B-210481, DECEMBER 9, 1983, 63 COMP.GEN. 114

B-210481: Dec 9, 1983

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GENERAL ACCOUNTING OFFICE - JURISDICTION - GRANTS-IN-AID - PROTESTS NOT CONCERNING AWARD PROPRIETY - NO AUTHORITY TO CONSIDER GENERAL ACCOUNTING OFFICE WILL NOT CONSIDER A BIDDER'S COMPLAINT THAT A MUNICIPALITY. WAS IMPROPERLY MAKING A CLAIM UNDER THE BIDDER'S BID BOND WHERE THE MUNICIPALITY CONDUCTED THREE ROUNDS OF BIDDING. THE LAST OF WHICH WAS UNDER SPECIFICATIONS DIFFERING FROM THE OTHERS. WHO HAD REFUSED TO EXECUTE A CONTRACT AT A PRICE IT MAINTAINED WAS MISTAKEN AND WHICH THE CITY WOULD NOT PERMIT THE BIDDER TO CORRECT. THE PROJECT WAS FUNDED. STEELE THEREUPON INFORMED THE CITY BY LETTER DATED MARCH 24 THAT ITS TOTAL BID SHOULD HAVE BEEN $2. WHEN BIDS WERE OPENED IN MAY. RESIDENTS OF THE NEIGHBORHOOD WHERE THE POOL WAS TO BE LOCATED.

B-210481, DECEMBER 9, 1983, 63 COMP.GEN. 114

GENERAL ACCOUNTING OFFICE - JURISDICTION - GRANTS-IN-AID - PROTESTS NOT CONCERNING AWARD PROPRIETY - NO AUTHORITY TO CONSIDER GENERAL ACCOUNTING OFFICE WILL NOT CONSIDER A BIDDER'S COMPLAINT THAT A MUNICIPALITY, SEEKING TO CONSTRUCT A SWIMMING POOL PARTIALLY FUNDED BY A FEDERAL GRANT, WAS IMPROPERLY MAKING A CLAIM UNDER THE BIDDER'S BID BOND WHERE THE MUNICIPALITY CONDUCTED THREE ROUNDS OF BIDDING, THE LAST OF WHICH WAS UNDER SPECIFICATIONS DIFFERING FROM THE OTHERS, AND THEN MADE A CLAIM AGAINST THE BID BOND OF THE LOW BIDDER, UNDER THE FIRST SOLICITATION, WHO HAD REFUSED TO EXECUTE A CONTRACT AT A PRICE IT MAINTAINED WAS MISTAKEN AND WHICH THE CITY WOULD NOT PERMIT THE BIDDER TO CORRECT. SUCH A COMPLAINT DOES NOT SUFFICIENTLY CONCERN THE PROPRIETY OF THE AWARD OF A CONTRACT AS TO COME WITHIN THE PURVIEW OF GAO'S REVIEW OF GRANT COMPLAINTS.

MATTER OF: STEELE AND ASSOCIATES, INC., DECEMBER 9, 1983:

STEELE AND ASSOCIATES, INC. HAS FILED A COMPLAINT WITH OUR OFFICE AGAINST THE DECISION BY THE CITY OF GARLAND, TEXAS, TO HOLD STEELE LIABLE ON THE BID BOND IT SUBMITTED WHEN BIDDING FOR A CONTRACT TO CONSTRUCT A "SURF AND SWIM" WAVE-ACTION POOL AND ASSOCIATED FACILITIES FOR THE CITY. THE PROJECT WAS FUNDED, IN PART, BY A $705,000 GRANT FROM THE DEPARTMENT OF THE INTERIOR UNDER THE LAND AND WATER CONSERVATION ACT OF 1965, AS AMENDED. 16 U.S.C. 4601-4 TO 4601-11 (1982). WE DISMISS THE COMPLAINT.

