B-175768, JUN 12, 1972

B-175768: Jun 12, 1972

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

WAIVER OF MARLOW'S DEVIATION FROM THE SPECIFICATIONS OF THE ORIGINAL IFB WOULD HAVE BEEN PREJUDICIAL TO OTHER BIDDERS. CANCELLATION WAS WELL WITHIN THE CONTRACTING OFFICER'S DISCRETION. BECAUSE THE SPECIFICATION RELATING TO THE CAPACITY OF THE SYSTEM WAS UNDULY RESTRICTIVE AND THE INVITATION WAS AMBIGUOUS WITH REGARD TO THE SALIENT CHARACTERISTICS OF THE BRAND NAME ITEM. THE PROTEST IS DENIED. SECRETARY: REFERENCE IS MADE TO LETTER DAEN-GCC DATED APRIL 21. INCLUDED AS SALIENT FEATURES WERE REQUIREMENTS THAT THE SYSTEM PUMP BE CAPABLE OF PUMPING 20 GPM AND THAT THE MOTOR OF THE PUMP BE "EXPLOSION PROOF.". BIDS WERE OPENED ON MARCH 8. THE LOWEST WAS IN THE AMOUNT OF $930 PER UNIT. WHILE THE TWO OTHER BIDS WERE IN THE AMOUNTS OF $1.

B-175768, JUN 12, 1972

BID PROTEST - NONRESPONSIVENESS - "BRAND NAME OR EQUAL" - PROPRIETY OF CANCELLATION AND RESOLICITATION DECISION DENYING THE PROTEST OF ITT MARLOW AGAINST THE CANCELLATION AND RESOLICITATION OF AN IFB BY THE FORT WORTH DISTRICT CORPS OF ENGINEERS FOR A PROCUREMENT OF DISPOSAL SYSTEMS ON A "BRAND NAME OR EQUAL" BASIS. WAIVER OF MARLOW'S DEVIATION FROM THE SPECIFICATIONS OF THE ORIGINAL IFB WOULD HAVE BEEN PREJUDICIAL TO OTHER BIDDERS. FURTHER, CANCELLATION WAS WELL WITHIN THE CONTRACTING OFFICER'S DISCRETION, PURSUANT TO ASPR 2- 404.1(B)(II), BECAUSE THE SPECIFICATION RELATING TO THE CAPACITY OF THE SYSTEM WAS UNDULY RESTRICTIVE AND THE INVITATION WAS AMBIGUOUS WITH REGARD TO THE SALIENT CHARACTERISTICS OF THE BRAND NAME ITEM. IN VIEW OF THE FOREGOING, AND SINCE THE PROPOSED CONTRACTOR SUBMITTED A LOWER PROPOSAL IN RESPONSE TO THE SECOND IFB FOR REASONS OTHER THAN THE DISCLOSURE OF MARLOW'S BID PRICE, THE PROTEST IS DENIED.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DAEN-GCC DATED APRIL 21, 1972, WITH ENCLOSURES, FROM THE GENERAL COUNSEL, OFFICE OF THE CHIEF OF ENGINEERS, TRANSMITTING FOR DECISION THE PROTEST OF ITT MARLOW, MIDLAND PARK, NEW JERSEY, AGAINST THE ACTION OF THE FORT WORTH DISTRICT, CORPS OF ENGINEERS, IN CANCELING INVITATION FOR BIDS (IFB) NO. DACW63-72-B-0063 AND READVERTISING THE PROCUREMENT UNDER INVITATION FOR BIDS NO. DACW63 72-B- 0084.

THE ORIGINAL INVITATION, IFB -0063, ISSUED ON FEBRUARY 18, 1972, REQUESTED BIDS FOR FURNISHING 28 DISPOSAL SYSTEMS, SANI-STATION MODEL SS- 100, AS PRODUCED BY STA-RITE INDUSTRIES, INC; DELAVAN, WISCONSIN, OR EQUAL. SECTION "F" OF THE INVITATION LISTED THE SALIENT FEATURES OF THE DISPOSAL SYSTEM. INCLUDED AS SALIENT FEATURES WERE REQUIREMENTS THAT THE SYSTEM PUMP BE CAPABLE OF PUMPING 20 GPM AND THAT THE MOTOR OF THE PUMP BE "EXPLOSION PROOF."

