B-171612, MAR 19, 1971

B-171612: Mar 19, 1971

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BID PROTEST - BID RESPONSIVENESS - DAMAGES SOUGHT DECISION HOLDING THAT ALTHOUGH VELONEX WAS ERRONEOUSLY DETERMINED NONRESPONSIVE. DAMAGES ARE NOT RECOVERABLE. THE COURTS HAVE CONSISTENTLY HELD THAT NO DAMAGES. ARE RECOVERABLE. NOTWITHSTANDING THAT CONTRACTING OFFICER'S DETERMINATION IS FOUND TO HAVE BEEN ERRONEOUS. IF SUCH IS NOT POSSIBLE. THAT COMPENSATORY DAMAGES BE ALLOWED ON THE BASIS THAT YOUR FIRM WAS ENTITLED TO THE AWARD. WE HAVE BEEN ADVISED BY HEADQUARTERS UNITED STATES ARMY MATERIEL COMMAND THAT YOUR FIRM'S LOW "OR EQUAL" BID WAS IMPROPERLY REJECTED AND THAT THE AWARD WAS MADE TO THE NEXT LOW RESPONSIVE BIDDER AT A COST OF APPROXIMATELY $50 IN EXCESS OF YOUR LOW BID. WE HAVE REVIEWED THIS PROCUREMENT AND WE CONCLUDE THAT THE REJECTION OF YOUR LOW BID WAS IMPROPER SINCE IT WAS RESPONSIVE TO THE "BRAND NAME OR EQUAL" REQUIREMENTS OF THE SOLICITATION.

B-171612, MAR 19, 1971

BID PROTEST - BID RESPONSIVENESS - DAMAGES SOUGHT DECISION HOLDING THAT ALTHOUGH VELONEX WAS ERRONEOUSLY DETERMINED NONRESPONSIVE, THE CONTRACT SOLICITED BY REDSTONE ARSENAL, DEPARTMENT OF THE ARMY, HAS BEEN FULLY PERFORMED, AND DAMAGES ARE NOT RECOVERABLE. WHERE THE RECORD DOES NOT INDICATE ARBITRARY OR CAPRICIOUS ACTION BY THE CONTRACTING OFFICER IN HOLDING PROTESTANT'S BID NONRESPONSIVE, THE COMP. GEN. AND THE COURTS HAVE CONSISTENTLY HELD THAT NO DAMAGES, INCLUDING COMPENSATORY DAMAGES, ARE RECOVERABLE, NOTWITHSTANDING THAT CONTRACTING OFFICER'S DETERMINATION IS FOUND TO HAVE BEEN ERRONEOUS.

TO VELONEX, A DIVISION OF VARIAN:

YOUR LETTER OF DECEMBER 23, 1970, WITH ENCLOSURES, PROTESTS THE ADMINISTRATIVE ACTIONS TAKEN BY REDSTONE ARSENAL, DEPARTMENT OF THE ARMY, UNDER SOLICITATION NO. DAAHO3-71-B-0031, AND REQUESTS THAT THE AWARD BE REVERSED AND, IF SUCH IS NOT POSSIBLE, THAT COMPENSATORY DAMAGES BE ALLOWED ON THE BASIS THAT YOUR FIRM WAS ENTITLED TO THE AWARD.

WE HAVE BEEN ADVISED BY HEADQUARTERS UNITED STATES ARMY MATERIEL COMMAND THAT YOUR FIRM'S LOW "OR EQUAL" BID WAS IMPROPERLY REJECTED AND THAT THE AWARD WAS MADE TO THE NEXT LOW RESPONSIVE BIDDER AT A COST OF APPROXIMATELY $50 IN EXCESS OF YOUR LOW BID. WE HAVE REVIEWED THIS PROCUREMENT AND WE CONCLUDE THAT THE REJECTION OF YOUR LOW BID WAS IMPROPER SINCE IT WAS RESPONSIVE TO THE "BRAND NAME OR EQUAL" REQUIREMENTS OF THE SOLICITATION. HOWEVER, WE ARE UNABLE TO GRANT THE RELIEF REQUESTED SINCE WE UNDERSTAND THAT THIS CONTRACT HAS BEEN FULLY PERFORMED AND THAT PAYMENT HAS BEEN MADE FOR THE EQUIPMENT WHICH, UNDER THE CONTRACT, WAS DELIVERED ON NOVEMBER 16, 1970, OR WITHIN THE REQUIRED 30 DAYS AFTER DATE OF CONTRACT (OCTOBER 28, 1970).

