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B-157590, OCT. 4, 1965

B-157590 Oct 04, 1965
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INC.: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 25. BIDS WERE REQUESTED ON OPTIONS TO PURCHASE THE FEE SIMPLE TITLE AT THE END OF THE BASIC 30 YEAR LEASE TERM AND AT THE END OF EACH RENEWAL TERM. AWARD WILL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID. IS MOST ADVANTAGEOUS TO THE GOVERNMENT. THE DEPARTMENT WILL ALLOW THE GREATER WEIGHT TO THE RENTAL SPECIFIED DURING THE BASIC 30- YEAR LEASE TERM.'. TEN BIDS WERE RECEIVED AND OPENED ON JULY 22. THE TWO LOWEST BIDS ON THE BASIC 30-YEAR TERM ARE AS FOLLOWS: 1. "ALMOST THE ENTIRE WEIGHT" WAS GIVEN TO THE BID TO THE BID FOR THE BASIC LEASE TERM IN DETERMINING THE LOWEST BID. WAS THEREBY DETERMINED THE LOW BIDDER. REDUCTIONS IN BOTH THE RENEWAL AND PURCHASE OPTIONS QUOTED WERE NEGOTIATED WITH IT AND THE DEPARTMENT PROPOSES TO AWARD IT THE CONTRACT.

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B-157590, OCT. 4, 1965

TO STATES CONSTRUCTION CO., INC.:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 25, 1965, PROTESTING AGAINST THE PROPOSED AWARD OF A CONTRACT BY THE POST OFFICE DEPARTMENT TO FINE AND SALZBERG, INCORPORATED, FOR THE CONSTRUCTION AND LEASING OF A POSTAL FACILITY AT PENINSULA, VIRGINIA.

THE INVITATION FOR BIDS, ISSUED MAY 21, 1965, PURSUANT TO THE PROVISION OF 39 U.S.C. 2103, CALLED FOR BIDS ON FURNISHING ALL LABOR, EQUIPMENT AND MATERIAL FOR CONSTRUCTION OF A POSTAL FACILITY AND LEASING OF SUCH FACILITY TO THE GOVERNMENT AT A STATED ANNUAL RENTAL FOR A TERM OF 30 YEARS, WITH EIGHT 5 YEAR RENEWAL OPTIONS. IN ADDITION, BIDS WERE REQUESTED ON OPTIONS TO PURCHASE THE FEE SIMPLE TITLE AT THE END OF THE BASIC 30 YEAR LEASE TERM AND AT THE END OF EACH RENEWAL TERM. AS TO EVALUATION OF BIDS AND AWARD OF A CONTRACT, THE INVITATION PROVIDED AS FOLLOWS:

"4. AWARD WILL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THIS ADVERTISEMENT FOR BIDS, IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. IN DETERMINING PRICE, THE DEPARTMENT WILL ALLOW THE GREATER WEIGHT TO THE RENTAL SPECIFIED DURING THE BASIC 30- YEAR LEASE TERM.'

TEN BIDS WERE RECEIVED AND OPENED ON JULY 22, 1965. THE TWO LOWEST BIDS ON THE BASIC 30-YEAR TERM ARE AS FOLLOWS:

1. FINE AND SALZBERG, INC. 2. ALBERT T. BROUT

$84,999 PER ANNUM $89,750 PER ANNUM-BASIC TERM-30 YEARS

$84,999 PER ANNUM $54,640 PER ANNUM-1ST RENEWAL OPTION-5YRS

$84,999 PER ANNUM $46,462 PER ANNUM-2ND RENEWAL OPTION 5YRS

$84,999 PER ANNUM $43,462 PER ANNUM-3RD RENEWAL OPTION 5YRS

$84,999 PER ANNUM $39,862 PER ANNUM-4TH RENEWAL OPTION 4YRS

$84,999 PER ANNUM $36,862 PER ANNUM-5TH RENEWAL OPTION 5YRS

$84,999 PER ANNUM $34,462 PER ANNUM-6TH RENEWAL OPTION 5YRS

$84,999 PER ANNUM $31,000 PER ANNUM-7TH RENEWAL OPTION 5YRS

$84,999 PER ANNUM $28,000 PER ANNUM-8TH RENEWAL OPTION-5YRS

IN EVALUATING THE BIDS, THE DEPARTMENT REPORTS THAT SINCE IT COULD NOT PROJECT OCCUPANCY BEYOND 30 YEARS WITH ANY REASONABLE DEGREE OF CERTAINTY, AND BECAUSE THE GOVERNMENT WOULD BE BOUND ON ANY CONTRACT AWARDED FOR ONLY THE BASIC 30 YEAR TERM,"ALMOST THE ENTIRE WEIGHT" WAS GIVEN TO THE BID TO THE BID FOR THE BASIC LEASE TERM IN DETERMINING THE LOWEST BID. SINCE FINE AND SALZBERG, INCORPORATED, WAS THEREBY DETERMINED THE LOW BIDDER, REDUCTIONS IN BOTH THE RENEWAL AND PURCHASE OPTIONS QUOTED WERE NEGOTIATED WITH IT AND THE DEPARTMENT PROPOSES TO AWARD IT THE CONTRACT.

