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was October 19, 1970, as stated in telegraphic amendment No. 3 to the RFP, and no further revisions were received after that date. Further, no changes were made by any offeror in its proposed union structure in response to the questions which had been raised by the Government.

Subsequently, as in the initial assessment, your proposal and Pan Am's proposal were ranked essentially equivalent technically with Boeing's proposal being third. On the business aspects of the evaluation process, however, you rated very high with Boeing nearly as high. Pan Am was rated third on the basis that its proposed wage rates were not realistic, such rates being lower than Pan Am now pays at the nearby Air Force Eastern Test Range and also dependent upon the success of Pan Am's efforts to induce IAM employees to transfer to the TWU and IBT units with which Pan Am has its bargaining agreements, a factor which NASA believes, as stated above, is likely to involve serious labor problems.

After careful reconsideration of all proposals, NASA concluded that the technical superiority of your proposal did not justify its acceptance if the low cost arrangement could be achieved with Boeing, whose technical proposal was entirely acceptable to NASA. NASA accordingly concluded that selection of Boeing's basic proposal would give the Government the best promise of good technical performance and reasonable cost, and the Acting Administrator of NASA directed that negotiations be conducted with Boeing on the basis of the labor plan reflected in Boeing's proposal, with the condition that Boeing show firm agreements with the appropriate unions providing coverage for the work to be performed under the procurement before approval of the contract.

As to Pan Am, whose proposal price was close to Boeing's basic proposal price, NASA decided not to risk the labor unrest which was likely to attend its acceptance. In view of this rejection of Pan Am's proposal, and our decision of today denying Pan Am's protest against such rejection, it would appear that your protest against consideration of Pan Am's proposal for award has become moot. The remainder of this decision will therefore be confined to your protest against consideration of Boeing's proposal.

Boeing, upon notice from NASA of your protest, submitted a legal memorandum to NASA stating, among other things, that your agreements with the IAM specifically state that they are "in accordance with the provisions of the Railway Labor Act" therefore, Boeing, not being a carrier subject to the RLA, could not be bound by your agreements. Further, Boeing raises the question of the legality of your agreements on the basis that the services in question do not relate to transportation, and under the decision in the Jackass Flats case, supra, the National Labor Relations Act is the controlling statute.

Enlarging on its argument that it cannot succeed to your union bargaining agreements, Boeing stated that such agreements are with a nationwide unit which includes individuals employed as guards. While the Railway Labor Act, according to Boeing, permits inclusion of guards in the bargaining units, Section 9(b) of the National Labor Relations Act (29 U.S.C. 159(b)) specifically prohibits certification by the NLRB of any bargaining unit which includes guards.

Boeing also pointed out that your agreements do not provide for arbitration as contemplated by the National Labor Relations Act but rely, rather, upon the provisions of the Railway Labor Act. In this connection, Boeing stated that District Lodge 142 of the IAM, with which you executed an agreement, bargains solely for employees subject to the Railway Labor Act.

Boeing also urged that since it has over 22,000 employees represented by the IAM in a nationwide bargaining unit, the additional 1,000 employees which Boeing might hire from your firm should properly be considered as an "accretion" to Boeing's IAM bargaining agreement in which event the "successor employer" doctrine would have no application.

In 42 Comp. Gen. 1 (1962), we had occasion to consider whether the Department of Defense and NASA could properly include in missile construction contracts at Cape Canaveral and Patrick Air Force Base the terms of a labor management project agreement which would require payment of specified wages and fringe benefits to laborers and mechanics, which had been approved by the Secretary of Labor but which were not prescribed pursuant to statute. At page 2 of our decision, we made the following pertinent statements :

"Our Office has considered many proposals to incorporate in Government contracts conditions or requirements concerning wages and other employment conditions and practices, and has in a long series of decisions adhered to the principle that contract stipulations tending to restrict competition and to increase the cost of performance are unauthorized unless reasonably requisite to

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the accomplishment of the legislative purposes of the contract appropriation involved, or unless such stipulations are expressly authorized by statute; and that when the Congress has legislated on the subject it is not open to administrative discretion to stipulate conditions beyond or at variance with those specifically directed by the statute."

In line with the above statements, which were followed by citations to pertinent decisions of our Office, such as 10 Comp. Gen. 294 (1931) relating to the need for specific statutory authority to prescribe in a Government contract minimum wage rates to be paid by a contractor, and for the other reasons stated in our decision, we held that a clause in the construction contracts in question which would require adherence to the project agreement would not be in conformity with the general statutes governing Government contracting. We did, however, point out that if a determination were made pursuant to the act of August 28, 1958, Public Law 85–804, 50 U.S.C. 1431-35, and Executive Order 10789, November 14, 1958, that the national defense would be facilitated by the inclusion of such a provision in the contracts in question, the contracts could be executed or modified accordingly.

We are not aware of any statute which imposes a requirement that a contractor who succeeds a prior contractor in the performance of services for the Government at a Government installation is required to assume the predecessor contractor's bargaining agreement with its union employees. Nor are we aware of any court decision to such effect. Neither the Wiley nor the Burns cases cited by NASA in its answer to question 56 at the preproposal conference, nor any of the other cases which you have cited for the proposition that the "successor employer" doctrine applies to the proposed contract, involved services at a Government installation. Nor did consideration of the statutes governing Government contracting enter into the making of any such decisions.

Further, we believe that in the case of Potter v. Emerald Maintenance, Civil Action 70-L-36, Southern District of Texas, October 29, 1970, relating to contracts for the performance of service and maintenance work for the Air Force, the United States District Court raised some objections to application of the successor contractor theory, as espoused in Burns, to Government procurements.

Turning now to the effect of the language which NASA used in the RFP and in its response to question 56 respecting your bargaining agreements with incumbent employees, we are unable to concur with your position that such statements constituted a requirement that offerors consent to be bound by such agreements. The language in the RFP simply called for a statement of the offeror's understanding of the impact, if any, of such agreements upon the offeror's assumption of the contract responsibilities, and the reply to question 56 merely placed offerors on notice of the "successor employer" doctrine as applied by NLRB in the Burns and Wiley cases but left to the offerors the interpretation of such decisions. That such interpretations could vary, depending upon the nature of each offeror's proposal, is apparent from NASA's answer numbered 2. While it is evident that your commitment to wage rates which were higher than those apparently available to Boeing and Pan Am placed you in a poor competitive position if you proposed only on the basis of paying such rates, that fact alone presents no adequate basis for requiring all other bidders to adopt your wage rates.

In line with the foregoing, it is our view that NASA was not obliged to include in the RFP a requirement that offerors agree to accept the "successor employer" doctrine as to incumbent employees covered by union bargaining agreements, and it is our further view that the language which NASA used in the RFP and in its response to question 56 at the preproposal conference did not state such a requirement but properly left the decision to the offerors. In the circumstances, we are unable to accept your position that the Government was deprived of meaningful competition under the solicitation so as to justify resolicitation of the procurement, as you have suggested as an alternative to elimination of Boeing and Pan Am from consideration for award.

Nor can we accept your argument that Boeing, which has proposed to abide by its own bargaining agreement with the IAM, has offered a price that is less than reasonably anticipated costs contrary to the provisions of NASA Procure. ment Regulation (NASA PR) 1-311 relating to "buying in” at low cost with expectation of recovering additional amounts after award. Not only has there been no authoritative determination that your employer bargaining agreements are applicable to any successor contractor, which will be performing services in addition to those currently performed by you, but the Acting Administrator of NASA has conditioned the award to Boeing on a showing by

Boeing of firm agreements with the appropriate unions providing coverage for the work to be performed under the proposed contract. It is our opinion that Boeing's proposal, when supported by such agreements, may properly be considered reasonable as to anticipated costs.

We have noted that the award of cost reimbursement contracts requires exercise by procurement personnel of informed judgments whether submitted proposals are realistic as to proposed costs as well as to technical approach. B-152039, January 20, 1964. Further, we believe that such judgment properly should be left to the discretion of the contracting agencies concerned since they are in the best position to assess "realism" of costs and technical approaches and must bear the major criticism for any difficulties or express experienced by reason of a defective cost analysis. B-171076, December 16, 1970, 50 Comp. Gen.

On the record before us, we are unable to conclude that NASA's selection of Boeing for negotiation of a contract for this procurement, under the conditions stipulated by the Acting Administrator of NASA as set out above, was other than a valid exercise of the descretion granted to NASA, as the contracting agency, to make the award which will be most advantageous to the Government as contemplated by the provisions of NASA PR-805.2. Your protest is therefore denied. Very truly yours,

ELMER B. STAATS, Comptroller General of the United States.

Exhibit 8

INTERNATIONAL ASSOCIATION OF MACHINISTS,

November 13, 1970. Dr. THOMAS O. PAINE, Administrator, Mr. ROBERT KING, National Aeronautics Space Administration, Washington, D.C. Mr. OLIVER KEARNS, Director of Labor Relations, Kennedy Space Center, Cape Kennedy, Fla.:

Information reaching my office indicates that NASA now has pending a determination with respect to the continuation of Trans World Airlines, Inc., as a subcontractor for certain so-called housekeeping functions at the Kennedy Space Center, Cape Kennedy, Florida, and particularly, that portion of same identified as Merritt Island. The employes of TWA in this case are represented by the International Association of Machinists and Aerospace Workers, AFL-CIO, and we are seriously disturbed by the content of the information at hand. The employment in question is governed by the provisions of the Railway Labor Act as amended and the International Association of Machinists is the duly authorized and certified employe representative. As such, we have a collective bargaining agreement-reached under and through the auspices of the National Mediation Board—which ordains that the work in question will be performed by appropriately classified employes under the coverage of that agreement. The "scope rule” contained therein effectively and lawfully asserts that IAM members—in addition to enjoying representation as employes for the purpose of establishing wages, hours and working conditions in effect "own" the work currently contracted for by TWA. That same agreement embodies a "successor and assigns" clause which preserves all rights accruing thereunder whether or not any change in employers occurs. It is also noteworthy that a well established principle of law with respect to the application of the Railway Labor Act is that any collective bargaining agreement executed under the Act's coverage survives to infinity and is a contract which uniquely enjoys coverage under Federal statutes only and is cancellable only by the mutual consent of the signatories. We regard the rights enumerated herein as inalienable and this wire may be construed as notice by the IAM that we will do all in our power to preserve them intact including recourse to the appropriate Federal Courts should that become necessary. Any information that you may be able to provide would be appreciated and may serve to clear the air and avoid any untoward developments.

FLOYD E. SMITH, International President.

Exhibit 9

[Telegrams]
INTERNATIONAL ASSOCIATION OF MACHINISTS,

December 16, 1970.
Mr. OLIVER KEARNS,
Director of Labor Relations, NASA, Kennedy Space Center Building, Kennedy

Space Center, Cocoa, Fla.: Understand that negotiations pursuant to recent NASA contract award began with Boeing Company on December 14. So that there may be no misunderstanding, it is position of IAM as representative of TWA employes currently performing work in question that any successor employe must assume wages, hours and working conditions as currently embodied in Collective Bargaining Agreement between IAM and TWA. No other labor agreement has applieability in these circumstances and we hold firmly to the view that any deviation from existing wages, hours and working conditions would be contrary to both national labor policy and the U.S. Government Procurement policies. Boeing Company has been advised of this position and any assertions to the contrary may be regarded as unfounded rumors.

FLOYD E. SMITH, International President.

Exhibit 10

INTERNATIONAL ASSOCIATION OF MACHINISTS,

January 8, 1971. Mr. ELMER B. STAATS, Comptroller General of the United States, U.S. General Accounting Office,

Washington, D.C.: Our organization has been informed that protests of interested bidders regarding the selection of the Boeing Company to provide installation and technical support services at the Kennedy Space Center have been forwarded to your office for review and decision. Certain work functions involved are covered by a collective bargaining agreement between the International Association of Machinists & Aerospace Workers and the incumbent employer and, therefore, clearly demand proper recognition and continuation of wages, hours and other conditions of employment as now. provided for in that contract. Notwithstanding the established national labor laws and government procurement policy NASA and the prospective successor have entered into negotiations which, in the end result, will arbitrarily reduce current employee wages and fringe benefiits and thereby avoid the welfare and protection of affected employees as established through collective bargaining under federal law. The only valid and effective terms of employment are now and should continue to be in full force and effect. The present situation is especially alarming to our organization and to those employees we represent at the Kennedy Space Center who over the years have maintained a harmonious and productive relationship with NASA in advancing the space program of our country.

FLOYD E. SMITH. International President, IAMAW.

Exhibit 11

MARCH 1, 1971. Mr. ELMER B. STAATS, Comptroller General of the United States, U.S. General Accounting Office,

Washington, D.C.: The letter of February 26, 1971 of the Comptroller General to Trans World Airlines concerning NASA's selection of The Boeing Company for negotiation of a contract to perform installation support services at Kennedy Space Center states at Page 7 that: Quote ... the Acting Administrator of NASA directed that negotiations be conducted with Boeing on the basis of the labor plan reflected in Boeing's proposal, with the condition that Boeing show firm agreements with the appropriate unions providing coverage for the work to be performed under the procurement before approval of the contract. Unquote. It similarly states at Page 10 that: Quote ... the Acting Administrator of NASA has conditioned the award to Boeing on a showing by Boeing of firm agreements with the appropriate unions providing coverage for the work to be performed under the proposed contract. Unquote. This is to inform you that the IAMAW has no agreement, much less a firm agreement, with Boeing providing coverage for the work proposed to be performed by Boeing for NASA at the Kennedy Space Center.

The only agreement between Boeing and the IAMAW covers units other than the one presently at issue. The unit presently at issue is covered by an agreement between Trans-World Airlines and IAMAW not due to expire until December 31, 1971. The IAMAW could not, and did not, enter into an agreement with Boeing covering a unit which it had under contract with another employer. The only agreement that IAMAW will enter into with Boeing covering the Kennedy Space Center unit presently under contract with Trans World Airlines is one by which Boeing adopts the essential terms of IAMAW's agreement with Trans World Airlines for its present duration. Accordingly, Boeing has no agreement with IAMAW covering the work to be performed by Boeing under the proposed contract with NASA. All Boeing has is a legal theory by which it asserts, but IAMAW denies, that an agreement exists between it and the IAMAW covering the work in issue. Boeing cannot pass off, and NASA cannot accept, a legal theory as the equivalent of a "firm agreement” between Boeing and IAMAW. Therefore, in accordance with the February 26, 1971 letter of the Comptroller General, NASA cannot consummate the proposed contract with Boeing.

FLOYD E. SMITH, International President, IAM AW.

Exhibit 12

INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS,

Washington, D.C. March 12, 1971. Mr. C. R. McGEHEE, Division Manager, Field Operations and Support, The Boeing Co., Seattle, Wash.

DEAR MR. MOGEHEE: In view of the execution of a Base Support Services Contract between The Boeing Company and National Aeronautics and Space Administration by which Boeing undertakes to provide NASA with support and housekeeping services at the John F. Kennedy Space Center, Florida, I am writing to you concerning the representation and employment terms of the nonsupervisory employees to be employed by Boeing to do the support and housekeeping work requisite to performing the Base support Services Contract. As you know, the employees now performing this work are represented by the International Association of Machinists and Aerospace Workers, AFL-CIO, and their wages, hours and other terms and conditions of employment are presently governed by the collective bargaining agreement between IAMAW and Trans World Airlines, Inc., entered into on January 28, 1970 and not due to expire until December 31, 1971.

1. The IAMAW requests that Boeing recognize it as the exclusive bargaining representative of the foregoing unit of employees.

2. The IAMAW requests that Boeing refrain from unilaterally, without prior notification of and negotiation with the IAMAW, changing the existing wages, hours and other terms and conditions of employment of the foregoing unit of employees.

3. The IAMAW requests that Boeing adopt and observe the terms of the collective bargaining agreement between IAMAW and TWA as they apply to the foregoing unit of employees. If Boeing believes that particular terms of that agreement are inappropriate in their application to Boeing's forthcoming operation at the Kennedy Space Center under its Base Support Services Contract, the IAMAW requests that Boeing identify those particular terms which in its view are inappropriate. The IAMAW will negotiate with Boeing concerning those identified terms to the end that mutual agreement upon the deletion, modification, or continuance of those terms shall be sought. I enclose for your convenience a copy of the current agreement between IAMAW and TWA. I would appreciate your reply to this letter within five days. Sincerely,

FLOYD E. SMITH, International President.

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