B-225304, DEC 11, 1986, OFFICE OF GENERAL COUNSEL

B-225304, DEC 11, 1986, OFFICE OF GENERAL COUNSEL

PRECIS-UNAVAILABLE

THE HONORABLE JESSE HELMS, UNITED STATES SENATE:

THIS IS IN RESPONSE TO YOUR CORRESPONDENCE TO OUR OFFICE DATED NOVEMBER 20, 1986, ON BEHALF OF MR. RICHARD CORRELL. MR. CORRELL COMPLAINS THAT HIS PURCHASE OFFER FOR EQUIPMENT OFFERED FOR SALE BY THE DEFENSE LOGISTICS AGENCY (DLA) UNDER SEALED BID SALE NOS. 27-6427 AND 27-6269, WAS UNFAIRLY AND IMPROPERLY REJECTED. YOU ASK FOR OUR FINDINGS AND VIEWS ON THE MATTER.

WE ARE UNABLE TO REVIEW THIS MATTER AS A PROTEST UNDER OUR BID PROTEST JURISDICTION. THE COMPETITION IN CONTRACTING ACT OF 1984 AUTHORIZES OUR OFFICE TO REVIEW ONLY PROTESTS CONCERNING PROPOSED CONTRACTS FOR THE "PROCUREMENT OF PROPERTY OR SERVICES" BY A FEDERAL AGENCY. AS A RESULT, OUR REGULATIONS PROVIDE THAT WE WILL REVIEW PROTESTS CONCERNING SALES BY A FEDERAL AGENCY ONLY WHERE THE AGENCY HAS AGREED IN WRITING TO SUCH REVIEW. AS DLA HAS NOT DONE SO, THE MATTER RAISED BY MR. CORRELL IS BEYOND OUR PURVIEW.

IN ANY CASE, AN OCTOBER 30, 1986 LETTER FROM DLA, FURNISHED BY MR. CORRELL, SEEMS TO INDICATE THAT DLA ACTED REASONABLY IN EFFECTING THIS SALE, WHICH FOLLOWED DEFAULT BY THE ORIGINAL PURCHASER. MR. CORRELL COMPLAINS, FIRST, THAT DLA CANCELED THE INITIAL RESALE OFFERING, AFTER RECEIVING BIDS, ON THE GROUND THAT THE BIDS WERE TOO LOW TO PROVIDE THE GOVERNMENT A SUFFICIENT RETURN, BUT THEN, AFTER REOFFERING THE PROPERTY, ACCEPTED A PRICE ONLY $1,000 HIGHER THAN MR. CORRELL'S HIGH BID ON THE FIRST OFFERING. DLA EXPLAINS, HOWEVER, THAT IT CANCELED THE INITIAL RESALE OFFERING BECAUSE MR. CORRELL'S HIGH BID WAS SUBSTANTIALLY LOWER THAN THE DEFAULTED CONTRACTOR'S $226,000 PURCHASE PRICE, AND ACCEPTED THE HIGH BID ON THE REOFFERING BECAUSE IT ONLY THEN BECAME APPARENT THAT NO HIGHER BIDS LIKELY WOULD BE RECEIVED. WE FIND NOTHING OBJECTIONABLE OR UNREASONABLE IN DLA ATTEMPTING, ALBEIT ULTIMATELY UNSUCCESSFULLY, TO OBTAIN THE HIGHEST POSSIBLE RETURN FOR THE PROPERTY.

MR. CORRELL ALSO COMPLAINS THAT DLA IMPROPERLY PREVENTED HIM FROM BIDDING ON THE REOFFERING BY RETAINING HIS BID DEPOSIT TO OFFSET DEBTS OWED BY THE DEFAULTED PURCHASER, BASED ON THE BELIEF THAT MR. CORRELL WAS AFFILIATED WITH THE DEFAULTED PURCHASER. ALTHOUGH THE FUNDS NOW HAVE BEEN RETURNED, MR. CORRELL MAINTAINS HE WAS UNABLE TO BID ON THE REOFFERING SINCE HE HAD NO OTHER FUNDS FOR A NEW BID DEPOSIT. DLA EXPLAINS IN ITS OCTOBER 30 LETTER THAT IS SPECIFICALLY ADVISED MR. CORRELL, IN RESPONSE TO HIS INQUIRIES, THAT THE BID DEPOSIT BEING RETAINED BY DLA COULD BE USED AS A BID DEPOSIT ON THE REOFFERING, AND THAT ANY ADDITIONAL FUNDS SUBMITTED TO SUPPORT AN INCREASED BID WOULD BE RETAINED. UNDER THESE CIRCUMSTANCES, IT DOES NOT APPEAR THAT DLA PREVENTED MR. CORRELL FROM BIDDING ON THE REOFFERING.

WE ARE RETURNING THE ENCLOSURES TO YOUR CORRESPONDENCE, AS YOU REQUESTED.