A-81117, NOVEMBER 28, 1936, 16 COMP. GEN. 538

A-81117: Nov 28, 1936

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ADVERTISING - TIE BIDS - AWARDS TO REMOTE BIDDERS RATHER THAN BY LOT CONTRACT AWARDS IN CASES OF IDENTICAL BIDS WITH NO PARTICULAR ADVANTAGE TO THE UNITED STATES IN THE SELECTION OF ANY ONE BID ARE REQUIRED TO BE BY LOT. THERE IS NO AUTHORITY FOR AWARD IN SUCH CASES TO THE MOST REMOTE BIDDERS IN AN ATTEMPT TO CORRECT AN ALLEGED ILLEGAL LOCAL COMBINATION TO RESTRICT COMPETITIVE BIDDING. SUBSEQUENT COMPLAINT OF THE COLORADO FUEL AND IRON CORPORATION OF THE SAME CITY AGAINST THE PROCEDURE FOLLOWED BY THE DENVER OFFICE OF THE BUREAU OF C.G RECLAMATION IN MAKING AWARDS OF CONTRACTS WHERE THE BIDS ARE EQUAL IN AMOUNT AND THERE IS NO OTHER DETERMINING CONSIDERATION IN THE MATTER. IT APPEARS FROM YOUR REPORT THAT THE PRACTICE HAS BEEN FOLLOWED OF AWARDING THE CONTRACT IN SUCH CASES TO BIDDERS FARTHEST REMOVED FROM THE SITE AND THE DENVER CONCERNS HAVE COMPLAINED WITH RESPECT THERETO THAT SUCH PROCEDURE OPERATED TO DEPRIVE THEM OF ANY OF THE CONTRACTS.

A-81117, NOVEMBER 28, 1936, 16 COMP. GEN. 538

ADVERTISING - TIE BIDS - AWARDS TO REMOTE BIDDERS RATHER THAN BY LOT CONTRACT AWARDS IN CASES OF IDENTICAL BIDS WITH NO PARTICULAR ADVANTAGE TO THE UNITED STATES IN THE SELECTION OF ANY ONE BID ARE REQUIRED TO BE BY LOT, AND THERE IS NO AUTHORITY FOR AWARD IN SUCH CASES TO THE MOST REMOTE BIDDERS IN AN ATTEMPT TO CORRECT AN ALLEGED ILLEGAL LOCAL COMBINATION TO RESTRICT COMPETITIVE BIDDING.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, NOVEMBER 28, 1936:

CONSIDERATION HAS BEEN GIVEN TO YOUR REPORTS OF OCTOBER 31 AND NOVEMBER 21, 1936, CONCERNING A COMPLAINT OF THE ROCKY MOUNTAIN ARCHITECTS AND BUILDERS SERVICE, DENVER, COLORADO, AND SUBSEQUENT COMPLAINT OF THE COLORADO FUEL AND IRON CORPORATION OF THE SAME CITY AGAINST THE PROCEDURE FOLLOWED BY THE DENVER OFFICE OF THE BUREAU OF C.G RECLAMATION IN MAKING AWARDS OF CONTRACTS WHERE THE BIDS ARE EQUAL IN AMOUNT AND THERE IS NO OTHER DETERMINING CONSIDERATION IN THE MATTER. IT APPEARS FROM YOUR REPORT THAT THE PRACTICE HAS BEEN FOLLOWED OF AWARDING THE CONTRACT IN SUCH CASES TO BIDDERS FARTHEST REMOVED FROM THE SITE AND THE DENVER CONCERNS HAVE COMPLAINED WITH RESPECT THERETO THAT SUCH PROCEDURE OPERATED TO DEPRIVE THEM OF ANY OF THE CONTRACTS.

WHILE THERE HAS BEEN NOTED YOUR STATEMENT THAT DUE TO THE "PERSISTENT FAILURE AND REFUSAL OF BIDDERS TO SUBMIT BIDS ON A COMPETITIVE BASIS," THERE HAD BEEN ADOPTED THE PROCEDURE OF AWARDING THE CONTRACT TO THAT BIDDER FARTHEST REMOVED FROM THE POINT WHERE THE MATERIAL WAS REQUIRED F.O.B. GOVERNMENT DESTINATION, SECTION 3709, REVISED STATUTES, REQUIRES CONTRACTS TO BE AWARDED TO THE LOWEST RESPONSIBLE BIDDER, AND IF THERE BE RECEIVED BIDS, ALL IN IDENTICAL AMOUNTS AND NO PARTICULAR ADVANTAGE TO THE UNITED STATES IN SELECTING ANY ONE OF THE BIDS, THERE SHOULD BE FOLLOWED THE PROCEDURE OF AWARDING THE CONTRACT BY LOT. THIS OFFICE HAS HELD THAT, IN VIEW OF THE ELEMENT OF TIME INVOLVED IN THE SHIPPING TO DESTINATION, THE ADMINISTRATIVE CONTRACTING OFFICER MAY AWARD THE CONTRACT TO A BIDDER IN THE LOCALITY WHERE THE WORK IS TO BE PERFORMED OR THE MATERIAL IS TO BE USED SO AS TO EFFECT ANY POSSIBLE SAVING IN TIME.

IF THERE HAS BEEN A COMBINATION IN VIOLATION OF THE ANTI-TRUST LAWS TO THROTTLE OR IMPEDE COMPETITION THROUGH THE NAMING OF IDENTICAL BID PRICES BY ALL OF THE BIDDERS, THERE IS AN ESTABLISHED PROCEDURE FOR PROCEEDING AGAINST SUCH BIDDERS IN COMBINATION TO RESTRICT COMPETITION. THAT PROCEDURE DOES NOT INCLUDE THE AWARDING OF CONTRACTS TO THE BIDDER WHOSE COST OF PERFORMANCE WOULD BE THE GREATEST, IN AN ATTEMPT TO ACCOMPLISH THE CORRECTION OF ANY SUCH COMBINATION.

HEREAFTER IF THE TIME ELEMENT IS NOT IMPORTANT AND IDENTICAL BIDS ARE SUBMITTED--- BOTH AS TO QUALITY AND PRICE--- THERE SHOULD BE FOLLOWED THE PROCEDURE OF AWARDING THE CONTRACT BY LOT WHICH WILL OPERATE TO PREVENT THE COMPLAINTS IN THIS CASE FROM THE ROCKY MOUNTAIN ARCHITECTS AND BUILDERS SERVICE AND FROM THE COLORADO FUEL AND IRON CORPORATION.