B-181593, OCT 24, 1974

B-181593: Oct 24, 1974

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

WHERE THERE WAS NO CONTRACTING OFFICER'S DOCUMENTED DETERMINATION THAT "LISTING OF SUBCONTRACTORS" CLAUSE WAS INAPPROPRIATE AS REQUIRED BY GENERAL SERVICES PROCUREMENT REGULATIONS. CLAUSE WAS NOT INCLUDED IN GSA IFB FOR CONSTRUCTION WORK ALTHOUGH BID FORM SUPPLEMENT FOR LISTING SUBCONTRACTORS WAS INCLUDED IN IFB. THERE IS NO BASIS FOR GSA TO REJECT ANY BID UNDER IFB AS NONRESPONSIVE FOR FAILING TO PROPERLY IDENTIFY SUBCONTRACTORS USED IN COMPILATION OF BID OR IN PERFORMANCE OF CONTRACT. SINCE SUBCONTRACTOR LISTING REQUIREMENT CANNOT BE DEEMED PART OF IFB UNLESS BIDDERS ARE PUT ON NOTICE IN IFB OF REQUIREMENT. 000 WAS THE HIGHEST OF THREE BIDS RECEIVED UNDER THE IFB. 000 SHOULD HAVE BEEN REJECTED AS NONRESPONSIVE.

B-181593, OCT 24, 1974

WHERE THERE WAS NO CONTRACTING OFFICER'S DOCUMENTED DETERMINATION THAT "LISTING OF SUBCONTRACTORS" CLAUSE WAS INAPPROPRIATE AS REQUIRED BY GENERAL SERVICES PROCUREMENT REGULATIONS, BUT CLAUSE WAS NOT INCLUDED IN GSA IFB FOR CONSTRUCTION WORK ALTHOUGH BID FORM SUPPLEMENT FOR LISTING SUBCONTRACTORS WAS INCLUDED IN IFB, THERE IS NO BASIS FOR GSA TO REJECT ANY BID UNDER IFB AS NONRESPONSIVE FOR FAILING TO PROPERLY IDENTIFY SUBCONTRACTORS USED IN COMPILATION OF BID OR IN PERFORMANCE OF CONTRACT, NOTWITHSTANDING BIDDERS' OPPORTUNITY TO BID SHOP, SINCE SUBCONTRACTOR LISTING REQUIREMENT CANNOT BE DEEMED PART OF IFB UNLESS BIDDERS ARE PUT ON NOTICE IN IFB OF REQUIREMENT.

GRUNLEY-WALSH CONSTRUCTION COMPANY, INC.:

BY LETTER DATED JUNE 25, 1974, THE GRUNLEY-WALSH CONSTRUCTION COMPANY, INC. (GRUNLEY-WALSH) PROTESTED AGAINST THE AWARD OF CONTRACT NO. GS-00B- 01098 TO ANY OTHER FIRM BY THE GENERAL SERVICES ADMINISTRATION (GSA), PURSUANT TO AN INVITATION FOR BIDS (IFB) FOR THE RENOVATION AND IMPROVEMENT OF THE GREAT HALL EXHIBIT AREA, DEPARTMENT OF COMMERCE BUILDING, WASHINGTON, D.C.

GRUNLEY-WALSH, WHOSE BID IN THE AMOUNT OF $1,155,000 WAS THE HIGHEST OF THREE BIDS RECEIVED UNDER THE IFB, CONTENDS THAT THE BIDS OF THE A.A. BEIRO CONSTRUCTION COMPANY, INC. (BEIRO), IN THE AMOUNT OF $1,023,000 AND THE MC COMPANY (MC) IN THE AMOUNT OF $1,095,000 SHOULD HAVE BEEN REJECTED AS NONRESPONSIVE, SINCE BEIRO AND MC DID NOT PROPERLY LIST THEIR SUBCONTRACTORS ON THE "SUPPLEMENT TO BID FORM LIST OF SUBCONTRACTORS" SUBMITTED WITH THE BIDS. GRUNLEY-WALSH CONTENDS THAT THE FORM WAS REQUIRED TO BE COMPLETED IN ACCORDANCE WITH THE SUBCONTRACTOR LISTING REQUIREMENTS IN THE GENERAL SERVICES PROCUREMENT REGULATIONS (GSPR) PUBLISHED AT 41 C.F.R. SEC. 5B-2.202-70 (1973). GRUNLEY-WALSH CONCLUDES THAT, SINCE BEIRO AND MC DID NOT PROPERLY COMPLETE THE FORM, THEY HAD AN UNFAIR ADVANTAGE, BECAUSE THEY WERE IN A POSITION TO BID SHOP A SUBSTANTIAL PORTION OF THE WORK UNDER THE CONTRACT AWARDED.

