B-170055, OCT. 16, 1970

B-170055, OCT. 16, 1970

BID PROTEST - NEGOTIATION - CANCELLATION AND RESOLICITATION DENIAL OF PROTEST OF INSTRUMENTS SYSTEMS CORPORATION AGAINST CANCELLATION OF AN INVITATION WHEN AN ERROR WAS DETECTED IN THE BID SPECIFICATION, BY ANOTHER BIDDER AND RESULTED IN RESOLICITATION FOR THE PROCUREMENT OF HAZARDOUS AREA HEADSETS, BY THE AIR FORCE AND AWARD OF CONTRACT TO ROANWELL CORPORATION. WHERE PRIOR TO THE AWARD OF CONTRACT FOR HAZARDOUS AREA HEADSETS, AN ERROR IN THE BID SPECIFICATION WAS DISCOVERED, RESULTING IN CANCELLATION AND RESOLICITATION UNDER A COMPETITIVE NEGOTIATION USING A REVISED SPECIFICATION RESULTED IN THE PRIOR LOW BIDDER BEING HIGH, AND THE AWARD TO BIDDER WHO HAD NOTIFIED THE CONTRACTING OFFICER OF THE ERROR, THEN THE CLAIM THAT THE ERROR SHOULD HAVE BEEN CHANGED BY AMENDMENT, AND THAT THE NOW LOW BIDDER HAD UNFAIR ADVANTAGE OF PRIOR PRICE DISCLOSURE, IS DENIED; NO RULE OF LAW PRECLUDES A VENDOR FROM COMPETING MORE VIGOROUSLY UPON RESOLICITATION, AFTER CANCELLATION OF AN INVITATION.

TO ISC/TELEPHONICS DIVISION, INSTRUMENTS SYSTEMS CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 15, 1970, AND TO YOUR LETTER OF JUNE 19, 1970, PROTESTING AGAINST CANCELLATION OF AIR FORCE INVITATION FOR BIDS (IFB) F08650-70-B-0096 (HEREAFTER IFB-0096) AND RESOLICITATION OF THE REQUIREMENT UNDER REQUEST FOR QUOTATIONS F08650 70-Q-1631 (HEREAFTER RFQ-1631.

IFB-0096, ISSUED MARCH 30, 1970, CALLED FOR THE FURNISHING OF 500 HAZARDOUS AREA HEADSETS TOGETHER WITH ONE LOT OF DATA. BIDS WERE OPENED ON APRIL 21, 1970, AND TWO BIDS WERE RECEIVED. YOUR FIRM BID A UNIT PRICE OF $80.00 FOR THE HEADSETS AND A LOT PRICE OF $1,700.00 FOR THE DATA, WHILE ROANWELL CORPORATION (ROANWELL) BID A UNIT PRICE OF $128.25 FOR THE HEADSETS AND A LOT PRICE OF $4,681.00 FOR THE DATA. NEITHER YOUR FIRM NOR ROANWELL QUALIFIED ITS BID OR TOOK ANY EXCEPTION TO THE SPECIFICATIONS. HOWEVER, ON APRIL 30, 1970, THE AIR FORCE RECEIVED A LETTER FROM ROANWELL PROTESTING THAT THE U-77/U CONNECTOR PLUG CALLED FOR BY PARAGRAPH 3.9 OF THE SPECIFICATIONS COULD NOT BE REPLACED WITHOUT SOLDERING AS REQUIRED THEREIN, AND THAT THE MANUFACTURER HAD NOT CERTIFIED THE CONNECTOR TO BE EXPLOSION PROOF IN A HYDROGEN ATMOSPHERE. ROANWELL VIEWED SPECIFICATION 3.7, WHICH PROVIDED FOR ENVIRONMENTAL TESTING, AS REQUIRING A CERTIFIED EXPLOSION-PROOF CONNECTOR, AND STATED THAT ITS BID INCLUDED THE COST OF SUCH A CONNECTOR WHICH AFFECTED ITS COMPETITIVE POSITION. AS A RESULT OF THIS PROTEST IT WAS DISCOVERED THAT THE U-77/U CONNECTOR PLUG WAS NOT REPLACEABLE WITHOUT SOLDERING, WHEREAS THE SPECIFICATIONS CLEARLY STATED, IN PARAGRAPH 3.9, THAT COMPONENTS BE REPLACEABLE WITHOUT SOLDERING, AND ALSO REQUIRED UNDER ITEM 12 THEREOF THAT A U-77/U CONNECTOR PLUG BE FURNISHED. IN VIEW OF THIS VARIANCE, THE SOLICITATION WAS CANCELLED ON MAY 12, 1970, PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2- 404.1(B), AND YOU WERE ADVISED OF THE CANCELLATION BY LETTER DATED MAY 13, 1970.

