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A SOLICITATION REQUIREMENT IS AMBIGUOUS WHEN IT IS SUSCEPTIBLE TO TWO OR MORE REASONABLE INTERPRETATIONS. THE PROTESTER IS NONETHELESS REQUIRED TO SHOW THAT ITS INTERPRETATION OF THE LANGUAGE IN ISSUE IS REASONABLE AND SUSCEPTIBLE OF THE UNDERSTANDING IT REACHED. PROTEST IS DENIED WHERE THE PROTESTER HAS MADE NO CREDIBLE SHOWING THAT AN INVITATION FOR BIDS ALLOWING THE SUBMISSION OF EITHER NEW OR USED PART PRICES FOR CERTAIN ITEMS COULD REASONABLY BE READ AS REQUIRING BOTH NEW AND USED PART PRICES FOR THE ITEMS IN QUESTION. AN AGENCY'S CANCELLATION OF AN INVITATION FOR BIDS AFTER BIDS HAVE BEEN EXPOSED IS NOT JUSTIFIED WHERE THE SOLICITATION AS WRITTEN WAS NOT AMBIGUOUS AND WHERE AN AWARD UNDER THE INVITATION.

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B-223328, AUG 27, 1986, 86-2 CPD 234

BIDS - INVITATION FOR BIDS - AMBIGUOUS - OBJECTIVE TEST DIGEST: 1. A SOLICITATION REQUIREMENT IS AMBIGUOUS WHEN IT IS SUSCEPTIBLE TO TWO OR MORE REASONABLE INTERPRETATIONS. ALTHOUGH A PROTESTER'S PARTICULAR INTERPRETATION NEED NOT BE THE MOST REASONABLE ONE FOR A FINDING OF AMBIGUITY, THE PROTESTER IS NONETHELESS REQUIRED TO SHOW THAT ITS INTERPRETATION OF THE LANGUAGE IN ISSUE IS REASONABLE AND SUSCEPTIBLE OF THE UNDERSTANDING IT REACHED. ACCORDINGLY, PROTEST IS DENIED WHERE THE PROTESTER HAS MADE NO CREDIBLE SHOWING THAT AN INVITATION FOR BIDS ALLOWING THE SUBMISSION OF EITHER NEW OR USED PART PRICES FOR CERTAIN ITEMS COULD REASONABLY BE READ AS REQUIRING BOTH NEW AND USED PART PRICES FOR THE ITEMS IN QUESTION. BIDS - INVITATION FOR BIDS - CANCELLATION - AFTER BID OPENING 2. AN AGENCY'S CANCELLATION OF AN INVITATION FOR BIDS AFTER BIDS HAVE BEEN EXPOSED IS NOT JUSTIFIED WHERE THE SOLICITATION AS WRITTEN WAS NOT AMBIGUOUS AND WHERE AN AWARD UNDER THE INVITATION, EVEN IF DEFECTIVE, WOULD SATISFY THE GOVERNMENT'S NEEDS WITHOUT PREJUDICE TO ANY BIDDER.

ENERGY MAINTENANCE CORPORATION:

ENERGY MAINTENANCE CORPORATION (EMC) PROTESTS THE AWARD OF A CONTRACT TO ANY FIRM OTHER THAN ITSELF UNDER INVITATION FOR BIDS (IFB) NO. DTCG40-86-B -1013, ISSUED BY THE UNITED STATES COAST GUARD, DEPARTMENT OF TRANSPORTATION. THE PROCUREMENT IS FOR THE OVERHAUL OF MARINE GAS GENERATORS. EMC ALLEGES THAT THE BID OF GAS TURBINE CORPORATION (GTC), THE APPARENT LOW BIDDER, IS NONRESPONSIVE AND SHOULD BE REJECTED FOR FAILURE TO CONTAIN A UNIT PRICE FOR ALL ITEMS LISTED IN THE SCHEDULE. ACCORDINGLY, EMC ASSERTS THAT IT IS ENTITLED TO THE AWARD AS THE REMAINING LOW, RESPONSIVE BIDDER.

