B-156085, FEB. 17, 1965

B-156085: Feb 17, 1965

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VETERANS ADMINISTRATION HOSPITAL: REFERENCE IS MADE TO YOUR LETTER 5024/134 OF FEBRUARY 3. PRICES FOR FURNISHING AND INSTALLING A PREVACUUM STERILIZER WERE SOLICITED BY THE HOSPITAL SUPPLY DIVISION ON STANDARD FORM 33: INVITATION. THE DETERMINATION TO EMPLOY THE STANDARD FORM FOR SUPPLY CONTRACTS WAS PREMISED UPON A DETERMINATION THAT THE PROCUREMENT WAS ESSENTIALLY ONE FOR SUPPLIES IN THAT THE INSTALLATION WAS A RELATIVELY MINOR ITEM. THE CHOICE OF A STANDARD FORM DOES NOT SEEM TO HAVE BEEN INAPPROPRIATE. 38 COMP. REGULATIONS OF THE SECRETARY OF LABOR ARE APPLICABLE IF THE CONTRACT IS FOR THE MANUFACTURE OR FURNISHING OF MATERIALS. 000 AND IS OTHERWISE SUBJECT TO THE ACT. THE PRICES RECEIVED ON THE PROCUREMENT WERE $17.

B-156085, FEB. 17, 1965

TO MR. L. D. HERMAN, CONTRACTING OFFICER, VETERANS ADMINISTRATION HOSPITAL:

REFERENCE IS MADE TO YOUR LETTER 5024/134 OF FEBRUARY 3, 1965, REQUESTING A DECISION WHETHER TO MAKE AN AWARD UNDER INVITATION FOR BIDS 5024-65-21 OR TO READVERTISE.

PRICES FOR FURNISHING AND INSTALLING A PREVACUUM STERILIZER WERE SOLICITED BY THE HOSPITAL SUPPLY DIVISION ON STANDARD FORM 33: INVITATION, BID, AND AWARD (SUPPLY CONTRACT). THE DETERMINATION TO EMPLOY THE STANDARD FORM FOR SUPPLY CONTRACTS WAS PREMISED UPON A DETERMINATION THAT THE PROCUREMENT WAS ESSENTIALLY ONE FOR SUPPLIES IN THAT THE INSTALLATION WAS A RELATIVELY MINOR ITEM. THE CHOICE OF A STANDARD FORM DOES NOT SEEM TO HAVE BEEN INAPPROPRIATE. 38 COMP. GEN. 131.

PARAGRAPH 17 OF THE GENERAL PROVISIONS OF STANDARD FORM 32 INCORPORATED BY REFERENCE IN THE INVITATION FOR BIDS PROVIDES THAT ALL THE REPRESENTATIONS AND STIPULATIONS REQUIRED BY THE WALSH-HEALEY ACT, 41 U.S.C. 35-45, AND REGULATIONS OF THE SECRETARY OF LABOR ARE APPLICABLE IF THE CONTRACT IS FOR THE MANUFACTURE OR FURNISHING OF MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT IN AN AMOUNT WHICH EXCEEDS OR MAY EXCEED $10,000 AND IS OTHERWISE SUBJECT TO THE ACT.

THE PRICES RECEIVED ON THE PROCUREMENT WERE $17,769, $18,651, $20,911 AND $21,723. THE FEBRUARY 3 LETTER INDICATES THAT THE INSTALLATION COST IS CONSIDERED TO BE VERY MINOR. HENCE, THE WALSH HEALEY ACT IS CONSIDERED TO BE APPLICABLE. HOWEVER, YOU INDICATE THAT NONE OF THE BIDDERS ARE MANUFACTURERS AND YOU EXPRESS DOUBT THAT ANY ONE OF THEM CAN QUALIFY AS REGULAR DEALERS WITHIN THE MEANING OF THE REGULATIONS ISSUED BY THE SECRETARY OF LABOR UNDER THE WALSH-HEALEY ACT. THEREFORE, YOU QUESTION WHETHER AN AWARD SHOULD BE MADE UNDER THE INVITATION FOR BIDS OR WHETHER THE PROCUREMENT SHOULD BE READVERTISED ON A BASIS WHICH ELIMINATES THE INSTALLATION WORK. WE ASSUME THAT BY ELIMINATING THE INSTALLATION WORK IT IS EXPECTED THAT BIDS WILL BE SUBMITTED BY MANUFACTURERS OF AND DEALERS IN THE EQUIPMENT WHICH MIGHT NOT BID WHERE INSTALLATION IS INVOLVED. YOU POINT OUT THAT IN VIEW OF THE DISCLOSURE OF BIDS AND THE GENERAL VIEW OF OUR OFFICE AGAINST THE READVERTISEMENT OF BIDS IN THAT CIRCUMSTANCE, YOU QUESTION WHETHER READVERTISEMENT WOULD BE PROPER.