THE SPECIFICATIONS WERE REVISED AND A U-161/U CONNECTOR, WHICH DOES NOT REQUIRE SOLDERING, WAS SUBSTITUTED FOR THE U-77/U CONNECTOR. IT IS REPORTED THAT THESE HEADSETS ARE REQUIRED IN SUPPORT OF TOPS HAZARDOUS AREA EQUIPMENT NOW BEING INSTALLED ON THE AIR FORCE EASTERN TEST RANGE WHERE THEY ARE TO BE UTILIZED IN SUPPORT OF COMPLEX 13 AND NASA/DELTA COMPLEX 17 LAUNCHES AT CAPE KENNEDY AIR FORCE STATION, AND WERE REQUIRED TO BE ON HAND DURING THE FIRST QUARTER OF FISCAL YEAR 1971 IN ORDER TO PROVIDE THIS SUPPORT. MANUFACTURING LEAD TIME WAS 90 TO 120 DAYS. THEREFORE, APPROVAL WAS RECEIVED TO RESOLICIT UNDER A COMPETITIVE NEGOTIATION USING REVISED SPECIFICATIONS, AND APPROVAL FOR ORAL SOLICITATION, AS REQUIRED BY ASPR 3-501(D)(II), WAS OBTAINED.

RFQ-1631 WAS ISSUED ON MAY 20, 1970. ONLY YOUR FIRM AND ROANWELL WERE SOLICITED AND BOTH WERE ADVISED THAT A TELEPHONE QUOTATION WAS NEEDED WITHIN 24 HOURS, WITH CONFIRMATION BY LETTER. THE TWO FIRMS WERE INFORMED OF THE SPECIFICATION CHANGES AND ADDITIONS, AND THAT THE SPECIFICATIONS DID NOT REQUIRE VENDOR CERTIFICATION OF AN EXPLOSION PROOF CONNECTOR, ONLY COMPLIANCE WITH THE SPECIFIED TEST. BOTH FIRMS GAVE TELEPHONIC QUOTATIONS ON MAY 21, FOLLOWED BY WRITTEN CONFIRMATIONS. YOUR FIRM OFFERED A UNIT PRICE OF $80.00 FOR THE HEADSETS AND A DATA PRICE OF $1,700.00, FOR A TOTAL PRICE OF $41,700.00, WHICH WAS THE SAME AS YOUR BID PRICE UNDER IFB- 0096. ON THE OTHER HAND, ROANWELL'S UNIT PRICE OF $64.89 FOR THE HEADSETS AND DATA PRICE OF $1,385.00 WHICH TOTALED $33,840.00, WAS CONSIDERABLY LESS THAN ITS BID PRICE UNDER IFB-0096. BOTH OFFERS WERE VERIFIED, AND AWARD WAS MADE TO ROANWELL ON JUNE 8, 1970.

IT IS YOUR CONTENTION THAT THE CANCELLATION OF IFB-0096 AND THE RESOLICITATION BY THE PROCURING ACTIVITY WAS CONTRARY TO ASPR AND GROSSLY PREJUDICIAL TO YOUR FIRM IN THAT YOUR LOW BID PRICE WAS DISCLOSED. YOU FURTHER CONTEND THAT THE CHANGE FROM THE U-77/U CONNECTOR TO THE U-161/U CONNECTOR COULD HAVE BEEN ACCOMPLISHED BY AN AMENDMENT PRIOR TO BID OPENING.

IN REGARD TO YOUR CONTENTION THAT THE CHANGE IN CONNECTOR PLUGS COULD HAVE BEEN MADE BY AN AMENDMENT PRIOR TO BID OPENING, WE AGREE WITH THIS CONTENTION. HOWEVER, THE RECORD INDICATES THAT ALTHOUGH YOUR FIRM AND ROANWELL WERE AWARE OF THE DEFECT IN THE SPECIFICATIONS, NEITHER FIRM BROUGHT THE MATTER TO THE ATTENTION OF THE CONTRACTING OFFICER PRIOR TO BID OPENING, AND HE THEREFORE HAD NO KNOWLEDGE OF THE DEFECT UNTIL THE RECEIPT OF ROANWELL'S PROTEST.

