B-148763, JUN. 19, 1962

B-148763, JUN. 19, 1962

TO NOBLE AND MOYLE:

WE REFER AGAIN TO YOUR LETTER OF APRIL 25, 1962, PRESENTING ON BEHALF OF THE ALLEN V. TORNEK COMPANY AN APPEAL IN CONNECTION WITH THE PROCUREMENT BY THE DEPARTMENT OF THE NAVY OF WATCHES UNDER INVITATION FOR BIDS NO. 104 -143-61, OPENED SEPTEMBER 2, 1960, AND NO. 104-870-61, OPENED FEBRUARY 16, 1961.

ONE OF THE ITEMS INCLUDED IN THE FIRST INVITATION COVERED A QUANTITY OF 1,000 SELF-WINDING SUBMERSIBLE WRIST WATCHES CONFORMING TO A GIVEN SPECIFICATION. THE LOW BID SUBMITTED ON THAT ITEM FOR THE GIVEN QUANTITY WAS FROM THE PHILADELPHIA WATCH SUPPLY COMPANY AT $33.16 PER UNIT, INCLUDING APPLICABLE FEDERAL TAXES. THE NEXT LOW BID, FROM THE C LONGINES -WITTNAUER WATCH COMPANY, INC., OFFERED THE PRODUCT AT A A UNIT PRICE OF $32.95 WITHOUT FEDERAL TAXES. THE NEXT BID WAS TORNEK'S AT $75 PER UNIT. THE LOW BID WAS CONSIDERED BY THE ADMINISTRATIVE AGENCY TO BE NONRESPONSIVE. IN OUR DECISION, B 144477, DECEMBER 23, 1960, WE UPHELD THE DETERMINATION OF NONRESPONSIVENESS. THE ADMINISTRATIVE AGENCY DETERMINED THAT THE SECOND LOW BID SHOULD BE REJECTED BECAUSE THE BIDDER COULD NOT MEET THE STATED DELIVERY SCHEDULE. IN VIEW OF THE FAILURE OF THE LOW BIDDERS TO QUALIFY FOR AWARD, AND POSSIBLY IN CONSIDERATION OF THE DIFFERENCE IN PRICE BETWEEN THOSE BIDS AND THE REMAINING BID, IT WAS DETERMINED TO REJECT ALL BIDS AND READVERTISE THE PROCUREMENT. IN A LETTER, B 144477, DECEMBER 23, 1960,ADDRESSED TO THE SECRETARY OF THE NAVY, WE CONCLUDED THAT SUCH ACTION WOULD BE PROPER IF ADMINISTRATIVELY DETERMINED TO BE IN THE GOVERNMENT'S BEST INTEREST.

IN CONNECTION WITH THE REJECTION OF ALL BIDS, IT SHOULD BE NOTED THAT SUCH RIGHT IS RESERVED TO THE GOVERNMENT BY THE SPECIFIC PROVISIONS OF ARTICLE 8 (B) OF THE TERMS AND CONDITIONS OF THE INVITATIONS FOR BIDS. ADDITION, IT HAS LONG BEEN RECOGNIZED THAT A CONTRACTING OFFICER MAY REJECT ALL BIDS AND READVERTISE THE PROCUREMENT UPON A BONA FIDE DETERMINATION THAT THE GOVERNMENT'S INTEREST WOULD BE SERVED THEREBY. COMP. GEN. 554, 559. THIS DISCRETION HAS BEEN REFLECTED IN THE STATUTE LAW APPLICABLE TO THE PROCUREMENT OF SUPPLIES BY THE ARMED SERVICES AT 10 U.S.C. 2305 (C).

THE SECOND INVITATION SOLICITING BIDS ON A QUANTITY OF 1,000 SELF WINDING SUBMERSIBLE WRIST WATCHES WAS ISSUED JANUARY 30, 1961. THE PRICES PER UNIT BID WERE AS FOLLOWS: PHILADELPHIA, $29,64; LONGINES WITTNAUER, $87.60; AND TORNEK, $117.50. IT WAS DETERMINED THAT THE LOW BIDDER WAS NOT RESPONSIBLE. AFTER A POSITIVE DETERMINATION WITH RESPECT TO THE RESPONSIBILITY OF THE LONGINES-WITTNAUER WATCH COMPANY, CONTRACT N104- 80700 WAS AWARDED TO THAT FIRM ON JUNE 7, 1961. THE SPECIFICATIONS CONSISTENT WITH THE TERMS OF THE INVITATION REQUIRED THE DELIVERY OF PREPRODUCTION SAMPLES TO THE GOVERNMENT BY MARCH 5, 1962. THE DELIVERY DATE FOR THE PREPRODUCTION SAMPLES WAS SUBSEQUENTLY EXTENDED TO APRIL 25, 1962, AND WE ARE ADVISED THAT THE LATTER DATE WAS MET BY THE CONTRACTOR. WE ARE FURTHER ADVISED BY THE DEPARTMENT OF THE NAVY THAT THE PREPRODUCTION WATCHES ARE NOW BEING TESTED.

IN YOUR LETTER YOU CONTEND THAT THE FAILURE OF THE CONTRACTOR TO FURNISH THE PREPRODUCTION SAMPLES WITHIN THE TIME SPECIFIED CONSTITUTED A BREACH OF CONTRACT, AND THAT THE GOVERNMENT SHOULD THEREFORE REGARD THE CONTRACT AS TERMINATED AND AWARD A REPLACEMENT CONTRACT TO THE TORNEK COMPANY, HOLDING LONGINES-WITTNAUER LIABLE FOR ANY DIFFERENCE IN COST.

WITHOUT GOING INTO THE EXTENT OF THE CONTRACTING OFFICER'S AUTHORITY TO EXTEND DELIVERY TIMES IN CONTRACTS, IT IS SUFFICIENT TO STATE THAT IN OUR VIEW THE FACTS PRESENTLY BEFORE US DO NOT EVIDENCE ANY ABUSE OF SUCH DISCRETION, AND WE FIND NO BASIS TO QUESTION THE LEGALITY OF THE ACTION. SINCE A VALID AND BINDING CONTRACT CONTINUES IN EXISTENCE, THE QUESTION OF TORNEK'S RIGHT TO AWARD OF REPLACEMENT CONTRACT ON THE BASIS OF THE BID OPENED ON FEBRUARY 16, 1961, IS ACADEMIC AND NEED NOT BE CONSIDERED HERE.