BNUMBER: B-271009.2
DATE: October 7, 1996
TITLE: Eastman Kodak Company--Reconsideration
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Matter of:Eastman Kodak Company--Reconsideration
File: B-271009.2
Date:October 7, 1996
John A. Howell, Esq., Ross & Hardies, for the protester.
Terence W. Carlson, Esq., and Richard A. Lieber, Department of
Transportation, for the agency.
Tania L. Calhoun, Esq., and Christine S. Melody, Esq., Office of the
General Counsel, GAO, participated in the preparation of the decision.
DIGEST
Request for reconsideration is denied where protester has not shown
that prior decision contains either errors of fact or law or presented
information not previously considered that warrants reversal or
modification of our decision.
DECISION
Eastman Kodak Company requests that we reconsider our decision in
Eastman Kodak Co., B-271009, May 8, 1996, 96-1 CPD para. 215, in which we
denied its protest of the cancellation of request for quotations (RFQ)
No. DTOS59-96-Q-3030, issued by the Department of Transportation (DOT)
for copier equipment.
We deny the request.
The RFQ requested quotations for copier equipment and maintenance
under a multiple award Federal Supply Schedule (FSS) contract. Firms
were to provide pricing for copier machines in accordance with various
minimum specifications, as well as pricing for maintaining the
copiers. Award would be made to the firm quoting the lowest overall
price.
Kodak submitted the lowest-priced quotation meeting the RFQ's minimum
specifications. The contracting officer prepared and signed a
delivery order[1] to Kodak but, on that same day, DOT received a
protest from another vendor complaining that certain specifications
unduly restricted competition. The agency's director of acquisition
services instructed the contracting officer not to make award to Kodak
and began reviewing the matter. He concluded that the specifications
might be too restrictive; that the stated method of evaluating the
copy usage cost was not in the government's best interest; and that
the agency should have used a best value approach to the acquisition.
After DOT canceled the solicitation, Kodak filed its protest.
In our decision, we concluded that the agency's bases for the
cancellation were reasonable. Kodak's request for reconsideration is
limited to its contention that we improperly used the standard of
review for the cancellation of an RFQ. According to Kodak, we should
have used the standard for determining the propriety of the
cancellation of a contract. Kodak asserts that the contracting
officer's signature on the delivery order gave rise to a binding
contract, and that the agency could not cancel this contract because
the illegality of the award was not plain or palpable.[2] Kodak
believes that the agency is required to allow the firm to proceed with
performance notwithstanding the impropriety of the award.
We are not persuaded that the contracting officer's signature on the
delivery order rendered it "issued," creating a binding contract.[3]
The clause at Federal Acquisition Regulation (FAR) sec. 52.216-18(c)
suggests that a delivery order is "issued" when it leaves the control
of the government ("[i]f mailed, a delivery order . . . is considered
'issued' when the government deposits the order in the mail").[4]
Further, in the only case cited by Kodak in support of its position,
Texas Instruments Inc. v. United States, 922 F.2d 810 (Fed. Cir.
1990), a price negotiation memorandum signed by the contracting
officer was held to be binding because, among other things, the
contracting officer's approval was communicated to the offeror.
Neither of these circumstances is present here.
In any event, even if the delivery order was issued, there is no
evidence to suggest that DOT could not have terminated the delivery
order for convenience. See FAR sec. 8.405-6. Termination of a contract
and resolicition is proper when, after award, the contracting agency
discovers that the solicitation did not properly describe the
government's needs. Special Waste, Inc., 67 Comp. Gen. 429 (1988),
88-1 CPD para. 520. Since our conclusion that DOT reasonably determined
that the solicitation did not meet its needs remains unchallenged, the
agency was not required to allow Kodak to proceed with performance,
but could have terminated the delivery order and resolicited. See
Duramed Homecare, B-260047, May 24, 1995, 95-1 CPD para. 257.
Under our Bid Protest Regulations, to obtain reconsideration, the
requesting party must show that our prior decision contains either
errors of fact or law or present information not previously considered
that warrants reversal or modification of our decision. 4 C.F.R. sec.
21.14(a) (1996); R.E. Scherrer, Inc.--Recon., B-231101.3, Sept. 21,
1988, 88-2 CPD para. 274. Kodak has not met that standard.
The request for reconsideration is denied.
Comptroller General
of the United States
1. While the protester notes that we erroneously characterized this
delivery order as a purchase order, as discussed below, this fact does
not alter our conclusion.
2. An awarded contract should not be canceled, even if improperly
awarded, unless the illegality of the award is plain or palpable.
John Reiner & Co. v. United States, 325 F.2d 438 (Ct. Cl. 1963); New
England Tel. and Telegraph Co., 59 Comp. Gen. 746 (1980), 80-2 CPD para.
225. The illegality of an award is plain or palpable where it is made
contrary to statute or regulation due to improper action by the
contractor, or where the contractor was on direct notice that the
procedures followed were violative of statutory or regulatory
requirements. New England Tel. and Telegraph Co., supra.
3. The issuance of a delivery order pursuant to an FSS contract
generally gives rise to a legal and binding contract. Lanier Business
Prods., B-187969, May 11, 1977, 77-1 CPD para. 336.
4. We do not share Kodak's view that the absence of this clause from
its contract means that a contracting officer's mere signature on a
delivery order pursuant to this contract is sufficient to consider
that delivery order issued.