B-160621, FEB. 14, 1967

B-160621, FEB. 14, 1967

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 23, 1966, FILE SUP 1242A, FROM THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND, TRANSMITTING REPORTS AND OTHER DATA RELATIVE TO THE PROTESTS OF THE ROCKETDYNE DIVISION OF NORTH AMERICAN AVIATION, INC., AND AEROJET-GENERAL CORPORATION IN CONNECTION WITH INVITATION FOR BIDS NO. N00174-67-B-0031.

THE INVITATION WAS ISSUED ON AUGUST 26, 1966, TO BE OPENED ON SEPTEMBER 26, 1966, AND CALLED FOR BIDS ON FOUR ITEMS. FOUR BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. SUBSEQUENT TO BID OPENING AND PRIOR TO AWARD PROTESTS WERE RECEIVED FROM ROCKETDYNE AND AEROJET GENERAL. AFTER REVIEWING THE INVITATION IN THE LIGHT OF THE PROTESTS, THE CONTRACTING OFFICER HAS CONCLUDED THAT THE INVITATION WAS DEFICIENT IN CERTAIN AREAS AND MISLEADING IN OTHERS AND, THEREFORE, HE RECOMMENDS THAT THE INVITATION BE CANCELED AND THE PROCUREMENT READVERTISED.

IN ITS PROTEST LETTER OF OCTOBER 14, 1966, AS SUPPLEMENTED BY AN UNDATED MEMORANDUM, ROCKETDYNE POINTS OUT THAT THE BID EVALUATION FORMULA OF THE INVITATION NOT ONLY OMITTED ANY REFERENCE TO ITEM 4 BUT ALSO THE DRAWINGS AND SPECIFICATIONS RELATING TO THAT ITEM WERE NOT FURNISHED TO THE BIDDERS. CONSEQUENTLY, IT IS THE CONTENTION OF ROCKETDYNE THAT ITEM 4 PROPERLY MAY NOT BE CONSIDERED IN EVALUATING THE BIDS. ROCKETDYNE FURTHER ALLEGES THAT ITEM 2 IS AN OPTION QUANTITY AND THAT THE "AVAILABILITY OF FUNDS" CONDITION CONTAINED IN THE INVITATION REGARDING THAT ITEM WAS IN CONTRAVENTION OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-318 (B) AND 1-1504 (B). THEREFORE, IT IS CONTENDED THAT ITEM 2 ALSO MAY NOT PROPERLY BE CONSIDERED IN EVALUATING BIDS. IN CONCLUSION, ROCKETDYNE CONTENDS THAT IF EITHER ITEM 2 OR ITEM 4 IS ELIMINATED AS A FACTOR FOR EVALUATION OR IF BOTH ARE ELIMINATED FROM CONSIDERATION IN THE EVALUATION OF THE BIDS IT IS THE LOW BIDDER AND IS ENTITLED TO THE AWARD OF A CONTRACT FOR ITEMS 1 AND 3 UNDER THE PROVISIONS OF PARAGRAPH 8 (C) OF THE BIDDING INSTRUCTIONS WHICH PERMIT AWARD FOR LESS THAN THE ENTIRE QUANTITY.

AEROJET-GENERAL CORPORATION PROTESTS THE PROVISIONS OF PARAGRAPHS 6.18 AND 6.19 OF THE INVITATION ON THE GROUND THAT THE EVALUATION FACTOR OF $120,000 SPECIFIED IN PARAGRAPH 6.19 RESTRICTS COMPETITION TO PRIOR MANUFACTURERS. REGARDING THIS PROTEST THE CONTRACTING OFFICER STATES THAT HE DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF ASPR 1-1902 THE NECESSITY FOR REQUIRING FIRST ARTICLE TESTING AND THAT THE EVALUATION FACTOR WAS INCLUDED IN THE INVITATION AS AUTHORIZED BY ASPR 1-1903 (A) (III).

OUR OFFICE HAS TAKEN THE POSITION THAT A REQUIREMENT IS AN INVITATION THAT ONLY NEW SUPPLIERS HAVE TO FURNISH FIRST ARTICLES FOR TESTING, WHILE CREATING A DISPARITY AMONG BIDDERS, IS NOT IN VIOLATION OF THE COMPETITIVE BIDDING PRINCIPLES, IF THE ACCEPTABILITY OF THE PRODUCT CANNOT BE DETERMINED WITHOUT SUCH TESTING, AND PROVIDED, THAT THE TERMS OF THE COMPETITION ARE CLEARLY SET FORTH IN THE INVITATION. SEE 42 COMP. GEN. 717 AND CASES CITED THEREIN. ACCORDINGLY, THE PROTEST OF AEROJET-GENERAL IN THIS REGARD IS WITHOUT MERIT.

