B-165186, NOV. 7, 1968

B-165186: Nov 7, 1968

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PROTESTING AGAINST THE PROPOSED WITHDRAWAL OF TWO ITEMS WHICH WERE INCLUDED IN AN AWARD TO YOU BY THE DEPARTMENT OF THE NAVY UNDER INVITATION FOR BIDS (IFB) NO. THE CONTRACT IS NO. PRICES WERE REQUESTED ON BOTH F.O.B. EACH BIDDER WAS REQUIRED TO NAME THE LOCATION OF THE PLANT FROM WHICH SHIPMENT WOULD BE MADE. THE 24 BIDS WHICH HAD BEEN RECEIVED BY THE PROCURING ACTIVITY WERE OPENED AS SCHEDULED. WAS EVALUATED AS THE LOWEST ON SEVERAL ITEMS. THESE ITEMS WERE AWARDED TO YOU ALONG WITH OTHER ITEMS ON WHICH YOU WERE LOWEST. A REVIEW OF THE PROCUREMENT RECORDS DISCLOSED THAT AN ITEM BY ITEM BID WHICH CONDEC HAD SUBMITTED IN CONJUNCTION WITH AN ALL OR NONE BID HAD BEEN OVERLOOKED WHEN THE BIDS WERE ORIGINALLY EVALUATED.

B-165186, NOV. 7, 1968

TO THE COSMODYNE CORPORATION:

WE REFER TO YOUR LETTER OF AUGUST 30, 1968, PROTESTING AGAINST THE PROPOSED WITHDRAWAL OF TWO ITEMS WHICH WERE INCLUDED IN AN AWARD TO YOU BY THE DEPARTMENT OF THE NAVY UNDER INVITATION FOR BIDS (IFB) NO. N00156-68-B -0592, ISSUED MAY 15, 1968, BY THE NAVAL AIR ENGINEERING CENTER, PHILADELPHIA, PENNSYLVANIA. THE CONTRACT IS NO. N00156-69-C-0504, DATED JULY 12, 1968.

THE IFB SOLICITED BIDS TO FURNISH THREE DIFFERENT TYPES OF MISSILE CRADLES. IN ADDITION TO A REQUIREMENT FOR DELIVERY OF THE FIRST TWO PRODUCTION UNITS OF EACH TYPE OF CRADLE BY NOVEMBER 15, 1968, TO THE NAVAL ORDNANCE LABORATORY (NOL), SILVER SPRING, MARYLAND, THE DELIVERY SCHEDULE CALLED FOR MONTHLY SHIPMENTS OF SPECIFIED QUANTITIES OF EACH TYPE OF MISSILE DURING THE PERIOD NOVEMBER 15, 1968, THROUGH JULY 15, 1969, TO SEAL BEACH, CALIFORNIA, AND YORKTOWN, VIRGINIA. PRICES WERE REQUESTED ON BOTH F.O.B. ORIGIN AND F.O.B. DESTINATION BASES, AND EACH BIDDER WAS REQUIRED TO NAME THE LOCATION OF THE PLANT FROM WHICH SHIPMENT WOULD BE MADE, FOR THE PURPOSE OF EVALUATING F.O.B. ORIGIN BIDS.

ON JUNE 20, 1968, THE 24 BIDS WHICH HAD BEEN RECEIVED BY THE PROCURING ACTIVITY WERE OPENED AS SCHEDULED. YOUR BID SHOWING TORRANCE, CALIFORNIA, AS THE LOCATION OF YOUR PLANT, WAS EVALUATED AS THE LOWEST ON SEVERAL ITEMS, INCLUDING ITEM 1AB COVERING 2 UNITS FOR DELIVERY TO THE NOL, SILVER SPRING, AND ITEM 1AD COVERING 431 UNITS OF THE SAME CRADLE FOR DELIVERY TO YORKTOWN. ACCORDINGLY, ON JULY 12, THESE ITEMS WERE AWARDED TO YOU ALONG WITH OTHER ITEMS ON WHICH YOU WERE LOWEST.

