B-169599, JUN. 11, 1970

B-169599: Jun 11, 1970

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BID PRICES EXCESSIVE WHERE ONLY BIDS REMAINING FOR CONSIDERATION UNDER FORMALLY ADVERTISED SMALL BUSINESS RESTRICTED GENERAL SERVICES ADMINISTRATION SOLICITATION FOR MARKERS ARE ADMINISTRATIVELY DETERMINED TO BE UNREASONABLY PRICED. MAY NOT BE ACCEPTED AS MODIFIED OFFER SINCE OFFER AS ORIGINALLY SUBMITTED WAS UNACCEPTABLE. IT IS IMMATERIAL PRICE REDUCTION OFFER ORIGINATED PRIOR TO OFFEROR'S KNOWLEDGE THAT ORIGINAL PRICE WAS CONSIDERED UNREASONABLE. INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE CANCELLATION OF THE TOTAL SMALL BUSINESS SET-ASIDE SEGMENT UNDER INVITATION FOR BIDS NO. WHICHEVER IS LATER. WERE RESTRICTED UNDER A TOTAL SMALL BUSINESS SET -ASIDE FOR AWARD TO SMALL BUSINESS FIRMS ONLY.

B-169599, JUN. 11, 1970

CONTRACTS--AWARDS--SMALL BUSINESS CONCERNS--SET-ASIDES--WITHDRAWAL--BID PRICES EXCESSIVE WHERE ONLY BIDS REMAINING FOR CONSIDERATION UNDER FORMALLY ADVERTISED SMALL BUSINESS RESTRICTED GENERAL SERVICES ADMINISTRATION SOLICITATION FOR MARKERS ARE ADMINISTRATIVELY DETERMINED TO BE UNREASONABLY PRICED, VOLUNTARY REDUCTION IN PRICE OF LOWEST OF SUCH OFFERS AFTER BID OPENING, BRINGING OFFER WITHIN REASONABLE PRICE RANGE, MAY NOT BE ACCEPTED AS MODIFIED OFFER SINCE OFFER AS ORIGINALLY SUBMITTED WAS UNACCEPTABLE, AND SUBSEQUENT RESUBMISSION WOULD NOT BE ONE MADE BY "OTHERWISE SUCCESSFUL" OFFEROR WITHIN MEANING OF FEDERAL PROCUREMENT REGULATIONS 1-7.101.35. FURTHER, IT IS IMMATERIAL PRICE REDUCTION OFFER ORIGINATED PRIOR TO OFFEROR'S KNOWLEDGE THAT ORIGINAL PRICE WAS CONSIDERED UNREASONABLE. SEE COMP. GEN. DECS. CITED.

TO ZIP MARK, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR PROTEST AGAINST THE CANCELLATION OF THE TOTAL SMALL BUSINESS SET-ASIDE SEGMENT UNDER INVITATION FOR BIDS NO. FPNSO -E6-0699A, ISSUED BY THE GENERAL SERVICES ADMINISTRATION, PROCUREMENT OPERATIONS DIVISION, FEDERAL SUPPLY SERVICE, NEW YORK, NEW YORK.

THE INVITATION, ISSUED ON FEBRUARY 4, 1970, SOLICITED BIDS UNDER THE FORMAL ADVERTISING PROCEDURE FOR REQUIREMENTS CONTRACTS FOR 32 ITEMS OF FINE TIP, TUBE TYPE, MARKERS FOR THE PERIOD JULY 1, 1970, OR DATE OF AWARD, WHICHEVER IS LATER, THROUGH JUNE 30, 1971. THE ODD-NUMBERED ITEMS (THOSE IN ZONES 1 AND 3), WERE RESTRICTED UNDER A TOTAL SMALL BUSINESS SET -ASIDE FOR AWARD TO SMALL BUSINESS FIRMS ONLY. THE BALANCE OF THE ITEMS (THOSE IN ZONES 2 AND 4), WERE UNRESTRICTED.