IN ADDITION, AEROJET-GENERAL CORPORATION IN LETTER DATED JANUARY 23, 1967, CONTENDS THAT FOR EVALUATION PURPOSES THE COST OF FIRST ARTICLE TESTING IN THE AMOUNT OF $120,000 MUST BE ADDED TO ALL BIDS EXCEPT THAT OF BERMIT POWDER COMPANY SINCE NONE OF THE OTHER BIDDERS IS NOW IN PRODUCTION OF THE ROCKET MOTORS CALLED FOR BY THE INVITATION. THEREFORE, AEROJET- GENERAL CORPORATION STATES THAT IT IS THE LOW BIDDER ON ANY OR ALL ITEMS OR ANY COMBINATION THEREOF AND, THUS, IT IS ENTITLED TO AWARD OF THE CONTRACT. IT IS ALSO CONTENDED THAT THE SPECIFICATIONS FOR ITEM 4 WERE ADEQUATE TO SUBMIT COMPETITIVE BIDS.

WITH RESPECT TO THE PROTESTS THE CONTRACTING OFFICER STATES THAT HE HAS DETERMINED THAT THE INVITATION WAS DEFECTIVE AND, THEREFORE, BIDDERS COULD NOT INTELLIGENTLY BID ON THE GOVERNMENT REQUIREMENTS. THE CONTRACTING OFFICER REPORTS THAT THE INVITATION WAS DEFICIENT IN THE FOLLOWING AREAS:

"A. DRAWING REFERENCES, INACCESSIBLE SPECIFICATIONS, AND INCORRECT REQUIREMENTS. SPECIFICATION WS 6028 * * * WAS SPECIFIED IN THE "LIST OF MATERIALS OR PARTS LIST" OF DRAWING X1569699 * * *, A DRAWING FURNISHED WITH ITEM 4 OF THE IFB, AS FOLLOWS:

CHART

NOMENCLATURE OR PART OR IDENTIFYING

DESCRIPTION NUMBER SPECIFICATION

PROPELLANT N-29 WS-6028

NOTE B ON THE ABOVE DRAWING SPECIFIED THE NAVAL PROPELLANT PLANT AS THE SOLE SOURCE OF SUPPLY FOR THE N-29 PROPELLANT. SINCE WS 6028 WAS NOT * * * ACCESSIBLE THE REQUIREMENTS SPECIFIED ON DRAWING X1569699 WERE INCORRECT AND SHOULD HAVE BEEN CORRECTED AS FOLLOWS:

CHART

NOMENCLATURE OR PART OF IDENTIFYING

DESCRIPTION NUMBER SPECIFICATION

PROPELLANT RDS 500 RAO 119-845

RAO 119-844

AS NOTED ABOVE IT WAS NOT THE INTENTION NOR A PART OF THE REQUIREMENT OF THE GOVERNMENT THAT THE NAVAL PROPELLANT PLANT BE THE SOLE SOURCE SUPPLIER FOR THE PROPELLANT SINCE IT IS IMPOSSIBLE FOR THE NAVAL PROPELLANT PLANT TO SUPPLY THE PROPELLANT.

"B. THE FOLLOWING ARE DRAWINGS AND SPECIFICATIONS FOR ITEM 4 THAT WERE NOT READILY ACCESSIBLE TO BIDDERS, BECAUSE THEY HAD NOT BEEN RELEASED FOR PROCUREMENT PURPOSES.

(1)SPECIFICATION X0D30765 * * * WAS CROSS REFERENCED ON DRAWING X1569699 * * * AND 1569700 * * *. THIS SPECIFICATION PRECISELY FORMULATED THE CHAPARRAL ROCKET MOTOR ASSEMBLY PROCEDURE.

(2) DRAWING X1569510 (NOT AVAILABLE) WAS CROSS REFERENCED IN SPECIFICATION WXS-6011B (RM) * * *. THE DRAWING SPECIFIED A TEST SET, ELECTRICAL CURRENT GUIDED MISSILE.

(3) SPECIFICATION WS-6529 * * * WAS CROSS REFERENCED ON DRAWING 1569699 * * * AND 1569700 * * *. THIS SPECIFICATION PRECISELY INDICATED THE RUBBER BASE COMPOUND.

