B-156115, MAY 4, 1965

B-156115: May 4, 1965

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TO THE SCHENUIT RUBBER COMPANY: REFERENCE IS MADE TO YOUR TELEGRAM OF FEBRUARY 10. THE ITEM IN QUESTION IS A QUALIFIED PRODUCTS LIST ITEM. THE QUALIFIED PRODUCTS LIST APPLICABLE TO THIS PROCUREMENT WAS NO. 5041-18. THEREFORE WAS NOT SHOWN ON THE LATEST ISSUE OF THE LIST. AMC/T/23-204-65-162 WAS DISTRIBUTED TO 15 PROSPECTIVE BIDDERS AND THE PROCUREMENT WAS SYNOPSIZED. THE BIDDERS MAILING LIST WHICH WAS INTENDED TO COMPRISE ALL CONCERNS WHICH HAD INDICATED AN INTEREST IN RECEIVING BIDS ON THE SUPPLY ITEM NUMBER (FSN2620 -269-7553) INCLUDED THE SIX QUALIFIED MANUFACTURERS LISTED ON THE QUALIFIED PRODUCTS LIST NO. 5041-18. THE DATE THE BIDDERS MAILING LIST WAS PREPARED FOR THE PROCUREMENT HERE INVOLVED.

B-156115, MAY 4, 1965

TO THE SCHENUIT RUBBER COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM OF FEBRUARY 10, 1965, AND YOUR LETTER OF FEBRUARY 25, 1965, PROTESTING THE REJECTION OF ALL BIDS SUBMITTED UNDER INVITATION FOR BIDS NO. AMC/T/23-204-65-162 AND THE READVERTISEMENT OF THE REQUIREMENTS UNDER INVITATION FOR BIDS NO. AMC/T/23-204-65-266 BY THE UNITED STATES ARMY AVIATION MATERIEL COMMAND, ST. LOUIS, MISSOURI.

THE REQUIREMENT IN THIS CASE COVERED 3,401 PNEUMATIC AIRCRAFT TIRES, TUBE TYPE, SIZE 7.00-6, 6-PLY RATING, TO BE IN ACCORDANCE WITH CERTAIN DESIGNATED SPECIFICATIONS. THE ITEM IN QUESTION IS A QUALIFIED PRODUCTS LIST ITEM. THE APPLICABLE SPECIFICATION SPECIFIED QUALIFICATION APPROVAL PRIOR TO BID OPENING DATE. THE QUALIFIED PRODUCTS LIST APPLICABLE TO THIS PROCUREMENT WAS NO. 5041-18, DATED JUNE 25, 1963. THE ARMSTRONG RUBBER COMPANY HAD ITS PRODUCT QUALIFIED IN JUNE 1964, AND THEREFORE WAS NOT SHOWN ON THE LATEST ISSUE OF THE LIST.

INVITATION FOR BIDS NO. AMC/T/23-204-65-162 WAS DISTRIBUTED TO 15 PROSPECTIVE BIDDERS AND THE PROCUREMENT WAS SYNOPSIZED. THE BIDDERS MAILING LIST WHICH WAS INTENDED TO COMPRISE ALL CONCERNS WHICH HAD INDICATED AN INTEREST IN RECEIVING BIDS ON THE SUPPLY ITEM NUMBER (FSN2620 -269-7553) INCLUDED THE SIX QUALIFIED MANUFACTURERS LISTED ON THE QUALIFIED PRODUCTS LIST NO. 5041-18. THE FILES OF THE PROCUREMENT OFFICE INVOLVED SHOW THAT AS OF OCTOBER 27, 1964, THE DATE THE BIDDERS MAILING LIST WAS PREPARED FOR THE PROCUREMENT HERE INVOLVED,THE NAME OF THE ARMSTRONG RUBBER COMPANY WAS NOT CONTAINED AS A PROSPECTIVE SOURCE OF SUPPLY EVEN THOUGH ARMSTRONG HAD BEEN THE RECIPIENT OF THE IMMEDIATE PRIOR PROCUREMENT. AS A RESULT A COPY OF THE ORIGINAL INVITATION IN THIS CASE WAS NOT DISTRIBUTED TO ARMSTRONG.

BIDS WERE OPENED ON JANUARY 18, 1965. FIVE RESPONSIVE BIDS WERE RECEIVED RANGING IN PRICE FROM $10.50 TO $30.56 PER TIRE. THE LOW BID WAS SUBMITTED BY YOU AND AMOUNTED TO A TOTAL OF $35,353.39. IN ORDER TO ASSURE REASONABLENESS OF THE PRICES OFFERED THE PAST PROCUREMENT HISTORY OF THE ITEM WAS REVIEWED. IT WAS THEN DISCOVERED THAT ARMSTRONG WAS A QUALIFIED SUPPLIER BUT HAD NOT BEEN SOLICITED. THE LAST CONTRACT FOR THE ITEM, NUMBERED O.I. 23-204-A5-01395/T) DATED AUGUST 24, 1964, HAD BEEN AWARDED TO ARMSTRONG FOR A QUANTITY OF1,756 TIRES AT A NET F.O.B. ORIGIN UNIT PRICE OF $4.83, OR A TOTAL OF $8,481.48. THE ABSTRACT OF BIDS FOR THAT PROCUREMENT SHOWS THAT YOU HAD OFFERED THE SECOND LOW PRICE OF $10.25 EACH, OR A TOTAL OF $17,999 LESS DISCOUNT OF 1 PERCENT-20 DAYS OR AN ADJUSTED TOTAL OF $17,919.01. A FURTHER SURVEY OF PRIOR PROCUREMENTS WAS MADE AND IT SHOWED THAT BETWEEN DECEMBER 1962 AND APRIL 1964 SEVEN OTHER PURCHASES WERE MADE RANGING IN PRICE FROM $15.88 TO $11 EACH.