WE DENY THE PROTEST.

BACKGROUND

THE IFB CONTEMPLATED THE AWARD OF A REQUIREMENTS CONTRACT FOR A 1 YEAR PERIOD WITH AN OPTIONAL YEAR OF PERFORMANCE. THE IFB'S SCHEDULE, IN PART, CALLED FOR THE SUBMISSION OF UNIT PRICES FOR BOTH "ANTICIPATED" PARTS AND "CONTINGENT" PARTS (THE LATTER WITH A WEIGHTED BID FACTOR) FOR USE IN GENERATOR OVERHAULS DURING EACH CONTRACT YEAR. THE IFB REQUIRED THAT CERTAIN PARTS BE NEW ITEMS AND A SINGLE BLANK WAS PROVIDED IN THE SCHEDULE FOR INSERTION OF THE UNIT PRICE. HOWEVER, THE IFB ALSO ALLOWED THAT THE REMAINING PARTS "MAY BE EITHER NEW OR REMANUFACTURED/RECONDITIONED," AND DOUBLE BLANKS WERE PROVIDED FOR THAT PURPOSE:

"UNIT PRICE

NEW / USED

AT SIGNIFICANT ISSUE IN THIS CASE, THE IFB CAUTIONED BIDDERS AT TWO PLACES IN THE SOLICITATION THAT, "OFFERORS SHALL BE CONSIDERED NONRESPONSIVE IF A UNIT PRICE AS A MINIMUM IS NOT SUBMITTED FOR EACH UNIT BLANK PROVIDED THROUGHOUT THIS SOLICITATION ITEM."

SECTION M.2 OF THE IFB PROVIDED THAT, WITH REGARD TO "ANTICIPATED" PARTS AND "CONTINGENT" PARTS, BIDS WOULD BE ANALYZED ON THE FOLLOWING BASIS:

"ANTICIPATED ITEMS: FOR THESE ITEMS, THE NEED OR QUANTITY CANNOT BE DETERMINED UNTIL THE MAJOR SHOP INSPECTION IS COMPLETED. FOR BID ANALYSIS PURPOSES ONLY:

(1) IF THE VENDOR BIDS ON AN ITEM WITH A NEW OR USED PRICE, THE AMOUNT BID FOR NEW PART WILL BE MULTIPLIED BY FOUR AND ADDED TO THE AMOUNT FOR THE USED PART. THE TOTAL WILL BE DIVIDED BY FIVE.

(2) THE TOTALS FOR ANTICIPATED ITEMS WILL BE ADDED TOGETHER AND MULTIPLIED TIMES 25 PERCENT.

"CONTINGENT ITEMS: FOR THESE ITEMS, THE NEED OR QUANTITY CANNOT BE DETERMINED UNTIL THE MAJOR SHOP INSPECTION IS COMPLETED. FOR BID ANALYSIS PURPOSES ONLY:

(1) IF THE VENDOR BIDS ON ITEM WITH A NEW OR USED PRICE, THE AMOUNT BID WILL BE MULTIPLIED BY THE BID FACTOR WHICH IS SHOWN OPPOSITE THE LINE ITEM. ALL WEIGHTED TOTALS FOR THESE CONTINGENT ITEMS WILL BE ADDED TOGETHER AND MULTIPLIED TIMES 25 PERCENT.

(2) IF THE VENDOR BIDS ON ITEM WITH A NEW AND USED PRICE, THE AMOUNT BID FOR NEW PART WILL BE MULTIPLIED BY FOUR AND ADDED TO THE AMOUNT FOR THE USED PART. THE TOTAL WILL BE DIVIDED BY FIVE. THE RESULT WILL BE MULTIPLIED BY THE BID FACTOR WHICH IS SHOWN OPPOSITE THE LINE ITEM. ALL WEIGHTED TOTALS FOR THESE CONTINGENT ITEMS WILL BE ADDED TOGETHER AND MULTIPLIED TIMES 25 PERCENT."

