B-169342, B-169351, B-169503, JUN. 19, 1970

B-169342,B-169351,B-169503: Jun 19, 1970

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CANCELLATION OF SOLICITATIONS SUBSEQUENT TO BID OPENING IS NOT ONLY PROPER. AS IN BEST INTEREST OF GOVERNMENT SINCE SUPPLIES ARE NO LONGER NEEDED. GAO WILL NOT OBJECT TO CANCELLATION OF INVITATION UNLESS THERE HAS BEEN CLEAR SHOWING OF ABUSE OF CONTRACTING OFFICER'S DISCRETION. CONTRACTING OFFICER'S REJECTION OF ALL BIDS AND CANCELLATION OF SOLICITATIONS WAS PROPER EXERCISE OF DISCRETION. NOTWITHSTANDING PROCUREMENTS HAD ADVANCED TO POINT WHERE LOW RESPONSIVE BIDDER WAS BENEFICIARY OF CERTIFICATES OF COMPETENCY FROM SMALL BUSINESS ADMINISTRATION. GAO QUESTIONS WHETHER IT WAS PROPER TO ISSUE -0571 IN FIRST PLACE SINCE. EXERCISE OF 50 PERCENT OPTION IN -0013 WOULD HAVE MET USING ACTIVITY'S REQUIREMENTS FOR 8200 ADDITIONAL UNITS.

