B-150666, FEB. 7, 1963

B-150666: Feb 7, 1963

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED JANUARY 18. THE INVITATIONS WILL HEREINAFTER BE IDENTIFIED AS IFB NO. 137 AND IFB NO. 3. WHICH WAS ISSUED BY THE LEXINGTON SIGNAL DEPOT. DELIVERY OF THE ITEM WAS REQUIRED TO BE MADE WITHIN 90 DAYS AFTER RECEIPT OF THE AWARD DOCUMENT. TWO BIDS WERE RECEIVED PRIOR TO THE TIME SET FOR OPENING OF BIDS. ONE OF THE BIDS WAS RECEIVED FROM THE ECONOMY CABLE GRIP COMPANY AND IT OFFERED TO FURNISH THE REQUIRED NUMBER OF CABLE GRIPS AT A UNIT PRICE OF $0.85 EACH WITHIN THE PRESCRIBED DELIVERY TIME. THE OTHER BID WAS RECEIVED FROM THE MCKINNEY-NEWMAN COMPANY AND IT OFFERED TO FURNISH KELLEM CABLE GRIPS AT A UNIT PRICE OF $0.57 EACH. SINCE THE BID OF MCKINNEY-NEWMAN WAS BASED ON A DELIVERY SCHEDULE OF 120 DAYS.

B-150666, FEB. 7, 1963

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JANUARY 18, 1963, WITH ENCLOSURES, FROM THE DIRECTOR OF PROCUREMENT AND PRODUCTION, UNITED STATES ARMY MATERIEL COMMAND, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING THE PROTEST OF THE ECONOMY CABLE GRIP COMPANY AGAINST THE REJECTION OF ALL BIDS RECEIVED IN RESPONSE TO INVITATION FOR BIDS NO. SC- 15-010-62-137 AND THE ACTION OF THE CONTRACTING OFFICER IN DISREGARDING ITS LATE HAND-CARRIED BID SUBMITTED IN RESPONSE TO THE NEW INVITATION NO. SC-15-010-63-3. THE INVITATIONS WILL HEREINAFTER BE IDENTIFIED AS IFB NO. 137 AND IFB NO. 3.

THE ORIGINAL INVITATION, IFB NO. 137, WHICH WAS ISSUED BY THE LEXINGTON SIGNAL DEPOT, LEXINGTON, KENTUCKY, REQUESTED BIDS FOR FURNISHING 39,380 JAW CABLE GRIPS. THE INVITATION CITED ECONOMY CABLE GRIP COMPANY PART NO. EQA/26S), STROMBERG-CARLSON COMPANY PART NO. 666144-174, OR EQUAL. DELIVERY OF THE ITEM WAS REQUIRED TO BE MADE WITHIN 90 DAYS AFTER RECEIPT OF THE AWARD DOCUMENT. TWO BIDS WERE RECEIVED PRIOR TO THE TIME SET FOR OPENING OF BIDS. ONE OF THE BIDS WAS RECEIVED FROM THE ECONOMY CABLE GRIP COMPANY AND IT OFFERED TO FURNISH THE REQUIRED NUMBER OF CABLE GRIPS AT A UNIT PRICE OF $0.85 EACH WITHIN THE PRESCRIBED DELIVERY TIME. THE OTHER BID WAS RECEIVED FROM THE MCKINNEY-NEWMAN COMPANY AND IT OFFERED TO FURNISH KELLEM CABLE GRIPS AT A UNIT PRICE OF $0.57 EACH. THE COMPANY STIPULATED IN ITS BID THAT THE GRIPS WOULD BE DELIVERED WITHIN 120 DAYS AFTER RECEIPT OF THE AWARD DOCUMENT. SINCE THE BID OF MCKINNEY-NEWMAN WAS BASED ON A DELIVERY SCHEDULE OF 120 DAYS, IT WAS REJECTED AS BEING NONRESPONSIVE TO THE INVITATION.

