B-169492, JUL. 17, 1970

B-169492: Jul 17, 1970

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

CANCELLATION OF A SOLICITATION AFTER AN ENGINEERING EVALUATION HAD BEEN STARTED ON THE BASIS THAT THERE WAS A POSSIBILITY OF A DUPLICATION OF THE REQUIREMENTS WAS A PROPER EXERCISE OF THE CONTRACTING OFFICER'S DISCRETION AND SINCE THE CANCELLATION WAS EFFECTED PROMPTLY AFTER THE DETERMINATION BY A HIGHER LEVEL THAT THE ITEMS WERE NOT NEEDED. NO OBJECTION TO THE CANCELLATION IS WARRANTED. TO TELECTRO SYSTEMS CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF APRIL 7. THE ITEM BEING PROCURED WAS THE REPRODUCER. SOUND RP-138/GR AND THE QUANTITY CALLED FOR IN THE REQUEST WAS 109 EACH. THE PROCUREMENT WAS NEGOTIATED UNDER PROVISIONS OF 10 U.S.C. 2304(A)(2) ON THE BASIS THAT THE PUBLIC EXIGENCY WOULD NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING.

B-169492, JUL. 17, 1970

BID PROTEST -- SOLICITATION CANCELLATION DECISION TO TELECTRO SYSTEMS CORPORATION DENYING PROTEST AGAINST CANCELLATION OF SOLICITATION FOR SOUND REPRODUCING COMPONENTS BY THE ARMY ELECTRONICS COMMAND AFTER A PREAWARD SURVEY AND SUBMISSION OF THE PROTESTANTS PROPOSAL FOR ENGINEERING EVALUATION. CANCELLATION OF A SOLICITATION AFTER AN ENGINEERING EVALUATION HAD BEEN STARTED ON THE BASIS THAT THERE WAS A POSSIBILITY OF A DUPLICATION OF THE REQUIREMENTS WAS A PROPER EXERCISE OF THE CONTRACTING OFFICER'S DISCRETION AND SINCE THE CANCELLATION WAS EFFECTED PROMPTLY AFTER THE DETERMINATION BY A HIGHER LEVEL THAT THE ITEMS WERE NOT NEEDED, NO OBJECTION TO THE CANCELLATION IS WARRANTED.

TO TELECTRO SYSTEMS CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 7, 1970, PROTESTING THE ACTION TAKEN BY THE CONTRACTING OFFICER IN CONDUCTING AN EXTENSIVE PREAWARD SURVEY UNDER REQUEST FOR PROPOSALS NO. DAAB05-70-R-0388, ISSUED BY THE U. S. ARMY ELECTRONICS COMMAND, PHILADELPHIA, PENNSYLVANIA, AND THEN CANCELLING THE SOLICITATION PRIOR TO AWARD.

THE ITEM BEING PROCURED WAS THE REPRODUCER, SOUND RP-138/GR AND THE QUANTITY CALLED FOR IN THE REQUEST WAS 109 EACH. THE PROCUREMENT WAS NEGOTIATED UNDER PROVISIONS OF 10 U.S.C. 2304(A)(2) ON THE BASIS THAT THE PUBLIC EXIGENCY WOULD NOT PERMIT THE DELAY INCIDENT TO FORMAL ADVERTISING. THE REQUEST FOR PROPOSALS WAS DATED DECEMBER 12, 1969, WITH A REQUIREMENT THAT PROPOSALS BE RECEIVED BY 5:00 P.M. ON JANUARY 2, 1970. BY SUBSEQUENT AMENDMENTS THE OPENING DATE FOR PROPOSALS WAS EXTENDED TO JANUARY 12, 1970, AND AGAIN UNTIL JANUARY 16, 1970. PROPOSALS WERE RECEIVED FROM LITTON SYSTEMS, INC., MELVILLE, NEW YORK, AND FROM YOUR COMPANY.

