B-168216, JAN. 14, 1970

B-168216: Jan 14, 1970

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CANCELLATION OF AN INVITATION AFTER OPENING WHEN IT WAS DISCOVERED THAT THE WRONG MODEL HAD BEEN DISPLAYED FOR POTENTIAL BIDDERS WAS PROPER. TO AUDIO SEARS CORPORATION: REFERENCE IS MADE TO YOUR TELEGRAM DATED OCTOBER 24. AN AMENDMENT TO THE REQUIREMENT WAS RECEIVED INCREASING THE QUANTITY TO 4500 EACH AND TOTAL ESTIMATED DOLLAR VALUE TO $166. AN IFB WAS ISSUED ON SEPTEMBER 15. THE SOLICITATION STATED THAT A PROCUREMENT MODEL WAS ON DISPLAY FOR INSPECTION AT FORT MONMOUTH. FOUR BIDS WERE RECEIVED. YOUR BID IN THE RANGE B (4500 TO 6749 UNITS) WAS THE LOWEST SUBMITTED. THE SECOND LOW BID WAS SUBSTANTIALLY HIGHER. WAS ADVISED BY THE CHIEF. IT WAS ALSO STATED: "3. THIS MODEL WAS FROM THE INITIAL PRODUCTION OF HEADSET MICROPHONE H- 182/PT.

B-168216, JAN. 14, 1970

BID PROTEST--CANCELLATION AND READVERTISEMENT DECISION TO AUDIO SEARS CORPORATION DENYING PROTEST AGAINST CANCELLATION OF INVITATION FOR FURNISHING HEADSET MICROPHONES TO ARMY ELECTRONICS COMMAND. CANCELLATION OF AN INVITATION AFTER OPENING WHEN IT WAS DISCOVERED THAT THE WRONG MODEL HAD BEEN DISPLAYED FOR POTENTIAL BIDDERS WAS PROPER. AWARD TO LOW BIDDER WITH ADDITIONAL COSTS RELATING TO CHANGES DESIRED BY GOVERNMENT WOULD BE UNFAIR TO OTHER BIDDERS AS WELL AS CONTRARY TO THE RULE THAT THE SPECIFICATIONS ADVERTISED MUST BE THOSE CONTEMPLATED TO BE USED FOR THE WORK.

TO AUDIO SEARS CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM DATED OCTOBER 24, 1969, AND YOUR LETTER DATED NOVEMBER 26, 1969, PROTESTING THE CANCELLATION OF INVITATION FOR BIDS (IFB) NO. DAAB05-70-B-0076 ISSUED BY THE UNITED STATES ARMY ELECTRONICS COMMAND, PHILADELPHIA, PENNSYLVANIA, WITH BID OPENING DATE OF OCTOBER 6, 1969, FOR HEADSET-MICROPHONES, H-182/PT.

THE U.S. ARMY ELECTRONICS COMMAND RECEIVED A REQUIREMENT FOR 2700 HEADSET -MICROPHONE TYPE NO. H-182/PT. THIS REQUIREMENT CARRIED AN UMMIPS PRIORITY 15 WITH AN ESTIMATED DOLLAR VALUE OF $99,954.00. AN AMENDMENT TO THE REQUIREMENT WAS RECEIVED INCREASING THE QUANTITY TO 4500 EACH AND TOTAL ESTIMATED DOLLAR VALUE TO $166,590.00.

AN IFB WAS ISSUED ON SEPTEMBER 15, 1969, WITH AN OPENING DATE OF OCTOBER 6, 1969. THE IFB, A 100 PERCENT SET-ASIDE FOR SMALL BUSINESS, SOLICITED BIDS IN SEVERAL RANGE QUANTITIES, AND HAD A FIRST ARTICLE APPROVAL REQUIREMENT WITH A POSSIBLE WAIVER. THE SOLICITATION STATED THAT A PROCUREMENT MODEL WAS ON DISPLAY FOR INSPECTION AT FORT MONMOUTH, NEW JERSEY, UP TO THE DATE OF BID OPENING.

