B-235206.3, Oct 5, 1989, 89-2 CPD ***

B-235206.3: Oct 5, 1989

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Digitize alleges that the agency improperly canceled the IFB and should have awarded a contract to it. The system equipment to be furnished consisted of two base station receiving or control consoles which would receive alarm and other messages sent by numerous radio fire alarm box transmitters which in turn were to be connected to the existing fire alarm system via a comparable number of separate interface panels. These requirements were incorporated into the bid schedule which. Digitize was the low bidder out of four at the September 16. The King-Fisher Company protested that Digitize was nonresponsive because its products did not meet the specifications and because of the bidding deviations noted above.

B-235206.3, Oct 5, 1989, 89-2 CPD ***

PROCUREMENT - Sealed Bidding - Invitations for bids - Cancellation - Justification - Competition enhancement DIGEST: Compelling reason exists for canceling an invitation for bids after bid opening, where agency determines that needs of the government can be satisfied by products meeting less restrictive specifications and award to protester would not be fair to competitors.

Digitize, Inc.:

Digitize, Inc., protests the cancellation after bid opening of invitation for bids (IFB) No. N62922-88-B-6012, issued by the Navy for procurement of radio fire alarm reporting system equipment to be installed by others at the Naval Base complex, Subic Bay, the Philippines. Digitize alleges that the agency improperly canceled the IFB and should have awarded a contract to it.

We deny the protest.

According to the IFB, the system equipment to be furnished consisted of two base station receiving or control consoles which would receive alarm and other messages sent by numerous radio fire alarm box transmitters which in turn were to be connected to the existing fire alarm system via a comparable number of separate interface panels. These requirements were incorporated into the bid schedule which, among other items, called for separate prices for the consoles, interface panels, transmitters, and separate battery packs, as well as fuses in three sizes for use with these items.

Digitize was the low bidder out of four at the September 16, 1988, bid opening. However, its bid deviated from the IFB requirements in three respects: it failed to provide individual prices for two of the fuses; it substituted fuses of a different size than that called for in the schedule; and it combined the battery packs, interface panel, and transmitter line items into a single priced line item.

The King-Fisher Company protested that Digitize was nonresponsive because its products did not meet the specifications and because of the bidding deviations noted above. After obtaining additional information from Digitize, the Navy rejected its bid as nonresponsive and awarded the contract to King-Fisher. Digitize then filed a protest with our Office.

In that protest, Digitize explained its bidding deviations as necessary because the fuses specified were applicable only to King Fisher's proprietary products and it bid the only fuse used in Digitize's unit. combined other line items because it was offering a combined transmitter/interface panel and selling in parts would violate its Factory Mutual listing. Digitize contended that its system met the functional requirements of the IFB and should have been accepted as responsive.

Subsequent to the award to King-Fisher, the contracting officer learned that the original IFB statement of work was based upon unrevised 1981 specifications. The 1981 specifications had been revised in 1985 since they were unduly restrictive because they exceeded the actual minimum needs of the government. Accordingly, the contracting officer determined that the award to King-Fisher was improper since it was obtained without the benefit of full and open competition. The award was terminated for the convenience of the government and a new IFB, based upon the revised specifications, was issued. Consequently, we dismissed Digitize's original protest as academic. Digitize, however, filed a new protest objecting to the canceled IFB and maintaining its responsiveness to the original IFB.

Because of the potential adverse impact on the competitive bidding system of cancellation after bid prices have been exposed, a contracting officer must have a compelling reason to cancel an IFB after bid opening. Federal Acquisition Regulation (FAR) Sec. 14.404 1(a)(1) (FAC 84-49); Southwest Marine, Inc., B-229596; B-229598, Jan. 12, 1988, 88-1 CPD Para. 22. determining whether such a reason exists, one of the factors that must be considered is whether the best interest of the government generally would be served by making an award under the solicitation. When it is determined that an IFB overstates the minimum needs of the government, the best interest of the government requires cancellation. Control Concepts, Inc., B-233354.3, Apr. 6, 1989, 89-1 CPD Para. 358.

