B-134424, DEC. 19, 1957

B-134424, DEC. 19, 1957

TO TOM HEINZE AND ASSOCIATES, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 18, 1957, WITH ENCLOSURES, PROTESTING THE REJECTION OF ALL BIDS SUBMITTED PURSUANT TO AN INVITATION FOR FURNISHING AND INSTALLING CUBICLE AND SHOWER CURTAINS FOR USE IN CONNECTION WITH D.C. HOSPITAL PROJECT NO. 49111.

THE INVITATION, ISSUED SEPTEMBER 20, 1957, BY THE GENERAL SERVICES ADMINISTRATION CALLED FOR A LUMP-SUM BID TO COVER ALL SERVICES AND SUPPLIES AND FOR COMPLETION OF THE PROJECT WITHIN 60 CALENDAR DAYS FROM RECEIPT OF NOTICE TO PROCEED. BIDS, OPENED ON OCTOBER 9, 1957, WERE AS FOLLOWS:

TABLE

BIDDER AMOUNT

CAPITAL PRODUCTS, INC. $13,541

TOM HEINZE AND ASSOCIATES, INC. 13,700

BELT OR MANUFACTURING CORP. 13,800

WE HAVE BEEN ADVISED BY THE GENERAL SERVICES ADMINISTRATION THAT, SUBSEQUENT TO THE OPENING OF BIDS, IT WAS DETERMINED THAT SHOWER STALL DOORS WOULD BE REQUIRED IN CERTAIN LOCATIONS IN LIEU OF CURTAINS. ACCORDINGLY, THE REQUIREMENT WAS REDUCED BY THE OMISSION OF 102 SHOWER CURTAINS AND SERVICES IN CONNECTION THEREWITH. IN VIEW OF THE DETERMINATION TO OMIT THESE SHOWER CURTAINS AND THE NECESSITY FOR REDUCING PERFORMANCE TIME TO COINCIDE WITH THE DATE SCHEDULED FOR THE OPENING OF THE HOSPITAL, IT WAS DETERMINED TO REJECT ALL BIDS. NOTICE OF REJECTION WAS SENT TO ALL BIDDERS ON NOVEMBER 18, 1957.

IN YOUR LETTER OF NOVEMBER 18, YOU PROTEST THAT THE REJECTION OF ALL BIDS WAS ARBITRARY, WITHOUT JUSTIFICATION AND AGAINST THE BEST INTEREST OF THE GOVERNMENT; THAT IT WILL UNNECESSARILY DELAY EQUIPPING THE HOSPITAL; AND THAT YOUR INTERESTS ARE THEREBY PREJUDICED BECAUSE OF DISCLOSURE OF PRICE AND SOURCE OF SUPPLY. YOU SUGGEST THAT INSTEAD OF REJECTING ALL BIDS NEGOTIATIONS SHOULD HAVE BEEN CONDUCTED WITH YOUR FIRM AS THE LOWEST QUALIFIED BIDDER.

WE HAVE HELD THAT THE REJECTION OF ALL BIDS AFTER OPENING IS A MATTER OF IMPORTANCE WHICH SHOULD BE DONE ONLY FOR COGENT REASONS SINCE IT RESULTS IN A DISCLOSURE OF PRICES TO A BIDDER'S COMPETITORS. B-133915, DECEMBER 9, 1957, AND B-129059, NOVEMBER 30, 1956. IT IS AXIOMATIC, HOWEVER, THAT INVITATIONS AND SPECIFICATIONS ARE REQUIRED TO ACCURATELY REFLECT THE MINIMUM NEEDS OF THE AGENCY. SEE 13 COMP. GEN. 284. IN THIS INSTANCE, THE DECISION MADE AFTER OPENING TO EFFECT A MATERIAL REDUCTION IN THE QUANTITY OF THE PROCUREMENT CLEARLY INDICATES THAT THE AGENCY'S ACTUAL NEEDS WERE NOT ACCURATELY EXPRESSED IN THE INVITATION. ACCORDINGLY, SINCE ONLY A LUMP SUM BID WAS CALLED FOR AND NO UNIT PRICES WERE SHOWN IN THE BID, WE REGARD THE REJECTION OF ALL BIDS NOT MERELY AS PERMISSIBLE BUT AS MANDATORY.

THE ACT OF AUGUST 7, 1946, 60 STAT. 896, AUTHORIZES THE LETTING OF CONTRACTS OF THE TYPE HERE INVOLVED WITHOUT REGARD TO SECTION 3709 OF THE REVISED STATUTES. THIS TYPE OF PROCUREMENT IS ALSO EXEMPTED FROM THE ADVERTISING REQUIREMENTS APPLICABLE TO THE GENERAL SERVICES ADMINISTRATION UNDER 41 U.S.C. 252 (C) BY THE PROVISIONS OF 41 U.S.C. 260 (B). PURSUANT TO THIS AUTHORITY, THERE WAS ISSUED ON NOVEMBER 26, 1957, SOLICITATION OF OFFERS NO. R2-R-60478-N-12-6-57 REQUESTING, ON A NEGOTIATED BASIS, OFFERS FOR THE DIMINISHED PROCUREMENT WITH A DESIRED DELIVERY TIME OF 30 DAYS AFTER NOTICE OF AWARD. IT SHOULD BE NOTED THAT SINCE YOU WERE AFFORDED AN OPPORTUNITY TO SUBMIT AN OFFER IN RESPONSE TO THE SOLICITATION, NEGOTIATIONS WITH YOUR FIRM IN ACCORDANCE WITH YOUR SUGGESTION WERE NOT CUT OFF BY REJECTION OF ALL BIDS SUBMITTED UNDER THE INVITATION OF SEPTEMBER 20. IN VIEW OF THE FOREGOING, THERE APPEARS TO BE NO BASIS UPON WHICH WE COULD LEGALLY OBJECT TO THE ACTION TAKEN BY THE GENERAL SERVICES ADMINISTRATION IN THIS MATTER.

IN YOUR LETTER OF NOVEMBER 18, YOU ALLEGE THAT THE REJECTION OF ALL BIDS AND CANCELLATION OF THE ORIGINAL INVITATION WAS "FOR THE SOLE PURPOSE OF PREVENTING THE DEPARTMENT OF LABOR FROM APPLYING THE PROVISIONS OF THE WALSH-HEALEY ACT TO THE LOWEST BIDDER.' IT IS ADMINISTRATIVELY REPORTED THAT NO DETERMINATION HAS BEEN MADE EITHER BY THE GENERAL SERVICES ADMINISTRATION OR THE DEPARTMENT OF LABOR AS TO THE QUALIFICATIONS OF THE LOW BIDDER UNDER THE WALSH-HEALEY ACT. THE ACT,41 U.S.C. 35-45, REQUIRES THAT ANY CONTRACT WITHIN CERTAIN CATEGORIES CONTAIN DESIGNATED REPRESENTATIONS AND STIPULATIONS BY THE CONTRACTOR ONE OF WHICH IS THAT THE CONTRACTOR IS THE MANUFACTURER OF OR REGULAR DEALER IN THE SUPPLIES TO BE FURNISHED. IT DOES NOT APPEAR THAT THE LAW REQUIRES OR CONTEMPLATES THAT A DETERMINATION AS TO A BIDDER'S ELIGIBILITY NEED BE MADE PRIOR TO THE TIME THAT AN AWARD TO THE BIDDER IS CONTEMPLATED.