B-167250, NOV. 13, 1969

B-167250: Nov 13, 1969

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RATES UNDER PRIOR CONTRACTS UNDER INVITATION FOR BIDS FOR OPERATION AND MAINTENANCE OF MOTOR POOL FOR 1 OR 2-YEAR PROGRAMS WHICH INCORPORATED MINIMUM MONETARY WAGES AND FRINGE BENEFITS FOR SOME EMPLOYEES ISSUED PURSUANT TO SERVICE CONTRACT ACT OF 1965 BUT NOT FOR OTHERS WHO WERE TO BE CLASSIFIED BY CONTRACTOR AND WAGES AGREED UPON BY PARTIES INVOLVED. NEITHER AVAILABILITY TO PROSPECTIVE BIDDERS OF PRESENT CONTRACTOR'S CONFORMED RATES NOR FAILURE TO INCORPORATE EXISTING CONFORMED RATES AS MINIMUM BIDDING REQUIREMENT WAS PREJUDICIAL TO CONTRACTOR SINCE ALL BIDDERS WERE SUBJECT TO IDENTICAL INVITATION REQUIREMENT TO CONFORM CERTAIN WAGE RATES IN ACCORDANCE WITH PROCEDURES SPECIFIED THEREIN. PROTEST TO LEGALITY OF PROCURING SERVICES ON MULTI-YEAR BASIS BECAUSE FUNDS FOR SECOND YEAR OF PROGRAM WERE NEITHER AVAILABLE NOR APPROPRIATED AND 10 U.S.C. 2306 (G) AUTHORIZES CONTRACTS FOR PERIODS UP TO 5 YEARS "FOR WHICH FUNDS WOULD OTHERWISE BE AVAILABLE FOR OBLIGATION ONLY WITHIN FISCAL YEAR FOR WHICH APPROPRIATED" BUT SINCE SUBJECT CONTRACT IS BEING FINANCED FROM NO-YEAR FUNDS WHICH ARE NOT LIMITED FOR OBLIGATION DURING FISCAL YEAR FOR WHICH APPROPRIATED.

