B-164527, AUG. 16, 1968

B-164527: Aug 16, 1968

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TO ENTWISTLE MANUFACTURING CORPORATION: REFERENCE IS MADE TO YOUR TELEGRAMS DATED MAY 23. WAS ISSUED TO 15 PROSPECTIVE BIDDERS WITH THE OPENING ESTABLISHED FOR JANUARY 11. AMENDMENTS 1 THROUGH 5 WERE ISSUED WITH THE OPENING DATE REESTABLISHED FOR MAY 20. THE SOLICITATION WAS UNCLASSIFIED BUT REQUIRED ACCESS TO CLASSIFIED DATA. BIDS WERE RECEIVED ONLY FROM OCEAN TECHNOLOGY. NO BID WAS MADE ON ITEMS 2 AND 3. THE PRICE SUBMITTED BY OTI FOR ITEM 1 WAS VERIFIED BY THE CONTRACTING OFFICER. 405.40 A DISCOUNT OF 10 PERCENT - 10 DAYS WAS OFFERED. 2 AND 3 ARE BASED UPON AN AWARD OF ALL THREE ITEMS. -ALL OR NONE.-" BOTH BIDDERS ARE CURRENTLY PRODUCING THE ACOUSTIC DEVICE. IT IS ALSO REPORTED THAT ITEMS 2 AND 3 WILL BE CANCELLED FROM THIS SOLICITATION AND READVERTISED AT A LATER DATE.

B-164527, AUG. 16, 1968

TO ENTWISTLE MANUFACTURING CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAMS DATED MAY 23, 1968, JUNE 4, 1968, AND AUGUST 9, 1968, CONCERNING THE PROCUREMENT OF CLASSIFIED END ITEMS UNDER INVITATION FOR BIDS NO. N00104-68-B-0678/11.8) ISSUED BY THE UNITED STATES NAVY SHIPS PARTS CONTROL CENTER, DECEMBER 11, 1967.

THE SOLICITATION, COVERING ITEM 1 OF AN ACOUSTIC DEVICE AND ITEMS 2 AND 3 OF ECCENTRIC MECHANISMS, WAS ISSUED TO 15 PROSPECTIVE BIDDERS WITH THE OPENING ESTABLISHED FOR JANUARY 11, 1968. AMENDMENTS 1 THROUGH 5 WERE ISSUED WITH THE OPENING DATE REESTABLISHED FOR MAY 20, 1968. THE SOLICITATION WAS UNCLASSIFIED BUT REQUIRED ACCESS TO CLASSIFIED DATA.

BIDS WERE RECEIVED ONLY FROM OCEAN TECHNOLOGY, INCORPORATED (OTI), AND ENTWISTLE MANUFACTURING CORPORATION. OTI BID ONLY ON ITEM 1, BIDDING $476.00 PER UNIT FOR 395 UNITS, TOTALLING $188,020.00, WITH NO DISCOUNT. NO BID WAS MADE ON ITEMS 2 AND 3, FOR THE STATED REASON THAT "* * * IN SPITE OF DILIGENT EFFORTS AND ESTABLISHED QUALIFICATIONS, (THE BIDDER) HAS BEEN UNABLE TO OBTAIN THE GOVERNING SPECIFICATION FOR THIS DEVICE.' THE PRICE SUBMITTED BY OTI FOR ITEM 1 WAS VERIFIED BY THE CONTRACTING OFFICER.

ENTWISTLE SUBMITTED BIDS ON ALL THREE ITEMS AS FOLLOWS:

ITEM QUANTITY UNIT PRICE EXTENDED AMOUNT

1 395 $ 710.23 $280,540.85

2 3 2,679.84 8,039.52

3 9 2,600.60 23,405.40 A DISCOUNT OF 10 PERCENT - 10 DAYS WAS OFFERED. THE OFFER SUBMITTED BY ENTWISTLE CONTAINED THE FOLLOWING NOTATION:

"THE PRICES QUOTED FOR ITEMS 1, 2 AND 3 ARE BASED UPON AN AWARD OF ALL THREE ITEMS, I.E., -ALL OR NONE.-"

BOTH BIDDERS ARE CURRENTLY PRODUCING THE ACOUSTIC DEVICE, ITEM 1 OF THE SOLICITATION, UNDER GOVERNMENT CONTRACTS.

