B-172649, MAY 17, 1971

B-172649, MAY 17, 1971

BID PROTEST - DAVIS BACON ACT REINSTATED DECISION DENYING PROTEST AGAINST AWARD OF A CONTRACT TO ANY OTHER FIRM UNDER AN IFB ISSUED BY NAVAL FACILITIES ENGINEERING COMMAND. IN VIEW OF DEPARTMENT OF LABOR'S MEMORANDUM #93 AND #94 THE COMP. GEN. IS UNABLE TO CONCLUDE THAT THE PRESIDENTIAL PROCLAMATION REINSTATING THE PROVISIONS OF THE DAVIS-BACON ACT ELIMINATED THE "COMPELLING REASON" ON WHICH THE ORIGINAL IFB WAS CANCELLED. BECAUSE THE REQUIREMENTS WERE RESOLICITED DURING THE EFFECTIVE PERIOD OF THE SUSPENSION OF THE ACT THERE IS NO BASIS FOR CONCLUDING THAT IT IS MANDATORY ON THE CONTRACTING AGENCY TO REINSTATE THE ORIGINAL BIDS.

TO MORGAN, LEWIS AND BOCKIUS:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF APRIL 20, 27 AND 29, 1971, PROTESTING IN BEHALF OF FUSCO AMATRUDA COMPANY (FUSCO), THE FAILURE OF THE NAVAL FACILITIES ENGINEERING COMMAND TO AWARD THAT COMPANY A CONTRACT UNDER IFB NO. N62472-71-C-0104.

FUSCO SUBMITTED THE LOWEST BID UNDER THE IFB. HOWEVER, THE IFB WAS CANCELLED ON MARCH 17, 1971, BY THE PROCURING ACTIVITY AND WAS REISSUED ON MARCH 19, 1971, WITH A NEW BID OPENING DATE OF MAY 18, 1971, AS N62472-71- C-0104-REVISED, WITHOUT THE PROVISIONS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A.

AUTHORITY FOR THE PROCUREMENT AGENCY'S ACTION IN CANCELLING AND READVERTISING THE PROCUREMENT WITHOUT THE PROVISIONS OF THE DAVIS-BACON ACT STEMS FROM THE ACT ITSELF, SECTION 6 OF WHICH PROVIDES:

"IN THE EVENT OF A NATIONAL EMERGENCY THE PRESIDENT IS AUTHORIZED TO SUSPEND THE PROVISIONS OF THIS ACT." SUSPENSION ACTION WAS TAKEN THEREUNDER BY PRESIDENTIAL PROCLAMATION 4031, DATED FEBRUARY 23, 1971, AND CANCELLATION OF THE IFB FOLLOWED.

YOU CONCEDE THAT PRESIDENTIAL PROCLAMATION 4031 CONSTITUTED A "COMPELLING REASON," WITHIN THE MEANING OF THAT TERM AS USED IN ASPR 2 404.1(A), FOR CANCELLING IFB-0104, REJECTING ALL BIDS RECEIVED THEREUNDER, AND READVERTISING UNDER IFB-0104-REVISED FOR BIDS WHICH WERE NOT SUBJECT TO THE DAVIS-BACON ACT. HOWEVER, YOU CONTEND THAT WHEN THE PRESIDENT ISSUED PROCLAMATION 4040 ON MARCH 29, AND THEREBY REACTIVATED THE DAVIS-BACON ACT, SUCH ACTION ELIMINATED THE COMPELLING REASON ON WHICH CANCELLATION OF IFB-0104 WAS BASED. IT FOLLOWS, YOU CONTEND, THAT SINCE A COMPELLING REASON FOR REJECTING THE BIDS UNDER IFB-0104 NO LONGER EXISTS, SUCH BIDS MUST NOW BE REINSTATED AND AN AWARD SHOULD BE MADE THEREUNDER. IN THIS CONNECTION, YOU ARGUE AS FOLLOWS:

