B-180642, JUN 6, 1974

B-180642, JUN 6, 1974

CANCELLATION OF IFB, AMBIGUOUS AS TO WHETHER ARTICLE WAS TO BE MANUFACTURED ENTIRELY OF PARTICLE BOARD OR IN COMBINATION WITH PLYWOOD, WAS PROPER NOTWITHSTANDING NO EXCEPTION TO SPECIFICATIONS WAS STATED BY BIDDERS PRIOR TO BID OPENING AND IFB PROVIDED FOR COMPLIANCE WITH SPECIFICATIONS, SINCE FPR PROVIDES FOR CANCELLATION OF IFB CONTAINING AMBIGUOUS SPECIFICATIONS AND CONTRACTING OFFICER WOULD BE UNABLE TO REQUIRE CONSTRUCTION ON COMBINATION BASIS AT CONTRACT PRICE IF CONTRACTOR INSISTED ON CONSTRUCTION ENTIRELY OF PARTICLE BOARD.

TO LEARNING RESOURCES MANUFACTURING CO.:

THE INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY, REQUESTED BIDS UNDER INVITATION FOR BIDS (IFB) NO. 74-31 FOR FURNISHING TO VARIOUS OFFICES THROUGHOUT THE UNITED STATES MODULAR COUNTER UNITS WHICH WERE TO BE MANUFACTURED IN ACCORDANCE WITH THE GOVERNMENT'S PURCHASE DESCRIPTION AND DRAWINGS.

FOUR BIDS RANGING FROM $245,750 TO $681,700 WERE RECEIVED AND OPENED ON NOVEMBER 9, 1973. THE LOWEST BID WAS SUBMITTED BY DEHLER MANUFACTURING COMPANY, INC. (DEHLER). THE NEXT LOWEST BID IN THE AGGREGATE TOTAL AMOUNT OF $380,988.15 WAS SUBMITTED BY LEARNING RESOURCES MANUFACTURING COMPANY (LEARNING RESOURCES).

BECAUSE THE LOW BID SUBMITTED BY DEHLER CONTAINED MATHEMATICAL ERRORS AND SINCE ITS TOTAL PRICE WAS SIGNIFICANTLY LOWER THAN THE PRICES SUBMITTED BY OTHER BIDDERS, DEHLER WAS REQUESTED TO VERIFY THE BID. BY LETTER DATED DECEMBER 6, 1973, DEHLER ADVISED THE CONTRACTING OFFICE AS FOLLOWS:

"ENCLOSED PLEASE FIND DETAILED AND CORRECTED BID SHEETS AND I HOPE THAT ALL MISTAKES HAVE BEEN ELIMINATED. HOWEVER, THE UNIT PRICES ARE CORRECT IN ANY CASE.

"THIS ALSO EXTENDS YOUR TIME OF ACCEPTANCE FOR THIS BID TO 9 JANUARY 1974 WITH THE UNDERSTANDING THAT BID-AMENDMENT NO. TWO, PARAGRAPH 3.3.2, CHANGING THE CONSTRUCTION FROM THE USE OF WOOD TO THE USE OF PARTICLE BOARD FOR ALL PANELS, INCLUDES THE USE OF PARTICLE BOARD THROUGHOUT THE CONTRACT ITEMS, AFFECTING ALSO PARAGRAPHS 3.3.5 AND 3.3.6."

THE LETTER BROUGHT OUT AMBIGUITIES IN THE SPECIFICATIONS THAT UNTIL THIS TIME HAD NOT BEEN NOTICED BY THE CONTRACTING OFFICE. UPON FURTHER REVIEW, IT WAS ALSO DETERMINED THAT THE DEHLER BID WAS NONRESPONSIVE FOR HAVING PROVIDED 30 DAYS FOR ACCEPTANCE OF THE BID CONTRARY TO AN IFB REQUIREMENT THAT 60 DAYS BE PROVIDED. BECAUSE OF THE DISCREPANCIES IN THE SPECIFICATIONS, THE CONTRACTING OFFICER DETERMINED THAT THE IFB SHOULD BE CANCELED PURSUANT TO FPR 1-2.404-1(B) AND A CORRECTED IFB WHICH ACCURATELY DESCRIBES THE REQUIREMENTS SHOULD BE ISSUED.

