B-162067, OCT. 24, 1967

B-162067, OCT. 24, 1967

BIDS - REJECTION AND READVERTISEMENT - SPECIFICATION REVISION DECISION TO THE TRANE COMPANY CONCERNING PROTEST AGAINST CANCELLATION AND READVERTISEMENT OF A PROCUREMENT OF AIR CONDITIONERS BY KELLY AIR FORCE BASE. READVERTISEMENT OF A PROCUREMENT OF AIR CONDITIONERS ON THE BASIS OF CHANGED SPECIFICATIONS THAT INCREASED THE MAXIMUM WEIGHT, DECREASED THE COOLING CAPACITY, AND INCREASED THE MAXIMUM POWER CONSUMPTION AS WELL AS REDUCING THE COST PER UNIT BY $600 IS JUSTIFIED. FAILURE OF SPECIFICATIONS TO REFLECT MINIMUM NEEDS OF GOVERNMENT IS A COGENT REASON FOR REJECTION OF ALL BIDS AND FOR READVERTISEMENT AND IN ABSENCE OF CLEAR PROOF OF ABUSE OF DISCRETIONARY POWER OF PURCHASING AGENCY IN MAKING DETERMINATION TO REJECT BIDS SUCH DETERMINATION WILL NOT BE SUBJECT TO OBJECTION.

TO THE TRANE COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 6, 1967, TO THE AIR FORCE, WITH COPIES TO OUR OFFICE, CONCERNING THE PROTEST BY REDMANSON CORPORATION THAT INVITATIONS FOR BIDS NO. F41608-67-B-2295 AND NO. F41608-68-B-0036, ISSUED BY KELLY AIR FORCE BASE, ARE RESTRICTIVE BECAUSE THE AIR CONDITIONERS BEING PROCURED THEREUNDER ARE REQUIRED TO BE IN ACCORDANCE WITH DRAWINGS PREPARED BY YOUR FIRM. WE HAVE THIS DATE ADVISED REDMANSON THAT THERE IS NO BASIS UPON WHICH OUR OFFICE MAY PROPERLY OBJECT TO THE USE OF THE DRAWINGS IN THE SUBJECT INVITATIONS.

IN ADDITION TO DISPUTING THE ABOVE ALLEGATION OF REDMANSON, YOU HAVE PROTESTED AGAINST THE DECISION OF THE CONTRACTING OFFICER TO CANCEL IFB NO. F41608-67-B-2295, AND READVERTISE THE REQUIREMENT UNDER REVISED SPECIFICATIONS. IT IS YOUR CONTENTION THAT THE REVISIONS ARE NOT SUBSTANTIAL AND, THEREFORE, DO NOT JUSTIFY CANCELLATION AFTER BIDS HAVE BEEN OPENED AND YOUR PRICES EXPOSED.

CONTRARY TO YOUR CONTENTION, THE AIR FORCE REPORTS THAT THE CHANGES IN THE SPECIFICATIONS ARE SUBSTANTIAL AND WILL HAVE AN EFFECT ON COST. IT IS ESTIMATED THAT REVISION C TO THE APPLICABLE MILITARY SPECIFICATION WILL RESULT IN A COST REDUCTION OF $600 PER UNIT. THE REVISION MAKES THE FOLLOWING CHANGES IN THE SPECIFICATION:

(1) INCREASES MAXIMUM WEIGHT FROM 520 LBS. TO 580 LBS. BY PERMITTING USE OF A HEAVIER HEAT EXCHANGER UNIT.

(2) DECREASES THE MINIMUM ALLOWABLE COOLING CAPACITY FROM 60,000 BTU/HR TO 54,000 BTU/HR.

(3) INCREASES MAXIMUM ALLOWABLE POWER CONSUMPTION FROM 15.5 KW TO 16.3 KW. THE REVISION WAS RECEIVED AFTER THE IFB WAS ISSUED, BUT DID NOT COME TO THE ATTENTION OF THE CONTRACTING OFFICER UNTIL AFTER THE BIDS HAD BEEN OPENED.

THE STATUTE GOVERNING THIS PROCUREMENT PROVIDES THE AGENCIES WITH AUTHORITY TO REJECT ALL BIDS WHEN SUCH ACTION IS DETERMINED TO BE IN THE PUBLIC INTEREST. 10 U.S.C. 2305 (C). ARMED SERVICES PROCUREMENT REGULATION 2-404.1 (B) (II) ALSO RECOGNIZES THE AUTHORITY OF THE CONTRACTING OFFICER TO REJECT ALL BIDS AFTER OPENING AND PRIOR TO AWARD WHERE THE SPECIFICATIONS HAVE BEEN REVISED.

FURTHERMORE, BY PARAGRAPH 8 (B) OF THE INVITATION THE GOVERNMENT EXPRESSLY RESERVED THE RIGHT TO REJECT ALL BIDS. IT IS, THEREFORE, CLEAR THAT THE QUESTION OF REJECTING ALL BIDS AND READVERTISING IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION.

SINCE THE RESPONSIBILITY FOR MAKING A DETERMINATION TO REJECT ALL BIDS RESTS WITH THE PURCHASING AGENCY, IN THE ABSENCE OF CLEAR PROOF OF ABUSE OF THEIR DISCRETIONARY POWERS IN THIS REGARD, OUR OFFICE MAY NOT PROPERLY OBJECT TO SUCH ACTION. WE HAVE REPEATEDLY OBSERVED THAT THE REJECTION OF BIDS AFTER THEY ARE OPENED AND EACH BIDDER OR PROSPECTIVE BIDDER HAS LEARNED HIS COMPETITORS' PRICES IS A SERIOUS MATTER AND SUCH ACTION SHOULD NOT BE TAKEN EXCEPT FOR COGENT REASONS. HOWEVER, WHERE IT IS DETERMINED THAT THE SPECIFICATIONS AS ADVERTISED DO NOT ACCURATELY REFLECT THE MINIMUM NEEDS OF THE GOVERNMENT, WE BELIEVE THIS IS A COGENT REASON FOR REJECTING BIDS AND READVERTISING.

ACCORDINGLY, THERE IS NO LEGAL BASIS FOR OUR OFFICE TO OBJECT TO THE ADMINISTRATIVE ACTION IN THIS CASE.