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DECISION RECOMMENDING THAT ADMINISTRATIVE ACTION TO CANCEL AND RESOLICIT AN IFB BE RESCINDED AND THAT THE RESOLICITATION IFB BE CANCELLED AND THE ORIGINAL IFB 03-45972-72 BE REINSTATED AND AN AWARD MADE TO THE LOWEST RESPONSIBLE BIDDER WHO IS OTHERWISE RESPONSIVE. SECRETARY: REFERENCE IS MADE TO LETTER 4330 DATED DECEMBER 1. WAS FOR THE "INSTALLATION OF IONIZATION FIRE DETECTION SYSTEM AT VARIOUS U.S.C.G. THE CONTRACTING OFFICER FOUND THAT REID WAS THE ONLY BIDDER WHO FURNISHED THE REQUIRED DESCRIPTIVE LITERATURE. THIS DETERMINATION WAS BASED SOLELY ON PARAGRAPH 2.6 OF THE SPECIFICATION WHICH STATED: "A PYROTRONICS. CONTROL PANEL AND EMERGENCY POWER SUPPLY WILL MEET THE REQUIREMENTS OF THIS SPECIFICATION.".

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B-177245, MAY 7, 1973

DECISION RECOMMENDING THAT ADMINISTRATIVE ACTION TO CANCEL AND RESOLICIT AN IFB BE RESCINDED AND THAT THE RESOLICITATION IFB BE CANCELLED AND THE ORIGINAL IFB 03-45972-72 BE REINSTATED AND AN AWARD MADE TO THE LOWEST RESPONSIBLE BIDDER WHO IS OTHERWISE RESPONSIVE. SECTION 236 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, 31 U.S.C. 1176 INVOKED, REQUIRING THAT THIS OFFICE BE ADVISED OF ACTION TAKEN.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER 4330 DATED DECEMBER 1, 1972, FROM THE ACTING COMPTROLLER, UNITED STATES COAST GUARD, REPORTING ON THE PROTEST FILED BY E. P. REID, INC. (REID), AGAINST THE REJECTION OF ALL BIDS AND THE CANCELLATION OF INVITATION FOR BIDS (IFB) 03-45972-72.

THE INVITATION, ISSUED ON MAY 8, 1972, WAS FOR THE "INSTALLATION OF IONIZATION FIRE DETECTION SYSTEM AT VARIOUS U.S.C.G. UNITS WITHIN THE THIRD COAST GUARD DISTRICT (NEW YORK, NEW JERSEY, AND CONNECTICUT)." THE SEVEN BIDS RECEIVED AND OPENED ON JUNE 8, 1972, MONACO ENTERPRISES, INC., SUBMITTED THE LOW BID AND REID SUBMITTED THE SECOND LOWEST BID. A LETTER DATED JUNE 8, 1972, REID ADVISED THAT AN AWARD TO ANY OTHER BIDDER WOULD BE PROTESTED ON THE GROUND OF NONRESPONSIVENESS SINCE ALL OF THE OTHER BIDDERS FAILED TO COMPLY WITH PARAGRAPH 1.5 OF IFB SPECIFICATION ECV-1516 DATED JANUARY 1972, WHICH PROVIDED:

ALL BIDDERS SHALL BE REQUIRED TO SUBMIT WITH HIS BID, MANUFACTURER'S CATALOG CUTS OF THE CONTROL PANEL AND DETECTORS SUFFICIENTLY DESCRIPTIVE TO SHOW CONFORMANCE WITH THESE SPECIFICATIONS. IN ADDITION, INTERNAL SCHEMATIC WIRING DIAGRAMS OF THE CONTROL PANEL SHALL BE SUBMITTED.

THE CONTRACTING OFFICER FOUND THAT REID WAS THE ONLY BIDDER WHO FURNISHED THE REQUIRED DESCRIPTIVE LITERATURE; HOWEVER, ON JULY 21, 1972, HE MADE A WRITTEN DETERMINATION TO CANCEL THE IFB AND TO REJECT ALL BIDS. THIS DETERMINATION WAS BASED SOLELY ON PARAGRAPH 2.6 OF THE SPECIFICATION WHICH STATED: "A PYROTRONICS, INC. SYSTEM OF IONIZATION DETECTORS, CONTROL PANEL AND EMERGENCY POWER SUPPLY WILL MEET THE REQUIREMENTS OF THIS SPECIFICATION." HE CONSIDERED THIS STATEMENT TO BE RESTRICTIVE BECAUSE IT TENDED TO REDUCE "FULL AND FREE COMPETITION" BY ELIMINATING OTHER MANUFACTURERS WHO MIGHT BE ELIGIBLE TO PROVIDE ACCEPTABLE EQUIPMENT. ADDITION, THE CONTRACTING OFFICER IN HIS REPORT TO OUR OFFICE ADVISES THAT DESCRIPTIVE LITERATURE WAS NOT REQUIRED TO DETERMINE WHETHER THE PRODUCTS OFFERED MET THE SPECIFICATION REQUIREMENT; CONSEQUENTLY, THE UNNECESSARY IMPOSITION OF A DESCRIPTIVE LITERATURE REQUIREMENT IS ALSO ADVANCED AS A BASIS FOR CANCELLATION OF THE INVITATION. IN THE NEW INVITATION, ISSUED ON OCTOBER 18, 1972, THE SPECIFICATION WAS REVISED TO ELIMINATE THE REQUIREMENT FOR SUBMISSION OF DESCRIPTIVE LITERATURE WITH THE BID AND TO ELIMINATE REFERENCE TO THE PRODUCT OF A SPECIFIC MANUFACTURER. ACTION UNDER THE NEW INVITATION IS BEING WITHHELD PENDING OUR RESOLUTION OF THE PROTEST.

