B-149567, OCT. 10, 1962

B-149567: Oct 10, 1962

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TO MERIT TRUCK PARTS AND WHEEL COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 26. THE BIDS FOR WHICH WERE OPENED AT COLUMBUS. THE PROPERTY INVOLVED IN THIS PROTEST WAS LISTED IN THE SALES ANNOUNCEMENT AS ITEM 290 AND CONSISTED OF 81 UNUSED AXLE ASSEMBLIES FOR A 2 1/2 TON AMPHIBIOUS TRUCK WITH A TOTAL ACQUISITION COST OF $46. THE BASIS FOR YOUR PROTEST IS THAT SUCH BID PRICE WAS MORE THAN ADEQUATE BY ALL EXISTING AND PREVIOUS STANDARDS. WE ARE IN RECEIPT OF A REPORT DATED SEPTEMBER 26. 93EACH FOR THE AXLE ASSEMBLIES WAS THE HIGHEST BID RECEIVED. WHEN THE ITEM WAS REACHED IN THE COURSE OF THE SALE. YOUR BID WAS. WE INVITE YOUR ATTENTION TO ARTICLE 3 OF THE GENERAL SALE TERMS AND CONDITIONS UNDER WHICH THE GOVERNMENT RESERVED THE RIGHT TO REJECT ANY AND ALL BIDS AND TO REOFFER ANY ITEMS FOR WHICH ACCEPTABLE BIDS WERE NOT RECEIVED ON THE INITIAL OFFER.

B-149567, OCT. 10, 1962

TO MERIT TRUCK PARTS AND WHEEL COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 26, 1962, WITH ENCLOSURES, PROTESTING THE REJECTION OF YOUR BID FOR THE PURCHASE OF CERTAIN GOVERNMENT-OWNED PROPERTY OFFERED FOR SALE PURSUANT TO SPOTBID SALE NO. 27-S-63-6, THE BIDS FOR WHICH WERE OPENED AT COLUMBUS, OHIO, ON JULY 25, 1962.

THE PROPERTY INVOLVED IN THIS PROTEST WAS LISTED IN THE SALES ANNOUNCEMENT AS ITEM 290 AND CONSISTED OF 81 UNUSED AXLE ASSEMBLIES FOR A 2 1/2 TON AMPHIBIOUS TRUCK WITH A TOTAL ACQUISITION COST OF $46,980. YOUR COMPANY SUBMITTED A UNIT BID PRICE OF $153.93, FOR A TOTAL OF $12,468.33, AND THE BASIS FOR YOUR PROTEST IS THAT SUCH BID PRICE WAS MORE THAN ADEQUATE BY ALL EXISTING AND PREVIOUS STANDARDS. YOU CONTENDED IN YOUR LETTER OF JULY 26, 1962, THAT YOU RIGHTFULLY OWN THESE AXLE ASSEMBLIES AND FOR THE REASONS SET FORTH YOU REQUESTED THAT THE MATTER BE INVESTIGATED.

WE ARE IN RECEIPT OF A REPORT DATED SEPTEMBER 26, 1962, FROM THE DEFENSE SUPPLY AGENCY, WHICH SHOWS THAT YOUR COMPANY'S BID OF $153,93EACH FOR THE AXLE ASSEMBLIES WAS THE HIGHEST BID RECEIVED, EITHER BY MAIL OR FROM THE FLOOR, WHEN THE ITEM WAS REACHED IN THE COURSE OF THE SALE. YOUR BID WAS, HOWEVER, REJECTED BECAUSE IT FAILED TO MEET THE PREVIOUSLY DETERMINED MINIMUM ACCEPTABLE PRICE OF $170 PER UNIT. IN THIS CONNECTION, WE INVITE YOUR ATTENTION TO ARTICLE 3 OF THE GENERAL SALE TERMS AND CONDITIONS UNDER WHICH THE GOVERNMENT RESERVED THE RIGHT TO REJECT ANY AND ALL BIDS AND TO REOFFER ANY ITEMS FOR WHICH ACCEPTABLE BIDS WERE NOT RECEIVED ON THE INITIAL OFFER.

