48 C.F.R. § 14.404-1

14.404-1 Cancellation of invitations after opening.

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(a)(1) Preservation of the integrity of the competitive bid system dictates that, after bids have been opened, award must be made to that responsible bidder who submitted the lowest responsive bid, unless there is a compelling reason to reject all bids and cancel the invitation.

(2) Every effort shall be made to anticipate changes in a requirement before the date of opening and to notify all prospective bidders of any resulting modification or cancellation. This will permit bidders to change their bids and prevent unnecessary exposure of bid prices.

(3) As a general rule, after the opening of bids, an invitation should not be cancelled and resolicited due solely to increased requirements for the items being acquired. Award should be made on the initial invitation for bids and the additional quantity should be treated as a new acquisition.

(b) When it is determined before award but after opening that the requirements of 11.201 (relating to the availability and identification of specifications) have not been met, the invitation shall be cancelled.

(c) Invitations may be cancelled and all bids rejected before award but after opening when, consistent with paragraph (a)(1) above, the agency head determines in writing that—

(1) Inadequate or ambiguous specifications were cited in the invitation;

(2) Specifications have been revised;

(3) The supplies or services being contracted for are no longer required;

(4) The invitation did not provide for consideration of all factors of cost to the Government, such as cost of transporting Government-furnished property to bidders' plants;

(5) Bids received indicate that the needs of the Government can be satisfied by a less expensive article differing from that for which the bids were invited;

(6) All otherwise acceptable bids received are at unreasonable prices, or only one bid is received and the contracting officer cannot determine the reasonableness of the bid price;

(7) The bids were not independently arrived at in open competition, were collusive, or were submitted in bad faith (see subpart 3.3 for reports to be made to the Department of Justice);

(8) No responsive bid has been received from a responsible bidder.

(9) A cost comparison as prescribed in OMB Circular A-76 and subpart 7.3 shows that performance by the Government is more economical; or

(10) For other reasons, cancellation is clearly in the public's interest.

(d) Should administrative difficulties be encountered after bid opening that may delay award beyond bidders' acceptance periods, the several lowest bidders whose bids have not expired (irrespective of the acceptance period specified in the bid) should be requested, before expiration of their bids, to extend in writing the bid acceptance period (with consent of sureties, if any) in order to avoid the need for resoliciting.

(e) Under some circumstances, completion of the acquisition after cancellation of the invitation for bids may be appropriate.

(1) If the invitation for bids has been cancelled for the reasons specified in subparagraphs (c) (6), (7), or (8) of this subsection, and the agency head has authorized, in the determination in paragraph (c) of this subsection, the completion of the acquisition through negotiation, the contracting officer shall proceed in accordance with paragraph (f) of this subsection.

(2) If the invitation for bids has been cancelled for the reasons specified in subparagraphs (c) (1), (2), (4), (5), or (10) of this subsection, or for the reasons in subparagraphs (c) (6), (7), or (8) of this subsection and completion through negotiation is not authorized under subparagraph (e)(1) of this subsection, the contracting officer shall proceed with a new acquisition.

(f) When the agency head has determined, in accordance with paragraph (e)(1) of this subsection, that an invitation for bids should be canceled and that use of negotiation is in the Government's interest, the contracting officer may negotiate (in accordance with part 15, as appropriate) and make award without issuing a new solicitation provided—

(1) Each responsible bidder in the sealed bid acquisition has been given notice that negotiations will be conducted and has been given an opportunity to participate in negotiations; and

(2) The award is made to the responsible bidder offering the lowest negotiated price.

[48 FR 42171, Sept. 19, 1983, as amended at 50 FR 1738, Jan. 11, 1985; 50 FR 52429, Dec. 23, 1985; 55 FR 52790, Dec. 21, 1990; 60 FR 48248, Sept. 18, 1995; 62 FR 51230, Sept. 30, 1997]

Notes of Decisions

Cited in 25 cases (1 in the last 5 years), 1985–2021 · leading case: Vets. Contracting Grp., Inc. v. United States, 920 F.3d 801 (Fed. Cir. 2019).

