B-170681, OCT. 22, 1970

B-170681, OCT. 22, 1970

BID PROTEST - SUBCONTRACTS - SMALL BUSINESS DENIAL OF PROTEST AGAINST AWARD BY PRIME CONTRACTOR GORDON H. BALL, INC., TO SUBCONTRACTOR TO FURNISH FLAP VALVE WEEP ASSEMBLIES AWARDED TO R.F. DILL & ASSOCIATES. PROTESTANT WHO ALLEGES SUBCONTRACTOR WILL NOT PRODUCE SUBJECT MATTER, IRREGULARITY IN SUBMISSION OF BID BY SUBCONTRACTOR MAY NOT HAVE PROTEST SUSTAINED BECAUSE NO PRIVITY OF CONTRACT BETWEEN GOVERNMENT AND SUBCONTRACTOR, THEREFORE NO JURISDICTION TO DECIDE THIS ISSUE AND NO EVIDENCE OF IRREGULARITY. FURTHER NO VIOLATION OF PRIME CONTRACT WHICH DOES NOT REQUIRE SUBCONTRACTING, BUT PERMITS IT TO AWARD TO SMALL BUSINESSES WHERE QUALIFICATION HAVE BEEN SATISFIED. REGULATIONS OF S.B.A. ARE ONLY APPLICABLE WHERE U.S. AWARDS CONTRACTS, NOT TO SUBCONTRACTS AWARDED BY PRIVATE COMPANIES.

TO LOPEZ, VILLA AND NUNEZ:

THIS CONCERNS YOUR PROTEST BY LETTER OF AUGUST 21, 1970, ON BEHALF OF MR. ROBERT E. WELLS, D/B/A REDELCO PLASTICS, AGAINST THE AWARD OF A SUBCONTRACT TO R. F. DILL AND ASSOCIATES BY GORDON H. BALL, INCORPORATED, UNDER THEIR PRIME CONTRACT WITH THE BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR.

YOUR PROTEST AGAINST THIS SUBCONTRACT AWARD BY GORDON H. BALL IS BASED UPON THE CONTENTION THAT GORDON H. BALL IGNORED THE SMALL BUSINESS SUBCONTRACTING POLICY SET FORTH IN THEIR PRIME CONTRACT WITH THE BUREAU OF RECLAMATION. THIS IS PREMISED ON THE BELIEF THAT R. F. DILL IS AN AGENT OF B. F. GOODRICH AND WILL NOT PRODUCE THE FLAP VALVE WEEP ASSEMBLIES CALLED FOR UNDER THE SUBCONTRACT. YOU ALSO BELIEVE THE MANNER OF SELECTING R. F. DILL AS THE SUBCONTRACTOR WAS IRREGULAR ON THE PREMISES THAT R. F. DILL KNEW OF YOUR QUOTED PRICE AND DID NOT SUBMIT THEIR PRICE UNTIL TWO HOURS PRIOR TO CLOSE OF BIDDING.

IT IS A WELL SETTLED RULE OF LAW THAT THERE IS NO PRIVITY OF CONTRACT BETWEEN SUBCONTRACTORS AND THE UNITED STATES. SEE UNITED STATES V DRISCOLL, 96 U.S. 421 (1877); MERRITT V UNITED STATES, 267 U.S. 338 (1925), AND ARMSTRONG V UNITED STATES, 169 F. SUPP. 259 (1959). AS A RESULT THIS OFFICE DOES NOT HAVE JURISDICTION TO RESOLVE DISPUTES BETWEEN A PRIME CONTRACTOR AND SUBCONTRACTOR. THIS RULE APPLIES WITH EQUAL FORCE TO PROSPECTIVE SUBCONTRACTORS OR COMPETITORS FOR A SUBCONTRACT. THEREFORE OUR ONLY BASIS FOR CONSIDERING YOUR PROTEST IS THAT GEORGE H. BALL BREACHED THE TERMS OF ITS PRIME CONTRACT WITH THE BUREAU OF RECLAMATION.

GORDON H. BALL'S PRIME CONTRACT REQUIRED THAT COMPANY TO ESTABLISH A PROGRAM WHICH WOULD ENABLE SMALL BUSINESSES TO BE FAIRLY CONSIDERED AS SUBCONTRACTORS. THE PRIME CONTRACT DOES NOT REQUIRE SUBCONTRACT AWARDS TO SMALL BUSINESSES. RATHER IT REQUIRES THAT SUCH BUSINESSES BE GIVEN AN EQUAL OR FAIR CHANCE TO COMPETE FOR SUBCONTRACTS. WE BELIEVE GORDON H. BALL COMPLIED WITH THAT REQUIREMENT. FIRST, R. F. DILL HAS FURNISHED A CERTIFICATE STATING THEY QUALIFY AS A SMALL BUSINESS CONCERN AND HAVE A GROSS INCOME OF $100,000 TO $150,000 PER YEAR. SECOND, WHILE THE PIPE IS MANUFACTURED BY GOODRICH, R. F. DILL WILL PERFORM THE CUTTING AND MACHINING OF THE BRASS AND PLASTIC TUBING, THE FORMING OF THE TOP AND BOTTOM PIECES, AND WILL ASSEMBLE THE FLAP VALVE WEEP ASSEMBLY UNITS AT THEIR PLANT. THIRD, CONTRARY TO YOUR INFORMATION, R. F. DILL SUBMITTED THEIR PRICE QUOTATION FOR THIS WORK ONE DAY PRIOR TO BID OPENING AND THE PRIME CONTRACTOR DENIES THAT ANY OTHER OFFERS WERE EXPOSED TO THAT COMPANY. FINALLY, R. F. DILL REQUESTED A BID FROM ROBERT E. WELLS FOR VARIOUS FLAP VALVE ASSEMBLIES BECAUSE OF AN ACCELERATED DELIVERY SCHEDULE FOR WHICH UNITS IN EXISTENCE WERE REQUIRED.

FOR THESE REASONS WE MUST CONCLUDE THAT GORDON H. BALL COMPLIED WITH THE PROVISION IN ITS PRIME CONTRACT RESPECTING SMALL BUSINESS SUBCONTRACTING. WE HAVE ALSO CONSIDERED YOUR STATEMENT THAT THE REGULATIONS OF THE SMALL BUSINESS ADMINISTRATION HAVE NOT BEEN FOLLOWED IN AWARDING THIS SUBCONTRACT. IN THAT REGARD YOU MAY BE ADVISED THAT THOSE REGULATIONS ARE APPLICABLE TO THE AWARD OF CONTRACTS BY THE UNITED STATES AND NOT TO SUBCONTRACTS AWARDED BY PRIVATE COMPANIES.

ACCORDINGLY, YOUR PROTEST IS DENIED.