B-139853, AUG. 13, 1959

B-139853: Aug 13, 1959

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TO VALLEY BOLT CORPORATION: FURTHER REFERENCE IS MADE TO YOUR COMMUNICATION DATED JUNE 1. PROTESTING THE ACTION TAKEN BY THE AIR FORCE BASE WITH RESPECT TO CERTAIN INVITATIONS FOR BIDS WHICH WERE ISSUED BY THE BASE DURING APRIL AND MAY 1959. A COPY OF YOUR COMMUNICATION WAS FORWARDED TO OUR OFFICE FOR A DETERMINATION AS TO THE PROPRIETY OF THE ACTION TAKEN. WAS ISSUED ON APRIL 3. INVITATION NO. 01-601-59-1246 WAS ISSUED ON APRIL 16. BEFORE AWARDS WERE MADE ON ITEMS NOS. 1 THROUGH 26. ALL OF WHICH ITEMS WERE REQUIRED TO COMPLY WITH MILITARY SPECIFICATION NO. WAS RECEIVED BY THE BROOKLEY AIR FORCE BASE. 388.89 WAS THE LOWEST TOTAL COST AT WHICH THESE BOLTS COULD BE PROCURED UNDER INVITATIONS NOS. 1145 AND 1246.

B-139853, AUG. 13, 1959

TO VALLEY BOLT CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR COMMUNICATION DATED JUNE 1, 1959, WITH ENCLOSURES, TO THE COMMANDING OFFICER, MOBILE AIR MATERIAL AREA, BROOKLEY AIR FORCE BASE, MOBILE, ALABAMA, PROTESTING THE ACTION TAKEN BY THE AIR FORCE BASE WITH RESPECT TO CERTAIN INVITATIONS FOR BIDS WHICH WERE ISSUED BY THE BASE DURING APRIL AND MAY 1959. A COPY OF YOUR COMMUNICATION WAS FORWARDED TO OUR OFFICE FOR A DETERMINATION AS TO THE PROPRIETY OF THE ACTION TAKEN.

INVITATION NO. 01-601-59-1145, AS AMENDED, WAS ISSUED ON APRIL 3, 1959, BY HEADQUARTERS, MOBILE AIR MATERIAL AREA, BROOKLEY AIR FORCE BASE, FOR FURNISHING 46 ITEMS OF VARIOUS SIZES, QUANTITIES, ETC., OF INTERNAL WRENCHING BOLTS FOR SHIPMENT TO THE AIR FORCE BASE. ALSO, INVITATION NO. 01-601-59-1246 WAS ISSUED ON APRIL 16, 1959, BY THE BASE COVERING 12 ITEMS OF SUBSTANTIALLY THE SAME TYPE OF BOLTS FOR SHIPMENT TO THE SAME DESTINATION. BEFORE AWARDS WERE MADE ON ITEMS NOS. 1 THROUGH 26, 40, 42, 43, 45, AND 46 UNDER INVITATION NO. 1145, AND ITEMS NOS. 1 THROUGH 11 AND 13 UNDER INVITATION NO. 1246, ALL OF WHICH ITEMS WERE REQUIRED TO COMPLY WITH MILITARY SPECIFICATION NO. MIL-B-7838A, A NEW PRICE LIST OF THE VOI SHAN MANUFACTURING COMPANY, EFFECTIVE MAY 8, 1959, WAS RECEIVED BY THE BROOKLEY AIR FORCE BASE. THE PRICE LIST APPARENTLY COVERED INTERNAL WRENCHING BOLTS OF ALL DIAMETERS THROUGH 5/8 INCH IN A VARIETY OF LENGTHS AND BOLTS WHICH COMPLIED WITH THE APPLICABLE MILITARY SPECIFICATION. SINCE IT APPEARED FROM THE EVALUATION OF THE BIDS RECEIVED THAT $141,388.89 WAS THE LOWEST TOTAL COST AT WHICH THESE BOLTS COULD BE PROCURED UNDER INVITATIONS NOS. 1145 AND 1246, WHEREAS THE SAME BOLTS WERE LISTED IN THE NEW PRICE LIST FOR A TOTAL PRICE OF $60,657.89, A DETERMINATION WAS MADE BY THE CONTRACTING OFFICER OF THE BROOKLEY AIR FORCE BASE TO READVERTISE THE REQUIREMENT, OR AT LEAST A PART THEREOF. THAT BASIS, INVITATION NO. 01-601-59-1494, AS AMENDED, WAS ISSUED ON MAY 20, 1959, BY THE AIR FORCE BASE FOR 45 ITEMS OF THE INTERNAL WRENCHING BOLTS. AN EVALUATION OF THE BIDS RECEIVED UNDER THIS INVITATION REVEALED THE VOI SHAN MANUFACTURING COMPANY TO BE THE APPARENT LOW BIDDER ON ALL ITEMS EXCEPT NOS. 7, 18, 39, AND 45. THE BROOKLEY AIR FORCE BASE REPORTS THAT THE TOTAL PRICE OF THE COMPANY FOR THE ITEMS BID WAS $72,295.09, WHICH WAS HIGHER THAN THE COMPANY'S NEW PRICE LIST INDICATED IT WOULD BE BUT, AT THE SAME TIME, IT WAS $69,093.80 LESS THAN THE APPARENT LOW BIDS RECEIVED ON INVITATIONS NOS. 1145 AND 1246.

