TITLE:  SHABA Contracting, B-287474, July 2, 2001
BNUMBER:  B-287474
DATE:  July 2, 2001
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SHABA Contracting, B-287474, July 2, 2001

Decision

Matter of: SHABA Contracting

File: B-287474

Date: July 2, 2001

Hadley H. Gross for the protester.

Lynn W. Flanagan, Esq., Department of Agriculture, for the agency.

Charles W. Morrow, Esq., and James Spangenberg, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Forest Service reasonably determined that it was not required to incorporate
the clauses in Federal Acquisition Regulation sect. 52.228-5, Insurance-Work on
a Government Installation, and Agriculture Acquisition Regulation sect.
452.228-71, Insurance Coverage, which obligate the contractor to obtain
specified coverages of workers' compensation and other insurance, in a
solicitation for work on forest lands in a national forest where the Forest
Service reasonably concluded that the work was not being performed on a
"Government installation," which is the situation where these clauses are
required to be incorporated.

DECISION

SHABA Contracting protests invitation for bids (IFB) No. FS-WOC-01-1029,
issued by the United States Department of Agriculture, Forest Service,
Russellville, Arkansas, for forestry work.

We deny the protest.

The IFB was issued to procure pine site preparation, hardwood site
preparation, timber stand improvement, and wildlife stand improvement on
National Forest lands in the Buffalo Ranger District, Arkansas under a
fixed-price requirements contract. The schedule contained estimated
quantities of acres for the four items of services.

SHABA first timely protests that the IFB should have included the Federal
Acquisition Regulation (FAR) clause requiring the contractor to have
insurance for workers' compensation and liability on government
installations.

FAR sect. 28.301(b) provides that "[c]ontractors . . . are required by law and
this regulation to provide insurance for certain types of perils (e.g.,
workers' compensation) [and] . . . when commingling of property, type of
operation, circumstances of ownership, or condition of the contract make it
necessary for the protection of the Government." We have found that the
foregoing section does not itself impose a requirement that contractors be
required to carry workers' compensation insurance, although we noted that
certain state laws and other
FAR sections require contractors to obtain various types of insurance in
certain situations. See Renewable Forestry Servs., Inc., B-235627, Sept. 20,
1989, 89-2 CPD
para. 253 at 2-3.

FAR sect. 28.310(a) states (with certain exceptions not applicable here):

The contracting officer shall insert the clause at [FAR sect.] 52.228-5,
Insurance--Work on a Government Installation, in solicitations and contracts
when a fixed-price contract is contemplated, the contract amount is expected
to exceed the simplified acquisition threshold, and the contract will
require work on a Government installation.

FAR sect. 52.228-5 requires the contractor to provide the insurance elsewhere
identified in the contract. FAR sect. 28.307 specifies the minimum insurance
types and coverages where the FAR sect. 52.228-5 clause is required to be
included in a solicitation. FAR sect. 28.306(b). Consistent with FAR sect. 28.307,
Agriculture Acquisition Regulation (AGAR) sect. 428-310 (2000) requires the
contracting officer to include the clause at AGAR sect. 452.228-71, Insurance
Coverage, in all solicitations that contain FAR sect. 52.228-5. AGAR
sect. 452.228-71 requires specified coverages of workers' compensation and
employers liability, general liability, automobile liability, and aircraft
public and passenger liability insurance.

The Forest Service argues that the clauses at FAR sect. 52.228-5 and AGAR sect.
452.228-71 were not included in this solicitation because the agency does
not consider work performed on forest lands within a national forest to be
performed on a "Government installation." Agency Legal Memorandum at 5.
There is no definition of "Government installation" in the FAR, and we are
unaware of any law or regulation that requires the Forest Service to include
all publicly-owned lands, such as national forest lands managed by the
Forest Service, in the definition, nor has the protester cited such a law or
regulation. It would seem that the federal government ownership of certain
lands does not necessarily make them a "Government installation"; otherwise,
the regulation would seemingly say "Government-owned property." [1] Under
the circumstances, we cannot conclude that the Forest Service's judgment
that national forest lands are not government installations is unreasonable.

