B-147291, OCT. 30, 1961

B-147291, OCT. 30, 1961

TO BAROCO ELECTRIC CONSTRUCTION CO.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 2, 1961, PROTESTING AGAINST THE REJECTION OF ALL BIDS RECEIVED UNDER INVITATION ENG-01-076-62- 4, COVERING CONSTRUCTION OF ELECTRICAL EXPANSION FOR NATIONAL AERONAUTICS AND SPACE ADMINISTRATION AT REDSTONE ARSENAL,ALABAMA, AND THE READVERTISEMENT OF CERTAIN OF THE WORK UNDER INVITATION ENG-01-076-62-16.

THE ORIGINAL INVITATION SOLICITED A BASE BID TO COMPLETE A SPECIFIC PORTION OF THE WORK AND A SEPARATE BID ON EACH OF FIVE ADDITIONAL ITEMS, TERMED "ADDITIVE ALTERNATES," LISTED IN THE ORDER OF PRIORITY. PARAGRAPH 4 (C) IN THE INVITATION SPECIFIED THAT BIDS WOULD BE EVALUATED BY ADDING ADDITIVE ALTERNATES IN THE ORDER OF PRIORITY TO THE BASE BID WITHIN THE LIMIT OF AVAILABLE FUNDS. AT THE BID OPENING ON SEPTEMBER 22, 1961, PRIOR TO THE OPENING OF ANY BIDS, IT WAS ANNOUNCED THAT THE FUND LIMITATION FOR THE CONSTRUCTION WAS $497,800. BIDS WERE RECEIVED FROM 19 BIDDERS. THE LOW BIDDER, BAROCO ELECTRIC CONSTRUCTION CO. AND THE NEXT LOW BIDDER, AAA ELECTRICAL CONTRACTORS AND ENGINEERS, INC., EACH SUBMITTED WITHIN THE FUND LIMITATION AN AGGREGATE BID AS FOLLOWS:

TABLE

BOROCO AAA

BASE BID $388,224.90 $376,606.71

PLUS ADDITIVE 1 395,724.90 385,292.71

2 396,309.90 386,849.71

3 412,002.40 414,147.21

4 424,502.40 429,458.21

5 436,864.40 442,396.21

PRIOR TO THE OPENING OF BIDS, AN EMPLOYEE OF THE USING AGENCY TELEPHONED TO REQUEST THAT ADDITIVE 3 NOT BE AWARDED AND THAT THE BID OPENING NOT BE DELAYED. BECAUSE OF THE MODE OF COMMUNICATION, THE CONTRACTING OFFICER CONSIDERED THE NOTIFICATION INFORMAL AND TENTATIVE AND THAT THE INFORMATION WAS FURNISHED TOO LATE TO BE ACTED UPON AND THEREFORE PROCEEDED WITH THE BID OPENING AS SCHEDULED. SUBSEQUENTLY, ON SEPTEMBER 25, 1961, THREE DAYS AFTER THE OPENING, FORMAL NOTIFICATION OF THE DELETION WAS RECEIVED. THEREUPON, THE CONTRACTING OFFICER DETERMINED THAT THE DELETION OF ADDITIVE 3 WAS REQUIRED AND, SINCE SUCH ACTION WOULD RESULT IN A REVERSAL OF THE RELATIVE STANDING OF THE TWO LOW BIDDERS, HE DECIDED TO REJECT ALL BIDS AND READVERTISE.

YOU CONTEND THAT THE CONTRACTING OFFICER'S ACTION WAS IMPROPER, THAT SINCE YOUR FIRM WAS THE LOW BIDDER ACCORDING TO THE METHOD OF EVALUATION SPECIFIED IN THE INVITATION, THE CONTRACTING OFFICER SHOULD HAVE MADE THE AWARD TO YOUR FIRM AND THEN NEGOTIATED WITH YOU FOR DELETION OF ADDITIVE 3.

