B-150904, OCT. 25, 1963

B-150904: Oct 25, 1963

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50 PERCENT OF WHICH WAS SET ASIDE FOR LABOR SURPLUS AREA BIDDERS. THIS INVITATION WAS INVOLVED IN OUR DECISION OF MAY 24. - WAS NONRESPONSIBLE. THIS ADMINISTRATIVE DETERMINATION WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION ON MAY 31. BIDS UNDER THIS SECOND INVITATION WERE OPENED ON JUNE 3. HENRY PRODUCTS ADVISED THAT ITS BID PRICE OF $229.60PER UNIT WAS BASED ON THE EXPECTATION OF RECEIVING AN AWARD UNDER THE FIRST INVITATION. THE PROCUREMENT AGENCY CONCLUDED THAT CANCELLATION OF THIS INVITATION WAS IN ERROR AND PREJUDICIAL TO THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM. THIS CONCLUSION WAS BASED ON THE FACT THAT HAD THE FIRST PROCUREMENT ADVERTISED UNDER THE EARLIER INVITATION BEEN CONSUMMATED WITHOUT THE DELAYS OCCASIONED BY AN ALLEGATION OF MISTAKE IN BID AND BY A SERIES OF PROTESTS.

B-150904, OCT. 25, 1963

TO ARKAY INTERNATIONAL, INC.:

BY TELEFAX DATED JULY 29, 1963, YOU PROTESTED AGAINST THE REINSTATEMENT OF INVITATION FOR BIDS NO. AMC-36-039-63-246-A1 AND ANY AWARD THEREUNDER AS NOT BEING IN THE BEST INTERESTS OF THE GOVERNMENT.

THE RECORD BEFORE US SHOWS THAT THIS INVITATION COVERED THE ARMY'S FISCAL YEAR 1963 REQUIREMENTS FOR 11,774 ANTENNAS, AT-912) ( (VRC, 50 PERCENT OF WHICH WAS SET ASIDE FOR LABOR SURPLUS AREA BIDDERS. THIS INVITATION WAS INVOLVED IN OUR DECISION OF MAY 24, 1963, WHEREIN WE CONCURRED IN THE ADMINISTRATIVE DETERMINATION TO DENY CORRECTION OF YOUR LOW BID ON THE BASIS OF AN ALLEGED MISTAKE SINCE THE EVIDENCE SUBMITTED BY YOU FAILED TO ESTABLISH YOUR INTENDED BID. THEREAFTER, THE CONTRACTING OFFICER DETERMINED THAT THE HENRY PRODUCTS COMPANY--- THE NEXT LOW BIDDER AT $260 PER UNIT UNDER THE INVITATION--- WAS NONRESPONSIBLE. THIS ADMINISTRATIVE DETERMINATION WAS REFERRED TO THE SMALL BUSINESS ADMINISTRATION ON MAY 31, 1963, IN ACCORDANCE WITH ASPR 1-705.6 (B), FOR ITS CONSIDERATION AS TO WHETHER A CERTIFICATE OF COMPETENCY SHOULD BE ISSUED TO HENRY PRODUCTS. IN THE MEANTIME, HOWEVER, A SECOND INVITATION NO. AMC/E/-36-039-63-2693-A1 HAD BEEN ISSUED FOR 10,920 ANTENNAS NEEDED DURING FISCAL YEAR 1964. BIDS UNDER THIS SECOND INVITATION WERE OPENED ON JUNE 3, 1963, AND IT APPEARED THAT THE CANADIAN COMMERCIAL CORPORATION BID A UNIT PRICE OF $213.23, AND HENRY PRODUCTS BID A UNIT PRICE OF $229.60 OR SUBSTANTIALLY BELOW THE $260 BID BY HENRY PRODUCTS UNDER THE EARLIER INVITATION.

ON THE BASIS OF THIS APPARENT DISPARITY OF PRICE, THE CONTRACTING OFFICER CANCELED THE EARLIER INVITATION ON JUNE 19, 1963, BECAUSE OF UNREASONABLENESS OF PRICE UNDER ASPR 2-404.1 (B) (VI). IN THIS CONNECTION, HENRY PRODUCTS ADVISED THAT ITS BID PRICE OF $229.60PER UNIT WAS BASED ON THE EXPECTATION OF RECEIVING AN AWARD UNDER THE FIRST INVITATION. UPON FURTHER CONSIDERATION, THE PROCUREMENT AGENCY CONCLUDED THAT CANCELLATION OF THIS INVITATION WAS IN ERROR AND PREJUDICIAL TO THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM. THIS CONCLUSION WAS BASED ON THE FACT THAT HAD THE FIRST PROCUREMENT ADVERTISED UNDER THE EARLIER INVITATION BEEN CONSUMMATED WITHOUT THE DELAYS OCCASIONED BY AN ALLEGATION OF MISTAKE IN BID AND BY A SERIES OF PROTESTS, THE BID PRICES WOULD HAVE BEEN COMPARED AGAINST THE PREVIOUS PRICE OF $452 PAID FOR THE SAME ITEM, AND THERE WOULD HAVE BEEN NO BASIS FOR THE DETERMINATION OF PRICE UNREASONABLENESS. FURTHERMORE, IN VIEW OF THE PARTICULAR CIRCUMSTANCES INVOLVED IN THE TWO INVITATIONS, AND THE DELAYS OCCASIONED BY ACTS OF THE GOVERNMENT, THE PROCUREMENT OFFICE WAS OF THE OPINION THAT BIDDERS SUBMITTED REASONABLE BIDS UNDER THE FIRST INVITATION. HENCE, INVITATION NO. AMC 36-039-63-246-A1, HAVING BEEN CANCELED THROUGH ADMINISTRATIVE INADVERTENCE, WAS REINSTATED. AWARD OF THE NONSET-ASIDE PORTION OF 5,887 ANTENNAS WAS MADE ON JULY 30, 1963, AT A UNIT PRICE OF $245.18 TO THE HENRY PRODUCTS AFTER A CERTIFICATE OF COMPETENCY WAS ISSUED TO THAT BIDDER. ON AUGUST 21, 1963, AWARD OF THE SET-ASIDE PORTION OF 5,887 UNITS WAS MADE TO THE ARKANSAS DIVISION, INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION AT A UNIT COST OF $240.72.

