B-182855, MAY 14, 1975, 54 COMP GEN 955

B-182855: May 14, 1975

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CONTRACTS - PROTESTS - TIMELINESS PROTEST FILED WITH GENERAL ACCOUNTING OFFICE ON DECEMBER 16 AFTER CONTRACTING AGENCY FAILED TO RESCIND CANCELLATION OF INVITATION FOR BIDS AT DECEMBER 11 MEETING REQUESTED BY PROTESTER WITHIN 5 DAYS OF NOTICE OF CANCELLATION IS TIMELY UNDER 4 C.F.R. 20.2(A) (1974). BIDS - INVITATION FOR BIDS - CANCELLATION - CHANGE IN DELIVERY REQUIREMENTS CHANGE IN TIME REQUIRED FOR DELIVERY OF UNACCOMPANIED BAGGAGE FROM 2 DAY REQUIREMENT TO LESS STRINGENT CONDITION WAS A SIGNIFICANT CHANGE AND COMPELLING REASON TO CANCEL INVITATION FOR BIDS AFTER BID OPENING. SINCE BID WAS ON STRINGENT SCHEDULE IN NEW IFB. FACT THAT ADVANTAGE WAS NOT OBTAINED DOES NOT AFFECT DETERMINATION TO CANCEL IFB.

