B-173452, SEP 27, 1971

B-173452, SEP 27, 1971

BID PROTEST - AMBIGUOUS IFB - CANCELLATION DECISION DENYING PROTEST OF JOHN R. HOLLINGSWORTH COMPANY AGAINST CANCELLATION OF IFB, RESOLICITATION, AND AWARD BY DEFENSE GENERAL SUPPLY CENTER, RICHMOND, VIRGINIA, TO ANOTHER FIRM A CONTRACT TO FURNISH 2,333 GENERATOR SETS EQUIPPED WITH ENGINES PROVIDED BY GOVERNMENT. SINCE PROTESTANT COMPLETED THE BLANK REFERRING TO DATE OF DELIVERY OF ENGINES BY GOVERNMENT AND THE OTHER BIDDERS DID NOT, IT IS APPARENT THAT THE INVITATION WAS AMBIGUOUS. THEREFORE, IT CANNOT BE SAID THAT THE CONTRACTING OFFICER ACTED WRONGLY IN CANCELLING THE IFB.

TO KLEINBARD, BELL & BRECKER:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 28, 1971, WITH ENCLOSURES, AND SUPPLEMENTAL CORRESPONDENCE, PROTESTING ON BEHALF OF JOHN R. HOLLINGSWORTH COMPANY AGAINST CANCELLATION OF INVITATION FOR BIDS NO. DSA-400-71-B-4446, AND AWARD OF A CONTRACT TO ANOTHER FIRM UPON RESOLICITATION OF THE REQUIREMENT UNDER INVITATION FOR BIDS NO. DSA-400-71 -B-6355, BY THE DEFENSE GENERAL SUPPLY CENTER, RICHMOND, VIRGINIA.

THE FIRST-MENTIONED IFB WAS ISSUED ON MARCH 1, 1971, FOR THE PROCUREMENT OF 2,333 GENERATOR SETS TO BE EQUIPPED WITH AN ENGINE FURNISHED TO THE CONTRACTOR BY THE GOVERNMENT. THE INVITATION INCLUDED A REQUIREMENT FOR FIRST ARTICLE TESTING OF THE GENERATOR AND ENGINE AS A UNIT AND REPORT THEREON WITHIN 180 CALENDAR DAYS AFTER AWARD. DELIVERY OF THE COMPLETED UNITS WAS REQUIRED TO BEGIN WITHIN 11 MONTHS AFTER AWARD PROVIDED THE GOVERNMENT-FURNISHED ENGINES WERE DELIVERED TO THE CONTRACTOR WITHIN THE TIME PROVIDED. IN THIS REGARD, THE IFB PROVIDED THAT "THE DELIVERY SCHEDULE CONTAINED HEREIN IS BASED ON THE ASSUMPTION THAT THE INITIAL DELIVERY OF GOVERNMENT FURNISHED MATERIAL WILL BE MADE TO THE CONTRACTOR WITHIN DAYS AFTER AWARD." THE BLANK WAS NOT FILLED IN BY THE CONTRACTING ACTIVITY. TYPED BELOW THIS PROVISION WAS INFORMATION THAT THE ENGINES WOULD BE AVAILABLE IN MARCH 1972. HOLLINGSWORTH INSERTED THE FIGURE "120" IN THE BLANK SPACE IN THE QUOTED PROVISION.

OF THE SEVEN BIDS RECEIVED AND OPENED ON APRIL 7, 1971, HOLLINGSWORTH WAS LOW. HOWEVER, THE CONTRACTING OFFICER CONCLUDED THAT ITS BID WAS RENDERED NONRESPONSIVE BY INSERTION OF "120" IN THE GOVERNMENT FURNISHED MATERIAL (GFM) CLAUSE SINCE THIS WAS AN EXCEPTION TO THE SPECIFIED DELIVERY DATE OF MARCH 1972. FURTHERMORE, HE CONSIDERED THE EXCEPTION PREJUDICIAL TO THE OTHER BIDDERS, NONE OF WHOM HAD INSERTED ANY FIGURE IN THE CLAUSE, SINCE HOLLINGSWORTH COULD HAVE REQUIRED DELIVERY OF THE ENGINES SEVEN MONTHS EARLIER THAN THEY COULD HAVE. AS A RESULT OF THE EXCEPTION TAKEN BY HOLLINGSWORTH, THE CONTRACTING OFFICER CONCLUDED THAT THE INVITATION WAS AMBIGUOUS IN THAT THE FIRST ARTICLE APPROVAL CLAUSE REQUIRED TESTING AND A REPORT ON A COMPLETE UNIT 180 DAYS AFTER AWARD, WHEREAS THE GFM CLAUSE PROVIDED FOR INITIAL DELIVERIES OF THE ENGINES IN MARCH 1972, APPROXIMATELY 10 OR 11 MONTHS AFTER THE CONTEMPLATED DATE OF AWARD. THEREFORE, BY LETTER DATED MAY 10, 1971, HE ADVISED ALL BIDDERS THAT THE INVITATION WAS CANCELLED PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2 404.1(B)(I).

ON MAY 14, 1971, THE REQUIREMENT WAS READVERTISED UNDER IFB NO. DSA 400- 71-B-6355. THE GFM CLAUSE WAS CHANGED TO PROVIDE FOR DELIVERY TO THE CONTRACTOR OF THREE ENGINES 120 DAYS AFTER THE CONTRACT DATE, AND DELIVERY OF THE BALANCE OF THE ENGINES ON SPECIFIED DATES COMMENCING ON FEBRUARY 1, 1972. AWARD WAS MADE TO THE LOW RESPONSIVE BIDDER UNDER THE RESOLICITATION PRIOR TO THE FILING OF THE PROTEST WITH OUR OFFICE.

