B-158248, MAR. 22, 1966

B-158248: Mar 22, 1966

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THE PROTEST IS DIRECTED AGAINST THE REJECTION OF THE LOW BID OF NORTHEAST. TO THE EXCLUSION OF NORTHEAST WHICH IS ALLEGED TO BE A MORE RESPONSIBLE SUPPLIER WHICH COULD PERFORM THE CONTRACT WITH SAVINGS TO THE GOVERNMENT. BIDDERS WERE REQUESTED TO FURNISH DESCRIPTIVE INFORMATION AND DETAIL RESPECTING THE EQUIPMENT OFFERED AND WERE ADVISED THAT TIME OF DELIVERY WOULD BE A PRIME CONSIDERATION IN MAKING AN AWARD. THE PROCUREMENT WAS AUTHORIZED BY PUBLIC LAW 89-81. WAS ISSUED ON STANDARD FORM 33. THAT IS. IT WAS BELIEVED THAT THE PROCUREMENT COULD BE MORE EFFECTIVELY EXPEDITED THROUGH THE USE OF THE GUIDELINES CONTAINED IN PART 1-2 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR). SIX BIDS WERE RECEIVED AND OPENED ON DECEMBER 1.

B-158248, MAR. 22, 1966

TO WILKINSON, CRAGUN AND BARKER:

BY LETTER DATED JANUARY 13, 1966, WITH ENCLOSURES, AND OTHER CORRESPONDENCE, YOU PROTESTED ON BEHALF OF NORTHEAST OHIO MACHINE BUILDERS, INC., AGAINST THE REJECTION OF ALL BIDS SUBMITTED IN RESPONSE TO BUREAU OF THE MINT, DEPARTMENT OF THE TREASURY, INVITATION FOR BIDS NO. NM 1, AND THE NEGOTIATED AWARD OF A CONTRACT TO THE E. W. BLISS COMPANY ON DECEMBER 29, 1965.

THE PROTEST IS DIRECTED AGAINST THE REJECTION OF THE LOW BID OF NORTHEAST, THE CANCELLATION OF THE INVITATION, AND AGAINST THE NEGOTIATION OF A CONTRACT THEREAFTER WITH BLISS ALONE UNDER THE AUTHORITY OF PUBLIC LAW 89-81, 31 U.S.C. 393, TO THE EXCLUSION OF NORTHEAST WHICH IS ALLEGED TO BE A MORE RESPONSIBLE SUPPLIER WHICH COULD PERFORM THE CONTRACT WITH SAVINGS TO THE GOVERNMENT.

THE INVITATION, DATED OCTOBER 28, 1965, REQUESTED BIDS FOR ROLLING MILLS AND AUXILIARY EQUIPMENT IN ACCORDANCE WITH DETAILED SPECIFICATIONS FOR USE AT THE NEW PHILADELPHIA MINT. BIDDERS WERE REQUESTED TO FURNISH DESCRIPTIVE INFORMATION AND DETAIL RESPECTING THE EQUIPMENT OFFERED AND WERE ADVISED THAT TIME OF DELIVERY WOULD BE A PRIME CONSIDERATION IN MAKING AN AWARD. THE PROCUREMENT WAS AUTHORIZED BY PUBLIC LAW 89-81, 79 STAT. 255, WHICH PROVIDES IN PERTINENT ART:

"SEC. 103. (A) IN ORDER TO ACQUIRE EQUIPMENT, MANUFACTURING FACILITIES, PATENTS, PATENT RIGHTS, TECHNICAL KNOWLEDGE AND ASSISTANCE, METALLIC STRIP, AND OTHER MATERIALS NECESSARY TO PRODUCE RAPIDLY AN ADEQUATE SUPPLY OF THE COINS AUTHORIZED BY SECTION 101 OF THIS ACT, THE SECRETARY MAY ENTER INTO CONTRACTS UPON SUCH TERMS AND CONDITIONS AS HE MAY DEEM APPROPRIATE AND IN THE PUBLIC INTEREST.

"/B) DURING SUCH PERIOD AS HE MAY DEEM NECESSARY, BUT IN NO EVENT LATER THAN FIVE YEARS AFTER THE DATE OF ENACTMENT OF THIS ACT, THE SECRETARY MAY EXERCISE THE AUTHORITY CONFERRED BY SUBSECTION (A) OF THIS SECTION WITHOUT REGARD TO ANY OTHER PROVISIONS OF LAW GOVERNING PROCUREMENT OR PUBLIC CONTRACTS.'

THE INVITATION, HOWEVER, WAS ISSUED ON STANDARD FORM 33, INVITATION,BID, AND AWARD (SUPPLY CONTRACT), AS A FORMALLY ADVERTISED PROCUREMENT FOR VALID ADMINISTRATIVE REASONS; THAT IS, TO ENCOURAGE THE SUBMISSION OF COMPETITIVE BIDS BY RESPONSIBLE SUPPLIERS UNDER STANDARD PROCEDURES. THIS WAY, IT WAS BELIEVED THAT THE PROCUREMENT COULD BE MORE EFFECTIVELY EXPEDITED THROUGH THE USE OF THE GUIDELINES CONTAINED IN PART 1-2 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR).

SIX BIDS WERE RECEIVED AND OPENED ON DECEMBER 1, 1965, AND IT APPEARED THAT NORTHEAST'S BID WAS THE LOWEST FOLLOWED BY THAT SUBMITTED BY BLISS. THE BIDS WERE SUBMITTED TO THE PARSONS-JURDEN CORPORATION, CONSULTING ARCHITECT-ENGINEERS UNDER CONTRACT WITH THE BUREAU FOR THE TECHNICAL DEVELOPMENT OF THE PROCUREMENT, FOR ANALYSIS AND EVALUATION IN THE LIGHT OF THE ADVERTISED TECHNICAL REQUIREMENTS. IN ITS REPORT OF DECEMBER 20, 1965, PARSONS-JURDEN ADVISED THE DIRECTOR OF THE MINT THAT THE DESCRIPTIVE INFORMATION FURNISHED BY NORTHEAST WAS DEFICIENT IN THAT THE EQUIPMENT PROPOSED WOULD NOT MEET THE PERFORMANCE REQUIREMENTS OF THE SPECIFICATIONS. PARSONS-JURDEN, AFTER COMMENTING SPECIFICALLY ON THE DEFICIENCIES IN THE BID, STATED THAT "THE EQUIPMENT PROPOSED WILL NOT DELIVERY THE PRODUCT ACCORDING TO THE SPECIFICATIONS.' YOU CONTEND THAT THE PARSONS-JURDEN ANALYSIS CONTAINS ERRONEOUS MATHEMATICAL AND ENGINEERING ASSUMPTIONS CONCERNING THE NORTHEAST BID WHICH ADMITTEDLY CONTAINED ERRORS. IN THAT CONNECTION,YOU POINT TO THE MANY OMISSIONS IN THE BLISS BID WHICH HAD NO APPARENT EFFECT UPON THE DECISION TO NEGOTIATE SOLELY WITH IT.

WE SEE NO BASIS FOR QUESTIONING THE TECHNICAL ACCURACY OF THE PARSONS- JURDEN EVALUATION OF NORTHEAST'S BID. IT WOULD SEEM THAT IT WAS PARTICULARLY WELL QUALIFIED TO JUDGE THE RESPECTIVE TECHNICAL MERITS OF THE BIDS AND, IN VIEW OF ITS CONTRACT UNDERTAKING WITH THE BUREAU TO PROVIDE TECHNICAL PROCUREMENT ASSISTANCE AND GUIDANCE, WE ARE UNABLE TO AGREE THAT THE TECHNICAL EVALUATION WAS ERRONEOUS. IN ANY EVENT, WE DO NOT HAVE THE COMPETENCY TO EVALUATE THE TECHNICAL ENGINEERING RESPONSES TO THE INVITATION OR TO SUBSTITUTE OUR LAYMAN'S OPINION FOR THAT OF THE ADMINISTRATIVE OFFICE AND ITS TECHNICALLY COMPETENT PERSONNEL.

IT WAS CONCLUDED BY THE BUREAU ON DECEMBER 27, 1965, THAT AWARD UNDER THE INVITATION COULD NOT BE ACCOMPLISHED UNDER THE COMPETITIVE BIDDING STATUTE CODIFIED AT 41 U.S.C. 253 SINCE ALL RESPONDING BIDDERS WERE EITHER NONRESPONSIVE TO THE ADVERTISED REQUIREMENTS OR HAD SUBMITTED EXCESSIVE BID PRICES. UNDER SUCH CIRCUMSTANCES, THE BUREAU HAD CLEAR AUTHORITY TO REJECT ALL BIDS PURSUANT TO 41 U.S.C. 253 (B) AND SECTION 8 (B) OF THE BIDDING INSTRUCTIONS, TERMS, AND CONDITIONS (SUPPLY CONTRACT). ALSO, SEE FPR SEC. 1-2.404-2 (A) AND (C) AUTHORIZING THE REJECTION OF INDIVIDUAL BIDS WHICH ARE NONRESPONSIVE OR WHICH ARE UNREASONABLE AS TO PRICE. FEEL, THEREFORE, THAT COMPELLING REASONS EXISTED FOR CANCELLATION OF THE INVITATION. SEE FPR SEC. 1-2.404-1; CF. 43 COMP. GEN. 382.

THEREAFTER, THE DIRECTOR OF THE MINT DETERMINED THAT THERE WAS A COMPELLING URGENCY TO PROCURE THE EQUIPMENT NECESSARILY REQUIRED FOR THE EARLY PRODUCTION OF CLAD COINS AND THAT TIME WOULD NOT PERMIT THE READVERTISEMENT OF THE EQUIPMENT BY FORMAL ADVERTISING PROCEDURES. THAT CONNECTION, PARSONS-JURDEN RECOMMENDED THAT:

"* * * YOU (BUREAU OF THE MINT) ACCEPT THE PROPOSAL FROM THE E. W. BLISS COMPANY FOR ALL THREE OF THE MILL STANDS TOGETHER WITH THE SUPPORTING ELECTRICALS. THIS RECOMMENDATION IS BASED UPON THE ADEQUACY OF THE EQUIPMENT PROPOSED, THE COMPETITIVENESS OF THE PRICE, AND THE FACT THAT ALL THE MILLS WILL BE COMING FROM THE SAME MANUFACTURER.'

IT WAS THEREFORE DETERMINED TO NEGOTIATE A CONTRACT WITH BLISS WHICH HAD SUBMITTED THE SECOND LOW BID IN THE TOTAL AMOUNT OF $1,958,480. SUBSEQUENT TO NEGOTIATIONS, A CONTRACT WAS AWARDED TO BLISS IN THE AMOUNT OF $2,149,420. THE INCREASE IN PRICE REPRESENTED CHANGES RECOMMENDED BY PARSONS-JURDEN FOR IMPROVED EQUIPMENT WHICH WAS BETTER SUITED TO THE REQUIREMENTS OF THE NEW MINT AT PHILADELPHIA. WHILE NORTHEAST'S BID IN THE TOTAL AMOUNT OF $1,693,080 WAS LOWER, THE TECHNICAL DEFECTS IN THE BID WERE SO EXTENSIVE AND OF SUCH A SERIOUS NATURE THAT PARSONS-JURDEN DID NOT BELIEVE IT PRACTICABLE TO DETERMINE THE PRECISE CORRECTIONS THAT WOULD BE REQUIRED OR THE ADDITIONAL COSTS OR TIME INVOLVED TO MAKE THE BID TECHNICALLY RESPONSIVE. HENCE, IT WAS DECIDED THAT TIME WOULD NOT PERMIT ANY NEGOTIATION WITH NORTHEAST IN AN EFFORT TO RAISE THE SPECIFICATIONS OFFERED BY NORTHEAST TO A LEVEL OF PERFORMANCE COMPATIBLE WITH THE ADVERTISED TECHNICAL ENGINEERING SPECIFICATIONS.