IT WAS REPORTED BY THE DEFENSE SUPPLY AGENCY THAT PRIOR TO THE SALE THE CHIEF OF THE DEFENSE SURPLUS SALES OFFICE, COLUMBUS ARMY DEPOT, NOTED THAT ITEM 290 WAS TO BE OFFERED ONLY ON AN ALL OR NONE BASIS AND THAT THE UNITS WERE DESCRIBED AS UNUSED. ON THE BASIS OF PAST EXPERIENCE WITH SIMILAR ITEMS HE CONCLUDED THAT A BID PRICE OF LESS THAN $170 EACH SHOULD NOT BE ACCEPTED. THE CONTRACTING OFFICER CONDUCTING THE SALE AGREED. SINCE YOUR COMPANY'S BID WAS FAR SHORT OF THE MINIMUM ACCEPTABLE PRICE ESTABLISHED FOR THE ITEMS PRIOR TO THE SALE, THE SAME WAS REJECTED AS INADEQUATE AND THE ITEM WAS REOFFERED. ONE BID WAS RECEIVED ON THE FIRST REOFFERING IN THE AMOUNT OF $168.91 PER UNIT, OR FOR A TOTAL OF $13,687.91, BUT THIS BID WAS ALSO REJECTED AS INADEQUATE. PRIOR TO THE CLOSE OF THE SALE AND AFTER CONFERRING WITH THE CHIEF OF THE DEFENSE SURPLUS SALES OFFICE THE SALES CONTRACTING OFFICER OFFERED ITEM 290 A THIRD TIME.

ON THE OCCASION OF THE THIRD OFFERING ONLY ONE BID WAS RECEIVED BEING THAT OFFERED BY MUTUAL TRUCK PARTS AT THE PRICE OF $173.89 EACH, OR A TOTAL OF $14,085.09 FOR THE ITEM. THIS BID WAS ACCEPTED BY THE CONTRACTING OFFICER AS THE HIGH ACCEPTABLE BID. INASMUCH AS THE ACQUISITION COST OF THE ITEM WAS $46,980 AN AWARD WAS NOT MADE AT THE TIME OF THE SALE BUT WAS MADE UNDER DATE OF JULY 31, 1962, AFTER APPROVAL BY THE CHIEF OF THE DEFENSE SURPLUS SALES OFFICE. THE DEFENSE SUPPLY AGENCY REPORTED THAT UNDER DATE OF AUGUST 6, 1962, THAT CONCERN PAID IN FULL FOR ALL ITEMS PURCHASED AT THE SALE AND REMOVED ITEM 290 FROM THE HOLDING ACTIVITY--- THE ERIE ORDNANCE DEPOT.

WE FEEL THAT THE REPRESENTATIVES OF THE DEFENSE SUPPLY AGENCY ACTED PROPERLY IN REJECTING YOUR COMPANY'S BID. WE TAKE THIS POSITION BECAUSE OF THE PROVISIONS OF ARTICLE 3 OF THE GENERAL SALE TERMS AND CONDITIONS, HEREINBEFORE REFERRED TO. WHILE IT IS TRUE THAT YOUR BID WAS THE HIGHEST RECEIVED FOR ITEM 290 AT THE BID OPENING ON JULY 25, 1962, IT DOES NOT FOLLOW THAT THEREBY YOU AUTOMATICALLY BECOME ENTITLED TO AN AWARD. THE CONTRACTING OFFICER HAD A DUTY TO OBTAIN A REASONABLE RETURN FOR THE PROPERTY AND SINCE IT HAD BEEN PREVIOUSLY DETERMINED THAT THE MINIMUM ACCEPTABLE PRICE WAS $170 PER UNIT IT FOLLOWS THAT HE WOULD HAVE BEEN SUBJECT TO CRITICISM HAD HE ACCEPTED YOUR COMPANY'S BID. THE REASONABLENESS OF THE DETERMINATION AS TO THE MINIMUM ACCEPTABLE BID APPEARS TO BE ESTABLISHED BY THE FACT THAT ON THE THIRD OFFERING A BID WAS RECEIVED IN EXCESS OF SUCH MINIMUM ACCEPTABLE BID.

UPON CONSIDERATION OF THE FACTS SHOWN BY THE RECORD BEFORE OUR OFFICE WE CONCLUDE THAT THERE IS NO LEGAL BASIS FOR YOUR PROTEST AND THE SAME IS HEREBY DENIED.