B-173670, NOV 18, 1971

B-173670: Nov 18, 1971

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SINCE IT WAS DETERMINED THAT THE WORK COULD BE PERFORMED "IN-HOUSE". THE IFB WAS PROPERLY CANCELLED IN ACCORDANCE WITH ASPR 2-404.1(B)(III) AND THERE EXISTS NO EVIDENCE IN THE RECORD OF AN ABUSE OF THE CONTRACTING OFFICER'S DISCRETIONARY POWER TO CANCEL THE SUBJECT INVITATION. THE PROTEST IS DENIED. NINE BIDS WERE RECEIVED RANGING FROM YOUR FIRM'S LOW BID OF $64. YOUR BID WAS VERIFIED BY LETTER DATED JULY 8. THE IFB WAS CANCELLED AND ALL BIDS DISCARDED PURSUANT TO A DETERMINATION BY THE ACTIVITY THAT THE WORK WOULD BE PERFORMED IN-HOUSE. YOU PROTEST THE CANCELLATION ON THE GROUND THAT SUCH ACTION ON THE PART OF THE ACTIVITY IS NOT IN THE GOVERNMENT'S BEST INTEREST BECAUSE THE COST OF IN-HOUSE PERFORMANCE WILL BE FAR IN EXCESS OF YOUR FIRM'S BID PRICE.

B-173670, NOV 18, 1971

BID PROTEST - CANCELLED IFB - IN-HOUSE PERFORMANCE DECISION DENYING PROTEST BY LOW BIDDER AGAINST CANCELLATION OF AN IFB ISSUED BY THE NAVAL REGIONAL PROCUREMENT OFFICE, OAKLAND, CALIF., FOR SERVICES AND MATERIAL TO REPAIR SEVEN REFUELING WINCHES. UNDER PARAGRAPH 10(B) OF THE IFB'S INSTRUCTION TO BIDDERS (STANDARD FORM 33A), THE GOVERNMENT EXPRESSLY RESERVES THE RIGHT TO REJECT ANY AND ALL BIDS WHEN IN ITS INTEREST TO DO SO. SINCE IT WAS DETERMINED THAT THE WORK COULD BE PERFORMED "IN-HOUSE", AFTER A WORK LOAD REVIEW, THE IFB WAS PROPERLY CANCELLED IN ACCORDANCE WITH ASPR 2-404.1(B)(III) AND THERE EXISTS NO EVIDENCE IN THE RECORD OF AN ABUSE OF THE CONTRACTING OFFICER'S DISCRETIONARY POWER TO CANCEL THE SUBJECT INVITATION. ACCORDINGLY, THE PROTEST IS DENIED.

TO TRIPLE "A" MACHINE SHOP, INCORPORATED:

WE REFER TO YOUR TELEFAX DATED JULY 22, 1971, PROTESTING AGAINST THE CANCELLATION OF INVITATION FOR BIDS (IFB) NO. N66314-71-B-2555, ISSUED BY THE NAVAL REGIONAL PROCUREMENT OFFICE, OAKLAND, CALIFORNIA.

THE SUBJECT IFB ISSUED JUNE 7, 1971, CALLED FOR THE PROCUREMENT OF SERVICES AND MATERIAL TO REPAIR SEVEN REFUELING WINCHES. NINE BIDS WERE RECEIVED RANGING FROM YOUR FIRM'S LOW BID OF $64,000 TO A HIGH BID OF $242,000. BECAUSE OF THE DISPARITY BETWEEN YOUR LOW BID AND THE OTHER BIDS, THE CONTRACTING OFFICER, BY LETTER DATED JULY 7, 1971, REQUESTED THAT YOUR FIRM VERIFY ITS BID. YOUR BID WAS VERIFIED BY LETTER DATED JULY 8, 1971. SUBSEQUENTLY, ON JULY 19, THE IFB WAS CANCELLED AND ALL BIDS DISCARDED PURSUANT TO A DETERMINATION BY THE ACTIVITY THAT THE WORK WOULD BE PERFORMED IN-HOUSE.

YOU PROTEST THE CANCELLATION ON THE GROUND THAT SUCH ACTION ON THE PART OF THE ACTIVITY IS NOT IN THE GOVERNMENT'S BEST INTEREST BECAUSE THE COST OF IN-HOUSE PERFORMANCE WILL BE FAR IN EXCESS OF YOUR FIRM'S BID PRICE. YOU ALSO ALLEGE THAT YOU WERE GIVEN NO REASON FOR THE CANCELLATION AS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-404.1.

