B-151741, JUL. 30, 1963

B-151741, JUL. 30, 1963

TO PRESIDENT, WEATHERS BROS. TRANSFER CO. OF GA., INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JUNE 7, 1963,PROTESTING A READVERTISEMENT FOR BIDS UNDER INVITATION NO. 09-038-63-120, ISSUED MAY 23, 1963, COVERING SERVICES ORIGINALLY SPECIFIED UNDER INVITATION NO. 09- 038-63-70, ISSUED MARCH 28, 1963, BY THE PURCHASING AND CONTRACTING OFFICE, FORT BENNING, GEORGIA.

THE PROPOSED PROCUREMENT WAS ORIGINALLY SET ASIDE EXCLUSIVELY FOR SMALL BUSINESS PARTICIPATION, BASED UPON A JOINT DETERMINATION BY THE CONTRACTING OFFICE AND A REPRESENTATIVE OF THE SMALL BUSINESS ADMINISTRATION. BIDS WERE REQUESTED FOR THE FURNISHING OF SERVICES WHICH MIGHT BE REQUIRED FOR THE MOVEMENT OF HOUSEHOLD GOODS WITHIN A RADIUS OF 20 MILES FROM THE MUSCOGEE COUNTY COURT HOUSE, COLUMBUS, GEORGIA, DURING THE PERIOD JULY 1, 1963, OR DATE OF CONTRACT AWARD IF LATER, THROUGH JUNE 30, 1964. A QUANTITY ESTIMATE OF 4,000,000 POUNDS WAS USED FOR BIDDING PURPOSES AND THE POST TRANSPORTATION OFFICE AT FORT BENNING HAD ESTIMATED THAT THE COST OF THE SERVICE WOULD BE $1.10 PER HUNDRED POUNDS. FOR 4,000,000 POUNDS THE TOTAL COST ESTIMATE WOULD HAVE BEEN $44,000.

SIX BIDS RECEIVED QUOTING THE FOLLOWING RATES PER HUNDRED POUNDS: $1.11, $1.33, $1.50, $1.80, $1.97, AND $2.09. THE LOWEST BID PRICE WAS QUOTED BY BURNHAM VAN SERVICES, INC., COLUMBUS, GEORGIA, AND THE SECOND LOWEST BID PRICE WAS QUOTED BY YOUR COMPANY. THE LOW BID COULD NOT BE ACCEPTED BECAUSE OF A DETERMINATION BY THE SMALL BUSINESS ADMINISTRATION OFFICE IN ATLANTA, GEORGIA, THAT BURNHAM VAN SERVICE, INC., WAS, IN FACT, A LARGE BUSINESS CONCERN. HOWEVER, SINCE YOUR BID PRICE WAS APPROXIMATELY ONE- FIFTH MORE THAN THE GOVERNMENT ESTIMATE AND THE PRICE QUOTED BY BURNHAM VAN SERVICE, INC., AND THE BID EVALUATIONS INDICATED THAT A SAVING OF AT LEAST $8,800 COULD BE EFFECTED IF BOTH LARGE AND SMALL BUSINESS CONCERNS WERE PERMITTED TO BID, THE CONTRACTING OFFICER DETERMINED THAT IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO WITHDRAW THE SMALL BUSINESS SET- ASIDE AND READVERTISE FOR BIDS ON AN UNRESTRICTED BASIS. HE OBTAINED THE CONCURRENCE OF THE SMALL BUSINESS ADMINISTRATION OFFICE IN ATLANTA, GEORGIA, WITH THE PROPOSED ACTION, AND IT HAS BEEN REPORTED THAT, WHEN THE PROCUREMENT WAS READVERTISED, BURNHAM VAN SERVICE, INC., WAS AGAIN THE LOW BIDDER WITH A PRICE OF $1.11 PER HUNDRED POUNDS.

YOU CONTEND THAT THE CONTRACTING OFFICER ERRONEOUSLY CONCLUDED THAT ALL BIDS SUBMITTED BY SMALL BUSINESS CONCERNS UNDER THE ORIGINAL ADVERTISEMENT WERE EXCESSIVE. IT IS ALLEGED THAT YOUR BID PRICE OF $1.33 PER HUNDRED POUNDS COMPARES FAVORABLY WITH THE PRICES OF GOVERNMENT CONTRACTS FOR SIMILAR SERVICES AND THAT, ALTHOUGH YOU HAD PERFORMED A CONTRACT FOR FORT BENNING DURING THE PERIOD JULY 1, 1961, THROUGH JUNE 30, 1962, AT A PRICE OF $1.05 PER HUNDRED POUNDS, A SMALL LOSS WAS INCURRED AND SINCE THAT TIME THE COST OF LABOR HAS INCREASED TO A CONSIDERABLE EXTENT.

