Skip to main content

B-164528, SEPT. 10, 1968

B-164528 Sep 10, 1968
Jump To:
Skip to Highlights

Highlights

THE PROCUREMENT WAS TOTALLY SET ASIDE FOR SMALL BUSINESS AND PROVIDED FOR THE OPENING OF BIDS ON MAY 6. BIDDERS WERE EXPECTED TO HAVE READY FOR OPERATION ON JULY 1. FOR THE EVALUATION OF BIDS THE BIDDER WILL PROVIDE A STATEMENT IF ANY OR ALL OF SUCH EQUIPMENT IS OWNED BY THE BIDDER. IF ANY OR ALL OF SUCH EQUIPMENT IS TO BE PURCHASED. (II) THE MODIFICATIONS THAT ARE NECESSARY TO ANY EXISTING EQUIPMENT TO MEET TECHNICAL REQUIREMENTS SET FORTH IN GENERAL DELIVERY PROVISIONS. "6. (THIS NOTICE IS NECESSARY IN ORDER THAT THE GOVERNMENT MAY MAKE A PRELIMINARY INSPECTION OF SUCH EQUIPMENT NO LATER THAN 10 JUNE 1968.). "B. IMPORTANT NOTICE: "SUBMISSION OF THE REQUIRED DATA AS PRESCRIBED HEREIN IS OF UTMOST IMPORTANCE TO THE GOVERNMENT IN MAKING TIMELY EVALUATION OF BIDS.

View Decision

B-164528, SEPT. 10, 1968

TO MR. GEORGE J. GOLDSBOROUGH, JR.:

BY LETTER DATED AUGUST 15, 1968, WITH ENCLOSURE, AND PREVIOUS CORRESPONDENCE FROM TE PARKER OIL CO., INC., AND FUEL SERVICE, INC., A JOINT VENTURE D.B.A. P.-AND-B. SERVICES, PROTEST HAS BEEN MADE BY P. AND- B. SERVICES AGAINST THE CANCELLATION OF INVITATION FOR BIDS NO. DABC01-68- B-0056, ISSUED BY HEADQUARTERS UNITED STATES ARMY AVIATION CENTER, FORT RUCKER, ALABAMA.

THE INVITATION, ISSUED APRIL 1, 1968, REQUESTED BIDS FOR FURNISHING REFUELING AND DEFUELING SERVICES TO MILITARY AIRCRAFT DURING FISCAL YEAR 1969. THE PROCUREMENT WAS TOTALLY SET ASIDE FOR SMALL BUSINESS AND PROVIDED FOR THE OPENING OF BIDS ON MAY 6, 1968. THE INVITATION CONTEMPLATED THAT THE SUCCESSFUL BIDDER WOULD COMMENCE CONTRACT OPERATIONS ON JULY 1, 1968. IN ORDER TO MEET THE INVITATION SERVICE REQUIREMENTS, BIDDERS WERE EXPECTED TO HAVE READY FOR OPERATION ON JULY 1, 1968, ABOUT FORTY-ONE 2,000-GALLON TANKERS AND FIFTEEN 4,000 GALLON TANKERS EQUIPPED WITH FILTERS AND OTHER REQUIRED ACCESSORIES. TO PROVIDE THE NECESSARY ASSURANCE TO THE GOVERNMENT THAT BIDDERS WOULD BE ENTIRELY RESPONSIBLE AND RESPONSIVE TO THE ADVERTISED NEEDS, PAGES 25 AND 26 OF THE INVITATION PROVIDED IN PERTINENT PART:

"A. DATA TO BE SUBMITTED WITH BIDS:

"1. A LIST OF EQUIPMENT (REFUELER, DEFUELERS, AND OILERS) TO BE USED TO SATISFY TANK TRUCK CAPACITY REQUIREMENTS OF PARAGRAPH ENTITLED -SERVICES.-

"5. FOR THE EVALUATION OF BIDS THE BIDDER WILL PROVIDE A STATEMENT IF ANY OR ALL OF SUCH EQUIPMENT IS OWNED BY THE BIDDER. IF ANY OR ALL OF SUCH EQUIPMENT IS TO BE PURCHASED, LEASED OR ACQUIRED BY OR THROUGH OTHER MEANS, THE BIDDER SHALL SO STATE AND SUPPORT EACH STATEMENT WITH CERTIFIED TRUE COPIES OF THE APPLICABLE AGREEMENTS. IN ADDITION THERE SHALL ACCOMPANY THE AFOREMENTIONED PLAN, A LIST SHOWING (I) THE LOCATION OR PLACE AND DATE OF MANUFACTURE OF THE EQUIPMENT, VEHICLE SERIAL NUMBER, AND (II) THE MODIFICATIONS THAT ARE NECESSARY TO ANY EXISTING EQUIPMENT TO MEET TECHNICAL REQUIREMENTS SET FORTH IN GENERAL DELIVERY PROVISIONS.

