B-161958, OCT. 30, 1967

B-161958: Oct 30, 1967

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A DETERMINATION TO ACCEPT A LOW BID ON TWO ITEMS UNDER AN INVITATION FOR VARIOUS DAIRY PRODUCTS RATHER THAN THE LOW AGGREGATE ALL OR NONE BID AND TO READVERTISE THE REMAINING ITEMS MAY NOT BE REGARDED AS AN ABUSE OF DISCRETION BY THE CONTRACTING OFFICER NOR IS THE FAILURE TO MAKE AN AWARD FOR ALL ITEMS ADVERTISED AN ABUSE OF SUCH DISCRETION. THE AIR FORCE IS ADVISED THAT THE FACT THAT A PARTIAL AWARD MAY BE MADE AT A PRICE LOWER FOR CERTAIN ITEMS THAN THE PRICE FOR THOSE ITEMS IN AN ALL OR NONE BID WHICH IS LOW IN THE OVERALL. DOES NOT PER SE JUSTIFY A DETERMINATION THAT THE ALL OR NONE BID IS UNREASONABLE NOR DOES IT BY ITSELF QUALIFY AS A COGENT REASON FOR CANCELLATION AND READVERTISEMENT OF SOME ITEMS.

B-161958, OCT. 30, 1967

BIDS - ALL OR NONE DECISION TO GILLETTE TOWN AND COUNTRY DAIRY, INC. PROTESTING REJECTION OF ITS BID TO SUPPLY DAIRY PRODUCTS TO OFFUTT AIR FORCE BASE. A DETERMINATION TO ACCEPT A LOW BID ON TWO ITEMS UNDER AN INVITATION FOR VARIOUS DAIRY PRODUCTS RATHER THAN THE LOW AGGREGATE ALL OR NONE BID AND TO READVERTISE THE REMAINING ITEMS MAY NOT BE REGARDED AS AN ABUSE OF DISCRETION BY THE CONTRACTING OFFICER NOR IS THE FAILURE TO MAKE AN AWARD FOR ALL ITEMS ADVERTISED AN ABUSE OF SUCH DISCRETION. HOWEVER, THE AIR FORCE IS ADVISED THAT THE FACT THAT A PARTIAL AWARD MAY BE MADE AT A PRICE LOWER FOR CERTAIN ITEMS THAN THE PRICE FOR THOSE ITEMS IN AN ALL OR NONE BID WHICH IS LOW IN THE OVERALL, DOES NOT PER SE JUSTIFY A DETERMINATION THAT THE ALL OR NONE BID IS UNREASONABLE NOR DOES IT BY ITSELF QUALIFY AS A COGENT REASON FOR CANCELLATION AND READVERTISEMENT OF SOME ITEMS.

TO GILLETTE TOWN AND COUNTRY DAIRY, INCORPORATED:

REFERENCE IS MADE TO THE PROTEST AGAINST REJECTION OF YOUR BID ON ITEMS 1 THROUGH 14, EXCLUDING ITEM 12, UNDER INVITATION FOR BIDS NO. F25600-67-B- 2211, ISSUED APRIL 20, 1967, TO SATISFY DAIRY SUPPLY REQUIREMENTS FOR OFFUTT AIR FORCE BASE, OMAHA, NEBRASKA, FOR THE PERIOD FROM DATE OF AWARD TO JUNE 24, 1968.

THREE BIDS WERE RECEIVED PURSUANT TO THE INVITATION AND AWARD WAS MADE TO ALAMITO DAIRY, THE LOW BIDDER, FOR ITEMS 12 AND 15 THROUGH 23 ON AN "ALL OR NONE" BASIS. THIS AWARD IS NOT PROTESTED BY YOU AND WILL NOT HEREIN BE CONSIDERED. ON ITEMS 1 THROUGH 14, EXCLUDING ITEM 12, THE BIDS WERE AS FOLLOWS:

A. COUNTRY CHARM DAIRY BID ON ITEMS 2 AND 3 ONLY AT THE FOLLOWING PRICES:

ITEM UNIT PRICE TOTAL PRICE ON

ESTIMATED QUANTITIES

2 .328 $262,400.00

3 .338 $243,360.00

$505,760.00

LESS 1 PERCENT DISCOUNT 20 DAYS $500,702.40

B. ALAMITO DAIRY'S BID WAS QUALIFIED WITH THE STATEMENT,"AWARD WILL BE ACCEPTED ON ITEMS NO.1 NO.4 NO.5 NO.6 NO.7 NO.8 NO.9 NO.10 NO.11 NO.13 AND NO.14 ONLY IF AWARDED ITEMS NO.2 OR NO.3.' ALAMITO'S TOTAL BID FOR ITEMS 1 THROUGH 14, EXCLUDING ITEM 12, WAS $641,080.00, BASED ON THE ESTIMATED QUANTITIES. ON ITEMS 2 AND 3 THE BIDS WERE AS FOLLOWS

