B-176588(2), FEB 5, 1973

B-176588(2): Feb 5, 1973

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THE CONTRACTING OFFICER HAS BROAD DISCRETION IN DECIDING TO REJECT ALL BIDS AFTER BID OPENING AND TO READVERTISE IF THERE IS A COGENT REASON. REVISION OF SPECIFICATIONS AND LACK OF SUFFICIENT FUNDS TO COVER THE COST OF THE PROCUREMENT ARE COGENT REASONS. FIVE BIDS WERE RECEIVED IN RESPONSE TO 0024. AWARD WAS MADE UNDER 0024 TO ATLANTIC. SINCE BERC WAS DETERMINED TO BE NONRESPONSIBLE. AWARD WAS MADE TO YOUR FIRM UNDER 0025. BOTH OF THESE REQUIREMENTS WERE CONSOLIDATED WITH THE REQUIREMENTS OF THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) FOR ITS ADJOINING FACILITY UNDER INVITATION FOR BIDS NO. 1-52 2777-A. TEN BIDS WERE RECEIVED AND OPENED ON MAY 19. THAT FIRM WAS DETERMINED TO BE A NONRESPONSIBLE BIDDER.

B-176588(2), FEB 5, 1973

BID PROTEST - READVERTISEMENT OF REQUIREMENT - COGENT REASONS - SHORT BID SUBMISSION PERIOD DECISION DENYING THE PROTEST OF INDUSTRIAL MAINTENANCE SERVICES, INC., AGAINST THE ISSUANCE OF AN IFB BY LANGLEY AFB, VA., FOR CUSTODIAL SERVICES. THE CONTRACTING OFFICER HAS BROAD DISCRETION IN DECIDING TO REJECT ALL BIDS AFTER BID OPENING AND TO READVERTISE IF THERE IS A COGENT REASON. REVISION OF SPECIFICATIONS AND LACK OF SUFFICIENT FUNDS TO COVER THE COST OF THE PROCUREMENT ARE COGENT REASONS. SEE 49 COMP. GEN. 584 (1970). ALSO, IN THIS CASE DUE TO THE URGENCY OF THE REQUIREMENT, THE SHORT TIME PROVIDED FOR BID SUBMISSION AND THE SHORT "START UP" PERIOD DID NOT DEPRIVE THE GOVERNMENT OF THE BENEFITS RESULTING FROM ADEQUATE COMPETITION. SEE B-170242, AUGUST 20, 1970.

TO INDUSTRIAL MAINTENANCE SERVICES, INCORPORATED:

WE REFER TO YOUR TELEFAX DATED SEPTEMBER 26, 1972, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST THE ISSUANCE OF INVITATION FOR BIDS NOS. F44600-73-B-0024 (0024) AND F44600-73-B-0025 (0025), BY THE BASE PROCUREMENT OFFICE AT LANGLEY AIR FORCE BASE, VIRGINIA.

INVITATION 0024, ISSUED SEPTEMBER 18, 1972, SOLICITED BIDS FOR CUSTODIAL SERVICES FOR THE BASE FACILITIES, WHILE INVITATION 0025, ISSUED ON THE SAME DATE, CALLED FOR BIDS FOR THE PERFORMANCE OF SIMILAR SERVICES AT THE BASE HOSPITAL. ON THE COMMON OPENING DATE OF SEPTEMBER 28, 1972, FIVE BIDS WERE RECEIVED IN RESPONSE TO 0024, AND SEVEN IN RESPONSE TO 0025. OLD ATLANTIC SERVICES, INCORPORATED (ATLANTIC), SUBMITTED THE LOW BID UNDER 0024 AT AN EXTENDED MONTHLY PRICE OF $23,497, WHILE BERC BUILDING MAINTENANCE COMPANY (BERC), SUBMITTED THE LOW BID UNDER 0025 AT A YEARLY ESTIMATED PRICE OF $71,151.00. YOUR FIRM SUBMITTED BIDS IN RESPONSE TO BOTH INVITATIONS.

ON NOVEMBER 10, 1972, NOTWITHSTANDING THE PENDENCY OF THE PROTEST, AWARD WAS MADE UNDER 0024 TO ATLANTIC. SINCE BERC WAS DETERMINED TO BE NONRESPONSIBLE, AWARD WAS MADE TO YOUR FIRM UNDER 0025, ON NOVEMBER 22, 1972, AT THE ESTIMATED YEARLY PRICE OF $92,213.88.