ON JULY 24, ANOTHER BIDDER, CONSOLIDATED DIESEL ELECTRIC COMPANY (CONDEC), WHOSE BID SHOWED CHARLOTTE, NORTH CAROLINA, AS THE LOCATION OF ITS PLANT, TELEPHONED THE PROCURING ACTIVITY TO INQUIRE WHY CONDEC HAD NOT BEEN AWARDED ITEMS 1AB AND 1AD AS THE LOWEST BIDDER. A REVIEW OF THE PROCUREMENT RECORDS DISCLOSED THAT AN ITEM BY ITEM BID WHICH CONDEC HAD SUBMITTED IN CONJUNCTION WITH AN ALL OR NONE BID HAD BEEN OVERLOOKED WHEN THE BIDS WERE ORIGINALLY EVALUATED, WITH THE RESULT THAT ONLY THE ALL OR NONE BID HAD BEEN CONSIDERED. REEVALUATION OF THE BIDS DISCLOSED THAT THE CONDEC ITEM BY ITEM BID WAS LOWEST ON BOTH ITEMS 1AB AND 1AD AND THAT AWARD THEREOF SHOULD HAVE BEEN MADE TO CONDEC. ACCORDINGLY, ON JULY 25, THE CONTRACTING OFFICER ADVISED YOU BY TELEPHONE OF THE PROPOSED CANCELLATION OF THE TWO ITEMS FROM THE CONTRACT WHICH HAD BEEN AWARDED TO YOU AND FURTHER ADVISED YOU THAT TERMINATION CHARGES WOULD NOT APPLY DUE TO THE IMPROPRIETY OF THE AWARD AS WELL AS THE FACT THAT IT WAS UNLIKELY THAT YOU HAD INCURRED COSTS TO DATE. FORMAL NOTICE OF THE CANCELLATION WAS GIVEN TO YOU IN A LETTER DATED JULY 26, WHICH ALSO REQUESTED THAT YOU SIGN AND RETURN TO THE CONTRACTING OFFICER A MODIFICATION REFLECTING THE CONTRACT ADJUSTMENT.

ON JULY 30, THE PROCUREMENT FILE, INCLUDING THE CONDEC BID, FREIGHT EVALUATION SHEETS, AND BID EVALUATION CARDS, WERE MADE AVAILABLE BY THE CONTRACTING OFFICER FOR EXAMINATION BY YOUR WASHINGTON, D.C., REPRESENTATIVE, WHO WAS ALSO FURNISHED WITH A COPY OF THE CONDEC BID EVALUATION CARD. ON AUGUST 1, YOUR MANAGER FOR CONTRACT ADMINISTRATION ADVISED THE CONTRACTING OFFICER BY TELEPHONE THAT CONDEC DID NOT HAVE A PLANT OF FACILITIES IN CHARLOTTE, AS INDICATED IN ITS BID. AT THIS TIME, THE CONTRACTING OFFICER ASCERTAINED THAT CONDEC HAD LEASED A PLANT IN CHARLOTTE, WHICH HAD BEEN PREVIOUSLY USED BY ANOTHER GOVERNMENT CONTRACTOR, AND INTENDED TO USE THE PLANT FOR PERFORMANCE OF A MULTI-YEAR CONTRACT WITH THE ARMY TANK AUTOMOTIVE CENTER (ATAC); THAT ATAC HAD ALREADY CONDUCTED AN EXHAUSTIVE SURVEY OF THE PLANT; AND THAT PRODUCTION UNDER THE ATAC CONTRACT WAS NOT DUE TO COMMENCE FOR AT LEAST ONE YEAR.

WITH A VIEW TO ASCERTAINING WHETHER THERE WOULD BE A CONFLICT OF DELIVERY SCHEDULES WITH THE ATAC CONTRACT, THE NAVY CONTRACTING OFFICER REQUESTED THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR), ATLANTA, GEORGIA, TO SURVEY CONDEC'S CHARLOTTE PLANT AND TO ADVISE WHETHER, IN VIEW OF THE SHORT LEAD TIME FOR PRODUCTION ON THE NAVY PROCUREMENT, CONDEC HAD ADEQUATE CAPABILITY AT ITS CHARLOTTE PLANT FOR PRODUCTION AND SHIPMENT OF THE PROCUREMENT ITEMS.

