B-175172(1), SEP 28, 1972

B-175172(1): Sep 28, 1972

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FAILURE TO COMPLY WITH THE LISTING OF SUBCONTRACTORS REQUIREMENT IN AN IFB IS A MATERIAL DEFECT WHICH CANNOT BE WAIVED. FAILURE OF THE PRIME CONTRACTOR TO LIST ITSELF FOR THOSE PORTIONS OF THE WORK WHICH IT WILL PERFORM REQUIRES REJECTION OF THE BID. TO HOLT BROTHERS: REFERENCE IS MADE TO YOUR TELEFAX DATED FEBRUARY 9. THE SUBJECT IFB WAS FOR THE CONSTRUCTION OF AN EMERGENCY GENERATOR SYSTEM AT THE SOUTHEAST WATER LABORATORY. BIDS WERE OPENED ON JANUARY 19. 399 WAS THE LOW BID. WERE NONRESPONSIVE FOR FAILURE TO CONFORM TO ALL OF THE ESSENTIAL REQUIREMENTS OF THE IFB. THE IFB WAS THEREFORE CANCELLED. ALL BIDDERS WERE SO INFORMED BY LETTER DATED FEBRUARY 7. THE BASIS FOR THE REJECTION OF YOUR BID WAS YOUR FAILURE TO LIST YOURSELF AS PERFORMING ANY PORTION OF THE WORK UNDER THOSE CATEGORIES OF WORK SET FORTH IN THE LIST OF SUBCONTRACTORS FORM.

B-175172(1), SEP 28, 1972

BID PROTEST - LISTING OF SUBCONTRACTORS - CATEGORIES OF WORK DECISION DENYING THE PROTEST OF HOLT BROTHERS AGAINST REJECTION OF ITS BID UNDER AN IFB ISSUED BY THE ENVIRONMENTAL PROTECTION AGENCY FOR THE CONSTRUCTION OF AN EMERGENCY GENERATOR SYSTEM AT THE SOUTHEAST WATER LABORATORY, ATHENS, GA. FAILURE TO COMPLY WITH THE LISTING OF SUBCONTRACTORS REQUIREMENT IN AN IFB IS A MATERIAL DEFECT WHICH CANNOT BE WAIVED. SUCH COMPLIANCE INCLUDES THE REQUIREMENT THAT A BIDDER LIST ITSELF AS AN INTENDED PERFORMER OF PART OF THE WORK IN A LISTED CATEGORY. SEE 50 COMP. GEN. 839 (1971). FAILURE OF THE PRIME CONTRACTOR TO LIST ITSELF FOR THOSE PORTIONS OF THE WORK WHICH IT WILL PERFORM REQUIRES REJECTION OF THE BID.

TO HOLT BROTHERS:

REFERENCE IS MADE TO YOUR TELEFAX DATED FEBRUARY 9, 1972, AND TO YOUR LETTERS DATED FEBRUARY 14 AND APRIL 26, 1972, PROTESTING AGAINST THE REJECTION OF YOUR BID UNDER INVITATION FOR BIDS (IFB) 72-9, ISSUED BY THE ENVIRONMENTAL PROTECTION AGENCY (EPA).

THE SUBJECT IFB WAS FOR THE CONSTRUCTION OF AN EMERGENCY GENERATOR SYSTEM AT THE SOUTHEAST WATER LABORATORY, ATHENS, GEORGIA. THE GOVERNMENT ESTIMATED THE COST OF THIS CONSTRUCTION TO BE $150,000. BIDS WERE OPENED ON JANUARY 19, 1972, AND YOUR FIRM'S BID OF $171,399 WAS THE LOW BID.

