B-171574, JUN 2, 1971

B-171574, JUN 2, 1971

BID PROTEST - SPLIT AWARDS - EVALUATION FACTORS - LOWEST COST DECISION DENYING PROTEST AGAINST THE AWARD OF A CONTRACT TO HILLDRUP TRANSFER & STORAGE, INC., UNDER AN IFB ISSUED BY THE MARINE CORPS DEVELOPMENT AND EDUCATION COMMAND, QUANTICO, VA., FOR DRAYAGE, STORAGE, AND PACKING OF HOUSEHOLD GOODS OF MEMBERS COVERING INBOUND SERVICES TO STAFFORD AND PRINCE WILLIAM COUNTIES (AREA A) AND SPOTSYLVANIA COUNTY (AREA B). PROTESTANT CONTENDS THAT THE IFB, BY PERMITTING SEPARATE AWARDS FOR AREA A AND AREA B, WAS DEFECTIVE, IN THAT COST FOR DRAYAGE, ETC. OF HOUSEHOLD GOODS IN A CROSS-OVER SITUATION WAS OMITTED. COSTS FROM CROSS-OVER RESULT FROM THE FACT THAT MEMBERS MOVING INTO THE QUANTICO AREA DO NOT KNOW BEFOREHAND IN WHICH AREA THEY WILL RESIDE, AND, UNDER THESE CONDITIONS AN AREA B SHIPMENT COULD BE DELIVERED TO AN AREA A CONTRACTOR (OR VICE VERSA). THE NET RESULT IS THAT THE MARINE CORPS WOULD BE REQUIRED BY SEPARATE PURCHASE ORDER, AT ADDITIONAL COST, TO PERFORM THE MOVE SINCE A CONTRACTOR FROM AREA A DID NOT CONTRACT TO COVER MOVES TO AREA B. THE MARINE CORPS IS NOT REQUIRED TO INCORPORATE A CROSS-OVER COST FACTOR WHERE IT WOULD BE VIRTUALLY IMPOSSIBLE TO EXPRESS SUCH A FACTOR IN REASONABLY DEFINITE TERMS, BECAUSE THERE IS NO PRIOR EXPERIENCE WITH SEPARATE AWARDS FOR THE TWO AREAS. FURTHER, WHILE AS A RESULT OF CROSS-OVERS A CONTRACTOR WOULD NOT RECEIVE ALL THE MARINE CORPS' REQUIREMENTS FOR A PARTICULAR AREA IN VIOLATION OF THE FUNDAMENTAL CONCEPT OF A REQUIREMENTS TYPE CONTRACT, THE CONTRACTORS REMEDY IS BEFORE THE COURTS OR THE COMP. GEN. THIS TYPE OF DEFECT IN THE IFB WILL NOT SUPPORT A CONCLUSION THAT AN AWARD MADE UNDER IT IS ILLEGAL.

TO KALER, WORSLEY, DANIEL & HOLLMAN:

WE REFER TO YOUR LETTER DATED MARCH 8, 1971, AND PRIOR CORRESPONDENCE, ON BEHALF OF VICTORY VAN CORPORATION, PROTESTING AGAINST THE AWARDS OF CONTRACTS TO FIDELITY STORAGE CORP. AND HILLDRUP TRANSFER & STORAGE INCORPORATED UNDER INVITATION FOR BIDS (IFB) NO. M00264-71-B-0018, ISSUED BY THE DEPARTMENT OF THE NAVY, UNITED STATES MARINE CORPS, MARINE CORPS DEVELOPMENT AND EDUCATION COMMAND (MCDEC), QUANTICO, VIRGINIA.

THE PROTEST IS DENIED FOR THE REASONS HEREINAFTER STATED.

