B-170420, NOV. 16, 1970

B-170420, NOV. 16, 1970

BID PROTEST - CANCELLATION AND READVERTISEMENT DENIAL OF PROTEST OF LOW BIDDER AGAINST CANCELLATION OF INVITATION FOR A REQUIREMENTS TYPE CONTRACT FOR OPERATION OF MOTION PICTURE FACILITY FOR ARMY MISSILE COMMAND, REDSTONE ARSENAL, ON THE BASIS THAT GOVERNMENT-OWNED EQUIPMENT WAS NO LONGER AVAILABLE. WHERE SHORTLY BEFORE OPENING OF BIDS IT WAS DETERMINED THAT NEEDS OF GOVERNMENT HAD INCREASED AND THAT 140 OF 238 ITEMS OF GOVERNMENT-OWNED EQUIPMENT OF SUBSTANTIAL VALUE WOULD NO LONGER BE AVAILABLE FOR USE OF THE SUCCESSFUL BIDDER AS PREVIOUSLY INDICATED, ONE OF THE MORE SIGNIFICANT BASES UPON WHICH BIDS WERE INVITED HAD BEEN DESTROYED SO THAT ANY CONTRACT AWARDED WOULD HAVE BEEN SUSPECT AS A MATTER OF LAW. UNDER THE CIRCUMSTANCES CANCELLATION WAS REQUIRED. EXTENSIONS OF TIME FOR THE CURRENT CONTRACTOR WHO WAS THIRD LOW UNDER THE CANCELLED SOLICITATION ON THE BASIS THAT THE FACILITY HAD TO BE KEPT OPEN UNTIL THE RESOLICITATION WAS MADE WAS PROPER.

TO KENTRON HAWAII, LTD.:

WE REFER TO YOUR PROTEST AGAINST THE CANCELLATION OF INVITATION FOR BIDS NO. DAAH03-70-B-0166 BY THE UNITED STATES ARMY MISSILE COMMAND, REDSTONE ARSENAL, ALABAMA. THE SUBJECT SOLICITATION, ISSUED JUNE 8, 1970, REQUESTED BIDS FOR A 1-YEAR REQUIREMENTS-TYPE CONTRACT FOR THE OPERATION AND MAINTENANCE OF THE MOTION PICTURE FACILITY AT REDSTONE ARSENAL, TOGETHER WITH SPECIFIED MOTION PICTURE PRODUCTION WORK. INCLUDED IN THE ART AND ANIMATION, PROCESSING, PRINTING, SOUND RECORDING AND SCRIPT SERVICES REQUESTED WERE FILM DEPOSITORY FUNCTIONS, EDITING, CAMERA WORK, WRITING. THE SOLICITATION ALSO INCLUDED A LIST OF 238 PIECES OF GOVERNMENT-OWNED EQUIPMENT, VALUED AT $988,621, WHICH WOULD BE USED BY THE SUCCESSFUL BIDDER IN PERFORMING THE CONTEMPLATED CONTRACT.

A PORTION OF THIS GOVERNMENT-OWNED EQUIPMENT WAS LOCATED AT THE ARMY PICTORIAL CENTER (APC), LONG ISLAND CITY, NEW YORK. IT IS REPORTED THAT ON MARCH 4, 1970, THE OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE (PUBLIC AFFAIRS) PUBLISHED AN ANNOUNCEMENT STATING THAT 371 BASES WERE TO BE CONSOLIDATED, REDUCED, REALIGNED OR CLOSED. APC WAS AMONG THOSE BASES WHICH WERE TO BE CLOSED. THE DEACTIVATION OF APC WAS EFFECTIVE JUNE 30, 1970, AND A PORTION OF THE WORKLOAD THEN REMAINING AT APC WAS TRANSFERRED TO THE REDSTONE ARSENAL.

FOUR BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE OPENED ON JULY 7, 1970, WITH THE FOLLOWING RESULTS:

KENTRON HAWAII, LTD. $519,446.00

GENERAL ELECTRIC CO. 549,507.21

RCA SERVICE CO. 611,999.91

TECHNICOLOR, INC. 988,944.00

HOWEVER, ON JULY 6, 1970, IT WAS ASCERTAINED THAT BECAUSE OF THE TRANSFER OF THE APC WORKLOAD TO REDSTONE ARSENAL THE ACTUAL REQUIREMENTS WOULD BE CONSIDERABLY MORE THAN THOSE CONTEMPLATED BY THE INVITATION. FURTHER, IT WAS DETERMINED THAT ONE CONTRACTOR COULD NOT MEET ALL THE THEN CONTEMPLATED REQUIREMENTS WITHIN REQUIRED TIME FRAMES. BY DEPARTMENTAL TELETYPE DATED JULY 13, 1970, 140 ITEMS OF EQUIPMENT LOCATED AT APC, WHICH HAD BEEN INCLUDED IN THE INVITATION LISTING AS GOVERNMENT-FURNISHED PROPERTY, WERE WITHDRAWN FROM AVAILABILITY FOR USE BY PROSPECTIVE BIDDERS.