FOUR BIDS WERE RECEIVED. YOUR BID IN THE RANGE B (4500 TO 6749 UNITS) WAS THE LOWEST SUBMITTED. THE SECOND LOW BID WAS SUBSTANTIALLY HIGHER.

BY MEMORANDUM DATED OCTOBER 15, 1969, THE CHIEF, PHILADELPHIA PROCUREMENT DIVISION, WAS ADVISED BY THE CHIEF, ENGINEERING OPERATIONS, FORT MONMOUTH, THAT THE WRONG MODEL HAD BEEN DISPLAYED FOR THIS SOLICITATION. IT WAS ALSO STATED:

"3. THIS MODEL WAS FROM THE INITIAL PRODUCTION OF HEADSET MICROPHONE H- 182/PT. LATER PRODUCTION RUNS OF THIS EQUIPMENT CONTAINED A SIGNIFICANT IMPROVEMENT OF THE MICROPHONE ELEMENT. THIS IMPROVEMENT IS DESIRED IN THE SUBJECT SOLICITATION.

"4. EFFECTING THIS CHANGE BY CONTRACT MODIFICATION COULD RESULTIN ADDITIONAL COSTS TO THE GOVERNMENT.

"5. BASED ON THE ABOVE, IT IS RECOMMENDED THAT THE REFERENCED SOLICITATION BE CANCELLED."

THE ADMINISTRATIVE REPORT INDICATES THAT THE PRODUCTION ENGINEER IN CHARGE OF THE ITEM WAS ON OFFICIAL LEAVE, AWAY FROM HIS OFFICE, WHEN HIS ASSISTANT SHOWED THE MODEL TO PROSPECTIVE BIDDERS. THE TWO MODELS AS ASSEMBLED ARE IDENTICAL TO THE EYE BUT WHEN THE CAP IS REMOVED IT IS OBVIOUS THAT THE MICROPHONE ELEMENTS ARE DIFFERENT. THE MICROPHONE DISPLAYED DID NOT CONTAIN THE IMPROVED ELEMENT WITH A MACHINED, AS OPPOSED TO STAMPED, FRAME PROVIDING STABLE CONSTRUCTION. THE NEW ELEMENT ALSO REPRESENTS IMPROVEMENT IN THE PLATING AND FINISH REQUIREMENTS OF THE CARBON CHAMBER.

FOR THE REASONS STATED ABOVE THE SOLICITATION WAS CANCELLED BY TWX OF OCTOBER 22, 1969, SENT BY THE CONTRACTING AGENCY TO EACH BIDDER.

YOU CONTEND THAT AS LOW BIDDER YOU ARE ENTITLED TO AWARD AND THAT THE CANCELLATION OF THE INVITATION WAS ARBITRARY ON THE PART OF THE CONTRACTING OFFICER SINCE THE REASON CITED RELATES TO A RELATIVELY UNIMPORTANT PART OF THE SOLICITATION. YOU ALSO CONTEND THAT PRODUCTION DRAWINGS WERE AVAILABLE TO THE GOVERNMENT AT THE TIME OF ISSUANCE OF THE INVITATION FOR BIDS, BUT THAT THEY WERE IGNORED AND A PROTOTYPE MODEL WAS CALLED FOR TO THE ADVANTAGE OF A COMPETING BIDDER. YOU STATE THAT THE PROTOTYPE EXHIBITED CONTAINED A MICROPHONE OF YOUR MANUFACTURE WHICH HAD BEEN TIME-TESTED AND WAS IN NO WAY "DEFECTIVE." IN CONCLUSION IT IS ASSERTED THAT AWARD SHOULD BE MADE TO YOUR FIRM AS THE LOWEST QUALIFIED BIDDER WITH ANY ADDITIONAL COSTS RELATING TO CHANGES DESIRED BY THE GOVERNMENT SUBJECT TO LATER NEGOTIATION.

