B-176605, NOV 29, 1972

B-176605, NOV 29, 1972

BID PROTEST - CANCELLATION OF IFB - TIMING OF PROTEST DECISION DENYING THE PROTEST OF JAMES H. MATTHEWS & CO., AGAINST CANCELLATION OF AN IFB AND READVERTISEMENT OF THOSE REQUIREMENTS UNDER A NEW IFB BY THE U.S. ARMY MEMORIAL AFFAIRS AGENCY FOR BRONZE GRAVE MARKERS. AN IFB CAN BE CANCELLED AFTER BID OPENING WHERE THE SPECIFICATIONS HAVE BEEN REVISED. ASPR 2-404.1(B)(II). GAO WILL NOT OBJECT TO SUCH A CANCELLATION UNLESS THERE HAS BEEN A CLEAR SHOWING OF ABUSE OF ADMINISTRATIVE DISCRETION. 49 COMP. GEN. 584 (1970). MOREOVER, PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN ANY TYPE OF SOLICITATION WHICH ARE APPARENT PRIOR TO BID OPENING ARE TO BE FILED PRIOR TO BID OPENING. 4 CFR 20.2(A).

TO JAS. H. MATTHEWS & CO.:

YOUR LETTER OF JULY 31, 1972, AND PRIOR CORRESPONDENCE PROTEST THE CANCELLATION BY THE UNITED STATES ARMY MEMORIAL AFFAIRS AGENCY OF INVITATION FOR BIDS (IFB) NO. SS 49-056-72-3 AND THE READVERTISEMENT OF THE REQUIREMENTS COVERED BY THAT INVITATION UNDER INVITATION FOR BIDS DAMEMA-72-B-0001.

INVITATION SS 49-056-72-3 WAS ISSUED ON APRIL 24, 1972, ON A 50 PERCENT SMALL BUSINESS SET-ASIDE BASIS, AND CALLED FOR AN ESTIMATED QUANTITY OF APPROXIMATELY 82,000 BRONZE GRAVE MARKERS. BIDS WERE OPENED ON MAY 24, 1972, WITH THE BID SUBMITTED BY YOUR FIRM DETERMINED TO BE LOW FOR THE NON -SET-ASIDE PORTION OF THE PROCUREMENT AND THE BID OF SHEIDOW BRONZE CORPORATION DETERMINED TO BE LOW FOR THE SET-ASIDE PORTION OF THE PROCUREMENT.

FOLLOWING BID OPENING, HOWEVER, APPROVAL WAS RECEIVED FOR A NEW GRAVE MARKER DESIGN DETERMINED TO BE SUPERIOR TO THE DESIGN CALLED FOR BY THE OUTSTANDING INVITATION AND ENTAILING A SIGNIFICANT CHANGE IN THE SPECIFICATIONS. UPON APPROVAL BY THE OFFICE OF THE ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS AND LOGISTICS), INVITATION SS 49-056-72-3 WAS CANCELED AND REPLACED BY INVITATION DAMEMA-72-B-0001. INVITATION 0001 WAS ISSUED ON JUNE 30, 1972, AND SET JULY 21, 1972, AS THE BID OPENING DATE. SHEIDOW WAS THE LOW BIDDER FOR BOTH THE SET-ASIDE AND NON-SET-ASIDE PORTIONS OF INVITATION -0001. ALTHOUGH YOUR PROTEST WAS FILED BEFORE AWARD WAS MADE TO SHEIDOW UNDER INVITATION -0001, AWARD WAS MADE TO SHEIDOW NOTWITHSTANDING YOUR PROTEST FOLLOWING PROPER NOTIFICATION TO OUR OFFICE AND APPROPRIATE DETERMINATION UNDER PARAGRAPH 2-407.8(B)(3) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR).