ITEM UNIT PRICE TOTAL PRICE ON

ESTIMATED QUANTITIES

2 .342 $273,600.00

3 .347 $249,840.00

NO DISCOUNT OFFERED - TOTAL $523,440.00

C. GILLETTE DAIRY BID ON ITEMS 1 THROUGH 14, EXCLUDING ITEM 12, ON AN ALL OR NONE BASIS. THE TOTAL BID ON AN ALL OR NONE BASIS WAS $616,222.00 BASED ON THE ESTIMATED QUANTITIES. ON ITEMS 2 AND 3 BIDS WERE THE FOLLOWING:

ITEM UNIT PRICE TOTAL PRICE ON

ESTIMATED QUANTITIES

2 .334 $267,200.00

3 .34 $244,800.00

NO DISCOUNT OFFERED - TOTAL $512,000.00

THE INVITATION FOR BIDS PROVIDED THAT:

"A. IN ADDITION TO OTHER FACTORS, BIDS WILL BE EVALUATED ON THE BASIS OF ADVANTAGES OR DISADVANTAGES TO THE GOVERNMENT THAT MIGHT RESULT FROM MAKING MORE THAN ONE AWARD (MULTIPLE AWARDS). FOR THE PURPOSE OF MAKING THIS EVALUATION, IT WILL BE ASSUMED THAT THE SUM OF $50 WOULD BE THE ADMINISTRATIVE COST TO THE GOVERNMENT FOR ISSUING AND ADMINISTERING EACH CONTRACT AWARDED UNDER THIS INVITATION, AND INDIVIDUAL AWARDS WILL BE FOR THE ITEMS AND COMBINATION OF ITEMS WHICH RESULT IN THE LOWEST AGGREGATE PRICE TO THE GOVERNMENT, INCLUDING SUCH ADMINISTRATIVE COSTS.'

THE CONTRACTING OFFICER EVALUATED THE THREE BIDS RECEIVED, PURSUANT TO THE PARAGRAPH OF INVITATION SET FORTH ABOVE. AFTER ADDING ADMINISTRATIVE COST OF $50 AS PROVIDED, HE FOUND THAT COUNTRY CHARM DAIRY WAS LOW BIDDER ON ITEM 2, ITEM 3, AND A COMBINATION OF THOSE ITEMS. ACCORDINGLY, AWARD WAS MADE TO COUNTRY CHARM DAIRY FOR THOSE TWO ITEMS. INASMUCH AS THE ONLY BIDDERS ON THE REMAINING ITEMS QUALIFIED THEIR BIDS ON AWARD OF EITHER ITEM 2 OR 3, OR ON AN "ALL OR NONE" BASIS, AWARD COULD NOT BE MADE FOR ITEMS 1, 4, 5, 6, 7, 8, 9, 10, 11, 13, AND 14. THESE ITEMS WERE CANCELLED AND READVERTISED ON MAY 24, 1967, UNDER INVITATION FOR BIDS NO. F 25600-67 -B-2647. AWARD UNDER THE SUBSEQUENT INVITATION WAS MADE TO FAIRMONT FOODS COMPANY FOR ITEMS 1, 4, 5, 6, 8, 10, 11, AND 14 IN THE AGGREGATE AMOUNT OF $79,525.10, BASED ON THE ESTIMATED QUANTITIES. AWARD WAS MADE TO ALAMITO DAIRY FOR ITEMS 7, 9 AND 13 IN THE AGGREGATE AMOUNT OF $23,768 BASED ON THE ESTIMATED QUANTITIES.

YOUR ALL OR NONE BID UNDER THE ORIGINAL INVITATION WAS THE LOW AGGREGATE BID RECEIVED UNDER THE ORIGINAL INVITATION FOR ITEMS 1 THROUGH 14, EXCLUDING ITEM 12, WHEN CONTRASTED TO ALL OTHER POSSIBLE BID COMBINATIONS WHICH COULD HAVE BEEN ACCEPTED BY THE CONTRACTING OFFICER IN MAKING AWARD FOR ALL ITEMS ADVERTISED. ACCORDINGLY, YOU PROTEST:

"* * * THAT THE GOVERNMENT PUTS OUT A BID IN ORDER TO OBTAIN THE BEST POSSIBLE PRICE AND QUALITY ON THE MERCHANDISE THEY NEED. IF A RESPONSIBLE BIDDER SUBMITS THE OVER-ALL LOW BID ON AN ENTIRE CONTRACT, WE FEEL THAT IT SHOULD BE AWARDED TO THAT BIDDER REGARDLESS OF MINOR TECHNICALITIES SUCH AS JUDGMENT DECISIONS ON SPLITTING UP A BID AWARD.

