B-177489, DEC 14, 1972

B-177489: Dec 14, 1972

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THE COURTS HAVE RECOGNIZED THAT BIDDERS ARE ENTITLED TO HAVE THEIR BIDS CONSIDERED FAIRLY AND HONESTLY FOR AWARD. TO GUARANTEED SUPPLY COMPANY: THIS IS IN REPLY TO YOUR LETTER OF NOVEMBER 15. WHICH WAS AWARDED TO PETROLEUM TANK SERVICE (PETROLEUM). YOUR CORRESPONDENCE INDICATES THAT YOU BELIEVE THE CONTRACT AWARD TO PETROLEUM WAS ERRONEOUS AND THAT YOU DESIRE TO FILE A CLAIM FOR OVERHEAD AND ANTICIPATED PROFITS IN CONNECTION WITH THIS CONTRACT. WHILE THE COURTS HAVE RECOGNIZED THAT BIDDERS ARE ENTITLED TO HAVE THEIR BIDS CONSIDERED FAIRLY AND HONESTLY FOR AWARD. THEY HAVE ALSO HELD THAT ANY FAILURE OF THE CONTRACTING AGENCY IN THIS REGARD WOULD GIVE RISE TO A CAUSE OF ACTION BY THE AGGRIEVED BIDDER TO RECOVER ONLY BID PREPARATION EXPENSES.

B-177489, DEC 14, 1972

PROCUREMENT PRACTICES - FAILURE TO CONSIDER BID-RECOVERY OF OVERHEAD, ANTICIPATED PROFITS AND BID PREPARATION COSTS DECISION DISCOURAGING GUARANTEED SUPPLY CO.'S FILING OF A CLAIM FOR OVERHEAD AND ANTICIPATED PROFITS RESULTING FROM A CONTRACT AWARDED TO PETROLEUM TANK SERVICE FOR FUEL TANK MAINTENANCE AT THE MARINE CORPS AIR STATION, CHERRY POINT, N.C. THE COURTS HAVE RECOGNIZED THAT BIDDERS ARE ENTITLED TO HAVE THEIR BIDS CONSIDERED FAIRLY AND HONESTLY FOR AWARD, BUT THE FAILURE OF THE CONTRACTING AGENCY TO CONSIDER THE BID GIVES RISE TO A CAUSE OF ACTION TO RECOVER ONLY BID PREPARATION EXPENSES. HOWEVER, A LONG SERIES OF CASES FROM THE COURT OF CLAIMS HAS DISALLOWED SUCH CLAIMS, AND IN THE ABSENCE OF JUDICIAL ADVICE AS TO WHAT STANDARDS OR CRITERIA TO APPLY, GAO MUST DECLINE TO CONSIDER THESE CLAIMS.

TO GUARANTEED SUPPLY COMPANY:

THIS IS IN REPLY TO YOUR LETTER OF NOVEMBER 15, 1972, TRANSMITTING COPIES OF CORRESPONDENCE RELATIVE TO YOUR BID ON CONTRACT NO. N62470-72 C-0684, FOR THE CLEANING AND REPAIRING OF FUEL TANKS AT THE MARINE CORPS AIR STATION, CHERRY POINT, NORTH CAROLINA, WHICH WAS AWARDED TO PETROLEUM TANK SERVICE (PETROLEUM).

YOUR CORRESPONDENCE INDICATES THAT YOU BELIEVE THE CONTRACT AWARD TO PETROLEUM WAS ERRONEOUS AND THAT YOU DESIRE TO FILE A CLAIM FOR OVERHEAD AND ANTICIPATED PROFITS IN CONNECTION WITH THIS CONTRACT. YOUR LETTER OF SEPTEMBER 7, 1972, TO THIS OFFICE REQUESTS ADVICE REGARDING HOW TO FILE SUCH A CLAIM.

WHILE THE COURTS HAVE RECOGNIZED THAT BIDDERS ARE ENTITLED TO HAVE THEIR BIDS CONSIDERED FAIRLY AND HONESTLY FOR AWARD, THEY HAVE ALSO HELD THAT ANY FAILURE OF THE CONTRACTING AGENCY IN THIS REGARD WOULD GIVE RISE TO A CAUSE OF ACTION BY THE AGGRIEVED BIDDER TO RECOVER ONLY BID PREPARATION EXPENSES. SEE HEYER PRODUCTS CO., INC. V. UNITED STATES, 140 F. SUPP. 409 (CT. CL. 1956); 177 F. SUPP. 251 (CT. CL. 1959); KECO INDUSTRIES, INC. V. UNITED STATES, 428 F.2D 1233 (CT. CL. 1970); AND CONTINENTAL BUSINESS ENTERPRISES, INC. V. UNITED STATES, 452 F.2D 1016 (CT. CL. 1971). THIS OFFICE THEREFORE COULD NOT ALLOW A CLAIM FOR OVERHEAD AND ANTICIPATED PROFITS, AS INDICATED IN YOUR CORRESPONDENCE.

WITH RESPECT TO A CLAIM FOR BID PREPARATION EXPENSES, IT SHOULD BE NOTED THAT IN NONE OF THE CASES CITED ABOVE HAS THE COURT ALLOWED THE BIDDER'S CLAIM, AND THIS OFFICE IS WITHOUT THE BENEFIT OF JUDICIAL ADVICE AS TO WHAT STANDARDS OR CRITERIA SHOULD BE APPLIED OR ADOPTED IN ALLOWING SUCH A CLAIM. UNTIL APPROPRIATE CRITERIA AND STANDARDS ARE JUDICIALLY ESTABLISHED, THIS OFFICE MUST THEREFORE DECLINE TO ATTEMPT THE SETTLEMENT OF CLAIMS FOR BID PREPARATION COSTS PURSUANT TO THE DOCTRINE OF THE CASES CITED ABOVE. SEE LONGWILL V. UNITED STATES, 17 CT. CL. 288 (1881); CHARLES V. UNITED STATES, 19 CT. CL. 316 (1884); B 168917, OCTOBER 6, 1970.

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