B-220394, FEB 11, 1986, 86-1 CPD 150

B-220394: Feb 11, 1986

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IS RESOLVED BY A REASONABLE INTERPRETATION OF THE IFB. OMISSION OF STANDARD DESCRIPTIVE LITERATURE CLAUSE IS NOT A COMPELLING REASON TO CANCEL AN IFB WHERE IFB CONTAINS A PROVISION REQUIRING SUBMISSION OF DESCRIPTIVE LITERATURE SHOWING COMPLIANCE WITH DETAILED SPECIFICATIONS ALSO INCLUDED IN THE IFB. THREE BIDS WERE RECEIVED AT BID OPENING ON JULY 16. THE DEFINITE QUANTITY PORTION OF THE IFB. /1/ THE BID SCHEDULE AS AMENDED PROVIDED THAT THE BID FOR ITEM 0001 WAS TO REFLECT THE BIDDER'S PRICE FOR PERFORMANCE OF THE DEFINITE QUANTITY PORTION OF THE CONTRACT AS SPECIFIED IN SECTIONS 00004 AND 00005 OF THE IFB. CLAUSE 17.1 PROVIDED THAT THE BID FOR THE DEFINITE QUANTITY PORTION OF THE CONTRACT WAS TO INCLUDE ALL WORK EXCEPT THAT LISTED IN THE SCHEDULE OF INDEFINITE QUANTITY WORK.

B-220394, FEB 11, 1986, 86-1 CPD 150

BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING - COMPELLING REASONS ONLY DIGEST: 1. CONTRACTING AGENCY LACKED COMPELLING REASON TO CANCEL INVITATION FOR BIDS (IFB) FOR WASTE COLLECTION SERVICES WHERE ALLEGED INCONSISTENCY BETWEEN TWO IFB PROVISIONS-- THE BID SCHEDULE CALLING FOR A LUMP SUM BID FOR NUMEROUS ITEMS INCLUDING TRASH CONTAINERS, AND ANOTHER PROVISION CALLING FOR THE TRASH CONTAINERS TO BE BID AS A SEPARATE ITEM-- IS RESOLVED BY A REASONABLE INTERPRETATION OF THE IFB, AND AWARD UNDER IFB AS SO INTERPRETED WOULD MEET AGENCY'S NEEDS WITHOUT PREJUDICE TO ANY BIDDER. BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING - COMPELLING REASONS ONLY 2. OMISSION OF STANDARD DESCRIPTIVE LITERATURE CLAUSE IS NOT A COMPELLING REASON TO CANCEL AN IFB WHERE IFB CONTAINS A PROVISION REQUIRING SUBMISSION OF DESCRIPTIVE LITERATURE SHOWING COMPLIANCE WITH DETAILED SPECIFICATIONS ALSO INCLUDED IN THE IFB, AND CONTRACTING AGENCY MAKES NO SHOWING THAT FAILURE TO USE LANGUAGE IN STANDARD CLAUSE RESULTED IN PREJUDICE TO BIDDERS OR AFFECTED AGENCY'S ABILITY TO DETERMINE WHETHER A BIDDER'S PRODUCT MET THE IFB SPECIFICATIONS.

PACIFIC COAST UTILITIES SERVICE, INC.:

PACIFIC COAST UTILITIES SERVICE, INC. PROTESTS THE CANCELLATION OF INVITATION FOR BIDS (IFB) NO. N62474-85-B-9178, ISSUED BY THE NAVY FOR SOLID WASTE COLLECTION AND DISPOSAL SERVICES AT CAMP PENDLETON, CALIFORNIA. THE PROTESTER CONTENDS THAT THE NAVY LACKED A COMPELLING REASON TO CANCEL THE IFB. WE SUSTAIN THE PROTEST.

