B-165310, NOV. 21, 1968

B-165310, NOV. 21, 1968

TO NELSON, ORMOND AND NELSON:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 19 AND NOVEMBER 4, 1968, ADDRESSED TO THE POST OFFICE DEPARTMENT AND OUR OFFICE, RESPECTIVELY, AND PROTESTING, ON BEHALF OF MR. LOUIS H. ADOLPH, THE AWARD OF A CONTRACT TO MR. AND MRS. RAYMOND J. ULLO FOR THE CONSTRUCTION AND LEASE FOR POSTAL PURPOSES OF A FACILITY LOCATED AT VENICE, LOUISIANA.

YOU PROTEST ON THE BASES THAT THE ULLO PROPERTY DID NOT MEET THE REQUIREMENTS OF THE POST OFFICE DEPARTMENT'S (POD) ADVERTISEMENT FOR SPACE; THAT THE AWARD WAS FOR A LONGER PERIOD OF TIME THAN THAT ADVERTISED IN THE INVITATION; AND THAT THE BIDDING SHOULD BE REOPENED TO TAKE ADVANTAGE OF THE LOWER BID WHICH MR. ADOLPH IS PREPARED TO OFFER. YOU THEREFORE REQUEST THAT THE ACCEPTANCE OF THE ULLO BID BE RECONSIDERED AND THAT YOUR CLIENT BE GIVEN AN OPPORTUNITY TO SUBMIT A BID ON THE VENICE POST OFFICE. YOU ADVISE THAT MR. ADOLPH DID NOT BID BECAUSE OF ILLNESS AND A SUBSEQUENT DEATH IN HIS FAMILY ABOUT THE TIME BIDDING UNDER THE INVITATION WAS OPENED.

ON JANUARY 22, 1968, THE DEPARTMENT ISSUED ITS ADVERTISEMENT FOR BIDS UNDER POD FORM 1410 FOR THE CONSTRUCTION AND LEASE BACK OF THE VENICE POSTAL FACILITY UNDER THE AUTHORITY OF 39 U.S.C. 2102. OFFERORS WERE DIRECTED TO SUBMIT A PROPOSAL FOR A FACILITY OF APPROXIMATELY 3,696 NET INTERIOR SQUARE FEET, 8,000 SQUARE FEET OF DRIVEWAY AND PARKING WHICH CONFORMED AS NEARLY AS POSSIBLE TO POD DRAWING NO. 9-67 151. THE OFFEROR WAS TO ACQUIRE CONTROL OF A LOCATION FOR THE FACILITY WHICH THE DEPARTMENT DESIRED TO BE WITHIN ONE-HALF TO ONE MILE IN A SOUTHERLY DIRECTION FROM THE PRESENT LOCATION AND THE OFFEROR WAS REQUIRED TO SUBMIT PROOF OF SUCH ACQUSITION WITH THE BID. OFFERORS WERE FURTHER REQUIRED TO QUOTE A RENTAL FOR A BASIC LEASE TERM OF 10 YEARS WITH THE PROVISIO FOR FOUR 5-YEAR RENEWAL TERMS AT THE OPTION OF THE GOVERNMENT.

OFFERS WERE TO BE SUBMITTED BY MARCH 27, 1968. ONE OFFER (AGREEMENT TO LEASE) WAS RECEIVED FROM RAYMOND J. ULLO AND BARBARA MARIE ULLO OFFERING A PRICE OF $17,934.88 FOR THE BASIC 10-YEAR LEASE AND THE SAME AMOUNT FOR EACH OF THE FOUR OPTION PERIODS. THE SITE OFFERED WAS FARTHER THAN ONE MILE FROM THE SITE OF THE PRESENT POSTAL FACILITY AND THEREFORE WAS DEEMED TO BE SOMEWHAT UNSATISFACTORY TO THE DEPARTMENT. ALSO, THE LEASE CONSIDERATION OFFERED WAS CONSIDERED TO BE TOO HIGH.

IN ACCORDANCE WITH PARAGRAPH 6 OF POD FORM 1410 (ADVERTISEMENT FOR BIDS FOR SPACE) WHICH PROVIDED THAT THE DEPARTMENT RESERVED THE RIGHT TO NEGOTIATE WITH BIDDERS FOR BETTER TERMS AND CONDITIONS, NEGOTIATIONS WERE CONDUCTED WITH THE ULLOS. AT THE SAME TIME, AND IN ACCORDANCE WITH PARAGRAPH 6 OF POD FORM 1410, THE DEPARTMENT ATTEMPTED TO SECURE ADDITIONAL OFFERS ON OTHER PROPERTIES. SUCH ATTEMPTS WERE UNSUCCESSFUL, ALTHOUGH AT ONE TIME, APPARENTLY SOON AFTER BID OPENING, THE LESSOR OF THE PRESENT FACILITY IN VENICE -- MR. ADOLPH -- SHOWED AN INTEREST IN SUBMITTING AN OFFER, BUT APPARENTLY NEVER DID SO DUE TO THE DEATH OF HIS BROTHER.

