B-164520, SEP. 24, 1968

B-164520, SEP. 24, 1968

TO AROSCENT CHEMICAL COMPANY:

REFERENCE IS MADE TO A LETTER DATED JUNE 5, 1968, FROM THE HONORABLE WILLIAM H. BATES, MEMBER OF CONGRESS, AND YOUR LETTER OF JUNE 12, 1968, PROTESTING THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS NO. FPNGC-K-70204-A-5-8-68 ISSUED BY THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, OR THE REJECTION OF ALL BIDS AND CANCELLATION OF THE INVITATION.

THE INVITATION, ISSUED APRIL 17, 1968, SOLICITED BIDS FOR THE PURCHASE OF 192,888 TUBES OF FSC CLASS 6840 DEODORANT GENERAL PURPOSE (SEMI-SOLID GEL), TO BE MANUFACTURED IN ACCORDANCE WITH INTERIM FEDERAL SPECIFICATION P-D-001360 (GSA-FSS), OCTOBER 31, 1967. PERTINENT PARTS OF THAT SPECIFICATION REQUIRE THAT WHEN FULLY EVAPORATED AT ROOM TEMPERATURE THE PRODUCT SHALL WEIGH NO MORE THAN 10 PERCENT OF ITS ORIGINAL WEIGHT. FURTHER, IN ACCORDANCE WITH FEDERAL SPECIFICATION PPP C-186, GROUP "B" , THE PRODUCT WAS TO BE PACKAGED IN COLLAPSIBLE TOOTHPASTE-TYPE CONTAINERS.

BIDS WERE OPENED ON MAY 8, 1968, AND IT APPEARED THAT EASTON R.S. CORPORATION WAS THE LOW BIDDER FOR EACH ITEM. HOWEVER, SINCE EASTON ENCLOSED A LETTER DATED MAY 4, 1968, WITH ITS BID, STATING THAT "WHEN FULLY EVAPORATED AT ROOM TEMPERATURE, THE PRODUCT SHALL WEIGH NO MORE THAN 15 PERCENT OF ITS ORIGINAL WEIGHT," ITS BID WAS DETERMINED TO BE NONRESPONSIVE TO THE ABOVE-REFERENCED SPECIFICATION. AROSCENT'S BID WAS SECOND LOW AS TO ALL OF THE ITEMS AND, ALTHOUGH THE BID DID NOT INDICATE ANY NONCOMPLIANCE WITH THE ADVERTISED SPECIFICATIONS, IT WAS NOTED THAT YOU INTENDED TO SUPPLY THE SAME PRODUCT AS DID EASTON. THEREFORE, A QUESTION WAS INITIALLY RAISED AS TO THE RESPONSIVENESS OF YOUR BID.

IT IS REPORTED, HOWEVER, THAT BEFORE EVALUATION OF YOUR BID COULD BE COMPLETED, THE PROCURING AGENCY CONCLUDED THAT THE INVITATION INADEQUATELY STATED THE MINIMUM REQUIREMENTS OF THE GOVERNMENT IN THAT THE PRODUCT IS NOT ORDINARILY PACKAGED IN TOOTHPASTE-TYPE CONTAINERS AND CANNOT PROPERLY BE UTILIZED IN SUCH FORM. THE REASONS GIVEN FOR THIS DETERMINATION ARE AS OLLOWS: "THIS TYPE OF DEODORANT IS PACKAGED COMMERCIALLY IN CANNISTER-TYPE CONTAINERS, AND EFFICIENT USE OF THE PRODUCT REQUIRES UTILIZATION OF A DISPENSER. NEITHER THE INVITATION NOR THE APPLICABLE SPECIFICATION REQUIRED THAT A DISPENSER BE FURNISHED. IN ADDITION, WE HAVE ASCERTAINED INFORMALLY THAT BOTH THE PRODUCT OFFERED BY AIRWICK INDUSTRIES, INC., AIRKEM DIVISION, AND THAT PRODUCED BY EASTON * * * ARE PACKAGED IN CANNISTER-TYPE CONTAINERS. IT APPEARS THAT NONE OF THE BIDDERS WAS AWARE OF THE PACKAGING REQUIREMENTS. "TO REQUIRE DELIVERY OF THE DEODORANT IN COLLAPSIBLE TOOTHPASTE-TYPE TUBES WOULD, IN ALL PROBABILITY, INCREASE THE COST OF THE PRODUCT TO THE GOVERNMENT AND, AT THE SAME TIME, PROVIDE A PRODUCT WHICH WOULD NOT BE SUITABLE FOR USE. * * *"

THEREFORE, AND SINCE IT WAS DETERMINED THAT THE 10 PERCENT RESIDUE REQUIREMENT WAS AN OVERSTATEMENT OF THE MINIMUM NEEDS OF THE GOVERNMENT, THE AGENCY REJECTED ALL BIDS SUBMITTED IN RESPONSE TO THE INVITATION AND CANCELLED THE PROCUREMENT PENDING REVISION OF THE INTERIM SPECIFICATION. THE CONTEMPLATED REVISIONS WOULD CORRECT THE PACKAGING REQUIREMENTS, REQUIRE THE FURNISHING OF THE NECESSARY DISPENSER, AND WOULD CHANGE THE RESIDUE REQUIREMENT FROM 10 TO 15 PERCENT.