HOWEVER, IN EVALUATING THE BIDS, THE CONTRACTING OFFICER DETERMINED THAT ALL OF THE BIDS, INCLUDING THE BID OF YOUR FIRM, WERE NONRESPONSIVE FOR FAILURE TO CONFORM TO ALL OF THE ESSENTIAL REQUIREMENTS OF THE IFB. THE IFB WAS THEREFORE CANCELLED, AND ALL BIDDERS WERE SO INFORMED BY LETTER DATED FEBRUARY 7, 1972. THE BASIS FOR THE REJECTION OF YOUR BID WAS YOUR FAILURE TO LIST YOURSELF AS PERFORMING ANY PORTION OF THE WORK UNDER THOSE CATEGORIES OF WORK SET FORTH IN THE LIST OF SUBCONTRACTORS FORM.

THE LISTING OF SUBCONTRACTORS CLAUSE CONTAINED IN THE IFB STATED IN PERTINENT PART THE FOLLOWING:

"(A) FOR EACH OF THE CATEGORIES OF WORK CONTAINED IN THE LIST INCLUDED AS AN ATTACHMENT OF THE BID FORM, SF 21, THE BIDDER SHALL SUBMIT THE NAME AND ADDRESS OF THE FIRM TO WHOM HE PROPOSES TO SUBCONTRACT THE WORK TO BE PERFORMED ON THE SITE. FAILURE TO SUBMIT THE LIST BY THE TIME SET FOR BID OPENING SHALL CAUSE THE BID TO BE CONSIDERED NONRESPONSIVE ***.

"(C) THE BIDDER SHALL LIST HIMSELF FOR EACH OF THOSE LISTED CATEGORIES OF WORK WHICH HE INTENDS TO PERFORM. IN SUCH INSTANCES ALL PERSONNEL PERFORMING SUCH WORK SHALL BE CARRIED ON HIS OWN PAYROLL. EQUIPMENT MAY BE SELF-OWNED OR LEASED. IF MORE THAN ONE SUBCONTRACTOR WILL PERFORM A SINGLE CATEGORY OF WORK, THE PORTION TO BE PERFORMED BY EACH SHALL BE SPECIFIED.

"(D) NOTHING CONTAINED IN THIS CLAUSE SHALL BE CONSTRUED AS CHANGING ANY PROVISIONS IN THE CONTRACT REQUIRING THE CONTRACTOR TO PERFORM WORK WITH HIS OWN FORCES.

"(F) NO ADDITIONS TO OR 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. IN THE EVENT THE CONTRACTING OFFICER FINDS THAT SUBSTITUTION IS NOT JUSTIFIED, THE CONTRACTOR'S FAILURE OR REFUSAL TO PROCEED WITH THE WORK BY OR THROUGH THE NAMED SUBCONTRACTOR SHALL BE GROUNDS FOR TERMINATION OF THE CONTRACT UNDER THE PROVISIONS OF CLAUSE 5 OF THE GENERAL PROVISIONS.

"(I) IN THE EVENT THE BIDDER FAILS IN CONNECTION WITH THIS BID (I) TO IDENTIFY THE SUBCONTRACTORS AS REQUIRED BY SUBPARAGRAPH (A), OR (2) TO COMPLY WITH SUBPARAGRAPH (C) IF THE BIDDER HIMSELF INTENDS TO PERFORM ONE OR MORE LISTED CATEGORIES OF WORK, THE BID WILL BE REJECTED AS NONRESPONSIVE TO THE INVITATION. CARE SHOULD BE TAKEN TO AVOID OMITTING AN ENTRY OF A NAME AND ADDRESS IN EACH SPACE OPPOSITE A DESIGNATION OF A CATEGORY LISTED IN THE ATTACHMENT TO BID FORM, SF 21."

