B-166617, JUN. 9, 1969

B-166617, JUN. 9, 1969

TO CANOLES AND MASTRACCO:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 3, 1969, PROTESTING ON BEHALF OF TABET MANUFACTURING COMPANY, INCORPORATED, AGAINST THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER SOLICITATION NO. N00600-69-B 0293, ISSUED BY THE UNITED STATES NAVY PURCHASING OFFICE, WASHINGTON NAVY YARD.

THE SOLICITATION COVERS REQUIREMENTS FOR FIVE ITEMS OF RADIO COMMUNICATION EQUIPMENT TO BE MANUFACTURED IN ACCORDANCE WITH SPECIFIED NAVAL ELECTRONIC SYSTEMS COMMAND DRAWINGS. THE MATERIAL TO BE USED IN THE MANUFACTURE OF THE EQUIPMENT WAS LISTED ON EACH OF THE DRAWINGS. IN A NUMBER OF INSTANCES THE MATERIAL LIST IDENTIFIED ITEMS BY A MANUFACTURER'S PART NUMBER WITHOUT PROVISION FOR THE SUBSTITUTION OF ANY OTHER MANUFACTURER'S PRODUCT FOR THE DESIGNATED ITEM. IN THE CASE OF OTHER ITEMS PROVISIONS WERE MADE FOR THE SUBSTITUTION OF "OR EQUAL" COMPONENTS.

THE SOLICITATION WAS ISSUED ON JANUARY 30, 1969, UNDER SMALL BUSINESS RESTRICTED ADVERTISING PROCEDURES. ON MARCH 24, 1969, 27 BIDS WERE PUBLICLY OPENED AND TABULATED. TABET'S BID WAS LOW ON ITEMS 1, 3 AND 5. ON PAGE 7 OF ITS BID TABET INDICATED THAT IT WAS OFFERING COMPONENTS MANUFACTURED BY ADC IN LIEU OF DESIGNATED COMPONENTS OF WESTERN ELECTRIC COMPANY (WECO). THE WECO PART NUMBERS FOR WHICH SUBSTITUTION WAS INDICATED BY TABET APPEAR ON A DRAWING APPLICABLE ONLY TO ITEM 5 OF THE SOLICITATION--COMMUNICATION PATCHING PANEL. WITH ONE EXCEPTION, NO PROVISION WAS MADE IN THE SOLICITATION TO PERMIT BIDDERS TO OFFER OTHER THAN THE PRESCRIBED WECO PARTS ON ITEM 5. IN THE CIRCUMSTANCES THE CONTRACTING OFFICER DETERMINED THE TABET BID ON ITEM 5 TO BE NONRESPONSIVE AND REJECTED IT.

IN A LETTER OF PROTEST DATED MARCH 27, 1969, DIRECTED TO THE NAVY PURCHASING OFFICE, TABET STATED THAT IN ITS OPINION IF SUBSTITUTION ("OR EQUAL") IS PERMITTED ON ITEMS 2 AND 3 OF THE SOLICITATION, IT NECESSARILY MUST BE PERMITTED ON ITEM 5 IN ORDER TO INSURE COMPLIANCE WITH THE DELIVERY REQUIREMENTS OF THE SOLICITATION. IT IS CONTENDED THAT PERMITTING ONLY WECO PARTS ON ITEM 5 DOES NOT ALLOW SUFFICIENT TIME TO MEET DELIVERY REQUIREMENTS. TABET ALSO STATED THAT "IT SEEMS ONLY LOGICAL THAT IF BRAND NAME SUBSTITUTION WAS ALLOWED ON TWO ITEMS OF A SOLICITATION IT SHOULD BE ALLOWED ON ALL ITEMS.' SUBSTANTIALLY THE SAME POINTS ARE RAISED IN YOUR LETTER OF APRIL 3, 1969, TO OUR OFFICE.

