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.