B-165792, APRIL 23, 1969, 48 COMP. GEN. 689

B-165792, APRIL 23, 1969, 48 COMP. GEN. 689

CONTRACTS - AWARDS - CANCELLATION - ERRONEOUS AWARDS - CANCELLATION AT NO COST TO GOVERNMENT THE CANCELLATION IN ITS ENTIRETY OF A CONTRACT ERRONEOUSLY AWARDED TO A NONRESPONSIVE BIDDER WHO HAD FAILED TO FURNISH F.O.B. ORIGIN SHIPPING POINT INFORMATION IS REQUIRED RATHER THAN JUST THE CANCELLATION OF THE OPTION DIRECTED IN 48 COMP. GEN. ----, WHERE THE CONCELLATION WILL POSE NO PROBLEM RESPECTING THE EMERGENCY NEED FOR THE PROCUREMENT AND THE CONTINGENT LIABILITY OF THE GOVERNMENT UNDER THE CANCELED CONTRACT, IN VIEW OF THE FACT THE NEXT LOWEST BIDDER IS WILLING TO PURCHASE THE INVENTORY ITEMS INVOLVED IN THE CANCELED CONTRACT AND TO HOLD THE GOVERNMENT HARMLESS FROM ANY LIABILITY RESULTING FROM CONTRACT CANCELLATION, AND HAS DEMONSTRATED ABILITY TO MEET DELIVERY REQUIREMENTS THAT REFUTES THE CONTRACTING OFFICER'S CONTRARY DETERMINATION. UPON THE IMMEDIATE CANCELLATION OF THE ENTIRE CONTRACT, A PROMPT AWARD SHOULD BE MADE TO THE LOWEST BIDDER. BIDS- EVALUATION--INCORPORATION BY REFERENCE-- AFFIRMATIVE ACTION BY BIDDER REQUIREMENT THE MERE INSERTION BY THE GOVERNMENT OF THE SYMBOL "X" IN A PARTICULAR BOX OF AN INVITATION NOT AUTOMATICALLY INCORPORATING THE PROVISION IN A RESULTING CONTRACT, THE IDENTIFIED BID TERM OR CONDITION REQUIRES SOME AFFIRMATIVE ACTION ON THE PART OF THE BIDDER TO ESTABLISH HIS AGREEMENT TO COMPLY WITH THE BID TERM OR CONDITION AND, THEREFORE, THE FAILURE OF A BIDDER TO RESPOND TO A BOXED "X" REGARDING F.O.B. ORIGIN SHIPPING POINT INFORMATION RELATING TO THE RESPONSIVENESS OF HIS BID, THE FAILURE MUST BE TREATED AS THOUGH THE BIDDER HAD TAKEN A DELIBERATE EXCEPTION TO A MATERIAL PROVISION OF THE ADVERTISED INVITATION.

TO THE SECRETARY OF THE NAVY, APRIL 23, 1969:

REFERENCE IS MADE TO LETTER DATED APRIL 4, 1969, WITH ATTACHMENTS, FROM THE ASSISTANT SECRETARY OF THE NAVY (INSTALLATION AND LOGISTICS), REPORTING ON THE REQUEST FOR RECONSIDERATION OF OUR DECISION OF MARCH 13, 1969, 48 COMP. GEN. ----, BY THE ADMIRAL CORPORATION, WHEREIN WE SUSTAINED THE CORPORATION'S PROTEST OF THE AWARD OF A CONTRACT TO THE COLLINS RADIO COMPANY ON JANUARY 28, 1969, UNDER AVIATION SUPPLY OFFICE (ASO) INVITATION FOR BIDS N00383-69-B-0553. SUPPLEMENTARY INFORMATION WAS INFORMALLY FURNISHED OUR OFFICE ON APRIL 17, 1969, CONCERNING THE CAPABILITIES OF ADMIRAL TO PERFORM ANY CONTRACT WHICH MIGHT RESULT FROM OUR FURTHER CONSIDERATION OF ITS PROTEST.

IN OUR DECISION OF MARCH 13, 1969, WE DETERMINED THAT COLLINS' FAILURE TO FURNISH WITH ITS BID ESSENTIAL INFORMATION REQUIRED BY SECTION 422 OF THE INVITATION FOR BIDS, THE F.O.B. ORIGIN DELIVERY PROVISIONS, RENDERED ITS BID NONRESPONSIVE AND THAT THE RESULTING AWARD TO COLLINS WAS, THEREFORE, IMPROPER AND CONTRARY TO THE WELL-ESTABLISHED PRINCIPLES GOVERNING FORMAL ADVERTISING. AT PAGES 12 AND 13 OF OUR DECISION WE QUOTED IN PART FROM A REPORT FROM THE PROCUREMENT AGENCY TO THE EFFECT THAT, AS OF FEBRUARY 21, 1969, THE ESTIMATED COST WHICH THE GOVERNMENT MIGHT HAVE TO BEAR IN THE EVENT OF TERMINATION FOR CONVENIENCE COULD AMOUNT TO $420,000. ALSO, PRIOR TO THE TIME YOU SUBMITTED YOUR ORIGINAL REPORT TO US IN THIS CASE, WE HAD BEEN INFORMED BY YOUR DEPARTMENT THAT IT HAD BEEN DETERMINED TO BE NECESSARY TO MAKE THE AWARD OF THE CONTRACT WITHOUT AWAITING OUR DECISION BECAUSE THERE WAS AN EMERGENCY NEED FOR AT LEAST A PORTION OF THE RADIOS COVERED BY THE PROCUREMENT. ON THE BASIS OF THESE REPRESENTATIONS, WE CONCLUDED THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD NOT BE SERVED BY CANCELLATION OF THE ENTIRE AWARD BUT THAT THE OPTION PORTION OF THE CONTRACT SHOULD BE CANCELED.

THE ASSISTANT SECRETARY'S LETTER OF APRIL 4, IN ADDITION TO REPORTING ON ADMIRAL'S REQUEST FOR RECONSIDERATION, SEPARATELY REQUESTS RECONSIDERATION OF THE MARCH 13 DECISION ON THE GROUND THAT COLLINS' BID WAS, IN FACT, COMPLETELY RESPONSIVE TO ALL OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS AND THAT, THEREFORE, THE RESULTING AWARD CREATED A VALID AND BINDING CONTRACT FOR THE BASIC AND OPTION QUANTITIES. BY LETTER OF MARCH 26, 1969, THE ATTORNEYS FOR COLLINS REQUESTED RECONSIDERATION OF THE MARCH 13 DECISION ON THE SAME BASIS.

