B-156430, OCT. 15, 1965

B-156430, OCT. 15, 1965

YOUR LETTER OF JUNE 29, 1965, REQUESTED RECONSIDERATION OF DECISION OF JUNE 9, 1965, DENYING YOUR PROTEST AGAINST CANCELLATION OF INVITATIONS FOR BIDS NOS. AMC/E/-36-039-65-306-5 (NO. 306-5) AND AMC/E/-36-039-65-309-5 (NO. 309-5). ALSO, YOUR LETTER PROTESTED THE ISSUANCE OF A NEW INVITATION NO. AMC/E/-36-039-65-751-5-B AND REQUESTED THAT AN AWARD BE MADE TO YOUR FIRM UNDER THE ORIGINAL INVITATION NO. 306-5.

THE REQUIREMENT UNDER EACH INVITATION COVERED 10 EACH REPEATER MONITOR GROUP, TELEGRAPH, AN/FGA-6 PER PRON C9-5-OPO16-00-C9-CZ REPRESENTING THE FISCAL YEAR 1965 REQUIREMENT FOR THE DESCRIBED EQUIPMENT. IFB NO. 309-5 WAS CANCELLED AFTER IT WAS FOUND THAT THE REQUIREMENT FOR THAT ITEM NO LONGER EXISTED AND IFB NO. 306-5 WAS CANCELLED FOLLOWING A PROTEST BY THE SECOND LOW BIDDER, STELMA, INCORPORATED, INVOLVING A REQUIREMENT FOR PRODUCTION DRAWINGS ON TWO SUB-ITEMS, NAMELY, CONTROL SWEEP GENERATOR TRANSFER, C-4081/FGA-6 AND INDICATOR, CHANNEL STATUS ID-1017/FGA-6 (ITEM NO. (4) ). THE CANCELLATION FOLLOWED AN ADMINISTRATIVE DETERMINATION THAT THE GOVERNMENT DID IN FACT MAKE AN ERROR IN THE DATA REQUIREMENTS AS ALLEGED BY STELMA. IN OUR DECISION OF JUNE 9, 1965, WE CONCLUDED THAT THE DETERMINATIONS TO CANCEL BOTH INVITATIONS WERE MADE IN GOOD FAITH AND ON A SOUND LEGAL BASIS AND THAT THEREFORE THERE WAS NO BASIS FOR SUSTAINING YOUR PROTEST.

AT THE OUTSET THERE HAS BEEN NOTED YOUR STATEMENT UNDER (B), PAGE ONE OF YOUR LETTER TO THE EFFECT THAT THE "NOTE" ON PAGE 55 OF THE IFB ON WHICH THE STELMA PROTEST WAS BASED AFFECTS ONLY ITEM NO. 4 OF THE IFB, NAMELY, PRODUCTION DRAWINGS. IN THIS REGARD AN EXAMINATION OF THE INVITATION SHOWS THAT THERE ARE 23 SUB-ITEMS LISTED ON THE CONTINUATION SHEET AND THAT ITEM NO. 4 COVERS DRAWINGS ON 14 SUB ITEMS.

YOUR REQUEST FOR RECONSIDERATION CONTENDS THAT: (1) A RESPONSIBLE BIDDER SHOULD HAVE MADE KNOWN ANY DEFECT IN THE IFB PRIOR TO OPENING; AND (2) THE DISPARITY BETWEEN STELMA'S QUOTED PRICE OF $1.00 FOR ITEM NO. (4) OF THE IFB (FOR PRODUCTION DRAWINGS) AND YOUR OWN QUOTED PRICE OF $4,000 FOR THE SAME ITEM NEGATES ANY ARGUMENT THAT THE "NOTE" ON PAGE 55 OF THE IFB WAS PREJUDICIAL TO STELMA; OR IF STELMA INDICATED THAT THE COST OF THE DRAWINGS "WAS INCLUDED IN ITEM 1, THEN THEIR BID WAS NON-RESPONSIVE AND SHOULD HAVE BEEN REJECTED * * *.'

