B-151589, OCTOBER 4, 1963, 43 COMP. GEN. 323

B-151589, OCTOBER 4, 1963, 43 COMP. GEN. 323

BIDDERS - QUALIFICATIONS - PRIOR UNSATISFACTORY SERVICE ALTHOUGH THE TERMINATION OF A CONTRACT FOR DEFAULT FOLLOWING DELAY IN PERFORMANCE AND FAILURE TO COMPLETE THE WORK ON SCHEDULE ATTRIBUTABLE TO LABOR DIFFICULTIES, NOTWITHSTANDING A PENDING APPEAL FROM THE TERMINATION, WAS PROPER FOR CONSIDERATION IN DETERMINING THE RESPONSIBILITY OF THE BIDDER ON SIMILAR PROJECTS IN OTHER AREAS, THE GOVERNMENT BEING ENTITLED TO RELY UPON THE VALIDITY OF THE TERMINATION UNLESS AND UNTIL THE CONTRACTOR SHOWS IT TO BE ERRONEOUS AND OBTAINS A REVERSAL BY HIGHER, AUTHORITY, THEREBY AVOIDING IMPOSING AN UNREASONABLE BURDEN UPON CONTRACTING OFFICERS, THE TERMINATION FOR DEFAULT DOES NOT CONSTITUTE A SUFFICIENT BASIS FOR DECLARING THE CONTRACTOR A NONRESPONSIBLE BIDDER ON SUBSEQUENT CONTRACTS UNLESS CIRCUMSTANCES AND RESULTS SIMILAR TO THE LABOR DIFFICULTIES EXPERIENCED UNDER PRIOR CONTRACTS CAN REASONABLY BE EXPECTED TO OCCUR IN THE PERFORMANCE OF FUTURE CONTRACTS.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, OCTOBER 4, 1963:

REFERENCE IS MADE TO A PROTEST SUBMITTED TO THIS OFFICE BY JACK PICOULT (A PARTNERSHIP) AGAINST THE ACTION OF YOUR ADMINISTRATION IN REJECTING ITS LOW BIDS IN THE AMOUNTS OF $6,417 AND $8,336 FOR ALTERATIONS TO THE POST OFFICE AND MORGAN ANNEX IN NEW YORK CITY AND TO THE POST OFFICE AT YONKERS, NEW YORK, UNDER PROJECT NOS. 00223-44 AND 01035.

AS INDICATED BY THE REPORT DATED JULY 15, 1963, FROM YOUR ADMINISTRATION, THE DETERMINATION TO REJECT PICOULT'S BID WAS BASED UPON THE CONTRACTOR'S POOR PERFORMANCE AND DEFAULT UNDER CONTRACT GS 063-6598, IN THE AMOUNT OF $332,290, FOR LIGHTING, ELECTRIC, AND OTHER WORK AT THE POST OFFICE IN MINNEAPOLIS, MINNESOTA. THAT CONTRACT WAS TERMINATED FOR DEFAULT ON MARCH 26, 1962, FOLLOWING DELAY IN PERFORMANCE AND FAILURE TO COMPLETE THE WORK ON SCHEDULE. SUCH DELAY AND FAILURE TO COMPLETE APPEARS TO BE PRIMARILY ATTRIBUTABLE TO THE FACT THAT THE JOB SITE AT MINNEAPOLIS WAS PICKETED BY MEMBERS OF I.B.E.W. LOCAL 110 OF ST. PAUL, MINNESOTA, WHICH UNION WAS THEN CURRENTLY ATTEMPTING TO ORGANIZE WORKERS EMPLOYED IN PERFORMING ANOTHER GOVERNMENT CONTRACT AWARDED TO PICOULT FOR WORK TO BE PERFORMED IN ST. PAUL, AND TO THE FACT THAT WORKERS OF THE ELECTRIC POWER COMPANY SERVING MINNEAPOLIS WOULD NOT CROSS THE PICKET LINE AND ELECTRIC POWER NECESSARY TO COMPLETE THE CONTRACT WORK THEREFORE WAS NOT AVAILABLE BY THE END OF THE PERIOD FOR PERFORMANCE OF THE CONTRACT. UNDER DATE OF APRIL 6, 1962, PICOULT APPEALED FROM THE CONTRACTING OFFICER'S DECISION TO TERMINATE THE MINNEAPOLIS CONTRACT FOR DEFAULT, CLAIMING, AMONG OTHER THINGS, THAT IT WAS THE RESPONSIBILITY OF THE GOVERNMENT UNDER THE MINNEAPOLIS CONTRACT TO SUPPLY ELECTRIC POWER; THAT THE FAILURE TO PERFORM THE CONTRACT ON SCHEDULE WAS DUE IN PART TO THE GOVERNMENT'S FAILURE TO SUPPLY SUCH ELECTRIC POWER AND IN PART TO CHANGES IN SPECIFICATIONS FOR WHICH EXTENSIONS OF THE TIME FOR PERFORMANCE SHOULD HAVE BEEN GRANTED; THAT PICKETING OF THE MINNEAPOLIS JOB WAS NOT FORESEEABLE; AND THAT TERMINATION OF THE CONTRACT FOR DEFAULT WAS THEREFORE IMPROPER. SUCH APPEAL WAS PENDING BEFORE YOUR BOARD OF CONTRACT APPEALS ON JUNE 13, 1963, ON WHICH DATE THE CONTRACTING ACTIVITY ADVISED PICOULT AS FOLLOWS WITH RESPECT TO ITS BID ON PROJECT NOS. 00223-44 AND 01035:

INFORMATION HAS BEEN RECEIVED FROM OUR WASHINGTON OFFICE THAT, PURSUANT TO FEDERAL PROCUREMENT REGULATIONS 1-1.310-5 (A) (5), IT HAS BEEN DETERMINED THAT YOU ARE NOT A RESPONSIBLE BIDDER. WE HAVE BEEN INSTRUCTED TO PASS OVER YOUR BID FOR THE PROJECT SHOWN BELOW.

PICOULT'S PROTEST TO THIS OFFICE AGAINST THE ABOVE DETERMINATION OF NONRESPONSIBILITY IS BASED UPON (1) THE CONTENTION THAT IT WAS IMPROPER FOR YOUR ADMINISTRATION TO CONSIDER THE MINNEAPOLIS CONTRACT AS PROPERLY TERMINATED FOR DEFAULT UNTIL THE APPEAL FROM SUCH DETERMINATION WAS DECIDED, AND (2) THAT EVEN IF IT HAD BEEN PROPER TO CONSIDER THE TERMINATION FOR DEFAULT, SUCH TERMINATION COULD ONLY CONSTITUTE A BASIS FOR DECLARING PICOULT A NONRESPONSIBLE BIDDER ON THE NEW YORK PROJECTS IF THE CIRCUMSTANCES RESULTING IN PICOULT'S FAILURE TO PERFORM THE MINNEAPOLIS CONTRACT COULD REASONABLY BE EXPECTED TO RECUR IN ITS PERFORMANCE OF THE WORK ON THE NEW YORK PROJECTS. IN CONNECTION WITH THE LATTER CONTENTION, IT IS PICOULT'S POSITION THAT YOUR ADMINISTRATION DID NOT CONSIDER THE CIRCUMSTANCES SURROUNDING ITS DEFAULT ON THE MINNEAPOLIS CONTRACT, AND THAT THERE IS NO REASONABLE BASIS FOR A CONCLUSION THAT SIMILAR CIRCUMSTANCES WOULD PREVENT ITS PERFORMANCE OF THE WORK ON THE NEW YORK PROJECTS.

WITH RESPECT TO PICOULT'S CONTENTION THAT IT WAS IMPROPER, WHILE ITS APPEAL FROM THE TERMINATION FOR DEFAULT ON THE MINNEAPOLIS CONTRACT WAS STILL PENDING, TO CONSIDER SUCH DEFAULT IN DETERMINING WHETHER PICOULT WAS A RESPONSIBLE BIDDER ON THE NEW YORK PROJECTS, IT IS OUR OPINION THAT IMPOSITION OF A RESTRICTION OF THIS NATURE WOULD IMPOSE AN UNREASONABLE BURDEN UPON CONTRACTING AGENCIES. A TERMINATION FOR DEFAULT, PROPERLY SUPPORTED BY FINDINGS OF FACT, IMPOSES UPON THE CONTRACTOR THE BURDEN OF PROVING SUCH ACTION ERRONEOUS, AND THE GOVERNMENT MUST BE ENTITLED TO RELY UPON THE VALIDITY OF THE TERMINATION UNLESS AND UNTIL THE CONTRACTOR SHOWS IT TO BE ERRONEOUS AND OBTAINS A REVERSAL BY HIGHER AUTHORITY. WE MUST THEREFORE CONCUR IN THE POSITION OF YOUR ADMINISTRATION THAT THE TERMINATION FOR DEFAULT ON PICOULT'S MINNEAPOLIS CONTRACT, NOTWITHSTANDING THE PENDING APPEAL FROM SUCH TERMINATION, WAS A PROPER MATTER FOR CONSIDERATION IN DETERMINING WHETHERPICOULT WAS A RESPONSIBLE BIDDER ON THE NEW YORK PROJECTS.

