B-122339, MARCH 18, 1955, 34 COMP. GEN. 451

B-122339: Mar 18, 1955

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VETERANS ADMINISTRATION MAY AWARD A CONTRACT TO A FIRM TIED AS LOW BIDDER WILL PERFORM THE CONTRACT IN AN AREA OF SUBSTANTIAL LABOR SURPLUS IN ACCORDANCE WITH DEFENSE MANPOWER POLICY NO. 4 ( REVISED). 1955: REFERENCE IS MADE TO LETTER DATED DECEMBER 15. REQUESTING A DECISION AS TO THE PROPRIETY OF THE VETERANS ADMINISTRATION MAKING AN AWARD OF A CONTRACT TO A FIRM TIED AS LOW BIDDER SOLELY ON THE BASIS THAT THE FIRM WILL PERFORM THE CONTRACT IN AN AREA OF SUBSTANTIAL LABOR SURPLUS. YOUR DOUBT IN THE MATTER ARISES FROM THE FACT THAT THE POLICY DIRECTIVE IS BASED UPON EXECUTIVE ORDER NO. 10480. ARE RECEIVED ARE DESIGNED TO INSURE FAIR AND EQUAL TREATMENT TO ALL BIDDERS. GOVERNMENT CONTRACTS SHOULD BE AWARDED TO FIRMS WHICH WILL PERFORM THE CONTRACT WORK IN AREAS OF SUBSTANTIAL LABOR SURPLUS IN THE EVENT OF TIE BIDS.

B-122339, MARCH 18, 1955, 34 COMP. GEN. 451

CONTRACTS - AWARDS - SURPLUS LABOR AREAS - TIE BIDS IN THE ABSENCE OF A DETERMINATION THAT A SMALL BUSINESS CONCERN SHALL RECEIVE AWARD OF CONTRACT, AS CONTEMPLATED BY SECTION 214 OF THE SMALL BUSINESS ACT OF 1953, VETERANS ADMINISTRATION MAY AWARD A CONTRACT TO A FIRM TIED AS LOW BIDDER WILL PERFORM THE CONTRACT IN AN AREA OF SUBSTANTIAL LABOR SURPLUS IN ACCORDANCE WITH DEFENSE MANPOWER POLICY NO. 4 ( REVISED), WHICH PROVIDES FOR THE AWARD OF CONTRACTS TO FIRMS LOCATED IN LABOR SURPLUS AREAS.

ASSISTANT COMPTROLLER GENERAL WEITZEL TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, MARCH 18, 1955:

REFERENCE IS MADE TO LETTER DATED DECEMBER 15, 1954, REQUESTING A DECISION AS TO THE PROPRIETY OF THE VETERANS ADMINISTRATION MAKING AN AWARD OF A CONTRACT TO A FIRM TIED AS LOW BIDDER SOLELY ON THE BASIS THAT THE FIRM WILL PERFORM THE CONTRACT IN AN AREA OF SUBSTANTIAL LABOR SURPLUS, IN ACCORDANCE WITH DEFENSE MANPOWER POLICY NO. 4 ( REVISED).

YOUR DOUBT IN THE MATTER ARISES FROM THE FACT THAT THE POLICY DIRECTIVE IS BASED UPON EXECUTIVE ORDER NO. 10480, DATED AUGUST 14, 1953, WHICH DOES NOT INCLUDE THE VETERANS ADMINISTRATION.

THE DECISIONS OF THE ACCOUNTING OFFICERS THAT AWARD MUST BE MADE BY LOT WHEN TIE LOW BIDS, EQUAL IN ALL RESPECTS, ARE RECEIVED ARE DESIGNED TO INSURE FAIR AND EQUAL TREATMENT TO ALL BIDDERS. HOWEVER, THE RULE NEED NOT BE APPLIED SO AS TO OPERATE UNFAIRLY OR PREJUDICIALLY TO THE GOVERNMENT'S INTERESTS.

THE DIRECTOR OF DEFENSE MOBILIZATION HAS DECIDED THAT, IN THE INTEREST OF MAINTAINING ECONOMIC BALANCE AND EMPLOYMENT STABILITY, GOVERNMENT CONTRACTS SHOULD BE AWARDED TO FIRMS WHICH WILL PERFORM THE CONTRACT WORK IN AREAS OF SUBSTANTIAL LABOR SURPLUS IN THE EVENT OF TIE BIDS. IT SEEMS APPARENT THAT THE BENEFICIAL RESULTS WHICH FLOW FROM THIS POLICY FAR OFFSET THE NORMAL BENEFITS DERIVED FROM REQUIRING AWARD BY LOT. FURTHERMORE, THIS POLICY HAS BEEN IMPLEMENTED BY SECTION 2 406.4 OF THE ARMED SERVICES PROCUREMENT REGULATION AND SECTION 209.26 OF MANUAL GS-5 ISSUED BY THE GENERAL SERVICES ADMINISTRATION AND APPLYING THE REGULATIONS TO THE EXAMPLES ENUMERATED IN THE LETTER OF DECEMBER 15, 1954, PREFERENCE WOULD BE GIVEN TO THE CONCERN PERFORMING IN THE SURPLUS LABOR AREA IN EACH INSTANCE.

ACCORDINGLY, IN THE ABSENCE OF A DETERMINATION THAT A SMALL BUSINESS CONCERN SHALL RECEIVE THE AWARD OR ANY PART THEREOF, SUCH AS CONTEMPLATED BY SECTION 214 OF THE SMALL BUSINESS ACT OF 1953, 67 STAT. 238, WE PERCEIVE NO LEGAL OBJECTION TO THE VETERANS ADMINISTRATION AWARDING CONTRACTS ON THE SAME BASIS.