YOU PROTEST THAT THE BIDS RECEIVED UNDER INVITATION SS 49-056-72-3 WERE NOT PROPERLY REJECTED. YOU ALSO PROTEST THAT SHEIDOW WAS AFFORDED PREFERENTIAL TREATMENT IN THE RESOLICITATION BECAUSE PRIOR TO THE SPECIFICATION REVISION SHEIDOW PREPARED A SAMPLE GRAVE MARKER AT THE REQUEST OF THE MEMORIAL AFFAIRS AGENCY WHICH YOU CONTEND WAS "SUBSTANTIALLY IDENTICAL TO THE PATTERNS WHICH WOULD BE REQUIRED TO MANUFACTURE MEMORIALS UNDER THE REVISED SPECIFICATIONS." YOU CONTEND THAT THIS ADVANCE KNOWLEDGE OF THE SPECIFICATION REVISION PROVIDED SHEIDOW WITH A COMPETITIVE EDGE IN THE AREAS OF PREPARATION FOR MANUFACTURE AND COST REDUCTION.

FINALLY, YOU CONTEND THAT ALTHOUGH THE SPECIFICATION AS REVISED REQUIRES "SUBSTANTIAL ADDITIONAL COSTS" OVER THOSE REQUIRED UNDER THE UNREVISED SPECIFICATION, THE EXPOSURE OF BIDS UNDER THE FIRST INVITATION RESULTED IN THE REDUCTION OF THE SHEIDOW BID PRICE UNDER INVITATION -0001 TO A FIGURE LOWER THAN THAT BID BY EITHER SHEIDOW OR MATTHEWS UNDER THE ORIGINAL INVITATION. IN THIS REGARD, THE ORIGINAL SHEIDOW PRICE WAS $23.98 EACH AND THE ORIGINAL MATTHEWS BID WAS $23.69 EACH, WHILE THE SHEIDOW BID UNDER INVITATION -0001 WAS $23.39 EACH, NOT INCLUDING PROMPT PAYMENT DISCOUNT.

FOR REASONS SET OUT BELOW, YOUR PROTEST MUST BE DENIED.

SECTION 2305 OF TITLE 10, U.S.C. WHICH GOVERNS ADVERTISED PROCUREMENTS BY THE MILITARY DEPARTMENTS OF THE GOVERNMENT, PROVIDES FOR REJECTION OF ALL BIDS WHERE SUCH REJECTION IS DETERMINED IN THE PUBLIC INTEREST. ASPR 2- 404.1, AN IMPLEMENTATION OF 10 U.S.C. 2305, PROVIDES AT SUBPARAGRAPH (B)(II) FOR REJECTION OF ALL BIDS AFTER OPENING WHERE SPECIFICATIONS HAVE BEEN REVISED. ALSO, PARAGRAPH 10(B) OF STANDARD FORM 33A, WHICH WAS A PART OF BOTH INVITATIONS HERE INVOLVED, RESERVES TO THE GOVERNMENT THE RIGHT "TO REJECT ANY OR ALL OFFERS." THE GENERAL RULE WITH RESPECT TO INVITATION CANCELLATION FOLLOWING OPENING OF BIDS IS SUCCINCTLY STATED IN 49 COMP. GEN. 584 (1970) AT PAGE 586 AS FOLLOWS:

"OUR OFFICE HAS CONSISTENTLY HELD THAT, WHILE THE INTEREST OF THE GOVERNMENT AND THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM REQUIRE THAT INVITATIONS BE CANCELED ONLY FOR THE MOST 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 ADMINISTRATIVE DISCRETION."

THE REPORT IN THIS MATTER FURNISHED OUR OFFICE BY THE DEPARTMENT OF THE ARMY ADVISES THAT WHILE SHEIDOW DID FURNISH A PROTOTYPE BRONZE MARKER AT THE REQUEST OF THE MEMORIAL AFFAIRS AGENCY, THE COMPANY WAS NOT AWARE OF THE NATURE OF THE SPECIFICATION CHANGE FINALLY AGREED UPON UNTIL THE NEW SPECIFICATION WAS ACTUALLY ISSUED TO ALL INTERESTED BIDDERS IN MID-JUNE 1972. THE REPORT THUS CONCLUDES THAT THE SUBMISSION BY SHEIDOW OF A PROTOTYPE AFFORDED IT NO COMPETITIVE ADVANTAGE.

