B-176140, SEP 19, 1972

B-176140, SEP 19, 1972

BID PROTEST - SMALL BUSINESS ADMINISTRATION - SECTION 8(A) CONTRACT - QUALIFIED BIDDER - REVIEWABILITY OF WAGE AND HOUR DETERMINATIONS DENIAL OF PROTEST BY SERVICE EMPLOYEES INTERNATIONAL UNION AGAINST THE AWARD OF A CONTRACT FOR PERFORMANCE OF JANITORIAL SERVICES AT FORT BENNING, GA., BY THE U.S. ARMY TO THE SMALL BUSINESS ADMINISTRATION, AND THE SUBSEQUENT AWARD BY SBA OF A SUBCONTRACT TO WORLDWIDE SERVICES, INC., OR SUPREME SERVICES, INC., PURSUANT TO SECTIONS 8(A)(1) AND 8(A)(2) OF THE SMALL BUSINESS ACT, 15 U.S.C. 637A. IN VIEW OF THE CONFLICTING COURT DECISIONS ON THE SUBJECT, GAO WILL NOT RULE ON THE LEGALITY OF THE 8(A) PROGRAM UNTIL THE CASES UNDER APPEAL HAVE BEEN LITIGATED. THERE IS NO BASIS FOR GAO TO TAKE ISSUE WITH THE SBA DETERMINATION THAT SUPREME SERVICES WAS ELIGIBLE AND QUALIFIED FOR THE CONTRACT, ESPECIALLY IN VIEW OF THE DEPARTMENT OF LABOR'S DETERMINATION THAT NO VIOLATION OF THE VACATION PAY BENEFITS DUE EMPLOYEES HAD OCCURRED, AND THE SBA'S BROAD AUTHORITY IN THESE AREAS. FURTHER, THERE IS NO REQUIREMENT THAT A SUCCEEDING CONTRACTOR FOR PERFORMANCE OF SERVICES AT A GOVERNMENT INSTALLATION ASSUME THE PREDECESSOR'S BARGAINING AGREEMENT WITH UNION EMPLOYEES. ALSO, A LABOR DEPARTMENT DETERMINATION AS TO THE PREVAILING WAGE RATES AND FRINGE BENEFITS IN A GIVEN AREA IS NOT SUBJECT TO REVIEW. UNITED STATES V. BINGHAMTON CONSTRUCTION CO., 347 U.S. 171. THEREFORE, THE PROTEST MUST BE DENIED.

TO SERVICE EMPLOYEES INTERNATIONAL UNION:

FURTHER REFERENCE IS MADE TO YOUR LETTERS PROTESTING AGAINST THE AWARD OF A CONTRACT FOR THE PERFORMANCE OF JANITORIAL SERVICES AT FORT BENNING, GEORGIA, BY THE UNITED STATES ARMY TO THE SMALL BUSINESS ADMINISTRATION, AND THE SUBSEQUENT AWARD BY SBA OF A SUBCONTRACT TO WORLDWIDE SERVICES, INCORPORATED, OR SUPREME SERVICES, INCORPORATED, PURSUANT TO SECTIONS 8(A)(1) AND 8(A)(2), RESPECTIVELY, OF THE SMALL BUSINESS ACT, 15 U.S.C. 637A. ALTHOUGH YOUR INITIAL PROTEST WAS DIRECTED TO THE ANTICIPATED AWARD TO WORLDWIDE SERVICES, WE WERE ADVISED ON JUNE 28, 1972, THAT THE AWARD WOULD BE MADE TO SUPREME SERVICES. HOWEVER, IT IS NOTED THAT THE PRINCIPAL OWNER OF WORLDWIDE SERVICES, JAMES RICE, ALSO HOLDS 49 PERCENT OF THE STOCK IN SUPREME SERVICES. THEREFORE, WE HAVE CONCLUDED THAT OUR CONSIDERATION OF YOUR PROTEST IS WARRANTED.

THE AWARD OF THE PRIME CONTRACT AND THE SUBCONTRACT WERE MADE UNDER SBA'S SO-CALLED SECTION 8(A) PROGRAM, THE LEGALITY OF WHICH HAS BEEN THE SUBJECT OF CONFLICTING UNITED STATES DISTRICT OPINIONS. FOR EXAMPLE, SEE PACIFIC COAST UTILITIES SERVICE V. LAIRD, CIVIL NO. 71 1035LHB (D.C. N.D. CALIF., JUNE 15, 1971), WHICH HAS BEEN APPEALED, AND KLEEN-RITE JANITORIAL SERVICES, INC., V. LAIRD, CIVIL NO. 71-1968W (D.C. MASS., SEPT. 21, 1971). IN VIEW OF THE CONFLICTING COURT DECISIONS, WE WILL NOT RULE ON PROTESTS QUESTIONING THE LEGALITY OF THE 8(A) PROGRAM UNTIL THE CASES UNDER APPEAL HAVE BEEN FINALLY LITIGATED. ACCORDINGLY, WE MUST DECLINE TO CONSIDER THIS ASPECT OF THE PROTEST.