INITIALLY, BOTH OF THESE REQUIREMENTS WERE CONSOLIDATED WITH THE REQUIREMENTS OF THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) FOR ITS ADJOINING FACILITY UNDER INVITATION FOR BIDS NO. 1-52 2777-A, ISSUED ON MAY 8, 1972, BY NASA AT HAMPTON, VIRGINIA. WITH REGARD TO THE NASA SOLICITATION, TEN BIDS WERE RECEIVED AND OPENED ON MAY 19, 1972. G. ASHE ENTERPRISES, INCORPORATED, SUBMITTED THE LOW BID AT $3,252,539.22. HOWEVER, THAT FIRM WAS DETERMINED TO BE A NONRESPONSIBLE BIDDER. YOUR FIRM SUBMITTED THE NEXT LOW BID AT $3,326,090.64. SUBSEQUENTLY, ON JULY 21, 1972, KLATE HOLT COMPANY (HOLT) PROTESTED THE PROCUREMENT TO THIS OFFICE. HOLT'S PROTEST WAS AIMED PRIMARILY AT THE ADEQUACY OF THE SPECIFICATIONS PERTAINING TO THE AIR FORCE PORTION OF THE COMBINED INVITATION. COUNSEL FOR HOLT FILED AN ACTION FOR A TEMPORARY RESTRAINING ORDER IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA, NEWPORT NEWS DIVISION. ON AUGUST 30, 1972, THE UNITED STATES ATTORNEY AND COUNSEL FOR HOLT ENTERED INTO A DISSOLUTION ORDER, WHICH WAS APPROVED BY THE DISTRICT JUDGE, SUBJECT TO THE CONDITION THAT THE GOVERNMENT WITHHOLD AWARD UNTIL OUR OFFICE HAD RULED ON THE HOLT PROTEST. PRIOR TO THE RESOLUTION OF THE PROTEST THE AIR FORCE WITHDREW ITS REQUIREMENT FROM THE COMBINED INVITATION AND ISSUED THE INVITATIONS AT ISSUE HERE. AS A RESULT, NASA CANCELLED ITS SOLICITATION. IN VIEW THEREOF, WE HAVE ADVISED HOLT THAT WE ARE CLOSING OUR FILE ON ITS PROTEST WITHOUT FURTHER ACTION.

THE AIR FORCE'S REASONS FOR WITHDRAWING FROM THE COMBINED INVITATION AND READVERTISING ITS REQUIREMENT ARE STATED IN THE ADMINISTRATIVE REPORT AS SET FORTH, IN PART, BELOW:

"2. DURING THE ENSUING DELAY, IN EXCESS OF THREE MONTHS DURING FY 73, LANGLEY AFB WAS DIRECTED BY HIGHER HEADQUARTERS TO ACCOMPLISH DRASTIC REDUCTIONS IN CUSTODIAL SERVICES AND FUND REDUCTIONS WERE ORDERED. INASMUCH AS NO AWARD HAD BEEN MADE, IT WOULD APPEAR THAT THOSE FUNDS, PREVIOUSLY MADE AVAILABLE, DID NOT CONSTITUTE A BONA-FIDE OBLIGATION. SINCE THE ORDERED REDUCTION REPRESENTED APPROXIMATELY 30% OF FUNDS AVAILABLE FOR BASE FACILITIES, IT WAS APPARENT THAT THE STATEMENT OF WORK WOULD REQUIRE COMPLETE REVISION. CONSEQUENTLY, THE BASE COMMANDER WITHDREW LANGLEY AFB FACILITIES AND THE USAF REGIONAL HOSPITAL REQUIREMENTS, AND DIRECTED THAT THESE AGENCIES RESUBMIT REVISED REQUIREMENTS ACCORDINGLY. UPON RECEIPT OF THESE REQUIREMENTS BY THE BASE PROCUREMENT OFFICE, IT WAS DETERMINED THAT DUE TO SEVERE FUND RESTRICTIONS, 'REQUIREMENT TYPE, FIRM-FIXED PRICE' SOLICITATIONS BE UTILIZED, THEREBY PROVIDING SOME FLEXIBILITY IN ORDERING THE NECESSARY SERVICES."