ON AUGUST 6, THE CONTRACTING OFFICER RECEIVED A LETTER DATED AUGUST 1 FROM YOU QUESTIONING THE FREIGHT RATE WHICH THE GOVERNMENT HAD USED IN EVALUATING CONDEC'S BID AND URGING THAT CONDEC WAS NOT RESPONSIBLE SINCE IT HAD ONLY A LEASE FOR THE PLANT IN CHARLOTTE BUT HAD NOT COMMENCED PRODUCTION. YOUR LETTER ALSO QUESTIONED WHETHER CONDEC HAD FORMED THE ORGANIZATION (I.E., THE CHARLOTTE PLANT) TO SECURE THE NAVY CONTRACT.

AT THE REQUEST OF THE CONTRACTING OFFICER, THE TRANSPORTATION PERSONNEL WHO HAD SUPPLIED THE FREIGHT RATE INFORMATION USED TO EVALUATE THE CONDEC BID VERIFIED THE RATE AS CORRECT AND IDENTIFIED IT AS A SECTION 22 QUOTE (A SPECIAL RATE GRANTED TO THE UNITED STATES GOVERNMENT UNDER AUTHORITY CONTAINED IN SECTION 22 OF THE INTERSTATE COMMERCE ACT, 49 U.S.C. 22) APPEARING IN THE SOUTHERN FREIGHT ASSOCIATION QUOTE 3787.

THE PRE-AWARD SURVEY REPORT, WHICH WAS ISSUED BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES OFFICE (DCASO), BRIDGEPORT, CONNECTICUT, UNDER DATE OF AUGUST 28, 1968, COVERS THE CONDEC PLANT AT CHARLOTTE AND INCLUDES THE RESULTS OF A PREVIOUS INVESTIGATION OF CONDEC'S FACILITIES INCIDENT TO THE RECENT AWARD TO CONDEC OF NAVY CONTRACT N60921-68-C-0390 FOR THE IDENTICAL PROCUREMENT ITEMS. THE CONSOLIDATED REPORT DISCLOSES THAT CONDEC IS A DIVISION OF THE CONDEC CORPORATION, WHICH HAS PLANTS AT OLD GREENWICH, CONNECTICUT, NISKAYUNA, NEW YORK, AND CHARLOTTE; THAT CONDEC IS CURRENTLY PRODUCING THE SAME ITEMS UNDER ITS EXISTING NAVY CONTRACT; THAT THE PLANT IN CHARLOTTE IS REGARDED AS MORE THAN ADEQUATE FOR THE INSTANT PROCUREMENT; AND THAT LABOR RESOURCES AND ABILITY TO MEET THE IFB DELIVERY SCHEDULE ARE ALSO REGARDED AS SATISFACTORY. THE REPORT FURTHER DISCLOSES THAT THE CONTRACTOR PLANS TO PERFORM CONTRACT ADMINISTRATION, PURCHASING, AND MACHINING OF SELECTED SUBCOMPONENTS AT THE HEADQUARTERS IN OLD GREENWICH; TO SHIP SUCH MACHINED SUBCOMPONENTS FROM OLD GREENWICH TO NISKAYUNA FOR FOLLOW-ON PRODUCTION OPERATIONS; TO PERFORM THE BASIC FABRICATION AND ASSEMBLY OF MAJOR SUBCOMPONENTS AT NISKAYUNA; AND TO ACCOMPLISH FINAL ASSEMBLY, INSPECTION, PACKAGING AND SHIPMENT OF THE ITEMS AT CHARLOTTE AFTER RECEIPT OF THE FABRICATED AND MACHINED SUBCOMPONENTS AND PARTS FROM NISKAYUNA. THE TOOLING FOR THE CHARLOTTE PLANT WAS SCHEDULED TO BE COMPLETED BY NISKAYUNA ON OCTOBER 15, AND BASED ON A SEPTEMBER 3 AWARD, DELIVERY OF THE COMPONENT PARTS TO CHARLOTTE WAS SCHEDULED BEFORE THE END OF NOVEMBER. ACCORDINGLY, DCASO, BRIDGEPORT, AND DCASR, ATLANTA, RECOMMENDED THAT AWARD BE MADE TO CONDEC.

