TITLE:  Brickwood Contractors, Inc., B-292171, June 3, 2003
BNUMBER:  B-292171
DATE:  June 3, 2003
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Brickwood Contractors, Inc., B-292171, June 3, 2003

   Decision
    
    
Matter of:   Brickwood Contractors, Inc.
    
File:            B-292171
    
Date:              June 3, 2003
    
Veron L. Kalos for the protester.
Julia L. Perry, Esq., Federal Highway Administration, for the agency.
Tania Calhoun, Esq., and Christine S. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
    
Agency reasonably concluded it had a compelling reason to cancel
invitation for bids after bid opening where the solicitation's language
was ambiguous concerning certain certification requirements associated
with the application and removal of paint from the steel structures of a
bridge, creating a competition conducted on an unequal basis, and where
one of the reasonable interpretations of the certification requirements
would not meet the agency's actual needs.
DECISION
    
Brickwood Contractors, Inc. protests as improper the cancellation of
invitation for bids (IFB) No. DTFH71-03-B-00019, issued by the Department
of Transportation, Federal Highway Administration (FHWA), for cleaning and
painting the structural steel of a bridge on the George Washington
Memorial Parkway in Arlington County, Virginia.
    

   We deny the protest.
    
The principal purpose of this solicitation was to obtain the services of a
firm to clean and paint all of the bridge's exposed steel surfaces.  In
addition to the tasks of surface preparation and painting, the work
included the containment and collection of surface preparation debris, the
disposal of surface preparation debris, and a worker health protection
program.  Accordingly, two of the solicitation's line items were for
*surface preparation and painting, steel structure* and *containment
system and worker protection plan.*  Bid Schedule at 4.  The solicitation
included the clause at Federal Acquisition Regulation S: 52.236-1,
*Performance of Work by the Contractor,* which requires the contractor to
perform on the site, and with its own organization, at least 50 percent of
the total amount of work to be performed under the contract.  IFB S: I.
    
Among the IFB's Special Contract Requirements were two provisions
associated with certification requirements established by the Society for
Protective Coatings, formerly known as the Steel Structures Painting
Council (SSPC).  The SSPC, a non-profit professional society concerned
with the use of coatings to protect industrial steel structures,
administers a nationally recognized independent contractor certification
program that serves as a pre-qualification tool for facility owners and
others who hire industrial painting contractors.  See SSPC Internet Site
at .  Among other things, the program includes the *QP 1*
category, which evaluates contractors who perform surface preparation and
industrial coating application on steel structures in the field, and the
*QP 2* category, a supplement to the QP 1 category, which evaluates the
contractor's ability to perform industrial hazardous paint removal in a
field operation.  Id. at .   
    
IFB Special Contract Requirements section 563.05 stated:
    
SSPC Painting Contractor Certification Program (PCCP) Requirements.  All
contractors and subcontractors that perform surface preparation shall be
certified by the [SSPC] to the requirements of SSPC-QP 1 prior to the
contract award, and shall remain certified while accomplishing any surface
preparation.
All contractors and subcontractors that perform paint removal containing
lead or other hazardous materials shall be certified by the [SSPC] to the
requirements of SSPC-QP 2 prior to the contract award, and shall remain
certified while accomplishing any paint removal.  The painting contractors
and painting subcontractors must remain certified for the respective work
for the duration of the project.
    
IFB Special Contract Requirements section 563.06 stated:
    
SSPC Painting Contractor Certification Program (PCCP) Requirements.  All
contractors and subcontractors that perform paint application shall be
certified by the [SSPC] to the requirements of SSPC-QP 1 prior to the
contract award, and shall remain certified while accomplishing any paint
application.  The painting contractors and painting subcontractors must
remain certified for the respective work for the duration of the project.
    
Brickwood was the apparent low bidder with a price of $834,110.  The
apparent second-low bidder filed an agency-level protest arguing that
Brickwood was not an SSPC-certified firm, and the FHWA asked Brickwood to
provide the required certification.  The certifications Brickwood provided
were for not for the firm itself but, instead, for its subcontractor. 
After discussions with the SSPC, the agency determined that there was no
prohibition to having a subcontractor perform the paint removal and paint
application as long as it was certified, even if the prime contractor--in
this case, Brickwood--was not certified.
    
As noted above, however, the solicitation also included the limitation on
subcontracting clause at FAR S: 52.236-1, which requires a prime
contractor to perform at least 50 percent of the work with its own
forces.  The agency determined that, if Brickwood's subcontractor was
performing all of the work in connection with the paint removal and paint
application, there would be insufficient work remaining in the contract
for Brickwood's forces to be performing at least 50 percent of the work. 
In this regard, Brickwood's bid for the two line items related to *surface
preparation and painting, steel structure* and *containment system and
worker protection plan* totaled $628,000 of its $834,110 overall price,
indicating that the firm planned to subcontract approximately 75 percent
of the work.  As a result, the FHWA informed Brickwood that its bid was
nonresponsive because it either failed to meet the solicitation's
certification requirements or failed to comply with the limitation on
subcontracting clause.
    
