B-175421, OCT 19, 1972

B-175421, OCT 19, 1972

BID PROTEST - TIMELINESS - TERMINATION OF CONTRACT - ADMINISTRATIVE DISCRETION DENIAL OF PROTEST BY S. R. WEINSTOCK & ASSOCIATES, INC., AGAINST THE PROPOSED AWARD OF A CONTRACT UNDER AN IFB ISSUED BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, OGDEN AIR MATERIEL AREA, HILL AFB, UTAH. PROTESTANT'S CONTENTIONS AS TO THE AMBIGUITY OF THE SPECIFICATIONS ARE CLEARLY UNTIMELY SINCE THEY WERE NOT RAISED UNTIL FOUR MONTHS AFTER BID OPENING. SEE 4 CFR 20.2. THE AUTHORITY OF A CONTRACTING AGENCY TO TERMINATE A CONTRACT FOR THE CONVENIENCE OF THE GOVERNMENT HAS LONG BEEN RECOGNIZED, SEE 44 COMP. GEN. 466 (1965), AND THE CONTRACTING OFFICER IS VESTED WITH VERY BROAD DISCRETION IN DECIDING TO TERMINATE FOR CONVENIENCE. GAO WILL NOT QUESTION THE TERMINATION HERE INVOLVED BECAUSE THERE IS NO SHOWING THAT IT WAS EITHER ARBITRARY OR IN BAD FAITH. ACCORDINGLY, THE PROTEST MUST BE DENIED.

TO S. R. WEINSTOCK & ASSOCIATES, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED MAY 9, 1972, WITH ENCLOSURES, AND PRIOR CORRESPONDENCE, PROTESTING THE PROPOSED AWARD OF A CONTRACT UNDER INVITATION FOR BIDS (IFB) NO. F42600-72-B-3400, ISSUED BY THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, OGDEN AIR MATERIEL AREA, HILL AIR FORCE BASE, UTAH.

THE IFB CALLED FOR FURNISHING SUPPLIES, SERVICES AND SUSTAINING EFFORT AS NECESSARY TO UPDATE TECHNICAL ORDERS AND PERFORM RELATED TASKS IN SUPPORT OF AIRCRAFT, MISSILES, MUNITIONS AND RELATED COMPONENTS IN ACCORDANCE WITH THE STATEMENT OF WORK ATTACHED TO THE IFB. A PREVIOUS CONTRACT WITH YOUR FIRM FOR THE SAME SUPPLIES AND SERVICES WAS TERMINATED FOR CONVENIENCE ON JULY 9, 1971.

YOU CONTEND THAT THE IFB CONTAINS UNCLEAR DEFINITIONS WHICH MISLED THE BIDDERS AND YOU REQUEST THAT IT BE CANCELLED AND THE TERMINATED CONTRACT WITH YOUR FIRM BE REINSTATED.

THE IFB WAS ISSUED ON SEPTEMBER 2, 1971, AND EIGHTEEN BIDS WERE OPENED ON NOVEMBER 4, 1971. YOUR FIRM DID NOT SUBMIT A BID. A PREAWARD SURVEY OF THE LOW RESPONSIVE BIDDER WAS PERFORMED. UPON RECEIPT OF AN AFFIRMATIVE PREAWARD SURVEY, AN AWARD WAS BEING PREPARED WHEN ON MARCH 6, 1972, YOUR FIRM'S LETTER OF PROTEST DATED MARCH 2, 1972, WAS RECEIVED. YOUR PROTEST THAT THE IFB DEFINITIONS WERE UNCLEAR WAS NOT RAISED UNTIL APPROXIMATELY FOUR MONTHS AFTER BID OPENING. IN THIS REGARD, WE HAVE HELD THAT PROTESTS AGAINST THE SPECIFICATIONS AND CONDITIONS OF AN IFB FILED AFTER THE OPENING OF BIDS ARE UNTIMELY AND ARE FOR DENIAL ON THAT BASIS. SEE B- 174481, MARCH 17, 1972. SECTION 20.2 OF OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS, 4 C.F.R. 20, STATES IN PERTINENT PART AS FOLLOWS:

"PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN ANY TYPE OF SOLICITATION WHICH ARE APPARENT PRIOR TO BID OPENING OR THE CLOSING DATE FOR RECEIPT OF PROPOSALS *** SHALL BE FILED PRIOR TO BID OPENING OR THE CLOSING DATE FOR RECEIPT OF PROPOSALS."