THE IFB, ISSUED ON OCTOBER 21, 1970, SOLICITED BIDS ON A REQUIREMENTS CONTRACT FOR THE DRAYAGE, STORAGE, PACKING AND CRATING OF HOUSEHOLD GOODS OF MARINE CORPS MEMBERS INCIDENT TO THEIR MOVEMENT TO AND FROM MCDEC, FROM JANUARY 1 TO DECEMBER 31, 1971. THE IFB SET FORTH THREE SCHEDULES, SUBDIVIDED INTO TWO SEPARATE AREAS: AREA "A" - STAFFORD AND PRINCE WILLIAM COUNTIES; AND AREA "B" - SPOTSYLVANIA COUNTY. SCHEDULE I COVERED COMPLETE OUTBOUND SERVICE, WHILE SCHEDULE III DEALT WITH INTRACITY AND INTRA-AREA MOVES. OUR REVIEW HAS UNCOVERED NO LEGAL BASIS UPON WHICH TO OBJECT TO THE AWARDS UNDER SCHEDULES I AND III TO FIDELITY AND HILLDRUP, RESPECTIVELY.

THE PROTEST APPEARS TO BE DIRECTED PRINCIPALLY TO THE CIRCUMSTANCES AND CONDITIONS UNDER WHICH THE AWARD OF SCHEDULE II WAS MADE TO HILLDRUP. SCHEDULE II COVERS COMPLETE INBOUND SERVICES AND REQUIRED BIDS ON ESTIMATED ANNUAL QUANTITIES AT A GROSS HUNDREDWEIGHT UNIT PRICE. STORAGE CHARGES WERE TO COMMENCE ON THE SIXTH WORKDAY FOLLOWING THE DATE THE TRANSPORTATION OFFICER WAS NOTIFIED OF THE ARRIVAL OF THE SHIPMENT. SECTION DA) OF THE IFB PRESCRIBED THAT "BIDS WILL BE EVALUATED ON THE BASIS OF TOTAL AGGREGATE PRICE OF ALL ITEMS WITHIN AN AREA OF PERFORMANCE UNDER A GIVEN SCHEDULE" IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 22- 600.3 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). BIDS WERE OPENED ON NOVEMBER 13, 1970, AND, FOR SCHEDULE II, WERE AS FOLLOWS:

AREA "A"

AREA "B" STAFFORD AND

SPOTSYLVANIA PRINCE WILLIAM TOTAL

VICTORY $ 5,325 $17,600 $22,925

HILLDRUP 4,950 18,550 23,500

FIDELITY 6,850 19,520 26,370

FOUR WINDS 12,600 48,450 61,050

VAN LINES, INC.

ON DECEMBER 3, 1970, A CONTRACT AWARD FOR SCHEDULE II WAS MAILED TO VICTORY. HOWEVER, ALL CONTRACTS AWARDED UNDER THE IFB WERE RETURNED TO MCDEC AT THE REQUEST OF THE CONTRACTING OFFICER SINCE AWARDS HAD BEEN INCORRECTLY MADE ON THE BASIS OF TOTAL BID PRICE UNDER EACH SCHEDULE, RATHER THAN BY AREA, AS REQUIRED BY SECTION "D" OF THE IFB. SUBSEQUENTLY, THE PRESIDENT OF VICTORY ADVISED THE CONTRACTING OFFICER THAT CERTAIN DIFFICULTIES WOULD ARISE IF SEPARATE CONTRACTS WERE AWARDED FOR AREAS "A" AND "B" UNDER SCHEDULE II. IN VIEW THEREOF, THE IFB WAS CANCELED ON DECEMBER 10, 1970, BECAUSE "IT IS IMPOSSIBLE FOR THE MARINE CORPS DEVELOPMENT AND EDUCATION COMMAND TO ADMINISTER CONTRACTS AWARDED BY THE METHOD OF EVALUATING BIDS STIPULATED IN THE INVITATION." SIMULTANEOUSLY, MCDEC REQUESTED AUTHORITY FROM THE CHIEF OF NAVAL MATERIAL TO DEVIATE FROM ASPR 22-600.3 BY THE USE OF THE FOLLOWING LANGUAGE IN SECTION DA) OF THE IFB: "BIDS WILL BE EVALUATED ON THE BASIS OF THE AGGREGATE PRICE OF ALL ITEMS OF PERFORMANCE UNDER A GIVEN SCHEDULE." MCDEC BASED THIS REQUEST FOR AUTHORITY TO DEVIATE FROM ASPR 22-600.3 ON THE FOLLOWING:

"2. THE TRAFFIC MANAGEMENT OFFICER IS RESPONSIBLE FOR MILITARY PERSONNEL MOVES IN THREE COUNTIES: PRINCE WILLIAM, STAFFORD, AND SPOTSYLVANIA. THE BASE IS LOCATED IN PRINCE WILLIAM AND STAFFORD COUNTIES AND 97 TO 98 PER CENT OF THE MOVES ARE IN THESE COUNTIES.

