B-174996, MAY 12, 1972

B-174996, MAY 12, 1972

BID PROTEST - DELAYED BID CORRECTION - ALLEGED IMPROPER PROCUREMENT PROCEDURES DECISION DENYING THE PROTEST OF DELONICS CORPORATION AGAINST PROCUREMENT PRACTICES WHICH CULMINATED IN THE CANCELLATION OF AN IFB ISSUED BY THE NAVY PURCHASING OFFICE (NPO) FOR TWO WELDING MACHINES. ABSENT ANY IMPROPRIETY BY NPO OFFICIALS, THE QUESTION OF DELAY IN THE CORRECTION OF DELONICS' BID IS ACADEMIC, SINCE PARAGRAPH 10(B) OF THE SOLICITATION SPECIFICALLY RESERVED THE GOVERNMENT'S RIGHT TO REJECT ANY OR ALL OFFERS AND THE PRINCIPLE THAT A LOW BIDDER HAS NO ABSOLUTE RIGHT TO AN AWARD WHICH WOULD NOT BE IN THE PUBLIC INTEREST IS CLEARLY APPLICABLE TO THE SUBJECT PROCUREMENT. B-147837, FEBRUARY 23, 1962. NPO DENIES THAT PROTESTANT WAS EVER PROMISED "PREFERENTIAL TREATMENT" OR THAT A BIDDER IS GENERALLY AWARE OF ITS SUCCESS PRIOR TO OFFICIAL NOTICE OF AWARD. IN ANY EVENT, IT SHOULD BE NOTED THAT THE GOVERNMENT IS NOT CONTRACTUALLY BOUND UNTIL THE SIGNED DOCUMENT IS RETURNED TO THE SUCCESSFUL BIDDER. 45 COMP. GEN. 700 (1966). IN VIEW OF THE FOREGOING, THE PROTEST MUST BE DENIED.

TO DELONICS CORPORATION:

A CONGRESSIONAL SOURCE HAS REFERRED FOR OUR CONSIDERATION YOUR LETTERS OF OCTOBER 22, 1971, AND DECEMBER 17, 1971, PROTESTING THE PROCUREMENT PROCEDURES WHICH CULMINATED IN THE CANCELLATION OF INVITATION FOR BIDS (IFB) NO. N00600-71-B-0196, ISSUED JANUARY 20, 1971, BY THE NAVY PURCHASING OFFICE (NPO), WASHINGTON NAVY YARD, FOR PURCHASE OF TWO WELDING MACHINES.

YOUR FIRM SUBMITTED THE LOWEST BID UNDER THE IFB AT $21,000 PER UNIT. TWO OTHER BIDS WERE SUBMITTED AT $26,405 AND $26,500 PER UNIT. IN A LETTER OF FEBRUARY 24, 1971, THE CONTRACTING OFFICER, ALERTED BY THE DISPARITY BETWEEN YOUR BID AND THAT OF THE SECOND LOW BIDDER, REQUESTED CONFIRMATION OF YOUR BID PRICE UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-406. IN A LETTER OF MARCH 5, 1971, AS FURTHER EXPLAINED BY LETTER OF AUGUST 6, 1971, YOU ALLEGED THAT YOU INTENDED TO SUBMIT A BID PRICE OF $26,000, BUT THAT THE FIGURE WAS INCORRECTLY COPIED AS $21,000 ON THE FINAL BID FORM. YOUR ALLEGATION WAS SUPPORTED BY A WORKSHEET AND A COMPUTER PRINTOUT USED IN PREPARATION OF THE BID AND BY AFFIDAVITS OF THE PRESIDENT AND GENERAL MANAGER OF YOUR COMPANY WHO WERE RESPONSIBLE FOR ITS PREPARATION. AFTER SEVERAL EXTENSIONS OF THE PERIOD FOR ACCEPTANCE OF YOUR BID, THE NAVAL SUPPLY SYSTEMS COMMAND (NSSC) ISSUED A DETERMINATION ON SEPTEMBER 22, 1971, THAT YOUR FIRM HAD SUBMITTED CLEAR AND CONVINCING EVIDENCE OF A MISTAKE IN BID WHICH SHOULD BE CORRECTED AND CONSIDERED FOR AWARD AT A PRICE OF $26,000 PER UNIT. HOWEVER, IN A COMMUNICATION OF SEPTEMBER 27, 1971, THE NAVAL SHIPS SYSTEMS COMMAND CANCELLED ITS REQUEST FOR THE WELDING MACHINES WHICH WERE NO LONGER REQUIRED AND YOUR FIRM WAS SO NOTIFIED BY LETTER OF OCTOBER 14, 1971.

