B-141858, APR. 1, 1960

B-141858: Apr 1, 1960

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WIENER AND ROSS: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 3. BIDS WERE SOLICITED FOR THE SALE OF A HARBOR TUG. THE CONTRACTING OFFICER RECEIVED A CONSIDERABLE NUMBER OF COMPLAINTS FROM INTERESTED BIDDERS WHO POINTED OUT THAT THERE WAS NOT SUFFICIENT TIME BETWEEN THE DATE THEY RECEIVED THE INVITATION AND THE BID OPENING DATE FOR THEM TO INSPECT THE TUG AND SUBMIT BIDS. THE DATE BIDS WERE OPENED ON SCHEDULE. THIS SITUATION WAS CAREFULLY REVIEWED BY THE CONTRACTING OFFICER. HE CONCLUDED THAT THE PREPARATION OF THE INVITATION WAS COMPLETED ON DECEMBER 28. WHEN THE INVITATION WAS PROCESSED FOR MAILING TO PROSPECTIVE BIDDERS. THE SALE WAS READVERTISED UNDER INVITATION NO. THE INVITATION WAS PRINTED AND MADE READY FOR MAILING ON JANUARY 8.

B-141858, APR. 1, 1960

TO WACHTEL, WIENER AND ROSS:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 3, 1960, PROTESTING, ON BEHALF OF THE SHIP SUPPLY CORPORATION, AGAINST THE REJECTION OF ALL BIDS SUBMITTED UNDER NEW YORK NAVAL SHIPYARD SALES INVITATION NO. B-174 60-131 AND THE READVERTISEMENT OF THE SALE UNDER INVITATION NO. B-184 60-131.

UNDER THE INVITATION DATED DECEMBER 18, 1959, BIDS WERE SOLICITED FOR THE SALE OF A HARBOR TUG, LARGE (YTB-389), WITH A SCHEDULED OPENING DATE OF JANUARY 5, 1960. OF THE NINE BIDS RECEIVED AT THE BID OPENING, YOUR CLIENT SUBMITTED THE HIGHEST BID IN THE AMOUNT OF $23,561.78. HOWEVER, SUBSEQUENT TO BID OPENING, THE CONTRACTING OFFICER RECEIVED A CONSIDERABLE NUMBER OF COMPLAINTS FROM INTERESTED BIDDERS WHO POINTED OUT THAT THERE WAS NOT SUFFICIENT TIME BETWEEN THE DATE THEY RECEIVED THE INVITATION AND THE BID OPENING DATE FOR THEM TO INSPECT THE TUG AND SUBMIT BIDS. SOME OF THESE BIDDERS COMPLAINED BY LETTER TO THE SALES DISPOSAL OFFICER THAT THEY DID NOT RECEIVE COPIES OF THE INVITATION UNTIL JANUARY 5, 1960, THE DATE BIDS WERE OPENED ON SCHEDULE. THIS SITUATION WAS CAREFULLY REVIEWED BY THE CONTRACTING OFFICER, AND HE CONCLUDED THAT THE PREPARATION OF THE INVITATION WAS COMPLETED ON DECEMBER 28, 1959, WHEN THE INVITATION WAS PROCESSED FOR MAILING TO PROSPECTIVE BIDDERS. THEREFORE, BASED UPON THE FACT THAT THE INVITATION HAD NOR BEEN MAILED IN SUFFICIENT TIME TO PERMIT FULL AND FREE COMPETITION AS REQUIRED BY DEPARTMENTAL REGULATIONS, THE CONTRACTING OFFICER REJECTED ALL BIDS WITH THE VIEW OF READVERTISING THE TUG FOR SALE AT A LATER DATE. THE SALE WAS READVERTISED UNDER INVITATION NO. B-184-60-131 ON JANUARY 11, 1960, WITH AN OPENING DATE SCHEDULED FOR JANUARY 28, 1960. AS A RESULT OF THE HIGH PRIORITY PLACED ON THIS INVITATION BY THE CONTRACTING OFFICER, THE INVITATION WAS PRINTED AND MADE READY FOR MAILING ON JANUARY 8, 1960. LATER THAT SAME DAY, THE INVITATION WAS MAILED TO PROSPECTIVE BIDDERS. THIRTEEN BIDS WERE RECEIVED AND OPENED UNDER THIS INVITATION. THE SHIP SUPPLY CORPORATION SUBMITTED A BID OF $31,250 AS AGAINST THE HIGH BID OF JAMES S. MUNRO IN THE AMOUNT OF $56,402. AWARD OF CONTRACT NO. N131-3 S-15441 WAS MADE TO MR. MUNRO AT HIS BID PRICE AND, AFTER PAYMENT WAS MADE IN FULL, THE TUG WAS REMOVED FROM NAVY CUSTODY ON FEBRUARY 12, 1960.

