[Request for Reconsideration]

B-199548.2: Aug 13, 1982

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An organization requested reconsideration of a decision which rejected its claim that the Army's inclusion of a cost provision in a request for proposals (RFP) for an environmental survey contract was a violation of the Brooks Act. The Act prohibits the use of cost in selection procedures for military construction contracts. In the original decision, GAO held that, since the Brooks Act did not explicitly cover nonconstruction contracts, it did not preclude the use of cost in the selection procedures. However, after examining the Act's legislative history, GAO concluded that it is reasonable to assert that Congress intended the military to apply the Act's provisions to all military contracts, thus prohibiting the use of cost as an evaluation criteria. Accordingly, the earlier decision was reversed.

B-199548.2, AUG 13, 1982

DIGEST: PRIOR DECISION WHICH HELD THAT BROOKS ACT SELECTION POLICIES FOR ARCHITECT-ENGINEER CONTRACTS ARE APPLICABLE ONLY TO MILITARY CONSTRUCTION PROJECTS BY VIRTUE OF MILITARY CONSTRUCTION AUTHORIZATION ACTS IS REVERSED.

ASSOCIATION OF SOIL AND FOUNDATION ENGINEERS - RECONSIDERATION:

THE ASSOCIATION OF SOIL AND FOUNDATION ENGINEERS (ASFE) REQUESTS RECONSIDERATION OF OUR DECISION IN ASSOCIATION OF SOIL AND FOUNDATION ENGINEERS, B-199548, SEPTEMBER 15, 1980, 80-2 CPD 196. THERE, ASFE PROTESTED THAT THE ARMY ACTED IMPROPERLY WHEN, IN REQUESTING PROPOSALS FOR ENGINEERING AND TECHNICAL SERVICES FOR AN ENVIRONMENTAL SURVEY, IT REQUIRED THE INCLUSION OF A PRICE TERM CONTRARY TO THE PROVISIONS OF THE BROOKS ACT, 40 U.S.C. SEC. 541 ET SEQ. (1976). ASFE'S REQUEST FOR RECONSIDERATION IS PREMISED ON ITS BELIEF THAT THE LEGISLATIVE HISTORY OF THE BROOKS ACT AND RELATED STATUTES AND THE PAST AND CURRENT PRACTICES OF THE MILITARY DEPARTMENTS SHOW THAT IT WAS NOT THE INTENTION OF CONGRESS TO LIMIT THE APPLICATION BY THE MILITARY OF THE BROOKS ACT ARCHITECTURAL AND ENGINEERING (A/E) SELECTION PROCEDURES TO CONSTRUCTION PROJECTS. ASFE HAS ABANDONED THE PROTEST INSOFAR AS THE SPECIFIC PROCUREMENT IS CONCERNED. THIS DECISION, THEN, IS LIMITED TO THE BROADER LEGAL CONCLUSIONS ADDRESSED IN THE ORIGINAL DECISION. WE REVERSE OUR PRIOR DECISION.

ESSENTIALLY, THE BROOKS ACT REQUIRES THAT GOVERNMENT AGENCIES INITIALLY SELECT A/E FIRMS BASED ON THEIR QUALIFICATIONS RATHER THAN THROUGH PRICE CONSIDERATIONS. AT LEAST THREE FIRMS ARE SELECTED AND RANKED IN ORDER OF THEIR QUALIFICATIONS. NEGOTIATIONS ARE THEN HELD WITH THE BEST QUALIFIED FIRM, AT WHICH TIME PRICE BECOMES A FACTOR.

IN OUR ORIGINAL DECISION WE HELD, INTER ALIA, THAT STRICT APPLICATION OF THE BROOKS ACT WAS LIMITED TO CIVILIAN AGENCIES OF THE FEDERAL GOVERNMENT BECAUSE THE ACT ONLY AMENDED THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, WHICH IS NOT APPLICABLE TO DEFENSE AGENCIES. RECOGNIZED, HOWEVER, THAT THE BROOKS ACT SELECTION PROCEDURES HAVE BEEN ADOPTED IN SUBSTANCE BY THE DEPARTMENT OF DEFENSE (DOD) IN DEFENSE ACQUISITION REGULATION (DAR) SEC. 18-401 ET SEQ. (1976 ED.). WE HELD THAT BROOKS ACT PROCEDURES ADOPTED IN THE DAR WERE NECESSARILY LIMITED TO THE PROCUREMENT OF A/E SERVICES IN MILITARY CONSTRUCTION CONTRACTS, BECAUSE THE ONLY EXPLICIT STATUTORY AUTHORIZATION FOR THE APPLICATION OF THESE PROCEDURES IS CONTAINED IN THE ANNUAL MILITARY CONSTRUCTION AUTHORIZATION ACTS.

