Protest Against Rejection of Low Bid

A firm protested the rejection of its low bid for a construction project at a Department of Energy (DOE) facility. The work was to be accomplished under a subcontract issued by the DOE on-site contractor at the facility. The solicitation required the subcontractor to conform to the contractor's labor policies to avoid problems with labor-management relations which might cause work stoppage. The protester, a nonunion contractor, was advised of the compliance requirement in the solicitation, and the contractor inquired as to whether the protester would sign a compliance agreement with the on-site unions. The protester refused to take any action to accommodate the unions; therefore, the contractor determined the protester to be nonresponsible because the job required working closely with a union contractor and, in the contractor's judgment, the protester's employment policies would lead to labor problems. The protester argued that the contractor relied on a strict prohibition against the award of a contract to a nonunion member as the basis for the rejection of its low bid and that this action was improper on a contract awarded for the Government. GAO determined that the contractor was acting independently in contracting for the Government; therefore, it was not a Government contract and regulations regarding Federal procurement do not directly apply. The contractor, however, is required to conduct its procurements for the Government in accordance with its contract with DOE and to conform to certain fundamental principles known as the Federal norm. The Federal norm requires not only that the competition for a contract be conducted in accordance with the broad general principles of Federal procurement, but also that the prospective awardee be responsible. GAO will not disturb a contractor's finding that a subcontractor is nonresponsible unless there is a reasonable basis to do so. GAO determined that the potential for labor unrest is a legitimate interest in the evaluation of a prospective awardee's responsibility. Accordingly, the protest was denied.