B-13851, DECEMBER 9, 1940, 20 COMP. GEN. 304

B-13851: Dec 9, 1940

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CONTRACTS - AWARDS - TIE BIDS - PROPERTY MANAGEMENT CONTRACTS OF FEDERAL HOUSING ADMINISTRATION IN CASES WHERE MORE THAN ONE LOW BID IN THE SAME AMOUNT IS RECEIVED THE PROCEDURE OF MAKING AWARD BY LOT IS PROPER WHEN THE ARTICLES OR SERVICES OFFERED BY THE TIE BIDDERS ARE OTHERWISE ON A PARITY AND NO ADVANTAGE WOULD RESULT TO THE GOVERNMENT IN MAKING AWARD TO ANY PARTICULAR ONE OF THOSE BIDDERS. THERE IS NO OBJECTION TO AWARD OF A PROPERTY MANAGEMENT CONTRACT BY THE FEDERAL HOUSING ADMINISTRATION TO THE LOW BIDDER WHO IS DETERMINED BY THE ADMINISTRATOR OR HIS AUTHORIZED REPRESENTATIVE TO BE BEST QUALIFIED TO SERVE THE ADMINISTRATION. 1940: I HAVE YOUR LETTER OF DECEMBER 5. UPON ACQUISITION OF THE PROPERTY INVITATIONS ARE SENT TO QUALIFIED MANAGING AGENTS FOR BIDS COVERING MANAGEMENT OF THE PARTICULAR PROPERTY.

B-13851, DECEMBER 9, 1940, 20 COMP. GEN. 304

CONTRACTS - AWARDS - TIE BIDS - PROPERTY MANAGEMENT CONTRACTS OF FEDERAL HOUSING ADMINISTRATION IN CASES WHERE MORE THAN ONE LOW BID IN THE SAME AMOUNT IS RECEIVED THE PROCEDURE OF MAKING AWARD BY LOT IS PROPER WHEN THE ARTICLES OR SERVICES OFFERED BY THE TIE BIDDERS ARE OTHERWISE ON A PARITY AND NO ADVANTAGE WOULD RESULT TO THE GOVERNMENT IN MAKING AWARD TO ANY PARTICULAR ONE OF THOSE BIDDERS, BUT THERE IS NO OBJECTION TO AWARD OF A PROPERTY MANAGEMENT CONTRACT BY THE FEDERAL HOUSING ADMINISTRATION TO THE LOW BIDDER WHO IS DETERMINED BY THE ADMINISTRATOR OR HIS AUTHORIZED REPRESENTATIVE TO BE BEST QUALIFIED TO SERVE THE ADMINISTRATION.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR, FEDERAL HOUSING ADMINISTRATION, DECEMBER 9, 1940:

I HAVE YOUR LETTER OF DECEMBER 5, 1940, AS FOLLOWS:

AS YOU KNOW, THE FEDERAL HOUSING ADMINISTRATOR INSURES MORTGAGES ON RENTAL HOUSING PROPERTIES PURSUANT TO THE PROVISIONS OF SECTION 207 OF THE NATIONAL HOUSING ACT, AS AMENDED. IN THE EVENT OF A DEFAULT OF ANY SUCH MORTGAGE THE MORTGAGEE MAY OBTAIN THE BENEFITS OF SUCH INSURANCE BY FORECLOSING UPON THE MORTGAGED PROPERTY AND CONVEYING THE SAME TO THE ADMINISTRATOR. UPON ACQUISITION OF THE PROPERTY INVITATIONS ARE SENT TO QUALIFIED MANAGING AGENTS FOR BIDS COVERING MANAGEMENT OF THE PARTICULAR PROPERTY. THIS MATTER WAS THE SUBJECT OF OUR LETTER TO YOU OF NOVEMBER 8, 1939, TO WHICH YOU GAVE REPLY ON NOVEMBER 25, 1939.

IN ACCORDANCE WITH THIS PROCEDURE THE ADMINISTRATION SENT OUT BIDS FOR CONTRACTS FOR MANAGEMENT OF A PROPERTY KNOWN AS ALEXANDRINE COURT, INC., LOCATED IN SHREVEPORT, LOUISIANA. PURSUANT TO SUCH INVITATION SIX BIDS WERE SUBMITTED WHICH RESULTED IN FOUR LOW TIE BIDS. SUBSEQUENTLY AN INVESTIGATION WAS MADE OF THESE BIDDERS AND IT WAS THE DETERMINATION OF OUR REPRESENTATIVES IN SHREVEPORT, LOUISIANA, THAT ONE OF SAID LOW BIDDERS WAS BEST QUALIFIED TO HANDLE THE MANAGEMENT OF THIS PROPERTY. THE QUESTION SUBMITTED TO YOU FOR DETERMINATION IS WHETHER OR NOT THE ADMINISTRATION CAN, IN THE EXERCISE OF ITS SOUND DISCRETION IN RELIANCE UPON RECOMMENDATIONS OF ITS REPRESENTATIVES IN THE COMMUNITY IN WHICH THE PROPERTY IS LOCATED, AWARD THE CONTRACT TO ONE OF SAID LOW TIE BIDDERS.