B-182855, MAY 14, 1975, 54 COMP GEN 955

CONTRACTS - PROTESTS - TIMELINESS PROTEST FILED WITH GENERAL ACCOUNTING OFFICE ON DECEMBER 16 AFTER CONTRACTING AGENCY FAILED TO RESCIND CANCELLATION OF INVITATION FOR BIDS AT DECEMBER 11 MEETING REQUESTED BY PROTESTER WITHIN 5 DAYS OF NOTICE OF CANCELLATION IS TIMELY UNDER 4 C.F.R. 20.2(A) (1974), SINCE FILED WITHIN 5 DAYS OF ADVERSE AGENCY ACTION (FAILURE TO RESCIND CANCELLATION). BIDS - INVITATION FOR BIDS - CANCELLATION - CHANGE IN DELIVERY REQUIREMENTS CHANGE IN TIME REQUIRED FOR DELIVERY OF UNACCOMPANIED BAGGAGE FROM 2 DAY REQUIREMENT TO LESS STRINGENT CONDITION WAS A SIGNIFICANT CHANGE AND COMPELLING REASON TO CANCEL INVITATION FOR BIDS AFTER BID OPENING. BIDS - COMPETITIVE SYSTEM - DELIVERY PROVISIONS - CHANGED CONDITIONS BIDDER, PERFORMING TRANSPORTATION SERVICES UNDER CONTRACT HAVING LESS STRINGENT DELIVERY SCHEDULE THAN NEW INVITATION FOR BIDS (IFB) BID UPON, DID NOT OBTAIN COMPETITIVE ADVANTAGE ON NEW IFB, SINCE BID WAS ON STRINGENT SCHEDULE IN NEW IFB; HOWEVER, FACT THAT ADVANTAGE WAS NOT OBTAINED DOES NOT AFFECT DETERMINATION TO CANCEL IFB, SINCE THERE WAS SUBSEQUENT CHANGE IN DELIVERY REQUIREMENT THAT PROVIDED BASIS FOR CANCELLATION. BIDS - COMPETITIVE SYSTEM - EQUAL BIDDING BASIS FOR ALL BIDDERS - DELIVERY REQUIREMENTS - AREA SCHEDULING CONTENTION BY BIDDER THAT IT WAS AWARE OF "AREA SCHEDULING" REQUIREMENT AND WOULD NOT HAVE BID DIFFERENTLY IF INCLUDED IN INVITATION FOR BIDS (IFB) IS NOT DISPOSITIVE OF ISSUE OF WHETHER AWARD SHOULD HAVE BEEN MADE UNDER IFB, SINCE TO PERMIT AWARD ON "AREA SCHEDULING" WOULD HAVE RESULTED IN CONTRACT WHICH WAS NOT SAME OFFERED TO COMPETITION AND MORE STRINGENT REQUIREMENT IN IFB MAY HAVE RESTRICTED COMPETITION. BIDS - DISCARDING ALL BIDS - SPECIFICATIONS - CONFLICTING PROVISIONS WHERE ALL BIDDERS, EXCEPT ONE NOT LOW BIDDER, WERE NONRESPONSIVE TO INVITATION FOR BIDS (IFB) BECAUSE OF CONFLICTING BID ACCEPTANCE PROVISIONS, THERE IS NO OBJECTION TO CANCELLATION AND RESOLICITATION UNDER PROPER IFB; HOWEVER, WHERE ALL BIDDERS FOR TRANSPORTATION SERVICE AWARDED UNDER ANOTHER IFB WERE NONRESPONSIVE BECAUSE OF SIMILAR CONFLICT, THERE IS NO OBJECTION TO CONTINUATION OF AWARDS IN VIEW OF AGENCY CONTENTION THAT IT WOULD NOT BE IN GOVERNMENT'S INTEREST TO TERMINATE AND SINCE NO BIDDER WAS PREJUDICED BY AWARDS AND NONE HAS PROTESTED AWARDS. CONTRACTS - AWARDS - ERRONEOUS - TERMINATION OF CONTRACT PROTEST BY BIDDER THAT IT HAD BEEN AWARDED CONTRACT AND WAS LATER ADVISED SUCH AWARD WAS MADE THROUGH ADMINISTRATIVE ERROR IS BEYOND AUTHORITY OF GENERAL ACCOUNTING OFFICE BECAUSE IF THERE WAS VALID CONTRACT, THEN IT MAY BE THAT IT WAS CONSTRUCTIVELY TERMINATED FOR CONVENIENCE AND MATTER WOULD BE FOR RESOLUTION AS TERMINATION FOR CONVENIENCE CLAIM WHICH IS CONTRACT ADMINISTRATION. CONTRACTS - AWARDS - PROTEST PENDING - FAILURE TO NOTIFY GAO - LEGALITY OF AWARD FAILURE OF AGENCY TO COMPLY WITH REQUIREMENT IN AGENCY REGULATIONS THAT IT NOTIFY GENERAL ACCOUNTING OFFICE THAT AWARD WILL BE MADE NOTWITHSTANDING PROTEST DOES NOT AFFECT LEGALITY OF AWARD. PURCHASES - BLANKET PURCHASE AGREEMENT - PENDING RESOLUTION OF PROTEST SERVICE BEING PERFORMED UNDER BLANKET PURCHASE AGREEMENT (BPA) AWARDED AND EXTENDED TO JUNE 30, 1975, PENDING RESOLUTION OF PROTESTS SHOULD BE RESOLICITED FOR PERIOD COMMENCING JULY 1, 1975, NOTWITHSTANDING AGENCY DESIRE TO CONTINUE UNTIL DECEMBER 31, 1975, SINCE BPA WAS INTERIM MEASURE WHICH HAS SERVED PURPOSE FOR WHICH INTENDED AND TO EXTEND AGREEMENT WOULD PENALIZE BIDDERS WHO PROTESTED DEFECTIVE INVITATION FOR BIDS BY NOT ALLOWING THEM TO COMPETE FOR REQUIREMENT AND THERE WOULD BE NO TERMINATION COSTS IF SERVICE WAS RESOLICITED EFFECTIVE JULY 1, 1975.

IN THE MATTER OF COLUMBIA VAN LINES, INC.; DISTRICT MOVING AND STORAGE, INC., MAY 14, 1975:

INVITATION FOR BIDS (IFB) NO. DAHC30-75-B-0002 WAS ISSUED IN AUGUST 1974 BY THE DEPARTMENT OF THE ARMY AND CONTEMPLATED A REQUIREMENTS TYPE CONTRACT FOR THE PREPARATION OF PERSONAL PROPERTY (HOUSEHOLD GOODS AND UNACCOMPANIED BAGGAGE) FOR MOVEMENT OR STORAGE, DRAYAGE AND RELATED SERVICES.

BIDS WERE OPENED ON OCTOBER 2, 1974, AND TWO BIDS WERE RECEIVED FOR THE PORTION OF THE CONTRACT RELATING TO UNACCOMPANIED BAGGAGE (SCHEDULES I AND II) WITH COLUMBIA VAN LINES, INC. (COLUMBIA), BEING THE LOW BIDDER. NOVEMBER 26, 1974, THE CONTRACTING OFFICER, BASED ON INFORMATION RECEIVED AFTER BID OPENING, DETERMINED TO CANCEL THE BAGGAGE PORTION OF THE SOLICITATION AND TO READVERTISE THE REQUIREMENT.

