B-164523, AUG. 28, 1968

B-164523: Aug 28, 1968

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TO TRANS-STUDENT LINES INCORPORATED: REFERENCE IS MADE TO YOUR LETTER DATED JUNE 4. DABC13-68-B-0124 WAS ISSUED ON APRIL 8. THIS PROCUREMENT WAS A 100 PERCENT SET-ASIDE FOR SMALL BUSINESSES. THREE BIDS WERE RECEIVED. THE PROTEST WAS FILED WITH THE SMALL BUSINESS ADMINISTRATION. THE SMALL BUSINESS ADMINISTRATION DETERMINATION WAS RECEIVED BY THE CONTRACTING OFFICER ON MAY 22. IT WAS STATED THAT JACKSONVILLE COACH COMPANY WAS NOT SMALL BUSINESS FOR THE PURPOSE OF THIS PROCUREMENT. IT IS REPORTED THAT THE PRIOR YEAR CONTRACT FOR APPROXIMATELY THE SAME SERVICES WAS AWARDED IN THE AMOUNT OF $20. THE NEXT LOW AND RESPONSIVE BID IS THAT OF TRANS-STUDENT LINES IN THE NET AMOUNT OF $27. W. EVANS BID WAS 63 PERCENT ABOVE THE PRIOR YEAR'S CONTRACT PRICE.

B-164523, AUG. 28, 1968

TO TRANS-STUDENT LINES INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 4, 1968, PROTESTING THE METHODS AND PROCEDURES EMPLOYED IN THE PROPOSED PROCUREMENT OF TRANSPORTATION SERVICE FOR THE PERIOD MAY 1, 1968 THROUGH MARCH 31, 1969, FOR RECRUITS AND REGISTRANTS BEING PROCESSED AT THE ARMED FORCES ENTRANCE AND EXAMINING STATION, JACKSONVILLE, FLORIDA, UNDER INVITATION FOR BIDS NOS. DABC13-68-B-0124 AND DABC13-68-B-0205.

INVITATION FOR BIDS NO. DABC13-68-B-0124 WAS ISSUED ON APRIL 8, 1968, WITH A BID OPENING DATE OF APRIL 26, 1968. AMENDMENT NO. 1 TO THE INVITATION, DATED APRIL 23, 1968, EXTENDED THE BID OPENING DATE TO MAY 3, 1968. THIS PROCUREMENT WAS A 100 PERCENT SET-ASIDE FOR SMALL BUSINESSES. THREE BIDS WERE RECEIVED, AS FOLLOWS: BIDDER ITEM 1 ITEM 2 TOTAL DISCOUNT ------ ---- - ------ ----- -------- TRANS-STUDENT LINES INC. $0.74 $0.74 $29,304 6 PERCENT WARNER ROBINS, GEORGIA W. W. EVANS $0.83$0.83 $32,868 NONE LOUISVILLE, KENTUCKY JACKSONVILLE COACH COMPANY $0.50 $0.40 $18,040 NONE JACKSONVILLE, FLORIDA

ON MAY 6, 1968, THE CONTRACTING OFFICER RECEIVED A PROTEST FROM THE TRANS -STUDENT LINES PROTESTING THE SMALL BUSINESS SIZE OF THE APPARENT LOW BIDDER, JACKSONVILLE COACH COMPANY. THE PROTEST WAS FILED WITH THE SMALL BUSINESS ADMINISTRATION, JACKSONVILLE, FLORIDA, FOR DETERMINATION OF SIZE ON MAY 6, 1968. THE SMALL BUSINESS ADMINISTRATION DETERMINATION WAS RECEIVED BY THE CONTRACTING OFFICER ON MAY 22, 1968,AND IT WAS STATED THAT JACKSONVILLE COACH COMPANY WAS NOT SMALL BUSINESS FOR THE PURPOSE OF THIS PROCUREMENT. JACKSONVILLE COACH COMPANY, ON MAY 23, 1968, PROTESTED THE DETERMINATION TO THE CONTRACTING OFFICER AND ALSO PROTESTED AWARD TO ANY OTHER BIDDER. JACKSONVILLE COACH COMPANY FAILED TO APPEAL THE DETERMINATION TO THE SMALL BUSINESS ADMINISTRATION WITHIN FIVE WORKING DAYS, AS REQUIRED BY PERTINENT PROCUREMENT REGULATIONS (ASPR 1-703 (B) (4).