THE IFB, ISSUED ON APRIL 25, 1985, CALLED FOR A LUMP SUM BID FOR EACH OF TWO BID ITEMS, A DEFINITE QUANTITY OF SOLID WASTE COLLECTION AND DISPOSAL SERVICES FOR ONE YEAR (BID ITEM 0001, CALLED THE "FIXED PRICE, LUMP SUM" PORTION OF THE CONTRACT), AND AN INDEFINITE QUANTITY OF ADDITIONAL COLLECTION AND DISPOSAL SERVICES FOR THE SAME YEAR (BID ITEM 0002, CALLED THE "INDEFINITE QUANTITY" PORTION). THREE BIDS WERE RECEIVED AT BID OPENING ON JULY 16. THE APPARENT LOW BIDDER, BAY CITIES DISPOSAL, SUBSEQUENTLY WITHDREW ITS BID; AS A RESULT, THE PROTESTER, AS THE SECOND LOW BIDDER, BECAME ELIGIBLE FOR AWARD. BY LETTER DATED OCTOBER 17, HOWEVER, THE NAVY NOTIFIED THE PROTESTER THAT THE IFB WOULD BE CANCELED DUE TO "AN INADEQUATE AND AMBIGUOUS SPECIFICATION." AS DISCUSSED IN DETAIL BELOW, THE PRIMARY REASON FOR THE CANCELLATION, EXPLAINED FOR THE FIRST TIME IN THE NAVY'S REPORT ON THE PROTEST, CONCERNS THE REQUIREMENT THAT THE CONTRACTOR PROVIDE TRASH CONTAINERS TO ALL RESIDENTIAL FAMILY DWELLINGS AS PART OF ITS PERFORMANCE UNDER BID ITEM 0001, THE DEFINITE QUANTITY PORTION OF THE IFB. /1/

THE BID SCHEDULE AS AMENDED PROVIDED THAT THE BID FOR ITEM 0001 WAS TO REFLECT THE BIDDER'S PRICE FOR PERFORMANCE OF THE DEFINITE QUANTITY PORTION OF THE CONTRACT AS SPECIFIED IN SECTIONS 00004 AND 00005 OF THE IFB, WITH THE EXCEPTION OF THE ITEMS INCLUDED UNDER BID ITEM 0002, THE INDEFINITE QUANTITY PORTION OF THE CONTRACT. SIMILARLY, SECTION 00001, CLAUSE 17.1 PROVIDED THAT THE BID FOR THE DEFINITE QUANTITY PORTION OF THE CONTRACT WAS TO INCLUDE ALL WORK EXCEPT THAT LISTED IN THE SCHEDULE OF INDEFINITE QUANTITY WORK; CLAUSE 17 ALSO PROVIDED THAT THE SPECIFIC WORK ITEMS COMPRISING THE DEFINITE QUANTITY PORTION OF THE CONTRACT WERE IDENTIFIED IN THE SCHEDULE OF DEDUCTIONS IN SECTION 00004 OF THE IFB.

THE SCHEDULE OF DEDUCTIONS LISTED THE WORK ITEMS TO BE PERFORMED BY QUANTITY AND CALLED FOR THE CONTRACTOR TO INSERT A UNIT PRICE BY ITEM. THE SCHEDULE DESCRIBED 12 TASKS IN ALL, AND PROVIDED THAT THE SUM OF THE TOTAL PRICES BY TASK WAS TO EQUAL THE LUMP SUM BID FOR BID ITEM 0001, THE DEFINITE QUANTITY PORTION OF THE CONTRACT. THE SCHEDULE WAS TO BE USED TO CALCULATE PAYMENT DEDUCTIONS FOR UNSATISFACTORY PERFORMANCE, AND WAS TO BE SUBMITTED WITHIN 15 DAYS AFTER AWARD.

THE NAVY'S DECISION TO CANCEL THE IFB WAS BASED ON AN ALLEGED AMBIGUITY IN THE IFB REGARDING THE CONTRACTOR'S OBLIGATION TO FURNISH RESIDENTIAL TRASH CONTAINERS AS PART OF THE DEFINITE QUANTITY PORTION OF THE CONTRACT. WITH REGARD TO THE REQUIREMENT, THE SCHEDULE OF DEDUCTIONS PROVIDED AS FOLLOWS:

(TABLE OMITTED)

CLAUSE 11.5 OF SECTION 00004, REFERRED TO IN THE SCHEDULE, DESCRIBED IN GREATER DETAIL THE CONTRACTOR'S OBLIGATION TO PROVIDE RESIDENTIAL TRASH CONTAINERS, LISTING THE REQUIRED SIZE AND OTHER SPECIFICATIONS OF THE CONTAINERS. /2/

THE CLAUSE ALSO STATED:

"ALL CONTAINERS PROVIDED, EITHER INITIALLY OR AS REPLACEMENTS, SHALL BE BID AS A SEPARATE ITEM ON THE CONTRACT AND SHALL BECOME THE PROPERTY OF THE GOVERNMENT UPON DELIVERY."

DESPITE THIS PROVISION FOR SEPARATE PRICING OF THE CONTAINERS, THE BID SCHEDULE, AS NOTED ABOVE, CALLED ONLY FOR A LUMP SUM BID FOR ALL THE WORK ITEMS; IT DID NOT INCLUDE A LINE ITEM FOR A SEPARATE BID ON THE CONTAINERS.

