B-173211, OCT 1, 1971

B-173211: Oct 1, 1971

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THE TWO LOWEST BIDDERS WERE ALLOWED TO WITHDRAW. A BREAKTHROUGH WAS ACHIEVED BY A SUBCONTRACTOR. WHEREBY COST OF A COMPONENT INTENDED FOR EXTENSIVE USE UNDER THE SOLICITATION WAS REDUCED WHICH WOULD RESULT IN AN ESTIMATED SAVINGS TO THE GOVERNMENT IN EXCESS OF $200. THE RIGHT OF THE GOVERNMENT TO REJECT ALL BIDS AND READVERTISE WAS INCLUDED IN THE IFB (PARAGRAPH 10(B) OF STANDARD FORM 33A) AND IS FURTHER RESERVED TO THE GOVERNMENT BY STATUTE. THE PROTEST IS THEREFORE DENIED. INCORPORATED: REFERENCE IS MADE TO YOUR LETTERS DATED JUNE 4 AND 17. WERE ALLOWED TO WITHDRAW. BIDS WERE INITIALLY OFFERED FOR ACCEPTANCE FOR A 60-DAY PERIOD. IN THE MEANTIME A BREAKTHROUGH WAS ACHIEVED BY A SUBCONTRACTOR UNDER ANOTHER CONTRACT WHEREBY THE COST OF A COMPONENT INTENDED FOR EXTENSIVE USE UNDER THE SOLICITATION WAS SUBSTANTIALLY REDUCED.

B-173211, OCT 1, 1971

BID PROTEST - CANCELLATION OF IFB - PUBLIC INTEREST DECISION DENYING PROTEST BY THIRD LOW BIDDER AGAINST CANCELLATION OF AN IFB ISSUED BY THE ARMY SAFEGUARD SYSTEM COMMAND, FOR 8 ANTENNA ARRAY SHIPPING KITS. DUE TO MISTAKES IN THEIR BIDS, THE TWO LOWEST BIDDERS WERE ALLOWED TO WITHDRAW. DURING AN EXTENSION OF THE ACCEPTANCE PERIOD, A BREAKTHROUGH WAS ACHIEVED BY A SUBCONTRACTOR, WHEREBY COST OF A COMPONENT INTENDED FOR EXTENSIVE USE UNDER THE SOLICITATION WAS REDUCED WHICH WOULD RESULT IN AN ESTIMATED SAVINGS TO THE GOVERNMENT IN EXCESS OF $200,000. THE RIGHT OF THE GOVERNMENT TO REJECT ALL BIDS AND READVERTISE WAS INCLUDED IN THE IFB (PARAGRAPH 10(B) OF STANDARD FORM 33A) AND IS FURTHER RESERVED TO THE GOVERNMENT BY STATUTE, 10 U.S.C. 2305(C). THE PROTEST IS THEREFORE DENIED.

TO DAY ENTERPRISES, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTERS DATED JUNE 4 AND 17, 1971, WITH ENCLOSURES, PROTESTING AGAINST THE CANCELLATION OF INVITATION FOR BIDS (IFB) NO. DAH060-71-B-0001, ISSUED BY THE UNITED STATES ARMY SAFEGUARD SYSTEM COMMAND (SAFSCOM).

THE SOLICITATION, ISSUED DECEMBER 22, 1970, CALLED FOR 8 ANTENNA ARRAY SHIPPING KITS FOR USE IN SHIPPING OF THE MISSILE SITE RADAR, AN INTEGRAL PART OF THE SAFEGUARD DEFENSE SYSTEM. AT BID OPENING ON FEBRUARY 1, 1971, DAY ENTERPRISES SUBMITTED THE THIRD LOWEST BID OF $39,446 PER KIT. SUBSEQUENTLY, DUE TO MISTAKES IN THEIR BIDS, THE TWO LOWEST BIDDERS, MOELLER MANUFACTURING AND AIR WORLD MANUFACTURING, WERE ALLOWED TO WITHDRAW. BIDS WERE INITIALLY OFFERED FOR ACCEPTANCE FOR A 60-DAY PERIOD. AFTER BID OPENING, ALL BIDDERS EXTENDED THIS PERIOD FOR AN ADDITIONAL 60 DAYS AS REQUESTED BY THE ARMY.

