B-147884, MAR. 29, 1962

B-147884, MAR. 29, 1962

TO WALLACE AND TEARS:

THIS REFERS TO YOUR LETTER OF FEBRUARY 12, 1962, AND MEMORANDUMS OF MARCH 13, 1962, AND FEBRUARY 12, 1962, SUBMITTED IN YOUR BEHALF BY HART, HUME AND ENGELMAN OF NEW YORK CITY, NEW YORK, REGARDING THE PROPOSED REJECTION OF YOUR BID UNDER SPECIFICATION NO. 224, ISSUED BY THE OFFICE OF SALINE WATER, DEPARTMENT OF THE INTERIOR.

THE SUBJECT INVITATION WAS ISSUED ON OCTOBER 10, 1961, FOR THE CONSTRUCTION OF A SALINE WATER CONVERSION DEMONSTRATION PLANT CAPABLE OF 1,000,000 GALLONS OUTPUT OF WATER PER DAY, TO BE SITUATED ON A PLOT OF LAND IN THE VICINITY OF ROSWELL, NEW MEXICO. AUTHORITY FOR THE PROJECT IS CONTAINED IN PUBLIC LAW 85-883 (ENACTED SEPTEMBER 2, 1958), WHICH READS IN PART AS FOLLOWS:

"* * * WHEREAS THE CONGRESS NOW FINDS IT IS IN THE NATIONAL INTEREST TO DEMONSTRATE, WITH THE LEAST POSSIBLE DELAY, IN ACTUAL PRODUCTION TESTS THE SEVERAL OPTIMUM ASPECTS OF THE CONSTRUCTION, OPERATION, AND MAINTENANCE OF SEA WATER CONVERSION AND BRACKISH WATER TREATMENT PLANTS: NOW, THEREFORE, BE IT RESOLVED BY THE SENATE AND HOUSE OF REPRESENTATIVES OF THE UNITED STATES OF AMERICA IN CONGRESS ASSEMBLED, THAT (A) THE SECRETARY OF THE INTERIOR SHALL, PURSUANT TO THE PROVISIONS OF THE ACT OF JULY 3, 1952, AS AMENDED (42 U.S.C. 1951 1958), AND IN ACCORDANCE WITH THIS JOINT RESOLUTION PROVIDE FOR THE CONSTRUCTION, OPERATION AND MAINTENANCE OF NOT LESS THAN FIVE DEMONSTRATION PLANTS FOR THE PRODUCTION, FROM SEA WATER OR BRACKISH WATER, OR WATER SUITABLE FOR AGRICULTURAL, INDUSTRIAL, MUNICIPAL, AND OTHER BENEFICIAL CONSUMPTIVE USES. SUCH PLANTS SHALL BE DESIGNED TO DEMONSTRATE THE RELIABILITY, ENGINEERING, OPERATING, AND ECONOMIC POTENTIALS OF THE SEA OR BRACKISH WATER CONVERSION PROCESSES WHICH THE SECRETARY SHALL SELECT FROM AMONG THE MOST PROMISING OF THE PRESENTLY KNOWN PROCESSES, AND EACH PLANT SHALL DEMONSTRATE A DIFFERENT PROCESS ..... (C) AS USED IN THIS JOINT RESOLUTION, THE TERM "DEMONSTRATION PLANT" MEANS A PLANT OF SUFFICIENT SIZE AND CAPACITY TO ESTABLISH ON A DAY-TO-DAY OPERATING BASIS THE OPTIMUM OBTAINABLE RELIABILITY, ENGINEERING, OPERATING, AND ECONOMIC POTENTIAL OF THE PARTICULAR SEA WATER CONVERSION PROCESS OR THE BRACKISH WATER TREATMENT PROCESS SELECTED BY THE SECRETARY OF THE INTERIOR FOR UTILIZATION IN SUCH PLANT.' * * *"

