B-143426, OCT. 6, 1960

B-143426: Oct 6, 1960

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TO WESTWOOD CABLE CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JULY 6. YOUR BID OF $45.81 ON ITEM NO. 2 OF THE INVITATION WAS THE LOWEST OF THE THREE SMALL BUSINESS BIDS WHICH WERE RECEIVED FOR THAT ITEM. THE CONTRACTING OFFICER DISCOVERED THAT THE "SET-ASIDE" WAS CONTRARY TO CERTAIN APPLICABLE REQUIREMENTS OF THE ARMED SERVICES PROCUREMENT REGULATION. THE CONTRACTING OFFICER NOTED THAT YOUR BID OF $45.81 EACH FOR ITEM NO. 2 WAS CONSIDERABLY HIGHER THAN PREVIOUSLY PAID FOR THE SAME ITEM. INVITATION NO. 30-635-60-448 WAS CANCELED AND INVITATION NO. 30-635-60-719 SUBSTITUTED THEREFOR ON JUNE 28. SET-ASIDE" ARE SET FORTH IN PARAGRAPH 1 706.2 (B) (III). AS FOLLOWS: "* * * A TOTAL SET-ASIDE SHALL NOT BE AUTHORIZED WHEN THE PRODUCTS OF ONE OR MORE LARGE BUSINESSES ARE ON THE QUALIFIED PRODUCTS LIST UNLESS IT HAS BEEN CONFIRMED THAT NONE OF SUCH LARGE BUSINESSES DESIRES TO PARTICIPATE IN THE PROCUREMENT.

B-143426, OCT. 6, 1960

TO WESTWOOD CABLE CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JULY 6, 1960, WITH ENCLOSURES, AND YOUR TELEGRAMS DATED JULY 6 AND JULY 12, 1960, PROTESTING THE ACTION TAKEN BY THE GRIFFISS AIR FORCE BASE IN CANCELING INVITATION FOR BIDS NO. 30-635-60-448 AND SUBSTITUTING THEREFOR INVITATION NO. 30-635 -60-719.

UNDER DATE OF APRIL 28, 1960, THE ROME AIR MATERIEL AREA, GRIFFISS AIR FORCE BASE, NEW YORK, ISSUED INVITATION NO. 30-635-60-448 SOLICITING BIDS ON CERTAIN QUANTITIES OF CABLE ASSEMBLIES--- ITEMS NOS. 1 AND 2--- IN ACCORDANCE WITH APPLICABLE DRAWINGS, SPECIFICATIONS, ETC. BOTH ITEMS COVERED QUALIFIED PRODUCTS, WHICH APPEAR ON DESIGNATED QUALIFIED PRODUCTS LISTS. THE INVITATION SET ASIDE THE PROCUREMENT 100 PERCENT FOR SMALL BUSINESS PROVIDING THAT ANY CONTRACT THEREUNDER WOULD BE AWARDED TO SMALL BUSINESS CONCERNS ONLY. YOUR BID OF $45.81 ON ITEM NO. 2 OF THE INVITATION WAS THE LOWEST OF THE THREE SMALL BUSINESS BIDS WHICH WERE RECEIVED FOR THAT ITEM. UPON CONSIDERING A COMPLAINT FROM A LARGE BUSINESS CONCERN AGAINST THE 100 PERCENT "SET-ASIDE" FOR SMALL BUSINESS, THE CONTRACTING OFFICER DISCOVERED THAT THE "SET-ASIDE" WAS CONTRARY TO CERTAIN APPLICABLE REQUIREMENTS OF THE ARMED SERVICES PROCUREMENT REGULATION. IN ADDITION, THE CONTRACTING OFFICER NOTED THAT YOUR BID OF $45.81 EACH FOR ITEM NO. 2 WAS CONSIDERABLY HIGHER THAN PREVIOUSLY PAID FOR THE SAME ITEM. FOR THESE REASONS, INVITATION NO. 30-635-60-448 WAS CANCELED AND INVITATION NO. 30-635-60-719 SUBSTITUTED THEREFOR ON JUNE 28, 1960. ORIGINALLY THE SUBSTITUTED INVITATION CONTAINED NO "SET ASIDE" OF THE PROCUREMENT FOR SMALL BUSINESS.

IN YOUR LETTER AND TELEGRAMS YOU PROTEST THE CANCELLATION, AS THE LOW BIDDER, OF INVITATION NO. 30-635-60-448 AND THE ISSUANCE OF INVITATION NO. 30-635-60-719 WITHOUT INCLUDING A "SET-ASIDE" FOR SMALL BUSINESS. YOU ALSO OBJECT TO THE READVERTISEMENT OF THE PROCUREMENT AFTER YOUR ORIGINAL BID PRICES HAD BEEN MADE PUBLIC.

