B-165359, APR. 15, 1969

B-165359, APR. 15, 1969

TO BUILDING MAINTENANCE CORPORATION:

WE MAKE FURTHER REFERENCE TO TWO LETTERS, ONE DATED FEBRUARY 6, 1969, THE OTHER DATED MARCH 6, 1969. THE FORMER REQUESTED RECONSIDERATION OF OUR DECISION OF FEBRUARY 4, 1969, DENYING YOUR PROTEST AGAINST A PROPOSED AWARD TO ANOTHER COMPANY UNDER INVITATION FOR BIDS NO. 2PB0-RC-505, ISSUED BY THE NEW YORK OFFICE OF THE PUBLIC BUILDINGS SERVICE, GENERAL SERVICES ADMINISTRATION. THE MARCH 6 LETTER PROTESTS THE AGENCY'S DECISION TO CANCEL THE INVITATION.

YOU HAVE ADVISED THAT BY LETTER OF MARCH 4, 1969, THE GENERAL SERVICES ADMINISTRATION (GSA) INFORMED YOU OF THE REJECTION OF ALL BIDS RECEIVED IN RESPONSE TO THE INVITATION AND OF THE DECISION TO CANCEL THE INVITATION. YOU STATE THAT IT IS APPARENT TO YOU THAT GSA, RATHER THAN RESPONDING TO YOUR RENEWED PROTEST, HAS SIMPLY DECIDED TO CANCEL, NOTWITHSTANDING THE FACT THAT IN YOUR ORIGINAL LETTERS OF PROTEST DATED SEPTEMBER 30 AND NOVEMBER 14, 1968, YOU PROTESTED THAT CANCELLATION WOULD BE UNWARRANTED, CITING THE MASSMAN CONSTRUCTION COMPANY V UNITED STATES, 102 CT. CL. 699, 60 F.SUPP. 635 (1945).

THE NOTICE OF CANCELLATION WAS SENT TO ALL BIDDERS AND IT STATED IN FULL: "ALL BIDS IN RESPONSE TO INVITATION NO. 2PB0-RC-505, FLOOR STRIPPING, WAXING AND BUFFING AT SEVERAL FEDERAL LOCATIONS IN THE NEW YORK CITY AREA ARE HEREBY REJECTED, AS THIS SERVICE IS NO LONGER REQUIRED.'

IN PARAGRAPH 11 (B) OF THE "BIDDING INSTRUCTIONS, TERMS AND CONDITIONS," ATTACHED TO AND MADE PART OF THE INVITATION, IT WAS PROVIDED THAT "THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS.' SEE, ALSO, 41 U.S.C. 253 (B). AS WE NOTED IN OUR DECISION TO YOU OF FEBRUARY 4, 1969, THE CONTEMPLATED CONTRACT PERIOD WAS OCTOBER 15, 1968, THROUGH APRIL 14, 1969. THE INVITATION INCLUDED AN OPTION FOR THE GOVERNMENT TO EXTEND THE CONTRACT ON A MONTH-TO-MONTH BASIS TO JUNE 30, 1969. YOUR INITIAL LETTER OF PROTEST WAS DATED SEPTEMBER 30, 1968. NO AWARD HAS EVER BEEN MADE UNDER THIS INVITATION, GSA HAVING WITHHELD AWARD PENDING FINAL RESOLUTION OF YOUR PROTEST.

IT IS APPARENT THAT, AT THE TIME OF THE MARCH 4 LETTER OF CANCELLATION, MORE THAN THREE-FOURTHS OF THE BASIC CONTRACT PERIOD HAD ELAPSED. IT IS EQUALLY APPARENT THAT DURING THIS DELAY GSA WAS REQUIRED TO HAVE THESE SERVICES PERFORMED OTHER THAN UNDER THE PROPOSED CONTRACT. IN THIS CONNECTION, YOU WILL NOTE THE LAST PHRASE IN THE GSA LETTER OF MARCH 4 -- "AS THIS SERVICE IS NO LONGER REQUIRED.' A LETTER OF MARCH 13, 1969, FROM THE GENERAL COUNSEL OF GSA, TO OUR OFFICE, EXPLAINED THAT "BECAUSE IT HAS BEEN POSSIBLE FOR THE GENERAL SERVICES ADMINISTRATION TO PERFORM THE SERVICES WITH ITS OWN EMPLOYEES, THE PROCUREMENT IS NOT REQUIRED.' IN A MEMORANDUM TO THE NEW YORK REGIONAL COUNSEL UNDER THE DATE FEBRUARY 27, 1969, THE ACTING CHIEF OF THE BUILDINGS MANAGEMENT DIVISION ADVISED: "FORCE ACCOUNT LABORERS ARE NOW PERFORMING SUBJECT SERVICE AND THIS CONTRACT REQUIREMENT IS NO LONGER REQUIRED.' THE MEMORANDUM IS INITIALED BY MR. R. COOPER, WHOSE NAME APPEARS ON THE INVITATION AS THE "PROCUREMENT OFFICER.'

