B-160910, JUNE 2, 1967, 46 COMP. GEN. 825

B-160910, JUNE 2, 1967, 46 COMP. GEN. 825

BIDS - DISCARDING ALL BIDS - READVERTISEMENT JUSTIFICATION - EXPIRED WAGE RATES THE CANCELLATION AND READVERTISING OF A PAINTING PROCUREMENT AFTER BID OPENING ON THE BASIS OF THE EXPIRATION OF THE MINIMUM WAGE DETERMINATIONS WITHOUT REQUESTING EXTENSION OF THE DETERMINATIONS WAS WARRANTED TO SATISFY THE GOVERNMENT'S NEEDS AND TO GIVE ALL BIDDERS AN EQUAL OPPORTUNITY WHERE THE SPECIFICATIONS REVISED TO INCLUDE SAMPLES AND TESTING OF PAINT, AND LIQUIDATED DAMAGES AFFECTED BID PRICES, AND ABSENT THE FIXING OF AN AMOUNT OR RATE OF LIQUIDATED DAMAGES IN THE MANDATORY REQUIREMENT PRESCRIBED BY PARAGRAPH 18-113 OF THE ARMED SERVICES PROCUREMENT REGULATION, THE INCLUSION OF THE LIQUIDATED DAMAGES PROVISION WAS NECESSARY. HOWEVER, IN THE FUTURE CONTRACTING OFFICERS SHOULD REQUEST EXTENSION OF WAGE DETERMINATIONS PURSUANT TO 18 704.2 (A) (3), AS SOON AFTER BID OPENING AS IT IS RECOGNIZED THAT IT WILL NOT BE FEASIBLE TO MAKE AN AWARD BEFORE THE EXPIRATION OF THE WAGE RATES INCLUDED IN THE SPECIFICATIONS.

TO SELLERS, CONNER AND CUNEO, JUNE 2, 1967:

REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF ROBERT MCMULLAN AND SON, INC. (MCMULLAN), AGAINST THE CANCELLATION BY THE DEPARTMENT OF THE AIR FORCE OF INVITATION FOR BIDS (IFB) NO. F64605-67-B-0053, ISSUED OCTOBER 14, 1966, BY THE BASE PROCUREMENT OFFICE, HICKAM AIR FORCE BASE, HAWAII. THE SUBSTANCE OF THE PROTEST, AS SET FORTH IN YOUR LETTERS OF FEBRUARY 17, MARCH 16 AND MAY 2, 1967, IS THAT THERE IS NO JUSTIFICATION FOR THE CANCELLATION OF THE PROCUREMENT AND, THEREFORE, AWARD SHOULD BE MADE TO MCMULLAN, THE LOW, RESPONSIVE AND RESPONSIBLE BIDDER.

THE IFB, WHICH SOLICITED BIDS FOR THE INTERIOR PAINTING AND FINISHING OF FAMILY QUARTERS AT HICKAM AIR FORCE BASE, INCLUDED, IN ACCORDANCE WITH THE PROVISIONS OF THE DAVIS-BACON ACT, 40 U.S.C. 276A, A SCHEDULE OF MINIMUM WAGE RATES FOUND BY THE SECRETARY OF LABOR TO BE PREVAILING IN THE AREA OF THE WORK. THE SCHEDULED DATE OF BID OPENING WAS NOVEMBER 14, 1966, AND THE WAGE RATE DETERMINATION HAD AN EXPIRATION DATE OF DECEMBER 2, 1966, ESTABLISHED IN ACCORDANCE WITH REGULATIONS ISSUED BY THE SECRETARY OF LABOR.

MCMULLAN'S BID OF $42,265.64 WAS THE LOWEST OF FOUR BIDS WHICH WERE RECEIVED AND OPENED ON NOVEMBER 14. THE BID RESULTS WERE TRANSMITTED ON THE SAME DATE TO THE BASE CIVIL ENGINEER, BUT IT WAS NOT UNTIL DECEMBER 6, OR 4 DAYS SUBSEQUENT TO THE EXPIRATION OF THE WAGE DETERMINATION, THAT THE ENGINEERING PERSONNEL MET WITH THE PROCUREMENT PERSONNEL TO DISCUSS THE MATTER. AT THE MEETING, THE ENGINEERING PERSONNEL QUESTIONED MCMULLAN'S RESPONSIBILITY ON THE BASIS OF ALLEGED MARGINAL PERFORMANCE UNDER A PRIOR CONTRACT FOR SIMILAR SERVICES, BUT THE PROCUREMENT PERSONNEL DISPOSED OF THE ISSUE BY STATING THAT MCMULLAN HAD PROMPTLY CORRECTED ANY PERFORMANCE DEFICIENCIES WHEN BROUGHT TO HIS ATTENTION AND THAT THERE WAS INSUFFICIENT EVIDENCE TO DECLARE HIM NONRESPONSIBLE. IN ADDITION, THE ENGINEERING PERSONNEL QUESTIONED THE SPECIFICATIONS AND INDICATED THAT REVISIONS WERE IN ORDER. THE PROCUREMENT PERSONNEL AGREED TO AWAIT RECEIPT OF THE PROPOSED REVISIONS, AFTER WHICH THE CONTRACTING OFFICER WOULD DETERMINE WHETHER CANCELLATION AND READVERTISEMENT OF THE PROCUREMENT WERE WARRANTED.

