B-170196, DEC. 4, 1970

B-170196: Dec 4, 1970

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CANCELLATION AFTER BID OPENING WHEN ASSIGNED WEIGHT FACTORS IN BID EVALUATION FORMULA FAILED TO REFLECT REQUIREMENTS OF PROCUREMENT WAS NOT AN ABUSE OF DISCRETION. THEREFORE CANCELLATION WAS PROPER AND READVERTISEMENT IS NOT SUBJECT TO QUESTION. INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JUNE 26. 18" X 24" X 30": (TUCK-IN TYPE) PER BOX "METHOD OF AWARD: A SINGLE AWARD WILL BE MADE. THE WEIGHTS SHOWN ARE PROPORTIONATE TO THE ESTIMATED TOTAL REQUIREMENTS.". BIDS WERE OPENED AS SCHEDULED ON JUNE 17. YOUR BID WAS THE LOWEST SUBMITTED. YOUR PROTEST IS FOUNDED UPON THE BASIS THAT THE METHOD OF AWARD WAS CLEARLY STATED IN THE INVITATION. THAT YOU WERE THE LOW RESPONSIVE BIDDER.

B-170196, DEC. 4, 1970

BID PROTEST - CANCELLATION AND READVERTISEMENT DENIAL OF PROTEST BY LOW BIDDER AGAINST CANCELLATION OF INVITATION FOR FURNISHING MOVING SERVICE FOR INTERIOR DEPARTMENT ON BASIS OF DEFICIENT SPECIFICATIONS AND AWARD UNDER READVERTISED PROCUREMENT TO COMMERCIAL STORAGE, INC., LOW BIDDER. CANCELLATION AFTER BID OPENING WHEN ASSIGNED WEIGHT FACTORS IN BID EVALUATION FORMULA FAILED TO REFLECT REQUIREMENTS OF PROCUREMENT WAS NOT AN ABUSE OF DISCRETION. THEREFORE CANCELLATION WAS PROPER AND READVERTISEMENT IS NOT SUBJECT TO QUESTION.

TO JACOBS MOVING, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED JUNE 26, 1970, WITH ENCLOSURES, PROTESTING AGAINST THE CANCELLATION OF INVITATION FOR BIDS NO. 779, ISSUED BY THE BRANCH OF SUPPLY, DEPARTMENT OF THE INTERIOR, ON MAY 6, 1970.

THE INVITATION, AS AMENDED, CALLED FOR THE FURNISHING OF LABORERS AND TRUCKS TO PERFORM MOVING SERVICES AS REQUIRED BY THE OFFICES AND BUREAUS OF THE DEPARTMENT OF THE INTERIOR IN WASHINGTON, D.C., AND ITS CONTIGUOUS AREAS AS FOLLOWS:

"WEIGHT

FACTOR

UNIT PRICE

"1. 05 SUPERVISORS: PER HOUR

STRAIGHT TIME

2. 80 LABORERS:

(1) STRAIGHT TIME

(2) NIGHT RATE

(3) OVERTIME RATE

3. 05 TRUCK, 16 TO 20 FT. VAN TYPE, INCLUDING DRIVER:

(1) STRAIGHT TIME

(2) NIGHT RATE

(3) OVERTIME RATE

4. 05 TRACTOR WITH 30 FT. MINIMUM VAN TYPE TRAILER, INCLUDING

DRIVER:

(1) STRAIGHT TIME

(2) NIGHT RATE

(3) OVERTIME RATE

5. 05 BOXES, PACKING, 18" X 24" X 30":

(TUCK-IN TYPE) PER BOX

"METHOD OF AWARD:

A SINGLE AWARD WILL BE MADE, IN THE AGGREGATE TO THE BIDDER WITH THE LOWEST WEIGHTED BID RESULTING FROM MULTIPLYING THE WEIGHT FACTORS APPLICABLE TO EACH SUBITEM BY THE PRICE BID AND TOTALING THEM. TO INSURE CONSIDERATION FOR AWARD, BIDDER MUST BID ON ALL ITEMS AND SUBITEMS. THE WEIGHTS SHOWN ARE PROPORTIONATE TO THE ESTIMATED TOTAL REQUIREMENTS."

