B-182817, MAY 13, 1975

B-182817, MAY 13, 1975

PROTESTER'S CONTENTION THAT IT SHOULD NOT BE BOUND BY AWARD OF TIMBER SALE CONTRACT IS NOT SUSTAINED WHERE EVIDENCE DOES NOT SUPPORT CONTENTIONS THAT ONLY OTHER BIDDER WAS UNQUALIFIED, THAT APPRAISAL VALUE OF TIMBER WAS NOT VALID, THAT HELICOPTER LOGGING WAS NOT REQUIRED, AND THAT OTHER BIDDER ENGAGED IN COLLUSIVE AND RESTRICTIVE BIDDING PRACTICES.

SAN JUAN LUMBER COMPANY:

THIS DECISION IS IN RESPONSE TO CORRESPONDENCE FROM THE SAN JUAN LUMBER COMPANY, INCORPORATED (SAN JUAN), PROTESTING THE AWARD BY THE UNITED STATES DEPARTMENT OF AGRICULTURE (USDA) OF BEAR GULCH TIMBER SALE CONTRACT NO. 01901-4, CONDUCTED BY OFFICIALS OF THE MALHEUR NATIONAL FOREST IN JOHN DAY, OREGON. THE BASIS FOR SAN JUAN'S PROTEST IS THAT EVERGREEN HELICOPTERS, INCORPORATED (EVERGREEN), THE OTHER BIDDER ON THE TIMBER SALE, WAS IMPROPERLY ALLOWED TO BID. ALTHOUGH SAN JUAN WAS THE SUCCESSFUL BIDDER, IT APPARENTLY FEELS THAT THE FACT OF EVERGREEN'S COMPETITION UNFAIRLY INCREASED THE PRICE AT WHICH THE SALE CONTRACT WAS AWARDED. FURTHER CONTENDS THAT THE PROCURING ACTIVITY'S APPRAISAL OF TIMBER VALUE AND ITS DETERMINATION TO REQUIRE HELICOPTER LOGGING WERE MADE WITHOUT A SUFFICIENT BASIS. IN ADDITION, SAN JUAN HAS ALLEGED THAT THERE WAS AN ATTEMPT AT COLLUSIVE BIDDING AND RESTRICTION OF COMPETITION ON THE PART OF EVERGREEN.

ON AUGUST 29, 1974, THE SALE OFFERING OF AN ESTIMATED 11,500 BOARD FEET OF DESIGNATED TIMBER AND 449 ACRES OF ALL SPECIES LOGS WAS ADVERTISED AND OFFERED UNDER FOREST SERVICE AUCTION BIDDING PROCEDURES, WHICH PROVIDED FOR BID OPENING ON SEPTEMBER 30, 1974, FOLLOWED IMMEDIATELY BY ORAL BIDDING. A TIMBER SALE PROSPECTUS WAS SENT TO ALL PROSPECTIVE PURCHASERS INFORMING THEM OF SOME OF THE CONDITIONS OF THE SALE AND STATING THAT 1,139 ACRES WOULD BE HELICOPTER LOGGED. THE CONTRACT AWARD WHICH IS THE SUBJECT OF THIS PROTEST OCCURRED ON SEPTEMBER 30, 1974.

THE PROTESTER'S ARGUMENT CONCERNING EVERGREEN'S LACK OF QUALIFICATION IS APPARENTLY BASED UPON THE FACT THAT EVERGREEN HAS NO LOG PROCESSING FACILITIES IN THE SALE AREA. IT IS CONTENDED THAT THIS FACT DISQUALIFIED EVERGREEN AS AN AWARD TO IT WOULD HAVE VIOLATED THE FOLLOWING PROVISIONS OF 36 CODE OF FEDERAL REGULATIONS (C.F.R.) SEC. 221.10 (1973 ED.):

"(A)(5) MONOPOLY, INJURIOUS TO THE PUBLIC WELFARE, WOULD RESULT FROM THE CONTROL OF LARGE AMOUNTS OF PUBLIC OR OF PUBLIC AND PRIVATE TIMBER.

"(A)(6) THE AWARD WOULD RESULT IN REMOVING OR MATERIALLY LESSENING OPPORTUNITIES FOR GAINFUL EMPLOYMENT TO LOCAL LABOR; OR WOULD BE AGAINST THE INTERESTS OF LOCAL USERS DEPENDENT UPON NATIONAL FOREST TIMBER; OR WOULD CAUSE THE ABONDONMENT OR PREVENT THE ESTABLISHMENT OF A LOCAL INDUSTRY WHICH COULD FURNISH A DESIRABLE PERMANENT MARKET FOR NATIONAL FOREST PRODUCTS.

"(B) ANY BIDDER OR APPLICANT FOR A SALE MAY BE REQUIRED TO FURNISH A STATEMENT OF HIS RELATION TO OTHER BIDDERS OR OPERATORS ***."