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Vets. Contracting Grp., Inc. v. United States, 920 F.3d 801 (Fed. Cir. 2019). · cites it 4× “UNITED STATES 48 C.F.R. § 14.404-1 (c)(6), which permits cancellation when “[a]ll otherwise acceptable bids received are at un- reasonable prices.”

Nat'l Forge Co. v. The United States, 779 F.2d 665 (Fed. Cir. 1985). · cites it 4× “1 It argued that the government failed to comply with 48 C.F.R. § 14.404-1 , which limits an agency’s authority to cancel a solicitation after the bids have been opened.”

First Enter. v. United States, 61 Fed. Cl. 109 (Fed. Cl. 2004). · cites it 3× “” 48 C.F.R. § 14.404-1 (a)(l) (2004). A compelling reason includes instances where “the agency head determines in writing that [a]ll otherwise acceptable bids received are at unreasonable prices.”

Brickwood Contractors, Inc. v. United States, 49 Fed. Cl. 148 (Fed. Cl. 2001). · cites it 5× “” 48 C.F.R. § 14.404-1 (c)(3). Assuming for the moment that the present case fits under the (c)(3) criteria, the FAR (at FAR 14.”

MORI Assocs., Inc. v. United States, 102 Fed. Cl. 503 (Fed. Cl. 2011). “703, 713-14 (1985) (applying the higher “compelling reason” standard of 48 C.F.R. § 14.404-1 (a)(1)). But in the absence of any specific limitation on cancellation of a solicitation, a cancellation was subject to the “constraints .”

California Marine Cleaning, Inc. v. United States, 42 Fed. Cl. 281 (Fed. Cl. 1998). · cites it 3× “404-1, 48 C.F.R. § 14.404-1 , which prescribes the circumstances under which the Government may cancel a solicitation after bid opening.”

Overstreet Elec. Co. v. United States, 47 Fed. Cl. 728 (Fed. Cl. 2000). “48 C.F.R. 14.404-1(e)(1) and (f). 11 Plaintiff, however, argues that the Corps erred in rejecting its low bid as including an unreasonable price, alleging that determination was based on an inadequate estimate of the project that materially understated its costs.”

Great Lakes Dredge & Dock Co. v. United States, 60 Fed. Cl. 350 (Fed. Cl. 2004). “See 48 C.F.R. § 14.404-1 (“FAR 14.404-1”). Paragraph (a)(1) provides that the “[preservation of the integrity of the competitive bid system dictates that, after bids have been opened, award must be made to that responsible bidder who submitted the lowest responsive bid, unless…”

FFTF Restoration Co. v. United States, 86 Fed. Cl. 226 (Fed. Cl. 2009). “404 — 1[, 48 C.F.R. 14.404-1 (2004) ]). Thus, the government’s argument amounts to an assertion that cancellation decisions in the negotiated procurement context, such as the one at issue in this case, are immune from any sort of judicial review, including both the “rational…”

The United States v. Int'l Bus. MacHines Corp., 892 F.2d 1006 (Fed. Cir. 1990). “By restricting the class of eligible protesters to those with a direct economic interest in the award, Congress deliberately relied on the mechanism of economic self-interest to police agencies’ conduct of ADPE procurements.”

John C. Grimberg Co., Inc. v. The United States, 869 F.2d 1475 (Fed. Cir. 1989). · cites it 2× “1985) (affirming the Claims Court’s decision upholding the cancellation of a solicitation by the contracting officer on the grounds the contracting officer did not abuse his discretion under 48 C.F.R. § 14.404-1 (c)(l) to cancel the solicitation); Caddell Constr.”

California Marine Cleaning, Inc. v. United States, 43 Fed. Cl. 724 (Fed. Cl. 1999). “” 48 C.F.R. §§ 14.404-1 (a)(1), 14.404-1(c)(10) (1997).”

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