THEREAFTER, ON JULY 15, 1970, AFTER BIDS HAD BEEN OPENED, IT WAS DETERMINED THAT, ALTHOUGH THE INVITATION WHEN ISSUED WAS BASED ON THE BEST AVAILABLE INFORMATION, IT DID NOT REFLECT THE REQUIREMENTS OF THE GOVERNMENT. HENCE, IT WAS CONCLUDED THAT ANY CONTRACT AWARDED UNDER THE ADVERTISED REQUIREMENTS WOULD NOT MEET THE KNOWN NEEDS OF THE GOVERNMENT. ADDITIONALLY, IT WAS FELT THAT THE NONAVAILABILITY OF A SUBSTANTIAL PORTION OF THE GOVERNMENT-OWNED EQUIPMENT WHICH THE INVITATION LISTED FOR USE BY THE SUCCESSFUL BIDDER JUSTIFIED CANCELLATION OF THE INVITATION. VIEW OF THE FOREGOING, THE INVITATION WAS CANCELED AND ALL BIDDERS WERE ADVISED OF THAT ACTION BY LETTER DATED JULY 16, 1970.

PARAGRAPH 2-404.1(A) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PROVIDES IN EFFECT THAT AFTER BIDS HAVE BEEN OPENED AWARD MUST BE MADE TO THE LOWEST RESPONSIBLE BIDDER UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS. IN DETERMINING WHETHER AN INVITATION FOR BIDS SHOULD OR SHOULD NOT BE CANCELED UNDER THE ABOVE-CITED ASPR PROVISION, OUR OFFICE HAS HELD THAT A CONTRACTING OFFICER IS CLOTHED WITH BROAD POWERS OF DISCRETION IN SUCH MATTERS AND OUR OFFICE WILL NOT INTERFERE WITH SUCH A DETERMINATION UNLESS SUCH DISCRETION HAS BEEN EXERCISED IN AN ARBITRARY MANNER. 39 COMP. GEN. 396 (1959).

UPON REVIEW OF THE ENTIRE RECORD BEFORE US, WE CONCLUDE THAT THE CONTRACTING OFFICER ACTED PROPERLY IN REJECTING ALL BIDS AND CANCELING THE INVITATION. WE FEEL THAT THE WITHDRAWAL FROM USE OF 140 OF THE 238 ITEMS OF GOVERNMENT-OWNED MOTION PICTURE PRODUCTION EQUIPMENT VALUED AT MORE THAN $500,000 WAS A COMPELLING REASON REQUIRING CANCELLATION OF THE INVITATION WITHIN THE PURVIEW OF ASPR 2-404.1(A). THE WITHDRAWAL OF THIS EQUIPMENT FROM AVAILABLE USE AFTER THE BIDS WERE SUBMITTED DESTROYED ONE OF THE MORE SIGNIFICANT BASES UPON WHICH BIDS WERE INVITED AND WOULD HAVE RENDERED ANY CONTRACT AWARDED PURSUANT TO THE INVITATION SUSPECT AS A MATTER OF LAW. UNDER THESE CIRCUMSTANCES, CANCELLATION OF THE INVITATION WAS REQUIRED IN VIEW OF THESE COMPELLING REASONS.

ALSO, THE CONTINUATION OF THE OPERATION AND MAINTENANCE OF THE MOTION PICTURE FACILITY AT THE ARSENAL BY THE CURRENT CONTRACTOR, WHO WAS THE THIRD LOW BIDDER UNDER THE CANCELED INVITATION, IS QUESTIONED. WE HAVE BEEN ADVISED THAT THE FACILITY HAD TO BE KEPT OPEN AND OPERATING PENDING THE AWARD OF CONTRACT UNDER AN INVITATION WHICH WAS ISSUED SUBSEQUENT TO THE CANCELLATION OF THE ONE UNDER QUESTION. HENCE, THE INCUMBENT CONTRACTOR HAS BEEN PERFORMING THESE NECESSARY FUNCTIONS UNDER A SERIES OF 30-DAY EXTENSIONS OF ITS 1970 FISCAL YEAR CONTRACT. THE LAST EXTENSION PERIOD WILL EXPIRE NOVEMBER 30, 1970. IT IS EXPECTED BY THAT DATE BIDS UNDER THE RESOLICITATION WILL BE OPENED AND THEREAFTER EVALUATED FOR A PROMPT AWARD TO THE SUCCESSFUL BIDDER. WE BELIEVE THAT EXTENSIONS OF THE 1970 CONTRACT PENDING AN AWARD UNDER THE RESOLICITATION REPRESENT A PROPER EXERCISE OF PROCUREMENT RESPONSIBILITY.

ACCORDINGLY, AND SINCE WE FIND NO LEGAL BASIS TO OBJECT TO THE CANCELLATION OF THE INVITATION OR TO THE RESOLICITATION OF THE REQUIREMENT, YOUR PROTEST IS DENIED. WE ARE ADVISING THE HONORABLE HIRAM L. FONG, UNITED STATES SENATE, BY LETTER OF TODAY OF OUR DECISION.