SINCE YOUR FIRM FAILED TO RAISE ANY QUESTIONS REGARDING THE IFB PRIOR TO BID OPENING, THIS ASPECT OF YOUR PROTEST IS UNTIMELY AND WILL NOT BE CONSIDERED BY OUR OFFICE.

YOU QUESTION THE CONTRACTING OFFICER'S TERMINATION OF YOUR CONTRACT FOR CONVENIENCE OF THE GOVERNMENT BECAUSE SUCH ACTION WAS NOT IN THE BEST INTEREST OF THE GOVERNMENT. THE AUTHORITY OF A CONTRACTING AGENCY OF THE GOVERNMENT TO TERMINATE A CONTRACT FOR THE GOVERNMENT'S INTEREST AND TO ENTER INTO AN AGREEMENT WITH A CONTRACTOR FOR THE SETTLEMENT OF HIS CLAIMS ARISING OUT OF SUCH TERMINATION HAS LONG BEEN RECOGNIZED BY THE COURTS AND BY OUR OFFICE. 44 COMP. GEN. 466, 468 (1965); UNITED STATES V. CORLISS STEAM-ENGINE COMPANY, 91 U.S. 321 (1875). THE CONTRACTING OFFICER IS VESTED WITH VERY BROAD DISCRETION TO DECIDE WHEN A TERMINATION FOR CONVENIENCE IS IN THE GOVERNMENT'S BEST INTEREST. IN THE CASE OF JOHN REINER AND COMPANY V. UNITED STATES, 163 CT. CL. 381 (1963), THE COURT DESCRIBED AT PAGE 392 THE GOVERNMENT'S RIGHT TO TERMINATE FOR CONVENIENCE AS BEING "FAR-REACHING". IN DISCUSSING THE MEANING OF THE WORDS "IN THE BEST INTERESTS OF THE GOVERNMENT," THE COURT STATED AT PAGE 390:

"*** THE BROAD REACH OF THAT PHRASE COMPREHENDS TERMINATION IN A HOST OF VARIABLE AND UNSPECIFIED SITUATIONS CALLING (IN THE CONTRACTING OFFICER'S VIEW) FOR THE ENDING OF THE AGREEMENT; THE ARTICLE IS NOT RESTRICTED, AS PLAINTIFF CONTENDS, TO A DECREASE IN THE NEED FOR THE ITEM PURCHASED. UNDER SUCH AN ALL-INCLUSIVE CLAUSE, THE GOVERNMENT HAS THE RIGHT TO TERMINATE 'AT WILL' (DAVIS SEWING MACH. CO. V. UNITED STATES, 60 CT. CL. 201, 217 (1925), AFF'D, 273 U.S. 324 (1927); LIBRACH V. UNITED STATES, 147 CT. CL. 605, 611 (1959)), AND IN THE ABSENCE OF BAD FAITH OR CLEAR ABUSE OF DISCRETION THE CONTRACTING OFFICER'S ELECTION TO TERMINATE IS CONCLUSIVE. SEE LINE CONSTR. CO. V. UNITED STATES, 109 CT. CL. 154, 187 (1947)."

FURTHER, IN THE CASE OF JERRY LIBRACH AND SOL CUTLER V. UNITED STATES, 147 CT. CL. 605 (1959), THE COURT OF CLAIMS STATED AT PAGE 612 AS FOLLOWS:

"*** IN THE ABSENCE OF CLEAR EVIDENCE TO THE CONTRARY, IT MUST BE PRESUMED THAT THE PUBLIC OFFICIALS INVOLVED IN THE TERMINATION OF THE PLAINTIFFS' CONTRACT WERE ACTING CONSCIENTIOUSLY IN THE DISCHARGE OF THEIR DUTIES WHEN THE CONTRACT WAS TERMINATED FOR THE PURPORTED CONVENIENCE OF THE GOVERNMENT."

IN OUR DECISION B-168624, JANUARY 5, 1970, WE HELD THAT:

"*** THE DETERMINATION WHETHER A CONTRACT SHOULD BE TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT IS A MATTER OF ADMINISTRATIVE DECISION WHICH DOES NOT REST WITH OUR OFFICE."

SEE ALSO B-174568, DECEMBER 10, 1971.

