B-153264, APR. 13, 1964

B-153264: Apr 13, 1964

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TWO BIDS WERE RECEIVED AND OPENED ON NOVEMBER 19. YOUR COMPANY'S BID WAS HIGH AND THAT OF THE WHITE MOP WRINGER COMPANY WAS LOW. THE BID OF WHITE WAS REJECTED BECAUSE IT WAS INELIGIBLE FOR AWARD AS A LARGE BUSINESS CONCERN. IT WAS ADMINISTRATIVELY DETERMINED NOT TO MAKE AN AWARD UNDER THAT INVITATION FOR ITEMS 4 AND 5. 41 U.S.C. 253 (B) PROVIDES FOR THE REJECTION OF ALL BIDS WHEN SUCH ACTION IS DETERMINED TO BE IN THE PUBLIC INTEREST SO TO DO. IS BOUND TO ACCEPT A BID. THAT: "* * * WE HAVE * * * CONSTANTLY SOUGHT TO PROTECT AND MAINTAIN THE PRINCIPLES OF IMPARTIALITY AND FAIR PLAY UPON WHICH THE COMPETITIVE BIDDING SYSTEM DEPENDS. HAVE NEVER COUNTENANCED THE REJECTION OF BIDS MERELY FOR THE PURPOSE OF AFFORDING THE BIDDERS AN OPPORTUNITY TO BETTER THE PRICES OF THEIR COMPETITORS.

B-153264, APR. 13, 1964

TO GEERPRES WRINGER, INC.:

BY LETTER DATED JANUARY 9, 1964, WITH ENCLOSURES, YOU PROTESTED AGAINST THE ACTIONS TAKEN BY THE VETERANS ADMINISTRATION, MARKETING DIVISION, LABORATORY AND PMR SUPPLY, HINES, ILLINOIS, IN REJECTING BIDS UNDER A SMALL BUSINESS SET-ASIDE INVITATION AND READVERTISING THE GOVERNMENT'S NEEDS UNDER AN UNRESTRICTED INVITATION WHICH DID NOT RESTRICT BIDDING AND AWARD TO SMALL BUSINESS CONCERNS.

INVITATION FOR BIDS NO. M7-30-64, ISSUED ON NOVEMBER 4, 1963, REQUESTED BIDS UNDER ITEMS 4 AND 5 FOR 180 EACH "WRINGER AND BUCKET, MOP, DOUBLE" ON A TOTAL SMALL BUSINESS SET-ASIDE BASIS. TWO BIDS WERE RECEIVED AND OPENED ON NOVEMBER 19, 1963, ON ITEMS 4 AND 5, IN THE AMOUNTS OF $31.88 AND $28.50, EACH, RESPECTIVELY. YOUR COMPANY'S BID WAS HIGH AND THAT OF THE WHITE MOP WRINGER COMPANY WAS LOW. ON THE BASIS OF A DETERMINATION MADE BY THE SMALL BUSINESS ADMINISTRATION ON OCTOBER 11, 1963, PURSUANT TO 15 U.S.C. 637 (B) (6), THE BID OF WHITE WAS REJECTED BECAUSE IT WAS INELIGIBLE FOR AWARD AS A LARGE BUSINESS CONCERN. HOWEVER, IN VIEW OF THE $1,216.80 DIFFERENCE BETWEEN YOUR BID AND THAT OF WHITE-S, IT WAS ADMINISTRATIVELY DETERMINED NOT TO MAKE AN AWARD UNDER THAT INVITATION FOR ITEMS 4 AND 5.

THE TERMS AND CONDITIONS OF THE INVITATION SPECIFICALLY RESERVED TO THE GOVERNMENT THE RIGHT TO REJECT ANY AND ALL BIDS. MOREOVER, 41 U.S.C. 253 (B) PROVIDES FOR THE REJECTION OF ALL BIDS WHEN SUCH ACTION IS DETERMINED TO BE IN THE PUBLIC INTEREST SO TO DO.