IN THE CONTRACTING OFFICER'S STATEMENT ACCOMPANYING THE ADMINISTRATIVE REPORT IT IS STATED:

"* * * AS THE TABET BID DEVIATED FROM THE REQUIREMENTS OF THE SPECIFICATION, IT WAS DETERMINED TO BE NONRESPONSIVE AS TO ITEM 5 AND REJECTED. HOWEVER, FURTHER INVESTIGATION WITH RESPECT TO THE SUITABILITY OF THE ADC COMPONENTS FOR THE INTENDED APPLICATION REVEALS THAT THEY ARE ACCEPTABLE AND THAT THE SPECIFICATIONS FOR ITEM 5 ARE UNDULY RESTRICTIVE. ACCORDINGLY, IT IS PROPOSED TO CANCEL THE SOLICITATION WITH RESPECT TO THIS ITEM AND READVERTISE WITH REVISED SPECIFICATIONS. IT IS ANTICIPATED THAT TABET WILL BE AWARDED ITEMS 1 AND 3.

"* * * IN VIEW OF THE UNNECESSARILY RESTRICTIVE NATURE OF THE SPECIFICATIONS, AWARD TO TABET (ON ITEM 5) WOULD BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS WHO WERE PROHIBITED FROM OFFERING ALTERNATE PRODUCTS FOR THE DESIGNATED BRAND NAMES. SUCH ALTERNATE COMPONENTS ARE AVAILABLE AT PRICES LOWER THAN THE WECO ITEMS AND SUBSTITUTION COULD EFFECT THE RELATIVE STANDING OF THE BIDDERS.'

THE RIGHT TO REJECT ALL BIDS IS RESERVED TO THE GOVERNMENT UNDER PARAGRAPH 10 (B) OF STANDARD FORM 33A, WHICH IS PART OF THE SOLICITATION. IN ADDITION, THE HEAD OF THE AGENCY IS GIVEN THE RIGHT UNDER 10 U.S.C. 2305 (C) TO REJECT ALL BIDS WHEN HE DEEMS THAT ACTION TO BE IN THE PUBLIC INTEREST. ALSO IT HAS LONG BEEN HELD THAT THE ADVERTISING STATUTE WAS ENACTED FOR THE PROTECTION OF THE GOVERNMENT AND THE ISSUANCE OF AN INVITATION FOR BIDS DOES NOT CARRY WITH IT ANY LEGAL OBLIGATION TO ACCEPT ANY OF THE BIDS RECEIVED. SEE B-126211, JANUARY 9, 1956.

CONTRACTING OFFICERS ARE CLOTHED WITH BROAD POWERS OF DISCRETION IN DECIDING WHETHER AN INVITATION FOR BIDS SHOULD OR SHOULD NOT BE CANCELLED AND OUR OFFICE WILL NOT INTERFERE WITH SUCH A DETERMINATION UNLESS IT IS ARBITRARY OR CAPRICIOUS OR NOT BASED ON SUBSTANTIAL EVIDENCE. 39 COMP. GEN. 396.

IN THE PRESENT MATTER THE SEPCIFICATION FOR ITEM 5 WAS RESTRICTIVE IN ITS LIMITATION OF PARTS TO WECO MANUFACTURE. TABET WISHED TO OFFER ADC COMPONENTS AS "EQUAL" TO WECO. THE CONTRACTING OFFICER, UPON LEARNING THAT ADC COMPONENTS WERE EQUALLY SUITABLE FOR THE INTENDED PURPOSE OF ITEM 5, USED PROPER DISCRETION, IN THE INTERESTS OF THE GOVERNMENT, IN CANCELLING THE SOLICITATION FOR ITEM 5, IN ORDER TO READVERTISE FOR THE ITEM PERMITTING "BRAND NAME OR EQUAL" COMPONENTS. TO PERMIT TABET TO FURNISH THE ADC COMPONENT WOULD HAVE BEEN CONTRARY TO THE SPECIFICATION AND POSSIBLY PREJUDICIAL TO OTHER FIRMS WHICH ACCEPTED AT FACE VALUE THE RESTRICTION ON THE USE OF EQUIVALENT PRODUCTS.

IN THE CIRCUMSTANCES WE FIND THAT CANCELLATION OF THE INVITATION FOR ITEM 5 WAS A REASONABLE AND PROPER EXERCISE OF ADMINISTRATIVE DISCRETION.