B-172006, MAY 13, 1971, 50 COMP GEN 807

B-172006, MAY 13, 1971, 50 COMP GEN 807

BIDS - DISCARDING ALL BIDS - SPECIFICATIONS DEFECTIVE - FEDERAL PROCUREMENT REGULATIONS REQUIREMENTS AN INVITATION FOR THE INSTALLATION OF HEAVY EQUIPMENT REPLACEMENTS THAT OMITTED THE DAVIS-BACON ACT ON THE BASIS THE PROCUREMENT DID NOT CONTEMPLATE CONSTRUCTION, ALTERATION, OR REPAIR OF A PUBLIC BUILDING, AND INCORPORATED THE PROVISIONS OF THE WALSH-HEALEY ACT, WHICH REQUIRES A CONTRACTOR TO BE A MANUFACTURER OF OR A REGULAR DEALER IN THE EQUIPMENT TO BE SUPPLIED, AND A PROVISION FOR BIDDERS TO ATTEST TO THEIR EXPERIENCE AND COMPETENCY SHOULD BE CANCELED AND REISSUED BY THE CONTRACTING AGENCY UNDER THE GUIDELINES IN SECTION 1-12.402-2 OF THE FEDERAL PROCUREMENT REGULATIONS FOR DETERMINING WHETHER SUBSTANTIAL AMOUNTS OF CONSTRUCTION, ALTERATION, OR REPAIR WORK WOULD BE INVOLVED, ALSO TAKING INTO CONSIDERATION THE FACT THAT NO BIDDER QUALIFIED AS A MANUFACTURER OR DEALER TO BE ELIGIBLE FOR AWARD, AND THAT THE SOLICITATION IN REQUIRING EXPERIENCE AND COMPETENCY ATTESTATION WAS UNDULY RESTRICTIVE OF COMPETITION.

TO SADUR, PELLAND AND BRAUDE, MAY 13, 1971:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 16, 1971, TO THE UNITED STATES GOVERNMENT PRINTING OFFICE (GPO) PROTESTING ON BEHALF OF THE KENNEDY ELECTRIC COMPANY, INC., AGAINST THE AWARD OF ANY CONTRACT UNDER PURCHASE REQUEST NO. 12770.

IT IS YOUR CONTENTION THAT:

DESPITE THE FACT THAT THE PROCUREMENT CALLS FOR REVISION TO THE EXISTING PROTECTIVE RELAY SYSTEM, REVISIONS TO THE EXISTING VOLT CIRCUITS, INSTALLATION OF A NEW VOLT CIRCUIT WITH PROTECTIVE RELAYING SYSTEM, REPLACEMENT OF EXISTING TRANSFORMERS, INSTALLATION OF A COMPLETE NEW SUBSTATION, REMOVAL OF EXISTING ROTARY CONVERTER EQUIPMENT AND BUS, AND INSTALLATION OF SOLID STATE RECTIFIERS (ALL OF WHICH REQUIRE WORK TO BE PERFORMED DIRECTLY ON THE SITE OF THE WORK), THE INVITATION DID NOT INCLUDE THE DAVIS-BACON ACT.

YOU QUESTION THE OMISSION OF DAVIS-BACON ACT PROVISIONS, 40 U.S.C. 276A, WHICH MUST BE INCLUDED IN CONTRACTS FOR CONSTRUCTION, ALTERATION, OR REPAIR OF A PUBLIC BUILDING, AND THE INCORPORATION OF THE PROVISIONS OF THE WALSH-HEALEY ACT 41 U.S.C. 35 NOTE, IN THE SOLICITATION, WHICH REQUIRE THE CONTRACTOR TO BE A MANUFACTURER OF, OR A REGULAR DEALER IN, THE SUPPLIES OR EQUIPMENT TO BE MANUFACTURED OR USED IN THE PERFORMANCE OF THE CONTRACT. FURTHER, YOU STATE THAT THIS PROCUREMENT DOES NOT QUALIFY UNDER THE WALSH-HEALEY ACT, AND THAT NONE OF THE BIDDERS IS A MANUFACTURER OF OR A REGULAR DEALER OF THE EQUIPMENT TO BE USED.

