B-164749, AUG. 26, 1968

B-164749: Aug 26, 1968

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TO SKYLAND FOOD CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF JUNE 27. OFFERS ARE SOLICITED ON A PER CASE BASIS - FOB ORIGIN. DELIVERY OF COMPONENTS WILL BE ON AN FOB DESTINATION BASIS. FOB ORIGIN PRICES WILL BE MODIFIED TO FOB DESTINATION EITHER BY NEGOTIATION PRIOR TO AWARD OR BY MODIFICATION OF CONTRACT SUBSEQUENT TO AWARD. FIRM DESTINATIONS WILL BE FURNISHED AS SOON AS ASSEMBLY CONTRACTS ARE AWARDED. DELIVERY OF FRUIT IS TENTATIVELY SCHEDULED AS FOLLOWS: "38 PERCENT DURING THE PERIOD - 1-15 SEPTEMBER-1-15 DECEMBER 1968 "34 PERCENT DURING THE PERIOD - 1-15 JANUARY-1-15 APRIL 1969 "28 PERCENT DURING THE PERIOD - 1-15 MAY-1-15 AUGUST 1969 * * * ** * * "D-6. IMPORTANCE OF TIMELY DELIVERY: THE ITEM CALLED FOR HEREIN IS TO BE USED AS A COMPONENT OF AN OPERATIONAL RATION THAT IS TO BE ASSEMBLED UNDER A SEPARATE CONTRACT.

B-164749, AUG. 26, 1968

TO SKYLAND FOOD CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 27, 1968, WITH ATTACHMENTS, PROTESTING THE REJECTION OF YOUR BID AND THE CANCELLATION OF INVITATION FOR BIDS DSA-137-8-B-283A5, ISSUED BY THE DEFENSE SUPPLY AGENCY, DEFENSE PERSONNEL SUPPORT CENTER.

THE INVITATION, ISSUED MAY 13, 1968, SOLICITED BIDS FOR THE PURCHASE OF 374,504 CASES OF 8-OUNCE CANS OF APPLESAUCE, PACKED 48 CANS TO THE CASE, FOR USE BY INDEPENDENT RATION ASSEMBLY CONTRACTORS IN PREPARING COMBAT MEALS. SECTION "D" OF THE INVITATION, ENTITLED "DELIVERIES," ADVISED PROSPECTIVE BIDDERS AS FOLLOWS: "D-1. OFFERS ARE SOLICITED ON A PER CASE BASIS - FOB ORIGIN, HOWEVER, DELIVERY OF COMPONENTS WILL BE ON AN FOB DESTINATION BASIS. FOB ORIGIN PRICES WILL BE MODIFIED TO FOB DESTINATION EITHER BY NEGOTIATION PRIOR TO AWARD OR BY MODIFICATION OF CONTRACT SUBSEQUENT TO AWARD. FIRM DESTINATIONS WILL BE FURNISHED AS SOON AS ASSEMBLY CONTRACTS ARE AWARDED. "D-2. DELIVERY OF FRUIT IS TENTATIVELY SCHEDULED AS FOLLOWS: "38 PERCENT DURING THE PERIOD - 1-15 SEPTEMBER-1-15

DECEMBER 1968 "34 PERCENT DURING THE PERIOD - 1-15 JANUARY-1-15

APRIL 1969 "28 PERCENT DURING THE PERIOD - 1-15 MAY-1-15

AUGUST 1969

* * * ** * * "D-6. IMPORTANCE OF TIMELY DELIVERY: THE ITEM CALLED FOR HEREIN IS TO BE USED AS A COMPONENT OF AN OPERATIONAL RATION THAT IS TO BE ASSEMBLED UNDER A SEPARATE CONTRACT. THE ABILITY OF THE ASSEMBLER TO COMPLY WITH THE PROVISIONS OF HIS CONTRACT IS DEPENDENT UPON THE PROMPT RECEIPT OF ALL ITEMS FROM COMPONENT CONTRACTORS. THEREFORE, IT IS ESSENTIAL THAT SUPPLIES BE DELIVERED IN ACCORDANCE WITH SCHEDULE OF DELIVERY SHOWN.'

