B-154604, AUG. 28, 1964

B-154604, AUG. 28, 1964

TO SWAGER TOWER CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 29, AND LETTER DATED JULY 3, 1964, PROTESTING AGAINST THE ACTION OF THE FEDERAL AVIATION AGENCY, WASHINGTON, D.C., IN CANCELING INVITATION NO. WA5M-4-786-B1 DATED APRIL 29, 1964.

THE FEDERAL AVIATION AGENCY, INSTALLATION AND MATERIEL SERVICE, PROCUREMENT SERVICE BRANCH, WASHINGTON, D.C., BY THE REFERRED-TO INVITATION REQUESTED BIDS FOR FURNISHING UHF DISC-CONE ANTENNAS IN QUANTITIES OF 300 TO 1,200 UNITS. AMENDMENTS NOS. 1 AND 2 DATED APRIL 29, 1964, WHICH WERE ISSUED ON MAY 14 AND 21, 1964, RESPECTIVELY, CHANGED THE BID OPENING DATE AND REVISED CERTAIN PARTS OF THE SPECIFICATIONS. EIGHT BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. R. A. MILLER INDUSTRIES, INC., WAS THE LOW BIDDER ON THE ANTENNAS BUT ITS BID WAS REJECTED AS BEING NONRESPONSIVE TO THE INVITATION BECAUSE IT OFFERED AN INITIAL DELIVERY OF 5 UNITS IN LIEU OF THE 50 UNITS REQUIRED BY THE INVITATION. THE NEXT LOWEST BID WAS SUBMITTED BY YOUR FIRM.

IN ITS REPORT TO OUR OFFICE THE FEDERAL AVIATION AGENCY STATES AS FOLLOWS:

"AFTER BID OPENING, THE AGENCY REALIZED THAT THE ORIGINAL ANTENNA SPECIFICATION (FAA-E-2090, DATED MARCH 17, 1964) WAS DEFECTIVE. IN ONE RESPECT THE SPECIFICATION WAS OVERLY-RESTRICTIVE AND CALLED FOR EXCESSIVE REQUIREMENTS. IT WAS ALSO DEFICIENT SINCE IT DID NOT CONTAIN ALL OF THE NECESSARY GOVERNMENT REQUIREMENTS FOR THIS TYPE OF EQUIPMENT. SPECIFICALLY, THE SPECIFICATION WAS DEFECTIVE IN THESE RESPECTS:

"/A) THE TEST FOR POWER HANDLING CAPABILITY IN PAR. 4.4 REQUIRED THE ANTENNA TO WITHSTAND APPLICATION OF A 100 PERCENT MODULATED RF CARRIER OF 1600 WATTS PEAK POWER. THIS TEST IS UNNECESSARY FOR THE OPERATIONAL USE REQUIRED. IN ORDER TO PASS THIS TEST THE ANTENNA WOULD HAVE TO BE BUILT WITH A VERY HEAVY STRUCTURAL CAPABILITY, WHICH WOULD INCREASE ITS COST TO THE GOVERNMENT SIGNIFICANTLY. ACTUAL NEEDS OF THE AGENCY ARE FOR A TEST OF POWER HANDLING CAPABILITY OF NOT MORE THAN 400 WATTS, MODULATED 100 PERCENT.

"/B) THE MOUNTING REQUIREMENTS FOR THE ANTENNA IN PAR. 3.8 OF THE SPECIFICATION WERE INADEQUATE. PAR. 3.8 MERELY REQUIRED THAT THE ANTENNA BE SUITABLE FOR MOUNTING ON A FLAT VERTICAL SURFACE, E.G., THE SIDE OF A BUILDING. IN FACT, THE ANTENNA WILL PROBABLY BE MOUNTED ON A METAL PIPE EXTENDING FROM THE TOPE OF A BUILDING. CONSEQUENTLY, IT IS NECESSARY TO MORE CLEARLY DEFINE THE TYPE OF MOUNTING BRACKET AND OTHER REQUIREMENTS FOR MOUNTING THE ANTENNA. BECAUSE OF THESE DEFECTS IN THE SPECIFICATION, THE AGENCY DECIDED TO CANCEL THE IFB IN ACCORDANCE WITH THE AUTHORITY OF FPR 2-1.404-1 (B) (1) AND (4). THE SPECIFICATION IS CURRENTLY BEING REWRITTEN TO REFLECT THE ACTUAL NEEDS OF THE GOVERNMENT MORE ADEQUATELY.'

IT HAS CONSISTENTLY BEEN HELD THAT AN INVITATION FOR BIDS DOES NOT IMPORT ANY OBLIGATION ON THE GOVERNMENT TO ACCEPT ONE OF THE OFFERS RECEIVED, AND THAT ALL BIDS MAY BE REJECTED WHERE IT IS DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO DO SO. 37 COMP. GEN. 760, 761. SEE ALSO THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 395, 41 U.S.C. 253 (B), AS AMENDED; PARAGRAPH 8 (B) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS. FURTHERMORE, FEDERAL PROCUREMENT REGULATION 1- 2.404-1 (B) (4) SPECIFICALLY PROVIDES THAT THE INVITATION MAY BE CANCELED AFTER OPENING OF BIDS WHEN THE "BIDS RECEIVED INDICATE THAT THE NEEDS OF THE GOVERNMENT CAN BE SATISFIED BY A LESS EXPENSIVE ARTICLE DIFFERING FROM THAT ON WHICH THE BIDS WERE INVITED.' THEREFORE, IT SEEMS CLEAR THAT WHEN AN ADMINISTRATIVE AGENCY BEFORE AWARD DETERMINES THAT AN INVITATION FOR BIDS IT HAS ISSUED CONTAINS A SPECIFICATION WHICH EITHER OVERSTATES OR MAY REASONABLY BE CONSTRUED TO OVERSTATE ITS MINIMUM NEEDS, THE BEST INTEREST OF THE GOVERNMENT ORDINARILY REQUIRES THE CANCELLATION OF THAT INVITATION FOR BIDS. SEE B-137424, DATED DECEMBER 30, 1954; B-119603, DATED MAY 7, 1954.

WE ARE AWARD THAT THE REJECTION OF BIDS AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITOR'S PRICES IS A SERIOUS MATTER AND SHOULD NOT BE DONE EXCEPT FOR COGENT REASONS. NEVERTHELESS, WE HAVE RECOGNIZED THAT SINCE CONTRACTING OFFICERS ARE AGENTS OF, AND ARE REQUIRED TO WORK IN THE BEST INTERESTS OF THE GOVERNMENT, THEIR ACTIONS IN REJECTING BIDS AND READVERTISING MAY NOT BE CONSIDERED IMPROPER WHEN BASED UPON SUBSTANTIAL REASONS LEADING TO A BONA FIDE BELIEF THAT THE INTERESTS OF THE GOVERNMENT WILL BE BEST SERVED THEREBY. CF. 38 COMP. GEN. 235 AND 39 COMP. GEN. 86.

FROM THE FOREGOING, IT APPEARS THAT THE REJECTION OF ALL BIDS WAS WARRANTED IN THIS CASE, SINCE THE SPECIFICATIONS OVERSTATED THE AGENCY'S MINIMUM ACTUAL NEEDS. THEREFORE, WE FIND NO LEGAL OBJECTION TO THE ACTION TAKEN BY THE ADMINISTRATIVE AGENCY.