"ASPR 2-404.1(A) PLAINLY STATES THAT ITS PURPOSE IS TO PRESERVE THE INTEGRITY OF THE COMPETITIVE BID SYSTEM, AND THAT, AFTER BIDS ARE OPENED, IT IS ESSENTIAL TO THE PRESERVATION OF THE INTEGRITY OF THAT SYSTEM THAT THE AWARD BE MADE TO THE RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID, UNLESS THERE IS A COMPELLING REASON FOR NOT MAKING SUCH AWARD. IT IS CLEAR, THEREFORE, THAT THE PROCURING AGENCY IS RELIEVED OF THAT MANDATORY OBLIGATION OF MAKING THE AWARD TO THE LOW, RESPONSIVE, RESPONSIBLE BIDDER ONLY IF IT IS ACTING UNDER THE COMPULSION OF A REASON WHICH PREVENTS SUCH AWARD BEING MADE. IN OTHER WORDS, THIS MANDATORY AWARD MUST BE MADE UNLESS THE COMPELLING REASON, WHICH PREVENTS SUCH AWARD, CONTINUES UNTIL A VALID AWARD IS MADE UNDER A RESOLICITATION, OR THE PROCUREMENT IS ABANDONED. THIS IS THE ONLY INTERPRETATION WHICH CAN BE GIVEN ASPR 2-404.1(A) WHICH ACCORDS IT WITH ITS PURPOSE. IF AFTER OPENING OF BIDS, AN AWARD IS NOT MADE TO THE LOW, RESPONSIVE, RESPONSIBLE BIDDER BECAUSE A COMPELLING REASON PREVENTS SUCH AWARD, AND THAT COMPELLING REASON IS ELIMINATED, THE PROCURING AGENCY VIOLATES THIS MANDATORY REQUIREMENT IF IT DOES NOT MAKE THE AWARD TO THAT BIDDER, BECAUSE THERE IS NO LONGER ANY COMPELLING REASON WHICH PREVENTS THAT AWARD."

"APPLYING THE FOREGOING LAW TO THE PROCUREMENT INVOLVED IN THIS PROTEST, AN AWARD WOULD HAVE BEEN MADE ON THE BASIS OF PROTESTANT'S BID, HAD IT NOT BEEN FOR THE ISSUANCE OF PROCLAMATION 4031, WHICH RESULTED IN THE REJECTION OF THAT BID. ON MARCH 19, 1971, THE PROCUREMENT WAS RESOLICITED ON SPECIFICATIONS IDENTICAL WITH THOSE ON WHICH PROTESTANT'S BID WAS SUBMITTED, WITH THE EXCEPTION THAT IN THE LATER INVITATION THE CONTRACT WAS FREED FROM THE EFFECT OF THE DAVIS BACON ACT. ON MARCH 29, THE PRESIDENT, IN PROCLAMATION 4040, REVOKED PROCLAMATION 4031, AND REINSTATED THE DAVIS-BACON ACT, AND THAT ACTION ELIMINATED THE COMPELLING REASON WHICH HAD PREVENTED THE AWARD OF THE CONTRACT TO PROTESTANT ON THE LOW RESPONSIVE BID IT HAD SUBMITTED IN RESPONSE TO THE INITIAL INVITATION. THUS, UNDER THE FOREGOING LAW, AND UNDER THE SPECIFIC PROVISIONS OF ASPR 2 -404.1(A), WHICH, AS YOU KNOW, HAS THE FORCE AND EFFECT OF LAW, ON THE ISSUANCE OF PROCLAMATION 4040 IT BECAME MANDATORY THAT THE PROCURING AGENCY AWARD THE CONTRACT TO PROTESTANT, BECAUSE THERE WAS NO COMPELLING REASON WHY SUCH AWARD COULD NOT BE MADE."

PRESIDENTIAL PROCLAMATION 4040 READS, IN PERTINENT PART, AS FOLLOWS:

" *** DO BY THIS PROCLAMATION REVOKE PROCLAMATION NO. 4031 OF FEBRUARY 23, 1971, AS TO ALL CONSTRUCTION CONTRACTS FOR WHICH SOLICITATIONS FOR BIDS OR PROPOSALS ARE ISSUED AFTER THE DATE OF THIS PROCLAMATION *** ."