THE CONTRACTING OFFICER STATES THAT HAVING NOTED A DIFFERENCE OF $0.28 PER UNIT BETWEEN THE BID OF ECONOMY AND THE REJECTED BID OF MCKINNEY- NEWMAN FOR A 30-DAY VARIATION IN DELIVERY TIME, SHE INSTITUTED A REVIEW TO DETERMINE WHETHER OR NOT THE 90-DAY DELIVERY SCHEDULE WAS IN EXCESS OF THE GOVERNMENT'S MINIMUM REQUIREMENTS FOR THIS ITEM. IT WAS DETERMINED THAT THE PRESCRIBED 90-DAY SCHEDULE WAS IN EXCESS OF THE MINIMUM REQUIREMENTS AND THAT IN VIEW OF THE SUBSTANTIAL MONETARY SAVINGS THAT COULD BE REALIZED, THE INVITATION SHOULD BE CANCELED AND THE ITEM READVERTISED.

ON JULY 10, 1962, A NEW INVITATION FOR BIDS, IFB NO. 3, WAS ISSUED REQUESTING BIDS ON 39,202 OF THE SAME KIND OF CABLE GRIPS BUT REQUIRING DELIVERY WITHIN 120 DAYS AFTER RECEIPT OF AWARD DOCUMENT INSTEAD OF WITHIN 90 DAYS. BIDS UNDER THE NEW INVITATION WERE TO BE OPENED AT 2 P.M., E.S.T., ON JULY 30, 1962. AT THE TIME SET FOR THE OPENING OF BIDS IT WAS NOTED THAT ONLY ONE BID HAD BEEN RECEIVED AND THAT SUCH BID WAS RECEIVED FROM MCKINNEY-NEWMAN WHO OFFERED TO FURNISH THE CABLE GRIPS WITHIN THE PRESCRIBED DELIVERY TIME AT A UNIT PRICE OF $0.71 EACH. IT IS REPORTED THAT APPROXIMATELY 30 MINUTES AFTER THE TIME OF THE BID OPENING, MR. DI PALMA, PRESIDENT OF THE ECONOMY CABLE GRIP COMPANY, APPEARED AT THE CONTRACTING OFFICE AND TENDERED HIS COMPANY'S SEALED BID TO THE CONTRACTING OFFICER AND INSISTED THAT HIS COMPANY'S BID BE CONSIDERED FOR AWARD. MR. DI PALMA EXPLAINED THAT UPON ARRIVAL AT THE LEXINGTON AIRPORT HE RENTED A CAR AND THAT AS HE DROVE ON ROUTE 60, JUST BEFORE REACHING THE CENTER OF TOWN, A CLOUDBURST PREVENTED TRAFFIC FROM MOVING AND THAT HE WAS INSTRUCTED BY THE STATE POLICE TO PULL OFF THE ROAD AND WAIT UNTIL DRIVING CONDITIONS IMPROVED AND THAT THIS WAS THE CAUSE OF THE 30-MINUTE DELAY IN SUBMITTING HIS BID. THE CONTRACTING OFFICER ADVISED MR. DI PALMA THAT HE WAS WITHOUT AUTHORITY TO CONSIDER THE COMPANY'S LATE HAND-CARRIED BID FOR AWARD. SINCE MR. DI PALMA STILL INSISTED THAT HIS COMPANY'S LATE BID BE CONSIDERED FOR AWARD, THE CONTRACTING OFFICER SUBMITTED THE MATTER TO THE DEPOT'S LEGAL COUNSEL FOR CONSIDERATION. THE CONTRACTING OFFICER WAS ADVISED THAT SHE LACKED THE AUTHORITY TO ACCEPT AND CONSIDER THE LATE- TENDERED BID OF ECONOMY. THE LATE BID OF ECONOMY WAS RETURNED UNOPENED TO THE COMPANY ON AUGUST 21, 1962. THE RECORD SHOWS THAT ON SEPTEMBER 18, 1962, CONTRACT NO. DA-15-010-AMC-1851/X) WAS AWARDED TO THE MCKINNEY NEWMAN COMPANY.

