B-176737, MAR 2, 1973

B-176737: Mar 2, 1973

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THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PROCEDURES INVOLVED HERE ARE NOT REQUIRED BY LAW OR REGULATION AND THEY MERELY REFLECT AGENCY POLICY. ADHERENCE TO THESE POLICIES IS PRIMARILY THE CONCERN OF THE AGENCY HEAD AND GAO HAS NO AUTHORITY TO REQUIRE ADHERENCE OR TO HOLD INVALID CONTRACTS AWARDED IN VIOLATION THEREOF. INC.: THIS IS IN REPLY TO YOUR LETTER OF JANUARY 29. 13 PROPOSALS WERE RECEIVED FROM EIGHT DEVELOPERS. THE FIVE LOWEST PROPOSALS WERE AS FOLLOWS: RAYMOND CONSTRUCTION CO. YOU QUESTIONED WHETHER THE ACTIONS OF WHA AND HUD IN SELECTING OTHER THAN THE LOWEST PRICED PROPOSAL WERE JUSTIFIED PROPERLY AND WHETHER THE PROPOSALS ARE SUBJECT TO PUBLIC INSPECTION. YOU QUESTIONED WHETHER HUD CONSIDERED THE FLOOD HAZARD IN THE AREA WHERE THE SITE OF THE D/M PROPOSAL IS LOCATED.

B-176737, MAR 2, 1973

BID PROTEST - VIOLATION OF AGENCY POLICIES - LIMITS ON GAO AUTHORITY DENIAL OF PROTEST BY RAYMOND CONSTRUCTION COMPANY, INC., AGAINST THE AWARD OF A CONTRACT TO D'AMBRA/MERANDI OF A TURNKEY ELDERLY HOUSING PROJECT IN WARREN, R.I. THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PROCEDURES INVOLVED HERE ARE NOT REQUIRED BY LAW OR REGULATION AND THEY MERELY REFLECT AGENCY POLICY. ADHERENCE TO THESE POLICIES IS PRIMARILY THE CONCERN OF THE AGENCY HEAD AND GAO HAS NO AUTHORITY TO REQUIRE ADHERENCE OR TO HOLD INVALID CONTRACTS AWARDED IN VIOLATION THEREOF. B-167244, DECEMBER 4, 1969.

TO RAYMOND CONSTRUCTION CO., INC.:

THIS IS IN REPLY TO YOUR LETTER OF JANUARY 29, 1973, AND EARLIER CORRESPONDENCE, PROTESTING AGAINST AWARD TO D'AMBRA/MERANDI OF TURNKEY ELDERLY HOUSING PROJECT RI 22-1 IN WARREN, RHODE ISLAND.

IN RESPONSE TO AN ADVERTISEMENT BY THE WARREN HOUSING AUTHORITY (WHA), 13 PROPOSALS WERE RECEIVED FROM EIGHT DEVELOPERS. THE FIVE LOWEST PROPOSALS WERE AS FOLLOWS:

RAYMOND CONSTRUCTION CO., INC.

PROPOSAL "A" $1,459,000

PROPOSAL "B" 1,512,000

PROPOSAL "C" 1,509,000

PROPOSAL "D" 1,541,986

D'AMBRA-MERANDI 1,600,150

YOUR FIRM SUBMITTED ONE DESIGN ON FOUR DIFFERENT SITES, THUS RESULTING IN FOUR PROPOSALS. THE WHA MADE A TENTATIVE SELECTION OF THE FIFTH LOW PROPOSAL OF D'AMBRA/MERANDI (D/M) AND THIS SELECTION HAS NOW BEEN APPROVED BY THE BOSTON AREA AND REGIONAL OFFICES OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD).