THE SOLE ARGUMENT ADVANCED BY YOU IN SUPPORT OF YOUR PROTEST AGAINST THE CANCELLATION OF THE INVITATION IS THAT SUCH ACTION WILL REQUIRE INTERIM PURCHASES BY THE GOVERNMENT FROM OTHER CONTRACTORS AT PRICES GREATLY IN EXCESS OF YOUR BID PRICES.

IT HAS CONSISTENTLY BEEN HELD THAT AN INVITATION FOR BIDS DOES NOT IMPORT ANY OBLIGATION ON THE GOVERNMENT TO ACCEPT ANY OF THE OFFERS SUBMITTED IN RESPONSE THERETO, AND THAT ALL BIDS MAY BE REJECTED WHERE IT IS DETERMINED TO BE IN THE BEST INTERESTS OF THE GOVERNMENT TO DO SO. 17 COMP. GEN. 554; 26 ID. 49; 37 ID. 760; PERKINS V LUKENS STEEL CO., 310 U.S. 113. SUBPARAGRAPH (B) OF 41 U.S.C. 253 -- THE STATUTORY AUTHORITY GOVERNING FORMAL ADVERTISED PROCUREMENT BY THE CIVILIAN AGENCIES OF THE GOVERNMENT - - PERMITS THE REJECTION OF ALL BIDS WHERE IT IS DETERMINED THAT REJECTION IS IN THE PUBLIC INTEREST. SECTION 1 2.404-1 (B) OF THE FEDERAL PROCUREMENT REGULATION, IMPLEMENTING THE ADVERTISING STATUTE, PERMITS CANCELLATION OF AN INVITATION AFTER OPENING WHERE IT "IS IN THE BEST INTEREST OF THE GOVERNMENT.' SUBSECTIONS (1) AND (4) THEREOF LIST AS EXAMPLES JUSTIFYING CANCELLATION WHERE "INADEQUATE, AMBIGUOUS, OR OTHERWISE DEFICIENT SPECIFICATIONS WERE CITED IN THE INVITATION," AND WHERE "BIDS RECEIVED INDICATE THAT THE NEEDS OF THE GOVERNMENT CAN BE SATISFIED BY A LESS EXPENSIVE ARTICLE DIFFERING FROM THAT ON WHICH BIDS WERE INVITED.' MOREVOER, THE RIGHT TO REJECT ALL BIDS WAS SPECIFICALLY RESERVED TO THE GOVERNMENT BY PARAGRAPH 10 (B) OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS.

OUR OFFICE HAS CONSISTENTLY HELD THAT, WHILE THE INTEREST OF THE GOVERNMENT AND THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM REQUIRE THAT INVITATIONS BE CANCELLED ONLY FOR THE MOST COGENT REASONS, THERE NECESSARILY IS RESERVED IN THE CONTRACTING OFFICIALS A SUBSTANTIAL AMOUNT OF DISCRETION IN DETERMINING WHETHER OR NOT AN INVITATION SHOULD BE CANCELLED. WE WILL, THEREFORE, NOT OBJECT TO THE CANCELLATION OF AN INVITATION UNLESS THERE HAS BEEN A CLEAR SHOWING OF ABUSE OF ADMINISTRATIVE DISCRETION.

WE MUST CONCLUDE THAT THERE HAS BEEN NO SUCH ABUSE OF DISCRETION HERE. THE PROCURING AGENCY DETERMINED AFTER BID OPENING THAT THE SPECIFICATIONS STATED IN THE INVITATION CALLED FOR THE PURCHASE OF A PRODUCT WHICH WAS NOT SUITABLE FOR USE AND WHICH, IN ALL PROBABILITY, WOULD INCREASE THE ULTIMATE COSTS OF THE PRODUCT TO THE GOVERNMENT. THE INVITATION THEREFORE, AT THE LEAST, FAILED TO ACCURATELY REFLECT THE MINIMUM NEEDS OF THE GOVERNMENT. WE STATED AT 36 COMP. GEN. 251 THAT A PROCURING AGENCY IS NOT REQUIRED TO PURCHASE EQUIPMENT NOT FULFILLING ITS PARTICULAR NEEDS MERELY BECAUSE IT CAN BE PURCHASED AT A LOWER PRICE. IT IS AXIOMATIC THAT WHERE THE PROCUREMENT OF AN UNSUITABLE PRODUCT WOULD RESULT, THE CONTRACTING OFFICER WOULD BE DERELICT IN HIS DUTY IF HE FAILED TO CANCEL THE INVITATION. THEREFORE, WHEN IT IS DETERMINED THAT AN INVITATION FOR BIDS CONTAINS SPECIFICATIONS WHICH OVERSTATE OR MISSTATE THE MINIMUM NEEDS OF THE PROCURING AGENCY, OR THE BIDS INDICATE AFTER OPENING THAT THE NEEDS OF THE GOVERNMENT CAN BE SATISFIED BY A LESS EXPENSIVE PRODUCT, DIFFERING FROM THAT ON WHICH BIDS WERE INVITED, THE BEST INTEREST OF THE GOVERNMENT REQUIRES CANCELLATION OF THE INVITATION. WE ARE OF THE OPINION THEREFORE THAT THE REJECTION OF ALL BIDS WAS NOT ONLY PROPER BUT REQUIRED UNDER CIRCUMSTANCES PRESENT HERE.