ACCORDING TO EMC'S PROTEST SUBMISSION, THE FIRM BECAME CONCERNED WHEN PREPARING ITS BID AS TO WHETHER THE IFB'S PROVISIONS COULD BE READ AS REQUIRING THE SUBMISSION OF BOTH A NEW AND A USED PART UNIT PRICE FOR THE VARIOUS "ANTICIPATED" AND "CONTINGENT" ITEMS FOR WHICH DOUBLE BLANKS HAD BEEN PROVIDED IN THE SCHEDULE, OR WHETHER A BIDDER WOULD BE RESPONSIVE UPON SUBMITTING EITHER A NEW OR A USED PART UNIT PRICE FOR THOSE ITEMS. IT IS UNDISPUTED THAT A REPRESENTATIVE OF THE CONTRACTING OFFICER ORALLY ADVISED THE FIRM ON THE DAY PRIOR TO BID OPENING THAT A BID FOR BOTH NEW AND USED PARTS WAS REQUIRED. EMC THEN PREPARED ITS BID BY INSERTING A UNIT PRICE FOR BOTH NEW AND USED PARTS FOR ALL ITEMS WITH A DOUBLE BLANK, E.G.:

"UNIT PRICE

NEW / USED

STAGE 1 TURBINE BLADES $165.00 $150.00"

AT BID OPENING, EMC REQUESTED AND RECEIVED AN ADDITIONAL CONFIRMATION FROM THE COAST GUARD THAT BOTH NEW AND USED UNIT PRICES WERE REQUIRED. THE COAST GUARD DETERMINED AT THIS TIME THAT THE BIDS OF GTC AND ANOTHER BIDDER WERE APPARENTLY NONRESPONSIVE BECAUSE THE FIRMS HAD PROVIDED ONLY UNIT PRICES FOR USED PARTS IN THEIR BIDS, E.G.:

"UNIT PRICE

NEW / USED

STAGE 1 TURBINE BLADES $ *** $120.00"

HOWEVER, THE COAST GUARD SUBSEQUENTLY DETERMINED THAT A BID WOULD BE DEEMED TO BE RESPONSIVE IF IT PROVIDED A UNIT PRICE "FOR A NEW PART, A USED PART, OR A NEW AND USED PART." EMC THEN PROTESTED THAT DETERMINATION TO THIS OFFICE, CONTENDING THAT THE IFB, BY TWICE CAUTIONING THAT BIDS WOULD BE FOUND TO BE NONRESPONSIVE IF A UNIT PRICE WAS NOT PROVIDED IN EACH BLANK IN THE SCHEDULE, CLEARLY REQUIRED THE INSERTION OF BOTH A NEW AND A USED PART UNIT PRICE FOR ALL ITEMS FEATURING A DOUBLE BLANK.

IN ITS ADMINISTRATIVE REPORT ON THE PROTEST, THE COAST GUARD ESSENTIALLY DISAGREED WITH EMC'S POSITION THAT BOTH NEW AND USED PRICES WERE REQUIRED. HOWEVER, THE AGENCY HAS NOW CONCLUDED THAT THE IFB WAS AMBIGUOUS, AND, THEREFORE, HAS CANCELED THE SOLICITATION. EMC, WHILE NOT DISAVOWING ITS PROTEST ARGUMENT, SUPPORTS THE AGENCY'S DECISION TO CANCEL.

BECAUSE OF THE COAST GUARD'S DECISION TO CANCEL THE IFB SUBSEQUENT TO THE FILING OF EMC'S PROTEST, WE BELIEVE THAT THE ESSENTIAL QUESTION FOR RESOLUTION IN THIS MATTER IS NOW WHETHER THAT CANCELLATION WAS JUSTIFIED ON THE GROUND THAT THE SOLICITATION WAS MATERIALLY AMBIGUOUS.

