B-132351, AUG. 23, 1957

B-132351, AUG. 23, 1957

TO MR. WILLIAM G. SMITH, ATTORNEY AT LAW:

FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF MR. RANDALL H. SHARPE, AGAINST THE AWARD OF A CONTRACT FOR THE REPAIR OF A WATER TANK AT THE HOLLOMAN AIR FORCE BASE, NEW MEXICO, UNDER INVITATION FOR BIDS NO. 29- 600-57-188, ISSUED MAY 1, 1957, TO THE EMPIRE SERVICE COMPANY, GOODLETSVILLE, TENNESSEE.

AS YOU WERE ADVISED IN OUR LETTER OF JULY 2, 1957, WE FORWARDED YOUR COMMUNICATION OF JUNE 18, 1957, TO THE SECRETARY OF THE AIR FORCE FOR HIS CONSIDERATION, AND IN A REPORT JUST RECEIVED FROM THAT OFFICE, THE DEPARTMENT'S ACTION IN THIS MATTER IS EXPLAINED AS FOLLOWS:

"INVITATION FOR BID NO. 29-600-57-188 WAS ISSUED ON 1 MAY 1957 TO 158 POTENTIAL SOURCES FOR REPAIRS ON A 10,000-BARREL WATER TANK AT HOLLOMAN AIR FORCE BASE. THE OPENING OF BIDS WAS SET FOR 22 MAY 1957 AT 3:00 P.M., MOUNTAIN STANDARD TIME. PRIOR TO THE BID OPENING, HOWEVER, AMENDMENT NO. 1, DATED 17 MAY 1957, WAS MAILED TO THE PROSPECTIVE SOURCES. THIS AMENDMENT ADDED AS AN ITEM OF WORK IN THE SPECIFICATIONS THE REQUIREMENT THAT THE CONTRACTOR CHECK THE TANK FOR LEAKS AND, IF ANY LEAKS WERE FOUND, WELD THEM CLOSED.

"BIDS WERE RECEIVED FROM THREE BIDDERS AND WERE OPENED, AS SCHEDULED, ON 22 MAY 1957 AT 3:00 P.M. NONE OF THE RESPONDING BIDDERS, HOWEVER, ACKNOWLEDGED OR COMPLETED AMENDMENT NO. 1 TO THE INVITATION FOR BID PRIOR TO THE BID OPENING. ACCORDINGLY, THE BIDS WERE REGARDED AS NONRESPONSIVE, IN ACCORDANCE WITH AIR FORCE PROCUREMENT INSTRUCTION 2-404 (C), AND ALL BIDS WERE REJECTED. INASMUCH AS NO RESPONSIVE BID HAD BEEN RECEIVED, IT WAS DECIDED TO NEGOTIATE THE PROCUREMENT ON THE BASIS OF THE SPECIFICATIONS INCLUDED IN THE INVITATION FOR BID AND IN AMENDMENT NO. 1 THERETO,ON THE AUTHORITY OF SECTION 2304 (A) (10) OF TITLE 10, U.S. CODE, AS IMPLEMENTED IN SECTION 3-210.2 (III) OF THE ARMED SERVICES PROCUREMENT REGULATION AND SECTION 3-210.2 (C) OF THE AIR FORCE PROCUREMENT INSTRUCTION. ALTHOUGH RANDALL H. SHARPE WOULD HAVE BEEN RESPONSIVE, AS A RESULT OF THE NEGOTIATIONS SUBSEQUENT TO THE REJECTION OF ALL BIDS, THE EMPIRE SERVICE COMPANY, WHICH HAD BEEN THE SECOND LOW BIDDER UNDER THE INVITATION FOR BID SUBMITTED A PRICE WHICH WAS $272 LESS THAN THAT PROPOSED BY RANDALL H. SHARPE AFTER SUCH NEGOTIATIONS. THE THIRD BIDDER, H. B. ZACHRY COMPANY, WAS THE HIGHEST BIDDER BOTH BEFORE AND AFTER NEGOTIATIONS. AN AWARD WAS CONSEQUENTLY MADE TO THE EMPIRE SERVICE COMPANY. PERFORMANCE OF THE CONTRACT WAS BEGUN ON JUNE 14, 1957 AND HAS NOW BEEN COMPLETED.'

AIR FORCE PROCUREMENT INSTRUCTION 2-404 (D) AUTHORIZES THE REJECTION OF A BID AS NON-RESPONSIVE WHICH FAILS TO ACKNOWLEDGE RECEIPT OF ALL AMENDMENTS TO THE INVITATION FOR BIDS. ALSO, AIR FORCE PROCUREMENT INSTRUCTION 3- 210.2 (C) AUTHORIZES A CONTRACTING OFFICER TO CONSUMMATE A PROCUREMENT BY NEGOTIATION, UNDER AUTHORITY OF SECTION 2 (C) (10) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, PUBLIC LAW 413, 80TH CONGRESS, WHEN BIDS HAVE BEEN SOLICITED "AND NO RESPONSIVE BID * * * HAS BEEN RECEIVED.'

THE BID OR PROPOSAL ORIGINALLY SUBMITTED BY MR. SHARPE ON THIS WORK CONTAINED NO ACKNOWLEDGMENT OF THE RECEIPT OF AMENDMENT NO. 1, NOR DID IT INCLUDE ANY QUOTATION FOR THE ADDITIONAL WORK CONTEMPLATED THEREBY. HENCE, HIS BID, ALONG WITH THE TWO OTHER ORIGINAL PROPOSALS RECEIVED, WERE REJECTED BY THE CONTRACTING OFFICER AS BEING NON RESPONSIVE TO THE GOVERNMENT'S INVITATION. MANIFESTLY, THIS PROCEDURE WAS JUSTIFIED UNDER THE REGULATIONS CITED.

THE AIR FORCE HAS FURTHER REPORTED TO US THAT ITS INVESTIGATION OF THIS PROCUREMENT INDICATES THAT THE CONTRACTING PERSONNEL AT THE HOLLOMAN AIR FORCE BASE EXPLAINED TO MR. SHARPE AT THE TIME THAT ALL BIDS SUBMITTED UNDER THE ORIGINAL INVITATION HAD BEEN REJECTED, AND THAT ALL BIDDERS WOULD BE GIVEN AN OPPORTUNITY TO BID ON THE WORK OF THE REVISED PROJECT, INCLUDING THAT COVERED BY AMENDMENT NO. 1. FURTHERMORE, FROM THE ADMINISTRATIVE REPORT SUBMITTED IN CONNECTION WITH THIS MATTER, THERE IS NO INDICATION THAT THE CONTRACTING PERSONNEL AT HOLLOMAN AT ANY TIME ADVISED MR. SHARPE THAT HIS ORIGINAL BID HAD BEEN ACCEPTED, OR THAT NEGOTIATIONS WOULD BE CONDUCTED WITH HIM ALONE.

IN VIEW OF THE DEPARTMENT'S WIDE DISCRETION UNDER THE LAW AND REGULATIONS CITED, THE FACT THAT THE CONTRACT WAS AWARDED ON TERMS CONSIDERED MOST ADVANTAGEOUS TO THE UNITED STATES, AND ALSO, THE CIRCUMSTANCES THAT THE CONTRACT AWARDED THE EMPIRE SERVICE COMPANY HAS SINCE BEEN COMPLETED, THERE IS NO PROPER BASIS FOR OUR INTERPOSING ANY OBJECTION TO THE ADMINISTRATIVE ACTION TAKEN IN THIS MATTER.