B-174996, JUL 25, 1972

B-174996: Jul 25, 1972

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THE RECORD INDICATES THAT PROTESTANT WAS GIVEN NOTICE OF THE CANCELLATION AT THE SAME TIME THAT IT WAS INFORMED OF ALLOWANCE OF ITS CORRECTION OF THE BID MISTAKE. PROTEST IS DENIED. C. THE GIST OF YOUR REQUEST FOR RECONSIDERATION IS YOUR CONTENTION THAT BEFORE YOU WERE ADVISED BY THE NAVY PURCHASING OFFICE THAT THE SUBJECT INVITATION HAD BEEN CANCELED. YOU WERE ORALLY ADVISED BY THAT OFFICE THAT CORRECTION OF A BID MISTAKE PREVIOUSLY ALLEGED HAD BEEN ALLOWED AND THAT A CONTRACT WOULD BE AWARDED TO YOUR COMPANY. WHILE YOU DO NOT DISPUTE THE NAVY'S RIGHT TO CANCEL THE REQUIREMENT FOR THE ITEMS WHICH WERE THE SUBJECT OF THE PROPOSED CONTRACT. YOU CONTEND THAT THE ALLEGED ORAL ADVICE OF CONTRACT AWARD WAS SUFFICIENT TO BRING INTO EFFECT A BINDING CONTRACT THE TERMINATION OF WHICH ENTITLES YOU TO REIMBURSEMENT OF EXPENDITURES MADE THEREUNDER.

B-174996, JUL 25, 1972

BID PROTEST - DAMAGES - RELIANCE ON ORAL ASSURANCE OF AWARD DECISION AFFIRMING PRIOR REJECTION OF PROTEST BY DELONICS CORPORATION AGAINST THE CANCELLATION OF AN IFB ISSUED BY THE NAVY PURCHASING OFFICE, WASH., D. C. PROTESTANT ALLEGES THAT IT BEGAN PERFORMANCE BEFORE CANCELLATION IN RELIANCE ON THE NAVY'S ASSURANCE THAT ITS BID MISTAKE ALLEGATION HAD BEEN ALLOWED AND THAT THE CONTRACT WOULD BE AWARDED TO IT. PROTESTANT DEMANDS REIMBURSEMENT FOR COSTS INCURRED. THE RECORD INDICATES THAT PROTESTANT WAS GIVEN NOTICE OF THE CANCELLATION AT THE SAME TIME THAT IT WAS INFORMED OF ALLOWANCE OF ITS CORRECTION OF THE BID MISTAKE. THEREFORE, PROTEST IS DENIED.

TO DELONICS CORPORATION:

YOUR LETTER OF MAY 25, 1972, REQUEST RECONSIDERATION OF OUR DECISION B- 174996, MAY 12, 1972, WHICH DENIED YOUR PROTEST UNDER INVITATION FOR BIDS NO. N00600-71-B-0196, ISSUED BY THE NAVY PURCHASING OFFICE, WASHINGTON, D. C.

THE GIST OF YOUR REQUEST FOR RECONSIDERATION IS YOUR CONTENTION THAT BEFORE YOU WERE ADVISED BY THE NAVY PURCHASING OFFICE THAT THE SUBJECT INVITATION HAD BEEN CANCELED, YOU WERE ORALLY ADVISED BY THAT OFFICE THAT CORRECTION OF A BID MISTAKE PREVIOUSLY ALLEGED HAD BEEN ALLOWED AND THAT A CONTRACT WOULD BE AWARDED TO YOUR COMPANY. YOU MAINTAIN THAT ON THE STRENGTH OF THIS ADVICE, AND BECAUSE OF THE LONG DELAY ENCOUNTERED IN SECURING NAVY CORRECTION OF YOUR BID MISTAKE, YOU PURCHASED CERTAIN MATERIALS AND BEGAN PERFORMANCE OF THE CONTRACT EVEN THOUGH NO WRITTEN CONTRACTUAL DOCUMENT HAD BEEN RECEIVED. WHILE YOU DO NOT DISPUTE THE NAVY'S RIGHT TO CANCEL THE REQUIREMENT FOR THE ITEMS WHICH WERE THE SUBJECT OF THE PROPOSED CONTRACT, YOU CONTEND THAT THE ALLEGED ORAL ADVICE OF CONTRACT AWARD WAS SUFFICIENT TO BRING INTO EFFECT A BINDING CONTRACT THE TERMINATION OF WHICH ENTITLES YOU TO REIMBURSEMENT OF EXPENDITURES MADE THEREUNDER. IN SUPPORT OF YOUR CONTENTION THAT AN ORALLY AWARDED CONTRACT CAN BE HELD TO BE LEGALLY BINDING, YOU CITE DECISIONS OF THE COURT OF CLAIMS, THE ARMED SERVICES BOARD OF CONTRACT APPEALS, AND OUR OFFICE.

UPON RECEIPT OF YOUR REQUEST FOR RECONSIDERATION, A REPORT ON YOUR CONTENTIONS WAS REQUESTED FROM THE DEPARTMENT OF THE NAVY. THIS REPORT FLATLY DENIES THAT ANY ORAL NOTICE OF THE AWARD OF A CONTRACT WAS FURNISHED TO YOUR FIRM. THE REPORT FURTHER POINTS OUT THAT CONTRARY TO YOUR MAY 25 STATEMENT YOU ADMITTED IN A LETTER DATED OCTOBER 22, 1971, TO A CONGRESSIONAL SOURCE, THAT THE NAVY ADVICE OF THE ALLOWABILITY OF MISTAKE CORRECTION WAS CONVEYED TO YOU AT THE SAME TIME THAT ADVICE OF THE INVITATION CANCELLATION WAS COMMUNICATED TO YOU. IN VIEW OF THIS STATE OF THE RECORD, WE MUST CONCLUDE THAT THE INVITATION WAS PROPERLY CANCELED BEFORE ANY AWARD WAS MADE AND THAT NO LEGAL BASIS EXISTS FOR REIMBURSEMENT OF ANY COSTS INCURRED IN ANTICIPATION OF A CONTRACT AWARD.

IN ACCORDANCE WITH THE ABOVE CONSIDERATIONS, OUR DECISION OF MAY 12, 1972, IS AFFIRMED.

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