THE ACTIVITY HAS PROVIDED US WITH THE FOLLOWING EXPLANATION OF ITS ACTION:

"4. SUBSEQUENT TO BID OPENING, BY MEMORANDUM OF 15 JULY 1971, THE REQUISITIONING ACTIVITY, HUNTER'S POINT NAVAL SHIPYARD, REQUESTED CANCELLATION OF THE INVITATION. THE MEMORANDUM STATED THAT THE REQUISITION WAS BASED ON A HEAVY WORKLOAD FORECAST, AND THAT BECAUSE OF SUBSEQUENT WORKLOAD REVIEWS, RESULTING FROM CHANGES IN THE SCOPE OF WORK ALLOCATED TO THE SHIPYARD, THE WORK WOULD BE PERFORMED IN-HOUSE. ACCORDINGLY, PURSUANT TO THE CONTRACTING OFFICER'S MEMORANDUM FOR FILE, THE SOLICITATION WAS CANCELLED ON 19 JULY 1971, IN ACCORDANCE WITH ASPR 2- 404.1(B)(III). ALL BIDDERS WERE NOTIFIED OF THE CANCELLATION BY MAIL.

"5. THE WORK CALLED FOR BY THE INVITATION IS NORMALLY PERFORMED BY THE SHIPYARD AND ONLY 'FARMED OUT' TO SOURCES EXTERNAL TO THE SHIPYARD WHEN HEAVY WORKLOAD PRECLUDES IN-HOUSE PERFORMANCE. THE REQUISITION WAS SUBMITTED TO THE NAVAL REGIONAL PROCUREMENT OFFICE BASED UPON A HEAVY WORKLOAD FORECAST IN THE MECHANICAL AND ELECTRICAL GROUPS. THE WORKLOAD ANTICIPATED DID NOT MATERIALIZE BECAUSE OF THE LOSS OF WORK ON FIVE SHIPS AND ONE SUBMARINE PREVIOUSLY ALLOCATED TO THE SHIPYARD.

"6. IF THE REQUISITIONING ACTIVITY HAD BEEN ABLE TO DETERMINE THAT THE WORK COVERED BY THE INVITATION WAS NO LONGER REQUIRED PRIOR TO BID OPENING, THE SOLICITATION WOULD HAVE BEEN CANCELLED PRIOR TO THE OPENING. THE REVISED WORKLOAD FORECAST DID NOT OCCUR, HOWEVER, UNTIL AFTER THE DATE OF BID OPENING.

"7. THE PROTESTOR'S ALLEGATION THAT THE SHIPYARD'S COST TO PERFORM THE WORK WILL EXCEED TRIPLE 'A' MACHINE SHOP'S BID CANNOT BE SUPPORTED FACTUALLY. TRIPLE 'A' MACHINE SHOP QUOTED FOR ITEM 2 OF THE SUBJECT SOLICITATION, WORK REQUEST, A MANHOUR RATE OF $10.00. DCAA, TREASURE ISLAND, SAN FRANCISCO, HAS INFORMED THIS OFFICE THAT ON 4 JUNE 1971, TRIPLE 'A' MACHINE SHOP QUOTED ON A PROPOSAL TO THE SUPERVISOR OF SHIPBUILDING, 12TH ND, A BURDENED HOURLY RATE OF $9.73, EXCLUSIVE OF PROFIT. THE BURDENED HOURLY RATE FOR THE SHIPYARD'S MECHANICAL SHOP, WHERE THE WORK WILL BE PERFORMED, IS $9.95."

UNDER PARAGRAPH NO. 10(B) OF THE IFB'S INSTRUCTIONS TO BIDDERS (STANDARD FORM 33A, MARCH 1969), THE GOVERNMENT EXPRESSLY RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS WHEN IN ITS INTEREST TO DO SO. ASPR 2 404.1(B)(III) PROVIDES FOR THE CANCELLATION OF AN INVITATION PRIOR TO AWARD BUT AFTER OPENING WHEN A DETERMINATION IS MADE THAT THE SUPPLIES OR SERVICES BEING PROCURED ARE NO LONGER NEEDED. IN VIEW OF THE ABOVE CITED EXPLANATION PROVIDED BY THE ACTIVITY IN SUPPORT OF ITS DETERMINATION TO CANCEL THE SUBJECT PROCUREMENT WE CANNOT SAY, BASED ON THE RECORD BEFORE US, THAT THE ACTION WAS AN ABUSE OF THE CONTRACTING OFFICER'S DISCRETIONARY POWERS. SEE 47 COMP. GEN. 103 (1967).

FINALLY, YOU ALLEGE THAT YOU WERE NOT INFORMED OF THE REASON FOR CANCELLATION PURSUANT TO ASPR 2-404.1. ASPR 2-404.3 PROVIDES FOR SUCH NOTIFICATION TO ALL BIDDERS IN THE EVENT OF THE CANCELLATION OF AN INVITATION. HOWEVER, YOUR TELEGRAM OF PROTEST SHOWS THAT YOU WERE IN FACT AWARE OF THE REASON FOR CANCELLATION. IN ANY CASE, WE DO NOT BELIEVE THE PROCEDURAL OMISSION ON THE PART OF THE AGENCY AFFECTED THE VALIDITY OF THE ADMINISTRATIVE ACTION.

IN VIEW OF THE FOREGOING, YOUR PROTEST MUST BE DENIED.