B-146647, MAR. 28, 1963

B-146647, MAR. 28, 1963

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

BY LETTER DATED FEBRUARY 20, 1963, THE DIRECTOR OF PROCUREMENT AND ECONOMIC POLICY, OFFICE OF FINANCE AND ADMINISTRATION, REQUESTED OUR COMMENTS ON THE FEBRUARY 1963 DRAFT OF PROVISIONS RELATIVE TO COLLUSIVE BIDDING WHICH ARE PROPOSED FOR ADDITION TO THE FEDERAL PROCUREMENT REGULATIONS AS SECTION 1-1.317.

WHILE SEVERAL OF THE RECOMMENDATIONS INCLUDED IN OUR LETTER OF OCTOBER 5, 1961, WHICH COMMENTED UPON THE AUGUST 1961 DRAFT OF THIS PROPOSED REGULATION, APPEAR TO HAVE BEEN INCORPORATED INTO THE PRESENT DRAFT, WE NOTE THAT ITS PROVISIONS WOULD STILL BE LIMITED TO FIXED-PRICE CONTRACTS. WE APPRECIATE THAT COLLUSION WOULD BE MORE LIKELY TO OCCUR IN CONNECTION WITH SUCH CONTRACTS. HOWEVER, IN VIEW OF THE POSSIBILITY OF COLLUSION IN PROCUREMENTS INVOLVING OTHER TYPES WE MUST AGAIN RECOMMEND THAT SUBSECTION 1-1.317-2 (A) BE REVISED TO REQUIRE THE CERTIFICATE IN CONNECTION WITH PROPOSALS FOR OTHER THAN FIXED PRICE CONTRACTS.

WHILE SUBSECTION 1-1.317-2 (B) NOW PROVIDES FOR REFERRAL TO THE DEPARTMENT OF JUSTICE OF BIDS WHICH ARE SUSPECTED OF BEING COLLUSIVE, AND SUCH PROCEDURE WOULD APPEAR TO ADEQUATELY PROTECT THE GOVERNMENT'S INTERESTS WHERE COLLUSION IS SUSPECTED PRIOR TO AWARDING A CONTRACT BASED UPON A COLLUSIVE BID, IT WOULD APPEAR THAT THE DRAFT SHOULD MORE SPECIFICALLY SET OUT THE GOVERNMENT'S REMEDIES WHERE A CONTRACT AWARD HAS BEEN BASED UPON A COLLUSIVE BID AND SUCH COLLUSION IS NOT DISCOVERED UNTIL AFTER THE CONTRACTOR HAS ENTERED INTO PERFORMANCE. YOU MAY THEREFORE WISH TO GIVE FURTHER CONSIDERATION, AS RECOMMENDED IN OUR OCTOBER 5, 1961, LETTER, TO EXPANDING THE CERTIFICATE OR OTHERWISE PROVIDING THAT THE FILING OF A FALSE CERTIFICATE WILL JUSTIFY TERMINATION OF THE CONTRACT, WITHOUT LIABILITY TO THE GOVERNMENT EXCEPT AS TO GOODS DELIVERED AND ACCEPTED AT THE TIME OF TERMINATION.