"3. IT IS NOT FEASIBLE TO MAKE SEPARATE AWARDS FOR THE TWO AREAS. PERSONNEL ASSIGNED TO QUANTICO DO NOT KNOW AT THE TIME THEIR HOUSEHOLD GOODS ARE SHIPPED WHERE THEY WILL BE HOUSED. HOUSEHOLD GOODS MUST BE STORED IN THE WAREHOUSE OF THE CONTRACTOR WHO WILL ULTIMATELY MOVE THE MAN INTO QUARTERS OR OFF BASE HOUSING. IT IS IMPOSSIBLE FOR THE TRAFFIC MANAGEMENT OFFICER TO ADMINISTER TWO CONTRACTS COVERING THE STORAGE AND MOVE OF ONE INDIVIDUAL'S GOODS.

"4. COMBINING THE THREE COUNTIES INTO ONE AREA WOULD BE VERY COSTLY TO THE GOVERNMENT. BIDDERS WOULD SUBMIT HIGHER BIDS TO COVER THE FAR GREATER DISTANCE TO SPOTSYLVANIA, THEREBY GREATLY INCREASING THE COST OF THE MOVES IN PRINCE WILLIAM AND STAFFORD COUNTIES. AWARDING BY SCHEDULE IN LIEU OF AREA WILL RESULT IN NOT ONLY SAVINGS TO THE GOVERNMENT, BUT SATISFACTORY AND TIMELY MOVES FOR MILITARY PERSONNEL."

ON DECEMBER 11, 1970, A REQUEST FOR PROPOSALS FOR THE IDENTICAL SERVICES SOLICITED UNDER THE IFB WAS ISSUED PURSUANT TO THE PUBLIC EXIGENCY EXCEPTION IN 10 U.S.C. 2304(A)(2). UPON FURTHER DELIBERATION THE REQUEST FOR PROPOSALS WAS CANCELED AND THE ORIGINAL IFB WAS REINSTATED ON DECEMBER 18, 1970. WITH RESPECT TO SCHEDULE II, VICTORY, THE LOW BIDDER, REFUSED TO REINSTATE ITS BID, WHEREUPON AN AWARD OF THE CONTRACT FOR AREA "A" WAS MADE TO HILLDRUP, THE NEXT LOW BIDDER. IT SHOULD BE NOTED THAT, AS LOW BIDDER ON AREA "B" ALSO, HILLDRUP BECAME THE ONLY CONTRACTOR UNDER SCHEDULE II.

YOUR INITIAL BASIS OF PROTEST CONCERNS THE FACT THAT THE ESTIMATED QUANTITIES USED BY MCDEC FOR EVALUATION IN THE IFB ARE UNREALISTIC, INACCURATE, AND NOT BASED ON ACTUAL EXPERIENCE. THE MARINE CORPS CONCEDES THAT SCHEDULE II OF THE IFB SETS FORTH ESTIMATES FOR EVALUATION ON AN 80 PERCENT-20 PERCENT BASIS FOR AREAS "A" AND "B," RESPECTIVELY, AND THAT ACTUAL EXPERIENCE, AS NOTED IN MCDEC'S REQUEST FOR AN ASPR DEVIATION, INDICATES THAT, IN 1970, ONLY 2 TO 3 PERCENT OF THE DRAYAGE WAS ALLOCATED TO AREA "B," AND 97 TO 98 PERCENT TO AREA "A," WHERE MCDEC IS LOCATED. THE MARINE CORPS STATES THAT THE ESTIMATE PROJECTIONS WERE PREDICATED ON (1) NEW MODE OF PROCUREMENT POLICY ESTABLISHED IN 1970, I.E., THE PROMULGATION OF ASPR 22-600.3, REQUIRING AWARD BY AREA WITHIN A SCHEDULE; (2) INCREASED POPULATION OF THE AREA SOUTH OF MCDEC WHICH INCLUDES SPOTSYLVANIA COUNTY, AREA "B," DUE TO IMPROVED ROADS AND INCREASED BUILDING ACTIVITY RESULTING IN INCREASED NUMBERS OF MILITARY PERSONNEL MOVING INTO THE AREA; (3) A CURTAILMENT IN MANNING OF DEPARTMENT OF DEFENSE ELEMENTS, AFFECTING MOVES INTO ALL AREAS, AND (4) THE KNOWLEDGE OF SERVICE SCHOOL REQUIREMENTS FOR 1971 AT THE QUANTICO BASE. IN CONCLUSION, THE MARINE CORPS ADMITS THAT THE ESTIMATES WERE DIFFICULT TO ASCERTAIN AND WERE "AT BEST A 'BALL PARK' APPROXIMATION DURING THIS TRANSITIONAL PERIOD." FURTHER, WE ARE ADVISED THAT SINCE JANUARY 1, 1971, OF THE FIRST 46 MOVES THAT HAVE BEEN MADE UNDER SCHEDULE II BY HILLDRUP, APPROXIMATELY 6 PERCENT HAVE BEEN MADE TO AREA "B."

