B-160503, JAN. 31, 1967

B-160503, JAN. 31, 1967

TO MITRON RESEARCH AND DEVELOPMENT CORPORATION:

REFERENCE IS MADE TO YOUR LETTERS OF DECEMBER 6 AND 20, 1966, PROTESTING THE CANCELLATION OF DEPARTMENT OF THE NAVY INVITATION FORBIDS NO. N00228 67B4521 DATED AUGUST 29, 1966.

THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, BY THE INVITATION, AS AMENDED, REQUESTED BIDS FOR FURNISHING TWO AIRCRAFT ENGINE SHOCK MITIGATED STOWAGE UNITS IN ACCORDANCE WITH DRAWINGS OF THE MITRON RESEARCH AND DEVELOPMENT CORPORATION. TWO RESPONSIVE BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 19, 1966. THE BID IN THE AMOUNT OF $8,483.20 PER UNIT WAS SUBMITTED BY AIRCRAFT ENGINEERING CORPORATION. THE OTHER BID WAS SUBMITTED BY YOUR FIRM WHICH QUOTED A PRICE OF $11,406 FOR EACH UNIT.

IT IS REPORTED THAT UPON OPENING OF BIDS SEVERAL PROBLEMS BECAME APPARENT, NAMELY, (1) ONE FIRM, PETERS MANUFACTURING COMPANY, HAD SUBMITTED A "NO BID" BECAUSE, IT STATED, YOUR COMPANY REFUSED TO QUOTE A PRICE ON THE VISCOUS DAMPER, A COMPONENT OF THE REQUIRED ASSEMBLY, AND IT WAS UNABLE TO CONSIDER AN ALTERNATE ITEM SINCE THE SPECIFICATIONS SPECIFIED YOUR DAMPER AND DID NOT PROVIDE PERFORMANCE CHARACTERISTICS; (2) THE PURCHASING ACTIVITY HAD NO PRIOR CONTRACTING EXPERIENCE WITH THE LOW BIDDER WHOSE BID DID NOT REFLECT ANY EXCEPTION TO THE SPECIFICATIONS; AND (3) THE SUGGESTION BY YOUR FIRM THAT ANY AWARD MADE TO IT BE BASED UPON REVISED DRAWINGS SUBMITTED WITH YOUR BID. IT IS ALSO REPORTED THAT DURING A PREAWARD SURVEY OF THE LOW BIDDER, IT WAS DISCOVERED THAT THE FIRM DID NOT HAVE A WRITTEN CONFIRMATION OF AN ALLEGED QUOTATION FROM YOUR COMPANY FOR PRICE AND DELIVERY OF THE VISCOUS DAMPER AND THAT ATTEMPTS TO OBTAIN CONFIRMATION OF THE QUOTATION WERE TO NO AVAIL.

IN VIEW OF THE ALLEGATION OF THE PETERS MANUFACTURING COMPANY THAT THE INFORMATION LISTED ON THE DRAWINGS COVERING THE VISCOUS DAMPER WAS INADEQUATE FOR THE PURPOSE OF MANUFACTURING THAT ITEM, THE CONTRACTING OFFICE REQUESTED THE ASSISTANCE OF THE REQUISITIONING ACTIVITY IN DETERMINING THE ADEQUACY OF DRAWING 603004 REVISION "B" WITH THE APPLICABILITY OF THE REVISED DRAWINGS SUBMITTED BY YOUR FIRM. THE REQUISITIONING ACTIVITY REFERRED THE MATTER TO THE NAVAL SHIP SYSTEMS COMMAND. PURSUANT TO THE REQUEST OF THE CONTRACTING ACTIVITY, YOUR FIRM EXTENDED THE PERIOD FOR ACCEPTANCE OF YOUR COMPANY'S BID; HOWEVER, THE LOW BIDDER REFUSED TO EXTEND THE PERIOD FOR ACCEPTANCE OF ITS BID.

BY LETTER DATED NOVEMBER 18, 1966, YOU PROTESTED AGAINST THE MAKING OF ANY AWARD OTHER THAN TO YOUR FIRM. ON DECEMBER 5, 1966, THE REQUISITIONING ACTIVITY ADVISED THE NAVAL SUPPLY CENTER THAT IT WAS CANCELING THE REQUIREMENT FOR THE EQUIPMENT IN QUESTION PENDING A DECISION BY THE NAVAL SHIP SYSTEMS COMMAND'S DECISION ON THE PLANS. BY LETTER DATED DECEMBER 13, 1966, THE CONTRACTING OFFICE ADVISED YOUR FIRM THAT THE INVITATION WAS BEING CANCELED BECAUSE IT HAD BEEN DETERMINED THAT THE SPECIFICATIONS WERE NOT ADEQUATE FOR THE PURPOSE INTENDED, IN THAT THEY APPARENTLY WERE NEITHER CURRENT NOR DETAILED ENOUGH TO ENABLE MANUFACTURE OR SELECTION OF ALTERNATE BRANDS ON A CRITICAL COMPONENT OF THE EQUIPMENT. YOUR FIRM ALSO WAS ADVISED THAT IT WAS THE INTENTION OF THE CONTRACTING OFFICE TO READVERTISE THE REQUIREMENT FOR THE EQUIPMENT WITH MORE DETAILED SPECIFICATIONS.

IN A LETTER DATED DECEMBER 20, 1966, YOU ADVISED THE CONTRACTING OFFICE AS FOLLOWS:

"WE HAVE YOUR LETTER OF DECEMBER 13, 1966. OUR POSITION HAS NOT CHANGED AND WE STILL PROTEST THE CANCELLATION AND RESOLICITATION OF THIS PROCUREMENT.