LITTON SYSTEMS WAS THE MANUFACTURER OF THE END ITEM IN WHICH THE RP 138/GR SOUND REPRODUCER WAS USED AND THE ONLY PREVIOUS SUPPLIER OF THE RP- 138/GR AS AN INDIVIDUAL ITEM. BROADCAST ELECTRONICS, INC., SILVER SPRING, MARYLAND, THE MANUFACTURER WHOSE PART IS CALLED FOR IN THE SOLICITATION, DID NOT SUBMIT A PROPOSAL. SINCE THE GOVERNMENT COULD NOT FURNISH ALL THE DRAWINGS NECESSARY TO MANUFACTURE THE ITEM MADE BY BROADCAST ELECTRONICS, INC., AND YOUR COMPANY HAD NOT PREVIOUSLY SUPPLIED THE ITEM, YOU WERE REQUESTED TO SUBMIT DATA SETTING FORTH YOUR INTENDED METHOD OF SUPPLYING THE ITEM. YOU RESPONDED BY ADVISING THAT TELECTRO WOULD BUY TEN MODELS FROM BROADCAST ELECTRONICS AND MANUFACTURE THE RP-138/GR IN ACCORDANCE WITH THE MECHANICAL CONSTRUCTION DETAILS OF THE MODEL, THE PARTS LISTED IN TECHNICAL MANUAL TM-11-5835-229-35 AND THE COMPLETE PERFORMANCE AND DIMENSIONAL DATA SHOWN IN SPECIFICATION DRAWING SM-D-461202. IN ADDITION, IN RESPONSE TO REQUESTS FROM THE CONTRACTING OFFICER, YOU FURNISHED A HARDWARE SCHEDULE AND A BREAKDOWN OF THE MATERIAL CONTAINED IN THE PURCHASED PARTS SHOWN IN THE PRICING DATA SUBMITTED WITH YOUR PROPOSAL.

SECTION 10 OF STANDARD FORM 33A WHICH WAS A PART OF THE SOLICITATION PROVIDED AS FOLLOWS:

"10. AWARD OF CONTRACT. (A) THE CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE OFFEROR WHOSE OFFER CONFORMING TO THE SOLICITATION WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.

"(B) THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL OFFERS ***

IN ACCORDANCE WITH THIS PROVISION AND THE REQUIREMENT IN ASPR 1 905.4, THE CONTRACTING OFFICER REQUESTED PREAWARD SURVEYS OF BOTH TELECTRO AND LITTON ON JANUARY 21, 1970. PRIOR TO MAKING A DETERMINATION OF RESPONSIBILITY, THE CONTRACTING OFFICER ALSO SUBMITTED YOUR PROPOSAL TO ENGINEERING PERSONNEL AT FORT MONMOUTH, NEW JERSEY, ON FEBRUARY 27, 1970, FOR EVALUATION.

THE EVALUATION HAD NOT BEEN COMPLETED ON MARCH 26, 1970, WHEN THE CONTRACTING OFFICER WAS ADVISED BY THE AREA NET RADIO BRANCH, MATERIEL MANAGEMENT DIRECTORATE, THAT PROCUREMENT AUTHORIZATION FOR THE RP 138/GR AND TWO OTHER RELATED ITEMS WAS BEING CANCELLED. THE MAJOR ITEMS PROGRAMS MANAGEMENT DIVISION HAD ADVISED THAT THE THREE ITEMS CANCELLED WERE COMPONENTS OF THE END ITEM AN/GSH-17, RECORDER REPRODUCER, AND THE COMPONENTS WERE LISTED ON THE SAME AUTHORIZATION DOCUMENTS AS THE END ITEM, INDICATING THE POSSIBILITY OF A DUPLICATION OF REQUIREMENTS.

IMMEDIATELY UPON RECEIPT OF THE CANCELLATION OF THE AUTHORIZATION, THE CONTRACTING OFFICER, ACTING UNDER ESTABLISHED PROCEDURE, REQUESTED APPROVAL FROM THE CHIEF, PHILADELPHIA PROCUREMENT DIVISION, TO CANCEL THE PROCUREMENT IN QUESTION. APPROVAL WAS GRANTED, AND ON MARCH 31, 1970, THE CONTRACTING OFFICER NOTIFIED BOTH TELECTRO AND LITTON BY LETTERS THAT THE SOLICITATION WAS CANCELLED IN ITS ENTIRETY.

