B-157976, FEB. 9, 1966

B-157976: Feb 9, 1966

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TO THE ANACO REPRODUCTION: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 22. WHEN IT DEVELOPED THAT YOUR COMPANY WAS THE ONLY SMALL BUSINESS OFFEROR IT WAS DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO CANCEL THE PROPOSAL REQUEST AND SOLICIT OFFERS FROM BOTH SMALL AND LARGE BUSINESS CONCERNS. REQUEST FOR PROPOSAL NO. 65-145 WAS ISSUED ON MAY 8. SEVEN PROPOSALS WERE RECEIVED. INCLUDING ONE SUBMITTED BY YOUR COMPANY AND ANOTHER WHICH WAS SUBMITTED BY BREVARD GRAPHICS. THE COMPANY WHICH WAS THEN ENGAGED IN THE PERFORMANCE OF MANAGEMENT AND OPERATION SERVICES AT THE TWO PRINTING PLANTS UNDER A GOVERNMENT CONTRACT WHICH WAS TO TERMINATE ON JUNE 30. THE CONTRACTING OFFICER SUSPENDED AWARD ACTION BECAUSE HE WAS INFORMED ON THAT DATE THAT HEADQUARTERS.

B-157976, FEB. 9, 1966

TO THE ANACO REPRODUCTION:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 22, 1965 (YOUR FILE REFERENCE: SSABA, PA-R-5), REQUESTING REIMBURSEMENT OF THE SUM OF $6,728.08 AS EXPENSES INCURRED IN NEGOTIATING A PROPOSED CONTRACT NO. AF 08/606/7673 WITH THE CONTRACTING OFFICER AT THE PATRICK AIR FORCE BASE FOR THE MANAGEMENT AND OPERATION OF THE FIELD PRINTING PLANT AT SUCH INSTALLATION AND THE SATELLITE PRINTING PLANT AT THE CAPE KENNEDY AIR FORCE STATION.

THE PATRICK AIR FORCE BASE INITIATED ACTION TO NEGOTIATE A CONTRACT FOR PERFORMANCE OF THE PARTICULAR SERVICES DURING THE PERIOD JULY 1, 1965, THROUGH JUNE 30, 1966, AND POSSIBLY FOR TWO ADDITIONAL FISCAL YEARS, SOMETIME PRIOR TO MARCH 12, 1965, WHEN IT ISSUED REQUEST FOR PROPOSAL NO. 65-104 WITH NOTICE THAT ONLY THE PROPOSALS OF SMALL BUSINESS CONCERNS WOULD BE ELIGIBLE FOR CONSIDERATION. WHEN IT DEVELOPED THAT YOUR COMPANY WAS THE ONLY SMALL BUSINESS OFFEROR IT WAS DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO CANCEL THE PROPOSAL REQUEST AND SOLICIT OFFERS FROM BOTH SMALL AND LARGE BUSINESS CONCERNS. REQUEST FOR PROPOSAL NO. 65-145 WAS ISSUED ON MAY 8, 1965. SEVEN PROPOSALS WERE RECEIVED, INCLUDING ONE SUBMITTED BY YOUR COMPANY AND ANOTHER WHICH WAS SUBMITTED BY BREVARD GRAPHICS, INCORPORATED, THE COMPANY WHICH WAS THEN ENGAGED IN THE PERFORMANCE OF MANAGEMENT AND OPERATION SERVICES AT THE TWO PRINTING PLANTS UNDER A GOVERNMENT CONTRACT WHICH WAS TO TERMINATE ON JUNE 30, 1965. THE CONTRACTING OFFICER CONSIDERED THE VARIOUS PROPOSALS AND, AFTER RECEIVING ADDITIONAL INFORMATION REGARDING THE TECHNICAL PORTION OF YOUR PROPOSAL, HE DETERMINED THAT THE CONTRACT SHOULD BE NEGOTIATED WITH YOUR COMPANY.

