B-170548, DEC. 17, 1970

B-170548: Dec 17, 1970

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NO OBJECTION TO CANCELLATION AND READVERTISEMENT WILL BE MADE. IN THE FUTURE WHEN REJECTION OF ALL BIDS AND REVISED ADVERTISEMENTS ARE CONSIDERED THE RECORD SHOULD BE DOCUMENTED SHOWING COST INFORMATION AND THE BASIS AS TO WHY THE GOVERNMENTS MINIMUM REQUIREMENTS AS CHANGED WERE NOT PRESENT AT TIME OF ISSUANCE OF ORIGINAL INVITATION. SECRETARY: REFERENCE IS MADE TO THE LETTER DATED SEPTEMBER 16. THE INVITATION WAS ISSUED ON MAY 18. THE INVITATION WAS MAILED TO SEVEN POTENTIAL BIDDERS INCLUDING THE PROTESTANT. TWO BIDS WERE RECEIVED AND WERE OPENED ON JUNE 5. WAS IN THE AMOUNT OF $22. WAS IN THE AMOUNT OF $30. WAS TO ELIMINATE THE NEED FOR KEEPING THE EXAMINING STATION FACILITIES OPEN AFTER NORMAL DUTY HOURS IN THE EVENING AND FOR OPENING BEFORE NORMAL DUTY HOURS IN THE MORNING.

B-170548, DEC. 17, 1970

BID PROTEST - CANCELLATION AND READVERTISEMENT DENIAL OF PROTEST OF LOW BIDDER, BROAD-MIAMI COMPANY AGAINST CANCELLATION OF SEPARATE INVITATIONS FOR LODGINGS AND MEALS AND READVERTISEMENT UNDER ONE COMBINED INVITATION FOR SUCH SERVICES FOR ARMY. ALTHOUGH RECORD DOES NOT SHOW A BASIS THAT INVITATIONS FOR LODGINGS AND MEALS DID NOT PROVIDE FOR CONSIDERATION OF "ALL FACTORS OF COSTS" SO AS TO COME WITHIN "COMPELLING REASONS" FOR REJECTION THE RECORDS SHOWS THAT THE GOVERNMENT'S NEEDS COULD BEST BE SERVED BY INCLUDING BOTH LODGING AND MEALS REQUIREMENTS IN ONE INVITATION AND, THEREFORE, NO OBJECTION TO CANCELLATION AND READVERTISEMENT WILL BE MADE. HOWEVER, IN THE FUTURE WHEN REJECTION OF ALL BIDS AND REVISED ADVERTISEMENTS ARE CONSIDERED THE RECORD SHOULD BE DOCUMENTED SHOWING COST INFORMATION AND THE BASIS AS TO WHY THE GOVERNMENTS MINIMUM REQUIREMENTS AS CHANGED WERE NOT PRESENT AT TIME OF ISSUANCE OF ORIGINAL INVITATION.

TO MR. SECRETARY:

REFERENCE IS MADE TO THE LETTER DATED SEPTEMBER 16, 1970, WITH ENCLOSURES, FROM THE ASSISTANT DEPUTY FOR PROCUREMENT, OFFICE OF THE ASSISTANT SECRETARY, FURNISHING A REPORT ON THE PROTEST MADE BY BROAD MIAMI CO., D.B.A. MID-CITY MOTEL, AGAINST THE CANCELLATION OF INVITATION FOR BIDS (IFB) NO. DABB03-70-B-0158, ISSUED BY THE PURCHASING AND CONTRACTING DIVISION, FORT KNOX, KENTUCKY.