AT THE TOP OF "SUPPLEMENT TO BID FORM LIST OF SUBCONTRACTORS," IT IS STATED:

"LISTED BELOW ARE THE NAMES AND BUSINESS ADDRESSES AS REQUIRED BY THE 'LISTING OF SUBCONTRACTORS' PARAGRAPH OF THE SPECIAL CONDITIONS."

HOWEVER, THE "LISTING OF SUBCONTRACTORS" CLAUSE WAS NOT INCLUDED IN THE SPECIAL CONDITIONS OR ANYWHERE IN THE IFB.

THE GSPR REQUIREMENTS FOR LISTING SUBCONTRACTORS AT 41 C.F.R. SEC. 5B 2.202-70 (1973) WERE PROMULGATED BY GSA IN ORDER TO RESTRICT THE PRACTICE OF BID SHOPPING FOR SUBCONTRACTORS BY CONTRACTORS AFTER THEY HAD RECEIVED AWARDS OF CONSTRUCTION CONTRACTS. SEE 43 COMP. GEN. 206 (1963). WE HAVE HELD THAT THE SUBCONTRACTOR LISTING PROVISION WHEN INCLUDED IN AN IFB IS A MATERIAL REQUIREMENT AND THAT THE FAILURE TO COMPLY RENDERS A BID NONRESPONSIVE AND PROPERLY FOR REJECTION. 43 COMP. GEN. SUPRA; 50 ID. 839 (1971).

THE GSPR SPECIFICALLY PROVIDES THAT THE "LISTING OF SUBCONTRACTORS" CLAUSE BE INCLUDED IN IFB'S ON NEW CONSTRUCTION CONTRACTS EXCEEDING $150,000 AND ON ALTERATION CONSTRUCTION CONTRACTS EXCEEDING $500,000, UNLESS IT IS DETERMINED BY THE CONTRACTING OFFICER THAT SUCH INCLUSION IS CLEARLY INAPPROPRIATE, PROVIDED THAT SUCH DETERMINATION IS DOCUMENTED AND RETAINED IN THE CONTRACT FILE. ALTHOUGH THERE IS NO INDICATION IN THE RECORD BEFORE US THAT ANY SUCH DOCUMENTED DETERMINATION WAS MADE BY THE CONTRACTING OFFICER FOR THE PRESENT IFB, WE DO NOT BELIEVE THE SUBCONTRACTOR LISTING REQUIREMENTS CAN BE DEEMED PART OF THE IFB, NONCOMPLIANCE WITH WHICH CAUSES REJECTION OF A BID AS NONRESPONSIVE, UNLESS THE BIDDERS ARE SPECIFICALLY PUT ON NOTICE IN THE IFB OF THE REQUIREMENTS. SEE 36 COMP. GEN. 380 (1956); 47 ID. 682 (1968); 48 ID. 171 (1968); 51. 403, 407 (1972); MATTER OF DPF INCORPORATED, B-180292, SEPTEMBER 12, 1974. BIDDERS CANNOT BE EXPECTED UNDER THESE CIRCUMSTANCES TO BE AWARE OF THE CONTRACTING OFFICER'S DISCRETIONARY DETERMINATION REGARDING THE INCLUSION OF THE SUBCONTRACTOR LISTING REQUIREMENTS EXCEPT FROM PERUSING THE IFB ITSELF, NOR CAN THEY COMPETE ON AN EQUAL BASIS UNLESS THEY KNOW IN ADVANCE THE BASIS ON WHICH THEIR BIDS WILL BE EVALUATED. SEE 36 COMP. GEN. SUPRA; 48 COMP. GEN. 326 (1968).

THE INCLUSION OF THE "SUPPLEMENT TO BID FORM LIST OF SUBCONTRACTORS" IN THE IFB, IN AND OF ITSELF, IMPOSES NO REQUIREMENT ON BIDDERS TO LIST THEIR PROPOSED SUBCONTRACTORS IN ACCORDANCE WITH THE "LISTING OF SUBCONTRACTORS" CLAUSE, SINCE THIS CLAUSE WAS NEITHER SPECIFICALLY SET FORTH NOR INCORPORATED BY REFERENCE IN THE IFB. WE BELIEVE THAT UNDER THESE CIRCUMSTANCES THERE WOULD BE NO BASIS FOR GSA TO REJECT ANY BID AS NONRESPONSIVE FOR FAILING TO PROPERLY IDENTIFY THE SUBCONTRACTORS USED IN THE COMPILATION OF THE BID, OR TO BE USED IN THE PERFORMANCE OF THE CONTRACT, NOTWITHSTANDING THAT THE BIDDERS MAY HAVE AN OPPORTUNITY TO BID SHOP AFTER AWARD IS MADE. SEE 51 COMP. GEN. SUPRA.

ACCORDINGLY, GRUNLEY-WALSH'S PROTEST MUST BE DENIED.