BIDS WERE OPENED ON MARCH 8, 1972, AND OF THE THREE BIDS RECEIVED, THE LOWEST WAS IN THE AMOUNT OF $930 PER UNIT, WHILE THE TWO OTHER BIDS WERE IN THE AMOUNTS OF $1,228 AND $1,431.50 PER UNIT. THE LOW BIDDER, MARLOW, BID ON ITS OWN 204-EC-HR MODEL. THE SECOND LOWEST BIDDER, HYDRAPRISE CORPORATION, BID ON ITS OWN NO. 100 MODEL AND THE THIRD BIDDER, VAN-TEMP DISTRIBUTING COMPANY, BID ON FURNISHING THE SANI STATION NO. SS-100 SPECIFIED IN THE INVITATION.

THE THREE BIDS WERE REVIEWED FROM A TECHNICAL STANDPOINT AND IT WAS DETERMINED THAT THE BIDS OF MARLOW AND HYDRAPRISE WERE NONRESPONSIVE TO THE INVITATION. IN THIS REGARD, THE DESCRIPTIVE LITERATURE WITH MARLOW'S BID SHOWED THAT THE PUMP WHICH THE COMPANY PROPOSED TO FURNISH WOULD PUMP ONLY 18 GPM RATHER THAN 20 GPM AS REQUIRED BY THE SPECIFICATIONS. AS TO THE BID OF HYDRAPRISE, THE LITERATURE SUBMITTED BY THE COMPANY SHOWED THAT THE PUMP WHICH IT PROPOSED TO FURNISH WAS NOT EQUIPPED WITH AN EXPLOSION- PROOF MOTOR AS REQUIRED BY THE SPECIFICATIONS. ALSO, ALTHOUGH VAN-TEMP OFFERED TO FURNISH THE SANI STATION MODEL SS-100, THE BRAND NAME SPECIFIED BY THE INVITATION, THE LITERATURE SUBMITTED WITH THE VAN-TEMP BID DISCLOSED THAT THAT MODEL DOES NOT HAVE AN EXPLOSION-PROOF MOTOR, AS REQUIRED BY THE SPECIFICATIONS. HOWEVER, THE LITERATURE DID SHOW THAT THE MOTOR OF THE SANI-STATION MODEL SS-100E, NOT LISTED IN THE INVITATION, IS EXPLOSION PROOF. THUS, IT WAS CONCLUDED BY THE CONTRACTING OFFICER THAT, NOTWITHSTANDING VAN-TEMP'S OFFER TO SUPPLY THE LISTED BRAND NAME ITEM, A "CLOUD OF DOUBT" EXISTED AS TO WHETHER VAN-TEMP PROPOSED TO FURNISH AN EXPLOSION PROOF MOTOR, AS REQUIRED.

FOLLOWING THIS, THE PROCUREMENT WAS REVIEWED AND IT WAS CONCLUDED THAT THE SPECIFICATIONS WERE RESTRICTIVE, PARTICULARLY WITH RESPECT TO THE 20 GPM REQUIREMENT, AND THAT AN AWARD UNDER IFB-0063 COULD THEREFORE NOT BE MADE. ACCORDINGLY, THE CONTRACTING OFFICER DETERMINED THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD BE SERVED BY REJECTING ALL BIDS UNDER IFB -0063 AND READVERTISING THE PROCUREMENT UNDER REVISED SPECIFICATIONS, WHICH AMONG OTHER THINGS, WOULD DEGRADE THE GPM REQUIREMENT TO 18 GPM. ALSO, BECAUSE OF ADDITIONAL REQUIREMENTS, THE QUANTITY OF SYSTEMS WAS INCREASED FROM 28 TO 32. IFB -0063 WAS THEN CANCELED AND THE PROCUREMENT WAS READVERTISED ON MARCH 17, 1972, UNDER IFB -0084, WHICH PROVIDED FOR A BID OPENING DATE OF MARCH 27, 1972. THE NEW INVITATION LISTED ALL THREE PUMP SYSTEMS PREVIOUSLY OFFERED AS ACCEPTABLE BRAND NAMES. WHILE IT IS NOT CLEAR THAT THE HYDRAPRISE MODEL LISTED WAS MODIFIED TO BE EXPLOSION PROOF, THAT FEATURE WAS RETAINED AS A SPECIFICATION REQUIREMENT.