ASFE, HOWEVER, MAINTAINS THAT THE BROOKS ACT SELECTION PROCEDURES APPLY TO THE PROCUREMENT OF A/E SERVICES IN BOTH MILITARY CONSTRUCTION AND NON- CONSTRUCTION CONTRACTS. DOD, AND NOW THE ARMY, APPEAR TO BE IN SUBSTANTIAL AGREEMENT WITH ASFE.

BACKGROUND

THE BROOKS ACT WAS ENACTED IN 1972 LARGELY IN RESPONSE TO OUR 1967 REPORT IN WHICH WE OBSERVED THAT THE METHOD OF PROCURING A/E SERVICES TRADITIONALLY FOLLOWED BY ALL AGENCIES OF THE FEDERAL GOVERNMENT, DID NOT COMPLY WITH THE REQUIREMENTS OF THE LAW REGARDING COMPETITIVE NEGOTIATION. FN1 SEE S.REP. NO. 1219, 92D CONG., 2D SESS. 1 (1972). SPECIFICALLY, WE REPORTED THAT THERE WAS NO STATUTORY BASIS TO EXCEPT A/E CONTRACTS FROM THE REQUIREMENTS THAT THE MILITARY DEPARTMENTS SOLICIT PROPOSALS "FROM THE MAXIMUM NUMBER OF QUALIFIED SOURCES CONSISTENT WITH THE NATURE AND REQUIREMENTS OF THE SUPPLIES OR SERVICES TO BE PROCURED," AND CONDUCT DISCUSSIONS "WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED." 10 U.S.C. SEC. 2304(G). WE CONCLUDED THAT THE STATUTE REQUIRED PRICE COMPETITION AT SOME STAGE OF THE PROCUREMENT, AND WE THEREFORE RECOMMENDED THAT CONGRESS "CLARIFY ITS INTENT AS TO WHETHER THE COMPETITIVE NEGOTIATION REQUIREMENTS OF THE LAW ARE TO APPLY TO SUCH A/E PROCUREMENTS." FN2

INITIAL CLARIFICATION CAME IN THE LEGISLATIVE HISTORY OF PUBLIC LAW 90-500, 82 STAT. 851 (1968), WHICH AMENDED SECTION 2304(G) TO REQUIRE THE MILITARY DEPARTMENTS TO INCLUDE PRICE AS AN ELEMENT OF THE PROPOSALS SOLICITED. THE LAW NOW REQUIRES:

"IN ALL NEGOTIATED PROCUREMENTS IN EXCESS OF $10,000 IN WHICH RATES OR PRICES ARE NOT FIXED BY LAW OR REGULATION AND IN WHICH TIME OF DELIVERY WILL PERMIT, PROPOSALS, INCLUDING PRICE, SHALL BE SOLICITED ***."

ACCORDING TO THE CONFERENCE COMMITTEE WHICH CONSIDERED PUBLIC LAW 90-500:

"*** THE CONFEREES WISH TO MAKE IT ENTIRELY CLEAR THAT THEIR AGREEMENT ON THE INCLUSION OF THIS LANGUAGE IN THE BILL IS NOT INTENDED TO MODIFY IN ANY WAY THE TRADITIONAL METHOD OF PROCURING ARCHITECT-ENGINEER SERVICES." H.R.REP. NO. 1869, 90TH CONG., 2D SESS. 10 (1968).

