Can the sub contractor to the Architecture and Engineering firm be excluded from bidding on the construction portion of the project when it is released for bidding?
Based on the information provided, there may be at least the perception of an organizational conflict of interest which may give an appearance of an unfair competitive advantage. In accordance with FAR 9.505(a), the contracting officer is required to “avoid, neutralize or mitigate potential significant OCIs before contract award.” Also, FAR 36.209 states “no contract for the construction of a project shall be awarded to the firm that designed the project or its subsidiaries or affiliates, except with the approval of the head of the agency or authorized representative.”
While a subcontractor is not a subsidiary or affiliate, the primary purpose of FAR 36.209 is to prevent an unfair competitive advantage, which might be a concern someone would have about a subcontractor to the A-E firm bidding on the construction and file a protest. However, if the subcontractor is performing a limited or minor portion of the work under the A-E design contract, the Contracting Officer may decide it’s so minor that it’s not a significant issue. On the other hand, she might determine that it’s significant enough that it needs to be addressed by attempting to avoid, prevent or mitigate the potential OCI. For example, the paint and masonry samples could be provided to all of the bidders for the subsequent construction contract, and the contracting officer could recommend any other reasonable steps as necessary to deal with the OCI. Her recommendation would need to be in a written determination to the appropriate approval authority in accordance with FAR 9.506 – Procedures.
So, the bottom line is the contracting officer will need to first determine if a significant OCI even exist. If she determines one does exist, she then would need to make a determination whether or not the potential OCI can be adequately addressed and recommend a strategy to address it in order for the subcontractor to be permitted to bid for the construction. A good GAO case to review is McTech Corporation, B-406100,B-406100.2: Feb 8, 2012. Finally, before making a recommendation/final decision related to any acquisition situation which involves or may involve a potential OCI, discuss it with your legal advisor.