YOU PROTEST THE READVERTISEMENT OF THIS PROCUREMENT FOR THE REASON THAT THE ABSTRACTS OF BIDS SHOWED THAT YOU WERE THE LOW BIDDER ON THE MAJORITY OF ITEMS SET FORTH UNDER INVITATIONS NOS. 1145 AND 1246. YOU CONTEND THAT INVITATION NO. 1494 COVERED 41 ITEMS ORIGINALLY LISTED UNDER INVITATIONS NOS. 1145 AND 1246 ON WHICH YOU WERE THE LOW BIDDER AND THAT THERE WERE OMITTED FROM INVITATION NO. 1494, ONLY THE 18 ORIGINAL ITEMS ON WHICH YOU WERE NOT THE LOW BIDDER. ALSO, YOU ALLEGE THAT NO REASONS HAVE BEEN BROUGHT TO YOUR ATTENTION AS TO WHY THE ARMED SERVICES PROCUREMENT REGULATION WAS NOT FOLLOWED IN THIS INSTANCE BY THE AWARDING OF A CONTRACT TO YOU AS THE LOWEST RESPONSIBLE BIDDER. YOU REQUEST, THEREFORE, THAT THE PROCUREMENT ACTION UNDER INVITATION NO. 1494 BE DEFERRED PENDING A DETERMINATION BY OUR OFFICE AS TO THE LEGALITY OF THE ACTION TAKEN.

THE RECORD BEFORE US SHOWS THAT BEFORE AWARDS WERE MADE IN CONNECTION WITH INVITATIONS NOS. 1145 AND 1246 THERE WAS BROUGHT TO THE CONTRACTING OFFICER'S ATTENTION ADDITIONAL INFORMATION IN THE FORM OF A NEW PRICE LIST OF THE VOI SHAN MANUFACTURING COMPANY. THE LIST SET FORTH NEW PRICES EFFECTIVE AS OF MAY 8, 1959, ON THE BOLTS COVERED BY MILITARY SPECIFICATION NO. MIL-B-7838A. MOREOVER, THE BROOKLEY AIR FORCE BASE REPORTS THAT PAST EXPERIENCE SHOWED THAT THE PRICE LIST WAS INDICATIVE OF PRICES THAT COULD BE EXPECTED ON INVITATIONS FOR BIDS; ALSO, THAT A SAVING OF APPROXIMATELY $72,000 REASONABLY MIGHT BE ANTICIPATED ON THE BASIS OF SUCH PRICE LIST.

IT IS PROVIDED IN 10 U.S.C. 2305 (B) THAT "ALL BIDS MAY BE REJECTED IF THE HEAD OF THE AGENCY DETERMINES THAT REJECTION IS IN THE PUBLIC INTEREST.' THE HEAD OF THE AGENCY MAY, UNDER 10 U.S.C. 2311, DELEGATE THE AUTHORITY TO MAKE SUCH DETERMINATION TO ANY OTHER OFFICER OR OFFICIAL OF THAT AGENCY. THAT AUTHORITY HAS BEEN DELEGATED TO THE CONTRACTING OFFICER BY THE TERMS OF PARAGRAPH 2-403 OF THE ARMED SERVICES PROCUREMENT REGULATION. THEREFORE, IT APPEARS THAT THE CONTRACTING OFFICER ACTED WITHIN HIS AUTHORITY IN REJECTING ALL BIDS AND READVERTISING. THE AUTHORITY VESTED IN THE HEAD OF THE AGENCY, AND DELEGATED TO THE CONTRACTING OFFICER, IS EXTREMELY BROAD AND WE HAVE CONSISTENTLY HELD THAT A DETERMINATION PURSUANT THERETO IS NOT SUBJECT TO REVIEW BY THIS OFFICE EXCEPT POSSIBLY UPON A CLEAR SHOWING OF FRAUD OR BAD FAITH AMOUNTING TO FRAUD.

