Camden Iron & Metal, Inc.

B-272074 Aug 26, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Was proper where agency reasonably determined that award under the terms of the solicitation would put the government in breach of another contract. (ITOC) is to move. Arguing (as relevant here) that the IFB is not inconsistent with the ITOC contract. That the changes needed could not be incorporated in a contract with Camden because they were material (the estimated cost of using ITOC labor and equipment ranged from $1. Could have affected the bidding. An agency must have a compelling reason to cancel a solicitation for the sale of property after bid opening. 95-1 CPD para. 212. [3] Contracting officials have broad discretion to determine whether a compelling reason to cancel exists. Our review is limited to considering the reasonableness of their decision. View Decision Matter of: Camden Iron & Metal, Inc. File: B-272074 Date: August 26, 1996 Withdrawal of item from surplus property sale, and rejection of high bid submitted for it, was proper where agency reasonably determined that award under the terms of the solicitation would put the government in breach of another contract; contracting officials reasonably determined that the solicitation did not accurately state the government's requirements. Attorneys DECISION Camden Iron and Metal, Inc. protests the rejection of its bid for, and the withdrawal of, item No. 128 from an invitation for bids (IFB) covering sale No. 31-6485, for the sale of bearings, hardware and miscellaneous surplus property, conducted by the Defense Reutilization & Marketing Service (DRMS), Defense Logistics Agency (DLA). [1] Item No. 128 consists of 145 containership cargo stowage adaptors (CCSA), 399 seasheds, and related hardware located at Military Ocean Terminal Bayonne (MOTB), Bayonne, New Jersey. [2] We deny the protest. Camden submitted the high bid for item 128. Prior to award, DRMS received a letter from the Military Traffic Management Command (MTMC), which operates MOTB and holds title to the property under the sale. The letter advised that eight issues had been identified which had to be addressed through an IFB modification before item 128 could be awarded. The only issue relevant here concerned the labor to be employed to dismantle and cut into scrap the CCSAs and seasheds and to move and load the scrap onto trucks. With respect to item 128, the IFB provided that the purchaser would "furnish all labor, material, and equipment necessary to dismantle and remove property at no cost to the Government." However, MTMC determined that this requirement conflicted with an existing requirements contract (No. DAHC24-96-D-0001) under which International Terminal Operating Co., Inc. (ITOC) is to move, load, and unload various types of cargo onto and from trucks, ships, and railcars. MTMC interpreted ITOC's contract as obligating the government to utilize ITOC services for the handling of all Department of Defense (DOD) property located at MOTB, including the item 128 property. It therefore concluded that the terms of the current IFB did not reflect the government's needs. On May 17, Camden protested the agency's failure to make award of item 128 under the IFB's original terms, arguing (as relevant here) that the IFB is not inconsistent with the ITOC contract. Thereafter, on June 18, the agency rejected all bids and withdrew item 128 from the sale on the grounds that the IFB did not accurately state the government's needs, and that the changes needed could not be incorporated in a contract with Camden because they were material (the estimated cost of using ITOC labor and equipment ranged from $1,209,296 to $2,597,096.46), and could have affected the bidding. In response, Camden reiterates its argument that it should receive the award based on the original IFB terms. An agency must have a compelling reason to cancel a solicitation for the sale of property after bid opening. Federal Acquisition Regulation (FAR) sec. 14.404-1(a)(1); Tucson Iron & Metal, B-259689, Apr. 25, 1995, 95-1 CPD para. 212. [3] Contracting officials have broad discretion to determine whether a compelling reason to cancel exists, and our review is limited to considering the reasonableness of their decision. Berendse & Sons Paint Co., Inc., B-262244, Nov. 21, 1995, 95-2 CPD para. 235. Generally, where an IFB does not contain specifications that reflect the agency's actual needs, the agency has a compelling reason to cancel. FAR sec. 14.404-1(c)(1); Victory Salvage Co., Inc., B-253006, Aug. 11, 1993, 93-2 CPD para. 92. Camden argues that the property in issue here is not subject to the ITOC contract because that contract covers only DOD property, and the property here will belong to Camden at the time it is loaded and removed.