IN B-171669(2), MARCH 24, 1971, WE DISCUSSED OUR POSITION RELATIVE TO THE USE OF ESTIMATES IN REQUIREMENTS CONTRACTS, AS FOLLOWS:

"THE RESPONSIBILITY FOR ASCERTAINING THE GOVERNMENT'S MINIMUM NEEDS RESTS PRIMARILY WITH THE CONTRACTING AGENCY CONCERNED, AND OUR OFFICE WILL NOT QUESTION THE DETERMINATION OF THE AGENCY IN THIS REGARD IN THE ABSENCE OF EVIDENCE OF BAD FAITH OR LACK OF A SUBSTANTIAL BASIS FOR THE DETERMINATION. WHERE A REQUIREMENTS TYPE OF CONTRACT IS CONTEMPLATED BY AN AGENCY, THE COURTS AND OUR OFFICE HAVE HELD THAT SUCH CONTRACTS ARE VALID PROVIDED THAT THE ESTIMATE OF THE PROBABLE AMOUNT OF GOODS OR SERVICES TO BE GENERATED WAS DETERMINED IN GOOD FAITH. SEE 47 COMP. GEN. 365 (1968) AND 37 ID. 688 (1958) COURT CASES THEREIN CITED. SEE, ALSO, SHADER CONTRACTORS, INC. V UNITED STATES, 149 CT. CL. 539 (1960).

"ASPR 3-409.2(A) REQUIRES THAT THE ESTIMATE OF THE GOVERNMENT'S NEEDS UNDER REQUIREMENTS CONTRACTS BE AS REALISTIC AS POSSIBLE. ASPR 3 409.2(B) CITES AS ONE OF THE ADVANTAGES OF A REQUIREMENTS CONTRACT (WHICH MAY BE USED FOR PROCUREMENTS WHERE IT IS IMPOSSIBLE TO DETERMINE IN ADVANCE THE PRECISE QUANTITIES OF THE SUPPLIES OR SERVICES THAT WILL BE NEEDED BY DESIGNATED ACTIVITIES DURING A DEFINITE PERIOD OF TIME) THE FACT THAT THE SUPPLIES OR SERVICES NEED BE ORDERED ONLY AFTER ACTUAL NEEDS HAVE MATERIALIZED."

FURTHER, SUCH ESTIMATES SHOULD BE BASED ON ALL KNOWN FACTS AND THE BEST INFORMATION AVAILABLE. SEE B-170812, FEBRUARY 5, 1971, AND B 161875, OCTOBER 13, 1967.

