B-162585, MAY 14, 1968, 47 COMP. GEN. 644

B-162585: May 14, 1968

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THE LOW BID WAS PROPERLY REJECTED AS NONRESPONSIVE. ACCEPTANCE OF THE LOW BID WAS PRECLUDED BY THE FAILURE OF ONE OF THE LISTED SUBCONTRACTORS TO MEET THE COMPETENCY REQUIREMENTS OF THE INVITATION. CONTRACTS - SUBCONTRACTS - BID SHOPPING - LISTING OF SUBCONTRACTORS THE LISTING OF A CATEGORY OF SPECIALTY WORK TO BE PERFORMED UNDER A PRIME CONTRACT PRECLUDED BY SECTION 5B-2.202-70 (A) OF THE GENERAL SERVICES ADMINISTRATION PROCUREMENT REGULATIONS WHEN THE CATEGORY IS LESS THAN 3- 1/2 PERCENT OF THE ESTIMATED COST OF THE ENTIRE CONTRACT. CONTRACTS - SUBCONTRACTS - BID SHOPPING - LISTING OF SUBCONTRACTORS WHERE THE OCCURRENCE OF A NUMBER OF ERRORS AND INCONSISTENCIES IN THE PREPARATION OF A SUBCONTRACTOR LISTING FORM DID NOT HAVE AN ADVERSE EFFECT ON COMPETITION OR CAUSE ANY MISINTERPRETATION THAT AFFECTED BID PRICES OR PREJUDICED BIDDERS' INTEREST UNDER AN INVITATION FOR THE EXTENSION AND MODERNIZATION OF A FEDERAL BUILDING AND POST OFFICE.

B-162585, MAY 14, 1968, 47 COMP. GEN. 644

CONTRACTS - SUBCONTRACTS - BID SHOPPING - BIDDER AFFILIATES LISTED AS SUBCONTRACTORS TO PERMIT THE LOW BIDDER UNDER AN INVITATION FOR THE EXTENSION AND MODERNIZATION OF A FEDERAL BUILDING AND POST OFFICE TO LIST INACTIVE AFFILIATES AS SUBCONTRACTORS WOULD PLACE THE BIDDER IN THE GUISE OF A SUBCONTRACTOR IN CONTROL OF THE SPECIALTY WORK, FREE TO BID SHOP AMONG BONA FIDE SUBCONTRACTORS, THEREBY OBTAINING A COMPETITIVE ADVANTAGE OVER BIDDERS LISTING THEMSELVES OR BONA FIDE SUBCONTRACTORS AND, THEREFORE, THE LOW BID WAS PROPERLY REJECTED AS NONRESPONSIVE, EVEN THOUGH THE INVITATION DID NOT REQUIRE THE SPECIALTY WORK TO BE PERFORMED BY LISTED SUBCONTRACTORS. IN ANY EVENT, ACCEPTANCE OF THE LOW BID WAS PRECLUDED BY THE FAILURE OF ONE OF THE LISTED SUBCONTRACTORS TO MEET THE COMPETENCY REQUIREMENTS OF THE INVITATION. CONTRACTS - SUBCONTRACTS - BID SHOPPING - LISTING OF SUBCONTRACTORS THE LISTING OF A CATEGORY OF SPECIALTY WORK TO BE PERFORMED UNDER A PRIME CONTRACT PRECLUDED BY SECTION 5B-2.202-70 (A) OF THE GENERAL SERVICES ADMINISTRATION PROCUREMENT REGULATIONS WHEN THE CATEGORY IS LESS THAN 3- 1/2 PERCENT OF THE ESTIMATED COST OF THE ENTIRE CONTRACT, A DISCREPANCY IN LISTING OR FAILURE TO LIST A SUBCONTRACTOR FOR A LESS THAN 3-1/2 PERCENT CATEGORY OF SPECIALTY WORK UNDER A PRIME CONTRACT FOR THE EXTENSION AND MODIFICATION OF A FEDERAL BUILDING AND POST OFFICE MAY BE WAIVED AS NOT AFFECTING THE RESPONSIVENESS OF THE BID. CONTRACTS - SUBCONTRACTS - BID SHOPPING - LISTING OF SUBCONTRACTORS WHERE THE OCCURRENCE OF A NUMBER OF ERRORS AND INCONSISTENCIES IN THE PREPARATION OF A SUBCONTRACTOR LISTING FORM DID NOT HAVE AN ADVERSE EFFECT ON COMPETITION OR CAUSE ANY MISINTERPRETATION THAT AFFECTED BID PRICES OR PREJUDICED BIDDERS' INTEREST UNDER AN INVITATION FOR THE EXTENSION AND MODERNIZATION OF A FEDERAL BUILDING AND POST OFFICE, CANCELLATION OF THE INVITATION IS NOT REQUIRED BY PARAGRAPH 1-2.404-1 (B) (1) OF THE FEDERAL PROCUREMENT REGULATIONS. HOWEVER, FUTURE SOLICITATIONS SHOULD CORRELATE THE SUBCONTRACTOR LISTING FORM AND THE SPECIFICATIONS SO THERE IS NO DOUBT AS TO WHAT IS REQUIRED OF THE LISTED PARTY.

TO THE GEVYN CONSTRUCTION CORPORATION, MAY 14, 1968:

REFERENCE IS MADE TO YOUR TELEGRAM OF SEPTEMBER 28, 1967, AND SUBSEQUENT CORRESPONDENCE, INCLUDING YOUR LETTER OF NOVEMBER 1, WITH ATTACHED MEMORANDUM AND RELATED EXHIBITS, AND COUNSEL'S LETTER OF DECEMBER 28, WITH ENCLOSURES, CONCERNING YOUR PROTEST OF AN AWARD TO ANOTHER BIDDER FOR EXTENSION AND MODERNIZATION OF THE FEDERAL BUILDING AND U.S. POST OFFICE, PORTLAND, MAINE, GENERAL SERVICES ADMINISTRATION (GSA) PROJECT NO. 58232.

