B-148151, APR. 2, 1962

B-148151: Apr 2, 1962

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CLEAN-RITE JANITORIAL SERVICE: REFERENCE IS MADE TO YOUR ATTORNEYS' LETTERS OF FEBRUARY 6. THERE HAVE BEEN RECEIVED ALSO COMMUNICATIONS FROM HONORABLE E. WAS ISSUED OCTOBER 2. ON PAGE 7 OF THE CONTINUATION SHEETS IT WAS PROVIDED THAT THE PERIOD OF THE CONTRACT SHOULD COMMENCE ON THE DATE OF AWARD OR DECEMBER 1. WHICHEVER WAS LATER. A NOTICE OF TOTAL SMALL BUSINESS SET ASIDE WAS INCLUDED IN THE INVITATION. THE NUMBER OF THE INVITATION WAS CHANGED FROM NO. 65-501- 62-27 TO NO. 65-501-62-33. THE GOVERNMENT ESTIMATE WAS IN THE AMOUNT OF $353. THE LOW BID AND THE THIRD LOW BID WERE REJECTED FOR THE STATED REASON THAT THE BIDDERS LACKED THE CAPABILITY OF PERFORMING THE CONTRACT WORK. 000 WAS REJECTED BECAUSE THERE WAS NO SHOWING THAT THE AGENT WHO SIGNED THE BID HAD AUTHORITY TO DO SO.

B-148151, APR. 2, 1962

TO D.B.A. CLEAN-RITE JANITORIAL SERVICE:

REFERENCE IS MADE TO YOUR ATTORNEYS' LETTERS OF FEBRUARY 6, FEBRUARY 13 AND MARCH 6, 1962, RELATIVE TO YOUR PROTEST AGAINST THE REJECTION OF ALL BIDS UNDER INVITATION FOR BIDS NO. 65-501-62-33 FOR JANITORIAL SERVICES AT ELMENDORF AIR FORCE BASE. THERE HAVE BEEN RECEIVED ALSO COMMUNICATIONS FROM HONORABLE E. L. BARTLETT AND HONORABLE RALPH J. RIVERS RELATIVE TO THE MATTER.

THE INVITATION, UNDER ITS ORIGINAL NUMBER 65-501-62-27, WAS ISSUED OCTOBER 2, 1961, REQUESTING BIDS--- TO BE OPENED OCTOBER 27, 1961--- FOR FURNISHING CUSTODIAL SERVICES IN CONNECTION WITH NUMEROUS LISTED BUILDINGS AT ELMENDORF AIR FORCE BASE. ON PAGE 7 OF THE CONTINUATION SHEETS IT WAS PROVIDED THAT THE PERIOD OF THE CONTRACT SHOULD COMMENCE ON THE DATE OF AWARD OR DECEMBER 1, 1961, WHICHEVER WAS LATER, AND EXTEND FOR 12 MONTHS THEREAFTER. A NOTICE OF TOTAL SMALL BUSINESS SET ASIDE WAS INCLUDED IN THE INVITATION. PARAGRAPH 8 OF THE TERMS AND CONDITIONS RESERVED TO THE GOVERNMENT THE RIGHT TO REJECT ANY OR ALL BIDS AND TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN BIDS RECEIVED. BY AMENDMENT NO. 1 DATED OCTOBER 9, 1961, THE NUMBER OF THE INVITATION WAS CHANGED FROM NO. 65-501- 62-27 TO NO. 65-501-62-33.

IN RESPONSE TO THE INVITATION, YOU SUBMITTED THE FOURTH LOW BID IN THE TOTAL AMOUNT OF $384,714.90. THE OTHER BIDS RECEIVED RANGED FROM $268,686 TO $475,173. THE GOVERNMENT ESTIMATE WAS IN THE AMOUNT OF $353,280. THE LOW BID AND THE THIRD LOW BID WERE REJECTED FOR THE STATED REASON THAT THE BIDDERS LACKED THE CAPABILITY OF PERFORMING THE CONTRACT WORK. THE SECOND LOW BID OF FA-AN COMPANY IN THE AMOUNT OF $276,000 WAS REJECTED BECAUSE THERE WAS NO SHOWING THAT THE AGENT WHO SIGNED THE BID HAD AUTHORITY TO DO SO.

IN VIEW OF THE GREAT DISPARITY ($108,714.90 OR 39 PERCENT) BETWEEN YOUR BID AND THE BID OF FA-AN COMPANY AND THE CONSIDERABLE DISPARITY BETWEEN YOUR BID AND THE GOVERNMENT ESTIMATE, THE CONTRACTING OFFICER REJECTED ALL REMAINING BIDS AND ISSUED ANOTHER INVITATION, NO. 65-501-62-66 DATED FEBRUARY 15, 1962, REQUESTING BIDS TO BE OPENED MARCH 7, 1962. THE LATTER INVITATION IS ALSO RESTRICTED TO SMALL BUSINESS BIDDERS AND COVERS THE SAME SERVICES AS THOSE COVERED BY THE ORIGINAL INVITATION BUT PROVIDES THAT THE PERIOD OF PERFORMANCE SHALL EXTEND FROM APRIL 1, 1962, OR DATE OF AWARD, WHICHEVER IS LATER, THROUGH JUNE 30, 1962.