WITH REGARD TO THE FIRST CONTENTION THE REPORTED FACTS SHOW THAT IFB NO. 306-5 WAS CANCELLED BECAUSE IT WAS DEFECTIVE AND THAT THE CANCELLATION WAS FOR THAT REASON ALONE. IT WAS FELT THAT IF AN AWARD HAD BEEN MADE TO YOUR FIRM STELMA'S PROTEST WOULD HAVE BEEN SUSTAINED BECAUSE THE INVITATION ("NOTE" ON PAGE 55 OF THE BID SCHEDULE) REQUIRED CERTAIN MANUFACTURING INFORMATION FROM ONE OR MORE BIDDERS NOT REQUIRED OF OTHER BIDDERS.

THE CANCELLATION OF AN INVITATION IS TO BE AVOIDED WHERE POSSIBLE, BECAUSE OF THE OBVIOUS PREJUDICIAL EFFECT OF THE DISCLOSURE OF ALL BIDS. SEE IN THIS REGARD THE MASSMAN CASE, 102 CT.CL. 699, 719, CERTIORARI DENIED, 325 U.S. 866. SEE ALSO, ASPR 2-404.1 (A) WHICH PROVIDES IN PART:

"/A) THE PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM DICTATES THAT AFTER BIDS HAVE BEEN OPENED, AWARD MUST BE MADE TO THAT RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIBLE BID, UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE VITATION.'

IN THIS CASE, HOWEVER, A COMPELLING REASON EXISTED. THE REQUIRED DETERMINATION WAS MADE BY THE CONTRACTING OFFICER THAT THE INCLUSION OF THE ABOVE "NOTE" ON PAGE 55 OF THE BID SCHEDULE WAS IN ERROR AND CREATED A SITUATION PREJUDICIAL TO STELMA. SUCH DETERMINATION WAS IN ACCORDANCE WITH OUR DECISIONS HOLDING THAT, AS A GENERAL RULE, AN INVITATION FOR BIDS WHICH IMPROPERLY OR UNNECESSARILY LIMITS COMPETITION BY ITS OWN TERMS IS INVALID. 41 COMP. GEN. 77, 82; 39 ID. 563, 564 AND 32 ID. 384, 387. NOTED IN THE BROOKSHIRE FARM CASE, 111 F.2D 461, CITED IN THE DECISION OF JUNE 9, 1965, TO YOU.

"THE PURPOSE OF THESE STATUTES AND REGULATIONS IS TO GIVE ALL PERSONS EQUAL RIGHTS TO COMPETE FOR GOVERNMENT CONTRACTS * * * AND THUS TO SECURE FOR THE GOVERNMENT THE BENEFITS WHICH ARISE FROM COMPETITION. FURTHERANCE OF SUCH PURPOSE, INVITATIONS AND SPECIFICATIONS MUST BE SUCH AS TO PERMIT COMPETITORS TO COMPETE ON A COMMON BASIS * * *.'

WHERE ONE BIDDER TAKES AN EXCEPTION TO CERTAIN SPECIFICATION REQUIREMENTS UNDER CIRCUMSTANCES NOT EXTENDING TO ALL BIDDERS, IT IS CLEAR THAT A CONTRACT AWARDED UPON THE BASIS OF SUCH A BID WOULD NOT BE THE CONTRACT OFFERED TO ALL BIDDERS. SINCE IT IS CLEAR IN THIS INSTANCE THAT THE ,NOTE" DID CREATE A SITUATION PREJUDICIAL TO STELMA THE READVERTISEMENT WAS JUSTIFIED.

WITH RESPECT TO YOUR SECOND CONTENTION, PARAGRAPH NO. 47 OF THE "ADDITIONAL GENERAL CONTRACTUAL PROVISIONS" WHICH WERE MADE A PART OF INVITATION NO. 306-5 PROVIDED THAT:

"DATA PRICING (APP 9-202.1A (1) (MAY 1960)

"WHERE DATA IS SPECIFIED FOR DELIVERY, BIDDERS ARE REQUESTED TO INSERT OPPOSITE THE DATA ITEMS THE PRICE OF SUCH DATA. IF THE PRICE OF THE DATA IS INCLUDED IN THE PRICE OF THE END ITEMS THE STATEMENT "DATA PRICE IS INCLUDED IN THE PRICE OF THE END ITEMS" MAY BE USED. IF THE BIDDER DOES NOT INSERT THE PRICE AS REQUESTED ABOVE, OR INSERTS THE WORDS "NO CHARGE FOR DATA," OR SIMILAR LANGUAGE, THE GOVERNMENT WILL CONSIDER AND THE BIDDER AGREES THAT THE DATA PRICE IS INCLUDED IN THE COST OF THE APPROPRIATE END ITEMS.'