THE REASON FOR THE CANCELLATION, AS CONTAINED IN THE DETERMINATION AND FINDINGS MADE BY THE CONTRACTING OFFICER, WAS THAT THERE HAD BEEN A CHANGE IN THE MANNER OF MAKING DELIVERIES UNDER THE PRIOR YEAR CONTRACT WITH COLUMBIA AND THAT IT WAS THE INTENTION OF THE ARMY'S OPERATING PERSONNEL TO CONTINUE THE NEW METHOD OF DELIVERY UNDER THE CONTRACT TO BE AWARDED UNDER IFB-0002. THE SPECIFICATIONS IN THE PRIOR YEAR CONTRACT AS WELL AS IFB-0002 REQUIRED DELIVERIES TO BE MADE WITHIN 2 WORKING DAYS AFTER ARRIVAL OF THE BAGGAGE. DURING THE COURSE OF PERFORMANCE OF THE PRIOR CONTRACT, THE TIME FOR DELIVERY WAS ALTERED TO REQUIRE THE CONTRACTOR TO DELIVER TO VIRGINIA ADDRESSES ON MONDAY, WEDNESDAY AND FRIDAY AND THE ADDRESSES IN MARYLAND AND THE DISTRICT OF COLUMBIA ON TUESDAY AND THURSDAY. THE CONTRACTING OFFICER REASONED THAT ONLY COLUMBIA, AS THE INCUMBENT CONTRACTOR, HAD KNOWLEDGE OF THE NEW RELAXED DELIVERY REQUIREMENTS WHICH RESULTED IN ITS OBTAINING A COMPETITIVE ADVANTAGE OVER OTHER BIDDERS. THEREFORE, IFB-0002 WAS CANCELED AND ON DECEMBER 2, 1974, THE RESOLICITATION (IFB NO. DAHC30-75 B-0032) WAS ISSUED.

COLUMBIA HAS PROTESTED THE CANCELLATION OF IFB-0002 CONTENDING THAT THE CONTRACTING OFFICER DID NOT HAVE A COGENT AND COMPELLING REASON TO CANCEL.

BEFORE DISCUSSING THE MERITS OF THE PROTEST, THE PROCURING ACTIVITY HAS RAISED THE MATTER OF THE TIMELINESS OF COLUMBIA'S PROTEST UNDER OUR INTERIM BID PROTEST PROCEDURES AND STANDARDS (4 C.F.R. PART 20 (1974)), WHICH QUESTION WILL BE CONSIDERED FIRST.

ON NOVEMBER 29, 1974, THE CONTRACTING OFFICER SENT LETTERS TO ALL BIDDERS ADVISING THAT THE IFB WAS CANCELED AND THE REQUIREMENT WOULD BE READVERTISED. THIS LETTER WAS RECEIVED BY COLUMBIA ON DECEMBER 3, 1974. ON DECEMBER 4, 1974, AN OFFICIAL OF COLUMBIA CALLED THE CONTRACTING OFFICER AND REQUESTED AN EXPLANATION OF THE REASON FOR THE CANCELLATION AND ON DECEMBER 6, ANOTHER OFFICIAL OF COLUMBIA CALLED FOR THE SAME REASON. THE ARMY CONTENDS THAT AT THESE TIMES, COLUMBIA WAS ADVISED OF THE REASON FOR THE CANCELLATION, NAMELY THE OMISSION OF "AREA SCHEDULING" FROM THE IFB. COLUMBIA STATES THAT DURING THESE PHONE CONVERSATIONS THE ONLY REASON GIVEN FOR THE CANCELLATION WAS "LEGAL PROBLEMS." THE ARMY MAINTAINS THAT AS COLUMBIA KNEW OF THE REASON FOR THE CANCELLATION ON DECEMBER 4, 1974, ITS PROTEST FILED WITH GAO ON DECEMBER 16, 1974, IS UNTIMELY UNDER 4 C.F.R. SEC. 20.2(A) WHICH REQUIRES THAT PROTESTS BE FILED WITH OUR OFFICE WITHIN 5 DAYS FROM THE TIME THE BASIS OF THE PROTEST WAS KNOWN OR SHOULD HAVE BEEN KNOWN.