ON AUGUST 30, THE CONTRACTING OFFICER INFORMED YOU OF THE RESULTS OF THE PRE-AWARD SURVEY OF CONDEC AND OF THE VERIFICATION OF THE FREIGHT RATES USED IN THE EVALUATION OF THE CONDEC BID AND ADVISED YOU OF HIS INTENT TO AWARD THE TWO ITEMS TO CONDEC. HOWEVER, IN VIEW OF YOUR PROTEST OF THE SAME DATE TO OUR OFFICE, THE AWARD IS BEING HELD IN ABEYANCE PENDING OUR DECISION IN THE MATTER.

IN YOUR LETTER TO OUR OFFICE, YOU CALL ATTENTION TO THE FACT THAT CONDEC FAILED TO COMPLETE CERTAIN BOXES OR BLOCKS ON A PAGE IN THE INVITATION WHICH IS HEADED "REPRESENTATIONS, CERTIFICATIONS, AND ACKNOWLEDGMENTS.' THE PAGE IS NUMBER 2 OF STANDARD FORM 33, AND THE ITEMS INVOLVED RELATE TO SMALL BUSINESS STATUS, REGULAR DEALER MANUFACTURER STATUS, CONTINGENT FEE CERTIFICATION, TYPE OF BUSINESS ORGANIZATION, AFFILIATION AND IDENTIFYING DATA, EQUAL OPPORTUNITY CERTIFICATION, BUY AMERICAN CERTIFICATE, CERTIFICATE OF INDEPENDENT PRICE DETERMINATION, AND A SUMMARY OF AMENDMENTS TO THE IFB AND THE DATE OF ACKNOWLEDGMENT OF EACH. IN THIS CONNECTION, IT MAY BE NOTED THAT THE "INDEPENDENT PRICE DETERMINATION" ITEM DOES NOT CALL FOR THE CHECKING OF ANY INFORMATION BY THE BIDDER BUT CONSTITUTES A CERTIFICATION BY THE BIDDER, UPON SUBMISSION OF THE BID, THAT IT HAS ARRIVED AT ITS PRICE WITHOUT COLLUSION, THAT THE PRICE HAS NOT BEEN DISCLOSED PRIOR TO OPENING, AND THAT NO ATTEMPT HAS BEEN MADE TO INDUCE ANOTHER TO SUBMIT OR NOT TO SUBMIT A BID. ACCORDINGLY, ABSENT ANY EVIDENCE THAT CONDEC HAS TAKEN EXCEPTION TO THE ITEM OR TO THE RELATED PROVISION IN PARAGRAPH 18 OF STANDARD FORM 33A, CONDEC MUST BE REGARDED AS BOUND BY ITS TERMS AND NO FURTHER DISCUSSION OF THE ITEM IS REQUIRED.

