A-40208, JANUARY 7, 1932, 11 COMP. GEN. 264

A-40208: Jan 7, 1932

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

ADVERTISING - BIDS - REJECTION - RESTRICTIVE SPECIFICATIONS WHERE THE SPECIFICATIONS ON WHICH BIDS ARE ASKED FOR THE FURNISHING OF BALLAST CARS FOR USE IN MAINTENANCE AND IMPROVEMENT WORK OF THE ALASKA RAILROAD ARE NOT DESCRIPTIVE OF THE ACTUAL NEEDS. ARE DRAWN TO COVER A CERTAIN PARTICULAR PRODUCT (CAR) MANUFACTURED UNDER LICENSE BY ONE PRODUCER AND IT LATER APPEARS. 1932: I HAVE YOUR LETTER OF DECEMBER 31. OR (2) WHETHER ALL BIDS RECEIVED MUST BE REJECTED AND A NEW INVITATION ISSUED IN WHICH THE KIND OF EQUIPMENT REQUIRED WILL BE DESCRIBED IN MORE GENERAL TERMS. THE FACTS WITH REFERENCE TO THE MATTER ARE SET FORTH IN LETTER OF DECEMBER 30. AN INVITATION WAS ISSUED FOR SEALED BIDS ON TEN CARS.

A-40208, JANUARY 7, 1932, 11 COMP. GEN. 264

ADVERTISING - BIDS - REJECTION - RESTRICTIVE SPECIFICATIONS WHERE THE SPECIFICATIONS ON WHICH BIDS ARE ASKED FOR THE FURNISHING OF BALLAST CARS FOR USE IN MAINTENANCE AND IMPROVEMENT WORK OF THE ALASKA RAILROAD ARE NOT DESCRIPTIVE OF THE ACTUAL NEEDS, BUT ARE DRAWN TO COVER A CERTAIN PARTICULAR PRODUCT (CAR) MANUFACTURED UNDER LICENSE BY ONE PRODUCER AND IT LATER APPEARS, BECAUSE OF AN ALTERNATE BID SUBMITTED BY THE LOW BIDDER, THAT OTHER MAKES AND TYPES WOULD MEET THE NEEDS OF THE SERVICE, THE INTERESTS OF THE UNITED STATES REQUIRE THAT ALL BIDS BE REJECTED AND THAT NEW BIDS BE ASKED ON SPECIFICATIONS SO DRAWN AS TO MEET WHAT CAN BE SHOWN TO BE THE ACTUAL NEEDS OF THE SERVICE.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, JANUARY 7, 1932:

I HAVE YOUR LETTER OF DECEMBER 31, 1931, RECEIVED JANUARY 4, 1932, TRANSMITTING LETTER FROM THE GENERAL MANAGER OF THE ALASKA RAILROAD CO., TOGETHER WITH SEVERAL BIDS RECEIVED FOR THE FURNISHING OF BALLAST CARS FOR USE IN MAINTENANCE AND IMPROVEMENT WORK OF THE ALASKA RAILROAD. YOU REQUEST DECISION (1) WHETHER AWARD MAY BE MADE TO THE MAGOR CAR CORPORATION ON ITS BID, OR (2) WHETHER ALL BIDS RECEIVED MUST BE REJECTED AND A NEW INVITATION ISSUED IN WHICH THE KIND OF EQUIPMENT REQUIRED WILL BE DESCRIBED IN MORE GENERAL TERMS.

THE FACTS WITH REFERENCE TO THE MATTER ARE SET FORTH IN LETTER OF DECEMBER 30, 1931, FROM THE GENERAL MANAGER OF THE SAID RAILROAD AS FOLLOWS:

ON NOVEMBER 18, 1931, AN INVITATION WAS ISSUED FOR SEALED BIDS ON TEN CARS, DESCRIBED AS FOLLOWS:

"IMPROVED HART CONVERTIBLE BALLAST CARS, 40 FT., 50 TON, STEEL UNDERFRAME, TO BE BUILT IN ACCORDANCE WITH GENERAL DRAWING NO. 3490-H AND SPECIFICATIONS NO. 661 OF ROGER BALLAST CAR CO., WITH THE EXCEPTION OF THE FOLLOWING CHANGES ------------ "