"1. IT IS OUR CONTENTION THAT SPECIFICATIONS AND DRAWINGS SENT WITH THE I.F.B. WERE ADEQUATE TO MANUFACTURE THE VISCOUS DAMPER AND THE COMPLETE EQUIPMENT.

"2. THE VISCOUS DAMPER IS NOT PROPRIETARY TO OUR COMPANY AND WE ARE NOT THE SOLE SOURCE FOR THE ITEM.

"3. WE DO NOT FEEL THAT WE WERE OBLIGATED TO GIVE INFORMATION WHICH WOULD AID OUR COMPETITORS.

"4. A FIRM KNOWLEDGEABLE IN THIS TYPE OF EQUIPMENT COULD MANUFACTURE, OR WOULD KNOW SOURCES OF SUPPLY, FOR THE VISCOUS DAMPER.

"WITH REGARD TO THE LOW BIDDER, IT APPEARS THAT HIS FIRST ATTEMPT TO OBTAIN PRICES OR MANUFACTURING INFORMATION ON THE VISCOUS DAMPER WAS AFTER THE BIDS WERE OPENED.'

THE RECORD INDICATES THAT THE EQUIPMENT CALLED FOR BY THIS INVITATION WAS ORIGINALLY DESIGNED BY YOUR FIRM UNDER A BUREAU OF SHIPS (NAVAL SHIP SYSTEMS COMMAND) CONTRACT. IT IS REPORTED THAT THE PRIMARY DIFFICULTY WITH THE SPECIFICATIONS CITED IN THIS INVITATION WAS THAT DRAWING NO. 603004 REVISION "B" CALLED FOR A COMPONENT, A VISCOUS DAMPER, IDENTIFIED AS MANUFACTURED BY ,MITRON," BUT DID NOT LIST THE PERFORMANCE CHARACTERISTICS OF SUCH ITEM. THE CONTRACTING OFFICE STATES THAT THE LACK OF DESCRIPTION OF SUCH PERFORMANCE CHARACTERISTICS PREVENTED COMPETING FIRMS FROM OBTAINING THIS COMPONENT FROM ALTERNATE SUPPLIERS.

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 INTERESTS OF THE GOVERNMENT TO DO SO. 37 COMP. GEN. 760, 761. FURTHERMORE, UNDER THE PROVISIONS OF ASPR 2-404.1 (B) (I) AN INVITATION FOR BIDS MAY BE CANCELED AFTER OPENING WHERE THE SPECIFICATIONS CITED IN THE INVITATION ARE INADEQUATE OR AMBIGUOUS AND THE CONTRACTING OFFICER HAS MADE A DETERMINATION IN WRITING TO THIS EFFECT. THIS PROCEDURE WAS FOLLOWED IN THIS CASE.

WE ARE AWARE THAT THE REJECTION OF BIDS AFTER THEY ARE OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITORS' 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 ID. 86. THIS CONNECTION, SEE B-154589, SEPTEMBER 10, 1964, A CASE WHEREIN THE INVITATION FOR BIDS CALLED FOR A PARTICULAR MANUFACTURER'S PRODUCT OR EQUAL AND REFERENCED A DRAWING WHICH SKETCHED THE ARTICLE, BUT DID NOT PROVIDE TECHNICAL DATA ON THE ARTICLE. UPON A PROTEST THAT TECHNICAL DATA ON THE ARTICLE WAS NOT AVAILABLE FROM THE PROCUREMENT OFFICE OR THE MANUFACTURER, THE CONTRACTING OFFICE CANCELED THE INVITATION. UPHOLDING THE ADMINISTRATIVE ACTION, OUR OFFICE STATED:

"THE PRINCIPAL PURPOSE OF COMPETITIVE BIDDING STATUTES IS TO OBTAIN FOR THE GOVERNMENT THE BENEFITS OF FULL AND FREE COMPETITION. 40 COMP. GEN. 348. THIS REQUIRES THAT THE PROCUREMENT BE ADVERTISED ON AS BROAD A BASIS AS POSSIBLE CONSISTENT WITH THE LEGITIMATE NEEDS OF THE PROCURING ACTIVITY. IN THE CASE UNDER DISCUSSION THE RECORD IS ABUNDANTLY CLEAR THAT NECESSARY TECHNICAL INFORMATION ON ONE OF THE MAJOR COMPONENTS WAS NOT AVAILABLE TO ANY BIDDER OTHER THAN GAR-LET (THE MANUFACTURER) AND THEREFORE, THE "OR EQUAL" PROVISION WAS MEANINGLESS, AND PROCUREMENT ON THAT BASIS MIGHT WELL BE REGARDED AS SO RESTRICTIVE OF COMPETITION AS TO FAIL TO COMPLY WITH THE BIDDING STATUTES. 41 COMP. GEN. 76. IN VIEW THEREOF WE FIND NO BASIS TO QUESTION THE ADMINISTRATIVE ACTION. SEE 41 COMP. GEN. 242; 38 COMP. GEN. 636.'

FROM THE FOREGOING, IT APPEARS THAT THE REJECTION OF ALL BIDS WAS WARRANTED IN THIS CASE SINCE THE SPECIFICATIONS WERE INADEQUATE FOR THE MANUFACTURE OF A CRITICAL COMPONENT OF THE EQUIPMENT BY OTHER SUPPLIERS. THEREFORE, WE FIND NO LEGAL OBJECTION TO THE ACTION TAKEN BY THE ADMINISTRATIVE AGENCY.