"6. THE LOCATION OF THE EQUIPMENT TO BE USED BY THE BIDDER UNDER THE CONTRACT. (THIS NOTICE IS NECESSARY IN ORDER THAT THE GOVERNMENT MAY MAKE A PRELIMINARY INSPECTION OF SUCH EQUIPMENT NO LATER THAN 10 JUNE 1968.)

"B. IMPORTANT NOTICE:

"SUBMISSION OF THE REQUIRED DATA AS PRESCRIBED HEREIN IS OF UTMOST IMPORTANCE TO THE GOVERNMENT IN MAKING TIMELY EVALUATION OF BIDS. THUS, FAILURE TO MAKE TIMELY SUBMISSION OF ANY OF THE REQUIRED DATA MAY RESULT IN A DETERMINATION THAT A BID IS NOT RESPONSIVE TO THE INVITATION FOR BIDS OR THAT THE BIDDER IS NOT A RESPONSIBLE SOURCE OF SUPPLY.'

THREE BIDS WERE RECEIVED AND OPENED AS SCHEDULED ON MAY 6, 1968. THE LOW BID WAS SUBMITTED BY SPEAR SERVICE, INC., AND THE SECOND LOW BID WAS SUBMITTED BY P.-AND-B. SERVICES, THE CURRENT CONTRACTOR. THE NATIONAL SERVICE CORPORATION WAS THE THIRD LOWEST BIDDER UNDER THE INVITATION.

A PREAWARD SURVEY WAS CONDUCTED OF THE CAPABILITIES OF SPEAR SERVICE, INC., AND IT WAS RECOMMENDED BY THE SURVEY TEAM THAT NO AWARD BE MADE TO SPEAR SERVICE. THE TEAM REPORTED THAT:

"SINCE IN OUR ESTIMATE THE CONTRACT WILL NOT BE AWARDED BEFORE 1 JUNE 1968, WE FIND THE CONTRACTOR DOES NOT HAVE SUFFICIENT TIME TO BE READY TO GO 1 JULY 1968. THE 30 DAYS AVAILABLE FOR PROCURING CHASSIS, INSTALLING TANKS AND ACCESSORIES, DELIVERY OF THE EQUIPMENT TO LAPINE, ALABAMA, COATING, ETC. IS OBVIOUSLY AN UNREALISTIC LEAD TIME.'

AFTER A DETAILED REVIEW OF THE CONTEMPLATED PROCUREMENT AS ADVERTISED, IT WAS CONCLUDED THAT THE INVITATION WAS RESTRICTIVE OF COMPETITION SINCE IT DID NOT PROVIDE SUFFICIENT TIME FOR BIDDERS, OTHER THAN THE INCUMBENT CONTRACTOR, TO MEET THE VEHICLE REQUIREMENTS BY JULY 1, 1968. THEREFORE, BY NOTICE TO BIDDERS DATED JUNE 10, 1968, THE INVITATION WAS CANCELED "IN THE BEST INTEREST OF THE GOVERNMENT.'

ON JUNE 13, 1968, INVITATION NO. DABC01-68-B-0102 WAS ISSUED COVERING THE REQUIRED SERVICES FROM NOVEMBER 1, 1968, THROUGH JUNE 30, 1969. BIDS WERE SCHEDULED TO BE OPENED ON JULY 17, 1968, WITH INSPECTION OF EQUIPMENT PROPOSED TO BE USED BY THE SUCCESSFUL BIDDER SCHEDULED FOR NO LATER THAN OCTOBER 20, 1968. WE UNDERSTAND THAT BIDS RECEIVED UNDER THIS NEW INVITATION HAVE NOT BEEN OPENED AND THAT NO FURTHER ACTION WILL BE TAKEN CONCERNING THIS INVITATION PENDING RESOLUTION OF THE PROTEST BY OUR OFFICE. SINCE JULY 1, 1968, THE SERVICES HAVE BEEN FURNISHED BY P.-AND-B. SERVICES UNDER EXTENSIONS TO ITS 1968 FISCAL YEAR CONTRACT.

YOU TAKE ISSUE WITH THE FOLLOWING BASES WHICH THE PROCUREMENT AGENCY RELIED UPON IN CANCELING THE INVITATION IN THE BEST INTEREST OF THE GOVERNMENT: "A. THE INVITATION FOR BIDS DID NOT PERMIT SUFFICIENT TIME FOR EACH BIDDER TO OBTAIN NECESSARY EQUIPMENT; "B. THE LOW BIDDER, SPEAR SERVICE, INC. WAS DETERMINED TO BE NON-RESPONSIBLE ONLY BECAUSE OF INSUFFICIENT TIME TO OBTAIN NECESSARY EQUIPMENT; AND "C.THE INVITATION FOR BIDS, AS WRITTEN, WOULD FAVOR THE INCUMBENT CONTRACTOR, P-AND-B SERVICES, WHO ALREADY HAD ALL NECESSARY EQUIPMENT, AND WOULD BE RESTRICTIVE TO COMPETITION.'