THE CONTRACTING OFFICER'S AUTHORITY TO CANCEL AN INVITATION AFTER BID OPENING IS REFLECTED IN PARAGRAPH 1-2.404-1 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR), WHICH PROVIDES, IN PERTINENT PART, AS FOLLOWS:

(A) PRESERVATION OF THE INTEGRITY OF THE COMPETITIVE BID SYSTEM DICTATES THAT, AFTER BIDS HAVE BEEN OPENED, AWARD MUST BE MADE TO THE RESPONSIBLE BIDDER WHO SUBMITTED THE LOWEST RESPONSIVE BID, UNLESS THERE IS A COMPELLING REASON TO REJECT ALL BIDS AND CANCEL THE INVITATION. ***

(B) INVITATIONS FOR BIDS MAY BE CANCELLED AFTER OPENING BUT PRIOR TO AWARD, AND ALL BIDS REJECTED, WHERE SUCH ACTION IS CONSISTENT WITH SEC 1- 2.404-1(A) AND THE CONTRACTING OFFICER DETERMINES IN WRITING THAT CANCELLATION IS IN THE BEST INTEREST OF THE GOVERNMENT FOR REASONS SUCH AS THE FOLLOWING:

(1) INADEQUATE, AMBIGUOUS OR OTHERWISE DEFICIENT SPECIFICATIONS WERE CITED IN THE INVITATION FOR BIDS.

WHILE WE RECOGNIZE THAT THE CONTRACTING OFFICER HAS BROAD DISCRETION IN REJECTING ALL BIDS AND READVERTISING THE PROCUREMENT, WE DO NOT BELIEVE THAT CANCELLATION OF THE INVITATION FOR BIDS IN THIS INSTANCE WAS BASED ON A "COMPELLING REASON". AS STATED IN 52 COMP. GEN. 285 (B 176647, NOVEMBER 21, 1972):

THE MERE UTILIZATION IN THE IFB OF INADEQUATE, AMBIGUOUS OR OTHERWISE DEFICIENT SPECIFICATIONS IS NOT, ITSELF, A "COMPELLING REASON" TO CANCEL AN IFB AND READVERTISE. THE REJECTION OF ALL BIDS AFTER THEY HAVE BEEN OPENED TENDS TO DISCOURAGE COMPETITION BECAUSE IT RESULTS IN MAKING ALL BIDS PUBLIC WITHOUT AWARD, WHICH IS CONTRARY TO THE INTERESTS OF THE LOW BIDDER, AND BECAUSE REJECTION OF ALL BIDS MEANS THAT BIDDERS HAVE EXPENDED MANPOWER AND MONEY IN PREPARATION OF THEIR BIDS WITHOUT THE POSSIBILITY OF ACCEPTANCE. 41 COMP. GEN. 536 (1962). MOREOVER, AS A GENERAL PROPOSITION, IT IS OUR VIEW THAT CANCELLATION AFTER BIDS ARE OPENED IS INAPPROPRIATE WHEN AN AWARD UNDER A SOLICITATION WOULD SERVE THE ACTUAL NEEDS OF THE GOVERNMENT. 49 COMP. GEN. 211 (1969); 48 ID. 731 (1969).

IN HIS REPORT, THE CONTRACTING OFFICER ASSERTS THAT IT WAS IN THE BEST INTEREST OF THE GOVERNMENT TO REJECT ALL BIDS BECAUSE THE TWO INVITATION DEFICIENCIES, PREVIOUSLY NOTED, HAD THE TOTAL EFFECT OF PREVENTING FULL AND FREE COMPETITION, CITING FPR SEC. 1-2.201(A)(7).

THE REQUIREMENT FOR DESCRIPTIVE LITERATURE WAS CONSIDERED TO BE A DEFICIENCY BECAUSE THE LITERATURE WAS NOT ACTUALLY NEEDED PRIOR TO AWARD TO ENABLE THE COAST GUARD TO DETERMINE WHETHER THE PRODUCT MET THE SPECIFICATION REQUIREMENTS AND SIX OF THE SEVEN BIDS RECEIVED WERE "NON- RESPONSIVE" AS A RESULT OF THEIR FAILURE TO COMPLY WITH THE REQUIREMENT.