ON DECEMBER 28, THE ENGINEERING OFFICE FORMALLY ADVISED THE CONTRACTING OFFICER THAT THE PROPOSED SPECIFICATION REVISIONS WERE AS FOLLOWS:

A. THE COLOR CLASSIFICATION AND THE TYPE OF FINISH REQUIRE CHANGES FROM THOSE SPECIFIED UNDER TP-13 OF THE TECHNICAL PROVISIONS.

B. MAXIMUM DAYS SPECIFIED UNDER "TIME SCHEDULE OF OPERATIONS.' TP 01, SUBPARAGRAPH D, REQUIRES REVISION ALLOWING ADDITIONAL DAYS TIME FOR PAINT TO DRY BETWEEN COATS AND INSPECTION OF COMPLETED WORK.

C. REQUIREMENT FOR LIQUIDATED DAMAGE CLAUSE IN THE CONTRACT DOCUMENT TO INSURE TIMELY PERFORMANCE OF EACH UNIT FOR COMPLETED WORK IN ACCORDANCE WITH THE PRESCRIBED TIME SCHEDULE. LIQUIDATED DAMAGE TO BE ASSESSED IS ESTABLISHED AT $50.00 PER DAY PER UNIT.

D. REQUIREMENT IN THE TECHNICAL PROVISIONS FOR SAMPLES AND CONFIRMATION TESTING OF PAINT PROPOSED UNDER THIS PROJECT. (THIS IS A MANDATORY REQUIREMENT IN ALL AIR FORCE PAINTING PROJECTS, AS CONTAINED IN CORPS OF ENGINEERS GUIDE SPECIFICATION NO. CE 250 DATED 30 AUGUST 1966.) ACCORDINGLY, THE ENGINEERING STAFF RECOMMENDED THAT THE BIDS RECEIVED UNDER THE EXISTING IFB BE REJECTED AND REQUESTED A JOINT REVIEW OF REVISED SPECIFICATIONS TO BE USED IN A NEW SOLICITAION.

ON DECEMBER 29, THE CONTRACTING OFFICER, BEING UNABLE TO REACH AN IMMEDIATE DECISION AS TO THE EFFECT OF THE PROPOSED REVISIONS, DISPATCHED A REQUEST TO THE AIR FORCE LOGISTICS COMMAND (AFLC), WRIGHT PATTERSON AIR FORCE BASE, OHIO, THAT ACTION BE TAKEN TO OBTAIN AN "EXTENSION" OF THE WAGE DETERMINATION FOR THE PROCUREMENT. AS INDICATED ABOVE, THE DETERMINATION HAD EXPIRED ON DECEMBER 2. ON JANUARY 6, 1967, THE CONTRACTING OFFICER, AFTER DISCUSSING THE PROPOSED REVISIONS OF THE SPECIFICATIONS WITH THE ENGINEERING STAFF, DETERMINED THAT SUCH REVISIONS WERE SUFFICIENT TO WARRANT CANCELLATION AND READVERTISEMENT OF THE PROCUREMENT, AND HE THEREUPON WITHDREW HIS REQUEST OF DECEMBER 29 TO THE AFLC FOR EXTENSION OF THE EXPIRATION DATE OF THE WAGE PREDETERMINATION.

ON JANUARY 23, 1967, THE CONTRACTING OFFICER RECEIVED THE REVISED SPECIFICATIONS FROM THE ENGINEERING OFFICE AND REFERRED THE MATTER TO THE BASE JUDGE ADVOCATE FOR AN OPINION CONCERNING THE PROPRIETY OF CANCELING THE IFB ON THE BASIS OF THE REVISIONS. IN AN OPINION DATED JANUARY 31, THE BASE JUDGE ADVOCATE REFERRED TO THE PROVISION IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-404.1 (A) THAT THERE MUST BE COMPELLING REASON TO REJECT ALL BIDS AND CANCEL AN INVITATION AFTER BID OPENING, AND CITED 42 COMP. GEN. 523, IN WHICH WE HELD THAT THE USE OF THE AUTHORITY IN ASPR 2-404.1 (B) (II) TO CANCEL AN INVITATION INCIDENT TO REVISION OF SPECIFICATIONS SHOULD BE LIMITED TO THOSE INSTANCES IN WHICH AWARD UNDER THE ORIGINAL SPECIFICATIONS WOULD NOT SERVE THE GOVERNMENT'S ACTUAL NEEDS. ACCORDINGLY, THE BASE JUDGE ADVOCATE EXPRESSED THE VIEW THAT WHILE HE WOULD HAVE NO LEGAL OBJECTION TO CANCELLATION OF THE IFB IF THE ENGINEERING PERSONNEL COULD CERTIFY THAT THE GOVERNMENT'S ACTUAL NEEDS COULD NOT BE MET UNDER THE IFB, THE EXISTING RECORD, IN HIS OPINION, WAS NOT SUFFICIENT TO WARRANT SUCH CONCLUSION. HOWEVER, POINTING TO THE FACT THAT NO AWARD COULD BE MADE UNDER THE IFB ABSENT EXTENSION BY THE SOLICITOR OF LABOR OF THE EXPIRATION DATE OF THE WAGE DETERMINATION, IN ACCORDANCE WITH THE APPLICABLE REGULATIONS PRESCRIBED BY THE SECRETARY OF LABOR, 29 CFR 5.4, AND WITH ASPR 18-704.2 (A) (3), THE BASE JUDGE ADVOCATE FURTHER STATED THAT THE MATTER OF WHETHER THE SPECIFICATION REVISIONS WARRANTED CANCELLATION OF THE IFB WAS MOOT. THEREFORE, BY LETTER OF THE SAME DATE, THE CONTRACTING OFFICER ADVISED ALL OF THE BIDDERS THAT THE IFB WAS CANCELED DUE TO THE EXPIRATION OF THE WAGE DETERMINATION.

