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B-153380, APR. 1, 1964

B-153380 Apr 01, 1964
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INC.: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND CONFIRMING LETTER OF JANUARY 28. AFTER PLANS AND SPECIFICATIONS WERE PREPARED INVITATIONS FOR BIDS WERE MAILED TO PROSPECTIVE BIDDERS ON OCTOBER 31. BIDS WERE SCHEDULE FOR OPENING ON DECEMBER 3. THE FOLLOWING BIDS IN THE AMOUNTS SHOWN FOR ITEM I WERE RECEIVED AND OPENED IN ACCORDANCE WITH ADVERTISEMENT: TABLE ZINGER CONSTRUCTION COMPANY. 000 THE RECORD SHOWS FURTHER THAT AFTER OPENING OF BIDS ALL BIDDERS WERE REQUESTED TO EXTEND THE BID ACCEPTANCE PERIOD TO FEBRUARY 1. IMMEDIATELY AFTER BIDS WERE OPENED. SPECIFICATIONS AND COST ESTIMATE WAS MADE. IT WAS CONSIDERED IN THE BEST INTERESTS OF THE GOVERNMENT TO REJECT ALL BIDS UNDER AUTHORITY OF FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.404-1 (B) (5) INASMUCH AS.

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B-153380, APR. 1, 1964

TO ZINGER CONSTRUCTION COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND CONFIRMING LETTER OF JANUARY 28, 1964, WITH ENCLOSURES, PROTESTING AGAINST THE READVERTISEMENT OF INVITATION FOR BIDS PROJECT NO. 31-5613.

THE RECORD SHOWS THAT VETERANS ADMINISTRATION PROJECT NO. 31-5613 CONSISTING OF ITEMS I, II AND III PROVIDES FOR ALTERNATIONS OF EXISTING SPACE TO PROVIDE A COMPLETE RADIOGRAPHIC DEPARTMENT IN THE MAIN BUILDING OF THE VETERANS ADMINISTRATION HOSPITAL, NEW YORK, NEW YORK. THE VETERANS ADMINISTRATION ESTIMATED THE CONSTRUCTION COST OF ITEM I TO BE $53,400. AFTER PLANS AND SPECIFICATIONS WERE PREPARED INVITATIONS FOR BIDS WERE MAILED TO PROSPECTIVE BIDDERS ON OCTOBER 31, 1963. BIDS WERE SCHEDULE FOR OPENING ON DECEMBER 3, 1963. THE FOLLOWING BIDS IN THE AMOUNTS SHOWN FOR ITEM I WERE RECEIVED AND OPENED IN ACCORDANCE WITH ADVERTISEMENT:

TABLE

ZINGER CONSTRUCTION COMPANY, INCORPORATED $81,854

PHILLIPS CONSTRUCTION COMPANY 116,419

CHARLES L. WALLACE, INCORPORATED 135,000

THE RECORD SHOWS FURTHER THAT AFTER OPENING OF BIDS ALL BIDDERS WERE REQUESTED TO EXTEND THE BID ACCEPTANCE PERIOD TO FEBRUARY 1, 1964, IN ORDER TO AFFORD THE GOVERNMENT TIME IN WHICH TO PROPERLY EVALUATE THEM. IMMEDIATELY AFTER BIDS WERE OPENED, A THOROUGH REEXAMINATION OF THE PLANS, SPECIFICATIONS AND COST ESTIMATE WAS MADE. IT WAS CONSIDERED IN THE BEST INTERESTS OF THE GOVERNMENT TO REJECT ALL BIDS UNDER AUTHORITY OF FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.404-1 (B) (5) INASMUCH AS, UPON REVIEW, THE GOVERNMENT COST ESTIMATE WAS FOUND TO BE REALISTIC, IN CONSIDERATION OF WHICH THE APPARENT LOW BID, THAT OF THE ZINGER CONSTRUCTION COMPANY, INC., REPRESENTED AN UNREASONABLE PRICE FOR PERFORMANCE OF THE CONTEMPLATED WORK. IT WAS FOUND THAT FUNDS WERE NOT AVAILABLE FOR FINANCING THE PROPOSED CONTRACT WORK IN THE AMOUNT OF THE APPARENT LOW BID WHICH EXCEEDED THOSE FUNDS BY APPROXIMATELY 50 PERCENT, AND FURTHER, THAT SINCE THE WIDE RANGE OF BID PRICES DID NOT INDICATE COMPETITIVE PRICES IT WAS DECIDED TO READVERTISE AND TO ATTEMPT, THROUGH GREATER COMPETITION, TO OBTAIN MORE FAVORABLE PROPOSALS.