IN 17 COMP. GEN. 554, 559-560, WE HELD THAT:

" * * * NOT ONLY DID THE INVITATION FOR BIDS EXPRESSLY STATE A RESERVATION OF THE RIGHT TO REJECT ANY AND ALL PROPOSALS, BUT A REQUEST FOR BIDS OR OFFERS, IRRESPECTIVE OF ANY SUCH RESERVATION, DOES NOT IMPORT ANY OBLIGATION TO ACCEPT ANY OF THE OFFERS RECEIVED, AND CERTAINLY IT CANNOT BE CONCEDED THAT A PUBLIC OFFICER, ACTING FOR THE GENERAL WELFARE, IS BOUND TO ACCEPT A BID, WHERE HE DETERMINES 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.'

WE ALSO HELD, ALONG THE SAME LINES, IN 36 COMP. GEN. 364, 365, THAT:

"* * * WE HAVE * * * CONSTANTLY SOUGHT TO PROTECT AND MAINTAIN THE PRINCIPLES OF IMPARTIALITY AND FAIR PLAY UPON WHICH THE COMPETITIVE BIDDING SYSTEM DEPENDS, AND HAVE NEVER COUNTENANCED THE REJECTION OF BIDS MERELY FOR THE PURPOSE OF AFFORDING THE BIDDERS AN OPPORTUNITY TO BETTER THE PRICES OF THEIR COMPETITORS. WE CANNOT, HOWEVER, CONSIDER THE MATTER OF COMPETITIVE BIDDING FOR GOVERNMENT CONTRACTS SOLELY AS A GAME, IN WHICH THE CONTRACT MUST AUTOMATICALLY GO TO THE LOWEST BIDDER WITHOUT REGARD TO THE REASONABLENESS OF HIS PRICE OR TO OTHER ATTEMPTED BIDS WHICH CANNOT FOR TECHNICAL REASONS BE ACCEPTED.'

IT SHOULD BE NOTED, PARTICULARLY, THAT IN THE LAST CITED DECISION, WE RECOGNIZED THAT CONTRACTING OFFICIALS COULD TAKE INTO CONSIDERATION THE DIFFERENCE IN BID PRICES IN DECIDING WHETHER TO MAKE AN AWARD UNDER THE INVITATION OR TO READVERTISE. SEE, ALSO, 37 COMP. GEN. 760; 39 ID. 86. WE, THEREFORE, FIND NO LEGAL BASIS TO QUESTION THE REJECTION OF ALL BIDS UNDER ITEMS 4 AND 5.

THEREAFTER, ON NOVEMBER 25, 1963, INVITATION NO. M7-33-64 REQUESTED BIDS FOR 360 OF THE MOPPING OUTFITS FORMERLY ADVERTISED UNDER THE EARLIER INVITATION. WITH THE APPROVAL OF THE SMALL BUSINESS ADMINISTRATION, THE TOTAL SMALL CLASS SET-ASIDE WAS REMOVED. THUS, THE LATER INVITATION REQUESTED BIDS ON AN UNRESTRICTED BASIS. THIS PROCEDURE WAS AUTHORIZED BY THE PROVISIONS OF SECTION 1-1.706-3 OF THE FEDERAL PROCUREMENT REGULATIONS WHICH READ AS FOLLOWS:

"SEC. 1-1.706-3 WITHDRAWAL OR MODIFICATION OF SET-ASIDES.

"/A) EACH INDIVIDUAL PROCUREMENT GOVERNED BY A CLASS SET-ASIDE SHALL BE CAREFULLY REVIEWED TO INSURE THAT ANY CHANGES IN THE MAGNITUDE OF ANTICIPATED REQUIREMENTS, SPECIFICATIONS FOR THE ITEMS OR SERVICES, DELIVERY REQUIREMENTS, OR COMPETITIVE MARKET CONDITIONS, SINCE THE INITIAL APPROVAL OF THE CLASS SET-ASIDE, ARE NOT OF SUCH MATERIAL NATURE AS TO RESULT IN THE PROBABLE PAYMENT OF AN UNREASONABLE PRICE BY THE GOVERNMENT OR IN A CHANGE IN SMALL BUSINESS CAPABILITY.

