B-157842, NOV. 22, 1965, 45 COMP. GEN. 277

B-157842, NOV. 22, 1965, 45 COMP. GEN. 277

REAL PROPERTY - SURPLUS GOVERNMENT PROPERTY - SALE - LATE BIDS THE HIGH BID ON SURPLUS APARTMENTS OFFERED FOR SALE PURSUANT TO SECTION 604 (G) OF THE NATIONAL HOUSING ACT OF 1934, AS AMENDED, 12 U.S.C. 1739 (G), WHICH DELAYED IN THE MAILS THROUGH NO FAULT OF THE BIDDER AND DELIVERED AFTER BID OPENING WAS REJECTED FOR NOT HAVING BEEN SENT BY CERTIFIED OR REGISTERED MAIL PURSUANT TO SECTION 1-2.303 OF THE FEDERAL PROCUREMENT REGULATIONS, MAY BE CONSIDERED FOR AWARD, THE INVITATION FOR BIDS HAVING FAILED TO INFORM BIDDERS OF THE CERTIFIED OR REGISTERED MAIL REQUIREMENT, AND ALTHOUGH THE FEDERAL HOUSING ADMINISTRATION USUALLY COMPLIES WITH REGULATIONS IMPLEMENTING THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, UNLESS COMPLIANCE WOULD IMPAIR OR AFFECT SPECIFIC PROGRAMS, THE APPROPRIATE REGULATION (FEDERAL PROPERTY MANAGEMENT) PRESCRIBING NO PROCEDURE FOR HANDLING LATE BIDS IN THE DISPOSAL OF REAL PROPERTY, AND ABSENT REGULATION REQUIRING COMPLIANCE WITH COMPETITIVE BIDDING, INVITATION FOR BIDS FOR THE SALE OF SURPLUS REAL PROPERTY SHOULD INFORM PROSPECTIVE BIDDERS THAT BIDS WILL BE REJECTED UNLESS SENT BY CERTIFIED OR REGISTERED MAIL.

TO THE COMMISSIONER, FEDERAL HOUSING ADMINISTRATION, NOVEMBER 22, 1965:

WE HAVE RECEIVED YOUR REPORT OF OCTOBER 29, 1965, CONCERNING A PROTEST BY NSM, INC., AGAINST THE REJECTION OF ITS BID, AND AGAINST THE REJECTION OF ALL BIDS AND THE READVERTISEMENT FOR NEW BIDS, FOR THE SALE OF MT. MCKINLEY APARTMENTS, PROJECT NO. 130-42015.

THE RECORD INDICATES THAT SEVEN BIDS WERE RECEIVED IN RESPONSE TO AN INVITATION FOR BIDS (IFB) WHICH CONTAINED A MINIMUM PRICE REQUIREMENT OF $200,000. NSM'S BID, ALLEGEDLY IN THE AMOUNT OF $623,000, WAS RECEIVED BY MAIL AFTER THE TIME SET FOR BID OPENING AND HAS BEEN REJECTED AS A LATE BID. THE APPARENT HIGH BID OF $540,000 WAS HAND-CARRIED TO THE BID OPENING ROOM AFTER BID OPENING AND WAS ALSO REJECTED AS A LATE BID. ALTHOUGH YOU APPARENTLY CONCEDE THAT NSM'S BID WAS LATE SOLEY AS A RESULT OF A DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE, YOU HAVE CONCLUDED THAT THE BID WAS PROPERLY REJECTED BECAUSE IT WAS NOT SENT BY CERTIFIED OR REGISTERED MAIL.

YOUR REPORT INDICATES THAT THE APPARENT SECOND HIGH BID WAS INCREASED BY TELEGRAPHIC MODIFICATION FROM $402,000 TO $452,000, THE APPARENT FOURTH HIGH BID WAS INCREASED BY TELEGRAPHIC MODIFICATION FROM $301,000 TO $426,631, AND THE APPARENT FIFTH HIGH BID WAS INCREASED BY TELEGRAPHIC MODIFICATION FROM $1 TO $278,001. YOU THEREFORE ADVISE THAT THESE BIDS APPEAR TO BE SUBJECT TO ATTACK BECAUSE THE "BIDDING INSTRUCTIONS" PROVIDED THAT "TELEGRAPHIC BIDS WILL NOT BE CONSIDERED BUT MODIFICATION OR WITHDRAWAL OF BIDS ALREADY SUBMITTED WILL BE CONSIDERED IF RECEIVED PRIOR TO THE HOUR OF OPENING.' YOUR REPORT ALSO TAKES NOTICE OF THE FACT THAT THE ORIGINAL SUBMISSION OF THE APPARENT FIFTH HIGH BID WAS MUCH LOWER THAN THE REQUIRED MINIMUM PRICE OF $200,000.

THE SUBJECT SALE WAS CONDUCTED PURSUANT TO SECTION 604 (G) OF THE NATIONAL HOUSING ACT OF 1934, 55 STAT. 58, AS ADDED TO AND AMENDED, 12 U.S.C. 1739 (G), WHICH PROVIDES IN RELEVANT PART:

NOTWITHSTANDING ANY OTHER PROVISION OF LAW RELATING TO THE * * * DISPOSAL OF REAL PROPERTY BY THE UNITED STATES, THE COMMISSIONER SHALL HAVE POWER TO * * * SELL FOR CASH OR CREDIT * * * ANY PROPERTIES CONVEYED TO HIM IN EXCHANGE FOR DEBENTURES AND CERTIFICATES OF CLAIM AS PROVIDED IN THIS SUBCHAPTER; * * *.

ALSO SEE SECTION 602 (D) (11) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, APPROVED JUNE 30, 1949, CH. 288, 63 STAT. 377, 40 U.S.C. 474 (11), WHICH GRANTS TO FEDERAL HOUSING ADMINISTRATION (FHA) AN EXEMPTION FROM THE PROVISIONS OF THE CITED ACT.

WITH RESPECT TO FHA'S EXEMPTION FROM THE 1949 ACT, WE NOTE OUR OBSERVATION IN 39 COMP. GEN. 426, 428-29, THAT:

HOUSE REPT. NO. 670, 81ST CONG., P. 28, ON H.R. 4754, WHICH WITH SOME MODIFICATION BECAME THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, POINTED OUT THAT THE SPECIAL EXEMPTIONS FROM THE ACT * * * WERE INTENDED TO HAVE ONLY A LIMITED EFFECT. IN THE LANGUAGE OF THIS REPORT:

"IT IS NOT INTENDED BY THESE EXEMPTIONS THAT THOSE ADMINISTERING THE AGENCIES OR PROGRAMS LISTED SHALL BE FREE FROM ALL OBLIGATION TO COMPLY WITH THE PROVISIONS OF THE ACT OR FROM ALL JURISDICTION OF THE ADMINISTRATOR. ON THE CONTRARY, IT IS EXPECTED THAT THEY WILL, AS FAR AS PRACTICABLE, PROCURE, UTILIZE AND DISPOSE OF PROPERTY IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THE REGULATIONS ISSUED THEREUNDER, PARTICULARLY SO FAR AS COMMON USE ITEMS AND ADMINISTRATIVE SUPPLIES ARE CONCERNED. * * * IN OTHER WORDS, TO THE EXTENT THAT COMPLIANCE WITH THE ACT AND SUBMISSION TO THE JURISDICTION OF THE ADMINISTRATOR WILL NOT SO "IMPAIR OR AFFECT THE AUTHORITY" OF THE SEVERAL AGENCIES TO WHICH THE SUBSECTION APPLIES AS TO INTERFERE WITH THE OPERATION OF THEIR PROGRAMS, THE ACT WILL GOVERN. ANY DISPUTES THAT ARISE CAN BE SETTLED BY THE PRESIDENT UNDER THE AUTHORITY TO PRESCRIBE POLICIES AND DIRECTIVES VESTED IN HIM BY SECTION 205 (A).' THE PRESIDENT, IN HIS LETTER, TO ALL EXECUTIVE AGENCIES OF JULY 1, 1949 (14 F.R. 3699), THE EFFECTIVE DATE OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT, ACTING UNDER THE AUTHORITY VESTED IN HIM BY THE ACT ALSO DIRECTED IN THIS RESPECT AS FOLLOWS:

"SECTION 502 (D) (NOW 602 (D) ( OF THE ACT PROVIDES THAT CERTAIN PROGRAMS AND FUNCTIONS NOW BEING CARRIED ON BY VARIOUS EXECUTIVE AGENCIES SHALL NOT BE IMPAIRED OR AFFECTED BY THE PROVISIONS OF THE ACT. HOWEVER, THE ATTENTION OF THESE AGENCIES IS CALLED SPECIFICALLY TO THE PURPOSES OF THIS LEGISLATION AND THEY SHALL, IN SO FAR AS PRACTICABLE, PROCURE, UTILIZE AND DISPOSE OF PROPERTY IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THE REGULATIONS ISSUED THEREUNDER IN ORDER THAT THE GREATEST OVERALL EFFICIENCY AND ECONOMY MAY BE EFFECTED * * *.

FROM THE FOREGOING, IT APPEARS CLEAR THAT THE CONGRESS AND THE PRESIDENT INTENDED THAT UNIFORM SYSTEMS AND PROCEDURES WOULD BE ESTABLISHED FOR USE BY THE VARIOUS AGENCIES COVERED BY THE ACT, EXCEPT THAT CERTAIN AGENCIES WERE TO BE EXEMPT TO THE EXTENT THAT COMPLIANCE WOULD IMPAIR OR AFFECT THE CARRYING OUT OF THEIR PROGRAMS. SINCE UNIFORM PROCEDURES WERE TO BE ESTABLISHED IT WAS A MATTER OF NECESSITY TO PLACE THE AUTHORITY TO ESTABLISH SUCH UNIFORM PROCEDURES IN ONE PERSON, THE ADMINISTRATOR OF GENERAL SERVICES.

IN VIEW OF THE ABOVE LEGISLATIVE HISTORY, IT HAS BEEN THE CONSISTENT POSITION OF THIS OFFICE THAT THE UNIFORM SYSTEMS AND PROCEDURES ESTABLISHED BY GSA REGULATIONS PURSUANT TO THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 SHOULD BE FOLLOWED BY THE VARIOUS FEDERAL AGENCIES EVEN THOUGH THEY MAY HAVE OTHER SPECIFIC STATUTORY AUTHORITY, OR MAY HAVE BEEN GRANTED CERTAIN EXEMPTIONS FROM THE ACT, UNLESS TO DO SO WOULD IMPAIR OR AFFECT THE CARRYING OUT OF THE SPECIFIC PROGRAMS OTHERWISE AUTHORIZED. SEE B-127011, JUNE 6, 1961. IN APPARENT ACCORD WITH THIS POSITION, YOU EXPRESS FAMILIARITY WITH THE REQUIREMENT OF SECTION 1-2.404-1 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR), AND WITH JUDICIAL AND GENERAL ACCOUNTING OFFICE DECISIONS TO THE EFFECT THAT THE REJECTION OF ALL BIDS SOLICITED BY COMPETITIVE ADVERTISING PROCEDURES MAY BE JUSTIFIED ONLY BY COGENT AND COMPELLING REASONS, AND OBSERVE THAT IT IS FHA'S LONGSTANDING POLICY TO FOLLOW THE USUAL GOVERNMENT COMPETITIVE BIDDING PROCEDURES, EXCEPT IN CERTAIN UNUSUAL SITUATIONS.

YOU STATE THAT THIS IS A UNIQUE CASE WHICH INVOLVED AN UNUSUAL AMOUNT OF CONFUSION, PROBABLY GENERATED BY UNKNOWN FACTORS INCIDENT TO THE EARTHQUAKE DAMAGE TO THE PROPERTY BEING SOLD. WHILE YOU CONCLUDE THAT IT WAS IN THE BEST INTERESTS OF THE GOVERNMENT AND THE ORDERLY PROGRESS OF YOUR DISPOSITION PROGRAM TO REJECT ALL BIDS AND PROMPTLY READVERTISE, IT DOES NOT APPEAR THAT SUCH CONCLUSION IS BASED ON THE FACT THAT THE FIRST IFB DID NOT ADVISE BIDDERS OF THE IMPORTANCE OF REGISTERING OR CERTIFYING THE LETTERS ENCLOSING THEIR BIDS, SINCE THE NEW INVITATION EMPLOYS PROVISIONS IDENTICAL TO THOSE IN THE CANCELED INVITATION, INCLUDING PARAGRAPHS C AND E, QUOTED BELOW:

C. RETURN DATE AND HOUR. BIDS MUST BE POSTED OR DELIVERED BY OTHER MEANS TO REACH THE ADDRESSEE NOT LATER THAN THE RETURN DATE AND HOUR SPECIFIED IN THE OFFICIAL ADVERTISEMENT. ALL BIDS WILL BE SECURELY KEPT UNOPENED UNTIL THAT TIME. NO RESPONSIBILITY WILL ATTACH FOR THE PREMATURE OPENING OF A BID NOT PROPERLY ADDRESSED AND IDENTIFIED. NO BID RECEIVED AFTER SUCH TIME WILL QUALIFY FOR CONSIDERATION, EXCEPT A BID WHICH ARRIVES BY MAIL AFTER SUCH TIME BUT BEFORE AWARD IS MADE AND IN CONNECTION WITH WHICH IT IS SHOWN TO THE SATISFACTION OF THE OFFICER AUTHORIZED TO MAKE THE AWARD THAT THE NONARRIVAL ON TIME WAS DUE SOLELY TO DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE. TELEGRAPHIC BIDS WILL NOT BE CONSIDERED BUT MODIFICATION OF BIDS ALREADY SUBMITTED WILL BE CONSIDERED IF RECEIVED PRIOR TO THE HOUR SET FOR OPENING.

E. AWARD OR REJECTION OF BIDS. BIDS NOT COMPLYING WITH THE REQUIREMENTS WILL NOT QUALIFY FOR CONSIDERATION. ALL BIDDERS WILL BE NOTIFIED AT THE EARLIEST POSSIBLE DATE AS TO THE BID RESULTS. THE RIGHT IS RESERVED TO REJECT ANY AND ALL BIDS, TO WAIVE ANY INFORMALITY IN BIDS RECEIVED, AND TO REJECT THE BID OF ANY BIDDER LACKING EXPERIENCE, ABILITY OR FINANCIAL RESPONSIBILITY REQUISITE TO REASONABLY ASSURE SATISFACTORY PERFORMANCE.

YOU SAY THAT IN VIEW OF YOUR POLICY OF USUALLY FOLLOWING PROCEDURES ESTABLISHED BY REGULATIONS ISSUED PURSUANT TO THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, IT IS YOUR POSITION THAT PARAGRAPH C OF THE BIDDING INSTRUCTIONS, QUOTED ABOVE, SHOULD BE READ IN CONJUNCTION WITH SECTION 1-2.303 OF THE FPR, WHICH PROVIDES THAT A LATE BID, WHEN ITS LATENESS IS DUE SOLELY TO A DELAY IN THE MAILS, SHALL BE CONSIDERED ONLY IF SENT BY REGISTERED OR CERTIFIED MAIL. IN THIS REGARD, IT SHOULD BE NOTED THAT SECTION 1-16.901-33A OF THE FPR SETS FORTH A STANDARD PROCUREMENT FORM, PARAGRAPH 6 OF WHICH ADVISES BIDDERS THAT LATE BIDS WILL BE TREATED AS REQUIRED BY SECTION 1-2.303. SINCE NONE OF THE REASONS GIVEN FOR REJECTING ALL OTHER BIDS APPEAR TO HAVE ANY BEARING ON YOUR REFUSAL TO EXAMINE NMS'S LATE BID, WE PRESUME THAT SUCH BID WAS REJECTED BY THE DISPOSAL OFFICER SOLELY BECAUSE IT WAS NOT REGISTERED OR CERTIFIED.

WHILE THE GENERAL SERVICES ADMINISTRATION (GSA) HAS ISSUED THE FPR PURSUANT TO THE 1949 ACT TO PRESCRIBE RULES FOR THE PROCUREMENT OF PROPERTY, IT HAS ALSO ISSUED THE FEDERAL PROPERTY MANAGEMENT REGULATIONS (FPMR) PURSUANT TO THE SAME ACT, AND TO OTHER LAWS NOT HERE RELEVANT. SEE 41 CFR 101 TO END. SUBPART 101-47.3 OF THE FPMR DEALS WITH THE DISPOSAL OF SURPLUS REAL PROPERTY. THE CITED SUBPART PRESCRIBES NO PROCEDURES FOR HANDLING LATE BIDS FOR THE PURCHASE OF REAL PROPERTY. WE ARE INFORMALLY ADVISED BY GSA THAT IN THE DISPOSAL OF REAL PROPERTY IT USES STANDARD FORM 1741,"INSTRUCTIONS TO BIDDERS.' WE ARE ADVISED THAT PARAGRAPH 3 OF STANDARD FORM 1741 CONTAINS SUBSTANTIALLY THE SAME LANGUAGE WITH RESPECT TO LATE BIDS AS IS PRESCRIBED BY PARAGRAPH "LATE BIDS AND MODIFICATIONS OR WITHDRAWALS," IN STANDARD FORM 33-A,"BIDDING INSTRUCTIONS, TERMS AND CONDITIONS (SUPPLY CONTRACT)," SET FORTH IN SECTION 1-16.901-33A OF THE FPR. IT FOLLOWS THAT WHILE GSA HAS NOT ISSUED ANY GOVERNMENT-WIDE REGULATIONS FOR USE BY FHA OR OTHER AGENCIES WHICH REQUIRE THAT LATE BIDS FOR THE SALE OF REAL PROPERTY BE REJECTED IF NOT SENT BY REGISTERED OR CERTIFIED MAIL, THE PROPOSED TREATMENT OF SUCH BIDS BY YOUR AGENCY IN ACCORDANCE WITH THE COMPETITIVE RULES APPLIES BY MOST FEDERAL AGENCIES IN PROCUREMENT MATTERS IS IDENTICAL TO THE PRACTICE OF GSA IN ITS SALES OF REALTY HELD BY VARIOUS GOVERNMENT AGENCIES.