AS THE RESULT OF NEGOTIATIONS WITH THE ULLOS, THE DEPARTMENT WAS SUCCESSFUL IN OBTAINING AN ALTERNATE BID WHICH WAS, IN EFFECT, A REDUCTION IN BID PRICE FOR THE LEASE TERM. THE NEW OFFER PROVIDED FOR A BASIC LEASE TERM OF 20 YEARS AT $13,500 PER YEAR WITH SIX 5-YEAR RENEWAL OPTIONS AT $13,500 PER YEAR. THIS OFFER WAS CONSIDERED REASONABLE IN LIGHT OF THE EXTREMELY HIGH COST OF LAND IN THE AREA, THE UNAVAILABILITY OF ANY OTHER SITE, THE CRITICAL NEED FOR A NEW FACILITY, AND THE FACT THAT THE ULLOS HAD ACQUIRED THE OPTION TO PURCHASE THE LAND AT A BARGAIN PRICE IN COMPARISON WITH OTHER PRICES IN THE AREA. THIS DETERMINATION OF REASONABLENESS WAS CONSIDERED TO OFFSET BY A GREAT MARGIN THE FACT THAT THE SITE OFFERED WAS APPROXIMATELY A MILE FARTHER THAN THE ONE-MILE FACTOR LISTED IN THE INVITATION. THEREAFTER, ON JULY 10, 1968, THE DEPARTMENT ACCEPTED THE REVISED OFFER OF THE ULLOS AND EXECUTED ITS AGREEMENT TO LEASE.

ON AUGUST 6, 1968, LOUIS ADOLPH COMPLAINED TO THE DALLAS REGIONAL OFFICE THAT HE NEVER WAS AFFORDED AN OPPORTUNITY TO BID. BY LETTER OF AUGUST 16, 1968, THE DEPARTMENT ADVISED MR. ADOLPH THAT THE PROJECT HAD BEEN ADVERTISED; THAT HE HAD BEEN AFFORDED AMPLE TIME TO SUBMIT A BID, AND THAT THE AWARD HAD THEREAFTER BEEN MADE TO THE SATISFACTION OF THE GOVERNMENT.

UNDER 39 U.S.C. 2102 THE POSTMASTER GENERAL IS AUTHORIZED TO ENTER INTO LEASE CONTRACTS FOR NOT TO EXCEED 20 YEARS ON SUCH TERMS AS HE DEEMS APPROPRIATE NOTWITHSTANDING ANY OTHER PROVISION OF LAW. WE HAVE HELD THAT STATUTES GRANTING AUTHORITY TO NEGOTIATE CONTRACTS WITHOUT ADVERTISING, SUCH AS 39 U.S.C. 2102, COMPREHEND THE LESSER AUTHORITY TO UTILIZE ADVERTISING TO THE EXTENT ADMINISTRATIVELY DEEMED APPROPRIATE IN MAKING CONTRACTS THEREUNDER WITHOUT RESTRICTING FINAL ADMINISTRATIVE DETERMINATION OF THE BIDDER TO WHOM THE CONTRACT SHOULD BE AWARDED. SEE 20 COMP. GEN. 194; B-159239, AUGUST 2, 1966. THE SOLICITATION OF BIDS UNDER THE CIRCUMSTANCES HERE INVOLVED WITH THE EXPRESS RESERVATION OF THE RIGHT IN THE GOVERNMENT TO NEGOTIATE FURTHER WITH A QUALIFIED BIDDER WAS A PROPER EXERCISE OF ADMINISTRATIVE AUTHORITY UNDER THE ABOVE-CITED STATUTE. THE FACT THAT MR. ADOLPH DESIRED TO COMPETE FOR THE LEASE OF PREMISES BY OFFERING A LOCATION MEETING THE DISTANCE REQUIREMENTS OF THE SOLICITATION AT A LESSER RENTAL CONSIDERATION AFFORDS NO LEGAL BASIS TO REOPEN THE COMPETITION. THE RECORD SHOWS THAT MR. ADOLPH COULD HAVE SUBMITTED A TIMELY OFFER BUT HE CHOSE NOT TO RESPOND TO THE SOLICITATION.

SINCE WE DO NOT FIND ON THE RECORD ANY ABUSE OF DISCRETION VESTED BY STATUTE IN THE DEPARTMENT, THERE IS NO LEGAL BASIS TO OBJECT TO THE AWARD OF THE LEASE TO THE ULLOS. IN VIEW THEREOF, YOUR PROTEST IS DENIED.