UNDER THE HEADING "OBJECTIVES OF THE PLANT," (SECTION 2.2.3 OF THE SPECIFICATIONS) BIDDERS ARE TOLD THAT THE MOST IMPORTANT OBJECTIVE OF THE DEMONSTRATION PROGRAM, AS APPLIED TO THIS PLANT, IS TO SHOW THE ECONOMIC POTENTIAL OF THE FORCED CIRCULATION VAPOR COMPRESSION PROCESS AND TO DEMONSTRATE ITS RELIABILITY TO THE PUBLIC. IT IS ALSO STATED IN PART AS FOLLOWS:

"RECOGNIZING THAT IT IS NOT POSSIBLE TO DESIGN AN OPTIMUM PLANT THAT DEMONSTRATES RELIABILITY COMBINED WITH EXPERIMENTAL FLEXIBILITY AND PRODUCES LOW COST WATER, THE DESIGN REQUIREMENTS AS SET FORTH IN THIS SPECIFICATION ARE NECESSARILY A COMPROMISE TO SATISFY THE OVER-ALL OBJECTIVE.

"* * * IT IS REALIZED THAT THE PROPOSED LAYOUT IS BY NO MEANS THE ONLY POSSIBLE ARRANGEMENT FOR A PLANT WITH A CAPACITY OF ONE MILLION GPD. PROVIDED OTHER ARRANGEMENT WILL PERMIT THE SAME OVER-ALL OBJECTIVE AND EXPERIMENTAL FLEXIBILITY AS THE ARRANGEMENT SHOWN, THEY ARE ACCEPTABLE. BIDDERS TAKING EXCEPTION TO THE SUGGESTED ARRANGEMENT REFLECTED BY THIS SPECIFICATION SHALL BE REQUIRED TO JUSTIFY THEIR ARRANGEMENT IN TERMS OF THE OBJECTIVES OUTLINED ABOVE. THIS FREEDOM OF DESIGN APPLIES TO THE EVAPORATOR EQUIPMENT ONLY. ALL OTHER PLANT EQUIPMENT AND STRUCTURES SHALL BE FURNISHED AS SPECIFIED IN THIS SPECIFICATION AND AS GENERALLY SHOWN ON THE ACCOMPANYING DRAWINGS.'

BIDDERS WERE REQUIRED TO QUOTE FIRM LUMP SUM PRICES FOR (1) CONSTRUCTION OF THE PLANT AND FOR (2) A PERIOD OF TEST OPERATION, AND TO FURNISH FOR USE IN THE BID EVALUATION, WARRANTED FUEL, ELECTRICAL ENERGY, CHEMICAL AND RESIN CONSUMPTION, AS WELL AS DIFFERENTIALS AS TO FOREIGN SOURCE PRODUCTS.

BIDS WERE OPENED ON DECEMBER 12, 1961, AND THE LOW BID AS EVALUATED, ADJUSTED FOR COST FACTORS, INCLUDING WARRANTED CONSUMPTION CHARACTERISTICS, WAS SUBMITTED BY THE JOINT VENTURE OF WALLACE AND TEARS, IN THE AMOUNT OF $6,666,324. THE OTHER BIDS (8 BIDS WERE RECEIVED AND EVALUATED) RANGE IN PRICE FROM $6,749,629 TO A HIGH OF $9,977,101. THE ARCHITECT-ENGINEER'S ESTIMATE IS IN THE AMOUNT OF $8,143,785.

BY LETTER OF JANUARY 4, 1962, THE DIRECTOR OF THE OFFICE OF SALINE WATER REPORTED TO US THAT THE OFFICE OF SALINE WATER BOARD OF CONTRACT REVIEW HAD RECOMMENDED THAT YOUR BID BE REJECTED BECAUSE IT WAS DETERMINED TO BE NONRESPONSIVE AS TO SECTION 1.11 A AND B OF THE SPECIFICATIONS; QUALIFICATIONS TO PERFORM AS CONTRACTOR (PAST EXPERIENCE AND KEY PERSONNEL); TO SECTION 6.2.7, DROPWISE CONDENSATION PROMOTER; TO SECTION 6.2.11.5, PUMP FEATURES; TO SECTION 6.2.12, HEAT EXCHANGERS 601, 602 AND 603; TO SECTION 6.6.7, VENDOR DATA; AND TO SECTION 6.9.2, CENTRIFUGAL PUMPS--- GENERAL CONDITIONS.