IT IS GPO'S POSITION THAT THE NATURE OF THE PROCUREMENT IS THE INSTALLATION OF PERSONAL PROPERTY (EQUIPMENT) AND THAT THE PROCUREMENT DOES NOT CONTEMPLATE CONSTRUCTION, ALTERATION OR REPAIR OF A PUBLIC BUILDING. GPO STATES THAT THE ESSENCE OF THIS SOLICITATION, AS WELL AS THE PROPOSED CONTRACTS BEING PLANNED FOR THE FORTHCOMING AIR CONDITIONING ENGINEERING WORK AND INSTALLATION, ARE ALL CONSIDERED TO BE NONCONSTRUCTION EFFORTS, I.E., IMPROVEMENTS TO THE EXISTING SYSTEMS BY THE INSTALLATION OF REPLACEMENT EQUIPMENT NEEDED FOR THE PROPER PERFORMANCE OF ITS PRODUCTION MACHINERY. ADDITIONALLY, THE ELECTRICAL EQUIPMENT INSTALLATION IS CONSIDERED BY GPO TO BE AN ESSENTIAL PART OF THE PRODUCTION EQUIPMENT OF THAT FACILITY, AND NO DIFFERENT FROM THE INSTALLATION OF THE PRINTING PRESSES AND OTHER PRODUCTION EQUIPMENT WHICH REQUIRE AND WILL BE SERVED BY THE ELECTRICAL INSTALLATIONS. THE SOLICITATION PROVIDES THAT THE EQUIPMENT FURNISHED MUST BE CAPABLE OF PASSING THROUGH A DOORWAY WHICH IS SIX FEET WIDE BY NINE FEET HIGH, AND THAT BUILDING ALTERATIONS MAY BE MADE ONLY WITH SPECIFIC AUTHORIZATION. WHILE GPO RECOGNIZES THAT ALL SUCH LARGE EQUIPMENT INSTALLATIONS MAY CONTAIN ELEMENTS OF CONSTRUCTION, THAT AGENCY CONTENDS THAT THE CONTRACT, WHEN CONSIDERED AS A WHOLE, IS NOT BASICALLY A CONSTRUCTION CONTRACT AND WITHIN THE CATEGORY OF CONSTRUCTION, ALTERATION OR REPAIR TO A PUBLIC BUILDING.

THIS OFFICE RECOGNIZES THAT THE RESPONSIBILITY FOR DETERMINING WHETHER A CONTRACT SHOULD BE CONSIDERED AS ONE PRINCIPALLY FOR CONSTRUCTION, ETC., OR FOR SUPPLIES, AND WHETHER DAVIS-BACON ACT PROVISIONS SHOULD, OR SHOULD NOT, BE INCLUDED THEREIN, RESTS PRIMARILY WITH THE CONTRACTING AGENCIES WHICH MUST AWARD, ADMINISTER AND ENFORCE THE CONTRACT. 44 COMP. GEN. 498 (1965). WHILE WE BELIEVE THAT CERTAIN ASPECTS OF THE CONTRACT, SUCH AS THE REPLACEMENT OF PORTIONS OF THE BUILDING'S PERMANENT WIRING SYSTEM, SHOULD BE REGARDED AS AN ALTERATION OR REPAIR TO THE BUILDING, WE FEEL THAT THE ANSWER IS NOT SO CLEAR REGARDING ALL ELECTRICAL EQUIPMENT INSTALLED FOR THE MAIN PURPOSE OF SERVING THE PRODUCTION MACHINERY AS TO JUSTIFY THIS OFFICE IN OVERTURNING THE GOOD-FAITH DETERMINATION OF THE AGENCY THAT THE CONTRACT IS NOT ESSENTIALLY FOR THE CONSTRUCTION, ALTERATION OR REPAIR OF A PUBLIC BUILDING. SINCE IT APPEARS, HOWEVER, THAT SUBSTANTIAL AMOUNTS OF CONSTRUCTION, ALTERATION OR REPAIR WORK MAY BE INVOLVED IN THE PROCUREMENT WE ARE CALLING TO THE ATTENTION OF THE PUBLIC PRINTER THE PROVISIONS OF SECTION 1-12.402-2 OF THE FEDERAL PROCUREMENT REGULATIONS FOR USE AS GUIDELINES IN DETERMINING WHETHER, AND TO WHAT EXTENT, IF ANY, THE DAVIS-BACON ACT PROVISIONS SHOULD BE INCLUDED IN A RESOLICITATION OF THE CONTRACT.

