B-170898, JAN 11, 1971

B-170898: Jan 11, 1971

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SUFFICIENT FUNDS FOR ENTIRE PROJECT WERE NOT AVAILABLE. A DETERMINATION AFTER BID OPENING FOR A CONSTRUCTION PROJECT THAT SUFFICIENT FUNDS WERE NOT AVAILABLE FOR AWARD TO LOW COMBINATION BIDDER AND THAT AWARD SHOULD BE MADE TO LOW BIDDER FOR PORTION OF PROJECT IS NOT SUBJECT TO OBJECTION. LETTER TO SECRETARY OF THE ARMY SUGGESTING THAT MORE TIMELY DETERMINATION OF THE UNAVAILABILITY OF FUNDS SHOULD BE MADE SO THAT BIDDERS COULD HAVE BEEN APPRISED OF DETERMINATION BEFORE BID OPENING AND THUS BE AFFORDED AN OPPORTUNITY TO BID ON WORK CONTEMPLATED. INC.: THIS IS IN REPLY TO YOUR TELEGRAM OF OCTOBER 9. WHICH IS REQUIRED IN CONNECTION WITH THE LIBBY DAM PROJECT. WHICHEVER WAS IN THE BEST INTEREST OF THE GOVERNMENT.

B-170898, JAN 11, 1971

BID PROTEST - AGGREGATE OR SEPARATE AWARDS - FUNDS AVAILABILITY DENIAL OF PROTEST OF LOW BIDDER FOR ENTIRE PROJECT FOR RELOCATION OF A HIGHWAY FOR LIBBY DAM PROJECT AGAINST AWARD TO LOW BIDDER ON ONLY PORTION OF WORK BECAUSE, AFTER BID OPENING, SUFFICIENT FUNDS FOR ENTIRE PROJECT WERE NOT AVAILABLE. A DETERMINATION AFTER BID OPENING FOR A CONSTRUCTION PROJECT THAT SUFFICIENT FUNDS WERE NOT AVAILABLE FOR AWARD TO LOW COMBINATION BIDDER AND THAT AWARD SHOULD BE MADE TO LOW BIDDER FOR PORTION OF PROJECT IS NOT SUBJECT TO OBJECTION. SINCE RECORD SUPPORTS DETERMINATION THAT AVAILABLE FUNDS SHOULD BE ALLOCATED FIRST TO RELOCATION AND THAT REMAINING FUNDS SHOULD BE ALLOCATED TO PORTION OF WORK. LETTER TO SECRETARY OF THE ARMY SUGGESTING THAT MORE TIMELY DETERMINATION OF THE UNAVAILABILITY OF FUNDS SHOULD BE MADE SO THAT BIDDERS COULD HAVE BEEN APPRISED OF DETERMINATION BEFORE BID OPENING AND THUS BE AFFORDED AN OPPORTUNITY TO BID ON WORK CONTEMPLATED.

TO GOODFELLOW BROS., INC.:

THIS IS IN REPLY TO YOUR TELEGRAM OF OCTOBER 9, 1970, AND LETTERS OF OCTOBER 12 AND DECEMBER 3, 1970, PROTESTING AGAINST AWARD OF A CONTRACT ON ANY BASIS OTHER THAN THE TOTAL PROJECT UNDER U.S. ARMY CORPS OF ENGINEERS (CORPS) INVITATION FOR BIDS NO. DACW67-71-B-0001.

THE SUBJECT PROCUREMENT INVOLVES CONSTRUCTION SERVICES FOR THE RELOCATION OF UNIT 3B OF MONTANA STATE HIGHWAY 37, WHICH IS REQUIRED IN CONNECTION WITH THE LIBBY DAM PROJECT, MONTANA. THE INVITATION DIVIDED THE GOVERNMENT'S TOTAL REQUIREMENTS FOR BIDDING PURPOSES INTO SCHEDULES A AND B, AND ALSO PERMITTED BIDS UNDER SCHEDULE C FOR THE COMBINED TOTAL WORK SPECIFIED IN A AND B. THE INVITATION PROVIDED THAT THE WORK WOULD BE AWARDED TO SEPARATE BIDDERS ON SCHEDULE A OR B, OR AS A WHOLE TO ONE BIDDER ON SCHEDULE C, WHICHEVER WAS IN THE BEST INTEREST OF THE GOVERNMENT.

THE ONLY BID PRICE SUBMITTED BY YOUR FIRM WAS FOR SCHEDULE C, WHICH WAS THE LOWEST PRICED BID FOR THE ENTIRE PROJECT, INCLUDING ANY COMBINATION OF ACCEPTABLE BIDS UNDER SCHEDULES A AND B. SINCE A CONTRACT WAS AWARDED TO ANOTHER BIDDER FOR SCHEDULE A WORK ONLY, YOU HAVE PROTESTED AGAINST SUCH AWARD AS NOT BEING IN THE BEST INTEREST OF THE GOVERNMENT.