FIVE BIDS WERE RECEIVED AND OPENED AUGUST 9, 1967. YOUR BID OF $5,683,000 WAS LOW AND THE SECOND LOW BID WAS SUBMITTED BY DAVISON CONSTRUCTION COMPANY, INC., IN THE AMOUNT OF $5,945,000. BY LETTER OF SEPTEMBER 28, 1967, WHICH WAS APPARENTLY READ TO YOU BEFORE BEING DISPATCHED, THE CONTRACTING OFFICER NOTIFIED YOU THAT YOUR BID WAS BEING REJECTED AS NONRESPONSIVE FOR FAILURE TO SUBSTANTIVELY COMPLY WITH THE SUBCONTRACTOR LISTING REQUIREMENTS OF THE INVITATION. YOUR TELEGRAMS OF THE SAME DATE TO THIS OFFICE AND TO GSA PROTESTED AWARD TO ANY OTHER BIDDER AND REQUESTED A MORE DETAILED STATEMENT OF THE BASIS FOR THE REJECTION OF YOUR BID. BY LETTER OF OCTOBER 9, 1967, THE GENERAL COUNSEL OF GSA SENT YOU A "MEMORANDUM OF LAW" SETTING FORTH THE BASIS FOR REJECTION OF YOUR BID AND ADVISED YOU THAT NOTICE TO PROCEED WOULD NOT BE ISSUED TO THE FIRM TO WHOM AWARD HAD BEEN MADE (DAVISON CONSTRUCTION COMPANY, INC.) UNTIL THE COMPTROLLER GENERAL REACHED A DECISION ON THE ISSUES INVOLVED IN THE PROTEST. HOWEVER, BY LETTER OF NOVEMBER 7, 1967, GSA ADVISED YOU THAT THE PROJECT HAD REACHED A CRITICAL POINT WHERE WORK MUST BE COMMENCED PRIOR TO THE ONSET OF SEVERE WEATHER AND THAT IT HAD BECOME NECESSARY TO ISSUE A NOTICE TO PROCEED WITHOUT FURTHER DELAY.

THE SPECIAL CONDITIONS OF THE INVITATION PROVIDE, IN PART, AS FOLLOWS:

2-01 SPECIALTY SUBCONTRACTOR

A. THE TERM "SPECIALTY SUBCONTRACTOR" AS USED IN THE SPECIFICATIONS SHALL MEAN A FIRM OF ESTABLISHED REPUTATION (OR, IF NEWLY ORGANIZED, A FIRM WHOSE PERSONNEL HAVE PREVIOUSLY ESTABLISHED A REPUTATION IN THE SAME FIELD), WHICH IS REGULARLY ENGAGED IN, AND WHICH MAINTAINS A REGULAR FORCE OF WORKMEN SKILLED IN, INSTALLING THE ITEMS REQUIRED BY THE CONTRACT, SUCH FIRM MUST EITHER BE THE MANUFACTURER OF SUCH ITEMS, BE LICENSED BY THE MANUFACTURER, OR WORK UNDER THE MANUFACTURER'S DIRECT SUPERVISION.

2-02 COMPETENCY OF BIDDER (AIR CONDITIONING)

A. THE BIDDER, OR THE SUBCONTRACTOR WHOM THE BIDDER WILL USE FOR INSTALLING AIR CONDITIONING EQUIPMENT SHALL HAVE HAD AT LEAST THREE YEARS' SUCCESSFUL EXPERIENCE IN THE INSTALLATION AND SERVICING OF AIR CONDITIONING SYSTEMS.

B. IN ADDITION, THE BIDDER OR SUCH SUBCONTRACTOR SHALL HAVE INSTALLED, ON AT LEAST TWO PRIOR PROJECTS AIR CONDITIONING SYSTEMS WHICH ARE COMPARABLE TO THAT REQUIRED FOR THIS PROJECT AND WHICH HAVE PERFORMED SATISFACTORILY UNDER CONDITIONS OF NORMAL USE FOR A PERIOD OF NOT LESS THAN ONE YEAR. BE CONSIDERED COMPARABLE, THE PRIOR INSTALLATIONS MUST HAVE HAD A RATED CAPACITY OF NOT LESS THAN 40 PERCENT OF THE TOTAL CAPACITY SPECIFIED FOR THIS PROJECT AND AT LEAST ONE REFRIGERATING MACHINE OF A CAPACITY OF NOT LESS THAN 25 PERCENT OF THE LARGEST SINGLE REFRIGERATING MACHINE SPECIFIED FOR THIS PROJECT. SUCH PRIOR INSTALLATIONS SHALL EACH HAVE BEEN OPERATED SUCCESSFULLY FOR NOT LESS THAN 1200 HOURS ACTUAL CUMULATIVE OPERATING TIME PRIOR TO THE DATE ON WHICH BIDS ARE OPENED.

C. A LIST OF THE PRIOR COMPARABLE INSTALLATIONS BY THE BIDDER, OR BY THE SUBCONTRACTOR WHOM THE BIDDER WILL USE FOR INSTALLING AIR CONDITIONING EQUIPMENT, TOGETHER WITH THE NAMES AND ADDRESSES OF THE BUILDINGS, THE NAMES OF THE OWNERS OR MANAGERS THEREOF, AND ANY OTHER PERTINENT INFORMATION REQUIRED SHALL BE SUBMITTED PROMPTLY UPON REQUEST OF THE GOVERNMENT.

D. THE NAMES, ADDRESSES, EXPERIENCE, AND A STATEMENT OF THE WORK TO BE PERFORMED BY EACH SUBCONTRACTOR OR SECOND-TIER SUBCONTRACTOR WHOM THE BIDDER OR THE PRINCIPAL SUBCONTRACTOR, AS THE CASE MAY BE, WILL USE FOR PERFORMANCE OF MINOR PORTIONS OF THE INSTALLATION OF AIR CONDITIONING EQUIPMENT, SHALL ALSO BE SUBMITTED PROMPTLY UPON REQUEST BY THE GOVERNMENT.

E. THE BID MAY BE REJECTED IF THE BIDDER, OR THE SUBCONTRACTOR WHO WILL INSTALL THE AIR CONDITIONING EQUIPMENT, HAS ESTABLISHED ON FORMER JOBS, EITHER GOVERNMENT, MUNICIPAL, OR COMMERCIAL, A RECORD FOR UNSATISFACTORY INSTALLATION OR AIR CONDITIONING SYSTEMS, HAS REPEATEDLY FAILED TO COMPLETE CONTRACTS AWARDED TO HIM WITHIN THE CONTRACT TIME, OR OTHERWISE FAILS TO MEET THE EXPERIENCE REQUIREMENTS OF THIS CLAUSE.

SECTION 2-03 SETS FORTH SIMILAR COMPETENCY OF BIDDER REQUIREMENTS FOR THE ELEVATOR WORK. ADDITIONALLY, THE SPECIFICATIONS REQUIRED PERFORMANCE OF A NUMBER OF DIFFERENT TYPES OF WORK, INCLUDING "FOUNDATIONS," BY A "SPECIALTY SUBCONTRACTOR.'