ASPR 2-404.1 (A) PROVIDES IN PART:

"/A) THE 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 VITATION.'

THIS IS CONSISTENT WITH THE MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 CT.CL. 699, 718-719, WHEREIN IT WAS STATED---

"THE GOVERNMENT IS REQUIRED BY LAW TO AWARD CERTAIN OF ITS CONTRACTS ON THE BASIS OF COMPETITIVE BIDS, AFTER ADVERTISEMENT. TO MAKE THE SYSTEM WORK WITHOUT UNDUE DELAYS AND WITHOUT THE OPENING OF THE BIDS BEING USED UNFAIRLY TO OBTAIN A DISCLOSURE OF WHAT COMPETITORS ARE OFFERING, IT IS NECESSARY THAT THE BIDS BE FIRM BIDS, BACKED BY A GUARANTEED WILLINGNESS TO SIGN A CONTRACT AT THE BID PRICE. 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.'

LIKEWISE, IT WOULD BE AN EQUALLY SERIOUS MATTER TO REFUSE TO GIVE FURTHER RECONSIDERATION TO THE PREVIOUS BIDS SUBMITTED UNLESS THERE EXISTS COMPELLING REASONS FOR NOT DOING SO.

OUR OFFICE HAS RECOGNIZED THAT THE ADMINISTRATIVE AUTHORITY TO REJECT ANY OR ALL BIDS AND TO READVERTISE IS EXTREMELY BROAD AND ORDINARILY WE WILL NOT QUESTION SUCH ACTION. HOWEVER, IN CIRCUMSTANCES IN WHICH NO COGENT OR COMPELLING REASON EXISTED FOR REJECTING ALL BIDS, WE HAVE HELD SUCH REJECTION TO BE IMPROPER AND HAVE DIRECTED CANCELLATION OF AWARDS MADE AFTER READVERTISEMENT. 36 COMP. GEN. 62; 39 ID. 396.

IN THIS CASE, THE LOWEST BID RECEIVED UNDER THE SECOND INVITATION WAS $213.23; HOWEVER, THIS BID WAS NONRESPONSIVE TO THE INVITATION AND OBVIOUSLY COULD NOT BE USED FOR COMPARING THE REASONABLENESS OF BID PRICES UNDER THE FIRST INVITATION. ALSO, WHILE HENRY PRODUCTS BID A UNIT PRICE OF $229.60 UNDER THE SECOND INVITATION, WE HAVE BEEN ADVISED THAT HENRY PRODUCTS INDICATED THAT THIS UNIT BID PRICE WAS BASED ON THE EXPECTATION OF RECEIVING AN AWARD UNDER THE FIRST INVITATION SINCE CERTAIN NONRECURRING COSTS HAD BEEN INCLUDED IN THE $260 UNIT PRICE IT HAD BID ORIGINALLY. WE BELIEVE THAT THIS EXPLANATION IS PLAUSIBLE. WE THEREFORE BELIEVE THAT THE ADMINISTRATIVE DETERMINATION THAT THE $260 UNIT PRICE BID BY HENRY PRODUCTS UNDER THE FIRST INVITATION WAS REASONABLE IS NOT SUBJECT TO QUESTION BY OUR OFFICE. FURTHERMORE, THE CANCELLATION AND REINSTATEMENT OF THE FIRST INVITATION LEFT THE BIDDERS IN THE SAME POSITION AS IF THE GOVERNMENT HAD PROCEEDED WITH AN AWARD INITIALLY.

IN VIEW THEREOF, AND SINCE HENRY PRODUCTS VOLUNTARILY AGREED TO ACCEPT A REDUCED UNIT PRICE OF $245.18 UNDER THE FIRST INVITATION, WE FIND NO SUBSTANTIAL BASES TO DISAGREE WITH THE ADMINISTRATIVE ACTION TAKEN IN REINSTATING INVITATION FOR BIDS NO. AMC-36-039-63- 246-A1 AND IN MAKING AWARDS THEREUNDER. ACCORDINGLY, YOUR PROTEST IS DENIED.

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