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