B-153852, JUN. 30, 1964

B-153852: Jun 30, 1964

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WALKER: REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 31 AND YOUR LETTERS OF APRIL 8 AND 13. THAT NOTICE BEARS CONTRACT NUMBER N228/221/64801/X) (FBM) AND STATES THAT YOUR COMPANY'S PROPOSAL UNDER REQUEST NUMBER 228- 44470-64 IS ACCEPTED AS TO AN ITEM DESCRIBED AS A CLOSED CIRCUIT AND ENTERTAINMENT TV SYSTEM. IT STATES FURTHER THAT THE NOTICE OF AWARD IS AUTHORITY TO COMMENCE PERFORMANCE IN ACCORDANCE WITH THE TERMS OF THE PROPOSAL WITHOUT WAITING FOR FORMAL AWARD. BEFORE THE NOTICE WAS ISSUED THE PROPOSAL SUBMITTED BY YOUR COMPANY WAS REVIEWED FROM A TECHNICAL STANDPOINT BY THE REQUISITIONING ACTIVITY. AFTER THE NOTICE OF AWARD WAS ISSUED THE ONLY OTHER COMPANY WHICH ENTERED A PROPOSAL PROTESTED THE AWARD ON THE GROUND THAT YOUR COMPANY'S PROPOSAL DEVIATED SUBSTANTIALLY FROM THE NAVY'S SPECIFICATIONS.

B-153852, JUN. 30, 1964

TO MR. FRANK W. WALKER:

REFERENCE IS MADE TO YOUR TELEGRAM OF MARCH 31 AND YOUR LETTERS OF APRIL 8 AND 13, 1964, PROTESTING THE ACTION TAKEN BY THE NAVY CONTRACTING OFFICER TO WITHDRAW NEGOTIATED CONTRACT N228/221/64801/X) (FBM).

ON MARCH 17, 1964, THE CONTRACTING OFFICER ISSUED A PURCHASE AWARD NOTICE TO YOUR COMPANY. THAT NOTICE BEARS CONTRACT NUMBER N228/221/64801/X) (FBM) AND STATES THAT YOUR COMPANY'S PROPOSAL UNDER REQUEST NUMBER 228- 44470-64 IS ACCEPTED AS TO AN ITEM DESCRIBED AS A CLOSED CIRCUIT AND ENTERTAINMENT TV SYSTEM. IT STATES FURTHER THAT THE NOTICE OF AWARD IS AUTHORITY TO COMMENCE PERFORMANCE IN ACCORDANCE WITH THE TERMS OF THE PROPOSAL WITHOUT WAITING FOR FORMAL AWARD.

BEFORE THE NOTICE WAS ISSUED THE PROPOSAL SUBMITTED BY YOUR COMPANY WAS REVIEWED FROM A TECHNICAL STANDPOINT BY THE REQUISITIONING ACTIVITY. AFTER THE NOTICE OF AWARD WAS ISSUED THE ONLY OTHER COMPANY WHICH ENTERED A PROPOSAL PROTESTED THE AWARD ON THE GROUND THAT YOUR COMPANY'S PROPOSAL DEVIATED SUBSTANTIALLY FROM THE NAVY'S SPECIFICATIONS. AN INVESTIGATION BY THE CONTRACTING OFFICER CONFIRMED THAT THE REVIEWING TECHNICIANS HAD OVERLOOKED MATERIAL DEVIATIONS IN YOUR COMPANY'S PROPOSAL. THE CONTRACTING OFFICER ATTEMPTED TO RECTIFY THE SITUATION BY REQUESTING THAT YOUR COMPANY SUBMIT A PROPOSAL CONFORMING TO THE DESIRED SPECIFICATIONS. APPARENTLY AN AGREEMENT COULD NOT BE REACHED AS TO HOW THE MATTER WOULD BE HANDLED. THE CONTRACTING OFFICER APPARENTLY WANTED A NEW CONFORMING PROPOSAL WHICH WOULD BE CONSIDERED FOR AWARD BECAUSE SOME DOUBT WAS ENTERTAINED AS TO THE LEGALITY OF THE AWARD THAT WAS MADE. YOUR COMPANY APPARENTLY DESIRED THAT A CHANGE ORDER BE ISSUED UNDER THE CONTRACT WHICH HAD BEEN AWARDED. WHEN THE MATTER COULD NOT BE RESOLVED AFTER SEVERAL DAYS, ON MARCH 30 THE CONTRACTING OFFICER SENT A TELEGRAM, RECEIVED MARCH 31, ADVISING THAT THE AWARD NOTICE "WAS SENT TO YOUR FIRM IN ERROR AND IS HEREBY WITHDRAWN.' THE TELEGRAM STATED FURTHER THAT IF A COURT OR BOARD SHOULD DECLARE THAT THE NOTICE OF AWARD CREATED A BINDING CONTRACT, THEN THE TELEGRAM SHALL BE DEEMED TO TERMINATE THE CONTRACT FOR THE CONVENIENCE OF THE GOVERNMENT.