ON JANUARY 22, 1962, A MEETING WAS HELD BETWEEN YOUR REPRESENTATIVES AND REPRESENTATIVES OF THE OFFICE OF SALINE WATER, FOR THE PURPOSE OF DISCUSSING THE RESPONSIVENESS OF YOUR BID. A REPORT WAS PREPARED BY THE OSW DEMONSTRATION DIVISION STAFF TO THE OSW DIRECTOR PURSUANT TO THE MEETING, WHICH STATED IN PART AS FOLLOWS:

"BEFORE GETTING INTO THE DISCUSSION OF THE APPARENT LOW ELECTRIC CONSUMPTION WARRANTY IT BECAME EVIDENT THAT WALLACE AND TEARS WERE PROPOSING TO OPERATE THE FORCED RECIRCULATION WATER SYSTEM, WHICH WAS SPECIFIED AS PUMPED, BY A THERMO-SYPHON OR NATURAL CIRCULATION METHOD. THIS WOULD BRING THE WARRANTY FOR ELECTRIC USE WITHIN THAT CONTAINED IN THEIR BID.

"CALCULATIONS BY DR. DODGE, CONSULTANT FOR W AND T. INC., TO SUPPORT THE WORKABILITY OF THE THERMO-SYPHON SYSTEM ARE ACCOMPANIED BY A STATEMENT OF QUALIFICATIONS AND HIS RECOGNITION OF THE EXPERIMENTAL NATURE OF THE PROPOSAL AND THE POSSIBILITY OF FAILURE. OUR OWN STUDY INDICATES ALL MOST CERTAIN PROBABILITY OF FAILURE. THE HEAT TRANSFER SURFACE OFFERED IN OUR JUDGEMENT IS INADEQUATE. CORRECTION OF THIS SURFACE WILL INCREASE THE LENGTH OF THE EVAPORATOR HEAT EXCHANGERS, THEREFORE THE FRICTION LOSS TO WATER FLOW THROUGH THEM, AND WILL DEMAND ENERGIES FROM THE THERMO-SYPHON SYSTEM WHICH ARE PROBABLY NOT AVAILABLE.

"THIS PROPOSAL FOR AN EXPERIMENTAL THERMO-SYPHON SYSTEM DEPARTS FROM THE SPECIFICATIONS, MAKES A MOCKERY OF THE SPIRIT OF PUBLIC LAW 85 883 WHICH REQUIRES A DEMONSTRATION OF RELIABILITY AND BY ITS REJECTION WILL INCREASE THE WALLACE AND TEARS, INC., ELECTRIC CONSUMPTION AS STATED ABOVE SO THAT THEY ARE DISPLACED AS LOW BIDDER.'

YOUR SUBMISSION OF FEBRUARY 12, 1962, PRESENTS IN DETAIL THE CONTENTION THAT YOUR BID IS RESPONSIVE TO THE SPECIFICATIONS ON THE VARIOUS POINTS QUESTIONED BY THE GOVERNMENT. ON PAGES 33-34 OF THE SUBMISSION YOU DISCUSS THE RESPONSIVENESS OF YOUR BID WITH REGARD TO THE SPECIFICATION REQUIREMENT FOR A 1,000,000 GALLON PER DAY OUTPUT FORCED-CIRCULATION VAPOR -COMPRESSION DISTILLATION BRACKISH WATER CONVERSION PLANT. IT IS YOUR CONTENTION THAT WHILE THE SPECIFICATIONS REQUIRE FORCED CIRCULATION, THE MEANS OF ACHIEVING SUCH FORCED CIRCULATION ARE NOT DETAILED. FREEDOM OF DESIGN IS ALLOWED. WHILE DATA SHEETS ARE PROVIDED FOR CIRCULATING PUMPS AND THEY ARE REQUIRED TO BE FURNISHED, THERE IS NO REQUIREMENT THAT THESE PUMPS BE USED TO THE EXCLUSION OF OTHER MEANS OF PROVIDING FORCED CIRCULATION. YOU STATE (P.34) AS FOLLOWS:

"SPECIFICATIONS 6.2.11.3 "POWER PENALTY" WARNS THE BIDDER TO MINIMIZE POWER COSTS. WALLACE-TEARS DID THIS BY PROPOSING A DESIGN THAT PERMITS THE MAXIMUM USE OF THE THERMOSYPHON EFFECT AND, AT THE SAME TIME, MINIMIZES THE POWER REQUIRED BY THE CIRCULATION PUMPS. THE THERMOSYPHON EFFECT IS A BASIC AND WELL-ESTABLISHED PRINCIPLE OF CHEMICAL ENGINEERING. IT CAN BE CALCULATED EXACTLY. THE THERMOSYPHON EFFECT IS A FORCE PROVIDED BY A PORTION OF THE ENERGY INPUT TO THE VAPOR COMPRESSOR. WALLACE-TEARS DESIGN MAXIMIZES THE RECOVERY OF THE FORCE, OTHERWISE DISSIPATED AND USES IT TO OBTAIN FORCED CIRCULATION.

"THE PUMPS PROVIDED WILL, OF THEMSELVES, FURNISH ALL THE FORCES REQUIRED FOR CIRCULATION. THE UTILIZATION OF THE THERMOSYPHON LIFT SUPPLIED WILL PERMIT COMPLIANCE WITH THE SPECIFICATION INJUNCTION THAT "THE COST OF WATER PRODUCTION SHOULD BE AS LOW AS POSSIBLE.' (2.2. OBJECTIVES OF THE PLANT)"

YOUR MEMORANDUM OF MARCH 13, 1962, REFERS TO YOUR PREVIOUS MEMORANDUM ON THIS POINT.

IN RESPONSE TO THIS CONTENTION, THE OFFICE OF SALINE WATER REPORTS TO US UNDER DATE OF FEBRUARY 26, 1962, THAT THE SPECIFICATION CALLS FOR A FORCED CIRCULATION VAPOR COMPRESSION EVAPORATOR SYSTEM, WHEREAS WALLACE AND TEARS HAS OFFERED A "THERMOSYPHON EVAPORATOR" SYSTEM INSTEAD. THE MATTER IS PRESENTED AS FOLLOWS:

"A FORCED CIRCULATION EVAPORATOR SYSTEM IS ONE IN WHICH THE FLUID IS ARTIFICIALLY PUMPED BY POSITIVE AND DIRECT MEANS THROUGH THE EVAPORATOR HEAT EXCHANGER. A NATURAL CIRCULATION SYSTEM--- (WHICH INCLUDES THE THERMOSYPHON SYSTEM) DEPENDS ON NATURAL CIRCULATION BEING CREATED BY A DIFFERENCE IN TEMPERATURE BETWEEN HIGH AND LOW POINTS WITHIN THE FLUID SYSTEM. * * *

"SPECIFICATION NO. 224, SECTION 2.2.3, PAGE 2.8, LAST PARAGRAPH, CLEARLY ALLOWS FOR A CHANGE IN THE ARRANGEMENT OF THE EVAPORATOR SECTION ONLY AND DOES NOT PERMIT THE CHANGE OF THE SYSTEM FROM FORCED CIRCULATION TO NATURAL CIRCULATION AS WALLACE-TEARS HAVE PROPOSED.

