B-156427, JUN. 10, 1965

B-156427, JUN. 10, 1965

TO TECHNER, RUBIN AND SHAPIRO:

YOUR LETTER OF MAY 17, 1965, REQUESTED THAT WE RECONSIDER OUR DECISION OF APRIL 28, 1965, WHEREIN WE DENIED THE PROTEST OF THE GOODWAY PRINTING COMPANY, INC., AGAINST THE AWARD OF A TERM PRINTING CONTRACT TO PHOTO DATA, INC., BY THE GOVERNMENT PRINTING OFFICE.

OUR DECISION CONSIDERED THE FAILURE OF THE PROCUREMENT AGENCY TO FOLLOW STRICTLY THE PROCEDURES PRESCRIBED IN SECTION 1-2.407.6 (B) OF THE FEDERAL PROCUREMENT REGULATIONS FOR THE DRAWING OF LOTS IN THE CASE OF EQUAL LOW BIDS. WE HELD THAT THE AWARD MADE TO PHOTO DATA--- THE LOWEST ELIGIBLE BIDDER DETERMINED BY THE DRAWING OF LOTS--- WOULD NOT BE DISTURBED EVEN THOUGH THE REQUIREMENTS OF THE CITED REGULATION WERE NOT STRICTLY FOLLOWED BY THE PROCUREMENT AGENCY. YOU POINT TO STATEMENTS TAKEN OUT OF CONTEXT FROM OUR DECISION AND CONCLUDE THEREFROM THAT THE DECISION IS ARBITRARY SINCE IT CANNOT STAND THE LIGHT OF LOGIC. SUCH STATEMENTS ARE AS FOLLOWS:

"* * * EXCEPT FOR THE FACT THAT THE TIE BIDDERS WERE NOT GIVEN AN OPPORTUNITY TO WITNESS THE DRAWING--- A REQUIREMENT WHICH COULD BE DISPENSED WITH IF TIME DID NOT PERMIT--- ALL OTHER REQUIREMENTS HAVE BEEN MET. SINCE THE OFFICIAL RECORD ESTABLISHES THAT THE AWARD WAS MADE TO THE LOWEST ELIGIBLE BIDDER, WE WOULD NOT BE JUSTIFIED IN DISTURBING THE AWARD BECAUSE A PROCEDURAL REGULATION OF THE TYPE HERE IN QUESTION WAS NOT STRICTLY FOLLOWED WHERE TO DO SO WOULD GIVE ANOTHER ELIGIBLE BIDDER A SECOND OPPORTUNITY TO COMPETE FOR THE AWARD. HOWEVER, TO AVOID ANY RECURRENCE OF THIS SITUATION, WE RECOMMEND THAT THE REGULATION AS PROMULGATED BE STRICTLY FOLLOWED IN THE FUTURE.'

IN ADDITION TO THE FACT THAT THE TWO TIE BIDDERS WERE NOT GIVEN AN OPPORTUNITY TO WITNESS THE DRAWING, YOU POINT OUT THAT CONTRARY TO THE PROVISIONS OF THE REGULATION, THE DRAWING WAS NOT WITNESSED BY THREE PERSONS WHOSE NAMES AND ADDRESSES MUST BE GIVEN. SINCE THE RULES OF CONSTRUCTION OF REGULATIONS ARE THE SAME AS THOSE APPLIED TO STATUTES (2 AM. JUR. 2D, ADMINISTRATIVE LAW, SECTION 307), WE CONCLUDED, BASED UPON CONSIDERATION OF SUCH RULES OF CONSTRUCTION, THAT THE ADMINISTRATIVE DEVIATIONS FROM THE REQUIREMENTS OF THE REGULATION DID NOT RENDER THE RESULTING AWARD LEGALLY DEFECTIVE. THE REGULATION, CITED ABOVE, PROVIDES IN PERTINENT PART:

"/B) * * * IF TWO OR MORE BIDDERS STILL REMAIN EQUALLY ELIGIBLE FOR AWARD, AWARD SHALL BE MADE BY A DRAWING BY LOT LIMITED TO SUCH BIDDERS. IF TIME PERMITS, THE BIDDERS INVOLVED SHALL BE GIVEN AN OPPORTUNITY TO BE PRESENT AT THE DRAWING BY LOT. SUCH DRAWING SHALL BE WITNESSED BY AT LEAST THREE PERSONS, AND THE CONTRACT FILE SHALL CONTAIN THE NAMES AND ADDRESSES OF THOSE WITNESSES.'

