B-155711, JUL. 28, 1965

B-155711, JUL. 28, 1965

TO MR. ALBERT H. GREENE:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 24, 1965, AND SUBSEQUENT CORRESPONDENCE, REQUESTING ON BEHALF OF BRASS RAIL FOOD SERVICES, INC., RECONSIDERATION OF OUR DECISION B-155711 OF FEBRUARY 4, 1965, WHEREIN OUR OFFICE OFFERED NO OBJECTION TO THE REJECTION OF BIDS SUBMITTED UNDER INVITATION FOR BIDS GS-R3-PBOE-14, AND CANCELLATION OF THE INVITATION.

THE BASIS FOR THE REJECTION WAS SET OUT IN DETAIL IN THE FEBRUARY 4 DECISION AND THERE IS THEREFORE NO NEED TO REPEAT IT HERE.

ESSENTIALLY, YOUR REQUEST FOR RECONSIDERATION SEEMS TO BE BASED UPON THE PREMISE THAT THE REASONS ADVANCED BY THE SOCIAL SECURITY ADMINISTRATION FOR REJECTING ALL BIDS ARE NOT THE REAL REASONS AND THAT THE PRIMARY REASON IS A DISAGREEMENT IN THE SOCIAL SECURITY ADMINISTRATION AS TO WHETHER PAYMENTS TO BE MADE BY THE CONTRACTOR ARE TO BE CREDITED TO THE CAFETERIA FUND OR DEPOSITED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

HOWEVER, THE SOCIAL SECURITY ADMINISTRATION HAS RESPONDED TO YOUR CONTENTION AS FOLLOWS:

"THIS CHARGE IS NOT TRUE. THE QUESTION OF DISPOSITION OF FUNDS WAS AND IS ONLY OF SECONDARY CONCERN TO THE SOCIAL SECURITY ADMINISTRATION. THEIR PRIMARY CONCERN IS A CONTRACT THAT ASSURES GOOD FOOD SERVICE. IT IS THEIR BELIEF THAT A CONTRACT IN WHICH THE FOOD BUSINESS IS LINKED TO THE VENDING BUSINESS IN SUCH MANNER AS TO REDUCE OVERALL PROFITS DOES NOT PROVIDE AN INCENTIVE TO IMPROVE AND ENLARGE THE FOOD BUSINESS BUT TO THE CONTRARY WOULD INDUCE THE OPERATOR TO NEGLECT HIS FOOD BUSINESS. IT IS THEIR FEELING THAT SUCH A CONTRACT WOULD NOT BE IN THE BEST INTEREST OF EITHER THE GOVERNMENT OR ITS EMPLOYEES.'

IN THE CIRCUMSTANCES, IT APPEARS THAT THE DECISION TO REJECT ALL BIDS AND TO CANCEL THE INVITATION FOR BIDS IS PRIMARILY MOTIVATED BY A DESIRE TO ASSURE THAT THE VENDING OPERATION WOULD NOT BE EXPLOITED TO THE DETRIMENT OF THE CAFETERIA OPERATION.

WHILE OUR OFFICE TAKES THE POSITION THAT ALL BIDS SHOULD NOT BE REJECTED AND THE INVITATION CANCELED UNLESS THERE ARE COGENT AND COMPELLING REASONS, WE RECOGNIZE THAT THE ADMINISTRATIVE AUTHORITY TO REJECT ALL BIDS IS EXTREMELY BROAD AND ORDINARILY WE WILL NOT INTERFERE WITH THAT ACTION IN THE ABSENCE OF A SHOWING THAT SUCH ACTION WAS ARBITRARY. WE DO NOT FIND ANY EVIDENCE OF AN ARBITRARY ACTION TO THIS CASE. CONSEQUENTLY, THERE IS NO LEGAL BASIS FOR OUR OFFICE TO OBJECT TO THE ACTION TAKEN.

WE HAVE BEEN INFORMALLY ADVISED THAT AS A RESULT OF A JOINT UNDERTAKING BY REPRESENTATIVES OF THE GENERAL SERVICES ADMINISTRATION, THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, AND THE SOCIAL SECURITY ADMINISTRATION, REVISED SPECIFICATIONS FOR THE OPERATION OF THE SOCIAL SECURITY ADMINISTRATION CAFETERIA HAVE BEEN DRAFTED, WHICH TAKE INTO CONSIDERATION THE REASONS FOR THE REJECTION OF THE BIDS PREVIOUSLY CONSIDERED, AND THAT A NEW INVITATION FOR BIDS WILL BE ISSUED IN THE NEAR FUTURE.