HOWEVER, EVEN IF COLUMBIA KNEW THE REASON FOR THE CANCELLATION ON DECEMBER 4, 1974, WE NOTE THAT IT REQUESTED A MEETING WHICH WAS HELD BETWEEN THE CONTRACTING OFFICER AND ITS OFFICIALS ON DECEMBER 11, 1974, TO DISCUSS THE CANCELLATION. WE BELIEVE THE REQUEST WITHIN 5 WORKING DAYS OF THE NOTICE OF CANCELLATION FOR A MEETING CONSTITUTED A TIMELY PROTEST BY COLUMBIA TO THE PROCURING ACTIVITY OF ITS DECISION TO CANCEL. THE FAILURE OF THE CONTRACTING OFFICER ON DECEMBER 11 TO RESCIND THE CANCELLATION CONSTITUTED THE ADVERSE AGENCY ACTION UNDER 4 C.F.R. SEC. 20.2(A) WHICH COLUMBIA WAS REQUIRED TO PROTEST TO OUR OFFICE WITHIN 5 DAYS. COLUMBIA DID THIS ON DECEMBER 16, 1974, AND WAS THEREFORE TIMELY.

COLUMBIA ARGUES THAT THE CHANGE IN THE MANNER OF MAKING DELIVERIES IS MINOR AND NOT OF SUFFICIENT IMPORT TO HAVE REQUIRED CANCELLATION OF IFB - 0002. FURTHER, COLUMBIA STATES THAT AT THE DATE OF BID OPENING, IT WAS BIDDING ON THE BASIS OF THE SPECIFICATIONS CONTAINED IN THE IFB, 2 DAY DELIVERIES, BECAUSE IT KNEW THAT THE "AREA SCHEDULING" WAS AN INTERIM MEASURE BECAUSE OF THE FUEL CRISIS OF 1974. FINALLY, COLUMBIA STATES THAT THE ONLY OTHER BIDDER FOR THE BAGGAGE PORTION OF THE SOLICITATION, DISTRICT MOVING AND STORAGE, INC. (DISTRICT), STATED IN A LETTER DATED JANUARY 10, 1975, TO THE CONTRACTING OFFICER THAT IT WAS AWARE OF THE "AREA SCHEDULING" ARRANGEMENT AND IF THAT TYPE OF DELIVERY SCHEDULE HAD BEEN INCLUDED IN THE IFB, ITS BID WOULD HAVE STILL BEEN THE SAME.

COLUMBIA'S FIRST CONTENTION IS THAT THE CHANGE IN DELIVERY WAS MINOR AND DID NOT CONSTITUTE A COMPELLING REASON TO CANCEL THE IFB UNDER SEC. 2- 404.1(A) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) (1974 ED.). ASPR SEC. 2-404.1(B)(II) (1974 ED.) PROVIDES FOR CANCELLATION OF IFB'S IF THE SPECIFICATIONS ARE REVISED. SINCE THE CONTRACTING AGENCY DECIDED TO CHANGE THE DELIVERY TERMS AFTER BID OPENING FROM A 2 DAY DELIVERY REQUIREMENT TO A LESS STRINGENT CONDITION, THERE WAS A SIGNIFICANT CHANGE AND A COMPELLING REASON TO CANCEL THE IFB.

THE SECOND BASIS OF PROTEST ADVANCED BY COLUMBIA, IN RESPONSE TO THE CONTRACTING OFFICER FINDING THAT COLUMBIA OBTAINED A COMPETITIVE ADVANTAGE AS THE INCUMBENT, IS THAT ON THE DATE OF BID OPENING IT HAD TO ASSUME THAT THE 2-DAY DELIVERY REQUIREMENT CONTAINED IN IFB -0002 WOULD BE FOLLOWED. WE AGREE. COLUMBIA SUBMITTED ITS BID AND STATED NO EXCEPTION TO THE DELIVERY SPECIFICATION IN THE IFB. THEREFORE, WE MUST ASSUME THAT COLUMBIA WAS BIDDING ON THE BASIS OF THE 2-DAY DELIVERY REQUIREMENT. HOWEVER, THE FACT THAT COLUMBIA DID NOT OBTAIN AN ADVANTAGE OVER OTHER BIDDERS DOES NOT AFFECT THE DETERMINATION TO CANCEL THE IFB, SINCE THERE WAS A SUBSEQUENT CHANGE IN REQUIREMENTS THAT PROVIDED A BASIS FOR CANCELLATION.

