B-153842, MAY 13, 1964

B-153842, MAY 13, 1964

TO TECHNER, RUBIN AND SHAPIRO:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 26, 1964, AND ENCLOSURES, PROTESTING ON BEHALF OF ESTRICH AND COMPANY, INC., POST OFFICE BOX 6135, PHILADELPHIA 15, PENNSYLVANIA, AGAINST THE CANCELLATION OF INVITATION FOR BIDS NO. 36-600-64-206, ISSUED OCTOBER 31, 1963, BY HEADQUARTERS, MIDDLETOWN AIR MATERIEL AREA, DIRECTORATE, PROCUREMENT AND PRODUCTION, OLMSTED AIR FORCE BASE, PENNSYLVANIA.

THE INVITATION REQUESTED BIDS FOR FURNISHING 916 POLYETHYLENE COWLING COVERS FOR THE GAR-2A MISSILE IN ACCORDANCE WITH DRAWINGS AND OTHER SPECIFICATIONS ATTACHED TO THE INVITATION. ALTHOUGH THE COVER WAS REGARDED AS A RELATIVELY SIMPLE PIECE OF EQUIPMENT AND EIGHTEEN FIRMS WERE SOLICITED, THE ONLY BID RECEIVED WAS SUBMITTED BY ESTRICH AND COMPANY, INC., WHICH BID WAS OPENED AS SCHEDULED ON DECEMBER 3, 1963.

CIRCUMSTANCES PRECEDING THE OPENING AND DURING THE BIDDING PERIOD ARE ADMINISTRATIVELY REPORTED AS FOLLOWS:

"PRIOR TO THE ISSUANCE OF THE INVITATION, THE PROCURING ACTIVITY HAD DETERMINED THAT THE DRAWINGS AND SPECIFICATIONS WERE ADEQUATE FOR PROCUREMENT BY FORMAL ADVERTISING. SUBSEQUENTLY, THE DRAWINGS WERE REPRODUCED AND AS A PART OF THE BID PACKAGE SENT TO THE BIDDERS. UPON RECEIPT OF A LETTER FROM PHOTOTYPE CORPORATION, DATED 4 NOVEMBER 1963, STATING THAT DRAWING 161612, REVISION C, SENT TO IT WITH THE INVITATION, WAS NOT LEGIBLE, TECHNICAL PERSONNEL WERE CONTACTED AND THEY ADVISED THAT LEGIBLE COPIES OF BID PACKAGE WERE AVAILABLE AND A COMPLETE NEW BID PACKAGE WOULD BE DISPATCHED TO THIS FIRM. THE LEGIBILITY OF THE SECOND DRAWING WAS ALSO QUESTIONED BY THIS FIRM ON 19 NOVEMBER 1963. THE BUYER IMMEDIATELY REQUESTED A LEGIBLE DRAWING FROM AIR FORCE TECHNICAL PERSONNEL. HOWEVER, A LEGIBLE COPY OF DRAWING 161612, REVISION C, WAS NOT FURNISHED TO THE CONTRACTING OFFICER UNTIL THE DAY PRIOR TO SCHEDULED BID OPENING. IN REVIEWING THIS DRAWING WITH THE CONTRACTING OFFICER, TECHNICAL PERSONNEL AT THAT TIME COULD NOT ASSURE THE ACCURACY OF TWO FIGURES THAT APPEARED ON THE DRAWING. INADEQUATE TIME REMAINED, PRIOR TO BID OPENING, TO ESTABLISH THE CORRECT FIGURES AND ADVISE PROSPECTIVE BIDDERS OF THE PROPER AIR FORCE REQUIREMENTS. THEREFORE, THE CONTRACTING OFFICER PROCEEDED WITH THE SCHEDULED OPENING OF BIDS.'

