B-160975, MAR. 28, 1967

B-160975: Mar 28, 1967

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YOU HAVE PROTESTED THE REJECTION BY THE NAVAL AIR SYSTEMS COMMAND OF ALL BIDS SUBMITTED PURSUANT TO INVITATION NO. WAS ISSUED ONLY TO TWO FIRMS: LINOCHINE PRODUCTS CORPORATION (WHICH APPARENTLY ACTS AS SALES AGENT FOR YOUR FIRM) AND STANDARD ARMAMENT COMPANY. IT WAS DETERMINED YOUR BID WAS LOW AND A PRE-AWARD SURVEY WAS INITIATED ON FEBRUARY 14. THIS PROTEST WAS SUBMITTED FORMALLY TO THE PROCURING AGENCY BY TELEGRAM OF FEBRUARY 24. THAT RMF WAS A CURRENT PRODUCER PERFORMING SATISFACTORILY. THAT THE PROCUREMENT HAD NOT BEEN SYNOPSIZED IN THE COMMERCE BUSINESS DAILY AS GENERALLY REQUIRED BY ASPR 1-1003.1 (A) UNDER THE EXCEPTION PROVIDED AT ASPR 1- 1003.1 (C) (IV) WHERE ADEQUATE TIME IS LACKING.

B-160975, MAR. 28, 1967

TO THE BORACA CORPORATION:

BY TELEGRAM OF FEBRUARY 28 AND LETTER OF MARCH 2, 1967, YOU HAVE PROTESTED THE REJECTION BY THE NAVAL AIR SYSTEMS COMMAND OF ALL BIDS SUBMITTED PURSUANT TO INVITATION NO. NOOO19-67-B-0126, ISSUED JANUARY 19, 1967, AND THE READVERTISEMENT OF THE SAME PROCUREMENT UNDER INVITATION NO. N00010-67-B-0224, ISSUED MARCH 6, 1967.

THE INITIAL INVITATION, A 100-PERCENT SMALL BUSINESS SET-ASIDE FOR THE PROCUREMENT OF A QUANTITY OF EJECTOR BOMB RACKS, WAS ISSUED ONLY TO TWO FIRMS: LINOCHINE PRODUCTS CORPORATION (WHICH APPARENTLY ACTS AS SALES AGENT FOR YOUR FIRM) AND STANDARD ARMAMENT COMPANY. UPON BID OPENING AS SCHEDULED ON FEBRUARY 7, 1967, IT WAS DETERMINED YOUR BID WAS LOW AND A PRE-AWARD SURVEY WAS INITIATED ON FEBRUARY 14. HOWEVER, ON FEBRUARY 23, 1967, A CURRENT PRODUCER, RMF CORPORATION, ORALLY PROTESTED THE FAILURE OF THE PROCURING AGENCY TO FURNISH IT AN INVITATION AND AN OPPORTUNITY TO BID. THIS PROTEST WAS SUBMITTED FORMALLY TO THE PROCURING AGENCY BY TELEGRAM OF FEBRUARY 24, 1967, AS CORRECTED ON FEBRUARY 27, 1967.

THE PROCURING AGENCY IN REVIEWING THE MATTER, DETERMINED THAT RMF HAD NOT BEEN SOLICITED DUE TO AN INADVERTENCE ON THE PART OF THE AGENCY, THAT RMF WAS A CURRENT PRODUCER PERFORMING SATISFACTORILY, AND THAT THE PROCUREMENT HAD NOT BEEN SYNOPSIZED IN THE COMMERCE BUSINESS DAILY AS GENERALLY REQUIRED BY ASPR 1-1003.1 (A) UNDER THE EXCEPTION PROVIDED AT ASPR 1- 1003.1 (C) (IV) WHERE ADEQUATE TIME IS LACKING. UNDER THE CIRCUMSTANCES, IT WAS DETERMINED THAT THE INVITATION SHOULD BE CANCELLED AND THE PROCUREMENT READVERTISED. BOTH BIDDERS UNDER THE INITIAL INVITATION WERE ADVISED OF THE REPROCUREMENT BY LETTER OF FEBRUARY 28, 1967.

THE SECOND INVITATION WHICH, AS PREVIOUSLY INDICATED, WAS ISSUED ON MARCH 6, 1967, IS NOW SCHEDULED FOR BID OPENING AT 10:00 A.M., MARCH 29, 1967.

