B-170765, NOV. 24, 1970

B-170765: Nov 24, 1970

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DETERMINATION THAT INSUFFICIENT FUNDS WERE AVAILABLE FOR THE SERVICES IN QUESTION IS ADEQUATE REASON FOR CANCELLATION OF INVITATION. THE INVITATION FOR BIDS WAS ISSUED ON JUNE 12. THREE BIDS WERE RECEIVED ON JULY 8. WAS DETERMINED TO BE NONRESPONSIVE DUE TO THAT FIRM'S FAILURE TO PROVIDE THE REQUIRED BID SECURITY AND BECAUSE IT FAILED TO ACKNOWLEDGE A SUBSTANTIVE AMENDMENT TO THE IFB. THE LOW CONFORMING BIDDER WAS DETERMINED TO BE BMC. THE CHESAPEAKE DIVISION WAS IN CONTACT WITH BMC REGARDING THE PREAWARD SURVEY INFORMATION. BOTH OF THESE DEFAULTS WERE DISPUTED BY BMC. BMC WAS NOTIFIED BY THE CHESAPEAKE DIVISION THAT ALL BIDS WOULD BE REJECTED BECAUSE INSUFFICIENT FUNDS WERE AVAILABLE FOR THE CUSTODIAL SERVICES IN QUESTION.

B-170765, NOV. 24, 1970

BID PROTEST - CANCELLATION OF INVITATION DENIAL OF PROTEST OF BUILDING MAINTENANCE CORP., LOW BIDDER, AGAINST THE CANCELLATION OF INVITATION FOR BIDS FOR CONTRACT COVERING CUSTODIAL SERVICES FOR THE NAVY SECURITY STATION. AFTER BIDS HAD BEEN OPENED, DETERMINATION THAT INSUFFICIENT FUNDS WERE AVAILABLE FOR THE SERVICES IN QUESTION IS ADEQUATE REASON FOR CANCELLATION OF INVITATION.

TO MR. LEONARD A. WHITE:

WE REFER TO YOUR LETTER OF SEPTEMBER 2, 1970, PROTESTING, ON BEHALF OF BUILDING MAINTENANCE CORPORATION (BMC), THE CANCELLATION OF INVITATION FOR BIDS (IFB) NO. N62477-70-C-0285 COVERING CUSTODIAL SERVICES FOR THE UNITED STATES NAVAL SECURITY STATION, WASHINGTON, D.C.

THE INVITATION FOR BIDS WAS ISSUED ON JUNE 12, 1970, BY THE CHESAPEAKE DIVISION, NAVAL FACILITIES ENGINEERING COMMAND. THREE BIDS WERE RECEIVED ON JULY 8, 1970, AS FOLLOWS:

BARRY INDUSTRIES, INC. $53,636.88

BUILDING MAINTENANCE CORPORATION 71,800.00

NATIONWIDE BUILDING MAINTENANCE, INC. 72,000.00

GOVERNMENT ESTIMATE 65,000.00

THE APPARENT LOW BID OF BARRY INDUSTRIES, INC., WAS DETERMINED TO BE NONRESPONSIVE DUE TO THAT FIRM'S FAILURE TO PROVIDE THE REQUIRED BID SECURITY AND BECAUSE IT FAILED TO ACKNOWLEDGE A SUBSTANTIVE AMENDMENT TO THE IFB. THUS, THE LOW CONFORMING BIDDER WAS DETERMINED TO BE BMC.

IMMEDIATELY AFTER BID OPENING, THE CHESAPEAKE DIVISION WAS IN CONTACT WITH BMC REGARDING THE PREAWARD SURVEY INFORMATION. IN ADDITION TO A LIST OF PREVIOUS JOBS, BMC FURNISHED THE CHESAPEAKE DIVISION CERTAIN INFORMATION REGARDING TWO SMALL JOBS WHICH HAD BEEN TERMINATED BY GOVERNMENT AGENCIES FOR DEFAULT. BOTH OF THESE DEFAULTS WERE DISPUTED BY BMC.

ON JULY 10, 1970, BMC WAS NOTIFIED BY THE CHESAPEAKE DIVISION THAT ALL BIDS WOULD BE REJECTED BECAUSE INSUFFICIENT FUNDS WERE AVAILABLE FOR THE CUSTODIAL SERVICES IN QUESTION.