TO ITERATE BRIEFLY, SECTION 422 (A) OF THE INVITATION ENTITLED "PLACE OF DELIVERY: ORIGIN" PROVIDED IN MATERIAL PART THAT THE SUCCESSFUL BIDDER SHALL DELIVER THE ADVERTISED ARTICLES "FREE OF EXPENSE TO THE GOVERNMENT AND, AT THE GOVERNMENT'S OPTION, (I) LOADED, BLOCKED, AND BRACED ON BOARD CARRIER'S EQUIPMENT, (II) AT THE FREIGHT STATION * * * AT OR NEAR CONTRACTOR'S PLANT AT:." BIDDERS WERE REQUIRED BY THE TERMS OF SECTION 422 (A) (1) TO INSERT THE CITY OR TOWN IN WHICH ITS PLANT IS LOCATED. THE PURPOSE FOR WHICH THIS INFORMATION WAS SOLICITED OF BIDDERS AS PART OF THEIR SEALED BIDS IS ALMOST SELF EVIDENT IN THE CONTEXT OF FORMAL COMPETITIVE ADVERTISING. THE COMPETITIVE BIDDING STATUTE CODIFIED AT 10 U.S.C. 2305 REQUIRES THAT THE AWARD OF A CONTRACT BE MADE TO THAT RESPONSIBLE BIDDER SUBMITTING THE LOWEST RESPONSIVE BID, "OTHER FACTORS CONSIDERED." 37 COMP. GEN. 550. ONE OF THE FACTORS FOR CONSIDERATION IN THE SELECTION OF A LOW BID SUBMITTED ON AN F.O.B. ORIGIN BASIS IS THE COST TO THE GOVERNMENT OF TRANSPORTATION TO DESTINATION. IN SUCH CIRCUMSTANCES, THE TRANSPORTATION FACILITIES AVAILABLE TO EACH BIDDER IS AN ESSENTIAL ELEMENT IN EVALUATING THE GOVERNMENT'S TRANSPORTATION COSTS APPLICABLE TO EACH RESPONSIVE BIDDER'S OFFER. THE PURPOSE OF SUCH EVALUATION IS TO FIX THE EXACT COST OF THE ITEM TO THE GOVERNMENT AND TO FIX BEYOND QUESTION THE BIDDER'S OBLIGATION TO THE GOVERNMENT TO PLACE THE END ITEMS AT THE F.O.B. POINT SELECTED AND IDENTIFIED BY HIM IN HIS BID.

THE FACESHEET OF THE INVITATION REQUIRED THE CONTRACTOR TO FURNISH THE PROCUREMENT ITEMS "DELIVERED AT THE DESIGNATED POINTS)," THAT IS, THE POINT TO BE IDENTIFIED BY THE BIDDER IN THE SPACE PROVIDED BY SECTION 422 (A) (1). ALSO, THE RESPONSIBILITY FOR SUPPLIES CLAUSE, INCORPORATED BY REFERENCE IN THE INVITATION, IMPOSED ON THE CONTRACTOR FULL RESPONSIBILITY FOR THOSE SUPPLIES "UNTIL THEY ARE DELIVERED TO THE DESIGNATED DELIVERY POINT, REGARDLESS OF THE POINT OF INSPECTION." BUT COLLINS DID NOT IDENTIFY IN SECTION 422 (A) (1) ITS F.O.B. ORIGIN POINT.

COLLINS ARGUED IN THE FIRST INSTANCE THAT ITS FAILURE IN THIS REGARD WAS NOT A FATAL DEFECT IN ITS BID SINCE THE F.O.B. ORIGIN POINT COULD BE ASCERTAINED OTHERWISE IN ITS BID. SPECIFICALLY, COLLINS ARGUED THAT THE INFORMATION IT SUPPLIED IN SECTION 511 (B) OF ITS BID REGARDING INSPECTION AND ACCEPTANCE, SHOWING THE NAME OF THE PRINCIPAL MANUFACTURER AND PLACE OF PRINCIPAL MANUFACTURE AS THE COLLINS RADIO COMPANY, CEDAR RAPIDS, IOWA, SATISFIED THE REQUIREMENT IN SECTION 422 BECAUSE FOR ALL PRACTICAL PURPOSES THE ONLY RESPONSE THAT COLLINS COULD GIVE UNDER SECTION 422 (A) (1) WOULD BE SYNONYMOUS WITH ITS RESPONSES TO SECTION 511 (B). ADDITION, COLLINS ARGUED THAT PARAGRAPHS 19-212 AND 2-201 (B) (XXXII) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR), EVEN THOUGH NOT INCLUDED IN THE INVITATION, REQUIRED THAT COLLINS' BUSINESS ADDRESS (CEDAR RAPIDS) STATED ON THE FACESHEET OF THE INVITATION BE TREATED BY THE CONTRACTING OFFICER AS SATISFYING SECTION 422 (A) (1). WE REJECTED THESE ARGUMENTS IN OUR MARCH 13 DECISION FOR THE REASONS DETAILED THEREIN.

IN ITS REQUEST FOR RECONSIDERATION, COLLINS RESTATES THE ARGUMENTS WHICH WE DISCUSSED IN OUR MARCH 13, 1969, DECISION. WE HAVE ACCORDINGLY CAREFULLY RECONSIDERED OUR OPINION AS TO THE NONRESPONSIVENESS OF THE COLLINS' BID IN THE LIGHT OF THE VARIOUS ARGUMENTS ADVANCED ON ITS BEHALF BUT WE REMAIN OF THE VIEW THAT NO SUBSTANTIAL LEGAL BASIS EXISTS FOR REACHING A CONTRARY CONCLUSION.