YOU PROTEST THE REJECTION OF ALL BIDS UNDER THE INITIAL INVITATION AND THE REPROCUREMENT UNDER THE SECOND INVITATION ON THE BASIS THAT THE FORMER WAS, IN FACT, GIVEN SUFFICIENT PUBLICITY SO THAT ALL INTERESTED PARTIES HAD AMPLE OPPORTUNITY TO OBTAIN KNOWLEDGE OF THE PROCUREMENT BY DILIGENT PURSUIT OF THE AVENUES OPEN TO BIDDERS. YOU ALSO POINT OUT THAT RMF DID NOT RESPOND TO A PRIOR INVITATION WHICH WAS AWARDED DESPITE THE FACTS THAT IT WAS PUBLICIZED IN THE COMMERCE BUSINESS DAILY AND THAT ONLY TWO BIDS WERE RECEIVED JUST AS IN THE CASE OF THE INITIAL INVITATION. YOU STATE FURTHER THAT OUR OFFICE HAS REPEATEDLY HELD THE MERE FAILURE OF THE GOVERNMENT TO MAIL AN INVITATION TO A POSSIBLE BIDDER TO BE INADEQUATE GROUNDS FOR CANCELLATION OF THE INVITATION. YOU CONTEND, ACCORDINGLY, THAT THE INVITATION ISSUED JANUARY 19, 1967, SHOULD BE REINSTATED AND AWARD MADE THEREON.

IT HAS LONG BEEN HELD THAT A PROCURING AGENCY HAS THE RIGHT TO REJECT ALL BIDS AND READVERTISE THE PROCUREMENT UNDER APPROPRIATE CIRCUMSTANCES. FOR EXAMPLE, ARTICLE 8 (B) OF THE BIDDING INSTRUCTIONS IN STANDARD FORM 33-A RESERVES TO THE GOVERNMENT THE RIGHT TO REJECT ANY OR ALL BIDS. ADDITION, THE STATUTE PROVIDING FOR PROCUREMENT UNDER FORMAL ADVERTISING SPECIFICALLY AUTHORIZES THE HEAD OF THE AGENCY TO REJECT ALL BIDS WHEN HE DETERMINES SUCH ACTION TO BE IN THE PUBLIC INTEREST. SEE 10 U.S.C. 2305 (C). THIS AUTHORITY IN THE HEAD OF THE AGENCY IS SUBJECT TO DELEGATION TO SUBORDINATES UNDER 10 U.S.C. 2311. FURTHER, IT IS WELL ESTABLISHED THAT STATUTES GOVERNING PUBLIC PROCUREMENT WERE ENACTED FOR THE PROTECTION OF THE PUBLIC AND VEST NO RIGHTS IN PARTIES SUBMITTING BIDS. 32 COMP. GEN. 251, 254. IN SUMMARY, WHERE A PROCURING AGENCY DETERMINES FOR VALID REASONS THAT THE PUBLIC INTEREST REQUIRES SUCH ACTION, INVITATIONS MAY BE CANCELLED AND THE PROCUREMENT READVERTISED. 38 COMP. GEN. 235, 237.

IT IS TRUE THAT WE HAVE TAKEN THE POSITION THAT THE CANCELLATION OF AN INVITATION AND THE READVERTISEMENT OF THE PROCUREMENT AFTER BIDS HAVE BEEN EXPOSED IS A SERIOUS MATTER WHICH MAY PROPERLY BE UNDERTAKEN ONLY FOR COGENT REASONS. IN THIS CONNECTION IT HAS BEEN HELD THAT THE READVERTISEMENT OF A PROCUREMENT BECAUSE THE INITIAL INVITATION DID NOT PRECLUDE MULTIPLE AWARDS IS NOT PROPER WHERE THE INVITATION CLEARLY DID NOT CONTEMPLATE SUCH AWARDS AND THE READVERTISEMENT OF THE PROCUREMENT TO SPECIFICALLY PROHIBIT THEM WOULD SERVE NO USEFUL PURPOSE. 39 COMP. GEN. 396. SIMILARLY IT HAS BEEN HELD THAT THE POSSIBILITY OF A MINOR PRICE CONCESSION ON A SMALL INCREASE IN QUANTITY DOES NOT JUSTIFY THE REJECTION OF ALL BIDS AND READVERTISEMENT OF THE PROCUREMENT. 36 COMP. GEN. 62. THE LAST CITED CASE WE NOTED AT PAGE 64 THAT:

"* * * AN ARBITRARY OR PATENTLY ERRONEOUS REJECTION AND RESOLICITATION OF BIDS CAN BE IN DEROGATION OF THE GOVERNMENT'S INTEREST IN MAINTAINING THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM AND IN OBSERVING ETHICAL STANDARDS OF BUSINESS CONDUCT WHICH SHOULD AT ALL TIMES BE PRESERVED. * *

THE QUESTION HERE FOR CONSIDERATION IS WHETHER THE FAILURE TO SOLICIT A BID FROM A CURRENT PRODUCER UNDER THE CIRCUMSTANCES DESCRIBED CAN BE REGARDED AS A COGENT REASON JUSTIFYING READVERTISEMENT OF THE PROCUREMENT.

ASPR 2-205.1 (B) PROVIDES:

"ALL ELIGIBLE AND QUALIFIED SUPPLIERS WHO HAVE SUBMITTED BIDDERS MAILING LIST APPLICATIONS, OR WHOM THE PURCHASING ACTIVITY CONSIDERS CAPABLE OF FILLING THE REQUIREMENTS OF A PARTICULAR PROCUREMENT SHALL BE PLACED ON THE APPROPRIATE BIDDERS MAILING LIST. * * *.'