IT IS REPORTED THAT THE PRIOR YEAR CONTRACT FOR APPROXIMATELY THE SAME SERVICES WAS AWARDED IN THE AMOUNT OF $20,142.92. ACCEPTING THE SMALL BUSINESS ADMINISTRATION DECISION AS FINAL, THE NEXT LOW AND RESPONSIVE BID IS THAT OF TRANS-STUDENT LINES IN THE NET AMOUNT OF $27,545.76, 37 PERCENT ABOVE THE PRIOR YEAR'S CONTRACT. THE W. W. EVANS BID WAS 63 PERCENT ABOVE THE PRIOR YEAR'S CONTRACT PRICE. THE BIDS OF TRANS-STUDENT LINES AND W. W. EVANS WERE CONSIDERED EXCESSIVE AND IT WAS CONSIDERED CLEARLY IN THE BEST INTEREST OF THE GOVERNMENT TO CANCEL THE INVITATION FOR BIDS AND TO ISSUE A NEW INVITATION ISSUED ON A NON-RESTRICTIVE BASIS.

FOLLOWING CANCELLATION OF THE ABOVE INVITATION BECAUSE OF THE UNREASONABLENESS OF BIDS, INVITATION FOR BIDS NO. DABC13-68-B-0207 WAS ISSUED ON MAY 31, 1968, ON A NON-RESTRICTIVE BASIS, WITH A BID OPENING DATE OF JUNE 18, 1968. THE CONTRACT PERIOD STATED IN THIS INVITATION WAS ,WITHIN TEN (10) DAYS AFTER RECEIPT OF CONTRACT AWARD THROUGH 31 MARCH 1969.' OTHER REQUIREMENTS WERE THE SAME AS THE PRIOR INVITATION. ALL BIDDERS ON THE PRIOR INVITATION WERE INCLUDED IN THE MAILING LIST OF THE NEW SOLICITATION. HOWEVER, ONLY TWO BIDS WERE RECEIVED, AS FOLLOWS: BIDDER

UNIT PRICE UNIT PRICE TOTAL BID ------ ---------- ---------- ---------

ITEM 1 ITEM 2 PRICE TRANS STUDENT LINES $0.74 $0.74 $29,304 (5 PERCENT DISCOUNT) JACKSONVILLE COACH CO. $0.50 $0.35 $17,160 (NET DISCOUNT)

IT IS REPORTED THAT UPON RECEIPT OF NOTICE OF THE PROTEST OF TRANS STUDENT LINES BY THE CONTRACTING OFFICER, THE BIDDERS WERE ADVISED THAT NO AWARD WOULD BE MADE ON THIS INVITATION PENDING DISPOSITION OF THE PROTEST.

IN YOUR PROTEST LETTER OF JUNE 4, 1968, YOU URGE THAT THE CONTRACTING OFFICER IMPROPERLY REJECTED ALL BIDS UNDER INVITATION FOR BIDS NO. 0124; THAT YOUR BID PRICE WAS NOT EXCESSIVE; AND THAT THE CONTRACTING OFFICER'S ACTION IS CONTRARY TO THE INTENT OF ASPR 2-204.1 (PROBABLY INTENDED AS ASPR 2-404.1).

PARAGRAPH 10 OF STANDARD FORM 33A, OF THE INVITATION FOR BIDS, PROVIDES IN PERTINENT PART, AS FOLLOWS:

"10. AWARD OF CONTRACT

(B) THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL OFFERS AND TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN OFFERS RECEIVED.

ASPR 2-404.1, PROVIDES IN PERTINENT PART, AS FOLLOWS: "2-404.1 CANCELLATION OF INVITATION AFTER OPENING.

