Matter of: The Fred B. DeBra Company File: B-250395.2 Date: December 3, 1992

B-250395.2: Dec 3, 1992

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PROCUREMENT Competitive Negotiation Requests for proposals Government estimates Wages rates PROCUREMENT Competitive Negotiation Requests for proposals Terms Wage rates Applicability Contracting agency's disagreement with a Department of Labor (DOL) wage determination which is based on an argument presented to DOL before the wage determination was issued. Received after proposals were submitted. Protester was not prejudiced by agency decision not to amend the solicitation to incorporate the wage determination and permit offerors to submit revised proposals. DeBra contends that the Air Force was required to amend the RFP and afford offerors the opportunity to submit revised best and fi Force awarded a contract.

Matter of: The Fred B. DeBra Company File: B-250395.2 Date: December 3, 1992

PROCUREMENT Competitive Negotiation Requests for proposals Government estimates Wages rates PROCUREMENT Competitive Negotiation Requests for proposals Terms Wage rates Applicability Contracting agency's disagreement with a Department of Labor (DOL) wage determination which is based on an argument presented to DOL before the wage determination was issued, does not justify failure to incorporate that wage determination in a solicitation. Procurement Socio-Economic Policies Labor standards Wage rates Modification Effects Where procuring agency's appropriately detailed analysis of proposals indicates that a revised wage determination, received after proposals were submitted, would not affect the award selection, protester was not prejudiced by agency decision not to amend the solicitation to incorporate the wage determination and permit offerors to submit revised proposals. REDACTED VERSION

Attorneys

DECISION The Fred B. DeBra Company protests the decision of the Department of the Air Force not to amend request for proposals (RFP) No. F33601-92-R-0184 to incorporate a revised wage determination issued by the Department of Labor (DOL). DeBra contends that the Air Force was required to amend the RFP and afford offerors the opportunity to submit revised best and fi Force awarded a contract, based on the RFP without the revised wage determination, to The H.J. Osterfeld Company.

We deny the protest.

FACTUAL BACKGROUND

The procurement is for civil engineering construction and maintenance support services for the Aeronautical Systems Division Laboratories at Wright-Patterson Air Force Base. On September 1, 1989, the Air Force awarded the current contract, No. F33657-89-D-2164, to DeBra, succeeding Osterfeld, the prior incumbent. The construction portion of DeBra's 3-year contract began on the September 1, 1989, award date; the maintenance portion began 1 month later.

As with the RFP at issue in the protest, DeBra's contract was on a time and materials basis, with the contractor paid for the number of hours of work performed by labor category, in accordance with the contract's billing rates. Those billing rates are burdened to include, in addition to wages paid to employees, other elements such as taxes, fringe benefits, general and administrative costs, and profit. Within the maintenance work covered by the RFP, there are the following nine labor categories:

*Heating/ventilation/air-conditioning mechanic *Tradesman/helper *Water treatment technician *Electrician *Steamfitter/welder *Insulator *Sheetmetal worker *Painter *Carpenter

Both DeBra's contract and the RFP are covered by the Service Contract Act of 1965 (SCA), as amended, 41 U.S.C. Secs. 351-358 (1988), which requires that employees must normally be paid at least the minimum hourly wages set forth in DOL area wage determinations. 41 U.S.C. Sec. 351(a)(1). Where employees have been paid under a collective bargaining agreement (CBA) resulting from arm's-length negotiations, section 4(c) of the SCA, 41 U.S.C. S 353(c), generally requires that successor contractors pay benefits, including prospective increases in wages and benefits, set forth in the CBA. Much of the dispute among the parties in this protest turns on whether a particular labor agreement satisfies section 4(c)'s standard that it be a CBA and that it have resulted from arm's-length negotiations: where the agreement does not satisfy that standard, successor contractors need not pay employees in accordance with the agreement's wage levels, and they are bound, instead, only by DOL's area wage determinations, which normally establish lower minimum rates.

Regulations implementing the SCA require that agencies notify DOL of their intent to enter into a service contract exceeding $2,500 and list the classes of workers they expect to employ. See 29 C.F.R. Part 4 (1992). The instrument to provide that notice is Standard Form (SF) 98, "Notice of Intention to Make a Service Contract and Response to Notice," and generally it must be submitted, together with other documents such as a predecessor contract's CBA, at least 60 days prior to issuance of a solicitation. Federal Acquisition Regulation (FAR) Sec. 22.1008. That submission serves as a request that DOL issue a wage determination, which, if issued, must generally be incorporated into the solicitation. FAR Secs. 22.10071013. The circumstances in which a DOL wage determination need not be so incorporated constitute another area of contention in the protest.