BECAUSE OF THE URGENCY OF THE REQUIREMENT AND SINCE ALL ORIGINAL BID SET DATA WAS APPARENTLY NOT LEGIBLE, THE CONTRACTING OFFICER REQUESTED AIR FORCE TECHNICAL PERSONNEL TO DETERMINE WHETHER ESTRICH COULD SUPPLY THE COVERS DESIRED FROM THE MATERIAL FORWARDED TO IT IN THE ORIGINAL BID SET. IN VIEW OF THE URGENCY, HE ALSO REQUESTED AT THAT TIME THAT A FACILITY CAPABILITY SURVEY BE ACCOMPLISHED ON THE ESTRICH FIRM FOR WHICH PURPOSE A NEW BID PACKAGE WAS FURNISHED. THE TECHNICAL PERSONNEL REPORTED THAT THEY COULD NOT DETERMINE IF THE ORIGINAL BID SET FURNISHED ESTRICH WAS ADEQUATE FOR FULFILLING THE REQUIREMENT BECAUSE THE DRAWINGS INCLUDED IN SUCH SET WERE REPRODUCED PRINTS AND IT WAS NOT KNOWN IF ALL BID SET DRAWINGS WERE EXACTLY ALIKE. HOWEVER, IT WAS DETERMINED THAT DRAWING NO. 161612, REV. C, WHICH HAD BEEN PHOTOGRAPHED AND COPIES INCLUDED IN THE ORIGINAL SETS, WAS NOT SATISFACTORY FOR USE IN THE BID SETS SINCE THE NOTES AND CERTAIN DIMENSION AREAS THEREON WERE EITHER ILLEGIBLE OR OF QUESTIONABLE LEGIBILITY AND, ALSO, THE DRAWING WAS NOT OF EQUAL QUALITY TO THE MICROFILM THAT HAD BEEN REVIEWED FOR COMPETITIVE BID PURPOSES. ADDITION THE TECHNICAL PERSONNEL REVIEWED THREE SEPARATE BID SETS WHICH HAD BEEN PREPARED AND EACH ONE HAD SEVERAL AREAS WHICH WERE QUESTIONABLE ON THAT PARTICULAR DRAWING, INDICATING THE STRONG PROBABILITY THAT NONE OF THE ORIGINAL SETS WERE COMPLETELY LEGIBLE.

WHILE THE FILE BEFORE US DOES NOT SHOW THAT YOU HAVE BEEN SO ADVISED, THE RECORD ALSO REFLECTS THAT DURING THE ADMINISTRATIVE CONSIDERATION OF YOUR PROTEST THE ESTRICH UNIT BID PRICE OF $13.87 WAS COMPARED WITH THE PRICES OF PREVIOUS PROCUREMENTS AND DETERMINED TO BE UNREASONABLE, INASMUCH AS 840 OF THE UNITS HAD BEEN PROCURED IN DECEMBER 1962 AT $7 EACH AND IN APRIL 1963, 907 UNITS WERE PROCURED AT $3.62 EACH.

IN VIEW THEREOF, AND SINCE THE FACTS AND CIRCUMSTANCES OF THE CASE APPEARED TO HAVE HAD AN ADVERSE EFFECT ON COMPETITION, THE CONTRACTING OFFICER CONCLUDED THAT THE BEST INTERESTS OF THE GOVERNMENT REQUIRED CANCELLATION OF THE INVITATION AND READVERTISEMENT OF THE PROCUREMENT AS SOON AS LEGIBLE DRAWINGS COULD BE OBTAINED FOR NEW BID SETS. WE HAVE BEEN ADVISED THAT SUCH READVERTISEMENT IS NOW BEING EFFECTED BECAUSE OF THE AIR FORCE'S URGENT NEED FOR THE COVERS.

BY LETTER OF JANUARY 9, 1964, TO THE MIDDLETOWN AIR MATERIEL AREA, YOU PROTESTED THE CONTRACTING OFFICER'S DECISION ON THE BASIS THAT IN HIS LETTER ADVISING ESTRICH OF THE DECISION HE HAD NOT INDICATED THAT ANY OF THE BIDDERS HAD PROTESTED THE LEGIBILITY OF THE DRAWINGS, WHICH YOU STATED YOUR CLIENT HAD EXPERIENCED NO DIFFICULTY IN UNDERSTANDING, AND SINCE ESTRICH WAS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER YOU ASSERTED THAT THE CONTRACT SHOULD BE AWARDED TO THAT FIRM. YOU ALSO POINTED OUT THAT THE SUBSEQUENT CANCELLATION OF THE INVITATION WAS NOT COMPATIBLE WITH EITHER THE GOVERNMENT'S PRIOR ACTION OF MAKING A PREAWARD SURVEY AT THE ESTRICH PLANT OR OF ASCERTAINING YOUR CLIENT'S FINANCIAL RESPONSIBILITY, AND AS A FURTHER CONTENTION YOU STATED THAT A READVERTISEMENT WOULD PLACE YOUR CLIENT AT A DISADVANTAGE SINCE ITS PRICE WAS KNOWN AND WOULD BE AVAILABLE TO ALL OTHER BIDDERS.