IN CONJUNCTION WITH THE LISTING OF SUBCONTRACTORS CLAUSE, A LIST OF SUBCONTRACTORS FORM WAS ATTACHED TO THE BID FORM, SF 21. IT SET FORTH CATEGORIES OF CONTRACT WORK NEXT TO WHICH THE NAMES AND ADDRESSES OF SUBCONTRACTORS WERE TO BE LISTED. THIS ATTACHMENT CONTAINED THE FOLLOWING INSTRUCTION:

"LISTED HEREINAFTER ARE THE NAMES AND BUSINESS ADDRESSES OF SUBCONTRACTORS (OR, WHEN APPROPRIATE, THE BIDDER'S OWN NAME AND ADDRESS) WHO WILL PERFORM THE DESIGNATED CATEGORIES OF WORK IF THE CONTRACT IS AWARDED TO THIS BIDDER. IT IS UNDERSTOOD THAT, BY LISTING THE BIDDER'S NAME AND BUSINESS ADDRESS, THE BIDDER AGREES TO FURNISH WITH HIS OWN ORGANIZATION ALL LABOR, PLANT AND MATERIALS REQUIRED FOR THAT CATEGORY OF WORK FOR WHICH HE IS LISTED.

(NOTE: IN CASE MORE THAN ONE SUBCONTRACTOR IS NAMED FOR THE SAME CATEGORY OF WORK, STATE THE PORTION THAT EACH WILL PERFORM.)"

THE CATEGORIES OF WORK LISTED WERE ELECTRICAL, MECHANICAL, CONCRETE, AIR CONDITIONING, LIGHTING, PAINTING AND PLUMBING. FURTHER, AT THE BOTTOM OF THE LIST THE FOLLOWING WAS INCLUDED AS A NOTE:

"LIST ANY CATEGORY OF WORK NOT LISTED ABOVE ON REVERSE SIDE OF THIS FORM."

IN ADDITION, PARAGRAPH GC-5 OF THE GENERAL CONDITIONS ACCOMPANYING THE IFB STATED:

"WORK TO BE DONE BY CONTRACTOR

"UNLESS OTHERWISE SPECIFIED, THE CONTRACTOR SHALL EXECUTE ON THE SITE, WITH HIS OWN ORGANIZATION, WORK EQUIVALENT TO AT LEAST 20 PERCENT OF THE TOTAL AMOUNT OF THE CONTRACT PRICE. THE COST OF MATERIAL INSTALLED BY SKILLED AND UNSKILLED LABOR CARRIED ON CONTRACTOR'S OWN PAYROLL MAY BE INCLUDED IN THE 20 PERCENT."

YOU CONTEND THAT THE DECISION TO REJECT YOUR BID AS NONRESPONSIVE FOR FAILING TO LIST YOURSELF ON THE LIST OF SUBCONTRACTORS WAS ERRONEOUS, BECAUSE FOR EACH OF THE CATEGORIES OF WORK CONTAINED IN THE LIST YOU SUBMITTED THE NAME AND ADDRESS OF THE SUBCONTRACTOR WHO WOULD PERFORM THE WORK, AND THAT YOU WERE ONLY REQUIRED TO LIST YOURSELF IF YOUR FIRM INTENDED TO PERFORM ONE OR MORE OF THE LISTED CATEGORIES OF WORK. FURTHER, YOU CONTEND THAT THE SUBMISSION OF YOUR BID CONTAINED A CLEAR PROMISE TO PERFORM 20 PERCENT OF THE TOTAL AMOUNT OF THE CONTRACT PRICE PURSUANT TO PARAGRAPH GC-5, AND, THEREFORE, THE FACT THAT YOU DID NOT LIST YOURSELF ON THE LIST OF SUBCONTRACTORS DID NOT MAKE YOUR BID NONRESPONSIVE TO THE PERCENTAGE OF WORK TO BE DONE BY THE CONTRACTOR UNDER GC-5. YOU STATE THAT YOUR FIRM WAS TO DO OTHER WORK NOT LISTED, PRINCIPALLY THE INSTALLATION OF EQUIPMENT, THE COST OF WHICH IS ALLOWED AS A PART OF THE 20 PERCENT UNDER PARAGRAPH GC-5.

