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B-145376, JUN. 21, 1961

B-145376 Jun 21, 1961
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INCORPORATED: REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 20. INVITATION NO. 33-600-61-119 WAS ISSUED NOVEMBER 1. BID "A" APPLIED TO CASES IN WHICH FIRST ARTICLE APPROVAL WAS REQUIRED AND BID "B" APPLIED TO CASES IN WHICH SUCH APPROVAL WAS NOT REQUIRED. A NOTICE OF SMALL BUSINESS SET-ASIDE WAS INCLUDED IN THE INVITATION. TWO OTHER BIDS WERE RECEIVED UNDER BID "A" IN THE UNIT AMOUNTS OF $21.40 (UNIVERSITY LOUDSPEAKERS. THE LOW BID OF $21.40 WAS NOT RESPONSIVE. THE CONTRACTING OFFICER DETERMINED THAT THE PRICES QUOTED BY THE SMALL BUSINESS CONCERNS WERE UNREASONABLE. THE BIDS RECEIVED WERE IN THE AMOUNTS OF $18.85. YOU URGE THAT THE FIRST INVITATION SHOULD NOT HAVE BEEN CANCELLED AND THAT AWARD SHOULD HAVE BEEN MADE TO YOU AS THE LOWEST RESPONSIVE BIDDER.

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B-145376, JUN. 21, 1961

TO AUDAX, INCORPORATED:

REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 20, 1961, AND YOUR ATTORNEYS' LETTERS OF MARCH 21 AND APRIL 14, 1961, PROTESTING THE ACTION TAKEN BY WRIGHT-PATTERSON AIR FORCE BASE, DAYTON, OHIO, IN CANCELLING INVITATION FOR BIDS NO. 33-600-61-119 AND SUBSTITUTING THEREFOR INVITATION NO. 33-600 -61-164.

INVITATION NO. 33-600-61-119 WAS ISSUED NOVEMBER 1, 1960, REQUESTING BIDS --- TO BE OPENED NOVEMBER 21, 1960--- ON 2,500 LOUDSPEAKERS AND RELATED ENGINEERING DATA. BID "A" APPLIED TO CASES IN WHICH FIRST ARTICLE APPROVAL WAS REQUIRED AND BID "B" APPLIED TO CASES IN WHICH SUCH APPROVAL WAS NOT REQUIRED. A NOTICE OF SMALL BUSINESS SET-ASIDE WAS INCLUDED IN THE INVITATION. ALSO, THE INVITATION RESERVED TO THE GOVERNMENT THE RIGHT TO REJECT ANY OR ALL BIDS.

IN RESPONSE TO THE INVITATION, YOU SUBMITTED A BID OF $27.75 EACH, PLUS $1,200 FOR ENGINEERING DATA, IN THE TOTAL AMOUNT OF $70,575 UNDER BID "A.' TWO OTHER BIDS WERE RECEIVED UNDER BID "A" IN THE UNIT AMOUNTS OF $21.40 (UNIVERSITY LOUDSPEAKERS, INC.) AND $31.85 (RACON ELECTRIC CO., INC.). FIDELITY AMPLIFIER COMPANY SUBMITTED A UNIT BID OF $29.94 UNDER BID "B.' THE LOW BID OF $21.40 WAS NOT RESPONSIVE, SINCE THE BIDDER DID NOT QUALIFY AS SMALL BUSINESS. HOWEVER, IN VIEW OF THE GREAT DIFFERENCE BETWEEN THE LOW BID AND THE OTHER BIDS RECEIVED, THE CONTRACTING OFFICER DETERMINED THAT THE PRICES QUOTED BY THE SMALL BUSINESS CONCERNS WERE UNREASONABLE; AND, WITH THE CONCURRENCE OF THE SMALL BUSINESS ADMINISTRATION, CANCELLED THE INVITATION AND ISSUED INVITATION NO. 33-600- 61-164, DATED FEBRUARY 9, 1961, REQUESTING BIDS--- TO BE OPENED MARCH 13, 1961--- FOR FURNISHING 3,010 LOUDSPEAKERS AND ENGINEERING DATA, WITHOUT RESTRICTION TO SMALL BUSINESS.

YOU DID NOT SUBMIT A BID UNDER THE NEW INVITATION. THE BIDS RECEIVED WERE IN THE AMOUNTS OF $18.85, $20.22, $21.40 AND $23.60 ON BID "A" AND $18.14, $21.10 AND $27.50 IN BID "B.' YOU URGE THAT THE FIRST INVITATION SHOULD NOT HAVE BEEN CANCELLED AND THAT AWARD SHOULD HAVE BEEN MADE TO YOU AS THE LOWEST RESPONSIVE BIDDER, CONTENDING THAT THE AMOUNT OF YOUR BID ($27.75 EACH) WAS REASONABLE AND THAT CANCELLATION OF THE FIRST INVITATION WAS CONTRARY TO THE INTENTION OF THE CONGRESS, THE INVITATION HAVING BEEN ISSUED ON THE BASIS OF A JOINT DETERMINATION BY THE PROCURING AGENCY AND THE SMALL BUSINESS ADMINISTRATION TO RESTRICT THE PROCUREMENT TO SMALL BUSINESS CONCERNS.

PARAGRAPH 1-706.3 OF THE ARMED SERVICES PROCUREMENT REGULATION (1960 EDITION) PROVIDES IN PART:

"/B) (1) IF, PRIOR TO THE AWARD OF A CONTRACT INVOLVING AN INDIVIDUAL OR CLASS SET-ASIDE FOR SMALL BUSINESS, THE CONTRACTING OFFICER CONSIDERS THAT PROCUREMENT OF THE SET-ASIDE FROM A SMALL BUSINESS CONCERN WOULD BE DETRIMENTAL TO THE PUBLIC INTEREST (E.G., BECAUSE OF UNREASONABLE PRICE), THE CONTRACTING OFFICER MAY WITHDRAW A UNILATERAL SET-ASIDE DETERMINATION OR INITIATE THE WITHDRAWAL OF A JOINT SET-ASIDE DETERMINATION.'

HERE, IT WAS DETERMINED THAT THE BIDS SUBMITTED BY SMALL BUSINESS CONCERNS ON THE FIRST INVITATION WERE UNREASONABLE--- A DETERMINATION WHICH APPEARS TO BE ADEQUATELY SUPPORTED BY THE FACT THAT THE LOWEST RESPONSIVE BID UNDER THE FIRST INVITATION ($27.75 EACH ON BID "A") WAS APPROXIMATELY 47 PERCENT HIGHER THAN THE LOWEST BID UNDER THE NEW INVITATION $18.85 EACH ON BID A").

HAVING REGARD FOR ALL THE FACTS AND CIRCUMSTANCES OF THIS MATTER, THERE IS NOT FOUND ANY VALID BASIS FOR OBJECTION BY OUR OFFICE TO THE ACTION OF THE PROCURING AGENCY IN CANCELLING THE FIRST INVITATION AND READVERTISING.

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