AS THE INCUMBENT CONTRACTOR FOR BOTH AREAS UNDER SCHEDULE II FOR 1970, VICTORY WAS WELL AWARE OF THE FACT THAT MOVES INTO AREA "B" WOULD BE MINIMAL. IN SUCH CIRCUMSTANCES, WE FIND IT DIFFICULT TO ENVISAGE ANY PREJUDICE TO VICTORY INSOFAR AS THE FIRM'S HAVING BEEN MISLED BY THE ESTIMATES, SINCE, AS ADMITTED TO REPRESENTATIVES OF OUR OFFICE, THE BIDDERS WERE FULLY COGNIZANT OF VICTORY'S PRIOR EXPERIENCE IN AREA "B." EVEN THOUGH THE MARINE CORPS DID NOT RELY ENTIRELY UPON VICTORY'S PRIOR EXPERIENCE IN AREA "B," ASPR 3-409.2(A) STATES THAT "THE ESTIMATE MAY BE OBTAINED FROM THE RECORDS OF PREVIOUS REQUIREMENTS AND CONSUMPTION, OR BY OTHER MEANS." SINCE THE ESTIMATES WERE MADE IN GOOD FAITH, THE TERMS OF COMPETITION WERE CLEARLY STATED IN THE IFB, AND NO BIDDER, PARTICULARLY THE MOST KNOWLEDGEABLE ON THE REQUIREMENTS, VICTORY, COMPLAINED BEFORE BID OPENING, WE FIND NO BASIS TO QUESTION THE AWARD ON THIS POINT. SEE B- 171669(2), SUPRA, AND B-154648, OCTOBER 22, 1964.

WE NEXT TURN TO YOUR ALLEGATION THAT THE IFB WAS FATALLY DEFECTIVE BECAUSE THERE WAS NO BASIS FOR DETERMINING THE LOWEST COST TO THE GOVERNMENT HAD THERE BEEN TWO SEPARATE CONTRACTORS FOR AREAS "A" AND "B." EXPANDING ON THIS BASIS OF PROTEST, YOU ARGUE THAT A SIGNIFICANT COST FACTOR WAS OMITTED FROM THE IFB, NAMELY, THE COST TO THE MARINE CORPS OF SEPARATELY CONTRACTING FOR THE DRAYAGE, ETC., OF HOUSEHOLD GOODS IN A CROSS-OVER SITUATION.

AT THIS JUNCTURE, WE QUOTE FROM YOUR MEMORANDUM TO OUR OFFICE DATED FEBRUARY 1, 1971, WHICH WE FEEL REPRESENTS A SUCCINCT EXPLANATION OF THE CROSS-OVER PROBLEM WHICH WOULD HAVE ARISEN HAD SEPARATE CONTRACTS BEEN AWARDED FOR AREAS "A" AND "B" UNDER SCHEDULE II:

"AS STATED BY THE PROCURING AGENCY, IT IS NOT KNOWN AT THE TIME INBOUND SHIPMENTS ARE DISPATCHED WHETHER THE ULTIMATE DESTINATION WILL BE AREA A OR AREA B. YET, THE SHIPPING POINTS ALL OVER THE WORLD MUST INDICATE ON THE CONTAINER A DESTINATION AGENT. THUS ANY ASSIGNMENT OF A PARTICULAR SHIPMENT, AS BETWEEN THE CONTRACTOR FOR AREA A OR AREA B, WOULD BE PURELY ARBITRARY AT THE TIME OF SHIPMENT. UNLESS THE 'GUESS' AT THE TIME OF SHIPMENT PROVED RIGHT IN EVERY INSTANCE, THE SEPARATE CONTRACTORS FOR AREAS A AND B WOULD NOT HAVE GOTTEN THE BUSINESS FOR WHICH THEY BARGAINED AND COMPUTED THEIR BID PRICES. FOR EXAMPLE, IF ALL OF THE SHIPMENTS DESIGNATED THE AREA A CONTRACTOR, HE WOULD ENJOY ALL THE STORAGE BUSINESS FOR SHIPMENTS, EVEN THOSE ULTIMATELY DELIVERED TO AREA B. THE CONTRACTOR FOR AREA B WOULD THUS HAVE BEEN DEPRIVED OF THE STORAGE BUSINESS PROPERLY HIS FOR GOODS THAT WERE DELIVERED TO SPOTSYLVANIA COUNTY. IN ADDITION, THE INDIVIDUAL CONTRACTORS MIGHT LIKEWISE BE DEPRIVED OF TRANSPORTATION SERVICES THEY BARGAINED TO PROVIDE WITHIN THEIR RESPECTIVE AREAS, FOR THE REASONS SET OUT BELOW.