"/A) THE PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM DICTATES THAT AFTER BIDS HAVE BEEN OPENED, AWARD MUST BE MADE TO THAT RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID, UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION. EVERY EFFORT SHALL BE MADE TO ANTICIPATE CHANGES IN A REQUIREMENT PRIOR TO THE DATE OF OPENING AND TO NOTIFY ALL PROSPECTIVE BIDDERS OF ANY RESULTING MODIFICATION OR CANCELLATION, THEREBY PERMITTING BIDDERS TO CHANGE THEIR BIDS AND PREVENTING THE UNNECESSARY EXPOSURE OF BID PRICES. * * *

"/B) * * * INVITATIONS FOR BIDS MAY BE CANCELED AFTER OPENING BUT PRIOR TO AWARD WHERE SUCH ACTION IS CONSISTENT WITH (A) ABOVE AND THE CONTRACTING OFFICER DETERMINES IN WRITING THAT --

"/VI) ALL OTHERWISE ACCEPTABLE BIDS RECEIVED ARE AT UNREASONABLE PRICES;

WE ARE FULLY AWARE THAT THE REJECTION OF BIDS AFTER THEY ARE OPENED AND EACH BIDDER OR SUBSEQUENT PROSPECTIVE BIDDER HAS LEARNED HIS COMPETITOR'S PRICES IS A SERIOUS MATTER, AND WE HAVE HELD THAT SUCH ACTION SHOULD NOT BE TAKEN EXCEPT FOR THE MOST COGENT REASONS. B 153229, FEBRUARY 5, 1964; B-140452, NOVEMBER 9, 1959.

IN B-147154, NOVEMBER 6, 1961, WE HELD WITH RESPECT TO THE CANCELLATION OF AN INVITATION PURSUANT TO THE CONTRACTING OFFICER'S DETERMINATION THAT ALL BIDS WERE UNREASONABLE AS TO PRICE AS FOLLOWS: "* * * THE AUTHORITY TO REJECT BIDS IS NOT ORDINARILY SUBJECT TO REVIEW BY THIS OFFICE, AND WE HAVE SPECIFICALLY HELD THAT WHEN IT IS ADMINISTRATIVELY DETERMINED THAT THE LOWEST ACCEPTABLE BID IS IN EXCESS OF THE AMOUNT FOR WHICH THE GOVERNMENT SHOULD BE ABLE TO PROCURE THE PARTICULAR SUPPLIES, A REJECTION OF ALL BIDS AND A SOLICITATION OF NEW BIDS IS A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION. 36 COMP. GEN. 364. SINCE THE FACTS, AS OUTLINED ABOVE, APPEAR TO SUBSTANTIALLY SUPPORT THE CONTRACTING OFFICER'S DETERMINATION THAT YOUR BID PRICE WAS UNREASONABLE, WE CANNOT CONCLUDE THAT THE ACTION TAKEN IN REJECTING THE BIDS WAS UNJUSTIFIED. SEE ALSO 39 COMP. GEN. 86, 88. * * *"

IN 36 COMP. GEN. 364, SUPRA, WE HELD THAT "IT IS NO DOUBT REGRETTABLE THAT ALL BIDDERS ARE AWARE OF THE AMOUNTS ORIGINALLY QUOTED BY THEIR COMPETITORS, BUT THEY ALSO ARE BETTER ADVISED AS TO WHAT PRICE RANGE IS CONSIDERED REASONABLE BY THE GOVERNMENT'S REPRESENTATIVES, AND ALL HAVE EQUAL OPPORTUNITIES TO SUBMIT SUCH NEW BIDS AS THEY WILL.'

WE ARE OF THE OPINION THAT THE RECORD AMPLY SUPPORTS THE CONTRACTING OFFICER'S DETERMINATIONS. THE CONTRACTING OFFICER, IN HIS OPINION, WAS UNABLE TO OBTAIN REASONABLE BIDS ON A SMALL BUSINESS SET-ASIDE INVITATION, AND READVERTISED THE PROCUREMENT ON AN UNRESTRICTED BASIS.

IT IS OUR VIEW THAT THE ADMINISTRATIVE AGENCY IS RESPONSIBLE FOR DETERMINING WHETHER THE LOWEST ACCEPTABLE BID IS IN EXCESS OF THE AMOUNT FOR WHICH THE GOVERNMENT SHOULD BE ABLE TO OBTAIN THE SERVICES SOUGHT AND, IN THE ABSENCE OF A SHOWING OF BAD FAITH, OR ARBITRARY OR CAPRICIOUS ACTION, WE WOULD NOT QUESTION THE REJECTION OF ALL BIDS BECAUSE THE PRICES WERE CONSIDERED EXCESSIVE. 36 COMP. GEN. 364; 39 COMP. GEN. 396.

IN VIEW OF THE FOREGOING, WE SEE NO LEGAL BASIS FOR QUESTIONING THE ADMINISTRATIVE ACTIONS TAKEN.