Brickwood objected to the agency's method of determining that it failed to
comply with the limitation on subcontracting clause.  The firm explained
that it was subcontracting only 30 percent of its total contract price,
not 75 percent, because its prices for the *surface preparation and
painting, steel structure* and *containment system and worker protection
plan* line items included the costs of various services its forces would
perform.  Brickwood stated that it would provide daily recycled grit
equipment operators, daily forklift operators for steel grit recycling,
daily dust collector operators, crane operators and daily rigging of work
platforms, daily building of containment, moving, and traffic control for
moving of both containment and work platforms, truck drivers, and all
daily general labor work.  Brickwood stated that its subcontractor would
have one supervisor  and three blaster/painters on site, while it would
have one supervisor, one traffic safety supervisor, and five equipment
operators and laborers on site. 
    
Around this same time, the apparent second-low bidder gave the FHWA
information from the SSPC indicating that the certified entity had to
have, at a minimum, supervisory responsibility over any entity performing
related work, including set-up and clean-up tasks.  Specifically, the FHWA
was given a copy of an SSPC alert expressing concern about certified
contractors who were subcontracting out work to non-certified contractors
as a practice that undermined the intent of the SSPC contractor
certification program and did not provide the facility owner with the
product expected--an SSPC-certified contractor.  The alert went on to say
that, in cases where a certified contractor had to hire a non-certified
contractor, and was not prohibited from doing so, it remained responsible
for the actions of the non-certified firms to ensure that they performed
in accordance with the QP 1 and QP 2 quality programs.  Tasks for which
the certified contractor would remain responsible included cleaning,
surface preparation and painting, erecting and moving
    
containment/scaffolding, and equipment maintenance.  Agency Report (AR)
Tab 6, SSPC Painting Contractor Certification Program, Application Form
and Instructions, at 27. 
    
After further discussions with the SSPC, the contracting officer decided
to cancel the solicitation, pursuant to FAR S: 14.404-1(c)(1), because the
specifications were ambiguous.  As she explained in her letter to
Brickwood and to the apparent second-low bidder,
    
the language in the Solicitation, at [sections] 563.06 and 563.05
respectively, which states that 'All contractors and subcontractors that
perform paint application shall be certified by the [SSPC] . . .' and 'All
contractors and subcontractors that perform paint removal containing lead
and other hazardous materials shall be certified by the [SSPC] . . . '
[is] ambiguous.  Specifically, the terms 'that perform paint application'
and 'that perform paint removal' are ambiguous as to whether they include
actions necessary to set up for and clean up after the paint removal and
paint application.  The Bidders have offered differing interpretations,
each of which could be supported by the language appearing in the
contract.  Brickwood has validly indicated that the language does not
specifically prohibit them from doing the set up and clean up work, even
though they are not certified.  And [the second low bidder] has validly
indicated that the SSPC interpretation of its certification requires
supervision of the set up and clean up by the certified entity.  The
language appearing in the Contract is not definitive as to whether or not
Brickwood's performance of the set up and clean up after paint removal and
paint application would be consistent with the certification requirement,
since the supervision would have to be provided by a subcontractor over
which the Government has no privity of contract.  Therefore, we have an
obligation to cancel the solicitation and resolicit with a clarification
to the Solicitation.
    
Agency's Letter of Mar. 31, 2003, at 1-2. 
    
After the agency denied Brickwood's agency-level protest of the
cancellation decision, the firm filed this protest in our Office. 
Brickwood primarily argues that the specification is not ambiguous because
both it and the apparent second-low bidder agree that the solicitation
requires SSPC certification; that it is unreasonable to require a
certified contractor to supervise such work as rigging the work platforms;
and that the agency cannot cancel the solicitation based upon the apparent
second-low bidder's interpretation because that firm did not timely
protest any ambiguity in the solicitation.
    
A contracting agency must have a compelling reason to cancel an IFB after
bid opening because of the potential adverse impact on the competitive
bidding system of resolicitation after bid prices have been exposed.  FAR
S: 14.404-1(a)(1); HDL Research Lab, Inc., B-254863.3, May 9, 1994, 94-1
CPD P: 298 at 5.  Where a solicitation contains inadequate or ambiguous
specifications, or otherwise does not contain specifications that reflect
the agency's actual needs, the agency has sufficient reason to cancel. 
FAR S: 14.404-1(c)(1); Days Inn Marina, B-254913, Jan. 18, 1994, 94-1 CPD
P: 23 at 2.  Contracting officials have broad discretion to determine
whether a compelling reason to cancel exists, and our review is limited to
considering the reasonableness of their decision.  Chenega Mgmt., LLC,
B-290598, Aug. 8, 2002, 2002 CPD P: 143 at 2.  Our review of the record
here shows that the FHWA reasonably concluded that it had a compelling
reason to cancel the solicitation because it both included ambiguous
specifications and failed to reflect the agency's actual needs. 
    
