B-153380, MAY 20, 1964

B-153380, MAY 20, 1964

TO ZINGER CONSTRUCTION CO., INC.:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 9, 1964, REGARDING OUR DECISION B-153380, DATED APRIL 1, 1964, WHICH DENIED YOUR PROTEST AGAINST VETERANS ADMINISTRATION READVERTISEMENT OF INVITATION FOR BIDS PROJECT NO. 31-5613. THE BASIS FOR THE READVERTISEMENT WAS STATED TO BE THAT THE CONTRACTING AGENCY HAD DETERMINED THAT THE PRICES RECEIVED WERE NOT REALISTIC AND NOT WITHIN A TRULY COMPETITIVE RANGE BASED ON THE GOVERNMENT'S ESTIMATE, AND, SINCE THOSE BENEFITS TO THE GOVERNMENT CONTEMPLATED BY THE LAW GOVERNING FORMAL ADVERTISING WERE NOT ASSURED BY THE INITIAL BIDDING, ALL THE BIDS WERE REJECTED. YOU STATE THAT YOU FEEL THAT THE FACTS SUPPORTING THE VETERANS ADMINISTRATION ESTIMATE MAY HAVE BEEN MISLEADING OR IN ERROR SINCE YOUR BID PRICE WAS BASED UPON A THOROUGH AND CAREFULLY STUDIED ANALYSIS BY A PROFESSIONAL ENGINEER AND THAT AN EXAMINATION OF THE PRICES RECEIVED UPON THE SECOND BID OPENING ON APRIL 7, 1964, DISCLOSES THAT YOUR ORIGINAL BID WAS COMPETITIVE SINCE THE LOWEST BID IS LESS THAN YOUR ORIGINAL BID BY ONLY $2,884, WITH OTHER BIDS "IN AND AROUND" YOUR ORIGINAL BID.

YOU AGAIN PROTEST ANY AWARD UNDER THE SECOND INVITATION FOR BIDS NO. 31- 5615 AND REQUEST THAT THIS OFFICE RECONSIDER THE DENIAL AND DIRECT THE VETERANS ADMINISTRATION TO MAKE AWARD TO YOU UNDER THE ORIGINAL INVITATION OR TO AT LEAST NEGOTIATE WITH YOUR COMPANY. YOU STATE FURTHER THAT YOUR BID UNDER INVITATION FOR BIDS NO. 31-5615 (31 5613) IS STILL IN FULL FORCE AND EFFECT SINCE THAT INVITATION WAS NEVER FORMALLY CANCELED.

AS STATED IN OUR DECISION OF APRIL 1 TO YOU, THE QUESTION OF REJECTING ALL BIDS AND READVERTISING IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION AND WHERE IT IS SHOWN THAT THE PURPOSE OF SUCH ACTION IS TO OBTAIN FOR THE GOVERNMENT THE ADVANTAGE OF MORE COMPETITIVE AND REALISTIC BIDDING AS DETERMINED BY THE GOVERNMENT'S DULY CONSTITUTED AGENTS, WE PERCEIVE NO OBJECTION TO SUCH ACTION. THE ADMINISTRATIVE OFFICE HAD OCCASION TO QUESTION THE SCOPE OF THE COMPETITION AFFORDED BY THE RECEIPT OF THREE BIDS ON ITEM I OF THE INVITATION. BECAUSE OF THE FEW BIDS RECEIVED AND THE ADMINISTRATIVE BELIEF THAT THEIR ORIGINAL ESTIMATE WAS REASONABLE, READVERTISING TO OBTAIN A LARGER NUMBER OF BIDS, AND THROUGH GREATER COMPETITION, MORE FAVORABLE PROPOSALS, WAS UNDERTAKEN. INFORMAL ADVICE NOW RECEIVED FROM THAT OFFICE IS TO THE EFFECT THAT UPON READVERTISEMENT EIGHT BIDS, OR NEARLY THREE TIMES THE NUMBER RECEIVED ON THE INITIAL INVITATION, WITH A RESULTANT LOWERING OF THE BID PRICE, WERE RECEIVED. THE FACT THAT A GREATLY REDUCED BID PRICE DOES NOT RESULT FROM THE READVERTISEMENT DOES NOT ALTER IN ANY RESPECT THE ADMINISTRATIVE AUTHORITY TO EFFECT THE CANCELATION OF ALL BIDS UNDER THE FIRST INVITATION AND THE READVERTISEMENT OF THE PROJECT. SEE SECTION 253 (B) OF TITLE 41, UNITED STATES CODE. BECAUSE OF THIS AUTHORITY AND ITS ATTENDANT RESPONSIBILITY, IT WOULD BE UNREASONABLE TO SUPERIMPOSE THE JUDGMENT OF OUR OFFICE OR ANY OTHER AGENCY OR GROUP ON THAT OF THE CONTRACTING OFFICE IN ANY CASE IN WHICH THERE APPEARS TO BE A SUBSTANTIAL BASIS FOR THE ACTIONS OF THOSE OFFICIALS.

IT APPEARS UPON REVIEW THAT THE BASIS OF THE CONTRACTING OFFICER'S ACTION IN CANCELING THE INITIAL INVITATION AND READVERTISING THE PROJECT IN THIS INSTANCE--- THAT IS, TOO FEW BIDDERS AND BID PRICES APPARENTLY OUT OF PROPORTION IN RELATION TO THE GOVERNMENT'S ESTIMATE OF THE REASONABLE COST --- REASONABLY SUPPORTS THE CONCLUSION HE REACHED IN DETERMINING THAT THE INTERESTS OF THE GOVERNMENT REQUIRED SUCH ACTION.

ACCORDINGLY, NO ADDITIONAL MATERIAL FACTS HAVING BEEN PRESENTED BY YOUR REQUEST FOR RECONSIDERATION, OUR DECISION OF APRIL 1, 1964, IS AFFIRMED.

RESPECTING YOUR CONTENTION THAT THE INITIAL INVITATION FOR BIDS WAS NEVER FORMALLY CANCELED, THE RECORD DISCLOSES THAT ALL BIDDERS WERE ORALLY ADVISED ON JANUARY 23, 1964, UNDER PROVISION OF FEDERAL PROCUREMENT REGULATIONS 1-2.404-3, THAT ALL BIDS WERE REJECTED.