HOLLINGSWORTH CONTENDS THAT THE FIRST INVITATION WAS IMPROPERLY CANCELLED AS IT DID NOT CONTAIN INADEQUATE OR AMBIGUOUS SPECIFICATIONS AS CONTEMPLATED UNDER ASPR 2-404.1(B)(I). IN THIS CONNECTION, IT IS CONTENDED THAT ANY INADEQUACIES WERE MINOR AND SHOULD HAVE BEEN CLARIFIED RATHER THAN CANCELLING THE IFB AFTER PRICES WERE EXPOSED. HOLLINGSWORTH'S VIEW, IT WAS CLEAR THAT THE BLANK SPACE IN THE GFM CLAUSE WAS TO BE COMPLETED BY THE BIDDERS SINCE IT IS INCONCEIVABLE THAT ANY BIDDER WOULD ASSUME THAT NO ENGINE WOULD BE FURNISHED UNTIL MARCH 1972 IN VIEW OF THE REQUIREMENT FOR FIRST ARTICLE APPROVAL IN NOVEMBER 1971. THEREFORE, IT IS ASSERTED THAT THIS MINOR PATENT AMBIGUITY COULD NOT HAVE AFFECTED THE PRICES BID. FURTHER, IT IS CONTENDED THAT THE REDUCED PRICES OFFERED BY THE OTHER BIDDERS UNDER THE SECOND INVITATION RESULTED FROM AN UNFAIR COMPETITIVE ADVANTAGE GAINED THROUGH THE UNJUSTIFIED CANCELLATION OF THE FIRST INVITATION AFTER PUBLIC DISCLOSURE OF THE BIDS.

UNDER 10 U.S.C. 2305(B), THE DEFENSE SUPPLY AGENCY IS REQUIRED TO INCLUDE IN THE INVITATION SPECIFICATIONS WHICH ARE SUFFICIENTLY DESCRIPTIVE IN LANGUAGE TO PERMIT FULL AND FREE COMPETITION. SUCH OBLIGATION REQUIRES THAT THE INVITATION BE SUFFICIENTLY DEFINITE TO PERMIT THE PREPARATION AND EVALUATION OF BIDS ON A COMMON BASIS. ARMED SERVICES PROCUREMENT REGULATION 2-404.1(B)(I) PROVIDES THAT INVITATIONS FOR BIDS MAY BE CANCELLED AFTER BID OPENING BUT BEFORE AWARD WHERE THE SPECIFICATIONS ARE INADEQUATE OR AMBIGUOUS. IN THE INSTANT CASE, ALTHOUGH THE GFM CLAUSE INCLUDED NO PROVISION FOR THE GOVERNMENT TO FURNISH ENGINES PRIOR TO MARCH 1972, YOU INTERPRETED IT TO PERMIT BIDDERS TO INSERT AN EARLIER DATE. ACCEPTANCE OF YOUR BID WOULD HAVE REQUIRED THE GOVERNMENT TO BEGIN DELIVERY OF AN UNSPECIFIED NUMBER OF ENGINES 120 DAYS AFTER AWARD. ON THE OTHER HAND, SINCE THE REMAINING SIX BIDDERS INSERTED NOTHING IN THE BLANK SPACE IT IS OBVIOUS THAT THEY INTERPRETED THE CLAUSE DIFFERENTLY. THEREFORE, IT IS CLEAR THAT THE INVITATION WAS NOT SUFFICIENTLY CLEAR TO PERMIT BIDDERS TO PREPARE AND HAVE THEIR BIDS EVALUATED ON A COMMON BASIS. FURTHERMORE, IT IS CLEAR IN THE LIGHT OF THE INCONSISTENT PROVISIONS IN THE FIRST INVITATION AND THE CHANGE IN THE GFM CLAUSE IN THE READVERTISEMENT, THAT THE FIRST INVITATION DID NOT REFLECT THE INTENTION OF THE GOVERNMENT WITH RESPECT TO DELIVERY OF THE ENGINES. IN OUR VIEW, THE CIRCUMSTANCES REQUIRED THE CONTRACTING OFFICER TO CANCEL THE INVITATION AND READVERTISE UNDER CORRECTED SPECIFICATIONS.

WHILE THE INTEREST OF THE GOVERNMENT AND THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM REQUIRE THAT INVITATIONS FOR BIDS BE CANCELLED AFTER BIDS ARE OPENED AND PRICES EXPOSED ONLY FOR THE MOST COGENT AND COMPELLING REASONS, AN INVITATION FOR BIDS DOES NOT IMPORT ANY OBLIGATION TO ACCEPT ANY OF THE BIDS RECEIVED WHERE THE CONTRACTING OFFICER REASONABLY DETERMINES THAT THE PUBLIC INTEREST WOULD BEST BE SERVED BY REJECTION OF ALL BIDS AND READVERTISEMENT UNDER SPECIFICATIONS MORE ACCURATELY STATING THE GOVERNMENT'S NEEDS. 49 COMP. GEN. 713 (1970); 17 COMP. GEN. 554 (1938). IN THE CIRCUMSTANCES, WE CONCLUDE THAT CANCELLATION OF THE INVITATION AND READVERTISEMENT OF THE REQUIREMENT IS NOT SUBJECT TO QUESTION BY OUR OFFICE.

WE HAVE EXAMINED THE CASES CITED BY YOU AND FIND THEM DISTINGUISHABLE FROM THE CIRCUMSTANCES PRESENTED HERE SINCE THERE WERE NO COGENT AND COMPELLING REASONS TO JUSTIFY CANCELLATION.

ACCORDINGLY, YOUR PROTEST IS DENIED.