B-173780, OCT 7, 1971

B-173780, OCT 7, 1971

BID PROTEST - PROCUREMENT PROCEDURES - CANCELLATION OF IFB DECISION DENYING PROTEST BY SUCCESSFUL OFFEROR AGAINST THE PROCUREMENT PROCEDURES USED BY THE NAVAL SUPPLY CENTER, NORFOLK, VA., UNDER AN IFB, AND LATER RESOLICITATION UNDER AN RFP FOR FINNED TUBING. BECAUSE THE MANUFACTURING PROCESS ALLOWED UNDER AN AMENDMENT TO THE IFB WAS DETERMINED TO BE AN UNACCEPTABLE METHOD AFTER BID OPENING AND COMMENCEMENT OF PREAWARD SURVEYS ON LOW BIDDER, ESCOA FINTUBE CORPORATION AND THIRD LOW BIDDER, PROTESTANT, (THE SECOND LOW BIDDER HAVING BEEN FOUND NONRESPONSIVE), THE IFB WAS PROPERLY CANCELLED UNDER PARAGRAPH 2- 404.1(B)(II) OF ASPR. DUE TO AN INCREASINGLY URGENT NEED FOR THE ITEM, THE PROCUREMENT WAS RESOLICITED BY COMPETITIVE NEGOTIATION PROCEDURES WHICH RESULTED IN AN AWARD TO PROTESTANT AT ITS LOW NEGOTIATED UNIT PRICE OF $15.87. THE COMP. GEN. CANNOT CONCLUDE THAT THE ABOVE PROCUREMENT PROCEDURE WAS IMPROPER, AND PROTESTANT'S CONTENTION THAT IT SHOULD RECEIVE THE AWARD UNDER THE ORIGINAL BID PRICE OF $16.89 IS REJECTED.

TO NORTHWEST TECHNICAL INDUSTRIES, INC.:

WE REFER TO YOUR LETTER OF JULY 30, 1971, WITH ENCLOSURES, PROTESTING THE PROCUREMENT PROCEDURES USED BY THE NAVAL SUPPLY CENTER, NORFOLK, VIRGINIA (NSCONORVA), UNDER INVITATION FOR BIDS (IFB) N00189-71-B-0140 AND THE RESOLICITATION OF THE REQUIREMENT UNDER REQUEST FOR PROPOSALS (RFP) N00189 -71-R-0207.

THE SPECIFICATION GOVERNING THIS PROCUREMENT OF FINNED TUBING WHEN THE SOLICITATION WAS FIRST ISSUED REQUIRED THAT THE TUBING BE PRODUCED BY AN EXPLOSIVE FORMING PROCESS. HOWEVER, AS A RESULT OF ADVICE GIVEN TO NSCNORVA BY THE ESCOA FINTUBE CORPORATION TO THE EXTENT THAT IT WAS SATISFACTORILY MANUFACTURING FINNED TUBING FOR THE PUGET SOUND NAVAL SHIPYARD BY A HIGH FREQUENCY WELDING PROCESS, THE NORFOLK NAVAL SHIPYARD, PORTSMOUTH, VIRGINIA (NNSY), THE AGENCY RESPONSIBLE FOR DRAWING UP THE APPLICABLE SPECIFICATION, DETERMINED THAT THE SOLICITATION SHOULD BE AMENDED TO ALSO ALLOW USE OF THE WELDING PROCESS. AMENDMENT NO. 0002 TO THE IFB WAS ISSUED ON MARCH 3, 1971, IMPLEMENTING THIS DETERMINATION.

THE BIDS OPENED ON APRIL 23, 1971, WERE AS FOLLOWS:

BIDDER UNIT PRICE AMOUNT

ESCOA FINTUBE CORPORATION $10.11 $20,220

THERMAL TRANSFER CORPORATION 14.78 29,560

NORTHWEST TECHNICAL INDUSTRIES, INC. 16.89 33,780

ELECTRO-FORM, INC. 19.85 39,700

THE BID OF THERMAL TRANSFER CORPORATION WAS REJECTED AS NONRESPONSIVE TO THE TERMS, CONDITIONS, AND SPECIFICATIONS OF THE IFB. THEREAFTER, IN AN ATTEMPT TO AVOID ANY POSSIBLE DELAY IN AWARD WHICH MIGHT HAVE OCCURRED HAD THE PREAWARD SURVEY SHOWN ESCOA'S LOW BID PRICE TO BE ERRONEOUS, THE CONTRACTING OFFICER REQUESTED THAT CONCURRENT PREAWARD SURVEYS BE CONDUCTED ON BOTH ESCOA AND NORTHWEST. PRIOR TO THE COMPLETION OF THE SURVEYS, HOWEVER, NNSY ADVISED NSCNORVA THAT THE WELDING PROCESS WAS NO LONGER CONSIDERED AS AN ACCEPTABLE METHOD FOR THE PROCUREMENT. THIS DETERMINATION WAS CONFIRMED FOLLOWING A RECOMMENDATION BY THE NAVAL SHIP ENGINEERING CENTER IN WASHINGTON, D.C., THAT ONLY FINNED TUBING MANUFACTURED BY THE EXPLOSIVE FORMING PROCESS BE ACCEPTED IN FUTURE PROCUREMENTS.