IT IS YOUR POSITION THAT THE AIR FORCE'S WITHDRAWAL FROM THE COMBINED INVITATION IS NOT IN THE GOVERNMENT'S BEST INTEREST BECAUSE IT WILL RESULT IN A HIGHER OVERALL COST RATHER THAN A SAVINGS AS THE AIR FORCE INSISTS. YOU BASE THIS ARGUMENT ON THE CONTENTION THAT THE DIVISION OF THE PROCUREMENT INTO THREE SEPARATE CONTRACTS WILL INCREASE THE COST OF PERFORMANCE BECAUSE IT WILL PREVENT THE CONTRACTOR FROM OVERLAPPING HIS SUPERVISORY AND EQUIPMENT COSTS BETWEEN THE THREE LOCATIONS. YOU ALSO CITE INCREASED COSTS TO THE AIR FORCE AND NASA OF ADMINISTERING THREE SEPARATE CONTRACTS AND THE NEW HIGHER WAGE RATE APPLICABLE TO THE NEW INVITATIONS AS NEGATING ANY COST SAVINGS. FINALLY, YOU INSIST THAT THE SPECIFICATION CHANGES INCLUDED IN 0024 ACTUALLY INCREASE THE AREA TO BE SERVICED.

THE RECORD SHOWS THAT THE PRICES RECEIVED ON THE FACILITIES PORTION OF THE NASA INVITATION AND 0024 DIFFER TO SOME EXTENT, WITH THE PRICES RECEIVED UNDER THE LATTER SOLICITATION SLIGHTLY HIGHER. IT SHOULD BE NOTED THAT THE PRICES UNDER 0024 ARE ESTIMATED RATHER THAN FIRM-FIXED PRICES. HOWEVER, THE REQUIREMENTS HAVE BEEN MATERIALLY CHANGED UNDER BOTH 0024 AND 0025. BECAUSE OF THE SIGNIFICANT REVISION OF THE STATEMENT OF WORK UNDER 0025, NO COMPARISON OF PRICES IS FEASIBLE. THE CHANGES UNDER THE TWO SOLICITATIONS AS REPORTED BY THE CONTRACTING OFFICER ARE LISTED BELOW:

"A. FREQUENCY OF SERVICES -

"(1) 7 DAYS - THE ORIGINAL 19,500 SF WAS REVISED AS THE RESULT OF (I) DELETING 11,500 SF (BLDG. 77); AND (II) ADDING A NEW FACILITY, 23,000 SF (BLDG. 71) NOT INCLUDED IN THE ORIGINAL REQUIREMENT. THIS TOTALLY NEW REQUIREMENT (BLDG. 71) IS A BASE HOUSING REQUIREMENT AND NOT FUNDED BY BASE O&M FUNDS.

"(2) 6 DAYS - REQUIREMENT REDUCED BY 8,000 SF.

"(3) 5 DAYS, SPECIAL - THE INCREASE OF 30,805 SF IN THIS CATEGORY REFLECTS AREAS WITHIN THE VARIOUS BUILDINGS OCCUPIED BY GENERAL OFFICERS WHERE SOME SPECIAL TYPES OF SERVICE ARE REQUIRED. THE REMAINING AREAS OF THESE BUILDINGS WERE REDUCED TO EITHER 5-DAY REGULAR, 3-DAY OR 2-DAY SERVICE.

"(4) THE 60,550 SF LISTED IN THE NEW SOLICITATION INCLUDES BLDG. 333 WITH 7,000 SF (ITEM 11 OF THE SCHEDULE) WHICH IS NOT REFLECTED IN THE FIGURES SHOWN IN PROTESTOR'S LETTER.

"(5) THE REMAINING AREAS ARE SELF-EXPLANATORY AND REFLECT A GENERAL REDUCTION IN OVERALL SERVICES. HOWEVER, INCLUDED IN 98,000 SF, 2 DAYS, BLDG. 609 WITH 6,800 SF WAS ADDED; WHEREAS BLDG. 1345 (ERRONEOUSLY LISTED AS 1346) WITH 3,400 SF WAS DELETED ENTIRELY AND BLDG. 23 WAS REDUCED BY 25,800 SF.

"7. A. THE MAJOR REASON FOR ISSUANCE OF B-0025 FOR THE BASE HOSPITAL WAS THE URGENCY OF NEED AS CERTIFIED BY THE USAF REGIONAL HOSPITAL COMMANDER. ADDITIONALLY, A COMPLETELY REVISED SOW (STATEMENT OF WORK) WAS UTILIZED IN B-0025 AS COMPARED WITH THE ORIGINAL SOW INCLUDED IN NASA'S SOLICITATION. FURTHER, THE DENTAL CLINIC, BLDG. 546, WITH APPROXIMATELY 8,828 SF AREA WAS TOTALLY DELETED FROM THE REQUIREMENT.

"B. IN MARCH 1972, THE TIME ESTABLISHED TO SUBMIT THE HOSPITAL'S REQUIREMENTS TO NASA FOR BID PREPARATION, ETC., THE BASE HOSPITAL'S CUSTODIAL CONTRACT HAD BEEN IN EFFECT FOR ABOUT A THREE (3) MONTH PERIOD. CONSEQUENTLY, THE DEFICIENCIES IN THE SOW HAD NOT BECOME OBVIOUS. THE BASE HOSPITAL HAD CHANGED FROM AN 'IN HOUSE' OPERATION TO 'CONTRACT SERVICES' AS OF 71 DEC 01."