2-05 LISTING OF SUBCONTRACTORS

A. FOR EACH OF THE CATEGORIES OF WORK CONTAINED IN THE LIST INCLUDED AS PART OF THE BID FORM, THE BIDDER SHALL SUBMIT THE NAME AND ADDRESS OF THE FIRM TO WHOM HE PROPOSES TO SUBCONTRACT THE WORK. IF ALTERNATE BIDS ARE REQUIRED UNDER THIS INVITATION, THE BIDDER MAY LIST BOTH THE NAME OF THE INDIVIDUAL OR FIRM WITH WHOM HE PROPOSES TO SUBCONTRACT IF AWARDED THE CONTRACT ON THE BASE BID ONLY AND THE NAME OF A DIFFERENT INDIVIDUAL OR FIRM WITH WHOM HE PROPOSES TO SUBCONTRACT FOR THE WORK IF AWARD IS MADE ON THE BASIS OF BASE BID PLUS AN ALTERNATE (OR ALTERNATES) WHICH AFFECTS THE CATEGORY FOR WHICH ALTERNATE SUBCONTRACTORS ARE SO LISTED, PROVIDED THAT THE BIDDER CLEARLY INDICATES AFTER EACH SUCH LISTING THE BASIS UPON WHICH EACH NAMED INDIVIDUAL OR FIRM SHALL BE DEEMED TO BE THE LISTED SUBCONTRACTOR FOR THAT CATEGORY OF THE WORK. THE LIST MAY BE SUBMITTED WITH THE BID OR SEPARATELY BY TELEGRAPH, MAIL, OR OTHERWISE. IF SENT SEPARATELY, THE ENVELOPE MUST BE SEALED, IDENTIFIED AS TO CONTENT, AND ADDRESSED IN THE SAME MANNER AS PRESCRIBED FOR SUBMISSION OF BIDS. FAILURE TO SUBMIT THE LIST BY THE TIME SET FOR BID OPENING SHALL CAUSE THE BID TO BE CONSIDERED NONRESPONSIVE EXCEPT IN ACCORDANCE WITH INSTRUCTION NO. 7 OF THE INSTRUCTIONS TO BIDDERS (STANDARD FORM 22).

EXCEPT AS OTHERWISE PROVIDED HEREIN, THE SUCCESSFUL BIDDER AGREES THAT HE WILL NOT HAVE ANY OF THE LISTED CATEGORIES OF WORK INVOLVED IN THE PERFORMANCE OF THIS CONTRACT PERFORMED BY ANY SUBCONTRACTOR OTHER THAN THE SUBCONTRACTOR NAMED FOR THE PERFORMANCE OF SUCH WORK.

B. THE TERM "SUBCONTRACTOR" FOR THE PURPOSE OF THIS REQUIREMENT SHALL MEAN THE INDIVIDUAL OR FIRM WITH WHOM THE BIDDER PROPOSES TO ENTER INTO A SUBCONTRACT FOR A LISTED CATEGORY OF WORK OR MATERIAL. IF SUBCONTRACTS ARE TO BE MADE WITH MORE THAN ONE SUBCONTRACTOR FOR A CATEGORY OF WORK OR MATERIAL, EACH PROPOSED SUBCONTRACTOR SHALL BE LISTED WITH A STATEMENT OF THE SERVICE TO BE FURNISHED BY EACH.

C. THE BIDDER SHALL LIST HIMSELF IF IT IS HIS INTENTION TO PERFORM ONE OR MORE OF THE LISTED CATEGORIES OF WORK. IN THIS CASE, ALL PERSONNEL PERFORMING SUCH WORK AT THE SITE SHALL BE CARRIED ON HIS OWN PAYROLL. EQUIPMENT IS LEASED WITH OPERATORS, THE OPERATORS NEED NOT BE CARRIED ON BIDDER'S PAYROLL.

D. NOTHING CONTAINED IN THE CLAUSE SHALL BE CONSTRUED AS CHANGING THE PERCENTAGE REQUIREMENT IN THE GENERAL CONDITIONS FOR THE CONTRACTOR TO PERFORM WORK WITH HIS OWN FORCES.

E. THE CONTRACTOR SHALL BE RESPONSIBLE FOR ALL WORK PERFORMED BY SUBCONTRACTORS.

F. NO SUBSTITUTIONS FOR THE FIRMS NAMED WILL BE PERMITTED EXCEPT IN UNUSUAL SITUATIONS AND THEN ONLY UPON THE SUBMISSION IN WRITING TO THE CONTRACTING OFFICER OF A COMPLETE JUSTIFICATION THEREFOR AND RECEIPT OF THE CONTRACTING OFFICER'S WRITTEN APPROVAL.

G. NOTWITHSTANDING ANY OF THE PROVISIONS OF THIS CLAUSE, THE CONTRACTING OFFICER SHALL HAVE AUTHORITY TO DISAPPROVE OR REJECT THE EMPLOYMENT OF ANY SUBCONTRACTOR HE HAS DETERMINED NON-RESPONSIBLE OR WHO DOES NOT MEET THE REQUIREMENTS OF AN APPLICABLE SPECIALTY SUBCONTRACTOR OR COMPETENCY OF BIDDER CLAUSE. HE SHALL HAVE THE RIGHT TO REQUIRE ANY INFORMATION CONCERNING THE COST OF PERFORMANCE OF THIS CONTRACT BY ANY SUBCONTRACTOR LISTED OR PROPOSED AS A SUBSTITUTE FOR A LISTED SUBCONTRACTOR, AS WELL AS THE RIGHT TO REQUIRE ANY OTHER INFORMATION HE DEEMS NECESSARY CONCERNING ANY LISTED SUBCONTRACTOR OR SUBCONTRACTOR PROPOSED AS A SUBSTITUTE. IMPOSITION OF ANY REQUIREMENTS UNDER THIS SUBPARAGRAPH SHALL NOT GIVE RISE TO ANY CAUSE OF ACTION AGAINST THE GOVERNMENT BY THE SUCCESSFUL BIDDER OR BY ANY SUBCONTRACTOR ENGAGED OR PROPOSED TO BE ENGAGED HEREUNDER.

H. NOTHING CONTAINED IN THIS CLAUSE SHALL IN ITSELF BE CONSTRUED TO CREATE ANY CONTRACT OR PROPERTY RIGHTS IN THE SUCCESSFUL BIDDER OR ANY SUBCONTRACTOR.

I. IN THE EVENT THE BIDDER FAILS IN CONNECTION WITH THIS BID EITHER(1) TO IDENTIFY THE SUBCONTRACTORS AS REQUIRED BY SUBPARAGRAPH A., OR (2) TO COMPLY WITH SUBPARAGRAPH C., THE BID WILL BE REJECTED AS NONRESPONSIVE TO THE INVITATION.

J. IN ORDER TO EFFECTIVELY IMPLEMENT THE OBJECTIVES OF THE FOREGOING PROVISIONS AND TO ASSURE TIMELY RECEIPT OF ACCURATE BIDS, THE BIDDER IS REQUESTED TO URGE ALL SUBCONTRACTORS INTENDING TO SUBMIT A PROPOSAL FOR WORK INVOLVED IN THE PROJECT TO SUBMIT TO ALL BIDDERS TO WHOM THEY INTEND TO BID, A WRITTEN PROPOSAL (OR WRITTEN ABSTRACT) WITH OR WITHOUT PRICE, OUTLINING IN DETAIL THE SPECIFIC SECTIONS OF THE SPECIFICATIONS TO BE INCLUDED IN THEIR WORK AS WELL AS ANY EXCEPTIONS OR EXCLUSIONS THEREFROM. IT IS SUGGESTED THAT SUCH WRITTEN PROPOSAL BE SUBMITTED TO THE BIDDER AT LEAST 48 HOURS IN ADVANCE OF THE BID OPENING.