THE FIRST QUESTION FOR CONSIDERATION IS WHETHER THERE EXISTED A PROPER BASIS FOR REJECTION OF ALL BIDS UNDER THE ORIGINAL INVITATION. IT HAS BEEN OUR POLICY TO PROTECT AND MAINTAIN THE PRINCIPLES OF IMPARTIALITY UPON WHICH THE COMPETITIVE BIDDING SYSTEM DEPENDS. WE ARE COGNIZANT OF THE DISADVANTAGES ENCOUNTERED AS A RESULT OF THE REJECTION OF ALL BIDS AFTER PUBLIC OPENING. HOWEVER, WE HAVE AUTHORIZED AND/OR APPROVED THE CANCELLATION OF ALL BIDS AND THE READVERTISEMENT OF CERTAIN CONTEMPLATED PROCUREMENTS IF THE CIRCUMSTANCES WARRANT SUCH ACTION.

IN THE INSTANT MATTER, IT IS CONCLUDED THAT THE ISSUANCE OF A NEW INVITATION FOR BIDS WAS PROPER, SINCE THE DELIVERY PERIOD FIXED IN THE ORIGINAL INVITATION WAS DETERMINED TO BE TOO SHORT AND SINCE THE LOWEST RESPONSIVE BID WAS OBVIOUSLY EXCESSIVE. PARAGRAPH 8 (B) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS SPECIFICALLY RESERVED TO THE GOVERNMENT THE RIGHT TO REJECT ANY OR ALL BIDS. MOREOVER, 10 U.S.C. 2305 (C) 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 CARRIES NO 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. HARNEY V. DURKEE, 237, P.2D 561; 31 A.L.R.2D 469; CHAMPION COATED PAPER COMPANY V. JOINT COMMITTEE ON PRINTING, 47 APP.D.C. 141. CF. 37 COMP. GEN. 12. A SIMILAR MATTER WAS THE SUBJECT OF OUR DECISION 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.

AS TO THE LATE HAND-CARRIED BID OF ECONOMY WHICH WAS SUBMITTED UNDER IFB NO. 3, THE REFUSAL OF THE CONTRACTING OFFICER TO CONSIDER THAT BID WAS IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 2-303.5 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WHICH PROVIDE THAT A LATE HAND-CARRIED BID OR ANY OTHER LATE BID NOT SUBMITTED BY MAIL OR TELEGRAM SHALL NOT BE CONSIDERED FOR AWARD. A HAND-CARRIED BID SHOULD NOT BE CONSIDERED IN THE SAME STATUS AS A BID WHICH IS MAILED AND WOULD BE DELIVERED IN NORMAL COURSE TO THE ADDRESSEE. IT IS THE RESPONSIBILITY OF A BIDDER SUBMITTING A HAND-CARRIED BID TO SEE THAT ITS BID IS DELIVERED AT THE DESIGNATED OFFICE PRIOR TO THE TIME SPECIFIED FOR THE OPENING OF BIDS. 38 COMP. GEN. 234. FAILURE TO DO SO IS FATAL TO THE CONSIDERATION OF THE BID FOR AN AWARD. IN B 135237, FEBRUARY 25, 1958, WE SAID:

"* * * OBVIOUSLY, THERE MUST BE A TIME AFTER WHICH BIDS MAY NOT BE RECEIVED, AND TO PERMIT CONSIDERATIONS OF DELAYS IN TRAFFIC, AND THE LIKE, TO ALTER OR AFFECT THE FIXED AND EXACT TIME CLEARLY STATED IN THE INVITATION WOULD, IN OUR OPINION, TEND TO WEAKEN THE COMPETITIVE BID SYSTEM. * * *"

IN OUR OPINION, THE BID OF ECONOMY WAS PROPERLY DISREGARDED FOR FAILURE TO ARRIVE ON TIME.

