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BIDS - DISCARDING ALL BIDS - READVERTISEMENT ON THE READVERTISEMENT OF A PROCUREMENT BECAUSE THE LOWEST ACCEPTABLE BID WAS IN EXCESS OF THE GOVERNMENT ESTIMATES. WAS A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION IN THE BEST INTEREST OF THE GOVERNMENT. 1956: REFERENCE IS MADE TO YOUR LETTERS DATED SEPTEMBER 13 AND OCTOBER 4. THE RECORDS OF THIS OFFICE INDICATE THAT BIDS WERE ORIGINALLY SOLICITED FOR PERFORMANCE OF SUCH WORK BY INVITATION DATED JUNE 7. BIDS IN THE FOLLOWING AMOUNTS WERE RECEIVED IN RESPONSE THERETO: TABLE CANNON DIAMOND DRILLING COMPANY . 500 AFTER THE BIDS WERE OPENED AND REQUESTED THAT ITS BID PRICE BE CORRECTED TO $127. WHILE THE EVIDENCE INDICATED THE LOW BID WAS ERRONEOUS.

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B-128646, NOVEMBER 2, 1956, 36 COMP. GEN. 364

BIDS - DISCARDING ALL BIDS - READVERTISEMENT ON THE READVERTISEMENT OF A PROCUREMENT BECAUSE THE LOWEST ACCEPTABLE BID WAS IN EXCESS OF THE GOVERNMENT ESTIMATES, ANY RESTRICTION ON PROSPECTIVE BIDDERS WHICH WOULD REQUIRE THEM TO SUBMIT BIDS BEARING ANY RELATIONSHIP TO THE PRICES IN THE PREVIOUSLY REJECTED BIDS WOULD DEFEAT THE ADVERTISING STATUTES. THE READVERTISEMENT OF A PROCUREMENT, WHICH RESULTED IN AN AWARD AT A PRICE SUBSTANTIALLY LOWER THAN THE GOVERNMENT ESTIMATE AND THE LOWEST BID UNDER THE ORIGINAL INVITATION, WAS A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION IN THE BEST INTEREST OF THE GOVERNMENT.

TO OWEN, WARD AND GREENWOOD, NOVEMBER 2, 1956:

REFERENCE IS MADE TO YOUR LETTERS DATED SEPTEMBER 13 AND OCTOBER 4, 1956, WRITTEN IN BEHALF OF BOYLES BROS. DRILLING COMPANY AND PROTESTING THE ACTION OF THE DEPARTMENT OF THE INTERIOR IN AWARDING A CONTRACT TO CANNON DIAMOND DRILLING COMPANY FOR EXPLORATORY DRILLING AND WATER TESTING AT GLEN CANYON DAMSITE, COLORADO STORAGE PROJECT, AS DESCRIBED IN SPECIFICATIONS NO. 400C-63.

THE RECORDS OF THIS OFFICE INDICATE THAT BIDS WERE ORIGINALLY SOLICITED FOR PERFORMANCE OF SUCH WORK BY INVITATION DATED JUNE 7, 1956. BIDS IN THE FOLLOWING AMOUNTS WERE RECEIVED IN RESPONSE THERETO:

TABLE CANNON DIAMOND DRILLING COMPANY --------------------- $105,403.00 BOYLES BROS. DRILLING COMPANY ----------------------- 226,696.00 MINERALS ENGINEERING COMPANY ------------------------- 273,923.25

HOWEVER, THE LOW BIDDER ALLEGED ERROR IN THE AMOUNT OF $22,500 AFTER THE BIDS WERE OPENED AND REQUESTED THAT ITS BID PRICE BE CORRECTED TO $127,903 BECAUSE OF SUCH ERROR. BY LETTER DATED JULY 27, 1956 (B 128646) WE ADVISED THE CONTRACTING OFFICER THAT, WHILE THE EVIDENCE INDICATED THE LOW BID WAS ERRONEOUS, SUCH EVIDENCE WAS NOT SUFFICIENT TO SUPPORT CORRECTION OF THE BID PRICE AND THE BID SHOULD THEREFORE BE DISREGARDED; HOWEVER, IN VIEW OF THE FACT THAT THE REMAINING BIDS WERE SUBSTANTIALLY IN EXCESS OF THE GOVERNMENT'S ESTIMATE OF $193,905, WE SUGGESTED THAT CONSIDERATION SHOULD BE GIVEN TO THE ADVISABILITY OF REJECTING ALL BIDS AND READVERTISING.

