B-176263, AUG 29, 1972

B-176263: Aug 29, 1972

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

PROTESTANT'S CONTENTIONS REGARDING THE NONRESPONSIVENESS OF THE LAMETTI BID ARE MOOT AS ALL BIDS WERE PROPERLY REJECTED. THE IFB WAS PROPERLY CANCELLED. SIMMONS & TURTLE: REFERENCE IS MADE TO YOUR TELEFAX DATED JUNE 16. THREE BIDS WERE RECEIVED AND OPENED ON JUNE 8. THE GOVERNMENT'S ESTIMATES AND THE BID PRICES FOR THE SCHEDULES WERE AS FOLLOWS: SCHEDULE NO. 1 SCHEDULE NO. 2 GOVERNMENT ESTIMATE $589. SINCE IT CANNOT BE AFFIRMATIVELY SHOWN THAT THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER FOR EACH SCHEDULE IS UNREASONABLY HIGH. YOU CLAIM THAT THE GOVERNMENT'S ESTIMATE WAS ARTIFICIALLY AND UNREALISTICALLY LOW AND THAT IN REALITY THE THREE BIDS RECEIVED WERE TRUE APPROXIMATIONS OF THE PROJECT'S COST.

B-176263, AUG 29, 1972

BID PROTEST - MOOTNESS - LACK OF AVAILABLE FUNDS DENIAL OF PROTEST ON BEHALF OF SORNSIN CONSTRUCTION COMPANY AGAINST ANY AWARD OF A CONTRACT TO LAMETTI & SONS, INC., AND THE PROPOSED REJECTION OF ALL BIDS UNDER AN IFB ISSUED BY THE BUREAU OF RECLAMATION, U.S. DEPARTMENT OF THE INTERIOR. PROTESTANT'S CONTENTIONS REGARDING THE NONRESPONSIVENESS OF THE LAMETTI BID ARE MOOT AS ALL BIDS WERE PROPERLY REJECTED. THE AGGREGATE TOTAL OF THE BIDS RECEIVED EXCEEDED THE FUNDING LIMITATION IMPOSED UNDER THE REPAYMENT CONTRACT BETWEEN THE UNITED STATES, THE CITY OF MINOT, N.D., AND THE GARRISON CONSERVANCY DISTRICT. THEREFORE, THE IFB WAS PROPERLY CANCELLED. SEE B-170765, NOVEMBER 24, 1970.

TO VOM BAUR, COBURN, SIMMONS & TURTLE:

REFERENCE IS MADE TO YOUR TELEFAX DATED JUNE 16, 1972, AND TO YOUR LETTER DATED JUNE 22, 1972, PROTESTING, ON BEHALF OF SORNSIN CONSTRUCTION COMPANY, ANY AWARD OF A CONTRACT TO LAMETTI & SONS, INC., AND THE PROPOSED REJECTION OF ALL BIDS UNDER INVITATION FOR BIDS (IFB) NO. DC-6954, ISSUED BY THE BUREAU OF RECLAMATION, U.S. DEPARTMENT OF THE INTERIOR.

THE BUREAU OF RECLAMATION SOLICITED BIDS FOR THE "MINOT EXTENSION, MINOT AND SUNDRE PIPELINES, GARRISON DIVERSION UNIT, NORTH DAKOTA" TO AUGMENT THE MUNICIPAL WATER SUPPLY OF MINOT, NORTH DAKOTA, WHICH HAD BEEN EXPERIENCING A WATER SHORTAGE. THE INVITATION REQUIRED BIDS ON 69 SEPARATE ITEMS OF WORK SET FORTH ON TWO BIDDING SCHEDULES (SCHEDULES NO. 1 AND NO. 2). SCHEDULE NO. 1 REQUIRED CONSTRUCTION OF THE SUNDRE PIPELINE, AND SCHEDULE NO. 2 REQUIRED CONSTRUCTION OF THE MINOT PIPELINE. BIDS COULD BE SUBMITTED ON EITHER OR BOTH OF THE SCHEDULES. THREE BIDS WERE RECEIVED AND OPENED ON JUNE 8, 1972. THE GOVERNMENT'S ESTIMATES AND THE BID PRICES FOR THE SCHEDULES WERE AS FOLLOWS:

SCHEDULE NO. 1 SCHEDULE NO. 2

GOVERNMENT ESTIMATE $589,200.00 $1,701.410.00

LAMETTI & SONS, INC. - 2,434,400.00

KEMPER CONSTRUCTION CO. 697,526.75 2,622,698.50

SORNSIN CONSTRUCTION CO. 824,716.50 2,555,303.50

YOU CONTEND THAT THE APPARENT LOW BIDDER ON SCHEDULE NO. 2, LAMETTI & SONS, INC., FAILED TO SUBMIT UNIT OR EXTENDED PRICES FOR THE INDIVIDUAL ITEMS OF THAT SCHEDULE, AND THEREFORE ITS BID MUST BE REJECTED AS NON RESPONSIVE TO THE TERMS OF THE INVITATION. IN ADDITION, YOU CONTEND THAT THE RESPONSIVE BIDS SHOULD NOT BE REJECTED, AND THE PROJECT READVERTISED, SINCE IT CANNOT BE AFFIRMATIVELY SHOWN THAT THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER FOR EACH SCHEDULE IS UNREASONABLY HIGH. IN THIS REGARD, YOU CLAIM THAT THE GOVERNMENT'S ESTIMATE WAS ARTIFICIALLY AND UNREALISTICALLY LOW AND THAT IN REALITY THE THREE BIDS RECEIVED WERE TRUE APPROXIMATIONS OF THE PROJECT'S COST. ACCORDINGLY, YOU CONTEND THAT THE RESPONSIVE BIDS SHOULD NOT BE REJECTED AND AWARD SHOULD BE MADE TO SORNSIN CONSTRUCTION COMPANY, THE RESPONSIVE AND RESPONSIBLE LOW BIDDER, UNDER SCHEDULE NO. 2 OF THE INVITATION.

