B-169813, SEP 15, 1970, 50 COMP GEN 177

B-169813: Sep 15, 1970

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THE RESOLICITATION OF THE PROCUREMENT WHEN THE LOW BID WAS DETERMINED TO BE NONRESPONSIVE AND THE ONLY OTHER BID RECEIVED EXCESSIVELY PRICED. WAS IN ACCORD WITH PARAGRAPH 2-404.2(E) ASPR. WAS PROPER. EVEN THOUGH INITIALLY THE REASONS FOR CANCELLATION OF THE INVITATION SHOULD HAVE BEEN ADVANCED. AS PARAGRAPH 2- 404.1(B)(VIII) IS NOT SELF-EXECUTING. THE CLAUSE SHOULD NOT HAVE BEEN USED AS IT ONLY CREATED UNCERTAINTY AND WAS SUPERFLUOUS BECAUSE MERE RECITATION OF THE CLAUSE DID NOT ESTABLISH A SUFFICIENT REASON FOR BID REJECTION AND RESOLICITATION OF THE PROCUREMENT. 1970: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 17. WE ARE ADVISED THAT PROPOSALS UNDER THE RFP WERE RECEIVED ON JULY 17.

B-169813, SEP 15, 1970, 50 COMP GEN 177

BIDS - DISCARDING ALL BIDS - "ONE RESPONSIVE BID" CLAUSE THE CANCELLATION, PURSUANT TO PARAGRAPH 2-404.1(B)(VIII) OF THE ARMED SERVICES PROCUREMENT REGULATION AS BEING IN THE BEST INTEREST OF THE GOVERNMENT, OF AN INVITATION FOR BIDS THAT CONTAINED A "ONE RESPONSIVE BID" CLAUSE TO ASSURE ADEQUATE PRICE COMPETITION, AND THE RESOLICITATION OF THE PROCUREMENT WHEN THE LOW BID WAS DETERMINED TO BE NONRESPONSIVE AND THE ONLY OTHER BID RECEIVED EXCESSIVELY PRICED, WAS IN ACCORD WITH PARAGRAPH 2-404.2(E) ASPR, WHICH AUTHORIZES THE REJECTION OF UNREASONABLY PRICED BIDS, AND WAS PROPER, EVEN THOUGH INITIALLY THE REASONS FOR CANCELLATION OF THE INVITATION SHOULD HAVE BEEN ADVANCED, AS PARAGRAPH 2- 404.1(B)(VIII) IS NOT SELF-EXECUTING, AND THE CLAUSE SHOULD NOT HAVE BEEN USED AS IT ONLY CREATED UNCERTAINTY AND WAS SUPERFLUOUS BECAUSE MERE RECITATION OF THE CLAUSE DID NOT ESTABLISH A SUFFICIENT REASON FOR BID REJECTION AND RESOLICITATION OF THE PROCUREMENT.

TO THE AMERICAN AIR FILTER COMPANY, INC., SEPTEMBER 15, 1970:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM OF JULY 17, 1970, AND SUBSEQUENT CORRESPONDENCE, PROTESTING THE CANCELLATION OF INVITATION FOR BIDS (IFB) NO. DACA87-70-B-0005 AND THE ISSUANCE OF REQUEST FOR PROPOSALS (RFP) NO. DACA87-71-R-0004 FOR THE SAME ITEMS BY THE UNITED STATES ARMY ENGINEER DIVISION, HUNTSVILLE, ALABAMA. YOU PROTEST ANY AWARD UNDER THE RFP, AND REQUEST THAT IT BE CANCELED AND THE IFB BE REINSTATED FOR THE PURPOSES OF AN AWARD TO YOU AS LOWEST RESPONSIVE BIDDER. WE ARE ADVISED THAT PROPOSALS UNDER THE RFP WERE RECEIVED ON JULY 17, 1970, AND THAT AWARD WAS MADE THEREUNDER ON AUGUST 7, 1970, TO NORTH AMERICAN ROCKWELL.

