B-153257, MAY 14, 1964

B-153257: May 14, 1964

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WAYNE'S BID PRICES WERE LOWER THAN YOURS ON THE UNITS ON WHICH IT BID. YOUR BID WAS SUBMITTED WITH THE FOLLOWING QUALIFICATION: "PLEASE CONSIDER OUR BID ON AN ALL-OR-NONE BASIS. THE PRICES HEREIN ARE OFFERED ONLY IF THE TOTAL QUANTITY PURCHASED IS AWARDED TO THE G. THAT UNLESS ONE OF THE SNOW REMOVAL ACCESSORY REQUIREMENTS WERE REMOVED. WHICH WAS THE LOW AND ONLY OTHER BIDDER ON ITEM 1. THE PROCURING ACTIVITY LEARNED FROM THE REQUISITIONING ACTIVITY THAT YOU WERE THE ONLY FIRM IT KNEW OF WHICH MANUFACTURED THESE ITEMS. THE CONTRACTING OFFICER DECIDED THAT ITEMS 3 AND 5 WERE SOLE-SOURCE ITEMS WHICH SHOULD NOT HAVE BEEN INCLUDED IN THE SMALL BUSINESS SET-ASIDE. AFTER DETERMINING THAT THE LOW BIDDER'S OFFERED PRICE WAS APPROXIMATELY THE SAME AS THAT SUBMITTED BY THE LOW BIDDER IN THE TWO PREVIOUS PROCUREMENTS OF THAT YEAR FOR ITEM 1 SWEEPERS.

B-153257, MAY 14, 1964

TO G. H. TENNANT COMPANY:

IN YOUR LETTER OF JANUARY 9, 1964, YOU PROTEST THE REJECTION OF YOUR ALL- OR-NONE BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS (IFB) NO. AMC/T/- 11-184-64-135/C/JD, SET ASIDE FOR SMALL BUSINESS, AND THE AWARD OF A CONTRACT FOR ITEM 1 OF THE IFB TO WAYNE MANUFACTURING COMPANY.

ITEMS 1, 3 AND 5 OF THE SUBJECT IFB, ISSUED BY U.S. ARMY ENGINEER PROCUREMENT OFFICE, CHICAGO, ILLINOIS, ON OCTOBER 29, 1963, CALLED FOR THREE TYPES OF SWEEPERS, AND ITEMS 2, 4 AND 6 CALLED FOR RESPECTIVELY APPURTENANT PUBLICATIONS. ITEM 1 OF THE IFB SPECIFIED FOUR SWEEPERS WITH GASOLINE ENGINES, ITEM 3 SPECIFIED TWO SWEEPERS WITH BATTERY POWERED ENGINES, AND ITEM 5 SPECIFIED TWO OF THE ITEM 1 SWEEPERS WITH BLOWER, BROOM, AND PLOW SNOW REMOVAL ATTACHMENTS.

THE BID RECEIVED FROM WAYNE MANUFACTURING COMPANY QUOTED PRICES ON THE FOUR UNITS CALLED FOR UNDER ITEM 1, WHILE YOUR COMPANY BID UPON ALL UNITS LISTED UNDER THE VARIOUS ITEMS IN THE INVITATION. WAYNE'S BID PRICES WERE LOWER THAN YOURS ON THE UNITS ON WHICH IT BID. ADDITIONALLY, YOUR BID WAS SUBMITTED WITH THE FOLLOWING QUALIFICATION:

"PLEASE CONSIDER OUR BID ON AN ALL-OR-NONE BASIS. THE PRICES HEREIN ARE OFFERED ONLY IF THE TOTAL QUANTITY PURCHASED IS AWARDED TO THE G. H. TENNANT COMPANY.'

THE INVITATION CONTAINED THE FOLLOWING STIPULATIONS IN ARTICLE 8 OF THE TERMS AND CONDITIONS:

"/B) THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS * * *

"/C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY BID, UNLESS THE BIDDER QUALIFIES HIS BID BY SPECIFIC LIMITATIONS. * * *"

THE RECORD DISCLOSES THAT ABOUT TWO WEEKS PRIOR TO THE BID OPENING ON DECEMBER 9, 1963, WAYNE HAD INFORMED THE CONTRACTING OFFICER THAT IT COULD NOT SUPPLY ITEM 5, AND THAT UNLESS ONE OF THE SNOW REMOVAL ACCESSORY REQUIREMENTS WERE REMOVED, ONLY ONE BID WOULD BE RECEIVED FOR THAT ITEM. AFTER THE OPENING OF BIDS DISCLOSED THAT NEITHER WAYNE, WHICH WAS THE LOW AND ONLY OTHER BIDDER ON ITEM 1, NOR ANY OTHER COMPANY EXCEPT YOURS OFFERED BIDS FOR ITEMS 3 AND 5, THE PROCURING ACTIVITY LEARNED FROM THE REQUISITIONING ACTIVITY THAT YOU WERE THE ONLY FIRM IT KNEW OF WHICH MANUFACTURED THESE ITEMS.