BIDS WERE OPENED AS SCHEDULED ON JUNE 17, 1970, AND YOUR BID WAS THE LOWEST SUBMITTED. HOWEVER, THE CONTRACTING OFFICER DECIDED TO WITHDRAW THE INVITATION AND REJECT ALL BIDS BECAUSE OF DEFICIENT SPECIFICATIONS IN THE INVITATION, WHICH DID NOT PROVIDE A PROPER BASIS FOR EVALUATION OF ALL FACTORS OF COST TO THE GOVERNMENT, THEREBY MAKING AN ADEQUATE AND EQUITABLE EVALUATION IMPOSSIBLE.

YOUR PROTEST IS FOUNDED UPON THE BASIS THAT THE METHOD OF AWARD WAS CLEARLY STATED IN THE INVITATION, THAT YOU WERE THE LOW RESPONSIVE BIDDER, AND THERE WAS NO QUESTION OF YOUR CAPACITY TO PERFORM. THEREFORE, YOU CONTEND AWARD SHOULD HAVE BEEN MADE TO YOU.

THE CONTRACTING OFFICER'S REPORT STATES IN PART THAT:

"THE WEIGHT FACTORS IN THE ORIGINAL INVITATION TO BE USED AS A TOOL IN EVALUATING THE BIDS WERE FOUND TO BE INEFFECTIVE IN PROVIDING A BASIS FOR AN ADEQUATE AND EQUITABLE EVALUATION. THE DEFICIENCY BECAME APPARENT AFTER THE OPENING OF THE BIDS. IN THE PROCESS OF EVALUATING, IT BECAME OBVIOUS THAT USING THE SAME WEIGHT FACTORS FOR EACH SUBITEM WITHIN EACH LINE ITEM DID NOT OFFER A REALISTIC EVALUATING TOOL BECAUSE OF THE ABILITY TO BID HIGH ON ONE ITEM, LOW ON ANOTHER, AND STILL NOT AFFECT THE OVERALL BID. IN REVIEWING THE BIDS, IT APPEARED AS THOUGH SOME BIDS WERE SUBMITTED IN SUCH A WAY AS TO TAKE ADVANTAGE OF THE DEFICIENT WEIGHT FACTOR. AS AN EXAMPLE, BID COULD BE HIGH IN THE 'STRAIGHT TIME' CATEGORY, LOW IN THE 'OVERTIME-NIGHT RATE,' AND STILL BE LOW ENOUGH TO BE ELIGIBLE TO WIN THE AWARD.

"THE JACOB'S BID, ALTHOUGH RESPONSIVE, INDICATED A LEANING TOWARD THIS TYPE BIDDING. THEIR TOTAL 'STRAIGHT TIME' BID, PRIOR TO APPLYING THE WEIGHT FACTOR, WAS $28.60 AS OPPOSED TO A LOW OF $17.28 FROM ANOTHER BIDDER. THEIR HOURLY RATE FOR LABORERS WAS BID AT $5.10 WHILE OTHER BIDS RANGED FROM $4.08 TO $4.35. ACCORDINGLY, TO AWARD THE CONTRACT TO JACOBS WOULD NOT HAVE BEEN IN THE BEST INTEREST OF THE GOVERNMENT AND THEREFORE, ALL BIDS WERE REJECTED. SINCE THE BULK OF OUR WORK IS ACCOMPLISHED DURING REGULAR WORKING HOURS (STRAIGHT TIME) IT WAS NECESSARY THAT PARTICULAR ATTENTION BE GIVEN THAT AREA. THE DEFICIENT WEIGHT FACTORS DID NOT PROVIDE AN EFFECTIVE SAFEGUARD IN THAT AREA TO INSURE A JUST AND ACCEPTABLE BID.