B-169342, B-169351, B-169503, JUN. 19, 1970

BIDS--DISCARDING ALL BIDS--ADMINISTRATIVE DETERMINATION--BEST INTEREST OF GOVERNMENT WHERE USING ACTIVITY WITHDREW PURCHASE REQUESTS FOR ITEMS COVERED BY 3 SOLICITATIONS, CANCELLATION OF SOLICITATIONS SUBSEQUENT TO BID OPENING IS NOT ONLY PROPER, BUT REQUIRED, AS IN BEST INTEREST OF GOVERNMENT SINCE SUPPLIES ARE NO LONGER NEEDED. GAO WILL NOT OBJECT TO CANCELLATION OF INVITATION UNLESS THERE HAS BEEN CLEAR SHOWING OF ABUSE OF CONTRACTING OFFICER'S DISCRETION. CONTRACTING OFFICER'S REJECTION OF ALL BIDS AND CANCELLATION OF SOLICITATIONS WAS PROPER EXERCISE OF DISCRETION, NOTWITHSTANDING PROCUREMENTS HAD ADVANCED TO POINT WHERE LOW RESPONSIVE BIDDER WAS BENEFICIARY OF CERTIFICATES OF COMPETENCY FROM SMALL BUSINESS ADMINISTRATION. CONTRACTS--EVALUATION--OPTIONS- ADVANTAGEOUS TO GOVERNMENT SOLICITATION -0013, COVERING 16,400 UNITS, CONTAINED OPTION NOT TO EXCEED 50 PERCENT (8200). SUBSEQUENTLY CONTRACTING OFFICER REQUESTED APPROVAL TO ISSUE SEPARATE SOLICITATION FOR 8200 ADDITIONAL UNITS (SOLICITATION - 0571). NOTWITHSTANDING CONTRACTING OFFICER'S WIDE DISCRETION, GAO QUESTIONS WHETHER IT WAS PROPER TO ISSUE -0571 IN FIRST PLACE SINCE, ABSENT URGENT REQUEST FOR IMMEDIATE AWARD, EXERCISE OF 50 PERCENT OPTION IN -0013 WOULD HAVE MET USING ACTIVITY'S REQUIREMENTS FOR 8200 ADDITIONAL UNITS. BIDS--DISCARDING ALL BIDS--NOTICE WHERE EXPIRATION DATE OF ALL BIDS, EXCEPT ONE, PASSED WITHOUT EXTENSION AND ONLY ACCEPTABLE BID WAS EXCESSIVE, SOLICITATION WAS CANCELED PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION, WHICH REQUIRES REJECTION OF BIDS THAT ARE UNREASONABLE AS TO PRICE. LOW BIDDER CONTENDS HE RECEIVED NO WRITTEN EXPLANATION FOR CANCELLATION ALTHOUGH RECEIPT OF ORAL ADVICE IS CONCEDED. WHILE ASPR 2-404.3 REQUIRES THAT CONTRACTING OFFICER NOTIFY EACH BIDDER OF THE REASON FOR REJECTION OF ALL BIDS, GAO HAS HELD THAT FAILURE TO FULLY COMPLY WITH ASPR NOTICE REQUIREMENT IS NOT SUBSTANTIAL REASON TO QUESTION CANCELLATION PROPRIETY SINCE SUCH NOTICE IS ADMINISTRATIVE MATTER. SEE B-168972, APR. 14, 1970. BIDDERS-- QUALIFICATIONS--PREAWARD SURVEYS- PERFORMANCE RECORD UNSATISFACTORY PROTESTANT, LOW RESPONSIVE BIDDER AND BENEFICIARY OF CERTIFICATES OF COMPETENCY ISSUED BY SMALL BUSINESS ADMINISTRATION, MAINTAINS ARSENAL COMPROMISED COMPETITIVE BIDDING SYSTEM BY CANCELING 3 SOLICITATIONS TO PROTESTANT'S PREJUDICE. CONTRACTING OFFICER IS NOT REQUIRED TO ACCEPT AFFIRMATIVE DETERMINATIONS OF PROSPECTIVE CONTRACTOR'S RESPONSIBILITY BY PREAWARD SURVEY TEAMS WHEN HE HAS DATA TO CONTRARY AND HE DID NOT ABUSE DISCRETION IN ORDERING ADDITIONAL PREAWARD SURVEYS IN FACE OF OBJECTIONS FROM SMALL BUSINESS ADMINISTRATION SINCE RECORD REFLECTS HISTORY OF UNSATISFACTORY DELIVERY PERFORMANCE AND, IN ONE INSTANCE, INABILITY TO DEMONSTRATE EFFECTIVE MANUFACTURE OF DESIRED ITEMS. SEE COMP. GEN. DECS. CITED. BIDS--ACCEPTANCE TIME LIMITATION--EXTENSION AFTER EXPIRATION UNDER SOLICITATION -0136 CONTRACTING OFFICER RECEIVED BID ACCEPTANCE EXTENSION FROM ALL BUT ONE BIDDER. AFTER BID ACCEPTANCE DATE ON ALL BUT ONE EXPIRED, CONTRACTING OFFICER CANCELED SOLICITATION SINCE ONLY ACCEPTABLE BID WAS EXCESSIVE. LOW BIDDER PROTESTS CANCELLATION AND ARMY PROPOSES TO DIRECT ARSENAL TO REQUEST THAT PROTESTANT AND OTHER LOW BIDDERS REINSTATE BIDS AND WAIVE EXPIRATION OF BID ACCEPTANCE PERIODS SINCE INADVERTENT EXPIRATION OF BIDS IS NOT COMPELLING REASON UNDER ARMED SERVICES PROCUREMENT REGULATION 2-404.1 TO AUTHORIZE CANCELLATION. SUCH REQUEST WILL CONSTITUTE REINSTATEMENT OF SOLICITATION -0136, MAKING -0656 UNNECESSARY AFTER AWARD. SEE 46 COMP. GEN. 371. BIDS--COMPETITIVE SYSTEM GENERALLY--SMALL BUSINESS CONCERNS WHERE CONTRACTING OFFICER FAILED TO TAKE TIMELY ACTION EITHER TO APPEAL CERTIFICATES OF COMPETENCY ISSUED BY SMALL BUSINESS ADMINISTRATION OR TO PROCEED WITH AWARDS, COLLECTIVE EFFECT OF BEING NOT ONLY LOW RESPONSIVE BIDDER BUT ALSO BENEFICIARY OF CERTIFICATES OF COMPETENCY ISSUED BY SMALL BUSINESS ADMINISTRATION INCIDENT TO THREE SOLICITATIONS, ALL OF WHICH WERE SUBSEQUENTLY CANCELED, CAN EASILY UNDERMINE BIDDER'S CONFIDENCE IN ADMINISTRATION OF COMPETITIVE PROCUREMENT SYSTEM, AND GAO URGES THAT APPROPRIATE MEASURES BE TAKEN TO AVOID RECURRENCE. SEE COMP. GEN. DECS. CITED.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTERS FROM THE ASSISTANT GENERAL COUNSEL, FURNISHING REPORTS ON THE PROTESTS OF IMCO PRECISION PRODUCTS, INC. (IMCO), AGAINST THE AWARDS OF CONTRACTS TO ANY OTHER BIDDERS UNDER SOLICITATIONS COVERING THREE PROCUREMENTS ADMINISTERED BY THE ARMY MATERIEL COMMAND (AMC), ROCK ISLAND ARSENAL (RIA), ILLINOIS.

INITIALLY, WE DIRECT YOUR ATTENTION TO THE PROCUREMENT OF 16,400 MAGAZINE CATCHES BY RIA UNDER FORMALLY ADVERTISED SOLICITATION NO. DAAF01-70-B- 0571, ISSUED SUBSEQUENT TO THE CANCELLATION OF FORMALLY ADVERTISED SOLICITATION NO. DAAF01-70-B-0013.

WE ARE DENYING THE PROTEST UNDER SOLICITATION -0571 ON THE BASIS THAT CANCELLATION OF A SOLICITATION SUBSEQUENT TO BID OPENING IS NOT ONLY PROPER, BUT REQUIRED, AS IN THE BEST INTEREST OF THE GOVERNMENT, IF THE SUPPLIES BEING PROCURED ARE NO LONGER REQUIRED. IN THIS PROCUREMENT, THE CUMULATIVE EFFECT OF THE USING ACTIVITY'S CANCELLATION OF ITS REQUIREMENTS BY WITHDRAWAL OF ITS PURCHASE REQUESTS FOR THE ITEMS, FURNISHED A PROPER BASIS FOR CANCELLATION OF SOLICITATIONS -0013 AND 0571 BY THE CONTRACTING OFFICER.