THE INVITATION WAS ISSUED ON MAY 18, 1970, FOR A REQUIREMENTS TYPE CONTRACT COVERING THE LODGING OF APPLICANTS FOR ENLISTMENT AND SELECTIVE SERVICE REGISTRANTS AND ARMY RESERVE TECHNICIANS ATTENDING TRAINING SCHOOL AT FORT HAYES, COLUMBUS, OHIO, FOR THE PERIOD JULY 1, 1970, THROUGH JUNE 30, 1971. THE INVITATION WAS MAILED TO SEVEN POTENTIAL BIDDERS INCLUDING THE PROTESTANT. TWO BIDS WERE RECEIVED AND WERE OPENED ON JUNE 5, 1970. THE OVERALL BID OF BROAD-MIAMI CO. WAS IN THE AMOUNT OF $22,667.50 AND THE OVERALL BID SUBMITTED BY THE ONLY OTHER BIDDER, PICK-FORT HAYES HOTEL, WAS IN THE AMOUNT OF $30,555. HOWEVER, DURING BID EVALUATION, THE COMMANDING OFFICER OF THE COLUMBUS, OHIO, ARMED FORCES EXAMINING AND ENTRANCE STATION (AFEES), ADVISED THAT BY LETTER DATED APRIL 7, 1970, TO THE PURCHASING AND CONTRACTING OFFICER, HE HAD REQUESTED THAT AN IFB FOR LODGING INCLUDE THE REQUIREMENT FOR THE BREAKFAST AND THE LATE EVENING MEAL AT THE CONTRACTOR'S HOTEL ON AN AS REQUIRED BASIS. THE PURPOSE FOR THIS REQUEST FOR MEAL SERVICE IN ADDITION TO LODGING, AS REPORTED TO US, WAS TO ELIMINATE THE NEED FOR KEEPING THE EXAMINING STATION FACILITIES OPEN AFTER NORMAL DUTY HOURS IN THE EVENING AND FOR OPENING BEFORE NORMAL DUTY HOURS IN THE MORNING. IT WAS ALSO DISCLOSED THAT ARRANGEMENTS HAD BEEN MADE WITH THE PRESENT MEALS CONTRACTOR TO FURNISH THE BREAKFAST AND EVENING MEALS AT THE CONTRACTOR'S PLACE OF BUSINESS TO AVOID ADDITIONAL INDIRECT COSTS TO THE GOVERNMENT.

THE ADMINISTRATIVE REVIEW OF THE FILES REVEALS THAT SUCH REQUEST WAS IN FACT MADE BUT THAT THE CONTRACTING OFFICER ERRONEOUSLY OMITTED THE REQUIREMENT IN PREPARING THE SUBJECT IFB. HENCE, BIDS WERE SOLICITED ON THE SAME BASIS AS PREVIOUS CONTRACTS FOR THIS SERVICE; THAT IS, IFB 0158 WAS ISSUED TO COVER LODGING AND IFB -0159 WAS ISSUED TO COVER MEALS. THE OVERSIGHT WAS COMPOUNDED WHEN, IN REVIEWING THE IFB THE AFEES COMMANDER ASSUMED THAT SINCE THE MEALS REQUIREMENT WAS NOT INCLUDED, IT WAS NOT AUTHORIZED AND HE THEREFORE MADE NO FURTHER COMMENT. AS A RESULT OF FINDINGS MADE DURING A MEETING OF THE BOARD OF AWARDS, IT WAS DETERMINED THAT BOTH INVITATIONS SHOULD BE CANCELED AND THE PROCUREMENT READVERTISED TO PROVIDE IN ONE INVITATION THE REQUIREMENTS FOR BOTH MEALS AND LODGING. TO PROVIDE TIME TO READVERTISE, EXTENSIONS WERE OBTAINED OF THE CURRENT MEALS CONTRACT WITH DYNETERIA, INC. (CONTRACT DABB03-69-C-0786), AND OF THE LODGING CONTRACT DABB03-69-C-0788 WITH THE NEIL HOUSE HOTEL.

IT IS REPORTED THAT INFORMATION OBTAINED DURING BOARD OF AWARDS REVIEW REVEALED THAT THE GOVERNMENT WAS NOT RECEIVING THE TYPE OF SERVICE ACTUALLY REQUIRED UNDER THE PRESENT CONTRACT FOR MEALS. IT IS REPORTED THAT WHILE THE CONTRACT PROVIDED FOR BREAKFAST AND EVENING MEALS TO BE SERVED AT THE EXAMINING STATION, THESE MEALS WERE ACTUALLY BEING SERVED AT THE CONTRACTOR'S PLACE OF BUSINESS, REQUIRING THE BUSSING TO THE CONTRACTOR'S RESTAURANT, WAITING FOR COMPLETION OF THE MEAL, AND BUSSING BACK TO PLACE OF LODGING.

