B-168917, OCT. 6, 1970

B-168917, OCT. 6, 1970

BID PROTEST DENIAL OF PROTEST OF CAMBRIDGE WAVEGUIDE CORPORATION LOW BIDDER, AGAINST THE CANCELLATION OF INVITATION FOR AN ELECTRONIC PART, MIXER, MECHANICAL ASSEMBLY, WHEN IT WAS DISCOVERED THAT THE PART COULD BE RECLAIMED FROM A HIGHER ASSEMBLY CONSIDERED SURPLUS, BY THE WARNER ROBINS AIR FORCE BASE. DETERMINATION TO CANCEL A PROCUREMENT AFTER OPENING OF BIDS ON BASIS OF DECLINING REQUIREMENTS OF GOVERNMENT AND FACT THAT ITEM COULD BE RECLAIMED FROM A HIGHER ASSEMBLY THAT HAD BEEN DECLARED SURPLUS IS NOT SUBJECT TO QUESTION IN ABSENCE OF ANY EVIDENCE OF BAD FAITH OR ARBITRARY ACTION.

TO MR. JACOB H. FISCHMAN:

REFERENCE IS MADE TO YOUR TELEGRAM DATED JUNE 29, 1970, AND LETTER OF JULY 6, 1970, WITH ENCLOSURES, PROTESTING ON BEHALF OF CAMBRIDGE WAVEGUIDE CORPORATION (CWC) AGAINST THE CANCELLATION OF INVITATION FOR BIDS (IFB) F09603-7-B-3344 (HEREAFTER IFB-3344), ISSUED ON SEPTEMBER 24, 1969, BY ROBINS AIR FORCE BASE.

THE IFB WAS FOR THE PURCHASE OF A QUANTITY OF AN ELECTRONIC PART DESCRIBED AS FSN-5841-342-2246 MIXER, MECHANICAL ASSEMBLY (HEREAFTER MIXER), LITTON PART NUMBER 1003444. THE MIXER IS AN INTEGRAL PART OF THE RADAR RECEIVER-TRANSMITTER, RT-275/APS-42A USED IN C-54, C119, C121, C130, EC47, HC54, C-97, C-118, C47 AND MISCELLANEOUS OTHER OLD CARGO AIRCRAFT. BIDS WERE OPENED ON OCTOBER 14, 1969, AND OF THE FIVE BIDS RECEIVED CWC WAS THE LOW BIDDER WHILE LITTON PRECISION PRODUCTS, INC., WAS SECOND LOW. ON OCTOBER 21, 1969, THE DEFENSE CONTRACT ADMINISTRATION SERVICES REGION (DCASR), BOSTON WAS REQUESTED TO CONDUCT A PRE-AWARD SURVEY OF CWC. THE PRE-AWARD SURVEY WAS NEGATIVE AND RECOMMENDED THAT AWARD NOT BE MADE TO CWC. YOU WERE ADVISED THAT CWC WAS BEING DENIED THE AWARD BECAUSE OF LACK OF TENACITY AND PERSEVERANCE AND THAT THE MATTER WOULD NOT BE SUBMITTED TO THE SMALL BUSINESS ADMINISTRATION, (SBA). HOWEVER, THE DEPARTMENT OF THE AIR FORCE PROMISED TO SUBMIT THE MATTER TO THIS OFFICE AS A PROTEST. THE BASIS OF THE NEGATIVE PRE-AWARD SURVEY THE CONTRACTING OFFICER ON DECEMBER 30, 1969, MADE A WRITTEN DETERMINATION THAT CWC WAS NONRESPONSIBLE FOR FAILURE TO APPLY THE NECESSARY TENACITY AND PERSEVERANCE TO DO AN ACCEPTABLE JOB. ON JANUARY 28, 1970, THE MATTER WAS SUBMITTED TO THIS OFFICE FOR OUR CONSIDERATION AND DECISION. IN OUR DECISION B-168917 OF MARCH 18, 1970, WE CONCLUDED THAT THE EVIDENCE OF RECORD WAS NOT SUFFICIENT TO SUPPORT A DETERMINATION THAT CWC'S PAST PERFORMANCE ESTABLISHED A LACK OF TENACITY AND PERSEVERANCE. ON APRIL 10 CWC'S FILE WAS SUBMITTED TO SBA, BOSTON FOR A DETERMINATION AS TO ITS CAPACITY AND CREDIT. BY LETTER DATED MAY 1, 1970, THE SBA BOSTON OFFICE ADVISED THE PROCURING ACTIVITY THAT IT WOULD BE WILLING TO ISSUE CWC A CERTIFICATE OF COMPETENCY (COC). ON MAY 13, 1970, IFB-3344 WAS CANCELLED PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2 404.1(B)(III) ON THE BASIS THAT THERE WAS NO LONGER A NEED FOR THE ITEM. IT WAS EXPLAINED THAT IT HAD BEEN DETERMINED THAT THE MIXER REQUIREMENT COULD BE FILLED BY RECLAIMING THE ITEM FROM 100 APS-42 SYSTEMS DECLARED SURPLUS.