ALTHOUGH A CONTRACTING OFFICER HAS BROAD DISCRETION TO CANCEL AN IFB, THERE MUST BE A COMPELLING REASON TO DO SO AFTER BID OPENING, BECAUSE OF THE POTENTIAL ADVERSE IMPACT ON THE COMPETITIVE BIDDING SYSTEM OF CANCELLATION AFTER BID PRICES HAVE BEEN EXPOSED. SEE FEDERAL ACQUISITION REGULATION (FAR), 48 C.F.R. SEC. 14.404-1(A)(1) (1984); ALLIANCE PROPERTIES, INC., B-219407, SEPT. 18, 1985, 64 COMP.GEN. ---, 85-2 CPD PARA. 299. THE FACT THAT A SOLICITATION IS DEFECTIVE IN SOME WAY DOES NOT JUSTIFY CANCELLATION AFTER BID OPENING IF AWARD UNDER THE IFB WOULD MEET THE GOVERNMENT'S ACTUAL NEEDS AND THERE IS NO SHOWING OF PREJUDICE TO OTHER BIDDERS. BROWNING-FERRIS INDUSTRIES OF THE SOUTH ATLANTIC, INC., B-217073 ET AL., APR. 9, 1985, 85-1 CPD PARA. 406.

HERE, IN THE NAVY'S VIEW, DUE TO THE FACT THAT THE IFB IN SECTION 00004, CLAUSE 11.5 CALLED FOR SEPARATE PRICING OF THE TRASH CONTAINERS BUT LACKED A CORRESPONDING LINE ITEM ON THE BID SCHEDULE, IT WAS UNCLEAR TO BIDDERS WHETHER THEY WERE TO INCLUDE THE PRICE FOR PROVIDING THE CONTAINERS IN THEIR BIDS, AND, IF SO, WHETHER TO INCLUDE IT UNDER BID ITEM 0001 OR 0002. THUS, THE NAVY ASSERTS, CANCELLATION OF THE IFB WAS JUSTIFIED BECAUSE THE NAVY COULD NOT BE SURE THAT AWARD TO ANY OF THE BIDDERS WOULD MEET THE NAVY'S NEED FOR THE CONTRACTOR TO PROVIDE THE TRASH CONTAINERS. THE PROTESTER DISAGREES, ARGUING THAT THE IFB CLEARLY CALLED FOR BIDDERS TO INCLUDE THE PRICE OF THE TRASH CONTAINERS IN THE LUMP SUM BID FOR BID ITEM 0001.

AS NOTED ABOVE, THE IFB ADVISED BIDDERS THAT BIDS FOR THE DEFINITE QUANTITY PORTION OF THE CONTRACT WERE TO INCLUDE THE PRICE OF THE CONTAINERS. SPECIFICALLY, SECTION 00001, CLAUSE 17 REFERRED BIDDERS TO THE SCHEDULE OF DEDUCTIONS IN SECTION 00004 OF THE IFB, WHICH LISTED THE REQUIREMENT TO PROVIDE TRASH CONTAINERS AS ONE OF THE TASKS INCLUDED IN BID ITEM 0001. SIMILARLY, THE BID SCHEDULE ITSELF REFERRED BIDDERS TO SECTION 00004 FOR A DESCRIPTION OF THE SCOPE OF WORK. IN LIGHT OF THESE REFERENCES TO FURNISHING THE TRASH CONTAINERS AS PART OF THE PERFORMANCE REQUIRED UNDER BID ITEM 0001, WE FIND UNREASONABLE THE NAVY'S CONTENTION THAT IT WAS UNCLEAR WHETHER BIDDERS WERE TO INCLUDE THE PRICE OF THE CONTAINERS IN THE LUMP SUM BID DUE TO THE SENTENCE IN SECTION 00004, CLAUSE 11.5 OF THE IFB CALLING FOR THE CONTAINERS TO BE PRICED SEPARATELY. THE NAVY CONTENDS THAT A BIDDER COULD LIST AND PRICE ALL THE TASKS INCLUDED IN BID ITEMS 0001 AND 0002, BUT "FORGET" TO INCLUDE THE PRICE OF THE CONTAINERS DUE TO THE PROVISION CALLING FOR SEPARATE PRICING OF THE CONTAINERS. WE FIND THIS CONTENTION IMPLAUSIBLE. IF, AS THE NAVY SUGGESTS, THE BIDDERS DREW UP THEIR BIDS BY ADDING TOGETHER ALL THE TASKS TO BE PERFORMED UNDER THE IFB, THEY NECESSARILY WOULD INCLUDE THE PRICE OF FURNISHING THE CONTAINERS SINCE IT IS LISTED AS A WORK ITEM UNDER THE SCHEDULE OF DEDUCTIONS.