SIX BIDS, RESPONDING TO THE INVITATION AFORESAID, WERE RECEIVED, INCLUDING THREE OFFERING SECOND-HAND EQUIPMENT. THE LOWEST BID RECEIVED FOR NEW CARS WAS THAT OF THE MAGOR CAR CORPORATION, 50 CHURCH STREET, NEW YORK, N.Y., FOR TEN CARS AT $2,614 EACH, DELIVERED ON PIER IN SEATTLE, WASHINGTON. A BID WAS ALSO RECEIVED FROM THE PACIFIC CAR AND FOUNDRY COMPANY AT $2,995 PER CAR, DELIVERED AT SEATTLE, WASHINGTON, AND ONE FROM ROGER BALLAST CAR COMPANY AT $2,980, DELIVERED AT MADISON, ILLINOIS. THE LATTER TWO BIDS CONFORM STRICTLY TO THE ADVERTISEMENT, IN OFFERING CARS OF THE HART CONVERTIBLE TYPE; THE BID OF THE MAGOR CAR CORPORATION, HOWEVER, OFFERS CARS OF A TYPE NOT DESCRIBED IN THE INVITATION FOR BIDS, ALTHOUGH ADAPTED TO THE SAME KIND OF SERVICE.

IT IS NOT CONSIDERED DESIRABLE TO ACCEPT ANY OF THE BIDS FOR SECOND HAND CARS FOR THE REASON THAT THE PRICES OFFERED ARE NOT CONSIDERED TO BE LOW ENOUGH IN COMPARISON WITH THE PRICES OF NEW EQUIPMENT OFFERED TO JUSTIFY THE PURCHASE OF SUCH USED CARS. FURTHERMORE, THE CARS OFFERED BY THE MAGOR CAR CORPORATION, THE LOWEST BIDDER ON NEW CARS, ARE OF A TYPE CONSIDERED SUPERIOR FOR THE PURPOSES OF THE ALASKA RAILROAD TO ANY OTHER TYPE OFFERED UNDER THE ADVERTISEMENT IN QUESTION.

THE MAGOR CAR CONTAINS MECHANICAL DEVICES FOR BOTH CENTER AND SIDE DUMPING, WHILE THE HART CONVERTIBLE TYPE, DESCRIBED IN THE ADVERTISEMENT, PROVIDES ONLY FOR CENTER DUMPING, LEAVING SIDE UNLOADING TO BE PERFORMED BY HAND OR THE USE OF A LIDGEWOOD UNLOADER. BOTH OF THE LATTER NAMED METHODS ARE MUCH SLOWER AND MORE EXPENSIVE THAN THE OPERATION OF THE DEVICES PROVIDED IN THE MAGOR DESIGN. USE AS A COAL CAR, AND HAVE COME TO THE CONCLUSION THAT IT WOULD BE A BETTER CAR FOR THE PURPOSES OF THE ALASKA RAILROAD THAT THE HART CONVERTIBLE CAR.

IT WOULD THEREFORE BE TO THE INTEREST OF THE RAILROAD TO AWARD THE ORDER TO THE MAGOR CAR CORPORATION, IN MY JUDGMENT, AND THIS WOULD BE DONE, EXCEPT THAT IT MAY BE QUESTIONED WHETHER THE BID OF THAT CONCERN CONFORMS SUFFICIENTLY TO THE INVITATION FOR BIDS ON ACCOUNT OF VARIATION FROM THE HART CONVERTIBLE TYPE DESCRIBED IN THE INVITATION.

IT ALSO IS DOUBTFUL WHETHER THE INVITATION FOR BIDS IS NOT OPEN TO OBJECTION ON THE GROUND THAT IT TENDS TO CONFINE THE BIDDING TO ONE SPECIFIED TYPE OF CAR, WHEN AT LEAST ONE OTHER TYPE EXISTS THAT WOULD SERVE THE PURPOSE AS WELL, OR BETTER.