SUBCONTRACTORS WERE REQUIRED TO BE LISTED FOR 18 CATEGORIES OF WORK, AND THE SUBCONTRACTOR LISTING FORM INCLUDED THE FOLLOWING HEADING: "LISTED BELOW ARE THE NAMES AND BUSINESS ADDRESSES AS REQUIRED BY THE LISTING OF SUBCONTRACTORS' PARAGRAPH OF THE SPECIAL CONDITIONS.' YOU LISTED, AMONG OTHERS, NINE AFFILIATED FIRMS, WHICH YOU STATE WERE FORMED FOR INTERNAL PURPOSES AND HAVE THE SAME OFFICERS, DIRECTORS, AND PRINCIPALS AS GEVYN. TWO OF THESE FIRMS, SPACE CONSTRUCTION CORPORATION AND METACOUSTIC, INC., HAD PREVIOUSLY DONE SOME WORK, BUT THE OTHER SEVEN HAD BEEN INACTIVE TO THE TIME OF BID OPENING. THE CONTRACTING OFFICER DETERMINED THAT THE LISTING OF THE LATTER SEVEN DID NOT CONSTITUTE SUBSTANTIVE COMPLIANCE WITH THE ABOVE-QUOTED SPECIAL CONDITIONS REQUIRING THE LISTING OF EITHER A BONA FIDE PROPOSED SUBCONTRACTOR OR YOUR OWN FIRM, AND THAT YOUR BID SHOULD BE REJECTED AS NONRESPONSIVE.

IT IS YOUR CONTENTION THAT YOUR BID WAS RESPONSIVE TO THE INVITATION AND THAT THE CONTRACTING OFFICER HAS NO STATUTORY AUTHORITY, AND NO IMPLIED AUTHORITY UNDER THE FEDERAL PROCUREMENT REGULATIONS (FPR) OR THE GENERAL SERVICES ADMINISTRATION PROCUREMENT REGULATIONS (GSPR) TO DECLARE YOUR BID NONRESPONSIVE, SINCE YOUR LISTED AFFILIATES ARE RESPONSIBLE CONCERNS AND THE PURPOSE OF THE REQUIREMENT TO LIST SUBCONTRACTORS IS TO ENSURE THEIR RESPONSIBILITY. IT IS ALSO YOUR POSITION THAT SINCE THERE IS NO PROHIBITION AGAINST SUB-SUBCONTRACTING, THE SUBCONTRACTOR LISTING REQUIREMENTS DO NOT IMPOSE ANY REAL RESTRAINT ON BID SHOPPING; THAT GSA HAS NOT ESTABLISHED A POLICY OF SUCH RESTRAINT, THERE BEING NO STATEMENT IN THE REGULATIONS THAT SUCH IS THEIR PURPOSE; AND THAT THE GSA CONCEPT OF BID SHOPPING IS IRRELEVANT UNDER EXISTING STATUTES IN DETERMINING THE RESPONSIVENESS OF A BID.

WITH RESPECT TO YOUR CONTENTION THAT YOUR BID IS RESPONSIVE, YOU POINT OUT THAT THE IFB REQUIRES EACH BIDDER TO EITHER LIST HIMSELF OR A SUBCONTRACTOR, AND THAT YOUR SEVEN AFFILIATES MEET THE DEFINITION OF A SUBCONTRACTOR, AS SET OUT IN SECTION 2-05B ABOVE, IN THAT EACH LISTED AFFILIATE IS THE FIRM WITH WHICH YOU PROPOSE TO ENTER INTO A SUBCONTRACT FOR THE LISTED CATEGORY OF WORK. YOU CONTEND FURTHER THAT LISTING THESE AFFILIATES COMPLIES WITH THE REQUIREMENT THAT A BIDDER LIST EITHER A SUBCONTRACTOR OR HIS OWN NAME BECAUSE, REGARDLESS OF WHETHER THE CONTRACTING OFFICER'S CONCLUSION IS ACCEPTED THAT THESE AFFILIATES ARE REALLY GEVYN UNDER ANOTHER NAME, THE LISTING OF AFFILIATES MEETS ONE OF THE TWO ALTERNATIVES, AND THERE IS NO THIRD ALTERNATIVE.

WE MUST AGREE THAT THE IFB DOES NOT SPECIFICALLY REQUIRE THE LISTED CATEGORIES OF WORK TO BE DONE BY THE SUBCONTRACTORS LISTED, AND IT THEREFORE FOLLOWS THAT A LISTED SUBCONTRACTOR MAY IN TURN SUBCONTRACT ALL OR A PORTION OF THE WORK TO ANOTHER SUBCONTRACTOR WITHOUT VIOLATING THE SPECIFIC TERMS OF THE IFB. HOWEVER, IT IS EQUALLY APPARENT THAT THE IFB DOES PRECLUDE THE PRIME CONTRACTOR FROM EITHER SUBSTITUTING ONE SUBCONTRACTOR FOR ANOTHER, OR FROM SUBSTITUTING A SUBCONTRACTOR FOR HIMSELF ON WORK WHICH THE PRIME CONTRACTOR HAS INDICATED HE HIMSELF WOULD PERFORM. IT FOLLOWS THAT, WHILE THE LISTING OF INACTIVE AFFILIATES AS SUBCONTRACTORS ON NONSPECIALTY WORK MAY NOT BE IN VIOLATION OF THE SPECIFIC TERMS OF THE IFB, IF SUCH ACTION IS PERMITTED IT WILL PLACE A BIDDER WHO SO LISTS IN A POSITION WHERE HE, ACTING IN THE GUISE OF HIS OWN SUBCONTRACTOR, MAY FREELY BID SHOP AMONG BONA FIDE SUBCONTRACTORS, AND THUS OBTAIN A COMPETITIVE ADVANTAGE OVER OTHER BIDDERS WHO EITHER LIST THEMSELVES OR BONA FIDE SUBCONTRACTORS TO PERFORM THE WORK. THAT SUCH WAS YOUR INTENTION IN LISTING YOUR AFFILIATES IS INDICATED BY REPEATED EXPRESSIONS OF YOUR BELIEF THAT NO LIMITATION IS IMPOSED UPON THE AMOUNT OF WORK A LISTED SUBCONTRACTOR MAY AWARD TO A SECOND-TIER SUBCONTRACTOR, AND BY YOUR LETTERS OF AUGUST 18 AND SEPTEMBER 8, 1967, WHEREIN YOU ADVISED GSA IT WAS NOT INTENDED THAT NODNOL CONTRACTING CORPORATION, WHICH YOU LISTED FOR FOUNDATION WORK, ACT AS A SPECIALTY SUBCONTRACTOR, SINCE IT WAS YOUR INTENTION TO HAVE SPECIALTY WORK PERFORMED BY A SUB-SUBCONTRACTOR WHO WOULD BE FULLY QUALIFIED UNDER THE SPECIFICATIONS, AS YOU HAD PREVIOUSLY DONE ON OTHER GSA PROJECTS. IT IS THEREFORE APPARENT THAT, WHEN YOU PURPORTED TO MAKE AN AGREEMENT WITH ONE OF YOUR LISTED AFFILIATES, YOU WERE REALLY AGREEING WITH YOURSELF TO RETAIN COMPLETE CONTROL OF THE LISTED WORK, AND OF HOW AND BY WHOM IT WOULD BE PERFORMED. AN AWARD TO YOU ON THAT BASIS CLEARLY WOULD HAVE RESULTED IN A COMPETITIVE ADVANTAGE OVER OTHER BIDDERS, AND THEREFORE WOULD HAVE BEEN IMPROPER.

