B-139334, AUG. 14, 1959

B-139334, AUG. 14, 1959

TO PACIFIC INTERNATIONAL LTD.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 10, 1959, WITH ENCLOSURES, RECEIVED HERE APRIL 14, 1959, RELATIVE TO YOUR PROTEST AGAINST AN AWARD OF A CONTRACT TO PHILIPPINE AIRLINES, INC., MANILA, P.I., PURSUANT TO AIR FORCE INVITATION FOR BIDS NO. 62-321-S-59-1, WHICH ADVERTISED FOR BIDS ON FIVE SURPLUS C-47 AIRCRAFT LOCATED AT THE KADENA AIR FORCE BASE, OKINAWA, WITH BIDS HAVING BEEN SCHEDULED FOR OPENING ON FEBRUARY 9, 1959.

THE DEPARTMENT OF THE AIR FORCE HAS FURNISHED A REPORT IN THE MATTER AND IT APPEARS THAT FIVE BIDS WERE RECEIVED; THAT THE TWO HIGHEST BIDS WERE SUBMITTED BY YOUR COMPANY AND PHILIPPINE AIRLINES, INC.; THAT THE BID OF THE LATTER CONCERN WAS CONSIDERED NOTWITHSTANDING THE FACT THAT THE COMPANY'S BID DEPOSIT WAS IN PHILIPPINE CURRENCY AND THE COMPANY'S BID PRICES WERE IN TERMS OF PHILIPPINE CURRENCY; AND THAT PHILIPPINE AIRLINES, INC., WAS AWARDED A CONTRACT ON MARCH 18, 1959. YOUR BID SET FORTH A TOTAL PRICE OF $21,550 IN AMERICAN CURRENCY AND THE BID OF PHILIPPINE AIRLINES, INC., SET FORTH A TOTAL PRICE OF 50,000 PESOS WHICH, WHEN CONVERTED INTO U.S. DOLLARS AT THE STANDARD EXCHANGE RATE THEN APPLICABLE, AMOUNTED TO $24,905.98. THE CONTRACT WITH PHILIPPINE AIRLINES, INC., HAS BEEN FULLY EXECUTED WITH FINAL PAYMENT HAVING BEEN MADE AND THE PROPERTY REMOVED FROM THE KADENA AIR FORCE BASE.

YOUR PROTEST IN THE MATTER APPEARS TO HAVE BEEN BASED UPON THE FOLLOWING CONTENTIONS: (1) THAT THE BID OF PHILIPPINE AIRLINES, INC., SHOULD HAVE BEEN REJECTED BECAUSE BIDDERS WERE NOT PERMITTED TO SUBMIT BID DEPOSITS OR TO QUOTE PRICES EXCEPT IN UNITED STATES CURRENCY; (2) THAT YOU WOULD HAVE QUOTED CONSIDERABLY HIGHER PRICES IF IT HAD BEEN KNOWN THAT A BID SUBMITTED ON THE BASIS OF PAYMENT IN PHILIPPINE CURRENCY WOULD HAVE BEEN ACCEPTED BY THE CONTRACTING OFFICER; (3) THAT YOU RECEIVED CORRESPONDENCE FROM THE AIR FORCE, THE UNITED STATES EMBASSY IN THE PHILIPPINES AND THE CENTRAL BANK OF THE PHILIPPINES TO THE EFFECT THAT PHILIPPINE CURRENCY WOULD NOT BE ACCEPTABLE AS PAYMENT FOR UNITED STATES SURPLUS PROPERTY SOLD IN JAPAN; AND (4) THAT PERMITTING ONLY ONE FIRM TO BID AT PRICES STATED IN TERMS OF PHILIPPINE PESOS WAS DISCRIMINATORY.

THE DEPARTMENTAL REPORT SETS FORTH THAT YOUR COMPANY WAS NEVER DENIED THE OPPORTUNITY TO SUBMIT A BID FOR THE FIVE C-47 AIRCRAFT IN PESOS AND STATES THAT THE DEPARTMENT HAS NOT BEEN FURNISHED ANY INFORMATION OR DATA TO SHOW THAT YOUR BID WOULD HAVE BEEN CONSIDERABLY HIGHER IF THE INVITATION FOR BIDS HAD NOT INDICATED THAT THE BID DEPOSITS AND BIDDERS' OFFERS SHOULD BE IN AMERICAN DOLLAR AMOUNTS. THE DEPARTMENT OF THE AIR FORCE REFERS TO PROVISIONS IN THE INVITATION WHICH PROVIDE IN EFFECT THAT EITHER A BID BOND OR A BID DEPOSIT IN AMERICAN CURRENCY MUST ACCOMPANY EACH BID BUT THE DEPARTMENT EMPHASIZES THE WORD "MAY" AS USED IN THE WHICH STATES; ,BIDS RECEIVED NOT ACCOMPANIED BY THE REQUIRED BID WHICH STATES; "BIDS RECEIVED NOT ACCOMPANIED BY THE REQUIRED BID DEPOSIT OR BOND MAY NOT BE CONSIDERED.' ALSO, ATTENTION IS INVITED TO THE FACT THAT CLAUSE C, PROVISIONS OF SALE, DOES NOT SPECIFICALLY PROHIBIT THE CONSIDERATION OF BIDS SUBMITTED ON THE BASIS OF MAKING PAYMENT IN FOREIGN CURRENCY AND THAT THE INVITATION CONTAINED A PROVISION IN CLAUSE 3 OF THE GENERAL SALE TERMS AND CONDITIONS THAT "THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY AND ALL BIDS, TO WAIVE ANY TECHNICAL DEFECTS IN BID, AND, UNLESS OTHERWISE SPECIFIED BY THE GOVERNMENT OR BY THE BIDDER, TO ACCEPT ANY ONE ITEM OR GROUP OF ITEMS IN THE BID, AS MAY BE IN THE BEST INTERESTS OF THE GOVERNMENT.'