"GILLETTE'S BID WAS THE AGGREGATE LOW BID OF THE FIGURES SUBMITTED AND THAT IS THE WAY WE FEEL IT SHOULD BE AWARDED.'

THE TERMS OF THE INVITATION EXPRESSLY RESERVED TO THE GOVERNMENT THE RIGHT TO MAKE MULTIPLE AWARDS WHEN TO THE ADVANTAGE OF THE GOVERNMENT AND SIMILAR INVITATIONS HAVE BEEN CONSTRUED BY THIS OFFICE TO AUTHORIZE AWARD ON AN ITEM, ON A COMBINATION OF ITEMS, OR ON AN "ALL OR NONE" BASIS, DEPENDING UPON WHICH IS IN THE BEST INTEREST OF THE GOVERNMENT. SEE B- 146213, SEPTEMBER 8, 1961 AND JULY 26, 1961; 35 COMP. GEN. 383. OUR DECISION, B-146213 CITED ABOVE, INVOLVED A SIMILAR PROCUREMENT AND BIDS WERE RECEIVED FROM TWO RESPONSIVE BIDDERS. ONE BID RECEIVED WAS FOR A PORTION OF THE PROCUREMENT AND THE OTHER WAS AN AGGREGATE BID ON AN "ALL OR NONE" BASIS. THE CONTRACTING OFFICER IN THAT PROCUREMENT CONTEMPLATED MAKING AWARD TO THE LOW AGGREGATE BIDDER CONSIDERING HIS BID TO BE REASONABLE. HOWEVER, HE CANCELLED THE INVITATION BECAUSE HE THOUGHT, IN VIEW OF THE LOWER PARTIAL BID, HE COULD NOT DETERMINE THE LOW AGGREGATE BID TO BE IN THE BEST INTEREST OF THE GOVERNMENT. THIS OFFICE RULED IN FAVOR OF REINSTATEMENT OF THE ORIGINAL INVITATION AND AWARD TO THE LOW AGGREGATE BIDDER. THE BASIS FOR THIS ACTION WAS THAT THE PRESENCE OF A LOWER ITEM BID DOES NOT PRECLUDE ACCEPTANCE OF A REASONABLE LOW AGGREGATE BID FROM BEING IN THE BEST INTEREST OF THE GOVERNMENT. WE CONCLUDED THAT THE CONTRACTING OFFICER'S REASON FOR CANCELLATION OF THE INVITATION WAS NOT SUFFICIENTLY COGENT OR COMPELLING TO MEET THE REQUIREMENTS OF ASPR 2- 404.1. WHEN BIDS ARE TO BE EVALUATED ON THE BASIS OF ADVANTAGE OR DISADVANTAGE TO THE GOVERNMENT IN MAKING MULTIPLE AWARDS, SEPARATE AWARDS FOR EACH ITEM ARE NOT REQUIRED. SEE ALSO 41 COMP. GEN. 455. IN THAT CASE WE CONCLUDED THAT THE PROVISION FOR MULTIPLE AWARDS MUST BE CONSTRUED AS ALSO RESERVING THE RIGHT NOT TO MAKE MULTIPLE AWARDS WHERE IT WAS MORE COSTLY TO DO SO. HOWEVER, THE GOVERNMENT IS NOT REQUIRED TO MAKE AWARD FOR THE AGGREGATE QUANTITY WHEN TO DO SO IS NOT IN THE BEST INTEREST OF THE GOVERNMENT. SEE B-153158, FEBRUARY 3, 1964.