THE FOLLOWING STATEMENT APPEARED IN THE MASSMAN CASE: "TO HAVE A SET OF BIDS DISCARDED AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITOR'S PRICE IS A SERIOUS MATTER, AND IT SHOULD NOT BE PERMITTED EXCEPT FOR COGENT REASONS.' THAT CASE CONCERNED A CLAIM FOR REFORMATION OF A CONTRACT, ALREADY PERFORMED, BECAUSE OF ALLEGED MUTUAL MISTAKE OF FACT, OR UNILATERAL MISTAKE ON THE PLAINTIFF'S PART, COUPLED WITH UNCONSCIONABLE CONDUCT BY THE GOVERNMENT. THE COURT HELD THAT THERE WERE NO GROUNDS UPON WHICH TO PREDICATE A REFORMATION. THE FACTS OF THAT CASE ARE THEREFORE QUITE DIFFERENT FROM THE INSTANT FACTS. MOREOVER, THE ABOVE -QUOTED STATEMENT WAS UNRELATED TO THE RESOLUTION OF THE ISSUES INVOLVED THERE. WE THEREFORE FIND NOTHING IN THAT CASE OF PARTICULAR RELEVANCE TO YOUR PROTEST.

IN YOUR LETTERS OF SEPTEMBER 30 AND NOVEMBER 14, 1968, YOU CITED IN ADDITION TO MASSMAN THE FOLLOWING DECISIONS OF OUR OFFICE AT 40 COMP. GEN. 671; 37 ID. 12; ID. 760, AND 36 ID. 62. IN THE MOST RECENT OF THESE CASES, WE HELD THAT WHILE WE DO NOT ORDINARILY SUBSTITUTE OUR JUDGMENT FOR THAT OF THE ADMINISTRATIVE AGENCY, THERE WAS NO "COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION.' THE AGENCY'S CANCELLATION IN 40 COMP. GEN. 671 WAS BASED ON A DETERMINATION THAT A TYPOGRAPHICAL ERROR IN THE INVITATION COULD HAVE BEEN MISLEADING TO BIDDERS. WHILE UNDER BOTH THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) AND THE FEDERAL PROCUREMENT REGULATIONS (FPR) AMBIGUITY IN THE INVITATION IS A PERMISSIBLE GROUND FOR CANCELLATION, A COMPELLING REASON MUST EXIST FOR CANCELLATION AFTER OPENING. A REVIEW OF THE RECORD THERE CONVINCED US THAT NEITHER OF THE TWO BIDDERS IN THAT CASE WAS IN FACT MISLED BY THE TYPOGRAPHICAL ERROR. IN THE ABSENCE OF PREJUDICE TO ANY BIDDER, WE COULD NOT AGREE THAT THERE WAS ANY COMPELLING REASON FOR CANCELING THE INVITATION.

OUR DECISION IN 37 COMP. GEN. 12 EMPHASIZED THAT DECISIONS TO REJECT ALL BIDS MUST BE BONA FIDE. IT WAS OUR VIEW IN THAT CASE THAT SUCH A DETERMINATION WAS NEITHER BONA FIDE NOR SUPPORTABLE WHERE IT WAS BASED ON FACTORS WHICH COULD HAVE BEEN DETERMINED FROM PAST EXPERIENCE PRIOR TO ISSUANCE OF THE INVITATION. HOWEVER, THERE WERE OTHER CONSIDERATIONS IN THAT CASE WHICH GAVE AMPLE SUPPORT TO THE AGENCY'S DETERMINATION THAT AWARD ON THE BASIS OF THE ORIGINAL INVITATION WOULD NOT BE COMPATIBLE WITH THE PUBLIC INTEREST.

THE DECISION AT 37 COMP. GEN. 760 IS INAPPLICABLE ALSO. THAT DECISION HELD THAT REJECTION OF ALL BIDS SHOULD BE BASED ON A BONA FIDE DETERMINATION THAT THE PUBLIC INTEREST WOULD THEREBY BE SERVED. WE FOUND THAT THE AGENCY'S ACTIONS WERE BONA FIDE AND THEREFORE NOT SUBJECT TO OBJECTION BY OUR OFFICE.

IN 36 COMP. GEN. 62, THE QUESTION WAS RAISED WHETHER A VALID AWARD COULD BE MADE ON THE BASIS OF A BID SUBMITTED IN RESPONSE TO AN INVITATION WHICH HAD BEEN CANCELED, WHICH CANCELLATION WAS RESCINDED WITHIN 2 DAYS. THESE FACTORS RAISED THE QUESTION AS TO THE VALIDITY OF THE REJECTION OF ALL BIDS AND THE CANCELLATION. WE HELD THAT NEITHER THE PROTESTANT'S LATE BID IN AN AMOUNT SLIGHTLY UNDER THAT OF THE LOW TIMELY BIDDER, NOR THE POSSIBILITY OF A MINOR PRICE CONCESSION FOR SMALL INCREASE IN THE ORIGINAL QUANTITY, WAS A "COGENT REASON" FOR CANCELING THE INVITATION.

