B-156814, OCT. 12, 1965

B-156814: Oct 12, 1965

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TO KEUFFEL AND ESSER COMPANY: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF MAY 19. WHICH WAS CANCELLED AFTER BID OPENING. UPON WHICH AWARD IS STILL PENDING. THE FIRST INVITATION (HEREINAFTER REFERRED TO AS IFB 569) WAS ISSUED ON JANUARY 4. THE COST OF WHICH WAS TO GE INCLUDED IN THE PRICE OF ITEM 1. BIDDERS WERE CONFUSED AS TO THE EXACT NATURE OF THE DATA REQUIREMENT. FIVE ITEMS OF WHICH WERE TO BE FURNISHED "AS REQUIRED.'. ONLY PRESERVATION AND PACKAGING DATA WAS UNCONDITIONALLY STIPULATED FOR DELIVERY. THE END ITEMS ARE OF A STANDARD COMMERCIAL TYPE WHICH HAD BEEN SEVERAL TIMES PURCHASED BEFORE ALONG WITH COMMERCIAL MANUALS BUT COMPLIANCE WITH A DD FORM 1423 HAD NEVER BEFORE BEEN DEMANDED OF BIDDERS.

B-156814, OCT. 12, 1965

TO KEUFFEL AND ESSER COMPANY:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER OF MAY 19, 1965, AND SUBSEQUENT CORRESPONDENCE DATED AUGUST 24 AND SEPTEMBER 3, 1965, REQUESTING OUR OFFICE TO DIRECT THE REINSTATEMENT OF INVITATION FOR BIDS NO. 36-600-65-569, WHICH WAS CANCELLED AFTER BID OPENING, AND PROTESTING THE READVERTISEMENT OF THE AIR FORCE REQUIREMENT UNDER INVITATION FOR BIDS NO. 36-600-65-831, OPENED ON MAY 14, UPON WHICH AWARD IS STILL PENDING.

THE FIRST INVITATION (HEREINAFTER REFERRED TO AS IFB 569) WAS ISSUED ON JANUARY 4, 1965, BY HEADQUARTERS, MIDDLETOWN AIR MATERIEL AREA, OLMSTEAD AIR FORCE BASE, PENNSYLVANIA, AND COVERED TWO LINE ITEMS: (1) 32 EACH THEODOLITE AND TRANSIT CALIBRATION SETS (FEDERAL STOCK NUMBER 6675-066- 7693); AND (2) SIX CATEGORIES OF DATA AS PRESCRIBED BY DEPARTMENT OF DEFENSE FORM 1423, EDITION OF MARCH 1, 1963, THE COST OF WHICH WAS TO GE INCLUDED IN THE PRICE OF ITEM 1. BIDDERS WERE CONFUSED AS TO THE EXACT NATURE OF THE DATA REQUIREMENT, FIVE ITEMS OF WHICH WERE TO BE FURNISHED "AS REQUIRED.' ONLY PRESERVATION AND PACKAGING DATA WAS UNCONDITIONALLY STIPULATED FOR DELIVERY. THE END ITEMS ARE OF A STANDARD COMMERCIAL TYPE WHICH HAD BEEN SEVERAL TIMES PURCHASED BEFORE ALONG WITH COMMERCIAL MANUALS BUT COMPLIANCE WITH A DD FORM 1423 HAD NEVER BEFORE BEEN DEMANDED OF BIDDERS. INDEED, ON FEBRUARY 8, 1965, MIDDLETOWN AIR MATERIEL AREA ISSUED INVITATION FOR BIDS 36-600-65-636 COVERING THREE EACH UNITS HAVING SOMEWHAT DIFFERING COMPONENTS REQUIRING THE FURNISHING OF COMMERCIAL DATA ONLY.

IFB 569 WAS CANCELLED BECAUSE THE DIRECTOR OF MATERIEL MANAGEMENT INFORMED THE PROCURING INSTALLATION AFTER BID OPENING THAT THE ELABORATE DATA CALLED FOR IN DD FORM 1423 WOULD NO LONGER BE REQUIRED AND THAT STANDARD COMMERCIAL MANUALS WOULD SUFFICE SINCE THE DEPARTMENT HAD ABANDONED ITS INTENTION TO ESTABLISH A TECHNICAL ORDER SYSTEM FOR THE ITEM.