SINCE THIS PROCLAMATION WAS, BY ITS TERMS, LIMITED TO CONTRACTS FOR WHICH SOLICITATIONS FOR BIDS OR PROPOSALS WERE ISSUED AFTER MARCH 29 WE DO NOT BELIEVE THAT THE PROCLAMATION REINSTATED, OR WAS INTENDED TO REINSTATE, THE DAVIS-BACON ACT WITH RESPECT TO SOLICITATIONS, SUCH AS IFB-0104, WHICH WERE ISSUED BETWEEN FEBRUARY 23 AND MARCH 29. THIS CONCLUSION IS SUPPORTED BY THE PROVISIONS OF THE DEPARTMENT OF LABOR'S MEMORANDUM #93, WHICH READ, IN PERTINENT PART, AS FOLLOWS:

"UNDER PROCLAMATION 4040 OF MARCH 29, 1971, REVOKING THE DAVIS-BACON SUSPENSION IMPOSED BY PROCLAMATION 4031 OF FEBRUARY 23, 1971, FEDERAL WAGE PAYMENT REQUIREMENTS DEPENDENT ON WAGE DETERMINATIONS OF THE SECRETARY OF LABOR ARE ONCE AGAIN MADE APPLICABLE TO -

"SOLICITATIONS (ISSUED AFTER MARCH 29, 1971) FOR BIDS OR PROPOSALS ON FEDERAL OR FEDERALLY ASSISTED CONSTRUCTION OF A CHARACTER SUBJECT TO THE PREVIOUS SUSPENSION; AND

"BY ITS TERMS, PROCLAMATION 4040 DOES NOT SPECIFICALLY REQUIRE CHANGES IN PENDING PROCUREMENT ACTIONS OR CONTRACT PROCEDURES WITH RESPECT THERETO WHICH WERE INITIATED PRIOR TO THE REVOCATION OF THE SUSPENSION.

"WHERE BIDS OR PROPOSALS FOR CONTRACT WORK WERE SOLICITED SUBJECT TO DAVIS-BACON PROVISIONS PRIOR TO PROCLAMATION 4031 SUSPENDING SUCH PROVISIONS WITH RESPECT TO 'CONTRACTS ENTERED INTO' ON OR AFTER FEBRUARY 23, 1971, AND NO FURTHER ACTION HAS BEEN TAKEN AND NO CONTRACT ENTERED INTO PURSUANT TO SUCH SOLICITATION BETWEEN FEBRUARY 23 AND MARCH 29, 1971, INCLUSIVE, IT WOULD APPEAR THAT NO CONTRACT OR SOLICITATION THEREFOR BECAME SUBJECT TO THE SUSPENSION PROCLAMATION BEFORE THE REVOCATION BY PROCLAMATION 4040 AND THAT THE ADDITIONAL EFFORT AND EXPENSE OF ISSUING A RESOLICITATION AFTER MARCH 29, 1971 WOULD NOT BE REQUIRED AS A RESULT SOLELY OF THE TWO PROCLAMATIONS. *** "

THE INTENTION THAT SOLICITATIONS ISSUED BETWEEN FEBRUARY 23 AND MARCH 29 SHOULD CONTINUE TO BE EXEMPT FROM THE DAVIS-BACON ACT IS MADE EVEN CLEARER BY THE FOLLOWING PROVISIONS OF THE DEPARTMENT'S MEMORANDUM #94:

"IT HAS BEEN BROUGHT TO OUR ATTENTION THAT A NUMBER OF AGENCIES HAVE PENDING PROCUREMENT ACTIONS FOR CONSTRUCTION PROJECTS ON WHICH BIDS OR PROPOSALS WERE SOLICITED WITHOUT DAVIS-BACON WAGE PAYMENT PROVISIONS DURING THE PERIOD FROM FEBRUARY 23 TO MARCH 29, INCLUSIVE, AS A RESULT OF THE SUSPENSION BY PROCLAMATION 4031, AND TO WHICH THE DAVIS-BACON ACT, EXCEPT FOR THE EFFECT OF THE SUSPENSION, WOULD BE APPLICABLE.

