B-175416, AUG 22, 1972

B-175416, AUG 22, 1972

BID PROTEST - CANCELLATION OF IFB - RESTRICTIVE CLAUSE DENIAL OF PROTEST BY COLT INDUSTRIES OPERATING CORP., AGAINST THE NAVAL FACILITIES ENGINEERING COMMAND'S REJECTION OF ALL BIDS RECEIVED IN RESPONSE TO AN IFB AND THE SUBSEQUENT READVERTISEMENT OF THE NAVY'S REQUIREMENT FOR DIESEL-ELECTRIC GENERATING UNITS AND ANCILLARY EQUIPMENT. THE DETERMINATION OF WHETHER A COMPELLING OR "COGENT" REASON EXISTS FOR CANCELLATION IS A MATTER PRIMARILY WITHIN THE DISCRETION OF THE ADMINISTRATIVE AGENCY AND WILL NOT BE QUESTIONED ABSENT A CLEAR SHOWING THAT THE DISCRETION WAS ABUSED. 50 COMP. GEN. 50 (1970). SINCE THE UNDULY RESTRICTIVE EXPERIENCE CLAUSE IS A SUFFICIENT BASIS TO SUPPORT THE DECISION TO CANCEL, THE CORRECTNESS OF THE OTHER BASES IS ACADEMIC.

TO COLT INDUSTRIES OPERATING CORP.:

WE REFER TO YOUR LETTER OF JULY 17, 1972, AND PRIOR CORRESPONDENCE, PROTESTING AGAINST THE NAVAL FACILITIES ENGINEERING COMMAND'S REJECTION OF ALL BIDS RECEIVED IN RESPONSE TO INVITATION FOR BIDS N62766-71-B 0133, AND THE SUBSEQUENT READVERTISEMENT OF THE NAVY'S REQUIREMENT FOR DIESEL- ELECTRIC GENERATING UNITS AND ANCILLARY EQUIPMENT UNDER REVISED SPECIFICATIONS.

THE COMMAND'S ADMINISTRATIVE REPORTS, COPIES OF WHICH WERE FURNISHED YOU FOR COMMENT, ASSIGN TWO BASIC REASONS FOR CANCELLATION. FIRST, PARAGRAPH 1A.12 OF THE SPECIFICATION IMPOSED A REQUIREMENT THAT THE LOW QUALIFIED BIDDER "DEMONSTRATE THAT HE HAS BEEN THE ENGINE MANUFACTURER." OF THE SIX BIDS RECEIVED IN RESPONSE TO THE INVITATION, YOUR FIRM WAS FIFTH LOW. APPLICATION OF PARAGRAPH 1A.12 RESULTED IN THE REJECTION OF THE FOUR LOWEST BIDS. THIS PROVISION WAS CONSIDERED RESTRICTIVE AND UNNECESSARY TO SATISFY THE GOVERNMENT'S NEEDS SINCE DEALERS CAN FURNISH SATISFACTORY UNITS OBTAINED FROM MANUFACTURERS.

SECOND, A NEED TO REVISE THE TECHNICAL SPECIFICATIONS WAS CITED. SPECIFICALLY, THE BRAKE MEANS EFFECTIVE PRESSURE LIMITS IMPOSED BY THE SPECIFICATION WERE ENLARGED TO PERMIT HIGHER POUNDS PER SQUARE INCH IN 4- CYCLE ENGINES. ADDITIONALLY, A LIMITATION OF 720 RPM MAXIMUM WAS REINSTATED. THE 720 RPM LIMIT WAS IN THE INVITATION AS ISSUED BUT HAD BEEN RAISED TO 900 RPM BY AN AMENDMENT.

