B-131317, MAY 9, 1957

B-131317: May 9, 1957

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BIDS SUBMITTED IN RESPONSE TO THE INITIAL INVITATION WERE OPENED ON FEBRUARY 28. YOUR BID WAS LOW ON ITEM 2. WAS LOW ON ITEM 1. IT WAS DETERMINED TO REJECT ALL BIDS AND READVERTISE. FOR THE REASON THAT THE INVITATION WAS DEFICIENT IN THE FOLLOWING RESPECTS: (1) CEILING MOUNTED UNITS SUCH AS THE LOW BIDDER UNDER ITEM 1 INTENDED TO SUPPLY. WERE NOT DESIRED IN VIEW OF THE CEILING HEIGHT IN THE BUILDINGS WHERE THEY WOULD BE INSTALLED. IT WOULD BE MORE ECONOMICAL TO HAVE BOTH THE SIZES OF UNITS OF THE SAME MAKE. THE ADMINISTRATIVE REPORT INDICATES THAT AN AWARD ON AN AGGREGATE BASIS WAS INTENDED BUT THE LANGUAGE OF THE INVITATION FAILED TO REFLECT SUCH INTENTION. (3) THE INITIAL INVITATION PRESCRIBED A TEST OPERATION NORMALLY USED FOR COMPLETELY SELF-CONTAINED UNITS AND DID NOT TAKE INTO ACCOUNT THE FACT THAT THE REFRIGERANT UNITS AND THE EVAPORATING UNITS TO BE PROCURED UNDER THIS INVITATION WERE TO BE INSTALLED SEPARATELY.

B-131317, MAY 9, 1957

TO UNITED STATES AIR CONDITIONING CORPORATION:

YOUR LETTER OF APRIL 1, 1957, WITH ENCLOSURE, PROTESTS THE CANCELLATION OF INVITATION FOR BIDS NO. 7044, ISSUED BY THE CIVIL AERONAUTICS ADMINISTRATION OF FEBRUARY 11, 1957, AND THE SUBSEQUENT READVERTISEMENT UNDER SUBSTANTIALLY THE SAME SPECIFICATIONS BY INVITATION NO. 7044A ISSUED MARCH 21, 1957.

BOTH INVITATIONS PROVIDED FOR THE PROCUREMENT OF TWO SIZES OF MECHANICAL COOLING UNITS, ITEM 1 HAVING A MINIMUM CAPACITY OF 46,000 B.T.U. PER HOUR AND ITEM 2 A MINIMUM HOURLY CAPACITY OF 28,000 B.T.U. BIDS SUBMITTED IN RESPONSE TO THE INITIAL INVITATION WERE OPENED ON FEBRUARY 28, 1957. YOUR BID WAS LOW ON ITEM 2, AFTER DEDUCTION OF $10 FROM THE UNIT PRICE FOR ELIMINATION OF A COUPLER NOT REQUIRED UNDER THE SPECIFICATIONS. CARRIER CORPORATION, OFFERING CEILING-MOUNTED UNITS, WAS LOW ON ITEM 1. THE REPORT RECEIVED FROM THE DEPARTMENT OF COMMERCE INDICATES THAT AFTER THOROUGH CONSIDERATION OF THE MATTER, IT WAS DETERMINED TO REJECT ALL BIDS AND READVERTISE, FOR THE REASON THAT THE INVITATION WAS DEFICIENT IN THE FOLLOWING RESPECTS:

(1) CEILING MOUNTED UNITS SUCH AS THE LOW BIDDER UNDER ITEM 1 INTENDED TO SUPPLY, EVEN THOUGH THEY COMPLIED FULLY WITH THE SPECIFICATIONS, WERE NOT DESIRED IN VIEW OF THE CEILING HEIGHT IN THE BUILDINGS WHERE THEY WOULD BE INSTALLED, THE HAZARD SUCH INSTALLATION WOULD CREATE WHERE ADJACENT TO TALL EQUIPMENT RACKS, AND THE FACT THAT UNITS SO MOUNTED WOULD BE MORE DIFFICULT TO MAINTAIN AND REPAIR.