CONGRESS CLARIFIED ITS INTENT FURTHER WITH RESPECT TO THE PROCUREMENT OF A/E SERVICES SPECIFICALLY BY PASSING THE BROOKS ACT AS AN AMENDMENT TO THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 (FPASA), 40 U.S.C. SEC. 471 ET SEQ. IN COMMENTING ON THE BILL THAT ULTIMATELY WAS ENACTED, BOTH THE SENATE AND HOUSE COMMITTEES ON GOVERNMENT OPERATIONS REPORTED:

"THIS POLICY EMBODIES THE TRADITIONAL METHOD OF ARCHITECT AND ENGINEER SELECTION AS REFLECTED IN THIS BILL. AND, FURTHER, IT SHOWS THAT CONGRESS CONSIDERS THIS SELECTION METHOD AS AN ACCEPTABLE APPLICATION OF COMPETITIVE NEGOTIATION FOR THE PROCUREMENT OF THESE SERVICES."

H.R.REP. NO. 1188, 92D CONG., 2D SESS. 9 (1972); S.REP. NO. 1219, SUPRA, 7.

ALTHOUGH THE BROOKS ACT PURPORTS TO STATE THE POLICY OF THE FEDERAL GOVERNMENT, IT IS NOT APPLICABLE PER'SE TO THE MILITARY DEPARTMENTS COVERED UNDER THE ARMED SERVICES PROCUREMENT ACT OF 1947 (ASPA), 10 U.S.C. SEC. 2301 ET SEQ. B-152306, JUNE 10, 1974. THE REASON ESSENTIALLY IS THAT THE ACT AMENDS THE FPASA, AND THE FPASA EXEMPTS FROM ITS PROVISIONS THOSE AGENCIES SUBJECT TO THE ASPA. 40 U.S.C. SEC. 474(3). THE DRAFTERS OF THE BROOKS ACT WERE WELL AWARE THAT IT WAS SUBJECT TO THE ABOVE-MENTIONED EXEMPTION AS THEY EXPRESSLY ACKNOWLEDGED IT IN BOTH THE HOUSE AND SENATE REPORTS. SEE H.R.REP. NO. 1188, SUPRA, 9; S.REP. NO. 1219, SUPRA, 7. THE SENATE REPORT EXPLAINS:

"SINCE THE MILITARY AGENCIES ARE CURRENTLY FOLLOWING THE ARCHITECT-ENGINEER SELECTION PROCEDURES AS SET FORTH IN H.R. 12807, AND WOULD BE EXPECTED TO CONTINUE SUCH PROCEDURES IN ACCORDANCE WITH THE STATEMENT OF POLICY CONTAINED IN H.R. 12807 (THE BILL THAT WAS ENACTED), FURTHER AMENDMENT OF THE MILITARY PROCUREMENT LAW IS NOT DEEMED NECESSARY." S.REP. NO. 1219, SUPRA, 6. RATIONALE OF OUR ORIGINAL DECISION

ALTHOUGH THE LEGISLATIVE HISTORY OF THE BROOKS ACT REVEALS THAT A MAJOR JUSTIFICATION FOR THE UNIQUE SELECTION PROCEDURES IS THE ANTICIPATED COST SAVINGS IN CONSTRUCTION AND MAINTENANCE OF A WELL DESIGNED FACILITY, THE LANGUAGE OF THE STATUTE DOES NOT LIMIT THE SCOPE OF THE SELECTION PROCEDURES TO CONSTRUCTION-RELATED A/E SERVICES. WE NONETHELESS HELD IN OUR ORIGINAL DECISION THAT THE APPLICATION OF THE BROOKS ACT PROCEDURES BY THE MILITARY WAS LIMITED TO CONSTRUCTION CONTRACTS BECAUSE OF THE ABSENCE OF ANY EXPLICIT STATUTORY AUTHORITY TO APPLY THESE PROCEDURES TO THE MILITARY OTHER THAN THAT WHICH FIRST APPEARS IN SECTION 604 OF THE MILITARY CONSTRUCTION AUTHORIZATION ACT OF 1971, PUBLIC LAW 91-511, 84 STAT. 1222 (1970).

SECTION 604 STATES THAT CONSTRUCTION CONTRACTS ARE TO BE AWARDED TO THE LOWEST COMPETITIVE BIDDER:

"*** EXCEPT ARCHITECT AND ENGINEERING CONTRACTS WHICH, UNLESS SPECIFICALLY AUTHORIZED BY THE CONGRESS, SHALL CONTINUE TO BE AWARDED IN ACCORDANCE WITH PRESENTLY ESTABLISHED PROCEDURES, CUSTOMS, AND PRACTICE ***."