THE FOLLOWING IS A COMPARISON OF THE PRICES RECEIVED ON THE THREE INVITATIONS MENTIONED ABOVE INSOFAR AS THE LOWEST BIDS RECEIVED ON EACH ARE CONCERNED:

TABLE

BRUNSON INSTRUMENT COMPANY

UNIT PRICE TOTAL PRICE IFB 569 $4,446.10

$142,275.20 IFB 831 3,348.00 107,136.00 IFB 636 2,460.00 7,380.00

KEUFFEL AND ESSER COMPANY

UNIT PRICE TOTAL PRICE IFB 569 $3,905.00

$124,960.00 IFB 831 3,905.00 124,960.00 IFB 636 2,583.00 7,749.00

AS THE LOWEST BIDDER ON THE FIRST INVITATION YOU PROTEST ITS CANCELLATION AFTER THE PUBLIC DISCLOSURE OF THE AMOUNT OF YOUR BID AND YOU CONTEND THE BRUNSON COMPANY DERIVED AN UNFAIR ADVANTAGE THEREFROM WHICH ENABLED THE SUBMISSION OF THE LOWEST QUOTATION ON THE READVERTISED PROCUREMENT. YOU ARGUE THAT THE INFORMATION REQUESTED ON THE DD FORM 1423 COMPRISES ONLY INFORMATION WHICH NORMALLY IS TRANSMITTED WITHOUT CHARGE TO THE PURCHASER OF THE STANDARD COMMERCIAL CATALOGUE ARTICLES IN ITEM 1. YOU FURTHERMORE ASSERT THAT ITEM 2 MIGHT PROPERLY HAVE BEEN DELETED FROM THE ORIGINAL INVITATION WITHOUT READVERTISING SINCE ITS DELIVERY REQUIRED NO FURTHER EXPENDITURES BECAUSE IT IS NOT A SEPARATE ITEM WHICH CAN BE INDIVIDUALLY PURCHASED. YOU CITE MASSMAN CONSTRUCTION V. UNITED STATES, 102 CT.CL. 699, 719 (1945), WHERE THE COURT STATES:

"TO HAVE A SET OF BIDS DISCARDED AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITOR'S PRICE IS A SERIOUS MATTER, AND IT SHOULD NOT BE PERMITTED EXCEPT FOR COGENT REASONS.'

THE RECORD BEFORE US DOES NOT JUSTIFY THE CONCLUSION THAT THERE NEVER WAS A REQUIREMENT FOR THE DATA SPECIFIED IN DD FORM 1423 OR THAT THE REQUIREMENT THERE STATED COULD FROM THE BEGINNING HAVE BEEN SATISFIED BY STANDARD COMMERCIAL MANUALS AND INFORMATION ALREADY IN THE HANDS OF THE GOVERNMENT. THE CONTRACTING OFFICER HAS CERTIFIED THAT INCORPORATION OF THE DD FORM 1423 INTO INVITATIONS COVERING OTHER KINDS OF ITEMS HAS, IN THE PAST, RESULTED IN SITUATIONS WHERE THE GREATEST PART OF THE PRICES QUOTED WAS ATTRIBUTABLE TO THE COST OF FURNISHING THE DATA RATHER THAN TO THE END ITEMS THEMSELVES. HE HAS CONCLUDED THAT THE BRUNSON REDUCTION IN UNIT PRICE FROM IFB 569 TO IFB 831 MAY BE DUE TO THE DELETION FROM THE PROCUREMENT OF THE DD FORM 1423 DATA REQUIREMENT. THE INFERENCE TO BE DRAWN IS THAT THE CONTRACTOR DATA REQUIREMENTS LIST IN THE FORMER INVITATION WAS TAKEN INTO CONSIDERATION BY BRUNSON IN THE COMPUTATION OF ITS PRICE AND THAT ITS IMPACT IN THIS REGARD WAS MATERIAL.

CONTRACTING OFFICERS ARE VESTED WITH BROAD DISCRETION TO CANCEL SOLICITATIONS WHICH HAVE CEASED TO REFLECT THE GOVERNMENT'S ACTUAL REQUIREMENTS PRIOR TO AWARD, ESPECIALLY WHEN THE MODIFICATION APPEARS TO HAVE HAD A MATERIAL IMPACT UPON THE PRICES QUOTED AND THE EXTENT OF THIS IMPACT CANNOT READILY BE MEASURED WITHOUT READVERTISING. WITH RESPECT TO A CONTRACTING OFFICER'S DISCRETION TO CANCEL INVITATIONS GENERALLY, COMPARE 36 COMP. GEN. 364.