"BIDDERS WERE NOTIFIED THAT ALL BIDS UNDER THE INVITATION WERE REJECTED AND THE INVITATION WITHDRAWN. THEY WERE FURTHER ADVISED THAT THE INVITATION WOULD BE READVERTISED UNDER AMENDED SPECIFICATIONS. INVITATIONS WITH REVISED SPECIFICATIONS WERE MAILED TO BIDDERS ON JUNE 19, 1970, WITH BID OPENING SET FOR JUNE 29, 1970 AT 2:00 P.M. THE REVISED SPECIFICATIONS INCLUDED WEIGHT FACTORS WHICH WOULD BE USED IN EVALUATING EACH SUBITEM IN ACCORDANCE WITH THE RATIO THAT 'STRAIGHT TIME, NIGHT TIME AND OVERTIME' WERE USED IN THE PAST. THE REVISED WEIGHT FACTORS INSURED A MORE REALISTIC EVALUATING TOOL AND PREVENTED THE MANIPULATION OF BID PRICES TO TAKE ADVANTAGE OF WEIGHT FACTORS."

THE REVISED SPECIFICATIONS ARE AS FOLLOWS:

"TIME WEIGHT UNIT PRICE

FACTOR FACTOR PER HOUR

1. 05 100 SUPERVISORS:

STRAIGHT TIME

2. 80 LABORERS:

85 (1) STRAIGHT TIME

5 (2) NIGHT RATE

10 (3) OVERTIME RATE

3. 05 TRUCK, 16 TO 20 FT. VAN TYPE, INCLUDING DRIVER:

85 (1) STRAIGHT TIME

5 (2) NIGHT RATE

10 (3) OVERTIME RATE

4. 05 TRACTOR WITH 30 FT. MINIMUM VAN TYPE TRAILER,

INCLUDING DRIVER:

85 (1) STRAIGHT TIME

5 (2) NIGHT RATE

10 (3) OVERTIME RATE

5. 05 BOXES, PACKING, 18" X 24" X 30":

100 (TUCK-IN TYPE) PER BOX

"METHOD OF AWARD:

A SINGLE AWARD WILL BE MADE TO THE BIDDER WITH THE LOWEST WEIGHTED BID IN THE AGGREGATE, RESULTING FROM MULTIPLYING THE WEIGHT FACTORS (COLUMN 2), APPLICABLE TO EACH SUBITEM UNDER EACH LINE ITEM BY THE PRICE BID AND TOTALING THEM. TO INSURE CONSIDERATION FOR AWARD, BIDDER MUST BID ON ALL ITEMS AND SUBITEMS. THE WEIGHTS SHOWN ARE BASED ON THE ESTIMATED TOTAL REQUIREMENT." BIDS ON THE READVERTISED REQUIREMENT WERE OPENED JUNE 29, 1970, AND COMMERCIAL STORAGE, INCORPORATED, WAS AWARDED THE CONTRACT AS THE LOW RESPONSIVE AND RESPONSIBLE BIDDER.

THE PRIMARY PURPOSE OF THE PROVISIONS OF 41 U.S.C. 253-THE STATUTORY AUTHORITY GOVERNING PROCUREMENT BY FORMAL ADVERTISING BY THE NONMILITARY AGENCIES OF THE GOVERNMENT-IS TO GIVE ALL BIDDERS AN EQUAL OPPORTUNITY TO COMPETE FOR GOVERNMENT BUSINESS AND TO SECURE TO THE UNITED STATES THE BENEFIT OF FREE AND OPEN COMPETITION. REJECTION OF ALL BIDS IS PERMITTED BY 41 U.S.C. 253(B) WHERE IT IS DETERMINED THAT REJECTION IS IN THE PUBLIC INTEREST. ALSO, SECTION 1-2.404-1(B) OF THE FEDERAL PROCUREMENT REGULATIONS, IMPLEMENTING THE ADVERTISING STATUTE, PERMITS CANCELLATION OF AN INVITATION AFTER OPENING WHERE IT "IS IN THE BEST INTEREST OF THE GOVERNMENT." FURTHER, THE RIGHT TO REJECT ALL BIDS WAS SPECIFICALLY RESERVED TO THE GOVERNMENT IN PARAGRAPH 10(B) OF THE INVITATION INSTRUCTIONS AND CONDITIONS.