B-167250, NOV. 13, 1969

LABOR STIPULATIONS--SERVICE CONTRACT ACT OF 1965--MINIMUM WAGE, ETC; DETERMINATIONS--RATES UNDER PRIOR CONTRACTS UNDER INVITATION FOR BIDS FOR OPERATION AND MAINTENANCE OF MOTOR POOL FOR 1 OR 2-YEAR PROGRAMS WHICH INCORPORATED MINIMUM MONETARY WAGES AND FRINGE BENEFITS FOR SOME EMPLOYEES ISSUED PURSUANT TO SERVICE CONTRACT ACT OF 1965 BUT NOT FOR OTHERS WHO WERE TO BE CLASSIFIED BY CONTRACTOR AND WAGES AGREED UPON BY PARTIES INVOLVED, NEITHER AVAILABILITY TO PROSPECTIVE BIDDERS OF PRESENT CONTRACTOR'S CONFORMED RATES NOR FAILURE TO INCORPORATE EXISTING CONFORMED RATES AS MINIMUM BIDDING REQUIREMENT WAS PREJUDICIAL TO CONTRACTOR SINCE ALL BIDDERS WERE SUBJECT TO IDENTICAL INVITATION REQUIREMENT TO CONFORM CERTAIN WAGE RATES IN ACCORDANCE WITH PROCEDURES SPECIFIED THEREIN. TERM- BEYOND ONE YEAR--SUPPLIES AND SERVICES UNDER INVITATION FOR BIDS FOR OPERATION AND MAINTENANCE OF MOTOR POOL FOR EITHER 1 OR 2-YEAR PERIOD, PROTEST TO LEGALITY OF PROCURING SERVICES ON MULTI-YEAR BASIS BECAUSE FUNDS FOR SECOND YEAR OF PROGRAM WERE NEITHER AVAILABLE NOR APPROPRIATED AND 10 U.S.C. 2306 (G) AUTHORIZES CONTRACTS FOR PERIODS UP TO 5 YEARS "FOR WHICH FUNDS WOULD OTHERWISE BE AVAILABLE FOR OBLIGATION ONLY WITHIN FISCAL YEAR FOR WHICH APPROPRIATED" BUT SINCE SUBJECT CONTRACT IS BEING FINANCED FROM NO-YEAR FUNDS WHICH ARE NOT LIMITED FOR OBLIGATION DURING FISCAL YEAR FOR WHICH APPROPRIATED, SPECIFIC LEGISLATIVE AUTHORITY REQUIRED BY REFERENCED STATUTE IS NOT REQUIRED FOR CONTRACTS EXTENDING BEYOND FISCAL YEAR. GOVERNMENT PROPERTY--DEFINITENESS REQUIREMENT--CONTRACTOR'S RESPONSIBILITY UNDER INVITATION FOR BIDS FOR OPERATION AND MAINTENANCE OF MOTOR POOL, PROTEST THAT REFERENCED INVITATION LACKED SUFFICIENT SPECIFICITY AND DEFINITENESS BECAUSE SOLICITATION INSTRUCTIONS AND CONDITIONS PROVIDE THAT "ALL ITEMS DESIGNATED AS EQUIPMENT WILL BE ACCOUNTED FOR UNDER A SEPARATE (UNFUNDED) FACILITIES CONTRACT ISSUED TO SUCCESSFUL BIDDER" AND SOLICITATION DOES NOT SPECIFY TERMS OF FACILITIES CONTRACT AND ONLY INCUMBENT CONTRACTOR COULD HAVE BEEN AWARE THAT UNFUNDED FACILITIES CONTRACT PROVIDED FOR CONTRACT ASSUMPTION OF RESPONSIBILITY FOR GOVERNMENT -FURNISHED EQUIPMENT, IS DENIED SINCE GENERAL PROVISIONS (SUPPLY CONTRACT) AND ATTACHMENT "C" OF INVITATION PROVIDED BIDDERS WITH FULL AND ADEQUATE EXPLANATION OF ASSUMPTION OF RESPONSIBILITY FOR GOVT--- FURNISHED EQUIPMENT UNDER CONTRACT.

TO THE TUMPANE COMPANY, INC.:

REFERENCE IS MADE TO YOUR TELEGRAMS OF JUNE 16 AND 18, 1969, AND TO LETTERS DATED AUGUST 27 AND OCTOBER 9, 1969, FROM YOUR ATTORNEYS PROTESTING THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. F04693-69-B-0012, ISSUED ON MAY 6, 1969, BY THE DEPARTMENT OF THE AIR FORCE.

THE INVITATION REQUESTED BIDS FOR THE OPERATION OF BASE SUPPORT SERVICES INCLUDING PURCHASING, MAINTENANCE, AND OPERATION OF A MOTOR POOL FOR SEVERAL GOVERNMENT ORGANIZATIONS LOCATED AT THE LOS ANGELES AIR FORCE STATION. BIDS WERE REQUESTED ON THE BASIS OF A ONE YEAR PROGRAM AND/OR A TWO YEAR PROGRAM. MINIMUM MONETARY WAGES AND FRINGE BENEFITS AS STATED IN DEPARTMENT OF LABOR WAGE DETERMINATION 68-523 (REV. I), DATED JANUARY 3, 1969, WERE INCORPORATED INTO THE SUBJECT INVITATION. SUCH WAGE DETERMINATIONS WERE ISSUED PURSUANT TO THE SERVICE CONTRACT ACT OF 1965, PUBLIC LAW 89-286, 41 U.S.C. 351-357, AND COVERED 18 CLASSIFICATIONS SUCH AS MAINTENANCE CARPENTERS, PLUMBERS, AND LABORERS, AS WELL AS TRUCK DRIVERS, SECRETARIES, STENOGRAPHERS, AND TYPISTS FOR LOS ANGELES AND ORANGE COUNTIES. HOWEVER, WAGES AND FRINGE BENEFITS WERE NOT LISTED FOR MANAGERS, SUPERVISORS, FOREMEN, LEADMEN, TECHNICIANS, AND CLERKS OF VARIOUS TYPES, NOR FOR BUYERS, EXPEDITORS AND INSPECTORS WHO WOULD ALSO BE NEEDED IN PERFORMANCE OF THE CONTRACT.