THE REMAINING QUESTION IS WHETHER SUCH TERMINATION FOR DEFAULT CONSTITUTED A PROPER AND SUFFICIENT BASIS FOR DECLARING PICOULT A NONRESPONSIBLE BIDDER ON THE NEW YORK PROJECTS.

AS PREVIOUSLY INDICATED, THE RECORDS SUBMITTED TO THIS OFFICE INDICATE THAT PICOULT'S FAILURE TO SATISFACTORILY PERFORM THE WORK REQUIRED UNDER THE MINNEAPOLIS CONTRACT WAS ATTRIBUTABLE PRIMARILY TO PICKETING AT THE JOB SITE, WHICH RESULTED FROM PICOULT'S REFUSAL TO RECOGNIZE THE ST. PAUL I.B.E.W. LOCAL 110 AS THE BARGAINING AGENT FOR EMPLOYEES ON THE ST. PAUL JOB. THIS CONCLUSION APPEARS TO BE IN ACCORD WITH THE POSITION OF YOUR ADMINISTRATION, AS SET OUT IN THE BRIEF FOR GENERAL SERVICES ADMINISTRATION ON PICOULT'S APPEAL FROM THE TERMINATION FOR DEFAULT ON THE MINNEAPOLIS CONTRACT.

THE RECORDS SUBMITTED TO THIS OFFICE SHOW THAT VARIOUS CHARGES OF UNFAIR LABOR PRACTICES IN CONNECTION WITH THE ST. PAUL AND MINNEAPOLIS JOBS WERE FILED WITH THE NLRB BY BOTH PICOULT AND LOCAL 110. THE INITIAL CHARGES RESULTED IN A SETTLEMENT AGREEMENT ON NOVEMBER 28, 1961, ENTERED INTO WITH THE APPROVAL OF THE NLRB, WHEREBY PICOULT RECOGNIZED THE UNION AS THE PROPER BARGAINING REPRESENTATIVE ON THE ST. PAUL JOB AND AGREED TO NEGOTIATE FOR A COLLECTIVE BARGAINING AGREEMENT. THE FACT THAT THE ST. PAUL CONTRACT HAD BEEN TERMINATED FOR CONVENIENCE ON NOVEMBER 16, 1961, AND NO PICOULT EMPLOYEES WHOM LOCAL 110 COULD REPRESENT REMAINED AT THE JOB SITE, APPEARS TO HAVE RESULTED IN THE FILING OF SUBSEQUENT CHARGES BY THE UNION THAT PICOULT HAD FAILED TO BARGAIN IN GOOD FAITH. ON JUNE 4, 1962, THE NLRB ADVISED THE UNION THERE WAS INSUFFICIENT INFORMATION TO SUPPORT SUCH CHARGES AND REFUSED TO ISSUE A COMPLAINT AGAINST PICOULT.

WHILE WE EXPRESS NO PRESENT OPINION ON THE PROPRIETY OF YOUR ADMINISTRATION'S POSITION, AS SET OUT IN YOUR BRIEF ON PICOULT'S APPEAL FROM THE DEFAULT TERMINATION ON THE MINNEAPOLIS CONTRACT, THAT THE RECORD INDICATES A FAILURE ON THE PART OF PICOULT TO BARGAIN WITH THE UNION IN GOOD FAITH AND THAT PICKETING OF THE MINNEAPOLIS JOB WAS THE RESULT OF SUCH FAILURE, IT IS OUR OPINION THAT THE PROPRIETY, OR IMPROPRIETY, OF PICOULT'S LABOR PRACTICES IN CONNECTION WITH THE ST. PAUL CONTRACT IS NOT A PROPER MATTER FOR CONSIDERATION OR DETERMINATION IN DECIDING PICOULT'S RESPONSIBILITY AS A BIDDER ON SUBSEQUENT CONTRACTS UNLESS CIRCUMSTANCES AND RESULTS SIMILAR TO THOSE INVOLVED IN THE ST. PAUL AND MINNEAPOLIS CONTRACTS CAN REASONABLY BE EXPECTED TO OCCUR IN THE PERFORMANCE OF SUCH FUTURE CONTRACTS. IN THIS CONNECTION IT SHOULD BE NOTED THAT THE DECISIONS OF THIS OFFICE HAVE CONSISTENTLY RECOGNIZED THE PRINCIPLE THAT A DEFAULT BY A BIDDER UNDER A PRIOR CONTRACT IS NOT PER SE A SUFFICIENT BASIS FOR DECLARING HIM A NONRESPONSIBLE BIDDER, AND THAT THE CIRCUMSTANCES OF THE CONTRACTOR'S FAILURE TO PERFORM PROPERLY AND IN A TIMELY MANNER MUST ALSO BE CONSIDERED. 39 COMP. GEN. 705; 37 ID. 756; 27 ID. 621.