(2) IN MANY INSTANCES, ONE OF EACH OF THE UNITS WOULD BE INSTALLED IN A BUILDING. THEREFORE, FROM THE STANDPOINT OF INSTALLATION, MAINTENANCE, REPAIR AND NECESSARY SPARE PARTS INVENTORY, IT WOULD BE MORE ECONOMICAL TO HAVE BOTH THE SIZES OF UNITS OF THE SAME MAKE. THE ADMINISTRATIVE REPORT INDICATES THAT AN AWARD ON AN AGGREGATE BASIS WAS INTENDED BUT THE LANGUAGE OF THE INVITATION FAILED TO REFLECT SUCH INTENTION.

(3) THE INITIAL INVITATION PRESCRIBED A TEST OPERATION NORMALLY USED FOR COMPLETELY SELF-CONTAINED UNITS AND DID NOT TAKE INTO ACCOUNT THE FACT THAT THE REFRIGERANT UNITS AND THE EVAPORATING UNITS TO BE PROCURED UNDER THIS INVITATION WERE TO BE INSTALLED SEPARATELY. THEREFORE, THE PRESCRIBED TEST WHICH REQUIRED THE TESTING OF THE TWO UNITS TOGETHER CREATED AN ADDITIONAL COST OUT OF PROPORTION TO THE BENEFITS RECEIVED SINCE THE STANDARD PRODUCTION LINE TEST IS ADEQUATE. IT WAS APPARENT, IN SOME INSTANCES AT LEAST, THAT THE TEST REQUIREMENT HAD A SIGNIFICANT EFFECT ON BID PRICES.

YOU CONTEND THAT YOU DID NOT FIND THE SPECIFICATIONS AMBIGUOUS, AND THAT THE READVERTISEMENT WOULD SERVE NO USEFUL PURPOSE AND WOULD BE UNFAIR TO YOUR COMPANY SINCE YOUR ORIGINAL BID HAD BEEN EXPOSED. ACCORDINGLY, YOU REQUEST A REVIEW OF INVITATION NO. 7044.

PARAGRAPH 8/B) OF THE INVITATION PROVIDES: "THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS * * *.' IN ADDITION TO SUCH RESERVATION, IT HAS BEEN CONSISTENTLY HELD BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT AND BY THE COURTS THAT THE QUESTION OF REJECTING ALL BIDS AND READVERTISING IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION AND WHERE, AS HERE, IT IS SHOWN THAT THE PURPOSE OF SUCH ACTION IS TO CLARIFY SPECIFICATIONS IN ORDER TO OBTAIN FOR THE GOVERNMENT THE TYPE OF EQUIPMENT DETERMINED BY THE GOVERNMENT'S DULY CONSTITUTED AGENTS TO REPRESENT ITS MINIMUM REQUIREMENTS, WE PERCEIVE NO OBJECTION TO SUCH ACTION. IN 17 COMP. GEN. 554, 559, WE STATED:

"NOT ONLY DID THE INVITATION FOR BIDS EXPRESSLY STATE A RESERVATION OF THE RIGHT TO REJECT ANY AND ALL PROPOSALS, BUT A REQUEST FOR BIDS OR OFFERS, IRRESPECTIVE OF ANY SUCH RESERVATION, DOES NOT IMPORT ANY OBLIGATION TO ACCEPT ANY OF THE OFFERS RECEIVED, AND CERTAINLY IT CANNOT BE CONCEDED THAT A PUBLIC OFFICER, ACTING FOR THE GENERAL WELFARE, IS BOUND TO ACCEPT A BID, WHERE HE DETERMINES THAT THE PUBLIC INTEREST WOULD BE SERVED BY A REJECTION OF ALL BIDS AND A READVERTISEMENT OF THE CONTRACT ON SPECIFICATIONS STATED TO REFLECT MORE ACCURATELY THE ACTUAL NEEDS TO BE MET, OR, FOR THAT MATTER, THAT DUE TO THE LAPSE OF TIME OR OTHERWISE A MORE ADVANTAGEOUS CONTRACT MIGHT BE OBTAINED. * * *"

SEE, ALSO, O-BRIEN V. CARNEY, 6 F.SUPP. 761.

