B-173126, OCT 21, 1971

B-173126: Oct 21, 1971

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AS INSTANT PROCUREMENT WAS MADE BY AN INSTRUMENTALITY OF THE STATE OF MINNESOTA. FEDERAL COMPETITIVE BIDDING PROCEDURE IS NOT APPLICABLE. THE PROTEST IS DENIED. TO NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION: REFERENCE IS MADE TO YOUR LETTERS DATED MAY 13 AND 20. IT DID FURNISH A LETTER WITH THE BID STATING: "WE WILL TAKE AFFIRMATIVE ACTION. THIS HAS ALWAYS BEEN OUR POLICY AS LONG AS PROSPECTIVE EMPLOYEES WERE QUALIFIED TO DO THE WORK REQUIRED OF THEM. WE WILL ACTIVELY SEEK EMPLOYEES THRU OUR LOCAL UNION. THE INSTANT PROCUREMENT WAS NOT MADE BY A FEDERAL AGENCY. ALTHOUGH FEDERAL FINANCIAL ASSISTANCE IS CONTEMPLATED DURING THE COURSE OF THE PROCUREMENT UNDER THE STATUTE. WE HAVE TAKEN THE POSITION THAT THE PROCEDURES APPLICABLE TO FORMALLY ADVERTISED PROCUREMENTS BY THE FEDERAL GOVERNMENT DO NOT APPLY TO NON- FEDERAL PROCUREMENTS WHERE.

B-173126, OCT 21, 1971

FEDERAL GRANTS - FEDERAL PROCUREMENT PRACTICE NOT CONTROLLING DECISION DENYING PROTEST OF NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION AGAINST AWARD OF ELECTRICAL CONTRACT TO MANKATO ELECTRIC, INC. UNDER AN ADVERTISEMENT FOR BIDS ISSUED BY THE MINNESOTA STATE COLLEGE BOARD FOR CONSTRUCTION OF A STUDENT UNION BUILDING AT MANKATO STATE COLLEGE. MANKATO ELECTRIC FAILED TO INCLUDE A WRITTEN AFFIRMATIVE ACTION PROGRAM AS REQUIRED BY HUD IN THEIR BID, BUT DID FURNISH A STATEMENT AFFIRMING AN INTENTION TO BE AN EQUAL OPPORTUNITY EMPLOYER. AS INSTANT PROCUREMENT WAS MADE BY AN INSTRUMENTALITY OF THE STATE OF MINNESOTA, AND NOT A FEDERAL AGENCY, FEDERAL COMPETITIVE BIDDING PROCEDURE IS NOT APPLICABLE. PROCEDURES APPLICABLE TO FORMALLY ADVERTISED PROCUREMENTS BY THE FEDERAL GOVERNMENT DO NOT APPLY TO NON-FEDERAL PROCUREMENTS WHERE, AS HERE, THE FEDERAL GOVERNMENT PARTICIPATED MERELY AS THE GRANTOR. THEREFORE, THE PROTEST IS DENIED.

TO NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION:

REFERENCE IS MADE TO YOUR LETTERS DATED MAY 13 AND 20, 1971, FORWARDED TO OUR OFFICE BY SENATOR WALTER F. MONDALE, PROTESTING AGAINST THE AWARD OF AN ELECTRICAL CONTRACT TO MANKATO ELECTRIC, INC., UNDER THE ADVERTISEMENT FOR BIDS (SOLICITATION) ISSUED BY THE MINNESOTA STATE COLLEGE BOARD (BOARD) FOR PROJECT NO. CH-MINN-85 (S) FOR THE CONSTRUCTION OF AN ADDITION TO THE EXISTING STUDENT UNION BUILDING AT MANKATO STATE COLLEGE, MINNESOTA.

ADDENDUM 1 TO THE SOLICITATION INFORMED PROSPECTIVE BIDDERS THAT THREE COPIES OF THE WRITTEN AFFIRMATIVE ACTION PROGRAM DESCRIBED IN DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) FORM HUD-907, A PART OF THE SPECIFICATIONS, "SHALL BE SUBMITTED WITH THE BID." MANKATO FAILED TO SUBMIT AN AFFIRMATIVE ACTION PROGRAM WITH ITS BID AS REQUIRED BY THE SOLICITATION. IT DID FURNISH A LETTER WITH THE BID STATING:

"WE WILL TAKE AFFIRMATIVE ACTION, AS NECESSARY, TO ASSURE EQUAL EMPLOYMENT OPPORTUNITIES, IRRESPECTIVE OF RACE, COLOR, RELIGION, OR NATIONAL ORIGIN. THIS HAS ALWAYS BEEN OUR POLICY AS LONG AS PROSPECTIVE EMPLOYEES WERE QUALIFIED TO DO THE WORK REQUIRED OF THEM. WE WILL ACTIVELY SEEK EMPLOYEES THRU OUR LOCAL UNION, MINNESOTA DEPARTMENT OF MANPOWER SERVICES, MANKATO VOCATIONAL TECHNICAL INSTITUTE AND MANKATO STATE COLLEGE'S STUDENT EMPLOYMENT SERVICES."