IN ITS RECENT SUBMISSIONS, COLLINS CONTENDS THAT "IT CANNOT BE SAID * * * THAT THE AWARD TO COLLINS IS CLEARLY OR PALPABLY ILLEGAL SO AS TO MAKE THE AWARD VOID AB INITIO," CITING B-158126, MARCH 10, 1966. IN THAT CASE WE HELD:

* * * THE COURT OF CLAIMS HAS RECENTLY CONCLUDED THAT APPLICABLE PROCUREMENT STATUES AND REGULATIONS CONFER BROAD DISCRETION ON THE CONTRACTING OFFICER; THAT THE AWARD OF A CONTRACT SHOULD BE UPHELD IF THE CONTRACTING OFFICER HAS ACTED IN GOOD FAITH AND IF SUCH ACTION IS REASONABLE UNDER THE LAW AND REGULATIONS; AND THAT A CONTRACT SHOULD BE CANCELLED AS VOID AB INITIO ONLY IF ITS ILLEGALITY IS CLEAR OR PALPABLE. SEE JOHN REINER & COMPANY V. UNITED STATES, 163 CT. CL. 381, 325, F. 2D 438 (1963), CERT. DENIED, 377 U.S. 931 (1964); BROWN & SON ELECTRICAL COMPANY V. UNITED STATES, 163 CT. CL. 465, 325 F. 2D 466 (1963); COASTAL CARGO COMPANY, INC. V. UNITED STATES, CT. CL. NO. 467 59 (OCT 15, 1965); AND WARREN BROTHERS ROADS COMPANY V. UNITED STATES, CT. CL. NO. 302-61 (DEC. 17, 1965). * * *

COLLINS CONTENDS THAT ITS BID, READ AS A WHOLE, OFFERED TO COMPLY WITH THE F.O.B. ORIGIN TERMS OF THE INVITATION. IT POINTS OUT THAT BLOCK 9 ON THE FACESHEET OF THE INVITATION MADE ALL BIDS SUBMITTED THEREUNDER SUBJECT TO THE ATTACHED SOLICITATION INSTRUCTIONS AND CONDITIONS, THE SCHEDULE, THE GENERAL PROVISIONS INCORPORATED BY REFERENCE THEREIN AND OTHER ATTACHED OR REFERENCED PROVISIONS, ETC. SPECIAL REFERENCE IS MADE TO PAGE 5 OF THE SCHEDULE WHICH READ IN PART: THE CLAUSES SET FORTH HEREINAFTER THAT ARE MARKED WITH AN "X" IN THE SPACE PROVIDED THEREFOR SHALL FORM A PART OF THIS SOLICITATION AND THE RESULTANT CONTRACT. NOTE TO BIDDERS--- BIDDERS ARE CAUTIONED NOT TO INSERT AN "X" IN ANY OF THE SPACES HEREINAFTER PROVIDED FOR THE DESIGNATION OF CLAUSES APPLICABLE TO THIS INVITATION FOR BIDS AND ARE CAUTIONED NOT TO FURNISH ANY INFORMATION REQUESTED BY CLAUSES NOT CHECKED BY THIS ACTIVITY. ONLY SUCH CLAUSES THAT ARE MARKED WITH AN "X" BY THIS ACTIVITY SHALL BE DEEMED A PART OF THIS INVITATION FOR BIDS. THE INSERTION OF AN "X" BY THE BIDDER IN ANY SUCH SPACE OR THE FURNISHING OF INFORMATION NOT REQUESTED MAY RESULT IN REJECTION OF THE BID AS NON-RESPONSIVE.

COLLINS CONTENDS THAT SINCE SECTION 422 WAS A PART OF THE SCHEDULE AND WAS MARKED WITH AN "X" THAT PROVISION AUTOMATICALLY BECAME A PART OF THE CONTRACT AWARDED TO COLLINS. THE INVITATION CLAUSES MARKED WITH AN "X," AS STATED ABOVE, FORM A PART OF THE INVITATION FOR BIDS AND THAT MARK CONSITUTED NOTICE TO BIDDERS THAT THE TERMS AND CONDITIONS SO IDENTIFIED WERE APPLICABLE TO THE SOLICITATION AND SHOULD BE TAKEN INTO CONSIDERATION IN THE PREPARATION OF THEIR BIDS. IN THIS REGARD, THE INVITATION CONTAINED MANY OTHER TERMS AND CONDITIONS WHICH WERE SIMILARLY PRECEDED BY A BLOCK BUT WHICH WERE NOT IDENTIFIED BY AN "X" FOR INCLUSION IN THE INVITATION. IT THUS APPEARS TO US THAT THE USE OF THE SYMBOL "X" MERELY SERVED TO IDENTIFY THOSE PROVISIONS WHICH THE BIDDERS SHOULD TAKE INTO CONSIDERATION IN THE PREPARATION OF THEIR BIDS AND TO IGNORE THOSE TERMS AND CONDITIONS NOT SO IDENTIFIED. IN THIS CONTEXT, IT MAY NOT BE SAID THAT THE MERE INSERTION BY THE GOVERNMENT OF AN "X" IN A PARTICULAR BOX SERVED TO AUTOMATICALLY INCORPORATE THAT PROVISION OR TERM IN A RESULTING CONTRACT WHERE THAT IDENTIFIED BID TERM OR CONDITION REQUIRED SOME AFFIRMATIVE ACTION ON THE PART OF THE BIDDER TO ESTABLISH HIS AGREEMENT TO COMPLY WITH THAT BID TERM OR CONDITION. IN ORDER TO BE INCLUDED IN THE RESULTING CONTRACT THOSE IDENTIFIED PROVISIONS MUST BE A PART OF THE SUCCESSFUL BID. WHERE A SECTION OF THE INVITATION REQUIRES AN INSERTION OF MATERIAL INFORMATION SUCH AS A PRICE, DESCRIPTIVE DATA, POINT OF ORIGIN, ETC; RELATING TO RESPONSIVENESS OF THE BID, THE FAILURE OF THE BIDDER TO SO PROVIDE THAT INFORMATION MUST BE TREATED THE SAME AS IF THE BIDDER HAD TAKEN A DELIBERATE EXCEPTION TO A MATERIAL ADVERTISED PROVISION, THEREBY RENDERING ITS BID CLEARLY NONRESPONSIVE. ANY PURPORTED AWARD MADE UNDER SUCH CIRCUMSTANCES WOULD NOT BE IN FULL COMPLIANCE WITH ALL OF THE TERMS AND CONDITIONS STATED IN THE INVITATION. THE UNDERLYING RATIONALE FOR THIS RULE IS THAT A BIDDER'S FAILURE TO SUPPLY THE REQUESTED INFORMATION, IN THE ABSENCE OF A CURING PROVISION WHICH IS NOT PRESENT IN THIS CASE, WOULD INDICATE AN INTENT BY THAT BIDDER NOT TO BE BOUND TO THOSE TERMS AND CONDITIONS. IN SUCH CIRCUMSTANCES, THOSE TERMS CANNOT BE MADE A PART OF THE RESULTING CONTRACT.