YOUR LETTER OF FEBRUARY 17 TOOK EXCEPTION TO SUCH ACTION ON THE BASIS THAT THE CONTRACTING OFFICER HAD AN OBLIGATION TO REQUEST AN EXTENSION OF THE WAGE DETERMINATION UNDER THE REGULATIONS IF THERE WAS ANY POSSIBILITY OF MAKING AWARD. IN THIS CONNECTION, YOU CITED 45 COMP. GEN. 325 AND 44 ID. 776 TO SUBSTANTIATE YOUR VIEW THAT SUCH OBLIGATION IS IMPLICIT IN THE DEVELOPMENT OF THE LAW IN THIS AREA. YOU CONTENDED FURTHER THAT UNLESS THE CONTRACTING OFFICER HAD SOME OTHER JUSTIFICATION FOR THE CANCELLATION, BY LETTING THE WAGE DETERMINATION EXPIRE WITHOUT REQUESTING AN EXTENSION BUT LISTING SUCH EXPIRATION AS THE BASIS FOR THE CANCELLATION, HE HAS DEFEATED THE INTENT OF ASPR 2-404.1 THAT THERE BE A COMPELLING REASON FOR CANCELLATION. YOUR LETTER REFERRED ALSO TO ANOTHER PROCUREMENT INVOLVING AN EXPIRED WAGE DETERMINATION, IN WHICH THE SAME PROCURING OFFICE ALLEGEDLY MADE AWARD AFTER SECURING AN AGREEMENT ON THE PART OF THE LOW BIDDER TO ACCEPT THE NEW WAGE DETERMINATION. ACCORDINGLY, YOU REQUESTED THAT OUR OFFICE INFORM THE DEPARTMENT OF THE AIR FORCE THAT ABSENT JUSTIFICATION UNDER ASPR 2-404.1 FOR CANCELLATION OF THE IFB, THE CANCELLATION MUST BE RESCINDED; THAT AN EXTENSION OF THE WAGE DETERMINATION SHOULD BE REQUESTED FROM THE SOLICITOR OF LABOR; AND THAT THE PROCUREMENT SHOULD NOT BE READVERTISED PENDING OUR DECISION ON YOUR PROTEST.

YOUR LETTER OF MARCH 16 ENCLOSED CORRESPONDENCE FROM MCMULLAN INDICATING THAT THE WAGE RATES FOR THE CLASSES OF WORKERS EMPLOYED UNDER SIMILAR CONTRACTS HAD NOT CHANGED UNDER THE NEW WAGE RATE DETERMINATION AND URGING THAT THE EXPIRATION OF THE WAGE RATE DETERMINATION INCLUDED IN THE IFB THEREFORE DOES NOT AFFECT THE AWARD.

IN A REPORT DATED APRIL 12, 1967, WHICH WAS MADE AVAILABLE TO YOU, THE DEPARTMENT OF THE AIR FORCE FURNISHED ADVICE OF THE SPECIFICATION REVISIONS SUMMARIZED ABOVE AND TOOK THE POSITION THAT HAD THE EXPIRED WAGE DETERMINATION NOT REQUIRED CANCELLATION OF THE IFB, SUCH ACTION WOULD HAVE BEEN REQUIRED BY THE SPECIFICATION REVISION RELATING TO SAMPLES AND TESTING AND BY THE NEED TO INCLUDE IN THE IFB A LIQUIDATED DAMAGES CLAUSE AS PROVIDED BY ASPR 18-113, CHANGES WHICH AFFECT THE PRICE AND WHICH ARE THEREFORE REGARDED BY THE DEPARTMENT AS GOING TO THE SUBSTANCE OF THE BID.

THE FILE FORWARDED BY THE DEPARTMENT INCLUDES A STATEMENT BY THE AFLC TO THE EFFECT THAT HAD THE CONTRACTING OFFICER NOT WITHDRAWN HIS REQUEST OF DECEMBER 29 FOR EXTENSION OF THE EXPIRATION DATE OF THE WAGE DETERMINATION, AFLC WOULD HAVE DECLINED TO PROCESS THE REQUEST ON THE BASIS THAT THE CIRCUMSTANCES INVOLVED IN THE DELAY OF THE AWARD WERE NOT "UNAVOIDABLE" AS CONTEMPLATED BY ASPR 18-704.2 (A) (3), THE SAME BASIS ON WHICH AFLC REFUSED TO PROCESS A REQUEST DATED DECEMBER 20 FROM THE SAME PROCURING ACTIVITY FOR EXTENSION OF THE EXPIRATION DATE OF THE WAGE DETERMINATION APPLICABLE TO TWO OTHER PROCUREMENTS. IN THIS CONNECTION, THE FILE ALSO INCLUDES A STATEMENT FROM THE DEPUTY BASE PROCUREMENT OFFICER THAT THE CONTRACTING OFFICER DID NOT MAKE A SECOND REQUEST FOR EXTENSION IN THE PROCUREMENT IN QUESTION BECAUSE HE DID NOT CONSIDER THAT THE CIRCUMSTANCES WERE AS STRONG AS THOSE INVOLVED IN THE TWO PROCUREMENTS IN WHICH AFLC REJECTED THE DECEMBER 20 REQUEST FOR EXTENSION, AND BECAUSE HE DID NOT FEEL THAT THERE WAS ANY OBLIGATION TO MAKE A SECOND REQUEST.

