B-244599, B-244599.2, Nov 4, 1991, 71 Comp.Gen. 55

B-244599, B-244599.2, Nov 4, 1991, 71 Comp.Gen. 55

DIGEST: 1. The General Accounting Office will consider a protest of a procurement of punch list items for the account of a construction contractor under the inspection clause, notwithstanding a pending claim by the contractor in the United States Claims Court concerning the propriety of the withholding of moneys for the punch list work and the propriety of the agency's exercise of its rights under the inspection clause. 2. Construction contractor's protest that agency improperly failed to solicit it for punch list work under a solicitation issued, for the contractor's account, pursuant to the inspection clause is denied, where the record indicates that the contractor evidenced to the agency no interest in performing or submitting a proposal for the work. 3. Protest by an affiliate of a construction contractor of the agency's failure to solicit it for the procurement, for the contractor's account, of punch list work under the inspection clause is sustained, where the affiliate expressly requested the solicitation and an opportunity to compete, and the agency has provided no legitimate reason why the affiliate should not have been permitted to compete.

Attorneys

Tango Construction, Inc.; Neal & Company, Inc:

Tango Construction, Inc. and Neal & Company, Inc. protest their exclusion from a procurement under request for proposals (RFP) No. DTCG50-91-R- 643418, issued by the United States Coast Guard for completion of punch list items remaining from contract No. DTCG50-88-C 67003, Lake Louise conducted for the account of contractors under the default clause of the previously awarded contracts. We determine if the reprocurement was conducted in accordance with applicable procurement standards and procedures. See Adaptive Concepts, Inc., B-243304, June 25, 1991, 91-1 CPD Para. 605; TSCO, Inc., 65 Comp.Gen. 347 (1986), 86-1 CPD Para. 198. Procurements for the account of the contractor under the inspection clause are substantially similar to reprocurements under the default clause. See Titan Atl. Constr. Corp., B-200986, July 7, 1981, 81-2 CPD Para. 12 (sustained pre-CICA protest of procurement issued under inspection clause). We therefore will consider the merits of the protests.

As indicated above, the Coast Guard elected to solicit only three on site contractors to perform the punch list work and obtained bids from two firms. Tango and Neal both protest the agency's failure to solicit them for this work.

The Coast Guard reports that it repeatedly requested Neal to perform this work since the fall of 1990 and Neal has expressed no interest in completing this work "by either word or deed." The Coast Guard has submitted documentation to substantiate its position. In its comments on the report, Neal does not dispute the Coast Guard's statements in this regard, nor assert that it expressed interest to the Coast Guard in submitting a proposal on this work. Consequently, we deny Neal's protest.

The Coast Guard admits that Tango contacted the agency prior to the closing date for receipt of proposals for this work, and requested a solicitation and an opportunity to submit a bid for this work. The Coast Guard then determined that Tango should not be solicited because of its affiliation with Neal, for whose account the work was being procured. Specifically, the Coast Guard determined that Tango had an "organizational conflict of interest" under FAR Sec. 9.501 since Tango's objectivity in performing the contract work on the protested solicitation would be impaired.

While it is true that an "organizational conflict of interest" is defined in FAR Sec. 9.501 as including situations where a "person's objectivity in performing the contract work is or might be otherwise impaired" because of "relationships with other persons," we do not see how this regulation applies here. The "underlying principles" of organizational conflict of interest involve the prevention of "conflicting roles that might bias a contractor's judgment" and of a contractor's unfair competitive advantage. FAR Sec. 9.505. This procurement is simply for construction work to be performed on a firm, fixed-price basis; it does not involve any situation where "objectivity" involving a contractor's judgment would be an issue.