THE REPORT DISPUTES YOUR CONTENTION THAT THE SPECIFICATION AS REVISED REQUIRES "SUBSTANTIAL ADDITIONAL COSTS" BY POINTING OUT THAT THE NEW SPECIFICATION DESIGN IS A SIMPLE ONE AND BY STATING THAT THE SHEIDOW REVISED BID PRICE WAS VERIFIED AS BEING SUFFICIENT TO ENABLE SHEIDOW TO MAKE A PROFIT. WITH REGARD TO THE RELATIVE SIMPLICITY OF THE NEW DESIGN, THE REPORT STATES AS FOLLOWS:

"*** THE NEWLY DESIGNED GRAVE MARKER OUGHT NOT TO CREATE ANY PRODUCTION PROBLEMS FOR A COMPETENT SUPPLIER OF BRONZE GRAVE MARKERS. THE DESIGN IS A SIMPLE ONE. THE NEW BORDER REQUIREMENT IS NOT AS ELABORATE A BORDER AS IS GENERALLY PRODUCED BY MARKER MANUFACTURERS FOR THE COMMERCIAL TRADE. THE RELOCATION OF THE CROSS IS A MATTER REQUIRING NO NEW TECHNICAL SKILL, THE NEW LETTER SIZES ARE READILY AVAILABLE FROM W. K. KNIGHT & SONS, SENECA FALLS, N. Y., A SUBSIDIARY OF THE JAMES H. MATTHEWS COMPANY. (IN FACT, THE KNIGHT COMPANY IS THE SOLE SOURCE FOR LETTERS AND SHEIDOW WILL HAVE TO OBTAIN THEIR SUPPLY FOR THE NEW MARKER FROM THAT COMPANY.) THE COLOR CHANGE IS CONTROLLED BY A MUNSELL COLOR CHIP AVAILABLE TO ALL PRODUCERS AND PIGMENTATION AND GLOSS ARE SIMPLE REQUIREMENTS ATTAINABLE BY ANY COMPETENT PAINT SUPPLIER. ***"

THAT SUBSTANTIAL ADDITIONAL COSTS WILL NOT BE INCURRED UNDER THE REVISED SPECIFICATION WOULD SEEM TO BE INDICATED BY THE FACT THAT THE MATTHEWS BID PRICE UNDER INVITATION -0001 IS ONLY $0.17 EACH MORE THAN ITS BID PRICE UNDER THE ORIGINAL INVITATION.

FURTHER, WE MIGHT NOTE THAT YOUR PROTEST AGAINST THE REVISED SPECIFICATIONS WHICH WERE INCLUDED IN THE SECOND IFB WAS NOT MADE UNTIL YOU DISCOVERED AFTER THE OPENING OF BIDS THAT YOU WERE NOT THE LOW BIDDER. IN THAT REGARD, SECTION 20.2(A) OF THE INTERIM BID PROTEST PROCEDURES IN TITLE 4 OF THE CODE OF FEDERAL REGULATIONS PROVIDES THAT PROTESTS BASED UPON ALLEGED IMPROPRIETIES IN ANY TYPE OF SOLICITATION WHICH ARE APPARENT PRIOR TO BID OPENING ARE TO BE FILED PRIOR TO BID OPENING. THEREFORE, YOUR PROTEST AGAINST THE REVISION OF THE SPECIFICATIONS DOES NOT APPEAR TO HAVE BEEN TIMELY.

HOWEVER, IN ANY EVENT, ON THE BASIS OF OUR REVIEW OF THE ADMINISTRATIVE FILE IN THIS MATTER, WE MUST CONCLUDE THAT THERE WAS NO ABUSE OF DISCRETION IN THE CONTRACTING OFFICER'S DETERMINATION THAT THE SPECIFICATION REVISION REQUIRED INVITATION CANCELLATION.

IN ACCORDANCE WITH THE ABOVE CONSIDERATIONS, YOUR PROTEST MUST BE DENIED.