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 2-404-1 (B) OF THE ARMED SERVICES PROCUREMENT REGULATION WHICH PROVIDES THAT INVITATIONS FOR BIDS MAY BE CANCELED AFTER OPENING BUT PRIOR TO AWARD WHERE THE CONTRACTING OFFICER DETERMINES THAT ,ALL OTHERWISE ACCEPTABLE BIDS RECEIVED ARE AT UNREASONABLE PRICES.' 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 IN THIS INSTANCE TO THE CONTRACTING OFFICER, IS EXTREMELY BROAD AND WE HAVE CONSISTENTLY HELD THAT A DETERMINATION PURSUANT THERETO IS NOT SUBJECT TO REVIEW BY OUR OFFICE EXCEPT POSSIBLY UPON A CLEAR SHOWING OF FRAUD OR BAD FAITH AMOUNTING TO FRAUD. B-118013, MARCH 31, 1954; B-128422, AUGUST 30, 1956.

OF COURSE, WE ARE KEENLY 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. AS WE POINTED OUT IN OUR DECISION, B-118072, DECEMBER 18, 1953:

"* * * WHILE IT IS DESIRABLE THAT THE GOVERNMENT OBTAIN THE BEST POSSIBLE PRICE OR MATERIALS MEETING ITS MINIMUM REQUIREMENTS, IT MUST BE RECOGNIZED THAT THE REJECTION OF BIDS WHICH ARE FULLY RESPONSIVE AND READVERTISEMENTS WITH CHANGED SPECIFICATIONS DESIGNED TO PERMIT ACCEPTANCE OF THE QUALIFICATIONS IN BIDS RECEIVED UNDER THE ORIGINAL INVITATION MUST, BY DISCOURAGING THOSE BIDDERS WHO OFFER FULL COMPLIANCE WITH THE SPECIFICATIONS, EVENTUALLY RESULT IN REDUCING COMPETITIVE BIDS, WHICH OBVIOUSLY WOULD BE DISADVANTAGEOUS TO THE GOVERNMENT. * * *"

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. -122060, DECEMBER 21, 1954; B-126817, FEBRUARY 28, 1956. IN THIS CONNECTION, IT WAS STATED IN 17 COMP. GEN. 554, 559, THAT:

"* * * CERTAINLY IT CANNOT BE CONCEDED THAT A PUBLIC OFFICER, ACTING FOR THE GENERAL WELFARE, IS BOUND TO ACCEPT A BID, WHERE HE DETERMINED THAT THE PUBLIC INTEREST WOULD BE SERVED BY A REJECTION OF ALL BIDS AND A READVERTISEMENT OF THE CONTRACT ON SPECIFICATIONS STATED TO REFLECT MORE ACCURATELY THE ACTUAL NEEDS TO BE MET, OR, FOR THAT MATTER, THAT DUE TO THE LAPSE OF TIME OR OTHERWISE A MORE ADVANTAGEOUS CONTRACT MIGHT BE OBTAINED.'

IN THE SAME VEIN, WE STATED, IN 36 COMP. GEN. 364, 365:

"* * * WHEN IN THE LIGHT OF ALL THE FACTS, INCLUDING THOSE DISCLOSED BY THE BIDDING, IT IS ADMINISTRATIVELY DETERMINED THAT THE LOWEST ACCEPTABLE BID IS IN EXCESS OF THE AMOUNT FOR WHICH THE GOVERNMENT SHOULD BE ABLE TO OBTAIN THE SUPPLIES OR SERVICES SOUGHT, WE BELIEVE THAT THE REJECTION OF ALL BIDS AND READVERTISING OF THE CONTRACT IS A PROPER EXERCISE OF THE ADMINISTRATIVE DISCRETION, IN CONFORMITY WITH THE DUTY OF THE ADMINISTRATIVE OFFICIALS TO ACT IN THE BEST INTEREST OF THE GOVERNMENT.

IN THE INSTANT MATTER, IT IS CONCLUDED THAT THE ACTION OF THE PROCURING OFFICE WAS TAKEN IN GOOD FAITH AND IN ACCORDANCE WITH THE APPLICABLE LAW AND REGULATIONS, THERE BEING A REASONABLE BASIS FOR REGARDING YOUR BID AS EXCESSIVE. ACCORDINGLY, THERE APPEARS NO VALID REASON FOR OBJECTION BY OUR OFFICE TO THE REJECTION OF ALL BIDS UNDER THE ORIGINAL INVITATION AND THE ACCEPTANCE OF A SUITABLE BID UNDER THE NEW INVITATION.