IN THIS CONNECTION, IT FURTHER APPEARS THAT SPACE CONSTRUCTION CORPORATION, WHICH YOU LISTED AS THE "SPECIALTY SUBCONTRACTOR" TO PERFORM THE AIR-CONDITIONING WORK, DOES NOT MEET THE "COMPETENCY OF BIDDER" REQUIREMENTS APPLICABLE TO SUCH WORK, AS SET OUT IN SECTION 2 02 OF THE SPECIAL CONDITIONS OF THE IFB, AS QUOTED ABOVE. THUS, IN RESPONSE TO THE CONTRACTING OFFICER'S REQUEST, BY LETTER OF SEPTEMBER 8, 1967, YOU FURNISHED A LIST OF COMPARABLE INSTALLATIONS PERFORMED BY ,EITHER SPACE CONSTRUCTION CORP. OR UNDER THE GENERAL SUPERVISION OF MR. GEORGE UNGER, PRESIDENT OF BOTH SPACE CONSTRUCTION CORPORATION AND GEVYN CONSTRUCTION CORPORATION, OR BY GEORGE MARCUS ACTING EITHER AS PROJECT MANAGER OF SPACE CONSTRUCTION CORPORATION, GEVYN CONSTRUCTION CORPORATION, OR PRINCIPAL OF ACE MECHANICAL CONTRACTING CORPORATION, OR OFFICER OF J.E. SCHECHTER CORP. OF NEW YORK CITY: * * *.' FROM SUCH LIST IT IS EVIDENT THAT SPACE CONSTRUCTION CORPORATION ITSELF DID NOT HAVE EXPERIENCE IN INSTALLATION AND SERVICING OF AIR-CONDITIONING EQUIPMENT, AS REQUIRED BY SECTION 2-02. AS PROVIDED IN SECTION 2-02E, THE CONTRACTING OFFICER WAS AUTHORIZED TO REJECT ANY BID WHICH LISTED A SUBCONTRACTOR FOR THIS WORK WHO DID NOT MEET THE COMPETENCY OF BIDDER REQUIREMENTS.

IN VIEW OF THE FOREGOING, IT IS OUR OPINION THAT YOUR ACTION IN NAMING NONOPERATIVE AFFILIATES AS SUBCONTRACTORS ON LISTED NONSPECIALTY WORK PRECLUDED ACCEPTANCE OF YOUR BID AS A RESPONSIVE BID, AND THAT ACCEPTANCE WOULD, IN ANY EVENT, HAVE BEEN PRECLUDED BECAUSE OF YOUR FAILURE TO LIST A SUBCONTRACTOR FOR THE AIR CONDITIONING WORK WHO MET THE COMPETENCY REQUIREMENTS OF SECTION 2-02 OF THE IFB. WE ARE THEREFORE UNABLE TO CONCLUDE THAT REJECTION OF YOUR BID AS NONRESPONSIVE WAS IMPROPER.

WITH REFERENCE TO YOUR ARGUMENT THAT GSA HAS NOT ESTABLISHED A POLICY OF RESTRAINT ON BID SHOPPING, WE ARE NOT AWARE OF ANY REQUIREMENT THAT A REGULATION SPECIFY THE REASON FOR ITS PRESCRIPTION. IN MANY INSTANCES THE PURPOSE IS APPARENT FROM THE LANGUAGE, BUT IT NEED NOT BE. THAT THE PURPOSE OF THE SUBCONTRACTOR LISTING REQUIREMENT WAS TO RESTRAIN BID SHOPPING ON LISTED WORK IN ORDER TO ASSURE PERFORMANCE OF QUALITY WORK BY RESPONSIBLE SUBCONTRACTORS WAS MADE KNOWN TO THIS OFFICE PRIOR TO PROMULGATION OF THE REGULATION IN QUESTION, AND WE BELIEVE ITS PURPOSE IS WELL KNOWN TO ALL BRANCHES OF THE CONSTRUCTION INDUSTRY. WHILE THERE IS NO SPECIFIC PROHIBITION IN THE REGULATION AGAINST SECOND-TIER SUBCONTRACTING, IT IS APPARENT THAT UNRESTRAINED BID SHOPPING BY A PRIME CONTRACTOR, ACTING THROUGH HIS LISTED AFFILIATES, WOULD CIRCUMVENT THE PURPOSE OF THE REGULATION.

WITH REFERENCE TO CONTRACTING BETWEEN AFFILIATES, GSA STATES THAT IT HAS "IN THE PAST MADE NO OBJECTION TO A PARENT COMPANY'S NAMING AND USING A SUBSIDIARY AS A SUBCONTRACTOR WHERE THE SUBSIDIARY HAD A RECORD OF PERFORMING LIKE WORK BOTH FOR THE PARENT COMPANY AND FOR OTHER PRIME CONTRACTORS, OR AS A PRIME CONTRACTOR ITSELF, AND WHERE IT WAS CLEAR THAT THE SUBSIDIARY HAD BEEN NAMED AS A SUBCONTRACTOR IN THE NORMAL COURSE OF EXISTING PRACTICE AND NOT FOR THE PURPOSE OF BEING USED AS A DUMMY BY THE PRIME CONTRACTOR TO ESCAPE THE SUBCONTRACTOR LISTING RESTRAINTS.'