IT IS THE POSITION OF EPA THAT IT NEVER QUESTIONED YOUR INTENTION TO PERFORM WORK OTHER THAN THE WORK SPECIFICALLY DESCRIBED ON THE LIST OF SUBCONTRACTORS. FURTHER, THE PERCENTAGE OF WORK YOU INTENDED TO PERFORM IS NOT IN QUESTION. HOWEVER, IT IS THE AGENCY'S POSITION THAT, PURSUANT TO PARAGRAPH (C) OF THE LIST OF SUBCONTRACTORS CLAUSE, QUOTED ABOVE, BY FAILING TO LIST YOURSELF TO PERFORM ANY WORK NECESSARY FOR PERFORMANCE AND COMPLETION OF THE PROJECT, WHETHER THE CATEGORY BE ONE THAT WAS LISTED BY THE AGENCY OR ONE TO BE LISTED BY YOU IN THE SPACE PROVIDED FOR OTHER CATEGORIES NOT LISTED, YOU WERE NOT RESPONSIVE, SINCE YOU FAILED TO LIST YOURSELF FOR THOSE CATEGORIES OF WORK WHICH YOU INTENDED TO PERFORM.

THE LISTING OF SUBCONTRACTORS CLAUSE CLEARLY REQUIRES THAT A BIDDER SHALL LIST HIMSELF FOR EACH OF THOSE LISTED CATEGORIES OF WORK HE INTENDS TO PERFORM OR WHERE HE INTENDS TO PERFORM A PORTION OF ANY LISTED CATEGORY OF WORK HE SHALL INDICATE THE PORTION TO BE PERFORMED BY HIMSELF AS WELL AS THE PORTION TO BE PERFORMED BY A SUBCONTRACTOR. IN THIS REGARD YOU HAVE STATED THAT THE PORTION OF THE CONTRACT WORK YOU INTENDED TO PERFORM WAS PRINCIPALLY THE INSTALLATION OF EQUIPMENT AND YOU MAKE REFERENCE TO THE GENERATOR SET. ALTHOUGH INSTALLATION IS NOT SPECIFICALLY MENTIONED IN THE LISTED MECHANICAL AND ELECTRICAL WORK CATEGORIES, NOR SHOWN AS A SEPARATE CATEGORY, IT IS OUR VIEW THAT INSTALLATION OF THE MECHANICAL AND ELECTRICAL EQUIPMENT (INCLUDING THE DIESEL GENERATOR) PROPERLY COMES WITHIN THE PURVIEW OF THE WORK CATEGORIES LISTED AS MECHANICAL AND ELECTRICAL. SUCH CATEGORIES CORRESPOND TO SPECIFIC SECTIONS OF THE SPECIFICATIONS WHICH EVIDENCE THAT INSTALLATION WORK IS AN INTEGRAL PART OF THE WORK DESCRIBED THEREIN. IN PARTICULAR, SECTION 3 OF THE SPECIFICATIONS, "MECHANICAL ELECTRICAL GENERAL REQUIREMENTS," WHICH APPLIES TO ALL MECHANICAL AND ELECTRICAL WORK FOR THE GENERATOR, STATES THAT IT IS THE INTENTION OF THE SPECIFICATIONS AND DRAWINGS TO CALL FOR FINISHED WORK READY FOR OPERATION AND FURTHER DECLARES THAT "WHENEVER THE WORDS 'FURNISH' OR 'PROVIDE' ARE USED, IT SHALL MEAN PROVIDE AND INSTALL COMPLETE AND READY FOR USE." IT IS ALSO NOTED THAT PARAGRAPHS 10.1 AND 11.1 OF THAT SECTION REQUIRE THE CONTRACTOR TO FURNISH ALL RIGGING AND SERVICES NECESSARY FOR INSTALLATION AND DELIVERY ONTO THE PREMISES OF THE EQUIPMENT, AND TO CUT AND RESTORE ANY WALLS, ETC., REQUIRED FOR PROPER INSTALLATION OF THE WORK OR APPARATUS. SECTION 4 "EMERGENCY GENERATOR" AND SECTION 5 "ELECTRICAL SYSTEM" OF THE SPECIFICATIONS INCLUDE WITHIN THEIR SCOPE OF WORK THE REQUIREMENT TO PROVIDE ONE DIESEL ELECTRIC GENERATOR WITH ALL CONTROLS AND WITH PROVISION FOR A FUTURE SECOND GENERATOR, AND THE FURNISHING OF ALL LABOR, MATERIAL, EQUIPMENT AND SERVICES TO CONSTRUCT AND INSTALL THE COMPLETE ELECTRICAL SYSTEM.