THE "SMALL BUSINESS" ITEM CALLS FOR THE BIDDER TO CERTIFY WHETHER IT IS A SMALL BUSINESS CONCERN, IN WHICH EVENT CERTAIN OTHER INFORMATION IS REQUESTED IF THE BIDDER ALSO IS NOT THE MANUFACTURER OF THE SUPPLIES IT OFFERS. THIS ITEM IS OBVIOUSLY RELATED TO THE SELF CERTIFICATION PROCEDURE SET FORTH IN 13 CFR 121.3-8 AND ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-703 FOR APPLICATION TO SMALL BUSINESS SET-ASIDE PROCUREMENTS, WHEREBY THE CONTRACTING OFFICER MAY ACCEPT THE BIDDER'S REPRESENTATION THAT IT IS SMALL BUSINESS ABSENT A CHALLENGE BEFORE AWARD. HOWEVER, IT IS TO BE NOTED THAT WHILE ASPR 1-703 PROVIDES THAT NO BIDDER OR OFFEROR SHALL BE ELIGIBLE FOR AWARD AS A SMALL BUSINESS CONCERN UNLESS IT HAS IN GOOD FAITH REPRESENTED ITSELF AS SMALL BUSINESS PRIOR TO THE OPENING OF BIDS OR CLOSING DATE FOR SUBMISSION OF OFFERS, SUCH PROVISION IS FOLLOWED BY A PARENTHETICAL REFERENCE TO ASPR 2-405CONCERNING MINOR INFORMALITIES AND IRREGULARITIES IN BIDS, THUS INDICATING THAT THE ABSENCE OF THE REPRESENTATION FROM A BID MAY BE CURED BY THE BIDDER PRIOR TO AWARD. THE PROCUREMENT IN QUESTION WAS NOT SET ASIDE, EITHER WHOLLY OR PARTIALLY, FOR AWARD TO SMALL BUSINESS; THEREFORE, THE SIZE OF CONDEC, WHO IS KNOWN TO BE A MANUFACTURER OF THE ITEMS IT OFFERS, WOULD BE PERTINENT ONLY IF THERE WERE RECEIVED OTHER EQUAL LOW BIDS ON ITEMS 1AB AND 1AD, IN WHICH CASE A SMALL BUSINESS BIDDER WOULD BE FIRST IN LINE FOR AWARD UNDER THE TERMS OF ASPR 2-407.6. SUCH IS NOT THE CASE HERE. CONDEC IS THE SOLE LOW BIDDER ON THE TWO ITEMS, AND ITS SIZE THEREFORE IS NOT FOR CONSIDERATION IN CONNECTION WITH THE AWARD OF THE ITEMS. IN ANY EVENT, THE CONTRACTING OFFICER'S STATEMENT IN THE PRE AWARD SURVEY REQUEST OF AUGUST 5 THAT CONDEC REPRESENTS THAT IT IS NOT SMALL BUSINESS (BLOCK 4 OF DD FORM 1524) EVIDENCES THAT THE GOVERNMENT HAS THE INFORMATION ENCOMPASSED BY THE SMALL BUSINESS ITEM.

THE "REGULAR DEALER OR MANUFACTURER" ITEM CALLS FOR THE BIDDER TO CHECK WHETHER HE IS A REGULAR DEALER IN, OR A MANUFACTURER OF, THE SUPPLIES OFFERED. ASPR 12-603, RELATING TO DETERMINATIONS OF ELIGIBILITY AS MANUFACTURER OR REGULAR DEALER, PROVIDES THAT QUALIFICATION AS A REGULAR DEALER OR MANUFACTURER MUST BE ESTABLISHED BEFORE AWARD. PURSUANT TO SUCH PROVISIONS, CONDEC COULD PROPERLY BE PERMITTED TO SUPPLY THE REQUESTED INFORMATION UP TO THE TIME OF AWARD. IT SHOULD BE OBSERVED, HOWEVER, THAT UNDER THE CLAUSE PRESCRIBED BY ASPR 12-605, ENTITLED "WALSH-HEALEY PUBLIC CONTRACTS ACT (JAN. 1958)" , WHICH IS INCORPORATED IN THE IFB, ALL OF THE REPRESENTATIONS AND STIPULATIONS REQUIRED BY THE ACT, INCLUDING THE REGULAR DEALER OR MANUFACTURER REPRESENTATION, ARE INCORPORATED IN THE BID AND CONTRACT.

THE "TYPE OF BUSINESS ORGANIZATION" ITEM CALLS FOR AN INDICATION BY THE BIDDER AS TO WHETHER HE OPERATES AS AN INDIVIDUAL, A PARTNERSHIP, A NONPROFIT ORGANIZATION, OR A CORPORATION. CLEARLY, THIS INFORMATION DOES NOT RELATE TO THE RESPONSIVENESS OF THE BID BUT TO THE QUALIFICATIONS OF THE BIDDER. THEREFORE, AS WITH OTHER INFORMATION WHICH RELATES TO THE MATTER OF RESPONSIBILITY, IT MAY BE FURNISHED UP TO THE TIME OF AWARD. SEE B-164852, SEPTEMBER 25, 1968, 48 COMP. GEN. --, AND DECISIONS CITED THEREIN.