AS TO YOUR CONTENTION THAT YOUR LISTING OF AFFILIATES AND YOUR UNLIMITED SECOND-TIER SUBCONTRACTING ON PRIOR PROJECTS HAD THE BLESSING OF GSA, IT APPEARS THAT THE ONLY PROJECT ON WHICH RECORDS ARE AVAILABLE FOR COMPARISON IS THAT FOR THE AIR-CONDITIONING AND MODERNIZATION OF THE FEDERAL BUILDING AND POST OFFICE IN HARTFORD, CONNECTICUT, SINCE GSA REPORTS THAT ON THE OTHER EIGHT PROJECTS MENTIONED BY YOU, THE ISSUE OF THE RESPONSIVENESS OF YOUR BIDS NEVER CAME BEFORE THE CONTRACTING OFFICERS FOR DECISIONS. THE RECORD SHOWS THAT ON THE HARTFORD PROJECT YOU LISTED SPACE CONSTRUCTION CORPORATION (SPACE) FOR THE PLUMBING AND THE HEATING AND VENTILATING CATEGORIES, AND METACOUSTIC, INC., FOR STRUCTURAL STEEL. AT THAT TIME, GSA ADVISES, NO BASIS FOR REJECTING YOUR BID WAS APPARENT. IT APPEARS, HOWEVER, THAT THE BULK OF THE WORK FOR WHICH THESE AFFILIATES WERE LISTED HAS BEEN PERFORMED BY SECOND AND THIRD TIER SUBCONTRACTORS. THERE ARE SOME DIFFERENCES OF OPINION BETWEEN YOUR COMPANY AND GSA AS TO JUST WHAT WORK THE TWO LISTED FIRMS HAVE PERFORMED AND, WHILE YOU QUESTION THE GSA REGION'S STATEMENT THAT THEY DID LITTLE MORE THAN SUPERVISE, IT APPEARS EVEN FROM YOUR FIGURES THAT THE MAJOR PORTIONS OF THE CATEGORIES FOR WHICH SPACE WAS LISTED HAVE BEEN PERFORMED BY OTHER FIRMS. THE FILE INCLUDES A STATEMENT BY GSA BASED ON PAYROLL RECORDS SUBMITTED AND REVIEWED AS OF NOVEMBER 6, 1967, WHICH LISTS SIX SUBCONTRACTORS WORKING FOR SPACE ON SECOND AND THIRD TIER LEVELS, AND WHICH POINTS OUT THAT NO PAYROLLS HAVE BEEN RECEIVED FOR METACOUSTIC AND THAT BERLIN STEEL CONSTRUCTION COMPANY, A SUBCONTRACTOR WORKING FOR SPACE, HAS PRIMARILY ACCOMPLISHED THE ERECTION OF STRUCTURAL STEEL, WHICH SHOULD HAVE BEEN ACCOMPLISHED BY METACOUSTIC.

AS TO GSA'S SUPPOSED FAILURE TO QUESTION THE SUB-SUBCONTRACTING, THE FACT THAT SOME OF THE WORK WAS NOT ACTUALLY BEING PERFORMED BY SPACE PERSONNEL WOULD NOT NECESSARILY COME TO THE ATTENTION OF AN INSPECTOR OR OTHER CONTRACTING OFFICER'S REPRESENTATIVE UNTIL THE WORK WAS SUBSTANTIALLY COMPLETED. GSA'S ACTION, OR INACTION, COULD THEREFORE HARDLY BE INTERPRETED AS RATIFICATION OF YOUR LISTING OF AFFILIATES AND SUBSEQUENT PERFORMANCE THROUGH SECOND AND THIRD TIER SUBCONTRACTORS, PARTICULARLY SINCE THE TRUE PICTURE OF YOUR LISTING DEVICE HAD NOT BECOME APPARENT. WHEN THE MANNER OF PERFORMANCE OF THE WORK FOR WHICH SPACE AND METACOUSTIC WERE LISTED DID COME TO LIGHT, IT APPEARS TO HAVE CAUSED THE CONTRACTING OFFICER TO INVESTIGATE YOUR LISTING OF AFFILIATES ON THE PORTLAND PROJECT, CULMINATING IN HIS REJECTION OF YOUR BID AS NONRESPONSIVE.

YOU ALSO CONTEND THAT DAVISON'S BID WAS NONRESPONSIVE FOR FAILURE TO FOLLOW THE PRESCRIBED SUBCONTRACTOR LISTING PROCEDURE WITH RESPECT TO "EXCAVATION," "FOUNDATIONS," "ROOF INSULATION, ROOFING AND RELATED SHEET METAL WORK: FLOORING, TERRACO (SIC) AND TILE WORK," "ARCHITECTURAL CAST STONE," AND "ARCHITECTURAL METAL AND WINDOWS.' GSPR 5B-2.202-70 (A) READS AS FOLLOWS:

(A) EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPH (B) OF THIS SECTION, INVITATIONS FOR BIDS SHALL REQUIRE THE BIDDER TO NAME THE PRINCIPAL SUBCONTRACTORS (OR HIS OWN FIRM WHEN IT WILL PERFORM THE WORK). CONTRACTING OFFICERS SHALL DETERMINE THE CATEGORIES OF WORK FOR WHICH SUBCONTRACTORS' NAMES ARE TO BE SUBMITTED. THE LISTING OF THE CATEGORIES OF WORK SHALL INCLUDE, WHENEVER APPLICABLE, PLUMBING, HEATING, AIR CONDITIONING AND VENTILATION, ELECTRICAL, AND ELEVATORS. IN ADDITION, SUCH LISTING SHALL INCLUDE ALL OTHER GENERAL CONSTRUCTION CATEGORIES OF WORK WHICH, INDIVIDUALLY ARE DETERMINED BY THE CONTRACTING OFFICER TO COMPRISE AT LEAST 3-1/2 PERCENT OF THE ESTIMATED COST OF THE ENTIRE CONTRACT. CATEGORIES ESTIMATED TO COST LESS SHALL NOT BE INCLUDED. THE TOTAL ESTIMATED COST OF THE PORTLAND PROJECT IS REPORTED TO HAVE BEEN $5,600,000, AND 3-1/2 PERCENT OF THIS AMOUNT IS $196,000. WITH RESPECT TO DISCREPANCIES IN THE LISTING OF SUBCONTRACTORS AT PORTLAND, THE GSA REPORT, COPY OF WHICH WAS FURNISHED YOU, STATES, IN PART, AS FOLLOWS:

