B-124197, AUG. 1, 1955

B-124197, AUG. 1, 1955

TO MR. M. A. JOHNSON:

FURTHER REFERENCE IS MADE TO YOUR ATTORNEY'S LETTER OF JUNE 1, 1955, PROTESTING ON YOUR BEHALF THE PROCEDURE FOR MAKING AN AWARD AS PRESCRIBED IN PARAGRAPH 5 OF THE CONDITIONS OF INVITATION NO. 56-14, ISSUED BY THE VETERANS ADMINISTRATION HOSPITAL, NORTH LITTLE ROCK, ARKANSAS, IN RESPONSE TO WHICH YOU SUBMITTED A BID, IN THE NAME OF PAPPY'S SHOE STORE, FOR FURNISHING THE SHOES DESCRIBED IN THE INVITATION.

THE REFERRED-TO INVITATION REQUESTED BIDS FOR FURNISHING MEN'S CLOTHING AND FOOTWEAR AS REQUIRED BY INCOMPETENT BENEFICIARIES AT THE HOSPITAL DURING THE PERIOD BEGINNING JULY 1, 1955, AND ENDING JUNE 30, 1956, UNLESS SOONER TERMINATED UNDER THE PROVISIONS OF THE CONTRACT. THE ITEMS DESCRIBED IN THE INVITATION ARE TO BE PAID FOR WITH THE PATIENT'S OWN FUNDS. PROSPECTIVE BIDDERS WERE REQUIRED BY PARAGRAPH 7 OF THE CONDITIONS OF THE INVITATION TO SUBMIT SAMPLES OF THE ITEMS THEY PROPOSED TO FURNISH. ALSO, BIDDERS WERE ADVISED OF THE ITEMS THEY PROPOSED TO FURNISH. ALSO, BIDDERS WERE ADVISED OF THE MAXIMUM UNIT PRICE THAT WOULD BE PAID FOR EACH ITEM. PARAGRAPH OF THE CONDITIONS OF THE INVITATION PROVIDES AS FOLLOWS:

"METHOD OF AWARD: AFTER CONSIDERING THE ABOVE FACTORS OF QUALITY AND DESIRABILITY, DETERMINATION WILL THEN BE MADE WHETHER IT IS MORE ADVANTAGEOUS TO MAKE A SINGLE AGGREGATE AWARD OR TO MAKE SPLIT AWARDS FOR ANY ITEM OR ITEMS.'

YOU CONTEND THAT THIS PROVISION IMPOSES A CONDITION WHICH TENDS TO LIMIT COMPETITION, WHICH, YOU STATE, WAS DENOUNCED IN 17 COMP. GEN. 37, AND THAT SUCH A REQUIREMENT DOES NOT ENABLE ALL BIDDERS TO COMPETE ON A COMMON BASIS AND ASSURE THE GOVERNMENT OF THE LOWEST PRICE OBTAINABLE. IN 17 COMP. GEN. 37, IT WAS HELD (QUOTING THE SYLLABUS) AS FOLLOWS:

"THERE IS NO AUTHORITY FOR REJECTING BIDS MERELY BECAUSE OF BIDDERS' NONCOMPLIANCE WITH THE REQUIREMENTS OF THE NATIONAL LABOR RELATIONS ACT OF JULY 5, 1935 (49 STAT. 449), OR FOR THE INCLUSION IN ADVERTISED SPECIFICATIONS OR CONTRACTS OF A REQUIREMENT OF COMPLIANCE WITH THE SAID ACT WITH RIGHT RESERVED TO REJECT ALL BIDS OR CANCEL CONTRACTS UPON FAILURE OF SUCH COMPLIANCE.'

THE APPLICABILITY OF THE ABOVE DECISION TO THIS CASE IS NOT APPARENT. THE FACTS OF THE TWO CASES ARE NOT SIMILAR IN ANY MATERIAL RESPECT, NEITHER ARE THE PERTINENT PROVISIONS OF THE TWO SETS OF SPECIFICATIONS INVOLVED. AND, ALTHOUGH THIS OFFICE AND THE COURTS HAVE CONSISTENTLY TAKEN THE POSITION THAT SPECIFICATIONS FOR GOVERNMENT CONTRACTS SHOULD NOT BE UNNECESSARILY RESTRICTIVE OF COMPETITION, WE PERCEIVE NO SOUND BASIS FOR THE VIEW THAT A CONDITION RESERVING THE RIGHT TO MAKE A SINGLE AGGREGATE AWARD IF DETERMINED TO BE MORE ADVANTAGEOUS TO THE GOVERNMENT SHOULD BE HELD OBJECTIONABLE FOR THAT REASON.