THREE BIDS WERE RECEIVED UNDER IFB -0084 AND THESE BIDS WERE SUBMITTED BY THE FIRMS WHICH HAD BID PREVIOUSLY, EACH FIRM BIDDING ON ITS OWN PRODUCT. THE LOW BID WAS SUBMITTED BY VAN-TEMP, THE PREVIOUS HIGH BIDDER, IN THE AMOUNT OF $894.85 PER UNIT. THE SECOND BID WAS SUBMITTED BY HYDRAPRISE, THE PREVIOUS SECOND LOWEST BIDDER, IN THE AMOUNT OF $923 PER UNIT. THE THIRD BID WAS SUBMITTED BY MARLOW, THE PREVIOUS LOW BIDDER, IN THE AMOUNT OF $930 PER UNIT. IT IS REPORTED THAT AWARD UNDER IFB -0084 IS BEING WITHHELD PENDING A DECISION ON THE PROTEST OF MARLOW BY OUR OFFICE.

MARLOW PROTESTS THE ACTION OF THE PROCURING ACTIVITY IN CANCELING IFB - 0063 ON THE GROUND THAT FROM A TECHNICAL AND PERFORMANCE POINT OF VIEW, THE DIFFERENCE IN CAPACITY BETWEEN AN 18 GPM PUMP AND A 20 GPM PUMP IS SO MINOR THAT STRICT COMPLIANCE TO THE 20 GPM REQUIREMENT SHOULD HAVE BEEN WAIVED BY THE CONTRACTING OFFICER. IN THIS CONNECTION, MARLOW STATES IN A LETTER DATED MAY 10, 1972, THAT THE USE OF A PUMP WITH A PUMPING CAPACITY OF 18 GPM INSTEAD OF A PUMP WITH A PUMPING CAPACITY OF 20 GPM RESULTS ONLY IN A 7-SECOND DELAY FOR THE COMPLETE CYCLE TO EMPTY AN AVERAGE BOAT HOLDING TANK. MARLOW CONTENDS FURTHER THAT THE DISCLOSURE OF ITS BID PRICE UNDER IFB-0063 GIVES AN ADVANTAGE TO ITS COMPETITORS AND THAT THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM IS THEREBY ENDANGERED. SUPPORT OF THIS POSITION, MARLOW POINTS OUT THAT BOTH VAN-TEMP AND HYDRAPRISE SUBMITTED MUCH LOWER PRICES UNDER THE SECOND INVITATION THAN THEY DID UNDER THE FIRST INVITATION, AND QUESTIONS WHETHER THOSE FIRMS CAN, IN FACT, FURNISH EQUIPMENT MEETING THE REQUIREMENTS OF THE SPECIFICATIONS AT THEIR REDUCED BID PRICES. MARLOW CONCLUDES BY REQUESTING THAT THE ORIGINAL INVITATION BE REINSTATED AND THAT AWARD BE MADE TO IT UNDER THAT INVITATION.

AS POINTED OUT ABOVE, IFB -0063 WAS CANCELED BECAUSE IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT THE SPECIFICATIONS AS WRITTEN WERE RESTRICTIVE AND THAT THE GOVERNMENT'S INTERESTS WOULD BE BEST SERVED BY READVERTISING UNDER REVISED SPECIFICATIONS.

REGARDING THE LOW BID OF MARLOW UNDER IFB -0063, WE BELIEVE THAT THE ACTION OF THE CONTRACTING OFFICER IN REJECTING THE BID AS NONRESPONSIVE WAS PROPER. IT IS A RECOGNIZED RULE THAT A CONTRACT AWARDED TO A BIDDER MUST BE THE SAME CONTRACT OFFERED TO ALL BIDDERS. 42 COMP. GEN. 96, 97 (1962). IT IS OBVIOUS THAT A CONTRACT AWARDED TO MARLOW WHICH WOULD PERMIT THE FURNISHING OF A PUMP WITH A PUMPING CAPACITY OF 18 GPM, WHICH WAS NEITHER SPECIFIED IN THE INVITATION NOR OFFERED BY THE TWO OTHER BIDDERS, WOULD NOT BE THE CONTRACT OFFERED TO ALL. FURTHERMORE, TO INSURE TO THE GOVERNMENT THE BENEFITS OF COMPETITION, IT IS ESSENTIAL THAT AWARDS OF CONTRACTS BE MADE ON THE BASIS OF THE REQUIREMENTS OF THE SPECIFICATIONS SUBMITTED FOR COMPETITION. SEE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-301. ANY DEVIATION BY A BIDDER FROM THE INVITATION REQUIREMENTS MAY ONLY BE WAIVED IF IT DOES NOT GO TO THE SUBSTANCE OF THE BID OR WORK AN INJUSTICE TO OTHER BIDDERS. SEE 33 COMP. GEN. 441 (1954); 30 ID. 179 (1950); PRESTEX INC. V. UNITED STATES, 162 CT. CL. 620 (1963). HERE, IT IS CLEAR THAT THE DEVIATION BY MARLOW FROM THE ADVERTISED REQUIREMENTS WAS DELIBERATELY TAKEN AND, THEREFORE, MAY NOT BE CONSIDERED TRIVIAL OR MINIMAL SO AS TO JUSTIFY WAIVER AS A MINOR INFORMALITY. SEE 47 COMP. GEN. 496, 499 (1968), AND ASPR 2-404.2.

