B-199501, DEC 22, 1980

B-199501, DEC 22, 1980

DIGEST: AGENCY PROPERLY MAY CANCEL SOLICITATION FOR REQUIREMENTS-TYPE CONTRACT FOR EQUIPMENT REPAIR WHERE PRICING SCHEDULE DID NOT PROVIDE BEST ESTIMATED QUANTITIES FOR DISTINCT EQUIPMENT ITEMS BUT ONLY STATED TOTAL QUANTITY FOR ALL EQUIPMENT, SINCE GOVERNMENT CANNOT USE BIDS AS SUBMITTED TO ASSURE ITSELF THAT PRICES ARE FAIR AND REASONABLE AND REPRESENT LOWEST COST AND BIDDERS ARE NOT COMPETING ON COMMON BASIS WHEN NOT APPRISED OF ESTIMATED QUANTITIES OF EQUIPMENT TO BE REPAIRED UNDER CONTRACT.

B. B. SAXON COMPANY, INC.:

B. B. SAXON COMPANY, INC. PROTESTS THE DEPARTMENT OF THE AIR FORCE'S CANCELLATION OF INVITATION FOR BIDS (IFB) F41608-80-B-0196. THE SOLICITATION WAS A SMALL BUSINESS SET-ASIDE AND WAS FOR A REQUIREMENTS TYPE CONTRACT FOR THE REPAIR/OVERHAUL OF GAS TURBINE POWER UNITS AND TRAILER ASSEMBLIES AT KELLY AIR FORCE BASE, TEXAS. THE AIR FORCE CANCELED THE IFB BECAUSE OF AN ALLEGED AMBIGUITY AND INCONSISTENCY BETWEEN CLAUSE D -1(F)(1), THE EVALUATION PROVISION, AND THE PRICING SCHEDULE. SAXON CONTENDS THAT THE IFB IS CLEAR ON ITS FACE AND SHOULD BE REINSTATED WITH AWARD MADE TO IT AS THE LOW BIDDER. WE DENY THE PROTEST.

CLAUSE D-1(F)(1) OF THE IFB STATED THAT:

"BIDS WILL BE EVALUATED ON THE BASIS OF THE SINGLE UNIT PRICE OFFERED FOR THE DESIGNATED BEQ (BEST ESTIMATED QUANTITY) FOR EACH ENGINE ITEM (ITEMS 0001 THROUGH 0005) APPEARING IN THE SCHEDULE. THE UNIT PRICE OFFERED WILL BE MULTIPLIED BY THE BEQ AND TOTALED."

THE SCHEDULE, HOWEVER, DID NOT INCLUDE A BEQ FOR THE FIVE LINE ITEMS. THE SALIENT PORTIONS OF THE SCHEDULE ARE AS FOLLOWS:

ITEM

NR BEQ UNIT PRICE

0001 TRAILER ASSEMBLY 0002 TURBINE GAS 0003 POWER UNIT 0004 POWER UNIT 0005 POWER UNIT $

18 MONTH PERIOD

0001AA BEQ 97 $

0001AB PROGRAM MAXIMUM QUANTITY 203 $** NSP ** NOT SEPARATELY PRICED

SAXON AND ANOTHER BIDDER ENTERED PRICES OF $2,903 AND $3,780, RESPECTIVELY, IN THE BLANK SPACE FOR ITEM 0001AA; PAGE AIRWAYS, INC. INSERTED A PRICE OF $217,000.

THE PROTESTER TAKES THE POSITION THAT THE IFB SHOULD BE REINSTATED BECAUSE THE EVALUATION CLAUSE D-1(F)(1) IS NOT AMBIGUOUS AND CLEARLY STATED THE GOVERNMENT'S INTENTION TO REQUIRE AND EVALUATE BIDS ON A PER UNIT BASIS. SAXON ARGUES THAT WHETHER OR NOT THE IFB SET FORTH SEPARATE BEQS FOR EACH ITEM IS IRRELEVANT BECAUSE THE SOLICITATION STATED THE TOTAL BEQ OF 97 AND PROVIDED A SPACE FOR A UNIT PRICE. SINCE, IN ITS VIEW, IT SUBMITTED THE LOW UNIT PRICE OF $2,903, SAXON STATES THAT THE AIR FORCE SHOULD MAKE AN AWARD TO IT.

ORDINARILY, WE WILL NOT QUESTION THE CONTRACTING OFFICER'S BROAD AUTHORITY TO CANCEL A SOLICITATION AND READVERTISE WHEN A COMPELLING REASON TO DO SO EXISTS. SPECKARD ENTERPRISES, INC., ET AL., 54 COMP.GEN. 145 (1974), 74-2 CPD 121. WE BELIEVE SUCH A REASON EXISTS HERE BECAUSE OF THE IFB'S FAILURE TO SPECIFY THE BEQ FOR EACH LINE ITEM.