THE CONTRACTING OFFICER'S REJECTION OF ALL BIDS AND CANCELLATION OF THE SOLICITATIONS WAS A PROPER EXERCISE OF HIS DISCRETION WHICH, WE HAVE CONSISTENTLY RECOGNIZED, IS EXTREMELY BROAD. STATED GENERALLY, WE HAVE HELD THAT, WHILE THE INTEREST OF THE GOVERNMENT AND THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM REQUIRE ON THE PART OF CONTRACTING OFFICERS THAT SOLICITATIONS BE CANCELED ONLY FOR COGENT REASONS, NECESSITY REQUIRES A RESERVATION IN THE CONTRACTING OFFICER OF A SUBSTANTIAL AMOUNT OF DISCRETION IN DETERMINING WHETHER A SOLICITATION SHOULD BE CANCELED. THEREFORE, WE WILL NOT OBJECT TO THE CANCELLATION OF AN INVITATION UNLESS THERE HAS BEEN A CLEAR SHOWING OF ABUSE OF THAT ADMINISTRATIVE DISCRETION. SEE B-169258, MAY 8, 1970, AND CASES CITED THEREIN.

IMCO WAS THE LOW RESPONSIVE BIDDER ON SOLICITATION NO. -0013 COVERING THE PURCHASE OF 16,400 UNITS. THEREAFTER, A PREAWARD SURVEY WAS CONDUCTED OF IMCO'S CAPABILITIES. HOWEVER, ON SEPTEMBER 17, 1969, RIA RECEIVED A PURCHASE REQUEST FOR AN ADDITIONAL 8,200 UNITS. IN THIS REGARD, SECTION 1, PAGES 8 AND 9 OF SOLICITATION NO. -0013, CONTAINED AN OPTION FOR INCREASED QUANTITIES NOT TO EXCEED 50 PERCENT (8,200 UNITS) OF THE SOLICITED REQUIREMENT. ACCORDINGLY, ON SEPTEMBER 17, 1969, IT WAS DETERMINED TO COMBINE THE PURCHASE REQUEST FOR THE ADDITIONAL QUANTITIES WITH THE PURCHASE REQUEST FOR THE ORIGINAL QUANTITIES AND TO EXERCISE THE OPTION AGAINST THE CONTRACT TO BE AWARDED UNDER SOLICITATION NO. -0013.

ALTHOUGH THE SMALL BUSINESS ADMINISTRATION (SBA) ISSUED A CERTIFICATE OF COMPETENCY (COC) TO IMCO ON DECEMBER 30, 1969, FOR SOLICITATION NO. 0013, THE CONTRACTING OFFICER DID NOT MAKE AN AWARD TO IMCO BUT DELIBERATED WHETHER TO APPEAL THE COC ISSUANCE IN ACCORDANCE WITH PARAGRAPH 1-705.4(G) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). ON JANUARY 12, 1970, HE REQUESTED APPROVAL TO ISSUE A SEPARATE SOLICITATION TO PROCURE THE 8,200 ADDITIONAL UNITS. UPON THE RECEIPT OF APPROVAL, SOLICITATION NO. - 0571 WAS ISSUED ON JANUARY 27, 1970, AND BID OPENING OCCURRED ON FEBRUARY 26, 1970.

IN THE INTERIM, ON FEBRUARY 6, 1970, A REPRESENTATIVE OF THE USING ACTIVITY ADVISED THE CONTRACTING OFFICER THAT RECENT SUPPLY STUDIES DICTATED A REDUCTION IN THE REQUIRED QUANTITY BY APPROXIMATELY 16,000 UNITS. SUBSEQUENT TO THE BID OPENING ON SOLICITATION NO. -0571, THE USING ACTIVITY ON MARCH 12, 1970, CANCELED ITS PURCHASE REQUEST FOR 16,400 UNITS; WHEREUPON, SOLICITATION NO. -0013 WAS CANCELED BY THE CONTRACTING OFFICER ON MARCH 18, 1970. SUBSEQUENTLY, THE USING AGENCY CANCELED ITS REQUIREMENT FOR THE 8,200 ADDITIONAL UNITS COVERED BY SOLICITATION NO. - 0571 AND ON MAY 4, 1970, THIS SOLICITATION WAS CANCELED.