WITH RESPECT TO THE PROCUREMENT TO WHICH YOU REFERRED IN YOUR LETTER OF FEBRUARY 17, IN WHICH AWARD WAS MADE AFTER EXPIRATION OF THE WAGE DETERMINATION UPON AGREEMENT OF THE LOW BIDDER TO ACCEPT THE NEW WAGE DETERMINATION WITHOUT A CHANGE IN HIS BID PRICE, THE AFLC STATES THAT SUCH ACTION WAS IMPROPER AND WILL BE CALLED TO THE ATTENTION OF THE CONTRACTING OFFICER WHEN OUR DECISION IS ISSUED, BUT STATES THAT SUCH FACT DOES NOT OPERATE TO MAKE AN AWARD UNDER THE PROCUREMENT IN QUESTION PROPER.

THE FILE ON THE PRESENT PROCUREMENT INCLUDES COPIES OF THE ORIGINAL AND THE REVISED TECHNICAL SPECIFICATIONS FOR THE PROCUREMENT. THE REVISIONS INCLUDE AN INCREASE IN THE NUMBER OF DAYS IN THE SCHEDULE OF OPERATIONS; SUBSTITUTION OF ITEMS SUCH AS READY-MIX ALUMINUM PAINT FOR ALUMINUM PIGMENT FOR PAINT; A SAMPLE AND CONFIRMATION TESTING REQUIREMENT NECESSITATING 30 DAYS ADVANCE STOCKPILING OF PAINT AND PROVIDING FOR ASSESSMENT OF A CHARGE OF $75 PER SAMPLE FOR EACH SAMPLE RETESTED DUE TO FAILURE TO MEET SPECIFICATION REQUIREMENTS; AND CHANGES IN THE COLORS AND FINISH OF THE PAINT.

IN CONNECTION WITH THE SAMPLE AND TESTING REQUIREMENT, THE FILE INCLUDES AN EXCERPT DATED JULY 31, 1964, FROM AIR FORCE MANUAL NO. 85 22, PERTAINING TO PAINTING, WITH A STATEMENT DATED MARCH 24, 1967, FROM THE HICKAM BASE ENGINEERING OFFICE THAT SAMPLING AND TESTING OF PAINT PRODUCTS, AS SET FORTH IN PARAGRAPH 13A-11 OF THE EXCERPT, IS A MANDATORY REQUIREMENT INCLUDED IN ALL BASE CIVIL ENGINEER TECHNICAL PROVISIONS FOR PAINTING WORK. PARAGRAPH 13A-11 READS AS FOLLOWS:

13A-11. SAMPLES AND TESTING. PAINT PROPOSED FOR USE WILL BE STORED ON THE PROJECT SITE OR IN THE DESIGNATED AREA ON BASE IN SEALED AND LABELED CONTAINERS. (THIS SHOULD BE DONE IN ADVANCE TO ALLOW 30 DAYS FOR TESTING.) UPON THE CONTRACTOR'S NOTIFICATION THAT THE MATERIAL IS AT THE SITE OR SOURCE OF SUPPLY, A 1-QUART SAMPLE OF EACH BATCH WILL BE OBTAINED BY RANDOM SELECTION FROM THE SEALED CONTAINERS. THE CONTRACTOR WILL DO THIS IN THE PRESENCE OF A REPRESENTATIVE OF THE CONTRACTING OFFICER. SAMPLES WILL BE CLEARLY IDENTIFIED BY DESIGNATED NAME, SPECIFICATION NUMBER, BATCH NUMBER, PROJECT CONTRACT NUMBER, INTENDED USE, AND QUANTITY INVOLVED. THE GOVERNMENT WILL SHIP AND TEST THE SAMPLES TO THE EXTENT DEEMED NECESSARY BY THE CONTRACTING OFFICER. THE COST OF THE FIRST TEST WILL BE BORNE BY THE GOVERNMENT. IF THE SAMPLE FAILS TO MEET SPECIFICATION REQUIREMENTS, THE MATERIAL REPRESENTED BY SAMPLE WILL BE REPLACED, AND THE COST OF RETESTING WILL BE DEDUCTED FROM THE PAYMENTS DUE THE CONTRACTOR AT THE RATE OF $35 PER SAMPLE RETEST. IF A SAMPLE FAILS TO MEET SPECIFICATION REQUIREMENTS, THE ENTIRE STORED MATERIAL (REPRESENTED BY THE SAMPLE) WILL BE REPLACED BY THE CONTRACTOR AT NO COST TO THE GOVERNMENT.

