B-174225, NOV 22, 1971

B-174225, NOV 22, 1971

BID PROTEST - CANCELLED IFB - "PRE-AWARD SURVEY COSTS" DECISION DENYING PROTEST BY SECOND LOW BIDDER AGAINST CANCELLATION OF AN IFB ISSUED BY THE NAVY SHIPS PARTS CONTROL CENTER FOR CYLINDER HEAD ASSEMBLIES. ALSO DENIES REQUEST FOR REIMBURSEMENT OF PRE-AWARD SURVEY COSTS. ASPR 2-401.1 CLEARLY ALLOWS CANCELLATION OF AN IFB AFTER OPENING BUT BEFORE AWARD WHEN, AS HERE, THE CONTRACTING OFFICER DETERMINES THAT THE SUPPLIES OR SERVICES ARE NO LONGER REQUIRED. WHILE IT IS NOT EXACTLY CLEAR HOW COSTS WERE INCURRED INCIDENT TO THE GOVERNMENT'S PRE-AWARD SURVEY, THE COMP. GEN. FINDS NO BASIS FOR APPROVING SUCH A CLAIM.

TO A. C. BALL COMPANY:

WE REFER TO YOUR LETTER OF SEPTEMBER 28, 1971, IN WHICH YOU PROTEST THE CANCELLATION OF INVITATION FOR BIDS NO. N00104-71-B-2044, ISSUED BY THE UNITED STATES NAVY SHIPS PARTS CONTROL CENTER, MECHANICSBURG, PENNSYLVANIA, ON JUNE 8, 1971.

THE SOLICITATION WAS FOR 515 CYLINDER HEAD ASSEMBLIES, A REPAIR COMPONENT OF A PACKARD DIESEL ENGINE DRIVEN MINE SWEEPER OCEAN (MSO). AT BID OPENING, A DISPARITY IN BID PRICES COMPARED TO PRIOR CONTRACTS CAUSED THE CONTRACTING OFFICER TO REQUEST VERIFICATION FROM THE FOUR LOW OFFERORS. THE LOWEST OFFEROR ALLEGED A MISTAKE IN BID AND WAS ALLOWED TO WITHDRAW. YOUR COMPANY, THE SECOND LOW BIDDER, CONFIRMED ITS BID PRICE OF $325 PER UNIT. THEREAFTER, A PRE-AWARD SURVEY OF YOUR COMPANY WAS CONDUCTED AND SUBMITTED ON SEPTEMBER 2, 1971. HOWEVER, ON AUGUST 27, 1971, THE CONTRACTING OFFICER WAS REQUESTED TO CANCEL THE SOLICITATION AND HE DID SO ON SEPTEMBER 14, 1971.

IN ITS ADMINISTRATIVE REPORT, THE NAVY STATES THAT:

"THE BASIS FOR THE REQUEST TO CANCEL WAS A DECREASE IN THE DEMAND ON THE INVENTORY SUPPLY SYSTEM FOR THE ITEM AS WELL AS THE COMMANDER, MINE WARFARE FORCES' FORECAST OF SUBSTANTIAL REDUCTIONS IN THE ACTIVE POPULATION OF MSO' PROPELLED BY PACKARD DIESEL ENGINE. ACCORDINGLY, THE SOLICITATION WAS CANCELLED *** AS THE SUPPLIES WERE NO LONGER REQUIRED ***

ASPR 2-401.1 CLEARLY ALLOWS CANCELLATION OF AN IFB AFTER OPENING BUT BEFORE AWARD WHEN THE CONTRACTING OFFICER DETERMINES THAT THE "SUPPLIES OR SERVICES BEING PROCURED ARE NO LONGER REQUIRED," AND IN SUCH SITUATIONS WE THINK IT IS INCUMBENT UPON THE CONTRACTING OFFICER TO CANCEL OUTSTANDING SOLICITATIONS. AS WE HAVE STATED PREVIOUSLY, "CONTRACTING OFFICIALS NOT ONLY HAVE THE RIGHT TO REJECT BIDS ON SUPPLIES WHICH ARE NO LONGER NEEDED, BUT WOULD, INDEED, BE DERELICT IN THEIR DUTY IF THEY DID NOT DO SO." 159865, OCTOBER 6, 1966. IN VIEW OF THE PLAIN LANGUAGE IN ASPR, WE CAN PERCEIVE NO LEGAL OBJECTION TO CANCELLATION OF THIS IFB. WHILE YOU HAVE QUESTIONED THE ASSERTED BASIS FOR WITHDRAWAL OF THE PROCUREMENT, WE FIND NOTHING IN THE RECORD TO INDICATE THAT THE ADMINISTRATIVE JUSTIFICATION FOR THE WITHDRAWAL IS NOT CORRECT.

IN YOUR LETTER YOU ALSO CLAIM $1,161 FOR "SERVICES RENDERED TO THE GOVERNMENT" IN THE CONDUCTING OF A PRE-AWARD SURVEY OF YOUR COMPANY. THIS AMOUNT IS BROKEN DOWN AS FOLLOWS:

DIRECT ENGINEERING LABOR:

160 HOURS $5.00 PER HOUR $ 800.00

32% OVERHEAD $ 256.00

10% PROFIT $ 105.00

TOTAL $1,161.00

THE RECORD BEFORE US PROVIDES NO EXPLANATION AS TO EXACTLY HOW YOU INCURRED SUCH COSTS AS PART OF THE GOVERNMENT'S PRE-AWARD SURVEY, BUT IN ANY EVENT WE ARE AWARE OF NO BASIS FOR APPROVING SUCH A CLAIM.

YOU CONTEND THAT WHEN THE GOVERNMENT REQUESTS A PRE-AWARD SURVEY, IT IN EFFECT MAKES AN INFORMAL COMMITMENT TO AWARD THE CONTRACT TO THE LOW RESPONSIBLE BIDDER. WE ARE UNAWARE OF ANY LEGAL BASIS FOR YOUR CONTENTION. WE THINK THE SITUATION HAS SOME ANALOGY TO A CLAIM FOR BID PREPARATION COSTS WHEN A BID IS ALLEGED TO HAVE BEEN IMPROPERLY REJECTED. IT IS WELL ESTABLISHED THAT, IN THE ABSENCE OF FRAUDULENT INDUCEMENT BY THE PROCURING AGENCY, BID PREPARATION COSTS ARE NOT RECOVERABLE. 48 COMP. GEN. 471 (1969). WE DO NOT BELIEVE ANY GREATER BASIS EXISTS FOR REIMBURSING BIDDERS FOR COSTS INCURRED IN CONNECTION WITH A PRE-AWARD SURVEY. WE NOTE THAT THIS SOLICITATION INCLUDED, IN PARAGRAPH 10(B) OF STANDARD FORM 33A, SOLICITATION INSTRUCTIONS AND CONDITIONS, SPECIFIC NOTICE TO ALL BIDDERS THAT THE GOVERNMENT "RESERVES THE RIGHT TO REJECT ANY OR ALL OFFERS." IN OUR VIEW, THE ABSENCE OF A REQUIREMENT FOR THE ITEM UNDER PROCUREMENT SHOULD HAVE BEEN DETERMINED PRIOR TO BID OPENING. HOWEVER, WE ARE AWARE OF NO BASIS FOR AUTHORIZING REIMBURSEMENT FOR THE COSTS YOU CLAIM BECAUSE THE PROCUREMENT WAS NOT CANCELLED UNTIL AFTER THE PRE-AWARD SURVEY.

FOR THE FOREGOING REASONS, WE MUST DENY BOTH YOUR PROTEST AND YOUR CLAIM FOR REIMBURSEMENT.