IN YOUR LETTER OF JULY 6, 1970, YOU CONTEND THAT ASPR 2-404.1(B)(III) DOES NOT SUPPORT THE CANCELLATION OF SUBJECT IFB IN THAT THE AIR FORCE HAD A NEED FOR AND CONTINUES TO REQUIRE THE ITEM AND THE ACTIONS OF THE AIR FORCE IN RECLAIMING THE ITEM FROM A HIGHER ASSEMBLY DO NOT JUSTIFY CANCELLATION OF THE IFB AFTER BID OPENING. ALSO, IN YOUR LETTER OF JUNE 8, 1970, TO MAJOR GENERAL A. J. BECK, COMMANDING GENERAL, WARNER ROBINS AIR MATERIEL AREA (WRAMA) (INCORPORATED BY REFERENCE IN YOUR LETTER OF JULY 6), YOU RAISED CERTAIN ADDITIONAL QUESTIONS. THESE QUESTIONS, AS WELL AS THE AIR FORCE'S RESPONSE, ARE AS FOLLOWS:

"(A) WHY DID WRAMA TAKE TWENTY-FIVE (25) DAYS AFTER IT RECEIVED THE SBA NOTICE OF FAVORABLE ACTION TO TRANSMIT ITS 'DISCOVERY' WIRE OF MAY 25TH?

"ANSWER: THE SBA DECISION WAS RECEIVED MAY 6, 1970. COORDINATION BETWEEN WRN AND WRP WAS NECESSARY TO INSURE CANCELLATION WAS IN ORDER AND TO PREPARE THE NECESSARY DOCUMENTATION AND PAPERWORK.

"(B) WHY, IN VIEW OF THE FACT THAT THIS PROCUREMENT HAD BEEN HELD UP FROM OCTOBER 24, 1969, DID NOT WRAMA UPON RECEIPT OF THE SBA AFFIRMATIVE NOTICE IMMEDIATELY PLACE AN AWARD WITH CAMBRIDGE?

"ANSWER: THE REQUIREMENT NO LONGER EXISTED.

"(C) WHY WAS WRAMA'S STARTLING REVELATION NOT DISCOVERED UNTIL AFTER SBA NOTIFIED WRAMA OF ITS AFFIRMATIVE FINDING?

"ANSWER: IT WAS REALIZED IN FEBRUARY 70 THAT THIS REQUIREMENT COULD POSSIBLY BE CANCELLED; HOWEVER, IN VIEW OF THE BELIEF THE GAO AND SBA DECISION WOULD BE RECEIVED MOMENTARILY AND DECISION AGAINST THE CONTRACTOR WAS EXPECTED AN ADMINISTRATIVE DECISION WAS MADE NOT TO CANCEL UNTIL THE GAO AND SBA DECISION WAS RECEIVED.

"(D) WHEN, DATE WISE, DID WRAMA DISCOVER 'IT WAS POSSIBLE TO RECLAIM THIS ITEM FROM STOCKS OF A HIGHER ASSEMBLY'?

"ANSWER: THE POSSIBILITY BECAME KNOWN 18 DEC 1969, HOWEVER REVIEW AND A FINAL DETERMINATION WAS NOT MADE UNTIL 10 FEB 70.

"(E) WHAT WERE THE CIRCUMSTANCES WHICH LEAD TO CHECKING 'OTHER COMPONENTS OF THE SYSTEM ... '?