IN VIEW OF THE FOREGOING, THE CONTRACTING OFFICER DECIDED THAT ITEMS 3 AND 5 WERE SOLE-SOURCE ITEMS WHICH SHOULD NOT HAVE BEEN INCLUDED IN THE SMALL BUSINESS SET-ASIDE, BUT SHOULD BE PROCURED BY MEANS OF A LATER NEGOTIATION RATHER THAN PURSUANT TO THIS IFB. ACCORDINGLY, ON DECEMBER 30, 1963, HE AWARDED A CONTRACT TO WAYNE FOR ITEM 1 ONLY (AND ITS APPURTENANT PUBLICATIONS), AFTER DETERMINING THAT THE LOW BIDDER'S OFFERED PRICE WAS APPROXIMATELY THE SAME AS THAT SUBMITTED BY THE LOW BIDDER IN THE TWO PREVIOUS PROCUREMENTS OF THAT YEAR FOR ITEM 1 SWEEPERS.

YOU INSIST THAT THE CONTRACTING OFFICER SHOULD HAVE AWARDED ALL THREE ITEMS TO YOUR FIRM, NOTWITHSTANDING THE POSSIBILITY THAT IT MAY HAVE BEEN THE SOLE SOURCE FOR ITEMS 3 AND 5; OR SHOULD HAVE CANCELLED THE IFB AND READVERTISED ITEM 1, SINCE YOU HAD NO WAY OF KNOWING THAT YOUR ALL-OR-NONE BID, INCLUDING AN OFFER FOR ITEM 1, WOULD NOT BE CONSIDERED FOR AWARD. YOU ALSO ALLEGE THAT THE PROCURING OFFICE ADVISED YOU BEFORE BID OPENING THAT ALL-OR-NONE BIDS WERE ACCEPTABLE, AND YOU CONTEND THAT IF THIS WAS NOT THE CASE YOU SHOULD HAVE BEEN PROPERLY ADVISED.

IN THE ABSENCE OF A SPECIFIC PROVISION TO THE CONTRARY, IT IS ALWAYS PERMISSIBLE FOR A BIDDER TO SUBMIT AN ALL-OR-NONE BID FOR ALL OR ANY COMBINATION OF ITEMS ON WHICH BIDS ARE INVITED. SEE 35 COMP. GEN. 383. THE BIDDER CANNOT, HOWEVER, BY SUCH A RESTRICTION DEPRIVE THE GOVERNMENT OF THE RIGHT RESERVED BY THE INVITATION TO ACCEPT ANY ITEM OR GROUP OF ITEMS ON WHICH A BETTER BID IS AVAILABLE. YOUR BID WAS NOT REJECTED BECAUSE IT WAS QUALIFIED, BUT BECAUSE IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT IT WOULD NOT BE IN THE BEST INTEREST OF THE GOVERNMENT TO ACCEPT IT. CONTRARY TO YOUR CONTENTION, THE GOVERNMENT IS NOT OBLIGATED TO AWARD A CONTRACT FOR EVERY ITEM ON WHICH IT HAS SOLICITED AND RECEIVED BIDS, BUT MAY ELECT TO REJECT ALL BIDS ON ANY ITEM WHEN IT IS DETERMINED TO BE IN THE INTEREST OF THE GOVERNMENT TO DO SO.

SEE 10 U.S.C. 2305 (C); ASPR 2-404.1.

THE REGULATION REFERRED TO STATES THE POLICY THAT AFTER BIDS HAVE BEEN OPENED AWARD MUST BE MADE TO THE LOWEST RESPONSIBLE AND RESPONSIVE BIDDER UNLESS THERE IS A COMPELLING REASON TO REJECT. WE BELIEVE THE FACT THAT NO COMPETITION HAS APPEARED AND NONE CAN BE OBTAINED FOR THE PARTICULAR ITEM DESIRED IS SUCH A REASON, AND THAT REJECTION FOR SUCH REASON DOES NOT IMPAIR THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM. TO HOLD OTHERWISE IN A CASE SUCH AS THIS WOULD BE FAR MORE INIMICAL TO THE INTEGRITY OF COMPETITIVE BIDDING, SINCE IT WOULD PERMIT A BIDDER, WHO HAPPENED TO BE THE SOLE SOURCE FOR A PARTICULAR ITEM, TO EFFECTIVELY ELIMINATE COMPETITION FOR OTHER ITEMS INCLUDED IN THE SAME INVITATION BY TYING THE SEVERAL ITEMS TOGETHER UNDER AN ALL OR-NONE QUALIFICATION. IT WOULD OF COURSE BE POSSIBLE, WHERE SUCH A SITUATION MIGHT BE ANTICIPATED, TO AVOID IT BY SPECIFICALLY PROHIBITING ALL-OR-NONE BIDS, BUT WE BELIEVE IT TO BE PREFERABLE AND MORE IN ACCORDANCE WITH PROCUREMENT LAWS AND REGULATIONS TO AVOID INCLUDING SOLE SOURCE ITEMS IN INVITATIONS FOR BIDS. WHEN, AS IN THIS CASE, IT IS NOT ASCERTAINED UNTIL AFTER BID OPENING THAT AN ITEM IS IN FACT AVAILABLE FROM ONLY A SINGLE SOURCE, THE PROCURING AGENCY MAY, IN THE EXERCISE OF ITS DISCRETION, DETERMINE WHAT ACTION WOULD BEST SERVE THE INTERESTS OF THE GOVERNMENT IN THE PARTICULAR CASE.

ON THE RECORD BEFORE US, WE FIND NO BASIS FOR OBJECTING TO THE DETERMINATION MADE IN THIS CASE, AND YOUR PROTEST IS DENIED.