THE FACT THAT THE ONLY OTHER BIDDER UNDER THE SOLICITATION HAS STATED THAT IT WAS AWARE OF THE "AREA SCHEDULING" ARRANGEMENT AND WOULD NOT HAVE BID DIFFERENTLY IF "AREA SCHEDULING" HAD BEEN INCLUDED IN THE SPECIFICATIONS IS NOT DISPOSITIVE OF THE ISSUE OF WHETHER AN AWARD SHOULD HAVE BEEN MADE UNDER THE IFB. TO PERMIT AWARD UNDER THIS CIRCUMSTANCE WOULD HAVE RESULTED IN A CONTRACT WHICH WAS NOT THE SAME OFFERED TO COMPETITION. 41 COMP. GEN. 593 (1962). FURTHER, THE 2-DAY DELIVERY REQUIREMENT MAY HAVE RESTRICTED COMPETITION, SINCE ON RESOLICITATION (IFB -0032), THERE WERE BIDDERS IN ADDITION TO COLUMBIA AND DISTRICT. ON THE RECORD, THEREFORE, WE HAVE NO OBJECTION TO THE CANCELLATION OF IFB -0002 AND THE SUBSEQUENT RESOLICITATION UNDER IFB 0032. BECAUSE OF THIS HOLDING, IT IS UNNECESSARY TO CONSIDER THE RESPONSIVENESS OF COLUMBIA'S BID UNDER IFB -0002.

IN THE REPORT TO OUR OFFICE ON THE ABOVE PROTEST, THE ARMY HAS RAISED ANOTHER ISSUE WHICH AFFECTS IFB'S -0002 AND -0032 AND THE CONTRACTS FOR HOUSEHOLD GOODS AWARDED UNDER THE UNCANCELED PORTION OF IFB -0002. BOTH IFB'S CONTAINED CONFLICTING BID ACCEPTANCE PERIODS. STANDARD FORM (S.F.) 33, INCLUDED IN BOTH IFB'S CONTAINED A STATEMENT REGARDING THE BID ACCEPTANCE PERIOD WHICH HAD A BLANK FOR THE BIDDER TO PROVIDE THE PERIOD THE BID WOULD BE OPEN FOR ACCEPTANCE, WITH A NOTATION THAT, IF NOTHING WAS INSERTED, A 60-DAY ACCEPTANCE PERIOD WAS OFFERED. IN THE SCHEDULES OF THE IFB'S IT STATED THAT BIDS OFFERING LESS THAN 90 DAYS FOR ACCEPTANCE WOULD BE CONSIDERED NONRESPONSIVE. THE ONLY BIDDER UNDER BOTH SOLICITATIONS WHO COMPLETED THE BLANK ON THE S.F. 33 WITH 90 DAYS WAS COLUMBIA. ALL OTHER BIDDERS, INCLUDING THE FIRMS WHICH WERE AWARDED CONTRACTS FOR HOUSEHOLD GOODS UNDER IFB -0002, EITHER DID NOT COMPLETE THE BLANK OR INSERTED 60 DAYS. THEREFORE, THEY OFFERED A 60 DAY ACCEPTANCE PERIOD AND WERE NONRESPONSIVE.

BASED ON A PAST DECISION OF OUR OFFICE, 52 COMP. GEN. 842 (1973), THE ARMY PROPOSES TO CANCEL IFB -0032. THE ABOVE-CITED DECISION HELD THAT WHERE AN IFB CONTAINED CONFLICTING BID ACCEPTANCE PROVISIONS AND THE PROVISIONS WERE NOT CROSS-REFERENCED TO ALERT BIDDERS OF THE PROBLEM, THE SOLICITATION, BY MISLEADING BIDDERS AND PLACING TOO GREAT A PREMIUM ON BIDDER ATTENTIVENESS, WAS DEFECTIVE AND SHOULD BE CANCELED. IN THAT CASE, INVOLVING THREE SOLICITATIONS, 10 OF 13 BIDS WERE REJECTED AS NONRESPONSIVE FOR FAILURE TO COMPLY WITH THE BID ACCEPTANCE PROVISIONS.

IN IFB -0032, ONLY COLUMBIA, NOT THE LOW BIDDER, WAS RESPONSIVE. ALL OTHER BIDS ARE NONRESPONSIVE BECAUSE OF THE BID ACCEPTANCE PROVISIONS. THEREFORE, BASED ON THE ABOVE DECISION, WE WOULD HAVE NO OBJECTION IF THE ARMY CANCELED IFB -0032 AND RESOLICITED THE REQUIREMENT UNDER AN IFB COMPORTING WITH THE REQUIREMENTS OF 52 COMP. GEN., SUPRA.