WE ARE ADVISED THAT IT WAS THE INTENT OF THE CONTRACTING OFFICIALS THAT THE PROCUREMENT ITEM WOULD BE PRODUCED AND DELIVERED INTO STORAGE COMMENCING SEPTEMBER 1, 1968, IN ORDER TO INSURE TIMELY DELIVERIES TO THE YET TO BE SELECTED RATION ASSEMBLY CONTRACTORS. IN THIS RESPECT, THE RECORD INDICATES THAT A DELAY IN THE INPUT OF ANY OF THE FRUIT COMPONENTS OF THE RATIONS -- INCLUDING APPLESAUCE -- WILL DELAY THE DELIVERY OF THE URGENTLY NEEDED ASSEMBLED COMBAT RATIONS, AND MIGHT POSSIBLY RESULT IN A CLAIM BY THE RATION ASSEMBLY CONTRACTOR FOR ADDITIONAL COSTS OCCASIONED BY THE DELAY.

OF THE 12 BIDS SUBMITTED IN RESPONSE TO THE INVITATION, 6 -- INCLUDING SKYLAND'S LOW BID -- INDICATED AN INTENTION NOT TO BEGIN DELIVERIES UNTIL SOME TIME SUBSEQUENT TO SEPTEMBER 15, 1968. SKYLAND STATED IN THIS RESPECT, AT PAGE 11 OF ITS BID THAT "EARLIEST AVAILABLE DATE FOR DELIVERY IS OCTOBER 15, 1968.'

THE CONTRACTING OFFICER, UPON EVALUATION OF BIDS, INITIALLY CONCLUDED THAT THE SKYLAND BID, AS WELL AS THE OTHER FIVE BIDS WHICH DID NOT PROVIDE FOR DELIVERIES COMMENCING SEPTEMBER 1, WERE NONRESPONSIVE TO THE DELIVERY TERMS AND CONDITIONS OF THE INVITATION AND, THEREFORE, NOT ELIGIBLE FOR CONSIDERATION FOR AWARD. THE CONTRACTING OFFICER, HOWEVER, SUBSEQUENTLY REVIEWED THE INVITATION AND DETERMINED THAT THE QUOTED DELIVERY PROVISIONS WERE AMBIGUOUS AND DID NOT "REFLECT WITH CERTAINTY AND ACCURACY THE NEEDS OF THE GOVERNMENT TO BE MET WITH RESPECT TO DELIVERY OF THE SUPPLIES.' NOTED SPECIFICALLY THAT THE INVITATION FAILED TO STATE THE EXACT DELIVERY TIMES PRIOR TO WHICH THE ADVERTISED SUPPLIES MUST BE MADE AVAILABLE TO THE GOVERNMENT AND MADE NO MENTION OF THE IMPORTANCE OF OFFERING THE SUPPLIES FOR TIMELY DELIVERY. IN FACT, AS STATED IN YOUR LETTER OF JUNE 27, THERE WAS NO REQUIREMENT IN THE INVITATION THAT BIDDERS WERE REQUIRED TO RESPOND TO ALL THREE OF THE DELIVERY PERIODS SET FORTH IN SECTION "D," SUPRA, COMMENCING ON SEPTEMBER 1, 1968. THEREFORE, AND IN VIEW OF THE NEED FOR TIMELY DELIVERY OF THE SUPPLIES, THE PROCURING AGENCY ON JUNE 17, 1968, PURSUANT TO A REQUEST BY THE CONTRACTING OFFICER, AUTHORIZED CANCELLATION OF THE INVITATION IN THE BEST INTEREST OF THE GOVERNMENT. HIS DETERMINATION CONCERNING THE REJECTION OF ALL BIDS AND CANCELLATION OF THE INVITATION READS:

"UPON REVIEW OF INVITATION FOR BIDS NO. DSA 137 8 B 283A5 AFTER THE OPENING OF BIDS BUT BEFORE AWARD IT IS NOTED THAT THE TERMS OF THAT INVITATION ARE, WITH RESPECT TO DELIVERY DATES, AMBIGUOUS AND DO NOT REFLECT WITH CERTAINTY AND ACCURACY THE NEEDS OF THE GOVERNMENT TO BE MET WITH RESPECT TO DELIVERY OF THE SUPPLIES. IN THIS CONNECTION IT IS NOTED THAT THE MANNER IN WHICH DELIVERY IS TO BE ACCOMPLISHED IS NOT SPELLED OUT, THE EXACT TIME PRIOR TO WHICH ALL SUPPLIES MUST BE MADE AVAILABLE TO THE GOVERNMENT IS NOT STATED, AND THERE IS NO MENTION OF THE IMPORTANCE TO BE ATTACHED TO OFFERING SUPPLIES FOR TIMELY DELIVERY.