"IT MUST BE NOTED THAT THE OTHER SEVEN BIDDERS DID USE A FORCED CIRCULATION SYSTEM AS DEFINED ABOVE IN THEIR PROPOSALS.

"THE REFERENCE ON PAGE 33 OF THE WALLACE-TEARS BRIEF TO THE LACK OF REQUIREMENT OF A PUMP IN SECTION 5.1.2 TO "ACHIEVE THIS RATION" AND THAT SECTION 5.2 "SIMILARLY FAILS TO DISCLOSE ANY SUCH REQUIREMENT" IS MISLEADING. THE IMPORTANT FACT IS THAT CIRCULATING PUMPS ARE REQUIRED AS SHOWN ON DRAWINGS B-213 AND R-203 WHICH ARE REFERRED TO IN SECTION 5.2.1.

"IN SECTION 5.2.2 ON PAGE 5.4, FIFTH PARAGRAPH, IT IS CLEARLY STATED THAT A CIRCULATING PUMP IS TO BE USED IN THE FORCED CIRCULATION SYSTEM. THE PREFERRED ARRANGEMENT OF THE SYSTEM IS GIVEN IN SECTION 6.2.4 AND CLEARLY INCLUDES CIRCULATING PUMPS AND DESCRIBES THEIR RELATION TO THE SYSTEM.'

SECTION 2.2.3 OF THE SPECIFICATIONS HEADED "OBJECTIVES OF THE PLANT," QUOTED ABOVE, STATES THAT THE GOVERNMENT IS PRIMARILY CONCERNED HERE WITH ESTABLISHING A PLANT THAT WILL SHOW THE ECONOMIC POTENTIAL OF THE FORCED CIRCULATION VAPOR COMPRESSION PROCESS AND TO DEMONSTRATE ITS RELIABILITY TO THE PUBLIC. FREEDOM OF DESIGN APPLIES TO THE EVAPORATOR EQUIPMENT ONLY. IT IS EVIDENT FROM THE PROCESS DESCRIPTION SPECIFIED IN SECTION 5.2 OF THE SPECIFICATIONS, AND THE SUGGESTED EFFECT ARRANGEMENT FOR THE SYSTEM DESCRIBED IN SECTION 6.2.4, THAT THE USE OF CIRCULATING PUMPS IS FUNDAMENTAL TO THE PROCESS TO BE DEMONSTRATED. IT IS SIGNIFICANT THAT ALL OTHER BIDDERS SO CONSTRUED THE INVITATION. FURTHERMORE, YOU DO NOT APPEAR TO HAVE CONSULTED WITH THE ADMINISTRATIVE OFFICE PRIOR TO BIDDING CONCERNING THOSE ASPECTS OF THE INVITATION WHICH YOU NOW QUESTION. WHILE THE THERMOSYPHON SYSTEM YOU PROPOSE MAY HAVE CERTAIN ADVANTAGES AND DISADVANTAGES IN USE OVER THE FORCED-CIRCULATION EVAPORATION SYSTEM, NEVERTHELESS IT IS THE PURPOSE OF THE DEMONSTRATION PROGRAM CONTEMPLATED HERE TO SHOW THE USE OF THE FORCED CIRCULATION VAPOR COMPRESSOR PROCESS. ALTHOUGH THE SYSTEM YOU PROPOSE APPARENTLY DOES CONTEMPLATE USE OF CIRCULATING PUMPS, YOUR SYSTEM RELIES ON THE USE OF THE THERMOSYPHON EFFECT TO REDUCE THE USE OF THE PUMPS. FOR THIS REASON IT IS NOT THE SYSTEM CONTEMPLATED FOR DEMONSTRATION BY THE SPECIFICATIONS, AND CONSEQUENTLY YOUR BID MUST BE DEEMED TO BE NONRESPONSIVE. IN VIEW OF THIS CONCLUSION, IT IS UNNECESSARY TO CONSIDER THE OTHER POINTS OF ALLEGED NONRESPONSIVENESS OF YOUR BID.