For multiyear contracts, such as DeBra's, each year is considered a separate contract for purposes of section 4(c). Accordingly, for each year of DeBra's 3-year contract, the Air Force was required to submit an SF 98 and to provide DOL a copy of any new (or revised) CBA. Pursuant to FAR Sec. 52.222-43, the contract billing rates (i.e., the hourly rates that the government pays the contractor) are adjusted once a year, on the contract anniversary, to reflect a contractor's actual increase in applicable wages and fringe benefits payable to the employees to the extent that the increase is made to comply with a DOL wage determination. In effect, once a year the government increases the contract billing rates to compensate the contractor for added labor costs attributable to a new or revised CBA.

Shortly after award of the contract in 1989, DeBra concluded CBAs with two unions. The CBA with the union representing the electricians is not subject to controversy in this protest. The other agreement, which is relevant to the protest, was with the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO (UA). For the second and third years of its contract, DeBra negotiated two amendments to its CBA with the UA which purported to cover several trades where the employ members of the UA: painters, insulators, and carpenters (hereafter, the "additional trades").

The wages and benefits set forth in those two CBA amendments were to be paid only "when and if incorporated" into DeBra's contract. The contingent nature of the amendments meant that the wage increases were at no cost or risk to DeBra: either the increases would be incorporated into the contract and DeBra would be compensated by the agency for the entire increase, pursuant to FAR Sec. 52.222-43; or the increases would not be incorporated (meaning that DeBra would not be compensated by the government), in which case DeBra would not be obligated to pay the employees the higher rates.

After DeBra forwarded a copy of each CBA amendment to the Air Force, the Air Force sent DOL a copy, together with an SF 98 and a request for a wage determination in light of the new wage rates negotiated between DeBra and the UA. In its correspondence with DOL, the Air Force stated that it recognized that changes to DeBra's CBA would cause DOL to issue a revised wage determination consistent with the revised CBA. While conceding that the revised wage determination would apply to the plumbers and other trades associated with the UA, the Air Force notified DOL of its view that the employees engaged in the additional trades could not properly be considered within the scope of the DeBra/UA CBA because the UA had no collective bargaining relationship with DeBra on behalf of these classifications. This objection seemed to reflect the fact that those engaged in the additional trades are not members of the UA. The Air Force also objected to the contingent nature of the wage increases in the CBA amendments. In separate correspondence, DeBra expressed its view to DOL that the additional trades were properly covered by the UA CBA.

DOL's cryptic responses did not make clear whether DOL agreed with the Air Force's view (i.e., agreed that the additional trades were subject only to an area wage determination, not the DeBra/UA CBA) or with DeBra's (that the additional trades were properly within the scope of the CBA). DOL did issue a general ruling that, beginning April 1, 1992, a CBA including a contingency clause would not be considered to reflect arm's- length negotiations and would, therefore, not trigger section 4(c) protection.

While the Air Force and DeBra were awaiting a DOL wage determination for the third contract year (beginning October 1, 1991) as well as further DOL clarification concerning the section 4(c) status of the additional trades, the Air Force was preparing the RFP for the successor contract. Accordingly, the agency sent DOL another SF 98 with a request, dated April 16, 1992, for a wage determination, this time for t beginning October 1, 1992. The Air Force's cover letter reminded DOL that the DeBra/UA CBA rates included a contingency clause.

The Air Force issued the RFP on May 19, 1992. Section M of the RFP stated that award would be made to the lowest priced, technically acceptable offeror, with price calculated on the basis of the RFP's estimated number of labor hours required during the 1-year term of the contract.

In questions and answers set forth in amendment 0003 to the RFP (including identification of the offeror asking each question), the Air Force informed offerors that a revised DOL wage determination based on the incumbent's (i.e., DeBra's) CBA would be incorporated into the RFP "as soon as received from [DOL]." The Air Force stated that the rates in that new wage determination would be applicable only to certain occupations, and the occupations listed were those other than the additional trades. The Air Force indicated that wages for the additional trades would be governed by the lower wages of the area wage determination.

By amendment 0005 to the RFP, the Air Force published another series of questions and answers (again including identification of the company raising each question). Among its questions, DeBra asked whether the Air Force anticipated that the DOL wage determination would explicitly list the various trades' wage rates, or whether it would simply incorporate the CBA by reference (as had happened in DOL's response to the request for a wage determination for the second year of the contract). The Air Force's answer was that DOL was expected to issue a detailed wage determination. The Air Force went on to state that DeBra's CBA "contains references to other classifications which do not have protection under [SCA] Section 4(c) . . . ."