AS YOU POINT OUT, PARAGRAPH 2-404.1(A) OF THE ARMED SERVICES PROCUREMENT REGULATION EXPRESSES THE BASIC PRINCIPLE GUIDING THE ADMINISTRATIVE DECISION TO CANCEL AN INVITATION AS WELL AS OUR REVIEW OF THAT DECISION: "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." MOREOVER, OUR OFFICE HAS LONG RECOGNIZED THAT THE DETERMINATION OF WHETHER A COMPELLING OR "COGENT" REASON EXISTS FOR CANCELLATION IS A MATTER PRIMARILY WITHIN THE DISCRETION OF THE ADMINISTRATIVE AGENCY AND WILL NOT BE QUESTIONED ABSENT A CLEAR SHOWING THAT THE ADMINISTRATIVE DISCRETION WAS ABUSED. 50 COMP. GEN. 50, 52 (1970), AND CASES CITED THEREIN.

WE CANNOT CONCLUDE THAT THE COMMAND ABUSED ITS DISCRETION IN THE CIRCUMSTANCES OF THIS CASE. WITH RESPECT TO THE EXPERIENCE REQUIREMENT, YOU HAVE NOT QUESTIONED THE COMMAND'S POSITION THAT THE REQUIREMENT WAS UNNECESSARY AND RESTRICTIVE; NOR WOULD WE. ITS RESTRICTIVENESS HAS BEEN DEMONSTRATED BY THE RESULTS REACHED UNDER THE FIRST INVITATION. AND, THE LACK OF NECESSITY IS UNDERSCORED BY OUR CONFIRMATION OF YOUR ADVICE THAT THE CLAUSE WAS DESIGNED TO PRECLUDE THE PARTICIPATION OF A PARTICULAR DISTRIBUTOR WITH WHOM THE NAVY HAD EXPERIENCED DIFFICULTY IN CONTRACT ADMINISTRATION. WE MUST ALSO ADD THAT THE FACT HEADQUARTERS NAVFAC OVERLOOKED THE CLAUSE AND FAILED TO DELETE IT DURING ITS INITIAL REVIEW AND APPROVAL OF THE INVITATION DOES NOT LIMIT ITS RIGHT TO TAKE SUBSEQUENT CORRECTIVE ACTION.

SINCE THE UNDULY RESTRICTIVE EXPERIENCE CLAUSE IS A SUFFICIENT BASIS TO SUPPORT THE DECISION TO CANCEL (CF. 50 COMP. GEN. 753, 758-759 (1971)), THE CORRECTNESS OF THE OTHER BASES ADVANCED IN SUPPORT OF CANCELLATION IS ACADEMIC.

HOWEVER, INSOFAR AS THE REVISIONS TO THE SPECIFICATIONS ARE CONCERNED, DECISIONS OF THIS NATURE ARE PRIMARILY THE RESPONSIBILITY OF THE CONTRACTING AGENCY. OUR REVIEW OF THE RECORD DISCLOSES NO BASIS UPON WHICH WE MAY OBJECT TO THE NATURE OF THE SPECIFICATION REVISIONS. WHILE YOU HAVE NOT QUESTIONED THE TECHNICAL SOUNDNESS OF THE EXPANSION OF THE BMEP LIMITS, YOU DO TAKE THE POSITION THAT THE RETURN TO THE 720 RPM LIMIT ORIGINALLY SPECIFIED WAS UNNECESSARY AND, POINTING TO THE BIDS SUBMITTED IN RESPONSE TO THE RESOLICITATION OF THE REQUIREMENTS, NOTE THAT IT RESULTS IN AN INCREASED ACQUISITION COST. THE FACT THAT INCREASED BID PRICES WERE RECEIVED AS A RESULT OF THE CHANGE IS NOT DECISIVE. SEE B- 167594, SEPTEMBER 5, 1969. NOTWITHSTANDING THE HIGHER ACQUISITION COST, IT IS THE POSITION OF HEADQUARTERS NAVFAC TECHNICAL PERSONNEL THAT REIMPOSITION OF THE 720 RPM LIMIT ASSURES GREATER RELIABILITY AND LOWER MAINTENANCE COSTS. WHILE YOU DISAGREE WITH THIS OPINION, THE RECORD BEFORE OUR OFFICE PRESENTS NO BASIS FOR LEGALLY QUESTIONING NAVFAC'S POSITION.

ACCORDINGLY, YOUR PROTEST IS DENIED.