THE ABOVE-QUOTED BASES FOR CANCELLATION ARE RELATED DIRECTLY TO PARAGRAPHS 5 AND 6 OF "DATA TO BE SUBMITTED WITH BIDS," QUOTED ABOVE. WITH REFERENCE THERETO, WE BELIEVE THAT SUCH DATA WAS REQUIRED TO FACILITATE THE DETERMINATION OF RESPONSIBILITY AS DISTINGUISHED FROM THE RESPONSIVENESS OF BIDS. WE BELIEVE THAT THERE IS NO QUESTION BUT THAT THE EQUIPMENT LISTING REQUIREMENTS AND THE INSPECTION OF SUCH EQUIPMENT AS OF A CERTAIN DATE PRIOR TO JULY 1, 1968, WAS FOR THE SOLE PURPOSE OF DETERMINING WHETHER A PROSPECTIVE CONTRACTOR WILL HAVE THE CAPACITY AND ABILITY TO PERFORM THE SERVICES. THE CONTEMPLATED CONTRACT IS ONE FOR THE FURNISHING OF FUELING SERVICES AND NOT FOR THE FURNISHING OF SPECIFIED EQUIPMENT, EXCEPT AS AN INCIDENT TO PERFORMING THE SERVICES. THE INFORMATION THUS REQUESTED COULD HAVE BEEN SUBMITTED AT ANY TIME BEFORE A DETERMINATION AS TO THAT FACTOR OF RESPONSIBILITY IS MADE EVEN WHERE, AS WERE, THE INVITATION REQUIRES THAT THE DATA WITH RESPECT THERETO MUST BE SUBMITTED WITH THE BID AND WARNS THAT FAILURE TO COMPLY MAY RESULT IN REJECTION. SEE 43 COMP. GEN. 77; 45 ID. 4.

HOWEVER, THE RECORD SHOWS THAT, AS A PRACTICAL MATTER, IT WAS IMPOSSIBLE FOR ANY NEW SUPPLIER OF FUELING SERVICES TO DEMONSTRATE ITS EQUIPMENT CAPABILITY AS OF JUNE 10, 1968. IN A SITUATION WHEREIN ONLY SMALL BUSINESS CONCERNS ARE COMPETITIVELY SOLICITED FOR THE FURNISHING OF LOGISTIC SERVICES TO THE GOVERNMENT, THE GOVERNMENT MUST HAVE SUBSTANTIVE INFORMATION UPON WHICH TO BASE A JUDGMENT DETERMINATION OF RESPONSIBILITY. ADDITIONALLY, WHERE THE CONTRACT COMMENCEMENT DATE IS FIRM AND COINCIDES WITH THE BEGINNING OF A FISCAL YEAR, SUFFICIENT TIME MUST BE GIVEN TO ALL INTERESTED BIDDERS TO PRESENT EVIDENCE OF THEIR EQUIPMENT CAPABILITIES OR FIRM COMMITMENTS THEREFOR BY THE CRITICAL DATE. IF SUCH IS NOT PRACTICAL OR CAPABLE OF COMPLIANCE BECAUSE OF THE SCOPE OF THE SERVICES ADVERTISED OR BECAUSE OF INSUFFICIENT TIME, THE INVITATION IS RESTRICTIVE OF COMPETITION.

WE AGREE THAT UNDER THE TERMS OF THE PROCUREMENT BEFORE US ONLY THE CURRENT CONTRACTOR WAS IN A POSITION TO DEMONSTRATE AND PROVE ITS CAPABILITY TO MEET THE EQUIPMENT REQUIREMENTS AS OF JUNE 10, 1968. WHEN WE CONSIDER THAT 56 FUEL TANKERS OF CERTAIN SPECIFICATIONS WERE TO BE AVAILABLE FOR INSPECTION BY JUNE 10, 1968, AND THE FACT THAT THE MAGNITUDE OF SUCH TASK REQUIRED A LEAD TIME OF AT LEAST 3 MONTHS, THE ACTION TAKEN TO CANCEL THE INVITATION APPEARS REASONABLE UNDER THESE CIRCUMSTANCES.

ALTHOUGH YOU BELIEVE THAT THE NOTICE OF REJECTION WAS INVALID FOR FAILURE TO SPECIFY THE REASON FOR REJECTION OF BIDS AND THAT THE REJECTION WAS ARBITRARY AND UNLAWFUL, WE FIND NO LEGAL BASIS TO DISAGREE WITH THE ACTIONS TAKEN BY THE PROCUREMENT ACTIVITY.