THE RECORD INDICATES THAT PICOULT COMMENCED PERFORMANCE OF THE ST. PAUL AND MINNEAPOLIS CONTRACTS WITHOUT LOCAL UNION AFFILIATION, AND THAT THE DISPUTE WITH LOCAL 110 IN ST. PAUL, TOGETHER WITH PICKETING OF THE MINNEAPOLIS JOB SITE, AROSE OUT OF THE UNION'S ATTEMPT TO "ORGANIZE THE JOB.' WE SEE NO SOUND BASIS ON WHICH IT MAY BE CONTENDED THAT SIMILAR LABOR DIFFICULTIES MAY REASONABLY BE EXPECTED TO DEVELOP IN PERFORMING CONTRACTS FOR $6,417 AND $8,336 IN NEW YORK, WHERE PICOULT MAINTAINS A "CLOSED SHOP" AND HAS A COLLECTIVE BARGAINING AGREEMENT WITH LOCAL 199, INDUSTRIAL WORKERS OF ALLIED TRADE, AN AFFILIATE OF THE CONFEDERATE UNION OF AMERICA. OUR DOUBT THAT SIMILAR CIRCUMSTANCES MAY REASONABLY BE EXPECTED TO DEVELOP IN NEW YORK IS INCREASED BY THE FACT THAT IN JUNE, 1960, PICOULT SATISFACTORILY COMPLETED WORK OF THE VALUE OF APPROXIMATELY $1,000,000 AT THE NEW YORK MORGAN ANNEX, APPARENTLY WITHOUT DELAY ATTRIBUTABLE TO LABOR DIFFICULTIES.

AS INDICATED IN YOUR ADMINISTRATION'S SUPPLEMENTAL REPORT OF AUGUST 29, 1963, TO THIS OFFICE, NO CONSIDERATION WAS GIVEN, IN YOUR ADMINISTRATION'S DETERMINATION THAT PICOULT WAS NOT A RESPONSIBLE BIDDER ON THE NEW YORK PROJECTS, TO THE FACT THAT PICOULT MAINTAINS A CLOSED SHOP IN NEW YORK. NEITHER DOES IT APPEAR THAT CONSIDERATION WAS GIVEN TO ANY OTHER SIMILAR, OR DISSIMILAR, CIRCUMSTANCES, OR CONDITIONS BETWEEN THE MINNEAPOLIS AND NEW YORK PROJECTS.

IN VIEW OF THE FOREGOING, IT IS OUR OPINION THAT THE RECORD CONTAINS NO SUBSTANTIAL EVIDENCE TO SUPPORT YOUR ADMINISTRATION'S DETERMINATION THAT PICOULT WAS NOT THE LOW RESPONSIBLE BIDDER ON THE NEW YORK PROJECTS. SINCE THE PROVISIONS OF 41 U.S.C. 253 (B) REQUIRE THE AWARD OF ADVERTISED CONTRACTS TO THE LOW RESPONSIBLE BIDDER, IT IS OUR OPINION THAT THE AWARDS MADE BY YOUR ADMINISTRATION TO THE SECOND LOW BIDDERS ON THE NEW YORK PROJECTS WERE INVALID. WHILE SUCH CONCLUSION WOULD ORDINARILY REQUIRE CANCELLATION OF THE CONTRACTS, IN VIEW OF OUR UNDERSTANDING THAT WORK UNDER SUCH CONTRACTS IS NOW SUBSTANTIALLY COMPLETED, WE DO NOT BELIEVE THEIR CANCELLATION AT THE PRESENT TIME WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT.