B-169547, FEB 10, 1971

B-169547, FEB 10, 1971

BID PREPARATION COSTS DECISION DENYING REIMBURSEMENT FOR BID PREPARATION COSTS INCIDENT TO AN IFB ISSUED BY THE DEPARTMENT OF THE NAVY AND CONTRACT AWARD TO ADOLPH J. BUEHLER, INC. NOTWITHSTANDING THAT GAO SUSTAINED CLAIMANT'S PROTEST AND HELD THAT THE CONTRACTING OFFICER ACTED ERRONEOUSLY IN REJECTING ITS BID AS NONRESPONSIVE, IT HAS BEEN CONSISTENTLY HELD THAT PROSPECTIVE CONTRACTORS HAVE NO ENFORCEABLE RIGHT TO RECOVER BID PREPARATION COSTS IN THE EVENT THEY ARE NOT AWARDED THE CONTRACT, B-167733, FEBRUARY 9, 1970, AND B- 169425, JUNE 12, 1970. THE COURTS HAVE UPHELD THIS POSITION UNLESS THE AWARD WAS MADE IN AN ARBITRARY OR CAPRICIOUS MANNER, WHICH IS NOT HERE THE CASE. THEREFORE, THE REQUEST FOR PAYMENT OF THESE COSTS MUST BE DENIED.

TO LAW SHE INSTRUMENT COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTERS DATED SEPTEMBER 24 AND NOVEMBER 10, 1970, IN WHICH YOU REQUEST THAT YOU BE PAID THE AMOUNT OF $3,065.00 BY THE DEPARTMENT OF THE NAVY AS REIMBURSEMENT FOR YOUR BID PREPARATION COSTS ON INVITATION FOR BIDS NO. N00600-70-B-0262 ISSUED BY THE NAVY PURCHASING OFFICE, WASHINGTON, D.C.

THE ABOVE IFB WAS ISSUED ON DECEMBER 29, 1969, AND UPON OPENING, ALTHOUGH YOUR BID WAS DETERMINED TO BE LOW, YOUR COMPANY WAS CONSIDERED TO BE NONRESPONSIVE AS A RESULT OF YOUR SUBMISSION OF ADDITIONAL UNSOLICITED MATERIAL WHICH DESCRIBED ITEMS WHICH DID NOT MEET THE SPECIFICATIONS. A RESULT, THE CONTRACTING OFFICER AWARDED THE CONTRACT TO ADOLPH J. BUEHLER, INCORPORATED, AS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER, AND YOU PROTESTED TO THIS OFFICE.

IN OUR DECISION OF SEPTEMBER 17, 1970, WE STATED, "WE BELIEVE THE CONTRACTING OFFICER ACTED ERRONEOUSLY IN REJECTING THE BID BY LAW SHE ON THAT BASIS." WE FURTHER STATED THAT " ***THE BID (REFERRING TO YOUR BID) SHOULD NOT HAVE BEEN REJECTED AS NONRESPONSIVE." HOWEVER, SINCE THE MATERIALS UNDER THE CONTRACT HAD ALREADY BEEN DELIVERED BY ADOLPH J. BUEHLER, INC., WE DID NOT RECOMMEND CANCELLATION OF THE CONTRACT.

CONCERNING YOUR CLAIM THAT YOUR FIRM IS ENTITLED TO RECOVER ITS EXPENSES FOR THE PREPARATION OF ITS BID, THIS OFFICE HAS CONSISTENTLY HELD THAT PROSPECTIVE CONTRACTORS HAVE NO ENFORCEABLE RIGHT TO RECOVER SUCH EXPENSES IN THE EVENT THEY ARE NOT AWARDED THE CONTRACT. SEE B 167733 DATED FEBRUARY 9, 1970 AND B-169425 DATED JUNE 12, 1970. THE COURTS HAVE UPHELD OUR POSITION EXCEPT IN CASES WHERE BIDS WERE NOT INVITED IN GOOD FAITH, OR IN CASES WHERE THE AWARD WAS MADE IN AN ARBITRARY AND CAPRICIOUS MANNER WITHOUT REGARD TO STATUTE AND REGULATION. SEE HEYER PRODUCTS COMPANY, INC., V UNITED STATES, 135 CT. CL. 63 (1956) AND KECO INDUSTRIES, INC., V UNITED STATES, 428 F2D 1233 (1970). IN THE HEYER PRODUCTS CASE, THE COURT STATED AT P. 71 AS FOLLOWS:

"IT GOES WITHOUT SAYING THAT NOT EVERY UNSUCCESSFUL BIDDER IS ENTITLED TO RECOVER THE COST OF PUTTING IN HIS BID. RECOVERY CAN BE HAD IN ONLY THOSE CASES WHERE IT CAN BE SHOWN BY CLEAR AND CONVINCING PROOF THAT THERE HAS BEEN A FRAUDULENT INDUCEMENT FOR BIDS, WITH THE INTENTION, BEFORE THE BIDS WERE INVITED OR LATER CONCEIVED, TO DISREGARD THEM ALL EXCEPT THE ONES FROM BIDDERS TO ONE OF WHOM IT WAS INTENDED TO LET THE CONTRACT, WHETHER HE WAS THE LOWEST RESPONSIBLE BIDDER OR NOT. IN OTHER WORDS, IT MUST BE SHOWN THAT BIDS WERE NOT INVITED IN GOOD FAITH, BUT AS A PRETENSE TO CONCEAL THE PURPOSE TO LET THE CONTRACT TO SOME FAVORED BIDDER, OR TO ONE OF A GROUP OF PREFERRED BIDDERS, AND WITH THE INTENT TO WILFULLY, CAPRICIOUSLY, AND ARBITRARILY DISREGARD THE OBLIGATION TO LET THE CONTRACT TO HIM WHOSE BID WAS MOST ADVANTAGEOUS TO THE GOVERNMENT."

THERE IS NO INDICATION IN THE RECORD THAT BIDS WERE NOT INVITED IN GOOD FAITH IN THE INSTANT PROCUREMENT, OR THAT THERE WAS ANY ACTION ON THE PART OF THE CONTRACTING OFFICER WHICH COULD REASONABLY BE CONSIDERED ARBITRARY OR CAPRICIOUS IN REJECTING YOUR BID AS NONRESPONSIVE. INSTEAD, IT APPEARS THAT THE DECISION TO REJECT YOUR BID WAS REACHED ONLY AFTER AN EXTENSIVE ANALYSIS OF THE APPLICABLE LAW, REGULATIONS, AND DECISIONS OF THIS OFFICE. THE FACT THAT THE LEGAL CONCLUSION REACHED BY THE CONTRACTING OFFICER FOLLOWING SUCH ANALYSIS WAS NOT CONCURRED IN BY THIS OFFICE IN OUR SUBSEQUENT CONSIDERATION OF YOUR PROTEST, AFFORDS NO BASIS FOR CONCLUDING THAT THE CONTRACTING OFFICER ACTED IN BAD FAITH OR THAT YOU ARE OTHERWISE ENTITLED TO RECOVER YOUR BID PREPARATION COSTS.

ACCORDINGLY, YOUR REQUEST FOR PAYMENT OF SUCH COSTS MUST BE DENIED.