B-153036, JAN. 4, 1966

B-153036, JAN. 4, 1966

TO THE FIRST NATIONAL REALTY CORPORATION:

REFERENCE IS MADE TO YOUR CORRESPONDENCE OF APRIL 13, 1965, WHEREIN YOU REQUEST RECONSIDERATION OF OUR DECISION OF FEBRUARY 19, 1965, DISALLOWING YOUR PROTEST OF AWARDS MADE FOR LEASED OFFICE SPACE.

WE HAVE AGAIN REVIEWED THESE LEASEHOLD ACQUISITIONS BY THE GENERAL SERVICES ADMINISTRATION AND THE PROCEDURES BY WHICH THESE ACQUISITIONS WERE MADE. FROM THE CORRESPONDENCE AND OTHER MATERIAL CONTAINED IN THE FILE, IT WOULD APPEAR THAT THERE MAY BE A MISUNDERSTANDING ON YOUR PART CONCERNING THE RULES AND REGULATIONS APPLICABLE TO SUCH PROCUREMENTS. GENERALLY, CONTRACTS FOR THE PERFORMANCE OF WORK, SUPPLYING OF MATERIALS OR THE ACQUISITION OF LEASED OFFICE SPACE, ETC., ARE LET BY PROCEDURES SPECIFICALLY PRESCRIBED BY STATUTE AND SUCH REGULATIONS AS ARE PROMULGATED BY AUTHORITY OF SUCH STATUTE. THE BASIC LAWS AND REGULATIONS GOVERNING THE LEASEHOLD ACQUISITIONS UNDER DISCUSSION ARE 41 U.S.C. 252 ET SEQ. AND THE FEDERAL PROCUREMENT REGULATIONS, PARTS 1-2 AND 1-3. THE BASIC PURPOSE OF SUCH LAWS IS TO FORMALIZE AND ENCOURAGE COMPETITIVE BIDDING ON THE PART OF PROSPECTIVE CONTRACTORS WHEREVER POSSIBLE.

ALTHOUGH FORMALIZED COMPETITIVELY BID CONTRACTS ARE THE BASIC REQUIREMENTS OF LAW, OUR OFFICE HAS HELD THAT INVITATIONS FOR BIDS DO NOT IMPART ANY OBLIGATION ON THE PART OF THE GOVERNMENT TO ACCEPT ANY OF THE BIDS RECEIVED; 34 COMP. GEN. 364, 37 ID. 760, NOR DOES A BIDDER ACQUIRE ANY ENFORCEABLE RIGHTS UNDER THESE BIDS UNTIL AN ACCEPTANCE OF HIS BID IS SENT BY A PROPERLY AUTHORIZED REPRESENTATIVE OF THE GOVERNMENT. SEE B- 155649, DATED FEBRUARY 5, 1965, AND CITED COURT CASES. IN FACT, 41 U.S.C. 253 (B) EXPRESSLY PROVIDES THAT CERTAIN DISCRETIONARY AUTHORITY IS VESTED IN THE PROCURING AGENCY, PERMITTING REJECTION OF ALL BIDS WHEN IN THE PUBLIC INTEREST TO DO SO. SUCH DETERMINATIONS ARE BASED ON QUESTIONS OF FACT, WITH THE AUTHORITY TO MAKE THESE DETERMINATIONS, BEING DELEGATED TO ALL CONTRACTING OFFICERS BY FEDERAL PROCUREMENT REGULATIONS 1-2.404-1/B). THIS ACTUALLY OCCURRED IN SEVERAL OF THE PROCUREMENTS UNDER PROTEST AND IS CLEARLY EVIDENCED IN THE RECORD.

