B-140009, AUG. 17, 1959

B-140009, AUG. 17, 1959

TO GRANITE STATE MACHINE CO., INC.:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 25, 1959, TO THE OGDEN AIR MATERIEL AREA, OGDEN, UTAH, PROTESTING THE PROPOSED AWARD OF A CONTRACT UNDER INVITATION NO. 42-600-59-323 FOR BIDS TO BE OPENED JUNE 19, 1959. COPY OF THE TELEGRAM WAS FURNISHED OUR OFFICE AND THERE HAS BEEN RECEIVED A REPORT DATED AUGUST 4, 1959, FROM THE DEPARTMENT OF THE AIR FORCE, WHICH DEALS WITH THE MERITS OF YOUR PROTEST.

INVITATION NO. 42-600-59-225 WAS ISSUED ON APRIL 1, 1959, AND REQUESTED BIDS--- TO BE OPENED MAY 12, 1959--- FOR FURNISHING A CERTAIN QUANTITY OF AERIAL TOW TARGETS. THE LOW BID OF $349 EACH WAS SUBMITTED BY YOUR FIRM AND THE COLONIAL AIRCRAFT COMPANY SUBMITTED A UNIT PRICE OF $559.95. SINCE YOU WERE THE LOW BIDDER ARRANGEMENTS WERE MADE BY AIR FORCE REPRESENTATIVES TO INSPECT YOUR FACILITIES. AT ABOUT THAT TIME IT WAS DISCOVERED THAT OBSOLETE DRAWINGS HAD BEEN USED IN THE ADVERTISEMENT AND IT IS STATED THAT IF THESE DRAWINGS WERE USED, THE RESULTANT TARGET WOULD NOT BE THAT DESIRED BY THE AIR RESEARCH AND DEVELOPMENT COMMAND. THEREFORE, IT WAS DECIDED TO REJECT ALL BIDS, REVISE THE SPECIFICATIONS AND READVERTISE FOR BIDS, WHICH WAS DONE BY INVITATION NO. 42-600-59-323. IT IS INDICATED BY YOU THAT UNDER THE NEW INVITATION THE COLONIAL AIRCRAFT COMPANY REDUCED ITS BID TO $315.15 EACH, WHEREAS YOUR BID WAS AGAIN IN THE AMOUNT OF $349 EACH.

YOUR PROTEST IS TO THE EFFECT THAT THERE WAS NO NEED FOR READVERTISEMENT SINCE THE CHANGES IN SPECIFICATIONS DID NOT INVOLVE THE LOWERING OF ANY MATERIAL OR LABOR COSTS AND THAT THIS PRACTICE IS CONSIDERED AN "UNFAIR ACT.' IT IS ADMINISTRATIVELY REPORTED, HOWEVER, THAT NOT ONLY WERE THE DRAWINGS CHANGED BY REVERSING THE REFLECTOR ARRAY ASSEMBLY SO THAT THE TRIHEDRAL REFLECTOR WOULD BE LOCATED AFT OF THE DIHEDRAL, PUTTING THE REFLECTOR IN THE NARROWER PORTION OF THE TARGET, BUT SINCE DRAWING 58B22530, REV.'A," DELETED ALL REFERENCES TO DETAIL DRAWINGS OF THE REFLECTOR SEGMENTS, IT WAS MANDATORY THAT THE SUCCESSFUL BIDDER DESIGN THE NEW REFLECTOR ASSEMBLY TO CONFORM TO THE SPACE REQUIREMENTS OF THE NEW LOCATIONS. IT IS REPORTED FURTHER THAT THIS CHANGE WAS MORE THAN TRANSPOSING TWO REFLECTOR ASSEMBLIES SINCE IT INVOLVED NEW DESIGNS AND PROBABLY A CHANGE IN FABRICATION TECHNIQUES. DUE TO THE INCREASE IN DESIGN WORK FOR THE RADAR REFLECTOR BY THE SUCCESSFUL BIDDER AND DUE TO OTHER CONCEIVABLE SAVINGS THAT MIGHT BE EFFECTED UNDER THE REVISED DRAWINGS BY REASON OF THE WIDE LATITUDE IN CHOICE OF CONSTRUCTION MATERIALS, IT WAS DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO READVERTISE THE TARGETS WITH THOSE DRAWINGS WHICH PROPERLY REPRESENTED AIR FORCE REQUIREMENTS.