THE REMAINING ASPECTS OF THE PROTEST INVOLVE THE QUALIFICATIONS OF THE SUBCONTRACTOR AND CERTAIN LABOR MATTERS. IT IS YOUR CONTENTION THAT SUPREME SERVICES OF WHICH MR. RICE IS A SIGNIFICANT STOCKHOLDER, IS NOT QUALIFIED BECAUSE WORLDWIDE SERVICES, IN WHICH MR. RICE HOLDS A MAJORITY OF THE STOCK, FAILED TO PAY HEALTH AND WELFARE BENEFITS DUE ITS EMPLOYEES UNDER ITS COLLECTIVE BARGAINING AGREEMENT WITH YOUR UNION WHILE PERFORMING THE EARLIER JANITORIAL SERVICES CONTRACT AT FORT BENNING. IN ADDITION, YOU CLAIM THAT WORLDWIDE SERVICES ALSO FAILED TO PROVIDE ITS EMPLOYEES CERTAIN VACATION BENEFITS REQUIRED BY THE APPLICABLE WAGE DETERMINATION OF THE WAGE AND HOURS DIVISION OF THE DEPARTMENT OF LABOR. IN CONNECTION WITH THE FOREGOING CHARGES, YOU STATE THAT LEGAL ACTION AGAINST WORLDWIDE SERVICES FOR BREACH OF THE COLLECTIVE BARGAINING AGREEMENT HAS BEEN INSTITUTED AND A COMPLAINT HAS BEEN FILED WITH THE WAGE AND HOURS DIVISION FOR FAILURE TO AFFORD THE EMPLOYEES THEIR VACATION BENEFITS. IN ADDITION, YOU FILED A "CHARGE AGAINST EMPLOYER" WITH THE NATIONAL LABOR RELATIONS BOARD (NLRB) CHARGING LEON SAVAGE OF THE SBA WITH HAVING FRUSTRATED THE COLLECTIVE BARGAINING AGREEMENT BY REFUSING TO ALLOW UNION REPRESENTATIVES TO ATTEND NEGOTIATION SESSIONS BETWEEN SBA AND THE SUBCONTRACTOR.

YOU ALSO CONTEND THAT THE SUBCONTRACT AWARDED TO SUPREME SERVICES INCLUDES THE WRONG WAGE DETERMINATION. IT IS YOUR POSITION THAT WHILE WAGE DETERMINATION NO. 67-191 (REV. -9), WHICH IS INCLUDED IN THE CONTRACT, REPLACED DETERMINATION NO. 69-173 (REV. -3), IT DID NOT REPLACE REV. -4 OF 69-173 WHICH IS STILL VALID AND SPECIFICALLY APPLICABLE TO WORK PERFORMED AT FORT BENNING. FINALLY, YOU COMPLAIN THAT THE WAGE RATES BEING PAID UNDER THE PRESENT CONTRACT PURSUANT TO THE ERRONEOUS WAGE DETERMINATION ARE LESS THAN THE WAGES PAID BY THE TWO PREVIOUS CONTRACTORS (WORLDWIDE SERVICES AND OLD ATLANTIC SERVICES) AT FORT BENNING PURSUANT TO THEIR CONTRACTS WITH YOUR UNION. IN THIS CONNECTION, YOU ARGUE THAT IT SHOULD BE INCUMBENT UPON SBA TO ADVISE PROSPECTIVE CONTRACTORS OF THE EXISTENCE OF SUCH AGREEMENT BETWEEN THE PREDECESSOR CONTRACTOR AND THE UNION PRIOR TO BIDDING SO THAT THE CONTRACT AWARDED WILL BE BASED UPON INCLUSION OF THE UNION WAGE RATES RATHER THAN THE LOWER APPLICABLE WAGE DETERMINATION.

