B-155889, FEB. 19, 1965

B-155889: Feb 19, 1965

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BIDS WERE SOLICITED FOR CONSTRUCTION WORK AT THE BASE NAVAL STATION MESS HALL AND NAVAL OFFICERS CANDIDATE SCHOOL DORMITORY. THE PROCUREMENT WAS TOTALLY SET ASIDE FOR SMALL BUSINESS CONCERNS. THE GOVERNMENT'S ESTIMATED COST FOR THE PROJECT WAS $3. WHICH WAS LATER REVISED TO A FIGURE OF $3. BIDS WERE OPENED ON DECEMBER 30. THE FOLLOWING BIDS WERE ECEIVED: FRANCHI CONSTRUCTION COMPANY. WE HAVE BEEN ADVISED BY THE DEPARTMENT OF THE NAVY THAT THIS PROJECT HAS BEEN READVERTISED WITHOUT THE SMALL BUSINESS SET-ASIDE. BID OPENING IS SCHEDULED FOR FEBRUARY 24. ARMED SERVICES PROCUREMENT REGULATION 1-706.3 (A) PROVIDES FOR THE WITHDRAWAL OF A SMALL BUSINESS SET-ASIDE WHEN IT IS CONSIDERED THAT AWARD UNDER THE SET-ASIDE "WOULD BE DETRIMENTAL TO THE PUBLIC INTEREST (E.G.

B-155889, FEB. 19, 1965

TO BONWIT BUILDING CORPORATION:

THIS REFERS TO YOUR TELEGRAM DATED JANUARY 5, 1965, AND A LETTER DATED JANUARY 11, 1965, PROTESTING AGAINST THE REJECTION OF ALL BIDS BY THE DEPARTMENT OF THE NAVY AT THE UNITED STATES NAVAL BASE, NEWPORT, RHODE ISLAND, UNDER INVITATION FOR BIDS NO. NBY-58911.

UNDER INVITATION FOR BIDS SPECIFICATION NO. 58911/64, ISSUED ON NOVEMBER 2, 1964, BIDS WERE SOLICITED FOR CONSTRUCTION WORK AT THE BASE NAVAL STATION MESS HALL AND NAVAL OFFICERS CANDIDATE SCHOOL DORMITORY. THE PROCUREMENT WAS TOTALLY SET ASIDE FOR SMALL BUSINESS CONCERNS.

THE GOVERNMENT'S ESTIMATED COST FOR THE PROJECT WAS $3,500,000, WHICH WAS LATER REVISED TO A FIGURE OF $3,361,000. BIDS WERE OPENED ON DECEMBER 30, 1964, AND THE FOLLOWING BIDS WERE ECEIVED:

FRANCHI CONSTRUCTION COMPANY, INC. $3,699,000

BONWIT BUILDING CORPORATION 3,667,000

THE CONTRACTING OFFICER AFTER DECIDING THAT THE LIMITED BIDDING HAD NOT FURNISHED SUFFICIENT COMPETITIVE EVIDENCE OF REASONABLE PRICE REJECTED BOTH BIDS AND REVISED THE PLANS AND SPECIFICATIONS TO EFFECT A REDUCTION IN COST. WE HAVE BEEN ADVISED BY THE DEPARTMENT OF THE NAVY THAT THIS PROJECT HAS BEEN READVERTISED WITHOUT THE SMALL BUSINESS SET-ASIDE, FOR THE PURPOSE OF ATTRACTING GREATER COMPETITION. BID OPENING IS SCHEDULED FOR FEBRUARY 24, 1965.

ARMED SERVICES PROCUREMENT REGULATION 1-706.3 (A) PROVIDES FOR THE WITHDRAWAL OF A SMALL BUSINESS SET-ASIDE WHEN IT IS CONSIDERED THAT AWARD UNDER THE SET-ASIDE "WOULD BE DETRIMENTAL TO THE PUBLIC INTEREST (E.G., BECAUSE OF UNREASONABLE PRICE).' THE QUESTION OF REJECTING ALL BIDS AND READVERTISING IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION AND WHERE IT IS SHOWN THAT THE PURPOSE OF SUCH ACTION IS TO OBTAIN FOR THE GOVERNMENT THE ADVANTAGE OF MORE COMPETITIVE AND REALISTIC BIDDING AS DETERMINED BY THE GOVERNMENT'S DULY CONSTITUTED AGENTS, WE PERCEIVE NO OBJECTION TO SUCH ACTION. B-149889, NOVEMBER 2, 1962, B-145376, AUGUST 11, 1961; SEE 37 COMP. GEN. 147. FURTHER, 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.'

IN OUR DECISION DATED NOVEMBER 2, 1956, B-128646, PUBLISHED AT 36 COMP. GEN. 364, WE HELD, IN PART AS FOLLOWS:

"* * * WHEN IN THE LIGHT OF ALL THE FACTS, INCLUDING THOSE DISCLOSED BY THE BIDDING, IT IS ADMINISTRATIVELY DETERMINED THAT THE LOWEST ACCEPTABLE BID IS IN EXCESS OF THE AMOUNT FOR WHICH THE GOVERNMENT SHOULD BE ABLE TO OBTAIN THE SUPPLIES OR SERVICES SOUGHT, WE BELIEVE THAT THE REJECTION OF ALL BIDS AND READVERTISING OF THE CONTRACT IS A PROPER EXERCISE OF THE ADMINISTRATIVE DISCRETION, IN CONFORMITY WITH THE DUTY OF THE ADMINISTRATIVE OFFICIALS TO ACT IN THE BEST INTEREST OF THE GOVERNMENT.

UNDER THE CIRCUMSTANCES THERE APPEARS TO BE NO LEGAL BASIS ON WHICH OUR OFFICE MAY QUESTION THE ADMINISTRATIVE ACTION TAKEN IN THIS MATTER.