B-155910, FEB. 19, 1965

B-155910, FEB. 19, 1965

TO GENERAL ELECTRIC COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 4, 1965, PROTESTING AWARD OF A CONTRACT UNDER INVITATION FOR BIDS NO. 197-107 65.

THE SUBJECT INVITATION, ISSUED BY THE CONTRACTING OFFICER, UNITED STATES NAVAL ORDNANCE PLANT, LOUISVILLE, KENTUCKY, ON SEPTEMBER 25, 1964, INVITED BIDS ON SPECIFIED QUANTITIES OF MINE CASES (MK 52 MOD O). SINCE THE SOLICITATION WAS CATEGORIZED AS A MULTI-YEAR PROCUREMENT, BIDDERS WERE INVITED TO SUBMIT ALTERNATE PRICES ON THE MULTI-YEAR REQUIREMENT AS SET FORTH IN THE INVITATION. IN ACCORDANCE WITH SECTION 1-322.2 OF THE ARMED SERVICES PROCUREMENT REGULATION, BIDDERS WERE ADVISED THAT THE UNIT PRICE OF THE LOWEST RESPONSIVE OFFER ON THE FIRST PROGRAM YEAR ALTERNATIVE WOULD BE COMPARED WITH THE PRICE OF THE LOWEST RESPONSIVE OFFER ON THE MULTI- YEAR REQUIREMENT. IN EFFECT, THE IFB PROVIDED THAT AWARD WOULD BE MADE ON EITHER THE FIRST PROGRAM YEAR (FISCAL YEAR 1965 REQUIREMENT) OR THE MULTI- YEAR REQUIREMENTS (FISCAL YEARS 1965, 1966 AND 1967), WHICHEVER PROVIDED THE LOWEST OVERALL UNIT COST TO THE GOVERNMENT. IN THIS CONNECTION, THE ADMINISTRATIVE OFFICE REPORTS THAT AFTER EVALUATING AND COMPARING THE INDIVIDUAL BIDS UNDER EACH ALTERNATE, IT WAS FOUND THAT GENERAL ELECTRIC SUBMITTED THE LOWEST BID ON THE MULTI-YEAR REQUIREMENT.

SOMETIME PRIOR TO AWARD AND AFTER THE DATE SET FOR BID OPENING THE CONTRACTING OFFICER WAS NOTIFIED THAT THE REQUIREMENTS FOR FISCAL YEAR 1966 AND 1967 HAD BEEN CANCELLED. UPON RECEIPT OF THIS INFORMATION HE THEN WAS CONFRONTED WITH THE CHOICE OF EITHER CANCELLING THE INVITATION OR MAKING AWARD TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER ON THE BASIS OF THE INDIVIDUAL YEAR BIDS. THE DECISION TO PURSUE THE LATTER COURSE WAS FELT DESIRABLE BECAUSE BIDS HAD BEEN PUBLICLY DISCLOSED AND ALL BIDDERS HAD HAD THE OPPORTUNITY TO BID ON THE SINGLE YEAR REQUIREMENT.

IT IS NOTED THAT YOUR BID ON THE FIRST YEAR OF THE MULTI-YEAR PROCUREMENT, PLUS MAXIMUM CANCELLATION CHARGES, AMOUNTED TO $377 PER UNIT COMPARED TO YOUR SINGLE YEAR BID OF $472 PER UNIT. WE NOTE THAT THE OTHER FOUR BIDDERS WHO BID ON BOTH THE SINGLE YEAR AND THE MULTI YEAR BASIS OFFERED A SINGLE YEAR PRICE WHICH WAS LESS THAN THEIR FIRST MULTI-YEAR PRICE PLUS MAXIMUM CANCELLATION CHARGES. THIS SEEMS TO INDICATE THAT THE CANCELLATION CEILING OF 10 PERCENT AT THE END OF THE FIRST YEAR WAS NOT TOO LOW, AND MAKES IT SEEM UNLIKELY THAT YOUR BID ON A SINGLE YEAR BASIS WOULD HAVE BEEN LOWER THAN THE ACCEPTED BID OF $336.28 PER UNIT EVEN IF THE INVITATION HAD RESERVED THE RIGHT TO MAKE AWARD ON EITHER A SINGLE OR A MULTI-YEAR BASIS.

THREE OF THE EIGHT BIDDERS ON THE SINGLE YEAR BASIS OFFERED PRICES LOWER THAN YOUR PRICE OF $377 FOR THE FIRST MULTI-YEAR QUANTITY, AND DESPITE THE FACT THAT THE EVALUATION MAY HAVE BEEN CONTRARY TO THAT ENVISIONED BY THE SOLICITATION, WE AGREE WITH NAVY THAT IT WAS A BETTER CHOICE IN THIS CASE TO MAKE AWARD ON THE LOWEST SINGLE YEAR BID THAN TO READVERTISE. MOREOVER, WE DO NOT BELIEVE THAT CANCELLATION AT THIS LATE DATE WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT. YOUR PROTEST IS, ACCORDINGLY, DENIED.