"ANSWER: THIS WAS DISCOVERED DURING DEC 1969 ROUTINE QUARTERLY REVIEW OF THE NEXT HIGHER ASSEMBLY.

"(F) WAS A LIST OF THE SO CALLED SURPLUS STOCKS OF THE ALLEGED 'HIGHER ASSEMBLY' CIRCULATED AMONG THE GOVERNMENT AGENCIES?

"ANSWER: YES, ON A QUARTERLY BASIS.

"(G)WHY IS THE 'HIGHER ASSEMBLY' PUT IN A SURPLUS STATUS IF THE SOLICITATION ITEM PRESENTLY IS BEING USED OR NEEDED FOR FIELD USE?

"ANSWER: THE NEXT HIGHER ASSEMBLY (THE RT UNIT) IS NOT CONSUMED DURING USAGE WHEREAS THE SOLICITATION ITEM IS TOTALLY CONSUMED. WITH DECREASING DEMANDS, WE NOW HAVE A SURPLUS OF THE NEXT HIGHER ASSEMBLY BUT STILL NEED THE ITEM IN QUESTION.

"(H) WAS AN ANALYSIS MADE OF THE COST TO THE GOVERNMENT TO DISASSEMBLE THE 'HIGHER ASSEMBLY' IN ORDER TO OBTAIN THE SOLICITATION ITEM THEREFROM? IF NOT, WHY NOT? IF YES, WHAT DID THESE COSTS COME TO?

"ANSWER: YES - $52.17 EACH VERSUS CAMBRIDGE'S QUOTED UNIT PRICE OF $168.00.

"(I) QUESTION: DOES THE RECLAIMING OF THE SOLICITATION ITEM DEMOTE THE 'HIGHER ASSEMBLY' FROM THE STATUS OF A MAJOR MODULE IN A SYSTEM TO THAT OF A SERIES OF COMPONENT PARTS? AND THEREBY, DOES IT NOT IRREVOCABLY LOSE THE ASSEMBLY AND TEST COST THAT WERE EXPENDED IN DETERMINING THE EFFICIENCY OF THE ORIGINAL MARRIAGE OF THE COMPONENTS USED IN MAKING UP THE 'HIGHER ASSEMBLY'?

"ANSWER: RECLAIMING THE SOLICITATION ITEM AND OTHER PARTS OF THE HIGHER ASSEMBLY (RT UNIT) WILL RESULT IN THE RESIDUE OF THE RECLAIMED RT UNIT BECOMING SCRAP. THIS IS ACCEPTABLE TO THE AIR FORCE AS THIS RT UNIT IS IN AN EXCESS POSITION."

IN REGARD TO QUESTION (I) WE ARE FURTHER ADVISED THAT TWENTY-ONE DIFFERENT ITEMS ARE BEING RECLAIMED FROM THE AN/APS-42A.

IT IS WELL ESTABLISHED THAT THE GOVERNMENT SHOULD NOT BE COMPELLED TO MAKE AN AWARD FOR AN ITEM OR FOR QUANTITIES OF AN ITEM WHICH IT NO LONGER NEEDS OR WANTS. B-158355, JUNE 22, 1966; B-162914, JANUARY 30, 1968. THE AIR FORCE HAS ADVISED THAT THE PRESENT PROCUREMENT WAS CANCELLED BECAUSE SINCE MAY 16, 1969 (THE DATE OF THE INITIAL PURCHASE REQUEST), QUARTERLY REQUIREMENTS COMPUTATIONS CONDUCTED IN JUNE, SEPTEMBER, AND DECEMBER 1969, AND MARCH 1970, INDICATED A DECLINING REQUIREMENT FOR THE ITEM, PLUS THE FACT THAT IT WAS DETERMINED THESE ITEMS COULD BE RECLAIMED, AT A GREATLY REDUCED PRICE, FROM A HIGHER ASSEMBLY WHICH HAD BEEN DECLARED SURPLUS. THERE WOULD APPEAR TO BE NO VALID BASIS UPON WHICH THIS OFFICE CAN QUESTION THE DETERMINATION UNDER ASPR 2-404.1(B)(III), SINCE THERE IS EVIDENCE OF RECORD THAT THERE WAS A DECLINING NEED FOR THE MIXER WHICH COULD BE FILLED BY RECLAIMING THE ITEM FROM A HIGHER ASSEMBLY AND, IN THE ABSENCE OF A SHOWING OF BAD FAITH, OR ARBITRARY OR CAPRICIOUS ACTION, WE WILL NOT QUESTION THE DETERMINATION BY AN AGENCY OF WHAT ITS NEEDS ARE AND HOW THEY SHALL BE MET. SINCE THE RECORD IN THIS CASE DOES NOT SHOW BAD FAITH OR ARBITRARY ACTION, WE SEE NO VALID BASIS UPON WHICH AN AWARD MAY BE MADE TO CWC, AND YOUR PROTEST MUST BE DENIED.

