BNUMBER: B-265605.5
DATE: May 29, 1996
TITLE: M.E.E., Inc.--Recon.
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Matter of:M.E.E., Inc.--Recon.
File: B-265605.5
Date:May 29, 1996
Donald A. Tobin, Esq., and Thomas J. Touhey, Esq., Bastianelli, Brown,
Touhey, & Kelley, for the protester.
Henry J. Gorczycki, Esq., and James A. Spangenberg, Esq., Office of
the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
Agency properly amended solicitation and obtained revised proposals,
as required by the Federal Acquisition Regulation sec. 22.404-5(c)(3)
and 22.404-6(c)(2), because it received a revised Davis-Bacon Act wage
determination prior to award; this was not corrective action in
response to a prior protest entitling the protester to the recovery of
its protest costs because the revised wage determination was unrelated
to the protest.
DECISION
M.E.E., Inc. requests reconsideration of our decision on its protests
and claim for costs, M.E.E., Inc., B-265605.3; B-265605.4, Feb. 22,
1996, 96-1 CPD para. 109, regarding the Department of the Air Force's
decision to amend and request revised best and final offers (BAFO)
under request for proposals (RFP) No. F02604-94-R-0010, issued for a
Simplified Acquisition of Base Engineering Requirements (SABER)
procurement for maintenance, repair, and minor construction work at
various facilities in Arizona. We denied the protest because the
agency was required by regulation to amend the solicitation and permit
submission of revised BAFOs because it had received a revised
Davis-Bacon Act wage determination. We denied the claim for costs
because the required actions were not attributable to M.E.E.'s prior
protests. M.E.E. alleges that we incorrectly determined that the
amendment of the RFP and revised BAFOs were required, and claims that
M.E.E. is entitled to recover its costs of pursuing the protest
because the agency's corrective action was actually in response to
M.E.E.'s protest.
We deny the request for reconsideration.
Under this SABER procurement, offerors were requested to propose
prices in terms of a coefficient of the "Means price," which is
determined from standardized prices for construction work published in
the Means cost book. Applicable "Means prices," i.e., fixed unit
prices comprised of the typical cost of performing maintenance,
repair, and construction work in the locations where the contract is
performed, are incorporated into the RFP, and subsequently
incorporated into the contract once each year when the Means prices
are updated. These Means prices account for Davis-Bacon Act wage
determinations and modifications to such determinations. The prices
for work performed under the contract will be determined by
multiplying the applicable Means prices by the contractor's proposed
price coefficient.
As explained in our prior decision, award had been previously made to
PI Construction Corporation under this RFP set aside for small
disadvantaged businesses (SDB). Subsequent to M.E.E.'s protest to our
Office, the Small Business Administration (SBA) determined that PI did
not qualify as an SDB concern. The agency then decided to obtain
revised proposals from the remaining offerors because, among other
things, the applicable Davis-Bacon Act wage determination had been
modified to increase the wage rates. We denied M.E.E.'s protest that
it should have received the award under the RFP, and that the agency
had no reasonable basis to amend the solicitation and solicit revised
proposals.
In our prior decision, we determined that under Federal Acquisition
Regulation (FAR) sec. 22.404-5(c)(3) and 22.404-6(c)(2), the agency was
required to amend the RFP to incorporate increases in the Davis-Bacon
Act wages and provide offerors an opportunity to submit revised BAFOs.
The regulation provides that, in negotiated procurements, if the
agency receives a wage modification before contract award, as was the
case in the protested procurement, the contracting officer shall
follow the procedures in FAR sec. 22.404-5(c)(3) and (4), which state:
"(3) If the new determination changes any wage rates, the
contracting officer shall amend the solicitation to incorporate
the new determination, and furnish the wage rate information to
all prospective offerors that were sent a solicitation if the
closing date for receipt of proposals has not yet occurred, or to
all offerors that submitted proposals if the closing date has
passed. All offerors to whom wage rate information has been
furnished shall be given reasonable opportunity to amend their
proposals.
"(4) If the new determination does not change any wage rates, the
contracting officer shall amend the solicitation to include the
number and date of the new determination and award the contract."
FAR sec. 22.404-5(c)(3) applies here because the revised wage
determination, issued by the Department of Labor prior to award,
increased wage rates. We agreed that the agency was required under
the circumstances to amend the RFP to include the wage modifications
and request revised BAFOs.
M.E.E.'s request for reconsideration repeats its previous arguments
that revised proposals did not need to be obtained because the
amendment did not involve material matters. M.E.E. argues that under
SABER contracts Davis-Bacon wages are accounted for in the Means
prices incorporated into the contract and when they are updated they
account for revised wage determinations. M.E.E. also notes that the
agency incorporates revised wage determinations into the contract as
they are issued during contract administration. M.E.E. asserts that
the agency was therefore not required to amend the RFP when it
received the revised wage determination.
M.E.E.'s arguments provide no basis to reconsider our decision.
First, the FAR does not provide for any exception to the rule
requiring revised proposals under these circumstances (where
Davis-Bacon Act wage determinations change wage rates and are received
prior to award) for SABER contracts, which provide for the periodic
updating of prices to reflect such things as wage rate changes.