ALTHOUGH THE DEPARTMENT OF THE INTERIOR CONCURS WITH YOUR CONTENTION THAT THE BID OF LAMETTI & SONS, INC., IS NONRESPONSIVE FOR FAILING TO SHOW ANY UNIT OR EXTENDED PRICES FOR THE INDIVIDUAL ITEMS OF SCHEDULE NO. 2, WE CONSIDER THE QUESTION TO BE ACADEMIC BECAUSE OF OUR CONCLUSION THAT THE REJECTION OF ALL BIDS RECEIVED IS AUTHORIZED FOR THE FOLLOWING REASONS.

FEDERAL PROCUREMENT REGULATIONS 1-2.404-1(A) PROVIDES, IN PERTINENT PART:

"(A) PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM DICTATES THAT, AFTER BIDS HAVE BEEN OPENED, AWARD MUST BE MADE TO THAT RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID, UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION. ***"

OUR OFFICE RECOGNIZES THAT CANCELLATION OF AN IFB AFTER BID OPENING IS PREJUDICIAL TO THE LOW RESPONSIVE AND RESPONSIBLE BIDDER AND THEREFORE COGENT OR COMPELLING REASONS ARE NECESSARY TO JUSTIFY SUCH A CANCELLATION. SEE 39 COMP. GEN. 396 (1959). HOWEVER, WE HAVE HELD THAT AN IFB COULD PROPERLY BE CANCELLED AFTER BID OPENING IF SUFFICIENT FUNDS FOR THE PROCUREMENT WERE NOT AVAILABLE. SEE B-170765, NOVEMBER 24, 1970, AND B-157419, OCTOBER 18, 1965. IN 48 COMP. GEN. 471, 473 474 (1969), WE SIMILARLY HELD:

"UNDER THE AUTHORITY OF 10 U.S.C. 2305(C), ALL BIDS MAY BE REJECTED IF THE HEAD OF THE AGENCY DETERMINES THAT REJECTION IS IN THE PUBLIC INTEREST, AND UNDER 10 U.S.C. 2311 THE AUTHORITY TO MAKE SUCH A DETERMINATION MAY BE DELEGATED TO ANY OTHER OFFICER OR OFFICIAL OF THAT AGENCY. PURSUANT TO THE FOREGOING, THE PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-404.1(B)(VIII) HAVE DELEGATED TO THE CONTRACTING OFFICER THE AUTHORITY TO CANCEL AN INVITATION WHERE SUCH ACTION IS DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT. IN THE INSTANT CASE IT WOULD APPEAR NOT ONLY THAT THE INTEREST OF THE GOVERNMENT REQUIRED CANCELLATION OF THE SUBJECT IFB, BUT ALSO THAT THE CONTRACTING OFFICER WOULD HAVE EXCEEDED HIS AUTHORITY IF HE HAD ACCEPTED YOUR BID, SINCE INSUFFICIENT FUNDS WERE AVAILABLE TO PURCHASE THE SYSTEM ON THE BASIS OF YOUR BID PRICE. B-158991, JULY 12, 1966. IT SHOULD BE POINTED OUT, MOREOVER, THAT THE COURTS HAVE HELD THAT A REQUEST FOR BIDS BY THE GOVERNMENT DOES NOT IMPORT ANY OBLIGATION TO ACCEPT ANY OF THE OFFERS RECEIVED, INCLUDING THE LOWEST RESPONSIVE BID. O'BRIEN V. CARNEY, 6 F. SUPP. 761. UNDER THE CIRCUMSTANCES WE CANNOT CONSIDER THE DECISION TO CANCEL THE SUBJECT IFB AS IMPROPER."

THE DEPARTMENT REPORTS THAT PURSUANT TO 43 U.S.C. 485H THE SUBJECT CONSTRUCTION IS TO BE FUNDED THROUGH A REPAYMENT CONTRACT BETWEEN THE UNITED STATES, THE CITY OF MINOT, NORTH DAKOTA, AND THE GARRISON CONSERVANCY DISTRICT (SIGNED JANUARY 26, 1972). WE ARE FURTHER ADVISED THAT THE BUREAU OF RECLAMATION IS PRECLUDED BY THE AGREEMENT FROM AWARDING A CONTRACT FOR THE CONSTRUCTION EFFORT IN EXCESS OF $2,080,000 FOR BOTH SCHEDULES. IN ADDITION, THE DEPARTMENT REPORTS THAT THE CITY OF MINOT IS NOT DESIROUS OF COMMITTING ANY ADDITIONAL FUNDS FOR REPAYMENT. THE DEPARTMENT ADVISES THAT THE DESIGN SPECIFICATIONS ARE THEREFORE BEING REVIEWED FOR MODIFICATION WHICH, TOGETHER WITH A LONGER CONSTRUCTION PERIOD, WILL HOPEFULLY REDUCE CONSTRUCTION COSTS TO WITHIN THE FUNDING LIMITATION SET BY THE CITY OF MINOT.

SINCE ADEQUATE FUNDS ARE NOT AVAILABLE FOR UNDERTAKING THE PROJECT ON THE BASIS OF ANY OF THE BIDS RECEIVED, WE ARE OF THE VIEW THAT COGENT REASONS EXIST FOR THE REJECTION OF ALL BIDS AND CANCELLATION OF THE IFB. ACCORDINGLY, YOUR PROTEST IS DENIED.