ink: GAO Opinion
Agency: Department of State
Disposition: Protest denied.
Keywords:Protesting the terms of the solicitation
General Counsel P.C. Highlight:
Perini Management Services, Inc. (Perini) protests the award of a contract under a request for proposals (RFP), issued by the Department of State (DOS), for the design and construction of a Type 3 Barrack and infrastructure improvements on the new embassy compound in Baghdad, Iraq.
The DOS issued the solicitation to nine firms that were identified as having the knowledge, experience, and ability to mobilize and meet an aggressive delivery schedule. The RFP stated that the procurement was subject to section11 of the Foreign Service Buildings Act of 1926, as amended, commonly referred to as the Percy Amendment. The Percy Amendment limits eligibility for award of certain overseas construction contracts to American-owned offerors and foreign offerors satisfying certain specified criteria. In addition, the Percy Amendment mandates that the prices proposed by American-owned offerors be reduced by 10% for evaluation purposes. The statute states, that qualification as an American-owned offeror requires, among other things, evidence of “performance of similar construction work in the United States or at a United States diplomatic or consular establishment abroad.”
The RFP included DOS Acquisition Regulation (DOSAR) sec. 652.236-71, which implements the requirements of the Percy Amendment. However, the regulation has not been revised to reflect that, under the current version of the Percy Amendment, similar construction services may be either performed in the United States or at a diplomatic or consular establishment abroad. The regulation incorrectly states that similar construction services are to be performed only in the United States.
After award was made to the apparent low offeror, Perini filed a protest, arguing that the agency failed to follow DOSAR sec. 652.236-71 and the terms of the RFP when it concluded that the awardee was American-owned for purposes of applying the 10% price preference under the Percy Amendment.
GAO states that it is well-settled that when a statutory language provides an unambiguous expression of the intent of Congress, the unambiguous intent of Congress must be given effect. Further, a regulation must be interpreted so as to harmonize with and not further conflict with the objective of the statute it implements. The DOSAR regulation, recited in the RFP, makes clear that “[t]his solicitation is subject to [the Percy Amendment], as amended (22 U.S.C. 301).” The Percy Amendment unambiguously states that projects performed outside the United States may be considered for purposes of determining American-owned status under the statute. Although it is true that the DOSAR clause recited in the solicitation misstates the Percy Amendment as defining American-owned firms as those that perform work in the United States, the language in the clause does not provide a basis for the agency to ignore the clear intent of Congress as set forth in the statute itself. To the extent the regulation may be interpreted as conflicting with the statue, the statute must be given effect. Accordingly, GAO finds reasonable the agency’s consideration of the awardee’s construction projects performed outside the United States at diplomatic or consular establishments. Protest denied.