LANGUAGE IDENTICAL TO SEC. 604 OF THE 1971 ACT OCCURS IN ALL SUBSEQUENT ANNUAL MILITARY CONSTRUCTION AUTHORIZATION ACTS.

WHILE THE QUOTED STATUTORY LANGUAGE IS AN EXPLICIT CONGRESSIONAL MANDATE TO CONTINUE "ESTABLISHED" PRACTICES, WE LIMITED ITS APPLICATION TO THE PROCUREMENT OF A/E SERVICES IN CONSTRUCTION CONTRACTS SINCE IT IS ONLY CONTAINED IN A CONSTRUCTION AUTHORIZATION ACT AND IN THE CONTEXT OF A PARAGRAPH DEALING ONLY WITH CONSTRUCTION. OUR INTERPRETATION OF THE LIMITS OF THIS EXEMPTION FROM NORMAL COMPETITIVE PROCUREMENT PROCEDURES IS CONSISTENT WITH THE PRINCIPAL RATIONALE OF THE BROOKS ACT LEGISLATIVE HISTORY - THE ANTICIPATED COST SAVINGS RELATED TO CONSTRUCTION.

RECONSIDERATION

WE HAVE BEEN ASKED TO REVIEW THE RELEVANT STATUTES AND THEIR LEGISLATIVE HISTORIES AGAIN AND UPON RECONSIDERATION WE REVERSE OUR DECISION BASED ON THE FOLLOWING CONSIDERATIONS.

AS STATED ABOVE, THE CONCERN WE EXPRESSED IN OUR 1967 REPORT TO THE CONGRESS WAS THAT 10 U.S.C. SEC. 2304(G) REQUIRED THAT PRICE BE A FACTOR IN COMPETITIONS FOR GOVERNMENT CONTRACTS, BUT THAT A/E PROCUREMENTS DID NOT INCLUDE PRICE COMPETITION. WE NOTE THAT THE LANGUAGE IN SEC. 2304(G) UPON WHICH WE BASED OUR CONCLUSION THAT PRICE COMPETITION WAS REQUIRED AT SOME STAGE OF THE COMPETITION - THAT DISCUSSIONS BE HELD WITH ALL RESPONSIBLE OFFERORS WHO SUBMIT PROPOSALS WITHIN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED - WAS NOT CHANGED BY THE 1968 AMENDMENT OF THAT SECTION.

THE LANGUAGE OF 10 U.S.C. SEC. 2304(G) AS AMENDED BY PUBLIC LAW 90 500 PLAINLY REQUIRES THE INCLUSION OF A PRICE TERM IN PROPOSALS SOLICITED FOR COMPETITIVE NEGOTIATION BY THE MILITARY. APPLIED LITERALLY, THEREFORE, 10 U.S.C. SEC. 2304(G) PRECLUDES THE USE OF BROOKS ACT PROCEDURES BY THE MILITARY WITHOUT ADDITIONAL STATUTORY AUTHORITY TO DO SO. HOWEVER, SENATOR STENNIS, A SPONSOR OF THE AMENDMENT AND A MEMBER OF THE COMMITTEE ON ARMED SERVICES, EXPLAINED TO HIS COLLEAGUES:

"IT IS NOT INTENDED THAT THIS LANGUAGE WILL OPERATE TO REQUIRE THE SELECTION OF ARCHITECTURAL AND ENGINEERING FIRMS ON THE BASIS OF PRICE QUOTATIONS." 144 CONG.REC. 26338 (1968).

IN REACHING OUR CONCLUSION, WE RECOGNIZE THAT THE BROOKS ACT WAS ENACTED AFTER THE 1968 AMENDMENTS TO 2304(G); THAT THE CONGRESS DID NOT EXPRESSLY EXEMPT A/E CONTRACTS FROM PRICE COMPETITION BY SPECIFIC LANGUAGE IN THE 1968 AMENDMENTS, AND THAT THE LEGISLATIVE HISTORY OF THE BROOKS ACT ITSELF SHOWS THAT THE CONGRESS EXPRESSLY REJECTED A PROPOSAL BY REPRESENTATIVE FLOYD HICKS, CHAIRMAN OF THE ARMED SERVICES COMMITTEE, TO AMEND THE ASPA TO ADOPT THE BROOKS ACT. MR. HICKS EXPLAINED THE PURPOSE OF HIS AMENDMENT AS FOLLOWS:

