B-150770, MAY 1, 1963

B-150770, MAY 1, 1963

TO MR. HENRY H. HILTON:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 31, 1963, PROTESTING THE CANCELLATION OF NATIONAL AERONAUTICS AND SPACE ADMINISTRATION INVITATION C-17942 PB SOLICITING BIDS FOR THE DEMOLITION AND REMOVAL OF BUILDINGS, FACILITIES, STRUCTURES AND EQUIPMENT AT PLUM BROOK STATION.

LUMP SUM BID PRICES WERE SOLICITED FOR THE WORK INVOLVED ON A STANDARD FORM 33 INVITATION WHICH CONTEMPLATED THAT BIDDERS WOULD CHARGE THE GOVERNMENT FOR THE SERVICES THAT WERE TO BE PERFORMED. STANDARD FORM 32, INCORPORATED BY REFERENCE INTO THE INVITATION SCHEDULE, SPECIFIED IN ARTICLE "PAYMENTS," THAT THE SUCCESSFUL BIDDER WOULD BE PAID BY THE GOVERNMENT.

ELEVEN BIDS WERE RECEIVED BY THE CONTRACTING AGENCY. WHEN THEY WERE OPENED ON JULY 24, 1962, THREE OF THE BIDS, INCLUDING YOUR BID, BECAUSE OF STATEMENTS MADE IN THEM, WERE READ AS OFFERS TO PAY THE GOVERNMENT FOR THE SERVICES REQUIRED BY THE INVITATION. THE HIGHEST OF THESE THREE BIDS WAS YOUR BID IN THE AMOUNT OF $40,000. THE EIGHT REMAINING BIDS, WHICH RANGED FROM $19,200 TO $297,000 WERE READ AS OFFERS REQUIRING THE GOVERNMENT TO PAY THE BIDDERS.

ABOUT AN HOUR AFTER BID OPENING, A REPRESENTATIVE FROM LURIA BROTHERS AND COMPANY, INC., ONE OF THE BIDDERS WHOSE BID IN THE AMOUNT OF $90,999.99 WAS READ AS CHARGING THE GOVERNMENT FOR THE SERVICES INVOLVED, INFORMED THE CONTRACTING OFFICE BY TELEPHONE THAT THE COMPANY'S BID HAD BEEN MISINTERPRETED AT THE BID READING BECAUSE IT WAS INTENDED TO BE AN OFFER TO PAY THE GOVERNMENT. THERE APPEARS TO BE SOME EVIDENCE THAT THIS WAS IN FACT THE ACTUAL INTENTION OF THE BIDDER AS THE BID CITED BY NUMBER A BID BOND WHICH IS ONE OF THE ANNUAL TYPE INTENDED TO SUPPORT BIDS OFFERING TO PURCHASE PROPERTY FROM THE GOVERNMENT.

HOWEVER, THE CONTRACTING OFFICER HAD SOME RESERVATION THAT HE COULD CONSIDER THE LURIA BID RESPONSIVE SINCE THE BID BOND DID NOT ACCOMPANY THE BID AND THE BIDDER FAILED TO ACKNOWLEDGE RECEIPT OF ADDENDUM 2 BEFORE BID OPENING, ALTHOUGH IT ACKNOWLEDGED THEREAFTER THAT THE BID HAD BEEN SUBMITTED WITH FULL KNOWLEDGE OF IT.

UPON FURTHER CONSIDERATION OF THE MATTER, IT WAS DECIDED THAT THE INVITATION SHOULD BE CANCELED. IN THAT CONNECTION, YOU WERE ADVISED:

"AS A RESULT OF THIS REVIEW, IT HAS BEEN DETERMINED THAT THE ISSUANCE OF THE INVITATION WAS IMPROPER ON SEVERAL DISTINCT AND SEPARATE GROUNDS. ONE OF THESE GROUNDS INVOLVES THE ADEQUACY OF THE INVITATION ITSELF. FOR INSTANCE THE INVITATION WAS FATALLY DEFECTIVE IN THAT IT NEITHER SPECIFIED A TIME FOR THE COMPLETION OF THE WORK, OR ANY CRITERIA FOR EVALUATING VARYING PERIODS FOR PERFORMANCE WHICH BIDDERS MIGHT (AND DID) OFFER. THE INVITATION WAS ALSO INADEQUATE AND DEFECTIVE IN THAT IT DID NOT CLEARLY INDICATE TO A BIDDER THE NECESSITY OR MANNER OF SPECIFYING WHETHER ITS BID REPRESENTED A CREDIT TO THE GOVERNMENT, OR A PRICE TO BE PAID BY THE GOVERNMENT. FOR THIS AND OTHER REASONS IT IS CONCLUDED THAT THE CANCELLATION OF THE SUBJECT INVITATION WAS PROPER UNDER THE CIRCUMSTANCES.'