ON MAY 12, 1971, THE CONTRACTING OFFICER PURSUANT TO PARAGRAPH 2 404.1 (B)(II) OF THE ARMED SERVICES PROCUREMENT REGULATION DETERMINED THAT THE IFB SHOULD BE CANCELED DUE TO THIS REVISION IN THE SPECIFICATIONS. CANCELLATION WAS IMPERATIVE IN THIS CASE BECAUSE THE LOW BIDDER'S TUBING WAS TO BE MANUFACTURED BY THE HIGH FREQUENCY WELDING PROCESS WHICH NOW IS UNACCEPTABLE TO THE GOVERNMENT. ALL BIDDERS WERE NOTIFIED ON MAY 13 OF THIS DETERMINATION.

DUE TO AN INCREASINGLY URGENT NEED FOR THE TUBING, THE CONTRACTING OFFICER DETERMINED THAT THE PUBLIC EXIGENCY REQUIRED THE PROCUREMENT TO BE RESOLICITED BY COMPETITIVE NEGOTIATION PROCEDURES IN LIEU OF FORMAL ADVERTISING, AND, ACCORDINGLY, RFP N00189-71-R-0207 WAS ISSUED WHICH REQUIRED THAT THE TUBING BE PROCESSED BY THE EXPLOSIVE FORMING METHOD. AFTER NEGOTIATIONS WERE CONDUCTED WITH BOTH NORTHWEST AND ELECTRO-FORM, AWARD OF THE CONTRACT WAS MADE TO NORTHWEST AT ITS LOW UNIT PRICE OF $15.87.

NOTWITHSTANDING THIS AWARD AT $15.87 PER UNIT, NORTHWEST CONTENDS THAT IT SHOULD HAVE RECEIVED AWARD UNDER THE ORIGINAL SOLICITATION AS LOW RESPONSIVE BIDDER AT $16.89 PER UNIT; THAT SINCE BOTH SOLICITATIONS WERE, IN ESSENCE, FOR THE SAME ITEM, THE RFP NEED NOT HAVE BEEN ISSUED; AND THAT ISSUANCE OF THE RFP CONSTITUTED PROCUREMENT BY AUCTION-TYPE METHODS.

WE ARE AWARE THAT THE REJECTION OF ALL BIDS AFTER OPENING IS A SERIOUS MATTER AND SHOULD NOT BE PERMITTED EXCEPT FOR THE MOST COGENT REASONS. NEVERTHELESS, SINCE CONTRACTING OFFICERS ARE AGENTS OF, AND ARE REQUIRED TO ACT IN THE BEST INTERESTS OF THE GOVERNMENT, THEIR ACTIONS IN REJECTING BIDS AND RESOLICITING MAY NOT BE CONSIDERED IMPROPER WHEN BASED UPON SUBSTANTIAL REASONS LEADING TO A BONA FIDE BELIEF THAT THE INTERESTS OF THE GOVERNMENT WILL BE BEST SERVED THEREBY. SEE 39 COMP. GEN. 86 (1959); B-169258, MAY 8, 1970.

UNDER THE ORIGINAL SOLICITATION, ESCOA, THE LOW RESPONSIVE BIDDER, APPARENTLY WOULD HAVE UTILIZED THE UNACCEPTABLE WELDING PROCESS AND, FOR THIS REASON, THE CONTRACTING OFFICER CANCELLED THE IFB AND RESOLICITED THE PROCUREMENT IN ORDER TO ASSURE THAT TUBING MANUFACTURED BY THE EXPLOSIVE METHOD WOULD BE FURNISHED. CONSEQUENTLY, WE CANNOT CONCLUDE THAT THE REJECTION OF ALL BIDS UNDER IFB N00189-71-B-0140 AND THE SUBSEQUENT RESOLICITATION UNDER REVISED SPECIFICATIONS WAS IMPROPER.

ACCORDINGLY, YOUR PROTEST IS DENIED.