THE "EQUAL OPPORTUNITY" ITEM SOLICITS INFORMATION FROM THE BIDDER REGARDING ITS PARTICIPATION IN PREVIOUS CONTRACTS OR SUBCONTRACTS SUBJECT TO THE EQUAL OPPORTUNITY CLAUSE WHICH IS INCLUDED IN THE IFB (THE CLAUSE PRESCRIBED BY ASPR 12-802 (A) ( OR THE CLAUSES PRESCRIBED BY EXECUTIVE ORDER 10925 OR EXECUTIVE ORDER 11114, TOGETHER WITH INFORMATION REGARDING THE FILING OF REQUIRED COMPLIANCE REPORTS. SINCE THIS INFORMATION LIKEWISE RELATES TO THE BIDDER'S QUALIFICATIONS AS A RESPONSIBLE PROSPECTIVE CONTRACTOR, IT MAY BE FURNISHED UP TO THE TIME OF AWARD. MOREOVER, IT IS TO BE NOTED THAT UNDER THE PROVISIONS OF THE EQUAL OPPORTUNITY CLAUSE PRESCRIBED BY ASPR 12-802 (A), WHICH IS INCORPORATED IN THE IFB, THE BIDDER AGREES NOT TO PRACTICE DISCRIMINATION IN EMPLOYMENT IN PERFORMING THE CONTRACT.

AS FOR THE "CONTINGENT FEE" ITEM, YOUR ATTENTION IS DIRECTED TO ASPR 1- 508.1 (C) TO THE EFFECT THAT FAILURE OF A PROPOSED CONTRACTOR TO FURNISH SUCH REPRESENTATION IS A MINOR INFORMALITY WHICH MAY BE CURED PRIOR TO AWARD. SEE B-149318, AUGUST 31, 1962, AND B-148548, APRIL 17, 1962, TO THE SAME EFFECT. FURTHER, YOUR ATTENTION IS ALSO DIRECTED TO THE FACT THAT THE CONVENANT AGAINST CONTINGENT FEES, PRESCRIBED BY ASPR 7-103.20, IS SPECIFICALLY INCORPORATED IN THE IFB. CONCERNING THE "AFFILIATION AND IDENTIFYING DATA" ITEM, YOU ARE ADVISED THAT ASPR 2-405 (V) CITES THE FAILURE OF A BIDDER TO FURNISH A REQUIRED AFFIDAVIT CONCERNING AFFILIATES AS AN EXAMPLE OF A MINOR IRREGULARITY OR INFORMALITY IN BID THAT MAY BE WAIVED. 39 COMP. GEN. 881 AND B-147943, MARCH 23, 1962, ARE TO THE SAME EFFECT. HERE AGAIN, HOWEVER, IT SHOULD BE NOTED THAT CONDEC'S STATUS AS A DIVISION OF THE CONDEC CORPORATION IS REFLECTED IN THE PRE-AWARD SURVEY REQUEST OF AUGUST 5, 1968.

THE "BUY AMERICAN" ITEM CONSTITUTES A CERTIFICATION BY THE BIDDER THAT EACH END PRODUCT, EXCEPT AS NOTED BY THE BIDDER UNDER THE ITEM, IS A DOMESTIC SOURCE ITEM AND THAT COMPONENTS OF UNKNOWN ORIGIN HAVE BEEN CONSIDERED TO HAVE BEEN MINED, PRODUCED, OR MANUFACTURED OUTSIDE THE UNITED STATES. IN ADDITION, THE BUY AMERICAN CLAUSE PRESCRIBED BY ASPR 6- 104.5, WHEREBY THE BIDDER AGREES TO DELIVER ONLY DOMESTIC END PRODUCTS WITH CERTAIN EXCEPTIONS NOT APPLICABLE HERE, IS INCORPORATED IN THE IFB. IN SUCH CIRCUMSTANCES, WE HAVE HELD THAT ABSENT ANY REPRESENTATION IN THIS ITEM THAT THE BIDDER INTENDED TO OFFER FOREIGN END PRODUCTS, THE BIDDER, UPON ACCEPTANCE OF ITS BID, WOULD BE BOUND TO FURNISH DOMESTIC END PRODUCTS AS FIXED UNDER THE BUY AMERICAN CLAUSE INCLUDED IN THE INVITATION. B-163550, MAY 3, 1968, 47 COMP. GEN. ---.