THE ABOVE REGULATION PROVIDES, IN ITS MANDATORY SENSE, FOR AWARD BY A DRAWING OF LOTS IN THE EVENT OF TIE BIDS. THE REMAINING LANGUAGE, QUALIFIED BY THE WORDS "IF TIME PERMITS," CONSTITUTES A DIRECTIVE TO PROCUREMENT OFFICERS TO FOLLOW THE PRESCRIBED PROCEDURES. IN THE LATTER SENSE, THE REGULATION IS DIRECTORY; IN THE FORMER SENSE, MANDATORY, IN THAT AWARD IS DEPENDENT UPON A DRAWING OF LOTS. IT SEEMS TO FOLLOW, THEREFORE, IF AWARD IS TO BE MADE BY A DRAWING OF LOTS, THE MANNER OF DRAWING OF LOTS IS PROCEDURAL OR DIRECTORY WHICH DOES NOT GO TO THE LEGAL ESSENCE OF THE AWARD. THIS, TO US, IS A REASONABLE CONSTRUCTION OF THE REGULATION. THE GENERAL RULE IS THAT IF PROVISION RELATES TO THE ESSENCE OF THE THING TO BE DONE SO THAT NONCOMPLIANCE WILL FRUSTRATE THE PURPOSE OF THE PROVISION, IT IS MANDATORY. ON THE OTHER HAND, IF PROVISIONS, AS HERE, RELATE TO DETAILS OF PROCEDURES RATHER THAN TO SUBSTANCE, IT IS DIRECTORY. 3 SUTHERLAND, STATUTORY CONSTRUCTION, 3RD EDITION, SECTIONS 5801-5826. THE ONLY SUBSTANTIVE RIGHT CREATED BY THE REGULATION IS THAT A TIE BIDDER IS ENTITLED TO A DRAWING OF LOTS TO RESOLVE THE TIE BUT THE MODUS OPERANDI IS DIRECTORY RELATING MORE TO THE CONTROL OVER PROCUREMENT PROCEDURES AND THE ADMINISTRATIVE PROCESSES OF RESOLVING TIE BID SITUATIONS.

THE REGULATION, SAYING AS IT DOES THAT TIE BIDDERS SHALL BE GIVEN AN OPPORTUNITY TO OBSERVE THE DRAWING WHICH SHALL BE WITNESSED BY THREE PERSONS WHOSE NAMES AND ADDRESSES SHALL BE A MATTER OF RECORD, IS IN TERMS MANDATORY. BUT IN CASES INVOLVING PROSPECTIVE ACTIONS OF GOVERNMENT OFFICIALS, THE WORD "SHALL" MAY BE GIVEN A MERELY DIRECTORY MEANING IF THE REGULATION'S PURPOSE IS THE PROTECTION OF THE GOVERNMENT BY GUIDANCE OF ITS OFFICIALS RATHER THAN THE GRANTING OF RIGHTS TO PRIVATE PERSONS AFFECTED. CF. TRIANGLE CANDY CO. V. UNITED STATES, 144 F.2D 195, 198; SEE SUTHERLAND STATUTORY CONSTRUCTION, 3RD EDITION, SECTION 5808, AND THE CASES THERE CITED.

THE DRAWING OF LOTS IN THE CASES OF TIE BIDS IS NOT A PART OF THE PUBLIC OPENING OF BIDS; IT IS NOT AN EXTENSION OF THE PUBLIC OPENING REQUIRED BY STATUTE. ONCE THE LOW OR LOWEST BIDDERS ARE PUBLICLY REVEALED AT THE TIME SPECIFIED IN THE INVITATION, THE REQUIREMENT OF 41 U.S.C. 253 (B) IS MET AND THE PROCESSING OF THE AWARD IS THEREAFTER GOVERNED BY ADMINISTRATIVE PROCEDURES SUBJECT, HOWEVER, TO THE STATUTORY SANCTION THAT AWARD BE MADE "TO THAT RESPONSIBLE BIDDER WHOSE BID CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.'

THERE IS ALSO FOR CONSIDERATION THE FACT THAT THE SUCCESSFUL TIE BIDDER HAS VESTED LEGAL RIGHTS WHICH MAY NOT BE DISREGARDED. THE AWARD MADE TO PHOTO DATA RESULTED FROM A MANDATORY DRAWING OF LOTS AND TO REQUIRE ANOTHER DRAWING BECAUSE CERTAIN DIRECTORY PROCEDURES WERE NOT STRICTLY FOLLOWED WOULD BE DEFINITELY PREJUDICIAL AND POSSIBLY SUBJECT THE GOVERNMENT TO DAMAGES FOR BREACH OF CONTRACT SHOULD THAT BIDDER BE UNSUCCESSFUL IN A SUBSEQUENT DRAWING. WE SEE NO LEGAL BASIS FOR REQUIRING PHOTO DATA TO COMPETE IN ANOTHER DRAWING TO REDETERMINE ITS RIGHTS TO AWARD WHICH WAS LEGALLY EFFECTIVE.

SINCE WE HOLD THAT THE FAILURE TO FOLLOW STRICTLY THE PROCEDURAL REQUIREMENTS OF THE REGULATION DID NOT AFFECT THE LEGALITY OF THE AWARD MADE TO PHOTO DATA, INC., WE FIND NO LEGAL BASIS TO DISTURB OUR DECISION OF APRIL 28, 1965.