We agree with the agency that a compelling reason existed for canceling the IFB after bid opening. The original specifications and bid schedule plainly required bidders to offer separate transmitters and interface panels. However, three of the four bidders offered combination units which did not meet this specification. Only King Fisher, around whose products the original specifications were apparently written, bid in complete conformance to the specifications. The contracting officer subsequently discovered that the original specifications had been revised and that use of separate transmitters and interface panels, as well as a number of other specifications, /1/ exceeded the government's minimum needs. As such, the contracting officer reasonably concluded that King- Fisher's award was not the product of full and open competition.

Where, as here, an agency discovers that a solicitation overstates the government's minimum needs, the best interests of the government generally require that no award be made under the restrictive solicitation. See Control Concepts, Inc., B-233354.3, supra. Accordingly, having determined that the IFB in this case overstated its minimum needs, the Navy was justified in terminating the contract with King-Fisher, canceling the IFB, and resoliciting on the basis of relaxed specifications that accurately reflect its minimum needs. Id.

Likewise, in view of the restrictive specifications, as noted by the agency, it would be unfair to other competitors to award to Digitize when its bid was not responsive due to its deviations from the bid schedule. That is, Digitizes' bid did not represent an unequivocal offer to supply the exact items called for in the IFB. See Record Press, Inc., B-225517, Mar. 20, 1987, 87-1 CPD Para. 321.

Digitize argues that its bid was responsive and relies upon a brand name or equal clause in the IFB's Section K, "Representations, Certifications and Other Statements of Offerors." However, that brand name or equal clause, by its terms, applies only where items are identified by a brand name or equal description, yet here there is no such description in the specifications or bid schedule. In any case, Digitize's bid did not indicate it was offering an equal product and its product does not match the ostensible "brand name."

Digitize also relies upon a provision in the specifications which states in part:"Items of equipment not indicated but necessary to provide a complete operating system shall be included." However, that clause also states: "System equipment components shall be, as a minimum, as indicated in the detailed list/schedule and/or line item of the contract and these specifications." Given this plain statement of minimum requirements we believe Digitize could not reasonably have relied upon the balance of the provision to offer products that did not conform to the specifications.

Digitize also alleges bad faith on the part of the contracting officials because of certain pre-bid opening statements in certain fire protection system revisions that mention King-Fisher as awardee of the contract and the Navy's letters to a senator first explaining that the specifications were not restrictive and later advising that this assessment was incorrect. We have reviewed the evidence submitted by Digitize, as well as an affidavit submitted by the Navy, and find no evidence of bad faith. The pre-bid opening reference to use of King Fisher products by a fire prevention engineer in his review of preliminary fire alarm and sprinkler drawings was made in error, based on the hearsay statements of engineers not connected with the procurement. He had no knowledge that the Navy intended to award to King-Fisher prior to bid opening. With regard to the letters to the senator, we find no evidence of bad faith where an agency reverses an earlier, erroneous viewpoint.

We will not attribute prejudicial motives to contracting officials on the basis of inference and supposition; any contention that the government acted with prejudice in excluding a protester from a contract award must be supported by virtually irrefutable proof that agency procurement officers had specific and malicious intent to harm the protester, since they are presumed to act in good faith. Mictronics, Inc., B-234034, May 3, 1989, 89-1 CPD Para. 420. No such showing has been made here.

Accordingly, the protest is denied. Since Digitize protest is denied, it is not entitled to recover its bid preparation costs or the costs of pursuing the protest. See 4 C.F.R. Sec. 21.6(d) (1989); Rix Indus., Inc., et al., B-225176.3 et al., Mar. 30, 1987, 87-1 CPD Para. 356.

/1/ Among other changes, the revised specifications relax the number of inputs on the transmitters, delete the requirements for solar battery charging and manual actuation of the alarm on auxiliary transmitters, and make plain that separate transmitters and interface panels are not required.