WHILE IT IS TRUE THAT AN AFFIRMATIVE FINDING WITH RESPECT TO THE FOREGOING PROVISIONS COULD PROVIDE A BASIS FOR NOT AWARDING EVERGREEN, OR ANY OTHER BIDDER, A CONTRACT HAD IT BEEN THE HIGHEST BIDDER, THERE IS NO REQUIREMENT IN THE REGULATION THAT TO QUALIFY FOR BIDDING A FIRM MUST POSSESS PROCESSING FACILITIES IN A GIVEN AREA OR THAT THE FOREST SERVICE MUST MAKE A DETERMINATION WITH RESPECT TO THE APPLICABILITY OF THE FOREGOING PROVISIONS AS A PREREQUISITE TO A FIRM BIDDING. FURTHERMORE, THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE FOREST SERVICE HAD REASON TO BELIEVE THAT EVERGREEN WAS OR MAY BE INELIGIBLE FOR AWARD UNDER THE CRITERIA OF THE REGULATION. THEREFORE, WE DO NOT AGREE THAT EVERGREEN SHOULD HAVE BEEN DISQUALIFIED ON THE BASIS OF A LACK OF FACILITIES IN THE SALE AREA.

PRIOR TO OFFERING THE TIMBER FOR SALE, THE FOREST SERVICE ISSUED AN APPRAISAL SUMMARY PURSUANT TO 36 C.F.R. SEC. 221.7 (1973). THE APPRAISAL SUMMARY, INDICATING THE FAIR MARKET VALUE OF THE TIMBER, WAS AVAILABLE FOR REVIEW BY PROSPECTIVE BIDDERS AT THE TIME OF ADVERTISEMENT. WHILE SAN JUAN OBJECTED TO THE APPRAISAL PRIOR TO BID OPENING AND HAS ALSO MADE THE SAME OBJECTION TO OUR OFFICE, IT HAS NOT SUBMITTED ANY EVIDENCE TO ESTABLISH THE INVALIDITY OF THE APPRAISAL. IN VIEW THEREOF, AND CONSIDERING THE AUTHORITY, DISCRETION AND EXPERTISE OF THE FOREST SERVICE OFFICIALS, OUR OFFICE HAS NO BASIS FOR SUSTAINING THIS ASPECT OF THE PROTEST.

WITH REGARD TO THE CONTENTION THAT THE FOREST SERVICE UNNECESSARILY REQUIRED HELICOPTER LOGGING, VARIOUS DECISIONS OF THIS OFFICE HAVE STATED THE PRINCIPLE THAT THE DRAFTING OF SPECIFICATIONS TO REFLECT THE NEEDS OF THE GOVERNMENT AND THE DETERMINATION AS TO WHETHER THOSE NEEDS CAN BE MET BY A GIVEN BIDDER ARE PRIMARILY WITHIN THE JURISDICTION OF THE PROCURING AGENCY. 38 COMP. GEN. 190 (1958); 39 COMP. GEN. 570 (1960). THUS, THE FOREST SERVICE'S DETERMINATION THAT HELICOPTER LOGGING WAS NECESSARY WOULD BE QUESTIONED BY THIS OFFICE ONLY IF IT CLEARLY APPEARED THAT THE DETERMINATION WAS NOT MADE IN GOOD FAITH OR NOT SUPPORTED BY ANY SUBSTANTIAL GROUNDS. SINCE THE CONTRACTING OFFICIALS HAVE INDICATED THAT THE REQUIREMENT FOR HELICOPTER LOGGING WAS BASED ON THE LATEST FIGURES AND PROCEDURES AVAILABLE, AND THE PROTESTER HAS NOT PROVIDED ANY CONTROVERTING EVIDENCE, WE WILL NOT QUESTION THE FOREST SERVICE'S DETERMINATION.

FINALLY, SAN JUAN PROTESTED TO THE FOREST SERVICE BOTH BEFORE AND AFTER BID OPENING THAT EVERGREEN HAD ENGAGED IN ATTEMPTS TO RESTRICT BIDDING. IN THIS CONNECTION, THE PROTESTER ALLEGES THAT PRIOR TO BID OPENING AN EVERGREEN OFFICIAL STATED THAT UNLESS EVERGREEN WAS CHOSEN TO DO THE HELICOPTER LOGGING "THEY WOULD BID ON THE TIMBER TO PREVENT US FROM GETTING IT OR TO MAKE THE COSTS PROHIBITIVE." IN ADDITION, SAN JUAN INDICATED EVERGREEN'S POSSIBLE COLLUSION WITH FOREST SERVICE PERSONNEL.

WITH REGARD TO THESE CHARGES, THE FOREST SERVICE REPORTS THAT SINCE IT WAS NOT PRIVY TO ANY CONVERSATIONS BETWEEN THE PARTIES, EVERGREEN CERTIFIED IN ITS BID THAT "NO ATTEMPT HAS *** OR WILL BE MADE *** TO INDUCE ANY ***FIRM TO SUBMIT OR NOT SUBMIT A BID ***," AND NO EVIDENCE OF COLLUSION WAS PRESENTED, IT TOOK NO ACTION WITH RESPECT TO EVERGREEN'S PARTICIPATION IN THE BIDDING. HOWEVER, THE MATTER WAS REFERRED TO THE DEPARTMENT OF JUSTICE AND IS REPORTEDLY UNDER CONSIDERATION THERE. THESE CIRCUMSTANCES, WE DO NOT BELIEVE THAT OUR OFFICE WOULD BE JUSTIFIED IN CONCLUDING THAT EVERGREEN WAS IMPROPERLY PERMITTED TO PARTICIPATE IN THE SALE.

ACCORDINGLY, WE SEE NO PROPER BASIS UPON WHICH TO QUESTION THE VALIDITY OF THE CONTRACT AT THE PRICE AWARDED TO SAN JUAN, AND THE PROTEST MUST THEREFORE BE DENIED.