YOUR LETTER ADVISES THAT ALL BIDS UNDER THE ORIGINAL INVITATION WERE SUBSEQUENTLY REJECTED, AND THE DEPARTMENT OF THE INTERIOR HAS INFORMALLY ADVISED THAT IN RESPONSE TO A NEW INVITATION THE ORIGINAL BIDDERS SUBMITTED BIDS IN THE FOLLOWING AMOUNTS:

TABLE CANNON DIAMOND DRILLING COMPANY ----------------------- $148,185 MINERALS ENGINEERING COMPANY --------------------------- 208,158 BOYLES BROS. DRILLING COMPANY ------------------------- 226,696

YOUR PROTEST AGAINST THE AWARD TO CANNON IS BASED ON THE FACT THAT THE BID WHICH THAT COMPANY SUBMITTED IN RESPONSE TO THE READVERTISEMENT CONTAINED ALTERATIONS IN THE BID PRICES ON ELEVEN ITEMS IN ADDITION TO THE ONE ITEM ON WHICH CORRECTION WAS REQUESTED IN ITS PRIOR BID. IN EFFECT, YOU STATE THAT THE READVERTISEMENT WAS AT CANNON'S REQUEST FOR THE SOLE PURPOSE OF CORRECTING AN ERROR, THAT CANNON TOOK ADVANTAGE OF THE READVERTISEMENT NOT ONLY TO CORRECT THE ALLEGED ERROR BUT TO REVISE ITS ENTIRE BID SCHEDULE IN THE DIRECTION OF YOUR CLIENT'S ESTIMATE, AND THAT A PROCEDURE WHICH PERMITS A BIDDER TO TAKE SUCH ADVANTAGE OF A COMPETITOR'S ESTIMATE DESTROYS THE EFFICACY OF THE BIDDING PRACTICE. ACCORDINGLY, YOU CONTEND THAT THE NET RESULT OF READVERTISEMENT HAS BEEN TO PERMIT A BIDDER TO CHANGE HIS BIDS, NOTWITHSTANDING THE BIDS HAD BEEN OPENED AND EXHIBITED TO ALL INTERESTED PARTIES, THAT THE ACCEPTANCE OF THE BID IN SUCH REVISED FORM WAS AN ABUSE OF DISCRETION IN CLEAR VIOLATION OF APPLICABLE LAW AND REGULATIONS, AND THAT THE ACCEPTANCE SHOULD THEREFORE BE WITHDRAWN.