YOU PROTEST THE ACQUIESCENCE OF HUD IN THE AWARD TO MANKATO BY THE BOARD, BECAUSE OF THE FAILURE OF MANKATO TO FURNISH THE AFFIRMATIVE ACTION PROGRAM WITH THE BID.

THE INSTANT PROCUREMENT WAS NOT MADE BY A FEDERAL AGENCY, BUT BY AN INSTRUMENTALITY OF THE STATE OF MINNESOTA, WITH FINANCIAL ASSISTANCE IN THE FORM OF A GRANT FROM HUD PURSUANT TO TITLE IV OF THE HOUSING ACT OF 1950, 12 U.S.C. 1749, AS IMPLEMENTED BY REGULATIONS CONTAINED IN 24 CFR 1540. ALTHOUGH FEDERAL FINANCIAL ASSISTANCE IS CONTEMPLATED DURING THE COURSE OF THE PROCUREMENT UNDER THE STATUTE, NEITHER THE STATUTE NOR ITS IMPLEMENTING REGULATIONS, BY EXPRESS TERMS OR NECESSARY IMPLICATION, REQUIRE THAT FEDERAL COMPETITIVE BIDDING PROCEDURES BE FOLLOWED IN EFFECTING PROCUREMENTS. THE PERTINENT GRANT AGREEMENT PROVIDES THAT ALL CONTRACTS BE AWARDED UNDER COMPETITIVE BIDDING PROCEDURES. HOWEVER, WE HAVE TAKEN THE POSITION THAT THE PROCEDURES APPLICABLE TO FORMALLY ADVERTISED PROCUREMENTS BY THE FEDERAL GOVERNMENT DO NOT APPLY TO NON- FEDERAL PROCUREMENTS WHERE, AS HERE, THE FEDERAL GOVERNMENT (HUD) PARTICIPATES MERELY AS A GRANTEE OF FUNDS TO PARTIALLY SUPPORT PROCUREMENTS EFFECTED BY LOCAL AGENCIES OR INSTITUTIONS.

FURTHER, WE DO NOT FIND THAT HUD FAILED TO FOLLOW ITS OWN REGULATIONS BY APPROVING THE AWARD TO MANKATO. IN THIS REGARD, 24 CFR 1540.8 STATES THAT ALL CONTRACTS FOR CONSTRUCTION WORK PAID FOR IN WHOLE OR PART UNDER THE HOUSING ACT ARE SUBJECT TO EXECUTIVE ORDER NO. 11246, PROVIDING FOR EQUAL OPPORTUNITY IN EMPLOYMENT AND THE RULES, AND REGULATIONS PROMULGATED THEREUNDER BY THE DEPARTMENT OF LABOR (41 CFR 60, ET SEQ.). THE CITED FORM (HUD-907), ISSUED IN IMPLEMENTATION THEREOF AND INCLUDED IN THE SOLICITATION, REQUIRES, IN CASES WHERE A CONTRACTOR MUST SUBMIT A WRITTEN AFFIRMATIVE ACTION PROGRAM, THAT SUCH PROGRAM BE SUBMITTED TO THE GRANTEE EFFECTING THE PROCUREMENT WITHIN 15 DAYS AFTER THE PRECONSTRUCTION CONFERENCE (OR AFTER RECEIPT OF HUD-907, IF THE PROJECT IS ALREADY UNDER CONSTRUCTION). BOTH OF THESE CONTINGENCIES OCCUR AFTER THE AWARD OF A CONTRACT. HUD REPORTS TO OUR OFFICE THAT MANKATO COMPLIED WITH ITS REQUIREMENTS BY SUBMITTING AN AFFIRMATIVE ACTION PLAN, WHICH WAS SUBSEQUENTLY APPROVED BY THE HUD OFFICE OF EQUAL EMPLOYMENT OPPORTUNITY, WITHIN THE PRESCRIBED TIME PERIOD.

IN THE CIRCUMSTANCES, THERE IS NO BASIS FOR ANY LEGAL OBJECTION BY OUR OFFICE. THE PROTEST IS THEREFORE DENIED.