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B-174480, JUL 14, 1972

B-174480 Jul 14, 1972
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BELIEVES THAT THE UNREASONABLE REJECTION OF THE SPEN PROPOSAL AND THE RESULTING DEPRIVATION OF THE OPPORTUNITY ON THE PART OF THE GOVERNMENT TO RECEIVE A SECOND COMPETITIVE BID WERE SUCH "COMPELLING REASONS" AS WOULD AUTHORIZE CANCELLATION AND RESOLICITATION UNDER ASPR 2- 404.1. THEY SHOULD HAVE BEEN GIVEN AN ADEQUATE CHANCE TO CORRECT THE TECHNICAL DEFICIENCIES DURING THE FIRST STEP OF THE PROCUREMENT. THE PRIOR DECISION IS SUSTAINED. THE FIRST BASIS FOR THE REQUEST FOR RECONSIDERATION IS THAT THERE WAS NO "COMPELLING REASON. IT WAS STATED "THAT BIDS SHOULD BE EVALUATED AND CONTRACTS AWARDED ON THE BASIS OF EQUAL TREATMENT OF BIDDERS IN ORDER TO MAINTAIN AND STRENGTHEN THE COMPETITIVE SYSTEM.".

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B-174480, JUL 14, 1972

BID PROTEST - IMPROPER REJECTION OF BID - ASPR 2-404.1 DENIAL OF REQUEST ON BEHALF OF WARD LA FRANCE TRUCK CORPORATION FOR RECONSIDERATION OF DECISION, B-174480, MARCH 23, 1972, WHICH SUSTAINED A PROTEST BY HENRY SPEN & CO., INC., AGAINST REJECTION OF ITS TECHNICAL PROPOSAL SUBMITTED UNDER TWO-STEP PROCEDURES FOR A QUANTITY OF AIRFIELD RAMP FIRE FIGHTING EQUIPMENT. THE COMP. GEN. BELIEVES THAT THE UNREASONABLE REJECTION OF THE SPEN PROPOSAL AND THE RESULTING DEPRIVATION OF THE OPPORTUNITY ON THE PART OF THE GOVERNMENT TO RECEIVE A SECOND COMPETITIVE BID WERE SUCH "COMPELLING REASONS" AS WOULD AUTHORIZE CANCELLATION AND RESOLICITATION UNDER ASPR 2- 404.1. FURTHER, THE SPEN PROPOSAL DID CONTAIN SUFFICIENT ASSURANCES THAT THE SUBJECT SPECIFICATIONS WOULD BE COMPLIED WITH, AND THEY SHOULD HAVE BEEN GIVEN AN ADEQUATE CHANCE TO CORRECT THE TECHNICAL DEFICIENCIES DURING THE FIRST STEP OF THE PROCUREMENT. ACCORDINGLY, THE PRIOR DECISION IS SUSTAINED.

TO HILL, CHRISTOPHER AND PHILLIPS:

WE REFER TO YOUR LETTER OF MAY 10, 1972, AND PRIOR CORRESPONDENCE, ON BEHALF OF WARD LA FRANCE TRUCK CORPORATION (LA FRANCE) REQUESTING RECONSIDERATION OF OUR DECISION IN 51 COMP. GEN. - (B-174480, MARCH 23, 1972, TO THE SECRETARY OF THE AIR FORCE) WHEREIN WE SUSTAINED THE PROTEST OF HENRY SPEN & CO., INC., AGAINST REJECTION OF ITS TECHNICAL PROPOSAL SUBMITTED UNDER TWO-STEP PROCEDURES FOR A QUANTITY OF AIRFIELD RAMP FIREFIGHTING EQUIPMENT.

