B-150660, MAR. 29, 1963

B-150660, MAR. 29, 1963

TO MESSRS. HERBERT S. GARTEN AND MILTON B. EDELSON:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 17, 1963, PROTESTING THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER THE ADVERTISEMENT FOR BIDS TO LEASE ISSUED NOVEMBER 23, 1962, BY THE WASHINGTON REGIONAL OFFICE OF THE POST OFFICE DEPARTMENT INVOLVING A NEW CONSTRUCTION FACILITY TO HOUSE THE GLEN BURNIE, MARYLAND, POST OFFICE.

THE INVITATION SOLICITED BIDS--- TO BE OPENED JANUARY 8, 1963--- TO FURNISH LEASED SPACE FOR POSTAL PURPOSES AT AN ANNUAL RENTAL WITH A BASIC LEASE TERM OF "TWENTY (20) YEARS WITH ONE 10-YEAR, AND TWO 5 YEAR RENEWAL OPTIONS AS STATED IN THE POST OFFICE DEPARTMENT FORM OF BID (AGREEMENT TO LEASE).' THE ADVERTISEMENT INFORMED THE BIDDERS THAT --

"ANY AWARD MADE UNDER THIS ADVERTISEMENT WILL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. THE POST OFFICE DEPARTMENT RESERVES THE RIGHT AFTER BID OPENING TO NEGOTIATE AS TO PRICE WITH THE BIDDER IT IN ITS JUDGMENT CONSIDERS LOW, OR TO REJECT ANY OR ALL BIDS.'

THE DEPARTMENT HAS REPORTED THAT THE ADVERTISEMENT PRODUCED 25 BIDS RANGING FROM AN ANNUAL RENTAL OF $39,272 TO $69,950 FOR THE BASIC 20 YEAR TERM, AND THAT WHILE YOUR BID OF $47,713 FOR THE BASIC TERM WAS 12TH LOWEST FOR SUCH TERM, YOUR BID CONTAINED THE LOWEST RENTALS FOR THE TEN- YEAR AND TWO FIVE-YEAR RENEWALS AT RENTALS OF $33,000, $30,000 AND $28,000 PER ANNUM, RESPECTIVELY. THE DEPARTMENT HAS FURTHER REPORTED THAT AFTER BID OPENING, NEGOTIATIONS CONDUCTED WITH THE BETTER HOME INVESTMENT CORPORATION, WHICH OFFERED THE LOWEST RENTAL FOR THE INITIAL 20 YEARS, RESULTED IN THE REDUCTION OF THAT CONCERN'S ORIGINAL BID OF $39,474 FOR ALL RENEWALS TO $39,000 FOR THE 10-YEAR RENEWAL AND TO $38,500 AND $37,500 FOR THE TWO FIVE-YEAR RENEWALS, RESPECTIVELY.

WHILE THE DEPARTMENT HAS REPORTED THAT IT IS PROPOSED TO MAKE AN AWARD TO BETTER HOME INVESTMENT CORPORATION, NO AWARD HAS YET BEEN MADE. PROTESTING ANY AWARD TO ANY OTHER BIDDER YOU CONTEND THAT YOU WERE THE LOW BIDDER, APPARENTLY BASING SUCH CONTENTION ON THE GROUND THAT THE AGGREGATE RENTAL OFFERED IN YOUR BID FOR THE 40 YEARS MADE UP OF THE BASIC TERM AND THE THREE RENEWALS IS THE LOWEST RECEIVED. IT APPEARS THAT THE ACTUAL DIFFERENCE WOULD BE $394. THE DEPARTMENT, HOWEVER, JUSTIFIES THE PROPOSED AWARD TO BETTER HOME INVESTMENT CORPORATION AS BEING AUTHORIZED UNDER THE AUTHORITY GRANTED TO THE POSTMASTER GENERAL IN 39 U.S.C. 2102, WHICH PROVIDES IN PART THAT---

"/A)NOTWITHSTANDING ANY OTHER PROVISION OF LAW THE POSTMASTER GENERAL MAY LEASE, ON SUCH TERMS AS HE DEEMS APPROPRIATE, REAL PROPERTY NECESSARY IN THE CONDUCT OF THE AFFAIRS OF THE DEPARTMENT.'