IN OUR DECISION OF MARCH 13 WE CONCLUDED IN PART THAT THE PLACE OF PRINCIPAL MANUFACTURE STATED BY COLLINS AT SECTION 511 OF ITS BID COULD NOT PROPERLY BE USED TO SATISFY THE MANDATORY REQUIREMENTS OF SECTION 422 BECAUSE ASPR 19-104.1 (C) (1) STATES THAT THE POINT OF INSPECTION AND ACCEPTANCE "SHALL NOT CONTROL THE TRANSPORTATION TERM." THIS POINT WAS MADE IN RESPONSE TO TWO INCONSISTENT STATEMENTS CONTAINED IN COLLINS' BRIEF OF FEBRUARY 28, 1969, WHICH WE NOTED DURING OUR INITIAL CONSIDERATION OF THE CASE. ON PAGE 7 OF ITS FEBRUARY 28 BRIEF COLLINS AFFIRMATIVELY STATED THAT A CONTRACTING OFFICER SHOULD LOOK TO AN INSPECTION CLAUSE STATING THE PLACE OF PRINCIPAL MANUFACTURE TO DETERMINE THE LOCATION OF THE BIDDER'S PLANT. HOWEVER, SIMULTANEOUSLY COLLINS STATED THAT THE REGULATION IN QUESTION MERELY SAYS THAT THE F.O.B. POINT OF ORIGIN MAY BE DIFFERENT FROM THE POINT OF INSPECTION. WE AGREE WITH THIS LATTER CONTENTION. WE ARE AWARE OF NO RELATIONSHIP BETWEEN THE POINTS OF INSPECTION AND/OR ACCEPTANCE AND THE DELIVERY TERMS OF THE INVITATION. IN FACT ASPR 19-104.1 (C) (1) MAKES THIS ABUNDANTLY CLEAR.

MORE IMPORTANTLY, HOWEVER, IS THE FACT THAT THE FREE CHOICE INFORMATION STATED IN SECTION 511 AS TO THE PLACE OF PRINCIPAL MANUFACTURE IS, BY PRIOR DECISION OF OUR OFFICE CITED IN THE MARCH 13 DECISION, SUBJECT TO CHANGE AT THE BIDDER'S OPTION AFTER THE OPENING OF BIDS. THIS IS TRUE EVEN THOUGH BIDDERS WERE SPECIFICALLY ADVISED THAT THE INFORMATION REQUESTED IN SECTION 511 WAS FOR BID EVALUATION PURPOSES AND THAT BIDS MAY BE REJECTED FOR FAILURE TO INCLUDE SUCH INFORMATION. OUR OFFICE HAS HELD ON NUMEROUS OCCASIONS THAT IF, DESPITE MANDATORY LANGUAGE USED IN A SOLICITATION, THE REQUESTED DATA OR INFORMATION IS TO BE USED TO DETERMINE RESPONSIBILITY, OR SOME OTHER FACTOR NOT RELATED TO RESPONSIVENESS, BIDS WHICH FAIL TO INCLUDE THAT DATA OR INFORMATION MAY PROPERLY BE CONSIDERED FOR AWARD. 41 COMP. GEN. 755.

IN B-155429, NOVEMBER 23, 1964, DISCUSSED IN THE MARCH 13 DECISION, WE AGREED WITH THE SAME NAVY PROCURING ACTIVITY AS IS INVOLVED IN THE PRESENT CASE THAT INFORMATION AS TO THE PLACE OF INSPECTION AND ACCEPTANCE DOES NOT RELATE TO THE RESPONSIVENESS OF A PARTICULAR BID AND, AS SUCH, MAY BE SUPPLIED AFTER THE OPENING OF BIDS. FOR THESE REASONS, THE STATEMENT IN COLLINS' BID AT SECTION 511 THAT ITS CONTEMPLATED PLACE OF PRINCIPAL MANUFACTURE WAS CEDAR RAPIDS, IOWA, DOES NOT POSSESS THE REQUISITE DEGREE OF CERTAINTY OR PERMANENCY INHERENT IN THE FIRM BID RULE TO SATISFY THE REQUIREMENT FOR SIMILAR INFORMATION IN SECTION 422. THAT INFORMATION CANNOT BE USED TO SUPPLY MISSING DATA REQUIRED BY SECTION 422 (A) (1) FOR TO DO SO WOULD PERMIT A SECOND OPPORTUNITY TO BID RESPONSIVELY AFTER BIDS HAD BEEN REVEALED. COLLINS ALSO CONTENDS IN SUPPORT OF ITS REQUEST FOR RECONSIDERATION THAT OUR REFUSAL TO RECOGNIZE THAT THE EFFECT OF ASPR 19- 212 AND 2-201 (B) (XXXII) IS TO RENDER ANY BID FAILING TO STATE ON F.O.B. ORIGIN SHIPPING POINT FULLY RESPONSIVE, IF THE BIDDER IDENTIFIES ITS PLANT AT WHICH THE CONTRACT WILL BE PERFORMED, IS UNSUPPORTABLE AND IS IN CLEAR DEROGATION OF THE MANIFEST INTENT OF THE PROCURING AGENCY. COLLINS STATES SPECIFICALLY THAT "EVEN THOUGH ASPR CLAUSE 2-201 (B) (XXXII) WAS NOT INCLUDED IN THE INVITATION FOR BIDS, IT TOGETHER WITH ASPR 19-212 DECLARED THE CONTRACTING OFFICER'S DUTY WITH RESPECT TO THE DETERMINATION OF THE COLLINS SHIPPING POINT TO THE EXTENT THERE WAS ANY DOUBT ABOUT THAT FROM THE FACE OF THE COLLINS BID." ASPR 19-212 STATES THAT THE CLAUSE PRESCRIBED BY ASPR 2-201 (B) (XXXII) SHALL BE INCLUDED IN SOLICITATIONS IN PROPER CIRCUMSTANCES "TO ASSURE APPLICATION OF APPROPRIATE FREIGHT COSTS IN EVALUATING BIDS." SUBPARAGRAPH "B" OF 2-201 (B) (XXXII) IS A PROVISION ADVISING PROSPECTIVE BIDDERS IN PART THAT IF THEY FAIL TO SPECIFY A SHIPPING POINT "THE GOVERNMENT WILL EVALUATE THE BID (OR PROPOSAL) ON THE BASIS OF DELIVERY FROM THE PLANT AT WHICH THE CONTRACT WILL BE PERFORMED." COLLINS CONCLUDES IN THIS RESPECT THAT ALTHOUGH IT FAILED TO STATE A SHIPPING POINT IN SECTION 422 (A) (1), BUT SPECIFIED IN SECTION 511 THAT THE PLACE OF PRINCIPAL MANUFACTURE IS CEDAR RAPIDS, IOWA, THE CONTRACTING OFFICER WAS OBLIGATED BY VIRTUE OF THE REGULATIONS TO ACCEPT COLLINS' BID BASED UPON EVALUATION OF TRANSPORTATION COSTS FROM CEDAR RAPIDS.