THE FIRST BASIS FOR THE REQUEST FOR RECONSIDERATION IS THAT THERE WAS NO "COMPELLING REASON," AS REQUIRED BY PARAGRAPH 2-404.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), FOR OUR DECISION THAT THE SECOND STEP OF THE PROCUREMENT SHOULD BE CANCELED AFTER RECEIPT AND OPENING OF THE ONLY BID SUBMITTED BY LA FRANCE. IN THAT REGARD, THE REQUEST FOR RECONSIDERATION POINTS OUT THAT IN 49 COMP. GEN. 330, 333 (1969), IT WAS STATED "THAT BIDS SHOULD BE EVALUATED AND CONTRACTS AWARDED ON THE BASIS OF EQUAL TREATMENT OF BIDDERS IN ORDER TO MAINTAIN AND STRENGTHEN THE COMPETITIVE SYSTEM." THE REQUEST FOR RECONSIDERATION FURTHER STATES THAT THERE CAN BE NO "EQUAL TREATMENT OF BIDDERS" WHERE THE PRICE OF ONE BIDDER, LA FRANCE, HAS BEEN EXPOSED. AND, 49 COMP. GEN. 417 (1970) IS CITED FOR THE PROPOSITION THAT THERE IS NO PROPER BASIS TO CANCEL AN IFB AND READVERTISE WHERE A BIDDER HAS MADE A MISTAKE.

AMONG THE COMPELLING REASONS PROVIDED IN ASPR 2-404.1 FOR THE CANCELLATION OF AN IFB IS:

"(VIII) FOR OTHER REASONS, CANCELLATION IS CLEARLY IN THE BEST INTEREST OF THE GOVERNMENT."

IN THIS CASE, SINCE, AS INDICATED IN THE MARCH 23 DECISION, IT WAS THE OPINION OF OUR OFFICE THAT THE REJECTION OF THE SPEN TECHNICAL PROPOSAL WAS UNREASONABLE AND THE GOVERNMENT WAS DEPRIVED OF AN OPPORTUNITY OF RECEIVING A PRICE QUOTATION FROM SPEN AS A RESULT OF SUCH REJECTION, IT WAS OUR BELIEF THAT IT WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT TO CANCEL THE INVITATION AND READVERTISE. FURTHER, WHILE LA FRANCE MAY HAVE BEEN PREJUDICED BY THE EXPOSURE OF ITS BID UNDER THE SECOND-STEP INVITATION, BIDDERS ARE USUALLY PLACED IN A SOMEWHAT DISADVANTAGEOUS POSITION WHEN A DETERMINATION IS MADE AFTER THE OPENING OF BIDS TO CANCEL AN IFB AND READVERTISE. IT IS FOR THAT REASON THAT THE CANCELLATION OF AN IFB AND READVERTISEMENT AFTER THE OPENING OF BIDS SHOULD ORDINARILY BE AVOIDED UNLESS A "COMPELLING REASON," AS HERE, DICTATES A CANCELLATION AND READVERTISEMENT TO AVOID PREJUDICIAL INJURY TO AN OTHERWISE QUALIFIED, ELIGIBLE FIRM WHICH HAS PARTICIPATED IN THE PROCUREMENT, BUT DENIED OPPORTUNITY TO COMPETE FOR AWARD. MOREOVER, THE FACT THAT SPEN IS AWARE OF THE LA FRANCE PRICE UNDER IFB -0619 CAN BE OF NO GREAT COMFORT TO SPEN, SINCE LA FRANCE MAY REPRICE ITS OFFER UNDER ANY NEW IFB. ALSO, THE IMMEDIATE CASE INVOLVES A SITUATION WHERE, IN OUR OPINION, THE GOVERNMENT AGENCY ERRED IN REJECTING THE SPEN TECHNICAL PROPOSAL AND IS THEREFORE UNLIKE THE CASE CONSIDERED IN 49 COMP. GEN. 417 (1970). ALTHOUGH YOU STATE THAT AIR FORCE TECHNICAL PERSONNEL MET WITH SPEN REPRESENTATIVES PRIOR TO THE AUGUST 4 LETTER - REQUESTING ADDITIONAL TECHNICAL INFORMATION - AND INDICATED TO THE SPEN REPRESENTATIVES THE KIND OF INFORMATION THAT SPEN SHOULD FURNISH, THE WRITTEN REQUEST WAS SILENT IN THAT REGARD AND INDICATED THAT SPEN WOULD EITHER HAVE TO ELEVATE THE HOSE REELS OR HAVE THE REELS PROVIDED WITH A 30-DEGREE BRACKET. IN THE CIRCUMSTANCES, IT WOULD NOT BE UNREASONABLE FOR SPEN TO CONCLUDE THAT ADDITIONAL INFORMATION IN THAT REGARD WAS NOT NECESSARY. SINCE THE SOLUTION TO THE PROBLEM WAS FURNISHED BY THE AIR FORCE AND THE SPEN TECHNICAL PROPOSAL WAS FOUND TO BE OTHERWISE ACCEPTABLE, IN OUR OPINION, THE AIR FORCE REJECTION OF THE PROPOSAL WAS INAPPROPRIATE.