In another question, DeBra, noting that it had challenged the decision to deny section 4(c) protection to the other trades, asked what the Air Force intended to do if DOL upheld DeBra's position. The Air Force replied (in an apparent reference to a somewhat ambiguous letter from DOL) that DOL had already denied DeBra's position. Nonetheless, the Air Force stated: "If DOL reverses their original ruling and notifies [the Air Force] of this change, [the Air Force] will ask DOL to issue a revised [wage determination based on DeBra's CBA] to reflect their decision. Any revisions to any [wage determinations] issued by DOL will be incorporated into the solicitation or contract in accordance with the provisions of the FAR."

DeBra also asked whether the incumbent would not be put at a disadvantage if DOL sustained the Air Force's position. The Air Force replied by simply stating that only valid agreements benefited from section 4(c) protection, so that application of the SCA did not provide the incumbent either an advantage or a disadvantage.

Three days before the July 23 closing date for receipt of proposals, DeBra sent the Air Force a letter stating that "we understand that our labor rates submitted in regard to the Maintenance Services required will be based on the following," and then listed [deleted] CBA wage rates for several occupations, but [deleted] area wage determination rates for the additional trades. DeBra's July 20 letter closed as follows: "If our understanding is not correct, please notify us in time to modify our offer." The Air Force did not reply to this letter, because it correctly characterized the Air Force's intent for the proposals.

By mid-July, DeBra was engaged in further wage negotiations with the UA. Through industry sources, Osterfeld learned of some [deleted] new, higher rates that were being negotiated. Osterfeld incorporated that information into its proposal, basing its wage rates on what it believed to be the new CBA rates.

Proposals were received on July 23 from five offerors. The somewhat surprising result of the developments set forth above was that, of the two proposals submitted to the Air Force on July 23 by the parties to this protest, Osterfeld's proposal was based on [deleted] higher rates then being negotatiated between the UA and DeBra, while DeBra's proposal listed as the employees' wages [deleted] wages referenced in DeBra's July 20 letter to the Air Force--wage rates lower than [deleted]. Specifically, for the additional trades, the hourly wage rates listed were as follows:

TRADEDeBra's July 20 letterDeBra: initial proposalOsterfeld: initial proposalInsulators[deleted][deleted][deleted]Carpenters[deleted][deleted][ delet DeBra's proposal included a two-page explanation for the [deleted] wage rate listed for the insulators, one of the additional trades. DeBra's proposal explained the basis for the rate that DeBra proposed to pay the insulators and advised the Air Force that, if any competitor proposed a lower wage rate for insulators, the Air Force should view such a proposed rate as defective pricing.

On July 24, counsel for the UA sent a letter to DOL requesting that DOL rule that the additional trades were properly within the scope of the DeBra/UA CBA and should benefit from section 4(c) protection. That letter included as attachments letters dated June 5, 1992, from three craft unions representing painters, carpenters, and insulators empowering the UA to negotiate wage agreements relative to DeBra's contract on behalf of those other unions.

On July 30, 1 week after the initial proposals were submitted, DeBra and the UA finalized the new CBA rates. Those rates were set forth in amendment No. 3 to the CBA, which was signed on July 30, 1992. Unlike its predecessors, amendment No. 3 contained no contingency clause. The agreement set forth the wage rates for the period beginning October 1, 1992, as well as higher rates to take effect on January 1, 1993, and June 1, 1993.

In late July and early August, the Air Force evaluated the proposals submitted and conducted discussions with the offerors. BAFOs were requested for August 31, 1992.

Shortly before forwarding amendment No. 3 to DOL, the Air Force sent DOL a six-page, single-spaced letter, dated August 17, 1992, setting forth in detail the Air Force's reasons for believing that the additional trades were not properly within the scope of the DeBra/UA CBA and that those trades, therefore, should not benefit from section 4(c) protection. The letter closed with a request that, in light of the anticipated September 1 award date, DOL issue a wage determination as soon as possible.

On August 28, the Air Force telephoned DOL and was assured that a wage determination would be forthcoming within a week. Based on that assurance, the Air Force notified offerors that the BAFO closing date was being postponed to 4 p.m. on Tuesday, September 8, 1992. A contemporaneous memorandum from the Air Force contract negotiator indicates that the Assistant Regional Administrator for Air Force Contractor Industrial Relations had informed the contract negotiator that there was a "60/40 chance" of DOL sustaining the Air Force's position in the dispute with DeBra but that, if DOL were to recognize the CBA as valid for the additional trades, "I will have to extend the original BAFO request and allow the contractors to include the new CBA rates."

