B-133707, SEPTEMBER 17, 1957, 37 COMP. GEN. 196

B-133707: Sep 17, 1957

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IS NOT IMPROPER EITHER UNDER SECTION 3709. PROVIDED THE CLAUSE IS INCLUDED IN THE INVITATION FOR THE INFORMATION OF ALL BIDDERS. REQUESTS OUR OPINION AS TO THE LEGALITY OF INCLUDING IN INVITATIONS FOR BIDS AND CONSTRUCTION CONTRACTS AWARDED BY THE VETERANS ADMINISTRATION A PROVISION RESERVING TO THE GOVERNMENT THE RIGHT TO LIMIT AWARD OF AN ELEVATOR AND/OR DUMBWAITER CONTRACT TO BIDDERS WHO ARE REGULARLY ENGAGED IN INSTALLING AND SERVICING ELEVATORS AND DUMBWAITERS AND WHO CAN DEMONSTRATE SUCCESSFUL EXPERIENCE IN SUCH INSTALLING AND SERVICING OF ELEVATORS AND DUMBWAITERS SIMILAR IN CLASS AND CAPACITY TO THOSE CALLED FOR IN THE CONTRACT. THE PROVISION WOULD ALSO REQUIRE A CONSTRUCTION CONTRACTOR TO AGREE THAT HE WILL NOT AWARD ANY SUBCONTRACT FOR PERFORMANCE OF THE ELEVATOR AND/OR DUMBWAITER WORK UNTIL WRITTEN APPROVAL HAS BEEN OBTAINED FROM THE CONTRACTING OFFICER.

B-133707, SEPTEMBER 17, 1957, 37 COMP. GEN. 196

BIDDERS - QUALIFICATIONS - EXPERIENCE - SUBCONTRACTING LIMITATION A SERVICE CONTRACT CLAUSE, WHICH WOULD LIMIT AWARDS TO BIDDERS REGULARLY ENGAGED IN SPECIAL EQUIPMENT INSTALLATION AND SERVICING, WOULD PREVENT THE SUCCESSFUL CONTRACTOR FROM SUBCONTRACTING WITH OTHER THAN EXPERIENCED SUBCONTRACTORS, AND WOULD REQUIRE THE SUBCONTRACTORS TO BE APPROVED BY THE CONTRACTING OFFICER, IS NOT IMPROPER EITHER UNDER SECTION 3709, REVISED STATUTES, OR ANY OTHER STATUTES REQUIRING ADVERTISED PROCUREMENTS, PROVIDED THE CLAUSE IS INCLUDED IN THE INVITATION FOR THE INFORMATION OF ALL BIDDERS.

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, SEPTEMBER 17, 1957:

YOUR LETTER OF SEPTEMBER 6, 1957, REQUESTS OUR OPINION AS TO THE LEGALITY OF INCLUDING IN INVITATIONS FOR BIDS AND CONSTRUCTION CONTRACTS AWARDED BY THE VETERANS ADMINISTRATION A PROVISION RESERVING TO THE GOVERNMENT THE RIGHT TO LIMIT AWARD OF AN ELEVATOR AND/OR DUMBWAITER CONTRACT TO BIDDERS WHO ARE REGULARLY ENGAGED IN INSTALLING AND SERVICING ELEVATORS AND DUMBWAITERS AND WHO CAN DEMONSTRATE SUCCESSFUL EXPERIENCE IN SUCH INSTALLING AND SERVICING OF ELEVATORS AND DUMBWAITERS SIMILAR IN CLASS AND CAPACITY TO THOSE CALLED FOR IN THE CONTRACT. THE PROVISION WOULD ALSO REQUIRE A CONSTRUCTION CONTRACTOR TO AGREE THAT HE WILL NOT AWARD ANY SUBCONTRACT FOR PERFORMANCE OF THE ELEVATOR AND/OR DUMBWAITER WORK UNTIL WRITTEN APPROVAL HAS BEEN OBTAINED FROM THE CONTRACTING OFFICER, WHICH APPROVAL IS TO BE BASED UPON A SHOWING THAT THE SUBCONTRACTOR IS COMPETENT, RESPONSIBLE AND TECHNICALLY QUALIFIED TO PERFORM THE WORK PROPERLY AS INDICATED BY HIS PRIOR EXPERIENCE IN THE FIELD.

WE HAVE HELD THAT AWARD OF A CONTRACT PURSUANT TO THE FORMAL ADVERTISING REQUIREMENTS OF THE SEVERAL STATUTES APPLICABLE TO THE VARIOUS AGENCIES OF THE GOVERNMENT MAY BE LIMITED TO THOSE BIDDERS MEETING SPECIFIED QUALITATIVE AND QUANTITATIVE EXPERIENCE REQUIREMENTS IN A SPECIALIZED FIELD WHERE THE INVITATION SO PROVIDES AND UPON A PROPER DETERMINATION THAT THE INTERESTS OF THE GOVERNMENT WOULD THEREBY BE SERVED. SEE, FOR EXAMPLE, 35 COMP. GEN. 161; 26 COMP. GEN. 676; AND 20 COMP. GEN. 862, 865.

ARTICLE 7 OF THE STANDARD CONSTRUCTION CONTRACT, U.S. STANDARD FORM NO. 23, REVISED, 41 U.S.C. APP. 54.13, REQUIRES THAT THE CONTRACTOR OBTAIN THE PRIOR APPROVAL OF THE CONTRACTING OFFICER FOR MACHINERY, MECHANICAL, AND OTHER EQUIPMENT TO BE INCORPORATED IN THE WORK. A SIMILAR PROVISION MAY BE INCLUDED IN SUPPLY CONTRACTS. SEE B-124390, SEPTEMBER 2, 1955. WHILE THE ABOVE REFERENCES APPLY TO EQUIPMENT RATHER THAN TO THE SELECTION OF SUBCONTRACTORS, IT REASONABLY APPEARS THAT THE VALIDITY OF THE INCLUSION OF ONE WOULD ALSO SUPPORT THE VALIDITY OF INCLUDING THE OTHER. FURTHER, SINCE WE HAVE HELD THAT THE SELECTION OF A PRIME CONTRACTOR MAY BE LIMITED TO THOSE HAVING THE NECESSARY EXPERIENCE IN THE PARTICULAR FIELD, WE SEE NO REASON WHY THE SAME LIMITATION CANNOT BE APPLIED TO THE SELECTION BY THE PRIME CONTRACTOR OF THE SUBCONTRACTORS TO PERFORM THE WORK IN WHICH THE SPECIALIZED EXPERIENCE IS DEEMED NECESSARY.

THEREFORE, WE SEE NO LEGAL OBJECTION, EITHER UNDER SECTION 3709, REVISED STATUTES, OR ANY OF THE OTHER STATUTES DEALING WITH FORMALLY ADVERTISED PROCUREMENT, TO THE USE OF THE PROPOSED CLAUSE. IT IS UNDERSTOOD, OF COURSE, THAT WHEREVER THE PROPOSED CLAUSE IS TO BE INCLUDED IN A CONTRACT, IT WILL ALSO BE STATED IN THE INVITATION TO BID SO THAT THE BIDDERS WILL BE INFORMED OF THE BASES UPON WHICH THEIR BIDS WILL BE EVALUATED.