IN REGARD TO THE WALSH-HEALEY ACT, PARAGRAPH 6.01 OF THE PURCHASE REQUEST INCORPORATES THE PROVISIONS OF UNITED STATES GOVERNMENT PRINTING OFFICE CONTRACT TERMS NO. 1. ARTICLE 30 OF THOSE TERMS STATES:

WALSH-HEALEY PUBLIC CONTRACTS ACT - IF THIS CONTRACT IS FOR THE MANUFACTURE OR FURNISHING OF MATERIALS, SUPPLIES, ARTICLES, OR EQUIPMENT IN AN AMOUNT WHICH EXCEEDS OR MAY EXCEED $10,000 AND IS OTHERWISE SUBJECT TO THE WALSH-HEALEY PUBLIC CONTRACTS ACT AS AMENDED (41 U.S.C. 35-45), THERE ARE HEREBY INCORPORATED BY REFERENCE ALL REPRESENTATIONS AND STIPULATIONS REQUIRED BY SAID ACT AND REGULATIONS ISSUED THEREUNDER BY THE SECRETARY OF LABOR, SUCH REPRESENTATIONS AND STIPULATIONS BEING SUBJECT TO ALL APPLICABLE RULINGS AND INTERPRETATIONS OF THE SECRETARY OF LABOR WHICH ARE NOW OR MAY HEREAFTER BE IN EFFECT.

IN CONJUNCTION WITH THE ABOVE, PARAGRAPH 6.20 OF THE PURCHASE REQUEST STATES:

ANY CONTRACT THAT MAY RESULT FROM THIS INVITATION TO BID WILL BE SUBJECT TO THE PROVISIONS OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT (41 U.S.C. 35- 45). SEE ARTICLE 30, GOVERNMENT PRINTING OFFICE CONTRACT TERMS, NO. 1.

THUS, IT IS APPARENT THAT THE PROVISIONS OF THE WALSH-HEALEY PUBLIC CONTRACTS ACT WERE SPECIFICALLY INCORPORATED IN THE SOLICITATION. HOWEVER, THERE IS NO INDICATION THAT ANY OF THE BIDDERS ARE MANUFACTURERS OR REGULAR DEALERS, AS REQUIRED BY THE WALSH-HEALEY ACT, SO AS TO BE ELIGIBLE FOR THE AWARD. THE QUESTION OF WHETHER THE BIDDERS QUALIFY OR DO NOT QUALIFY, AS MANUFACTURERS OR DEALERS IS NOT ONE FOR DETERMINATION BY THIS OFFICE. THE WALSH-HEALEY PUBLIC CONTRACTS ACT RULINGS AND INTERPRETATIONS NO. 3, PUBLISHED BY THE DEPARTMENT OF LABOR, STATES AT SECTION 29:

(A) THE RESPONSIBILITY OF DETERMINING WHETHER OR NOT A BIDDER IS QUALIFIED AS A MANUFACTURER OR AS A REGULAR DEALER UNDER THE PUBLIC CONTRACTS ACT RESTS IN THE FIRST INSTANCE WITH THE CONTRACTING AGENCY. HOWEVER, ANY DECISION WHICH THE CONTRACTING OFFICER MIGHT MAKE IS SUBJECT TO REVIEW BY THE DEPARTMENT OF LABOR WHICH IS CHARGED WITH THE ADMINISTRATION OF THE ACT. THE DEPARTMENT OF LABOR MAY DETERMINE THE QUALIFICATIONS OF A BIDDER IN THE FIRST INSTANCE IN THE ABSENCE OF ANY DECISION BY THE CONTRACTING OFFICER.

