B-159472, AUG. 10, 1966

B-159472: Aug 10, 1966

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TO ROSENBAUM SALES: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 15. THE SUBJECT INVITATION WAS ISSUED ON APRIL 27. BID OPENING WAS SET FOR MAY 12. YOURS WAS THE ONLY BID RECEIVED AND OPENED ON MAY 12. THERE WAS ALSO A STATEMENT TO THE EFFECT THAT IF YOU WERE AWARDED THE CONTRACT YOU WOULD ACT AS THE MANAGER AND HAVE AN ASSISTANT MANAGER AS A FOOD SPECIALIST- COOK. IT IS REPORTED THAT YOU WERE CONTACTED BY THE ASSISTANT BUILDINGS MANAGER OF THE GSA BATTLE CREEK OFFICE ON MAY 16. YOU ADVISED HIM THAT IF YOU WERE AWARDED THE CONTRACT YOU WOULD RETIRE FROM GOVERNMENT SERVICE AND DEVOTE FULL TIME TO THE OPERATION OF THE CAFETERIA. WAS INCLUDED IN THAT LETTER. THERE IS ALSO A RECORD OF A TELEPHONE CONVERSATION WITH YOU ON MAY 17 IN WHICH YOU STATED THAT YOU WERE .

B-159472, AUG. 10, 1966

TO ROSENBAUM SALES:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 15, 1966, PROTESTING THE REJECTION OF YOUR BID UNDER INVITATION FOR BIDS NO. GS 05BB-6042, ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA), CHICAGO, ILLINOIS.

THE SUBJECT INVITATION WAS ISSUED ON APRIL 27, 1966, AND CALLED FOR BIDS ON OPERATING THE CAFETERIA IN THE FEDERAL CENTER, BATTLE CREEK, MICHIGAN. BID OPENING WAS SET FOR MAY 12, 1966, WITH PERFORMANCE OF THE CONTRACT TO COMMENCE ON JUNE 1, 1966. YOURS WAS THE ONLY BID RECEIVED AND OPENED ON MAY 12, 1966.

AS REQUESTED BY THE INVITATION, YOUR SUBMISSION INCLUDED GSA FORM 527, CONTRACTOR'S QUALIFICATIONS AND FINANCIAL INFORMATION, WHICH CONTAINED THE STATEMENT THAT "I AM PRESENTLY EMPLOYED BY THE GOVERNMENT--- OFFICE OF CIVIL DEFENSE AT BATTLE CREEK--- SALARY, $14,250 PER UM.' THERE WAS ALSO A STATEMENT TO THE EFFECT THAT IF YOU WERE AWARDED THE CONTRACT YOU WOULD ACT AS THE MANAGER AND HAVE AN ASSISTANT MANAGER AS A FOOD SPECIALIST- COOK. IN ORDER TO CLARIFY THESE MATTERS, IT IS REPORTED THAT YOU WERE CONTACTED BY THE ASSISTANT BUILDINGS MANAGER OF THE GSA BATTLE CREEK OFFICE ON MAY 16, 1966, AND YOU ADVISED HIM THAT IF YOU WERE AWARDED THE CONTRACT YOU WOULD RETIRE FROM GOVERNMENT SERVICE AND DEVOTE FULL TIME TO THE OPERATION OF THE CAFETERIA. ON THE SAME DATE, MAY 16, 1966, IN RESPONSE TO THE ABOVE MENTIONED CONTACT, YOU SUBMITTED A LETTER SETTING FORTH YOUR PROPOSED OPERATION. HOWEVER, NO INFORMATION CONCERNING YOUR STATUS AS A GOVERNMENT EMPLOYEE, ON YOUR INTENTION IN SUCH RESPECT, WAS INCLUDED IN THAT LETTER. THERE IS ALSO A RECORD OF A TELEPHONE CONVERSATION WITH YOU ON MAY 17 IN WHICH YOU STATED THAT YOU WERE ,THINKING" OF RETIRING FROM GOVERNMENT SERVICE IN SEPTEMBER. SINCE THE PROCURING ACTIVITY CONSIDERED THAT YOUR STATUS AS A GOVERNMENT EMPLOYEE PRECLUDED IT FROM MAKING THE AWARD TO YOU, YOU WERE ADVISED BY LETTER DATED MAY 23, 1966, THAT YOUR BID WAS REJECTED AS REQUIRED BY FEDERAL PROCUREMENT REGULATION 1-1.302-3 (A) WHICH PROVIDES:

"/A) CONTRACTS SHALL NOT KNOWINGLY BE ENTERED INTO BETWEEN THE GOVERNMENT AND EMPLOYEES OF THE GOVERNMENT OR BUSINESS CONCERNS OR ORGANIZATIONS WHICH ARE SUBSTANTIALLY OWNED OR CONTROLLED BY GOVERNMENT EMPLOYEES, EXCEPT FOR THE MOST COMPELLING REASONS, SUCH AS CASES WHERE THE NEEDS OF THE GOVERNMENT CANNOT REASONABLY BE OTHERWISE SUPPLIED.'