CLEARLY, THE CONTRACTING AGENCY'S DETERMINATION THAT THE INVITATION WAS DEFECTIVE FOR FAILURE TO TAKE INTO CONSIDERATION ADEQUATE LEAD TIME FOR BIDDERS TO DEMONSTRATE THEIR RESPONSIBILITY COMES WITHIN ASPR 2 404.1 (B) (VIII), LISTING AS ONE OF THE REASONS FOR WHICH ALL BIDS MAY BE REJECTED A DETERMINATION THAT "FOR OTHER REASONS, CANCELLATION IS CLEARLY IN THE BEST INTEREST OF THE GOVERNMENT.' IN THE PRESENT CASE, IT IS UNCONTRADICTED THAT THE INVITATION UNNECESSARILY RESTRICTED COMPETITION AND TENDED TO DEPRIVE THE GOVERNMENT OF THE OPPORTUNITY TO OBTAIN ITS ACTUAL REQUIREMENTS AT THE LOWEST BID PRICE.

AN INVITATION FOR BIDS DOES NOT IMPORT ANY OBLIGATION TO ACCEPT ANY OF THE BIDS RECEIVED AND, CONSEQUENTLY, A CONTRACTING OFFICER IS NOT BOUND TO ACCEPT A BID WHERE HE DETERMINES THAT THE PUBLIC INTEREST WOULD BEST BE SERVED BY A REJECTION OF ALL BIDS. SEE 37 COMP. GEN. 12; 41 ID. 709, AND AUTHORITIES CITED THEREIN. ALSO, IN THOSE INSTANCES WHERE IT HAS BEEN DETERMINED TO REJECT ALL BIDS, BOTH THE COURTS AND THIS OFFICE HAVE HELD THAT SUCH DETERMINATION IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION AND, IN THE ABSENCE OF A CLEAR SHOWING THAT THE REJECTION OF ALL BIDS IS ARBITRARY, OUR OFFICE WILL NOT INTERFERE WITH THE EXERCISE OF SUCH DISCRETION. 40 COMP. GEN. 352; 47 ID. 103, 106.

YOU REFER TO DECISION B-140175, NOVEMBER 25, 1959, OF THIS OFFICE (39 COMP. GEN. 396) AND SUGGEST SUCH CASE IS SUFFICIENTLY SIMILAR TO THE CIRCUMSTANCES HERE INVOLVED AS TO CONSTITUTE CONTROLLING AUTHORITY FOR HOLDING, AS IN THAT DECISION, THAT THE REJECTION OF ALL BIDS CONSTITUTED AN ARBITRARY REJECTION TO THE DETRIMENT OF THE GOVERNMENT'S INTEREST IN MAINTAINING THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM, AND THAT A COMPELLING REASON DID NOT EXIST FOR THE CANCELLATION.

THE TWO CASES ARE READILY DISTINGUISHABLE. IN 39 COMP. GEN. 396 THE SOLICITATION INVOLVED (IN PERTINENT PART) A REVISION IN A GOVERNMENT ESTIMATE AS TO THE QUANTITY OF STORAGE NEEDED, WHEREAS THE PRESENT CASE INVOLVES INADEQUATE LEAD TIME TO PROVIDE EVIDENCE OF RESPONSIBILITY. FURTHER, THE PRIMARY BASIS FOR THE CONCLUSION IN 39 COMP. GEN. 396 THAT THE REJECTION OF ALL BIDS CONSTITUTED AN ARBITRARY ACTION WAS NOT THE PERCENTAGE OF THE REVISION BUT WAS, INSTEAD, OUR VIEW THAT THERE WAS NO REASONABLE BASIS FOR CONSIDERING THE ORIGINAL ESTIMATE TO BE EXCESSIVE, AND THAT THE CONTRACTING OFFICER DID NOT ACTUALLY RELY ON SUCH BELIEF FOR HIS ACTION. WE HAVE CAREFULLY CONSIDERED YOUR OTHER POINTS OF PROTEST, SUCH AS ALLEGEDLY SIMILAR INVITATIONS INVOLVING REFUELING PROCUREMENTS, BUT WE FIND NO BASIS FOR DISTURBING THE ACTION TAKEN.

IN THESE CIRCUMSTANCES, SINCE WE FEEL THAT "COGENT" REASONS EXISTED FOR THE REJECTION OF ALL BIDS, THE PROTEST MUST BE DENIED. ACCORDINGLY, AND ON THE RECORD BEFORE US, WE WILL NOT OBJECT TO AN OTHERWISE PROPER AWARD UNDER INVITATION NO. -0102 TO THE LOWEST RESPONSIBLE AND RESPONSIVE BIDDER THEREUNDER.

GAO Contacts

Office of Public Affairs