B-149010, JUN. 15, 1962

B-149010: Jun 15, 1962

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ESQUIRE: REFERENCE IS MADE TO YOUR LETTER OF MAY 23. IT WAS DETERMINED THAT AT LEAST TWO OF THE STIPULATED QUANTITIES WERE MATERIALLY OVER- ESTIMATED. AN EVALUATION BASED UPON MORE REALISTIC QUANTITIES DISCLOSED THAT A SECOND BIDDER WOULD HAVE BEEN LOW. WE HAVE HELD THAT INVITATIONS SHOULD BE CANCELLED ONLY FOR THE MOST COGENT REASONS AFTER OPENING AND DISCLOSURE OF THE BIDDERS' QUOTATIONS BECAUSE OF THE OBVIOUS PREJUDICIAL EFFECTS FLOWING THEREFROM. UNDER ONE OF THE PRINCIPAL EXCEPTIONS THERETO THE ACCOUNTING OFFICERS OF THE UNITED STATES HAVE INTERPOSED NO OBJECTION TO SUCH ACTION WHERE IT HAS BEEN ESTABLISHED THAT THE TERMS OR CONDITIONS OF THE INVITATION WOULD NOT SERVE THE GOVERNMENT'S INTEREST.

B-149010, JUN. 15, 1962

TO ANDREW N. HEINE, ESQUIRE:

REFERENCE IS MADE TO YOUR LETTER OF MAY 23, 1962, TO THE CONTRACTING OFFICER, FIRST ARMY, GOVERNOR'S ISLAND, NEW YORK, PROTESTING THE CANCELLATION OF INVITATION FOR BIDS NO. A1-28-013-62-31, ISSUED BY THE PURCHASING AND CONTRACTING OFFICE, FORT DIX, NEW JERSEY, AND THE SUBSEQUENT ISSUANCE OF INVITATION FOR BIDS NO. A1-28-013-62-65. YOU QUESTION THE PROPRIETY OF SUCH ACTION PARTICULARLY IN VIEW OF THE ALLEGATION THAT THE GOVERNMENT WOULD NOT INCUR ANY DAMAGES IF AWARD BE MADE ON THE BASIS OF THE BIDS SUBMITTED IN RESPONSE TO THE INITIAL INVITATION; THAT BENEFITS MAY BE DERIVED BY THE USING FACILITIES IF THE OVER-ESTIMATED AMOUNTS NOT BE REDUCED; AND, THAT NO ADDITIONAL BIDDERS CAN REASONABLY BE EXPECTED TO RESPOND TO THE SECOND INVITATION.

THE SUBJECT INVITATION SOUGHT BIDS ON VARIOUS ITEMS OF DAIRY PRODUCTS TO BE FURNISHED TO FOUR DESIGNATED MILITARY GROUPS DURING THE PERIOD JULY 1, 1962, TO JUNE 30, 1963, WITH ESTIMATED QUANTITIES STATED FOR EACH COMMODITY. AFTER OPENING OF THE BIDS, BUT BEFORE AWARD, IT WAS DETERMINED THAT AT LEAST TWO OF THE STIPULATED QUANTITIES WERE MATERIALLY OVER- ESTIMATED, WITH THE RESULT THAT WHILE AN EVALUATION OF THE BIDS ON THE STATED QUANTITIES SHOWED YOUR CLIENT TO BE THE LOW BIDDER, AN EVALUATION BASED UPON MORE REALISTIC QUANTITIES DISCLOSED THAT A SECOND BIDDER WOULD HAVE BEEN LOW.

PARAGRAPH 8 (B) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS SPECIFICALLY PROVIDED THAT--- "THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS.' SEE ALSO 10 U.S.C. 2305 (C). WE HAVE HELD THAT INVITATIONS SHOULD BE CANCELLED ONLY FOR THE MOST COGENT REASONS AFTER OPENING AND DISCLOSURE OF THE BIDDERS' QUOTATIONS BECAUSE OF THE OBVIOUS PREJUDICIAL EFFECTS FLOWING THEREFROM. HOWEVER, UNDER ONE OF THE PRINCIPAL EXCEPTIONS THERETO THE ACCOUNTING OFFICERS OF THE UNITED STATES HAVE INTERPOSED NO OBJECTION TO SUCH ACTION WHERE IT HAS BEEN ESTABLISHED THAT THE TERMS OR CONDITIONS OF THE INVITATION WOULD NOT SERVE THE GOVERNMENT'S INTEREST, PRICE AND OTHER FACTORS CONSIDERED. IN THIS CASE IT WAS CONCLUDED BY THE CONTRACTING OFFICER THAT WHILE YOUR CLIENTS' BID WAS LOW ON EVALUATION IT WOULD NOT BE THE MOST ADVANTAGEOUS ON PERFORMANCE BASED UPON ACTUAL REQUIREMENTS. PROPOSED CANCELLATION OF THE INITIAL INVITATION WAS CONCURRED IN BY THE STAFF JUDGE ADVOCATE AND THE OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS AS IN THE PUBLIC INTEREST. FEEL THAT THE ACTION TAKEN UNDER THE AUTHORITY CITED WAS A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION AND CONSISTENT WITH OUR DISPOSITION OF A SOMEWHAT SIMILAR CASE DECIDED JUNE 4, 1959, B-139196. THE FACT THAT NO ADDITIONAL BIDS COULD REASONABLY BE EXPECTED TO BE SUBMITTED ON THE READVERTISEMENT IS NOT MATERIAL TO THE ISSUES RAISED.

ACCORDINGLY, WE HAVE NO ALTERNATIVE BUT TO CONCLUDE THAT CANCELLATION OF THE ORIGINAL INVITATION AND THE READVERTISING WITH REALISTIC QUANTITIES SPECIFIED WAS JUSTIFIED AND YOUR PROTEST MUST THEREFORE BE DENIED.