B-142681, MAY 23, 1960

B-142681, MAY 23, 1960

TO MINNEAPOLIS-MOLINE COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF APRIL 23 AND MAY 9, 1960, PROTESTING THE CANCELLATION OF LOTS I AND II OF INVITATION FOR BIDS NO. 600-1112-60 ISSUED BY THE NAVY PURCHASING OFFICE, WASHINGTON, D.C.

THE INVITATION COVERED A REQUEST FROM THE U.S. AIR FORCE FOR FORK LIFT TRUCKS OF 4,000 POUNDS, 6,000 POUNDS, AND 15,000 POUNDS CAPACITY, LOTS I, II, AND III, RESPECTIVELY. THE SPECIFICATIONS REQUIRED THE LIFT TRUCKS TO BE EQUIPPED WITH A "MILITARY QUALIFIED STANDARDIZATION ENGINE," AND FOR THE WINTERIZATION OF A SMALL NUMBER OF EACH CAPACITY TRUCK.

THE BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE OPENED ON MARCH 9, 1960. THE BID OF MINNEAPOLIS-MOLINE COMPANY WAS LOW AS TO LOTS I AND II. IT DID NOT BID ON LOT III. THE HYSTER COMPANY WAS THE LOW BIDDER ON LOT III.

MINNEAPOLIS-MOLINE HAD PREVIOUSLY RECEIVED AWARDS FOR FORK LIFT TRUCKS SIMILAR TO THOSE HERE INVOLVED UNDER INVITATIONS FOR BIDS NOS. 600-63-60 AND 600-67-60. HOWEVER, THE AWARDS MADE TO MINNEAPOLIS MOLINE WERE PROTESTED BY ANOTHER BIDDER AND THE QUESTION AS TO THE VALIDITY OF THE AWARDS WAS BEING CONSIDERED BY THIS OFFICE. IN VIEW THEREOF, THE CONTRACTING OFFICER WAS DIRECTED BY THE BUREAU OF SUPPLIES AND ACCOUNTS TO WITHHOLD FURTHER AWARDS TO MINNEAPOLIS-MOLINE PENDING A DECISION IN CONNECTION WITH THE PROTEST. SINCE THE HYSTER COMPANY WAS THE LOW BIDDER AND WAS NOT INVOLVED IN THIS PROTEST, AN AWARD WAS MADE TO THAT FIRM FOR LOT III.

SUBSEQUENTLY, THE CONTRACTING OFFICER RECEIVED A REQUEST FROM THE AIR FORCE TO CHANGE THE SPECIFICATIONS FROM A MILITARY TYPE ENGINE TO A COMMERCIAL ENGINE AND TO ELIMINATE ENTIRELY THE REQUIREMENT FOR WINTERIZATION. IT IS REPORTED THAT THE DECISION WITH RESPECT TO THE TYPE OF ENGINE REPRESENTS A MATERIAL AND SUBSTANTIAL CHANGE IN THE SPECIFICATION. IN VIEW THEREOF, AND SINCE NO AWARD HAD BEEN MADE IN LOTS I AND II THE CONTRACTING OFFICER DETERMINED THAT AN AWARD WOULD BE IMPROPER AND, THEREFORE, THE UNAWARDED PORTION OF THE INVITATION WAS CANCELED BY WRITTEN NOTICE TO ALL BIDDERS. A NEW INVITATION FOR BIDS WAS PREPARED COVERING THE REVISED REQUIREMENTS.

YOU PROTEST THE ACTION TAKEN BY THE CONTRACTING OFFICER IN CANCELING LOTS I AND II OF THE INVITATION ON THE BASIS THAT YOU ARE PLACED IN AN UNFAIR COMPETITIVE POSITION IN THAT YOUR COMPETITORS ARE AWARE OF THE PRICES YOU QUOTED. YOU URGE THAT THE ONLY FAIR COURSE OF ACTION WOULD BE TO MAKE AN AWARD TO YOU ON THE BASIS OF YOUR BID FOR MILITARY ENGINES AND THEREAFTER MODIFY THE CONTRACT TO COVER A COMMERCIAL ENGINE WITH AN APPROPRIATE ADJUSTMENT IN THE CONTRACT PRICE. IT IS FURTHER STATED THAT AN AWARD OF LOTS I AND II WAS WITHHELD THROUGH NO FAULT OF YOUR OWN AND THAT YOU SHOULD BE AFFORDED THE SAME ADVANTAGE THAT WAS GIVEN TO THE SUCCESSFUL BIDDER ON LOT III.

TITLE 10 OF THE U.S.C. PROVIDES AT SECTION 2305 (A) THAT: "THE SPECIFICATIONS AND INVITATIONS FOR BIDS SHALL PERMIT SUCH FREE AND FULL COMPETITION AS IS CONSISTENT WITH THE PROCUREMENT OF THE PROPERTY AND SERVICES NEEDED BY THE AGENCY CONCERNED.' IT CONSISTENTLY HAS BEEN HELD THAT THE CONTRACT AWARDED MUST BE THE CONTRACT OFFERED TO ALL BIDDERS. THE INSTANT CASE, BIDDERS WERE REQUIRED TO QUOTE ON A MILITARY ENGINE AND IF AT THE TIME OF THE AWARD IT IS KNOWN THAT THE CONTRACT IS TO BE IMMEDIATELY AMENDED TO SUBSTITUTE A COMMERCIAL ENGINE, A SUBSTANTIVE CHANGE, IT WOULD NOT BE THE SAME CONTRACT OFFERED TO THE OTHER BIDDERS.

IT HAS ALWAYS BEEN RECOGNIZED THAT IT IS PROPER AND REQUISITE TO REJECT ALL BIDS AND READVERTISE WHEN IT IS DETERMINED, PRIOR TO AWARD, THAT THE NEEDS OF THE GOVERNMENT CAN BE MET AS WELL OR BETTER BY A LESS EXPENSIVE ARTICLE WITH DIFFERENT SPECIFICATIONS. SEE 10 COMP. GEN. 160; 11 ID. 264; 18 ID. 117; 19 ID. 662; 38 ID. 235. SEE ALSO, SECTION 2-404.1, ARMED SERVICES PROCUREMENT REGULATION.

THE GOVERNMENT IS NOT IN THE SAME POSITION WITH RESPECT TO LOT III SINCE THE AWARD WAS ALREADY MADE AT THE TIME THE ERROR IN THE SPECIFICATION WITH RESPECT TO THE TYPE OF ENGINE WAS DISCOVERED. SINCE AN AWARD HAD BEEN MADE, THE GOVERNMENT WOULD OF NECESSITY BE REQUIRED TO NEGOTIATE WITH THE CONTRACTOR WITH RESPECT TO ANY CHANGE IN THE SPECIFICATION. HOWEVER, SINCE AN AWARD UNDER LOTS I AND II HAD NOT BEEN MADE, REGARDLESS OF THE REASON, IT WOULD NOT BE PROPER TO MAKE AN AWARD UNDER SPECIFICATIONS WHICH DO NOT REFLECT THE ACTUAL NEEDS OF THE GOVERNMENT. THE INTEREST OF THE GOVERNMENT MUST BE CONSIDERED PARAMOUNT.

IT IS UNFORTUNATE THAT THE ORIGINAL INVITATION DID NOT REFLECT THE NEEDS OF THE GOVERNMENT. HOWEVER, IN THE CIRCUMSTANCES, WE FIND NO LEGAL BASIS TO OBJECT TO THE ACTION ADMINISTRATIVELY TAKEN.