IT IS ALSO CONTENDED THAT THE MARCH 23 DECISION IS FACTUALLY AND LEGALLY IN ERROR. IN THAT CONNECTION, REFERENCE HAS BEEN MADE TO STATEMENTS IN THE AIR FORCE AUGUST 4 LETTER TO SPEN WHICH STATED IT WOULD BE NECESSARY FOR SPEN TO RESPOND TO PARAGRAPH 3 (DISCUSSING THE TAILGATE) AND ALSO REQUESTED THE INFORMATION REQUIRED BY THAT PARAGRAPH. IN VIEW THEREOF, IT IS STATED THAT THE STATEMENTS IN THE MARCH 23 DECISION THAT THE AUGUST 4 EVALUATION DID NOT ADEQUATELY ADVISE SPEN OF THE NECESSITY OF AMENDING ITS PROPOSAL AND THAT IT WAS REASONABLE FOR SPEN TO REGARD THE EVALUATION AS NOT REQUIRING A DEFINITIVE RESPONSE ARE INCORRECT. HOWEVER, AS INDICATED ABOVE AND IN THE MARCH 23 DECISION, SINCE THE AUGUST 4 EVALUATION PROVIDED A SOLUTION TO THE TAILGATE PROBLEM, IT WOULD NOT BE UNREASONABLE FOR SPEN TO SUPPOSE THAT NO REPLY WAS NECESSARY. IN THAT REGARD, IT IS NOTED THAT PARAGRAPH 3 REFERENCED ANOTHER PROBLEM FOR WHICH NO SOLUTION WAS GIVEN AS TO WHICH SPEN PROVIDED AN APPARENTLY ADEQUATE SOLUTION. THEREFORE, WE CANNOT CONCLUDE THAT SPEN'S FAILURE TO ADDRESS ITSELF SPECIFICALLY TO THE HOSE REEL PROBLEM CONSTITUTED AN ADEQUATE BASIS TO DENY IT AN OPPORTUNITY TO COMPETE UNDER THE SECOND STEP.

YOU HAVE STATED THAT YOU DO NOT UNDERSTAND THE STATEMENT IN THE MARCH 23 DECISION THAT THE SPEN PROPOSAL WAS "SUMMARILY REJECTED" BY THE AIR FORCE. HOWEVER, IN THE CONTEXT OF OUR DECISION WE STATED THAT A PROPOSAL INDICATING A GENERALLY ACCEPTABLE TECHNICAL APPROACH SHOULD NOT BE SUMMARILY REJECTED. WE THEN WENT ON TO DISCUSS THE PARTICULAR CIRCUMSTANCES OF THIS CASE AND STATED THAT "AN OVERLITERAL INTERPRETATION OF THE FIRST-STEP PROCEDURES SHOULD NOT PREVAIL TO EXCLUDE THE ONLY OTHER AVAILABLE SOURCE OF SUPPLY." WE WERE FULLY COGNIZANT OF THE IMPLICATIONS ARISING OUT OF TWO-STEP PROCEDURES BUT WE FELT ALL THE FACTS AND CIRCUMSTANCES REQUIRED CORRECTIVE ACTION TO PROVIDE AN ADEQUATE REMEDY TO A QUALIFIED PRODUCER AND TO AVOID AN UNWARRANTED SOLE-SOURCE SITUATION.