AS FOR THE IFB AMENDMENTS ITEM, IT IS TO BE NOTED THAT EACH AMENDMENT (STANDARD FORM 30) CARRIED A NOTATION TO THE EFFECT THAT EACH OFFEROR SHOULD SIGN AND RETURN TO THE PROCUREMENT ACTIVITY TWO COPIES. YOU DO NOT ALLEGE, AND WE HAVE NO REASON TO BELIEVE, THAT CONDEC DID NOT COMPLY WITH THIS INSTRUCTION AS TO EACH AMENDMENT TO THE IFB. IN THE CIRCUMSTANCES, CONDEC'S FAILURE TO TABULATE THE AMENDMENT INFORMATION ON PAGE 2 OF STANDARD FORM 33 MAY ALSO BE REGARDED AS A MINOR INFORMALITY OR IRREGULARITY IN ITS BID WHICH MAY BE WAIVED PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2 405.

YOUR LETTER ALSO REPEATS THE ASSERTION WHICH YOU MADE TO THE CONTRACTING OFFICER; I.E., CONDEC'S OPERATIONS (THE CHARLOTTE PLANT) ARE BEING PERFORMED TO SECURE THIS PARTICULAR CONTRACT, AND IN VIEW OF THE URGENT NEED FOR THE PROCUREMENT ITEMS CONDEC CANNOT MEET THE SHORT LEAD TIME. THIS CONNECTION, YOU CITE OUR UNPUBLISHED DECISION B 161955, SEPTEMBER 28, 1967. THAT DECISION CONCERNED A LOW OFFEROR ON THE SMALL BUSINESS SET- ASIDE PORTION OF AN ADVERTISED PROCUREMENT, WHO WAS DETERMINED TO BE LACKING IN FINANCIAL CAPABILITY AS WELL AS PRODUCTIVE CAPACITY, AND THE PREAWARD SURVEY SHOWED THAT THE OFFEROR HAD NEITHER A PLANT NOR EQUIPMENT AT THE DESIGNATED PLACE OF PERFORMANCE. FURTHER, THE URGENCY OF THE PROCUREMENT NEED WOULD NOT ALLOW FOR THE 60-DAY PERIOD NECESSARY TO START PRODUCTION. IN THE INSTANT CASE, THERE IS NO QUESTION OF FINANCIAL INCAPACITY, AND THE PRE-AWARD SURVEY, WHICH THE CONTRACTING OFFICER IS REQUIRED BY ASPR 1 905.4 (A) TO USE IN DETERMINING CONDEC'S RESPONSIBILITY, AFFIRMATIVELY STATES THAT CONDEC HAS THE ABILITY TO MEET THE REQUIRED DELIVERY SCHEDULE BY COMPLETING PERFORMANCE OF THE CONTRACT AT ITS PLANT IN CHARLOTTE AND THE PLANT WAS LEASED ORIGINALLY TO PERFORM ANOTHER GOVERNMENT CONTRACT. IN THE CIRCUMSTANCES, THE NEWNESS OF CONDEC'S CHARLOTTE PLANT DOES NOT APPEAR TO ADVERSELY AFFECT CONDEC'S CAPABILITY AND THEREFORE MAY NOT BE ACCORDED ANY PARTICULAR SIGNIFICANCE.

FINALLY, YOU URGE THAT SINCE YOU ACCEPTED THE AWARD IN GOOD FAITH, THERE IS A VALID AND BINDING CONTRACT BETWEEN YOU AND THE GOVERNMENT AND THEREFORE THE REDUCTION OF THE SCOPE OF THE CONTRACT SHOULD BE ACCOMPLISHED UNDER THE CHANGES ARTICLE, THUS PERMITTING YOU TO SUBMIT A TERMINATION CLAIM FOR CHARGES RESULTING FROM THE CHANGE IN SCOPE. FURTHER, YOU ASSERT THAT THE GOVERNMENT SHOULD ACCEPT YOUR ESTIMATE OF THE TERMINATION CHARGES FOR THE PURPOSE OF AN "OFFSET" IN THE EVALUATION OF BIDS AND FOR CONSIDERATION IN THE EVENT OUR DECISION SUSTAINS THE ACTION PROPOSED BY THE CONTRACTING OFFICER.

