[Complaint of Rejection of Bid]

The second low bidder for the construction of 42 units of new, scattered sited housing under a solicitation issued by the Housing Authority of Omaha, Nebraska, complained about the rejection of its bid for failure to demonstrate the ability of proposed subcontractors to meet the local hiring goals for women and minorities. The protester contended that the awardee's bid was priced nearly $200,000 higher than its own and that the award was improper. GAO held that: (1) when competitive bidding is a condition to a local housing authority's receipt of Federal funds, the authority must follow certain basic principles of Federal procurement law and may award the contract only to the lowest responsible bidder; (2) when the purpose of a subcontractor listing is to permit evaluation of a bidder's ability to meet affirmative action and equal employment opportunity provisions of a solicitation, the local housing authority may consider the listed subcontractors' hiring records in making its responsibility determination; (3) when extensive subcontracting is proposed, the subcontractor may be considered before award in the course of making a responsibility determination; and (4) when the two lowest bidders fail to adequately demonstrate the ability of the proposed subcontractors to meet hiring goals for women and minorities, the housing authority may reasonably find them nonresponsible and make award to the third-low bidder, regardless of increased cost. Accordingly, the protest was denied.