THE CONTRACTING OFFICER STATES THAT HE REGARDS THE SPECIFICATION REVISIONS AS SUBSTANTIAL AND SUFFICIENT TO WARRANT CANCELLATION OF THE IFB EVEN IF THE WAGE PREDETERMINATION HAD NOT EXPIRED. IN HIS OPINION, THE MOST SIGNIFICANT CHANGES WERE THE EXTENSION OF THE PERFORMANCE SCHEDULE, WHICH HE STATES SHOULD BE AVAILABLE TO ALL BIDDERS AND COULD RESULT IN A REDUCTION IN COST TO THE GOVERNMENT; THE TESTING REQUIREMENT; AND THE 30- DAY ADVANCE STOCKPILING REQUIREMENT. MOREOVER, THE CONTRACTING OFFICER CONTENDS THAT REINSTATEMENT OF THE IFB AND AWARD TO MCMULLAN WOULD NOT BE PRACTICAL AS THE CONTRACT WOULD HAVE TO BE AMENDED IMMEDIATELY TO INCORPORATE THE CHANGES TO INSURE THAT THE GOVERNMENT TESTING REQUIREMENTS WOULD BE MET AND THERE WOULD BE NO GUARANTEE, IN SUCH EVENT, THAT AN EQUITABLE ADJUSTMENT IN THE CONTRACT PRICE COULD BE ACHIEVED THROUGH NEGOTIATION. A STATEMENT DATED MARCH 15, 1967, BY THE DEPUTY BASE PROCUREMENT OFFICER INDICATES THAT PERSONNEL OF THE BASE CIVIL ENGINEER BECAME COGNIZANT OF THE REQUIRED CHANGE TO THE TESTING REQUIREMENT SHORTLY BEFORE BID OPENING BUT FELT THAT THE CHANGE COULD BE MADE AFTER AWARD BY MODIFICATION TO THE CONTRACT; THEREFORE, PROCUREMENT PERSONNEL WERE NOT NOTIFIED THEREOF. THE STATEMENT FURTHER INDICATES THAT IT WAS NOT UNTIL THE IFB WAS REVIEWED AFTER BID OPENING THAT THE ENGINEERING PERSONNEL DETERMINED THAT THE OTHER CHANGES WOULD BE NECESSARY TO PRECLUDE RECURRENCE OF THE PROBLEMS CURRENTLY BEING ENCOUNTERED ON THE EXISTING CONTRACT, NO. AF64/605/-4090, WITH MCMULLEN FOR INTERIOR PAINTING OF QUARTERS, AND THAT SUCH CHANGES WERE FIRST BROUGHT TO THE ATTENTION OF THE PROCUREMENT PERSONNEL AT THE DECEMBER 6 MEETING.

HEADQUARTERS, UNITED STATES AIR FORCE (USAF), CONCURS WITH THE VIEW OF THE AFLC THAT THE EXTENSIVE DELAY IN REVIEWING THE MCMULLAN BID AND IN MAKING THE NECESSARY SPECIFICATION CHANGES CANNOT BE CONSIDERED "UNAVOIDABLE" FOR THE PURPOSES OF ASPR 18-704.2 (A) (3), AND THAT THE PROCURING ACTIVITY SHOULD HAVE BEEN AWARE OF THE DECEMBER 2, 1966, EXPIRATION DATE OF THE WAGE DETERMINATION AND SHOULD HAVE EXPEDITED ACTION UNDER THE IFB. FURTHER, IT IS STATED THAT WHILE SOME OF THE SPECIFICATION CHANGES ARE RELATIVELY MINOR, THE REQUIREMENTS FOR SAMPLES AND CONFIRMATION TESTING OF THE PAINT, AS WELL AS THE LIQUIDATED DAMAGES PROVISION, ARE CONSIDERED TO BE MATERIAL SINCE THEY GO TO THE SUBSTANCE OF THE BID AND HAVE AN EFFECT ON PRICE. ACCORDINGLY, HEADQUARTERS, USAF, RECOMMENDS THAT THE PROTEST BE DENIED.

YOUR LETTER OF MAY 2 CONSTITUTES A REBUTTAL TO THE ADMINISTRATIVE REPORT. YOU CHALLENGE THE REASONS ADVANCED BY THE DEPARTMENT OF THE AIR FORCE AS JUSTIFICATION FOR CANCELLATION OF THE IFB: THAT IS, THAT THE DELAY IN MAKING AWARD WAS AVOIDABLE, THEREBY PRECLUDING REQUEST FOR EXTENSION OF THE WAGE DETERMINATION UNDER ASPR 18-704.2 (A) (3) AND 29 CFR 5.4, AND THAT IN ANY EVENT CANCELLATION WOULD HAVE BEEN REQUIRED BECAUSE OF THE PROPOSED REVISIONS TO THE SPECIFICATIONS.