WE AGREE WITH YOUR POLICY OF ATTEMPTING TO FOSTER UNIFORM TREATMENT OF LATE BIDS BY FOLLOWING THE PROCEDURES SET FORTH IN FPR FOR PROCUREMENTS AND THE PRACTICE OF GSA IN ITS SALES OF REAL PROPERTY. HOWEVER, WITH RESPECT TO THE TREATMENT OF LATE BIDS FOR THE DISPOSAL OF REAL PROPERTY, AS DISTINGUISHED FROM LATE BIDS IN PROCUREMENT MATTERS, GSA APPEARS TO MAINTAIN UNIFORMITY NOT BY ITS REGULATIONS, BUT BY ADVISING PROSPECTIVE BIDDERS IN ITS IFB'S THAT LATE BIDS SENT BY OTHER THAN CERTIFIED OR REGISTERED MAIL WILL NOT BE CONSIDERED FOR AWARD. WITHOUT SUCH ADVICE IN IFBS FOR REALTY SALES, BIDDERS WOULD HAVE NO REASON TO SUSPECT, AND PRESUMABLY NSM HAD NO REASON TO SUSPECT UNDER THE PRESENT IFB, ANY ADVANTAGE IN REGISTERING OR CERTIFYING A MAILED BID. FURTHERMORE, EVEN WHERE A "PROCUREMENT"IFB IS ISSUED TO A BIDDER PRESUMABLY KNOWLEDGEABLE OF THE FPR, BY AN AGENCY FULLY SUBJECT TO SUCH REGULATIONS, THE IFB SHOULD, AS A MATTER OF SOUND PROCUREMENT PRACTICE, ADVISE BIDDERS THAT LATE BIDS WHICH ARE NOT SENT BY EITHER CERTIFIED OR REGISTERED MAIL WILL NOT BE CONSIDERED.

WHILE THE PARTICULAR CIRCUMSTANCES UNDER WHICH LATE BIDS RECEIVED BY THE GOVERNMENT SHOULD BE ACCEPTED IS A MATTER OF SOME IMPORTANCE TO THE COMPETITIVE BIDDING SYSTEM, AND UNIFORMITY IS THEREFORE A DESIRABLE OBJECTIVE, THE FACT REMAINS THAT THE GSA REGULATIONS APPROPRIATE FOR REALTY SALES DO NOT SPECIFICALLY PROHIBIT THE CONSIDERATION OF LATE BIDS WHICH ARE NEITHER CERTIFIED NOR REGISTERED, AND IN THE ABSENCE OF SUCH A REGULATION, ANY SUCH REQUIREMENT SHOULD BE MADE KNOWN TO ALL BIDDERS BY ITS INCLUSION IN THE IFB BEFORE BIDS MAY BE REJECTED ON SUCH BASIS. VIEW THEREOF WE DO NOT BELIEVE CONSIDERATION OF NSM'S LATE BID WOULD BE SUBJECT TO LEGAL OBJECTION OR VIOLATIVE OF COMPETITIVE BIDDING PROCEDURES SOLELY BECAUSE THE LETTER IN WHICH THE BID WAS ENCLOSED WAS NEITHER CERTIFIED NOR REGISTERED.

FOR THE PURPOSE OF FUTURE SALES, WE ASSUME THAT YOUR POLICY OF FOLLOWING USUAL GOVERNMENT PROCEDURES IN THESE MATTERS WILL RESULT IN APPROPRIATE CHANGES TO THE LATE BID CLAUSE FHA NOW USES, WHICH CHANGES PRESUMABLY WILL RESULT IN LANGUAGE SIMILAR TO THAT PRESCRIBED IN PARAGRAPH "LATE BIDS AND MODIFICATIONS OR WITHDRAWALS," IN STANDARD FORM 33A,"BIDDING INSTRUCTIONS, TERMS AND CONDITIONS (SUPPLY CONTRACT)," SET FORTH IN SECTION 1-16.901-33A OF THE FPR. YOU MAY ALSO WISH TO CONSIDER RESOLVING ANY AMBIGUITY WHICH MAY EXIST IN YOUR CURRENT LATE BID CLAUSE WITH RESPECT TO THE ACCEPTABILITY OF BID MODIFICATIONS WHICH ARE SUBMITTED BY TELEGRAM, PERHAPS BY ADOPTING LANGUAGE SIMILAR TO THAT IN PARAGRAPH 3,"SUBMISSION OF BIDS," IN THE SAME STANDARD FORM, WITH ANY ADDITIONAL LANGUAGE WHICH MAY BE NECESSARY TO CLARIFY WHETHER TELEGRAPHIC MODIFICATIONS OF BIDS ORIGINALLY SUBMITTED IN AN AMOUNT LESS THAN THE STATED MINIMUM PRICE REQUIREMENT WILL BE CONSIDERED.