B-167204, AUG. 11, 1969

B-167204: Aug 11, 1969

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ACTION IN REJECTING BID WHICH WAS 61 PERCENT HIGHER THAN GOVERNMENT ESTIMATE HELD TO BE PROPER. INCORPORATED: REFERENCE IS MADE TO YOUR LETTER DATED JULY 23. THREE BIDS WERE RECEIVED AND OPENED. THE TWO LOWEST BIDS WERE IN LINE WITH THE GOVERNMENT'S ESTIMATE OF $9. THOSE BIDS WERE FOUND TO BE UNACCEPTABLE BECAUSE THE INVITATION FOR BIDS CONTAINED A NOTICE TO THE EFFECT THAT THE PROCUREMENT INVOLVED HAD BEEN SET ASIDE FOR THE EXCLUSIVE PARTICIPATION OF SMALL BUSINESS CONCERNS AND. THE SMALL BUSINESS ADMINISTRATION DETERMINED THAT THE TWO LOWEST BIDDERS WERE NOT SMALL BUSINESS CONCERNS FOR THE PURPOSE OF AWARD PURSUANT TO THE INVITATION. THE OTHER BID WAS SUBMITTED BY YOUR COMPANY AND A PRICE OF $15.

B-167204, AUG. 11, 1969

BID PROTEST - CANCELLATION AND READVERTISEMENT DECISION TO BALDWIN TRASH CO., INC., THIRD LOW BIDDER, DENYING PROTEST AGAINST CANCELLATION OF INVITATION ON BASIS OF EXCESSIVE PRICES AND READVERTISEMENT WITHOUT SMALL BUSINESS SET-ASIDE OF CONTRACT FOR TRASH COLLECTION SERVICES FOR HARRY DIAMOND LABORATORIES. ACTION IN REJECTING BID WHICH WAS 61 PERCENT HIGHER THAN GOVERNMENT ESTIMATE HELD TO BE PROPER. WITH RESPECT TO WITHDRAWAL OF SET-ASIDE UNDER READVERTISEMENT SINCE RECORD ESTABLISHES THAT PREVIOUS ADVERTISEMENT DID NOT RESULT IN RECEIPT OF A REASONABLE BID FROM ANY SMALL BUSINESS ELIMINATION IF SET ASIDE PROPER.

TO BALDWIN TRASH COMPANY, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 23, 1969, AND TO PREVIOUS CORRESPONDENCE, CONCERNING THE REJECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. DAAG39-69-B-1083, ISSUED MAY 8, 1969, BY THE DEPARTMENT OF THE ARMY PROCUREMENT OFFICE AT THE HARRY DIAMOND LABORATORIES, WASHINGTON, D.C., FOR THE COLLECTION AND DISPOSAL OF REFUSE GENERATED AT THE HARRY DIAMOND LABORATORIES AND AT ONE OFF POST LOCATION DURING AN INITIAL PERIOD OF 1 YEAR BEGINNING ON JULY 1, 1969, AND FOR OPTIONAL ADDITIONAL PERIODS OF 1 YEAR EACH, EXTENDING THROUGH JUNE 30, 1972.

THREE BIDS WERE RECEIVED AND OPENED, AS SCHEDULED, ON JUNE 5, 1969. THE TWO LOWEST BIDS WERE IN LINE WITH THE GOVERNMENT'S ESTIMATE OF $9,480 AS A REASONABLE CONTRACT PRICE FOR THE BASIC 1-YEAR PERIOD OF SERVICE. THOSE BIDS WERE FOUND TO BE UNACCEPTABLE BECAUSE THE INVITATION FOR BIDS CONTAINED A NOTICE TO THE EFFECT THAT THE PROCUREMENT INVOLVED HAD BEEN SET ASIDE FOR THE EXCLUSIVE PARTICIPATION OF SMALL BUSINESS CONCERNS AND, AFTER THE BID OPENING, THE SMALL BUSINESS ADMINISTRATION DETERMINED THAT THE TWO LOWEST BIDDERS WERE NOT SMALL BUSINESS CONCERNS FOR THE PURPOSE OF AWARD PURSUANT TO THE INVITATION. THE OTHER BID WAS SUBMITTED BY YOUR COMPANY AND A PRICE OF $15,264 WAS QUOTED IN THAT BID FOR THE FIRST YEAR OF SERVICE. HOWEVER, AN AWARD WAS NOT MADE TO YOUR COMPANY BECAUSE THE BID PRICE OF $15,264 APPEARED TO BE EXCESSIVE IN THAT IT EXCEEDED THE GOVERNMENT'S ESTIMATE OF A REASONABLE CONTRACT PRICE BY THE AMOUNT OF $5,784. IT WAS FINALLY DECIDED TO REJECT YOUR BID AND TO ISSUE A NEW INVITATION WHICH WOULD NOT CONTAIN A SMALL BUSINESS SET-ASIDE NOTICE AND WHICH WOULD PERMIT BIDDING BY BOTH SMALL AND LARGE BUSINESS CONCERNS. 167204

