B-140155, AUGUST 13, 1959, 39 COMP. GEN. 86

B-140155: Aug 13, 1959

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CONTRACTS - READVERTISED PROCUREMENT - JUSTIFICATION THE CANCELLATION OF AN INVITATION AFTER THE ONLY CONFORMING BID IS FOUND TO BE EXCESSIVE BOTH AS TO PRICE AND AS TO THE QUALITY OF THE ITEM OFFERED AND THE READVERTISEMENT OF THE PROCUREMENT ON THE BASIS OF LESS STRINGENT SPECIFICATIONS TO MATCH THE NEEDS OF THE PROCURING AGENCY. ARE PROPER ADMINISTRATIVE ACTIONS. WHOSE PRODUCT WAS EXCESSIVE BOTH AS TO PRICE AND AS TO THE PRODUCT OFFERED. THAT THE READVERTISED PROCUREMENT ON THE BASIS OF LESS STRINGENT SPECIFICATIONS WAS AMBIGUOUS. BECAUSE ONLY ONE DRAWING WAS FURNISHED FOR TWO DISSIMILAR MECHANISMS AND THAT THE TEST PROCEDURES IN THE READVERTISED PROCUREMENT SHOULD NOT HAVE BEEN ELIMINATED.

B-140155, AUGUST 13, 1959, 39 COMP. GEN. 86

CONTRACTS - READVERTISED PROCUREMENT - JUSTIFICATION THE CANCELLATION OF AN INVITATION AFTER THE ONLY CONFORMING BID IS FOUND TO BE EXCESSIVE BOTH AS TO PRICE AND AS TO THE QUALITY OF THE ITEM OFFERED AND THE READVERTISEMENT OF THE PROCUREMENT ON THE BASIS OF LESS STRINGENT SPECIFICATIONS TO MATCH THE NEEDS OF THE PROCURING AGENCY, WHICH ACTIONS RESULT IN WIDER COMPETITION AND A SAVINGS TO THE GOVERNMENT, ARE PROPER ADMINISTRATIVE ACTIONS. A PROTEST BY THE ONLY BIDDER, WHOSE PRODUCT WAS EXCESSIVE BOTH AS TO PRICE AND AS TO THE PRODUCT OFFERED, THAT THE READVERTISED PROCUREMENT ON THE BASIS OF LESS STRINGENT SPECIFICATIONS WAS AMBIGUOUS, BECAUSE ONLY ONE DRAWING WAS FURNISHED FOR TWO DISSIMILAR MECHANISMS AND THAT THE TEST PROCEDURES IN THE READVERTISED PROCUREMENT SHOULD NOT HAVE BEEN ELIMINATED, IS NOT SUPPORTED BY THE RECORD SHOWING THE COMPETITION PRICES WERE OBTAINED FROM SEVERAL INTERESTED BIDDERS, WHICH INDICATES AN UNDERSTANDING OF THE BID REQUIREMENTS, AND AN ADMINISTRATIVE REPORT SHOWING THAT THE DETAILED TEST PROCEDURES WERE NOT NECESSARY BUT THAT BIDDERS WERE ONLY REQUIRED TO COMPLY WITH THE SPECIFICATIONS.

TO THE SECRETARY OF THE ARMY, AUGUST 13, 1959:

REFERENCE IS MADE TO A LETTER DATED JULY 28, 1959, FROM THE ASSISTANT SECRETARY ( LOGISTICS) SUBMITTING AN ADMINISTRATIVE REPORT IN CONNECTION WITH THE PROTESTS OF JO-LINE TOOLS, INC., AND RICHMONT, INC., AGAINST THE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS NO. IDP X-ORD-01-021-59- 10289 FOR THE PROCUREMENT OF APPROXIMATELY 10,000 TORQUE WRENCHES BY THE ARMY ROCKET AND GUIDED MISSILE AGENCY. THE LETTER REQUESTS OUR OFFICE TO RENDER A DECISION WITH RESPECT TO THE PROTESTS IN ORDER THAT THE ADMINISTRATIVE ACTIONS TAKEN THEREON MIGHT BE FINALIZED.