ECONOMY ALSO PROTESTS THE AWARD OF A CONTRACT TO MCKINNEY-NEWMAN UNDER IFB NO. 3 ON THE GROUNDS THAT (1) THERE HAD BEEN A PRIOR AWARD TO THAT COMPANY FOR A LARGER CABLE GRIP AT A PRICE OF $0.61 EACH, WHILE THE CURRENT AWARD CALLS FOR A SMALLER CABLE GRIP AT $0.71; (2) THAT MCKINNEY- NEWMAN IS A JOBBER AND NOT A MANUFACTURER; AND (3) THAT THE GOVERNMENT IS PURCHASING A SUBSTITUTE FOR ITS BRAND. WITH REFERENCE TO THE PREVIOUS AWARD TO MCKINNEY-NEWMAN, IT IS REPORTED THAT THAT AWARD COVERED A CABLE GRIP WITH A DIFFERENT PART NUMBER. THE FACT THAT MCKINNEY-NEWMAN MAY BE A JOBBER AND ECONOMY A MANUFACTURER HAS NO RELEVANCE IN DETERMINING WHETHER A BID IS RESPONSIVE SO LONG AS THE BIDDER IS A MANUFACTURER OR REGULAR DEALER AS DEFINED IN ASPR. IT IS REPORTED THAT MCKINNEY-NEWMAN IS A SMALL BUSINESS REGULAR DEALER AS DEFINED IN ASPR 12-603.2 (A) AND THAT THE COMPANY HAS BEEN DETERMINED TO BE A RESPONSIBLE SOURCE OF SUPPLY.

ECONOMY'S CONTENTION THAT THE GOVERNMENT IS PAYING MORE FOR THIS PROCUREMENT BY PERMITTING ANOTHER PART TO BE SUBSTITUTED FOR ECONOMY'SPART SPECIFIED IN THE INVITATION FOR BIDS MUST BE CONSIDERED IN THE LIGHT OF PROCUREMENT REGULATIONS PROHIBITING RESTRICTIVE SPECIFICATIONS IN INVITATIONS FOR BIDS, WHICH REGULATIONS ALLOW INVITATIONS TO BE REQUESTED ON THE BASIS OF "BRAND NAME OR EQUAL.' THE PURPOSE OF THESE REGULATIONS IS TO ENCOURAGE COMPETITION BY PERMITTING BIDDERS TO OFFER A PRODUCT EQUAL IN ALL MATERIAL RESPECTS TO THE BRAND NAME SPECIFIED IN THE INVITATION FOR BIDS. THAT COURSE WAS FOLLOWED IN THIS PROCUREMENT AND THE CONTRACTING OFFICER DETERMINED THE "OR EQUAL" ITEM OFFERED BY MCKINNEY-NEWMAN TO BE ACCEPTABLE UNDER THE TERMS OF THE INVITATION.

IT IS REPORTED THAT PRIOR TO THE AWARD OF A CONTRACT TO MCKINNEY NEWMAN, WHICH WAS MADE ON SEPTEMBER 18, 1962, ECONOMY ADVISED THE CONTRACTING OFFICER IN A LETTER DATED AUGUST 2, 1962, THAT THE BID PRICE IN ITS LATE BID WAS MUCH LOWER THAN THE PRICE QUOTED BY MCKINNEY NEWMAN IN ITS BID SUBMITTED IN RESPONSE TO IFB NO. 3; THAT ON OCTOBER 1, 1962, ECONOMY INFORMALLY ADVISED THE CONTRACTING OFFICER THAT IT HAD QUOTED A PRICE OF $0.54 EACH IN ITS LATE BID, WHICH PRICE IS $0.17 LOWER THAN THE PRICE QUOTED BY MCKINNEY-NEWMAN. ECONOMY NOW CONTENDS THAT IN VIEW OF THE PRICE QUOTED IN ITS LATE BID, THE CONTRACT WITH MCKINNEY-NEWMAN SHOULD BE CANCELED AND THE ITEM READVERTISED SO THAT THE GOVERNMENT MAY REALIZE A GREATER MONETARY SAVINGS. WE ARE OF THE OPINION THAT THE FOREGOING DOES NOT PROVIDE A LEGAL BASIS FOR DISTURBING THE AWARD MADE TO THE MCKINNEY- NEWMAN COMPANY UNDER INVITATION NO. SC-15-010-63-3.