WE BELIEVE THAT AN ANALYSIS OF THE PARTICULAR FACTS INVOLVED IN THE FOREGOING DECISIONS WILL SHOW THAT THERE ARE SIGNIFICANT AND MATERIAL DIFFERENCES BETWEEN THOSE DECISIONS AND THE PRESENT CASE. THEREFORE, THOSE DECISIONS ARE NOT APPLICABLE HERE.

HOWEVER, THE ABOVE-QUOTED STATEMENT FROM THE MASSMAN CASE REPRESENTS A SALUTARY GENERAL POLICY STATEMENT AGAINST WHICH A CONTEMPLATED CANCELLATION OF AN INVITATION AFTER BID OPENING SHOULD BE MEASURED. THIS POLICY HAS BEEN MORE FULLY RESTATED IN THE FEDERAL PROCUREMENT REGULATIONS. SECTION 1-2.404-1 (A) OF THE FPR PROVIDES IN PART:

"PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM DICTATES THAT, AFTER BIDS HAVE BEEN OPENED, AWARD MUST BE MADE TO THAT RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID, UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION. * * *" SECTION 1-2.404-1 (B) IMPLEMENTS THE ABOVE POLICY WITH THE FOLLOWING:

"INVITATIONS FOR BIDS MAY BE CANCELLED AFTER OPENING BUT PRIOR TO AWARD, AND ALL BIDS REJECTED, WHERE SUCH ACTION IS CONSISTENT WITH SEC. 1-2.404-1 (A) AND THE CONTRACTING OFFICER DETERMINES IN WRITING THAT CANCELLATION IS IN THE BEST INTEREST OF THE GOVERNMENT FOR REASONS SUCH AS THE FOLLOWING:

"/2) THE SUPPLIES OR SERVICES ARE NO LONGER REQUIRED.'

THE DECISION TO REJECT ALL BIDS AND TO CANCEL THE INVITATION WAS NOT MADE BY OUR OFFICE. WITH RESPECT TO OUR ROLE IN REVIEWING SUCH DECISIONS, WE MADE THE FOLLOWING REMARKS IN B-164528, SEPTEMBER 10, 1968:

"AN INVITATION FOR BIDS DOES NOT IMPORT ANY OBLIGATION TO ACCEPT ANY OF THE BIDS RECEIVED AND, CONSEQUENTLY, A CONTRACTING OFFICER IS NOT BOUND TO ACCEPT A BID WHERE HE DETERMINES THAT THE PUBLIC INTEREST WOULD BEST BE SERVED BY A REJECTION OF ALL BIDS. SEE 37 COMP. GEN. 12; 41 ID. 709, AND AUTHORITIES CITED THEREIN. ALSO, IN THOSE INSTANCES WHERE IT HAS BEEN DETERMINED TO REJECT ALL BIDS, BOTH THE COURTS AND THIS OFFICE HAVE HELD THAT SUCH DETERMINATION IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION AND, IN THE ABSENCE OF A CLEAR SHOWING THAT THE REJECTION OF ALL BIDS IS ARBITRARY, OUR OFFICE WILL NOT INTERFERE WITH THE EXERCISE OF SUCH DISCRETION. 40 COMP. GEN. 352; 47 ID. 103, 106.'

WE THINK THE GSA DETERMINATION THAT THE PUBLIC INTEREST WOULD BE BEST SERVED BY A CANCELLATION BECAUSE THE SERVICES WERE NO LONGER REQUIRED IS NOT SUBJECT TO QUESTION ON THE RECORD BEFORE US. WE RECENTLY CONSIDERED A SIMILAR SITUATION IN B-164721, NOVEMBER 21, 1968. WE ARE ENCLOSING A COPY OF THAT DECISION. WE INVITE YOUR ATTENTION TO THE SENTENCE THEREIN WHICH READS:

"* * * IT IS OBVIOUS, HOWEVER, THAT CONTRACTING OFFICERS NOT ONLY HAVE THE RIGHT TO REJECT BIDS ON SUPPLIES OR SERVICES WHICH ARE NO LONGER NEEDED, BUT WOULD BE DERELICT IN THEIR DUTY IF THEY DID NOT DO SO. * * *"

SINCE WE AGREE THAT THE CANCELLATION OF THE INVITATION WAS PROPER UNDER THE CIRCUMSTANCES, NO PURPOSE WOULD BE SERVED BY A RECONSIDERATION OF OUR FEBRUARY 4 DECISION WHICH RELATED TO THE ALLEGED AMBIGUITY OF THE ALLSTATE BID THAT NOW HAS BEEN REJECTED BY THE GSA LETTER OF MARCH 4, 1969. YOUR PROTEST IS THEREFORE DENIED.