YOU PROTEST THE PROPOSED ACTION ON THE BASIS THAT YOUR BID IS IN FACT THE LOW BID AND IN THE BEST INTEREST OF THE GOVERNMENT TO ACCEPT "IF ANY REASONABLE WEIGHT IS ... GIVEN TO THE OTHER ELEMENTS REQUESTED IN THE BID," THAT IS, THE BIDS ON BOTH THE RENEWAL AND PURCHASE OPTIONS. YOU HAVE STATED, IN CONFERENCES WITH A REPRESENTATIVE OF OUR OFFICE, THAT SINCE THIS FACILITY WILL BE A VERY LARGE STRUCTURE FOR COLLECTION AND DISTRIBUTION OF MAIL FROM NUMEROUS POST OFFICES IN THE NEWPORT NEWS- HAMPTON ROADS, VIRGINIA AREA, IT WILL ALMOST CERTAINLY BE USED BY THE GOVERNMENT LONG BEYOND THE BASIC LEASE TERM AND, THEREFORE, THE TOTAL BID, INCLUDING THE OPTIONS, SHOULD BE THE BASIS FOR DETERMINING THE LOW BID.

AS YOU ARE AWARE, WE HAVE HAD OCCASIONS IN THE PAST TO CONSIDER PROTESTS UNDER FACTS AND CIRCUMSTANCES ALMOST IDENTICAL TO THOSE PRESENT IN THE INSTANT CASE. OUR MOST RECENT DECISION IS THAT OF SEPTEMBER 21, 1962, REPORTED AT 42 COMP. GEN. 170 (COPY ENCLOSED). IN THAT CASE THE INVITATION CONTAINED THE SAME LANGUAGE REGARDING AWARD AND EVALUATION OF BIDS AS IS CONTAINED IN THE INSTANT INVITATION, AND THE PROTESTING BIDDER WAS LOW ON AN OVER-ALL BASIS BUT HIGH ON THE BASIC TERM, AS IS YOUR BID. SINCE THE DEPARTMENT WAS UNABLE TO PROJECT OCCUPANCY BEYOND THE BASIC 20 YEAR TERM INVOLVED IN THAT CASE, WE HELD THAT IT PROPERLY ACCORDED THE "GREATER WEIGHT" TO THE BASIC TERM RATHER THAN GIVING EQUAL WEIGHT TO ALL PERIODS IN DETERMINING THE LOW BID. WE FAIL TO SEE ANY DISTINGUISHING CIRCUMSTANCES IN THE INSTANT CASE WHICH WOULD JUSTIFY OUR REACHING A DIFFERENT RESULT AT THIS TIME. DESPITE YOUR BELIEF THAT THIS FACILITY WILL IN ALL PROBABILITY BE UTILIZED BY THE GOVERNMENT FAR BEYOND THE BASIC LEASE TERM, WE FIND NO SUFFICIENT BASIS FOR SUBSTITUTING OUR JUDGMENT FOR THAT OF COGNIZANT DEPARTMENT PERSONNEL WHO REPORT THAT THEY ARE UNABLE TO PROJECT THE GOVERNMENT'S OCCUPANCY BEYOND THE 30-YEAR INITIAL TERM WITH ANY CERTAINTY.

AS POINTED OUT IN THE DECISION CITED ABOVE, THE BIDDERS IN A COMPETITIVE PROCUREMENT SHOULD BE APPRIZED OF THE BASIS OF EVALUATION IN AS CLEAR, PRECISE AND EXACT TERMS AS POSSIBLE. WHILE LANGUAGE TO THE EFFECT THAT IN DETERMINING PRICE "GREATER WEIGHT" WILL BE GIVEN TO THE RENTAL SPECIFIED FOR THE BASIC LEASE TERM IS CERTAINLY NOT VERY CLEAR, WE RECOGNIZE THE DIFFICULTLY IN FIXING A SPECIFIC WEIGHT WHICH WILL BE ALLOCATED TO THE BID FOR THE VARIOUS PERIODS, AND THAT THIS IS A MATTER WHICH MUST NECESSARILY DEPEND UPON THE JUDGMENT OF THE OFFICIALS CHARGED WITH RESPONSIBILITY FOR THE PROCUREMENT. THEREFORE, AND IN VIEW OF THE FACT THAT THE ONLY BINDING OBLIGATION ON THE GOVERNMENT WILL BE LIMITED TO THE 30-YEAR TERM, WE CANNOT SAY THAT THE USE OF SUCH LANGUAGE PRECLUDES AWARD OF A BINDING CONTRACT TO THE LOW BIDDER FOR THE 30-YEAR TERM. WHILE WE ARE RECOMMENDING THAT THE POSTMASTER GENERAL DISCONTINUE USE OF THE LANGUAGE IN THE SECOND SENTENCE OF PARAGRAPH FOUR OF THE INSTANT INVITATION, WITH A VIEW TOWARD CLARIFYING THE PROVISIONS OF FUTURE INVITATIONS, WE DO NOT FEEL THAT THERE IS A VALID BASIS FOR OBJECTION TO THE PROPOSED AWARD, AND YOUR PROTEST IS THEREFORE DENIED.

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