THE BUREAU WAS CLEARLY AUTHORIZED BY 31 U.S.C. 393 TO CONDUCT NEGOTIATIONS SOLELY WITH BLISS WHICH HAD DEMONSTRATED ITS TECHNICAL CAPABILITIES TO MEET THE PARTICULAR NEEDS OF THE NEW MINT. THERE IS NO STATUTORY OR REGULATORY REQUIREMENT, IN THIS SITUATION, THAT NEGOTIATION OPPORTUNITY BE EXTENDED TO A BIDDER WHO, IN THE TECHNICAL JUDGMENT OF THE BUREAU AND ITS CONSULTING ENGINEER, HAD NOT DEMONSTRATED THE ENGINEERING COMPETENCE CONTEMPLATED BY THE ADVERTISEMENT. THIS IS NOT A SITUATION WHEREIN A PROCUREMENT AGENCY IS REQUIRED BY REGULATION AND/OR LAW TO NEGOTIATE WITH ALL RESPONSIBLE OFFERORS WHO SUBMITTED PROPOSALS IN A COMPETITIVE RANGE, PRICE AND OTHER FACTORS CONSIDERED. SEE FPR SECS. 1- 3.214 AND 1-3.805-1; CF. B 157150, JANUARY 19, 1966, 45 COMP. GEN. - . HERE, THE PROCUREMENT WAS AUTHORIZED BY A SPECIFIC STATUTE WHEREUNDER THE BUREAU "MAY ENTER INTO CONTRACTS UPON SUCH TERMS AND CONDITIONS AS HE (THE SECRETARY OF THE TREASURY) MAY DEEM APPROPRIATE AND IN THE PUBLIC INTEREST," AND WHERE SUCH AUTHORITY MAY BE EXERCISED "WITHOUT REGARD TO ANY OTHER PROVISIONS OF LAW GOVERNING PROCUREMENT OR PUBLIC CONTRACTS.' SEE 41 U.S.C. 252 (C) (15) AND FPR SEC. 1-3.215 (A).

WE ATTACH NO LEGAL SIGNIFICANCE TO THE FACT THAT THIS PROCUREMENT WAS INITIATED UNDER FORMAL ADVERTISING PROCUREMENT OR PUBLIC CONTRACTS.' SEE 41 U.S.C. 252 (C) (15) AND FPR SEC. 1-3.215 (A).

WE ATTACH NO LEGAL SIGNIFICANCE TO THE FACT THAT THIS PROCUREMENT WAS INITIATED UNDER FORMAL ADVERTISING PROCEDURES BUT AWARD RESULTED FROM NEGOTIATION CONDUCTED WITH BUT ONE BIDDER. IN 42 COMP. GEN. 493, 494, WE HELD IN PART:

"* * * WHEN COMPETITIVE BIDDING IS NOT REQUIRED BY STATUTE AND THE PUBLIC AUTHORITY VOLUNTARILY ADVERTISES FOR BIDS, IT CAN REJECT ALL BIDS AND ENTER INTO PRIVATE NEGOTIATIONS WITH ONE OF THE BIDDERS IN ORDER TO SECURE A LOWER BID. 43 AM.JUR., PUBLIC WORKS AND CONTRACTS, SECTION 49.'

WE FEEL THAT THE FOREGOING RATIONALE APPLIES IN A CASE, SUCH AS HERE, WHERE THE NEGOTIATIONS WERE CONDUCTED WITH THE ONLY RESPONSIVE, RESPONSIBLE BIDDER UNDER SPECIFIC NEGOTIATION AUTHORITY. SEE 31 COMP. GEN. 347 INVOLVING A SIMILAR NEGOTIATION AND AWARD AT A PRICE IN EXCESS OF A LOW BID PRICE RECEIVED UNDER A PRIOR ADVERTISEMENT. ALSO, SEE 20 COMP. GEN. 194 AND 22 COMP. GEN. 1018.

UPON REVIEW, WE FIND NO LEGAL BASIS TO DISTURB THE AWARD MADE TO BLISS. THE PROTEST IS THEREFORE DENIED.