OUR OFFICE HAS CONSISTENTLY HELD THAT PROSPECTIVE CONTRACTORS HAVE NO ENFORCEABLE RIGHT TO RECOVER LOSSES, INCLUDING COMPENSATORY DAMAGES, IN THE EVENT THEY ARE NOT AWARDED A CONTRACT. B-167733, FEBRUARY 9, 1970; B- 169425, JUNE 12, 1970; B-168485, OCTOBER 29, 1970; B-169547, FEBRUARY 10, 1971. THE COURTS HAVE UPHELD OUR POSITION EXCEPT IN CASES WHERE BIDS WERE NOT INVITED IN GOOD FAITH, OR IN CASES WHERE THE AWARD WAS MADE IN AN ARBITRARY AND CAPRICIOUS MANNER WITHOUT REGARD TO STATUTE AND REGULATION. SEE HEYER PRODUCTS COMPANY, INC. V UNITED STATES, 135 CT. CL. 63 (1956), AND KECO INDUSTRIES, INC. V UNITED STATES, 428 F. 2D 1233 (1970). HEYER PRODUCTS, THE COURT STATED AT PAGE 71 AS FOLLOWS:

"IT GOES WITHOUT SAYING THAT NOT EVERY UNSUCCESSFUL BIDDER IS ENTITLED TO RECOVER THE COST OF PUTTING IN HIS BID. RECOVERY CAN BE HAD IN ONLY THOSE CASES WHERE IT CAN BE SHOWN BY CLEAR AND CONVINCING PROOF THAT THERE HAS BEEN A FRAUDULENT INDUCEMENT FOR BIDS, WITH THE INTENTION, BEFORE THE BIDS WERE INVITED OR LATER CONCEIVED, TO DISREGARD THEM ALL EXCEPT THE ONES FROM BIDDERS TO ONE OF WHOM IT WAS INTENDED TO LET THE CONTRACT, WHETHER HE WAS THE LOWEST RESPONSIBLE BIDDER OR NOT. IN OTHER WORDS, IT MUST BE SHOWN THAT BIDS WERE NOT INVITED IN GOOD FAITH, BUT AS A PRETENSE TO CONCEAL THE PURPOSE TO LET THE CONTRACT TO SOME FAVORED BIDDER, OR TO ONE OF A GROUP OF PREFERRED BIDDERS, AND WITH THE INTENT TO WILFULLY, CAPRICIOUSLY, AND ARBITRARILY DISREGARD THE OBLIGATION TO LET THE CONTRACT TO HIM WHOSE BID WAS MOST ADVANTAGEOUS TO THE GOVERNMENT."

THERE IS NO INDICATION IN THE RECORD BEFORE US THAT BIDS WERE NOT INVITED IN GOOD FAITH, OR THAT THERE WAS ANY ACTION ON THE PART OF THE CONTRACTING OFFICER WHICH COULD REASONABLY BE CONSIDERED ARBITRARY OR CAPRICIOUS IN REJECTING YOUR BID AS NONRESPONSIVE. THE FACT THAT THE CONCLUSION REACHED BY THE CONTRACTING OFFICER TO REJECT YOUR LOW BID WAS LATER DETERMINED TO HAVE BEEN IN ERROR AFFORDS NO BASIS FOR CONCLUDING THAT THE CONTRACTING OFFICER ACTED IN BAD FAITH OR WITH THE PRECONCEIVED INTENT TO DENY YOUR FIRM AN AWARD.

ACCORDINGLY, YOUR REQUEST FOR RELIEF IS DENIED.