WE ARE OF THE OPINION, THEREFORE, THAT SINCE THE SPECIFICATIONS SPECIFICALLY INCORPORATED INSTALLATION WORK AS PART OF THE ELECTRICAL AND MECHANICAL WORK TO BE PROVIDED AND FURNISHED, SUCH INSTALLATION WORK, INCLUDING THE ELECTRICAL AND MECHANICAL INSTALLATION OF THE GENERATOR, MUST BE REGARDED AS BEING A PART OF THE LISTED ELECTRICAL AND MECHANICAL CATEGORIES OF WORK. INASMUCH AS YOU DID NOT LIST YOUR FIRM TO PERFORM PART OF THE WORK (INSTALLATION) UNDER THE ELECTRICAL AND MECHANICAL CATEGORIES, APPARENTLY BECAUSE OF YOUR MISTAKEN BELIEF THAT YOU WERE NOT REQUIRED TO DO SO, THE BASIC QUESTION PRESENTED IS WHETHER SUCH FAILURE MAY BE WAIVED AS A MINOR INFORMALITY (FEDERAL PROCUREMENT REGULATIONS 1- 2.405).

A REVIEW OF THE HISTORY OF THE SUBCONTRACTOR LISTING REQUIREMENT DISCLOSES THAT THE REQUIREMENT WAS INSTITUTED IN ORDER TO RESTRICT THE PRACTICE OF "BID SHOPPING." THE EXPERIENCE OF FEDERAL DEPARTMENTS AND AGENCIES INVOLVED IN THE PROCUREMENT OF CONSTRUCTION SERVICES HAD SHOWN THAT BID SHOPPING PRODUCED SOME UNDESIRABLE EFFECTS. IN LIGHT OF THIS UNSATISFACTORY EXPERIENCE, CONTRACTING OFFICERS WERE AUTHORIZED TO REQUIRE BIDDERS ON GOVERNMENT CONSTRUCTION PROJECTS TO LIST ALL INTENDED SUBCONTRACTORS FOR CERTAIN ASPECTS OF THE WORK TO BE PERFORMED. IT WAS FURTHER REQUIRED OF BIDDERS THAT THEY AGREE NOT TO HAVE ANY OF THE LISTED CATEGORIES OF WORK PERFORMED BY ANY PERSONS OR FIRMS OTHER THAN THOSE NAMED IN THE SUBCONTRACTOR LISTING FORM, EXCEPT WHERE SUBSTITUTION WAS PERMITTED BY WRITTEN APPROVAL OF THE CONTRACTING OFFICER. B-169974, AUGUST 27, 1970. WHILE WE HAVE CONCLUDED ABOVE THAT OTHER PROVISIONS OF THE LISTING OF SUBCONTRACTORS CLAUSE, AND RELATED DOCUMENTS, REQUIRED YOU TO INCLUDE YOUR FIRM ON THE LIST OF SUBCONTRACTORS FORM FOR THE INSTALLATION WORK YOU INTENDED TO PERFORM, WE BELIEVE THE REQUIREMENT IN THE SUBJECT IFB FOR LISTING PRIME CONTRACTOR WORK IS FURTHER EVIDENCED BY PARAGRAPH (B) OF THE CLAUSE DEFINING, IN PART, A SUBCONTRACTOR AS AN INDIVIDUAL OR FIRM WHO PERFORMS ACTIVE DUTIES ON THE WORK SITE, INVOLVING CONSTRUCTION, FABRICATION AND/OR INSTALLATION OF MATERIALS OR ITEMS OF EQUIPMENT IN CONNECTION WITH ONE OR MORE OF THE LISTED CATEGORIES OF WORK. THIS DEFINITION MUST BE REGARDED AS BEING BROAD ENOUGH TO INCLUDE THE PRIME CONTRACTOR WHEN IT INTENDS TO PERFORM ANY OF SUCH WORK.