OUR OFFICE DOES NOT CONSIDER THAT IT HAS AUTHORITY TO REVIEW DETERMINATIONS AS TO WHETHER PARTICULAR FIRMS ARE REGULAR DEALERS OR MANUFACTURERS, AND WE HAVE CONCLUDED THAT SUCH DETERMINATIONS REST WITH THE CONTRACTING OFFICER, SUBJECT TO THE REVIEW BY THE DEPARTMENT OF LABOR WHICH HAS THE FINAL AUTHORITY. B-156085, FEBRUARY 17, 1965; B 151133, MAY 7, 1963. IN THIS CONNECTION, WE HAVE BEEN INFORMALLY ADVISED BY A REPRESENTATIVE OF THE GPO THAT NONE OF THE BIDDERS APPEARS TO BE A MANUFACTURER OF OR A REGULAR DEALER IN THE EQUIPMENT AND SUPPLIES TO BE FURNISHED IN THE PERFORMANCE OF THE CONTRACT. IF NONE OF THE BIDDERS IS A MANUFACTURER OF OR REGULAR DEALER IN THE EQUIPMENT TO BE SUPPLIED, NO AWARD MAY BE MADE WHICH COMPLIES WITH THE WALSH HEALEY REQUIREMENTS AND THE PROCUREMENT MUST BE READVERTISED.

HOWEVER, EVEN THOUGH THE BIDDERS DO NOT QUALIFY UNDER THE WALSH HEALEY ACT FOR THE AWARD, WE ALSO BELIEVE THE SOLICITATION TO BE UNDULY RESTRICTIVE OF COMPETITION IN SUCH RESPECT. SUBPARAGRAPH "E" OF THE INSTRUCTIONS TO BIDDERS, PARAGRAPH 1-10, STATES THAT BIDS WILL BE CONSIDERED ONLY FROM ESTABLISHED CONTRACTORS EXPERIENCED IN THE PERFORMANCE OF THE WORK AND INSTALLATION OF THE EQUIPMENT SPECIFIED. BIDDERS ARE ALSO REQUIRED TO SUBMIT WITH THEIR BIDS A LIST OF PRIOR INSTALLATIONS, AND BUSINESS REFERENCES, WHICH CAN ATTEST TO THE BIDDER'S EXPERIENCE AND COMPETENCE IN THE WORK TO BE PERFORMED. SUCH PROVISIONS SEEM TO UNNECESSARILY EXCLUDE FROM THE BIDDING ANY MANUFACTURERS OF OR REGULAR DEALERS IN THE EQUIPMENT WHO WOULD HAVE THE INSTALLATION AND OTHER WORK PERFORMED BY COMPETENT AND EXPERIENCED SUBCONTRACTORS.

ACCORDINGLY, WE ARE ADVISING THE PUBLIC PRINTER THAT THE PROJECT SHOULD BE READVERTISED IN ACCORDANCE WITH THE ABOVE CONCLUSIONS. WE ARE ALSO POINTING OUT TO THE PUBLIC PRINTER THAT 41 U.S.C. 40 AUTHORIZES THE SECRETARY OF LABOR TO MAKE EXCEPTIONS TO THE WALSH HEALEY MANUFACTURER OR REGULAR DEALER STIPULATIONS IN A SOLICITATION AND RESULTING CONTRACT UPON A WRITTEN FINDING BY THE HEAD OF THE CONTRACTING AGENCY THAT THE INCLUSION OF SUCH STIPULATIONS WILL SERIOUSLY IMPAIR THE CONDUCT OF GOVERNMENT BUSINESS.