WITH RESPECT TO THE APPLICATION OF THE SERVICE CONTRACT ACT TO THE INSTANT PROCUREMENT, PARAGRAPH 44 OF THE GENERAL PROVISIONS OF THE INVITATION PROVIDED, IN PERTINENT PART, AS FOLLOWS: ,/A) COMPENSATION. EACH SERVICE EMPLOYEE EMPLOYED IN THE PERFORMANCE OF THIS CONTRACT BY THE CONTRACTOR OR ANY SUBCONTRACTOR SHALL BE PAID NOT LESS THAN THE MINIMUM MONETARY WAGE AND SHALL BE FURNISHED FRINGE BENEFITS IN ACCORDANCE WITH THE WAGES AND FRINGE BENEFITS DETERMINED BY THE SECRETARY OF LABOR OR HIS AUTHORIZED REPRESENTATIVE, AS SPECIFIED IN ANY ATTACHMENT TO THIS CONTRACT. IF THERE IS SUCH AN ATTACHMENT, ANY CLASS OF SERVICE EMPLOYEES WHICH IS NOT LISTED THEREIN, BUT WHICH IS TO BE EMPLOYED UNDER THIS CONTRACT, SHALL BE CLASSIFIED BY THE CONTRACTOR SO AS TO PROVIDE A REASONABLE RELATIONSHIP BETWEEN SUCH CLASSIFICATIONS AND THOSE LISTED IN THE ATTACHMENT, AND SHALL BE PAID SUCH MONETARY WAGES AND FURNISHED SUCH FRINGE BENEFITS AS ARE DETERMINED BY AGREEMENT OF THE INTERESTED PARTIES, WHO SHALL BE DEEMED TO BE THE CONTRACTING AGENCY, THE CONTRACTOR, AND THE EMPLOYEES WHO WILL PERFORM ON THE CONTRACT OR THEIR REPRESENTATIVES. THE INTERESTED PARTIES DO NOT AGREE ON A CLASSIFICATION OR RECLASSIFICATION WHICH IS, IN FACT, CONFORMABLE, THE CONTRACTING OFFICER SHALL SUBMIT THE QUESTION, TOGETHER WITH HIS RECOMMENDATION, TO THE ADMINISTRATOR OF THE WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS, DEPARTMENT OF LABOR, OR HIS AUTHORIZED REPRESENTATIVE FOR FINAL DETERMINATION. FAILURE TO PAY SUCH EMPLOYEES THE COMPENSATION AGREED UPON BY THE INTERESTED PARTIES OR FINALLY DETERMINED BY THE ADMINISTRATOR OR HIS AUTHORIZED REPRESENTATIVE SHALL BE A VIOLATION OF THIS CONTRACT.' THE ABOVE CLAUSE WAS INCLUDED IN THE CONTRACT SPECIFICATIONS PURSUANT TO DEPARTMENT OF LABOR REGULATIONS, 29 CFR 4.6, AND ARMED SERVICES PROCUREMENT REGULATION (ASPR) 12-1004.

THE RECORD SHOWS THAT YOUR COMPANY WAS THE INCUMBENT CONTRACTOR AND IN ACCORDANCE WITH THAT CONTRACT YOU HAD CONFORMED ALL WAGES AND BENEFITS NOT LISTED IN THE ABOVE REFERENCED DETERMINATION. IT IS REPORTED THAT LISTS OF YOUR CONFORMED RATES WERE MADE AVAILABLE TO PROSPECTIVE BIDDERS ON THE SUBJECT PROCUREMENT TO GIVE THEM AN IDEA AS TO THE GOING RATES FOR THOSE CATEGORIES AND TO ASSIST THEM IN PREPARING REALISTIC BIDS.

