B-159865, OCT. 6, 1966

B-159865, OCT. 6, 1966

TO ARNOLT CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 8, 1966, PROTESTING AGAINST THE CANCELLATION OF INVITATIONS FOR BIDS NOS. 174 131-66B, ISSUED ON FEBRUARY 21, 1966, AND 174-190-66B, ISSUED ON JUNE 10, 1966. BOTH OF THE INVITATIONS WERE ISSUED BY THE NAVAL PROPELLANT PLANT, INDIAN HEAD, MARYLAND.

IFB NO. 174-131-66B, A 100 PERCENT SET-ASIDE FOR SMALL BUSINESS CONCERNS, WAS ISSUED FOR THE PROCUREMENT OF THE FOLLOWING:

"CAN BREECH ASSEMBLY, TUBE, LAUNCHER, WIRE, LOCK, RING, ATTACHMENT, PISTON BAR, PISTON VALVE, GRAIN SPRING, MOTOR TUBE, BOOSTER TUBE WELDMENT, NOZZLE ASS-Y., CABLE RETAINER, NOZZLE PLUG RETAINER, KEY ATTACHMENT RING, SPRING, AND MISCELLANEOUS ITEMS.'

IFB NO. 174-190-66B, WAS ISSUED FOR THE PROCUREMENT OF:

"TUBE, LAUNCHER; MOTOR TUBE; BOOSTER TUBE WELDMENT; NOZZLE ASSEMBLY"

THE CONTRACTING OFFICER HAS FORWARDED THE FOLLOWING INFORMATION REGARDING THE PROCUREMENT HISTORY OF RAPEC I (ROCKET ASSIST PERSONNEL EJECTION CATAPULT) METAL PARTS:

"IN THE PAST, ALL PROCUREMENTS OF RAPEC I METAL PARTS HAVE BEEN FROM A SOLE-SOURCE QUALIFIED VENDOR. AT PRESENT, THE SOLE QUALIFIED VENDOR IS APPROXIMATELY 6 MONTHS DELINQUENT AND HAS AN AVERAGE REJECTION RATE OF 50 PERCENT ON ALL MAJOR COMPONENTS. IN AN EFFORT TO ESTABLISH A QUALIFIED VENDOR, THE FOLLOWING ACTION WAS INITIATED:

"/1) INVITATION FOR BID 174-131-66B (ENCLOSURE (1) ( WAS ISSUED BY THIS OFFICE ON 21 FEBRUARY 1966 AND WAS A 100 PERCENT SET-ASIDE FOR SMALL BUSINESS CONCERNS. THE INVITATION WAS FOR 29 INDIVIDUAL ITEMS USED AS COMPONENTS OF THE RAPEC I (ROCKET ASSIST PERSONNEL EJECTION CATAPULT) AT AN ESTIMATED PRICE OF $325.00 PER UNIT. (ONE EACH OF THE 29 ITEMS REQUIRED BY THE INVITATION CONSTITUTES ONE COMPLETE INERT UNIT). THE OPENING DATE WAS ORIGINALLY SET FOR 6 APRIL 1966 AND WAS SUBSEQUENTLY AMENDED TO OPEN ON 13 APRIL 1966.

"/2) THE INVITATION WAS MAILED TO THIRTY-NINE (39) COMPANIES, THE PUBLIC SERVICE BUREAU AND WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY. FIVE (5) RESPONSES WERE RECEIVED AS SHOWN IN ENCLOSURE (2).

"/3) FOUR (4) BIDS WERE CONSIDERED AS BEING RESPONSIVE AND THE BID PRICE FOR THE LOT (TOTAL UNIT COST OF ITEMS 1 THRU 29) RANGED FROM $849.75 TO $992.04 PER UNIT.

"/4) SINCE THE NAVAL PROPELLANT PLANT HAD PROCURED THE IDENTICAL ITEMS FOR A TOTAL UNIT COST OF $325.00, THE LOW BID OF $849.75 WAS CONSIDERED BY THE CONTRACTING OFFICER AS BEING UNREASONABLE AS TO PRICE * * *.

"/5) INVITATION FOR BID 174-190-66B (ENCLOSURE (3) (, WAS ISSUED ON 10 JUNE 1966. DUE TO THE RESPONSE UNDER IFB 174-131-66B A SMALL BUSINESS SET -ASIDE WAS NOT CONSIDERED. THE INVITATION WAS FOR FOUR (4) ITEMS WHICH WERE CONSIDERED AS LONG LEAD TIME ITEMS AND MAJOR COMPONENTS OF THE RAPEC I. THE OPENING DATE WAS ORIGINALLY SET FOR 30 JUNE 1966 AND WAS SUBSEQUENTLY AMENDED TO OPEN ON 11 JULY 1966.

"/6) THE INVITATION WAS MAILED TO TWENTY (20) COMPANIES, THE PUBLIC SERVICE BUREAU AND WAS SYNOPSIZED IN THE COMMERCE BUSINESS DAILY. THREE (3) RESPONSES WERE RECEIVED AS SHOWN IN ENCLOSURE (4).