INVITATION FOR BIDS NO. ODP-X-ORD-01-021-59-10103, DATED OCTOBER 13, 1958, REQUESTED BIDS ON EIGHT SIZES OF APPROXIMATELY 10,000 TORQUE WRENCHES IN ACCORDANCE WITH SPECIFICATIONS OF ORDNANCE DRAWING NO. 8022631, REVISION D. FOUR BIDDERS RESPONDED, INCLUDING JO-LINE AND RICHMONT WHICH SUBMITTED BOTH A PRIMARY AND ALTERNATE BID. HOWEVER, ONLY JO-LINE AND RICHMONT SUBMITTED SAMPLE WRENCHES WITH THEIR BIDS AS REQUIRED BY THE INVITATION FOR TEST AND EVALUATION. UPON EVALUATION OF THE SAMPLE WRENCHES SUBMITTED, IT WAS DETERMINED THAT THE JO-LINE WRENCH AND THE RICHMONT ALTERNATE SAMPLE WRENCH DID NOT MEET THE SPECIFICATIONS OF ORDNANCE DRAWING NO. 8022631, REVISION D. HOWEVER, IT WAS DETERMINED THAT THE ONLY ACCEPTABLE BID WAS RICHMONT'S PRIMARY BID WHICH WAS ABOUT $182,000 IN EXCESS OF THE JO-LINE BID. THE CONTRACTING OFFICER AND THE ENGINEERING BRANCH DETERMINED THAT THE SPECIFICATIONS OF THE INVITATION WERE IN EXCESS OF THE QUALITY NECESSARY FOR THE NEEDS OF THE GOVERNMENT AND THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD BE SERVED BY RELAXATION OF THE SPECIFICATIONS TO MATCH THE REQUIREMENTS OF THE ORDERING AGENCY. IT WAS FURTHER FOUND BY THE CONTRACTING OFFICER THAT THE JO-LINE BID DEVIATED SUBSTANTIALLY FROM THE SPECIFICATIONS AND THAT AWARD TO JO- LINE WOULD HAVE BEEN PREJUDICIAL TO OTHER FIRMS WHO MIGHT HAVE BID ON LESS STRINGENT SPECIFICATIONS. ACCORDINGLY, THE INVITATION WAS CANCELED ON JANUARY 17, 1959, PURSUANT TO SECTION 2.403 (E) (2), OF THE ARMY PROCUREMENT PROCEDURE SINCE IT APPEARED THAT THE SPECIFICATIONS SHOULD BE REVISED.

THEREAFTER, THE SPECIFICATIONS WERE INFORMALLY COORDINATED WITH RICHMONT AND JO-LINE FOR THE PURPOSE OF REDUCING THE ENGINEERING REQUIREMENTS SO AS TO AFFORD WIDER COMPETITION FOR WRENCHES OF ADEQUATE QUALITY BUT NOT OF THE EXCESSIVE QUALITY CALLED FOR UNDER THE CANCELED INVITATION. ORDNANCE DRAWING NO. 8022631 WAS ACCORDINGLY REVISED TO PROVIDE FOR LESS STRINGENT REQUIREMENTS FOR THE PROCUREMENT OF TORQUE WRENCHES.

ON FEBRUARY 24, 1959, INVITATION FOR BIDS NO. IDP-X-ORD-01-021-59 10289 WAS ISSUED INCORPORATING REVISED DRAWING NO. 8022631, REVISION E, AND INCREASING EACH ITEM BY ONE WRENCH. FIVE BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION, INCLUDING THOSE OF RICHMONT, JO-LINE AND TORQUE CONTROLS, INC. JOINT-LINE, IN A LETTER ACCOMPANYING ITS BID WHICH QUOTED THE SAME UNIT PRICES AS UNDER THE CANCELED INVITATION, STATED THAT IT WAS PROTESTING ANY AWARD UNDER THE INVITATION AND THAT IT WAS SUBMITTING A BID FOR THE SOLE PURPOSE OF MAINTAINING A POSITION OF RESPONSIVENESS. INASMUCH AS TORQUE CONTROLS, INC., SUBMITTED THE LOWEST RESPONSIVE BID, CONTRACT NO. DA-01-021-ORD-11535 WAS AWARDED TO THAT FIRM ON MAY 15, 1959, FOR THE FURNISHING OF THE TORQUE WRENCHES COVERED BY THE INVITATION.

JOINT-LINE PROTESTS THE AWARD OF THE RESULTING CONTRACT BECAUSE:

1. IT OFFERED TORQUE WRENCHES CONFORMING TO ORDNANCE DRAWING NO. 8022631, REVISION D;

2. NO VALID REQUIREMENT EXISTED FOR THE CHANGE IN SPECIFICATIONS;

3. THE NEW " REVISION E" OF THE DRAWING RESTRICTED, BUT DID NOT ESSENTIALLY CHANGE, THE BASIC REQUIREMENTS; AND

4. THE CANCELLATION OF THE FIRST INVITATION AND THE READVERTISEMENT UNDER THE SECOND WERE INVALID.

IT IS, THEREFORE, CONCLUDED BY JO-LINE THAT AWARD MUST BE MADE TO IT AS THE LOW BIDDER UNDER THE FIRST INVITATION.

