B-247334.2, May 14, 1992, 71 Comp.Gen. 396

B-247334.2: May 14, 1992

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PROCUREMENT - Bid Protests - GAO procedures - GAO decisions - Reconsideration The General Accounting Office does not have jurisdiction to consider the protest of an award of a second-tier subcontract to another offeror by a subcontractor to a government management and operating contractor] the acquisition of title to the equipment by the government does not in itself establish the procurement as "by or for the government.". PROCUREMENT - Bid Protests - Subcontracts - GAO review The General Accounting Office does not have jurisdiction to consider the protest of an award of a second-tier subcontract to another offeror by a subcontractor to a government management and operating contractor] the acquisition of title to the equipment by the government does not in itself establish the procurement as "by or for the government.".

B-247334.2, May 14, 1992, 71 Comp.Gen. 396

PROCUREMENT - Bid Protests - GAO procedures - GAO decisions - Reconsideration The General Accounting Office does not have jurisdiction to consider the protest of an award of a second-tier subcontract to another offeror by a subcontractor to a government management and operating contractor] the acquisition of title to the equipment by the government does not in itself establish the procurement as "by or for the government." PROCUREMENT - Bid Protests - Subcontracts - GAO review The General Accounting Office does not have jurisdiction to consider the protest of an award of a second-tier subcontract to another offeror by a subcontractor to a government management and operating contractor] the acquisition of title to the equipment by the government does not in itself establish the procurement as "by or for the government." Michael R. Hatcher, Esq., Israel and Raley, for the protester. Guy R. Pietrovito, Esq., and James A. Spangenberg, Esq., Office of the General Counsel, GAO, participated in the preparation of this decision.

Merrick Engineering, Inc.-- Reconsideration:

Merrick Engineering, Inc. requests reconsideration of our dismissal of its protest of the award of a second-tier subcontract to another offeror under solicitation No. 0348-000008-11/15/91, issued by General Dynamics Space Systems, Inc., a subcontractor to University Research Association, Inc., the management and operating contractor of the Department of Energy's Super Collider Laboratory. The procurement is for welding equipment. We dismissed Merrick's protest of the propriety of the award made by General Dynamics since it was not made "by or for the government."

We affirm the dismissal.

Under the Competition in Contracting Act of 1984, our Office has jurisdiction to decide protests involving contract solicitations and awards by federal agencies. 31 U.S.C. Sec. 3551(1) (1988). We have interpreted this provision as authorizing us to decide protests of subcontract solicitations and awards only when the subcontract is "by or for the government." 4 C.F.R. Sec. 1.3(m)(10) (1992).

We dismissed Merrick's protest because the procurements of General Dynamics-- a subcontractor that is neither a federal agency nor a prime contractor-- are not "by or for" the government. See Servisco Mgmt. Ltd. -- Recon., B-244539.2, Oct. 22, 1991, 91-2 CPD Para. 357; Yard USA, Inc., B-232326, Sept. 1, 1988, 88-2 CPD Para. 207. We also found that the fact that the government would acquire title to the welding equipment or that it would be installed in a government-owned laboratory did not alone establish this subcontract procurement as "for" the government. See White Storage and Retrieval Sys., Inc., B-242646, Apr. 22, 1991, 91-1 CPD Para. 394.

Merrick argues, citing Midwest Tele Communications Corp., B-184323, Feb. 9, 1976, 76-1 CPD Para. 81, that we erred in dismissing its protest because we have jurisdiction over subcontractor procurements where equipment is being purchased for installation in a government owned plant. In Midwest Tele Coms., we did find that we had jurisdiction over a subcontract procurement, noting that the purchased equipment would be installed in a government-owned plant and the government acquired title to the equipment. In that case, however, the procurement was conducted by a government prime contractor as part of the contractor's overall responsibility to operate the government-owned ammunition plant, including associated procurement responsibilities.

In other decisions, we have noted that the purchase of equipment for government-owned contractor-operated plants is one of several factors to be considered in determining whether a prime contractor is making purchases "by or for" the government. See, e.g., Edison Chouest Offshore, Inc.; Polar Marine Partners, B-230121.2; B-230121.3, May 19, 1988, 88-1 CPD Para. 477. In essence, a prime contractor may be found to be purchasing "by or for" the government where it acts as a middleman or a conduit between the government and subcontractor, where the prime contractor operates and manages a government facility, otherwise provides large-scale management services, serves as an agency's construction manager or functions primarily to handle the administrative procedures of subcontract vendors effectively selected by the agency. ToxCo, Inc., 68 Comp.Gen. 635 (1989), 89-2 CPD Para. 170.

Here, as noted in our prior decision, the procurement was not conducted by a prime contractor with purchasing responsibilities, but by a subcontractor that had its own responsibilities in performing its subcontract. Since the government ordinarily acquires title to property purchased under a cost reimbursement contract or subcontract, see Federal Acquisition Regulation FAR. 52.245-5(c), the government's acquisition of title to the welding equipment does not establish that this second-tier subcontract procurement is "by or for the government," even if the equipment were installed in a government-owned plant. /1/ See White Storage and Retrieval Sys., Inc., supra; Motorola, Inc., B-194494, Aug. 15, 1979, 79-2 CPD Para. 124; see also Amdahl Corp. v. Baldrige et al., 617 F.Supp. 501 (D.D.C. 1985). The procurements of a prime contractor's sub-contractors are not "by or for the government." See Sygnetron Protection Sys., Inc., B-225441.2, Nov. 19, 1986, 86-2 CPD Para. 593.

The dismissal is affirmed.

/1/ General Dynamics has informed us that the equipment is not being installed in a government-owned facility but at General Dynamics's leased facilities used in the performance of its subcontract.