DOL issued the new wage determination on Friday, September 4, 1992. The new wage determination explicitly named all the occupations covered by DeBra's CBA with the UA, including the additional trades. It listed as the minimum permissible wages those wage rates set forth in the CBA for each occupation, again including the additional trades. The rates for the period beginning October 1, 1991, were those in amendment No. 2 to the CBA; for the periods beginning October 1, 1992; January 1, 1993; and June 1, 1993, the rates were those of amendment No. 3.

DOL telecopied the new wage determination to Air Force personnel involved in administration of DeBra's contract on Labor Day, September 7. The next working day, September 8, those personnel received the wage determination, but, because they were not involved in the new procurement, they apparently did not realize the urgency of the matter and failed to contact the Air Force personnel responsible for the RFP until September 9. Nonetheless, by midday on September 8, those involved in the procurement had heard at least that DOL was on the verge of issuing a wage determination. As a result, offerors were telephoned at approximately 1:30 p.m. that day and told that the scheduled 4 p.m. receipt of BAFOs was being postponed indefinitely (although the agency had apparently already received a BAFO from every offeror).

According to the agency report, the Air Force then learned that the new wage determination would adopt DeBra's position by incorporating the CBA wage rates of all of the occupations, including the additional trades. With that knowledge and continuing uncertainty about precisely when the wage determination would be received, the Air Force reversed itself shortly before 4 o'clock and telephoned offerors to tell them that receipt of BAFOs would proceed as planned at 4 p.m. A few minutes after 4 o'clock, DOL telecopied another copy of the wage determination to Air Force officials involved in the new procurement.

Review of the BAFOs revealed that Osterfeld's total proposed price was $10,279,860, placing it lowest in the field of five offerors. DeBra's total price was [deleted], [deleted] higher than Osterfeld's.

The Air Force then analyzed the BAFOs to determine whether the agency needed to incorporate the new wage determination into the RFP and afford offerors the opportunity to submit revised proposals, or whether the new wage determination could not have affected the relative standing of the competing proposals. The focus of this review was on DeBra's proposal, because it is the incumbent that risks being prejudiced by an agency's failure to require all offerors to pay their employees at least the wages which a CBA already requires the incumbent to pay.

In its review, the Air Force saw that DeBra's BAFO listed under "wages" the lower rates which DeBra had cited in its July 20 letter to the Air Force as those which would form the basis of its labor rates. DeBra's proposal thus appeared to be consistent with both DeBra's July 20 notification to the Air Force that the company intended to use the lower rates as the basis for its proposal and DeBra's explanation (in its initial proposal) for the rate it proposed for the insulators. It thus appeared to the Air Force that DeBra had not based its proposal on the rates called out in the new wage determination.

Further, regardless of whether DeBra had used those higher rates in its proposal, the Air Force's analysis led it to conclude that the incorporation of the rates from the new wage determination would not have affected the price ranking of the five competing proposals. The agency performed a two-part analysis, first assuming that DeBra had based its proposal on the lower rates (as appeared to the Air Force to be the case) and then assuming that DeBra, but no other offeror, had based its proposed rates on the higher rates of amendment No. 3 and the new wage determination.

The Air Force concluded that, if DeBra used the lower rates, it could not have been prejudiced by its competitors' also using those lower rates. Although the impact of the higher rates might have varied among offerors, the Air Force's calculation of the anticipated impact led it to conclude that it could not be expected to change the relative price positions of the five offerors.

The Air Force also performed a second calculation: leaving DeBra's proposed price static, on the assumption that DeBra had used the higher wage rates of amendment No. 3 and the new wage determination, the Air Force computed the anticipated impact on the other four offerors' proposals and concluded that, even if DeBra had relied on the higher rates in its proposal, O priced proposal. From these two calculations, the Air Force concluded that, regardless of which rates DeBra was using in its proposal, the non-incorporation of the new wage determination did not impact the award selection.

Another factor in the Air Force's analysis was its dissatisfaction with DOL's handling of the matter, including DOL's failure to explain its incorporation of the additional trades' rates in the September 4, 1992, wage determination. The Air Force believed that the new wage determination was inexplicably inconsistent with DOL's previous views (as interpreted by the Air Force), and so long overdue as to be disruptive of the procurement schedule.

Despite the absence of the contingency clause from amendment No. 3 and the letters of empowerment to the UA from the unions representing employees in the additional trades, the Air Force also continued to doubt the existence of an arm's-length negotiation relationship between the UA and DeBra regarding the additional trades. Moreover, the Air Force noted that amendment No. 3 established wage increases well after DeBra's contract was scheduled to end. Since the CBA and the wage determination were intended to be tied to a specific contract, the Air Force felt that it was improper for DOL to impose three successive waves of wage increases (on October 1, 1992; January 1, 1993; and June 1, 1993) on the future contractor and on the Air Force, which would have to compensate the contractor for the higher rates.