ANALYSIS

IT IS WELL-SETTLED THAN AN AMBIGUITY EXISTS WHERE TWO OR MORE REASONABLE INTERPRETATIONS OF A SOLICITATION REQUIREMENT ARE POSSIBLE. EMS DEVELOPMENT CORP., B-207786, JUNE 28, 1982, 82-1 CPD PARA. 631. ALTHOUGH A PARTY'S PARTICULAR INTERPRETATION NEED NOT BE THE MOST REASONABLE ONE FOR A FINDING OF AMBIGUITY, THE PARTY IS NONETHELESS REQUIRED TO SHOW THAT ITS INTERPRETATION OF THE LANGUAGE IN ISSUE IS REASONABLE AND SUSCEPTIBLE OF THE UNDERSTANDING IT REACHED. SEE WHEELER BROS., INC., ET AL.-- REQUEST FOR RECONSIDERATION, B-214081.3, APR. 4, 1985, 85-1 CPD PARA. 388. WHEN A DISPUTE EXISTS AS TO THE ACTUAL MEANING OF A SOLICITATION REQUIREMENT, THIS OFFICE WILL RESOLVE THE MATTER BY READING THE SOLICITATION AS A WHOLE AND IN A MANNER THAT GIVES EFFECT TO ALL PROVISIONS OF THE SOLICITATION. SYSTEM DEVELOPMENT CORP., B-219400, SEPT. 30, 1985, 85-2 CPD PARA. 356; ROACH MANUFACTURING CORP., B-208574, MAY 23, 1983, 83-1 CPD PARA. 547.

IN LIGHT OF THESE GOVERNING PRINCIPLES, WE DO NOT FIND THAT EMC'S INTERPRETATION OF THE IFB AS REQUIRING UNIT PRICES FOR BOTH NEW AND USED PARTS IS REASONABLE. AS INDICATED EARLIER, THE IFB PROVIDED THAT CERTAIN PARTS HAD TO BE NEW IN ORIGIN, BUT THAT THE OTHER PARTS COULD BE EITHER "NEW OR REMANUFACTURED/RECONDITIONED." THUS, IN OUR VIEW, THE LOGICAL EXPLANATION FOR THE IFB'S PROVISION OF DOUBLE BLANKS IN THE SCHEDULE FOR THESE ITEMS WAS TO ENABLE BIDDERS TO INSERT EITHER A NEW OR A USED PART PRICE AS BUSINESS CONSIDERATIONS INDICATED. AS EMC ITSELF HAS POINTED OUT, IT NORMALLY WOULD BE PREFERABLE TO SUPPLY USED PARTS RATHER THAN NEW PARTS, IF ALLOWED, BECAUSE THE INHERENTLY LOWER COST OF USED PARTS WOULD RESULT IN A MORE ATTRACTIVE BID PRICE. OF COURSE, THIS DID NOT PREVENT A BIDDER FROM SUBMITTING BOTH A NEW AND A USED PART PRICE FOR A PARTICULAR ITEM, BUT WE CANNOT REASONABLY READ THE IFB LANGUAGE AS REQUIRING SUCH A BID AS A MATERIAL CONDITION OF RESPONSIVENESS.

OUR CONCLUSION IS FURTHER SUPPORTED BY THE PROVISIONS OF SECTION M.2 OF THE IFB WHICH, AS NOTED EARLIER, SET FORTH A METHOD FOR ANALYZING BIDS WITH EITHER "NEW OR USED" PRICES OR "NEW AND USED" PRICES FOR THE "CONTINGENT" ITEMS WITH DOUBLE BLANKS. ARGUABLY, THE ADDITIONAL REFERENCE TO "NEW AND USED" PRICES FOR THE "CONTINGENT" ITEMS, A REFERENCE NOT MADE WITH REGARD TO PRICES FOR THE "ANTICIPATED" ITEMS (THE STATED METHOD OF ANALYSIS ONLY MENTIONING "NEW OR USED" PRICES), MAY HAVE GENERATED A CERTAIN DEGREE OF CONFUSION, BUT WE DO NOT BELIEVE THAT THIS REFERENCE CAN REASONABLY BE INTERPRETED AS REQUIRING TWO UNIT PRICES (BOTH NEW AND USED) FOR EVERY ITEM IN THE SCHEDULE FOR WHICH A DOUBLE BLANK WAS PROVIDED. RATHER, BY CONTEMPLATING ALTERNATIVE MEANS FOR ANALYZING BIDS, SECTION M.2 OF THE IFB GENERALLY INDICATED THAT BIDS WITH VARIOUS PRICING CONFIGURATIONS WERE PERMISSIBLE.

