B-167936(2), DEC. 19, 1969

B-167936(2): Dec 19, 1969

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RECOVERY UNSUCCESSFUL BIDDER'S CLAIM FOR AMOUNT OF PROFIT IT WOULD HAVE REALIZED FROM CONTRACT WHICH IT ALLEGES WAS IMPROPERLY AWARDED TO COMPETITOR IS DENIED. UNSUCCESSFUL BIDDER MUST SHOW THAT BIDS WERE INVITED AS PRETENSE TO CONCEAL INTENTION TO LET CONTRACT TO SOME FAVORED BIDDER. TO PREMAC CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 16. ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO THE SECRETARY OF HEALTH. WELFARE WHICH IS SELF-EXPLANATORY. IN REGARD TO YOUR CLAIM FOR PAYMENT OF THE AMOUNT OF PROFIT YOUR FIRM WOULD HAVE REALIZED FROM THIS CONTRACT WHICH YOU ALLEGE WAS IMPROPERLY AWARDED TO A COMPETITOR. YOU ARE ADVISED THAT FAVORABLE CONSIDERATION OF YOUR REQUEST WOULD BE INAPPROPRIATE IN LIGHT OF THE CIRCUMSTANCES INVOLVED IN THE AWARD WHICH WAS MADE IN GOOD FAITH.

B-167936(2), DEC. 19, 1969

BIDS--PREPARATION--COSTS--RECOVERY UNSUCCESSFUL BIDDER'S CLAIM FOR AMOUNT OF PROFIT IT WOULD HAVE REALIZED FROM CONTRACT WHICH IT ALLEGES WAS IMPROPERLY AWARDED TO COMPETITOR IS DENIED, IN VIEW OF LACK OF PROOF SUCH AS REQUIRED BY HEYER PRODUCTS CO; INC. V UNITED STATES, 135 CT. CL. 63 (1956)--IN WHICH COURT HELD THAT UNSUCCESSFUL BIDDER LACKED ENTITLEMENT TO RECOVER ANTICIPATED PROFITS BECAUSE IT HAD NO CONTRACT, AND THAT TO RECOVER COST OF SUBMITTING BID, UNSUCCESSFUL BIDDER MUST SHOW THAT BIDS WERE INVITED AS PRETENSE TO CONCEAL INTENTION TO LET CONTRACT TO SOME FAVORED BIDDER, WITH INTENT TO WILLFULLY DISREGARD OBLIGATION TO LET CONTRACT TO BIDDER SUBMITTING BID MOST ADVANTAGEOUS TO GOVERNMENT.

TO PREMAC CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 16, 1969, PROTESTING THE REJECTION OF YOUR BID UNDER SOLICITATION NO. 2-70 ISSUED BY THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, UNITED STATES PUBLIC HEALTH SERVICE, ATLANTA, GEORGIA.

ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE WHICH IS SELF-EXPLANATORY.

IN REGARD TO YOUR CLAIM FOR PAYMENT OF THE AMOUNT OF PROFIT YOUR FIRM WOULD HAVE REALIZED FROM THIS CONTRACT WHICH YOU ALLEGE WAS IMPROPERLY AWARDED TO A COMPETITOR, YOU ARE ADVISED THAT FAVORABLE CONSIDERATION OF YOUR REQUEST WOULD BE INAPPROPRIATE IN LIGHT OF THE CIRCUMSTANCES INVOLVED IN THE AWARD WHICH WAS MADE IN GOOD FAITH. IN HEYER PRODUCTS COMPANY, INC. V UNITED STATES, 135 CT. CL. 63 (1956) WHERE AN UNSUCCESSFUL BIDDER CLAIMED BOTH LOSS OF PROFIT AND COSTS INCURRED IN PREPARING A BID, THE COURT HELD:

"IT GOES WITHOUT SAYING THAT NOT EVERY UNSUCCESSFUL BIDDER IS ENTITLED TO RECOVER THE COST OF PUTTING IN HIS BID. RECOVERY CAN BE HAD IN ONLY THOSE CASES WHERE IT CAN BE SHOWN BY CLEAR AND CONVINCING PROOF THAT THERE HAS BEEN A FRAUDULENT INDUCEMENT FOR BIDS, WITH THE INTENTION, BEFORE THE BIDS WERE INVITED OR LATER CONCEIVED, TO DISREGARD THEM ALL EXCEPT THE ONES FROM BIDDERS TO ONE OF WHOM IT WAS INTENDED TO LET THE CONTRACT, WHETHER HE WAS THE LOWEST RESPONSIBLE BIDDER OR NOT. IN OTHER WORDS, IT MUST BE SHOWN THAT BIDS WERE NOT INVITED IN GOOD FAITH, BUT AS A PRETENSE TO CONCEAL THE PURPOSE TO LET THE CONTRACT TO SOME FAVORED BIDDER, OR TO ONE OF A GROUP OF PREFERRED BIDDERS, AND WITH THE INTENT TO WILFULLY, CAPRICIOUSLY, AND ARBITRARILY DISREGARD THE OBLIGATION TO LET THE CONTRACT TO HIM WHOSE BID WAS MOST ADVANTAGEOUS TO THE GOVERNMENT." THE COURT HELD FURTHER THAT THE UNSUCCESSFUL BIDDER WAS NOT ENTITLED TO RECOVER ANTICIPATED PROFITS BECAUSE IT HAD NO CONTRACT. ALSO SEE PERKINS V LUKENS STEEL CO; 310 U.S. 113 (1940).

IN VIEW OF THE LACK OF PROOF SUCH AS IS REQUIRED BY THE HEYER CASE, AND BECAUSE WE ARE AWARE OF NO DECISION, EITHER BY OUR OFFICE OR THE COURTS TO THE CONTRARY, WE MUST CONCLUDE THAT YOU ARE NOT ENTITLED TO BE PAID ANY AMOUNT FOR ANTICIPATED PROFITS.