCEDED THAT A PROTEST AGAINST A PROCUREMENT BEING CONDUCTED BY J.A.JONES, AS A DOE CONSTRUCTION MANAGER, WAS APPROPRIATE FOR OUR REVIEW. WHILE DOE HAS ADVANCED SEVERAL REASONS WHY THAT CASE IS DISTINGUISHABLE, WE FIND THE CASES ARE ESSENTIALLY THE SAME.

DOE ARGUES THAT MOTLEY'S PROTEST IS UNTIMELY BECAUSE IT WAS NOT FILED UNTIL AFTER BID OPENING. HOWEVER, SINCE MOTLEY IS CONTESTING THE APPLICATION OF THE SOLICITATION'S LABOR PROVISION, RATHER THAN OBJECTING TO THE PROVISION ITSELF, MOTLEY WAS NOT REQUIRED TO FILE THIS PROTEST PRIOR TO THE DATE OF BID OPENING IN ORDER TO BE TIMELY UNDER OUR BID PROTEST PROCEDURES, 4 C.F.R. PART 21 (1981). CONSEQUENTLY, WE WILL CONSIDER THIS PROTEST.

INITIALLY, WE NOTE THAT J.A.JONES IS NOT ACTING AS AN AGENT OF THE GOVERNMENT AND THESE SUBCONTRACTS ARE THEREFORE NOT CONTRACTS WITH THE GOVERNMENT. COMPARE 31 COMP.GEN. 561 (1952); 8 COMP.GEN. 135 (1928). RATHER, J.A.JONES IS AN INDEPENDENT CONTRACTOR CONTRACTING "FOR" THE GOVERNMENT. COMPARE 49 COMP.GEN. 668 (1970). AS A CONSEQUENCE, THE STATUTES AND REGULATIONS GOVERNING FEDERAL PROCUREMENTS DO NOT APPLY DIRECTLY TO THIS ACQUISITION. 41 COMP.GEN. 424 (1961); 49 COMP.GEN. 668, SUPRA. J.A.JONES IS, HOWEVER, BOUND TO CONDUCT ITS PROCUREMENTS "FOR" THE GOVERNMENT IN ACCORDANCE WITH ITS CONTRACT WITH DOE AND TO CONFORM TO CERTAIN FUNDAMENTAL PRINCIPLES OF FEDERAL PROCUREMENT KNOWN AS THE FEDERAL NORM. SEE CENTENNIAL COMPUTER PRODUCTS, INC., B-200605, JUNE 24, 1981, 81-1 CPD 526; COHU, INC., 57 COMP.GEN. 759 (1978), 78-2 CPD 175; PIASECKI AIRCRAFT CORPORATION, B-190178, JULY 6, 1978, 78-2 CPD 10. THE QUESTION THEREFORE IS WHETHER J.A.JONES VIOLATED THE FEDERAL NORM BY REQUIRING MOTLEY TO COMPLY WITH J.A.JONES' AGREEMENTS WITH THE ON-SITE LABOR UNIONS. WE DO NOT THINK THAT IT DID.

THE FEDERAL NORM REQUIRES NOT ONLY THAT THE COMPETITION FOR A CONTRACT BE CONDUCTED IN ACCORDANCE WITH THE BROAD GENERAL PRINCIPLES OF FEDERAL PROCUREMENT, BUT ALSO THAT THE PROSPECTIVE AWARDEE BE RESPONSIBLE, THAT IS, THAT THE PROSPECTIVE CONTRACTOR INTENDS TO AND CAN COMPLY WITH THE REQUIREMENTS OF THE CONTRACT. BECAUSE THESE DETERMINATIONS INVOLVE THE EXERCISE OF CONSIDERABLE DISCRETION AND JUDGMENT, WE WILL NOT DISTURB A CONTRACTOR'S FINDING THAT A PROSPECTIVE SUBCONTRACTOR IS NONRESPONSIBLE UNLESS THERE IS NO REASONABLE BASIS FOR THE DETERMINATION. ARROWHEAD LINEN SERVICE, B-194496, JANUARY 17, 1980, 80-1 CPD 54.

WE THINK J.A.JONES ACTED REASONABLY IN DETERMINING MOTLEY TO BE NONRESPONSIBLE. THE POTENTIAL FOR LABOR UNREST IS A LEGITIMATE INTEREST IN THE EVALUATION OF A PROSPECTIVE AWARDEE'S RESPONSIBILITY. 43 COMP.GEN. 323 (1963). IN MID-SOUTH FIRE PROTECTION, INC., B-180390, FEBRUARY 25, 1974, 74-1 CPD 102, WE NOTED THAT THE VETERANS ADMINISTRATION, IN A DIRECT FEDERAL PROCUREMENT, COULD JUSTIFY AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY IN PART ON THE CONTRACTOR'S EXPRESSED INTENT TO TAKE STEPS TO AVOID LABOR PROBLEMS ON A CONSTRUCTION PROJECT. HERE, WE HAVE THE CONVERSE OF THAT SITUATION BECAUSE MOTLEY, THE PROSPECTIVE AWARDEE, REFUSED TO TAKE STEPS TO AVOID POSSIBLE LABOR STRIFE. WE THINK THAT THIS POSSIBILITY OF LABOR STRIFE PROVIDED A REASONABLE BASIS FOR J.A.JONES' DETERMINATION THAT MOTLEY WAS NONRESPONSIBLE.

THE PROTEST IS DENIED.

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