BIDDERS WERE NOTIFIED BY LETTER DATED JUNE 27, 1970, THAT THE INVITATIONS WERE CANCELED AND THAT THE REQUIREMENT WOULD BE READVERTISED UNDER REVISED REQUIREMENTS. THE CONTRACTING OFFICER BASED HIS DETERMINATION TO CANCEL THE SOLICITATIONS ON PARAGRAPH 2 404.1(B)(IV) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WHICH AUTHORIZES SUCH ACTION WHEN ALL FACTORS OF COST TO THE GOVERNMENT ARE NOT PROVIDED FOR IN THE SOLICITATION AND ON ASPR 2-404.1(B)(VIII) WHICH AUTHORIZES SUCH ACTION WHEN IT IS CLEARLY IN THE BEST INTEREST OF THE GOVERNMENT. THE READVERTISEMENT WOULD INCLUDE NOT ONLY LODGINGS BUT ALSO BREAKFAST AND EVENING MEALS ON OR NEAR THE PLACE OF LODGING.

ASPR 2-404.1(A) CONTAINS THE GENERAL PRINCIPLES APPLICABLE TO THE REJECTION OF BIDS AND THE CANCELLATION OF AN IFB AFTER OPENING.

"(A) THE PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM DICTATES THAT AFTER BIDS HAVE BEEN OPENED, AWARD MUST BE MADE TO THAT RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID, UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION. EVERY EFFORT SHALL BE MADE TO ANTICIPATE CHANGES IN A REQUIREMENT PRIOR TO THE DATE OF OPENING AND TO NOTIFY ALL PROSPECTIVE BIDDERS OF ANY RESULTING MODIFICATION OR CANCELLATION, THEREBY PERMITTING BIDDERS TO CHANGE THEIR BIDS AND PREVENTING THE UNNECESSARY EXPOSURE OF BID PRICES. AS A GENERAL RULE, AFTER OPENING, AN INVITATION FOR BIDS SHOULD NOT BE CANCELED AND READVERTISED DUE SOLELY TO INCREASED REQUIREMENTS FOR THE ITEMS BEING PROCURED; AWARD SHOULD BE MADE ON THE INITIAL INVITATION FOR BIDS AND THE ADDITIONAL QUANTITY REQUIRED SHOULD BE TREATED AS A NEW PROCUREMENT."

OUR REVIEW OF THE RECORD DOES NOT REVEAL THE BASIS UPON WHICH IT WAS CONCLUDED THAT THE INVITATION FAILED TO PROVIDE FOR CONSIDERATION OF "ALL FACTORS OF COST." RATHER, IT APPEARS TO US THAT THE ONLY BASIS FOR CANCELLATION WAS THE FACT THAT THE GOVERNMENT'S NEEDS COULD BEST BE SERVED BY A PROCUREMENT COVERING BOTH LODGING AND MEALS REQUIREMENTS. IN OTHER WORDS, THE RECORD REASONABLY ESTABLISHES THAT EXISTING CIRCUMSTANCES CALLED FOR A REVISION OF THE SPECIFICATIONS TO EXPRESS THOSE DUAL REQUIREMENTS. CF. 49 COMP. GEN. 211 (1969).

UNDER PARAGRAPH 10(B) OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS, THE GOVERNMENT EXPRESSLY RESERVED THE RIGHT TO REJECT ANY OR ALL BIDS WHEN IN ITS INTEREST TO DO SO. WE HAVE RECOGNIZED THAT THIS AUTHORITY IS EXTREMELY BROAD AND WE DO NOT ORDINARILY QUESTION THE EXERCISE OF SUCH RIGHT IN THE ABSENCE OF A CLEAR SHOWING THAT REJECTION CONSTITUTED AN ABUSE OF ADMINISTRATIVE DISCRETION. 39 COMP. GEN. 396 (1959); B-160626, MARCH 6, 1967. ALTHOUGH WE DO NOT FEEL THAT THE RECORD CLEARLY DEMONSTRATES THAT A "COMPELLING REASON" EXISTED TO REJECT ALL BIDS, IT IS CLEAR THAT THE ADMINISTRATIVE NEED WAS FOR BOTH LODGING AND MEAL SERVICES. WHETHER SEPARATE AWARDS WOULD SERVE THESE NEEDS IS NOT FULLY ANSWERED BY THE RECORD. IN THIS REGARD, WE SEE NO VALID OBJECTION TO SINGLE AWARDS FOR EACH TYPE OF SERVICE EVEN THOUGH SOME JUSTIFICATION IS MADE THAT COSTS WOULD BE REDUCED IF THE SERVICES WERE COMBINED IN ONE SOLICITATION. BUT THE ANTICIPATED SAVINGS HAVE NOT BEEN STATED OR ESTIMATED. ATTACHMENT NO. 1 TO THE SUMMARY OF BOARD OF AWARDS ACTION, JUNE 17, 1970, STATES IN PART:

"B. IT WAS FOUND THAT THE BREAKFAST AND EVENING MEALS UNDER THE PRESENT CONTRACT WERE NOT BEING FED AT THE EXAMINING STATION FACILITIES AS PROVIDED FOR IN THE PRESENT CONTRACT. THE CHAIRMAN OF THE BOARD QUERIED MAJOR BROOKS AS TO WHY AND IT WAS FOUND THAT IT WAS BETTER TO BUS THE INDIVIDUALS TO THE CONTRACTORS PLACE OF PREPARATION TO EAT RATHER THAN OPEN THE EXAMINING STATION EARLIER IN THE MORNING AND KEEP IT OPEN LATER IN THE EVENING TO PROVIDE EATING FACILITIES FOR THE APPLICANTS AND INDUCTEES. IT WAS FURTHER DETERMINED THAT THIS REQUIRED A BUS AND A DRIVER TO CHAUFFEUR THE INDIVIDUALS TO THE RESTAURANT, WAIT FOR THEM TO COMPLETE THEIR MEAL AND THEN TAKE THEM TO THEIR LODGING FACILITIES. BECAME APPARENT THAT THE GOVERNMENT WAS INCURRING EXTRA UNNECESSARY COSTS EITHER BY FEEDING THE BREAKFAST AND EVENING MEAL AT THE EXAMINING STATION OR BY BUSSING THE INDIVIDUALS TO OTHER THAN THE PLACE OF LODGING. THE POSSIBILITIES THAT THE GOVERNMENT PROVIDE BREAKFAST AND EVENING MEALS AT OR AROUND THE LODGING FACILITIES WAS DISCUSSED, MAJOR BROOKS DECLARED THAT THIS IS WHAT WAS REALLY REQUIRED BUT HE WAS OF THE ERRONEOUS OPINION THAT THE LODGING HAD TO BE A SEPARATE CONTRACT AND THE MEALS A SEPARATE CONTRACT.

"2. SUBSEQUENT REVIEW OF THESE CIRCUMSTANCES REVEALED THAT ALL FACTORS OF COST HAD NOT BEEN CONSIDERED IN ADVERTISING FOR BIDS FOR BOTH THE MEALS AND THE LODGING, THAT THE NEEDS OF THE GOVERNMENT COULD BE BETTER SERVED BY COMBINING THE REQUIREMENTS FOR THE BREAKFAST AND EVENING MEAL WITH THE LODGING REQUIREMENTS, REQUIRING MEALS ON THE PREMISES OR WITHIN A REASONABLE WALKING DISTANCE AND THAT THE GOVERNMENT WAS NOT NOW OBTAINING THE SERVICE SPECIFIED IN THE INVITATION AND IT WAS CLEARLY IN THE BEST INTERESTS OF THE GOVERNMENT TO CANCEL THE INVITATION FOR BIDS AND RE- ADVERTISE UNDER REVISED REQUIREMENTS."

IN THIS REGARD, WE HAVE HELD THAT EVEN WHERE EVENTUAL SAVINGS ARE UNCERTAIN OR EVEN REMOTE, A CANCELLATION OF AN INVITATION BASED UPON THE POSSIBILITY OF SAVINGS WOULD NOT BE DISTURBED WHERE TO DO SO WOULD VITIATE THE PROCUREMENT AGENCY'S JUDGMENT AS TO THE GOVERNMENT'S PRESENT NEEDS. 47 COMP. GEN. 103 (1967).

WE, THEREFORE, ARE OF THE VIEW THAT THE CANCELLATIONS OF THE INVITATIONS AND THE PROPOSED READVERTISEMENT ARE PROPER UNDER THE CIRCUMSTANCES.

HOWEVER, WE SUGGEST THAT FUTURE APPRAISALS OR REVIEWS BY THE PROCUREMENT ACTIVITY IN CONNECTION WITH THE REJECTION OF ALL BIDS AND REVISED READVERTISEMENTS OF GOVERNMENT'S REQUIREMENTS BE BASED ON ADEQUATELY DOCUMENTED COST INFORMATION AND ANALYSIS OF THE GOVERNMENT'S MINIMUM REQUIREMENTS AS CHANGED OR AFFECTED BY CURRENT SITUATIONS NOT PRESENT AT THE TIME THE ORIGINAL INVITATIONS WERE ISSUED.