THE RIGHT TO REJECT ALL BIDS IS RESERVED TO THE GOVERNMENT UNDER PARAGRAPH 10(B) OF STANDARD FORM 33A, WHICH IS PART OF THE SOLICITATION. IN ADDITION, THE HEAD OF THE AGENCY IS GIVEN THE RIGHT UNDER 10 U.S.C. 2305 (C) TO REJECT ALL BIDS WHEN HE DEEMS THAT ACTION TO BE IN THE PUBLIC INTEREST. ALSO, IT HAS LONG BEEN HELD THAT THE ADVERTISING STATUTE WAS ENACTED FOR THE PROTECTION OF THE GOVERNMENT AND THE ISSUANCE OF AN INVITATION FOR BIDS DOES NOT CARRY WITH IT A LEGAL OBLIGATION TO ACCEPT ANY OF THE BIDS RECEIVED. 37 COMP. GEN. 760 (1958).

CONTRACTING OFFICERS ARE CLOTHED WITH BROAD POWERS OF DISCRETION IN DECIDING WHETHER AN INVITATION FOR BIDS SHOULD OR SHOULD NOT BE CANCELLED AND OUR OFFICE WILL NOT INTERFERE WITH SUCH A DETERMINATION UNLESS IT IS ARBITRARY OR CAPRICIOUS OR NOT BASED ON SUBSTANTIAL EVIDENCE. 36 COMP. GEN. 62 (1956).

IN THE PRESENT MATTER THE SCHEDULE AND SPECIFICATIONS REQUIRED THE FURNISHING OF A HEADSET-MICROPHONE H-182/PT "IN ACCORDANCE WITH MODEL" AND CERTAIN MILITARY SPECIFICATIONS. THE MODEL EXHIBITED TO PROSPECTIVE BIDDERS WAS NOT THE ONE THE GOVERNMENT INTENDED TO OBTAIN. HENCE, IF AN AWARD HAD BEEN MADE ON THE ORIGINAL SOLICITATION THE ITEM PRODUCED WOULD NOT BE THE ITEM DESIRED BY THE GOVERNMENT. YOUR SUGGESTION THAT THE GOVERNMENT COULD HAVE ISSUED MODIFICATIONS AFTER AWARD IN ORDER TO OBTAIN THE ITEM DESIRED CLEARLY INDICATES THAT IF AWARDED THE CONTRACT YOU WOULD FEEL BOUND TO FURNISH THE DISPLAY ITEM UNLESS A CHANGE ORDER WAS ISSUED CALLING FOR THE IMPROVED ITEM. SUCH PROCEDURE WOULD NOT ONLY BE UNFAIR TO OTHER BIDDERS WHO MAY HAVE BID ON THE BASIS OF THE DISPLAY MODEL BUT WOULD ALSO BE CONTRARY TO THE RULE THAT THE SPECIFICATIONS ADVERTISED MUST BE THOSE CONTEMPLATED TO BE USED IN THE WORK. SEE 41 COMP. GEN. 593, 595 (1962).

THE RECORD DOES NOT SHOW THAT THE CONTRACTING OFFICER ACTED IN AN ARBITRARY OR CAPRICIOUS MANNER OR THAT THERE WAS NOT SUBSTANTIAL EVIDENCE TO SUPPORT HIS ACTION. ON THE CONTRARY, UPON THE DISCOVERY OF THE EXHIBITION OF THE WRONG MODEL AND THE AVAILABILITY OF COMPLETE DRAWINGS, HIS ACTION WAS THE ONLY FAIR AND PROPER ACTION THAT COULD BE TAKEN.

IN THE CIRCUMSTANCES WE FIND THAT CANCELLATION OF THE INVITATION WAS A REASONABLE AND PROPER EXERCISE OF ADMINISTRATIVE DISCRETION.