YOU ALSO STATE IN YOUR LETTER THAT THE FACT THAT "BOTH THE CAA ENGINEERS WHO EVALUATED THE BIDS AND THE CAA CONTRACTING OFFICER RECOMMENDED USAIRCO FOR THE AWARD (IS) EVIDENCE THAT THE SPECIFICATIONS WERE FULLY MET BY USAIRCO.' IN THIS REGARD, THE ADMINISTRATIVE REPORT STATES:

"THE U.S. AIR CONDITIONING CORPORATION, BEING LOW BIDDER ON ONE ITEM WAS DEFINITELY IN CONTENTION FOR A PORTION OF THIS AWARD IF SUCH ACTION COULD LEGALLY HAVE BEEN TAKEN AND IF THIS WOULD HAVE SATISFIED OUR REQUIREMENTS. IN NO WAY DID WE INTEND TO IMPLY TO THE UNITED STATES AIR CONDITIONING CORPORATION THAT AWARD TO THAT FIRM WAS BEING ACCOMPLISHED, AND REGRET THAT MR. STORCK HAS DRAWN THIS CONCLUSION FROM THE INFORMATION HE ACQUIRED IN THE COURSE OF OUR CONSIDERATIONS. THE CAA ADMISSION TO MR. STORCK WAS TO THE EFFECT THAT AN ERROR HAD BEEN MADE IN THE ORIGINAL SPECIFICATIONS, NOT IN THE DECISION TO READVERTISE.'

WE ARE KEENLY AWARE THAT THE REJECTION OF BIDS AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITORS' PRICES IS A SERIOUS MATTER AND SHOULD NOT BE DONE EXCEPT FOR COGENT REASONS. NEVERTHELESS, WE HAVE RECOGNIZED THAT SINCE CONTRACTING OFFICERS ARE AGENTS OF, AND ARE REQUIRED TO WORK IN THE BEST INTERESTS OF, THE GOVERNMENT, THEIR ACTIONS IN REJECTING BIDS AND READVERTISING MAY NOT BE CONSIDERED IMPROPER WHEN BASED UPON SUBSTANTIAL REASONS LEADING TO A BONA FIDE BELIEF THAT THE INTERESTS OF THE GOVERNMENT WILL BE BEST SERVED THEREBY.

IT IS UNFORTUNATE THAT IN THIS INSTANCE THE ORIGINAL INVITATION AND SPECIFICATIONS FAILED TO SET OUT THE PRECISE NATURE OF THE UNITS WHICH WERE DESIRED AND THE EXACT TERMS UPON WHICH IT WAS INTENDED THAT AWARDS WOULD BE MADE. HOWEVER, THE ONLY ALTERNATIVE TO THE REJECTION OF ALL BIDS --- THAT IS, ACCEPTANCE OF YOUR BID ON ITEM 2 AND OF THAT OF THE CARRIER CORPORATION ON ITEM 1--- WOULD HAVE RESULTED IN THE PURCHASE OF CEILING- MOUNTED UNITS, WHICH WERE DEFINITELY NOT DESIRED AND NOT SUITED TO THE GOVERNMENT'S ACTUAL REQUIREMENTS, AND IN THE INSTALLATION IN SOME CASES OF DIFFERENT MAKES OF UNITS IN THE SAME BUILDING, WHICH ALSO WOULD HAVE BEEN CONTRARY TO THE ACTUAL INTENTION OF THE PROCURING OFFICIALS. IN THESE CIRCUMSTANCES WE BELIEVE THAT THE INTERESTS OF THE GOVERNMENT ARE PROPERLY TO BE REGARDED AS SUPERIOR TO THE INTEREST OF ANY BIDDER IN NOT HAVING ITS PRICES DISCLOSED.

FOR THESE REASONS WE WOULD NOT FEEL JUSTIFIED IN OBJECTING TO THE ACTION OF THE CIVIL AERONAUTICS ADMINISTRATION IN THIS INSTANCE.