THE INVITATION WAS ISSUED ON JANUARY 30, 1970, AND REQUESTED BIDS ON 22 COMBUSTION ENGINE AIR FILTERS. THE DETAILS CONCERNING THIS ADVERTISED PROCUREMENT WERE SET FORTH IN OUR DECISION 50 COMP. GEN. 8, JULY 6, 1970, COPY OF WHICH WAS FURNISHED TO YOU. YOU HAD PROTESTED AWARD TO THE LOW BIDDER UNDER THE INVITATION ON THE BASIS THAT ITS BID WAS NONRESPONSIVE. OUR DECISION OF JULY 6, 1970, CONCLUDED THAT THE BID SUBMITTED BY FILTER PRODUCTS DIVISION, AIR-MAZE PLANT, NORTH AMERICAN ROCKWELL, WAS NONRESPONSIVE AND SHOULD NOT BE CONSIDERED FOR AN AWARD. AS A RESULT OF THIS DECISION, ONLY YOUR BID REMAINED FOR CONSIDERATION UNDER THE INVITATION.

ON JULY 6, 1970, ALL BIDS UNDER THE INVITATION WERE REJECTED AND RESOLICITATION ACTION WAS INITIATED BY RFP -0004 WHICH INCORPORATED THE TERMS AND CONDITIONS OF IFB -0005 AND THE ORIGINAL DELIVERY SCHEDULE. CANCELLATION WAS STATED AS BEING EFFECTED IN ACCORDANCE WITH PARAGRAPH 2- 404.1(B)(VIII) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) AND AS BEING IN THE BEST INTEREST OF THE GOVERNMENT.

YOUR TELEGRAM OF JULY 7, 1970, TO THE CONTRACTING OFFICER ASKED THE FOLLOWING QUESTIONS:

1. WHY WAS AMERICAN AIR FILTER'S BID REJECTED? ASPR 2-404.3 REQUIRES NOTICE OF REJECTION.

2. WHAT IS REASON FOR CANCELLATION OF SUBJECT IFB?

3. REQUEST YOU CITE ASPR PARAGRAPH AUTHORIZING INCLUSION OF THE "ONE RESPONSIVE BID" CLAUSE ON PAGE 6 OF THE SUBJECT IFB.

BY TELEGRAM OF JULY 13, 1970, THE CONTRACTING OFFICE ADVISED YOU AS FOLLOWS:

1. BIDS WERE REJECTED AND IFB WAS CANCELLED IN ACCORDANCE WITH ASPR 2- 404.1(B)(VIII) AND THE "ONE RESPONSIVE BID" CLAUSE OF THE IFB.

2. THIS CLAUSE WAS INCLUDED IN THE IFB TO ASSURE THE GOVERNMENT AN AWARD UNDER COMPETITIVE CIRCUMSTANCES.

BY TELEGRAM OF JULY 14, 1970, TO THE CONTRACTING OFFICE, YOU REQUESTED CLARIFICATION, AND BY TELEGRAM OF JULY 15, 1970, THE CONTRACTING OFFICE ADVANCED FURTHER JUSTIFICATION (NOTED INFRA) FOR THE ACTION TAKEN.

THE PRIMARY ISSUE RAISED BY YOUR QUESTIONING OF THE ACTION TAKEN IS WHETHER THE CANCELLATION OF THE INVITATION WAS PROPER UNDER THE CIRCUMSTANCES. THE ADMINISTRATIVE BASES FOR CANCELLATION OF INVITATION - 0005 WERE STATED IN THE CONTRACTING OFFICER'S REPORT AS FOLLOWS:

A. IN ACCORDANCE WITH THE "ONE RESPONSIVE BID" CLAUSE, THE SINGLE RESPONSIVE BID WAS REJECTED BECAUSE THERE WAS NO ASSURANCE OF ADEQUATE PRICE COMPETITION. THE INVITATION CONTAINED A PROVISION FOR "ONE RESPONSIVE BID" AS FOLLOWS: "IN THE EVENT ONLY ONE RESPONSIVE BID IS RECEIVED FOR A RESPONSIVE BIDDER, THE GOVERNMENT RESERVES THE RIGHT TO CANCEL THIS SOLICITATION AND RESOLICIT BY WHATEVER PROCEDURES ARE THEN APPROPRIATE." THIS PROVISION WAS DEVISED BY HUNTSVILLE DIVISION FOR USE IN THE SAFEGUARD PROGRAM TO PROVIDE FOR AN AWARD UNDER COMPETITIVE CIRCUMSTANCES. THIS PROVISION IS NOT IN CONFLICT WITH ANY PROVISION OF ASPR AND NO OBJECTION WAS MADE TO THE CLAUSE BY ANY BIDDER DURING THE BIDDING PERIOD. WITH THE DECISION OF THE COMPTROLLER GENERAL CONCLUDING THAT THE NAR BID WAS NONRESPONSIVE, ONE RESPONSIVE BID REMAINED.