ESSENTIALLY, IT IS YOUR CONTENTION THAT THE GOVERNMENT SHOULD HAVE ESTABLISHED YOUR EXISTING CONFORMED RATES AS A MINIMUM BIDDING REQUIREMENT FOR ALL BIDDERS IN THE SUBJECT PROCUREMENT AND BECAUSE OF THE FAILURE TO DO SO TUMPANE WAS PLACED AT A COMPETITIVE DISADVANTAGE BY THE PROCURING ACTIVITY'S PUBLICATION OF THE EXISTING CONFORMED RATES. IT IS YOUR BELIEF THAT THIS ACTION INFORMED BIDDERS OF THE EXTENT TO WHICH THEY WOULD HAVE TO BID BELOW TUMPANE WITH RESPECT TO THE CONFORMED RATE POSITIONS. ADDITION, IT IS ARGUED THAT THE FAILURE TO INCORPORATE YOUR EXISTING CONFORMED RATES AS A MINIMUM BIDDING REQUIREMENT WAS PREJUDICIAL TO YOU SINCE ONLY TUMPANE WAS REQUIRED BY ITS UNION CONTRACT AND OTHER PRIOR COMMITMENTS TO ITS PRESENT EMPLOYEES TO BID THE EXISTING CONFORMED RATES FOR PURPOSES OF THE PRESENT PROCUREMENT. SEVERAL OTHER BASES FOR PROTESTING THE AWARD ARE ALSO PRESENTED IN YOUR ATTORNEY'S LETTERS OF AUGUST 27 AND OCTOBER 9 AND WILL BE DISCUSSED IN TURN.

IN A REPORT TO THIS OFFICE, A COPY OF WHICH WAS PREVIOUSLY FURNISHED YOUR COMPANY, THE DEPARTMENT OF THE AIR FORCE HAS TAKEN THE POSITION THAT TUMPANE WAS NOT PREJUDICED BY THE DISCLOSURE AND/OR THE FAILURE TO INCORPORATE THE PREVIOUSLY CONFORMED RATES AS A BIDDING REQUIREMENT SINCE ALL BIDDERS WERE SUBJECT TO THE IDENTICAL INVITATION REQUIREMENT TO PAY THEIR EMPLOYEES IN ACCORDANCE WITH THE REQUIREMENTS OF THE SERVICE CONTRACT ACT, AS IMPLEMENTED, AND ANY SUCCESSFUL BIDDER WOULD BE REQUIRED TO CONFORM THE RATES FOR ANY EMPLOYEE CLASSIFICATION FOR WHICH A WAGE DETERMINATION HAD NOT BEEN MADE. IT IS POINTED OUT IN THE REPORT THAT FOR BIDDING PURPOSES TUMPANE WAS NOT BOUND BY ITS PREVIOUSLY CONFORMED RATES BUT ONLY BY THE ABOVE STATED REQUIREMENT.

WE MUST AGREE WITH THE PROCURING ACTIVITY'S ACTION IN REFUSING TO INCORPORATE AS A MINIMUM BIDDING REQUIREMENT THE CONFORMED RATES UNDER YOUR PREVIOUS CONTRACT, SINCE REQUIREMENTS CONCERNING WAGES AND OTHER EMPLOYMENT PRACTICES MAY BE INCLUDED IN GOVERNMENT CONTRACTS ONLY AS SPECIFICALLY AUTHORIZED BY STATUTE, AND THE STATUTE APPLICABLE TO THIS CONTRACT PROVIDES THAT THE MINIMUM WAGE REQUIREMENTS SHALL BE THOSE DETERMINED BY THE SECRETARY OF LABOR.

