B-167381, JAN. 28, 1970

B-167381, JAN. 28, 1970

BID PROTEST--SURETY PRACTICES DECISION DENYING PROTEST OF HARRIS BROTHERS CO. AND B AND T TRUCKING CO. AGAINST AWARD OF STAR ROUTE CONTRACT BY POST OFFICE DEPARTMENT. SINCE AWARD WAS MADE TO LOW BIDDER AND NO EVIDENCE OF WRONG DOING IS FOUND ON PART OF SUCCESSFUL BIDDERS, FACT THAT TWO LOW BIDDERS WERE REQUIRED TO RAISE BID PRICES IN ORDER TO GET SURETY BONDS IS MATTER BETWEEN PROTESTANTS AND SURETY.

TO MR. MORRIS J. LEVIN:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 27, 1969, PROTESTING ON BEHALF OF HARRIS BROTHERS COMPANY AND B AND T TRUCKING COMPANY AGAINST THE AWARD OF STAR ROUTE CONTRACTS BY THE POST OFFICE DEPARTMENT TO JOHN T. SAMUEL.

ON JUNE 6, 1969, JOHN T. SAMUEL BID $30,819.50 ON STAR ROUTE NO. 19034, BETWEEN PHILADELPHIA AND AMBLER AND $45,346.50 ON STAR ROUTE NO. 19011, BETWEEN PHILADELPHIA AND WILMINGTON. THE PEERLESS INSURANCE COMPANY (PEERLESS) AGREED TO BE SURETY FOR BOTH OF THESE BIDS.

ON JUNE 10, 1969, WILLIAM F. CHILDS, REPRESENTING B AND T TRUCKING, MET WITH A MR. PATTERSON, AN AGENT FOR PEERLESS, IN ORDER TO OBTAIN THE REQUIRED BONDING FOR HIS BID OF $28,340 ON STAR ROUTE NO. 19034. BEFORE AGREEING TO COMMIT PEERLESS TO ISSUE A BOND, HOWEVER, PATTERSON REQUIRED CHILDS TO RAISE HIS BID PRICE. YOU ALLEGE THAT PATTERSON, IMPROPERLY AND DISCRIMINATIVELY, AND WITHOUT A COMPREHENSIVE REVIEW OF B AND T'S FINANCIAL DATA, OR A GOOD BUSINESS REASON, FORCED HIM TO BID OVER $31,000. BY VIRTUE OF THIS CHANGE IN BID PRICE, CHILD'S FIRM WAS CAUSED TO BE OTHER THAN LOW BIDDER. THE CONTRACT WAS THEN AWARDED TO SAMUEL AS LOW BIDDER.

WILLIAM T. HARRIS, REPRESENTING HARRIS BROTHERS COMPANY, ALSO MET WITH PATTERSON ON JUNE 10, 1969, TO ARRANGE FOR PEERLESS TO BOND HIS BID ON STAR ROUTE NO. 19011. HARRIS INTENDED TO SET HIS BID PRICE AT $42,000 BUT ALLEGES THAT PATTERSON WITHOUT REVIEWING ANY FINANCIAL DATA, TOLD HIM HE WOULD HAVE TO RAISE HIS BID TO APPROXIMATELY $46,000 IN ORDER TO OBTAIN THE REQUIRED BONDING. HARRIS' ORIGINAL BID, LIKE CHILD'S, WOULD HAVE BEEN THE LOW BID. INSTEAD THE CONTRACT WAS AWARDED TO SAMUEL AS LOW BIDDER.

YOU ASK, IN YOUR LETTER OF JUNE 16, 1969, TO THE POST OFFICE DEPARTMENT THAT THE DEPARTMENT REFUSE TO AWARD THE CONTRACTS TO SAMUEL AND THAT YOUR CLIENTS BE ALLOWED TO RESUBMIT THEIR BIDS AT THEIR ORIGINAL PRICES SO THAT THEY WILL BE LOW BIDDERS.

IT SHOULD BE NOTED AT THE OUTSET THAT WE HAVE FOUND NO EVIDENCE OF A VIOLATION OF THE LAW. IN ADDITION, A REVIEW OF THE FACTS OF THE CASE BY THE CRIMINAL DIVISION OF THE DEPARTMENT OF JUSTICE HAS RESULTED IN THEIR CONCLUDING THAT THEY HAVE NO BASIS FOR CONDUCTING A CRIMINAL INVESTIGATION.

FURTHER, WE HAVE NO EVIDENCE, NOR DO YOU ALLEGE, THAT SAMUEL PARTICIPATED IN THE ALLEGED DISCRIMINATORY PRACTICES. SINCE SAMUEL DID SUBMIT THE LOWEST BIDS, HE WAS ENTITLED TO BE AWARDED BOTH CONTRACTS. IT WOULD THEREFORE BE UNJUST AND INEQUITABLE FOR THIS OFFICE TO PENALIZE HIM FOR ANY WRONGDOING ON THE PART OF PATTERSON.

FINALLY, IT IS OUR UNDERSTANDING THAT ASIDE FROM PEERLESS, THERE ARE AT LEAST TWO OTHER MAJOR FIRMS FROM WHOM YOUR CLIENTS MIGHT HAVE OBTAINED BONDS. YOUR CLIENTS WERE FREE TO DEAL WITH EITHER OF THESE FIRMS OR TO MAKE OTHER ARRANGEMENTS TO ACQUIRE A SURETY FOR THEIR BIDS. WE SEE NO REASON WHY THEIR FAILURE TO TAKE SUCH ACTION SHOULD RESULT IN A LOSS OF THE CONTRACTS TO SAMUEL. YOUR CLIENTS' REMEDIES, IF ANY, LIE AGAINST PATTERSON AND PEERLESS.