"MR. CHAIRMAN, THIS BILL, AS REPORTED, DOES NOT COVER ARCHITECT AND ENGINEER SERVICE PROCUREMENT IN THE DEPARTMENT OF DEFENSE AND OTHER AGENCIES UNDER THE ARMED SERVICES PROCUREMENT ACT OF 1947 AS AMENDED. MILITARY PROCUREMENT DOES NOT FALL WITHIN THE SUBSTANTIVE JURISDICTION OF THE HOUSE GOVERNMENT OPERATIONS COMMITTEE, AND MR. BROOKS, THE AUTHOR OF H.R. 12807, IN SCRUPULOUS OBSERVATION OF COMMITTEE JURISDICTION, LIMITED THE PROPOSAL HE INTRODUCED TO CONTRACTS BY THE GENERAL SERVICES ADMINISTRATION ***. AS A MEMBER OF THE ARMED SERVICES COMMITTEE AS WELL AS A MEMBER OF THE SUBCOMMITTEE THAT HAS HAD THIS PROBLEM UNDER CAREFUL REVIEW FOR A NUMBER OF YEARS, I BELIEVE THAT THE PROPOSAL SHOULD EXTEND TO ALL A/E PROCUREMENT THROUGHOUT THE GOVERNMENT."

118 CONG.REC. 25495, 25496 (1972).

NEITHER THE FACT THAT THE HICKS AMENDMENT WAS DEFEATED NOR THE STATEMENTS MADE IN CONGRESSIONAL DEBATE ON THE SUBJECT ARE CONCLUSIVE. FOX V. STANDARD OIL CO., 294 U.S. 87, 95 (1935). THE FINAL COMMITTEE REPORT ON THE BROOKS ACT ALONE SUGGESTS STRONGLY THAT THE CONGRESS DID NOT BELIEVE IT NECESSARY TO AMEND ASPA TO EXTEND THE BROOKS ACT SELECTION PROCEDURES TO MILITARY PROCUREMENTS. S.REP. NO. 92-1219, SUPRA, 6.

AFTER EXAMINING THE LANGUAGE AND HISTORY OF THE BROOKS ACT, OF 10 U.S.C. SEC. 2304(G) AND THE PAST AND PRESENT PRACTICES OF DOD, WE CONCLUDE IT IS REASONABLE TO ASSERT THAT CONGRESS INTENDED THE MILITARY TO ADHERE TO THOSE TRADITIONAL METHODS OF A/E SELECTION EMBODIED IN THE BROOKS ACT TO THE SAME EXTENT AS THE CIVILIAN AGENCIES OF THE FEDERAL GOVERNMENT. IT IS REASONABLE TO READ THE EXCEPTION FOR A/E CONTRACTOR SELECTION TO THE COMPETITIVE REQUIREMENTS IN SECTION 604 OF THE MILITARY CONSTRUCTION AUTHORIZATION ACT AS APPLYING TO A/E CONTRACTS GENERALLY, RATHER THAN TO CONSTRUCTION ONLY, SINCE IT IS CLEAR THAT THE CONGRESS IS AWARE OF THE LONG STANDING NONCOMPETITIVE A/E SELECTION PRACTICES OF THE MILITARY. THE MATTER IS, HOWEVER, NOT FREE FROM DOUBT, AND WE ARE THEREFORE SENDING COPIES OF THIS DECISION TO THE APPROPRIATE COMMITTEES OF CONGRESS FOR WHATEVER LEGISLATIVE ACTION THEY MAY DEEM WARRANTED.

THE DECISION IS REVERSED.

FN1 REPORT TO THE CONGRESS BY THE COMPTROLLER GENERAL OF THE UNITED STATES, "GOVERNMENT-WIDE REVIEW OF THE ADMINISTRATION AND CERTAIN STATUTORY AND REGULATORY REQUIREMENTS RELATING TO ARCHITECT-ENGINEER FEES" (B-152306, APRIL 1967), 27.

FN2 ID. AT 32, 33.

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