IN THE INSTANT CASE, INVITATIONS FOR BIDS WERE SENT OUT TO SIX PARTIES AFTER INVESTIGATION BY OUR STATE DIRECTOR AND HIS RECOMMENDATION THAT EACH WAS QUALIFIED TO HANDLE THE MANAGEMENT OF THIS PROPERTY. THE QUESTION SUBMITTED TO YOU FOR DETERMINATION IS WHETHER OR NOT THE ADMINISTRATION CAN, IN THE EXERCISE OF ITS SOUND DISCRETION IN RELIANCE UPON RECOMMENDATIONS OF ITS REPRESENTATIVES IN THE COMMUNITY IN WHICH THE PROPERTY IS LOCATED, AWARD THE CONTRACT TO ONE OF SAID LOW TIE BIDDERS.

IN THE INSTANT CASE, INVITATIONS FOR BIDS WERE SENT OUT TO SIX PARTIES AFTER INVESTIGATION BY OUR STATE DIRECTOR AND HIS RECOMMENDATION THAT EACH WAS QUALIFIED TO HANDLE THE MANAGEMENT OF THIS PROJECT. IN OTHER WORDS, IF THERE WAS A SINGLE LOW BIDDER IT WAS HIS OPINION THAT SUCH BIDDER WOULD BE QUALIFIED TO HANDLE THE CONTRACT. ADMITTEDLY, AS BETWEEN A GROUP OF QUALIFIED BIDDERS, SOME ONE OR MORE MAY VERY WELL STAND OUT AS PERHAPS THE BETTER QUALIFIED. THE PERSONAL QUALIFICATIONS OF A GIVEN PARTY ARE NOT OF SUCH A NATURE AS TO BE SUBJECT TO RIGID SPECIFICATIONS NOR IS IT EASY AT ALL TIMES TO PRESENT TANGIBLE AND CONCRETE REASONS IN SUPPORT OF A DETERMINATION THAT ONE IS BETTER QUALIFIED THAN THE OTHERS. IT SEEMS CLEAR THAT THE NATIONAL HOUSING ACT VESTS IN THE ADMINISTRATOR A WIDE DEGREE OF DISCRETION IN THE MAKING OF CONTRACTS FOR THE MANAGEMENT OF THESE PROJECTS.

IN THE PRESENT CASE IT IS THE OPINION OF OUR LOCAL REPRESENTATIVES THAT ONE FIRM IS BEST QUALIFIED TO HANDLE THE SYSTEM OF BOOKKEEPING THAT IS REQUIRED BY OUR PROPERTY MANAGEMENT SECTION IN THE OPERATION OF THE SUBJECT PROPERTY. FURTHERMORE, THEY ARE OF THE OPINION THAT THIS PARTICULAR FIRM IS BETTER QUALIFIED BY REASON OF THE FACT THAT IT DEALS WITH THE TYPE OF PEOPLE THAT WOULD MOST LIKELY BECOME THE TENANTS OF THIS PROJECT. IN ADDITION, BY VIRTUE OF GENERAL KNOWLEDGE OF THE PARTICULAR FIRM, THEIR REPUTATION AND SUCCESS, OUR REPRESENTATIVES FEEL THAT THE BEST INTERESTS OF THE ADMINISTRATION WOULD BE SERVED BY THE SELECTION OF THIS ONE FIRM OVER THE OTHER LOW BIDDERS.

AS STATED ABOVE, IT IS DIFFICULT IN MANY INSTANCES TO GIVE MANY TANGIBLE, CONCRETE REASONS IN THE SUPPORT OF A PARTICULAR ACTION. ON THE OTHER HAND, IT SEEMS THAT THERE IS VESTED IN THE ADMINISTRATOR SUCH AUTHORITY AS WILL AUTHORIZE HIM IN HIS SOUND DISCRETION AND WHEN HE BELIEVES THAT IT IS IN THE BEST INTERESTS OF THE ADMINISTRATION TO AWARD THE CONTRACT TO THE PARTICULAR BIDDER WHICH HE DEEMS BEST QUALIFIED.