THE UNITED STATES WAS PRIMARILY INTERESTED IN OBTAINING THE HIGHEST POSSIBLE PRICE FOR THE SURPLUS PROPERTY WHICH IT PROPOSED TO SELL AND WE ARE ADVISED THAT CONTRACTING OFFICERS ARE PERMITTED BY AIR FORCE REGULATION TO SELL FOREIGN EXCESS PROPERTY FOR UNITED STATES DOLLARS OR, SUBJECT TO CERTAIN APPROVALS, FOR THE EQUIVALENT IN FOREIGN CURRENCY WHICH CAN READILY BE CONVERTED TO UNITED STATES DOLLAR AMOUNTS. IT IS STATED IN THE REPORT OF THE DEPARTMENT OF THE AIR FORCE THAT ALL NECESSARY APPROVALS WERE OBTAINED IN THIS CASE TO ACCEPT PESOS IN LIEU OF DOLLARS, AND THAT THE FILE ALSO INDICATES THAT PACIFIC AIRLINES, INC., HAD OBTAINED THE REQUIRED APPROVALS OF BOTH THE DEPARTMENT OF COMMERCE AND INDUSTRY AND THE CENTRAL BANK OF THE PHILIPPINE GOVERNMENT TO IMPORT THESE AIRCRAFT AND TO EXCHANGE PESOS FOR DOLLARS UNDER THE REGULATIONS OF THAT GOVERNMENT. IS NOTED THAT YOU WERE ADVISED BY THE AMERICAN EMBASSY AT MANILA, IN CONNECTION WITH A PREVIOUS INVITATION FOR BIDS, THAT THERE WOULD BE NO LEGAL OBSTACLE TO BIDDING IN PHILIPPINE PESOS PROVIDED PERMISSION WAS OBTAINED FROM THE PHILIPPINE GOVERNMENT.

FOR SEVERAL YEARS, OUR OFFICE HAS TAKEN THE POSITION THAT A REQUIREMENT IN AN INVITATION FOR BIDS FOR THE SUBMISSION OF A BID BOND MAY BE WAIVED BY THE CONTRACTING OFFICER, PROVIDED THAT THE FAILURE TO COMPLY WITH THE REQUIREMENT WAS DUE TO INADVERTENCE OR OTHER EXCUSABLE CAUSE NOT BEARING ON THE BIDDER'S ABILITY OR INABILITY TO OBTAIN THE BOND BECAUSE OF FINANCIAL OR RELATED REASONS. A DECISION OF FEBRUARY 5, 1959, 38 COMP. GEN. 532, IN WHICH WE CONCLUDED THAT A WAIVER OF A MANDATORY BID BOND REQUIREMENT IN AN INVITATION FOR BIDS SHOULD NOT BE PERMITTED WAS APPLICABLE "ONLY TO BIDS SUBMITTED UNDER INVITATIONS ISSUED MORE THAN 60 DAYS AFTER THE DATE OF THIS DECISION.'

IN VIEW OF THE STATED EFFECTIVE DATE FOR THE APPLICATION OF SUCH NEW RULE, AND SINCE IT APPEARS THAT PHILIPPINE AIRLINES, INC., SUBSTANTIALLY MET THE BID BOND OR DEPOSIT REQUIREMENT OF THE INSTANT INVITATION FOR BIDS WHEN IT SUBMITTED A BID DEPOSIT WHICH COULD READILY BE CONVERTED TO AMERICAN CURRENCY AND WHICH REPRESENTED THE REQUIRED 20 PERCENT OF ITS TOTAL BID PRICE, WE WOULD NOT BE WARRANTED IN CONCLUDING THAT THE CONTRACTING OFFICER ACTED IMPROPERLY WHEN HE MADE THE AWARD TO THAT COMPANY.

ACCORDINGLY, YOU ARE ADVISED THAT NO FURTHER ACTION IN THE MATTER APPEARS TO BE REQUIRED BY OUR OFFICE.