THE APPLICABLE REQUIREMENTS OF THE ARMED SERVICES PROCUREMENT REGULATION PERTAINING TO THE ,SET-ASIDE" ARE SET FORTH IN PARAGRAPH 1 706.2 (B) (III), AND PROVIDE, IN PERTINENT PART, AS FOLLOWS:

"* * * A TOTAL SET-ASIDE SHALL NOT BE AUTHORIZED WHEN THE PRODUCTS OF ONE OR MORE LARGE BUSINESSES ARE ON THE QUALIFIED PRODUCTS LIST UNLESS IT HAS BEEN CONFIRMED THAT NONE OF SUCH LARGE BUSINESSES DESIRES TO PARTICIPATE IN THE PROCUREMENT; "

THE DEPARTMENT OF THE AIR FORCE REPORTS THAT TWO LARGE BUSINESS CONCERNS WERE ON THE QUALIFIED PRODUCTS LIST FOR THE CABLE ASSEMBLIES SPECIFIED IN INVITATION NO. 30-635-60-448 AND IT WAS NOT SHOWN THAT THEY DID NOT DESIRE TO PARTICIPATE IN THE PROCUREMENT. IN FACT, THE COMPLAINT RECEIVED TO THE TOTAL "SET-ASIDE" WAS FROM A LARGE BUSINESS CONCERN WHICH WAS ON THE QUALIFIED PRODUCTS LIST, AND THAT CONCERN EXPRESSED A DEFINITE INTEREST IN THE PROCUREMENT. HENCE, EVEN THOUGH THE DETERMINATION TO INCLUDE THE "SET -ASIDE" FOR SMALL BUSINESS IN INVITATION NO. 30-635-60-448 RESULTED ONLY AFTER CONSIDERATION BY REPRESENTATIVES OF BOTH THE SMALL BUSINESS ADMINISTRATION AND THE GRIFFISS AIR FORCE BASE, IT IS OBVIOUS THAT AN OVERSIGHT OCCURRED IN INCLUDING THE ,SET-ASIDE" PROVISION IN THE INVITATION. IT IS EQUALLY OBVIOUS THAT SUCH INCORPORATION WAS CONTRARY TO THE TERMS OF THAT PART OF THE ARMED SERVICES PROCUREMENT REGULATION SET FORTH ABOVE. FOR THIS REASON THE ACTION OF THE CONTRACTING OFFICER IN CANCELING INVITATION NO. 30-635-60-448 WAS PROPER. MOREOVER, IT IS REPORTED THAT YOUR LOW BID ON ITEM NO. 2 OF $45.81 EACH WAS $7.61 A UNIT MORE THAN THE PRICE PREVIOUSLY PAID BY THE GRIFFISS AIR FORCE BASE FOR THE SAME ITEM. AN AWARD ON THIS BASIS WOULD HAVE RESULTED IN A TOTAL EXCESS EXPENDITURE OF $12,937 FOR THE 1,700 UNITS SPECIFIED UNDER ITEM NO. 2.

WHILE WE ARE AWARE THAT THE REJECTION OF BIDS AFTER THEY HAVE BEEN OPENED AND EACH BIDDER OR SUBSEQUENT PROSPECTIVE 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 THE GOVERNMENT REQUIRED TO WORK IN THE BEST INTERESTS OF THE GOVERNMENT, WHEN READVERTISING MAY RESULT IN SUBSTANTIAL SAVINGS TO THE GOVERNMENT OR THE PROCUREMENT OF EQUIPMENT MORE PROPERLY MEETING THE GOVERNMENT'S NEEDS, SUCH ACTION, WHEN AUTHORIZED, SHOULD BE CONSIDERED. 36 COMP. GEN. 364. THE RIGHT OF THE CONTRACTING OFFICER TO REJECT YOUR BID WAS CONTAINED IN PARAGRAPH 8 (B) OF THE TERMS AND CONDITIONS OF THE INVITATION, AND IT IS SHOWN THAT THE READVERTISEMENT WAS ACCOMPLISHED SOLELY FOR THE PURPOSE OF ASSURING A FAIR AND EQUAL OPPORTUNITY FOR ALL QUALIFIED BIDDERS TO COMPETE AND TO OBTAIN THE BEST POSSIBLE PRICES FOR THE GOVERNMENT.

IN VIEW OF THE FOREGOING, WE MUST CONCLUDE THAT THE ACTION TAKEN BY THE DEPARTMENT OF THE AIR FORCE IN THE MATTER IS NOT SUBJECT TO LEGAL OBJECTION.

YOU MAY BE INFORMED, HOWEVER, THAT SUBSEQUENT TO THE ISSUANCE OF INVITATION NO. 30-635-60-719, AS A RESULT OF A DETERMINATION BY A REPRESENTATIVE OF THE SMALL BUSINESS ADMINISTRATION AND THE CONTRACTING OFFICER 50 PERCENT OF THE PROCUREMENT WAS SET ASIDE FOR SMALL BUSINESS. AN APPROPRIATE AMENDMENT TO THE INVITATION WAS ISSUED SETTING ASIDE 50 PERCENT OF THE PROCUREMENT FOR EXCLUSIVE NEGOTIATION WITH, AND AWARD TO, SMALL BUSINESS CONCERNS IN ACCORDANCE WITH THE APPLICABLE PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION. IT ALSO MAY BE POINTED OUT THAT SIX BIDS WERE RECEIVED IN RESPONSE TO INVITATION NO. 30-635-60-719, AND THAT THE PRICES QUOTED WERE MUCH LOWER THAN THOSE RECEIVED UNDER THE CANCELED INVITATION.