UNDER 10 U.S.C. 2305 (C), THE ADVERTISING STATUTE APPLICABLE TO THE PROCUREMENT IN QUESTION, AWARD IS REQUIRED TO BE MADE TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED. PARAGRAPH 10/A), STANDARD FORM 33A, SOLICITATION INSTRUCTIONS AND CONDITIONS, INCORPORATED IN THE IFB, IS TO THE SAME EFFECT.

OUR OFFICE HAS HELD THAT SUCH PROVISIONS REQUIRE THAT AWARD, IF ANY, BE MADE TO THE LOW BIDDER, WITH CERTAIN EXCEPTIONS NOT APPLICABLE HERE, AND THAT AN AWARD OF A CONTRACT BY A GOVERNMENT AGENCY CONTRARY THERETO IS A NULLITY AND CONFERS NO RIGHTS ON THE CONTRACTOR AGAINST THE UNITED STATES. THEREFORE, EVEN WHEN THE FAILURE TO MAKE AWARD TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER HAS BEEN OCCASIONED BY A MISTAKE ON THE PART OF THE GOVERNMENT, WE HAVE HELD THAT ADMINISTRATIVE OFFICERS USUALLY ARE REQUIRED TO CANCEL THE CONTRACT, PARTICULARLY IF SUCH MAY BE DONE WITHOUT JEOPARDIZING THE INTEREST OF THE UNITED STATES. SEE B-148569, APRIL 10, 1962; B-149795, NOVEMBER 6, 1962, AND COURT CASES AND DECISIONS OF OUR OFFICE THEREIN CITED.

THERE IS ALSO FOR CONSIDERATION SECTION 523 OF THE DEPARTMENT OF DEFENSE APPROPRIATION ACT FOR THE FISCAL YEAR 1969, PUBLIC LAW 90-580, OCTOBER 17, 1968, 82 STAT. 1120, 1133, WHICH INCLUDES A PROVISION TO THE EFFECT THAT INSOFAR AS IS PRACTICABLE ALL CONTRACTS SHALL BE AWARDED ON A FORMALLY ADVERTISED COMPETITIVE BID BASIS TO THE LOWEST RESPONSIBLE BIDDER.

THE RECORD ESTABLISHES THAT YOU WERE NOT THE LOWEST BIDDER ON ITEMS 1AB AND 1AD. ACCORDINGLY, THE AWARD OF SUCH ITEMS TO YOU WAS CONTRARY TO THE STATUTORY PROVISIONS CITED AND CREATED NO BINDING CONTRACT THEREFOR. SUCH CIRCUMSTANCES, THE PARTIAL TERMINATION OF THE CONTRACT WAS NOT FOR THE CONVENIENCE OF THE GOVERNMENT, AND NO ALLOWANCE TO YOU OF TERMINATION CHARGES MAY BE AUTHORIZED. B-154530, JULY 15, 1964. NOR DOES IT APPEAR THAT RECOVERY MAY BE HAD BY YOU ON A QUANTUM VALEBANT BASIS, FOR SUCH REMEDY IS APPROPRIATE ONLY WHERE ONE PARTY TO A TRANSACTION HAS RECEIVED AND RETAINED TANGIBLE BENEFITS, AND NO BENEFITS ARE SHOWN TO HAVE PASSED TO THE UNITED STATES FROM YOU FOR THE TWO ITEMS IN QUESTION. UNITED STATES V MISSISSIPPI VALLEY GENERATING CO. (1961), 364 U.S. 520, 566.

WHILE IT IS UNFORTUNATE THAT THE CONDEC ITEM BY ITEM BID WAS OVERLOOKED IN THE INITIAL EVALUATION OF THE BIDS, NEVERTHELESS CANCELLATION OF THE AWARD TO YOU OF THE TWO ITEMS IN QUESTION IS LEGALLY REQUIRED. IN THE CIRCUMSTANCES, THE CONTRACTING OFFICER'S ACTION IN CANCELLING THE ITEMS FROM YOUR CONTRACT IS PROPER, AND WE SEE NO LEGAL BASIS FOR OBJECTION TO THE AWARD OF SUCH ITEMS TO CONDEC, WHO APPEARS TO BE RESPONSIBLE AS WELL AS RESPONSIVE. YOUR PROTEST IS THEREFORE DENIED.