ALTHOUGH A CONTRACTING OFFICER MAY HAVE WIDE DISCRETION IN SELECTING THE MANNER IN WHICH A REQUISITION DEMAND MAY BE MET, WE QUESTION WHETHER IT WAS PROPER UNDER THE CIRCUMSTANCES TO ISSUE SOLICITATION NO. -0571. THE ABSENCE OF AN URGENT REQUEST FOR IMMEDIATE AWARD BY THE USING ACTIVITY, THE DECISION TO ISSUE A SEPARATE SOLICITATION FOR THE ADDITIONAL 8,200 UNITS WAS UNWARRANTED. THE CONTRACTING OFFICER'S DECISION TO ISSUE SOLICITATION NO. -0571 DID NOT TAKE INTO ACCOUNT THAT SOLICITATION -0013 PERMITTED A 50-PERCENT OPTION WHICH, IF EXERCISED, WOULD HAVE MET THE USING ACTIVITY'S REQUIREMENTS FOR 8,200 ADDITIONAL UNITS.

THE CONTRACTING OFFICER, AFTER THE ISSUANCE OF SOLICITATION NO. 0571, BUT BEFORE BID OPENING, RECEIVED INFORMATION FROM THE USING ACTIVITY THAT THE REQUIREMENTS COULD BE REDUCED BY APPROXIMATELY 16,000 UNITS. AT THIS POINT, IT SHOULD BE NOTED THAT SOLICITATION NO. -0013 CONTAINED THE FOLLOWING PROVISION IN PARAGRAPH 10(C) OF THE INSTRUCTIONS TO BIDDERS:

"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."

THIS PARAGRAPH RESERVED TO THE GOVERNMENT THE CONTRACTUAL RIGHT TO AWARD A CONTRACT FOR A QUANTITY OF UNITS LESS THAN THAT BID UPON UNLESS THE BIDDER SPECIFIES OTHERWISE. IMCO DID NOT LIMIT OR QUALIFY ITS BID. SEE B -150197, NOVEMBER 14, 1962; AND B-166821, JULY 10, 1969. WE HAVE HELD THAT A REDUCTION IN INVITATION QUANTITY REQUIREMENTS, IN SOME CIRCUMSTANCES, DOES NOT CONSTITUTE A COGENT OR COMPELLING REASON TO CANCEL AN INVITATION FOR PURPOSES OF RESOLICITATION FOR THE REDUCED REQUIREMENTS. SEE 39 COMP. GEN. 397 (1959). IN OUR VIEW, THEREFORE, UPON RECEIPT OF THE USING ACTIVITY'S WITHDRAWAL OF THE 16,400-UNIT REQUIREMENT, SOLICITATION NO. -0571 SHOULD HAVE BEEN CANCELED AND SOLICITATION NO. - 0013 REINSTATED FOR THE PURPOSE OF MAKING AN AWARD FOR THE REDUCED QUANTITY OF 8,200 UNITS. WE REALIZE, OF COURSE, THAT THE NEED FOR THE REDUCED QUANTITY WAS ELIMINATED AT A LATER DATE. BUT WE FEEL THAT THIS UNFULFILLED PROCUREMENT ILLUSTRATES UNSOUND PRACTICES WHICH SHOULD BE AVOIDED IN THE FUTURE.

WE TURN TO IMCO'S PROTEST UNDER FORMALLY ADVERTISED SOLICITATION NO. DAAF01-70-B-0656, ISSUED SUBSEQUENT TO THE CANCELLATION OF FORMALLY ADVERTISED SOLICITATION NO. DAAF01-70-B-0136.

IMCO MAINTAINS THAT, AS THE LOW RESPONSIVE, RESPONSIBLE BIDDER ON SOLICITATION NO. -0136, IT SHOULD HAVE BEEN AWARDED A CONTRACT THEREUNDER. IMCO FURTHER MAINTAINS THAT THE SOLICITATION SHOULD NOT HAVE BEEN CANCELED AND THAT, IN ANY EVENT, IT WAS NOT FURNISHED AN EXPLANATION AS TO WHY CANCELLATION WAS DEEMED NECESSARY.

SOLICITATION NO. -0136, ISSUED ON AUGUST 26, 1969, COVERED CERTAIN QUANTITIES OF GAGE, BORE, STRAIGHTNESS, TO BE FURNISHED IN ACCORDANCE WITH U.S. ARMY DRAWING C8448202. ELEVEN BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 25, 1969, WITH UNIT PRICES AS FOLLOWS:

SERVICE SCREW COMPANY $ 1.14

IMCO PRECISION PRODUCTS, INC. 1.32

BERNER, INC. 2.35

JAY ROCK PRECISION, INC. 2.75

MECHANICAL COMPONENTS CORP. 2.89

MERCURY TOOL & MACHINE CO; INC. 3.45

ASTRODYNE, INC. 4.00

DENNISON MACHINE TOOL CO; INC. 5.48

UNITED STANDARD, INC. 7.65

DORSEY GAGE CO; INC. 10.50

GENERAL MACHINING WORKS 19.80

IMCO BECAME THE LOW RESPONSIVE BIDDER WHEN SERVICE SCREW COMPANY'S BID WAS REJECTED AS NONRESPONSIVE. ON OCTOBER 8, 1969, THE CONTRACTING OFFICER REQUESTED THAT A PREAWARD SURVEY BE PERFORMED ON IMCO BY THE DEFENSE SUPPLY AGENCY, DEFENSE CONTRACT ADMINISTRATION SERVICES DISTRICT (DCASD), GARDEN CITY, NEW YORK. THE PREAWARD SURVEY DATED OCTOBER 28, 1969, RECOMMENDED THAT NO AWARD BE MADE TO IMCO BASED ON UNSATISFACTORY RATINGS IN THE FOLLOWING AREAS: TECHNICAL CAPABILITY, PRODUCTION CAPABILITY, PURCHASING AND SUBCONTRACTING, PERFORMANCE RECORD, AND ABILITY TO MEET REQUIRED SCHEDULE.