B. AS OF THE DATE OF CANCELLATION OF THE SOLICITATION IT WAS APPARENT THAT THE PERFORMANCE PERIOD OF THE PROPOSED SUPPLY CONTRACT WOULD NEED TO BE COMPRESSED AT A POTENTIAL INCREASE IN COST TO MEET THE CONTRACTUAL DELIVERY SCHEDULE IN THE EXISTING CONSTRUCTION CONTRACT FOR WHICH THE SUPPLIES WERE BEING PROVIDED. THE INVITATION DID NOT PROVIDE FOR CONSIDERATION OF ALL FACTORS OF COST TO THE GOVERNMENT DUE TO THE DELAY IN AWARD OF 39 DAYS PAST 28 MAY 1970, WHICH WAS THE DATE THE GOVERNMENT ASSUMED IT WOULD MAKE AN AWARD. THE GOVERNMENT COULD NOT, BASED ON INFORMATION ON 6 JULY 1970, EXTEND DELIVERY DATES TO ACCOMMODATE THIS 39- DAY SLIPPAGE, AS THE ORIGINAL DELIVERY DATES WERE BASED ON CONSTRUCTION NEED DATES. FURTHER, THE GOVERNMENT WAS CONTRACTUALLY COMMITTED TO THE CONSTRUCTION CONTRACTOR TO FURNISH THE FILTERS ON A SCHEDULE DERIVED FROM THESE DELIVERY DATES AND THE CONSTRUCTION CONTRACTOR HAD REITERATED THE NEED TO HOLD THIS DELIVERY SCHEDULE. THUS, THE EFFECT OF THIS DELAY AS OF 6 JULY 1970, WAS TO REDUCE THE PERFORMANCE TIME AVAILABLE TO THE SUPPLIER BY 39 DAYS FROM THE PERFORMANCE TIME PROVIDED UNDER THE INVITATION UPON WHICH BIDS WERE BASED. THE COST TO THE GOVERNMENT OF THIS REDUCED PERFORMANCE TIME WAS NOT PROVIDED FOR IN THE INVITATION.

C. IT COULD NOT BE DETERMINED THAT THE AAF BID PRICE WAS FAIR AND REASONABLE. THE BID PRICE OF AFF, $198,572, FOR 22 UNITS COULD NOT BE DETERMINED AS FAIR AND REASONABLE BY THE CONTRACTING OFFICER. THE GOVERNMENT ESTIMATE FOR THE COMBUSTION AIR ENGINE FILTERS WAS $137,280 FOR THE 22 UNITS ON THE SOLICITATION. FURTHER, THE BID PRICE OF AAF WAS 27% HIGHER THAN THE BID PRICE OF NAR AND INCLUDED IN THE NAR BID WAS PAYMENT OF A ROYALTY TO AAF. IT WAS RECOGNIZED THAT THE COMPTROLLER GENERAL DECLARED THE BID OF NAR NON-RESPONSIVE; HOWEVER, USE OF THE BID PRICE AS A BASIS OF COMPARISON IS VALID SINCE THE GOVERNMENT HAD CONDUCTED A FAVORABLE PREAWARD SURVEY IN WHICH IT WAS FOUND THAT AN ACCEPTABLE PRODUCT CONFORMING TO THE SPECIFICATIONS HAD BEEN OFFERED.