THE CONTRACTING OFFICER PROPOSES TO AWARD ITEM 1 TO THE LOW RESPONSIBLE OFFEROR, OCEAN TECHNOLOGY, INCORPORATED, AT THE UNIT PRICE OF $476.00 EACH. THE ADMINISTRATIVE REPORT STATES THAT AN AWARD TO ENTWISTLE ON AN ALL OR NONE BASIS WOULD NOT BE IN THE BEST INTEREST OF THE GOVERNMENT SINCE THE OFFERED PRICE ON ITEM 1, INCLUDING THE 10 PERCENT PROMPT PAYMENT DISCOUNT, AMOUNTS TO $64,466.76 MORE THAN THAT OF THE ACCEPTABLE LOW OFFER ON THAT ITEM. IT IS ALSO REPORTED THAT ITEMS 2 AND 3 WILL BE CANCELLED FROM THIS SOLICITATION AND READVERTISED AT A LATER DATE.

IT IS YOUR CONTENTION THAT CANCELLATION AND READVERTISING OF SOLICITATION OF ITEMS 2 AND 3 AFTER BID OPENING CIRCUMVENTS THE INVITATION FOR BIDS SYSTEM RULES; THAT EVALUATION ON THE BASIS OF ONLY ONE ITEM IS NOT REALISTIC; AND THAT THE PRICES, ON READVERTISEMENT OF ITEMS 2 AND 3, COULD CONCEIVABLY BE SO HIGH AS TO EXCEED ANY SAVINGS ON ITEM 1. IT IS ALSO YOUR CONTENTION THAT THE CLAUSE, CONTAINED IN THE SOLICITATION,"THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY OFFER UNLESS THE OFFEROR QUALIFIES HIS OFFER BY SPECIFIC LIMITATIONS; AND, UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, OFFERS MAY BE SUBMITTED FOR ANY QUANTITY LESS THAN THOSE SPECIFIED, * * *," IS INTENDED TO MAKE POSSIBLE MULTIPLE AWARDS WHENEVER THE BID RESPONSE MAKES IT POSSIBLE, AND "* * * NOT TO BE CONSTRUED TO MEAN THAT THE PROCURING OFFICER CAN DISREGARD FAIR, REASONABLE, RESPONSIVE AND RESPONSIBLE BIDS ON THEIR TOTAL NEEDS * * *.'

PARAGRAPH 10, AWARD OF CONTRACT, OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"/A) THE CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE OFFEROR WHOSE OFFER CONFORMING TO THE SOLICITATION WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

"/C) THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY OFFER, UNLESS THE OFFEROR QUALIFIES HIS OFFER BY SPECIFIC LIMITATIONS. UNLESS OTHERWISE PROVIDED IN THE SCHEDULE, OFFERS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED; AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE AN AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY OFFERED AT THE UNIT PRICES OFFERED UNLESS THE OFFEROR SPECIFIES OTHERWISE IN HIS OFFER.'

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 35 COMP. GEN. 383. 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, THIS DOES NOT MEAN THAT AWARD OF ALL ITEMS COVERED BY AN INVITATION MUST BE MADE IF TO DO SO RESULTS IN PAYING AN UNREASONABLE PRICE FOR CERTAIN ITEMS. WE BELIEVE THAT A UNIT PRICE OF $639.21 MAY WELL BE CONSIDERED UNREASONABLE COMPARED TO A UNIT PRICE OF $476.00, REGARDLESS OF PRICES UNDER CURRENT CONTRACTS. 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 ANY ABUSE OF DISCRETION IN DETERMINING NOT TO MAKE AWARD FOR ALL THE ITEMS ADVERTISED.

WE HAVE APPROVED SIMILAR ACTION BY THE CONTRACTING OFFICER IN PAST PROCUREMENTS. SEE B-163158, 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.' ..END :