IN VIEW OF THE AUGUST 1964 PROCUREMENT PRICE OF $4.83 EACH FROM ARMSTRONG THE CONTRACTING OFFICER CONTACTED ARMSTRONG TO ASCERTAIN WHETHER IT HAD MADE A MISTAKE IN ITS PRICE BUT HAD CHOSEN TO PERFORM NEVERTHELESS. WAS ASSURED BY THE PERSON SIGNING THE BID ON BEHALF OF ARMSTRONG THAT NO MISTAKE WAS MADE WHEN IT SUBMITTED ITS BID IN JUNE 1964 BUT THAT IF IT BID AS OF THIS TIME THE BID PRICE WOULD BE INCREASED BUT CERTAINLY BY NO MORE THAN $1.50 PER TIRE. ON THE BASIS OF THESE FACTS THE CONTRACTING OFFICER CONCLUDED THAT THE INTERESTS OF THE GOVERNMENT WOULD BEST BE SERVED BY REJECTING ALL BIDS AS BEING UNREASONABLY HIGH IN PRICE, PURSUANT TO THE PROVISIONS OF PARAGRAPH 2 404.1/B) (VI) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR).

THE REQUIREMENT WAS READVERTISED ON FEBRUARY 8, 1965, UNDER INVITATION FOR BIDS NO. AMC/T/23-204-65-266 AND THE SCHEDULED OPENING DATE AS EXTENDED WAS APRIL 1, 1965. THE BIDS RECEIVED, HOWEVER, HAVE NOT BEEN OPENED, PENDING RESOLUTION OF YOUR PROTEST.

IT IS YOUR CONTENTION THAT ARMSTRONG HAD AN OPPORTUNITY TO SUBMIT A BID AND THERE WAS ADEQUATE COMPETITION UPON THE ORIGINAL SOLICITATION. ALSO, YOU CONTEND THAT THE ACTION IN THIS CASE AMOUNTS TO AN AUCTION AND THAT IF AN INTERESTED PARTY REFRAINED FROM SUBMITTING A BID HE COULD THEREAFTER INSIST THAT HE SHOULD BE ALLOWED TO BID SO AS TO OBTAIN A COMPETITIVE ADVANTAGE OVER OTHER BIDDERS.

IN THE FIRST PLACE, THE RECORD DOES NOT SHOW THAT ARMSTRONG INITIATED ANY ACTION IN THIS CASE. THE CONTRACTING OFFICER IN THE PERFORMANCE OF HIS PROCUREMENT DUTIES, PROPERLY REVIEWED THE PROCUREMENT HISTORY OF THIS ITEM SO AS TO DETERMINE WHETHER THE PRICES QUOTED WERE REASONABLE. THE REPORTED FACTS IN THIS CASE SUPPORT THE CONTRACTING OFFICER'S CONCLUSION THAT THE PRICES QUOTED UNDER INVITATION NO. AMC/T/23-204-65-162 WERE UNREASONABLE AND A READVERTISEMENT WAS JUSTIFIED. THE GOVERNMENT RESERVED THE RIGHT TO REJECT ANY OR ALL BIDS RECEIVED UNDER PARAGRAPH 9/B) OF INSTRUCTIONS AND CONDITIONS--- SOLICITATION AND OFFER APPEARING ON THE REVERSE SIDE OF THE FIRST PAGE OF THE BID FORM. THIS PROVISION IS IN ACCORDANCE WITH THE PROVISION CONTAINED IN 10 U.S.C. 2305 WHICH AUTHORIZES THE REJECTION OF ALL BIDS IF SUCH ACTION IS DEEMED TO BE IN THE PUBLIC INTEREST AND ASPR 2-404.1/B) (VI), REFERRED TO HEREINABOVE, SPECIFICALLY REFERS TO A DETERMINATION OF UNREASONABLY PRICED BIDS AS A COMPELLING REASON FOR THE CANCELLATION OF AN INVITATION FOR BIDS. THE DECISIONS OF OUR OFFICE HAVE CONSISTENTLY UPHELD THE ACTION OF THE PROCURING OFFICERS IN SUCH CANCELLATIONS WHERE IT HAS BEEN DETERMINED TO BE IN THE INTEREST OF THE GOVERNMENT TO DO SO. SEE 36 COMP. GEN. 364; 39 ID. 86; B- 154762,AUGUST 26, 1964; AND B-153974, JULY 14, 1964.

WE FIND NO LEGAL BASIS FOR OBJECTING TO THE ADMINISTRATIVE ACTION IN THIS CASE AND YOUR PROTEST IS DENIED.