"/B) IF, PRIOR TO THE AWARD OF A CONTRACT INVOLVING AN INDIVIDUAL OR CLASS SET-ASIDE FOR SMALL BUSINESS, THE CONTRACTING OFFICER CONSIDERS THAT PROCUREMENT OF THE SET-ASIDE PORTION FROM A SMALL BUSINESS CONCERN WOULD BE DETRIMENTAL TO THE PUBLIC INTEREST (E.G., BECAUSE OF UNREASONABLE PRICE), THE CONTRACTING OFFICER SHALL WITHDRAW A UNILATERAL SET-ASIDE DETERMINATION. IN THE CASE OF A JOINT SET-ASIDE DETERMINATION, THE CONTRACTING OFFICER MAY INITIATE THE WITHDRAWAL THEREOF BY GIVING NOTICE, CONTAINING THE REASON THEREFOR, TO THE SBA REPRESENTATIVE. SIMILARLY, A CLASS SET-ASIDE MAY BE MODIFIED SO AS TO WITHDRAW ONE OR MORE INDIVIDUAL PROCUREMENTS THEREFROM. IN THE CASE OF A JOINT SET-ASIDE DETERMINATION, IF THE SBA REPRESENTATIVE DOES NOT AGREE TO A WITHDRAWAL OR MODIFICATION, THE ACTION MAY BE APPEALED IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN SEC. 1-1.706-2 (A).

"/C) A STATEMENT SUPPORTING ANY WITHDRAWAL OR MODIFICATION OF A SET-ASIDE SHALL BE MADE BY THE PROCURING ACTIVITY AND RETAINED IN THE CONTRACT FILE.'

SEE, ALSO, THE SMALL BUSINESS ADMINISTRATION REGULATIONS AT 13 CFR 127.15 -2 (D) TO THE SAME EFFECT.

THE LATER INVITATION WAS OPENED ON DECEMBER 16, 1963, AND WHITE AND YOUR COMPANY SUBMITTED THE ONLY BIDS. YOUR COMPANY OFFERED TO FURNISH THE ITEMS AT $31.98 EACH FOR DELIVERY TO SOMERVILLE, N.J., AND $30.98 EACH FOR DELIVERY TO HINES, ILLINOIS, WHEREAS WHITE BID $28.50 EACH FOR DELIVERY TO BOTH DESTINATIONS. IN VIEW OF THE $1,052.80 DIFFERENCE BETWEEN BIDS AND SINCE WHITE WAS OTHERWISE ELIGIBLE FOR AWARD, AWARD WAS MADE TO WHITE AS THE LOWEST RESPONSIVE BIDDER.

THE MATTER OF WHETHER A PROCUREMENT SHOULD BE SET ASIDE FOR AWARD TO SMALL BUSINESS CONCERNS IS ONE FOR DETERMINATION JOINTLY BY THE PROCUREMENT AGENCY AND THE SMALL BUSINESS ADMINISTRATION. BY STATUTE CODIFIED AT 15 U.S.C. 644, THE ADMINISTRATION OF THE SMALL BUSINESS SET- ASIDE PROGRAM IS SOLELY THE RESPONSIBILITY OF THE ADMINISTRATION AND THE PROCUREMENT AGENCY AS TO WHICH OUR OFFICE HAS NO AUTHORITY TO QUESTION INDIVIDUAL DETERMINATIONS IN THE ABSENCE OF CONVINCING EVIDENCE OF ARBITRARY OR CAPRICIOUS ACTION. ON THE RECORD BEFORE US, WE FIND NO BASIS TO DISAGREE WITH THE ACTIONS TAKEN BY THE PROCUREMENT AGENCY.