IN VIEW OF THE PURPOSE FOR REQUIRING THE LISTING OF ALL CONTRACTORS WHO WILL PERFORM WORK IN THE DESIGNATED CATEGORIES, WE HAVE HELD THAT STRICT COMPLIANCE WITH THE LISTING OF SUBCONTRACTORS REQUIREMENT IN AN INVITATION IS ESSENTIAL TO AN AWARD OF A CONSTRUCTION CONTRACT THEREUNDER, AND NO AUTHORITY EXISTS FOR WAIVER OF SUCH REQUIREMENT. B 166971, JUNE 27, 1969. IN THAT DECISION WE FURTHER INDICATED THAT A LISTING OF THE APPROPRIATE COMPANIES UNDER A WORK CATEGORY WOULD STILL BE INCOMPLETE WHERE THE SERVICES EACH WERE TO PERFORM WERE NOT STATED. ALSO, SEE 50 COMP. GEN. 839, 842 (1971) WHEREIN WE AGREED THAT THE FAILURE OF A BIDDER TO LIST ITSELF AS INTENDED PERFORMER OF PART OF THE WORK IN LISTED CATEGORIES PRECLUDED ACCEPTANCE OF THE BID IN VIEW OF THE EXPLICIT DIRECTION IN THE INVITATION THAT SUCH LISTING BE INCLUDED, AND THE ADVICE THAT FAILURE TO COMPLY WOULD RESULT IN BID REJECTION. WE CONSIDERED SUCH CONCLUSION TO BE IN ACCORD WITH OUR POSITION IN 43 COMP. GEN. 206 (1963) THAT THE LISTING REQUIREMENTS SHOULD BE CONSIDERED MATERIAL INVITATION REQUIREMENTS.

ACCORDINGLY, INASMUCH AS A FULL LISTING OF THE INTENDED PERFORMERS OF THE SPECIFIED WORK CATEGORIES IS A MATERIAL REQUIREMENT, AND SINCE THE CONTRACTING OFFICER IS ON NOTICE THAT YOUR BID DOES NOT FULLY IDENTIFY SUCH INTENDED PERFORMERS, IT IS OUR VIEW THAT HE MAY NOT PROPERLY WAIVE THE DEFECT AND AWARD THE CONTRACT TO YOUR FIRM.

REGARDING YOUR FAILURE TO SEPARATELY LIST ANY OTHER WORK AS AN ADDITIONAL CATEGORY (AND YOUR FIRM AS PERFORMING THAT WORK), PURSUANT TO THE NOTE AT THE BOTTOM OF THE LIST OF SUBCONTRACTORS, NONCOMPLIANCE WITH THE NOTE IS NOT CONSIDERED FATAL WITH REGARD TO THE RESPONSIVENESS OF YOUR BID. STATED IN 50 COMP. GEN. 839 (1971), SUPRA, THAT "IT IS THE DUTY OF THE PROCURING OFFICIALS *** TO DETERMINE WHICH SECTIONS OF THE SPECIFICATION WORK ARE SUBJECT TO THE EVILS OF BID SHOPPING AND TO LIST THEM IN THE INVITATION." THUS, NOTWITHSTANDING THE EXPLICIT NOTATION ON THE LIST OF SUBCONTRACTORS FORM TO LIST ANY CATEGORY OF WORK NOT LISTED BY THE GOVERNMENT, IT IS OUR POSITION THAT A FAILURE TO COMPLY WITH THAT NOTICE COULD NOT SERVE AS A BASIS FOR THE REJECTION OF YOUR BID. HOWEVER, IN LIGHT OF OUR CONCURRENCE, FOR OTHER REASONS, WITH THE ULTIMATE DECISION OF EPA TO REJECT YOUR BID, YOUR PROTEST MUST BE DENIED.