B-125464, NOV. 21, 1955

B-125464, NOV. 21, 1955

TO LENRY-BERGAN, CONTRACTORS:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 10, 1955, WITH ENCLOSURES, PROTESTING THE OMISSION OF YOUR NAMES FROM THE LIST OF SELECTED BIDDERS FROM WHOM BIDS WERE SOLICITED BY THE DISTRICT ENGINEER, U.S. ARMY, BALTIMORE, MARYLAND, FOR CERTAIN CONSTRUCTION WORK ON A RETAINING WALL AT THE SCRANTON ORDNANCE PLANT.

THE DEPARTMENT OF THE ARMY NOW REPORTS THAT AUTHORITY TO NEGOTIATE A CONTRACT COVERING THE CONSTRUCTION WORK WAS GRANTED BY THE CHIEF OF ENGINEERS TO THE DISTRICT ENGINEER, BALTIMORE, MARYLAND, ON THE BASIS THAT DAMAGE CAUSED BY RECENT FLOODS REQUIRED PROMPT ACTION IN ORDER TO REDUCE THE HAZARDS TO LIFE AND PROPERTY. THE SELECTION BOARD OF THE BALTIMORE DISTRICT INITIALLY SELECTED 14 FIRMS WHICH WERE CONSIDERED QUALIFIED TO PERFORM THE WORK. YOUR FIRM WAS INCLUDED IN THIS ORIGINAL LIST. ACTING PURSUANT TO DEFENSE MOBILIZATION ORDER VII-7, SUPPLEMENT NO. 1, DATED AUGUST 25, 1955, THE DEPARTMENT OF THE ARMY, BY DIRECTIVE DATED AUGUST 27, 1955, AUTHORIZED PROCUREMENT AGENCIES TO NEGOTIATE SOLELY WITH FIRMS LOCATED WITHIN THE DISASTER AREA IN THE INTEREST OF ALLEVIATING DISASTER CONDITIONS. THE CHIEF OF ENGINEERS WAS DIRECTED ON OR ABOUT SEPTEMBER 1, 1955, TO NEGOTIATE WITH FIRMS LOCATED IN DISASTER AREAS FOR WORK WHICH COULD REASONABLY BE EXPECTED TO ASSIST IN ALLEVIATING DISASTER CONDITIONS IN THOSE AREAS UNDER AUTHORITY OF SECTION 2 (C) (1) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, 62 STAT. 21. IT IS UNDERSTOOD THAT THESE INSTRUCTIONS WERE PASSED ON TO THE DISTRICT ENGINEER, BALTIMORE, MARYLAND, ON SEPTEMBER 2, 1955, WHO REVIEWED THE ORIGINAL LIST OF PROSPECTIVE BIDDERS FOR THE BUILDING OF THE RETAINING WALL AND FOUND THAT OF THE 14 FIRMS ORIGINALLY LISTED ONLY FIVE WERE LOCATED IN THE DISASTER AREA. INVITATIONS TO SUBMIT PROPOSALS WERE THEN RESTRICTED TO THOSE 5 FIRMS. CONTRACT TO PERFORM THE CONSTRUCTION WORK IS REPORTED TO HAVE BEEN AWARDED TO THE BIDDER AMONG THE 5 WHICH SUBMITTED THE LOWEST BID.

SECTION 2 (C) (1) OF THE ARMED SERVICES PROCUREMENT ACT PROVIDES THAT ALL PURCHASES AND CONTRACTS FOR SUPPLIES AND SERVICES MAY BE NEGOTIATED, WITHOUT ADVERTISING, BY THE AGENCY HEADS SPECIFIED IN SECTION 2 (A) OF THE ACT, INCLUDING THE SECRETARY OF THE ARMY, IF DEEMED TO BE NECESSARY IN THE PUBLIC INTEREST DURING A PERIOD OF NATIONAL EMERGENCY DECLARED BY THE PRESIDENT OR THE CONGRESS. SUCH AN EMERGENCY WAS DECLARED BY THE PRESIDENT ON DECEMBER 16, 1950, AND ON DECEMBER 18, 1950, THE UNDER SECRETARY OF THE ARMY DETERMINED THAT IT WAS NECESSARY IN THE PUBLIC INTEREST THAT PURCHASES AND CONTRACTS FOR SUPPLIES AND SERVICES BE NEGOTIATED WITHOUT FORMAL ADVERTISING DURING THE PERIOD OF THE EMERGENCY. THIS BEING THE SITUATION EXISTING AT THE TIME OF THE AWARD OF THE CONTRACT IN THE PRESENT MATTER, THE MANNER OF MAKING THE AWARD IS NOT OBJECTIONABLE FROM A LEGAL STANDPOINT.

WE, THEREFORE, PERCEIVE NO PROPER BASIS FOR QUESTIONING THE PROCEDURE FOLLOWED IN SOLICITING PROPOSALS FROM A LIMITED NUMBER OF BIDDERS WITHIN THE DISASTER AREA AND IN MAKING AWARD OF A CONTRACT FOR THE CONSTRUCTION WORK TO THE LOWEST BIDDER INCLUDED WITHIN THAT NUMBER OF BIDDERS.