B-142195, MAR. 29, 1960

B-142195, MAR. 29, 1960

TO MR. OSBORNE KOERNER, CONTRACTING OFFICER, FEDERAL HOUSING ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 2, 1960, WITH ENCLOSURES, RELATIVE TO THE REQUEST OF LARRY LARIMORE, CORAL GABLES, FLORIDA, TO WITHDRAW HIS BID SUBMITTED IN RESPONSE TO YOUR SOLICITATION OF BIDS FOR THE MANAGEMENT OF THE SOUTH MIAMI APARTMENT PROJECT LOCATED IN MIAMI, FLORIDA.

THE RECORD SHOWS THAT IN ACCORDANCE WITH THE PROCEDURE PRESCRIBED IN DECISION 19 COMP. GEN. 523 GOVERNING THE SOLICITATION OF BIDS FOR THE AWARD OF A CONTRACT TO COVER THE MANAGEMENT OF A PROJECT TO WHICH TITLE IS HELD BY THE FEDERAL HOUSING COMMISSIONER, BY INVITATION NO. 5453 DATED FEBRUARY 15, 1960, THE FEDERAL HOUSING ADMINISTRATION INVITED WRITTEN SEALED BIDS FROM SIX FIRMS TO HANDLE THE MANAGEMENT OF THE SOUTH MIAMI APARTMENT PROJECT. THE INVITATION CALLED FOR THE FURNISHING OF SERVICES, FACILITIES, MATERIALS, AND LABOR IN CONNECTION WITH THE MANAGEMENT, OPERATION, REPAIR, MAINTENANCE, AND RENTAL OF THE PROPERTIES, AND REQUIRED BIDS TO BE SUBMITTED ON THE BASIS OF A PERCENTAGE OF THE GROSS CASH RENTAL INCOME OF THE PROPERTIES. WHEN BIDS WERE OPENED ON FEBRUARY 25, 1960, SIX BIDS WERE RECEIVED, AS FOLLOWS:

TABLE

BIDDER AMOUNT LARRY LARIMORE

2.99 PERCENT KEYES MANAGEMENT COMPANY

3 PERCENT ARTHUR E. PARRISH 3.5

PERCENT ALBERT L. HAAS 4.5 PERCENT

(MODIFIED) C. THIGPEN 4.98 PERCENT

JAMES EDLER AND ASSOCIATES, INC. 10 PERCENT

UPON BEING INFORMALLY NOTIFIED THAT HIS BID WAS LOW AND THAT ITS ACCEPTANCE WOULD BE RECOMMENDED, MR. LARIMORE EXPRESSED A DESIRE TO WITHDRAW HIS BID. BY LETTER DATED FEBRUARY 27, 1960, HE CONFIRMED THIS REQUEST AND EXPLAINED THAT DUE TO UNFORSEEN DEVELOPMENTS IT WOULD BE IMPOSSIBLE FOR HIM TO ACCEPT THE CONTRACT.

YOU STATE THAT ONE OF THE PROMINENT FEATURES IN YOUR CURRENT MANAGEMENT CONTRACTS, WHICH WAS ALSO PRESENT AT THE TIME THE ABOVE REFERRED-TO DECISION WAS RENDERED, IS THE OBTAINING OF THE REQUIRED SERVICES FROM A PERSON OR FIRM THAT IS WHOLLY COOPERATIVE IN CARRYING OUT THE PROVISIONS OF THE CONTRACT TO THE BEST INTERESTS OF THE GOVERNMENT. YOU, THEREFORE, REQUEST A DECISION AS TO WHETHER MR. LARIMORE MAY BE PERMITTED TO WITHDRAW HIS BID.

WE HAVE BEEN FURTHER ADVISED INFORMALLY BY YOUR OFFICE THAT MR. LARIMORE HAS SINCE INFORMED YOU THAT HE WILL NOT ENTER INTO A CONTRACT BASED UPON HIS BID; THAT YOU ARE UNABLE TO MAKE A DETERMINATION THAT HE IS NOT NOW A RESPONSIBLE BIDDER; AND THAT THE RENTAL AT THE PROJECT IS APPROXIMATELY $1,800 PER MONTH.