IN LINE WITH THE CONTENTION WHICH YOU SET FORTHIN YOUR LETTER OF FEBRUARY 17, THAT UNDER THE CURRENT REGULATIONS, AS INTERPRETED IN 45 COMP. GEN. 325 AND 44 ID. 776, THE PROCURING AGENCY HAS AN OBLIGATION TO REQUEST EXTENSION OF THE WAGE DETERMINATION, ABSENT ANOTHER JUSTIFIABLE REASON FOR CANCELLATION OF THE INVITATION, YOU ASSERT THAT FAILURE TO RECOGNIZE THIS OBLIGATION CONSTITUTES A CLEAR VIOLATION OF THE INTENT OF ASPR 2-404.1 THAT INVITATIONS BE CANCELED ONLY FOR COMPELLING REASON, AND YOU CONTEND THAT NO DISCRETION SHOULD BE ALLOWED THE PROCURING AGENCY ON WHETHER AN EXTENSION SHOULD BE REQUESTED IN SUCH CIRCUMSTANCES, PARTICULARLY, WHERE, AS HERE, THE NEW DETERMINATION MAKES NO CHANGE IN THE APPLICABLE WAGE RATES. YOU CONTEND THAT THE AFLC STATEMENTS TO THE EFFECT THAT THE DELAY IN AWARD WAS AVOIDABLE CONSTITUTE AN ADMISSION OF NEGLIGENCE WHICH WOULD PROBABLY ENTITLE MCMULLAN TO DAMAGES UNDER THE RATIONALE OF HEYER PRODUCTS COMPANY, INC. V. UNITED STATES, 135 CT. CL. 63, 140 F.SUPP. 409 (1956); THAT TO APPLY THE ,AVOIDABILITY" TEST TO THE ACTIONS OR INACTIONS OF THE ENGINEERING PERSONNEL IS TO PERMIT SUCH PERSONNEL, FOR WHATEVER REASON, INCLUDING PERSONAL DISLIKE OF A CERTAIN CONTRACTOR, TO FRUSTRATE THE REQUIREMENT IN 10 U.S.C. 2305 THAT AWARD BE MADE TO THE LOWEST, RESPONSIBE AND RESPONSIBLE BIDDER, AS WELL AS THE REQUIREMENT INASPR 2-404 THAT INVITATIONS NOT BE LIGHTLY CANCELED; AND THAT WHILE THE REASON FOR THE USE OF THE WORD "UNAVOIDABLE" IN ASPR 18-704.2 (A) (3) AND 29 CFR 5.4 IS NOT CLEAR, IT CERTAINLY DOES NOT TAKE PRECEDENCE OVER THE CRITERIA OF PUBLIC INTEREST AND PREVENTION OF INJUSTICE WHICH ARE ALSO SET FORTH IN SUCH REGULATIONS. IN ADDITION, YOU STATE THAT THE DELAY WAS UNAVOIDABLE AS TO THE BIDDERS AND THAT THE QUESTION WHETHER IT WAS AVOIDABLE AS TO THE GOVERNMENT IS NOT AS IMPORTANT AS THE PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM AND THE PREVENTION OF INJUSTICE TO MCMULLAN.

CONCERNING THE SPECIFICATION REVISIONS, WHICH YOU CLAIM HAVE ALL THE EARMARKS OF AN AFTERTHOUGHT, YOU CITE, IN ADDITION TO ASPR 2-404.1, THE PROVISIONS OF ASPR 2-209 TO THE EFFECT THAT INVITATIONS FOR BIDS SHOULD NOT BE CANCELED UNLESS SUCH ACTION IS CLEARLY IN THE PUBLIC INTEREST, SUCH AS WHERE THERE IS NO LONGER A REQUIREMENT FOR THE SUPPLIES OR SERVICES OR WHERE AMENDMENTS TO THE INVITATION WOULD BE OF SUCH MAGNITUDE THAT A NEW INVITATION IS DESIRABLE. YOU REFER TO THE BASE JUDGE ADVOCATE'S STATEMENT IN HIS OPINION OF JANUARY 31 TO THE EFFECT THAT A CERTIFICATION FROM THE ENGINEERING PERSONNEL THAT THE GOVERNMENT'S NEEDS COULD NOT BE MET UNDER THE ORIGINAL SPECIFICATIONS IS ESSENTIAL TO SUBSTANTIATE CANCELLATION OF THE IFB ON THE BASIS OF NEED FOR REVISED SPECIFICATIONS, AND YOU STATE THAT SUCH CERTIFICATION HAS NOT BEEN FURNISHED. CONVERSELY, YOU POINT OUT, ALTHOUGH THE ENGINEERING OFFICE APPARENTLY CONSIDERS THE MANDATORY PROVISIONS IN AIR FORCE MANUAL NO. 85-22 CONCERNING SAMPLES AND TESTING AS SUFFICIENT JUSTIFICATION FOR READVERTISING THE PROCUREMENT, SUCH PROVISIONS, WHICH BECAME EFFECTIVE ON JULY 31, 1964, HAVE NOT BEEN INCLUDED IN SIMILAR SOLICITATIONS, A FACT WHICH IN YOUR OPINION CONCLUSIVELY SHOWS THAT THE GOVERNMENT'S NEEDS CAN BE MET BY THE ORIGINAL SPECIFICATIONS IN THIS PROCUREMENT. FURTHER, YOU STATE THAT THE IFB DOES INCLUDE A SAMPLE REQUIREMENT AND THAT SINCE THE TESTING IS TO BE PERFORMED AT GOVERNMENT EXPENSE, ONLY ADDITIONAL TIME, NOT MONEY, WOULD HAVE RESULTED FROM SUCH CHANGE.

WITH RESPECT TO THE LIQUIDATED DAMAGES PROVISION, YOU STATE THAT THE CONTRACTING OFFICER DID NOT CONSIDER SUCH ISSUE TO BE OF SUFFICIENT SUBSTANCE TO MERIT CANCELLATION AND THEREFORE DID NOT MENTION SUCH PROVISION IN HIS STATEMENT OF FACTS AND FINDINGS, AND YOU CITE A STATEMENT IN THE OPINION OF THE BASE JUDGE ADVOCATE TO THE EFFECT THAT THE LIQUIDATED DAMAGES REQUIREMENT WAS NOT CONSIDERED SUFFICIENT TO JUSTIFY CANCELLATION OF THE IFB. IN ADDITION, YOU ASSERT THAT ASPR 18 113 MAKES INCLUSION OF A LIQUIDATED DAMAGES CLAUSE MANDATORY IN THE IFB IN QUESTION; THEREFORE, UNDER THE RATIONALE OFG.L. CHRISTIAN AND ASSOCIATES V. UNITED STATES, 160 CT. CL. 1, 312 F.2D 418, REHEARING DENIED 160 CT. CL. 58, 320 F.2D 345, CERTIORARI DENIED 375 U.S. 954 (1963), THE PROVISION WOULD HAVE BEEN READ INTO THE CONTRACT AS A MATTER OF LAW REGARDLESS OF ITS PHYSICAL PRESENCE. ACCORDINGLY, YOU CONTEND, FAILURE TO INCLUDE THE LIQUIDATED DAMAGES CLAUSE IN THE IFB DOES NOT JUSTIFY CANCELLATION THEREOF.