OUR OFFICE HAS CONSISTENTLY HELD THAT, WHILE THE INTEREST OF THE GOVERNMENT AND THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM REQUIRE THAT INVITATIONS BE CANCELED ONLY FOR THE MOST COGENT AND COMPELLING REASONS, THERE NECESSARILY IS RESERVED IN THE CONTRACTING OFFICIALS A SUBSTANTIAL AMOUNT OF DISCRETION IN DETERMINING WHETHER OR NOT AN INVITATION SHOULD BE CANCELED. OUR OFFICE, THEREFORE, WILL NOT OBJECT TO THE CANCELLATION OF AN INVITATION UNLESS THERE HAS BEEN A CLEAR SHOWING OF ABUSE OF ADMINISTRATIVE DISCRETION.

WE MUST CONCLUDE THAT THERE HAS BEEN NO SUCH ABUSE OF DISCRETION HERE. THE PROCURING AGENCY DETERMINED AFTER BID OPENING THAT THE ASSIGNED WEIGHT FACTORS IN THE BID EVALUATION FORMULA PROVIDED IN THE CANCELED INVITATION FAILED TO ACCURATELY REFLECT THE REQUIREMENTS OF THE PROCUREMENT WHEN APPLIED TO YOUR BID. WHILE YOUR BID WAS LOW UNDER THE INITIAL EVALUATION, ANY AWARD TO YOUR FIRM WOULD HAVE RESULTED IN SUBSTANTIALLY HIGHER CONTRACT COSTS THAN HAD AN AWARD BEEN MADE TO THE SECOND LOW BIDDER, WHOSE "STRAIGHT TIME" COSTS WERE SUBSTANTIALLY LOWER. IN THIS RESPECT, YOUR ATTENTION IS INVITED TO OUR DECISION, B 159684, OCTOBER 7, 1966, INVOLVING A SOMEWHAT ANALOGOUS SITUATION, WHEREIN WE CONCLUDED THAT AN INVITATION FOR BIDS WAS PROPERLY CANCELED, AFTER BID OPENING, IN ORDER TO PROTECT THE GOVERNMENT FROM THE CONSEQUENCES OF AN UNWISE CONTRACT SINCE THE APPARENT LOW BID WAS NOT IN FACT LOW WHEN MEASURED BY THE ACTUAL REQUIREMENTS OF THE CONTEMPLATED PROCUREMENT. SEE, ALSO, 39 COMP. GEN. 86, 88 (1959).

THE STATUTORY ADVERTISING PROVISIONS PLAINLY REQUIRE THAT THE CONTRACT SHALL BE AWARDED TO THAT RESPONSIVE, RESPONSIBLE BIDDER OFFERING THE MOST ADVANTAGEOUS BID TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. IT IS AXIOMATIC THAT, IN ORDER TO INSURE COMPLIANCE WITH THIS BASIC REQUIREMENT, BIDS BE EVALUATED, AS NEARLY AS POSSIBLE, IN LIGHT OF THE ANTICIPATED REQUIREMENTS AND THE COSTS ULTIMATELY TO BE BORNE BY THE UNITED STATES.

ACCORDINGLY, IT IS OUR OPINION THAT THE CANCELLATION OF INVITATION FOR BIDS NO. 779 WAS PROPER. IN ADDITION, ON THE RECORD BEFORE US, WE FIND NO BASIS TO QUESTION THE AWARD UNDER THE READVERTISED INVITATION.

ACCORDINGLY, YOUR PROTEST IS DENIED.