(4) DRAWING X1569745 * * * WAS CROSS REFERENCED ON DRAWING 1569700 * * *. THIS DRAWING SPECIFIED THE HEAD CLOSURE ASSEMBLY PROCEDURE.

(5) DRAWING X1571798 * * * WAS CROSS REFERENCED ON DRAWING X1569700 * * *.THIS DRAWING SPECIFIED THE SOCKET HEAD SCREW TO BE USED TO SECURE THE COUPLING RING TO THE LOADED ROCKET MOTOR.

(6) DRAWING X1569768 * * * WAS CROSS REFERENCED ON DRAWING X1569700 * * *. THIS DRAWING SPECIFIED THE AFT INHIBITOR AND INSTALLATION PROCEDURE.

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

"6. NOTE 2 UNDER ITEM 4 ON PAGE 2 OF THE INVITATION WAS NOT CLEAR TO THE BIDDER IN RESPECT TO THE DIFFERENCE IN THE NOZZLE, HANGER AND WING RIB FOR THE CHAPARRAL FROM THAT OF THE SIDEWINDER. THESE DIFFERENCES SHOULD HAVE BEEN CLEARLY STATED IN THE INVITATION IN ORDER FOR BIDDERS TO BID PROPERLY.'

IN VIEW OF THE FACTS REPORTED BY THE CONTRACTING OFFICER WE AGREE THAT THE INVITATION WAS DEFICIENT AND MISLEADING TO THE BIDDERS. THEREFORE, WE DO NOT AGREE THAT EITHER ROCKETDYNE OR AEROJET-GENERAL IS ENTITLED TO AN AWARD OF A CONTRACT.

IT LONG HAS BEEN RECOGNIZED IN CONNECTION WITH THE AWARD OF GOVERNMENT CONTRACTS THAT NO BIDDER HAS AN ABSOLUTE RIGHT TO PUBLIC BUSINESS BUT, RATHER, THAT THE PUBLIC INTEREST IS FOR PRIMARY CONSIDERATION IN MAKING AN AWARD. FURTHER, IT HAS CONSISTENTLY BEEN HELD THAT AN INVITATION FOR BIDS DOES NOT IMPORT ANY OBLIGATION TO ACCEPT ANY OF THE OFFERS RECEIVED AND, CONSEQUENTLY, A PUBLIC OFFICER ACTING FOR THE GENERAL WELFARE IS NOT BOUND TO ACCEPT A BID WHERE HE DETERMINES THAT THE NEEDS OF THE GOVERNMENT WOULD BEST BE SERVED BY A REJECTION OF ALL BIDS AND A READVERTISEMENT OF THE REQUIREMENTS OF THE GOVERNMENT. SEE 37 COMP. GEN. 12 AND CASES CITED THEREIN. IN ADDITION, ALL BIDS MAY BE REJECTED PURSUANT TO THE AUTHORITY OF 10 U.S.C. 2305 (C) WHENEVER IT IS DETERMINED THAT SUCH ACTION IS IN THE PUBLIC INTEREST. 41 COMP. GEN. 709. ALSO, UNDER THE PROVISIONS OF ASPR 2 -404.1 (B) INVITATIONS FOR BIDS MAY BE CANCELED AFTER OPENING OF BIDS IN CERTAIN CASES INCLUDING THOSE WHERE THE SPECIFICATIONS CITED IN THE INVITATION ARE INADEQUATE OR AMBIGUOUS. SEE B-149672, JUNE 3, 1963, HOLDING THAT THE PUBLIC'S INTEREST PERMITS THE REJECTION OF ANY AND ALL BIDS FOR THE PURPOSE OF CLARIFYING THE SPECIFICATIONS.

IN THIS INSTANCE THE CONTRACTING OFFICER HAS DETERMINED AFTER DUE CONSIDERATION OF THE MATTER THAT THE SPECIFICATIONS NOT ONLY DID NOT REFLECT THE NEEDS OF THE GOVERNMENT BUT ALSO WERE NOT SET FORTH CLEARLY AND ACCURATELY AS TO INSURE COMPETITION ON AN EQUAL FOOTING AS CONTEMPLATED BY THE LAW GOVERNING FORMAL ADVERTISING. IN VIEW THEREOF, WE AGREE WITH THE RECOMMENDATION THAT THE INVITATION FOR BIDS PROPERLY SHOULD BE CANCELED AND THE PROCUREMENT READVERTISED.

THE ENCLOSURES TO THE LETTER OF DECEMBER 23, 1966, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF FACTS, ARE RETURNED AS REQUESTED.