BY LETTER DATED MAY 27, 1966, YOU PROTESTED THE ACTION IN REJECTING YOUR BID AND ADVISED THAT YOU WOULD SEVER YOUR RELATIONSHIP AS A GOVERNMENT EMPLOYEE BEFORE CONSUMMATION OF A CONTRACT. YOU WERE AGAIN ADVISED BY LETTER DATED JUNE 8, 1966, THAT REJECTION OF YOUR BID WAS REQUIRED BY REASON OF YOUR STATUS AS A GOVERNMENT EMPLOYEE AS PROVIDED FOR IN THE FPR HERETOFORE CITED. THERE WAS FURTHER ADVICE TO THE EFFECT THAT SINCE AN AWARD CONDITIONED UPON SEVERANCE OF YOUR EMPLOYMENT WAS NOT PERMITTED AND SINCE NOTIFICATION OF AWARD TO YOU WITHOUT FURTHER ACTION BY EITHER PARTY, AS PROVIDED FOR IN PARAGRAPH 11C OF THE TERMS AND CONDITIONS OF THE IFB, WOULD HAVE RESULTED IN A CONTRACT, NO AWARD COULD HAVE BEEN MADE WITHOUT CONTRAVENING THE CITED REGULATION AS YOU WERE STILL A GOVERNMENT EMPLOYEE AT THAT TIME.

ALTHOUGH THE DECISIONS OF OUR OFFICE HAVE FREQUENTLY STATED THAT CONTRACTS BETWEEN THE GOVERNMENT AND ITS EMPLOYEES ARE NOT PROHIBITED BY STATUTE EXCEPT WHERE AN EMPLOYEE OF THE GOVERNMENT ACTS AS AGENT BOTH FOR THE GOVERNMENT AND THE CONTRACTOR IN THE PARTICULAR TRANSACTION OR WHERE THE SERVICE TO BE RENDERED UNDER THE CONTRACT IS SUCH AS COULD HAVE BEEN REQUIRED OF THE CONTRACTOR IN HIS CAPACITY AS AN EMPLOYEE, 14 COMP. GEN. 403; 21 ID. 705; 25 ID. 690; 27 ID. 735, WE HAVE ALSO HELD IN THE CITED CASES THAT CONTRACTS BETWEEN THE GOVERNMENT AND ITS EMPLOYEES ARE OPEN TO CRITICISM ON THE GROUNDS OF POSSIBLE FAVORITISM OR PREFERENTIAL TREATMENT AND SHOULD NOT BE ENTERED INTO EXCEPT FOR THE MOST COGENT REASONS. WHILE OUR OFFICE HAS RECOGNIZED CERTAIN EXCEPTIONS TO THE GENERAL RULE OF PUBLIC POLICY REGARDING CONTRACTING BY THE GOVERNMENT WITH ITS EMPLOYEES WHERE THE FACTS WARRANT SUCH EXCEPTION AND THERE IS NO STATUTE OR REGULATION EXPRESSLY PROHIBITING SUCH CONTRACTS, SEE 41 COMP. GEN. 569 AND CASES CITED, WE ARE AWARE OF NO CIRCUMSTANCES IN THE INSTANT CASE WHICH WOULD CLEARLY WARRANT AN EXCEPTION, AND WE HAVE FOR APPLICATION A REGULATION EXPRESSLY PROHIBITING SUCH CONTRACTS "EXCEPT FOR THE MOST COMPELLING REASONS, SUCH AS CASES WHERE THE NEEDS OF THE GOVERNMENT CANNOT REASONABLY BE OTHERWISE PPLIED.'

IN THE INSTANT CASE, THE CONTRACTING OFFICER APPARENTLY FOUND NO COMPELLING REASON WHICH WOULD JUSTIFY AN EXCEPTION TO THE PROHIBITION. FACT, WE ARE ADVISED THAT THE PRESENT CONTRACT FOR THE SERVICES IS BEING EXTENDED ON A MONTH TO MONTH BASIS PENDING THE DECISION OF OUR OFFICE ON YOUR PROTEST. WITH RESPECT TO YOUR STATEMENT THAT YOU ADVISED THE CONTRACTING OFFICER, PRIOR TO THE REJECTION OF YOUR BID ON MAY 23, THAT YOU WOULD RESIGN YOUR PRESENT GOVERNMENT POSITION IF AWARDED THE CONTRACT, IT IS ADMINISTRATIVELY REPORTED THAT YOU HAD INDICATED ONLY THAT YOU WERE THINKING" OF RETIRING IN SEPTEMBER. SINCE THE CURRENT CONTRACT WAS DUE TO EXPIRE ON MAY 31 AND COMMENCEMENT OF ANY NEW CONTRACT WAS PLANNED FOR JUNE 1, AN AWARD TO YOU WOULD HAVE BEEN AT A TIME WHEN YOU WERE, IN FACT, STILL IN THE EMPLOY OF THE GOVERNMENT AND, THEREFORE, CONTRARY TO THE APPLICABLE REGULATION.

ALTHOUGH THE INTERVAL BETWEEN BID OPENING AND COMMENCEMENT OF PERFORMANCE UNDER THE SUBJECT IFB WAS NOT A PARTICULARLY LONG ONE, IT WOULD APPEAR TO HAVE BEEN LONG ENOUGH FOR DETERMINING THE LOW RESPONSIVE AND RESPONSIBLE BIDDER AND MAKING THE AWARD, AND ALL PROSPECTIVE BIDDERS WERE MADE AWARE OF THE TIME INTERVAL AND THE MECHANICS OF MAKING THE AWARD BY THE TERMS OF THE IFB.

IN THESE CIRCUMSTANCES, WE SEE NO BASIS UPON WHICH WE MAY PROPERLY OBJECT TO THE ADMINISTRATIVE ACTION TAKEN IN REJECTING YOUR BID AND YOUR PROTEST IS THEREFORE DENIED.