IN RESPONSE TO AN INQUIRY ABOUT POSSIBLE FUTURE REQUIREMENTS FOR THE RP- 138/GR, THE AREA NET RADIO BRANCH, MATERIEL MANAGEMENT DIRECTORATE, ADVISED THE CONTRACTING OFFICER ON MAY 11, 1970, THAT THE DEPARTMENT OF THE ARMY APPROVED REVISED GROSS REQUIREMENTS, RELEASED IN MARCH 1970, DELETED ALTOGETHER THE REQUIREMENTS FOR THE RP-138/GR AND THE TWO OTHER MAJOR COMPONENTS OF THE END EQUIPMENT AN/GSH-17 RECORDER REPRODUCER AND REPLACED THOSE REQUIREMENTS FOR THE COMPONENTS WITH A REQUIREMENT FOR THE END ITEM. THE CONTRACTING OFFICER'S ADMINISTRATIVE REPORT STATES THAT IN THE EVENT A REQUIREMENT FOR THE RP-138/GR IS ESTABLISHED AT SOME FUTURE DATE, THE PROCUREMENT WILL BE ON A COMPETITIVE BASIS AND TELECTRO WILL BE SOLICITED.

THE ESSENCE OF THE PROTEST IN YOUR LETTER OF APRIL 7, 1970, IS THAT A NEEDLESSLY EXCESSIVE EFFORT WAS MADE TO EVALUATE YOUR PROPOSAL AND THAT SUCH EFFORT EITHER SHOULD NOT HAVE BEEN STARTED OR SHOULD HAVE BEEN HALTED MUCH EARLIER.

YOU DID NOT QUESTION THE RIGHT OF THE CONTRACTING OFFICER TO CANCEL THE SOLICITATION PRIOR TO AWARD AND, ON THE RECORD BEFORE US, IT IS CLEAR THAT HE ACTED WITHIN HIS AUTHORITY IN DOING SO. THE RIGHT TO REJECT ALL OFFERS WAS RESERVED TO THE GOVERNMENT UNDER PARAGRAPH 10(B) OF STANDARD FORM 33A, WHICH WAS A PART OF THE SOLICITATION.

WITH RESPECT TO FORMALLY ADVERTISED PROCUREMENTS, ASPR 2 404.1(B)(III) PERMITS CANCELLATION OF AN INVITATION FOR BIDS AFTER OPENING BUT PRIOR TO AWARD WHEN IT IS DETERMINED THAT THE SUPPLIES OR SERVICES BEING PROCURED ARE NO LONGER REQUIRED. OUR OFFICE HAS LONG RECOGNIZED THAT 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); 49 ID. 135 (1969). THIS PRINCIPLE IS EQUALLY APPLICABLE TO CANCELLATION OF A SOLICITATION UNDER A NEGOTIATED PROCUREMENT. B-166617, JUNE 9, 1969; B-167364, SEPTEMBER 29, 1969.

THE CONTRACTING OFFICER'S REQUEST FOR PREAWARD SURVEYS OF BOTH OFFERORS AND HIS SUBMISSION OF YOUR PROPOSAL FOR ENGINEERING EVALUATION WERE MADE AT A TIME WHEN THE PROCUREMENT AUTHORIZATION WAS STILL IN EFFECT. THE DECISION THAT A DUPLICATION OF REQUIREMENTS EXISTED, AND THE DELETION OF REQUIREMENTS FOR INDIVIDUAL COMPONENTS IN FAVOR OF A REQUIREMENT FOR THE END ITEM, WERE MADE AT A DIFFERENT LEVEL OF COMMAND AND COMMUNICATED TO THE CONTRACTING OFFICER BEFORE HIS EVALUATION WAS COMPLETED. THEREAFTER, HE ACTED PROMPTLY TO CANCEL THE PROCUREMENT. OUR REVIEW OF THIS RECORD DISCLOSES NO ABUSE OF ADMINISTRATIVE DISCRETION.

ACCORDINGLY, YOUR PROTEST IS DENIED.