THE RULE, OF COURSE, IS THAT AFTER BIDS ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITOR'S PRICE, BIDS SHOULD NOT BE DISREGARDED EXCEPT FOR COGENT REASONS. THE MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 CT.CL. 699, 719.

THE WALSH-HEALEY ACT IS APPLICABLE TO A PROCUREMENT EVEN THOUGH A CONTRACT EXCEEDING $10,000 REQUIRES AFTER DELIVERY AN INCIDENTAL AMOUNT OF ERECTION OR INSTALLATION OF THE EQUIPMENT FURNISHED UNDER THE CONTRACT. SECTION 6 (B) OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT RULINGS AND INTERPRETATIONS NO. 3, PUBLISHED BY THE DEPARTMENT OF LABOR. THE ACT REQUIRES THAT THE CONTRACTOR FURNISHING THE EQUIPMENT BE A MANUFACTURER OF OR A REGULAR DEALER IN THE EQUIPMENT TO BE MANUFACTURED OR USED IN THE PERFORMANCE OF THE CONTRACT. 41 U.S.C. 35 (A). THE WALSH-HEALEY PUBLIC CONTRACTS ACT RULINGS AND INTERPRETATIONS NO. 3 STATES AT SECTION 29:

"/A) THE RESPONSIBILITY OF DETERMINING WHETHER OR NOT A BIDDER IS QUALIFIED AS A MANUFACTURER OR AS A REGULAR DEALER UNDER THE PUBLIC CONTRACTS ACT RESTS IN THE FIRST INSTANCE WITH THE CONTRACTING AGENCY. HOWEVER, ANY DECISION WHICH THE CONTRACTING OFFICER MIGHT MAKE IS SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR WHICH IS CHARGED WITH THE ADMINISTRATION OF THE ACT. THE DEPARTMENT OF LABOR MAY DETERMINE THE QUALIFICATIONS OF A BIDDER IN THE FIRST INSTANCE IN THE ABSENCE OF ANY DECISION BY THE CONTRACTING OFFICER.'

OUR OFFICE DOES NOT CONSIDER THAT IT HAS ANY AUTHORITY TO REVIEW DETERMINATIONS AS TO WHETHER PARTICULAR FIRMS ARE REGULAR DEALERS OR MANUFACTURERS AND WE HAVE CONSIDERED THAT SUCH DETERMINATIONS REST WITH THE CONTRACTING OFFICER SUBJECT TO THE REVIEW OF THE DEPARTMENT OF LABOR WHICH HAS THE FINAL AUTHORITY. B-151133, MAY 7, 1963.

IN THE CIRCUMSTANCES, IF YOU HAVE ANY QUESTION AS TO THE REGULAR DEALER STATUS OF ANY OF THE BIDDERS, THAT IS A MATTER WHICH SHOULD MORE PROPERLY BE PURSUED WITH THE DEPARTMENT OF LABOR THAN WITH OUR OFFICE. EVEN IF THERE IS NO QUESTION BUT THAT THE BIDDERS ARE NOT REGULAR DEALERS, UPON CERTAIN FINDINGS BY THE HEAD OF THE CONTRACTING AGENCY, THE SECRETARY OF LABOR IS PERMITTED TO MAKE EXCEPTIONS IN SPECIFIC CASES OR OTHERWISE WHEN JUSTICE OR THE PUBLIC INTEREST WILL BE SERVED. 41 U.S.C. 40.

SHOULD IT BE DECIDED FINALLY THAT NONE OF THE BIDDERS ARE REGULAR DEALERS AND THAT NO EXCEPTIONS WILL BE REQUESTED OR MADE, THERE WILL BE NO BIDS WHICH PROPERLY CAN BE ACCEPTED UNDER THE INVITATION. IN THAT EVENT THERE WOULD BE COGENT REASONS FOR DISREGARDING THE BIDS AND IN THAT EVENT OUR OFFICE WOULD NOT OBJECT IF THE PROCUREMENT WAS READVERTISED AS PROPOSED.