B-242646, Apr 22, 1991, 91-1 CPD 394

B-242646: Apr 22, 1991

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PROCUREMENT - Bid Protests - Subcontracts - GAO review PROCUREMENT - Bid Protests - Prime contractors - Contract awards - Subcontracts - GAO review DIGEST: Protest challenging the propriety of a subcontract awarded by a government prime contractor independent of the contracting agency is dismissed since the prime contractor is not acting as the government's agent and the award was not made "by or for the government.". Since this subcontract protest is not for consideration under our Bid Protest Regulations. Raytheon was awarded a cost-plus-award-fee contract for approximately $88.5 million by the National Aeronautics and Space Administration (NASA) for comprehensive logistics depot support services for tracking and data operations.

B-242646, Apr 22, 1991, 91-1 CPD 394

PROCUREMENT - Bid Protests - Subcontracts - GAO review PROCUREMENT - Bid Protests - Prime contractors - Contract awards - Subcontracts - GAO review DIGEST: Protest challenging the propriety of a subcontract awarded by a government prime contractor independent of the contracting agency is dismissed since the prime contractor is not acting as the government's agent and the award was not made "by or for the government."

Attorneys

White Storage and Retrieval Systems, Inc.:

White Storage and Retrieval Systems, Inc. protests the award by Raytheon Company of a subcontract to Kardex Systems, Inc., under request for quotations (RFQ) No. 0229A002-354, for vertical and horizontal storage carousels used to support tracking and data operations at Goddard Space Flight Center (Goddard).

We dismiss the protest, since this subcontract protest is not for consideration under our Bid Protest Regulations, 4 C.F.R. Sec. 21.3(m)(10) (1991).

On March 30, 1989, Raytheon was awarded a cost-plus-award-fee contract for approximately $88.5 million by the National Aeronautics and Space Administration (NASA) for comprehensive logistics depot support services for tracking and data operations, including tracking stations, control centers, communications networks, and data processing facilities and providing support for the engineering activities associated with these activities. As part of its support function, Raytheon was required to procure storage carousels to be used at the White Sands facility, which is operated by Bendix Corporation. Bendix provided Raytheon with a statement of its requirements for the carousels and, on August 22, 1990, Raytheon issued the protested solicitation. Six vendors, including White and Kardex, submitted quotations in response to the RFQ. Kardex was selected for further negotiations and was awarded the subcontract on January 9, 1991. After notification of the award to Kardex, White filed this protest.

White contends that Kardex's proposal did not meet the specifications, that "Raytheon/NASA unfairly conducted negotiations with only one offeror" to allow deviations from the solicitation specifications, and that Kardex proposed horizonal carousels from a non Federal Supply Schedule Source and therefore should have been rejected.

Under the Competition in Contracting Act (CICA), 31 U.S.C. Sec. 3551 (1988), our Office has jurisdiction to decide protests involving contract solicitations and awards by "federal agencies." A prime contractor is not considered a federal agency and will not be treated as such merely because it awards a subcontract pursuant to a prime contract with the government. Aviation Data Serv., Inc.-- Recon., B-238057.2, Apr. 11, 1990, 90-1 CPD Para. 383. Rather, we will take jurisdiction only in those situations where the prime contractor is acting "by or for the government." See 4 C.F.R. Sec. 21.3(m)(-10).

Generally, a subcontract is considered to have been awarded "by or for the government" where the prime contractor principally provides large- scale management services to the government and, as a result, generally has on-going purchasing responsibility. In effect, the prime contractor acts as a middleman or a conduit between the government and the subcontractor. American Nuclear Corp., B-228028, Nov. 23, 1987, 87-2 CPD Para. 503. Such circumstances may exist where the prime contractor operates and manages a government facility, Westinghouse Elec. Corp., B-227091, Aug. 10, 1987, 87-2 CPD Para. 145; otherwise provides large- scale management services, Union Natural Gas Co., B-224607, Jan. 9, 1987, 87-1 CPD Para. 44; serves as an agency's construction manager, C-E Air Preheater Co., Inc., B-194119, Sept. 14, 1979, 79-2 CPD Para. 197; or functions primarily to handle the administrative procedures of subcontracting with vendors actually selected by the agency. University of Michigan et al., 66 Comp.Gen. 538 (1987), 87-1 CPD Para. 643. Except in these limited circumstances in which the prime contractor is basically acting as the government's agent, a subcontract awarded by a government contractor in the course of performing a prime contract generally is not considered "by or for the government." Ames Co., Inc.-- Recon., B-233314.2 et al., Dec. 15, 1988, 88-2 CPD Para. 597.

We find the circumstances here do not fall within the limited circumstances under which we review a subcontract protest. The prime contract lacks any indication that Raytheon is providing large-scale management services or is merely acting as a conduit between NASA and the subcontractor. The prime contract provides for various logistics support services for Goddard. While Raytheon will organize and manage the required logistics operations, NASA retains the review and approval of the operational procedures and the management systems. The prime contract specifically provides that NASA retains responsibility for, among other functions, program planning and policy, quality assurance, government-to- government agreements, and budgeting and funding. These provisions suggest an absence of large-scale, all-encompassing management activities such as those involved in the management and operation of a government- owned, contractor-operated facility. Indeed, we have previously found that a prime contractor engaged, as here, in performing a logistics support function for NASA does not provide large scale management services or operate and manage a government facility. Reach-All, Inc.-- Recon., B-239848.3, Nov. 29, 1990, 90-2 CPD Para. 449.

Here, the procurement for logistics support services is for limited purposes and does not entail ongoing purchasing responsibility. Further, the record indicates that Raytheon acted independently of the agency: Raytheon prepared the RFQ, conducted the negotiations, and evaluated the offers without the direction or participation of NASA. It was Raytheon's ultimate evaluation and rejection of White's offer and selection of the awardee that forms the basis of the protest, not the government's involvement. See Atlantic Marine, Inc., B-236273, Nov. 21, 1989, 89-2 CPD Para. 483. We conclude, therefore, that Raytheon's contractual duties for NASA do not fit into any of the above classifications and that the work Raytheon performs does not constitute work which is "by or for the government."

White's argument that a procurement is "for the government" if title to the goods purchased ultimately vests with the government is without merit. We have previously refused jurisdiction in instances where subcontractor goods are incorporated into a product that ultimately is owned by the government, see, e.g., Perkin-Elmer Corp., Metco Division, B-237076, Dec. 28, 1989, 89-2 CPD Para. 604, and to do otherwise would require that our Office take jurisdiction over every protest where a subcontractor's goods will be incorporated into an end item which will be delivered to the government. Such jurisdiction is beyond our Office's jurisdiction as authorized under CICA.

The protest is dismissed.