THE REQUIREMENT IN THE FIRST INVITATION THAT SAMPLES BE FURNISHED WAS FOR THE PURPOSE OF DETERMINING THAT BIDDERS DID, IN FACT, OFFER TO SUPPLY TORQUE WRENCHES MEETING THE SPECIFICATIONS. HENCE, THE SUBMISSION OF A SAMPLE BY JO-LINE WHICH WAS DETERMINED, AFTER ENGINEERING ANALYSIS, TO BE NOT IN ACCORDANCE WITH THE SPECIFICATIONS MUST BE REGARDED AS A QUALIFICATION OF ITS BID, REQUIRING ITS REJECTION. SEE 34 COMP. GEN. 180; 37 ID. 745. IT IS WELL ESTABLISHED THAT THE RESPONSIBILITY FOR DRAFTING PROPER SPECIFICATIONS WHICH REFLECT THE NEEDS OF THE PROCURING AGENCY AND FOR DETERMINING FACTUALLY WHETHER ARTICLES OFFERED BY BIDDERS MEET THESE SPECIFICATIONS IS PRIMARILY THAT OF THE PROCURING AGENCY. SEE 17 COMP. GEN. 554; 36 ID. 251. WE FIND NOTHING IN THE EVIDENCE OF RECORD THAT THE DETERMINATION MADE THAT THE WRENCHES OFFERED BY JO-LINE FAILED TO MEET SPECIFICATIONS WAS ARBITRARY OR NOT SUPPORTED BY COMPETENT EVIDENCE. HOLD OTHERWISE WOULD BE TANTAMOUNT TO PLACING THE GOVERNMENT IN A POSITION OF ALLOWING A BIDDER TO DICTATE SPECIFICATIONS WHICH WOULD PERMIT ACCEPTANCE OF EQUIPMENT WHICH DID NOT, IN THE CONSIDERED JUDGMENT OF THE PROCURING AGENCY, REASONABLY MEET THE ADVERTISED REQUIREMENTS.

IN VIEW OF THE LIMITED RESPONSE TO THE FIRST INVITATION AND OF THE FACT THAT THE ONLY CONFORMING BID WAS EXCESSIVE BOTH AS TO PRICE AND AS TO THE TORQUE WRENCH OFFERED, WE FEEL THAT IT WAS ENTIRELY REASONABLE TO CONSIDER A RELAXATION OF THE SPECIFICATION REQUIREMENTS TO MATCH THE DESIRED NEEDS OF THE PROCURING AGENCY AND TO GENERATE, IF POSSIBLE, WIDER COMPETITIVE INTEREST. THAT SUCH IS A PROPER AND REQUIRED PROCUREMENT RESPONSIBILITY IS NOT OPEN TO SERIOUS QUESTION, ESPECIALLY, AS HERE, WHERE IT HAS BEEN DEMONSTRATED THAT REVISION OF ORDNANCE DRAWING NO. 8022631 WAS ACCOMPLISHED TO FURTHER THE COMPETITIVE BIDDING SYSTEM. EVEN IF IT BE CONCEDED THAT THE REVISION WAS NOT MAJOR IN SCOPE, THE RECORD DOES ESTABLISH THAT " REVISION E" DID RESULT IN MORE, NOT LESS, COMPETITION AND IN SAVINGS TO THE GOVERNMENT.

10 U.S.C. 2305 (B) PROVIDES FOR THE REJECTION OF ALL BIDS WHEN SUCH ACTION IS DETERMINED TO BE IN THE GOVERNMENT'S INTEREST. IT HAS BEEN HELD CONSISTENTLY THAT AN INVITATION FOR BIDS DOES NOT IMPART ANY OBLIGATION TO ACCEPT ANY OF THE BIDS RECEIVED AND ALL BIDS MAY BE REJECTED WHERE IT IS DETERMINED TO BE IN THE GOVERNMENT'S INTEREST TO DO SO. SEE 37 COMP. GEN. 760, 761, AND THE CASES THEREIN CITED. THE AUTHORITY TO REJECT ALL BIDS IS NOT ORDINARILY SUBJECT TO REVIEW BY THE COURTS OR OUR OFFICE. SEE B- 118013, MARCH 31, 1954; B-128422, AUGUST 30, 1956; B-131028, APRIL 29, 1957; HARNEY V. DUNKEE, 237 P.2D 561; 31 ALRZD 469; CHAMPION COATED PAPER COMPANY V. JOINT COMMITTEE, 47 APP. D.C. 141. CF. 37 COMP. GEN. 12; 34 ID. 535. A SIMILAR MATTER WAS THE SUBJECT OF OUR DECISION AT 36 COMP. GEN. 364, AND IT WAS STATED THEREIN THAT WHEN IT IS ADMINISTRATIVELY DETERMINED THAT THE LOWEST ACCEPTABLE BID IS IN EXCESS OF THE AMOUNT FOR WHICH THE GOVERNMENT SHOULD BE ABLE TO PROCURE THE PARTICULAR SUPPLIES, A REJECTION OF ALL BIDS AND A READVERTISEMENT FOR NEW BIDS WAS CONSIDERED AS A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION. ALSO, SEE, 17 COMP. GEN. 554. ACCORDINGLY, UNDER THE CIRCUMSTANCES REPORTED, WE AGREE THAT THE ADMINISTRATIVE ACTIONS TAKEN WITH RESPECT TO THE PROTEST OF JO-LINE WERE PROPER.