ARTICLE 8 (B) OF THE TERMS AND CONDITIONS OF THE INVITATION SPECIFICALLY RESERVED TO THE GOVERNMENT THE RIGHT TO REJECT ANY OR ALL BIDS. ADDITION, AS EXPLAINED IN OFFICE LETTER TO YOU OF APRIL 7, 1964, ALL BIDS MAY BE REJECTED PURSUANT TO AUTHORITY IN 10 U.S.C. 2305 (C) WHENEVER IT IS DETERMINED THAT SUCH ACTION IS IN THE PUBLIC INTEREST. IT HAS BEEN CONSISTENTLY HELD BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT AND BY THE COURTS THAT THE NECESSITY FOR REJECTING ALL BIDS IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION AND WHERE, AS HERE, IT IS DETERMINED THAT THE ONLY BID RECEIVED IS UNREASONABLE, OR IT IS SHOWN THAT THE PURPOSE OF SUCH ACTION IS TO CLARIFY SPECIFICATIONS IN ORDER TO INSURE FULL AND OPEN COMPETITION FOR THE GOVERNMENT'S REQUIREMENTS, WE PERCEIVE NO OBJECTION TO SUCH ACTION. SEE 36 COMP. GEN. 364 AND 17 COMP. GEN. 554.

ALTHOUGH IT SEEMS THAT THE CONTRACTING OFFICER'S ACTION IN REQUESTING A PRE-AWARD SURVEY AND TECHNICAL INVESTIGATION WERE OCCASIONED BY THE URGENT NATURE OF THE REQUIREMENT, WE AGREE THAT THE TAKING OF SUCH ACTION AT A TIME WHEN A BASIS FOR CANCELLATION OF THE INVITATION WAS KNOWN TO HIM MAY NOT HAVE BEEN IN ACCORDANCE WITH THE USUAL PROCEDURES IN SUCH SITUATIONS. FURTHER, WE ARE KEENLY AWARE THAT THE REJECTION OF ALL BIDS AFTER THEY HAVE BEEN OPENED AND THE BID PRICES MADE PUBLIC 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, AND ARE REQUIRED TO WORK IN THE BEST INTERESTS OF THE GOVERNMENT, THEIR ACTIONS IN REJECTING BIDS AND READVERTISING MAY NOT BE CONSIDERED IMPROPER WHEN BASED UPON SUBSTANTIAL REASONS LEADING TO A BONA FIDE BELIEF THAT THE BEST INTERESTS OF THE GOVERNMENT WILL BE BEST SERVED THEREBY.

ASIDE FROM THE DETERMINATION AS TO THE UNREASONABLENESS OF THE ESTRICH BID PRICE WHICH FACTOR ALONE WOULD REQUIRE REJECTION OF THE BID UNDER 10 U.S.C. 2305 (C) AND SECTION 2-404.1 OF THE ARMED SERVICES PROCUREMENT REGULATION, IN THIS CASE THE CONTRACTING OFFICER HAD RECEIVED REPEATED REQUESTS BY A PROSPECTIVE BIDDER FOR A LEGIBLE COPY OF A MATERIAL PART OF THE SPECIFICATIONS WHICH THE CONTRACTING OFFICER WAS UNABLE TO FURNISH PRIOR TO BID OPENING, AND AFTER THOROUGH CONSIDERATION OF THE MATTER THE CONTRACTING OFFICER DETERMINED THAT THE SPECIFICATIONS WERE NOT SET FORTH SO CLEARLY AS TO INSURE COMPETITION ON AN EQUAL BASIS AS CONTEMPLATED BY THE LAW GOVERNING FORMAL ADVERTISING. SEE 17 COMP. GEN. 789.

IN VIEW OF THE FOREGOING WE FIND NO BASIS TO QUESTION THE LEGALITY OF THE ACTION TAKEN BY THE DEPARTMENT OF THE AIR FORCE, AND YOUR PROTEST AGAINST SUCH ACTION IS DENIED.