For all of these reasons, the Air Force concluded that it could properly proceed with award to Osterfeld, which it did on September 11, 1992. Arguing that it had been prejudiced by the Air Force's failure to incorporate the September 4 wage determination in the RFP, DeBra filed suit against the Air Force in the United States District Court for the District of Columbia seeking a writ of mandamus, a temporary restraining order, and a preliminary injunction barring the Air Force from permitting performance of Osterfeld's contract. A temporary restraining order was issued by the district court on September 25. The district court has requested that our Office address the merits of the protest.

POSITIONS OF THE PARTIES

DeBra contends that the only issue presented by the protest is whether the Air Force violated FAR Sec. 22.1012-1 by awarding a contract without first incorporating the September 4, 1992, DOL wage determination into the RFP and requiring offerors to submit proposals based on that wage determination. DeBra states that it used the higher rates of amendment No. 3 to its CBA (the same rates that were in DOL's September 4 wage determination) and that, by not requiring all offerors to base their proposals on those rates, the Air Force treated offerors unequally, to DeBra's detriment. According to DeBra, the differential between the wage rates to which it was bound by its CBA and the lower wage rates that others were free to pay increased DeBra's proposed price by approximately $258,000.

The Air Force responds that FAR Sec. 22.1012-3(d) allows a contracting agency to decide not to incorporate a wage determination received after the latest date needed to maintain an acquisition schedule. The Air Force states that its April 18, 1992, request to DOL for a wage determination for the new procurement was timely and that any delay in responding was caused by DOL, not the Air Force. The Air Force's view is that, since the responsible Air Force officials did not receive the September 4 wage determination until after 4 p.m., September 8, the wage determination effectively did not reach the Air Force until after the time for receipt of BAFOs. The Air Force also contends that, even if the wage determination should have been incorporated into the RFP, DeBra was not prejudiced, because its proposal indicated that it used the lower rates listed in its July 20 letter to the Air Force, not the higher rates of amendment No. 3 and the September 4 wage determination.

In addition to agreeing with the Air Force's arguments, Osterfeld adds a further no-prejudice allegation. Osterfeld contends that, even if DeBra used the higher rates, it could not have been prejudiced vis-a-vis Osterfeld, because Osterfeld (having learned of [deleted] higher rates being negotiated between the UA and DeBra) [deleted] used [deleted] higher rates.

DISCUSSION

The protest presents the question of a contracting agency's obligations upon receipt of a DOL wage determination which the contracting agency considers both untimely and misguided. We address each of the Air Force's concerns about DOL's wage determination before turning to the question of prejudice.

FAR Sec. 22.1012, entitled "Late receipt or nonreceipt of wage determination," is meant to provide contracting agencies guidance in cases such as this one where a DOL wage determination is received late in the procurement process. FAR Sec. 22.1012-1, "General," provides

"The Wage and Hour Administrator [of DOL], generally, will issue a wage determination or revision to it in response to [an SF 98]. The contracting officer shall incorporate the determination or revision in the particular solicitation and contract for which the wage determination was sought."

The remaining four subsections of FAR Sec. 22.1012 provide contracting officers guidance in the application of this general guidance in four scenarios, in each of which the contracting officer receives DOL's wage determination late (or not at all). The parties appear to agree that the situation here is governed by FAR Sec. 22.1012-3, that is, there is a CBA and the Air Force submitted the SF 98 in a timely fashion. That subsection provides that, for negotiated procurements such as this one, a wage determination based on a new or modified CBA "shall not be effective if notice of the terms of the new or changed [CBA] is received by the contracting agency after award of a successor contract," so long as the scheduled performance start date is within 30 days of award, as was the case here. FAR Sec. 22.1012-3(b). The provision does not indicate whether all wage determinations received prior to award are to be incorporated into solicitations and a new round of BAFOs requested.

DOL's regulations implementing the SCA state that a contract must contain any revision of a wage determination "issued prior to award of the contract." 29 C.F.R. Sec. 4.5(a)(2). This provision, however, refers to the contract; it does not state that a solicitation must be revised and new offers solicited if a wage determination is issued prior to award, nor does the DOL regulation take into account DOL tardiness in responding to a contracting agency's submission of an SF 98. For the latter state merely that the contracting agency shall "contact the Wage and Hour Division by telephone for guidance." 29 C.F.R. Sec. 4.5(d).

