Protest Concerning Award of Subcontract

A firm protested the award of a subcontract to another firm for module optical boxes under invitation for bids issued by the Rockwell International Corporation's Rocketdyne Division. The firm contended that Rockwell improperly rejected its low bid because its fabricating shop employed nonunion labor. The protester also asserted that the Air Force effectively controlled the selection of the subcontractor because the Air Force reserved the right to audit the subcontractor's bid before a subcontract could be made. Further, the protester maintained that the subcontract award was for the Government since the Government would acquire title to the optical boxes which the subcontractor furnished to Rockwell. Finally, the protester argued that the controlling fact was that the prime contractor was acquiring equipment which it used in performing a function that the Government would otherwise be performing itself. GAO does not generally review protests concerning the awards of subcontracts by prime contractors, unless they come within certain clearly delineated circumstances as in the instances where the Government so actively participates in the subcontractor selection process as to effectively cause or control the selection and where subcontract award is "for" an agency of the Federal Government. GAO held that although title to the item purchased may vest in the Government, this fact alone does not make a subcontract award "for" the Government. Rather, there must also be a contractual relationship between the Government and prime contractor such as where the contractor is managing and operating Government facilities or where the contractor is construction manager under a cost-type contract. Since Rockwell is merely a research contractor and the optical boxes will not be used in a Government-owned facility, it clearly does not fall into any of the aforementioned categories. Consequently, GAO does not believe Rockwell was acting for the Government in awarding the subcontract. Moreover, the Air Force reports that the Government had no contact with Rockwell concerning the selection of a subcontractor until the procurement package was submitted to the Government for approval. Accordingly, mere approval of a proposed subcontract does not constitute sufficient Government involvement so as to invoke GAO jurisdiction. The protest was dismissed.