THE REPORT FURNISHED BY THE CORPS TO THIS OFFICE ADVISES THAT, SUBSEQUENT TO THE OPENING OF BIDS, THE LATEST FUNDING ALLOCATIONS FURNISHED BY THE OFFICE, CHIEF OF ENGINEERS, TO THE NORTH PACIFIC DIVISION OFFICE WERE CONSIDERED AND IT WAS DETERMINED THAT ONLY SCHEDULE A SHOULD BE AWARDED AND THAT SCHEDULE B SHOULD BE DEFERRED UNTIL LATER. THE REPORT ALSO STATED THAT CURRENT OBLIGATIONS (INCLUDING CERTAIN REQUIRED SUBSTANTIAL PAYMENTS TO THE RAILROAD WHICH MUST BE RELOCATED BEFORE THE SCHEDULE A WORK CAN BE ACCOMPLISHED) HAVE EXHAUSTED A PORTION OF THE FUNDS PLANNED FOR USE ON THE SCHEDULE A AND B WORK, AND THE CONTRACTING OFFICER WAS THEREFORE UNABLE TO ACCEPT THE LOW BID ON SCHEDULE C. MOREOVER, IN ORDER TO MINIMIZE INTERFERENCE WITH THE LIBBY DAM CONTRACTOR, IT WAS DETERMINED THAT THE SCHEDULE A WORK SHOULD COMMENCE BY NOVEMBER 1, 1970, SINCE A DELAY MIGHT INHIBIT THE PLACEMENT OF CONCRETE ON THE DAM AND REQUIRE THE RELOCATION OF THE LIBBY DAM CONTRACTOR'S CONCRETE AGGREGATE CONVEYOR SYSTEM. IT IS ESTIMATED THAT SUCH A RELOCATION WOULD COST THE GOVERNMENT AN ADDITIONAL $450,000.

A COPY OF THE ADMINISTRATIVE REPORT WAS FURNISHED TO YOU, IN ACCORDANCE WITH YOUR REQUEST, AND COMMENTS THEREON WERE SUBMITTED IN YOUR LETTER DATED DECEMBER 3, 1970. YOU STATE THAT ACCORDING TO THE INVITATION FUNDS AVAILABLE FOR SCHEDULES A AND B WORK FOR FISCAL YEAR 1971 AMOUNTED TO $1,000,000 FOR EACH PORTION OF THE WORK AND YOU ARGUE THAT THE CURRENT OBLIGATIONS WHICH HAVE EXHAUSTED THE FUNDS PLANNED FOR USE ON THIS PROJECT WERE NOT UNANTICIPATED.

IN CONNECTION WITH THE INVITATION'S PROVISIONS REGARDING THE FUNDS AVAILABLE FOR PAYMENT, AMENDMENT NO. 0002, PARAGRAPH SP-100, STATED THAT FOR PLANNING PURPOSES THE CONTRACTOR COULD NOT EXPECT EARNINGS OF MORE THAN $1,000,000 UNDER EACH SCHEDULE FOR THE ENTIRE 1971 FISCAL YEAR AND THAT AFTER ENACTMENT OF THE 1971 APPROPRIATION ACT, AND IN ACCORDANCE WITH ANY LIMITATIONS THAT MIGHT BE IMPOSED BY CONGRESSIONAL OR PRESIDENTIAL ACTIONS, THE CONTRACTOR WOULD BE ADVISED IN WRITING OF THE FUNDS AVAILABLE FOR PAYMENT THROUGH FISCAL YEAR 1971. IT WAS STATED THAT UNTIL PASSAGE OF THE ACT IT WAS NECESSARY TO ALLOCATE FUNDS ON A MONTHLY BASIS AND THAT FOR THE FIRST MONTH OF THE CONTRACT AN ALLOCATION OF $50,000 FOR EACH SCHEDULE HAD BEEN MADE. ACCORDINGLY, YOUR UNDERSTANDING THAT THE INVITATION PROVIDED THAT FUNDS WERE AVAILABLE UP TO $1,000,000 FOR EACH SCHEDULE IS NOT CORRECT.

SECTION 665, TITLE 31, OF THE U.S.C. PROHIBITS EXPENDITURES OR CONTRACT OBLIGATIONS IN EXCESS OF APPROPRIATED FUNDS, OR IN EXCESS OF APPORTIONMENTS OF APPROPRIATIONS MADE TO ACHIEVE THE MOST EFFECTIVE AND ECONOMICAL USE OF APPROPRIATED FUNDS. WHERE, AS HERE, AN ADMINISTRATIVE AGENCY OF THE GOVERNMENT HAS DETERMINED THAT FUNDS ARE NOT AVAILABLE FOR CONTRACT OBLIGATION AT A PARTICULAR TIME, WE BELIEVE THAT THIS IS A SUFFICIENT REASON TO REJECT THE BIDS RECEIVED IN RESPONSE TO A SOLICITATION. IN VIEW THEREOF IT DOES NOT APPEAR THAT OUR OFFICE WOULD BE WARRANTED IN THE INSTANT CASE IN OBJECTING TO THE ADMINISTRATIVE DETERMINATION THAT THE AVAILABLE APPROPRIATED FUNDS SHOULD FIRST BE ALLOCATED TO RELOCATION OF THE RAILROAD, OR THAT THE REMAINING FUNDS SHOULD BE OBLIGATED FOR PERFORMANCE OF THE SCHEDULE A WORK.

IT IS REGRETTABLE THAT THE MATTER OF FUND UNAVAILABILITY WAS NOT ESTABLISHED PRIOR TO THE OPENING OF BIDS, AND IN THIS REGARD, WE HAVE REQUESTED THE SECRETARY OF THE ARMY TO CONSIDER ANY NECESSARY CORRECTIVE ACTION TO PRECLUDE A RECURRENCE OF THIS SITUATION IN FUTURE PROCUREMENTS.

FOR THE REASONS STATED, YOUR PROTEST MUST BE DENIED.