IN YOUR LETTER DATED JULY 23, 1969, YOU INDICATED THAT A READVERTISEMENT HAD BEEN MADE UNDER INVITATION FOR BIDS NO. DAAG39-70-B 0015. YOU PROTESTED WHAT YOU CONSIDERED TO BE AN ARBITRARY DELETION OF THE SMALL BUSINESS SET-ASIDE CLAUSE AND YOU CONTENDED THAT YOUR BID UNDER THE ORIGINAL ADVERTISEMENT WAS NOT UNREASONABLE AND YOUR PRICE WAS IN LINE WITH THE PRICES AVAILABLE TO PRIVATE INDUSTRY FOR THE PERFORMANCE OF REFUSE COLLECTION AND DISPOSAL SERVICES.

THE RECORD SHOWS THAT THE GOVERNMENT'S ESTIMATE OF $9,480 WAS BASED ON THE PRICE OF CONTRACT NO. DA-49-186-AMC-402/D) WITH THE POTOMAC DISPOSAL COMPANY, COVERING SERVICES TO BE PERFORMED AT THE HARRY DIAMOND LABORATORIES AND AT ONE OFF-POST LOCATION DURING THE PAST FISCAL YEAR BEGINNING ON JULY 1, 1968. IN VIEW THEREOF, WE WOULD NOT BE WARRANTED IN TAKING EXCEPTION TO THE CONTRACTING OFFICER'S DETERMINATION THAT YOUR BID PRICE OF $15,264, WHICH IS APPROXIMATELY 61 PERCENT HIGHER THAN THE GOVERNMENT'S ESTIMATE, COULD NOT BE REGARDED AS REASONABLE IN THE PARTICULAR CIRCUMSTANCES.

IT WAS HELD IN 45 COMP. GEN. 613 THAT THERE IS NO BASIS UPON WHICH OUR OFFICE MAY PROPERLY OBJECT TO A DETERMINATION TO SET ASIDE A PROCUREMENT FOR SMALL BUSINESS CONCERNS IF THE DETERMINATION HAS BEEN MADE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 1, PART 7, OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), WHICH IMPLEMENT THE CONGRESSIONAL MANDATE THAT A FAIR PROPORTION OF GOVERNMENT CONTRACTS BE AWARDED TO SMALL BUSINESS CONCERNS. IT IS ALSO OUR OPINION THAT WE MAY NOT PROPERLY OBJECT TO A WITHDRAWAL OF ANY SUCH DETERMINATION WHERE, AS HERE, THE RECORD APPEARS REASONABLY TO ESTABLISH THAT A PREVIOUS SOLICITATION FOR BIDS FROM SMALL BUSINESS CONCERNS ONLY HAD NOT RESULTED IN THE RECEIPT OF A REASONABLE BID FROM ANY SMALL BUSINESS CONCERN. IN THAT CONNECTION, SEE ASPR 1-706.3 (A).

ACCORDINGLY, THE PROTEST MADE IN REGARD TO THE REJECTION OF YOUR BID UNDER THE ORIGINAL ADVERTISEMENT AND THE FACT THAT THE READVERTISEMENT DID NOT LIMIT BIDDING TO SMALL BUSINESS CONCERNS IS HEREBY DENIED.