IN OUR VIEW, WHETHER BIDS ARE EVALUATED ON THE BASIS OF TOTAL PRICE OR UNIT PRICE IS NOT DISPOSITIVE OF THE ISSUE. SINCE PAGE'S TOTAL BID PRICE OF $217,000 CAN BE DIVIDED BY 97 TO DERIVE A UNIT PRICE OR THE UNIT PRICES CAN BE MULTIPLIED BY 97 TO DERIVE A TOTAL PRICE, PAGE'S AND SAXON'S BIDS CAN BE EVALUATED ON A COMMON BASIS. THUS, IF ITEMS 0001 0005 REPRESENTED THE SAME REPAIR ITEMS OR REQUIRED SUBSTANTIALLY THE SAME AMOUNT OF WORK, WE WOULD NOT OBJECT TO AN AWARD UNDER THE ORIGINAL IFB. SEE SHAMROCK FIVE CONSTRUCTION COMPANY, B-191749, AUGUST 16, 1978, 78-2 CPD 123. HOWEVER, FOR THE REASONS SET FORTH BELOW, WE THINK THE DEFECT IN THE PRICING SCHEDULE PREVENTS THE GOVERNMENT FROM ASSURING ITSELF THAT AN AWARD UNDER THE ORIGINAL IFB WOULD BE AT THE LOWEST COST, REPRESENTING A FAIR AND REASONABLE PRICE.

THE RELEVANT ADVERTISING STATUTE REQUIRES THAT AN AWARD BE MADE TO THE RESPONSIBLE, RESPONSIVE BIDDER WHOSE BID WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED. 10 U.S.C. SEC. 2305(C) (1976). WHERE REQUIREMENTS-TYPE CONTRACTS ARE INVOLVED, ESTIMATES OBVIOUSLY ARE ESSENTIAL IN ENSURING THAT THE GOVERNMENT AWARDS THE CONTRACT TO THE LOWEST RESPONSIVE, RESPONSIBLE BIDDER. EDWARD E. DAVIS CONTRACTING, INC., B-192707, APRIL 20, 1979, 79-1 CPD 280. HERE, ALTHOUGH THE IFB SET FORTH A TOTAL BEQ OF 97, THE EQUIPMENT TO BE REPAIRED IS NOT IDENTICAL AND, AS THE AIR FORCE REPORTS, WOULD REQUIRE DIFFERENT AMOUNTS OF TIME TO REPAIR WITH A CORRESPONDING DIFFERENCE IN PRICE. WITHOUT SEPARATE PRICES FOR EACH ITEM, THE PRICE BID NECESSARILY MUST REPRESENT AN AVERAGE PRICE FOR THE MIX OF EQUIPMENT ITEMS. THUS, EVEN IF THE GOVERNMENT UTILIZED, FOR EXAMPLE, SAXON'S UNIT PRICE, IT COULD NOT DETERMINE WHETHER THIS PRICE WAS FAIR AND REASONABLE BECAUSE THE AVERAGE UNIT PRICE BID FOR ALL ITEMS MAY NOT BEAR ANY RELATIONSHIP TO THE TIME AND EFFORT REQUIRED TO REPAIR ANY GIVEN ITEM. CONSEQUENTLY, IF THE AIR FORCE'S ACTUAL REQUIREMENTS OVER THE CONTRACT'S TERM RESULTED IN THE NEED TO REPAIR EQUIPMENT REQUIRING RELATIVELY LESS TIME AND EFFORT TO REPAIR, THE AIR FORCE ULTIMATELY WOULD PAY MORE THAN IT OTHERWISE WOULD HAVE PAID IF BIDDERS HAD BID INDIVIDUAL UNIT PRICES FOR EACH TYPE OF EQUIPMENT SPECIFIED IN THE INDIVIDUAL LINE ITEMS.

THE ABSENCE OF A BEQ FOR EACH ITEM ALSO HAS AN ADVERSE EFFECT ON COMPETITION. WITH REGARD TO REQUIREMENTS CONTRACTS, WHERE THE QUANTITIES OF THE ITEMS TO BE PROCURED ARE NOT KNOWN, THE IFB MUST PROVIDE SOME BASIS FOR BIDDING, SUCH AS ESTIMATED QUANTITIES FOR THE VARIOUS ITEMS, 52 COMP. GEN. 732 (1973), SINCE ESTIMATES ARE ESSENTIAL IN HELPING BIDDERS PREPARE REASONABLE, INTELLIGENT BIDS. EDWARD E. DAVIS CONTRACTING, INC., SUPRA. WITHOUT ESTIMATES, BIDDERS ARE NOT PROVIDED ALL THE INFORMATION THAT MIGHT BE IMPORTANT TO FORMULATE A REALISTIC BID ON A COMMON BASIS. NORTH AMERICAN REPORTING, INC.; ACE FEDERAL REPORTERS, INC., B-198448, NOVEMBER 18, 1980, 80-2 CPD . THEREFORE, EACH BIDDER WOULD HAVE TO SPECULATE ON THE GOVERNMENT'S REQUIREMENTS FOR EACH ITEM TO BE REPAIRED AND FORMULATE ITS BID ACCORDINGLY.

SAXON ALSO POINTS OUT THAT A RECENT DECISION OF A REGIONAL OFFICE OF THE SMALL BUSINESS ADMINISTRATION (SBA) ON ANOTHER PROCUREMENT HELD THAT PAGE IS NOT A SMALL BUSINESS CONCERN UNDER THE SAME SMALL BUSINESS SIZE STANDARD APPLICABLE TO THIS PROCUREMENT. ON THAT BASIS, SAXON REQUESTS THAT WE DIRECT THE AIR FORCE TO REINSTATE THE IFB AND AWARD IT THE CONTRACT. HOWEVER, THE SBA'S RULING IN THIS RESPECT DOES NOT AFFECT OUR CONCLUSION THAT THE DEFECTS IN THE IFB JUSTIFY CANCELLATION.

THE PROTEST IS DENIED.