BNUMBER: B-276675
DATE: July 10, 1997
TITLE: American Overseas Book Company, Inc., B-276675, July 10, 1997
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Matter of:American Overseas Book Company, Inc.
File: B-276675
Date:July 10, 1997
Cicely P. Marks for the protester.
Frank W. Miller, Esq., Paul D. Warring, Esq., Edwin A. Davis, and
Jerry W. Aldridge, Department of the Air Force, for the agency.
Jeanne W. Isrin, Esq., David A. Ashen, Esq., and John M. Melody, Esq.,
Office of the General Counsel, GAO, participated in the preparation of
the decision.
DIGEST
Protest against cancellation of purchase order is denied where item
description in request for quotations misstated the agency's actual
needs; although awardee's quotation reflected agency's actual needs,
other firms submitted quotes based on the stated description, and
therefore were prejudiced by the error.
DECISION
American Overseas Book Company, Inc. (AOBC) protests the Department of
the Air Force's cancellation of a purchase order (No. F49642-97-P0401)
issued to AOBC under request for quotations (RFQ) No. F49642-97-QS164
for specified books.
We deny the protest.
The RFQ, issued through the Electronic Data Interchange (EDI),
contained two line items (CLIN): CLIN 0001, for 125 copies of "Book,
Priorities--The Pathway to Success," and CLIN 0002, for 125 copies of
"Book, Developing The Leaders Around You." Quotations were received
as follows:
CLIN 0001 CLIN 0002 Total
Firm A $ 400.00$1,437.50 $ 1,837.50
R.G. Associates (RGA)$ 437.50$1,431.25 $ 1,868.75
Firm B $ 480.00$1,386.25 $ 1,866.25
AOBC $13,493.75 $1,312.50 $14,806.25
The disparity between the three lowest CLIN 0001 prices and the
government estimate led the contracting officer to question the item
description, whereupon he called the publisher and learned that the
item desired was actually a book/video set, rather than simply a book,
as had been stated in the RFQ. Because only AOBC's quotation appeared
to be based on the actual desired item, the contracting officer issued
a purchase order to AOBC through EDI for both items (AOBC's CLIN 0002
price was low). In accordance with its normal procedure, EDI
automatically forwarded the name of the successful firm and its quote
to the other offerors.
Subsequently, another firm objected to the rejection of its quotation
on the ground that its CLIN 0001 price for the book alone reflected
the requirement as stated in the RFQ, and rejecting its CLIN 0001
quotation for failing to meet the agency's unstated actual needs
deprived the firm of a fair opportunity to compete. The contracting
officer agreed that the low quotations should not have been rejected
based on unstated needs, and thus canceled the purchase order. (The
CLIN 0002 portion of the purchase order had to be canceled along with
CLIN 0001 because AOBC submitted its quotation on an "all or none"
basis.) Thereafter, the agency issued a replacement RFQ (No.
F49642-97-QS222) with a CLIN 0001 purchase description calling for a
book/video set rather than only a book (the publisher's name also was
included). RGA's quotation was low for this second RFQ.
AOBC maintains that the cancellation of the original purchase order
was unjustified, and that the issuance of the second RFQ resulted in
an impermissible auction, since its price on the first RFQ was exposed
in the EDI award announcement.
Where a request for quotations invites competition, vendors must be
given sufficient detail to allow them to compete intelligently and on
a relatively equal basis; the agency's description of its needs must
be free from ambiguity and describe the agency's minimum needs
accurately. Haworth, Inc.; Knoll N. Am., Inc., 73 Comp. Gen. 283, 286
(1994), 94-2 CPD para. 98 at 5. Where an RFQ fails to set forth the
agency's actual minimum needs, the RFQ should be revised and new
quotes solicited to ensure that all firms are afforded an equal
opportunity to compete based on the same set of requirements.
Dictaphone Corp., B-254920.2, Feb. 7, 1994, 94-1 CPD para. 75 at 3; New
Brunswick Scientific Co., Inc., B-246291, Feb. 3, 1992, 92-1 CPD para. 141
at 2-3.
It is undisputed that the RFQ in this case failed to set forth the
agency's actual needs--it incorrectly described the item required as a
book of a specific title, rather than as the required book/video set,
i.e., the same book plus an accompanying videotape. Further, it is
clear, and also undisputed, that, as a result of the misdescription,
all offerors other than AOBC quoted prices for the book alone (as
demonstrated by their quotes, which were significantly lower than the
government estimate, the publisher's suggested list price for the
book/video set, and AOBC's quote). As the firms which relied on the
RFQ description therefore essentially were deprived of an opportunity
to quote a price for the agency's actual requirement--so that the
competition between them and AOBC was not based on the same set of
requirements--the agency properly canceled the purchase order in favor
of a new competition based on an accurate statement of its needs.
Cancellation of a solicitation after disclosure of prices does not
create an impermissible auction where, as here, the cancellation is
otherwise justified. See Consolidated Indus., Inc., B-256278;
B-256278.2, June 3, 1994, 94-1 CPD para. 343 at 3-5. Thus, the fact that
AOBC's prices had been disclosed did not render the cancellation and
resolicitation improper.
AOBC claims that it notified the contracting officer before the
closing time that it was able to locate only a book/video set under
the given title, and that contracting officials therefore could, and
should, have issued a clarifying amendment prior to the closing date.
The contracting officer denies that AOBC provided such notice, stating
that AOBC only requested the name of the publisher, which he provided,
and that he did not learn of the erroneous item description until he
contacted the publisher following closing. AOBC has furnished no
evidence establishing that it provided the claimed notice to the
agency. In any case, a procuring agency's failure to correct a
solicitation deficiency before disclosure of prices does not preclude
the agency from subsequently canceling the solicitation to correct the
defect. See Adrian Supply Co., B-246207.2; B-246207.3, Mar. 13, 1992,
92-1 CPD para. 282 at 3-4 (concerning an invitation for bids).
AOBC objects to the award under the second RFQ on the ground that
RGA's quotation for CLIN 0001 failed to take into account the
publisher's policy of providing a 40-percent discount to retail
bookstores which agree to sell the products at the suggested retail
price; the protester essentially argues that, since RGA's quoted price
was below the suggested retail price, it was inconsistent with the
publisher's discount agreement and that, if RGA were unable to obtain
the discount, RGA would have to perform at a loss. This argument is
without merit. Whether RGA's performance would be inconsistent with
its agreement with the publisher concerns a dispute between private
parties, which generally is not a matter for consideration under our
bid protest process. Advanced Communications Sys., Inc., B-271040;
B-271040.2, June 10, 1996, 96-1 CPD para. 274 at 7. Further, submission
and acceptance of below-cost offers are not legally objectionable;
whether a potential contractor can meet contract requirements in light
of its low price concerns the contracting agency's affirmative
responsibility determination, which our Office generally does not
review. Automated Data Management, Inc., B-234549, Mar. 2, 1989, 89-1
CPD para. 229 at 4. (In any case, we note that AOBC's price for CLIN 0001
likewise is below the suggested retail price.)
AOBC also maintains that RGA impermissibly conditioned its quotation
on receiving advance payment for the items. However, we have reviewed
RGA's quotation and find no such condition.
The protest is denied.
Comptroller General
of the United States