Resource Recovery International Group, Inc.

B-265880 Dec 19, 1995 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights The Service Contract Act does not apply because the proposed contract is not principally for services. Is unduly restrictive is denied where agency presents a reasonable explanation in support of the condition and protester fails to show that the requirement is clearly unreasonable. Oriskany for scrap. [1] RRI contends that the solicitation is flawed for various reasons. A World War II era aircraft carrier which is no longer in active service and has been stricken from the U.S. Award was to be made to the responsive. The awardee is required to scrap and demilitarize the vessel in the United States or its territories. Scrapping is to be accomplished by dismantlement and mutilation of the hull and superstructure in such a manner that no considerable part of the vessel is left intact or undisturbed. View Decision Matter of: Resource Recovery International Group, Inc. File: B-265880 Date: December 19, 1995 Although solicitation for sale of former naval vessel for scrap involves the removal and proper disposal of hazardous materials, the Service Contract Act does not apply because the proposed contract is not principally for services. Protest that domestic scrapping requirement, as condition of sale of former naval vessel, is unduly restrictive is denied where agency presents a reasonable explanation in support of the condition and protester fails to show that the requirement is clearly unreasonable. Attorneys DECISION Resource Recovery International Group, Inc. (RRI) protests the terms of the invitation for bids (IFB) covering Sale No. 31-5179, issued by the Defense Reutilization and Marketing Service (DRMS), Defense Logistics Agency (DLA), for the sale of the ex-U.S.S. Oriskany for scrap. [1] RRI contends that the solicitation is flawed for various reasons. We deny the protest. The IFB sought bids to purchase the ex-U.S.S. Oriskany, a World War II era aircraft carrier which is no longer in active service and has been stricken from the U.S. Naval Register. Award was to be made to the responsive, responsible bidder submitting the highest acceptable bid. The awardee is required to scrap and demilitarize the vessel in the United States or its territories. Scrapping is to be accomplished by dismantlement and mutilation of the hull and superstructure in such a manner that no considerable part of the vessel is left intact or undisturbed. Title to the scrap, parts, and/or components available for removal vests in the purchaser at the time when the scrap/property is physically removed from the vessel. As a further condition of the sale, the purchaser assumes responsibility for proper removal and disposal of all hazardous materials present on board or produced as part of the scrapping process. These hazardous materials include asbestos, sodium chromate, polychlorinated biphenyls (PCB) and others. Although the government remains a co-generator of any PCB waste (see Toxic Substances Control Act, 15 U.S.C. Sec. 2601 et seq. (1994)), the purchaser is responsible both for ascertaining the extent to which local, state, and federal statutes and regulations apply to this and other hazardous materials and for compliance with the law in the disposal of those materials. The IFB provided a survey of locations of the hazardous materials, including asbestos and PCBs, but expressly disclaimed any warranty as to the completeness of these surveys. RRI did not bid, and instead filed this protest prior to bid opening. Three responsive bids were submitted by the September 6 bid opening date. The high bidder was Pegasus, Inc. DRMS awarded Pegasus the contract on September 29. Performance of the contract has been stayed pending this decision. RRI contends that this IFB is actually a solicitation for hazardous waste remediation and disposal services, rather than a sale. In the protester's view, the scrap represents the payment for these services and the purchase price is "merely" an adjustment. RRI thus argues that the IFB is flawed because it does not contain provisions of the Federal Acquisition Regulation (FAR) associated with service contracts. The only provision identified by the protester is that associated with the Service Contract Act of 1965, 41 U.S.C. Sec. 351 et seq. (1988). The Service Contract Act requires federal contractors performing service contracts entered into by the United States to pay minimum wages and fringe benefits, as determined by the Secretary of Labor. If a contracting officer believes that a proposed contract "may be subject to" the Service Contract Act, he is required to notify the Department of Labor (DOL) of the agency's intent to make a service contract so that DOL can provide the appropriate wage determination. 29 C.F.R. Sec. 4.4 (1995).