IN THE LETTER OF JUNE 1, 1955, IT IS STATED THAT LAST YEAR YOU SUBMITTED A BID FOR FURNISHING SHOES IN RESPONSE TO AN INVITATION CONTAINING THE SAME PROVISION AS CONTAINED IN PARAGRAPH 5 OF THE CONDITIONS OF THE SUBJECT INVITATION; THAT YOU QUOTED A PRICE OF $11.75 A PAIR FOR THE SHOES WHILE THE SUCCESSFUL BIDDER BID $13 PER PAIR; AND THAT THE MERCHANDISE OFFERED BY YOU WAS EQUAL TO OR SUPERIOR IN QUALITY TO THAT OFFERED BY THE SUCCESSFUL BIDDER. IT IS STATED FURTHER THAT YOUR EFFORTS TO LEARN WHY THE CONTRACT HAD BEEN AWARDED TO A HIGHER BIDDER RESULTED IN THE INFORMATION THAT THE ADMINISTRATIVE AUTHORITIES AT THE HOSPITAL HAD MADE A DOGMATIC RULING THAT THE CONTRACT WOULD BE AWARDED TO A FIRM FURNISHING ALL OF THE ITEMS.

THE ADMINISTRATOR OF VETERANS AFFAIRS REPORTED IN A LETTER DATED JULY 21, 1955, AS FOLLOWS:

"THE CONTRACT IS AWARDED TO THE BIDDER WHO OFFERS THE BEST QUALITY WITHIN THE ESTABLISHED PRICE LIMITATION STATED IN THE INVITATION. QUALITY IS DETERMINED BY A CLOTHING COMMITTEE, CONSISTING OF OFFICIALS OF THE HOSPITAL DESIGNATED BY THE MANAGER, WHO EXAMINE SAMPLES SUBMITTED BY THE RESPECTIVE BIDDERS AS TO THEIR WORKMANSHIP AND QUALITY OF MATERIAL. AFTER CONSIDERING THESE FACTORS, DETERMINATION IS THEN MADE IF IT IS MORE ADVANTAGEOUS TO MAKE A SINGLE AGGREGATE AWARD OR TO MAKE SPLIT AWARDS FOR ANY ITEM OR ITEMS. (SEE CONDITION 5 OF THE INVITATION, PAGE 5).

"REGARDING THE BID SUBMITTED LAST YEAR BY MR. JOHNSON, THE MANAGER ADVISES US THAT MR. JOHNSON BID $11.75 FOR TWO ITEMS OF SHOES AND $10.75 FOR ONE ITEM. THE ACCEPTED BID PRICE WAS $12.50 FOR TWO ITEMS AND $11.50 FOR ONE ITEM. THE CLOTHING COMMITTEE DID NOT FEEL THAT THE MERCHANDISE OFFERED BY MR. JOHNSON WAS EQUAL IN QUALITY TO THAT OFFERED BY THE SUCCESSFUL BIDDER.

"MR. JOHNSON'S STATEMENT THAT LAST YEAR IN HIS EFFORTS TO LEARN WHY THE CONTRACT WAS AWARDED TO A HIGHER BIDDER RESULTED IN INFORMATION THAT THE CONTRACT WOULD BE AWARDED TO A FIRM FURNISHING ALL OF THE ITEMS IS IN ERROR, ACCORDING TO THE MANAGER. THE AWARD WAS MADE STRICTLY IN ACCORDANCE WITH THE RESULTS OF A BALLOT OF THE THREE MEMBERS OF THE CLOTHING COMMITTEE ON A QUALITY BASIS.

"RECORDS SHOW THAT DURING THE PAST SIX YEARS THE CLOTHING CONTRACT WAS DIVIDED BETWEEN THREE CONTRACTORS FOR THE FISCAL YEAR 1953, TWO CONTRACTORS FOR 1951 AND THREE CONTRACTORS FOR 1949.'

CONSIDERING THE FACTS THUS REPORTED, TOGETHER WITH THE FACT THAT, FOR THE REASONS STATED, PARAGRAPH 5 OF THE INVITATION DOES NOT APPEAR TO BE OBJECTIONABLE, AND THE FURTHER FACT THAT THE PROCUREMENT WILL INVOLVE THE USE OF NONAPPROPRIATED FUNDS, THERE WOULD APPEAR TO BE NO PROPER BASIS FOR QUESTIONING THE ADMINISTRATIVE PROCEDURE FOLLOWED IN THIS CASE.