B-158789, AUG. 5, 1966

B-158789, AUG. 5, 1966

TO PRIME BATTERY CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 24, 1966, WITH REGARD TO OUR DECISION OF MAY 19, 1966, B-158789, TO YOU, WHEREIN WE HELD THAT UNDER THE FACTS OF THIS CASE WE COULD SEE NO BASIS FOR OBJECTING TO THE ACTION TAKEN BY THE DEPARTMENT OF THE ARMY, UNITED STATES ARMY TANK AUTOMOTIVE CENTER, WARREN, MICHIGAN, IN REJECTING ALL BIDS RECEIVED UNDER A SMALL BUSINESS SET-ASIDE INVITATION (NO. AMC 20-113 66-0463/T) ( AND READVERTISING THE GOVERNMENT'S NEEDS UNDER AN INVITATION (NO. AMC 20-113-66-1143/T) ( WHICH DID NOT RESTRICT BIDDING AND AWARD TO SMALL BUSINESS CONCERNS.

THE RECORD INDICATES THAT IN RESPONSE TO THE CANCELED INVITATION,THE LOWEST BIDDER, PRICE BATTERY COMPANY, A LARGE BUSINESS CONCERN, QUOTED A UNIT PRICE OF $21.82 AND THAT YOUR FIRM, A SMALL BUSINESS CONCERN, QUOTED THE NEXT LOWEST UNIT BID PRICE OF $24.70. SINCE THE PROCUREMENT WAS SET ASIDE FOR SMALL BUSINESS, THE BID OF PRICE BATTERY COMPANY, A LARGE BUSINESS CONCERN, WAS DECLARED NONRESPONSIVE TO THE INVITATION. HOWEVER, THE CONTRACTING OFFICER DETERMINED NOT TO ACCEPT YOUR BID BECAUSE HE CONSIDERED IT TO BE UNREASONABLE WHEN COMPARED TO THE PRICE QUOTED BY PRICE BATTERY COMPANY AND THE PRICES AT WHICH THE STORAGE BATTERIES HAD BEEN PREVIOUSLY PROCURED UNDER PRIOR PROCUREMENTS. AFTER RECEIVING THE CONCURRENCE OF THE SMALL BUSINESS SPECIALIST ASSIGNED TO THE CENTER, THE CONTRACTING OFFICER DECIDED TO REJECT ALL BIDS, CANCEL THE INVITATION AND READVERTISE THE PROCUREMENT WITHOUT THE SMALL BUSINESS RESTRICTION. THE PROCUREMENT WAS READVERTISED UNDER INVITATION FOR BIDS NO. AMC 20-113-66- 1143/T) AND THAT INVITATION REQUESTED BIDS FOR FURNISHING THE SAME QUANTITY OF STORAGE BATTERIES AS CALLED FOR BY THE CANCELED INVITATION, NAMELY 8,599.

YOU ALLEGE THAT THE BID SUBMITTED BY THE PRICE BATTERY COMPANY IN RESPONSE TO THE CANCELED INVITATION WAS OBVIOUSLY A SUBTERFUGE TO HAVE ALL BIDS REJECTED UNDER THAT INVITATION. YOU STATE THAT IN RESPONSE TO INVITATION NO. AMC 20-113-66-1143/T/--- A READVERTISEMENT OF THE PROCUREMENT COVERED BY THE CANCELED INVITATION--- THE PRICE BATTERY COMPANY QUOTED A UNIT BID PRICE OF $24.81; THAT IN THE INTERIM BETWEEN MARCH 9, THE DATE BIDS WERE OPENED UNDER THE CANCELED INVITATION, AND JUNE 6, THE DATE BIDS WERE OPENED UNDER THE NEW INVITATION, THERE WAS A MARKET DECLINE OF $0.01 PER POUND ON THE PRICE OF LEAD; AND THAT INSTEAD OF QUOTING A LOWER BID PRICE UNDER THE NEW INVITATION TO REFLECT THE LOWER MANUFACTURING COST OF THE BATTERIES, PRICE BATTERY COMPANY INCREASED ITS BID PRICE FROM $21.82 EACH--- QUOTED IN RESPONSE TO THE CANCELED INVITATION--- TO $24.81 EACH. YOU CONTEND THAT YOUR ORIGINAL UNIT BID PRICE OF $24.70 SUBMITTED IN RESPONSE TO THE CANCELED INVITATION WAS JUST AND FAIR AND THAT YOUR FIRM SHOULD HAVE RECEIVED A CONTRACT. ALSO, YOU CONTEND THAT AFTER THE BIDS, WHICH WERE OPENED ON JUNE 6, WERE REVIEWED YOUR FIRM SHOULD HAVE BEEN OFFERED THE OPPORTUNITY TO NEGOTIATE A CONTRACT FOR THE REQUIRED STORAGE BATTERIES.

THE DEPARTMENT OF THE ARMY HAS INFORMALLY ADVISED OUR OFFICE THAT SIX BIDS WERE RECEIVED IN RESPONSE TO INVITATION FOR BIDS NO. AMC 20 113-66- 1143/T), OPENING JUNE 6, 1966; THAT YOUR FIRM DID NOT SUBMIT A BID IN RESPONSE TO THIS INVITATION; THAT THE PRICE BATTERY COMPANY QUOTED A UNIT BID PRICE OF $24.81; AND THAT THE LOWEST BID IN THE AMOUNT OF $23.30 EACH WAS SUBMITTED BY THE WESTERN BATTERY AND SUPPLY COMPANY. THE DEPARTMENT ALSO ADVISED OUR OFFICE THAT ON JULY 16, 1966, A CONTRACT FOR FURNISHING 8,599 STORAGE BATTERIES FOR A TOTAL PRICE OF $200,356.70 WAS AWARDED TO THE WESTERN BATTERY AND SUPPLY COMPANY. THUS, THE READVERTISEMENT WILL RESULT IN AN APPARENT SAVING OF $12,038.60, REPRESENTING THE DIFFERENCE BETWEEN YOUR ORIGINAL TOTAL PRICE OF $212,395.30 AND WESTERN'S CONTRACT PRICE OF $200,356.70.

SINCE THE FACTS, AS OUTLINED ABOVE, APPEAR TO SUBSTANTIALLY SUPPORT THE CONTRACTING OFFICER'S DETERMINATION THAT YOUR BID PRICE WAS UNREASONABLE, WE CANNOT CONCLUDE THAT THE ACTION TAKEN IN REJECTING ALL BIDS WAS UNJUSTIFIED. SEE 39 COMP. GEN. 86, 88. MOREOVER, AS ABOVE INDICATED, SUCH ACTION DID IN FACT RESULT IN THE PROCUREMENT OF THE STORAGE BATTERIES AT A SUBSTANTIAL SAVINGS TO THE GOVERNMENT.

UNDER THE CIRCUMSTANCES, THIS OFFICE WILL TAKE NO FURTHER ACTION IN THE MATTER.

REGARDING YOUR ALLEGATION THAT THE DEPARTMENT OF THE ARMY SHOULD HAVE NEGOTIATED WITH YOUR COMPANY AFTER THE BIDS RECEIVED IN RESPONSE TO THE NEW INVITATION HAD BEEN REVIEWED, APPARENTLY BECAUSE YOUR FIRM WAS THE LOWEST ELIGIBLE BIDDER UNDER THE CANCELED INVITATION, WE MUST ADVISE THAT THESE CIRCUMSTANCES ARE NOT INCLUDED IN ASPR 3-100, ET SEQ., WHICH PROVIDES AUTHORITY FOR PROCUREMENT BY NEGOTIATION AND THE LIMITATIONS THEREON.