B-175815, AUG 3, 1972

B-175815: Aug 3, 1972

Additional Materials:

Contact:

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

 

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

THE DETERMINATION TO REJECT ALL BIDS AND RESOLICIT UNDER FPR 1-2.404 2(C) IS A MATTER WITHIN THE DISCRETION OF THE CONTRACTING AGENCY AND WILL NOT BE DISTURBED BY GAO IN THE ABSENCE OF CLEAR PROOF OF ABUSE OF DISCRETION. TWO BIDS WERE RECEIVED IN RESPONSE TO THE INITIAL SOLICITATION. A PLANT FACILITIES SURVEY WAS CONDUCTED ON YOUR FIRM. THE CONTRACTING OFFICER CONCLUDED THAT THE SOLICITATION SHOULD BE CANCELED PURSUANT TO SECTION 1- 2.404-2(C) OF THE FEDERAL PROCUREMENT REGULATIONS BECAUSE THE BID PRICES RECEIVED WERE DETERMINED TO BE EXCESSIVE. THIS DETERMINATION WAS BASED ON THE FACT THAT YOUR PRICE WAS 45 PERCENT HIGHER THAN THE $1.61 UNIT PRICE FOR THE ITEM UNDER LAST YEAR'S CONTRACT WITH THE IMPERIAL-EASTMAN CORPORATION.

B-175815, AUG 3, 1972

BID PROTEST - CANCELLATION AND RESOLICITATION DENIAL OF PROTEST BY PENN AIRCRAFT PRODUCTS, INC., AGAINST THE REJECTION BY GSA OF ALL BIDS FOR AN INDEFINITE QUANTITY OF PIPECUTTERS, AND AGAINST THE PROPOSED AWARD OF A CONTRACT TO IMPERIAL-EASTMAN CORPORATION UNDER A RESOLICITATION OF THE PROCUREMENT. THE DETERMINATION TO REJECT ALL BIDS AND RESOLICIT UNDER FPR 1-2.404 2(C) IS A MATTER WITHIN THE DISCRETION OF THE CONTRACTING AGENCY AND WILL NOT BE DISTURBED BY GAO IN THE ABSENCE OF CLEAR PROOF OF ABUSE OF DISCRETION. SEE 50 COMP. GEN. 50 (1970). FURTHER, THE FACT THAT IMPERIAL-EASTMAN'S BID MAY BE BELOW THEIR ACTUAL MANUFACTURING COSTS DOES NOT, OF ITSELF, PRESENT A LEGAL BASIS FOR PRECLUDING AN AWARD TO THEM.

TO PENN AIRCRAFT PRODUCTS, INC.:

WE REFER TO YOUR LETTER OF JULY 18, 1972, AND PRIOR CORRESPONDENCE, PROTESTING AGAINST THE GENERAL SERVICES ADMINISTRATION (GSA) REJECTION OF ALL BIDS FOR THE INDEFINITE QUANTITY OF PIPECUTTERS COVERED BY ITEM 24 OF SOLICITATION FPNTP-A-8-19215 AND THE PROPOSED AWARD OF A CONTRACT TO IMPERIAL-EASTMAN CORPORATION UNDER A RESOLICITATION OF THE REQUIREMENT.

TWO BIDS WERE RECEIVED IN RESPONSE TO THE INITIAL SOLICITATION. YOUR FIRM SUBMITTED A UNIT PRICE OF $2.34 FOR A TOTAL OF $96,642 FOR THE ESTIMATED NUMBER OF UNITS REQUIRED, WHILE THE RIDGE TOOL COMPANY BID $2.44 PER UNIT. SUBSEQUENTLY, A PLANT FACILITIES SURVEY WAS CONDUCTED ON YOUR FIRM. THE SURVEY RESULTED IN A RECOMMENDATION BY THE GSA QUALITY ASSURANCE SPECIALIST TO THE CONTRACTING OFFICER THAT YOUR FIRM BE CONSIDERED CAPABLE OF PERFORMING. HOWEVER, THE CONTRACTING OFFICER CONCLUDED THAT THE SOLICITATION SHOULD BE CANCELED PURSUANT TO SECTION 1- 2.404-2(C) OF THE FEDERAL PROCUREMENT REGULATIONS BECAUSE THE BID PRICES RECEIVED WERE DETERMINED TO BE EXCESSIVE. THIS DETERMINATION WAS BASED ON THE FACT THAT YOUR PRICE WAS 45 PERCENT HIGHER THAN THE $1.61 UNIT PRICE FOR THE ITEM UNDER LAST YEAR'S CONTRACT WITH THE IMPERIAL-EASTMAN CORPORATION, WHILE THE BUREAU OF LABOR STATISTICS INDICATED A 3.6-PERCENT INCREASE FOR HANDTOOLS FOR THE PERIOD OF FEBRUARY 1971 THROUGH JANUARY 1972. WE UNDERSTAND THAT THROUGH OVERSIGHT THE IMPERIAL-EASTMAN CORPORATION DID NOT SUBMIT A BID PRICE FOR ITEM 24.

IT IS WELL ESTABLISHED THAT THE DETERMINATION TO REJECT ALL BIDS AND RESOLICIT IS A MATTER PARTICULARLY WITHIN THE DISCRETION OF THE CONTRACTING AGENCY AND WILL NOT BE DISTURBED BY OUR OFFICE IN THE ABSENCE OF CLEAR PROOF OF ABUSE OF DISCRETION. SEE 50 COMP. GEN. 50 (1970); 47 ID. 103 (1967); 39 ID. 86 (1959). IN VIEW OF THE BASIS ADVANCED FOR THE CONTRACTING OFFICER'S DECISION, WE ARE UNABLE TO CONCLUDE THAT HE ABUSED HIS DISCRETION. MOREOVER, IMPERIAL-EASTMAN'S FAILURE TO BID INITIALLY MAY NOT, IN OUR OPINION, BE VIEWED AS A LIMITATION ON THE CONTRACTING OFFICER'S RIGHT OF ACTION.

ON RESOLICITATION, IMPERIAL-EASTMAN OFFERED A UNIT PRICE OF $1.75 PER UNIT. YOU ASSERT THAT IMPERIAL-EASTMAN'S PRICE IS BELOW ITS WHOLESALE PRICES AND "PROBABLY" BELOW ITS ACTUAL TRUE MANUFACTURING COSTS. LETTER DATED JUNE 5, 1972, TO OUR OFFICE, IMPERIAL-EASTMAN HAS DENIED YOUR SUGGESTION THAT ITS PRICES ARE BELOW COST. HOWEVER, EVEN IF THEY WERE, THIS FACT ALONE WOULD NOT PRESENT A LEGAL BASIS FOR PRECLUDING AN AWARD TO IMPERIAL-EASTMAN. CF. 50 COMP. GEN., SUPRA. IT WOULD, HOWEVER, BE FOR CONSIDERATION IN DETERMINING THE FIRM'S RESPONSIBILITY. CF. 51 COMP. GEN. 225 (1971). BUT NO QUESTION OF IMPERIAL-EASTMAN'S RESPONSIBILITY HAS BEEN RAISED.

WITH RESPECT TO YOUR OTHER QUESTIONS, WE BELIEVE THAT GSA'S GENERAL COUNSEL'S LETTER OF JULY 6, 1972, A COPY OF WHICH WAS FURNISHED TO YOU FOR COMMENT, CONSTITUTES AN ADEQUATE REPLY.

ACCORDINGLY, YOUR PROTEST IS DENIED.