B-164093, JUN. 10, 1968

B-164093: Jun 10, 1968

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JR.: REFERENCE IS MADE TO YOUR LETTER OF APRIL 19. BIDS WERE SOLICITED FOR A 62 FOOT AUXILIARY YAWL. SEVENTY-ONE BIDS WERE RECEIVED FOR THE "MANITOU. THE FIVE HIGHEST BIDS RECEIVED ARE SHOWN AS FOLLOWS: $27. IT WAS DETERMINED BY THE SALES CONTRACTING OFFICER AND THE VESSEL SALES SPECIALISTS OF THE SELLING ACTIVITY THAT IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO REJECT YOUR HIGH BID. THIS DETERMINATION WAS BASED ON A PREVIOUSLY ESTABLISHED MINIMUM PRICE OF $42. 000 WHICH WAS CONSIDERED TO BE A REASONABLE RETURN FOR THE VESSEL TO THE GOVERNMENT. WE HAVE BEEN INFORMALLY ADVISED THAT THE READVERTISEMENT OF THIS SALE. THIS HIGH BID WAS SUBMITTED BY MR. NOTICE OF AWARD WAS MAILED TO HIM ON MAY 27.

B-164093, JUN. 10, 1968

TO MR. JAMES BENONSON, JR.:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 19, 1968, PROTESTING AGAINST THE REJECTION OF BIDS SUBMITTED IN RESPONSE TO ITEM NO. 1 OF SALES INVITATION FOR BIDS NO. 18-8052, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, BROOKLYN, NEW YORK.

UNDER ITEM NO. 1 OF THE INVITATION, BIDS WERE SOLICITED FOR A 62 FOOT AUXILIARY YAWL,"MANITOU," EX-CG-62012, WITH A SCHEDULED BID OPENING DATE OF APRIL 9, 1968. SEVENTY-ONE BIDS WERE RECEIVED FOR THE "MANITOU," AND RANGED FROM A LOW BID OF $57.80 TO YOUR HIGH BID OF $27,321. THE FIVE HIGHEST BIDS RECEIVED ARE SHOWN AS FOLLOWS: $27,321; $27,112; $21,100; $20,876; AND $15,101.50. AFTER EVALUATING THE BIDS RECEIVED, IT WAS DETERMINED BY THE SALES CONTRACTING OFFICER AND THE VESSEL SALES SPECIALISTS OF THE SELLING ACTIVITY THAT IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO REJECT YOUR HIGH BID, AS WELL AS ALL OTHER BIDS RECEIVED, ON THE "MANITOU" AND READVERTISE THE SALE. THIS DETERMINATION WAS BASED ON A PREVIOUSLY ESTABLISHED MINIMUM PRICE OF $42,000 WHICH WAS CONSIDERED TO BE A REASONABLE RETURN FOR THE VESSEL TO THE GOVERNMENT. THIS CONNECTION, WE HAVE BEEN INFORMALLY ADVISED THAT THE READVERTISEMENT OF THIS SALE, WITH BID OPENING ON MAY 23, 1968, BROUGHT A HIGH BID OF $35,000 FOR THE "MANITOU.' THIS HIGH BID WAS SUBMITTED BY MR. HARRY LUNDEBERG, SCHOOL OF SEAMANSHIP, PINEY POINT, MARYLAND, AND NOTICE OF AWARD WAS MAILED TO HIM ON MAY 27, 1968.

YOU CONTENDED THAT THE REJECTION OF ALL BIDS ON INVITATION -8052 WAS NOT IN THE BEST INTEREST OF THE GOVERNMENT AND THAT THE FUTURE OFFERING SCHEDULED FOR MAY 23, 1968, WAS LIKELY TO BRING IN LOWER BIDS FOR THE BOAT. ALSO, YOU CONTEND THAT YOUR HIGH BID OF $27,321 WAS A FAIR BID IN VIEW OF THE FACT OF THE VESSEL BEING SOLD ON AN "AS IS" BASIS.

UNDER PARAGRAPH 3 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION THE GOVERNMENT RESERVED THE RIGHT TO REJECT ANY OR ALL BIDS AS MAY BE IN THE BEST INTEREST OF THE GOVERNMENT. THIS RESERVATION PROPERLY SHOULD BE EXERCISED BY THE CONTRACTING OFFICER WHEN TO DO SO WOULD BE IN FURTHERANCE OF THE PROVISIONS OF 40 U.S.C. 484 (E) (2) RESPECTING THE ADVERTISING REQUIREMENTS FOR THE SALE OF GOVERNMENT PROPERTY. THAT STATUTE READS, IN PART, AS FOLLOWS:

"/2) WHENEVER PUBLIC ADVERTISING FOR BIDS IS REQUIRED UNDER PARAGRAPH (1) OF THIS SUBSECTION --

"/A) THE ADVERTISEMENT FOR BIDS SHALL BE MADE AT SUCH TIME PREVIOUS TO THE DISPOSAL OR CONTRACT, THROUGH SUCH METHODS, AND ON SUCH TERMS AND CONDITIONS AS SHALL PERMIT THAT FULL AND FREE COMPETITION WHICH IS CONSISTENT WITH THE VALUE AND NATURE OF THE PROPERTY INVOLVED;

"/B) ALL BIDS SHALL BE PUBLICLY DISCLOSED AT THE TIME AND PLACE STATED IN THE ADVERTISEMENT;

"/C) AWARD SHALL BE MADE WITH REASONABLE PROMPTNESS BY NOTICE TO THE RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED: PROVIDED, THAT ALL BIDS MAY BE REJECTED WHEN IT IS IN THE PUBLIC INTEREST TO DO SO.'

THE AUTHORITY THUS RESERVED BY STATUTE AND INVITATION IS EXTREMELY BROAD AND A DETERMINATION MADE PURSUANT TO SUCH AUTHORITY IS NOT ORDINARILY SUBJECT TO REVIEW. SEE 31 ALR 2D 469; ERIE COAL AND COKE CORPORATION V. UNITED STATES, 266 U.S. 518. THE PRESENT RECORD, IN OUR OPINION, SUPPORTS THE DETERMINATION OF THE CONTRACTING OFFICER THAT THE REJECTION OF ALL BIDS ON INVITATION -8052 WAS "IN THE PUBLIC INTEREST.' THIS IS CONFIRMED BY THE FACT THAT THE READVERTISEMENT OF THE "MANITOU" BROUGHT A HIGH BID OF $35,000, NOTWITHSTANDING YOUR CONTENTIONS IN THE MATTER. IN LINE WITH THE ABOVE, AND, AS STATED IN 26 COMP. GEN. 49, AT PAGE 50,"IT LONG HAS BEEN RECOGNIZED THAT IN CONNECTION WITH THE AWARDING OF PUBLIC CONTRACTS NO BIDDER ACQUIRES AN ABSOLUTE RIGHT TO AN AWARD OF PUBLIC BUSINESS BUT, RATHER, THE PUBLIC INTEREST IS FIRST FOR CONSIDERATION IN THE MAKING OF SUCH AWARD.' SEE, ALSO, O-BRIEN V CARNEY, 67. SUPP. 761; 17 COMP. GEN. 554, 559; B 141858, APRIL 1, 1960; B-159925, OCTOBER 24, 1966.

ACCORDINGLY, WE FIND NO LEGAL JUSTIFICATION FOR DISTURBING THE ACTIONS TAKEN BY THE DISPOSAL AGENCY IN THE MATTER.