ALL BIDS WERE SCHEDULED TO EXPIRE ON NOVEMBER 24, 1969. THEREFORE, THE CONTRACTING OFFICER REQUESTED AND RECEIVED BID ACCEPTANCE EXTENSIONS FROM ALL BIDDERS, WITH THE EXCEPTION OF UNITED STANDARD, TO DECEMBER 31, 1969. THAT BIDDER WAS GRANTED A 60-DAY EXTENSION TO JANUARY 23, 1970.

ON NOVEMBER 18, 1969, THE CONTRACTING OFFICER DETERMINED THAT IMCO WAS NONRESPONSIBLE FOR PURPOSES OF THE PROCUREMENT WITHIN THE MEANING OF ASPR 1-902 AND 1-903 BASED ON THE DCASD NEGATIVE PREAWARD SURVEY AND ITS PAST AND CURRENT PERFORMANCE RECORD ON CONTRACTS ADMINISTERED BY RIA. THEREAFTER ON NOVEMBER 19, 1969, THE CONTRACTING OFFICER TRANSMITTED HIS DOCUMENTED FINDINGS TO SBA, NEW YORK, FOR CERTIFICATE OF COMPETENCY CONSIDERATION. SBA ISSUED A COC, AND NOTIFIED RIA OF SUCH ISSUANCE BY LETTER DATED DECEMBER 19, 1969. THE ADMINISTRATIVE REPORT DISCUSSES THE CONTRACTING OFFICER'S CONSIDERATIONS SUBSEQUENT TO RECEIPT OF THE DECEMBER 19, 1969, LETTER, AS FOLLOWS:

"AFTER RECEIPT OF THE LATTER REFERENCED LETTER (FROM SBA), CONSIDERATION WAS GIVEN AS TO HOW TO PROCEED; I.E; APPEAL THE COC ISSUANCE PURSUANT TO ASPR 1-705.4(G), OR PROCEED WITH AWARD IN ACCORDANCE WITH ASPR 1- 705.4(F)(I). AN ADDED CONSIDERATION WAS WHETHER, IF THE LATTER COURSE WERE CHOSEN, IMCO WOULD HAVE TO BE QUESTIONED AS TO THE CORRECTNESS OF ITS BID BECAUSE, ALTHOUGH THE PAS MONITOR STATES THAT IMCO CONFIRMED ITS BID, THERE WERE NOT SUFFICIENT FACTS TO INDICATE THAT THIS CONFIRMATION WOULD FULFILL THE CONTRACTING OFFICER'S ERROR DETECTION DUTY'. IN ADDITION, ROCK ISLAND ARSENAL INDUSTRIAL SPECIALIST HAD PREPARED A PRICE ESTIMATE FOR SUBJECT ITEM OF $2.63 PER UNIT."

WHILE THE CONTRACTING OFFICER CONTINUED TO DELIBERATE THE PROPER COURSE OF ACTION TO TAKE, THE DECEMBER 31, 1969, BID EXPIRATION DATE OF ALL BIDS, EXCEPT THAT OF UNITED STANDARD, PASSED WITHOUT EXTENSIONS FROM THE AFFECTED BIDDERS. SUCH FAILURE TO REQUEST ADDITIONAL BID ACCEPTANCE EXTENSIONS WAS APPARENTLY THE RESULT OF AN UNINTENTIONAL OVERSIGHT. THE PASSING OF THE BID EXPIRATION DATE FOR ALL BUT ONE OF THE RESPONSIVE BIDDERS WAS DISCOVERED ON JANUARY 5, 1970. ON JANUARY 9, 1970, THE CONTRACTING OFFICER CANCELED SOLICITATION NO. -0136 BECAUSE THE ONLY SUBSISTING BID WHICH COULD BE ACCEPTED--UNITED STANDARD--WAS, IN HIS OPINION, EXCESSIVE AS TO PRICE. WE FEEL THAT THIS CANCELLATION WAS IN CONSONANCE WITH ASPR 2-404.1(VI) WHICH REQUIRES THE REJECTION OF BIDS THAT ARE UNREASONABLE AS TO PRICE.