THE SMALL BUSINESS ADMINISTRATION ADVISES THAT IT HAS DETERMINED THAT SUPREME SERVICES IS OWNED AND CONTROLLED BY DISADVANTAGED INDIVIDUALS WITHIN THE CRITERIA SET FORTH IN SECTION 124.8-1(C) AND IS THEREFORE ELIGIBLE FOR AN 8(A) SUBCONTRACT. FURTHERMORE, SBA POINTS OUT THAT UNDER SECTION 124.8-2(C) OF THE REGULATIONS IT IS SBA'S RESPONSIBILITY TO DETERMINE IF A POTENTIAL SUBCONTRACTOR IS COMPETENT TO PERFORM A SPECIFIC CONTRACT AND, UPON THE REQUEST OF THE OTHER AGENCY OR DEPARTMENT TO CERTIFY THAT THE ADMINISTRATION, THROUGH ITS PROPOSED SUBCONTRACTOR, IS COMPETENT TO PERFORM THE CONTRACT. IT IS SBA'S POSITION THAT SUPREME SERVICES IS QUALIFIED TO PERFORM THE CONTRACT. IN THIS CONNECTION, IT IS REPORTED THAT YOUR ALLEGATIONS CONCERNING WORLDWIDE SERVICES' FAILURE TO PAY VACATION BENEFITS DUE EMPLOYEES UNDER THE APPLICABLE WAGE DETERMINATION WERE INVESTIGATED BY THE DEPARTMENT OF LABOR AND NO VIOLATIONS WERE FOUND. AS TO YOUR CONTENTION CONCERNING BREACH OF THE COLLECTIVE BARGAINING AGREEMENT, IT IS NOTED THAT THIS IS AN UNRESOLVED DISPUTE NOW PENDING BEFORE THE COURT. IN THESE CIRCUMSTANCES, AND IN VIEW OF SBA'S BROAD AUTHORITY IN THESE AREAS, THERE IS NO BASIS FOR OUR OFFICE TO TAKE ISSUE WITH THE DETERMINATION THAT SUPREME SERVICES WAS ELIGIBLE AND QUALIFIED FOR THE 8(A) SUBCONTRACT. SEE B-175609, JUNE 27, 1972.

WITH REGARD TO YOUR CHARGES CONCERNING UNFAIR LABOR PRACTICES BY MR. LEON SAVAGE OF SBA, THE NATIONAL LABOR RELATIONS ACT, 29 U.S.C. 151, ET SEQ., PROVIDES THAT THE AUTHORITY TO HEAR AND ISSUE ORDERS RELATING TO SUCH CHARGES RESTS WITH THE NATIONAL LABOR RELATIONS BOARD (NLRB). UNDERSTAND THAT THE CHARGES WERE DISMISSED BY THE NLRB FOR LACK OF JURISDICTION BECAUSE IT WAS DETERMINED THAT NEITHER MR. SAVAGE NOR THE SBA WERE EMPLOYERS WITHIN THE MEANING OF THE ACT. FURTHERMORE, SBA'S DETERMINATION THAT THERE IS NO REQUIREMENT, STATUTORY OR OTHERWISE, THAT THE UNION BE INCLUDED IN THE NEGOTIATION PROCESS, AND THAT TO PERMIT SUCH PRACTICE MAY WELL VIOLATE REGULATORY AND STATUTORY SANCTIONS CONCERNING DISCLOSURE OF CONFIDENTIAL INFORMATION, IS NOT SUBJECT TO OUR REVIEW UNDER THE BID PROTEST PROCEDURE.

ALTHOUGH OUR OFFICE HAS NO OBJECTION TO ADVICE BEING GIVEN TO PROSPECTIVE CONTRACTORS AS TO THE EXISTENCE OF A COLLECTIVE BARGAINING AGREEMENT COVERING THE INCUMBENT CONTRACTOR'S EMPLOYEES WHO WILL LIKELY BE RETAINED BY THE SUCCESSOR CONTRACTOR, WE ARE NOT AWARE OF ANY STATUTE WHICH REQUIRES THAT A SUCCEEDING CONTRACTOR FOR PERFORMANCE OF SERVICES AT A GOVERNMENT INSTALLATION ASSUME HIS PREDECESSOR'S BARGAINING AGREEMENT WITH UNION EMPLOYEES. NOR ARE WE AWARE OF ANY COURT DECISION WHICH HAS APPLIED THE SO-CALLED "SUCCESSOR EMPLOYER" DOCTRINE TO SERVICE CONTRACTS AT GOVERNMENT INSTALLATIONS. 42 COMP. GEN. 1 (1962); 50 COMP. GEN. 592, 599 (1971); AND 50 ID. 648, 654 (1971).

OUR OFFICE HAS NO INFORMATION AS TO THE PROPER WAGE DETERMINATION APPLICABLE TO THE SUBJECT CONTRACT. MOREOVER, IT SHOULD BE NOTED THAT A LABOR DEPARTMENT DETERMINATION AS TO THE PREVAILING WAGE RATES AND FRINGE BENEFITS IN A PARTICULAR AREA HAS BEEN HELD NOT TO BE SUBJECT TO REVIEW BY ANY OTHER AUTHORITY. UNITED STATES V. BINGHAMTON CONSTRUCTION CO., 347 U.S. 171. WE SUGGEST, THEREFORE, THAT ANY QUESTION CONCERNING THE APPLICABLE WAGE DETERMINATION BE DIRECTED TO THE ADMINISTRATOR OF THE WAGE AND HOUR AND PUBLIC CONTRACTS DIVISION OF THE DEPARTMENT OF LABOR.

IN VIEW OF THE FOREGOING, YOUR PROTEST IS DENIED.