EXCEPTION IS ALSO TAKEN TO THE STATEMENTS IN THE MARCH 23 DECISION THAT "THE PURPOSE OF THE FIRST STEP OF A TWO-STEP ADVERTISED PROCUREMENT IS TO EVALUATE THE POTENTIAL BIDDER'S ABILITY TO MEET THE SPECIFICATIONS OF THE CONTRACT" AND THAT IT SUFFICES IF THE TECHNICAL PROPOSAL INDICATES "A GENERALLY ACCEPTABLE TECHNICAL APPROACH." WE DID NOT MEAN TO CONVEY BY THE FIRST STATEMENT THAT THE PURPOSE OF THE FIRST STEP WAS TO DETERMINE THE PROPOSER'S RESPONSIBILITY. SUCH DETERMINATION, AS YOU HAVE NOTED, IS FOR CONSIDERATION AFTER THE RECEIPT OF BIDS IN THE SECOND STEP. THE PURPOSE OF THE FIRST STEP IS, OF COURSE, TO DETERMINE THE ACCEPTABILITY OF THE EQUIPMENT OFFERED AND THE STATEMENT THAT WAS MADE IN THE MARCH 23 DECISION WAS MADE IN THAT SENSE AND NOT IN THE SENSE OF "RESPONSIBILITY." AS TO THE SECOND STATEMENT, WE LIKEWISE RECOGNIZE THAT THE PURPOSE OF THE FIRST STEP IS FOR THE PROPOSER TO DEMONSTRATE WHAT IT PROPOSES TO FURNISH UNDER THE CONTRACT AND THAT THE REGULATIONS AND LETTER REQUEST FOR TECHNICAL PROPOSALS PROVIDE FOR THE REJECTION OF AN INITIAL PROPOSAL WHICH FAILS TO CONFORM TO THE ESSENTIAL ADVERTISED REQUIREMENTS. HOWEVER, WE CONTINUE OF THE VIEW THAT SINCE THE FIRST STEP IS IN THE NATURE OF A NEGOTIATION, THERE SHOULD BE AN OPPORTUNITY FOR A NONCONFORMING PROPOSAL WHICH IS EASILY SUSCEPTIBLE OF CORRECTION TO BE CORRECTED. IN THAT REGARD, WE NOTE THAT THE AIR FORCE ADVISED SPEN AS TO THE METHODS WHICH WOULD CORRECT ITS PROPOSAL AND OUR PRINCIPAL OBJECTION WAS THAT SPEN WAS REJECTED THEREAFTER BECAUSE IT FAILED TO ADDRESS ITSELF TO THE TAILGATE REQUIREMENT WHICH, WHILE MATERIAL, WAS OF MINOR TECHNICAL SIGNIFICANCE IN TERMS OF THE END PRODUCT TO BE FURNISHED.

YOU HAVE POINTED OUT THAT THE LETTER REQUEST FOR TECHNICAL PROPOSALS REQUIRED OFFERORS TO SUBMIT DRAWINGS SHOWING THE METHOD OF MOUNTING THE HOSE REELS TO AVOID TAILGATE INTERFERENCE. YOU THEREFORE CONTEND THAT SPEN WAS REQUIRED TO SUBMIT REVISED DRAWINGS TO SHOW HOW IT WAS GOING TO AVOID TAILGATE INTERFERENCE. HOWEVER, THE AUGUST 4 LETTER WAS SILENT IN THAT RESPECT AND FOR THE REASONS ABOVE INDICATED IT WAS NOT UNREASONABLE FOR SPEN TO ASSUME THAT NOTHING FURTHER WAS REQUIRED OF IT AS TO AVOIDANCE OF THE TAILGATE INTERFERENCE.