WE ARE AWARE THAT IN THE ORDINARY CASE IN THE EVENT OF TIE BIDS THE SELECTION MUST BE BY LOT UNLESS THERE IS A DEFINITE DISPARITY IN THE QUALIFICATIONS OF THE BIDDERS OR THE QUALITY OF MATERIALS TO BE FURNISHED BY THE BIDDERS. HOWEVER, WE BELIEVE THAT MANAGEMENT CONTRACTS ARE NOT ORDINARY CONTRACTS IN THAT THE PERSONAL EQUATION IS THE DOMINATING FACTOR. IT IS ALMOST IMPOSSIBLE TO ACCURATELY SPECIFY AND DEFINE THE PERSONAL QUALIFICATIONS REQUIRED. SIMILARLY, IT IS ALMOST IMPOSSIBLE TO SPECIFY AND DEFINE (IN THE INSTANT CASE) WITH FULL CLARITY THE REASONS WHICH ACTUATE THE SELECTION OF ONE PARTICULAR BIDDER OVER ANOTHER. ACCORDINGLY, IT SEEMS LOGICAL THAT IN THE PRESENT CASE THE AWARD OF THE CONTRACT TO ONE OF THESE BIDDERS IS AN ADMINISTRATIVE ACT, THE DETERMINATION OF WHICH RESTS IN THE SOUND DISCRETION OF THE PROPER OFFICER OF THIS AGENCY. YOUR DECISION IS, THEREFORE, RESPECTFULLY REQUESTED AS TO WHETHER THE ADMINISTRATOR, OR HIS AUTHORIZED REPRESENTATIVE, IN THE EXERCISE OF HIS SOUND DISCRETION CAN AWARD THE MANAGEMENT CONTRACT IN THE INSTANT CASE TO ONE PARTICULAR LOW TIE BIDDER WHERE, IN HIS OPINION, SUCH BIDDER IS BEST QUALIFIED TO SERVE THE ADMINISTRATION.

WE ANTICIPATE THE ACQUISITION OF THE PROPERTY HERE INVOLVED NOT LATER THAN JANUARY 5, 1941. IT IS NECESSARY THAT THE MANAGING AGENT WHO FINALLY RECEIVES THE AWARD BE PROPERLY INSTRUCTED IN OUR REQUIREMENTS BEFORE HE ACTUALLY TAKES OVER MANAGEMENT. IN ADDITION, AFTER THE AWARD IS MADE, IT WILL BE NECESSARY TO HAVE THE CONTRACT FORMALLY EXECUTED. IT WOULD, THEREFORE, BE APPRECIATED IF YOU COULD GIVE YOUR DECISION IN THIS MATTER WITHIN THE NEXT 2 WEEKS.

THE PROCEDURE OF MAKING AWARD BY LOT, IN CASES WHERE MORE THAN ONE LOW BID IN THE SAME AMOUNT IS RECEIVED, HAS BEEN APPROVED BY THIS OFFICE FOR APPLICATION WHEN THE ARTICLES OR SERVICES OFFERED BY THE TIE BIDDERS ARE OTHERWISE ON A PARITY AND NO ADVANTAGE WOULD RESULT TO THE GOVERNMENT IN MAKING AWARD TO ANY PARTICULAR ONE OF THOSE BIDDERS. SEE 13 COMP. GEN. 233; 15 ID. 712.

IT WAS RECOGNIZED IN THE DECISION TO YOU OF NOVEMBER 25, 1939, B 7067, 19 COMP. GEN. 523, THAT PROPERTY MANAGEMENT CONTRACTS OF THE NATURE HERE CONTEMPLATED REQUIRE CAREFUL CONSIDERATION OF THE RESPONSIBILITY, COMPETENCY, CAPABILITY, AND EXPERIENCE OF THE INDIVIDUALS OR CORPORATIONS WITH WHICH SUCH CONTRACTS ARE MADE; AND THAT BIDS NEED BE SOLICITED ONLY FROM THOSE FOUND TO BE SATISFACTORY IN THOSE RESPECTS. IT FOLLOWS, THEREFORE, THAT THOSE ATTRIBUTES ARE PROPERLY FOR CONSIDERATION IN DETERMINING WHETHER ANY ONE OF THE TIE BIDS OFFERS TO THE GOVERNMENT AN ADVANTAGE NOT OFFERED BY OTHER TIE BIDS.

ACCORDINGLY, YOU ARE ADVISED THAT THIS OFFICE WILL NOT OBJECT TO THE AWARD OF A CONTRACT TO THE LOW TIE BIDDER WHO IS DETERMINED BY THE ADMINISTRATOR OR HIS AUTHORIZED REPRESENTATIVE TO BE BEST QUALIFIED TO SERVE THE ADMINISTRATION.