FINALLY, YOU CONTEND THAT SINCE THE WAGE RATES APPLICABLE TO THE CONTRACT HAVE NOT CHANGED, THE INTENT OF THE DAVIS-BACON ACT WILL NOT BE VIOLATED IF THE OLD DETERMINATION IS EXTENDED. SUCH FACTOR, TOGETHER WITH THE RULE THAT CANCELLATION OF INVITATIONS IS CONTRARY TO PUBLIC INTEREST, COMPELS, IN YOUR VIEW, AN AWARD UNDER THE IFB. ACCORDINGLY, YOU REITERATE YOUR REQUEST THAT OUR OFFICE DIRECT THE DEPARTMENT OF THE AIR FORCE TO REQUEST AN EXTENSION OF THE WAGE DETERMINATION AND TO MAKE AWARD TO MCMULLAN.

CONSIDERING THE SPECIFICATION REVISIONS WHICH ACCOUNTED FOR THE FAILURE TO MAKE THE AWARD PRIOR TO THE EXPIRATION OF THE WAGE DETERMINATION AND WHICH THE DEPARTMENT OF THE AIR FORCE VIEWS AS SUFFICIENT TO WARRANT CANCELLATION OF THE IFB AND READVERTISEMENT OF THE PROCUREMENT, THE DECISION WHETHER THE GOVERNMENT'S ACTUAL NEEDS CAN BE MET BY EXISTING SPECIFICATIONS IS PRIMARILY WITHIN THE PROVINCE OF THE PROCURING AGENCY. WHILE THE ENGINEERING STAFF HAS NOT MADE AN OUTRIGHT STATEMENT TO THE EFFECT THAT WITHOUT THE PROPOSED REVISION THE GOVERNMENT'S NEEDS CANNOT BE MET, THE RECORD INDICATES THAT SUCH REVISIONS WERE PROMPTED BY THE PROBLEMS ENCOUNTERED UNDER MCMULLAN'S PRIOR CONTRACT AND THAT THE ADDITIONAL DRYING TIME BETWEEN COATS OF PAINT AND THE TESTING ARE CONSIDERED NECESSARY. THE ADDITIONAL DRYING TIME REQUIREMENT ALONE AFFECTS THE PERFORMANCE SCHEDULE AND MORE THAN LIKELY WILL AFFECT THE CONTRACT PRICE, AND FAILURE TO INCLUDE IT IN THE CONTRACT SPECIFICATIONS WOULD INEVITABLY RESULT IN A CLAIM BY THE CONTRACTOR FOR A TIME EXTENSION AND POSSIBLY FOR AN EQUITABLE ADJUSTMENT IN THE PRICE. FURTHER, IT WOULD APPEAR THAT THE TESTING REQUIREMENTS COULD HAVE CONSIDERABLE EFFECT ON THE CONTRACT PRICE IN THE EVENT THE INITIAL SAMPLE TESTS INDICATE THAT ANY SAMPLE IS DEFICIENT, SINCE SUBSEQUENT TESTING MUST BE AT THE EXPENSE OF THE CONTRACTOR AND ALL OF THE STORED PAINT IN THE BATCH IN WHICH A DEFICIENT SAMPLE IS TAKEN MUST BE REPLACED BY THE CONTRACTOR. MOREOVER, THE FACT THAT THE TESTING REQUIREMENTS WERE OVERLOOKED IN ANY PRIOR PROCUREMENT DOES NOT JUSTIFY THEIR DISREGARD IN THIS PROCUREMENT SINCE THE PROCURING ACTIVITY NOW CONSIDERS THAT TESTING IS ESSENTIAL TO THE GOVERNMENT'S ACTUAL NEEDS.

WITH RESPECT TO THE LIQUIDATED DAMAGES PROVISION, APPLICATION OF THE CHRISTIAN ASSOCIATES DOCTRINE COULD NOT CURE THE OMISSION, SINCE THE REGULATION DOES NOT FIX THE AMOUNT OR RATE OF SUCH DAMAGES, AND ENFORCEMENT WOULD THUS BE IMPOSSIBLE.

