B-123338, MAY 12, 1955, 34 COMP. GEN. 595

B-123338: May 12, 1955

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CONTRACTS - SUBCONTRACTING - LEGALITY THERE IS NOTHING IN THE WALSH-HEALEY ACT OR IN THE ARMED SERVICES PROCUREMENT ACT WHICH PROHIBITS AWARDING A CONTRACT TO A COMPANY WHICH CONTEMPLATES SUBCONTRACTING AND. AN OTHERWISE QUALIFIED BIDDER FOUND TO HAVE THE NECESSARY EXPERIENCE. 1955: FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 18. AS YOU WERE ADVISED BY LETTER OF MARCH 25. THE SECRETARY OF THE NAVY WAS REQUESTED TO FURNISH A FULL REPORT IN THE MATTER. NEW YORK AND THE LOCATION WHERE THE ARTICLES WERE TO BE INSPECTED AS " GROSSE POINTE ACCESSORIES CORP. YOU CONTEND THAT THE ABOVE-QUOTED PROVISION IN THE BID IS IMPROPER AND DOES NOT CONFORM TO THE INVITATION. IT IS ALLEGED THAT DEXTON CLOTHES IS SHOPPING AROUND FOR A SUBCONTRACTOR AND THAT THIS IS THE TYPE OF BIDDING WHICH THE WALSH-HEALEY ACT WAS DESIGNED TO PREVENT.

B-123338, MAY 12, 1955, 34 COMP. GEN. 595

CONTRACTS - SUBCONTRACTING - LEGALITY THERE IS NOTHING IN THE WALSH-HEALEY ACT OR IN THE ARMED SERVICES PROCUREMENT ACT WHICH PROHIBITS AWARDING A CONTRACT TO A COMPANY WHICH CONTEMPLATES SUBCONTRACTING AND, THEREFORE, AN OTHERWISE QUALIFIED BIDDER FOUND TO HAVE THE NECESSARY EXPERIENCE, ORGANIZATION, AND TECHNICAL QUALIFICATIONS, AND WHO HAS OR CAN ACQUIRE THE NECESSARY FACILITIES FOR PERFORMANCE MAY BE AWARDED THE CONTRACT NOTWITHSTANDING IT INTENDS TO SUBCONTRACT THE WORK.

COMPTROLLER GENERAL CAMPBELL TO THE BLUE ANCHOR OVERALL COMPANY, INC., MAY 12, 1955:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 18, 1955, PROTESTING AGAINST AN AWARD OF A CONTRACT TO DEXTON CLOTHES COMPANY ON THE BASIS OF ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. JD-IFB-383-728- 55, ISSUED BY THE AVIATION SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA.

AS YOU WERE ADVISED BY LETTER OF MARCH 25, 1955, THE SECRETARY OF THE NAVY WAS REQUESTED TO FURNISH A FULL REPORT IN THE MATTER. THE REQUESTED REPORT, TOGETHER WITH PERTINENT PAPERS, HAS NOW BEEN RECEIVED.

THE RECORD SHOWS THAT THE BID OF THE DEXTON CLOTHES COMPANY INDICATED THE NAME OF THE MANUFACTURER AND THE PLACE OF THE MANUFACTURE AS DEXTON CLOTHES COMPANY, 79 FIFTH AVENUE, NEW YORK 3, NEW YORK AND THE LOCATION WHERE THE ARTICLES WERE TO BE INSPECTED AS " GROSSE POINTE ACCESSORIES CORP., ANNISTON, ALA., AND/OR OTHERS.'

YOU CONTEND THAT THE ABOVE-QUOTED PROVISION IN THE BID IS IMPROPER AND DOES NOT CONFORM TO THE INVITATION, AND THAT AFTER THE OPENING OF THE BIDS YOU RECEIVED A TELEPHONE CALL FROM DEXTON CLOTHES COMPANY INQUIRING WHETHER YOU WOULD BE INTERESTED IN MAKING THE ARTICLE FOR THEM IN YOUR PLANT AT OLIVE HILL, KENTUCKY. IT IS ALLEGED THAT DEXTON CLOTHES IS SHOPPING AROUND FOR A SUBCONTRACTOR AND THAT THIS IS THE TYPE OF BIDDING WHICH THE WALSH-HEALEY ACT WAS DESIGNED TO PREVENT.

THE RECORD SHOWS THAT, UPON REQUEST OF THE CONTRACTING OFFICER, DEXTON CLOTHES ADVISED THAT THE CUTTING, SHIPMENT AND INSPECTION WOULD BE AT THE PLANT OF THE GROSSE POINTE ACCESSORY CORP., ANNISTON, ALABAMA, AND SUBMITTED A LETTER DATED MARCH 11, 1955 (5 DAYS PRIOR TO THE BID OPENING) FROM THAT CORPORATION AGREEING TO MANUFACTURE THE ARTICLES. A PREAWARD SURVEY OF BOTH THE DEXTON CLOTHES COMPANY AND THE GROSSE POINTE ACCESSORY CORP. DISCLOSED THAT BOTH WERE QUALIFIED TO PERFORM THE PROPOSED CONTRACT.

THERE IS NOTHING IN THE WALSH-HEALEY ACT, 49 STAT. 2036, OR IN THE ARMED SERVICES PROCUREMENT ACT, 62 STAT. 21, WHICH PROHIBITS AN AWARD TO A COMPANY WHICH CONTEMPLATES SUBCONTRACTING. SECTION 1-307 (C) OF THE ARMED SERVICES PROCUREMENT REGULATIONS PERMITS AWARD TO AN OTHERWISE QUALIFIED BIDDER WHO HAS THE NECESSARY EXPERIENCE, ORGANIZATION, AND TECHNICAL QUALIFICATIONS, AND HAS OR CAN ACQUIRE THE NECESSARY FACILITIES (INCLUDING PROBABLE SUBCONTRACTOR ARRANGEMENTS) TO PERFORM THE PROPOSED CONTRACT. SINCE IT HAS BEEN ADMINISTRATIVELY DETERMINED THAT BOTH DEXTON CLOTHES COMPANY AND GROSSE POINTE ACCESSORY CORP. ARE QUALIFIED TO PERFORM THE WORK AND THE BID APPEARS OTHERWISE PROPER, THERE IS NO LEGAL BASIS TO REFUSE TO CONSIDER THE BID OF THE DEXTON CLOTHES COMPANY.