CONCERNING YOUR IMPLICATION THAT ROANWELL TOOK UNFAIR ADVANTAGE OF THE DISCLOSURE OF YOUR BID PRICE, ROANWELL CONTENDS THAT ITS BIDS PRICE INCLUDED THE COST OF A CERTIFIED EXPLOSION PROOF CONNECTOR AND THAT THIS ADDITIONAL CHARGE AFFECTED ITS PRICING. IN ANY EVENT, WE ARE AWARE OF NO RULE OF LAW WHICH PRECLUDES A VENDOR FROM COMPETING MORE VIGOROUSLY UPON RESOLICITATION FOLLOWING CANCELLATION OF AN INVITATION, ASSUMING, OF COURSE, THAT THE CANCELLATION WAS PROPER.

UNDER ASPR 2-404.1(B)(I) AN INVITATION FOR BIDS MAY BE CANCELLED AFTER OPENING BUT PRIOR TO AWARD WHERE THE SPECIFICATIONS CITED IN THE INVITATION ARE INADEQUATE OR AMBIGUOUS AND THE CONTRACTING OFFICER HAS MADE A DETERMINATION IN WRITING TO THIS EFFECT. SEE B-169101, APRIL 14, 1970. AS INDICATED ABOVE THIS PROCEDURE WAS FOLLOWED IN THE PRESENT CASE. ADDITIONALLY, SECTION 10(B) OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS (STANDARD FORM 33A) RESERVES TO THE GOVERNMENT THE RIGHT TO REJECT ANY OR ALL BIDS. SEE B-169237, JUNE 18, 1970.

THE REJECTION OF BIDS AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITORS' PRICES IS A SERIOUS MATTER AND SHOULD NOT BE DONE EXCEPT FOR COGENT REASONS. MASSMAN CONSTRUCTION COMPANY V UNITED STATES, 102 CT. CL. 699, 719 (1945). ALSO, WE HAVE RECOGNIZED THAT SINCE CONTRACTING OFFICERS ARE AGENTS OF AND ARE REQUIRED TO WORK IN THE BEST INTEREST OF THE GOVERNMENT, THEIR ACTIONS IN REJECTING BIDS AND READVERTISING MAY NOT BE CONSIDERED IMPROPER WHEN BASED UPON SUBSTANTIAL REASONS LEADING TO A BONA FIDE BELIEF THAT THE INTERESTS OF THE GOVERNMENT WILL BE BEST SERVED THEREBY. SEE 38 COMP. GEN. 235 (1958) AND 39 ID. 86 (1959).

IN THE PRESENT CASE ROANWELL APPRISED THE CONTRACTING OFFICER OF THE FACT THAT THE U-77/U CONNECTOR DID NOT CONFORM TO THE SPECIFICATION REQUIREMENT THAT COMPONENTS BE REPLACEABLE WITHOUT SOLDERING, AND WHEN YOU WERE ASKED WHAT TYPE OF CONNECTOR YOU INTENDED TO USE PURSUANT TO PARAGRAPH 3.9, YOU REPLIED THAT YOU INTENDED TO USE THE U-161/U CONNECTOR. THE CONTRADICTION IN THE SPECIFICATIONS WAS VERIFIED, THUS, THERE APPEARS TO BE NO QUESTION AS TO THE SPECIFICATIONS HAVING BEEN DEFECTIVE CONCERNING A MATERIAL REQUIREMENT. IN THESE CIRCUMSTANCES, AND IN VIEW OF THE BROAD DISCRETION PLACED WITH THE ADMINISTRATIVE AGENCIES IN SUCH MATTERS, WE CANNOT CONCLUDE THAT THE CANCELLATION OF IFB-0096 WAS ARBITRARY OR CAPRICIOUS. SEE B-165272, JANUARY 3, 1969; B 168176, DECEMBER 1, 1969; B-157192, NOVEMBER 2, 1965.

IN SITUATIONS OF THIS NATURE, IT SEEMS OBVIOUS THAT THE APPROPRIATE TIME FOR PROTESTING THE CANCELLATION OF AN IFB IS PRIOR TO THE RECEIPT OF INFORMATION BY THE BIDDER THAT HE IS NOT IN LINE FOR THE AWARD ON THE SUBSEQUENT SOLICITATION. IT IS OUR OPINION THAT A FIRM WHICH PARTICIPATES, WITHOUT OBJECTION, IN A RESOLICITATION OF A REQUIREMENT TO THE POINT OF AWARD MAY BE DEEMED TO HAVE ACQUIESCED IN THE CANCELLATION OF THE PRIOR SOLICITATION BY THE CONTRACTING OFFICER.

FOR THE ABOVE REASONS, YOUR PROTEST IS DENIED.