IT IS CONTENDED THAT THE REJECTION OF ALL BIDS WAS IMPROPER SINCE THE SHIP SUPPLY CORPORATION RECEIVED THE FIRST INVITATION PRIOR TO DECEMBER 23, 1959, AND THAT 10 OTHER INTERESTED BIDDERS ALSO HAD RECEIVED THE INVITATION PRIOR TO THAT DATE. EVEN ASSUMING THAT A RELATIVELY SMALL NUMBER OF INVITATIONS WERE RECEIVED IN SUFFICIENT TIME PRIOR TO THE BID OPENING DATE, THE FACT STILL REMAINS THAT THE EVIDENCE OF RECORD CLEARLY ESTABLISHES THAT THE BULK OF THE 1,800 COPIES OF THE INVITATIONS WERE NOT MAILED TO INTERESTED BIDDERS IN SUFFICIENT TIME TO PERMIT FULL AND FREE COMPETITION UNDER THE CIRCUMSTANCES.

OF COURSE, WHAT IS A REASONABLE TIME FOR PROSPECTIVE BIDDERS TO PREPARE AND SUBMIT THEIR BIDS IS DEPENDENT UPON THE CIRCUMSTANCES OF THE PARTICULAR CASE. HERE THE CONTRACTING OFFICER DETERMINED IN GOOD FAITH ON THE BASIS OF HIS INVESTIGATION OF THE FACTS THAT A SUFFICIENT PERIOD OF TIME WAS NOT AVAILABLE TO MOST INTERESTED BIDDERS TO PARTICIPATE IN THE SALE. WE ARE NOT DISPOSED TO QUESTION THAT DETERMINATION ON THE BASIS OF THE RECORD BEFORE US. CF. 16 COMP. GEN. 485, 486. THE GOVERNMENT RESERVED THE RIGHT UNDER PARAGRAPH 3 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION "TO REJECT ANY OR ALL BIDS.' THIS RESERVATION PROPERLY SHOULD BE EXERCISED BY THE CONTRACTING OFFICER WHEN TO DO SO WOULD BE IN FURTHERANCE OF THE PROVISIONS OF 40 U.S.C. 484 (E) (2) RESPECTING THE ADVERTISING REQUIREMENTS FOR THE SALE OF GOVERNMENT PROPERTY. THAT STATUTE READS IN PART AS FOLLOWS:

"/2) WHENEVER PUBLIC ADVERTISING FOR BIDS IS REQUIRED UNDER PARAGRAPH (1) OF THIS SUBSECTION---

(A) THE ADVERTISEMENT FOR BIDS SHALL BE MADE AT SUCH TIME PREVIOUS TO THE DISPOSAL OR CONTRACT, THROUGH SUCH METHODS, AND ON SUCH TERMS AND CONDITIONS AS SHALL PERMIT THAT FULL AND FREE COMPETITION WHICH IS CONSISTENT WITH THE VALUE AND NATURE OF THE PROPERTY INVOLVED;

(B) ALL BIDS SHALL BE PUBLICLY DISCLOSED AT THE TIME AND PLACE STATED IN THE ADVERTISEMENT;

(C) AWARD SHALL BE MADE WITH REASONABLE PROMPTNESS BY NOTICE TO THE RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED: PROVIDED, THAT ALL BIDS MAY BE REJECTED WHEN IT IS IN THE PUBLIC INTEREST TO DO SO.'

THE AUTHORITY THUS RESERVED BY STATUTE AND THE INVITATION IS EXTREMELY BROAD AND A DETERMINATION MADE PURSUANT TO SUCH AUTHORITY IS NOT ORDINARILY SUBJECT TO REVIEW. SEE 31 ALR2D 469; ERIE COAL AND COKE COMPANY V. UNITED STATES, 266 U.S. 518.

ACCORDINGLY, WE FIND NO LEGAL JUSTIFICATION FOR DISTURBING THE ACTIONS TAKEN BY THE DISPOSAL AGENCY IN THE MATTER.