B-162487, DEC. 29, 1967

B-162487, DEC. 29, 1967

BIDS - REJECTION AND READVERTISEMENT - SPECIFICATION REVISION DECISION TO MINNESOTA MINING AND MANUFACTURING COMPANY PROTESTING REJECTION OF BID FOR RECORDING TAPES FOR PATRICK AIR FORCE BASE. BIDDER WHO OFFERED ONLY PRODUCT ON QUALIFIED PRODUCTS LIST AND WHO PROTESTS REJECTION OF BIDS AND REVISION OF SPECIFICATIONS MUST HAVE PROTEST DENIED SINCE RECORD INDICATES THAT PROTESTANT'S BID WAS 24 PERCENT HIGHER THAN PRICE OF NONQUALIFIED SOURCE, AND TESTS SHOWED NONQUALIFIED ITEM SATISFACTORY. WHILE DISCLOSURE OF PRICES IS REGRETTABLE IT IS LESS UNDESIRABLE THAN WOULD BE THE ACCEPTANCE OF BID FOR ITEMS WHICH DO NOT MEET ACTUAL NEEDS OR AT COST IN EXCESS OF WHAT WOULD BE SPENT UNDER REVISED SPECIFICATIONS.

TO MINNESOTA MINING AND MANUFACTURING COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 13, 1967, WITH ENCLOSURES, PROTESTING AGAINST THE CANCELLATION OF GROUP 2, ITEMS 11 THROUGH 22 OF INVITATION FOR BIDS (IFB) F08650-67-B-0173, ISSUED BY AIR FORCE EASTERN TEST RANGE (ETR), PATRICK AIR FORCE BASE, FLORIDA.

IFB F08650-67-B-0173 SOLICITED BIDS FOR THE FURNISHING OF INSTRUMENTATION AND SOUND RECORDING TAPES, INCLUDING REELS, IN ACCORDANCE WITH FEDERAL SPECIFICATION (FS) W-T-0070, WHICH REQUIRED THAT THE TAPE BE QUALIFIED. ALSO, FS-W-T-0070 INCORPORATED FS-W-R 00175, WHICH REQUIRED THAT THE REELS BE QUALIFIED FOR LISTING ON A QUALIFIED PRODUCTS LIST (QPL) PRIOR TO THE BID OPENING DATE. ON MAY 29, 1967, WHEN THE SOLICITATION WAS ISSUED A QPL HAD NOT BEEN ESTABLISHED FOR W-R-00175. YOUR FIRM WAS THE ONLY FIRM WHICH QUALIFIED ITS REELS PRIOR TO BID OPENING. YOUR FIRM'S AGGREGATE BID FOR THE GROUP 2 ITEMS WAS $1,575,105, WHILE THE AGGREGATE BIDS OF THE OTHER TWO BIDDERS, AMPEX CORPORATION (AMPEX) AND MEMOREX CORPORATION (MEMOREX), WERE $1,482,896 AND $1,267,475, RESPECTIVELY.

SUBSEQUENT TO BID OPENING, BUT PRIOR TO AWARD, TECHNICAL PERSONNEL, INCLUDING TECHNICIANS FROM THE NAVAL APPLIED SCIENCE LABORATORY (NASL), THE LABORATORY RESPONSIBLE FOR THE QUALIFIED PRODUCTS LIST, TESTED THE MEMOREX TAPE. THESE TESTS AFFIRMED THAT THE MEMOREX TAPE MET SPECIFICATION REQUIREMENTS, HOWEVER THE SPECIFICATIONS WERE DETERMINED TO BE INADEQUATE IN THAT THEY FAILED TO PROVIDE FOR CRITERIA AND TESTS THAT WOULD REJECT TAPES CAUSING LOSS OF DATA (THROUGH SHEDDING). THE CONTRACTING OFFICER THEREFORE CONCLUDED THAT THE SPECIFICATIONS NO LONGER SET FORTH THE MINIMUM NEEDS OF ETR. THE INVITATION WAS SUBSEQUENTLY CANCELLED AND THE BIDDERS ADVISED OF THE CANCELLATION.

THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), SECTION 2-404.1 (B) (II) CITES AS A REASON FOR CANCELLING AN INVITATION THE FACT THAT THE SPECIFICATIONS HAVE BEEN REVISED. THIS OFFICE HAS HELD THAT CANCELLATION FOR THIS REASON IS PROPER IN THOSE INSTANCES IN WHICH AWARD UNDER THE ORIGINAL SPECIFICATIONS WOULD NOT SERVE THE GOVERNMENT'S ACTUAL NEEDS. 162067, OCTOBER 24, 967; B-146607, OCTOBER 20, 1961. ALSO, SEE 42 COMP. GEN. 523, 525; B-160790, APRIL 21, 1967. THE EVIDENCE OF RECORD SUPPORTS THE CONTRACTING OFFICER'S WRITTEN DETERMINATION THAT THE SPECIFICATIONS FOR THE TAPE NEEDED TO BE REVISED SO THAT THE GOVERNMENT WOULD NOT BE REQUIRED TO ACCEPT AN ITEM WHICH NO LONGER MET ITS NEEDS. WHILE, ADMITTEDLY, BOTH YOUR TAPE AND THE TAPE OFFERED BY MEMOREX MET THE SPECIFICATIONS AS WRITTEN, THE SPECIFICATIONS DID NOT ADEQUATELY DESCRIBE THE ITEM NEEDED BY THE GOVERNMENT.

MOREOVER, THIS OFFICE HAS HELD, AND ASPR 2-404.1 (B) (V) SO PROVIDES, THAT THE CONTRACTING OFFICER HAS AUTHORITY TO REJECT ALL BIDS, CANCEL THE INVITATION, AND READVERTISE WHEN IT IS BROUGHT TO HIS ATTENTION THAT THE BIDS RECEIVED INDICATE THAT THE NEEDS OF THE GOVERNMENT CAN BE SATISFIED BY A LESS EXPENSIVE ARTICLE DIFFERING FROM THAT ORIGINALLY ADVERTISED. 153538, APRIL 9, 1964; B-157070, SEPTEMBER 21, 1965; B-157738, NOVEMBER 15, 1965; B-159771, SEPTEMBER 28, 1966; 43 COMP. GEN. 209, 211. IN THE PRESENT CASE, ACCORDING TO THE ADMINISTRATIVE REPORT, YOUR BID PRICE WAS 24 PERCENT HIGHER THAN THE PRICE OFFERED BY MEMOREX, ALTHOUGH BOTH BIDS WERE BASED ON TAPES QUALIFIED TO THE SAME SPECIFICATIONS. THIS IS AN INDICATION THAT SINCE YOUR FIRM WAS THE ONLY BIDDER OFFERING A QUALIFIED REEL, QUALIFICATION OF THE REEL MAY HAVE ACCOUNTED FOR THE INCREASED PRICE OF YOUR BID. IN VIEW OF THIS INFORMATION AND THE FACT THAT PAST PROCUREMENTS UTILIZING UNQUALIFIED REELS HAD PROVEN SATISFACTORY, THE CONTRACTING OFFICER CONCLUDED THAT THE ETR REEL NEEDS COULD BE SATISFIED BY A LESS EXPENSIVE ITEM THAN OFFERED BY YOUR FIRM.

THE AUTHORITY TO REJECT ALL BIDS AFTER OPENING IS WELL ESTABLISHED. 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 A REGRETTABLE INCIDENT OF SUCH ACTION, WHICH SHOULD BE AVOIDED WHEREVER POSSIBLE. HOWEVER, IN THE PRESENT CASE THE CONSEQUENCE IS LESS UNDESIRABLE THAN WOULD BE THE ACCEPTANCE OF A BID FOR ITEMS WHICH DO NOT MEET THE GOVERNMENT'S ACTUAL NEEDS, OR AT A COST IN EXCESS OF WHAT WOULD BE SPENT UNDER REVISED SPECIFICATIONS.

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