WITH RESPECT TO THE "ONE RESPONSIVE BID" CLAUSE, CITED IN THE CONTRACTING OFFICER'S TELEGRAM OF JULY 13, 1970, WE ARE ADVISING THE SECRETARY OF THE ARMY BY LETTER OF TODAY THAT THE MERE RECITATION OF THE CLAUSE DOES NOT ESTABLISH A SUFFICIENT REASON FOR REJECTION OF THE BID AND RESOLICITATION OF THE REQUIREMENT. SEE ASPR 2-404.2(E). MOREOVER, WE CAN APPRECIATE YOUR UNCERTAINTY AS TO THE BASES FOR THE CANCELLATION WHEN FACED WITH THE FURTHER ADVICE IN THE TELEGRAM OF JULY 13 THAT CANCELLATION WAS IN ACCORDANCE WITH ASPR 2-404.1(B)(VIII), WHICH AUTHORIZES SUCH ACTION "FOR OTHER REASONS *** IN THE BEST INTEREST OF THE GOVERNMENT." WE AGREE THAT THIS SUBPARAGRAPH IS NOT SELF-EXECUTING; THE REASONS WHY CANCELLATION IS IN THE BEST INTEREST OF THE GOVERNMENT MUST BE STATED. IN THIS CONNECTION, THE CONTRACTING OFFICE'S TELEGRAM OF JULY 15, 1970, IN ADDITION TO REEMPHASIZING ITS RELIANCE ON THE "ONE RESPONSIVE BID" CLAUSE, ADVANCED IN GENERAL TERMS THE TWO REASONS REQUIRING CANCELLATION, WHICH ARE TREATED MORE EXTENSIVELY IN PARAGRAPHS "B" AND "C" OF THE CONTRACTING OFFICER'S REPORT, QUOTED ABOVE.

WHILE WE BELIEVE THAT THESE REASONS SHOULD HAVE BEEN ADVANCED INITIALLY, WE CANNOT AGREE WITH YOUR APPARENT CONTENTION THAT THE CITATION OF ASPR 2- 404.1(B)(VIII) DEMONSTRATES THAT THESE OTHER REASONS DID NOT EXIST AND CANNOT SUPPORT THE ACTION TAKEN. (WE NOTE THAT IT WAS THE CONTRACTING OFFICER'S BELIEF THAT CITATION OF ASPR 2 404.1(B)(VIII) WAS APPROPRIATE SINCE IT WAS CONSIDERED TO ENCOMPASS ALL REASONS FOR CANCELLATION.)

OF THE REASONS ADVANCED IN THE CONTRACTING OFFICER'S REPORT, WE FOCUS ONLY ON HIS ABOVE-QUOTED PARAGRAPH "C" AND THE DETERMINATION THAT YOUR PRICE WAS UNREASONABLE. SECTION 2305(C) OF TITLE 10, U.S.C. PROVIDES THAT ALL BIDS MAY BE REJECTED, IF THE HEAD OF THE AGENCY DETERMINES THAT REJECTION IS IN THE PUBLIC INTEREST, AND SUCH RIGHT IS ALSO RESERVED BY PARAGRAPH 10 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS. ASPR 2- 404.2(E), IMPLEMENTING THE AUTHORITY TO REJECT BIDS, PROVIDES THAT ANY BID MAY BE REJECTED IF THE CONTRACTING OFFICER DETERMINES IN WRITING THAT IT IS UNREASONABLE AS TO PRICE. OUR OFFICE AND THE COURTS HAVE HELD THAT THE REJECTION OF BIDS IS A MATTER OF ADMINISTRATIVE DISCRETION AND THAT A REQUEST FOR BIDS DOES NOT IMPORT AN OBLIGATION TO ACCEPT ANY OF THE BIDS RECEIVED, INCLUDING THE LOWEST CONFORMING ONE. SEE B-168562, JANUARY 14, 1970; B-126211, JANUARY 9, 1956; 36 COMP. GEN. 364, 365 (1956). FROM OUR REVIEW OF THE RECORD, WE MUST CONCLUDE THAT THE CONTRACTING OFFICER'S DETERMINATION THAT YOUR PRICE WAS UNREASONABLE WAS NOT AN ABUSE OF HIS BROAD DISCRETION IN THIS AREA. SEE 47 COMP. GEN. 103 (1967); 39 ID. 396 (1959). ACCORDINGLY, WE CAN INTERPOSE NO LEGAL OBJECTION TO THE CANCELLATION AND RESOLICITATION OF THE REQUIREMENT.

FOR THE FOREGOING REASONS, YOUR PROTEST IS DENIED.

Jan 14, 2021

Jan 13, 2021

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