AS STATED, ASPR 2-201 (B) (XXXII) IS A MANDATORY BIDDING TERM FOR INCLUSION IN SOLICITATIONS OF THIS NATURE (SEE ASPR 19-212); HOWEVER, FOR THE REASONS STATED IN THE MARCH 13 DECISION, IF THAT BIDDING TERM IS INADVERTENTLY OR INTENTIONALLY OMITTED FROM THE SOLICITATION, IT MAY NOT SUBSEQUENTLY BE INCORPORATED THEREIN BY LAW UNDER THE "CHRISTIAN DOCTRINE" SO AS TO MAKE A NONRESPONSIVE BID RESPONSIVE. SEE, IN THIS RESPECT, PAGES 5 AND 6 OF THE MARCH 13 DECISION. THAT REGULATION, LIKE OTHER BIDDING TERMS AND CONDITIONS INCLUDED IN THE SOLICITATION, IS TO BE CONSIDERED BY BIDDERS IN PREPARING THEIR BIDS AND BY THE GOVERNMENT IN EVALUATION IF INCLUDED IN THE SOLICITATION AND LIKE THE OTHER TERMS AND CONDITIONS WOULD THEREBY BE INCORPORATED INTO THE RESULTING CONTRACT. AS SUCH, SUBPARAGRAPH "B" THEREOF IS NOT SIMPLY, AS COLLINS CONTENDS, AN INSTRUCTION TO THE CONTRACTING OFFICER TO EVALUATE BIDS ON A BASIS OTHER THAN AS SPECIFIED IN THE INVITATION OR AS CONTEMPLATED BY COMPETING BIDDERS DURING PREPARATION OF THEIR BIDS. IN OTHER WORDS, WE AGREE THAT THE IMPORT OF THE CITED REGULATIONS WOULD BE TO RENDER A BID, LIKE COLLINS IN THIS INSTANCE, FULLY RESPONSIVE TO THE DELIVERY TERMS OF THE INVITATION, BUT BY THE CLEAR LANGUAGE OF THOSE REGULATIONS AND THE APPLICABLE CASE LAW CITED IN OUR DECISION OF MARCH 13, THE METHOD OF EVALUATION OF BIDS PRESENTED THEREIN IS PROPER FOR APPLICATION ONLY IN SITUATIONS WHERE ASPR 2-201 (B) (XXXII) B IS ACTUALLY INCLUDED OR INCORPORATED BY REFERENCE INTO THE INVITATION.

IN A LETTER OF MARCH 17, 1969, THE ATTORNEY FOR ADMIRAL POINTS OUT THAT OUR DECISION NOT TO CANCEL THE ENTIRE AWARD WAS BASED ON THE FACT THAT THE GOVERNMENT MIGHT AT SOME LATER DATE BECOME LIABLE FOR THE COSTS DESCRIBED ON PAGES 12 AND 13 OF THE MARCH 13 DECISION IF THE COLLINS' CONTRACT IS TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT. IN ORDER TO OVERCOME THESE REASONS FOR NOT CANCELING THE ENTIRE CONTRACT, ADMIRAL HAS OFFERED, IF AWARDED THE PROCUREMENT, TO HOLD THE GOVERNMENT HARMLESS FROM LIABILITY RESULTING FROM CANCELLATION. IN ITS LETTER OF APRIL 18, 1969, TO THE CONTRACTING OFFICER, ASO, ADMIRALAMPLIFIED ITS OFFER IN THE MARCH 17 LETTER AS FOLLOWS: 1. THE CONTRACTING OFFICER MAY CHANGE THE DELIVERY DATES AS SPECIFIED IN THE BID FOR CONTRACT QUANTITIES TO CONFORM TO DELIVERY AT THE EXACT TIMES SPECIFIED IN CONTRACT N00383-69-C-2038 WITH COLLINS RADIO COMPANY. 2. THE CONTRACTING OFFICER MAY AMEND THE CONTRACT TO PROVIDE FOR THE ADMIRAL'S ASSUMPTION OF THE POSSIBLE TERMINATION COSTS FROM CANCELLATION OF CONTRACT N00383-69-C-2038 WITH COLLINS RADIO COMPANY AS HEREINAFTER PROVIDED.

ADMIRAL CORPORATION AGREES THAT, IF THIS CONTRACT HAS BEEN AWARDED TO IT FOLLOWING THE CANCELLATION OF CONTRACT N00383-69-C-2038 AWARDED BY ASO TO COLLINS RADIO COMPANY, IT IS WILLING TO ASSUME THE COST OF ALL OR ANY PART, AT COLLINS ELECTION, PURCHASE ORDERS PLACED BY COLLINS RADIO COMPANY WITH VENDORS FOR MECHANICAL AND ELECTRICAL PURCHASED PARTS TOTALING $2,371,835.00. ADMIRAL FURTHER AGREES TO PURCHASE FROM COLLINS, AT COLLINS ELECTION, ALL OR ANY PART OF THE FABRICATED PARTS TOTALING $555,747.00 BEING MADE BY COLLINS AT ITS CEDAR RAPIDS PLANT AT FAIR AND REASONABLE PRICES. PRE-PRODUCTION ENGINEERING COSTS NOT TO EXCEED $13,699.00 INCURRED UP TO THE DATE OF TERMINATION WILL BE PAID BY ADMIRAL TO COLLINS WITHIN 10 DAYS AFTER NOTIFICATION BY COLLINS TO ADMIRAL OF THE VENDOR ORDERS AND IN HOUSE FABRICATED PARTS IT WISHES TO TRANSFER TO ADMIRAL CORPORATION. THE AMOUNT PAYABLE BY ADMIRAL WILL NOT EXCEED $2,941,281.00 LISTED AS TOTAL COSTS COMMITTED AS OF 4 APRIL 1969 IN COLLINS' LETTER TO THE COMPTROLLER GENERAL OF MARCH 26, 1969, EXCEPT THAT ADMIRAL WILL INDEMNIFY THE GOVERNMENT FOR AN ADDITIONAL $35,000.00 TO COVER ANY CLAIMS BY COLLINS FOR PURCHASING, G&A, AND PROFIT ON VENDOR MATERIALS RECEIVED BY IT PRIOR TO NOTICE OF CANCELLATION.