THE EIGHT BIDS RECEIVED WERE OPENED ON FEBRUARY 24, 1970, AS SCHEDULED. YOUR FIRM SUBMITTED THE SECOND LOW BID FOR ALL ITEMS ON THE SMALL BUSINESS SET-ASIDE, AS WELL AS THOSE ON THE UNRESTRICTED PART OF THE SOLICITATION. HOWEVER, WHEN IT WAS DETERMINED THAT THE LOW BIDDER DID NOT QUALIFY AS A SMALL BUSINESS FOR THE RESTRICTED PROCUREMENT AND, IN ADDITION, WAS DETERMINED TO BE NONRESPONSIBLE, YOUR FIRM BECAME THE LOW BIDDER FOR BOTH PORTIONS. YOUR BID WAS $0.58 PER DOZEN ON ALL ITEMS OF THE UNRESTRICTED PORTION, AND $0.64 ON ALL ITEMS OF THE RESTRICTED PORTION.

YOU STATE THAT ON APRIL 16TH YOU BECAME APPREHENSIVE SINCE NO AWARD HAD BEEN MADE AND DECIDED TO MAKE A VOLUNTARY PRICE REDUCTION UNDER THE RESTRICTED PORTION FROM $0.64 PER DOZEN TO $0.58 PER DOZEN--THE SAME PRICE AS YOU BID ON THE UNRESTRICTED PORTION; THAT YOU TELEPHONED THE CONTRACTING AGENCY TO ADVISE THEM OF THE REDUCTION; AND THAT YOU WERE ADVISED THAT THEY HAD A LETTER TO GO OUT THAT DAY ADVISING YOU THAT YOU HAD BEEN AWARDED THE UNRESTRICTED PORTION AND THAT THE RESTRICTED PORTION HAD BEEN REJECTED FOR EXCESSIVE PRICES AND WOULD BE READVERTISED. YOU CONFIRMED THE VOLUNTARY PRICE REDUCTION BY TELEGRAM OF THE SAME DATE, APRIL 16, 1970.

YOU PROTEST THE CONTRACTING OFFICER'S REFUSAL TO CONSIDER YOUR VOLUNTARY PRICE REDUCTION ON THE RESTRICTED PORTION ALTHOUGH IT IS STATED THAT THE OFFER WAS TIMELY AND PROPERLY SUBMITTED IN ACCORDANCE WITH FEDERAL PROCUREMENT REGULATIONS 1-7.101.35, "LATE OFFERS AND MODIFICATIONS OR WITHDRAWALS."

PARAGRAPH 8(A) OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS, AS WELL AS FPR 1-7.101.35, PROVIDES THAT "A MODIFICATION OF AN OFFER WHICH MAKES THE TERMS OF AN OTHERWISE SUCCESSFUL OFFER MORE FAVORABLE TO THE GOVERNMENT WILL BE CONSIDERED AT ANY TIME IT IS RECEIVED AND MAY THEREAFTER BE ACCEPTED."

WE HAVE HELD THAT THE ABOVE-QUOTED PROVISION CONTEMPLATES MODIFICATIONS BY OFFERORS UNDER ADVERTISED SOLICITATIONS WHO ARE OTHERWISE IN LINE FOR AWARD BEFORE THE MODIFICATION IS RECEIVED, AND THAT AN OFFER DETERMINED BY THE CONTRACTING OFFICER TO BE UNREASONABLY HIGH AND THEREFORE FOR REJECTION CANNOT BE SAID TO BE THAT OF THE "OTHERWISE SUCCESSFUL" OFFEROR. B-167299, AUGUST 11, 1969, AND 45 COMP. GEN. 228 (1965).

IN LINE WITH SUCH DECISIONS, IT IS OUR VIEW THAT WHERE THE ONLY BIDS REMAINING FOR CONSIDERATION UNDER A FORMALLY ADVERTISED SMALL BUSINESS RESTRICTED SOLICITATION ARE ADMINISTRATIVELY DETERMINED TO BE UNREASONABLY PRICED, A VOLUNTARY REDUCTION IN THE PRICE OF THE LOWEST OF SUCH OFFERS WHICH WOULD BRING THE OFFER WITHIN A REASONABLE PRICE RANGE MAY NOT BE ACCEPTED, SINCE THE OFFER AS ORIGINALLY SUBMITTED WAS NOT ACCEPTABLE. FURTHER, IT IS IMMATERIAL THAT THE PRICE REDUCTION OFFER ORIGINATED WITH THE OFFEROR PRIOR TO THE TIME THAT HE WAS AWARE THAT HIS ORIGINAL PRICE WAS DETERMINED TO BE UNREASONABLE. ACCORDINGLY, WE FIND NO LEGAL BASIS TO OBJECT TO THE ADMINISTRATIVE ACTION TAKEN AND, THEREFORE, YOUR PROTEST MUST BE DENIED.