YOU OBJECT TO THE FACT THAT A PERIOD OF MORE THAN SIX MONTHS ELAPSED BETWEEN YOUR REQUEST FOR A CORRECTION OF THE ERROR IN YOUR BID AND THE APPROVAL FOR THE CORRECTION. THE DELAY WAS CAUSED IN PART BY REQUESTS TO YOUR FIRM FOR ADDITIONAL EVIDENCE IN SUPPORT OF YOUR ALLEGATION OF A MISTAKE IN BID. HOWEVER, THE PRINCIPAL CAUSE FOR THE DELAY APPEARS TO HAVE BEEN THE FAILURE OF EMPLOYEES OF NPO TO ACT TIMELY ON YOUR REQUEST FOR CORRECTION. ACCORDING TO THE ADMINISTRATIVE REPORT, THIS DELAY WAS CAUSED CHIEFLY BY THE PRESSURE OF MORE URGENT PROCUREMENTS BEING MADE DURING THAT PERIOD. ALTHOUGH IT IS UNFORTUNATE THAT PROMPT ACTION WAS NOT TAKEN UPON YOUR REQUEST, THERE IS NO INDICATION IN THE RECORD OF IMPROPRIETY BY PROCUREMENT OFFICIALS IN DELAYING BID CORRECTION.

YOU ALSO ALLEGE THAT IT IS THE "PRACTICE" OF NPO TO NOTIFY A BIDDER THAT IT WILL RECEIVE AN AWARD, ALLOWING THE BIDDER TO BEGIN PERFORMANCE BEFORE RECEIPT OF THE AWARD AND THUS MAKING THE "EFFECTIVE DATE" OF THE AWARD UP TO TWO WEEKS EARLIER THAN RECEIPT OF THE CONTRACT. HOWEVER, NPO DENIES CATEGORICALLY THAT SUCH A PRACTICE HAS EVER EXISTED AND STATES THAT NORMALLY A SUCCESSFUL BIDDER KNOWS NOTHING OF AN AWARD UNTIL RECEIPT OF THE CONTRACT. FURTHERMORE, ALTHOUGH YOU ALLEGE THAT AN AWARD WAS PROMISED TO YOUR COMPANY, THE GOVERNMENT CANNOT BE CONTRACTUALLY BOUND UNTIL THE SIGNED DOCUMENT IS RETURNED TO THE SUCCESSFUL BIDDER, ORDINARILY BY DEPOSITING THE CONTRACT IN THE MAIL OR OTHERWISE FURNISHING IT TO THE BIDDER. SEE 45 COMP. GEN. 700 (1966).

YOU ALSO QUESTION WHY THE CONTRACT WAS NOT AWARDED BETWEEN THE TIME CORRECTION OF THE MISTAKE IN BID WAS AUTHORIZED AND THE TIME WHEN THE DECISION WAS MADE TO CANCEL THE IFB, "AT LEAST A WEEK" ACCORDING TO YOUR RECKONING. HOWEVER, THE BID CORRECTION AUTHORIZED SEPTEMBER 22 BECAME ACADEMIC WHEN IT WAS DETERMINED ON SEPTEMBER 27 TO CANCEL THE IFB BECAUSE NO NEED EXISTED FOR THE WELDING MACHINES. IN ANY EVENT, THE GOVERNMENT RESERVED THE RIGHT TO REJECT ANY OR ALL OFFERS UNDER PARAGRAPH 10(B) OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS. EVEN WITHOUT THAT RESERVATION, A BIDDER HAS NO ABSOLUTE RIGHT TO AN AWARD MERELY BECAUSE HE HAS SUBMITTED THE LOWEST BID WHEN AN AWARD WOULD NOT BE IN THE PUBLIC INTEREST. SEE B-147837, FEBRUARY 23, 1962; AND 17 COMP. GEN. 554 (1938). THAT PRINCIPLE IS CLEARLY ILLUSTRATED HERE WHERE NO NEED EXISTED FOR EQUIPMENT ADVERTISED.

FINALLY YOU ALLEGE THAT YOU WERE PROMISED "PREFERENTIAL TREATMENT" ON THIS OR A SUBSEQUENT PROCUREMENT. THE ADMINISTRATIVE REPORT STATES "EMPHATICALLY" THAT REPRESENTATIVES OF NPO MADE NO SUCH PROMISE WHICH, AS YOU ACKNOWLEDGED, WOULD BE ILLEGAL.

ACCORDINGLY, WE FIND NO BASIS FOR REVISING THE DECISIONS OF PROCUREMENT OFFICIALS UNDER THE IFB AND WE CONCLUDE THAT YOUR PROTEST MUST BE DENIED.