B-168784, APR. 13, 1970

B-168784: Apr 13, 1970

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HOSPITAL CONSTRUCTION ALTHOUGH BID OPENING TIME SPECIFIED BY PROJECT SPONSOR INCIDENT TO HOSPITAL CONSTRUCTION PROJECT FUNDED UNDER HILL-BURTON ACT WAS SUBJECT TO VARYING INTERPRETATIONS AND HENCE INCONSISTENT WITH COMPETITIVE BID PROCEDURES PRESCRIBED BY 42 CFR 53.128 (C). GAO MAY TAKE NO CORRECTIVE ACTION SINCE FEDERAL GOVERNMENT IS NOT PARTY TO CONSTRUCTION CONTRACTS PERFORMED UNDER ACT. ITS SOLE RESPONSIBILITY (THROUGH PHS) IS TO DETERMINE WHETHER GRANTEE HAS FAILED TO COMPLY WITH REQUIREMENTS IN MANNER WARRANTING DISAPPROVAL OF APPLICATION OR WITHHOLDING OF FUNDS. SUCH ACTION IS NOT REQUIRED. INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 6. ADDENDUM NO. 1 WAS ISSUED. YOUR DATE STAMP ON THE COPY WHICH YOU SENT US INDICATES IT WAS RECEIVED ON JANUARY 2.

B-168784, APR. 13, 1970

BIDS--COMPETITIVE SYSTEM--FEDERAL AID, GRANTS, ETC.--HOSPITAL CONSTRUCTION ALTHOUGH BID OPENING TIME SPECIFIED BY PROJECT SPONSOR INCIDENT TO HOSPITAL CONSTRUCTION PROJECT FUNDED UNDER HILL-BURTON ACT WAS SUBJECT TO VARYING INTERPRETATIONS AND HENCE INCONSISTENT WITH COMPETITIVE BID PROCEDURES PRESCRIBED BY 42 CFR 53.128 (C), GAO MAY TAKE NO CORRECTIVE ACTION SINCE FEDERAL GOVERNMENT IS NOT PARTY TO CONSTRUCTION CONTRACTS PERFORMED UNDER ACT, AND ITS SOLE RESPONSIBILITY (THROUGH PHS) IS TO DETERMINE WHETHER GRANTEE HAS FAILED TO COMPLY WITH REQUIREMENTS IN MANNER WARRANTING DISAPPROVAL OF APPLICATION OR WITHHOLDING OF FUNDS. SURGEON GENERAL MAY WITHHOLD PAYMENT IN EVENT GRANTEE BREACHES REGULATIONS, BUT SUCH ACTION IS NOT REQUIRED. SEE COMP. GEN. DECS. CITED.

TO OTTO RANDOLPH, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 6, 1970, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD OF A CONTRACT FOR ADDITIONS TO THE SIERRA VISTA COMMUNITY HOSPITAL TO ANY OTHER BIDDER.

THE ADVERTISEMENT FOR BIDS ISSUED BY THE DIRECTORS OF THE HOSPITAL SET THE BID OPENING TIME FOR 3:00 P.M. ON JANUARY 6, 1970. SUBSEQUENTLY, ON DECEMBER 29, 1969, ADDENDUM NO. 1 WAS ISSUED. YOUR DATE STAMP ON THE COPY WHICH YOU SENT US INDICATES IT WAS RECEIVED ON JANUARY 2, 1970. ADDENDUM NO. 1, IN PERTINENT PART, STATES:

"BIDS SHALL BE OPENED AT 2:00 PM (BID TIME AS ADVERTISED)." YOUR BID, SUBMITTED AT 2:45 P.M. ON JANUARY 6, 1970, WAS REJECTED AS LATE AND, WE ARE ADVISED, RETURNED TO YOU UNOPENED. YOU PROTESTED THIS ACTION.

FUNDS FOR THE PROJECT WERE TO BE OBTAINED FROM A FEDERAL ASSISTANCE GRANT UNDER THE HILL-BURTON ACT, 41 U.S.C. 291 ET SEQ; AS AMENDED BY THE HOSPITAL AND MEDICAL FACILITIES AMENDMENT OF 1964, AUGUST 18, 1964, PUBLIC LAW 88-443, 78 STAT. 447, REFERRED TO IN THE ADVERTISEMENT AS THE HILL- HARRIS ACT.