The FAR provides contracting officers with further guidance in Sec. 22.1012-3(d):

"If the contracting officer has not received a response from the Department of Labor within 60 days . . . , the contracting agency shall contact the Wage and Hour Division to determine when the wage determination or revision can be expected. If the Department of Labor is unable to provide the wage determination or revision by the latest date needed to maintain the acquisition schedule, the solicitation/contract action should proceed according to the following instruction:

"(1) If a successorship/same locality/incumbent [CBA] exists, the contracting officer shall incorporate in the solicitation the wage and fringe benefit terms of the [CBA], or the [CBA] itself, and the clause at 52.222-47, Service Contract Act (SCA) Minimum Wages and Fringe Benefits."

DeBra interprets Sec. 22.1012-3(b) and 29 C.F.R. Sec. 4.5(a)(2) to require the Air Force to incorporate the September 4 wage determination in the solicitation, since the wage determination was received prior to award. The Air Force construes Sec. 22.10123(d) as authorizing the agency to refrain from incorporating into the RFP wage rates which the contracting agency viewed as not properly part of a CBA and where the Air Force interpreted previous correspondence from DOL as supporting that view.

There is no absolute requirement that all CBA-based wage determinations received prior to award be incorporated into solicitations and offerors provided the opportunity to resubmit offers. For example, in KCA Corp., 69 Comp.Gen. 549 (1990), 90-2 CPD Para. 1, the agency was not required to resolicit bids based on a CBA received by the contracting officer after bids had been opened and award was imminent. Although KCA Corp. believe that the need for flexibility it recognized applies to the context of an RFP such as in this case as well, since the rationale for that flexibility --the contracting agencies' legitimate need to proceed with award in an orderly fashion--applies in both contexts. See KCA Corp., supra.

Neither the FAR nor the DOL regulations at 29 C.F.R. Sec. 4.5 explicitly set forth a rigid requirement that, even where DOL has not acted in a timely fashion, contracting agencies incorporate into solicitations all CBA-based wage determinations received from DOL prior to award. Our Office has also consistently declined to read such a rigid requirement into those regulations. As we noted in KCA Corp., supra, a rigid rule could enable incumbent contractors to manipulate the procurement process by controlling the timing of submission of revised CBAs.

We have, however, recognized the impact of failure to incorporate a new CBA-based wage determination into a solicitation, where that wage determination will govern the subsequent contract. Such a failure compels the contracting agency to speculate about how, if at all, competing offerors would have altered their bids or proposals if the new wage determination had been incorporated into the solicitation. The goal of full and open competition is not well served by assuming that new minimum wage rates would affect all offerors equally. Dyneteria, Inc., 55 Comp. Gen. 97 (1975), 75-2 CPD Para. 36. It is for this reason that we have held that speculation as to the effect of a change in the governing wage determination should be avoided where possible. Id.; see also Minjares Bldg. Maintenance Co., 55 Comp.Gen. 864 (1976), 76-1 CPD Para. 168. Accordingly, the proper way to determine the effect of a new wage determination issued prior to award is generally to amend the solicitation and invite new bids or revised proposals. Raytheon Serv. Co., 59 Comp. Gen. 316 (1980), 80-1 CPD Para. 214. Our approach is grounded not on the regulations implementing the SCA, but rather on the general principles that all offerors must be treated equally and that agencies must not award contracts with the intent of materially changing them immediately after award. See Logistical Support, Inc., B-212689.3; B-212689.4, Feb. 14, 1984, 84-1 CPD Para. 191; Minjares, supra.

However, we have, in certain circumstances, accepted as reasonable a contracting agency's decision not to incorporate a wage determination received shortly before an anticipated award date where the agency had performed appropriate analysis of the potential effect of a new wage determination and concluded that it could not be expected to have an impact on the choice of an awardee. See, e.g., Raytheon Serv. Co., supra. If failure to allow offerors the opportunity to submit new bids or revised proposals, taking into account the new wage determination, could prejudice any offeror, the agency is generally not free to proceed with award without affording all offerors such an opportunity. However, where the evidence indicates that there is not a meaningful risk of such prejudice, the agency may make award without the delay associated with amending the solicitation. The determination of the required course must, in the nature of these matters, turn on the facts of each case.

Here, the Air Force received the new wage determination shortly before the anticipated award date. The agency invested considerable time and effort in trying to determine the appropriate course of action before concluding that it could properly proceed with award. The two primary elements of its analysis were the propriety of DOL's wage determination and the extent to which any offeror (particularly the incumbent, DeBra) would be prejudiced if the Air Force proceeded with award without amending the RFP. As explained below, we find that the Air Force's disagreement with DOL's issuance of the wage determination did not justify the failure to incorporate the new wage determination in the RFP, but that the wage determination's apparent lack of impact on source selection--and thus the absence of prejudice to any offeror--permitted the Air Force to proceed with award without amending the RFP.