"/7) AFTER THE OPENING, IT WAS DETERMINED THAT THE ITEMS WERE NO LONGER REQUIRED, DUE TO A CHANGE IN THE PROCUREMENT PLAN. THE CONTRACTING OFFICER WAS ADVISED SUBSEQUENT TO THE OPENING OF THE BID AND PRIOR TO AWARD THAT THE SUPPLY OF METAL PARTS FOR RAPEC I PRODUCTION WOULD BE GENERATED THROUGH A REWORK AND REMANUFACTURING PROGRAM AND THEREFORE THE NEW METAL PARTS CONTEMPLATED BY IFB 174-190 66B WOULD NOT BE REQUIRED. ACCORDINGLY, THE INVITATION FOR BID WAS CANCELLED ON 6 AUGUST 1966. MEMORANDUM FROM THE PRODUCTION DEPARTMENT OF THIS INSTALLATION (ENCLOSURE 5) ( CONFIRMS THE ABOVE INFORMATION.'

YOUR LETTER OF AUGUST 8, 1966, REQUESTS THAT OUR OFFICE REVIEW THE LEGALITY OF THE CANCELLATION OF THE ABOVE INVITATIONS. YOUR LETTER ALSO REQUESTS BID PREPARATION COSTS OF $5,130, IF IT IS FOUND THAT THERE WAS NO BASIS FOR THE CANCELLATION OF THE ABOVE INVITATIONS.

OF COURSE, WE ARE FULLY AWARE THAT THE REJECTION OF BIDS AFTER THEY ARE OPENED AND EACH BIDDER OR SUBSEQUENT PROSPECTIVE BIDDER HAS LEARNED HIS COMPETITOR'S PRICES IS A SERIOUS MATTER AND SUCH ACTION SHOULD NOT BE TAKEN EXCEPT FOR COGENT REASONS.

IN B-147154, NOVEMBER 6, 1961, WE STATED AS FOLLOWS WITH RESPECT TO THE CANCELLATION OF AN INVITATION PURSUANT TO THE CONTRACTING OFFICER'S DETERMINATION THAT ALL BIDS WERE UNREASONABLE AS TO PRICE:

"* * * THE AUTHORITY TO REJECT BIDS IS NOT ORDINARILY SUBJECT TO REVIEW BY THIS OFFICE, AND WE HAVE SPECIFICALLY HELD THAT WHEN IT IS ADMINISTRATIVELY DETERMINED THAT THE LOWEST ACCEPTABLE BID IS IN EXCESS OF THE AMOUNT FOR WHICH THE GOVERNMENT SHOULD BE ABLE TO PROCURE THE PARTICULAR SUPPLIES, A REJECTION OF ALL BIDS AND A SOLICITATION OF NEW BIDS IS A PROPER EXERCISE OF ADMINISTRATIVE DISCRETION. 36 COMP. GEN. 364. SINCE THE FACTS, AS OUTLINED ABOVE, APPEAR TO SUBSTANTIALLY SUPPORT THE CONTRACTING OFFICER'S DETERMINATION THAT YOUR BID PRICE WAS UNREASONABLE, WE CANNOT CONCLUDE THAT THE ACTION TAKEN IN REJECTING THE BIDS WAS UNJUSTIFIED. SEE ALSO 39 COMP. GEN. 86, 88. * * *"

IN VIEW OF THE RECORD PRESENTED WE HAVE NO BASIS FOR QUESTIONING THE CONTRACTING OFFICER'S DETERMINATION THAT THE PRICES QUOTED UNDER IFB 174- 131-66B WERE UNREASONABLE. IN THESE CIRCUMSTANCES THERE IS NO LEGAL BASIS FOR QUESTIONING THE DETERMINATION TO CANCEL THIS INVITATION.

WITH RESPECT TO IFB NO. 174-190-66B, THIS INVITATION WAS CANCELLED PURSUANT TO ADVICE FROM THE PURCHASING DEPARTMENT THAT A REMANUFACTURING PROGRAM FOR THE RAPEC I UNITS HAD BEEN APPROVED AND THAT NEW SETS OF RAPEC I METAL PARTS WOULD NOT BE REQUIRED. IT IS OBVIOUS, OF COURSE, THAT CONTRACTING OFFICIALS NOT ONLY HAVE THE RIGHT TO REJECT BIDS ON SUPPLIES WHICH ARE NO LONGER NEEDED, BUT WOULD, INDEED, BE DERELICT IN THEIR DUTY IF THEY DID NOT DO SO. THERE IS, THEREFORE, NO BASIS FOR OBJECTING TO THE CANCELLATION OF THIS INVITATION.

IN REGARD TO YOUR REQUEST CONCERNING BID PREPARATION COSTS, IT HAS REPEATEDLY BEEN HELD BOTH BY THIS OFFICE AND BY THE COURTS THAT THE ADVERTISING STATUTES WERE ENACTED FOR THE BENEFIT OF THE GOVERNMENT RATHER THAN THE BIDDER, AND UNLESS IT CAN BE SHOWN THAT HIS BID WAS NOT HONESTLY CONSIDERED, THE UNSUCCESSFUL BIDDER HAS NO ENFORCEABLE CLAIM FOR BID PREPARATION COSTS. SEE HEYER PRODUCTS COMPANY, INC. V. THE UNITED STATES, 147 CT.CL. 256 (1959). IN THE INSTANT CASE THERE IS NO INDICATION THAT THE CONTRACTING OFFICER DID NOT HONESTLY CONSIDER YOUR BID. IN THESE CIRCUMSTANCES YOUR REQUEST FOR REIMBURSEMENT OF BID PREPARATION COSTS MUST BE DENIED. SEE B-157941, FEBRUARY 4, 1966.