B-149590, SEP. 12, 1962

B-149590: Sep 12, 1962

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TO GIMBEL BROTHERS: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 30. YOUR ORGANIZATION WERE THE ONLY BIDDERS TO SUBMIT BIDS UNDER THE SUBJECT INVITATIONS. ALL THE BIDS WERE REJECTED BECAUSE THE PRICES WERE CONSIDERED UNREASONABLE. TERMINAL COMMERCE BUILDING WAS LOW. IT WAS DETERMINED AGAIN THAT THE PRICES WERE UNREASONABLE AND FURTHER REDUCTIONS WERE SOUGHT. 000 SQUARE FEET OF FLOOR SPACE WAS NOT TO BE MADE AVAILABLE BEFORE DECEMBER 1. A DETERMINATION WAS MADE TO REJECT THE LAST OFFERS RECEIVED AND TO READVERTISE ON THE BASIS OF THE REVISED REQUIREMENT. THE SECOND INVITATION WAS ISSUED PROVIDING FOR THE DELIVERY OF 26. TERMINAL COMMERCE BUILDING WAS LOW AND IT WAS AWARDED THE LEASE ON AUGUST 6.

B-149590, SEP. 12, 1962

TO GIMBEL BROTHERS:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 30, 1962, PROTESTING AGAINST AN AWARD TO ANY OTHER BIDDER THAT RESPONDED TO GSA INVITATIONS NY- DOPA-220 AND 229, SOLICITING BIDS TO LEASE TO THE GOVERNMENT 146,000 SQUARE FEET OF SPACE IN A CERTAIN SECTION OF PHILADELPHIA, PENNSYLVANIA.

THE TERMINAL COMMERCE BUILDING OF PHILADELPHIA, INC., STERN BROTHERS, AND YOUR ORGANIZATION WERE THE ONLY BIDDERS TO SUBMIT BIDS UNDER THE SUBJECT INVITATIONS. YOU SUBMITTED THE LOWEST BID UNDER THE ORIGINAL INVITATION. HOWEVER, ALL THE BIDS WERE REJECTED BECAUSE THE PRICES WERE CONSIDERED UNREASONABLE. THE CONTRACTING AGENCY THEREUPON UNDERTOOK TO NEGOTIATE A CONTRACT FOR THE SPACE AND REQUESTED NEW OFFERS. AS A RESULT OF THE NEGOTIATED OFFERS RECEIVED, TERMINAL COMMERCE BUILDING WAS LOW, BUT IT WAS DETERMINED AGAIN THAT THE PRICES WERE UNREASONABLE AND FURTHER REDUCTIONS WERE SOUGHT. THEREUPON, YOU BECAME THE LOWEST OFFEROR AGAIN.

SUBSEQUENT TO RECEIPT OF THE LAST OFFERS, THE NEEDS OF THE GOVERNMENT CHANGED. WHEREAS ORIGINALLY THE TOTAL OF 146,000 SQUARE FEET OF FLOOR SPACE WAS NOT TO BE MADE AVAILABLE BEFORE DECEMBER 1, 1962, IT BECAME NECESSARY TO ACQUIRE 26,000 SQUARE FEET OF THAT TOTAL BY SEPTEMBER 15, 1962. THEREFORE, A DETERMINATION WAS MADE TO REJECT THE LAST OFFERS RECEIVED AND TO READVERTISE ON THE BASIS OF THE REVISED REQUIREMENT. ACCORDINGLY, THE SECOND INVITATION WAS ISSUED PROVIDING FOR THE DELIVERY OF 26,000 SQUARE FEET OF SPACE COMMENCING SEPTEMBER 15, 1962, AND FOR THE DELIVERY OF THE BALANCE OF THE 146,000 SQUARE FEET ON JANUARY 15, 1963. IN RESPONSE TO THIS INVITATION, TERMINAL COMMERCE BUILDING WAS LOW AND IT WAS AWARDED THE LEASE ON AUGUST 6, 1962. THE LOW BID OF $423,999.96 PER ANNUM FROM TERMINAL COMMERCE BUILDING UNDER THE SECOND INVITATION WAS $108,500.04 PER ANNUM LESS THAN THE LOW BID OF $532,500 PER ANNUM SUBMITTED BY YOU UNDER THE FIRST INVITATION.

AS TO THE REJECTION OF BIDS RECEIVED UNDER THE ORIGINAL ADVERTISEMENT FOR BIDS AND THE NEGOTIATION FOR BETTER PRICES, 41 U.S.C. 252 (14) PROVIDES THAT BIDS MAY BE REJECTED AND LOWER PRICES NEGOTIATED WHERE THE BID PRICES RECEIVED AFTER ADVERTISING ARE DETERMINED TO BE UNREASONABLE. AS TO THE SUBSEQUENT REJECTION OF THE LAST NEGOTIATED PRICES AND THE READVERTISEMENT BECAUSE OF CHANGED REQUIREMENTS, THE POSITION OF OUR OFFICE, AS EXPRESSED IN 17 COMP. GEN. 554 AND 36 ID. 364, HAS BEEN THAT A PUBLIC OFFICER ACTING FOR THE PUBLIC WELFARE IS NOT BOUND TO ACCEPT A BID WHERE IT IS DETERMINED THAT A MORE ADVANTAGEOUS CONTRACT FOR THE GOVERNMENT MIGHT RESULT AND THE PUBLIC INTEREST MIGHT BE BETTER SERVED BY A REJECTION OF ALL BIDS AND READVERTISEMENT.

UPON REVIEW OF THE ABOVE TRANSACTIONS, IT APPEARS THAT THE ADMINISTRATIVE ACTION IN NEGOTIATING AND EVENTUALLY READVERTISING HAS RESULTED IN A MORE FAVORABLE PRICE AND SAVINGS TO THE GOVERNMENT SUBSTANTIALLY IN THE GOVERNMENT'S INTEREST. FURTHER, WE FIND NO LEGAL BASIS TO OBJECT TO THE ADMINISTRATIVE ACTION THAT HAS BEEN TAKEN AND THEREFORE WE WILL NOT DISTURB THE AWARD THAT HAS BEEN MADE.