UNDER THE TERMS SET FORTH IN THE BID INVITATION PARAGRAPH 5, WITHDRAWAL OF BIDS, PROVIDES THAT BIDS MAY BE WITHDRAWN ON WRITTEN OR TELEGRAPHIC REQUEST RECEIVED FROM THE BIDDER PRIOR TO THE TIME FIXED FOR OPENING, BUT THAT NEGLIGENCE ON THE PART OF THE BIDDER IN PREPARING THE BID CONFERS NO RIGHT FOR THE WITHDRAWAL OF THE BID AFTER IT HAS BEEN OPENED. PARAGRAPH 7, AWARD OR REJECTION OF BIDS, PROVIDES THAT THE CONTRACT WILL BE AWARDED TO THE LOWEST RESPONSIBLE BIDDER COMPLYING WITH CONDITIONS OF THE INVITATION FOR BIDS, PROVIDED HIS BID IS REASONABLE AND IT IS TO THE INTEREST OF THE UNITED STATES TO ACCEPT IT, BUT THAT THE UNITED STATES RESERVES THE RIGHT TO REJECT THE BID OF A BIDDER LACKING THE ESSENTIAL QUALIFICATIONS, INTENTIONS OR MEANS OF SUCCESSFULLY PERFORMING THE CONTRACT. ARTICLE 2 OF THE CONTRACT REQUIRED BY THE TERMS OF THE BID INVITATION TO BE EXECUTED BY THE SUCCESSFUL BIDDER PROVIDES THAT EITHER PARTY TO THE CONTRACT, AFTER IT HAS BEEN IN EFFECT FOR 60 DAYS, MAY WITHOUT LIABILITY CANCEL AND TERMINATE THE CONTRACT BY GIVING TO THE OTHER PARTY NOT LESS THAN 60 DAYS NOTICE OF HIS DECISION TO TERMINATE.

THE GENERAL RULE IS THAT PROPOSALS WHICH HAVE BEEN SUBMITTED IN RESPONSE TO AN ADVERTISEMENT FOR BIDS MAY NOT BE WITHDRAWN AFTER THEY HAVE BEEN OPENED, EVEN BEFORE AWARD IS MADE, AND THAT THE BIDDER IS BOUND TO ACCEPT AWARD. SEE 29 COMP. GEN. 341; 342; 19 ID. 761 AND CASES CITED THEREIN.

SINCE MR. LARIMORE LEGALLY MAY NOT WITHDRAW HIS BID THE GOVERNMENT PROPERLY MAY AWARD HIM THE CONTRACT AND, IN THE EVENT OF HIS REFUSAL TO PERFORM, THE SERVICES MAY BE OBTAINED FROM THE NEXT LOW BIDDER AND THE DIFFERENCE IN PRICE CHARGED TO MR. LARIMORE. WE DO NOT BELIEVE, HOWEVER, THAT IT WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT TO FOLLOW SUCH PROCEDURE IN THE INSTANT CASE. UNDER THE PROVISIONS OF ARTICLE 2 OF THE PROPOSED CONTRACT AFTER THE CONTRACT HAS BEEN IN EXISTENCE 60 DAYS MR. LARIMORE WOULD HAVE THE RIGHT, UPON GIVING 60 DAYS NOTICE, TO TERMINATE THE CONTRACT WITHOUT INCURRING ANY FURTHER LIABILITY. THUS, SINCE MR. LARIMORE HAS ADVISED THAT HE WILL NOT PERFORM IF HE IS AWARDED THE CONTRACT IT APPEARS THAT HE COULD ONLY BE CHARGED, AT MOST, THE EXCESS COST FOR 120 DAYS OR FOUR MONTHS. SINCE THE ACCEPTANCE OF THE NEXT LOW BID, BASED UPON THE ESTIMATED RENTAL OF $1,800 PER MONTH, WOULD RESULT IN AN EXCESS COST TO THE GOVERNMENT OF ONLY 18 CENTS PER MONTH WE WOULD NOT BE REQUIRED TO OBJECT TO YOUR DISREGARDING MR. LARIMORE'S BID IN MAKING AN AWARD OF A CONTRACT UNDER THE INVITATION.