HOWEVER, THE QUESTION REMAINS AS TO WHAT ACTION SHOULD BE TAKEN REGARDING THE HOUSEHOLD GOODS CONTRACTS AWARDED UNDER IFB -0002 TO BIDDERS WHO WERE NONRESPONSIVE BECAUSE OF AN INADEQUATE BID ACCEPTANCE PERIOD. THE ARMY HAS SUBMITTED ITS VIEWS ON THE QUESTION AND CONTENDS THAT IT WOULD NOT BE IN THE BEST INTEREST OF THE GOVERNMENT TO TERMINATE THE CONTRACTS BECAUSE OF (1) THE TERMINATION COSTS WHICH WOULD BE INCURRED IF THE INCUMBENT CONTRACTORS WERE NOT SUCCESSFUL ON THE RESOLICITATION; (2) THE DIFFICULTY IN EVALUATING BIDS FOR ONLY THE HIGH VOLUME MONTHS OF THE SUMMER AND FALL; AND (3) THE DISADVANTAGE TO INCUMBENTS WHO HAVE ABSORBED LOSSES DURING LOW VOLUME MONTHS OF WINTER, WHICH LOSSES NEW BIDDERS WOULD NOT HAVE TO ALLOW FOR IN THEIR BIDS. IN ADDITION, WE NOTE THAT ALL BIDDERS UNDER THE HOUSEHOLD GOODS PORTION OF THE IFB FAILED TO OFFER A 90-DAY BID ACCEPTANCE PERIOD, THAT NO BIDDER WAS PREJUDICED BY THE AWARDS WHICH WERE MADE SINCE EACH HAD THE SAME DEFICIENCY AND THAT NO ONE HAS PROTESTED THE AWARDS. THE CIRCUMSTANCES, WE HAVE NO OBJECTION TO THE CONTINUATION OF THE HOUSEHOLD GOODS CONTRACTS AWARDED UNDER IFB -0002.

ANOTHER PROTEST HAS BEEN FILED WITH OUR OFFICE INVOLVING THIS SERIES OF SOLICITATIONS. DISTRICT HAS PROTESTED THE AWARD OF A BLANKET PURCHASE AGREEMENT (BPA) TO FIDELITY STORAGE CORPORATION (FIDELITY) BY THE ARMY FOR SUPPLYING THE SERVICES REQUIRED UNDER THE CANCELED PORTION OF IFB -0002 UNTIL A RESOLICITATION AND AWARD COULD BE MADE. THIS AWARD WAS MADE BASED ON URGENCY AND THE FACT THAT A CONTINUING REQUIREMENT FOR THE SERVICES EXISTED.

DISTRICT'S PROTEST IS BASED ON THE PREMISE THAT IT HAD BEEN AWARDED A VALID CONTRACT UNDER IFB -0002 ON DECEMBER 3, 1974, AS EVIDENCED BY THE AWARD NOTICE SIGNED BY THE CONTRACTING OFFICER. DISTRICT WAS THE SECOND LOW BIDDER FOR THE UNACCOMPANIED BAGGAGE PORTION OF IFB -0002 AND THE LOW BIDDER FOR THE HOUSEHOLD GOODS PORTION OF THE INVITATION. THE AWARD NOTICE WHICH IT RECEIVED SHOWED THAT IT WAS THE PRIMARY CONTRACTOR FOR HOUSEHOLD GOODS AND THE SECONDARY CONTRACTOR FOR UNACCOMPANIED BAGGAGE. DISTRICT CONTENDS THAT SINCE COLUMBIA, AS LOW BIDDER FOR UNACCOMPANIED BAGGAGE, DID NOT RECEIVE THE AWARD, IT BECAME THE CONTRACTOR FOR THAT PORTION OF THE SOLICITATION AS WELL AS FOR THE MOVEMENT OF HOUSEHOLD GOODS. THE AWARD NOTICE, DATED DECEMBER 3, 1974, WAS ATTACHED TO A COVER LETTER FROM THE CONTRACTING OFFICER ADVISING THAT THE UNACCOMPANIED BAGGAGE PORTION OF THE IFB WAS BEING CANCELED. ON JANUARY 29, 1975, DISTRICT RECEIVED A LETTER FROM THE CONTRACTING OFFICER ADVISING THAT THE INSERTION OF IT AS THE SECONDARY BIDDER WAS MADE THROUGH ADMINISTRATIVE ERROR AND, THEREFORE, NO CONTRACT RESULTED. DISTRICT CONTENDS THAT IT HAD A VALID CONTRACT WHICH COULD NOT BE RENDERED A NULLITY SIMPLY BY STATING THAT AWARD WAS MADE THROUGH "ADMINISTRATIVE ERROR," AND THAT THE AWARDING OF THE BPA TO FIDELITY VIOLATED ITS CONTRACT.