THE NAVY DOES NOT EXPLAIN WHY THE PROVISION FOR SEPARATE PRICING OF THE CONTAINERS WAS INCLUDED IN THE IFB. IN OUR VIEW, READING THE IFB AS A WHOLE, THE ONLY REASONABLE INTERPRETATION IS THAT THE NAVY SOUGHT A SEPARATE PRICE FOR ITS OWN INFORMATION, SINCE THE NAVY WAS TO RETAIN OWNERSHIP OF THE CONTAINERS. CONSISTENT WITH THIS INTERPRETATION, THERE IS NO INDICATION IN THE IFB, NOR DOES THE NAVY CONTEND, THAT THE CONTAINERS WERE INTENDED TO BE TREATED AS A SEPARATE ITEM FOR BID EVALUATION PURPOSES; ON THE CONTRARY, SECTION 00001, CLAUSE 18.1 OF THE IFB PROVIDES THAT BIDS WILL BE EVALUATED ON THE BASIS OF THE AGGREGATE SUM OF THE TOTAL BID PRICES FOR BID ITEMS 0001 AND 0002. FURTHER, TO THE EXTENT THAT THERE IS ANY INCONSISTENCY BETWEEN THE BID SCHEDULE AND THE PROVISION FOR SEPARATE PRICING OF THE CONTAINERS, SECTION 00004, CLAUSE 8 OF THE IFB, THE ORDER OF PRECEDENCE CLAUSE, ADVISES BIDDERS THAT PRECEDENCE IS TO BE GIVEN TO THE BID SCHEDULE, WHICH CLEARLY REQUIRES THE PRICE OF THE CONTAINERS TO BE INCLUDED IN THE LUMP SUM BID FOR ITEM 0001.

ACCORDINGLY, WE FIND THAT, READING THE IFB AS A WHOLE, THE ONLY REASONABLE INTERPRETATION IS THAT THE LUMP SUM BID FOR ITEM 0001 WAS TO INCLUDE THE PRICE FOR THE TRASH CONTAINERS. AWARD UNDER THE IFB THEREFORE WILL MEET THE NAVY'S NEEDS AS SET OUT IN THE IFB. IN ADDITION, THE NAVY DOES NOT CONTEND, AND WE SEE NO EVIDENCE IN THE RECORD, THAT ANY OF THE BIDDERS MISINTERPRETED THE IFB AND OMITTED THE TRASH CONTAINERS FROM THEIR LUMP SUM BIDS. THUS, THERE IS NO INDICATION THAT THE BIDDERS WERE PREJUDICED OR FAILED TO BID ON A COMMON BASIS. AS A RESULT, WE FIND THAT THE NAVY LACKED A COMPELLING BASIS FOR CANCELING THE IFB, SINCE AWARD UNDER THE IFB WILL MEET THE NAVY'S NEEDS WITHOUT PREJUDICE TO THE BIDDERS.

THE NAVY ALSO STATES THAT THE IFB FAILED TO INCLUDE THE STANDARD CLAUSE SET OUT IN FAR, 48 C.F.R. SEC. 52.214-21 REGARDING SUBMISSION OF DESCRIPTIVE LITERATURE, WHICH, IN THIS CASE, WAS REQUIRED TO DEMONSTRATE THE BIDDER'S COMPLIANCE WITH THE SIZE, MATERIAL AND OTHER SPECIFICATIONS LISTED IN THE IFB FOR THE TRASH CONTAINERS. SECTION 00004, CLAUSE 11.5 OF THE IFB DID PROVIDE, HOWEVER, THAT "THE CONTRACTOR SHALL SUBMIT DESCRIPTIVE LITERATURE WITH HIS BID WHICH CLEARLY SHOWS THAT CONTAINERS BEING PROVIDED MEET THE MINIMUM SPECIFICATIONS LISTED HEREIN." WHETHER THE OMISSION OF THE STANDARD DESCRIPTIVE LITERATURE CLAUSE IS RELIED ON AS A BASIS FOR THE CANCELLATION IS UNCLEAR; THE NAVY'S REPORT STATES ONLY THAT THE OMISSION ITSELF "MAY NOT CONSTITUTE A COMPELLING REASON" FOR CANCELLATION, BUT THAT, TOGETHER WITH THE ALLEGED DEFICIENCY IN THE BID SCHEDULE, IT SUPPORTS THE CANCELLATION.