IN JUSTIFICATION OF THE ACTION TAKEN IN THIS CASE THE CONTRACTING OFFICER STATES AS FOLLOWS:

"BECAUSE OF THE NUMEROUS DRAWING CHANGES HERETOFORE MENTIONED WHICH MIGHT CONCEIVABLY HAVE A SUBSTANTIAL EFFECT UPON THE ENGINEERING DESIGN AND MATERIAL COSTS OF ANY OR ALL PROSPECTIVE BIDDERS, AND BECAUSE ONLY THE REVISED DRAWINGS MEET THE ACTUAL REQUIREMENTS OF THE GOVERNMENT, READVERTISEMENT UNDER THESE REVISED DRAWINGS WAS THE ONLY COURSE DETERMINED TO BE EQUITABLE TO ALL CONCERNED. TO HAVE AWARDED A CONTRACT WHEN IT WAS KNOWN THAT IT WAS NOT FOR THE ITEM NOW DESIRED BY THE GOVERNMENT, AND TO HAVE SUBSEQUENTLY NEGOTIATED A CHANGE IN THE SPECIFICATION UNDER THE CHANGES ARTICLE OF THE CONTRACT FOR THE ITEM NOW REQUIRED MIGHT HAVE WELL RESULTED IN A SUBSTANTIAL AND UNJUSTIFIABLE COST INCREASE OVER THE AWARD PRICE. SUCH A COURSE OF ACTION OBVIOUSLY WOULD NOT HAVE BEEN IN THE GOVERNMENT'S INTEREST.

"THE GRANITE STATE MACHINE CO., INC., PROTEST REFERRED TO THE "ABNORMAL REDUCTION" OF $235 BY COLONIAL AIRCRAFT UNDER THE SECOND INVITATION FOR BID 42-600-59-323. THIS REDUCTION OF COST WAS MADE SOLELY ON THE PART OF AND BY COLONIAL AIRCRAFT, AND MAY WELL ILLUSTRATE THE CONCEIVABLE DESIGN CHANGES POSSIBLE UNDER THE REVISED DRAWINGS. FURTHER, THE GRANITE STATE MACHINE CO., INC., HAD AN EQUAL OPPORTUNITY, ALONG WITH ALL OTHER BIDDERS UNDER THE FIRST INVITATION FOR BID, TO RECONSIDER THEIR FIRST OFFER.'

UNDER PARAGRAPH 8 OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS THE GOVERNMENT EXPRESSLY RESERVED THE RIGHT TO REJECT ANY OR ALL BIDS. THIS PROVISION IS IN CONFORMITY WITH 10 U.S.C. 2305 (B) WHICH PROVIDES THAT ALL BIDS MAY BE REJECTED IF THE HEAD OF THE AGENCY DETERMINES THAT REJECTION IS IN THE PUBLIC INTEREST. THE POWER TO MAKE THIS DETERMINATION IS DELEGABLE UNDER THE PROVISIONS OF 10 U.S.C. 2311. IN THE CIRCUMSTANCES AND IN VIEW OF THE AUTHORITY CITED ABOVE, WE CANNOT CONCLUDE THAT THE REJECTION OF ALL BIDS UNDER THE FIRST INVITATION REPRESENTED AN ABUSE OF THE ADMINISTRATIVE DISCRETION GRANTED BY THE STATUTE AND RESERVED IN THAT INVITATION. IT IS UNFORTUNATE THAT THE NEW DRAWINGS WHICH HAD BEEN PREPARED BEFORE THE DATE OF THE FIRST INVITATION HAD NOT BEEN DISTRIBUTED TO THE PROCUREMENT OFFICE PRIOR TO THE OPENING DATE OF THE BIDS AND THAT AS A RESULT THE AMOUNTS OF THE VARIOUS BIDS WERE DISCLOSED TO COMPETING BIDDERS. HOWEVER, WE WOULD NOT BE WARRANTED IN OBJECTING TO AN AWARD MADE AS A RESULT OF THE READVERTISEMENT.