B-163931, JUL. 26, 1968

B-163931, JUL. 26, 1968

TO GENERAL HEDLUND:

ENCLOSED IS A COPY OF OUR DECISION OF TODAY DENYING THE PROTEST OF GENERAL STEEL TANK COMPANY AGAINST THE AWARD OF A CONTRACT TO FRAM CORPORATION UNDER INVITATION FOR BIDS NO. DSA-700-68-B-1483.

WHILE FOR THE REASONS STATED WE CONCLUDE THAT THE PROTEST MUST BE DENIED, IT IS OUR OPINION THAT USE OF 10 U.S.C. 2304 (A) (10) WAS CLEARLY IN ERROR, SINCE THE PRESENCE OF ADEQUATE COMPETITION WAS CLEARLY DEMONSTRATED BY THE RESPONSES TO THE SUBJECT INVITATION, AND IT THEREFORE CAN HARDLY BE SAID THAT FORMAL ADVERTISING WAS NOT "FEASIBLE AND PRACTICABLE" WITHIN THE INTENDMENT OF THE FIRST SENTENCE OF 10 U.S.C. 2304 (A).

ALSO, WE FEEL THAT WHERE, AS HERE, ALL BIDS ARE FOUND TO BE NONRESPONSIVE, DUE TO AN ERROR COMMITTED BY THE GOVERNMENT, THE GOVERNMENT CANNOT THEN PROPERLY INVOKE THIS EXCEPTION TO THE ADVERTISING STATUTE, AND THE GOVERNMENT SHOULD THEREFORE CANCEL THE INVITATION AND READVERTISE, UNLESS IT CLEARLY APPEARS THAT ASIDE FROM THE ERROR COMMITTED BY THE GOVERNMENT THERE IS ANOTHER VALID BASIS FOR INVOKING ONE OF THE OTHER EXCEPTIONS.

IN THIS CONNECTION, IT IS OUR OPINION THAT USE OF YOUR FORM NO. FM1057/R2),"DETERMINATION AND FINDINGS -- AUTHORITY TO PROCURE BY NEGOTIATION," UNDER THE CIRCUMSTANCES PRESENT IN THIS CASE WAS IMPROPER UNLESS SUPPORTED BY WRITTEN FINDINGS WHICH SET OUT FACTS AND CIRCUMSTANCES THAT CLEARLY AND CONVINCINGLY ESTABLISH THAT FORMAL ADVERTISING WOULD NOT HAVE BEEN FEASIBLE AND PRACTICABLE, AS REQUIRED BY 10 U.S.C. 2310 (B). PRESENTLY CONSTITUTED THE FINDINGS PORTION OF THE PRINTED FORM ONLY STATES A CONCLUSION IN RECITING THAT "NO RESPONSIVE BIDS WERE RECEIVED," WHICH IS APPARENTLY BASED ON THE EXAMPLE GIVEN IN ASPR 3-210 (III). AS STATED IN OUR DECISION, THE EXAMPLES LISTED IN THE ASPR PARAGRAPH ARE MERELY ILLUSTRATIVE OF SITUATIONS WHERE NEGOTIATION MAY BE PERMITTED AND THEY DO NOT GIVE AUTHORITY TO NEGOTIATE IN ALL SIMILAR SITUATIONS, BUT ONLY WHERE THE UNDERLYING REASON FOR THE EXCEPTION EXISTS AND THERE IS SOME BASIS FOR CONCLUDING THAT FORMAL ADVERTISING IS NOT FEASIBLE AND PRACTICABLE. SEE PAGES 619 AND 620 OF THE HEARINGS BEFORE THE HOUSE SUBCOMMITTEE FOR SPECIAL INVESTIGATIONS ON CONSIDERATION OF H.R. 5532, 87TH CONGRESS,"A BILL TO AMEND THE ARMED SERVICES PROCUREMENT ACT OF 1947," AND PAGE 4, SENATE REPORT NO. 1884, 87TH CONGRESS, ON THE SAME BILL.

IN VIEW OF THE FOREGOING, IN FUTURE PROCUREMENTS WHERE ALL BIDS ARE FOUND TO BE NONRESPONSIVE SEPARATE FINDINGS SHOULD BE MADE SETTING OUT FACTS AND CIRCUMSTANCES WHICH MAKE IT IMPRACTICABLE TO READVERTISE FOR BIDS BEFORE NEGOTIATION IS PERMITTED.