WITH RESPECT TO YOUR COMPLAINT THAT YOUR COMPETITIVE POSITION WAS PREJUDICED BY DISCLOSURE TO PROSPECTIVE BIDDERS OF YOUR EXISTING CONFORMED WAGE RATES, WE FIND NO BASIS FOR CONCLUDING THAT THE DISCLOSURE WAS UNAUTHORIZED OR THAT YOU WERE MATERIALLY AND ADVERSELY AFFECTED BY SUCH ACTION SINCE THE GOVERNMENT DID NOT REQUIRE YOU TO PAY SUCH RATES ON FUTURE CONTRACTS. MOREOVER, IN OUR OPINION, ANY INTERESTED PROSPECTIVE BIDDER WOULD NOT HAVE BEEN PRECLUDED FROM ACQUIRING THIS INFORMATION FROM OTHER SOURCES SUCH AS THE LABOR UNIONS INVOLVED, THE EMPLOYEES AFFECTED OR, PERHAPS, EVEN THE DEPARTMENT OF LABOR PURSUANT TO THE FREEDOM OF INFORMATION ACT. AS POINTED OUT IN THE REPORT BY THE DEPARTMENT OF THE AIR FORCE ALL PROSPECTIVE BIDDERS WERE EQUALLY REQUIRED TO PREPARE THEIR BIDS WITH THE UNDERSTANDING THAT THEY WERE SUBJECT TO THE INVITATION REQUIREMENT TO CONFORM CERTAIN WAGE RATES IN ACCORDANCE WITH THE PROCEDURES SPECIFIED THEREIN IF A BID IS ACCEPTED BY THE GOVERNMENT. SHOULD ALSO BE NOTED THAT THE STIPULATION OF A MINIMUM WAGE SCHEDULE IS NOT A REPRESENTATION BY THE GOVERNMENT THAT LABOR WILL BE AVAILABLE AT THOSE WAGE RATES, BUT EACH BIDDER HAS THE BURDEN OF ASCERTAINING HIS PROBABLE ACTUAL LABOR COSTS. UNITED STATES V BINGHAMTON CONSTRUCTION CO. 347 U.S. 171.

YOUR ATTORNEY ALSO ARGUES THAT THE CONTRACTING OFFICER VIOLATED PROPER PROCUREMENT PRACTICES AND PROCEDURES BY ADVISING BIDDERS THAT AN EVALUATION OF THE BIDS "WOULD INCLUDE ESTABLISHMENT OF COMPARATIVE PRICING BY THE GOVERNMENT UTILIZING WAGE DETERMINATION RATES AND CONFORMABLE RATES AND APPLYING A FACTOR OF 19 TO 20 PERCENT FOR OVERHEAD PLUS AN UNDISCLOSED PROFIT FACTOR.' SINCE SUCH EVALUATION CRITERIA WAS NOT MADE A PART OF THE INVITATION, IT IS CONTENDED THAT SUCH ACTION CONFLICTED WITH THE PRINCIPLES OF FORMAL ADVERTISING. IN THIS REGARD THE CONTRACTING OFFICER HAS STATED THAT WHILE BIDDERS WERE INFORMED THAT THE SUCCESSFUL BIDDER WOULD BE REQUESTED TO FURNISH OR GIVE EVIDENCE OF THE WAGES TO BE PAID SO THAT A DETERMINATION COULD BE MADE AS TO THE FAIRNESS AND REASONABLENESS OF THE BIDDER'S OVERALL PRICE, BIDDERS WERE ADVISED THAT THIS REVIEW WOULD NOT BE A CRITERIA IN THE EVALUATION OF A BID'S RESPONSIVENESS TO THE INVITATION. IN ANY EVENT, BIDDERS WERE ADVISED BY VIRTUE OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS (PAGE 3, PARAGRAPH 3, OF THE INVITATION) THAT ORAL EXPLANATIONS OR INSTRUCTIONS GIVEN BEFORE THE AWARD OF THE CONTRACT ARE NOT BINDING.

