Allegation of Improper Disqualification From Participating as Subcontractor

The protesting firm complained that it was improperly disqualified from participating as a subcontractor in the performance of work on the Eisenhower Memorial Tunnel for the grantee, the Colorado Department of Highways. The prime contract required Colorado's approval of all subcontracts, but Colorado refused to approve the award of a subcontract to the protester because of an unresolved dispute on a joint venture contract in which the protester was involved. The protester maintained that Colorado thus violated procedures concerning competitive bidding and improperly imposed prequalification procedures. GAO held that the grantee has the right to make a negative determination of responsibility with respect to a firm's prior inadequate performance even if the dispute is still unresolved. A good faith nonresponsibility determination does not unduly restrict competition or involve the approval of a prequalification procedure. Finally, the protester contended that involvement in its prior joint venture contract should not affect its future participation as a contractor, but GAO held that all persons acting as a joint venture are answerable for acts done by their partners. The complaint was summarily denied.