IF IT COULD BE PROVEN BEYOND DOUBT THAT CANCELLATION OF THE PRIOR INVITATION SERVED NO USEFUL PURPOSE OR THAT NO BIDDER COULD CONCEIVABLY BE PREJUDICED BY THE CONSUMMATION OF AN AWARD THEREUNDER, WE WOULD BE JUSTIFIED IN DIRECTING CANCELLATION OF THE SUBSEQUENT SOLICITATION. SEE 43 COMP. GEN. 23; 41 ID. 758; 40 ID. 561 AND 671; 39 ID. 563 AND 834. OUR ATTENTION IS DIRECTED TO A DOCUMENT FURNISHED BY YOUR COMPANY WHICH IS DATED MAY 1, 1965, AND BEARS THE LETTERHEAD OF THE BRUNSON INSTRUMENT COMPANY. THE DOCUMENT CONSTITUTES A PUBLISHED PRICE LIST OF VARIOUS COMPONENTS EMBODIED IN THE THEODOLITE AND TRANSIT CALIBRATION SETS UNDER DISCUSSION. THE IMPLICATION TO BE DERIVED FROM YOUR ANALYSIS OF THIS PRICE LIST IS THAT THE BRUNSON BID ON IFB 636 WAS VERY CLOSE TO THE CATALOGUE PRICE OF THE THREE UNITS PURCHASED THEREUNDER, EVEN THOUGH ONLY COMMERCIAL DATA WAS ORDERED. YOU ARGUE THAT BRUNSON'S UNIT PRICE ON IFB 569, NOTWITHSTANDING THE PRESENCE OF THE SUPPOSEDLY MATERIAL DD FORM 1423 REQUIREMENT, WAS APPROXIMATELY 20 PERCENT LESS THAN A RECONSTRUCTED LIST PRICE FOR THE ITEM AND THAT CERTAINLY A QUANTITY DISCOUNT MUST HAVE BEEN FIGURED INTO THE PRICE TENDING TO COUNTERBALANCE THE EFFECT OF ANY ADDITION OF A CONTINGENCY FACTOR ATTRIBUTABLE TO THE DATA PROVISIONS. FURTHERMORE YOUR ANALYSIS OF THE BRUNSON BID ON IFB 831 LEAVES THE IMPRESSION THAT A DISCOUNT OF APPROXIMATELY 40 PERCENT FROM THE LIST PRICE WAS OFFERED THE GOVERNMENT IN RESPONSE TO THAT INVITATION. YOU HAVE ARGUED THAT THERE ARE ONLY TWO POSSIBLE EXPLANATIONS FOR THE EXCISION FROM THE BRUNSON PRICE OF AN ADDITIONAL 20 PERCENT ON IFB 831 SINCE WHATEVER QUANTITY DISCOUNT MAY HAVE BEEN OFFERED ON THE PROCUREMENT WAS SURELY EXHAUSTED ON IFB 569; VIZ, A REDUCTION IN PRICE FOR DELETION OF THE DD FORM 1423 REQUIREMENT; OR A DESIRE TO BETTER YOUR COMPANY'S KNOWN PRICE AND WIN THE AWARD WITHOUT REGARD TO ANY MODIFICATION OF THE COST OF PERFORMING THE EVENTUAL CONTRACT.

AS WE SEE THE EVIDENCE BEFORE US, IT DOES NOT RESOLVE THE ISSUE AS TO WHICH IS THE CORRECT EXPLANATION FOR THE CHANGE IN BRUNSON'SPRICE. IT IS POSSIBLE THAT THE BRUNSON BID ON IFB 569 WOULD HAVE OFFERED A DISCOUNT OF 40 PERCENT FROM LIST PRICE HAD THE DD FORM 1423 REQUIREMENT NOT BEEN STATED IN THE FIRST PLACE. SINCE THE RECORD DOES NOT CONCLUSIVELY DEMONSTRATE THAT REQUIREMENT TO HAVE BEEN EITHER MATERIAL OR IMMATERIAL WITH RESPECT TO THE PRICES ORIGINALLY BID, WE ARE CONSTRAINED TO STATE THAT WE WOULD NOT BE AUTHORIZED TO INTERFERE WITH THE EXERCISE OF THE CONTRACTING OFFICER'S DISCRETION TO MAKE AWARD ON THE BASIS OF IFB 831.