B-146323, SEP. 18, 1961

B-146323, SEP. 18, 1961

TO THE BAUMGARTEN COMPANY OF WASHINGTON:

FURTHER REFERENCE IS MADE TO YOUR COMPANY'S PROTEST AGAINST THE AWARD MADE TO HANLEY POSTAL SUPPLY, INC., FOR FURNISHING RUBBER POSTMARKING AND CANCELLING STAMPS TO THE POST OFFICE DEPARTMENT FOR THE FISCAL YEAR 1962. THIS PROTEST WAS THE SUBJECT OF YOUR LETTERS DATED JULY 6 AND AUGUST 3, 1961.

THE INVITATION, ISSUED ON JUNE 16, 1961, PROVIDED THAT BIDS WOULD BE PUBLICLY OPENED FOR FURNISHING THE SUPPLIES DESCRIBED IN THE ACCOMPANYING SCHEDULE FOR DELIVERY F.O.B., "AS SHOWN ON PAGE TWO.'

PAGE 3 OF THE INVITATION PROVIDED THAT: "BECAUSE OF URGENCY OF DELIVERY AND SECURITY MEASURES, THE MANUFACTURING FACILITIES OF SUCCESSFUL BIDDERS SHALL BE LOCATED IN WASHINGTON, D.C.' IT WAS ALSO SPECIFIED THAT THE AWARD WOULD BE MADE TO THE LOWEST BIDDER IN THE AGGREGATE. SINCE HANLEY HAD SUBMITTED THE LOWEST AGGREGATE BID WHEN BIDS WERE OPENED ON JUNE 29, 1961, IN THE ESTIMATED AMOUNT OF $71,250 AS COMPARED TO YOUR COMPANY'S BID OF $77,530, AWARD WAS MADE TO THAT BIDDER ON JULY 6, 1961.

YOU PROTEST AGAINST THE AWARD ON THE BASIS THAT HANLEY HAD NO MANUFACTURING FACILITIES IN WASHINGTON, D.C., UNTIL AT LEAST JULY 13, 1961, WHEN THE FIRST ORDER WAS ISSUED TO HANLEY FOR THE DELIVERY OF A CERTAIN QUANTITY OF STAMPS WITHIN 24 HOURS. IT IS YOUR POSITION THAT IN ORDER TO QUALIFY FOR THE CONTRACT THE SUCCESSFUL BIDDER HAD TO BE IN THE POSITION TO PERFORM NOT LATER THAN JULY 1, 1961.

WE BELIEVE THAT THE REQUIREMENT FOR LOCAL MANUFACTURING FACILITIES PERTAINED TO A MATTER OF RESPONSIBILITY OF BIDDERS RATHER THAN RESPONSIVENESS OF THE BIDDERS AND THAT, THEREFORE, THE LOW BIDDER WAS NOT REQUIRED TO HAVE FACILITIES ALREADY ESTABLISHED IN WASHINGTON, D.C., AS A CONDITION PRECEDENT TO HAVING ITS BID CONSIDERED. UNDER THIS VIEW, THE FACT THAT THE SUCCESSFUL BIDDER DID NOT HAVE LOCAL FACILITIES AVAILABLE AT THE TIME OF OPENING OF BIDS OR EVEN AT THE TIME OF AWARD DOES NOT FURNISH A VALID LEGAL BASIS FOR CANCELLATION OF THE CONTRACT.

IT WOULD HAVE BEEN PREFERABLE, OF COURSE, FOR THE POST OFFICE DEPARTMENT TO HAVE CONSUMMATED THE CONTRACT SUFFICIENTLY IN ADVANCE OF THE CONTEMPLATED EFFECTIVE DATE OF JULY 1, 1961, TO HAVE PERMITTED THE SUCCESSFUL BIDDER THE REASONABLY SHORT PERIOD OF TIME NECESSARY TO ACQUIRE OR ESTABLISH THE REQUIRED FACILITIES. AS INDICATED ABOVE, HOWEVER, WE CANNOT AGREE THAT FAILURE TO FOLLOW SUCH PREFERABLE PROCEDURE WOULD JUSTIFY DEPRIVING THE GOVERNMENT OF THE LOW BIDDER'S MORE FAVORABLE PRICES FOR THE FISCAL YEAR INVOLVED BY CANCELLING THE AWARD MADE TO THAT BIDDER.

ACCORDINGLY, WHILE WE BELIEVE THE CONTRACT SHOULD HAVE BEEN CONSUMMATED SUFFICIENTLY IN ADVANCE OF THE JULY 1, 1961, EFFECTIVE DATE TO ALLOW THE SUCCESSFUL BIDDER TIME TO ACQUIRE OR ESTABLISH FACILITIES, NO LEGAL BASIS IS APPARENT FOR DISTURBING THE AWARD AS MADE.

BY LETTER OF TODAY WE ARE ADVISING THE POST OFFICE DEPARTMENT TO TAKE THE NECESSARY CORRECTIVE ACTION TO AVOID RECURRENCE OF SIMILAR SITUATIONS IN THE FUTURE.