OF COURSE, WE ARE AWARE THAT THE REJECTION OF BIDS AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITOR'S PRICE IS A SERIOUS MATTER AND SHOULD NOT BE DONE EXCEPT FOR COGENT REASONS. NEVERTHELESS, WE HAVE RECOGNIZED THAT SINCE CONTRACTING OFFICERS ARE AGENTS OF THE GOVERNMENT REQUIRED TO WORK IN THE BEST INTERESTS OF THE GOVERNMENT, WHEN READVERTISING MAY RESULT IN SUBSTANTIAL SAVINGS TO THE GOVERNMENT SUCH ACTION, WHEN PROPERLY AUTHORIZED, SHOULD BE CONSIDERED. 36 COMP. GEN. 364.

IT IS THEREFORE CLEAR THAT THE CONTRACTING OFFICER'S REJECTION OF ALL BIDS WAS WITHIN HIS AUTHORITY AND IN VIEW OF THE FACT THAT SUBSTANTIALLY LOWER PRICES WERE OBTAINED UPON READVERTISEMENT, SUCH ACTION WAS IN THE BEST INTERESTS OF THE GOVERNMENT. ACCORDINGLY, WE MUST CONCLUDE THAT HIS ACTION IN THAT REGARD IS NOT SUBJECT TO LEGAL OBJECTION.

WITH RESPECT TO YOUR CONTENTIONS THAT 41 ITEMS WERE READVERTISED ON WHICH YOU HAD SUBMITTED THE LOW BIDS AND THAT THERE WERE OMITTED FROM THE READVERTISEMENT ONLY THE 18 ITEMS ON WHICH YOU WERE NOT THE LOW BIDDER, THE CONTRACTING OFFICER REPORTS THAT THE ONLY ITEMS WHICH WERE ORIGINALLY INCLUDED UNDER INVITATIONS NOS. 1145 AND 1246 THAT DID NOT APPEAR ON INVITATION NO. 1494 WERE ORIGINAL ITEMS NOS. 27 THROUGH 39, 41, AND 44 ON INVITATION NO. 1145 AND ALL ITEMS EXCEPT ITEM NO. 12 ON INVITATION NO. 1246. IT IS REPORTED FURTHER THAT THE SAID ITEMS, WHICH WERE EXCLUDED FROM THE READVERTISEMENT, COVERED THE TYPE OF BOLTS MANUFACTURED TO A SPECIFICATION OTHER THAN THE MILITARY SPECIFICATION NO. MIL-B-7838A, AND, AS SUCH, WERE NOT INCLUDED IN THE PRICE LIST PREVIOUSLY MENTIONED. THERE ARE 15 OF THE LATTER TYPE OF ITEMS--- 27 THROUGH 39, 41 AND 44--- UNDER INVITATION NO. 1145 WHICH WERE NOT READVERTISED, NINE OF WHICH NOW ARE BEING CONSIDERED BY THE BROOKLEY AIR FORCE BASE FOR AWARD TO YOU AS THE LOWEST RESPONSIBLE BIDDER. YOU DID NOT SUBMIT A BID ON TWO OF THE OTHER ITEMS AND YOU WERE NOT THE LOW BIDDER ON THE REMAINING FOUR. ITEM NO. 12 OF INVITATION NO. 1246 ALSO WAS AN ITEM NOT COVERED BY MILITARY SPECIFICATION NO. MIL-B-7838A AND, THEREFORE, WAS NOT READVERTISED BUT NOW IS BEING CONSIDERED FOR AWARD TO THE VOI SHAN MANUFACTURING COMPANY AS THE LOWEST RESPONSIBLE BIDDER.

YOU MAY BE INFORMED THAT THE DEPARTMENT OF THE AIR FORCE ADVISES THAT A STUDY CURRENTLY IS BEING MADE OF THE SUBMISSION, BY A NUMBER OF BIDDERS, OF "EQUAL BIDS" WHICH APPEARS TO HAVE OCCURRED UNDER THE SUBJECT INVITATIONS, AS WELL AS UNDER A NUMBER OF PRIOR INVITATIONS, FOR THE PROCUREMENT OF SIMILAR MATERIALS.