WHILE YOUR VIEWS IN THIS MATTER ARE APPRECIATED, YOUR ATTENTION IS INVITED TO THE FACT THAT THE BIDS SUBMITTED BY BOYLES BROS. AND BY MINERALS ENGINEERING COMPANY UNDER THE ORIGINAL INVITATION WERE REJECTED BECAUSE THEY WERE CONSIDERED EXCESSIVE, AND BIDS WERE SOLICITED UNDER A NEW INVITATION TO INSURE THAT THE UNITED STATES WOULD RECEIVE THE BENEFIT OF THE FULL AND OPEN COMPETITION WHICH WAS CONTEMPLATED BY THE ADVERTISING STATUTES. SUCH STATUTES WERE ENACTED FOR THE PROTECTION OF THE INTERESTS OF THE UNITED STATES AND NOT FOR THE BENEFIT OR PROTECTION OF BIDDERS. PERKINS V. LUKENS STEEL COMPANY, 310 U.S. 113, 126; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75, 78. WE HAVE, NEVERTHELESS, CONSTANTLY SOUGHT TO PROTECT AND MAINTAIN THE PRINCIPLES OF IMPARTIALITY AND FAIR PLAY UPON WHICH THE COMPETITIVE BIDDING SYSTEM DEPENDS, AND HAVE NEVER COUNTENANCED THE REJECTION OF BIDS MERELY FOR THE PURPOSE OF AFFORDING THE BIDDERS AN OPPORTUNITY TO BETTER THE PRICES OF THEIR COMPETITORS. WE CANNOT, HOWEVER, CONSIDER THE MATTER OF COMPETITIVE BIDDING FOR GOVERNMENT CONTRACTS SOLELY AS A GAME, IN WHICH THE CONTRACT MUST AUTOMATICALLY GO THE LOWEST BIDDER WITHOUT REGARD TO THE REASONABLENESS OF HIS PRICE OR TO OTHER ATTEMPTED BIDS WHICH CANNOT FOR TECHNICAL REASONS BE ACCEPTED. WHEN IN THE LIGHT OF ALL THE FACTS, INCLUDING THOSE DISCLOSED BY THE BIDDING, IT IS ADMINISTRATIVELY DETERMINED THAT THE LOWEST ACCEPTABLE BID IS IN EXCESS OF THE AMOUNT FOR WHICH THE GOVERNMENT SHOULD BE ABLE TO OBTAIN THE SUPPLIES OR SERVICES SOUGHT, WE BELIEVE THAT THE REJECTION OF ALL BIDS AND READVERTISING OF THE CONTRACT IS A PROPER EXERCISE OF THE ADMINISTRATIVE DISCRETION, IN CONFORMITY WITH THE DUTY OF THE ADMINISTRATIVE OFFICIALS TO ACT IN THE BEST INTEREST OF THE GOVERNMENT. UPON SUCH REJECTION AND READVERTISING THE ORIGINAL BIDS ARE NO LONGER MATERIAL OR EFFECTIVE FOR ANY PURPOSE WHATSOEVER. IT IS NO DOUBT REGRETTABLE THAT ALL BIDDERS ARE AWARE OF THE AMOUNTS ORIGINALLY QUOTED BY THEIR COMPETITORS, BUT THEY ALSO ARE BETTER ADVISED AS TO WHAT PRICE RANGE IS CONSIDERED REASONABLE BY THE GOVERNMENT'S REPRESENTATIVES, AND ALL HAVE EQUAL OPPORTUNITIES TO SUBMIT SUCH NEW BIDS AS THEY WILL. IT IS OBVIOUS THAT THE IMPOSITION OF ANY RESTRICTION ON A PROSPECTIVE BIDDER WHICH WOULD REQUIRED HIM TO SUBMIT A BID BEARING ANY PARTICULAR RELATIONSHIP TO A PREVIOUSLY REJECT BID WOULD DEFEAT THE VERY PURPOSE FOR WHICH THE ADVERTISING STATUTES WERE ENACTED.

IN THE INSTANT CASE ALL BIDDERS UNDER THE ORIGINAL INVITATION HAD EQUAL OPPORTUNITY TO BE APPRISED OF THE BIDS SUBMITTED BY THEIR COMPETITORS, AND ALL BIDDERS UNDER THE READVERTISED INVITATION HAD EQUAL AND UNRESTRICTED OPPORTUNITY TO SUBMIT COMPETITIVE PROPOSALS WITHOUT REGARD TO THE ORIGINAL BID PRICES. IN VIEW OF THE FACT THAT THE CONTRACT HAS BEEN AWARDED TO THE LOWEST BIDDER AT A PRICE WHICH IS SUBSTANTIALLY LOWER THAN EITHER THE ENGINEER'S ESTIMATE OR THE LOWEST BID PRICE WHICH COULD HAVE BEEN ACCEPTED UNDER THE ORIGINAL INVITATION, IT WOULD APPEAR THAT THE DECISION OF THE DEPARTMENT OF THE INTERIOR TO READVERTISE WAS IN THE BEST INTEREST OF THE GOVERNMENT.

UNDER THE CIRCUMSTANCES THERE IS NO LEGAL BASIS ON WHICH THIS OFFICE MAY QUESTION THE ADMINISTRATIVE ACTION TAKEN IN THE MATTER.

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