B-147154, NOV. 6, 1961

B-147154: Nov 6, 1961

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CO.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 7. YOU CONTEND THAT YOUR BID PRICES WERE NOT UNREASONABLE AND NOT "EXCESSIVE" AND THAT A CONTRACT SHOULD BE AWARDED TO YOUR COMPANY FOR 56. QM/CTM/-36-243-62-46 WAS ISSUED ON JULY 13. THE BIDS WERE OPENED ON AUGUST 14. THE INVITATION WAS RESTRICTED TO SMALL BUSINESS CONCERNS ONLY. THREE BIDS WERE RECEIVED AND ON AUGUST 26. DA-36-243-QM/CTM/-10874-E 62 WAS AWARDED TO DOYLE SHOE CO. THE OTHER BIDS WERE REJECTED BECAUSE THE PRICES WERE DETERMINED TO BE UNREASONABLE. IT IS REPORTED THAT REPRESENTATIVES OF YOUR COMPANY VISITED THE MILITARY CLOTHING AND TEXTILE SUPPLY AGENCY ON SEPTEMBER 5 AND 6. DURING THE VISIT THE BID PRICES WERE REVIEWED AND CONSIDERATION WAS GIVEN TO PRIOR AWARD PRICES.

B-147154, NOV. 6, 1961

TO BELLEVILLE SHOE MFG. CO.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 7, 1961, PROTESTING AGAINST THE ACTION TAKEN BY THE MILITARY CLOTHING AND TEXTILE SUPPLY AGENCY IN REJECTING YOUR BID FOR THE MANUFACTURE AND DELIVERY OF MEN'S COMBAT BOOTS IN RESPONSE TO AN INVITATION FOR BIDS ISSUED BY THAT AGENCY. YOU CONTEND THAT YOUR BID PRICES WERE NOT UNREASONABLE AND NOT "EXCESSIVE" AND THAT A CONTRACT SHOULD BE AWARDED TO YOUR COMPANY FOR 56,960 PAIRS OF COMBAT BOOTS IN ACCORDANCE WITH YOUR BID.

IT APPEARS THAT INVITATION FOR BIDS NO. QM/CTM/-36-243-62-46 WAS ISSUED ON JULY 13, 1961, AND THE BIDS WERE OPENED ON AUGUST 14, 1961. THE SUBJECT INVITATION FOR BIDS REQUIRED THE MANUFACTURE AND DELIVERY OF 66,960 PAIRS OF BOOTS, COMBAT, MAN-S, DARK BROWN, AND THE INVITATION WAS RESTRICTED TO SMALL BUSINESS CONCERNS ONLY. THREE BIDS WERE RECEIVED AND ON AUGUST 26, 1961, CONTRACT NO. DA-36-243-QM/CTM/-10874-E 62 WAS AWARDED TO DOYLE SHOE CO., INC., OF BROCKTON, MASSACHUSETTS, FOR 10,000 PAIRS AT $7.42 PER PAIR. THE OTHER BIDS WERE REJECTED BECAUSE THE PRICES WERE DETERMINED TO BE UNREASONABLE.

IT IS REPORTED THAT REPRESENTATIVES OF YOUR COMPANY VISITED THE MILITARY CLOTHING AND TEXTILE SUPPLY AGENCY ON SEPTEMBER 5 AND 6, 1961, TO DISCUSS THE CAUSE OF THE REJECTION OF THE BID. YOUR REPRESENTATIVES ADVISED THAT YOUR BID PRICES WHICH RANGED FROM $8.22 TO $8.57 PER PAIR INCLUDED FROM $0.50 TO $0.75 PER PAIR ADDITIONAL FOR A SPECIFICATION CHANGE SET FORTH IN THE INVITATION WHICH REQUIREMENT HAD NOT BEEN INCLUDED IN PRIOR PROCUREMENTS. DURING THE VISIT THE BID PRICES WERE REVIEWED AND CONSIDERATION WAS GIVEN TO PRIOR AWARD PRICES, INCREASED COSTS RESULTING FROM OVER-ALL INCREASE IN MARKET PRICES AND LEATHER AND OTHER FOOTWEAR COMPONENTS SINCE THE PRIOR PROCUREMENT. THE CONTRACTING OFFICER HAS EXPRESSED THE OPINION THAT THIS REVIEW CONFIRMED HIS DETERMINATION THAT THE BIDS WHICH HAD BEEN REJECTED AS UNREASONABLE IN PRICE WERE, IN FACT, EXCESSIVE UNDER EXISTING MARKET CONDITIONS.