DOL must be accorded great deference in the interpretation both of the SCA as a statute that has been committed to DOL for implementation and enforcement and of the regulations it has issued in implementing the SCA, such as those governing the applicability of section 4(c). Commercial Energies, Inc., 70 Comp.Gen. 44 (1990), 90-2 CPD Para. 319; Information Handling Servs., 70 Comp.Gen. 35 (1990), 90-2 CPD Para. 306; High Voltage Maintenance Corp., supra. Nothing in the FAR grants contracting agencies the discretion to ignore a determination by DOL in interpreting and applying its regulations.

Here, the Air Force had repeatedly and forcefully presented its case to DOL, but in the September 4, 1992, wage determination DOL, by listing the CBA's wage rates for all occupations, including the additional trades, had clearly rejected the Air Force's position. The Air Force had earlier recognized its obligation when faced with a DOL wage determination: the Air Force labor adviser informed the contract negotiator on August 28 that, if DOL determined that the CBA properly covered the additional trades, the Air Force would have to amend the RFP and allow offerors the opportunity to submit revised proposals. That advice properly reflected the statutory and regulatory scheme establishing DOL's and contracting agencies' respective authority. Although DOL's regulations allow a contracting agency to request that DOL determine whether a CBA was reached as a result of arm's-length negotiations, 29 C.F.R. Sec. 4.11, nothing in the regulations allows the contracting agency to disregard a DOL wage determination or DOL's determination to treat a particular agreement as a valid, arm's-length CBA. On the contrary, while the Air Force disagrees with DOL's determination as to the applicability of section 4(c) to the DeBra/UA CBA, the Air Force does not contend that DOL's determination was clearly contrary to law; in that situation responsibility for administering the SCA, DOL's view must prevail. See Information Handling Servs., supra.

Notwithstanding the above, the Air Force could properly elect not to conduct a new round of BAFOs, and instead to proceed with award to Osterfeld, if analysis of the new wage determination and the proposals already submitted established that the wage determination would not have an impact on the source selection. The extent of the required analysis has been the subject of some dispute in this protest. In Raytheon, we referred to the detailed analysis and empirical study which the agency had performed, and DeBra contends that the Air Force here failed to meet the Raytheon standard.

We do not read Raytheon to establish a rigid procedural requirement. Raytheon stands for the proposition that, where the agency's review "clearly demonstrate[s] that the revised wage determination would not affect the award selection," the agency may proceed to award without incorporating the wage determination in the RFP and allowing offerors the opportunity to submit revised offers. In Raytheon, a detailed analysis was necessitated by the nature of the procurement, a potential cost/technical tradeoff, and probable cost calculations. Here, award was to be made to the lowest cost, technically acceptable proposal and the cost computations were relatively simple, thus allowing the Air Force's analysis of the wage determination's impact to be correspondingly straightforward while still demonstrating as clearly as in Raytheon that the new wage determination would not affect the award selection.

We find that the Air Force performed an adequate analysis of the expected impact of the wage determination and reasonably concluded that that wage determination would not affect the award selection. The Air Force considered the possibility that DeBra had based its proposal on paying its employees the lower wage rates listed in DeBra's July 20 letter, as appeared to the Air Force to be the case, as well as the possibility that DeBra had actually used the higher amendment No. 3 wage rates. Certainly, if DeBra had used the lower rates, the Air Force could conclude with a reasonable level of confid the chance to raise their proposals to take into account the new wage determination would not alter the relative price standing of the competing proposals. Even were it assumed that DeBra had actually used the higher rates, as it claims, the agency's calculation was reasonable. In light of the Air Force's finding that the wage determination would not affect the award selection, the agency properly proceeded with award without incorporating the wage determination in the RFP and inviting another round of BAFOs.

Because of the lack of prejudice, DeBra's protest cannot be sustained. Prejudice is an essential element of a viable protest. Lithos Restoration Ltd., 71 Comp.Gen. 367 (1992), 92-1 CPD Para. 379. While any doubt concerning the existence of prejudice will be resolved in favor of the protester, IRT Corp., B-246991, Apr. 22, 1992, 92-1 CPD Para. 378, we will not presume prejudice where the record establishes that the protester was not prejudiced by the alleged violation of regulation.