"FURTHER, IT APPEARS THAT THE REQUIREMENT THAT BIDDERS MUST OFFER SUPPLIES COMMENCING IN SEPTEMBER, 1968, HAS THE EFFECT OF RESTRICTING PARTICIPATION IN PROCUREMENT OF APPLESAUCE FOR RATIONS TO THOSE PRODUCERS SITUATED IN A SINGLE GROWING AREA, TO THE EXCLUSION OF SUBSTANTIAL SEGMENTS OF THE INDUSTRY LOCATED IN OTHER GROWING AREAS.

"IT IS THE DETERMINATION OF THE UNDERSIGNED THAT THE INVITATION CITED AMBIGUOUS TERMS, THAT THE NEEDS OF THE GOVERNMENT CAN BE SATISFIED BY ACCOMPLISHING THE PROCUREMENT ON TERMS WHICH MORE ACCURATELY REFLECT THOSE NEEDS, AND THAT THE CANCELLATION OF INVITATION FOR BIDS NO. DSA 137 8 B 283A5 IS CLEARLY IN THE BEST INTEREST OF THE GOVERNMENT.'

WE NOTE THAT THE PROCUREMENT WAS READVERTISED ON JULY 9, 1968, PER INVITATION FOR BIDS DSA-137-69-B-0137, AND THAT AWARDS WERE MADE THEREUNDER ON JULY 29, 1968, TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDERS, PRIOR TO OUR CONSIDERATION OF YOUR PROTEST BECAUSE OF THE EXTREME URGENCY OF THE PROCUREMENT. IN THIS REGARD, SEE ASPR 2-407.9 (B) (3) (II) WHICH AUTHORIZES AWARDS UNDER URGENCY SITUATIONS NOTWITHSTANDING A PROTEST IS PENDING BEFORE OUR OFFICE.

YOU PROTEST THE CANCELLATION OF THE ORIGINAL INVITATION ON THE GROUNDS THAT YOUR BID WAS RESPONSIVE TO ALL ASPECTS OF THE TERMS AND CONDITIONS STATED THEREIN, AND THAT THE DISCLOSURE OF YOUR BID PRICES PLACED SKYLAND AT A COMPETITIVE DISADVANTAGE UNDER THE RESOLICITATION.

AS STATED ABOVE, HOWEVER, THE QUESTION OF THE RESPONSIVENESS OF SKYLAND'S BID TO THE ORIGINAL INVITATION IS NOT DETERMINATIVE OF THE PROPRIETY OR LEGALITY OF ITS CANCELLATION, SINCE IT WAS DETERMINED THAT THE DELIVERY PROVISIONS OF THAT INVITATION WERE UNCERTAIN AND AMBIGUOUS. REJECTION OF ALL BIDS IS PERMITTED BY 10 U.S.C. 2305 (C) WHERE IT IS DETERMINED THAT REJECTION IS IN THE PUBLIC INTEREST. ALSO, ASPR 2-404.1 (B) (VIII) PERMITS CANCELLATION OF AN INVITATION AFTER OPENING WHERE IT "IS CLEARLY IN THE BEST INTEREST OF THE GOVERNMENT.' FURTHER THE RIGHT TO REJECT ALL BIDS WAS SPECIFICALLY RESERVED TO THE GOVERNMENT IN PARAGRAPH 10 (B) OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS OF THE CANCELLED INVITATION.

OUR OFFICE HAS CONSISTENTLY HELD THAT, WHILE THE INTEREST OF THE GOVERNMENT AND THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM REQUIRE THAT INVITATIONS FOR BIDS BE CANCELLED ONLY FOR THE MOST COGENT AND COMPELLING REASONS, THERE NECESSARILY IS RESERVED IN THE CONTRACTING OFFICIALS A SUBSTANTIAL AMOUNT OF DISCRETION IN DETERMINING WHETHER OR NOT AN INVITATION SHOULD BE CANCELLED. OUR OFFICE, THEREFORE, WILL NOT OBJECT TO AN INVITATION CANCELLATION UNLESS THERE HAS BEEN A CLEAR ABUSE OF ADMINISTRATIVE DISCRETION. CF. 41 COMP. GEN. 76; B-162067, OCTOBER 24, 1967. WE MUST CONCLUDE THAT THERE HAS BEEN NO SUCH ABUSE OF DISCRETION HERE. IN VIEW OF THE FOREGOING, WE CONCLUDE THAT THE CANCELLATION OF THE INVITATION AND THE READVERTISEMENT OF THE PROCUREMENT IS NOT SUBJECT TO QUESTION BY OUR OFFICE.