While SHABA complains that the Forest Service has included clauses requiring
workers' compensation and other insurance in other solicitations for similar
work and asserts that this clause serves the best interest of the government
in this case, FAR subpart 28.3 gives contracting officers the discretion to
include FAR sect. 52.228-7 and AGAR sect. 452.228-71 in solicitations, even if they
are not being performed on a government installation. It is apparent that
while these clauses are intended to protect the government and others,
providing the insurance specified in those clauses has a cost. SHABA has not
shown that the agency has abused its discretion in not including the clauses
in this case. [2]

SHABA protests that the site viewing was inadequate because an insufficient
number of acres were available during the site viewing. The Forest Service
explains that the purpose of the site viewing was simply to demonstrate to
potential bidders the types of services that would be required under the
contract, not to identify the precise acres to undergo the services. Thus,
the Forest Service reports that the agency's site viewing identified acreage
that had undergone timber stand improvement, wildlife stand improvement,
commercial thinning, and an area that was to receive hardwood site
preparation. In addition, the agency advises that it pointed out varying
conditions of slash, standing trees, and terrain, answered questions and
provided technical information regarding species selection, estimating
residual basal area, and stump removal. See Agency Memorandum of Law at 7.
The Forest Service reports that it was unable to identify the precise areas
in need of these services, and this is the reason the agency utilized a
requirements contract to obtain the services. SHABA does not specify what
additional information it needed, except to state that the "areas to be
worked were not reasonably obtainable." Protester's Comments. Under the
circumstances, we find no merit to SHABA's complaint about the adequacy of
the site viewing.

Finally, SHABA complains that the Forest Service will make award to a firm
at a very low price, and that firm will circumvent workers' compensation and
other employment statutes and will employ nonimmigrant aliens. SHABA
complains that the Department of Labor is not enforcing applicable labor
regulations and the Forest Service is taking advantage of this situation to
obtain low-priced contractors. These issues are not for our consideration,
even if they were not premature and speculative. A protester's claim that a
bidder or offeror submitted an unreasonably low price--or even that the
price is below the cost of performance--is not a valid basis for protest. An
offeror, in its business judgment, properly may decide to submit a price
that is extremely low. Brewer-Taylor Assocs., B-277845, Oct. 30, 1997, 97-2
CPD para.124 at 4. An agency decision that the contractor can perform the
contract at the offered price is an affirmative determination of
responsibility, which we will not review absent a showing of possible bad
faith on the part of procurement officials, or that definitive
responsibility criteria in the solicitation may not have been met. Bid
Protest Regulations, 4 C.F.R. sect. 21.5(c) (2001). Moreover, an allegation that
a contractor will engage in illegal practices after award of the contract is
a question of contract administration, which is the responsibility of the
procuring agency and other cognizant federal agencies, such as the
Department of Labor, and which cannot be reviewed by our Office under our
bid protest function. Bid Protest Regulations, 4 C.F.R. sect. 21.5(a)(2); see
The Galveston Aviation Weather Partnership, B-252014.2, May 5, 1993,
93-1 CPD para. 370 at 2.

The protest is denied.

Anthony H. Gamboa

General Counsel

Notes

1. For example, the Department of Defense has defined "Government
installation" as a "United States Government facility having fixed
boundaries and owned or controlled by the government." 32 C.F.R. sect. 842.74
(2000). It would seem that forest land within a national forest would not
ordinarily be characterized as a "facility" (although perhaps a building or
set of buildings located in a national forest could be considered a
facility).

2. SHABA also protested that the agency included an incorrect wage
determination in the solicitation. Following the protest, the agency
obtained the correct wage determination and this was incorporated into the
IFB by amendment 1. This protest ground has therefore been rendered academic
and will not be considered further.