EMC URGES THAT THE REPEATED CAUTIONS TO BIDDERS AS TO THE NECESSITY FOR SUBMITTING A UNIT PRICE FOR EACH BLANK IN THE SCHEDULE CONSTITUTED A REQUIREMENT TO INSERT BOTH A NEW AND USED PART PRICE FOR ALL ITEMS LISTED WITH DOUBLE BLANKS. WE CANNOT AGREE. AS THE AGENCY HAS POINTED OUT, THOSE CAUTIONS DID NOT FOLLOW THE PARTICULAR SECTIONS OF THE SCHEDULE INVOLVING THE "ANTICIPATED" AND "CONTINGENT" ITEMS, BUT RATHER DIRECTLY FOLLOWED UNRELATED SECTIONS CALLING FOR PRICES FOR LABOR HOUR REPAIR RATES AND CONDITION AND TEST REPORTS. THIS IS BORNE OUT BY THE FACT THAT THE LANGUAGE OF THE CAUTIONS REFERS SPECIFICALLY TO "THIS SOLICITATION ITEM." IN ANY EVENT, EVEN IF THESE CAUTIONS WERE APPLICABLE TO ALL SECTIONS OF THE SCHEDULE, THE ONLY REASONABLE READING WOULD BE THAT A SINGLE UNIT PRICE (WHETHER FOR A NEW OR A USED PART) HAD TO BE INSERTED IN THE APPROPRIATE BLANK FOR THOSE ITEMS FEATURING A DOUBLE BLANK. IN OUR VIEW, EMC'S INTERPRETATION OF THE CAUTIONARY LANGUAGE AS REQUIRING THE INSERTION OF BOTH A NEW AND A USED PART PRICE FOR ALL ITEMS WITH DOUBLE BLANKS IS TOO NARROW TO BE CREDIBLE. ACCORDINGLY, FROM OUR READING OF THE SOLICITATION AS A WHOLE, WE CONCLUDE THAT THE ONLY REASONABLE INTERPRETATION OF THE IFB WAS THAT IT ALLOWED THE SUBMISSION OF EITHER A NEW OR A USED PRICE-- OR, FOR THAT MATTER, BOTH A NEW AND A USED PRICE-- FOR THE ITEMS IN QUESTION. SEE SYSTEM DEVELOPMENT CORP., B-219400, SUPRA.

IN ANY EVENT, EVEN ASSUMING THAT EMC'S INTERPRETATION WERE ALSO REASONABLE SO AS TO FIND THAT THE IFB WAS AMBIGUOUS AS WRITTEN, WE FAIL TO SEE HOW EMC WAS PREJUDICED THEREBY. THE STANDARD OF REVIEW NECESSARY FOR A SHOWING OF PREJUDICE IS THAT THE PROTESTER MUST DEMONSTRATE THAT THERE WAS A REASONABLE POSSIBILITY IT WAS DISPLACED DUE TO THE UNFAIR COMPETITIVE ADVANTAGE AFFORDED ANOTHER FIRM AS A RESULT OF THE DEFECT. SEE DOWNTOWN COPY CENTER, 62 COMP.GEN. 65 (1982), 82-2 CPD PARA. 503. EMC HAS NOT MET THAT BURDEN HERE.