"ANY AREA B SHIPMENT DELIVERED TO THE CONTRACTOR FOR AREA A (VICTORY VAN AT ALEXANDRIA) COULD NOT BE DELIVERED BY THE CONTRACTOR FOR AREA A TO AREA B, SINCE HIS CONTRACT DOES NOT COVER THAT AREA. NEITHER IS THE CONTRACTOR FOR AREA B ABLE TO PERFORM THE TRANSPORTATION SERVICE BECAUSE HIS CONTRACT DOES NOT COVER SERVICES OUTSIDE OF THE AREA OF PERFORMANCE TO PICK UP SHIPMENTS FOR AREA B IN ALEXANDRIA (DRAYAGE IS DEFINED AT PAGE 19 OF THE SCHEDULE TO INCLUDE ONLY STORAGE WAREHOUSES WITHIN THE CONTRACT AREA OF PERFORMANCE). THUS THE MARINE CORPS WOULD EITHER HAVE TO ENTER INTO A SPECIAL CONTRACT, AT ADDITIONAL CONSIDERATION, WITH EITHER THE CONTRACTOR FOR AREA A OR AREA B TO BRING THE GOODS INTO AREA B, OR CONTRACT WITH ANOTHER COMMERCIAL FACILITY, OR PROVIDE THE TRANSPORTATION ITSELF. THE ADDED COST TO THE GOVERNMENT WAS NOT INCLUDED IN THE EVALUATION OF THE BIDS UNDER SCHEDULE II AND THUS THE REAL COST TO THE GOVERNMENT OF EACH OF THE BIDS HAS NOT BEEN PROPERLY EVALUATED. *** ."

IN A REPORT TO OUR OFFICE, THE MARINE CORPS CONCURS WITH YOUR ANALYSIS OF THE PROBLEM BY STATING:

"THE DIFFICULTY STEMS FROM THE INHERENT NATURE OF THE MOVES INTO THE QUANTICO AREA - NO ONE REALLY KNOWS, BEFOREHAND, WHERE THE SERVICE MEMBER WILL ULTIMATELY RESIDE. HE IS GENERALLY NEW TO THE AREA AND AT THE TIME OF THE CONTEMPLATED MOVE ONLY KNOWS THAT HE IS BEING TRANSFERRED TO THE BASE ITSELF; I.E., QUANTICO."

THE MARINE CORPS ACKNOWLEDGED THAT, IN A CROSS-OVER SITUATION, THE MOVE WOULD BE PERFORMED "IN-HOUSE" OR BY SEPARATE PURCHASE ORDER, THEREBY INCURRING ADDITIONAL EXPENSE, AND DEPRIVING THE CONTRACTORS OF PERFORMING SERVICES FOR WHICH THEY HAD CONTRACTED.

THE DETERMINATION OF AN EVALUATION FACTOR IS A MATTER WITHIN THE RESPONSIBILITY OF CONTRACTING OFFICIALS. 49 COMP. GEN. 98, 100 (1969). THE VERY NATURE OF A REQUIREMENT CONTRACT AWARDED UNDER AN IFB BASED ON ESTIMATES, AS HERE, PRESUMES AN ELEMENT OF UNCERTAINTY. TO COMPOUND THIS INHERENT UNCERTAINTY YOU WOULD REQUIRE THE MARINE CORPS TO INCORPORATE A COST FACTOR FOR CROSS-OVERS IN THE IFB. IT IS OUR VIEW THAT IT WOULD BE VIRTUALLY IMPOSSIBLE TO EXPRESS SUCH A FACTOR IN REASONABLY DEFINITE TERMS OR AMOUNTS. THIS IS SO BECAUSE 1970 WAS THE FIRST YEAR FOR CONTRACTING ON THE SCHEDULE AND AREA DIVISION IN THE IFB BY THE MARINE CORPS. IN 1970, AS NOTED ABOVE, VICTORY WAS THE INCUMBENT CONTRACTOR IN AREAS "A" AND "B." HILLDRUP IS THE CURRENT CONTRACTOR FOR AREAS "A" AND "B." THEREFORE, THERE HAS NEITHER BEEN ANY PRIOR NOR ANY PRESENT EXPERIENCE UPON WHICH THE MARINE CORPS COULD DETERMINE THE NUMBER OF CROSS-OVERS LIKELY TO OCCUR. COST WHICH IS DIFFICULT TO DEFINITIZE SHOULD NOT BE USED IN EVALUATION. WE HAVE CONSISTENTLY EMPHASIZED THE NECESSITY FOR EXACTITUDE IN THE ESTABLISHMENT OF SPECIFIC COST EVALUATION FACTORS. SEE 50 COMP. GEN. (B-170682, MARCH 19, 1971) AND B-168570, JUNE 19, 1970. FURTHERMORE, KEEPING IN MIND THE HYPOTHETICAL BASIS UPON WHICH WE MUST CONSIDER THIS QUESTION, WE ARE IN NO POSITION TO DISAGREE WITH THE MARINE CORPS' DENIAL OF YOUR ASSERTION THAT AN AWARD TO SEPARATE CONTRACTORS UNDER SCHEDULE II WOULD RESULT IN SUBSTANTIAL ADDED COST TO THE GOVERNMENT. THEREFORE, WE WILL NOT QUESTION THE FAILURE OF THE MARINE CORPS TO INCLUDE A COST EVALUATION FACTOR FOR CROSS-OVERS IN THE IFB.