Specifications must be sufficiently definite and free from ambiguity so as
to permit competition on an equal basis.  Hebco, Inc., B-228394, Dec. 8,
1987, 87-2 CPD P: 565
at 2-3.  An ambiguity exists if a solicitation requirement is subject to
more than one reasonable interpretation when read in the context of the
solicitation as a whole.  Phil Howry Co., B-245892, Feb. 3, 1992, 92-1 CPD
P: 137 at 2-3.  Here, there is no question but that the certification
requirements in the solicitation were susceptible to more than one
reasonable interpretation.
    
As the FHWA explained in its notice of cancellation, Brickwood reasonably
interpreted the solicitation's language as permitting it to perform the
set-up and clean-up work associated with the paint removal and application
tasks, even though the firm is not an SSPC-certified firm.  On the other
hand, the apparent second-low bidder, relying on the SSPC's published
guidance, reasonably interpreted the solicitation's language as requiring
that, at a minimum, a certified firm must be responsible for ensuring that
the set-up and clean-up work associated with the paint removal and
application tasks be done in accordance with the QP 1 and QP 2 quality
programs.  The fact that these two bidders so interpreted the IFB is an
indication of the ambiguity of the requirement and that the competition
was conducted on an unequal basis.  This, in our view, warrants the
agency's cancellation of the solicitation.  Brickwood's argument that
there is no ambiguity because both bidders agree that SSPC certification
is required by sections 563.05 and 563.06 is misplaced.  The question is
not whether SSPC certification is required at all, but to what extent an
SSPC-certified firm must perform the work encompassed in the paint removal
and application tasks.    
    
The record also shows that the solicitation's requirements fail to reflect
the agency's actual needs.  As the FHWA explains, when it issued the
solicitation, it expected the prime contractor to perform all work in
connection with the paint removal and paint application, including the set
up and clean up, since that work constituted the majority of the work. 
The FHWA also explains that, based on the requirements in sections 563.05
and 563.06, it expected any prime contractor bidding on the work to be an
SSPC-certified firm.  The FHWA states that Brickwood's approach of
subcontracting the work to a certified firm, while not prohibited by the
solicitation, is nonetheless inconsistent with its expectations.  As the
agency explains, the certification process was established to protect
against the improper release of lead paint and other pollutants into the
air and the nearby water sources, so set-up and clean-up are crucial
aspects underlying the intent of the certification requirement.  Neither
the solicitation's language nor Brickwood's bid were definitive as to
whether the firm's performance of the set-up and clean-up work would be
consistent with the purpose of the certification requirement.  As the FHWA
explains, one reason for the inclusion of the certification requirement is
that the agency has no staff with sufficient expertise to oversee such
operations.[1]  Since the supervision of Brickwood's work would have to be
provided by the certified firm--in this case a subcontractor with whom the
government has no privity of contract--the agency believed that it would
have no method to ensure that the work was performed in accordance with
the SSPC standards. 
    
Brickwood argues that it is unreasonable to require the contractor who
performs such set-up tasks as rigging the work platforms with enclosures
and ventilation to be SSPC-certified.  The agency has not taken this
position.  Instead, the agency's position is that such work activities
must, at a minimum, be supervised by an SSPC-certified firm in order to
ensure that the activities are performed in accordance with the QP 1 and
QP 2 quality programs, a view that is consistent with the SSPC's own
requirements.  We do not find this position to be unreasonable. 
    
As a final matter, Brickwood argues that the agency cannot base its
decision to cancel the solicitation on the interpretation of the apparent
second-low bidder because that firm failed to timely challenge the
solicitation's terms as ambiguous.  However, the ambiguity present in this
solicitation is not a patent one, which should have been obvious from the
face of the solicitation, but a latent one, whose existence only became
known after bid opening.  In any event, a procuring agency is not
precluded from canceling a solicitation based upon the post-opening
discovery of a sufficient reason to cancel.  Phil Howrey Co., supra, at 3;
Ace-Federal Reporters, Inc., B-237414, Jan. 31, 1990, 90-1 CPD P: 144 at
3.
    
The protest is denied.
    
Anthony H. Gamboa
General Counsel
    

   ------------------------

   [1] The fact that the agency will incur costs to administer the contract
does not, as Brickwood argues, mean that it has staff with expertise to
ensure that the removal and application of paint in this project are
performed in accordance with SSPC standards.