IT SHOULD BE NOTED THAT ADEQUATE COMPETITION WAS OBTAINED IN THIS CASE. IN OUR VIEW, OUR DECISION AT 48 COMP. GEN. 659 (1969) IS CONTROLLING. THERE, AS HERE, A REQUIREMENT FOR THE SUBMISSION OF DESCRIPTIVE DATA WAS INCLUDED IN AN INVITATION WITHOUT FULL COMPLIANCE WITH FPR SEC. 1-2.202- 5. THE PURPOSE OF THE REQUIREMENT WAS TO PERMIT THE CONTRACTING AGENCY TO DETERMINE WHETHER THE PRODUCT OFFERED WOULD CONCEIVABLY MEET THE SPECIFICATIONS AND TO GENERALLY ESTABLISH WHAT THE BIDDER PROPOSED TO FURNISH. IN SUCH CIRCUMSTANCES, WE CONCLUDED THAT THE REQUIREMENT WAS DIRECTED TOWARD DETERMINING THE RESPONSIBILITY OF A BIDDER RATHER THAN THE RESPONSIVENESS OF THE BID, AND, THEREFORE, NO VALID BASIS EXISTED FOR REJECTING THE LOW BID SOLELY FOR FAILURE TO SUBMIT DRAWINGS AND DATA. IDENTICAL CONCLUSION IS REQUIRED HERE, PARTICULARLY IN VIEW OF THE CONTRACTING OFFICER'S ADVICE THAT DESCRIPTIVE LITERATURE WAS NOT NECESSARY.

INSOFAR AS THE IDENTIFICATION OF THE PRODUCT OF A PARTICULAR MANUFACTURER WITH THE ADVICE THAT THE PRODUCT MET THE SPECIFICATIONS IS CONCERNED, WE DO NOT AGREE THAT THIS IDENTIFICATION IS A SUFFICIENT BASIS FOR CANCELLATION OF THE INVITATION. IN OUR VIEW, THE MERE POSSIBILITY THAT BIDDERS MIGHT HAVE BASED THEIR BIDS ON THE PRODUCT OF A NAMED MANUFACTURER DOES NOT JUSTIFY A CONCLUSION THAT THE INVITATION RESTRICTED COMPETITION. WHILE THE CONTRACTING OFFICER NOTES THAT OTHER MANUFACTURERS' PRODUCTS COULD MEET THE SPECIFICATIONS, THERE IS NO REASONABLE BASIS TO ASSUME THAT KNOWLEDGEABLE BIDDERS WOULD BE UNAWARE OF THE ALTERNATIVE SOURCES. ADDITION, IT WOULD BE UNREASONABLE TO SUGGEST THAT A BIDDER WHO EXAMINED PARAGRAPH 2.6 OF THE SPECIFICATIONS WOULD CONCLUDE THAT IT WAS REQUIRED TO FURNISH A PYROTRONICS, INC. SYSTEM.

ACCORDINGLY, WE RECOMMEND THAT THE RESOLICITATION BE CANCELLED AND THAT IFB 03-45972-72 BE REINSTATED AND AN AWARD BE MADE TO THE LOWEST RESPONSIBLE BIDDER WHO IS OTHERWISE RESPONSIVE.

SINCE THIS DECISION CONTAINS A RECOMMENDATION FOR CORRECTIVE ACTION TO BE TAKEN, IT IS BEING TRANSMITTED BY LETTER OF TODAY TO THE CONGRESSIONAL COMMITTEES NAMED IN SECTION 232 OF THE LEGISLATIVE REORGANIZATION ACT OF 1970, PUBLIC LAW 91-510, 84 STAT. 1170, 31 U.S.C. 1172. IN VIEW THEREOF, YOUR ATTENTION IS DIRECTED TO SECTION 236 OF THE ACT (31 U.S.C. 1176) WHICH REQUIRES THAT YOU SUBMIT WRITTEN STATEMENTS OF THE ACTION TO BE TAKEN WITH RESPECT TO THE RECOMMENDATION. THE STATEMENTS ARE TO BE SENT TO THE HOUSE AND SENATE COMMITTEES ON GOVERNMENT OPERATIONS NOT LATER THAN 60 DAYS AFTER THE DATE OF THIS LETTER AND TO THE COMMITTEES ON APPROPRIATIONS IN CONNECTION WITH THE FIRST REQUEST FOR APPROPRIATIONS MADE BY YOUR AGENCY MORE THAN 60 DAYS AFTER THE DATE OF THIS LETTER.

WE WOULD APPRECIATE RECEIVING ADVICE OF WHATEVER ACTION IS TAKEN ON OUR RECOMMENDATION.

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