YOU FURTHER ARGUE THAT AN AWARD TO SEPARATE CONTRACTORS FOR AREAS "A" AND "B" WOULD RESULT IN IRREPARABLE PREJUDICE TO THE CONTRACTORS AND, CONCOMMITANTLY, THAT ANY CONTRACT AWARDED TO A SEPARATE CONTRACTOR WOULD NOT BE THE ONE ADVERTISED DUE TO THE POSSIBILITY OF CROSS-OVERS.

IT APPEARS LIKELY THAT SINCE QUANTICO BASE IS IN AREA "A," AN INCOMING MEMBER WOULD DESIGNATE THAT AREA, RATHER THAN AREA "B." THEREFORE, MOST, IF NOT ALL, THE CROSS-OVERS WOULD DEPRIVE THE CONTRACTOR FOR AREA "B" OF POSSIBLE ORDERS UNDER THE RESULTING CONTRACT. CONSEQUENTLY, ANY PREJUDICE RESULTING THEREFROM WOULD HAVE INURED TO THE DETRIMENT OF HILLDRUP, THE LOW BIDDER IN AREA "B," AND NOT TO VICTORY, THE LOW BIDDER IN AREA "A."

WE AGREE WITH YOUR CONTENTION THAT CROSS-OVERS WOULD HAVE BEEN LIKELY TO OCCUR HAD AWARDS BEEN MADE TO SEPARATE CONTRACTORS UNDER SCHEDULE II. ALSO, AS A RESULT THEREOF, THE TWO CONTRACTORS WOULD HAVE NOT RECEIVED ALL OF THE MARINE CORPS REQUIREMENTS FOR THEIR RESPECTIVE AREAS. THIS WOULD HAVE BEEN IN VIOLATION OF THE FUNDAMENTAL CONCEPT OF REQUIREMENTS CONTRACTS TO THE EFFECT THAT SUCH A CONTRACT IS ONE IN WHICH ONE PARTY PROMISES TO SUPPLY ALL THE SPECIFIC GOODS OR SERVICES WHICH THE OTHER PARTY MAY NEED DURING A CERTAIN PERIOD AT AN AGREED PRICE. THE OTHER PARTY IMPLICITLY PROMISES THAT HE WILL OBTAIN HIS REQUIRED GOODS OR SERVICES FROM THE FIRST PARTY EXCLUSIVELY. SEE SHADER CONTRACTORS, INC. V UNITED STATES, SUPRA. IF EITHER OF THE TWO SEPARATE CONTRACTORS HAD NOT RECEIVED ORDERS FOR ALL OF THE MARINE CORPS REQUIREMENTS WITHIN HIS DESIGNATED AREA, AS YOU RECOGNIZE, AN ADEQUATE REMEDY BEFORE THE COURTS OR OUR OFFICE WOULD BE AVAILABLE TO THE AGGRIEVED PARTY. SEE SHADER CONTRACTORS, INC. V UNITED STATES, SUPRA; AND B-164995, AUGUST 26, 1968. THEREFORE, IN OUR OPINION, THIS TYPE OF DEFECT IN THE IFB DOES NOT PROVIDE SUPPORT FOR THE CONCLUSION THAT THE AWARD TO HILLDRUP WAS ILLEGAL.