IN YOUR LETTER OF SEPTEMBER 7, 1961, TO THIS OFFICE, A COPY OF WHICH WAS FORWARDED TO THE PROCURING AGENCY, YOU ALLEGED THAT THE AGENCY:

"1) ERRED IN ASSUMING THAT THEIR AWARDS ON I/B NO. 799 REFLECTED ACCURATELY THE MARKET AT THAT TIME ON MARINE CORPS COMBAT BOOTS;

"2) IMPROPERLY EVALUATED THE LABOR AND MATERIAL COST INCREASES WITHIN THE SHOE INDUSTRY BETWEEN I/B NO. 799 AND I/B NO. 46; AND

"3) FAILED TO TAKE INTO CONSIDERATION THE CHANGES IN SPECIFICATIONS ON WHICH WE BASED OUR BID.'

INVITATION FOR BIDS NO. QM/CTM/-36-243-61-799 WAS ISSUED ON APRIL 13AND OPENED ON MAY 4, 1961. THIS INVITATION WAS FOR 54,076 PAIRS OF BOOTS, COMBAT, MAN-S, DARK BROWN. THE FORMAL PORTION OF THIS PROCUREMENT WAS UNRESTRICTED. HOWEVER, AN ADDITIONAL QUANTITY OF 44,992 PAIRS WAS SET ASIDE FOR NEGOTIATION WITH FIRMS LOCATED IN LABOR SURPLUS AREAS. ON THE FORMAL PORTION OF THE PROCUREMENT, AWARDS WERE MADE AS FOLLOWS:

A. CONTRACT NO. DA-36-243-QM/CTM/-10282-E-61 FOR 30,204 PAIRS WAS AWARDED AT AN AVERAGE UNIT PRICE OF $6.21.

B. CONTRACT NO. DA-36-243-QM-CTM/-10283-E-61 FOR 23,872 PAIRS WAS AWARDED AT AN AVERAGE UNIT PRICE OF $6.65.

ON THE SET-ASIDE PORTION OF THE PROCUREMENT, CONTRACT NO. DA-36-243 QM/CTM/-10324-E-61 FOR 44,992 PAIRS WAS AWARDED AT AN AVERAGE UNIT PRICE OF $6.50.

INASMUCH AS 16 BIDS WERE FURNISHED UNDER INVITATION NO. QM/CTM/ 36/243/61 -799, IT IS THE OPINION OF THE CONTRACTING OFFICER THAT THE PROCUREMENT UNDER THAT INVITATION FAIRLY REFLECTS THE MARKET PRICE OF THE ITEM AT THAT TIME. CAREFUL CONSIDERATION WAS GIVEN BY THE CONTRACTING OFFICER TO ANY INCREASE IN LABOR AND MATERIAL COST IN THE MANUFACTURING OF THESE BOOTS FROM MAY 1961 UNTIL AUGUST 1961. FURTHER, THE CONTRACTING OFFICER DID CONSIDER THE POSSIBLE ADDITIONAL COST DUE TO THE CHANGE IN SPECIFICATION PRIOR TO REJECTING YOUR BID AS BEING UNREASONABLE. IT IS THE CONTRACTING OFFICER'S DETERMINATION THAT ALLOWING $0.50 PER PAIR FOR THE CHANGE IN SPECIFICATION AND 18 PERCENT FOR INCREASED COST OF MATERIAL AND LABOR OVER THE PREVIOUS AVERAGE AWARD PRICE OF $6.45, THE HIGHEST PRICE HE COULD HAVE FOUND TO BE REASONABLE WOULD HAVE BEEN $8.11 OR $6.45 PLUS $1.16 PLUS $0.50.