YOUR PROTEST QUESTIONED WHETHER WHA AND HUD COMPLIED WITH THE HUD EVALUATION AND SELECTION OF PROPOSALS PROCEDURE GOVERNING THE TURNKEY METHOD OF PROCUREMENT OF HOUSING AS SET FORTH IN THE LOW-RENT HOUSING TURNKEY HANDBOOK (RHA 7420.1, MAY 1970). YOU QUESTIONED WHETHER THE ACTIONS OF WHA AND HUD IN SELECTING OTHER THAN THE LOWEST PRICED PROPOSAL WERE JUSTIFIED PROPERLY AND WHETHER THE PROPOSALS ARE SUBJECT TO PUBLIC INSPECTION. YOU REQUESTED AN EXPLANATION OF THE MEANING OF "SITE CONTROL" UNDER THE HANDBOOK AS THIS ISSUE RESULTED IN THE REJECTION OF ONE OF YOUR PROPOSALS. ALSO, YOU QUESTIONED WHETHER HUD CONSIDERED THE FLOOD HAZARD IN THE AREA WHERE THE SITE OF THE D/M PROPOSAL IS LOCATED. THESE POINTS IN CONJUNCTION WITH OUR DECISION B 170447, OCTOBER 28, 1970, LEAD YOU TO THE CONCLUSION THAT HUD FAILED TO ACT PROPERLY IN THE INSTANT MATTER. APPEARS TO BE YOUR BELIEF THAT THE DECISION OF OCTOBER 28, 1970, REQUIRES THAT HUD AWARD THE PROJECT TO THE LOW BIDDER.

IN THE REFERENCED DECISION, OUR OFFICE CONSIDERED THE PROTEST OF THE FIFTH LOW BIDDER UNDER A TURNKEY PROJECT WHO HAD BEEN SELECTED BY THE LOCAL HOUSING AUTHORITY BUT REJECTED BY THE REGIONAL OFFICE OF HUD, WHICH DIRECTED THAT AWARD BE MADE TO THE LOW BIDDER. IN THAT DECISION, WE HELD:

SINCE THIS IS A MATTER OF JUDGMENT, WE WILL NOT SUBSTITUTE OUR JUDGMENT OR QUESTION THE REGIONAL OFFICE'S JUDGMENT IN THE ABSENCE OF FRAUD, BAD FAITH, CAPRICIOUSNESS OR ABUSE OF AUTHORITY BY THE CHICAGO REGIONAL OFFICE. ***

THUS, THE DECISION DID NOT TURN ON THE FACT THAT THE BID WAS LOW, BUT RATHER UPON THE FACT THAT THE APPROVAL WAS A MATTER OF JUDGMENT FOR THE HUD REGIONAL OFFICE. AS INDICATED ABOVE, THE SELECTION OF WHA IN THIS CASE WAS APPROVED BY BOTH THE HUD AREA AND REGIONAL OFFICES.

AS STATED PREVIOUSLY, YOUR PROTEST INVOLVES COMPLIANCE WITH THE HUD EVALUATION AND SELECTION OF PROPOSALS PROCEDURE CONCERNING TURNKEY DEVELOPMENTS. THIS OFFICE HAS FURNISHED YOU A COPY OF THE HUD REPORT REGARDING ITS COMPLIANCE WITH THE PROCEDURES. SUCH HUD PROCEDURES ARE NOT REQUIRED BY LAW OR REGULATION AND THEY MERELY REFLECT AN AGENCY POLICY. ADHERENCE TO OR DEPARTURE FROM AGENCY POLICIES OF THIS NATURE IS PRIMARILY THE CONCERN OF THE HEAD OF THE AGENCY AND THE GENERAL ACCOUNTING OFFICE HAS NO AUTHORITY TO REQUIRE ADHERENCE TO AGENCY POLICIES IN SPECIFIC PROCUREMENTS OR TO HOLD INVALID CONTRACTS WHICH MAY HAVE BEEN AWARDED IN DEROGATION OF SUCH POLICIES. B-167244, DECEMBER 4, 1969, COPY ENCLOSED.

ACCORDINGLY, WE FIND NO BASIS UPON WHICH TO INTERPOSE A LEGAL OBJECTION TO THE ACTIONS OF THE WHA OR HUD. THE PROTEST THEREFORE IS DENIED.