A COPY OF THE AIR FORCE DETAILED RESPONSE TO THE CONTENTIONS YOU RAISE WAS PREVIOUSLY FURNISHED YOU. THE PARTICULAR REASONS WHICH PROMPTED THE TERMINATION ARE STATED BELOW. THE RECORD INDICATES THAT YOUR CONTRACT WAS TERMINATED AFTER MORE THAN FIVE MONTHS OF NONPERFORMANCE. THE AIR FORCE REPORTS THAT AS OF THE DATE OF TERMINATION, DATA REQUIREMENTS WERE DELIVERED BY YOUR FIRM, ALTHOUGH ORDERS FOR DATA REQUIREMENTS WERE FURNISHED TO YOUR FIRM DURING THE TERM OF THE CONTRACT. AS A RESULT, THE AIR FORCE REPORTS THAT MISSION SUPPORT OF AIR MUNITION REQUIREMENTS IN SOUTHEAST ASIA AND OTHER PRIME WEAPONS SYSTEMS, INCLUDING THE MINUTEMAN, TITAN, F-4, ETC., WAS JEOPARDIZED. THE RECORD INDICATES THAT PRIOR TO TERMINATING THE CONTRACT SEVERAL ATTEMPTS BY AIR FORCE PERSONNEL WERE MADE TO RESOLVE THE PROBLEMS WHICH YOU CONTENDED PRECLUDED PERFORMANCE. THIS REGARD, THE AIR FORCE REPORTS THAT ODGEN AIR MATERIEL AREA (OAMA) PERSONNEL HAD MANY TELEPHONE CONVERSATIONS WITH MR. WEINSTOCK REGARDING YOUR FAILURE TO PERFORM.

THE CONTRACTING OFFICER REPORTS THAT ON APRIL 15, 1971, MR. WEINSTOCK ATTENDED A MEETING AT OAMA TO DISCUSS RELATED CONTRACTS AND GOVERNMENT FURNISHED MATERIAL (GFM) MATTERS. A SECOND MEETING WAS HELD ON JUNE 23, 1971, AT YOUR FACILITY IN BALTIMORE, MARYLAND, WITH OAMA AND DCAS PERSONNEL IN ATTENDANCE. THIS MEETING WAS HELD FOR THE PURPOSE OF EVALUATING GFM/CONTRACT ORDER PROBLEMS AND THEIR RESULTANT IMPACT ON YOUR FIRM'S ABILITY TO PERFORM. DESPITE THE CONTRACTING OFFICER'S ATTEMPT TO ARRIVE AT AN EQUITABLE SOLUTION ON EACH GOVERNMENT-GENERATED PROBLEM PRESENTED, YOUR FIRM CONTINUED FAILING TO MAKE DELIVERIES. SINCE SOME OF THE PROBLEMS AND DELAYS UNDER THE CONTRACT WERE CONSIDERED TO BE INDUCED BY DEFICIENCIES IN THE CONTRACT ORDER PREPARATION AND PROCESSING PROCEDURES USED BY THE AIR FORCE, THE CONTRACT WAS TERMINATED FOR CONVENIENCE RATHER THAN FOR DEFAULT. YOUR RECOURSE FOR EXTRA EFFORT REQUIRED TO RESOLVE GOVERNMENT FURNISHED PROPERTY (GFP) PROBLEMS IS COVERED UNDER THE GOVERNMENT PROPERTY CLAUSE AND THE CONTRACTING OFFICER REPORTS THAT YOU DID NOT RESPOND TO THE INSTRUCTIONS GIVEN TO YOU ON SEVERAL OCCASIONS TO PROCEED WITH THE WORK AND PREPARE AN ESTIMATE OF THE IMPACT CAUSED BY GFP PROBLEMS. FURTHER, THE RECORD INDICATES THAT YOU FAILED TO COMPLY WITH THE PROVISIONS OF THE DISPUTES CLAUSE INCORPORATED INTO YOUR CONTRACT BY REFERENCE (ARMED SERVICES PROCUREMENT REGULATION PARAGRAPH 7-103.12(A)), WHICH REQUIRED YOU TO PROCEED DILIGENTLY WITH THE PERFORMANCE OF THE CONTRACT PENDING A FINAL DECISION REGARDING ANY DISPUTE ARISING UNDER THE CONTRACT.

IN THE CIRCUMSTANCES, WE ARE UNABLE TO CONCLUDE THAT THE TERMINATION OF YOUR CONTRACT FOR CONVENIENCE WAS EITHER ARBITRARY OR MADE IN BAD FAITH. ACCORDINGLY, THERE IS NO BASIS FOR OUR OFFICE TAKING ANY CORRECTIVE MEASURES IN THIS MATTER.