ON MARCH 6, 1970, SOLICITATION NO. -0656 WAS ISSUED FOR THE PROCUREMENT OF THE IDENTICAL QUANTITIES OF THE ITEM SOLICITED UNDER CANCELLED SOLICITATION NO. -0136. NINE BIDS WERE RECEIVED AND OPENED ON MARCH 20, 1970, AS FOLLOWS:

ATRONIX, INC. $ 1.88

ASTRODYNE, INC. 3.75

UNITED STANDARD INDUSTRIES, INC. 4.98

HOPPE TOOL, INC. 6.70

DORSEY GAGE COMPANY, INC. 6.85

AUTOMATIC SCREW MACHINE PRODUCTS 6.92

MERCURY TOOL & MACHINE CO; INC. 8.45

GENERAL MACHINING WORKS 9.80

K-WARD COMPANY 12.32 DUE TO THE POSTAL STRIKE, IMCO'S BID WAS HAND CARRIED TO RIA ON MARCH 25, 1970, 5 DAYS AFTER BID OPENING. THE BID PACKAGE WAS RETURNED UNOPENED SINCE IT WAS CONSIDERED TO BE AN UNACCEPTABLE LATE BID.

IT IS CONTENDED THAT IMCO DID NOT RECEIVE AN EXPLANATION FOR THE CANCELLATION OF SOLICITATION NO. -0136 FROM THE CONTRACTING OFFICER, ALTHOUGH IT IS ADMITTED THAT IT WAS ORALLY ADVISED OF THE SAME. IN THIS REGARD, ASPR 2-404.3 REQUIRES THAT CONTRACTING OFFICERS NOTIFY EACH BIDDER THAT ALL BIDS HAVE BEEN REJECTED, STATING THE REASON FOR SUCH ACTION. HAVE HELD THAT THE FAILURE TO FULLY COMPLY WITH THE ASPR NOTICE REQUIREMENT IS NOT A SUBSTANTIAL REASON TO QUESTION THE PROPRIETY OF A SOLICITATION CANCELLATION, SINCE SUCH NOTICE IS PURELY AN ADMINISTRATIVE MATTER WHICH DOES NOT GO TO THE SUBSTANCE OF THE ACTION TAKEN. SEE B- 168972, APRIL 14, 1970.

AMC HAS PROPOSED TO DIRECT RIA TO REQUEST THAT IMCO AND THE NEXT SEVERAL LOW BIDDERS ON SOLICITATION NO. -0136 REINSTATE THEIR BIDS AND TO WAIVE THE EXPIRATION OF THEIR BID ACCEPTANCE PERIODS, SINCE AMC IS OF THE OPINION THAT THE INADVERTENT EXPIRATION OF BIDS IS NOT A COMPELLING REASON UNDER ASPR 2-404.1 TO AUTHORIZE CANCELLATION OF A SOLICITATION. SUCH A REQUEST WILL CONSTITUTE, IN EFFECT, A REINSTATEMENT OF SOLICITATION NO. - 0136. ALSO, AMC CONTEMPLATES THAT, IF AN AWARD IS MADE UNDER SOLICITATION NO. -0136, SOLICITATION NO. 0656 WILL BE CANCELED. WE CONCUR WITH THIS PROPOSAL SINCE IT IS IN CONSONANCE WITH DECISIONS OF OUR OFFICE. SEE 46 COMP. GEN. 371, 374 (1966); 34 ID. 535 (1955); 19 ID. 356 (1939); B- 162000, SEPTEMBER 1, 1967. IN 46 COMP. GEN; SUPRA, WE SUSTAINED AN AWARD OF A CONTRACT TO A LOW BIDDER WHO EXTENDED HIS BID ACCEPTANCE PERIOD, SUBSEQUENT TO ITS EXPIRATION, BECAUSE IT WOULD HAVE BEEN IMPROPER FOR THE CONTRACTING OFFICER TO HAVE CANCELED THE ORIGINAL INVITATION AND READVERTISED THE PROCUREMENT. WE HELD THERE THAT THE EXPIRATION OF THE LOW BIDDER'S BID ACCEPTANCE PERIOD DID NOT CONSTITUTE A "COMPELLING REASON" TO REJECT ALL BIDS. SEE ASPR 2-404.1(A) AND 2-404.1(C). IMCO MAINTAINS THAT RIA CIRCUMVENTED THE COC PROCEDURES OF SBA AND HAS COMPROMISED THE COMPETITIVE BIDDING SYSTEM. IMCO POINTS OUT THAT WHILE IT WAS THE LOW BIDDER ON THESE SOLICITATIONS AND WAS CERTIFIED TO BE COMPETENT BY SBA, THE PROCUREMENT ACTIVITY CANCELLED THE PROCUREMENTS TO ITS PREJUDICE.

AT THIS JUNCTURE, IT SHOULD BE NOTED THAT THE COC'S ISSUED ON ALL THREE INITIAL SOLICITATIONS HAVE BEEN CANCELLED BY SBA SINCE THE SOLICITATIONS HAD BEEN CANCELLED. SEE 13 CFR 124.8-15.