IN FURTHER JUSTIFICATION OF THE PROPOSED AWARD TO BETTER HOME INVESTMENT CORPORATION IT IS REPORTED THAT---

"THE DEPARTMENT, PURSUANT TO THE TERMS OF THE ADVERTISEMENT, CONSIDERS THE BID OF BETTER HOME INVESTMENT CORP. AS THE BID MOST ADVANTAGEOUS TO THE GOVERNMENT. IN EVALUATING THE TWO BIDS, THE DEPARTMENT GAVE ALMOST ALL OF THE WEIGHT TO THE ANNUAL RENT QUOTED FOR THE BASIC LEASE TERM SINCE ON THE BASIS OF THE KNOWN FACTS IN THIS CASE, IT FELT IT COULD NOT REASONABLY PROJECT OCCUPANCY BEYOND 20 YEARS. RENEWAL OPTIONS WERE SOUGHT IN THE EVENT IT MIGHT BE IN THE GOVERNMENT'S INTEREST TO CONTINUE OCCUPANCY AT THE EXPIRATION OF THE BASIC LEASE TERM. IF AWARD WERE MADE TO THE PROTESTANT, THE GOVERNMENT WOULD BEAR AN ADDITIONAL COST OF $168,820 (THE DIFFERENCE BETWEEN THE TWO BIDS FOR BASIC TERM), SHOULD THE DEPARTMENT ELECT NOT TO RENEW AT THE END OF THE PRIMARY TERM.'

IT MAY BE ADDED THAT FOR 30 YEARS, MADE UP OF THE INITIAL TERM AND THE FIRST 10-YEAR RENEWAL, THE AGGREGATE RENTAL UNDER YOUR BID WOULD BE $104,346 MORE THAN UNDER THAT OF THE BETTER HOME INVESTMENT CORPORATION; FOR 35 YEARS YOUR RENTAL WOULD BE $56,976 HIGHER; AND THAT ONLY IN THE LAST MONTH OF THE 40TH YEAR WOULD THE AGGREGATE RENTALS PAID AT YOUR QUOTED RATES DROP BELOW THE AGGREGATE ORIGINALLY QUOTED BY THE LATTER BIDDER.

WE HAVE HELD THAT STATUTES GRANTING AUTHORITY TO NEGOTIATE CONTRACTS WITHOUT ADVERTISING, SUCH AS 39 U.S.C. 2102, COMPREHEND THE LESSER AUTHORITY TO UTILIZE ADVERTISING TO THE EXTENT ADMINISTRATIVELY DEEMED APPROPRIATE IN MAKING CONTRACTS THEREUNDER, WITHOUT RESTRICTING FINAL ADMINISTRATIVE DETERMINATION OF THE BIDDER TO WHOM THE CONTRACT SHOULD BE AWARDED. 20 COMP. GEN. 194. AS POINTED OUT IN THE CITED DECISION, IN SUCH CASES AN ADMINISTRATIVE ELECTION TO ADVERTISE RATHER THAN TO NEGOTIATE WITH A SINGLE CONTRACTOR DOES NOT NECESSARILY REQUIRE THE MAKING OF AN AWARD TO THE LOWEST BIDDER REGARDLESS OF ANY OR ALL OTHER CONSIDERATIONS. IN THE PRESENT INSTANCE THE DEPARTMENT HAS REPORTED THAT IT PROPOSES TO AWARD THE CONTRACT TO THE LOWEST BIDDER FOR THE BASIC TERM (BETTER HOME INVESTMENT CORPORATION). IT ALSO POINTS OUT THAT UNDER 39 U.S.C. 2102 IT HAS AUTHORITY TO ENTER INTO THE PROPOSED LEASE BY NEGOTIATION WITHOUT REGARD TO THE RULES OF FORMALLY ADVERTISED COMPETITIVE BIDDING. EVEN IF IT BE CONSIDERED THAT IT WAS BOUND BY THE LANGUAGE OF THE INVITATION FOR BIDS TO NEGOTIATE ONLY WITH THE LOWEST BIDDER, WE FIND NO BASIS FOR DISAGREEMENT WITH ITS CONCLUSION THAT BETTER HOME INVESTMENT CORPORATION WAS THE LOWEST BIDDER, SINCE NOTHING IN THE INVITATION REQUIRES EVALUATION TO BE STRICTLY ON THE BASIS OF AGGREGATE RENTAL FOR FORTY YEARS, AND IN FACT THE DEPARTMENT COULD NOT OBLIGATE THE GOVERNMENT FOR THAT PERIOD.

FOR THE REASONS STATED, WE CONCLUDE THAT WE WOULD NOT BE JUSTIFIED IN OBJECTING TO THE PROPOSED AWARD TO THE BETTER HOME INVESTMENT CORPORATION.