UPON REVIEW OF THE SUBCONTRACTOR LISTING FORM FOR THAT PROJECT AND THE INFORMATION FURNISHED BY OUR REGIONAL OFFICE AS TO COST ESTIMATES, IT IS CLEAR THAT THREE TYPES OF ERROR OCCURRED IN THE PREPARATION OF THE SUBCONTRACTOR LISTING FORM: (1) THE LISTING ON THE FORM OF CATEGORIES WHICH WERE NOT CORRELATED WITH CATEGORIES OF WORK CONTAINED IN THE SPECIFICATIONS (E.G., THE REQUIREMENT TO LIST A SUBCONTRACTOR FOR "EXCAVATION" ONLY WHEREAS THE SPECIFICATIONS CONTAIN A SECTION ENTITLED "EXCAVATION, FILL, BACKFILLING AND GRADING" WHICH ALSO COVERS THE WORK OF CONTINUOUS SHEET PILING, SHORING AND UNDERPINNING; THE LISTING OF "FOUNDATIONS" WHEREAS THE INDEX TO THE SPECIFICATIONS LISTS SECTION 9 AS "PILING" AND SECTION 9 ITSELF IS ENTITLED "FOUNDATION PILES," AND THE LISTING OF "ARCHITECTURAL CAST STONE" WHEREAS NO ARCHITECTURAL CAST STONE IS REQUIRED FOR THE PROJECT); (2) THE COMBINING OF UNRELATED CATEGORIES OF WORK COVERED IN THE SPECIFICATIONS INTO A SINGLE CATEGORY ON THE SUBCONTRACTOR LISTING FORM (E.G., THE COMBINING OF "ARCHITECTURAL METAL" WITH "ALUMINUM WINDOWS" AND THE COMBINING OF "ROOF INSULATION," "BUILT-UP ROOFING" AND ,SHEET METAL" WITH THE UNRELATED CATEGORIES OF "RESILIENT FLOOR," "TERRAZZO" AND "CERAMIC TILE"); AND (3) THE INCLUSION OF CATEGORIES WHICH, IN FACT WERE NEITHER ONE OF THE CATEGORIES SPECIFICALLY NAMED BY THE REGULATION NOR ESTIMATED TO CONSTITUTE AT LEAST 3-1/2 PERCENT OF THE ESTIMATED CONTRACT PRICE (E.G., "STRUCTURAL STEEL; " "ROOFING INSULATION, ROOFING AND SHEET METAL WORK: FLOORING TERRACO (SIC) AND TILE WORK; " "ARCHITECTURAL METAL AND WINDOWS," AND ,PLASTERING, LATHING AND FURRING").

ACCORDINGLY, IT MUST BE ACKNOWLEDGED THAT, BY REASON OF THE FIRST TYPE OF ERROR, GSA IS RESPONSIBLE FOR HAVING CREATED POTENTIAL HAZARDS FOR THE BIDDER'S ATTEMPTS TO BE RESPONSIVE AND THAT, BY THE THIRD, BIDDERS WERE ASKED TO NAME SUBCONTRACTORS THAT THEY NEED NOT HAVE NAMED. HOWEVER, FOR REASONS SET OUT BELOW, IT DOES NOT APPEAR THAT ANY OF THESE ERRORS ON GSA'S PART RESULTED IN A FATALLY DEFECTIVE BID SUBMISSION BY THE SECOND LOW BIDDER.

IN REVIEWING THE DAVISON BID AS WELL AS THOSE FROM ALL OTHER BIDDERS INCLUDING GEVYN, WE ARE FORCED TO CONCLUDE THAT THE REQUIREMENT TO NAME A SUBCONTRACTOR FOR "EXCAVATION" REQUIRED NO MORE THAN THAT, BECAUSE THE WORD "EXCAVATION" ALONE PATENTLY DID NOT SERVE TO INDICATE TO THE BIDDERS THAT THEY WERE REQUIRED TO NAME SUBCONTRACTORS FOR ALL PHASES OF THE WORK ENCOMPASSED IN THE SPECIFICATIONS UNDER "EXCAVATION, FILL, BACKFILLING AND GRADING," INCLUDING THE CONTINUOUS SHEET PILING, UNDERPINNING AND SHORING REQUIRED THEREIN. ACCORDINGLY, SINCE ALL BIDDERS INTERPRETED THE WORD AT FACE VALUE AND SINCE WE FIND NO BASIS TO SUPPORT A BROADER INTERPRETATION, IT MUST BE CONCLUDED THAT DAVISON'S BID WAS RESPONSIVE TO THAT PARTICULAR LISTING REQUIREMENT.

WITH RESPECT TO THE "FOUNDATIONS" CATEGORY ON THE SUBCONTRACTOR LISTING FORM, SOME CONFUSION DOUBTLESS AROSE BECAUSE THE INDEX TO THE SPECIFICATIONS LISTS SECTION 9 AS "PILING" WHEREAS SECTION 9 ITSELF IS ENTITLED "FOUNDATION PILES.' BE THAT AS IT MAY, AMENDMENT NO. 3 TO THE INVITATION REQUIRED BIDS ON ALTERNATE C FOR SUBSTITUTING PRESSURE INJECTED FOOTINGS IN LIEU OF THE CAST-IN-PLACE CONCRETE PILING REQUIRED UNDER SECTION 9, BUT DID NOT AMEND THE SUBCONTRACTOR LISTING FORM ACCORDINGLY TO REQUIRE THE LISTING OF A SUBCONTRACTOR FOR THE PRESSURE INJECTED FOOTINGS AGAINST THE POSSIBLE SELECTION OF THE ALTERNATE IN MAKING THE AWARD. SEEMS TO US THAT, BY ANALOGY TO YOUR DECISION NO. B-155665 OF DECEMBER 31, 1964, HOLDING THAT A BIDDERS' FAILURE TO BID ON AN ALTERNATE WHICH WAS NOT ACCEPTED DID NOT RENDER THE BID NONRESPONSIVE ON THE BASIS WHICH AWARD WAS MADE. DAVISON'S DEFECTIVE LISTING OF A SUBCONTRACTOR FOR "FOUNDATIONS" DOES NOT RENDER THE BID NONRESPONSIVE WHEN THE GOVERNMENT ELECTS TO MAKE THE AWARD ON THE BASIS OF THE ALTERNATE INSERTED LATER BY AMENDMENT AND FOR WHICH NO CORRELATIVE AMENDMENT OF THE SUBCONTRACTOR LISTING FORM WAS MADE.

WE ARE INCLINED TO AGREE WITH GSA'S CONCLUSION THAT THE PARTY LISTED FOR "EXCAVATION" WAS REQUIRED TO DO JUST THAT AND NO MORE, AND THAT THE BIDDERS SO INTERPRETED THE LISTING REQUIREMENTS. WITH REFERENCE TO THE "FOUNDATIONS," YOUR LETTER OF DECEMBER 28, 1967, DOES NOT SPEAK TO THE POSITION OF GSA SET FORTH IN THE PRECEEDING PARAGRAPH THAT OUR DECISION OF DECEMBER 31, 1964, B-155665, IS APPLICABLE. YOU MERELY STATE THAT DAVISON WAS NONRESPONSIVE FOR FAILURE TO NAME A SPECIALTY SUBCONTRACTOR FOR THE BASE CONTRACT PILING. WE BELIEVE THAT THE CITED DECISION AND OTHERS REFERRED TO THEREIN JUSTIFY THE CONCLUSION THAT IT WOULD BE IMPROPER TO REJECT DAVISON'S BID (1) FOR ANY DEFECT, IF SUCH THERE WAS, IN THE LISTING OF THE PARTY WHO WOULD DO THE ,FOUNDATIONS" AS ORIGINALLY CONTEMPLATED AND WHICH IN FACT WERE NOT PART OF THE EVALUATION FORMULA, BECAUSE OF AMENDMENT NO. 3, OR (2) FOR FAILURE TO NAME A SUBCONTRACTOR FOR THE PRESSURE INJECTED FOOTINGS, WHICH WAS NOT SPECIFICALLY REQUIRED BY THE AMENDMENT. IN FACT, EVEN IF SUCH LISTING HAD BEEN REQUIRED, THERE WOULD BE SERIOUS DOUBT THAT FAILURE TO COMPLY WOULD BE A FATAL DEFECT SINCE THE RECORD INDICATES THAT INSTALLATION OF THE FOOTINGS IS A PATENTED PROCESS HANDLED ONLY BY THE FRANKI FOUNDATION COMPANY. WE NOTE THAT, WHILE GEVYN STATED AFTER BID OPENING THAT IT INTENDED TO USE FRANKI FOR THESE FOOTINGS, ITS BID AS SUBMITTED LISTED ONLY NODNOL FOR THE FOUNDATIONS. ADDITIONALLY, IT APPEARS THAT CONSIDERATION SHOULD BE GIVEN TO THE FACT THAT DAVISON IN A LETTER TO THIS OFFICE DATED NOVEMBER 29, 1967, STATES THAT IT HAS BEEN IN THE CONTRACTING BUSINESS IN THE NEW ENGLAND AREA FOR THE LAST 34 YEARS AND THAT "ON ANY PROJECT WHICH IT UNDERTAKES, DAVISON CONSTRUCTION COMPANY REGULARLY AND HABITUALLY HAS DONE AT LEAST THE EXCAVATION, FOUNDATION, CONCRETE AND MASONRY WORK, AND IT ALWAYS HAS SO PERFORMED ITS CONTRACTS IN THE PAST.'

