B-241413.2, Mar 1, 1991, 91-1 CPD 231

B-241413.2, Mar 1, 1991, 91-1 CPD 231

PROCUREMENT - Sealed Bidding - Invitations for bids - Post-bid opening cancellation - Resolicitation

DIGEST

Attorneys

Deere & Company:

Deere & Company protests the cancellation of invitation for bids (IFB) No. DLA730-90-B-4041, issued by the Defense Logistics Agency for a quantity of loaders for forklift operations. Deere argues that the agency lacked a compelling reason to cancel the solicitation once bids were opened and prices were exposed.

We deny the protest.

The IFB was issued on June 11, 1990, and solicited bids on a "brand name or equal" basis, identifying the John Deere Model 544E TC, Volvo Clark Michigan Model L70, and Caterpillar Model IT28 as the brand name products. The IFB listed several salient characteristics of the brand name products. On October 2, prior to bid opening that day, Komatsu Dresser Company filed a protest with our Office generally alleging that the IFB's salient characteristics were unduly restrictive of competition, exceeded the government's minimum needs, and merely reflected operator or design preferences. Subsequent to bid opening and after reviewing Komatsu -Dresser's protest, the agency determined that at the very least the salient characteristic requiring the loader's diesel engine to be manufactured by the loader's manufacturer was unduly restrictive of competition. Further, prior to any resolicitation, the agency stated it would review and possibly revise or delete the other salient characteristics which were challenged by Komatsu-Dresser as unduly restrictive of competition (involving requirements for a four-speed forward transmission, automatic parallel lift capability, rear mounting of the cab on the loader, and adjustable steering columns). For these reasons, the agency canceled the solicitation and indicated that a less restrictive solicitation would be issued in the future. Komatsu-Dresser withdrew its protest. On November 2, Deere filed this protest challenging the cancellation of the IFB.

Deere, the apparent low bidder, argues that the cancellation was improper because its prices have been exposed and maintains that since three bids were submitted, the agency received sufficient competition.

Because of the potential adverse impact on the competitive bidding system of a cancellation of an IFB after bid prices have been exposed, any cancellation after bid opening must be based on a compelling reason. Federal Acquisition Regulation Sec. 14.404-1(a)(1); Bangar Contractors Corp., B-240071, Oct. 16, 1990, 90-2 CPD Para. 295. A compelling reason for cancellation exists when it is determined that an IFB overstates the minimum needs of the government or fails to express properly the agency's minimum needs. JoaQuin Mfg. Corp., B-238169.2, May 16, 1990, 90-1 CPD Para. 474.

Here, we find the agency had a compelling reason to cancel the solicitation based on its determination that the solicitation overstated the agency's needs with respect to the requirement that the loader's diesel engine be manufactured by the loader's manufacturer. This requirement, which the agency states is unnecessary, clearly could have eliminated from the competition those firms which do not manufacture their own engines, but which use engines on their loaders which are manufactured by outside engine manufacturing firms. While the agency received three bids in response to the solicitation, this does not establish that the engine manufacturing requirement did not unduly restrict competition because other firms, like Komatsu-Dresser, may not have competed based on their inability to meet the requirement (along with other requirements that now may be changed) as stated in the original solicitation. In this regard, a specification is unduly restrictive where it unnecessarily prevents one or more companies from competing. Deere & Co., B-206453.2, Nov. 1, 1982, 82-2 CPD Para. 392. The agency has stated that upon resolicitation the restriction concerning the engine manufacturer will be deleted. Therefore, we find that the agency's cancellation of the solicitation after bid opening was reasonably based on its desire to properly state its minimum needs in order to enhance competition.

The protest is denied.