WE CONCUR IN THE GENERAL PROPOSITION THAT THE GOVERNMENT ADVERTISES TO SECURE ITS NEEDS AT THE BEST POSSIBLE PRICES AND THAT AWARD OF THE WHOLE CONTRACT, WHEN IN THE BEST INTEREST OF THE GOVERNMENT, SHOULD BE MADE TO A RESPONSIVE AND RESPONSIBLE BIDDER OFFERING A LOW AGGREGATE BID, EVEN THOUGH THAT BID MAY BE HIGHER ON CERTAIN ITEMS THAN ANOTHER BID. HOWEVER, IN THIS PROCUREMENT THE CONTRACTING OFFICER DETERMINED IT TO BE TO THE GOVERNMENT'S ADVANTAGE AND BEST INTEREST TO ACCEPT THE LOW BID BY COUNTRY CHARM DAIRY ON ITEMS 2 AND 3. THIS DISTINGUISHES YOUR PROTEST FROM OUR DECISION IN B-146213 WHEREIN THE CONTRACTING OFFICER BELIEVED A LOW AGGREGATE BID COULD NOT BE IN THE BEST INTEREST OF THE GOVERNMENT IF ANOTHER BIDDER WAS LOWER ON CERTAIN ITEMS. WE FREQUENTLY HAVE HELD THAT IN THE CANCELLATION OF INVITATIONS, CONTRACTING OFFICERS ARE VESTED WITH A CERTAIN AMOUNT OF DISCRETION AND, IN THE ABSENCE OF A SHOWING OF ARBITRARY OR CAPRICIOUS ACTION, FAVORITISM OR A COMPLETE DISREGARD OF THE LAW OR FACTS, WE WOULD NOT BE WARRANTED IN HOLDING THAT THEIR ACTIONS WERE ILLEGAL. WE DO NOT FIND EVIDENCE IN THIS PROCUREMENT OF SUCH AN ABUSE OF DISCRETION IN DETERMINING A LOW ITEM BID TO BE IN THE GOVERNMENT'S BEST INTEREST. NOR DO WE CONCLUDE THAT THE FAILURE OF THE CONTRACTING OFFICER TO MAKE AWARD FOR ALL THE ITEMS ADVERTISED CONSTITUTES AN ABUSE OF DISCRETION.

WE HAVE APPROVED SIMILAR ACTION BY THE CONTRACTING OFFICER IN PAST PROCUREMENTS. SEE B-153158, FEBRUARY 3, 1964, WHEREIN WE STATED THE FOLLOWING:

"THE TERMS OF AWARD IN THE ORIGINAL INVITATION QUOTED ABOVE, HAVE BEEN UNDERSTOOD BY THIS OFFICE TO AUTHORIZE AWARD ON AN ITEM, ON A LOT, OR ON AN -ALL OR NONE- BASIS, DEPENDING UPON WHICH IS IN THE BEST INTERESTS OF THE GOVERNMENT. B-146213, SEPTEMBER 8, 1961 AND JULY 26, 1961; SEE 35 COMP. GEN. 383. UNDER PARAGRAPH 8 OF THE TERMS THE GOVERNMENT RESERVED THE RIGHT TO REJECT ANY OR ALL BIDS; AND THIS OFFICE HAS GENERALLY VIEWED THE ADMINISTRATIVE AUTHORITY TO REJECT BIDS TO BE EXTREMELY BROAD. 147008, AUGUST 31, 1961. IMPLICIT IN THESE TERMS, IT SEEMS TO US, IS THE RIGHT TO MAKE AWARD ON LESS THAN ALL THE SPECIFIED ITEMS IF SUCH ACTION IS TO THE GOVERNMENT'S ADVANTAGE. SEE B-130908, APRIL 11, 1957. IN THIS PROCUREMENT, FOR EXAMPLE, THE GOVERNMENT SAVED $3,194.04 BY MAKING AWARD SOLELY ON THE LOT II REQUIREMENT, AND THE CONTRACTING OFFICER ESTIMATES THAT THE GOVERNMENT WILL SAVE APPROXIMATELY $2,500 ON THE LOT I REQUIREMENT BY READVERTISING. IF BIDS HAD BEEN RECEIVED ONLY ON LOT II (THE TROUSERS), SURELY AN AWARD COULD HAVE BEEN MADE ON THAT LOT, DESPITE THE ABSENCE OF ANY BIDS ON LOT I (THE COMPLETE UNIFORMS). WE DO NOT FIND THAT THE GOVERNMENT LOST THE RIGHT TO MAKE A SINGLE AWARD ON LOT II MERELY BECAUSE THE EXERCISE OF THAT RIGHT PRECLUDED ANY FURTHER CONSIDERATION OF YOUR BID AND PREVENTED THE MAKING OF AN AWARD ON LOT I.'

WE ARE ADVISING THE DEPARTMENT OF THE AIR FORCE THAT IN DETERMINING THE BEST INTEREST OF THE GOVERNMENT, THE DESIRABILITY OF MAKING AWARDS FOR ALL ITEMS AND AVOIDING PREJUDICE AND DETERIMENT TO BIDDERS AND TO THE INTEGRITY OF THE COMPETITIVE BID SYSTEM OFTEN CAUSED BY READVERTISEMENT SHOULD BE CONSIDERED. HOWEVER, FOR THE ABOVE REASONS YOUR PROTEST MUST BE DENIED.