WITH REFERENCE TO THE ROOF INSULATION, ETC., IT APPEARS THAT UNRELATED CATEGORIES WERE ERRONEOUSLY GROUPED WHICH NORMALLY WOULD NOT BE PERFORMED BY THE SAME CONTRACTOR. WHY THIS WAS DONE IS NOT CLEAR, EXCEPT THAT IN ESTIMATING THE COST OF THE WORK THE ROOFING AND RELATED SHEET METAL WORK WAS LISTED AT $75,000 AND THE FLOORING, TERRAZO AND TILE WORK AT $120,647, AND THE TWO WERE EXTENDED AS ONE PRICE OF $195,647. IT WILL BE NOTED, THEREFORE, THAT IF THEY HAD BEEN CONSIDERED INDIVIDUALLY, AS UNRELATED CATEGORIES SHOULD BE, BOTH WERE WELL UNDER THE 3-1/2 PERCENT REQUIRED FOR LISTING, AND COMBINED THEY WERE STILL UNDER. AS TO THE ARCHITECTUAL METAL AND WINDOWS, THEY LIKEWISE SHOULD NOT HAVE BEEN COMBINED, BUT EVEN TAKEN TOGETHER THE TOTAL ESTIMATED COST WAS ONLY $110,000, WHICH WAS CONSIDERABLY BELOW THE REQUIRED 3-1/2 PERCENT. IN OUR DECISION OF AUGUST 17, 1965, B 157279, WE HELD THAT WHERE A CATEGORY OF LESS THAN 3-1/2 PERCENT WAS INCLUDED ON THE LIST, FAILURE TO NAME A SUBCONTRACTOR FOR THAT CATEGORY WAS A MINOR DEFICIENCY WHICH DID NOT JUSTIFY REJECTION OF THE BID AS NONRESPONSIVE. THE REGULATIONS WERE SUBSEQUENTLY AMENDED BECAUSE OF THIS DECISION, AND AT THE TIME BIDS WERE OPENED ON THE PORTLAND PROJECT, GSPR 5B-2.202-70 (A) SPECIFICALLY PROHIBITED INCLUSION OF CATEGORIES ESTIMATED TO COST LESS THAN 3-1/2 PERCENT OF THE ESTIMATED COST OF THE ENTIRE CONTRACT. ACCORDINGLY, ANY DEFECT IN LISTING, OR OUTRIGHT FAILURE TO LIST A SUBCONTRACTOR FOR A CATEGORY WHICH WAS UNDER THE 3-1/2 PERCENT FIGURE AND THEREFORE REQUIRED TO BE EXCLUDED, COULD NOT AFFECT THE RESPONSIVENESS OF THE BID. SINCE NO ARCHITECTURAL CAST STONE WAS USED, FAILURE TO LIST A SUBCONTRACTOR FOR THIS CATEGORY COULD NOT BE FAULTED, AND DAVISON'S ACTION IN NAMING THE FIRM FROM WHICH IT INTENDED TO PURCHASE THE MATERIAL (GRANITE) WHICH SEEMED NEAREST TO THE LISTED CATEGORY AFFORDS NO BASIS FOR QUESTIONING THE RESPONSIVENESS OF ITS BID.

TO SUMMARIZE, THERE WERE A NUMBER OF ERRORS AND INCONSISTENCIES IN THE PREPARATION OF THE SUBCONTRACTOR LISTING FORM, AS ACKNOWLEDGED BY GSA, AND WHETHER THESE DEFECTS WERE SUFFICIENTLY MATERIAL TO HAVE GIVEN CONSIDERATION TO CANCELING THE INVITATION PURSUANT TO FPR 1-2.404-1 (B) (1) WOULD APPEAR TO DEPEND ON WHETHER THE GOVERNMENT'S INTERESTS OR THE RIGHTS OF ANY BIDDERS WERE SERIOUSLY PREJUDICED THEREBY. SEE B 160727, APRIL 4, 1967; 43 COMP. GEN. 23; 40 ID. 561. AS STATED IN THE SUBCONTRACTOR LISTING FORM HAD AN ADVERSE EFFECT ON COMPETITIVE BID SYSTEM DICTATES THAT, AFTER BIDS HAVE BEEN OPENED, AWARD MUST BE MADE TO THAT RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION. AFTER GIVING DUE CONSIDERATION TO ALL AVAILABLE INFORMATION AND EVIDENCE, WE ARE UNABLE TO CONCLUDE THAT THE DEFECTS IN THE SUBCONTRACTOR LISTING FORM HAD AN ADVERSE EFFECT ON COMPETITION OR CAUSED ANY MISINTERPRETATIONS AFFECTING BID PRICES, OR THAT THEY WERE OTHERWISE PREJUDICIAL TO BIDDERS' INTERESTS SO AS TO CONSTITUTE A COMPELLING REASON TO CANCEL THE INVITATION. HOWEVER, WE ARE SUGGESTING TO GSA THAT IN ALL FUTURE SOLICITATIONS THE SUBCONTRACTOR LISTING FORM AND THE SPECIFICATIONS BE CORRELATED SO THAT THERE IS NO DOUBT AS TO EXACTLY WHAT IS REQUIRED OF THE LISTED PARTY.

FOR THE REASONS STATED, WE ARE CONSTRAINED TO THE VIEW THAT YOUR BID WAS PROPERLY REJECTED AS NONRESPONSIVE, AND WE FIND NO LEGAL BASIS FOR QUESTIONING THE AWARD TO DAVISON. YOUR PROTEST IS THEREFORE DENIED.