IN THE CIRCUMSTANCES, WE ARE CONSTRAINED TO AGREE WITH THE CONTRACTING OFFICER THAT SUCH CHANGES ARE SIGNIFICANT AND THAT READVERTISEMENT IS THE ONLY MEANS BY WHICH THE GOVERNMENT CAN BE ASSURED OF CONTRACTING FOR ITS ACTUAL NEEDS AND BY WHICH ALL BIDDERS WILL BE AFFORDED AN OPPORTUNITY TO BID ON SUCH NEEDS. IN THE LIGHT OF OUR CONCLUSION ON THE REVISIONS IN QUESTION, NO COMMENT IS NECESSARY ON THE SIGNIFICANCE OF THE OTHER SPECIFICATION REVISIONS, EXCEPT THAT THEY WOULD HAVE SOME CUMULATIVE EFFECT IN SUPPORTING THE DETERMINATION TO CANCEL. WHILE IT IS REGRETTABLE THAT THE NEED FOR THE VARIOUS REVISIONS TO THE SPECIFICATIONS WAS NOT REALIZED IN TIME TO BE INCLUDED IN THE IFB BEFORE THE BID OPENING, WE ARE UNABLE TO CONCLUDE THAT THERE WAS ANY BAD FAITH ON THE PART OF THE PROCURING ACTIVITY.

IN LINE WITH THE FOREGOING, WE FIND NO LEGAL BASIS UPON WHICH WE MAY PROPERLY OBJECT TO THE REFUSAL OF THE DEPARTMENT OF THE AIR FORCE TO MAKE AN AWARD TO MCMULLAN UNDER THE IFB OR TO ITS CANCELLATION AND READVERTISEMENT OF THE PROCUREMENT NEED UNDER REVISED SPECIFICATIONS INCORPORATING THE ACTUAL NEEDS OF THE GOVERNMENT AS DETERMINED BY THE PROCURING ACTIVITY. ACCORDINGLY, YOUR PROTEST IS DENIED.

IN VIEW OF OUR CONCLUSION ABOVE STATED, DETAILED CONSIDERATION OF THE MERITS OF YOUR CONTENTIONS CONCERNING THE DAVIS-BACON FEATURES OF THE CASE IS NOT REQUIRED. IT MAY BE STATED, HOWEVER, THAT THE REGULATIONS OF THE SECRETARY OF LABOR AS TO THE LIFE OF HIS PREVAILING WAGE DETERMINATIONS, COUPLED WITH THE CURRENT PRACTICE OF HIS DEPARTMENT IN ISSUING PERIODIC AREA DETERMINATIONS INSTEAD OF INDIVIDUAL DETERMINATIONS FOR EACH PROPOSED CONTRACT, MAY IMPOSE A MORE ONEROUS BURDEN UPON THE ADMINISTRATIVE PROCUREMENT PROCESS THAN DID THE 90-DAY RULE IN EFFECT, FROM 1951 TO 1964, EVEN THOUGH IT WAS SUPPOSED THAT THE SUBSTITUTION OF 120 FOR 90 DAYS WOULD IMPROVE THE SITUATION. WHEREAS UNDER THE INDIVIDUAL DETERMINATION AN AGENCY COULD BE PROMPT ISSUANCE OF ITS INVITATION FOR BIDS GENERALLY BE ASSURED OF HAVING FROM 30 TO 60 DAYS AFTER BID OPENING WITHIN WHICH TO MAKE AWARD, THE PRESENT PROCEDURE, EVEN UNDER THE 120-DAY LIFE, MAY HAVE THE EFFECT OF LIMITING THE TIME FOR AWARD TO A MUCH SHORTER PERIOD, AS IN THIS CASE WHERE THE BIDS WERE OPENED 18 DAYS BEFORE EXPIRATION OF THE WAGE RATE DETERMINATION INCLUDED IN THE ADVERTISED SPECIFICATIONS. WE FIND IN THE RECORD NO INDICATION OF DELIBERATE DELAY BY THE CONTRACTING OFFICER, AS SUGGESTED BY YOU, NOR ARE WE NECESSARILY IN AGREEMENT WITH THE VIEW OF THE LOGISTICS COMMAND THAT THE FAILURE TO MAKE AWARD WITHIN THE 18 DAYS WAS NOT "UNAVOIDABLE" WITHIN THE MEANING OF ASPR 18 704.2. HOWEVER, IN SUCH CIRCUMSTANCES WE BELIEVE IT WOULD NOT BE UNREASONABLE TO IMPOSE UPON THE CONTRACTING OFFICER A DUTY, AS SOON AFTER BID OPENING AS HE BECOMES AWARE THAT IT WILL PROBABLY NOT BE FEASIBLE TO MAKE AN AWARD BEFORE EXPIRATION OF THE WAGE RATES INCLUDED IN THE SPECIFICATIONS, TO INSTITUTE ACTION TO OBTAIN AN EXTENSION PURSUANT TO ASPR 18-704.2 (A) (3). WE ARE THEREFORE RECOMMENDING TO THE SECRETARY OF DEFENSE THAT CONSIDERATION BE GIVEN TO THE PROMULGATION OF AN APPROPRIATE REGULATION TO THAT EFFECT.

WITH RESPECT TO THE PROCUREMENT IN WHICH AWARD WAS MADE AFTER THE EXPIRATION OF THE ADVERTISED WAGE DETERMINATION UPON AGREEMENT BY THE LOW BIDDER TO ACCEPT THE SUPERSEDING WAGE DETERMINATION, WE CONCUR WITH THE VIEW OF THE AFLC THAT SUCH AWARD, WHICH WAS IMPROPER, DOES NOT AFFORD A BASIS FOR SIMILAR ACTION IN THIS PROCUREMENT. FURTHER, SINCE ADMINISTRATIVE ACTION WILL BE TAKEN TO PRECLUDE ANY SIMILAR OCCURRENCES, ACTION BY OUR OFFICE DOES NOT APPEAR TO BE REQUIRED.