FURTHERMORE, THE AIR FORCE POINTS OUT THAT BOTH 0024 AND 0025 INVITED BIDS ON AN INDEFINITE QUANTITY BASIS FOR REQUIREMENT TYPE CONTRACTS, WHILE THE COMBINED INVITATION SOLICITED BIDS ON A MONTHLY AND YEARLY FIXED-PRICE BASIS. THE AIR FORCE INTENDS UNDER THE CONTRACTS AWARDED PURSUANT TO THE NEW INVITATIONS TO LIMIT ITS ORDERS FOR SERVICES TO FALL WITHIN ITS NEW FUNDING LIMITATION.

IT IS RECOGNIZED BY OUR OFFICE THAT THE CONTRACTING OFFICER IS ACCORDED BROAD DISCRETION IN DECIDING, AFTER BID OPENING, TO REJECT ALL BIDS AND READVERTISE. WHILE SUCH ACTION SHOULD BE TAKEN ONLY FOR COGENT REASONS, WE HAVE RECOGNIZED THAT THE REVISION OF SPECIFICATIONS AND THE LACK OF SUFFICIENT FUNDS TO COVER THE COST OF THE PROCUREMENT ARE TWO SUCH REASONS.

SEE 49 COMP. GEN. 584 (1970) AND B-157419, OCTOBER 18, 1965. IN REGARD TO THE ALTERNATIVE OF AWARDING UNDER THE ORIGINAL INVITATION AND NEGOTIATING THE CHANGES AFTERWARD, AS YOU SUGGEST SHOULD HAVE BEEN DONE, WE HAVE HELD THAT THE LOW BID MUST BE DETERMINED ON THE BASIS OF BIDS ON THE WORK ACTUALLY TO BE PERFORMED, NOT ON THE BASIS OF BIDS ON SPECIFICATIONS KNOWN TO CALL FOR MORE OR LESS WORK, OR WORK OF A DIFFERENT TYPE. SEE B-171965, MAY 20, 1971, AND CASES CITED THEREIN. IN THE CIRCUMSTANCES, WE BELIEVE THE ADMINISTRATIVE EFFORT TO REDUCE THE FREQUENCY AND AREA TO BE CLEANED AND TO CONFORM THE HOSPITAL SPECIFICATIONS TO THE ACCREDITING ASSOCIATIONS MINIMUM STANDARDS WAS A REASONABLE EXERCISE OF DISCRETION AND JUSTIFIED THE ACTION TAKEN HERE.

YOU OBJECT TO THE SHORT TIME (10 DAYS) PROVIDED BY BOTH INVITATIONS BETWEEN ISSUANCE AND BID OPENING. YOU ALSO QUESTION THE SHORT "START UP" PERIOD ALLOWED BY THE INVITATIONS. (11 DAYS AFTER OPENING FOR THE FACILITIES CONTRACT AND 3 DAYS FOR THE HOSPITAL CONTRACT). THE RECORD INDICATES THAT THE "URGENT" NEED FOR THE SERVICES DICTATED THE SHORT TIME PROVIDED FOR BOTH BID SUBMISSION AND "START-UP". IN ADDITION, IT WAS DETERMINED THAT THE SERVICES BEING PROVIDED BY THE INCUMBENT CONTRACTOR UNDER THE EXTENDED NASA CONTRACT WERE GREATLY EXCEEDING THE FUNDING LIMITATION APPLICABLE TO THE AIR FORCE. FURTHERMORE, SEVERAL BIDS WERE RECEIVED IN RESPONSE TO BOTH INVITATIONS AND AT PRICES WHICH COMPARE FAVORABLY WITH THOSE RECEIVED FOR SIMILAR SERVICES UNDER THE EARLIER NASA INVITATION. SINCE CONTRACT AWARDS HAVE BEEN MADE AT REASONABLE PRICES (YOUR FIRM RECEIVED ONE OF THE TWO AWARDS), WE MUST CONCLUDE THAT NEITHER THE SHORT TIME PROVIDED FOR BID SUBMISSION NOR THE SHORT "START-UP" PERIOD DEPRIVED THE GOVERNMENT OF THE BENEFITS RESULTING FROM ADEQUATE COMPETITION. SEE B-170242, AUGUST 20, 1970.

ACCORDINGLY, YOUR PROTEST IS DENIED.