ALTHOUGH EMC MAY HAVE HAD ITS INTERPRETATION OF THE IFB REINFORCED BY ORAL STATEMENTS FROM THE AGENCY /1/, THE FIRM HAS MADE NO REASONABLE SHOWING THAT IT WOULD HAVE BEEN THE LOW BIDDER IF IT HAD KNOWN THAT BIDS WITH USED PART UNIT PRICES ALONE WERE ALSO ACCEPTABLE. IN THIS REGARD, THE COAST GUARD STATES THAT IT HAS REEVALUATED EMC'S BID ON THE BASIS OF THE FIRM'S SUBMITTED PRICES FOR USED PARTS ONLY, AND HAS DETERMINED THAT EMC WOULD STILL NOT HAVE DISPLACED GTC AS THE LOW BIDDER ($138,084.12 VS. $130,024.73). SINCE IT IS PRESUMED THAT EMC OFFERED ITS LOWEST PRICES FOR USED PARTS IN ITS ORIGINAL BID, AND, THEREFORE, WOULD NOT HAVE BID ANY DIFFERENTLY ON A USED PRICE-ONLY BASIS, WE FIND NOTHING TO PERSUADE US THAT EMC REASONABLY MIGHT HAVE BEEN IN LINE FOR THE AWARD BUT FOR THE ASSUMED AMBIGUITY. SEE A TO Z TYPEWRITER CO. ET A., B-215830.2, ET AL., FEB. 14, 1985, 85-1 CPD PARA. 198.

THEREFORE, SINCE WE CONCLUDE THAT THE IFB WAS NOT AMBIGUOUS, THERE EXISTS NO COMPELLING REASON TO CANCEL THIS IFB AFTER BIDS HAVE BEEN EXPOSED. SEE THE FEDERAL ACQUISITION REGULATION, 48 C.F.R. SECS. 14.404-1(A)(1) AND (C)(1) (1985); PACIFIC COAST UTILITIES SERVICE, INC., B-220394, FEB. 11, 1986, 86-1 CPD PARA. 150. MOREOVER, EVEN ASSUMING OTHERWISE, CANCELLATION IS NOT WARRANTED SINCE IT APPEARS THAT AN AWARD UNDER THE ORIGINAL IFB WILL SATISFY THE GOVERNMENT'S NEEDS, AND THERE HAS BEEN NO SHOWING OF PREJUDICE TO ANY BIDDER. SEE BROWNING FERRIS INDUSTRIES OF THE SOUTH ATLANTIC, INC. ET AL., B-217073, ET AL., APR. 9, 1985, 85-1 CPD PARA. 406.

BY SEPARATE LETTER OF TODAY, WE ARE ADVISING THE SECRETARY OF TRANSPORTATION OF OUR DECISION IN THIS MATTER, AND WE ARE FURTHER RECOMMENDING THAT THE IFB NOW BE REINSTATED AND THAT AWARD BE MADE TO THE LOW RESPONSIVE, RESPONSIBLE BIDDER UNDER THE ORIGINAL TERMS OF THE SOLICITATION.

THE PROTEST IS DENIED.

/1/ IT IS WELL-SETTLED THAT WHERE A SOLICITATION PROVISION CLEARLY PUTS BIDDERS ON NOTICE NOT TO RELY ON THE ORAL REPRESENTATIONS OF AGENCY PERSONNEL, A BIDDER MUST SUFFER THE CONSEQUENCES OF ITS RELIANCE UPON SUCH ADVICE. JENSEN CORP., 60 COMP.GEN. 543 (1981), 81-1 CPD PARA. 524. HERE, THE IFB INCORPORATED THE STANDARD CLAUSE OF THE FEDERAL ACQUISITION REGULATION, 48 C.F.R. SEC. 52.214-6 (1985), WHICH PROVIDES THAT ANY ORAL EXPLANATIONS OR INSTRUCTION GIVEN BEFORE THE CONTRACT AWARD WILL NOT BE BINDING.

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