B-153854, MAY 22, 1964

B-153854, MAY 22, 1964

TO MR. G. C. ALLETAG:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MARCH 30, 1964, PROTESTING CANCELLATION BY THE DEFENSE GENERAL SUPPLY CENTER OF INVITATION FOR BIDS DSA 4-64-1218 ON WHICH YOUR COMPANY WAS THE LOW BIDDER.

THE INVITATION SOLICITED BIDS ON DEFENSE GENERAL SUPPLY CENTER ANNUAL REQUIREMENTS FOR LABORATORY TESTING OF PHOTOGRAPHIC CHEMICALS, DIAZO MATERIAL AND FILM AND PHOTOGRAPHIC PAPER, FOR OPENING ON FEBRUARY 17, 1964. BIDDERS WERE WARNED SPECIFICALLY IN THE CONDITIONS OF THE SOLICITATION THAT "SUBCONTRACTING OF TESTS REQUIRING SENSITOMETRIC TESTING IS NOT PERMITTED" (PARAGRAPH XA, PAGE 14, CONTINUATION SHEET) AND AND THAT THEY MUST "HAVE ON HAND THE NECESSARY SPECIALIZED TECHNICAL EQUIPMENT AND FACILITIES AS OUTLINED IN THE PERTINENT TESTING SPECIFICATIONS AND STANDARDS" (PARAGRAPH XIVD (8), PAGE 19, CONTINUATION SHEET). THE NATURE OF THE ESSENTIAL EQUIPMENT WAS FULLY EXPLAINED IN THE PREINVITATION NOTICE, RESPONSES TO WHICH IDENTIFIED FIRMS INTERESTED IN RECEIVING INVITATIONS, AND IN APPLICABLE FEDERAL STANDARD NO. 170, PARAGRAPH 6.2.2 WHICH ADVISED--- "SENSITOMETER.---THE SENSITOMETER USED IN THESE TESTS SHALL BE OF THE NONINTERMITTENT, INTENSITY-SCALE TYPE, WITH CALIBRATED LAMPS AND VARIABLE EXPOSURE CAPABILITY. THE SENSITOMETER SHALL HAVE A REPEATABLE ACCURACY OF PLUS OR MINUS 5 PERCENT AT THE 11TH STEP.'

OF THE FOUR FIRMS SUBMITTING BIDS ON THE INVITATION, METACOMET INCORPORATED OFFERED TO PERFORM AT THE LOWEST COST TO THE GOVERNMENT. THE UNITED STATES TESTING COMPANY, INC., WAS THE NEXT LOWEST BIDDER. HOWEVER, A PREAWARD SURVEY OF THE LOW BIDDER'S PLANT WAS CONDUCTED ON FEBRUARY 25 AND 26, 1964, AT WHICH TIME TESTS RUN ON AN EASTMAN KODAK MODEL EK101 SENSITOMETER WHICH IT HAD ON HAND FAILED TO MEET THE REPEATABLE ACCURACY REQUIREMENTS OF PARAGRAPH 6.2.2 OF FEDERAL STANDARD NO. 170. ALTHOUGH SUBSEQUENTLY, IN A LETTER DATED MARCH 13, 1964, THE COMPANY ASSERTED THAT A REEVALUATION OF THE TESTS MADE DISCLOSED THAT THE RESULTS ORIGINALLY OBTAINED WERE ERRONEOUS AND THAT SATISFACTORY RESULTS COULD BE SECURED USING THE EQUIPMENT, IT HAS BEEN CONCLUDED ADMINISTRATIVELY THAT "THE EASTMAN MODEL EK101 IS NOT DESIGNED FOR THE DEGREE OF PRECISION REQUIRED IN ACCEPTANCE AND VERIFICATION TESTING.' A PREAWARD SURVEY OF THE PLANT OF THE NEXT LOWEST BIDDER, THE UNITED STATES TESTING COMPANY, INC., CONDUCTED ON FEBRUARY 27, 1964, DISCLOSED THAT IT LIKEWISE DID NOT HAVE ON THE PREMISES A SENSITOMETER MEETING THE ACCURACY REQUIREMENTS SPECIFIED, ALTHOUGH IT OFFERED TO OBTAIN ONE IF AWARDED THE CONTRACT.

SINCE NEITHER OF THE TWO LOWEST BIDDERS MET THE EXPRESS CONDITION CONCERNING EQUIPMENT ON HAND, AND SINCE THE REMAINING TWO BIDDERS QUOTED PRICES NEARLY THREE TIMES HIGHER, THE CONTRACTING OFFICER DETERMINED THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD BE SERVED THROUGH CANCELING THE INVITATION AND READVERTISING ITS NEEDS IN LESS RESTRICTIVE FASHION FROM THE VIEWPOINT OF SUBCONTRACTING AND EQUIPMENT ON HAND AND, INCIDENTALLY, DELINEATING TESTING SPECIFICATIONS WITH GREATER ACCURACY. THE AUTHORITY TO REJECT ALL BIDS AFTER OPENING IS WELL ESTABLISHED. IT INVOLVES THE EXERCISE OF SOUND ADMINISTRATIVE DISCRETION, WITH WHICH OUR OFFICE WILL NOT INTERFERE EXCEPT IN CASE OF CLEARLY ARBITRARY ACTION. THE DISCLOSURE OF PRICES BID IS, OF COURSE, A REGRETTABLE INCIDENT OF SUCH ACTION, WHICH SHOULD BE AVOIDED WHEREVER POSSIBLE. HOWEVER, THE CONSEQUENCE OF CANCELLATION IN THIS INSTANCE IS LESS UNDESIRABLE THAN WOULD BE THE ACCEPTANCE OF A MUCH HIGHER RESPONSIVE OR RESPONSIBLE BID FOR SERVICES MEETING THE NEEDS ORIGINALLY ADVERTISED. SEE 40 COMP. GEN. 352. SHOULD BE NOTED, ALSO, THAT SECTION 8 (B) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS PROVIDED THAT "THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS * * *.'

IN ANY EVENT, YOUR SUGGESTION THAT THE SPECIFICATIONS WERE NOT UNDULY RESTRICTIVE, THAT THEY WERE ADEQUATE IN ALL RESPECTS, AND THAT CHANGES TO BE MADE IN READVERTISING DID NOT CONSTITUTE A PROPER BASIS FOR CANCELLATION OF THE INVITATION, ARE NOT RELEVANT TO THE FACT THAT AWARD WAS NOT MADE TO YOUR COMPANY. BECAUSE YOUR COMPANY DID NOT HAVE ON HAND THE NECESSARY SPECIALIZED EQUIPMENT, IT FAILED TO MEET THE RESPONSIBILITY STANDARDS ESTABLISHED BY THE TERMS OF THE INVITATION. IN THE CIRCUMSTANCES, NEITHER IT NOR THE NEXT LOWEST BIDDER, WHO ALSO LACKED SUITABLE EQUIPMENT, COULD BE CONSIDERED ELIGIBLE FOR AWARD.

FOR THESE REASONS WE ARE UNABLE TO AGREE THAT THE ADMINISTRATIVE ACTION WAS IMPROPER. YOUR PROTEST THEREFORE MUST BE DENIED.