IT IS OUR OPINION THAT TO EMPLOY THE PRESCRIBED BID EVALUATION METHOD REQUIRING THE INCLUSION OF ADDITIVE 3 AFTER A DETERMINATION HAD BEEN MADE TO OMIT THAT ADDITIVE FROM THE WORK TO BE PERFORMED WOULD HAVE BEEN IMPROPER AND UNREALISTIC, SINCE YOUR BID PRICE WAS NOT THE BEST COMPETITIVE PRICE FOR THE ACTUAL WORK SOUGHT TO BE PROCURED. IN THAT CONNECTION, THE ADVERTISING STATUTE, 10 U.S.C. 2305 (A), REQUIRES THAT "INVITATIONS FOR BIDS SHALL PERMIT SUCH FREE AND FULL COMPETITION AS IS CONSISTENT WITH THE PROCUREMENT OF THE PROPERTY AND SERVICES NEEDED BY THE AGENCY CONCERNED.' THE CITED STATUTE SHOWS A CLEAR CONGRESSIONAL INTENT THAT INVITATIONS SHOULD RESULT IN OBTAINING THE BEST PRICE FOR THE ACTUAL NEEDS OF THE GOVERNMENT, AND WHERE THE BID EVALUATION METHOD IN THE INVITATION WILL NOT ACCOMPLISH THAT OBJECTIVE BECAUSE OF A CHANGE IN THE GOVERNMENT'S NEEDS BEFORE THE AWARD OF A CONTRACT IS MADE, THE ONLY ALTERNATIVE AVAILABLE TO CONTRACTING OFFICIALS IS TO CANCEL THE ORIGINAL INVITATION AND TO CONTRACT FOR THE REVISED WORK ON AN EVALUATION BASIS THAT WILL OBTAIN THE BEST PRICE FOR THE ACTUAL REQUIREMENTS.

FURTHER, IT IS TO BE NOTED THAT THE INVITATION EXPRESSLY RESERVED TO THE GOVERNMENT THE RIGHT TO REJECT ANY AND ALL BIDS. SEE PARAGRAPH 14, STANDARD FORM 22, INSTRUCTIONS TO BIDDERS. IN THAT REGARD, IT WAS STATED IN 17 COMP. GEN. 554 AT PAGES 559 AND 560:

"* * * NOT ONLY DID THE INVITATION FOR BIDS EXPRESSLY STATE A RESERVATION OF THE RIGHT TO REJECT ANY AND ALL PROPOSALS, BUT A REQUEST FOR BIDS OR OFFERS, IRRESPECTIVE OF ANY SUCH RESERVATION, DOES NOT IMPORT ANY OBLIGATION TO ACCEPT ANY OF THE OFFERS RECEIVED, AND CERTAINLY IT CANNOT BE CONCEDED THAT A PUBLIC OFFICER, ACTING FOR THE GENERAL WELFARE, IS BOUND TO ACCEPT A BID, WHERE HE DETERMINES THAT THE PUBLIC INTEREST WOULD BE SERVED BY A REJECTION OF ALL BIDS AND A READVERTISEMENT OF THE CONTRACT ON SPECIFICATIONS STATED TO REFLECT MORE ACCURATELY THE ACTUAL NEEDS TO BE MET * * *.'

OF COURSE, THE CANCELLATION AND READVERTISEMENT OF AN INVITATION AFTER BIDS ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITORS' PRICES ARE SERIOUS MATTERS AND SHOULD NOT BE DONE EXCEPT FOR COGENT REASONS. HOWEVER, SINCE THE DUTY OF MAKING A DETERMINATION TO REJECT ALL BIDS LIES WITH THE ADMINISTRATIVE OFFICERS OF THE CONTRACTING AGENCY, THIS OFFICE WILL NOT OBJECT TO SUCH ACTION PARTICULARLY WHERE, AS HERE, THE PURPOSE IS TO CORRECT THE REQUIREMENTS STATED IN THE INVITATION.

IF THE CONTRACTING OFFICER COULD NOT HAVE ASCERTAINED POSITIVELY BEFORE THE BID OPENING TIME WHETHER ADDITIVE 3 WAS TO BE REQUIRED, IT WOULD SEEM THAT THE PREFERABLE ACTION WOULD HAVE BEEN TO POSTPONE THE OPENING TIME TO ALLOW SUFFICIENT TIME TO MAKE THAT DETERMINATION, AND IF, AS IT DEVELOPED, ADDITIVE 3 WAS UNNECESSARY, THE INVITATION SHOULD THEN HAVE BEEN CORRECTED BY AMENDMENT BEFORE ANY OPENING OF BIDS. BE THAT AS IT MAY, WE ARE SATISFIED, AS SHOWN ABOVE, THAT THERE WAS A PROPER BASIS FOR THE DETERMINATION THE CONTRACTING OFFICER MADE AFTER THE BIDS WERE OPENED.

ACCORDINGLY, WE WOULD NOT FEEL WARRANTED IN OBJECTING TO THE DECISION MADE TO CANCEL THE ORIGINAL INVITATION AND TO READVERTISE.