IF DISTRICT HAD A VALID CONTRACT WITH THE ARMY AS IT CONTENDS, THEN IT MAY BE THAT THE CONTRACT WAS CONSTRUCTIVELY TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT AND THE MATTER WOULD BE FOR RESOLUTION AS A TERMINATION FOR CONVENIENCE CLAIM WHICH IS CONTRACT ADMINISTRATION BEYOND THE AUTHORITY OF OUR OFFICE. SEE MATTER OF ASTRODYNE, INCORPORATED, B-180877, APRIL 18, 1974.

DISTRICT ALSO PROTESTS THE FAILURE OF THE ARMY TO NOTIFY OUR OFFICE THAT IT WAS MAKING AN AWARD TO FIDELITY UNDER THE BPA IN VIOLATION OF ARMY PROCUREMENT PROCEDURE SEC. 2-407.8(I) WHICH REQUIRES THAT OUR OFFICE BE NOTIFIED THAT AN AWARD WILL BE MADE NOTWITHSTANDING THE PENDENCY OF A PROTEST. HOWEVER, FAILURE TO COMPLY WITH THE NOTICE REQUIREMENT DOES NOT AFFECT THE LEGALITY OF THE AWARD. B-178303, JUNE 26, 1973.

FINALLY, THE ARMY HAS STATED THAT IT DESIRES TO EXTEND THE BPA WITH FIDELITY UNTIL DECEMBER 31, 1975, CONTENDING THAT IT IS NOT IN THE BEST INTEREST OF THE GOVERNMENT TO RESOLICIT THE BAGGAGE PORTION OF THE CANCELED IFB.

THE BPA, ORIGINALLY ISSUED UNTIL MARCH 31, 1975, HAS PRESENTLY BEEN EXTENDED UNTIL JUNE 30, 1975, SO THAT THE REQUIRED SERVICES WILL BE AVAILABLE PENDING THE RESOLUTION OF THE PROTEST. THE ARMY CONTENDS THAT THE EXTENSION OF THE BPA UNTIL THE END OF THE CALENDAR YEAR WOULD BE THE MOST ECONOMICAL METHOD OF PROVIDING THE SERVICES. AS POINTED OUT BY THE ARMY, THE BPA WAS ORIGINALLY INTENDED AS AN INTERIM MEASURE TO PROVIDE THE SERVICES UNTIL THE PROTESTS WERE RESOLVED. THE BPA HAS SERVED THIS PURPOSE AND WE BELIEVE THAT A FURTHER EXTENSION OF THE AGREEMENT PAST JUNE 30, 1975, WOULD, IN EFFECT, PENALIZE THE BIDDERS WHO PROTESTED TO OUR OFFICE BY NOT GIVING THEM AN OPPORTUNITY TO COMPETE FOR THE REQUIREMENT CONTAINED IN IFB -0032 WHICH WE HAVE HELD WAS DEFECTIVE. FURTHER, THERE WOULD BE NO TERMINATION COSTS INVOLVED IF THE SERVICE WAS RESOLICITED AND THE NEW CONTRACT AWARDED EFFECTIVE JULY 1, 1975. THEREFORE, THE UNACCOMPANIED BAGGAGE SERVICE PRESENTLY BEING PERFORMED BY FIDELITY UNDER THE BPA SHOULD BE RESOLICITED FOR THE PERIOD COMMENCING JULY 1, 1975.

BY LETTER OF TODAY, WE ARE ADVISING THE SECRETARY OF THE ARMY OF THIS RECOMMENDATION AND ALSO OF THE NEED FOR STEPS TO BE TAKEN TO AVOID A RECURRENCE OF THE PROBLEM CAUSED BY THE CONFLICTING BID ACCEPTANCE PROVISION IN THE IFB'S WHICH WERE THE SUBJECT OF THESE PROTESTS.