WE ARE ADVISED THAT ON SEPTEMBER 13, 1961, THERE WAS ISSUED REQUEST FOR PROPOSALS NO. QM/CTM/-36-243-62-NEG-76, RESTRICTED TO SMALL BUSINESS, FOR 56,960 PAIRS OF COMBAT BOOTS REPRESENTING THE UNAWARDED PORTION OF INVITATION NO. QM/CTM/-36-243-62-46. ON SEPTEMBER 29, 1961, AWARDS WERE MADE AS FOLLOWS:

RED WING SHOE CO., INC. - 35,768 PAIRS, F.O.B. UTAH GENERAL

RED WING, MINNESOTA DEPOT, AT $7.46 PER PAIR, TERMS - NET.

DOYLE SHOE CO., INC. - 10,000 PAIRS, F.O.B. ATLANTA GENERAL

BROCKTON, MASSACHUSETTS DEPOT, AT $7.73 PER PAIR, TERMS - NET.

BELLEVILLE SHOE MFG. CO. - 10,744 PAIRS, F.O.B. ATLANTA GENERAL

BELLEVILLE, ILLINOIS - DEPOT, AT $7.9396 PER PAIR, TERMS - NET.

- 448 PAIRS, F.O.B. ALBANY, GEORGIA,

AT $8.0072 PER PAIR, TERMS - NET.

THESE AWARDS RESULTED IN AN AVERAGE UNIT PRICE OF $7.60216 COMPARED TO AN AVERAGE UNIT PRICE OF $8.381 IF AN AWARD HAD BEEN MADE TO YOUR COMPANY ON INVITATION NO. QM/CTM/-36242-62-46.

SECTION 2305 (C) OF TITLE 10, U.S.C. AUTHORIZED THE REJECTION OF ALL BIDS WHEN SUCH ACTION IS DETERMINED TO BE IN THE PUBLIC INTEREST. ALSO, UNDER SECTION 8 (B) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS. THE AUTHORITY TO REJECT BIDS IS NOT ORDINARILY SUBJECT TO REVIEW BY THIS OFFICE, AND WE HAVE SPECIFICALLY HELD THAT WHEN IT IS ADMINISTRATIVELY DETERMINED THAT THE LOWEST ACCEPTABLE BID IS IN EXCESS OF THE AMOUNT FOR WHICH THE GOVERNMENT SHOULD BE ABLE TO PROCURE THE PARTICULAR SUPPLIES, A REJECTION OF ALL BIDS AND A SOLICITATION OF NEW BIDS IS A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION. 36 COMP. GEN. 364. SINCE THE FACTS, AS OUTLINED ABOVE, APPEAR TO SUBSTANTIALLY SUPPORT THE CONTRACTING OFFICER'S DETERMINATION THAT YOUR BID PRICE WAS UNREASONABLE, WE CANNOT CONCLUDE THAT THE ACTION TAKEN IN REJECTING THE BIDS WAS UNJUSTIFIED. SEE ALSO 39 COMP. GEN. 86, 88. MOREOVER, AS ABOVE INDICATED, SUCH ACTION DID IN FACT RESULT IN THE PROCUREMENT OF COMBAT BOOTS AT A SUBSTANTIAL SAVING TO THE GOVERNMENT. AND, IT IS NOTED THAT YOUR COMPANY WAS SUCCESSFUL IN OBTAINING AN AWARD UNDER THE SECOND PROCUREMENT ACTION.