THE NEGOTIATIONS PROCEEDED TO THE POINT OF SIGNING THE CONTRACT NUMBERED AF 08/606/7673 ON JUNE 15, 1965, BUT THE CONTRACTING OFFICER SUSPENDED AWARD ACTION BECAUSE HE WAS INFORMED ON THAT DATE THAT HEADQUARTERS, AIR FORCE SYSTEMS COMMAND, HAD ISSUED A DIRECTIVE REQUIRING THE CONTRACT AWARD TO BE WITHHELD PENDING A DECISION ON A PROTEST SUBMITTED BY BREVARD GRAPHICS, INCORPORATED, AGAINST ANY FAVORABLE CONSIDERATION OF YOUR PROPOSAL. IT WAS SUBSEQUENTLY DETERMINED BY HEADQUARTERS, AIR FORCE SYSTEMS COMMAND, THAT YOUR PROPOSAL SHOULD HAVE BEEN REJECTED AS NONRESPONSIVE INASMUCH AS A RATING OF 65 WAS ASSIGNED TO THE TECHNICAL PORTION OF SUCH PROPOSAL, AS ORIGINALLY SUBMITTED, AND THE GOVERNMENT'S REQUEST FOR PROPOSAL PROVIDED THAT "ANY TECHNICAL PROPOSAL WHICH IS RATED LESS THAN 75 WILL BE CONSIDERED TECHNICALLY NON-ACCEPTABLE.' IN THE OPINION OF HEADQUARTERS, AIR FORCE SYSTEMS COMMAND, THE CONTRACTING OFFICER WAS NOT AUTHORIZED TO PERMIT YOUR COMPANY TO SUBMIT ADDITIONAL INFORMATION TO JUSTIFY A REVISION IN THE EVALUATION RATING OF 65 TO A RATING OF 90, ASSIGNED AS OF THE TIME THAT THE CONTRACTING OFFICER SELECTED YOUR FIRM FOR NEGOTIATION OF THE CONTRACT.

THE SECOND REQUEST FOR PROPOSAL WAS CANCELED AND THE CURRENT CONTRACT PERIOD WAS EXTENDED FOR A SUFFICIENT PERIOD OF TIME TO PERMIT THE GOVERNMENT TO OBTAIN AN ACCEPTABLE BID UNDER A TWO-STEP FORMAL ADVERTISING PROCEDURE. FOLLOWING THE RECEIPT OF FIVE TECHNICALLY ACCEPTABLE TECHNICAL PROPOSALS, THE SAME OFFERORS SUBMITTED BIDS IN RESPONSE TO AN INVITATION OF SEPTEMBER 17, 1965, AND IT WAS DETERMINED AFTER REVIEW OF THE BIDS THAT THE CONTRACT AWARD SHOULD BE MADE TO BREVARD GRAPHICS, INCORPORATED. ACCORDINGLY, CONTRACT NO. AF 08/606/7856 WAS ENTERED INTO WITH THAT COMPANY ON OCTOBER 28, 1965.

IT IS STATED IN THE ATTACHMENT TO YOUR LETTER OF OCTOBER 22, 1965, THAT THE OWNER OF ANACO REPRODUCTION WAS REQUESTED BY PROCUREMENT PERSONNEL AT THE PATRICK AIR FORCE BASE IN JUNE 1964 (CORRECT MONTH--- JUNE 1965), TO NEGOTIATE FOR THE CONTRACT AND PREPARE FOR PERFORMANCE ON JULY 1, 1965. IT IS ALLEGED THAT, FROM ABOUT THE TIME OF SUCH REQUEST UNTIL JUNE 28, 1965, YOUR COMPANY INCURRED TRAVEL, PAYROLL, VEHICLE, ADMINISTRATIVE AND MISCELLANEOUS EXPENSES TOTALING THE SUM OF $6,728.08 IN CONNECTION WITH THE NEGOTIATIONS AND PREPARATIONS MADE FOR PERFORMANCE OF THE PARTICULAR SERVICES WHICH WERE TO BEGIN AS OF JULY 1, 1965. THE LETTER ALSO CONTAINS A REQUEST FOR A STATEMENT OF FACT FROM THE COMMANDER OF THE PATRICK AIR FORCE BASE, CONCERNING YOUR REIMBURSEMENT CLAIM. THAT REQUEST WAS REFERRED TO THE SUCCESSOR CONTRACTING OFFICER WHOSE STATEMENT IN THE MATTER IS AS FOLLOWS:

"1. MR. R. G. LOVELADY (OWNER OF ANACO REPRODUCTION) AND GEORGE E. GOGEL (CONTRACTING OFFICER) AFFIXED THEIR NAMES TO CONTRACT AF 08/606/7673, 15 JUNE 1965, AND THE FILE WAS FORWARDED, ALONG WITH PROTEST BEFORE AWARD FOLDER, TO AFSC FOR REVIEW AND APPROVAL.

"2. PRIOR TO SIGNING AND DURING AFSC REVIEW OF SUBJECT CONTRACT, MR. R. G. LOVELADY DID TAKE CERTAIN STEPS AND ACTIONS IN PREPARATION FOR PERFORMANCE OF SERVICES UNDER SUBJECT CONTRACT.

"3. MR. R. G. LOVELADY WAS NOTIFIED VERBALLY ON MORE THAN ONE OCCASION THAT ANY COST INCURRED PRIOR TO CONTRACT AWARD WOULD BE AT HIS OWN EXPENSE.

"4. THE VALIDITY OF THE COSTS ITEMIZED ON PAGE 2 OF ANACO REPRODUCTION'S LETTER DATED 22 OCTOBER 1965 TO MR. J. CAMPBELL (COMPTROLLER GENERAL) CANNOT BE SUBSTANTIATED, AN ACTUAL VOUCHERS WERE NOT SUBMITTED TO THIS OFFICE.

"5. ANY CONTRACTOR, OTHER THAN THE INCUMBENT, WOULD HAVE HAD TO TAKE THE SAME STEPS, INCURRING THE SAME COST, IN PREPARATION FOR SERVICES TO BE PERFORMED UNDER SUBJECT CONTRACT.

"6. SINCE THE CONTRACTOR WAS VERBALLY NOTIFIED THAT COSTS INCURRED BY HIM WOULD BE AT HIS OWN RISK; ANY CONTRACTOR WOULD HAVE TO ASSUME THE SAME RISK; AND ANACO REPRODUCTION WAS NEVER AWARDED A CONTRACT; IT IS RECOMMENDED THAT ANACO REPRODUCTION BE DENIED PAYMENT FOR EXPENSES INCURRED.'

THE FOREGOING RECOMMENDATION IS CONSISTENT WITH THE POSITION TAKEN BY OUR OFFICE IN OTHER SIMILAR CASES IN VIEW OF THE ESTABLISHED RULE THAT A DISAPPOINTED BIDDER HAS NO STANDING TO SUE IN ORDER TO SECURE AN AWARD OF A GOVERNMENT CONTRACT TO HIM (UNITED STATES V. STEWART, 234 F.SUPP. 94, 100-101, AFFIRMED BY DECISION OF THE UNITED STATES COURT OF APPEALS, DISTRICT OF COLUMBIA CIRCUIT, ON NOVEMBER 25, 1964, 339 F.2D 753). ALSO HAS BEEN HELD THAT BIDDING EXPENSES MAY NOT BE RECOVERED IF THE REJECTION OF THE PLAINTIFF'S BID "WAS NOT FRAUDULENT NOR ARBITRARY NOR CAPRICIOUS NOR SO UNREASONABLE AS TO NECESSARILY IMPLY BAD FAITH.' HEYER PRODUCTS COMPANY V. UNITED STATES 177 F.SUPP. 251. IN THIS CASE IT APPEARS THAT THE PROCUREMENT OFFICIALS ACTED IN GOOD FAITH WHEN IT WAS DETERMINED THAT NO AWARD SHOULD BE MADE UNDER THE SECOND REQUEST FOR PROPOSAL AND THAT IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO RESOLICIT PROPOSALS UNDER A TWO-STEP FORMAL ADVERTISING PROCEDURE.

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR ALLOWANCE OF ANY PART OF YOUR CLAIM IN THE MATTER AND THE CLAIM IS HEREBY DISALLOWED IN ITS ENTIRETY.