WE HAVE CONSISTENTLY RECOGNIZED THAT THE DETERMINATION OF THE RESPONSIBILITY OF A PROSPECTIVE CONTRACTOR FOR A PARTICULAR CONTRACT IS PRIMARILY THE FUNCTION OF THE CONTRACTING OFFICER. IN THIS REGARD, IN THE ABSENCE OF A CLEAR SHOWING OF BAD FAITH OR LACK OF A REASONABLE BASIS THEREFOR, HIS DETERMINATIONS WILL BE ACCORDED FINALITY BY OUR OFFICE. COMP. GEN. 430 (1957); 45 COMP. GEN. 4 (1965); 49 COMP. GEN. (B-166969, SEPTEMBER 2, 1969); B-169160, MAY 4, 1970. MOREOVER, WE DISCUSSED THE WIDE SCOPE OF AUTHORITY VESTED IN A CONTRACTING AREA WHEN DEALING WITH QUESTIONS OF RESPONSIBILITY, IN B 169160, SUPRA, AS FOLLOWS:

"WHETHER A BIDDER IS, OR IS NOT, CAPABLE OF PRODUCING IN ACCORDANCE WITH CONTRACT REQUIREMENTS IS A QUESTION OF FACT, AND ABSENT EVIDENCE THAT THE DETERMINATION OF A BIDDER'S CAPABILITIES WAS BASED ON ERROR, FRAUD, OR FAVORITISM, THE ADVERSE FINDINGS OF THE CONTRACTING OFFICER ARE GENERALLY CONCLUSIVE. 46 COMP. GEN. 371, 372 (1966); 46 ID. 124, 126 (1966); 40 ID. 294 (1960). WE HAVE ALSO HELD THAT THE PROJECTION OF A BIDDER'S ABILITY TO PERFORM IF AWARDED A CONTRACT IS OF NECESSITY A MATTER OF JUDGMENT, WHICH, WHILE IT SHOULD BE BASED ON FACT AND ARRIVED AT IN GOOD FAITH, MUST PROPERLY BE LEFT LARGELY TO THE SOUND ADMINISTRATIVE DISCRETION OF THE CONTRACTING OFFICERS INVOLVED. SINCE CONTRACTING OFFICERS ARE IN THE BEST POSITION TO ASSESS RESPONSIBILITY, THEY MUST BEAR THE MAJOR BRUNT OF ANY DIFFICULTIES EXPERIENCED BY REASON OF THE CONTRACTOR'S LACK OF ABILITY, AND THEY MUST MAINTAIN THE DAY TO DAY RELATIONS WITH THE CONTRACTOR ON BEHALF OF THE GOVERNMENT.

"OUR OFFICE WILL NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF THE CONTRACTING OFFICERS CHARGED WITH THE DUTY AND RESPONSIBILITY OF MAKING SUCH DECISIONS UNLESS THERE IS CLEARLY NO SUBSTANTIAL BASIS FOR THEIR ACTION OR THERE IS EVIDENCE OF BAD FAITH."

THERE IS NO PROVISION OF ASPR WHICH REQUIRES A CONTRACTING OFFICER TO ACCEPT AFFIRMATIVE DETERMINATIONS OF A PROSPECTIVE CONTRACTOR'S RESPONSIBILITY BY PREAWARD SURVEY TEAMS WHEN HE HAS OTHER FACTUAL INFORMATION AND DATA TO THE CONTRARY. SEE, 45 COMP. GEN; SUPRA, AT PAGE 10, B-166275(1), OCTOBER 17, 1969, AND CASES CITED THEREIN. HE MAY AND SHOULD CONSIDER AND WEIGH ALL EVIDENTIARY DATA AT HIS DISPOSAL TO MAKE THE DETERMINATION ON THE BASIS OF HIS OWN BEST JUDGMENT, AS IT IS HIS DUTY TO MAKE A FINAL DETERMINATION OF NONRESPONSIBILITY PRIOR TO REFERRAL TO SBA FOR COC CONSIDERATION. 45 COMP. GEN; SUPRA; ASPR 1 903.

WE DO NOT FIND THAT THE CONTRACTING OFFICER ABUSED HIS WIDE RANGE OF DISCRETION IN ORDERING ADDITIONAL PREAWARD SURVEYS IN TWO OF THE THREE PROCUREMENT ACTIONS SUBSEQUENT TO THE INITIAL SURVEY WHEREIN COMPLETE AWARD TO IMCO WAS RECOMMENDED. ALTHOUGH THESE ADDITIONAL SURVEYS WERE REQUESTED AND COMPLETED IN THE FACE OF OBJECTIONS FROM SBA REGIONAL PERSONNEL, THE FILES REFLECT THAT IMCO HAD A HISTORY OF UNSATISFACTORY DELIVERY PERFORMANCE ON PAST AND CURRENT CONTRACTS ADMINISTERED BY BOTH RIA AND DCASD, AND, IN ONE INSTANCE, AN INABILITY TO DEMONSTRATE EFFECTIVE MANUFACTURE OF THE DESIRED ITEMS.