UNDER THE ACT CONTRACTS ARE NOT AWARDED BY AN AGENCY OF THE FEDERAL GOVERNMENT BUT BY THE PROJECT SPONSOR WHICH HAS RECEIVED A CONSTRUCTION GRANT UNDER THE ACT. B-151187, JULY 11, 1963. THE GRANT IS ADMINISTERED ON BEHALF OF THE FEDERAL GOVERNMENT BY THE PUBLIC HEALTH SERVICE, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, WHICH HAS THE RESPONSIBILITY FOR MAKING THE GRANT AND OBTAINING CERTAIN ASSURANCES FROM THE GRANTEE INCLUDING THOSE WHICH PERTAIN TO COMPETITIVE BIDDING UNDER 42 CFR 53.128 (C).

AS INDICATED ABOVE, THE FEDERAL GOVERNMENT IS NOT A PARTY TO ANY CONSTRUCTION CONTRACTS PERFORMED IN ACCORDANCE WITH THE ACT AND ITS SOLE RESPONSIBILITY IS ONE OF DETERMINING WHETHER THERE HAS BEEN A FAILURE ON THE PART OF THE GRANTEE TO COMPLY WITH REQUIREMENTS AS WOULD WARRANT THE DISAPPROVAL OF THE APPLICATION OR THE WITHHOLDING OF GRANT FUNDS. 166366, MAY 14, 1969.

OUR OFFICE HAS RECOGNIZED THAT UNDER PREVIOUS VERSIONS OF THE ACT (42 U.S.C. 291J) THE SURGEON GENERAL COULD, AT HIS DISCRETION, WITHHOLD THE CERTIFICATION OF FEDERAL PAYMENTS IN THE EVENT OF A BREACH OF REGULATIONS BUT THAT SUCH ACTION WAS NOT REQUIRED EVEN IF IT WERE FOUND THAT REGULATIONS HAVE BEEN BREACHED. B-166366, SUPRA; B-161681, AUGUST 11, 1967, AND CASES CITED THEREIN. THE FACT THAT 41 U.S.C. 291J HAS BEEN REENACTED AS 41 U.S.C. 291G WITH SOME CHANGE IN LANGUAGE PROVIDES NO BASIS FOR MODIFYING OUR VIEW AS TO THE DISCRETION VESTED IN THE SURGEON GENERAL. SEE 1964 U.S. CODE CONG. AND ADM. NEWS, P.2812.

A REVIEW OF THE AWARD PROCEDURES USED IN THE AWARD OF THE HOSPITAL CONTRACT HAS BEEN CONDUCTED BY THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE AND NO BASIS FOR WITHHOLDING FUNDS HAS BEEN FOUND. WE NOTE, HOWEVER, YOUR CONTENTION THAT YOUR BID WAS TIMELY SUBMITTED. WHILE WE ARE INFORMALLY ADVISED BY THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE THAT THE PHRASE "(BID TIME AS ADVERTISED)" REFERS TO AN ADVERTISEMENT APPEARING IN THE HERALD DISPATCH NEWSPAPER TO THE EFFECT THAT BIDS WOULD BE OPENED AT 2:00 P.M; YOU CONTEND THAT THE PHRASE PERTAINS TO THE 3:00 P.M. BID TIME STATED IN THE ORIGINAL ADVERTISEMENT OF BIDS. ON THE RECORD, WE BELIEVE THAT THE BID OPENING TIME WAS SUBJECT TO VARYING INTERPRETATIONS, AND, HENCE, INCONSISTENT WITH THE COMPETITIVE BID PROCEDURES PRESCRIBED BY 42 CFR 53.128 (C). HOWEVER, FOR THE REASONS STATED ABOVE, NO CORRECTIVE ACTION MAY BE EFFECTED BY OUR OFFICE. THIS DEFICIENCY IS BEING BROUGHT TO THE ATTENTION OF THE DEPARTMENT FOR APPROPRIATE ADMINISTRATIVE CONSIDERATION.