B-133979, NOV. 18, 1957

B-133979: Nov 18, 1957

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TO TELEPHONICS CORPORATION: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM WHICH WAS RECEIVED OCTOBER 4. THAT REFUSAL OF THE CONTRACTING OFFICER TO AWARD YOU THE CONTRACT IS CONTRARY TO THE REQUIREMENTS OF FORMAL COMPETITIVE BIDDING. THAT YOU AND OTHER RESPONSIBLE BIDDERS HAVE BEEN PREJUDICED SINCE YOUR PRICES HAVE BEEN REVEALED. THAT THERE HAVE BEEN COMMITTED ERRORS IN JUDGMENT AND INTERPRETATION OF THE ARMED SERVICES PROCUREMENT REGULATIONS. AS YOU WERE ADVISED IN OUR LETTER OF OCTOBER 9. YOUR PROTEST WAS REFERRED TO THE SECRETARY OF THE NAVY WITH A REQUEST FOR A COMPLETE REPORT IN THE MATTER. THAT THE REQUIREMENTS OF THE INVITATION WHICH WERE OMITTED FROM THE BID COULD BE FURNISHED OR ACCOMPLISHED FOR AN ESTIMATED $20.

B-133979, NOV. 18, 1957

TO TELEPHONICS CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM WHICH WAS RECEIVED OCTOBER 4, 1957, PROTESTING THE ACTION TAKEN BY THE NAVY PURCHASING OFFICE, WASHINGTON, D.C., IN REJECTING ALL BIDS SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. IFB-600-462-58, AND READVERTISING THE CONTEMPLATED PROCUREMENT. YOU STATE THAT YOU SUBMITTED THE LOWEST RESPONSIVE BID; THAT REFUSAL OF THE CONTRACTING OFFICER TO AWARD YOU THE CONTRACT IS CONTRARY TO THE REQUIREMENTS OF FORMAL COMPETITIVE BIDDING; THAT YOU AND OTHER RESPONSIBLE BIDDERS HAVE BEEN PREJUDICED SINCE YOUR PRICES HAVE BEEN REVEALED; AND, THAT THERE HAVE BEEN COMMITTED ERRORS IN JUDGMENT AND INTERPRETATION OF THE ARMED SERVICES PROCUREMENT REGULATIONS.

AS YOU WERE ADVISED IN OUR LETTER OF OCTOBER 9, 1957, YOUR PROTEST WAS REFERRED TO THE SECRETARY OF THE NAVY WITH A REQUEST FOR A COMPLETE REPORT IN THE MATTER, AND BY COVERING LETTER DATED NOVEMBER 4, 1957, THE ASSISTANT CHIEF OF NAVAL MATERIAL (PROCUREMENT) FORWARDED THE CONTRACTING OFFICER'S REPORT WITH SUPPORTING PAPERS. THE RECORD DISCLOSES THAT THE LOWEST BID RECEIVED CONTAINED CERTAIN DISCREPANCIES WHICH, IN THE OPINION OF THE PROCUREMENT OFFICIALS, RENDERED THE PROPOSAL NON-RESPONSIVE; THAT THE REQUIREMENTS OF THE INVITATION WHICH WERE OMITTED FROM THE BID COULD BE FURNISHED OR ACCOMPLISHED FOR AN ESTIMATED $20,000; AND, THAT THE DIFFERENCE BETWEEN THE LOW BID AND THAT SUBMITTED BY YOUR CORPORATION WAS IN EXCESS OF $250,000. SINCE THE LOWEST BID COULD NOT BE ACCEPTED, BEING UNRESPONSIVE, AND IN VIEW OF THE MATERIAL DIFFERENCE BETWEEN THE AMOUNTS QUOTED BY THE LOW BIDDER AND BY YOU, IT WAS CONCLUDED BY THE ADMINISTRATIVE OFFICERS CONCERNED THAT THE BEST INTERESTS OF THE UNITED STATES REQUIRED THE REJECTION OF ALL BIDS.

YOUR VIEWS IN THE MATTER ARE APPRECIATED, AND IT MAY BE STATED THAT IT HAS BEEN OUR POLICY TO PROTECT AND MAINTAIN THE PRINCIPLES OF IMPARTIALITY UPON WHICH THE COMPETITIVE BIDDING SYSTEM DEPENDS. WE A RECOGNIZANT OF THE DISADVANTAGES ENCOUNTERED AS A RESULT OF THE REJECTION OF ALL BIDS AFTER PUBLIC OPENING; HOWEVER, WE HAVE AUTHORIZED AND/OR APPROVED THE CANCELLATION OF ALL BIDS AND THE READVERTISING OF CERTAIN CONTEMPLATED PROCUREMENTS IF THE CIRCUMSTANCES WARRANT SUCH ACTION, INCLUDING CASES WHERE, AS HERE, THE LOWEST CORRECT BID IS DEEMED TO BE EXCESSIVE.

ARTICLE 8 OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS INVOLVED PROVIDES, IN PERTINENT PART, THAT "THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY AND ALL BIDS.' IN THAT CONNECTION THE ACCOUNTING OFFICERS AND THE COURTS HAVE HELD REPEATEDLY THAT, IRRESPECTIVE OF SUCH RESERVATION, A REQUEST FOR BIDS DOES NOT IMPART AN OBLIGATION TO ACCEPT ANY OF THE OFFERS RECEIVED, INCLUDING THE LOWEST CORRECT BID. O-BRIEN V. CARNEY, 6 F.SUPP. 761; SCOTT V. UNITED STATES, 44 C.CLS. 524; COLORADO PAVING CO. V. MURPHY, 78 F. 28. THAT PRINCIPLE IS PREDICATED UPON THE SOUND LEGAL CONCLUSION THAT SECTION 3709, REVISED STATUTES, AND OTHER LAWS AND REGULATIONS PROMULGATED PURSUANT THERETO CONCERNING PROCUREMENT ACTIVITIES OF THE UNITED STATES WERE ENACTED FOR THE BENEFIT OF THE GOVERNMENT (AMERICAN SMELTING AND REFINING CO. V. UNITED STATES, 259 U.S. 75), THERE BEING NO QUESTION THAT IN THE CIRCUMSTANCES THERE IS NOT INVOLVED THE PRINCIPLE OF MUTUALITY.

A SIMILAR MATTER WAS THE SUBJECT OF OUR DECISION OF NOVEMBER 2, 1956, 36 COMP. GEN. 364, AND IT WAS POINTED OUT THEREIN THAT WHEN 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 PARTICULAR SUPPLIES, A REJECTION OF ALL BIDS AND A READVERTISEMENT FOR NEW BIDS WAS CONSIDERED AS A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION. ALSO SEE 17 COMP. GEN. 554, 559-560. WITH REGARD TO YOUR STATEMENT THAT THE MATTER WAS NOT HANDLED IN ACCORDANCE WITH THE ARMED SERVICES PROCUREMENT REGULATIONS, YOUR ATTENTION IS INVITED TO PARAGRAPH 2-403 OF THESE REGULATIONS WHICH SPECIFICALLY PROVIDES THAT ALL BIDS MAY BE REJECTED WHEN THE REJECTION IS IN THE INTEREST OF THE GOVERNMENT OR WHERE IT IS FOUND THAT THE BIDS ARE NOT REASONABLE.

IN VIEW OF THE FOREGOING, WE FIND NO LEGAL JUSTIFICATION FOR DISTURBING THE ACTION TAKEN BY THE ADMINISTRATIVE OFFICE IN THE MATTER.