IN THE EVENT THAT COLLINS TRANSFERS OR SELLS ALL OR ANY PART OF THE MATERIAL SPECIFIED ABOVE TO ADMIRAL, THE GOVERNMENT SHALL NOT BE RESPONSIBLE FOR ANY FAILURES OR DEFICIENCIES IN THIS MATERIAL, AND IT SHALL BE ADMIRAL'S SOLE RESPONSIBILITY TO DELIVERY ACCEPTABLE EQUIPMENTS UNDER THE CONTRACT. ANY DISPUTE COVERING THIS SPECIAL PROVISIONS SHALL BE DECIDED BY THE CONTRACTING OFFICER IN ACCORDANCE WITH THE PROVISION OF THE CONTRACT ENTITLED "DISPUTES."

ON MARCH 19, 1969, A COPY OF ADMIRAL'S LETTER OF MARCH 17 WAS FORWARDED TO YOUR DEPARTMENT FOR COMMENT. IN THE CONTRACTING OFFICER'S "THIRD SUPPLEMENT TO STATEMENT OF FACTS" DATED APRIL 1, 1969, ATTACHED TO AND MADE A PART OF THE ASSISTANT SECRETARY'S APRIL 4, 1969, REPORT TO US, THE CONTRACTING OFFICER CONCLUDED THAT ADMIRAL COULD NOT, BECAUSE OF PRACTICAL CONSIDERATIONS, POSSIBLY MEET COLLINS' CONTRACT DELIVERY SCHEDULE, USING COLLINS' INVENTORY. IN THIS REGARD, THE CONTRACTING OFFICER CONCLUDES THAT: * * * IT HAS BEEN REPORTED BY THE DCAS (DEFENSE CONTRACT ADMINISTRATION SERVICE) THAT ADMIRAL HAS ADVISED THAT IT HAS ON HAND A QUANTITY OF ARC-51 COMPONENTS SUFFICIENT TO FABRICATE 200RADIOS AND THAT IT SHOULD, THEREFORE, HAVE NO DIFFICULTY IN ASSEMBLING 200 RADIOS IN TIME TO MEET THE JULY DELIVERY REQUIREMENTS. ADMIRAL HAS FURTHER ADVISED THAT IF AWARD WERE MADE TO IT PRIOR TO 11 APRIL, IT COULD EXERCISE OPTIONS ON EXISTING PURCHASE ORDERS WITH ITS VENDORS. IT HAS BEEN ASSERTED BY ADMIRAL THAT EVEN THE "LONG-LEADED-TIME" CASTINGS COULD BE PROCURED IN 60 DAYS (OR BY MID-JUNE), THAT IT COULD MACHINE THE CASTINGS WITHIN 30 DAYS AND THAT IT, THUS, SHOULD BE ABLE TO MEET THE BALANCE OF THE JULY DELIVERY REQUIREMENTS. THE DCAS HAS ADVISED THAT BASED UPON THE ABOVE REPRESENTATIONS IT CONSIDERS THAT DELIVERY COULD BE MADE BY ADMIRAL AS INDICATED. 6. THE PREDICTION MADE BY ADMIRAL THAT IT CAN MEET THE ENTIRE JULY DELIVERY REQUIREMENT (313 SETS) IS BASED UPON (1) PROCUREMENT OF MATERIAL IN THE SHORTEST POSSIBLE TIME, (2) THE MACHINING OF CASTINGS IN LESS THAN THE NORMAL TIME (30 TO 45 DAYS), (3) NO ALLOWANCE FOR NORMAL ASSEMBLY TIME AFTER RECEIPT AND MACHINING OF THE CASTINGS, (4) NO APPARENT ALLOWANCE OF TIME FOR RELIABILITY TESTING FOLLOWING ASSEMBLY, AND (5) MOST IMPORTANTLY, NO ALLOWANCE OF TIME FOR CORRECTION OF DEFECTS UNCOVERED IN TESTING OR FOR THE RETESTING OF SUCH CORRECTED ARTICLES, A COMMON REQUIREMENT IN THE FABRICATION OF COMPLEX GEAR SUCH AS ARC-51 RADIOS. IS, THEREFORE NOT REALISTIC TO EXPECT DELIVERIES OF THE JULY QUANTITIES IN EXCESS OF 200 OR THE DELIVERY OF THE COMPLETE QUANTITY REQUIRED IN AUGUST. THE RISK OF SLIPPAGE OF DELIVERY IN THESE EXTREMELY URGENTLY REQUIRED RADIOS--- MANY OF WHICH ARE ALREADY REQUIRED--- IS A RISK THAT THE GOVERNMENT SHOULD NOT BE REQUIRED TO ASSUME. FOR THESE REASONS, IT IS THE CONTRACTING OFFICER'S OPINION THAT ADMIRAL'S PREDICTION OF ITS ABILITY TO MEET SUCH DELIVERY REQUIREMENTS AND THE DCAS CONCURRENCE ARE BOTH OVERLY OPTIMISTIC AND THE CONTRACTING OFFICER CANNOT MAKE THE POSITIVE DETERMINATION OF RESPONSIBILITY REQUISITE TO AN AWARD.

BY LETTER OF APRIL 9, 1969, THE ATTORNEY FOR ADMIRAL RESPONDED TO THE STATEMENTS OF THE CONTRACTING OFFICER, QUOTED ABOVE, BY STATING THAT THOSE CONCLUSIONS MUST HAVE BEEN BASED ON AN ABSENCE OF FACTUAL INFORMATION, ERROR, OR AS A RESULT OF ARBITRARY ACTION. HE FURTHER STATED THAT ADMIRAL HAS SUFFICIENT TIME, IF AWARDED THE CONTRACT BY APRIL 11, 1969--- NOW EXTENDED TO APRIL 24--- TO INSURE DELIVERY OF THE JULY REQUIREMENT (313 SETS) WITHOUT UTILIZATION OF THE COMPONENTS FOR 200 OF THE RADIO SETS IT CURRENTLY HAS IN INVENTORY.

THE QUESTION THUS POSED BY ADMIRAL'S OFFER IS WHETHER, UNDER THE CIRCUMSTANCES, CANCELLATION OF THE COLLINS' CONTRACT AND AWARD OF THE ENTIRE PROCUREMENT TO ADMIRAL WOULD BE APPROPRIATE AND FEASIBLE.

