B-147008, AUG. 31, 1961

B-147008, AUG. 31, 1961

TO COMMISSIONER, INTERNATIONAL BOUNDARY AND WATER COMMISSION:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 18, 1961, REQUESTING TO BE ADVISED WHETHER WE WOULD CONCUR IN THE PROPOSED REJECTION OF BIDS RECEIVED ON SCHEDULE IV UNDER INVITATION UDA-6457 COVERING CONSTRUCTION OF TEXAS AND NEW ORLEANS RAILROAD RELOCATION FOR AMISTAD DAM.

THE INVITATION WAS DIVIDED INTO FIVE SCHEDULES. EACH OF THE FIRST FOUR SOLICITED A BID ON A SEPARATE PHASE OF THE CONSTRUCTION. SCHEDULE V SOLICITED AN AGGREGATE BID FOR ALL THE WORK REQUIRED BY THE FIRST FOUR SCHEDULES.

PARAGRAPH 5 OF THE INVITATION PROVIDED:

"BIDS MAY BE SUBMITTED ON ANY ONE, OR ANY COMBINATION OF THE SCHEDULES. THE GOVERNMENT FURTHER RESERVES THE RIGHT TO MAKE AWARD ON ANY ONE OR MORE OF SCHEDULES I THROUGH IV OF ANY BID UNLESS THE BIDDER QUALIFIES SUCH BID BY SPECIFIC LIMITATION; ALSO TO MAKE AWARD TO THE BIDDER WHOSE AGGREGATE BID ON ANY COMBINATION OF BID SCHEDULES I THROUGH IV IS LOW, OR TO MAKE AWARD TO THE LOW BIDDER ON SCHEDULE V.'

PARAGRAPH 10 (B) OF THE INSTRUCTIONS TO BIDDERS STATED:

"THE GOVERNMENT MAY WHEN IN ITS INTEREST, REJECT ANY OR ALL BIDS OR WAIVE ANY INFORMALITY IN BIDS RECEIVED.'

SEVENTEEN BIDDERS RESPONDED TO THE INVITATION. ONLY THREE BID ON SCHEDULE IV. H. B. ZACHRY, ET AL., A JOINT VENTURE, SUBMITTED THE ONLY BID ON SCHEDULE V (WORK CONTAINED IN SCHEDULES I THROUGH IV). TWO OTHER BIDDERS, THE JOINT VENTURE OF WILLIAMS BROTHERS CONSTRUCTION COMPANY, INCORPORATED, AND JOHN G. NELSON (BIDDER 17), AND ANOTHER COMPANY, EACH PROVIDED THAT AN AWARD ON SCHEDULE IV WOULD NOT BE ACCEPTED WITHOUT AN AWARD ON SCHEDULE I. THE BID PRICES HERE FOR CONSIDERATION WERE AS FOLLOWS:

SCHEDULE. BIDDER SCHEDULE

I II III IV V 16 $5,159,405 17 $6,042,962

$225,000

6 $2,581,981.90

$1,364,975.40

9 $11,095,385.08

IF AN AWARD IS MADE ON A BASIS THAT INCLUDES THE WILLIAMS JOINT VENTURE BID, THE COMBINED TOTAL FOR THE ENTIRE WORK WOULD BE $10,214,919.30. AN AWARD IS MADE ON A BASIS THAT ONLY INCLUDES THE WORK DESCRIBED IN THE FIRST THREE SCHEDULES, THAT COMBINED TOTAL WOULD BE $9,106,362.30. THE MAJOR PART OF THE DIFFERENCE BETWEEN THOSE TWO TOTALS IS THE $883,557 DIFFERENCE BETWEEN THE BIDS OF BIDDERS 16 AND 17 ON SCHEDULE I.

THE WORK REQUIRED BY SCHEDULE IV IS ONLY TWO PERCENT OF THE TOTAL CONSTRUCTION AND IS NOT REQUIRED UNTIL SCHEDULES I THROUGH III ARE SUBSTANTIALLY COMPLETE (ACTUAL COMPLETION THROUGH SCHEDULE III IS NOT REQUIRED BEFORE 700 CALENDAR DAYS AFTER DATE OF RECEIPT OF THE NOTICE TO PROCEED). ALSO, AS IS APPARENT FROM THE ABOVE FIGURES, THE UNITED STATES STANDS TO SAVE APPROXIMATELY $880,000 IF THE BIDS ON SCHEDULE IV ARE REJECTED AND AN AWARD IS MADE ONLY ON SCHEDULES I THROUGH III. SINCE THE WORK REQUIRED UNDER SCHEDULE IV IS RELATIVELY MINOR AND IS NOT NEEDED AT THE PRESENT TIME AND EXCLUSION OF THAT ITEM REASONABLY MAY BE EXPECTED TO RESULT IN A SUBSTANTIAL MONETARY SAVINGS TO THE GOVERNMENT, IT IS YOUR CONSIDERED OPINION THAT THE INTERESTS OF THE UNITED STATES WILL BE SERVED BEST BY MAKING AN AWARD ON SCHEDULES I THROUGH III ALONE.

OUR OFFICE HAS GENERALLY CONSIDERED THE ADMINISTRATIVE AUTHORITY TO REJECT BIDS TO BE EXTREMELY BROAD AND WE DO NOT QUESTION SUCH ACTION WHEN COGENT OR COMPELLING REASONS EXIST FOR IT. IN CONSIDERATION OF WHETHER COGENT OR COMPELLING REASONS EXIST WE HAVE ORDINARILY WEIGHED THE INTERESTS OF THE BIDDERS AGAINST THE INTERESTS OF THE GOVERNMENT AND HAVE CONCLUDED THAT IT IS GENERALLY IN THE PUBLIC INTEREST TO PROTECT THE BIDDERS' INTERESTS RATHER THAN TO OBTAIN A PECUNIARY ADVANTAGE IN A PARTICULAR CASE. HOWEVER, WE CANNOT DISREGARD THE IMPACT OF THE APPROXIMATE $880,000 THAT STANDS TO BE SAVED IN THIS CASE IF SCHEDULE IV IS NOT AWARDED AND WE CANNOT OVERLOOK THE FACT THAT, FROM A LEGAL STANDPOINT, THIS PARTICULAR INVITATION RESERVED TO THE GOVERNMENT THE RIGHT TO "MAKE AWARD ON ANY ONE OR MORE OF SCHEDULES I THROUGH IV.' THESE CIRCUMSTANCES AND SINCE IT IS NOT REASONABLY CONCEIVABLE THAT THE COST OF PROCURING SCHEDULE IV ALONE AT A LATER DATE WOULD EVEN APPROXIMATE THE LARGE SAVING THAT CAN BE EFFECTED BY THE ACTION PROPOSED HERE, WE BELIEVE THE INTERESTS AND LEGAL RIGHTS OF THE GOVERNMENT IN THIS CASE OVERBALANCE ANY EQUITIES THE WILLIAMS JOINT VENTURE MIGHT HAVE IN ITS FAVOR. CERTAINLY IT WOULD NOT BE REASONABLE TO REQUIRE THE GOVERNMENT TO PAY $880,000 MORE FOR AN ITEM SOLELY ON THE THEORY THAT AS A GENERAL PROPOSITION A GOVERNMENT CONTRACT SHOULD BE AWARDED FOR ALL ITEMS INCLUDED IN THE BID INVITATION.