YOU HAVE STATED THAT THE DECISION IN 48 COMP. GEN. 49 (1968), CITED IN THE MARCH 23 DECISION, IS INAPPOSITE TO THE IMMEDIATE CASE. HOWEVER, 48 COMP. GEN., SUPRA, WAS CITED FOR THE PROPOSITION THAT THE FIRST-STEP EVALUATION PROCEDURE IS SIMILAR TO A NEGOTIATED PROCUREMENT.

YOU ALSO OBJECT TO THE STATEMENT IN THE MARCH 23 DECISION THAT "SPEN'S PROPOSAL, AS AMENDED, CONTAINS SUFFICIENT ASSURANCES THAT THE TAILGATE SPECIFICATION WILL BE COMPLIED WITH." YOU OBJECT TO THAT STATEMENT BECAUSE YOU STATE THAT THE LETTER REQUEST FOR TECHNICAL PROPOSALS REQUIRED OFFERORS TO FURNISH DRAWINGS AND SPECIFIC TECHNICAL SOLUTIONS AND NOT ASSURANCES. HOWEVER, WE FIND NOTHING IN THE RECORD WHICH WOULD EVEN INDICATE THAT SPEN WOULD NOT PROVIDE FIREFIGHTING EQUIPMENT MEETING THE ADVERTISED REQUIREMENTS INCLUDING TAILGATE NONINTERFERENCE.

WHILE YOU INDICATE THAT THERE MIGHT BE A PROBLEM AS TO WHAT SPEN IS REQUIRED TO PRODUCE UNDER A RESULTING CONTRACT BECAUSE OF ITS FAILURE TO AMEND ITS TECHNICAL PROPOSAL WITH RESPECT TO THE TAILGATE MATTER, WE NOTE THAT THE LETTER REQUEST FOR TECHNICAL PROPOSALS PROVIDED THAT:

"THE AWARD IN THE SECOND STEP WILL BE MADE TO THE LOWEST RESPONSIBLE BIDDER CONFORMING TO THE INVITATION FOR BIDS WHICH IFB WILL INCLUDE A REQUIREMENT FOR COMPLIANCE WITH THE APPLICABLE SPECIFICATION AND BIDDER'S TECHNICAL PROPOSAL AS FINALLY ACCEPTED BY THE GOVERNMENT."

FURTHER, WE NOTE THAT THE IFB AS IT WAS ISSUED PROVIDED THAT NOTHING CONTAINED IN THE TECHNICAL PROPOSAL SHALL CONSTITUTE A WAIVER OF THE SPECIFICATIONS.

YOU HAVE ALSO STATED THAT EVEN THOUGH OUR INTERIM BID PROTEST PROCEDURES WERE NOT IN EFFECT AT THE TIME SPEN PROTESTED TO OUR OFFICE AGAINST THE REFUSAL OF THE CONTRACTING AGENCY TO ISSUE IT A SECOND-STEP IFB, THE PROTEST SHOULD BE REJECTED AS UNTIMELY IN THAT SPEN WAITED UNTIL AFTER THE OPENING OF BIDS IN THE SECOND STEP TO PROTEST TO OUR OFFICE. ALTHOUGH SPEN DID NOT PROTEST TO OUR OFFICE UNTIL AFTER THE OPENING OF BIDS, IT APPEARS THAT IT WAS ACTIVELY PURSUING ITS PROTEST WITH THE CONTRACTING OFFICE PRIOR TO SUCH OPENING AS WELL AS IMMEDIATELY AFTER. EVEN UNDER OUR INTERIM BID PROTEST PROCEDURES, WHICH WERE NOT IN EFFECT AT THE TIME OF THE PROTEST, "PROTESTORS ARE URGED TO SEEK RESOLUTION OF THEIR COMPLAINTS INITIALLY WITH THE CONTRACTING AGENCY." 4 CFR 20.2.

IN VIEW OF THE FOREGOING, THE DECISION OF MARCH 23, 1972, IS SUSTAINED.

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