AS A RESULT OF THE ABOVE FINDINGS, ALL BIDDERS WERE VERBALLY ADVISED ON JANUARY 23, 1964, THAT ALL BIDS WERE REJECTED (FPR 1-2.404-3). INVITATION FOR BIDS WERE AGAIN ISSUED JANUARY 24, 1964, WITH BIDS SCHEDULED TO BE OPENED MARCH 3, 1964. WE HAVE BEEN ADVISED THAT THE BID OPENING DATE HAS BEEN CHANGED TO APRIL 7, 1964.

YOU HAVE PROTESTED THE REJECTION OF ALL PREVIOUS BIDS ON THE GROUND THAT THIS IS AN ADVERTISED SOLICITATION OF THE SAME PROJECT WITH THE SAME PLANS AND SPECIFICATIONS FOR WHICH YOUR BID WAS THE LOWEST. YOU STATE THAT YOU FEEL---

"* * * THIS IS A VIOLATION OF THE PRINCIPLES OF FORMAL ADVERTISING AND DESTRUCTION OF THE COMPETITIVE SPIRIT THEREOF AS SO OFTEN STATED BY THE COMPTROLLER GENERAL. WE PROTEST ON THE GROUNDS OF THE DECISIONS ON THIS SUBJECT AND UNDER THE AUTHORITY OF FPR 1-2.407-8 * * *.'

YOU ASK THAT THIS OFFICE INSTRUCT THE VETERANS ADMINISTRATION TO MAKE THE AWARD TO YOU AND ASK FURTHER THAT THE AGENCY BE INSTRUCTED TO POSTPONE THE OPENING OF THE READVERTISEMENT PENDING OUR DECISION.

SECTION 253 (B) OF TITLE 41, U.S.C. PROVIDES THAT "ALL BIDS MAY BE REJECTED WHEN THE AGENCY HEAD DETERMINES THAT IT IS IN THE PUBLIC INTEREST SO TO DO.' IT CONSISTENTLY HAS BEEN HELD THAT AN INVITATION FOR BIDS DOES NOT IMPART ANY OBLIGATION TO ACCEPT ANY OF THE OFFERS RECEIVED. SEE O- BRIEN V. CARNEY, 6 F.SUPP. 761 AND COLORADO PAVING COMPANY V. MURPHY, 78 F. 28. FURTHER, IT HAS BEEN HELD BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT AND BY THE COURTS THAT THE QUESTION OF REJECTING ALL BIDS AND READVERTISING IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION. WHERE, AS HERE, IT IS SHOWN THAT THE PURPOSE OF SUCH ACTION IS TO OBTAIN FOR THE GOVERNMENT THE ADVANTAGE OF MORE COMPETITIVE AND REALISTIC BIDDING AS DETERMINED BY THE GOVERNMENT'S DULY CONSTITUTED AGENTS, WE PERCEIVE NO OBJECTION TO SUCH ACTION. SEE 17 COMP. GEN. 554.

WE ARE MOST AWARE THAT THE REJECTION OF BIDS AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITOR'S PRICES IS A SERIOUS MATTER AND SHOULD NOT BE DONE EXCEPT FOR COGENT REASONS. NEVERTHELESS, WE HAVE RECOGNIZED THAT SINCE CONTRACTING OFFICERS ARE AGENTS OF, AND ARE REQUIRED TO WORK IN THE BEST INTERESTS OF THE GOVERNMENT, THEIR ACTIONS IN REJECTING BIDS AND READVERTISING MAY NOT BE CONSIDERED IMPROPER WHEN BASED UPON SUBSTANTIAL REASONS LEADING TO A BONA FIDE BELIEF THAT THE INTERESTS OF THE GOVERNMENT WILL BE BEST SERVED THEREBY. COMPARE 38 COMP. GEN. 235 AND 39 COMP. GEN. 86.

IN THIS INSTANCE THE CONTRACTING AGENCY HAS DETERMINED AFTER DUE CONSIDERATION OF THE MATTER THAT THE PRICES RECEIVED WERE NOT REALISTIC AND NOT WITHIN A TRULY COMPETITIVE RANGE. SINCE THOSE BENEFITS TO THE GOVERNMENT CONTEMPLATED BY THE LAW GOVERNING FORMAL ADVERTISING WERE NOT ASSURED BY THE INITIAL BIDDING ALL THE BIDS WERE REJECTED. IN VIEW THEREOF AND IN VIEW OF THE DISCRETION VESTED IN THE CONTRACTING AGENCY WITH RESPECT TO SUCH MATTERS, WE FIND NO BASIS TO QUESTION THE LEGALITY OF THE ACTION TAKEN BY THE VETERANS ADMINISTRATION AND YOUR PROTEST IS DENIED.

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