UNDER THE QUOTED PROVISION RMF, A CURRENT PRODUCER, SHOULD, OF COURSE, HAVE BEEN PLACED ON THE BIDDERS MAILING LIST, AND IN VIEW OF THE SMALL NUMBER OF BIDDERS ON THAT LIST OBVIOUSLY SHOULD HAVE BEEN SOLICITED. WHERE THE PROCURING AGENCY REFUSED TO FURNISH AN INVITATION TO ONE OF FIVE ELIGIBLE PROSPECTIVE BIDDERS WE HELD THAT SUCH REFUSAL CONSTITUTED A VIOLATION OF THE APPLICABLE ADVERTISING STATUTE. 25 COMP. GEN. 859. THE PRESENT CASE THERE WAS A FAILURE RATHER THAN A REFUSAL TO FURNISH AN INVITATION; HOWEVER, THE DIFFERING CIRCUMSTANCES DO NOT WARRANT A DIFFERENT CONCLUSION.

IN THIS CASE WE UNDERSTAND THAT THE PROCURING AGENCY FAILED TO FURNISH A COPY OF THE INITIAL INVITATION TO RMF BASED ON A "VERBAL INDICATION" GIVEN SOME WEEKS EARLIER THAT RMF WOULD NOT BE INTERESTED IN BIDDING. UNDERSTAND RMF'S POSITION TO BE THAT THERE WAS NO INTENT IN THE COURSE OF A CONVERSATION TO IMPLY THAT RMF DID NOT WISH TO SUBMIT A BID. THE ADMINISTRATIVE RECORD DOES NOT INDICATE THE INCIDENT INVOLVED NOR THE PRECISE LANGUAGE EMPLOYED. IN GENERAL, AN INFORMAL CONVERSATION BETWEEN UNIDENTIFIED INDIVIDUALS IS A POOR BASIS FOR DETERMINING WHETHER A SUPPLIER WOULD BE INTERESTED IN BIDDING ON A PROCUREMENT. IN SUCH CIRCUMSTANCES THE PRACTICAL WAY TO DETERMINE THE SUPPLIER'S INTEREST IS TO FURNISH HIM A COPY OF THE INVITATION. SUCH A REQUIREMENT IMPOSES NO UNDUE BURDEN ON THE PROCURING AGENCY IN TERMS EITHER OF COST OR TIME.

YOUR LETTER OF MARCH 2 STATES OUR OFFICE HAS REPEATEDLY HELD THE MERE FAILURE OF THE GOVERNMENT TO MAIL AN INVITATION FOR BIDS TO A POSSIBLE BIDDER NOT TO BE GROUNDS FOR CANCELLING AN INVITATION. YOU APPEAR TO HAVE IN MIND OUR DECISION AT 34 COMP. GEN. 684. IN THAT CASE THE PROCURING AGENCY CHOSE NOT TO REJECT ALL BIDS AND READVERTISE EVEN THOUGH A POSSIBLE SUPPLIER HAD NOT RECEIVED AN INVITATION. THERE THE PROPOSED SUPPLIER HAD NOT REQUESTED THAT ITS NAME BE PLACED ON THE BIDDERS MAILING LIST, NOR APPARENTLY WAS IT SUPPLYING A PRODUCT UNDER A CURRENT CONTRACT. ADDITION, ONE OF ITS DISTRICT REPRESENTATIVES HAD BEEN FURNISHED A BID FORM AND HAD, IN FACT, SUBMITTED A TIMELY BUT NOT LOW BID. THOSE CIRCUMSTANCES ARE NOT ANALOGOUS TO THE CASE HERE AT ISSUE.

ALSO, WE HAVE HELD THAT THE FAILURE OF A BIDDER TO ACKNOWLEDGE RECEIPT OF AN ADDENDUM BECAUSE HE DID NOT RECEIVE IT, POSSIBLY BECAUSE OF THE INACTION OF THE PROCURING AGENCY, WAS NOT A SUFFICIENT BASIS TO CONSIDER THE BID TO BE RESPONSIVE. SUCH A CASE WAS REPORTED AT 40 COMP. GEN. 126. AGAIN, IN THAT CASE, THE PROPRIETY OF REJECTING ALL BIDS AND READVERTISING WAS NOT INVOLVED. IT MERELY HELD THAT A BID WHICH WAS NONRESPONSIVE BY REASON OF FAILURE TO ACKNOWLEDGE A MATERIAL AMENDMENT TO AN INVITATION COULD NOT BE CONSIDERED RESPONSIVE BECAUSE THE BIDDER'S NONRECEIPT OF THE AMENDMENT WAS ATTRIBUTABLE TO THE GOVERNMENT.

IN VIEW OF THE FOREGOING WE CONCLUDE THAT THE ACTION OF THE PROCURING AGENCY IN REJECTING ALL BIDS AND READVERTISING IS NOT SUBJECT TO LEGAL OBJECTION.