WITH RESPECT TO THE FOREGOING, WE HAVE BEEN ADVISED THAT FREQUENTLY CONTRACTORS INSERT "NO CHARGE" OR A NOMINAL AMOUNT FOR DATA SUCH AS PRODUCTION DRAWINGS; THAT SUCH BIDS ARE REGARDED AS RESPONSIVE AND CANNOT BE REJECTED; AND THAT IN THE EVENT OF TERMINATION FOR THE CONVENIENCE OF THE GOVERNMENT IN INSTANCES WHERE NOMINAL AMOUNTS ARE QUOTED SUCH AS THE QUOTED PRICE IN STELMA'S BID FOR DATA UNDER ITEM NO. 4 IT DOES NOT FOLLOW THAT THE CONTRACTOR WOULD ONLY HAVE TO ALLOW THE GOVERNMENT ONE DOLLAR ON SUCH ITEM. ON THE CONTRARY, THE CONTRACTING OFFICER HAS POINTED OUT THAT THE RIGHTS OF THE PARTIES WOULD BE DETERMINED BY PARAGRAPH 70 OF THE ADDITIONAL GENERAL PROVISIONS (TERMINATION FOR CONVENIENCE OF THE GOVERNMENT).

WITH RESPECT TO THE READVERTISEMENT FOR THE INVOLVED EQUIPMENT IFB AMC/E/ -36-039-65-751-5-B (NO. 751-5) CALLED FOR 20 EACH OF THE REPEATER-MONITOR GROUP, TELEGRAPH, AN/FGA-6 RATHER THAN 10 EACH CALLED FOR UNDER IFB NO. 306-5. THE CONTRACTING OFFICER HAS REPORTED THAT THE TARGET DATE FOR ISSUANCE OF IFB NO. 751-5 HAD BEEN SET FOR JUNE 30, 1965, BUT SINCE THE INVITATION HAD NOT BEEN ISSUED BY THAT DATE THE REQUIREMENT HAS BEEN RENUMBERED IFB NO. AMC/E/-36-039-66-287-5 (NO. 287-5); THAT NO FUTURE REQUIREMENTS BEYOND THE FISCAL YEAR 1966 EXISTED FOR ITEM NO. AN/FGA-6; AND THAT PRODUCTION DRAWINGS INCLUDED AS ITEM NO. 4 ON IFB NO. 306-5 HAVE BEEN DELETED ENTIRELY, BASED ON A DETERMINATION THAT NO REQUIREMENTS NOW EXIST FOR SUBJECT EQUIPMENT BEYOND THE PRESENT PROCUREMENT.

IN REGARD TO THE ABOVE DELETION AND THE INCREASED EQUIPMENT REQUIREMENT OF 20 INSTEAD OF 10 PROVIDED FOR IN IFB NO. 306-5, IT WAS STATED IN OUR DECISION OF JANUARY 25, 1965 (B-154899), TO THE SECRETARY OF THE ARMY THAT:

"WHILE WE HAVE NEVER COUNTENANCED THE REJECTION OF BIDS MERELY FOR THE PURPOSE OF AFFORDING ONE OR MORE BIDDERS AN OPPORTUNITY TO BETTER THE PRICES OF THEIR COMPETITORS (SEE 36 COMP. GEN. 364), WE HAVE CONSISTENTLY MAINTAINED THAT THE PUBLIC INTEREST IS FOR PRIMARY CONSIDERATION IN AWARDING A CONTRACT--- A PRINCIPLE EXPRESSLY EMBODIED IN 10 U.S.C. 2305 (C) WHICH AUTHORIZES REJECTION OF ALL BIDS UPON DETERMINATION THAT SUCH ACTION IS IN THE PUBLIC INTEREST. WE HAVE THUS RECOGNIZED THE PROPRIETY OF SUCH ACTION IN NUMEROUS INSTANCES, INCLUDING THOSE IN WHICH IT IS DESIRED TO PROCURE UNDER DIFFERENT TERMS THAN THOSE ON WHICH BIDS WERE ORIGINALLY SOLICITED. SEE 37 COMP. GEN. 12; ID. 760; 40 ID. 352.'