ALTERNATIVELY, YOU REQUEST THAT, SHOULD WE DECIDE CWC IS NOT ENTITLED TO AN AWARD, WE SHOULD ALLOW REIMBURSEMENT FOR THE EXPENSE INCURRED BY CWC AND ITS PARENT CORPORATION, HURLEY, FROM FEBRUARY 10, 1970, TO MAY 25, 1970, THE DATE OF CANCELLATION OF THE PROCUREMENT. THIS REQUEST APPEARS TO BE BASED UPON A CONTENTION THAT THE AIR FORCE KNEW ON FEBRUARY 10, 1970, THAT THE IFB WOULD BE CANCELLED, AND IF IT HAD SO ADVISED YOU AT THAT TIME YOU WOULD NOT HAVE INCURRED THE EXPENSES NECESSARY TO OBTAIN A DECISION FROM THIS OFFICE AND A COC FROM SBA. IN SUPPORT OF THIS REQUEST, IN YOUR SUPPLEMENTAL LETTER OF AUGUST 13, 1970, YOU CITE THE CASE OF KECO INDUSTRIES, INC. V UNITED STATES, COURT OF CLAIMS NO. 173-69, DECIDED JULY 15, 1970, WHICH HELD THAT BIDDERS ARE ENTITLED TO HAVE THEIR BIDS CONSIDERED FAIRLY AND HONESTLY FOR AWARD AND THAT FAILURE OF THE CONTRACTING AGENCY IN THIS REGARD CONSTITUTES ARBITRARY AND CAPRICIOUS ACTION ON WHICH A SUIT MAY BE BROUGHT BY THE AGGRIEVED BIDDER TO RECOVER BID PREPARATION EXPENSES. TO THE SAME EFFECT, SEE HEYER PRODUCTS CO., INC. V UNITED STATES, 135 CT. CL. 63 (1956). ASIDE FROM THE FACT THAT A CONTRACT WAS ACTUALLY AWARDED IN BOTH OF THOSE CASES IT SHOULD BE NOTED THAT NEITHER OF THOSE CASES HAS THE COURT TO DATE ALLOWED THE BIDDER'S MONETARY CLAIM, AND THIS OFFICE IS THEREFORE WHOLLY WITHOUT THE BENEFIT OF ADVICE AS TO WHAT STANDARDS OR CRITERIA THE COURT MAY APPLY OR ADOPT IN ALLOWING SUCH A CLAIM.

FURTHER, WE ARE AWARE OF NO CASE IN WHICH THE COURT HAS REACHED A SIMILAR CONCLUSION WITH RESPECT TO EXPENSES INCURRED BY A BIDDER AFTER PREPARATION AND SUBMISSION OF HIS BID, WHEN SUCH EXPENSES ARE ATTRIBUTABLE TO THE GOVERNMENT'S DELAY IN ADVISING BIDDERS THE SUPPLIES ON WHICH BIDS HAVE BEEN REQUESTED ARE NO LONGER NEEDED. SINCE IT IS THEREFORE AN OPEN QUESTION AS TO WHETHER THE COURT WOULD, OR WOULD NOT, EXTEND THE DOCTRINE OF THE HEYER AND KECO CASES TO YOUR CASE, THIS OFFICE MUST DENY THE CLAIM. SEE LONGWILL V UNITED STATES, 17 CT. CLS. 288 (1881); CHARLES V UNITED STATES, 19 CT. CLS. 316 (1884).