B-231499, Aug 12, 1988

B-231499: Aug 12, 1988

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Which was issued on February 19. That clause specifies that an item is of United States or Canadian origin if it is manufactured in either country and the cost of its United States or Canadian manufactured components exceeds 50 percent of the cost of all its components. Submitted evidence indicating that more than 50 percent of its components were manufactured in the United States. Award was made to Clausing at a price of $64. Gosiger characterized the contracting officer's determination concerning the origin clause as a matter of responsibility and argued that the agency was required to refer the matter to the Small Business Administration (SBA) prior to excluding Gosiger from award since Gosiger is a small business.

B-231499, Aug 12, 1988

PROCUREMENT - Competitive Negotiation - Requests for proposals - Cancellation - Justification - GAO review DIGEST" Contracting agency has reasonable basis to cancel request for proposals where specifications required domestically manufactured milling machines and no offeror can supply such machines.

Gosinger, Inc.:

Gosiger, Inc., protests the award of a contract to Clausing Industrial, Inc. under request for proposals (RFP) No. F33601-88-R 0041, issued by the Air Force for vertical three-axis milling machines. We dismiss the protest.

The Air Force received 11 proposals in response to the RFP, which was issued on February 19, 1988. The solicitation contained the clause set forth at Department of Defense Federal Acquisition Regulation Supplement (DFARS) Sec. 52.225-7023 requiring machine tools to be of United States or Canadian origin. That clause specifies that an item is of United States or Canadian origin if it is manufactured in either country and the cost of its United States or Canadian manufactured components exceeds 50 percent of the cost of all its components. In evaluating the proposals, the Air Force found that only one offeror, Clausing, submitted evidence indicating that more than 50 percent of its components were manufactured in the United States. Award was made to Clausing at a price of $64,787 on May 11. Gosiger submitted an offer in the amount of $61,800.

Gosinger then filed a protest with our Office. In its protest Gosiger alleged that the contracting officer failed to conduct discussions with it and awarded to other than the low responsible offeror as stated in the solicitation. Additionally, Gosiger characterized the contracting officer's determination concerning the origin clause as a matter of responsibility and argued that the agency was required to refer the matter to the Small Business Administration (SBA) prior to excluding Gosiger from award since Gosiger is a small business.

As a result of the protest, the Air Force reports that it conducted a review of the award to Clausing and determined that although the milling machine Clausing proposed met the origin clause component requirement, the machine itself was manufactured in Spain and therefore did not meet the requirement that it be manufactured in either the United States or Canada. The Air Force then terminated Clausing's contract for convenience on June 8.

The Air Force states that it has found that milling machines which meet its requirements are not made in the United States or Canada and that funds will no longer be available for this procurement in the current fiscal year. In this regard, the report states that an Air Force investigation showed that the machine offered by the protester, the Alliant, was in fact manufactured in Taiwan. Based on these considerations, the Air Force decided to make no award under the solicitation. The protester does not specifically dispute any of the agency's statements.

In essence, the Air Force has decided to cancel the solicitation because it contained defective specifications that no offeror could meet. In a negotiated procurement, contracting agencies have broad discretion in deciding when it is appropriate to cancel a solicitation and need only establish a reasonable basis to support a decision to cancel. Union Natural Gas Co., B-225519.4, June 5, 1987 87-1 CPD Para. 572. solicitation may properly be canceled where the record shows that the solicitation specifications are deficient. Id.

We find nothing unreasonable in the agency's decision. The Air Force's determination that it is not possible to obtain the domestic milling machines specified in the RFP is undisputed. In addition to not disputing the Air Force's position in its protest report, Gosinger did not submit any information with its proposal which indicated that the milling machine it offered met the requirement of the origin clause. Since the Air Force has terminated the contract awarded to Clausing and has decided not to make any award under the solicitation, we view Gosiger's protest of the award to Clausing as academic. See Systems Management American Corp., B-224229, Nov. 10, 1986, 86-2 CPD Para. 546.

The protest is dismissed.