ANY DETERMINATION AS TO ADMIRAL'S ABILITY TO MEET THE COLLINS' CONTRACT DELIVERY SCHEDULE IS NECESSARILY A QUESTION OF FACT. IT IS A RESPONSIBILITY OF OUR OFFICE TO INSURE THAT GOVERNMENT PROCUREMENTS ARE MADE IN ACCORDANCE WITH APPLICABLE LAW, AND THIS NECESSARILY INVOLVES REVIEW OF THE ADMINISTRATIVE DISCRETION TO THE EXTENT NECESSARY TO INSURE THAT SUCH DISCRETION HAS BEEN EXERCISED WITHIN PROPER LIMITS. IT IS OUR DUTY TO DETERMINE FROM ALL OF THE FACTS AND CIRCUMSTANCES SURROUNDING THE PRESENT CONTROVERSY WHETHER THE CONTRACTING OFFICER'S DETERMINATION THAT ADMIRAL IS NOT CAPABLE OF MEETING THE DELIVERY SCHEDULE IN THIS INSTANCE IS REASONABLY SUPPORTED BY THE RECORD. IN THIS REGARD, WE HAVE ADOPTED THE GENERAL RULE THAT WE WILL NOT SUBSTITUTE OUR JUDGEMENT FOR THAT OF THE CONTRACTING OFFICER, UNLESS IT IS SHOWN BY CONVINCING EVIDENCE THAT A DETERMINATION WAS ARBITRARY, OR NOT BASED ON SUBSTANTIAL EVIDENCE. COMP. GEN. 257, 258; 38 ID. 778.

ANY DECISION REGARDING THE CONTRACTING OFFICER'S DETERMINATION THAT ADMIRAL CANNOT MEET THE ESTABLISHED DELIVERY SCHEDULE MUST BE BASED UPON FULL CONSIDERATION OF THE DATA AND INFORMATION AVAILABLE TO AND RELIED ON BY HIM. IN THIS RESPECT, ON APRIL 10, 1969, SUBSEQUENT TO RECEIPT OF ADMIRAL'S LETTER OF APRIL 9 AND THE ASSISTANT SECRETARY'S LETTER OF APRIL 4, WE MET WITH THE ATTORNEY FOR ADMIRAL AND THE COUNSEL FOR NAVAL SUPPLY SYSTEMS COMMAND HEADQUARTERS TO DISCUSS THE IMPORT OF BOTH LETTERS. THAT MEETING, THE CONTENTION MADE BY ADMIRAL IN ITS APRIL 9 LETTER, THAT THE CONTRACTING OFFICER'S DECISION IS UNSUPPORTABLE, WAS DISCUSSED IN CONSIDERABLE DETAIL. BECAUSE WE FELT AT THE CONCLUSION OF THE MEETING THAT FURTHER INFORMATION RELATIVE TO THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION, CHICAGO (DCASR), RECOMMENDATION WAS NECESSARY A REPRESENTATIVE OF OUR OFFICE VISITED THE DCASR OFFICE ON APRIL 11, 1969, TO DEVELOP ALL PERTINENT FACTS RELATING TO ADMIRAL'S CAPACITY TO MEET THE COLLINS' DELIVERY SCHEDULE.

THE FACTS, AS DISCLOSED BY OUR VISIT, SHOWED THAT INITIALLY ASO NEVER ASKED FOR A RECOMMENDATION BY DCASR AS TO ADMIRAL'S ABILITY TO MEET COLLINS' DELIVERY SCHEDULE AND THAT NEITHER AN AFFIRMATIVE NOR A NEGATIVE RECOMMENDATION WAS GIVEN AT THAT TIME. ON MARCH 29, 1969, ASO BY TELETYPE ASKED DCASR TO REVIEW THE REQUIRED CONTRACT DELIVERY SCHEDULE AND DETERMINE WHETHER ADMIRAL COULD MEET IT IN WHOLE OR IN PART. SINCE ADMIRAL'S LETTER OF MARCH 17 STATED THAT IT COULD MEET THE DELIVERY SCHEDULE AND REQUESTED TOTAL OR PARTIAL CANCELLATION OF THE AWARD TO COLLINS, AND A COPY OF THAT LETTER WAS MADE AVAILABLE TO THE PROCURING ACTIVITY SHORTLY BEFORE MARCH 29, 1969, IT IS EVIDENT THAT ASO'S TELETYPE MESSAGE OF MARCH 29 TO DCASR WAS GENERATED BY RECEIPT OF ADMIRAL'S REQUEST FOR RECONSIDERATION AND CONSIDERATION OF THE STATEMENT MADE THEREIN.

BY TELETYPE MESSAGE, DATED APRIL 3, 1969, SUBSTANTIATING A TELEPHONE CALL ON APRIL 2 FROM DCASR TO ASO, DCASR ADVISED THAT ADMIRAL: 1. * * * CAN DELIVERY THE COMPLETE SCHEDULE IN ACCORDANCE WITH REQUIRED DATES USING CURRENT PRODUCTION PERSONNEL, FACILITIES AND TEST EQUIPMENT. BIDDER CURRENTLY HAS IN STOCK APPROXIMATELY 200 UNITS LONG LEAD ITEMS AND REQUIRES NOTICE OF AWARD, IF AWARD IS TO BE MADE, NOT LATER THAN 11 APRIL 1969 IN ORDER TO EXERCISE OPTIONS WITH SUPPLIERS.

* * * * * ** 4. DTA SUPPLIED BY CONTRACTOR REPRESENTATIVES CONSIDERED TO BE CONSERVATIVE AND REALISTIC.

OTHER RESULTS OF OUR INVESTIGATION SHOW ALSO THAT ADMIRAL'S HISTORY OF TIMELY DELIVERIES OF THE RADIO SETS INVOLVED HERE UNDER CONTRACTS PERFORMED DURING THE PAST FEW YEARS HAS BEEN GOOD.

IN ADDITION, OUR INVESTIGATION OF THE DCASR FILES EVIDENCED, WITH RESPECT TO THE ARGUMENT PRESENTED BY THE CONTRACTING OFFICER IN SUPPORT OF HIS NEGATIVE DETERMINATION, THAT THE FIVE POINTS SPECIFIED BY HIM WE WERE NOT SUPPORTED BY THE RECORDS AT DCASR. SPECIFICALLY, WE FOUND: 1. ADMIRAL'S VENDORS FOR THE LONG LEAD ITEMS HAVE GUARANTEED DELIVERY OF THOSE COMPONENTS CLEARLY IN SUFFICIENT TIME FOR ADMIRAL TO MEET THE JULY DELIVERY SCHEDULE OF 313 UNITS; THAT THERE NEVER HAS BEEN A PROBLEM WITH RESPECT TO THE DELIVERY OF OTHER COMPONENTS; AND THAT ADMIRAL HAS A CUSHION OF 200 COMPONENTS AND LONG LEAD TIME CASTINGS CURRENTLY IN-HOUSE THAT CAN BE UTILIZED IMMEDIATELY;