CONCERNING THE RICHMONT PROTEST, IT IS THE POSITION OF THAT FIRM AS SET FORTH IN ITS LETTER OF MAY 8, 1959, THAT ORDNANCE DRAWING NO. 8022631, REVISION E, IS BOTH AMBIGUOUS AND CONFUSING. RICHMONT ALLEGES THAT THE DRAWING PROVIDES FOR TWO TOTALLY DISSIMILAR TORQUE WRENCH MECHANISMS WHICH ARE WHOLLY DIFFERENT IN CONSTRUCTION, QUALITY, PERFORMANCE, COST AND VALUE; THAT THE WRENCHES SHOULD HAVE BEEN THE SUBJECT OF SEPARATE DRAWINGS, SPECIFICATIONS AND INVITATIONS FOR BIDS; AND THAT NO SPECIFIC TEST PROCEDURES FOR EVALUATION WERE PROVIDED. WE FIND NOTHING IN THE RECORD TENDING TO INDICATE ANY AMBIGUITY OR CONFUSION AMONG BIDDERS AS TO THE WRENCHES REQUIRED. THE ABSTRACT OF BIDS REVEALS THAT COMPETITIVE PRICES WERE OBTAINED FROM THE INTERESTED BIDDERS WHICH WOULD SEEM TO INDICATE AN UNDERSTANDING OF THE BID REQUIREMENTS. RICHMONT'S MAY 8 LETTER WHICH SET OUR IN SOME DETAIL THE TECHNICAL BASES OF ITS POSITION WAS RESPONDED TO BY THE CHIEF OF THE INDUSTRIAL ENGINEERING DIVISION OF THE ARMY ROCKET AND GUIDED MISSILE AGENCY ON JUNE 5, 1959, AND SUCH REPORT OF EVALUATION CONCLUDED AS FOLLOWS:

RELATIVE TO THE QUESTIONS, PROPOSITIONS, AND ADVERTISING TYPE OF CLAIMS PRESENTED IN THE BALANCE OF 8 PAGE LETTER FROM RICHMONT, IT IS POINTED OUT THAT THE DRAWING AS IT EXISTS IN REVISION E ADEQUATELY AND COMPLETELY DESCRIBES THE CURRENT REQUIREMENTS OF THE WRENCHES REQUIRED BY ARGMA. THE DRAWING DOES NOT REFLECT MINUTE DETAILS OF OPERATION, CONSTRUCTION OR SPECIAL FEATURES THAT ARE NOT ESSENTIAL FOR THE INTENDED PURPOSE OF THE WRENCH. RICHMONT CONTENDS THAT THE AIR FORCE AND MANY AIRCRAFT AND MISSILE MANUFACTURERS HAVE ACCEPTED THEIR WRENCH AS STANDARD; HOWEVER, THIS HAS NO BEARING ON THE REQUIREMENTS OF ARGMA. PERHAPS THE SPECIAL FEATURES AND CONSTRUCTION OF THE RICHMONT WRENCHES ARE ESSENTIAL TO THE AIR FORCE AND SOME AIRCRAFT AND MISSILE MANUFACTURERS; HOWEVER, THEY ARE NOT ESSENTIAL FOR ARGMA USE. IT IS THE INTENT OF ARGMA TO OBTAIN WRENCHES WHICH WILL FULFILL THE ESSENTIAL REQUIREMENTS AT THE LOWEST POSSIBLE COST. REVISION E TO THE DRAWING WAS ISSUED WITH THIS OBJECTIVE.

IN VIEW OF THE FOREGOING AND SINCE ALSO IT HAS BEEN DETERMINED BY THE PROCURING AGENCY THAT DETAILED TEST PROCEDURES WERE NEITHER NECESSARY NOR PROPER, BUT THAT IT WAS ONLY NECESSARY TO COMPLY WITH THE SPECIFICATIONS, WE AGREE THAT RICHMONT'S PROTEST WAS PROPERLY DENIED UNDER THE CIRCUMSTANCES AND FACTS OF RECORD. SEE, IN THIS CONNECTION, 34 COMP. GEN. 174.

AS REQUESTED, COPIES OF THIS DECISION ARE BEING FORWARDED BY LETTERS DATED TODAY TO JO-LINE AND RICHMONT.