WE DO NOT QUESTION THE ADDITIONAL PREAWARD SURVEYS REQUESTS OF THE CONTRACTING OFFICER OR HIS DETERMINATIONS OF NONRESPONSIBILITY. BUT, WE DO QUESTION THE REASONABLENESS OF HIS ACTIONS SUBSEQUENT TO THE RECEIPT OF COC NOTIFICATION FROM SBA. IN ALL THREE CASES, COC NOTIFICATION WAS FOLLOWED BY THE CONTRACTING OFFICER'S DELIBERATIONS WHETHER TO APPEAL THE ISSUANCE THEREOF IN ACCORDANCE WITH ASPR 1 705.4(G), WHICH STATES:

"IF AN SBA FIELD OFFICE FAILS TO GIVE A CONTRACTING OFFICER THE OPPORTUNITY TO REFER A PROPOSED AFFIRMATIVE CERTIFICATE OF COMPETENCY ACTION TO HIGHER AUTHORITY IN HIS MILITARY DEPARTMENT OR DSA FOR REVIEW AND POSSIBLE APPEAL, APPEAL ACTION DESCRIBED IN 1-705.4(F) MAY BE TAKEN BY THE CONTRACTING OFFICER SUBSEQUENT TO THE ISSUANCE OF A CERTIFICATE OF COMPETENCY IF HE HAS SUBSTANTIAL DOUBT AS TO THE ABILITY OF THE CONTRACTOR TO PERFORM."

A REVIEW OF THE HISTORY OF TWO OF THE THREE PROCUREMENTS IN QUESTION INDICATES THAT THE CONTRACTING OFFICER, WHILE HE WAS ON NOTICE THAT SBA ISSUED COC'S TO IMCO, FAILED TO TAKE TIMELY ACTION EITHER TO APPEAL THE COC'S OR TO PROCEED WITH AWARDS. IN THE GAGE, BORE PROCUREMENT, THE CONTRACTING OFFICER WAS NOTIFIED ON DECEMBER 19, 1969, OF COC ISSUANCE; HOWEVER, NO ACTION LOOKING TOWARD AN AWARD ON THE PROCUREMENT WAS UNDERTAKEN UNTIL JANUARY 5, 1970, WHEN HE FOUND THAT THE BID ACCEPTANCE PERIODS HAD EXPIRED. IN THE MAGAZINE CATCH PROCUREMENT, NOTIFICATION OF THE COC ISSUANCE OCCURRED ON DECEMBER 30, 1969, AND SUPPLEMENTAL INFORMATION REQUESTED FROM SBA BY THE CONTRACTING OFFICER WAS RECEIVED ON JANUARY 21, 1970. ON FEBRUARY 6, 1970, THE INITIAL INDICATION WAS RECEIVED FROM THE USING ACTIVITY OF A REQUIREMENTS REDUCTION. ALL ACTION ON THE PROCUREMENT WAS SUSPENDED UNTIL THE SOLICITATION WAS CANCELLED ON MARCH 12, 1970. WE NOTE THAT IN THE CAM SHAFT PROCUREMENT, ON JANUARY 2, 1970, SBA ADVISED THE CONTRACTING OFFICER OF THE COC ISSUANCE. ON JANUARY 6, 1970, THE CONTRACTING OFFICER RECEIVED A PRICE OF $102.23 FOR THE ITEM PROCURED, AND, WE FEEL, PROPERLY HELD THE PROCUREMENT IN ABEYANCE DURING DETERMINATIONS ON THE VALIDITY OF THE PRICE BEFORE CANCELLATION.

WE CAN APPRECIATE THE BASES FOR THE ALLEGATIONS OF PREJUDICE RAISED BY IMCO. THE COLLECTIVE EFFECT OF BEING NOT ONLY THE LOW RESPONSIVE BIDDER, BUT ALSO THE BENEFICIARY OF COC'S ISSUED BY SBA IN CONNECTION WITH THREE SOLICITATIONS, ALL OF WHICH WERE SUBSEQUENTLY CANCELLED, CAN EASILY UNDERMINE A BIDDER'S CONFIDENCE IN THE ADMINISTRATION OF THE COMPETITIVE PROCUREMENT SYSTEM. WHILE WE FOUND NO INDICATION THAT IMCO WAS DELIBERATELY AND SYSTEMATICALLY DENIED AWARDS, WE STRONGLY URGE THAT APPROPRIATE MEASURES BE TAKEN TO AVOID A RECURRENCE OF THE CIRCUMSTANCES DISCUSSED ABOVE. THERE IS ENCLOSED A COPY OF OUR DECISION OF TODAY TO IMCO WITH RESPECT TO ITS PROTEST UNDER NEGOTIATED SOLICITATION NO. DAAF01- 70-Q-3409.