IN RESPONSE TO ITS INITIAL JANUARY 1982 SOLICITATION, THE CITY RECEIVED EIGHT BIDS. SINCE STEELE'S BASE BID OF $1,914,100 APPEARED LOW, THE CITY NOTIFIED STEELE ON MARCH 22 THAT A $1,914,100 CONTRACT HAD BEEN APPROVED BY THE CITY COUNCIL. STEELE THEREUPON INFORMED THE CITY BY LETTER DATED MARCH 24 THAT ITS TOTAL BID SHOULD HAVE BEEN $2,028,200 (STILL $61,800 LESS THAN THE SECOND-LOW BID OF $2,090,000) AND THAT IT HAD MISTAKENLY ASSUMED THAT THE CITY WANTED LANDSCAPING AND LANDSCAPE IRRIGATION FOR THE PROJECT TO BE PRICED SEPARATELY. ACCORDINGLY, STEELE REQUESTED CORRECTION OF ITS BASE BID TO INCLUDE ITS PRICES FOR THESE ITEMS.

BY LETTER OF APRIL 7, THE CITY REJECTED STEELE'S REQUEST AND INSTEAD DECLARED STEELE IN DEFAULT FOR FAILURE TO EXECUTE THE CONTRACT; THE CITY THEN RESOLICITED. WHEN BIDS WERE OPENED IN MAY, STEELE'S BID, THIS TIME FOR $2,028,200, AGAIN APPEARED LOW. HOWEVER, RESIDENTS OF THE NEIGHBORHOOD WHERE THE POOL WAS TO BE LOCATED, CONCERNED ABOUT THE CONGESTION IT WOULD CREATE AND QUESTIONING THE NEED FOR SUCH A POOL SINCE A SIMILAR, COMMERCIALLY OWNED WAVE-ACTION POOL WAS TO BE BUILT NEARBY, OBJECTED TO ITS CONSTRUCTION. IN RESPONSE TO THESE OBJECTIONS, THE CITY COUNCIL CANCELED THE SOLICITATION WITHOUT MAKING AN AWARD. AFTER VOTERS LATER APPROVED THE PROJECT IN A REFERENDUM, THE CITY SOLICITED BIDS FOR A THIRD TIME, ALTHOUGH WITH DIFFERENT SPECIFICATIONS THAN IN THE INITIAL SOLICITATION. STEELE SUBMITTED A BID FOR $2,078,200, BUT AWARD WAS MADE INSTEAD TO HANNAH CONSTRUCTION COMPANY, INC., ON ITS LOW BID OF $2,012,000.

THE CITY THEN DEMANDED PAYMENT FROM STEELE OF $38,700, THE APPARENT ADDITIONAL COST OF THE AWARD TO HANNAH, /1/ AND ATTEMPTED TO COLLECT ON THE BID BOND IN THE ABSENCE OF PAYMENT FROM STEELE. STEELE SUBSEQUENTLY FILED THIS COMPLAINT WITH OUR OFFICE, ARGUING THAT IT WOULD BE UNCONSCIONABLE FOR THE CITY TO HOLD IT LIABLE ON THE BID BOND.

WE CONSIDER GRANT COMPLAINTS PURSUANT TO OUR PUBLIC NOTICE ENTITLED "REVIEW OF COMPLAINTS CONCERNING CONTRACTS UNDER FEDERAL GRANTS," 40 FED.REG. 42406, SEPTEMBER 12, 1975, WHEREIN WE STATED THAT WE WOULD UNDERTAKE REVIEWS CONCERNING THE PROPRIETY OF CONTRACT AWARDS MADE BY GRANTEES. IN ITS COMPLAINT, HOWEVER, STEELE IS NOT SEEKING THE AWARD OF THIS CONTRACT BUT RELIEF FROM A CLAIM AGAINST ITS BID BOND MADE BY THE CITY AFTER THE CONTRACTING PROCESS HAD BEEN COMPLETED. WE CONSIDER THIS MATTER AS ONE NOT SUFFICIENTLY CONCERNING THE AWARD OF A CONTRACT AS TO BE WITHIN THE PURVIEW OF OUR GRANT NOTICE.

ACCORDINGLY, THE COMPLAINT IS DISMISSED.

/1/ IT IS NOT CLEAR FROM THE RECORD HOW THE CITY CALCULATED THIS AMOUNT, WHICH IS LESS THAN THE DIFFERENCE BETWEEN THE TWO FIRMS' BIDS.