We find that the record here demonstrates that DeBra was not prejudiced by the Air Force's decision to proceed with award without incorporating the new wage determination in the RFP and requesting another round of BAFOs. Indeed, while the Air Force's conclusion to that effect was reasonable when made shortly before award, the record that has been developed during the course of the protest has amply corroborated the reasonableness of that conclusion. The record, which includes the transcript of a hearing conducted concerning the question of which rates DeBra and Osterfeld used in preparing their initial proposals and BAFOs, establishes that Osterfeld used [deleted] higher rates (except for [deleted]), while DeBra, for whatever reason, did not.

Osterfeld's proposals, both initial and BAFO, were based largely on [deleted] higher wage rates. Its contemporaneous workpapers clearly demonstrate that Osterfeld's proposed labor rates were predicated on paying the employees [deleted] higher rates for every one of the nine maintenance categories, including the additional trades. Although Osterfeld apparently did not know of, and thus did not take into account, the [deleted], those [deleted], even by DeBra's calculation, woul in the context of a difference of more than [deleted] between Osterfeld's and DeBra's proposed prices. Thus, even if we assume that DeBra incorporated [deleted] higher rates in its BAFO, it was not prejudiced by the agency's failure to require all offerors to pay their employees [deleted] higher rates.

But there is clear and convincing evidence that DeBra did not, in fact, use the higher rates in either its initial proposal or its BAFO. Instead, DeBra's initial proposal plainly listed the lower wage rates that DeBra notified the Air Force through its July 20 letter it would use as the basis for its labor rates. It is true that, at the time that letter was written and even on July 23, when DeBra submitted its initial proposal, it was not yet bound to pay its employees the higher rates, since those rates were still being negotiated. Transcript (Tr.) at 9:55:55 (DeBra).

By September, however, when DeBra was preparing its BAFO, amendment No. 3 was in place, and DeBra has stated that it would be bound, as of October 1, 1992, to pay its employees at least the rates set forth in that agreement. Such new costs would be expected to have had an impact on DeBra's BAFO, and DeBra's president states in an affidavit that, in "preparing DeBra's Best and Final Offer, I estimated that the difference between the wage rates set forth in the solicitation and the wage rates that DeBra would be obligated to pay under the terms of its noncontingent collect[ive] bargaining agreement . . . was approximately $258,000.00. Therefo offered for the maintenance work by including the additional [deleted] per hour in the mark-up."

Notwithstanding the extra costs that amendment No. 3 to the CBA allegedly imposed on DeBra between submission of its initial proposal and preparation of its BAFO, every single wage rate, for every category of maintenance labor, remained absolutely identical: As the following table shows, while Osterfeld's proposal [deleted], there is not one penny's difference between the wage rates proposed when DeBra was still bound only by the old CBA and those proposed after the new CBA was negotiated (although the wage rates are listed only for the additional trades, the pattern is identical for all trades).

TRADEDeBra: initial proposal DeBra: BAFOOsterfeld: initial proposal & BAFOCBA Am.3 & 9/4 wage determin.Insulators[deleted][deleted][deleted]$19.38Carpenters[deleted ] [delete for this anomaly. DeBra's position has generally been that the wage rates in its proposal were unrelated to the wage rates that DeBra intended to pay its employees. Yet the discussion of insulators' wage rates included in DeBra's initial proposal clearly indicates that DeBra understood that the wages listed in proposals do refer to the wages that offerors propose to pay their employees. DeBra has provided no credible explanation for its proposal's indicating to the governmen pay employees a certain wage rate if, in fact, DeBra intended to pay a higher rate.

DeBra insists that the category in its proposal labeled "mark-up" contains the extra wage cost imposed by the CBA. Thus, as quoted above, the company's president claims that, in preparing DeBra's BAFO, he included the additional cost in the mark-up. This explanation has no tenable support in the record. Review of DeBra's workpapers demonstrates that the company considered various ways of recouping costs and differing profit margins and eventually decided--prior to the execution of amendment No. 3 to the CBA on July 30--to use a particular mark-up figure ([deleted] per hour) in the initial (July 23) proposal. Nothing in the record suggests that this particular figure was driven by the higher rates of the future agreement in amendment No. 3; instead, simple business judgment seems to have been behind the specific mark-up rate selected. The same mark-up rate was then used, unchanged, in the BAFO--it was not raised to cover the higher costs arising from amendment No. 3 to the CBA. We therefore find that, contrary to DeBra's assertion, its BAFO did not reflect the higher wage rates of amendment No. 3, either in the wage rates or in the mark-up.

We conclude that DeBra did not use the higher wage rates of amendment No. 3 and the September 4 wage determination in constructing either its initial proposal or its BAFO, and that Osterfeld [deleted] higher wage rates in preparing its initial and final proposals. The result was that the Air Force's decision not to incorporate the new wage determination into the RFP did not prejudice DeBra vis-a-vis the awardee.

The protest is denied.