IN ANY EVENT, OMISSION OF A MANDATORY CLAUSE IS NOT A SUFFICIENT BASIS FOR CANCELLATION, STANDING ALONE; RATHER, CANCELLATION IS APPROPRIATE ONLY WHERE BIDDERS ARE PREJUDICED BY THE OMISSION OR THE GOVERNMENT'S NEEDS WILL NOT BE MET BY AWARD UNDER THE SOLICITATION. SEE LINDA VISTA INDUSTRIES, INC., B-214447 ET AL., OCT. 2, 1984, 84-2 CPD PARA. 380. HERE, THE NAVY DOES NOT CONTEND THAT THE FAILURE TO USE THE LANGUAGE OF THE STANDARD CLAUSE RESULTED IN PREJUDICE TO THE BIDDERS OR AFFECTED THE NAVY'S ABILITY TO DETERMINE WHETHER THE TRASH CONTAINERS MET THE IFB SPECIFICATIONS, AND WE SEE NO BASIS ON WHICH TO CONCLUDE THAT IT DID. NOTED ABOVE, SECTION 00004, CLAUSE 11.5 OF THE IFB REQUIRED BIDDERS TO SUBMIT DESCRIPTIVE LITERATURE. THE PROTESTER MAINTAINS, AND THE AGENCY DOES NOT DISPUTE, /3/ THAT THE PROTESTER DID NOT SUBMIT DESCRIPTIVE LITERATURE WITH ITS BID, BUT THAT THE AGENCY NEVERTHELESS PROPOSED TO ACCEPT THE BID BECAUSE IT CONCLUDED THAT THE AWARDEE WOULD HAVE TO MEET THE SOLICITATION'S DETAILED SPECIFICATIONS FOR THE CONTAINERS, WHETHER OR NOT THE LITERATURE WAS INCLUDED WITH ITS BID. IT THUS APPEARS THAT THE AGENCY DID NOT NEED TO HAVE THE LITERATURE SUBMITTED WITH THE BID AS THE CLAUSE REQUIRED. SINCE THE AGENCY SEEMS TO HAVE WAIVED THE REQUIREMENT, AND SINCE IT IS CLEAR THAT ANY AWARDEE UNDER THE SOLICITATION WOULD HAVE TO MEET THE CONTAINER SPECIFICATIONS, WE FIND THAT THE OMISSION OF THE STANDARD DESCRIPTIVE LITERATURE CLAUSE WAS NOT A COMPELLING REASON TO CANCEL THE IFB.

IN VIEW OF OUR CONCLUSION THAT AWARD UNDER THE IFB IS PROPER, WE SUSTAIN THE PROTEST AGAINST CANCELLATION OF THE IFB. BY SEPARATE LETTER TO THE NAVY, WE ARE RECOMMENDING THAT THE IFB BE REINSTATED AND AWARD BE MADE TO THE PROTESTER AS THE LOW BIDDER, IF THAT FIRM'S BID IS FOUND RESPONSIVE AND THE FIRM RESPONSIBLE.

THE PROTEST IS SUSTAINED.

/1/ THE PROTESTER STATES THAT IN A CONVERSATION WITH THE CONTRACTING OFFICER BEFORE THE NAVY'S OCTOBER 17 LETTER WAS RECEIVED, THE PROTESTER WAS ADVISED THAT THE CANCELLATION WAS BASED ON THE OMISSION OF A STANDARD DESCRIPTIVE LITERATURE CLAUSE, AND TWO OTHER ALLEGEDLY DEFICIENT PROVISIONS IN THE IFB. THE PROTESTER'S INITIAL SUBMISSION ADDRESSES THESE ISSUES IN DETAIL. SINCE THE NAVY DOES NOT NOW RELY ON THE LATTER TWO DEFICIENCIES AS JUSTIFICATION FOR THE CANCELLATION, WE NEED NOT ADDRESS THEM.

/2/ THE OTHER PROVISIONS REFERRED TO IN THE SCHEDULE-- SECTION 00005, CLAUSE 3.14.2, AND APPENDIX 6-- DESCRIBE REQUIREMENTS FOR STENCILING THE CONTAINERS AND A COLLECTION SCHEDULE, AND DO NOT BEAR ON THE NAVY'S DECISION TO CANCEL THE IFB.

/3/ WHILE THE PROTESTER INCLUDED A DETAILED NARRATIVE OF THE EVENTS REGARDING ITS FAILURE TO SUBMIT DESCRIPTIVE LITERATURE WITH ITS BID, THE AGENCY IGNORED THE SUBJECT IN ITS PROTEST REPORT.