IN VIEW OF THE DETERMINATION THAT THE EQUIPMENT OFFERED BY YOUR COMPANY DID NOT COMPLY WITH ESSENTIAL REQUIREMENTS OF THE GOVERNMENT SPECIFICATION, IT DOES NOT APPEAR THAT THE CONTRACTING OFFICER ACTED IMPROPERLY IN ATTEMPTING TO RECTIFY THE SITUATION. HOWEVER, OUR OFFICE IS INCLINED TO AGREE WITH YOU THAT A VALID AND SUBSISTING CONTRACT CAME INTO BEING BY THE CONTRACTING OFFICER'S ISSUANCE OF THE NOTICE OF AWARD. WHILE THE CONTRACTING OFFICER HAS INDICATED THAT SUCH AWARD WAS CONSIDERED TO BE ILLEGAL IN VIEW OF ASPR 3-805.1 WHICH PROVIDES THAT WHEN A PROPOSAL MOST ADVANTAGEOUS TO THE GOVERNMENT INVOLVES A MATERIAL DEPARTURE FROM THE STATED REQUIREMENTS, CONSIDERATION SHALL BE GIVEN TO OFFERING THE OTHER FIRMS WHICH SUBMITTED PROPOSALS AN OPPORTUNITY TO SUBMIT NEW PROPOSALS ON A TECHNICAL BASIS WHICH IS COMPARABLE TO THAT OF THE MOST ADVANTAGEOUS PROPOSAL, WE DO NOT BELIEVE THAT SUCH PROVISION IS MATERIAL TO THE IMMEDIATE CASE, SINCE IT WAS NOT THE INTENTION OF THE CONTRACTING OFFICER TO MAKE AN AWARD FOR EQUIPMENT MATERIALLY DEPARTING FROM THE NAVY'S SPECIFICATIONS. THE SITUATION, AS WE OBSERVE IT, IS SIMPLY ONE INVOLVING A UNILATERAL MISTAKE OF FACT BY THE CONTRACTING OFFICER, WHO APPARENTLY DID NOT BELIEVE AT THE TIME OF AWARD TO YOUR COMPANY THAT SHE WAS MAKING AN AWARD WHICH WAS CONTRARY TO THE NAVY SPECIFICATIONS AND APPARENTLY RELYING ON ADVICE FROM HER TECHNICAL PEOPLE BELIEVED THAT THE AWARD WAS SUBSTANTIALLY IN CONFORMANCE WITH THE SPECIFICATIONS. SUCH AN ERRONEOUS AWARD WOULD NOT PRECLUDE A VALID CONTRACT FROM COMING INTO BEING. SINCE THE CONTRACT IS VALID, THE CONTRACTING OFFICER WOULD BE JUSTIFIED IN TERMINATING THE CONTRACT UNDER THE TERMINATION FOR CONVENIENCE CLAUSE WHICH IS A PART OF THE CONTRACT. WHILE YOU QUESTION WHETHER SUCH A TERMINATION WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT WHERE THERE IS A NEED FOR EQUIPMENT, THERE IS IN OUR OPINION A BASIS FOR SUCH TERMINATION WHERE THE EQUIPMENT COVERED BY THE CONTRACT IS NOT WHAT THE GOVERNMENT DESIRES TO PROCURE.

ISSUANCE OF A FORMAL CONTRACT TO YOUR COMPANY, AS YOU HAVE REQUESTED IN THE APRIL 8 LETTER, IS NEITHER NECESSARY NOR REQUIRED IN THE CIRCUMSTANCES OF THIS CASE.