IN THE MEANTIME A BREAKTHROUGH WAS ACHIEVED BY A SUBCONTRACTOR UNDER ANOTHER CONTRACT WHEREBY THE COST OF A COMPONENT INTENDED FOR EXTENSIVE USE UNDER THE SOLICITATION WAS SUBSTANTIALLY REDUCED. THIS BREAKTHROUGH NOT ONLY COULD BE EXPECTED TO SUBSTANTIALLY REDUCE THE COST OF THE ITEM BEING PROCURED, BUT ALSO DICTATED SUBSTANTIAL CHANGES IN SPECIFICATIONS AND DRAWINGS. THE IFB WAS, THEREFORE, CANCELLED ON MAY 12, 1971, IN ACCORDANCE WITH ASPR 2-404.1. YOU PROTEST CANCELLATION OF THE SOLICITATION ALLEGING THAT SINCE THE COMPONENT WAS DEVELOPED UNDER A CONTRACT CONTAINING A VALUE ENGINEERING CLAUSE, ITS USE WOULD ACTUALLY RESULT IN INCREASED COST TO THE GOVERNMENT.

THE RECORD INDICATES THAT THE SUBCONTRACTOR, RAYTHEON, ACTUALLY BEGAN DEVELOPMENT OF THE NEW COMPONENT IN APRIL OF 1970 AFTER RECEIVING WHAT WAS REGARDED AS A HIGH QUOTE FOR THE COMPONENT FROM AN EXISTING SUPPLIER. THE UNDERTAKING WAS KNOWN TO SAFSCOM PRIOR TO THE ISSUANCE OF THE IFB AT ISSUE. NEVERTHELESS, THE IFB WAS ISSUED ON DECEMBER 22, 1970, WITHOUT RECOGNITION OF THE DEVELOPMENT BECAUSE THE COMMAND FELT THAT DELIVERY LEAD TIMES WERE SUCH AS TO PRECLUDE ANY FURTHER DELAY TO DETERMINE THE FEASIBILITY OF THE NEW DESIGN. HOWEVER, WHEN IT WAS DISCOVERED THAT DELIVERY OF THE SHIPPING KITS COULD BE OBTAINED WITHIN 160 DAYS AFTER DATE OF CONTRACT RATHER THAN THE ANTICIPATED 300-DAY DELIVERY, IT WAS DECIDED TO DELAY AWARD UNTIL THE COMPONENT DEVELOPMENT COULD BE PROVED OUT. CONSEQUENTLY, BIDDERS WERE REQUESTED TO EXTEND THEIR BIDS FOR 60 DAYS. DURING THIS PERIOD THE GOVERNMENT WAS INFORMED THAT THE DESIGN EFFORT HAD BEEN SUCCESSFUL. THEREFORE, ON MAY 12, 1971, THE IFB WAS CANCELLED IN ORDER TO REPROCURE ON THE NEW SPECIFICATIONS.

THERE IS NO EVIDENCE IN THE RECORD THAT THE COMPONENT WAS OVERDESIGNED. IT APPEARS CLEAR THAT THE DEVELOPMENT HAS RESULTED IN A SAVINGS (FROM $3.74 TO LESS THAN $.50 PER COMPONENT UNIT) RATHER THAN INCREASED COST TO THE GOVERNMENT. IT IS REPORTED THAT THE SAVINGS IS ESTIMATED TO BE IN EXCESS OF $200,000.

WE REGRET THAT YOU WENT TO THE TROUBLE AND EXPENSE OF PREPARING A BID OR A SOLICITATION WHICH WAS CANCELLED AFTER OPENING AND BEFORE AWARD. HOWEVER, THE RIGHT OF THE GOVERNMENT TO REJECT ALL BIDS AND READVERTISE IS SPELLED OUT CLEARLY IN PARAGRAPH 10(B) OF STANDARD FORM 33A WHICH WAS PART OF THE IFB. IN ADDITION, THE RIGHT IS RESERVED TO THE GOVERNMENT BY STATUTE (10 U.S.C. 2305(C)) WHENEVER IT IS DETERMINED TO BE IN THE PUBLIC INTEREST. WE HAVE HELD THAT THE PROSPECT OF A SUBSTANTIAL MONETARY SAVINGS TO THE GOVERNMENT IS A COGENT REASON JUSTIFYING SUCH ACTION.

IN VIEW OF THE FOREGOING, WE FIND NO REASON TO OBJECT TO THE PROCEDURE USED IN THE SUBJECT PROCUREMENT OR TO OBJECT TO THE CANCELLATION OF THE IFB. ACCORDINGLY, YOUR PROTEST IS DENIED.