LEARNING RESOURCES PROTESTED THE CANCELLATION TO OUR OFFICE ON SEVERAL GROUNDS. IT STATED THAT THERE WAS A PREBID CONFERENCE FOR BIDDERS AND THE FOUR BIDDERS SUBMITTED OFFERS AGREEING WITH THE TERMS OF THE IFB AND NOT ONE TOOK EXCEPTION TO THE SPECIFICATIONS OR DRAWINGS. FURTHER, IT IS POINTED OUT THAT PARAGRAPH 3 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS PROVIDED FOR ANY EXPLANATION DESIRED BY AN OFFEROR REGARDING THE MEANING OR INTERPRETATION OF THE SOLICITATION, DRAWINGS, SPECIFICATIONS, ETC., BEING IN WRITING AND BEFORE THE SUBMISSION OF BIDS AND THAT NO EXPLANATION WAS REQUESTED BY ANY BIDDER BEFORE BID OPENING. ADDITIONALLY, IT STATED THAT ALL BIDDERS ACKNOWLEDGED THE AMENDMENTS OF THE IFB. ALSO, IT STATED THAT IFB PARAGRAPH 2.0 PROVIDED FOR A PREBID CONFERENCE WARNING BIDDERS OF THEIR RESPONSIBILITY, THAT IFB PARAGRAPH 3.1 PROVIDED FOR THE CONTRACTOR SUBMITTING SHOP DRAWINGS FOR GOVERNMENTAL APPROVAL AND THAT IFB PARAGRAPH 3.2 PROVIDED FOR A PREPRODUCTION MODEL FOR GOVERNMENTAL APPROVAL. MOREOVER, ATTENTION IS INVITED TO IFB PARAGRAPH 3.2.4 PROVIDING RESPONSIBILITY OF THE CONTRACTOR TO COMPLY WITH THE SPECIFICATIONS AND PARAGRAPH 6.0 PROVIDING FOR INSPECTION AND ACCEPTANCE OF THE QUANTITY TO BE SUPPLIED UNDER THE CONTRACT. IT IS INTIMATED THAT IN VIEW OF THE FOREGOING PROVISIONS THE GOVERNMENT HAD REASONABLE ASSURANCES OF COMPLIANCE WITH THE SPECIFICATIONS. IN THE CIRCUMSTANCES, LEARNING RESOURCES OBJECTS TO THE CONTRACTING OFFICER'S REFUSAL TO REQUEST CLARIFICATION FROM IT AS TO THE MATERIALS IT INTENDED TO USE IN THE PERFORMANCE OF THE CONTRACT AND TO THE FAILURE TO MAKE AN AWARD TO IT.

ALTHOUGH NO ONE POINTED TO ANY INCONSISTENCY IN THE SPECIFICATIONS UNTIL DEHLER BROUGHT THE MATTER TO THE ATTENTION OF THE CONTRACTING OFFICER WHEN IT WAS REQUESTED TO VERIFY ITS BID, THE CONTRACTING OFFICER WAS FACED WITH HAVING TO MAKE A DETERMINATION AT THAT TIME UPON LEARNING OF THE DISCREPANCY AS TO WHETHER TO CANCEL THE IFB. IN THAT REGARD, FPR 1-2.404- 1(B)(1) PROVIDES THAT AN IFB MAY BE CANCELED AFTER BID OPENING BUT PRIOR TO AWARD WHERE AMONG OTHER CONDITIONS THE SPECIFICATIONS CITED IN THE IFB ARE "INADEQUATE, AMBIGUOUS OR OTHERWISE DEFICIENT." IN THIS SITUATION, THE CONTRACTING OFFICER RECOGNIZED THAT BECAUSE THE SPECIFICATIONS WERE AMBIGUOUS ANY OFFEROR COULD HAVE MISINTERPRETED THE SPECIFICATIONS AS DEHLER DID TO PERMIT THE COUNTER CORES TO BE CONSTRUCTED OF PARTICLE BOARD. HOWEVER, IT WAS NOT THE INTENTION OF IRS THAT THE CORES BE CONSTRUCTED ENTIRELY OF PARTICLE BOARD AND SUCH CONSTRUCTION WOULD HAVE BEEN ENTIRELY UNACCEPTABLE TO IRS. THUS, THE CONTRACTING OFFICER WAS IN A POSITION OF EITHER MAKING AN AWARD UNDER AMBIGUOUS SPECIFICATIONS THAT COULD LEAD TO AN UNINTENDED AND UNACCEPTABLE PRODUCT OR OF CANCELING THE IFB AND RESOLICITING UNDER CORRECTED SPECIFICATIONS. THE CONTRACTING OFFICER CHOSE THE LATTER ALTERNATIVE UPON LEGAL ADVICE THAT IT WOULD NOT BE PROPER TO HAVE LEARNING RESOURCES CLARIFY ITS BID AS TO HOW IT INTENDED TO PERFORM UNDER THE CONTRACT. THAT DETERMINATION IS CONSISTENT WITH OUR DECISION IN 40 COMP. GEN. 393 (1961) WHEREIN IT WAS STATED AT PAGE 396:

"*** IT HAS CONSISTENTLY BEEN STATED BY THIS OFFICE THAT IT IS IMPROPER TO ALLOW A PARTICULAR BIDDER TO CHANGE HIS BID AFTER THE PUBLIC OPENING TO THE PREJUDICE OF OTHER BIDDERS. WE HAVE GENERALLY TAKEN THE POSITION THAT AN AMBIGUOUS BID MAY NOT BE EXPLAINED AFTER OPENING SINCE THE BIDDER WOULD, IN EFFECT, HAVE AN ELECTION AS TO WHETHER OR NOT HE WISHED TO HAVE HIS BID CONSIDERED. ***"

SEE ALSO 47 COMP. GEN. 496, 500 (1968).

ALTHOUGH NO REQUEST FOR CLARIFICATION OF THE IFB WAS MADE PRIOR TO THE BID OPENING AND ALL AMENDMENTS OF THE IFB WERE ACKNOWLEDGED AND NO EXCEPTIONS TO THE SPECIFICATIONS OR AMENDMENTS STATED PRIOR TO BIDDING THAT DOES NOT PRECLUDE THE CONTRACTING OFFICER FROM CANCELING THE IFB WHEN AN AMBIGUITY CREATED BY THE SPECIFICATIONS AND AMENDMENTS IS BROUGHT TO ATTENTION PRIOR TO AWARD. FPR 1-2.404-1(B)(1), CITED ABOVE, CLEARLY PROVIDES FOR CANCELLATION OF AN IFB AFTER BID OPENING FOR AMBIGUITIES IN THE SPECIFICATIONS.

ALSO, IT HAS CONSISTENTLY BEEN HELD THAT AN INVITATION FOR BIDS DOES NOT IMPORT ANY OBLIGATION ON THE GOVERNMENT TO ACCEPT ANY OF THE BIDS RECEIVED, AND THAT ALL BIDS MAY BE REJECTED WHEN SUCH ACTION IS DETERMINED TO BE IN THE BEST INTERESTS OF THE GOVERNMENT. SEE 50 COMP. GEN. 464, 469 -470 (1970), AND CASES CITED THEREIN.

MOREOVER, NOTWITHSTANDING THE CONTENTION OF LEARNING RESOURCES THAT THE PARAGRAPHS CITED IN THE IFB WOULD PROVIDE REASONABLE ASSURANCES OF COMPLIANCE, IN VIEW OF THE AMBIGUITY IN THE SPECIFICATIONS THE CONTRACTING OFFICER WOULD BE UNABLE TO REQUIRE THE CONTRACTOR TO UTILIZE PARTICLE BOARD/PLYWOOD CONSTRUCTION AT THE CONTRACT PRICE IF IT INSISTED THAT THE CONTRACT PROVIDED FOR CONSTRUCTION ENTIRELY OF PARTICLE BOARD. SEE 37 COMP. GEN. 249, 251 (1957).

IN VIEW OF THE FOREGOING, WE ARE OF THE VIEW THAT THE CONTRACTING OFFICER ACTED PROPERLY IN NOT PROVIDING LEARNING RESOURCES AN OPPORTUNITY TO CLARIFY ITS BID IN ORDER THAT IT MIGHT RECEIVE AN AWARD. ACCORDINGLY, THE PROTEST IS DENIED.