THE MARINE CORPS STATES THAT THE DISCRETIONARY DETERMINATION OF THE CONTRACTING OFFICER TO CANCEL THE REQUEST FOR PROPOSALS AND REINSTATE THE IFB RESULTED FROM A "WEIGHING" OF THE TWO FOLLOWING FACTORS:

"1. THE ADMINISTRATIVE BURDEN TO THE MARINE CORPS HAVING TO SEPARATELY CONTRACT FOR (OR PROVIDE SERVICES IN HOUSE) FOR THE UNAVOIDABLE CROSS- OVERS IN AREAS A AND B OF SCHEDULE II, BECAUSE OF THE WAY THE IFB WAS STRUCTURED AND THE INDEFINITIVE SELECTION OF A RESIDENCE BY THE INCOMING SERVICE MEMBERS, OR

"2. THE AFFECT ON THE BIDDERS AS A RESULT OF CANCELLATION AND THE FACT THAT THE BIDDERS HAD DISCLOSED THEIR PRICES."

THE ADMINISTRATIVE AUTHORITY TO CANCEL A SOLICITATION IS EXTREMELY BROAD AND ORDINARILY WE WILL NOT QUESTION SUCH ACTION. FURTHERMORE, SOLICITATIONS SHOULD ONLY BE CANCELED AFTER BIDS HAVE BEEN OPENED IF THERE IS A COMPELLING REASON TO DO SO. SEE ASPR 2-404.1(A). WE VIEW THE CANCELLATION OF THE REQUEST FOR PROPOSALS AND REINSTATEMENT OF THE IFB AS REPRESENTING A DETERMINATION ON THE PART OF THE CONTRACTING OFFICER THAT NO COMPELLING REASON EXISTED TO REJECT ALL BIDS UNDER THE IFB. OUR OFFICE HAS APPROVED AND DIRECTED SUCH ACTION IN APPROPRIATE CIRCUMSTANCES. SEE 50 COMP. GEN. (B-170266, DECEMBER 30, 1970); 46 ID. 371 (1966); AND B- 161803, NOVEMBER 9, 1967. WE WILL NOT DISTURB THE BROAD DISCRETION VESTED IN THE CONTRACTING OFFICER IN THIS INSTANCE. ALTHOUGH THE SITUATION OF TWO SEPARATE CONTRACTORS UNDER SCHEDULE II ADMITTEDLY WOULD HAVE BEEN ADMINISTRATIVELY BURDENSOME TO SOME DEGREE, ON BALANCE WITH THE REVELATION OF COMPETITIVE PRICES AND THE EVALUATION ON THE BASIS OF UNIFORM CRITERIA SET FORTH IN THE IFB, IT APPARENTLY WAS NOT THOUGHT TO BE SO TROUBLESOME AS TO CONTINUE TO REQUIRE THE RESOLICITATION. CF. B-163828, JUNE 18, 1968; 47 COMP. GEN. 272 (1967); AND 38 ID. 550 (1959).

IN CONCLUSION, WE NOTE THAT VICTORY DID NOT COMPLAIN PRIOR TO BID OPENING ABOUT THE CROSS-OVER OR ESTIMATE PROBLEMS. IT APPEARS, FROM THE RECORD, THAT ALL THE BIDDERS WERE AWARE OF THE PROBLEMS INVOLVED AND CHOSE TO BID WITHOUT COMPLAINT. IT WOULD HAVE BEEN MORE APPROPRIATE FOR ANY OF THE BIDDERS, INCLUDING VICTORY, TO HAVE BROUGHT ANY PROBLEMS WITH THE IFB TO THE ATTENTION OF THE MARINE CORPS AND SOUGHT TO HAVE THEM CORRECTED PRIOR TO BIDDING. B-171568, APRIL 15, 1971; B-168205(1), JUNE 30, 1970; AND B- 166005, MARCH 25, 1969.