Moreover, a contractor's obligation to pay its employees prevailing
Davis-Bacon Act wage rates depends on whether the wage determination
establishing the prevailing wages has been incorporated into the
solicitation/contract or whether there exists some other instrument,
such as a collective bargaining agreement, binding the contractor to
pay wages to its employees not lower than those in the prevailing
Davis-Bacon Act wage determination; this obligation generally is not
affected by changes in the contract price. See ABC Paving Co., 66
Comp. Gen. 47 (1986), 86-2 CPD para. 436; Robinson & Co., B-265656, Dec.
1, 1995, 95-2 CPD para. 262; LaCorte ECM, Inc., B-231448.2, Aug. 31, 1988,
88-2 CPD para. 195. Thus, while the Means prices incorporated into the
RFP and contract are revised annually to reflect changes in cost
elements, including Davis-Bacon Act wage modifications, they neither
incorporate revised Davis-Bacon Act wage determinations into the
contract nor otherwise bind the contractor to pay the revised wages to
its employees. Moreover, where an applicable wage determination has
been revised prior to contract award, unless a revised wage
determination is incorporated into the RFP, the contractor would not
be bound by the contract, as awarded, to pay its employees the revised
wages. While an agency could incorporate wage determination
modifications into the contract after award, such additional
obligations on the contractor should be imposed, where possible, as
part of the competition, inasmuch as they define the contractors
obligations as of the time of award and may affect the offerors'
initial contract prices (in this case, their coefficients). This is
why the FAR requires agencies to amend the solicitation and obtain
revised proposals when apprised of Davis-Bacon Act wage changes prior
to award.
M.E.E.'s remaining allegations also do not provide a basis for
modifying our decision. For example, M.E.E. alleges that the Air
Force did not previously amend the RFP to incorporate wage
modifications at the time they became effective, and thus they should
not now be cause for amendment of the RFP. However, an agency's prior
incorrect practice is not a basis for protesting the application of
correct procurement practice. Fry Communications, Inc., 62 Comp. Gen.
164 (1983), 83-1 CPD para. 109; Blanton Contractors, Inc., B-260562, June
27, 1995, 95-1 CPD para. 292.
M.E.E. also reasserts its earlier protest allegation that
recompetition here would result in an improper auction.[1] However,
as stated in our decision, the possibility that a contract may not be
awarded on the basis of fair and equal competition has a more harmful
effect on the integrity of the competitive procurement system than the
fear of an auction. Ameriko/Omserv--Recon., B-252879.4, May 25, 1994,
94-1 CPD para. 341. Thus, where, as here, an agency must provide an
opportunity for submission of revised proposals, even the disclosure
of an offeror's price is not a basis for precluding the recompetition.
See id.
M.E.E. also requests reconsideration of our decision to deny its claim
for protest costs because it alleges that the record established that
the protester would have prevailed on its primary protest allegation
that the agency did not apply the stated evaluation plan. We
disagree. We did not decide the merits of this protest issue because
the revised Davis-Bacon Act wage determination required amendment of
the RFP and submission of revised proposals. Because applicable
regulations, not M.E.E.'s protest, required the agency's action of
obtaining revised proposals, M.E.E. is not entitled to reimbursement
of its protest costs.[2] See Tri-Ex Tower Corp., B-245877, Jan. 22,
1992, 92-1 CPD para. 100, recon. denied, B-245877.2, Mar. 23, 1993, 93-1
CPD para. 258.
The request for reconsideration is denied.
Comptroller General
of the United States
1. M.E.E. continues to allege that the agency released its price to
competitors. However, the record indicates that M.E.E.'s price was
not released to its competitors. The specific information which
M.E.E. alleges was improperly released was M.E.E.'s protest allegation
that the "Air Force improperly penalized M.E.E. for providing a price
below the coefficient." The agency notified interested parties to the
protest of this and other protest bases. Our Bid Protest Regulations
applicable at the time of this protest provide that the agency shall
immediately furnish copies of the protest submissions to interested
parties to the protest. 4 C.F.R. sec. 21.3(a) (1995). Unless a
protester has identified information as protected, the protest
material submitted generally will not be withheld from any interested
party. 4 C.F.R. sec. 21.3(b). M.E.E.'s protest letter containing this
statement did not identify this or any other information as protected.
2. To the extent M.E.E. alleges that the agency terminated the
contract previously awarded to PI Construction Corporation as a result
of its September 15, 1995, protest to our Office, as stated in our
prior decision, the contract was terminated as a result of the SBA's
September 13 determination that PI was not an SDB concern as required
by the solicitation. This determination was not prompted by any
protest to our Office, and the resulting contract termination thus was
not corrective action in response to a protest to our Office. In any
event, the contract was terminated on September 29, which is only 14
days after the September 15 protest to our Office and prior to the due
date for an agency report on that protest; therefore, even if we would
consider the termination to be corrective action in response to that
protest, the termination was sufficiently prompt that we would not
have awarded protest costs. See Oklahoma Indian Corp.--Claim for
Costs, 70 Comp. Gen. 558 (1991), 91-1 CPD para. 558.