B-142942, JUL. 15, 1960

B-142942: Jul 15, 1960

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INC.: REFERENCE IS MADE TO YOUR LETTERS OF MAY 18 AND JUNE 27. THAT YOUR FAILURE TO COMPLY WITH THE REQUIREMENTS OF THE INVITATION ADDENDUM TO LIST UNIT PRICES AND MAJOR SUBCONTRACTORS WAS DUE TO THE LATE DATE THE ADDENDUM WAS ISSUED. YOU POINT OUT THAT THE NAMING OF MAJOR SUBCONTRACTORS NOT ONLY WAS UNNECESSARY BUT IMPOSSIBLE. YOU STATE THAT SUCH WAS AN INFORMALITY WHICH SHOULD HAVE BEEN WAIVED. PARTICULARLY SINCE NO QUANTITIES WERE INVOLVED. THE PROJECT IN QUESTION WAS APPROVED BY THE PUBLIC HEALTH SERVICE FOR FEDERAL ASSISTANCE UNDER THE ABOVE-CITED STATUTE. THOSE REGULATIONS ARE CONTAINED IN PART 57 OF TITLE 42 OF THE CODE OF FEDERAL REGULATIONS. THE CATHOLIC UNIVERSITY IS NOT A FEDERAL AGENCY.

B-142942, JUL. 15, 1960

TO THE AMERICAN CONSTRUCTION COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTERS OF MAY 18 AND JUNE 27, 1960, CONCERNING THE PROPOSED AWARD OF A CONTRACT BY THE CATHOLIC UNIVERSITY TO THE SECOND LOW BIDDER FOR THE CONSTRUCTION OF A NEW BIOLOGY BUILDING, WHICH PROPOSED CONTRACT INVOLVES A FEDERAL GRANT-IN-AID OF $216,642 UNDER THE HEALTH RESEARCH FACILITIES ACT OF 1956, 42 U.S.C. 292, TO ASSIST IN CONSTRUCTING AND EQUIPPING THE RESEARCH PORTION OF THE BUILDING.

YOU CONTEND THAT SINCE YOU SUBMITTED BOTH THE LOWEST BASE BID AND THE LOWEST BID ON ALTERNATES NOS. 1 AND 2, AWARD SHOULD PROPERLY BE MADE TO YOUR FIRM AND NOT TO THE SECOND LOW BIDDER, VICTOR R. BEAUCHAMP ASSOCIATES. YOU FURTHER CONTEND, IN EFFECT, THAT YOUR FAILURE TO COMPLY WITH THE REQUIREMENTS OF THE INVITATION ADDENDUM TO LIST UNIT PRICES AND MAJOR SUBCONTRACTORS WAS DUE TO THE LATE DATE THE ADDENDUM WAS ISSUED. ALSO, YOU POINT OUT THAT THE NAMING OF MAJOR SUBCONTRACTORS NOT ONLY WAS UNNECESSARY BUT IMPOSSIBLE. CONCERNING THE FAILURE TO LIST UNIT PRICES, YOU STATE THAT SUCH WAS AN INFORMALITY WHICH SHOULD HAVE BEEN WAIVED, PARTICULARLY SINCE NO QUANTITIES WERE INVOLVED.

AS STATED, THE PROJECT IN QUESTION WAS APPROVED BY THE PUBLIC HEALTH SERVICE FOR FEDERAL ASSISTANCE UNDER THE ABOVE-CITED STATUTE. WHILE THE ACT ITSELF CONTAINS NO LIMITATION WITH RESPECT TO THE MANNER OF AWARDING CONTRACTS FOR PROJECTS GRANTED FEDERAL ASSISTANCE, SECTION 709 OF THE ACT, 42 U.S.C. 292H, PROVIDES FOR THE PROMULGATION OF GENERAL REGULATIONS BY THE SURGEON GENERAL. THOSE REGULATIONS ARE CONTAINED IN PART 57 OF TITLE 42 OF THE CODE OF FEDERAL REGULATIONS. SECTION 57.7 (A) OF THOSE REGULATIONS PROVIDES, IN DETERMINING THE NECESSARY COSTS OF CONSTRUCTION, THAT THE SURGEON GENERAL, IN ADDITION TO OTHER RELEVANT CONSIDERATIONS, SHALL EXCLUDE:

"/A) THE COST OF ANY NECESSARY SERVICES, MATERIALS OR EQUIPMENT IN EXCESS OF THE LOWEST, RESPONSIBLE, COMPETITIVE BID OR, WHERE THERE HAS BEEN NO SUCH BIDDING, IN EXCESS OF REASONABLE COSTS AS THE SURGEON GENERAL MAY DETERMINE.'

THE CATHOLIC UNIVERSITY IS NOT A FEDERAL AGENCY, AND FEDERAL FUNDS ARE INVOLVED IN THE CONSTRUCTION PROJECT ONLY TO THE EXTENT APPROVED BY THE SURGEON GENERAL, WITHIN THE LIMITS AUTHORIZED BY THE ACT. THE AMOUNT OF THE FEDERAL GRANT IS NOT NECESSARILY AFFECTED BY INCREASED EXPENDITURES BY THE HOSPITAL, AND NO REQUIREMENT FOR THE USE OF COMPETITIVE BIDDING PROCEDURES IS IMPOSED EITHER BY THE ACT OR UNDER REGULATIONS ISSUED PURSUANT TO THE ACT. THE ACT IMPOSES UPON THE NATIONAL ADVISORY COUNCIL ON HEALTH RESEARCH FACILITIES AND THE SURGEON GENERAL THE DUTY OF RECOMMENDING AND APPROVING GRANTS UNDER FINDINGS THAT THE CONDITIONS PRESCRIBED IN 42 U.S.C. 292D HAVE BEEN MET.

WE DO NOT BELIEVE THAT THE BIDDING REQUIREMENT FOR THE LISTING OF UNIT PRICES AND THE NAMING OF MAJOR SUBCONTRACTORS WAS AN UNREASONABLE CONDITION OF BIDDING. IN ANY EVENT, WE CANNOT HOLD UNDER THE CIRCUMSTANCES INVOLVED THAT SUCH REQUIREMENT IS SUBJECT TO QUESTION BY OUR OFFICE SINCE, IN FACT, THE GOVERNMENT WAS NOT A PARTY TO THE TRANSACTION. MOREOVER, WE ARE ADVISED THAT SUBSTANTIAL ADVANTAGES WILL ACCRUE TO THE CATHOLIC UNIVERSITY IF AN AWARD BE MADE TO VICTOR R. BEAUCHAMP ASSOCIATES. IN VIEW OF THE FOREGOING, WE SEE NO LEGAL BASIS FOR QUESTIONING THE ACTIONS TAKEN OR TO BE TAKEN IN THE INSTANT MATTER. ACCORDINGLY, YOUR PROTEST MUST BE DENIED.