FURTHER, IN OUR OPINION, THE ACTION OF THE CONTRACTING OFFICER IN REJECTING ALL BIDS RECEIVED UNDER THE FIRST INVITATION ISSUED ON FEBRUARY 18, 1972, WAS A PROPER EXERCISE OF DISCRETION UNDER 10 U.S.C. 2305(C), AND UNDER ASPR 2-404.1(B)(II) WHICH PROVIDE THAT INVITATIONS FOR BIDS MAY BE CANCELED AFTER OPENING BUT PRIOR TO AWARD WHEN THE CONTRACTING OFFICER DETERMINES IN WRITING THAT THE SPECIFICATIONS HAVE BEEN REVISED.

OUR OFFICE HAS CONSISTENTLY HELD IN THIS REGARD THAT WHILE THE INTEREST OF THE GOVERNMENT AND THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM REQUIRE THAT INVITATIONS BE CANCELED ONLY FOR COGENT REASONS, THERE NECESSARILY IS RESERVED IN THE CONTRACTING OFFICIALS A SUBSTANTIAL AMOUNT OF DISCRETION IN DETERMINING WHETHER OR NOT AN INVITATION SHOULD BE CANCELED. WE WILL, THEREFORE, NOT OBJECT TO THE CANCELLATION OF AN INVITATION UNLESS THERE HAS BEEN A CLEAR SHOWING OF ABUSE OF THE ADMINISTRATIVE DISCRETION PROVIDED BY LAW AND REGULATION. SEE B-165206, JANUARY 8, 1969. WE MUST CONCLUDE ON THE RECORD THAT THERE HAS BEEN NO ABUSE OF DISCRETION HERE. ALSO, IN ADDITION TO THE SPECIFICATION RESTRICTIVENESS WITH RESPECT TO PUMPING CAPACITY RELIED ON BY THE CONTRACTING OFFICER TO JUSTIFY INVITATION CANCELLATION, IT IS OUR OPINION THAT THE INVITATION WAS AMBIGUOUS IN THAT THE BRAND NAME MODEL LISTED DID NOT HAVE AN EXPLOSION PROOF MOTOR, AS REQUIRED, WITH THE RESULT THAT THE VAN-TEMP BID, OFFERING THE LISTED BRAND NAME, COULD NOT HAVE BEEN ACCEPTED AS RESPONSIVE TO ONE OF THE SALIENT CHARACTERISTICS.

WITH REGARD TO THE STATEMENT OF MARLOW THAT THE DISCLOSURE OF ITS BID PRICE UNDER THE FIRST INVITATION, IFB -0063, ENABLED ITS COMPETITORS TO UNDERCUT MARLOW'S PRICE UNDER THE SECOND INVITATION, IFB -0084, THE RECORD CONTAINS A LETTER DATED APRIL 6, 1972, IN WHICH VAN-TEMP, THE LOWEST BIDDER UNDER IFB -0084, ADVISED THE CONTRACTING OFFICER THAT IT WAS ABLE TO REDUCE ITS BID PRICE UNDER THE SECOND INVITATION, IFB 0084, BECAUSE ITS SUPPLIER, STA-RITE INDUSTRIES, INC; HAD SUBSTANTIALLY REDUCED ITS PRICE ON THE REQUIRED DISPOSAL UNIT, EFFECTIVE MARCH 13, 1972 - WHICH DATE IS PRIOR TO THE DATE ON WHICH IFB -0084 WAS ISSUED.

IN VIEW OF THE FOREGOING, WE FIND NO LEGAL BASES FOR DISAPPROVING THE ADMINISTRATIVE ACTION IN CANCELING IFB -0063 AND READVERTISING THE PROCUREMENT UNDER IFB -0084. ACCORDINGLY, AWARD MAY BE MADE TO VAN TEMP AS THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER UNDER IFB -0084, IF PROPER IN OTHER RESPECTS.