2. THE CASTING MACHINES VENDOR HAS GUARANTEED SHIPMENT OF 500 FINISHED CASTINGS TO ADMIRAL BY THE END OF THE FIRST MONTH AFTER DATE OF AWARD AND 600 PER MONTH THEREAFTER, BUT BECAUSE OF THE 200 MACHINED CASTINGS ALREADY AVAILABLE, ADMIRAL ONLY NEEDS 113 TO MEET THE END-OF JULY DELIVERY; USING ITS CURRENT WORK FORCE, ADMIRAL NOW MANUFACTURES 15 SETS A DAY, TOTALING 300 PER MONTH, BUT BECAUSE SUBASSEMBLY CAN BEGIN THE DAY AWARD IS MADE AND CAN BE INCORPORATED IMMEDIATELY INTO THE LONGER LEAD TIME ITEMS WHEN THEY BECOME AVAILABLE, ADMIRAL SHOULD PRODUCE BY JULY 27--- COUNTING THE 200 CUSHION--- 345 SETS, LEAVING 232 SETS TO ALLOW FOR SLIPPAGE AND REJECTION;

4. 14 DAYS IS THE NORMAL RELIABILITY TEST TIME AND RUNS CONCURRENTLY WITH PRODUCTION SO THAT NO IDENTIFIABLE SEPARATE TIME PERIOD IS REQUIRED FOR THIS PHASE OF MANUFACTURE;

5. CONTRARY TO THE CONTRACTING OFFICER'S STATEMENT THAT "MOST IMPORTANTLY" ADMIRAL HAS ALLOTTED NO TIME FOR THE "COMMON REQUIREMENT" OF CORRECTION OF DEFECTS DISCOVERED DURING TESTING, WE FOUND THAT NO FIXED PERIOD OF CORRECTIVE TIME IS NECESSARY BECAUSE OPERATIONAL FAILURE OVER THE LAST 6 MONTHS HAS AVERAGED ONLY 3.2 PERCENT AND 1.1 PERCENT FOR DEFECTS DISCOVERED IN FINAL ELECTRICAL TESTING.

SUBSEQUENT TO OUR VISIT TO DCASR, THE ASSISTANT SECRETARY OF THE NAVY SENT A TEAM OF PRODUCTION EXPERTS TO DCASR AND THE ADMIRAL PLANT FOR THE PURPOSE OF "PRODUCTION REVIEW OF ADMIRAL CORPORATION, GOVERNMENT ELECTRONICS DIVISION, PRODUCTION CAPABILITIES CONCERNING CURRENT ARC-51 MILITARY REQUIREMENTS." THE RESULTS OF ITS REVIEW ARE CONTAINED IN A REPORT ADDRESSED TO THE DIRECTOR OF PROCUREMENT, OFFICE OF ASTSECNAV (INSLOG), DATED APRIL 15, 1969. THE REPORT CONCLUDES IN PERTINENT PART AS FOLLOWS:

2. AS A RESULT OF DISCUSSIONS WITH DCASR PERSONNEL ADMINISTERING CONTRACTS WITH ADMIRAL, ADMIRAL MANAGEMENT PERSONNEL, REVIEW OF PERTINENT DOCUMENTS, AND AN ON-SITE REVIEW OF ADMIRAL'S FACILITIES AND ACTUAL OPERATIONS, IT IS THE CONSENSUS OF THE TEAMS THAT ADMIRAL CAN PRODUCE THE REQUIRED QUANTITIES OF ITEMS AS SCHEDULED IN COLLINS-RADIO COMPANY, CONTRACT NO. N00383-69-C-2083 IF AWARDED A CONTRACT BY 18 APRIL 1969. THE EVENT ADMIRAL ASSUMES ALL OR PART OF COLLINS-RADIO PURCHASED OR PRODUCED PARTS, ADMIRAL MUST RECOGNIZE AND ASSUME THE RISKS INVOLVED, AND, OF COURSE, BE HELD TO THE CONTRACT TO WHICH THEY ADMIRAL, AGREED.

WE ARE AWARE THAT A CONTRACTING OFFICER IS NOT BOUND TO ACCEPT THE FINDINGS OR CONCLUSIONS REACHED BY DCASR, BUT IS FREE TO CONSIDER OTHER SOURCES OF INFORMATION IN MAKING HIS DETERMINATION. HOWEVER, WE ARE OF THE OPINION THAT AN AFFIRMATIVE DETERMINATION OF CAPABILITY MADE BY TECHNICAL PERSONNEL OF THE DEPARTMENT OF DEFENSE WHO ARE INTIMATELY FAMILIAR WITH THE DAY-TO-DAY OPERATIONS AND ABILITIES OF THE COMPANY UNDER SCRUTINY--- AND CONFIRMED BY NAVY PRODUCTION PERSONNEL--- SHOULD BE UTILIZED BY THE CONTRACTING OFFICER TO THE MAXIMUM EXTENT PRACTICABLE.

THE ENTIRE MATTER HAS BEEN CAREFULLY CONSIDERED BY OUR OFFICE WITH DUE REGARD FOR THE WEIGHT WHICH GENERALLY SHOULD BE ACCORDED ADMINISTRATIVE DISCRETION IN DETERMINING A BIDDER'S CAPABILITIES TO PERFORM IN ACCORDANCE WITH THE STATED REQUIREMENTS OF THE GOVERNMENT. HOWEVER, THE PRESENT RECORD FAILS TO ESTABLISH AN ADEQUATE FACTUAL BASIS FOR THE CONTRACTING OFFICER'S DETERMINATION THAT ADMIRAL DOES NOT HAVE THE PRODUCTION CAPABILITY OF MEETING THE DELIVERY SCHEDULE ESTABLISHED IN THE COLLINS' CONTRACT.

RELATING ALL OF THE FOREGOING TO THE QUOTED INFORMATION ON PAGES 12 AND 13 OF OUR DECISION OF MARCH 13, IT NOW APPEARS THAT THE PRACTICAL EFFECT OF COMPLETE CANCELLATION OF THE COLLINS' CONTRACT SHOULD POSE NO REAL PROBLEM WITH RESPECT TO THE EMERGENCY NEED FOR THE RADIOS AND THE CONTINGENT LIABILITY OF THE GOVERNMENT FOR TERMINATION COSTS ARISING OUT OF THAT ACTION.

ACCORDINGLY, WE CONCLUDE THAT THE ENTIRE COLLINS' CONTRACT SHOULD BE IMMEDIATELY CANCELED AND A PROMPT AWARD OF THE PROCUREMENT SHOULD BE MADE TO THE ADMIRAL CORPORATION UNDER THE STIPULATIONS AND CONDITIONS CONTAINED IN THE ADMIRAL LETTER OF APRIL 19, 1969.