"FOR THE FURTHER GUIDANCE OF THE AGENCIES OF THE FEDERAL GOVERNMENT AND THE DISTRICT OF COLUMBIA WITH RESPECT TO THESE PENDING PROCUREMENT ACTIONS, THE PRESIDENT HAS ASKED ME TO EXPLAIN THAT IN THE CASE OF CONTRACTS NOT YET ENTERED INTO AS A RESULT OF THE SOLICITATION OF BIDS OR PROPOSALS DURING THE PERIOD WHEN PROCLAMATION 4031 WAS EFFECTIVE, EACH AGENCY SHOULD, IF IT CAN DO SO LEGALLY AND WITHOUT UNDUE HARDSHIP, TAKE SUCH ACTION TO ACCOMPLISH A RESOLICITATION OF BIDS OR PROPOSALS AS IS AUTHORIZED UNDER THE GOVERNING PROCUREMENT LAWS AND REGULATIONS AND IS MOST APPROPRIATE TO EFFECT A REINSTATEMENT OF THE APPLICATION OF THE DAVIS -BACON PROVISIONS TO THE PROPOSED CONTRACT WORK."

TO THE SAME EFFECT, SEE PARAGRAGH B. OF THE MEMORANDUM ENTITLED "REINSTATEMENT OF DAVIS-BACON ACT PROVISIONS" ISSUED BY THE ASSISTANT SECRETARY OF DEFENSE ON MARCH 30, WHICH READS:

"B. SOLICITATIONS ISSUED AFTER FEBRUARY 23, 1971, BUT BEFORE MARCH 30, 1971, SHALL NOT CONTAIN THE DAVIS-BACON ACT PROVISIONS."

IN VIEW OF THE FOREGOING, WE ARE UNABLE TO AGREE WITH YOUR CONTENTION THAT PRESIDENTIAL PROCLAMATION 4040 REINSTATED THE DAVIS-BACON ACT WITH RESPECT TO IFB-0104, REVISED, OR THAT IT ELIMINATED THE COMPELLING REASON WHICH PREVENTED AN AWARD UNDER IFB-0104. CONVERSELY, IT IS OUR OPINION THAT PROCLAMATION 4040 CLEARLY INDICATES THAT PROCLAMATION 4031 WAS TO REMAIN IN EFFECT AS TO SOLICITATIONS ISSUED ON OR BEFORE MARCH 29. WHILE WE HAVE RECOGNIZED THE PROPRIETY OF REINSTATING THE ORIGINAL BIDS WHERE NO RESOLICITATION WAS ISSUED BETWEEN FEBRUARY 23 AND MARCH 29, (SEE B-172640, MAY 12, 1971), AND WE AGREE THAT THE DEPARTMENT OF LABOR'S MEMORANDUM #94 PERMITS AN AGENCY VOLUNTARILY TO AMEND A RESOLICITATION ISSUED BETWEEN SUCH DATES SO AS TO INCLUDE DAVIS-BACON ACT PROVISIONS, WE SEE NO VALID BASIS FOR CONCLUDING THAT IT IS MANDATORY ON THE CONTRACTING AGENCY TO REINSTATE THE ORIGINAL BIDS UNDER THE CIRCUMSTANCES IN THE INSTANT CASE. B-172102, APRIL 23, 1971.

WITH RESPECT TO YOUR ADVICE THAT THE WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY (METRO) RECENTLY REINSTATED THE ORIGINAL BIDS UNDER CIRCUMSTANCES SIMILAR TO THOSE IN THE PRESENT CASE, WE HAVE NO KNOWLEDGE OF SUCH ACTION. HOWEVER, IT SHOULD BE NOTED THAT METRO IS A QUASI- GOVERNMENTAL AGENCY WHOSE TRANSACTIONS ARE NOT SUBJECT TO THE SAME CONSIDERATIONS AND RESTRAINTS AS ARE APPLICABLE TO AGENCIES AND DEPARTMENTS OF THE FEDERAL GOVERNMENT, AND ITS ACTIONS THEREFORE ARE NOT FOR CONSIDERATION IN DETERMINING THE PROPER COURSE TO BE FOLLOWED BY FEDERAL AGENCIES.

IN VIEW THEREOF, AND SINCE IT IS OUR UNDERSTANDING THAT THE DEPARTMENT OF THE NAVY DOES NOT CONSIDER IT PROPER TO AMEND IFB-0104, REVISED, TO INCLUDE THE DAVIS-BACON ACT PROVISIONS, WE SEE NO BASIS FOR OBJECTION TO AN AWARD BASED UPON THE BIDS SOLICITED AND RECEIVED UNDER IFB-0104, REVISED, AS PRESENTLY CONSTITUTED.

ACCORDINGLY, YOUR PROTEST AGAINST SUCH ACTION MUST BE DENIED.