B-151784, JUL. 31, 1963

B-151784: Jul 31, 1963

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WHICH WAS APPROVED BY THE RURAL ELECTRIFICATION ADMINISTRATION IN ACCORDANCE WITH THE PROVISIONS OF THE LOAN CONTRACT BETWEEN THE COOPERATIVE AND THE GOVERNMENT. WERE SET OUT IN A LETTER DATED JUNE 25. THE PERTINENT PROVISION OF THE LOAN AGREEMENT WHICH PERTAINS TO THE AWARD OF CONTRACTS BY THE COOPERATIVE AND APPROVAL THEREOF BY THE ADMINISTRATION IS SIMILAR TO THAT CONSIDERED IN OUR DECISION B-151349 DATED JUNE 13. THAT AWARD OF THIS CONTRACT IS SUBJECT TO THE RULES APPLICABLE TO THE AWARD OF CONTRACTS BY FEDERAL AGENCIES ONLY TO THE EXTENT THAT SUCH RULES ARE MADE APPLICABLE BY THE TERMS OF THE LOAN AGREEMENT. WE HAVE BY LETTER OF MAY 20. BEEN ADVISED BY THE ADMINISTRATOR OF THE RURAL ELECTRIFICATION ADMINISTRATION THAT THE PERTINENT PROVISION OF THE LOAN AGREEMENT IS AS FOLLOWS: " "ARTICLE III.

B-151784, JUL. 31, 1963

TO MAUN, HAZEL, GREEN, HAYES, SIMON AND ARETZ:

BY LETTER DATED JUNE 12, 1963, WITH ENCLOSURES, YOU TRANSMITTED THE PROTEST OF FOLEY BROTHERS, INC., AGAINST THE AWARD OF A CONTRACT BY THE BASIN ELECTRIC POWER COOPERATIVE OF BISMARCK, NORTH DAKOTA.

THE CIRCUMSTANCES INVOLVED IN THE AWARD, WHICH WAS APPROVED BY THE RURAL ELECTRIFICATION ADMINISTRATION IN ACCORDANCE WITH THE PROVISIONS OF THE LOAN CONTRACT BETWEEN THE COOPERATIVE AND THE GOVERNMENT, WERE SET OUT IN A LETTER DATED JUNE 25, 1963, TO YOU, FROM THE ADMINISTRATOR, AND NEED NOT BE REPEATED HERE.

THE PERTINENT PROVISION OF THE LOAN AGREEMENT WHICH PERTAINS TO THE AWARD OF CONTRACTS BY THE COOPERATIVE AND APPROVAL THEREOF BY THE ADMINISTRATION IS SIMILAR TO THAT CONSIDERED IN OUR DECISION B-151349 DATED JUNE 13, 1963, WHEREIN WE HELD:

"AS WE INDICATED IN OUR LETTER OF MAY 3, 1963, THAT AWARD OF THIS CONTRACT IS SUBJECT TO THE RULES APPLICABLE TO THE AWARD OF CONTRACTS BY FEDERAL AGENCIES ONLY TO THE EXTENT THAT SUCH RULES ARE MADE APPLICABLE BY THE TERMS OF THE LOAN AGREEMENT. WE HAVE BY LETTER OF MAY 20, 1963, BEEN ADVISED BY THE ADMINISTRATOR OF THE RURAL ELECTRIFICATION ADMINISTRATION THAT THE PERTINENT PROVISION OF THE LOAN AGREEMENT IS AS FOLLOWS:

" "ARTICLE III, SECTION 3. THE BORROWER SHALL, IF THE ADMINISTRATOR SHALL SO REQUIRE, INVITE BIDS FOR CONSTRUCTION WORK PERTAINING TO THE SYSTEM, AND FOR MATERIALS, EQUIPMENT, OR SUPPLIES TO BE USED THEREIN, AND THE BORROWER SHALL INCLUDE ALL PERSONS DESIGNATED BY THE ADMINISTRATOR AMONG THOSE INVITED TO SUBMIT BIDS. IF THE ADMINISTRATOR SHALL SO REQUIRE, THE BORROWER SHALL OPEN BIDS IN THE PRESENCE OF A REPRESENTATIVE OF THE ADMINISTRATOR AND, IN ANY EVENT, THE BORROWER SHALL OPEN ALL BIDS PUBLICLY AT THE TIME AND PLACE WHICH SHALL HAVE BEEN SPECIFIED IN THE NOTICE TO BIDDERS. THE BORROWER SHALL AWARD EACH CONTRACT TO THE LOWEST RESPONSIBLE BIDDER, UNLESS ALL BIDS ARE REJECTED OR THE ADMINISTRATOR SHALL APPROVE THE AWARD OF THE CONTRACT TO ANOTHER RESPONSIBLE BIDDER UPON A SHOWING THAT THE AWARD OF THE CONTRACT TO SUCH BIDDER IS IN THE BEST INTERESTS OF THE BORROWER.'

"* * * IN VIEW OF THE TERMS OF ARTICLE III, SECTION 3, OF THE LOAN AGREEMENT, QUOTED ABOVE, WE MUST CONCLUDE THAT THE RULES APPLICABLE TO FEDERAL PROCUREMENT ARE NOT NECESSARILY APPLICABLE TO THE INSTANT PROCUREMENT, AND IN VIEW OF THE ADMINISTRATOR'S APPROVAL OF THE AWARD, WE FIND NO BASIS TO QUESTION ITS VALIDITY.'

IN VIEW THEREOF, AND SINCE THE ADMINISTRATION APPROVED THE RECOMMENDATION OF THE BORROWER'S CONTRACT COMMITTEE TO MAKE AWARD TO THE LOWEST RESPONSIVE BIDDER AND TO DISREGARD THE BID OF FOLEY AND POWERS BECAUSE IT DEVIATED FROM THE SPECIFICATIONS, NO BASIS EXISTS TO QUESTION THE AWARD.

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