PARAGRAPH 2-404.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) READS IN PERTINENT PART AS FOLLOWS:

"(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. ***

"(B) *** INVITATIONS FOR BIDS MAY BE CANCELED AFTER OPENING BUT PRIOR TO AWARD WHEN SUCH ACTION IS CONSISTENT WITH (A) ABOVE AND THE CONTRACTING OFFICER DETERMINES IN WRITING THAT--

"(VIII) FOR OTHER REASONS, CANCELLATION IS CLEARLY IN THE BEST INTEREST OF THE GOVERNMENT."

WE TOO HAVE RECOGNIZED THAT CANCELLATION OF AN IFB AFTER BID OPENING IS PREJUDICIAL TO THE LOW BIDDER AND THEREFORE COGENT AND COMPELLING REASONS ARE NECESSARY TO JUSTIFY SUCH CANCELLATION. SEE 39 COMP. GEN. 396 (1959). HOWEVER, IN B-157419, OCTOBER 18, 1965, WE HELD THAT AN IFB COULD BE CANCELED AFTER BID OPENING IF SUFFICIENT FUNDS FOR PROCUREMENT ARE NOT AVAILABLE. ALSO, IN 48 COMP. GEN. 471, 473-474 (1969), WE HELD:

"UNDER THE AUTHORITY OF 10 U.S.C. 2305(C), ALL BIDS MAY BE REJECTED IF THE HEAD OF THE AGENCY DETERMINES THAT REJECTION IS IN THE PUBLIC INTEREST, AND UNDER 10 U.S.C. 2311 THE AUTHORITY TO MAKE SUCH A DETERMINATION MAY BE DELEGATED TO ANY OTHER OFFICER OR OFFICIAL OF THAT AGENCY. PURSUANT TO THE FOREGOING, THE PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-404.1(B)(VIII) HAVE DELEGATED TO THE CONTRACTING OFFICER THE AUTHORITY TO CANCEL AN INVITATION WHERE SUCH ACTION IS DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT. IN THE INSTANT CASE IT WOULD APPEAR NOT ONLY THAT THE INTEREST OF THE GOVERNMENT REQUIRED CANCELLATION OF THE SUBJECT IFB, BUT ALSO THAT THE CONTRACTING OFFICER WOULD HAVE EXCEEDED HIS AUTHORITY IF HE HAD ACCEPTED YOUR BID, SINCE INSUFFICIENT FUNDS WERE AVAILABLE TO PURCHASE THE SYSTEM ON THE BASIS OF YOUR BID PRICE. B-158991, JULY 12, 1966. IT SHOULD BE POINTED OUT, MOREOVER, THAT THE COURTS HAVE HELD THAT A REQUEST FOR BIDS BY THE GOVERNMENT DOES NOT IMPORT ANY OBLIGATION TO ACCEPT ANY OF THE OFFERS RECEIVED, INCLUDING THE LOWEST RESPONSIVE BID. O'BRIEN V CARNEY, 6 F. SUPP. 761. UNDER THESE CIRCUMSTANCES WE CANNOT CONSIDER THE DECISION TO CANCEL THE SUBJECT IFB AS IMPROPER."

YOU MAINTAIN THAT THE SECURITY STATION MADE INDEPENDENT INQUIRIES TO PERSONNEL AT FORT MYER, VIRGINIA, CONCERNING A CONTRACT WHICH HAD BEEN TERMINATED FOR DEFAULT AND THAT "IT IS APPARENT THAT THE UNAUTHORIZED INVESTIGATIONS BY SOMEONE OTHER THAN THE PROCURING OFFICE RAISED SOME DOUBTS AS TO BMC'S ABILITY TO MEET THE QUALITY, QUANTITY, AND TIME REQUIREMENTS OF THE IFB AND THAT THESE DOUBTS RESULTED IN THE FUNDS BEING WITHDRAWN."

WE HAVE BEEN ADVISED BY THE NAVAL FACILITIES ENGINEERING COMMAND THAT BMC'S TWO PREVIOUS DEFAULTS WERE NOT TAKEN INTO CONSIDERATION IN THE DECISION TO CANCEL THE IFB BUT RATHER A REASSESSMENT OF OBLIGATIONS WAS MADE BY THE NAVAL COMMUNICATIONS COMMAND, THE SECURITY STATION'S PARENT COMMAND, AND THE DETERMINATION WAS MADE TO WITHDRAW THE FUNDING FROM THIS CONTRACT DUE TO UNANTICIPATED INCREASES IN COMMAND-WIDE OPERATIONS AND MAINTENANCE REQUIREMENTS FOR FISCAL YEAR 1971.

UNDER THE CIRCUMSTANCES, WE CANNOT CONCLUDE THAT THE ACTION TAKEN IN CANCELING THE BIDS WAS IMPROPER AND, THEREFORE, YOUR PROTEST IS DENIED.