IN CASES WHERE SUCH REJECTION OF BIDS OCCUR, THE PROCUREMENT TIME REQUIREMENTS OF THE GOVERNMENT MAY BE SUCH THAT SUFFICIENT TIME REMAINS TO PERMIT READVERTISEMENT. HOWEVER, IN MANY SITUATIONS, A NUMBER OF WHICH ARE EVIDENCED IN THIS FILE, I.E., HOUSING REQUIREMENTS BECOMING ACUTE, THERE IS INSUFFICIENT TIME TO READVERTISE SUCH PROCUREMENT. WHERE ANY IMMEDIACY OF NEED SHOULD ARISE, BEFORE OR AT THE TIME OF THE AGENCY'S DETERMINATION TO CANCEL AND READVERTISE, SUCH PROCUREMENTS MAY BE SECURED BY NEGOTIATION, PROVIDED THAT THE REGULATIONS GOVERNING NEGOTIATED PROCUREMENTS ARE FOLLOWED, SEE FPR 1-3 ET SEQ.

THE STATUTES WHICH REQUIRE COMPETITIVE BIDDING IN THE LETTING OF CONTRACTS CONTAIN SPECIFIC PROVISIONS EXEMPTING CERTAIN TYPES OF PROCUREMENTS. SEE 41 U.S.C. 252 (C) (1/-/15). IN THESE ENUMERATED SITUATIONS, CONTRACTS MAY BE AWARDED ON A NEGOTIATED BASIS WHICH IS UNLIKE THE AWARDING OF AN ORDINARY CONTRACT THROUGH FORMAL ADVERTISING. IN ORDER TO PERMIT NEGOTIATION OF A CONTRACT UNDER THESE EXEMPTIONS, THERE MUST BE A SPECIFIC DETERMINATION AND FINDING THAT SUCH NEGOTIATION IS REQUIRED, WHICH INCLUDES AN AGENCY OPINION THAT SUCH PROCEDURE WILL PROMOTE THE BEST INTEREST OF THE GOVERNMENT. SEE 41 U.S.C. 254 (A). IN THIS REGARD, OUR OFFICE HAS HELD THAT THE AWARD OF A CONTRACT BY NEGOTIATION MAY BE BASED ON FACTORS OTHER THAN PRICE. SEE B-138482, DATED FEBRUARY 13, 1959.

WITH RESPECT TO THE AWARDS UNDER PROTEST, THE ACQUISITION OF LEASEHOLDS BY THE GOVERNMENT WERE EVALUATED AS REQUIRED BY 41 U.S.C. 253 (B) AND 254 (A). NOT ONLY WAS PRICE PROPERLY CONSIDERED, BUT ALSO OTHER FACTORS, INCLUDING, BUT NOT LIMITED TO, THE OVER-ALL WELFARE OF GOVERNMENT EMPLOYEES, THE EFFICIENT FULFILLMENT OF AGENCY FUNCTION, GENERAL ACCESSABILITY, SUITABILITY AND ENGINEERING ACCEPTABILITY OF THE PROPERTY IN QUESTION. SEE GENERALLY, B-152768, DATED APRIL 6, 1964. IT HAS ALSO BEEN SAID THAT THERE IS NO REQUIREMENT THAT THE GOVERNMENT LEASE SPACE MERELY BECAUSE IT IS OFFERED AT A LOWER PRICE WITHOUT INTELLIGENT REFERENCES TO THE PARTICULAR NEEDS TO BE SERVED. B-147512, DATED DECEMBER 18, 1961. THESE DETERMINATIONS ARE CLEARLY EVIDENCED IN THE RECORD BEFORE US.

FURTHER, THE RECORD SHOWS THAT THE AUTHORITY VESTED IN THE AGENCY WAS UTILIZED. CONSEQUENTLY, OUR OFFICE MAY NOT QUESTION THE USE OF SUCH DISCRETION AS A MATTER OF LAW, ABSENT A CLEAR SHOWING OF BAD FAITH OR ARBITRARY AND CAPRICIOUS ACTION IN THE EXERCISE OF SUCH DISCRETION. SEE GENERALLY, 38 COMP. GEN. 703. THERE IS NOTHING IN THE RECORD TO WARRANT ANY SUCH FINDING BY THIS OFFICE.

SINCE WE FIND NO ABUSE OF THE DISCRETION IN THE MANNER IN WHICH CONTRACTS WERE AWARDED IN THIS CASE, OUR SETTLEMENT OF FEBRUARY 19, 1965, IS SUSTAINED.