BY LETTER OF OCTOBER 9, 1969, YOUR ATTORNEY HAS RAISED THE QUESTION WHETHER THE AIR FORCE WAS LEGALLY AUTHORIZED TO PROCURE THE SERVICES INVOLVED ON A MULTI-YEAR BASIS, SINCE AT THE TIME THE INVITATION WAS ISSUED FUNDS FOR THE SECOND YEAR OF THE PROGRAM WERE NEITHER AVAILABLE NOR APPROPRIATED. HIS LETTER ALSO POINTS OUT THAT PURSUANT TO 10 U.S.C. 2306 (G), MULTI-YEAR SERVICE CONTRACTS ARE PERMITTED WHERE PERFORMANCE IS TO BE OUTSIDE THE 48 CONTIGUOUS STATES AND THE DISTRICT OF COLUMBIA, BUT THAT NO SUCH SPECIFIC AUTHORIZATION EXISTS FOR SERVICE CONTRACTS TO BE PERFORMED WITHIN THE UNITED STATES.

IN THIS CONNECTION IT IS TO BE NOTED THAT THE STATUTORY PROVISION REFERRED TO, WHICH WAS ENACTED BY PUB. L. 90-378, JULY 5, 1968, AUTHORIZES CONTRACTS FOR PERIODS UP TO FIVE YEARS "FOR WHICH FUNDS WOULD OTHERWISE BE AVAILABLE FOR OBLIGATION ONLY WITHIN THE FISCAL YEAR FOR WHICH APPROPRIATED.' THE DEPARTMENT OF THE AIR FORCE HAS ADVISED THIS OFFICE THAT THE SUBJECT CONTRACT IS BEING FINANCED FROM NO-YEAR FUNDS, THAT IS, FUNDS WHICH ARE NOT LIMITED FOR OBLIGATION DURING THE FISCAL YEAR FOR WHICH APPROPRIATED. IN SUCH CIRCUMSTANCES SPECIFIC LEGISLATIVE AUTHORITY SUCH AS THE ABOVE REFERENCED STATUTE IS NOT REQUIRED FOR CONTRACTS EXTENDING BEYOND A FISCAL YEAR.

IT IS FURTHER ARGUED BY YOUR ATTORNEY THAT THE REFERENCED INVITATION LACKED SUFFICIENT SPECIFICITY AND DEFINITENESS IN THAT PARAGRAPH 47 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS PROVIDES THAT "ALL ITEMS DESIGNATED AS EQUIPMENT WILL BE ACCOUNTED FOR UNDER A SEPARATE (UNFUNDED) FACILITIES CONTRACT ISSUED TO THE SUCCESSFUL BIDDER" AND THE SOLICITATION DOES NOT SPECIFY THE TERMS OF THE FACILITIES CONTRACT. IT IS SUBMITTED THAT ONLY TUMPANE, AS INCUMBENT CONTRACTOR, COULD HAVE BEEN AWARE THAT THE UNFUNDED FACILITIES CONTRACT, WHICH CONSISTED OF OVER 40 CLAUSES, PROVIDED FOR CONTRACT ASSUMPTION OF RESPONSIBILITY FOR GOVERNMENT FURNISHED EQUIPMENT. IN THIS REGARD WE BELIEVE THAT PARAGRAPH 25 (G) OF THE GENERAL PROVISIONS (SUPPLY CONTRACT) AND "ATTACHMENT C" PARAGRAPH 1.06, OF THE INVITATION PROVIDED BIDDERS WITH A FULL AND ADEQUATE EXPLANATION AS TO THE ASSUMPTION OF RESPONSIBILITY FOR GOVERNMENT FURNISHED EQUIPMENT UNDER THIS CONTRACT.

LASTLY, IT IS SUBMITTED THAT THE CONTRACTING AUTHORITY HAS PREJUDICIALLY AND WITHOUT CAUSE OR EXCUSE DELAYED THE SUBMISSION OF ITS REPORT IN THIS MATTER. SINCE WE FIND NO GROUNDS FOR SUSTAINING YOUR PROTEST ON ITS MERITS, WE DO NOT CONSIDER THAT YOU HAVE BEEN PREJUDICED BY ANY DELAY IN THIS RESPECT.