IN DETERMINING WHAT MIGHT BE A REASONABLE PRICE FOR FURNISHING THE REQUIRED SERVICES, IT IS APPARENT THAT THE CONTRACTING OFFICER WAS JUSTIFIED IN CONSIDERING THE BID OF BURNHAM VAN SERVICE, INC., SINCE THERE WAS NO INDICATION THAT SUCH BID WAS SUBMITTED OTHER THAN IN GOOD FAITH, AND THE BID PRICE WAS ONLY SLIGHTLY MORE THAN THE COST ESTIMATE MADE BY THE POST TRANSPORTATION OFFICE AT FORT BENNING. IN ANY EVENT, THE CONTRACTING OFFICER WAS ON NOTICE OF THE PROBABILITY THAT A SUBSTANTIAL SAVING IN COST COULD BE AFFECTED THROUGH A READVERTISEMENT FOR BIDS WITHOUT EMPLOYING THE "SMALL BUSINESS RESTRICTED ADVERTISING" PROCEDURE.

SUBSECTION 1.706.3 OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES IN PART THAT THE CONTRACTING OFFICER MAY WITHDRAW A UNILATERAL SMALL BUSINESS SET-ASIDE DETERMINATION OR INITIATE THE WITHDRAWAL OF A JOINT SET -ASIDE DETERMINATION BY GIVING TO THE SMALL BUSINESS ADMINISTRATION REPRESENTATIVE WRITTEN NOTICE CONTAINING THE REASONS FOR WITHDRAWING A JOINT DETERMINATION.

WE DO NOT CONSIDER THAT THE WITHDRAWAL OF THE SMALL BUSINESS SET ASIDE RELATING TO THIS PROPOSED PROCUREMENT WAS ARBITRARY IN ANY RESPECT, AND WE HAVE RECOGNIZED THE PROPRIETY OF WITHDRAWING SMALL BUSINESS SET-ASIDES IN CIRCUMSTANCES SIMILAR TO THOSE HERE INVOLVED. THUS, IN 37 COMP. GEN. 147, WE DETERMINED THAT THE WITHDRAWAL OF A SMALL BUSINESS SET-ASIDE AFTER OPENING OF BIDS WAS NOT IMPROPER INASMUCH AS THE LOW RESPONSIVE BID WAS APPROXIMATELY 10 PERCENT HIGHER THAN THE PRICE PREVIOUSLY PAID FOR THE SAME SUPPLIES, AND THE SUPPLIER HAD SUBMITTED A LOW BID WHICH COULD NOT BE ACCEPTED BECAUSE IT WAS RECEIVED LATE AND BECAUSE THE SUPPLIER NO LONGER QUALIFIED AS A SMALL BUSINESS CONCERN.

YOU HAVE SUGGESTED THAT IT WAS UNFAIR TO YOUR COMPANY TO READVERTISE FOR BIDS AFTER YOUR BID PRICE UNDER THE ORIGINAL INVITATION WAS DISCLOSED. IS A SERIOUS MATTER TO CANCEL AN INVITATION FOR BIDS AFTER EACH COMPETITOR HAS LEARNED HIS COMPETITOR'S PRICE. HOWEVER, IT IS OUR OPINION THAT SUCH ACTION PROPERLY MAY BE TAKEN WHERE, AS HERE, THERE EXISTS A REASONABLE BASIS FOR CONCLUDING THAT CANCELLATION WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT. CANCELLATION FOR SUCH REASON IS SPECIFICALLY AUTHORIZED BY STATUTE IN THE CASE OF A FORMALLY ADVERTISED PROCUREMENT AND THE SAME RULE SHOULD BE APPLIED IN THE CONSIDERATION OF BIDS WHICH HAVE BEEN SOLICITED UNDER THE SMALL BUSINESS SET-ASIDE PROGRAM.

ACCORDINGLY, YOUR PROTEST TO OUR OFFICE IN THE MATTER MUST BE, AND IS, DENIED.