B-130064, FEB. 15, 1957

B-130064: Feb 15, 1957

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TO THE LEGNANO ELECTRIC CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 11. THE DEPARTMENT OF THE INTERIOR REPORT ON THE MATTER SHOWS THAT FOUR BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION ISSUED SEPTEMBER 28. WAS LOW AT $51. YOUR BID PRICE WAS FIRM. EACH OF THE OTHER THREE BIDDERS INCLUDED AN ESCALATION PROVISION ALTHOUGH THE INVITATION DID NOT INDICATE THAT OTHER THAN FIRM BIDS WERE BEING SOLICITED. THE INVITATION WAS READVERTISED WITH SUCH PROVISION ON NOVEMBER 20. BIDS WERE RECEIVED FROM THE SAME FOUR BIDDERS AND THE LOWEST. WAS THE BID OF THE WAGNER ELECTRIC CORPORATION OF ST. WE ARE ADVISED THAT NO AWARD HAS YET BEEN MADE. WE HAVE CONSISTENTLY HELD THAT THE REJECTION OF ALL BIDS IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION.

B-130064, FEB. 15, 1957

TO THE LEGNANO ELECTRIC CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 11, 1956, YOUR FILE BBNO. 80, PROTESTING THE REJECTION OF ALL BIDS UNDER INVITATION FORBIDS NO. DS-4773 ISSUED BY THE BUREAU OF RECLAMATION FOR A POWER TRANSFORMER, FRENCHMAN SPRINGS PUMPING PLANT SWITCHYARD, COLUMBIA BASIN PROJECT.

THE DEPARTMENT OF THE INTERIOR REPORT ON THE MATTER SHOWS THAT FOUR BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION ISSUED SEPTEMBER 28, 1956. YOUR BID, INCLUDING THE EVALUATION OF FACTORS FOR EFFICIENCY, COST OF THE SERVICES OF AN ERECTING ENGINEER, AND FOREIGN DIFFERENTIAL, WAS LOW AT $51,429.20. YOUR BID PRICE WAS FIRM. HOWEVER, EACH OF THE OTHER THREE BIDDERS INCLUDED AN ESCALATION PROVISION ALTHOUGH THE INVITATION DID NOT INDICATE THAT OTHER THAN FIRM BIDS WERE BEING SOLICITED. THE CONTRACTING OFFICER DETERMINED, BECAUSE OF THE APPARENT PRACTICE WITHIN THE INDUSTRY TO PROVIDE FOR ESCALATION IN DELIVERY PRICES, THAT THE BEST INTERESTS OF THE GOVERNMENT APPEARED TO REQUIRE THAT ALL BIDS BE DISCARDED AND THE PROCUREMENT BE READVERTISED WITH THE ADDITION OF A PROVISION FOR ADJUSTMENT IN PRICE TO REFLECT CHANGES IN MANUFACTURING COSTS BASED UPON BUREAU OF LABOR STATISTICS COST INDICES. THE INVITATION WAS READVERTISED WITH SUCH PROVISION ON NOVEMBER 20, 1956. BIDS WERE RECEIVED FROM THE SAME FOUR BIDDERS AND THE LOWEST, INCLUDING THE EVALUATING FACTORS CONSIDERED IN ADDITION TO PRICE, WAS THE BID OF THE WAGNER ELECTRIC CORPORATION OF ST. LOUIS, MISSOURI, AT $45,869. WE ARE ADVISED THAT NO AWARD HAS YET BEEN MADE.

YOU CONTEND THAT AN AWARD SHOULD BE MADE TO YOU ON THE BASIS OF THE ORIGINAL BIDS.

WE HAVE CONSISTENTLY HELD THAT THE REJECTION OF ALL BIDS IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION. SEE 17 COMP. GEN. 554, 559. FURTHER, SECTION 303 (B) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 395, 41 U.S.C. 253, PROVIDES, IN PERTINENT PART, THAT ALL BIDS MAY BE REJECTED UPON AN ADMINISTRATIVE DETERMINATION THAT IT WOULD BE IN THE PUBLIC INTEREST TO DO SO. IN VIEW OF THE FACT THAT THREE OF THE FOUR BIDDERS CONDITIONED THEIR BIDS BY PROVISIONS FOR PRICE ESCALATION, THE CONTRACTING OFFICER DETERMINED THAT THE INTERESTS OF THE UNITED STATES COULD BETTER BE SERVED BY REJECTING ALL BIDS AND AMENDING THE INVITATION TO PROVIDE FOR ESCALATION UPWARD OR DOWNWARD TO REFLECT CHANGES IN COST, THUS ENCOURAGING THE SUBMISSION OF BIDS WITHOUT ANY FACTOR IN THE PRICE TO PROTECT THE BIDDER AGAINST SUCH CHANGES. THE REJECTION OF ALL BIDS WAS WELL WITHIN THE DISCRETION OF THE CONTRACTING AGENCY IN THIS INSTANCE AND WE PERCEIVE NO LEGAL BASIS ON WHICH IT MAY BE QUESTIONED.

WHILE THE LOWEST PRICE OBTAINABLE IS, OF COURSE, A PRINCIPAL OBJECTIVE OF COMPETITIVE BIDDING FOR GOVERNMENT CONTRACTS, THIS DOES NOT MEAN THAT THE CONTRACT MUST AUTOMATICALLY GO TO THE LOWEST BIDDER WITHOUT REGARD TO WHETHER THE INTERESTS OF THE UNITED STATES WILL THEREBY BE SERVED. AS WE STATED IN 36 COMP. GEN. 364---

"WHEN, IN THE LIGHT OF ALL THE FACTS INCLUDING THOSE DISCLOSED BY THE BIDDING, IT IS ADMINISTRATIVELY DETERMINED THAT THE LOWEST ACCEPTABLE BID IS IN EXCESS OF THE AMOUNT FOR WHICH THE GOVERNMENT SHOULD BE ABLE TO OBTAIN THE SUPPLIES OR SERVICES SOUGHT, WE BELIEVE THAT THE REJECTION OF ALL BIDS AND READVERTISING OF THE CONTRACT IS A PROPER EXERCISE OF THE ADMINISTRATIVE DISCRETION, IN CONFORMITY WITH THE DUTY OF THE ADMINISTRATIVE OFFICIALS TO ACT IN THE BEST INTEREST OF THE GOVERNMENT. UPON SUCH REJECTION AND READVERTISING, THE ORIGINAL BIDS ARE NO LONGER MATERIAL OR EFFECTIVE FOR ANY PURPOSE WHATSOEVER.'

UNDER THE CIRCUMSTANCES, WE WOULD NOT BE JUSTIFIED IN OBJECTING TO A PROPER AWARD PURSUANT TO THE READVERTISED INVITATION.