YOU HAVE PROTESTED THE CANCELLATION BECAUSE YOU DO NOT BELIEVE THAT THE REASONS RELIED UPON BY THE CONTRACTING AGENCY ARE ADEQUATE.

REGARDLESS OF THE SPECIFIC REASONS CITED TO YOU BY THE CONTRACTING AGENCY FOR THE CANCELLATION OF THE INVITATION FOR BIDS, WE DO NOT FEEL THAT WE WOULD BE JUSTIFIED IN OBJECTING TO THE ACTION TAKEN SINCE THERE IS SOME EVIDENCE THAT THERE WAS A GOOD POSSIBILITY THAT THE GOVERNMENT COULD HAVE OBTAINED AN OFFER MORE THAN TWICE AS GOOD AS YOURS HAD THE POSSIBILITY NOT EXISTED THAT THE BETTER OFFER MAY HAVE BEEN TECHNICALLY NONRESPONSIVE TO THE INVITATION FOR BIDS UNDER WHICH THE AWARD WOULD HAVE BEEN MADE. BELIEVE THAT THIS SUBSTANTIAL DIFFERENCE IN PRICE IN AND OF ITSELF WAS, AS A MATTER OF GOOD BUSINESS PRACTICE, ADEQUATE REASON FOR THE CANCELLATION OF THE INVITATION. WHILE THE AGENCY MAY HAVE RELIED UPON OTHER FACTORS, IT SEEMS THAT THERE WAS OTHER REASON THAT WE WOULD HAVE CONSIDERED VALID IF IT HAD BEEN RELIED UPON SO THAT WE WILL NOT REQUIRE ANY OTHER ACTION IN THIS CASE.

TITLE 10 U.S.C. 2305 (C) PROVIDES THAT ALL BIDS MAY BE REJECTED IF THE HEAD OF THE AGENCY DETERMINES THAT REJECTION IS IN THE PUBLIC INTEREST. ALSO, UNDER SECTION 8 (B) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, THE RIGHT WAS RESERVED TO THE GOVERNMENT TO REJECT ANY AND ALL BIDS. FURTHER, IT CONSISTENTLY HAS BEEN HELD THAT AN INVITATION FOR BIDS DOES NOT IMPORT ANY OBLIGATION TO ACCEPTANY OF THE OFFERS RECEIVED. SEE O -BRIEN V. CARNEY, 6 F.SUPP. 761; COLORADO PAVING CO. V. MURPHY, 78 F. 28. NOTWITHSTANDING THIS BROAD AUTHORITY, WE DO NOT, OF COURSE, ADVOCATE ARBITRARY REJECTION OF BIDS AFTER THEY HAVE BEEN EXPOSED TO PUBLIC VIEW, BUT IN A CASE LIKE THIS WHERE THERE IS A PROSPECT OF A SUBSTANTIALLY BETTER PRICE WE BELIEVE THAT THERE IS A COGENT REASON FOR THE CANCELLATION OF THE INVITATION ALTHOUGH SUCH REASON MAY NOT HAVE BEEN SPECIFICALLY RELIED UPON BY THE CONTRACTING AGENCY.

WE HAVE BEEN ADVISED THAT THE AGENCY CONTEMPLATES ISSUING A NEW INVITATION WHICH WILL INCLUDE WORK ADDITIONAL TO THAT WHICH WAS INCLUDED IN THE ORIGINAL INVITATION. IT IS TO BE EXPECTED THAT AT SUCH TIME AS THE NEW INVITATION IS ISSUED YOU WILL BE ACCORDED ANOTHER OPPORTUNITY TO BID.