THE PRINCIPAL STRUCTURAL DIFFERENCES BETWEEN THE MAGOR CAR AND THE HART CONVERTIBLE CAR ARE FOUND IN THE ARRANGEMENT OF DOORS AND GATES PROVIDED FOR UNLOADING. THE UNLOADING DEVICES OF THE MAGOR CONSTRUCTED CAR, CONSIST OF BOTTOM DOORS AND SIDE GATES EITHER OF WHICH CAN BE OPENED AND CLOSED UNDER LOAD AND PERMIT THE COMPLETE CONTROL OF THE FLOW OF BALLAST AND FOR ITS SELECTIVE DISTRIBUTION BETWEEN THE TIES AND BEYOND EITHER OR BOTH ENDS OF THE TIES; ALSO ELIMINATING THE NECESSITY OF CHANGING THE FLOOR ARRANGEMENT WHEN THE CAR IS CHANGED FROM CENTER DUMPING TO SIDE DUMPING SERVICE.

THE UNLOADING FEATURES OF THE HART CONVERTIBLE BALLAST CAR CONSIST OF A SERIES OF BOTTOM DOORS WHICH, WHEN SET UP FOR CENTER DUMPING, CAUSE THE MATERIAL TO BE SPREAD IN THE CENTER OF THE TRACK. WHEN THIS CLASS OF EQUIPMENT IS USED IN SIDE DUMPING SERVICE IT BECOMES NECESSARY TO UTILIZE ADDITIONAL MECHANICAL LIDGERWOOD UNLOADING EQUIPMENT AND PLOWS PULLED BY CABLE THROUGH THE CARS IN ORDER TO FORCE THE MATERIAL THROUGH SIDE DOORS OF CARS. THE LATTER METHOD IS DESTRUCTIVE TO THE EQUIPMENT AND A SOURCE OF DELAY AND HEAVY EXPENSE IN OPERATION, WHICH OBJECTION CAN BE ENTIRELY ELIMINATED THROUGH THE USE OF THE MAGOR CAR.

COMPETITION MUST BE FREE AND UNRESTRICTED, THAT IS, OPEN TO ALL DEALERS, ETC., ON THE BASIS OF EQUALITY AND COMMON GROUND. THERE IS NO COMPETITION UNLESS BIDDING IS DONE ON THE SAME BASIS. UNITED STATES V. PAN AMERICAN PETROLEUM CO., 6 FED.REP./2D) 43, 68.

UNDER EXISTING LAW GOVERNING THE PURCHASE OF EQUIPMENT FOR THE GOVERNMENT, THE CONTROLLING ELEMENT IS THE JOB TO BE DONE--- THE WORK NECESSARY TO BE ACCOMPLISHED. THE REQUEST FOR BIDS SHOULD FAIRLY REFLECT THE ACTUAL NEED THROUGH SPECIFICATION OR OTHERWISE, AND THE LOWEST PRICED EQUIPMENT THAT WILL DO THE JOB IS THAT AUTHORIZED TO BE PURCHASED AT PUBLIC EXPENSE. IF THE NEED BE OF EXTRAORDINARY NATURE, AS DISTINGUISHED FROM THE USUAL, SO AS TO REQUIRE UNUSUAL EQUIPMENT, THE TRUE NATURE OF THE NEED SHOULD BE FULLY DISCLOSED SO THAT ALL WHO WISH TO BID MAY BE INFORMED.

IT MAY BE STATED AS A GENERAL PROPOSITION THAT BIDDERS ARE REQUIRED TO SUBMIT THEIR BIDS IN STRICT ACCORDANCE WITH THE ADVERTISEMENT FOR BIDS AND THE SPECIFICATIONS ACCOMPANYING SAME, AND BIDS NOT SUBMITTED IN ACCORDANCE THEREWITH OR BIDS THAT DO NOT MEET THE REQUIREMENTS AS SET FORTH IN THE SPECIFICATIONS MAY, UNDER CERTAIN CIRCUMSTANCES AND UPON THE PROPER SHOWING OF THE FACTS INVOLVED, BE REJECTED. IN THE SPECIFICATIONS ON WHICH BIDS WERE ASKED IN THIS CASE, THE PROSPECTIVE BIDDERS WERE ADVISED AS TO WHAT PURPORTED TO BE THE NEEDS OF THE UNITED STATES WITH RESPECT TO BALLAST CARS. IT WOULD APPEAR FROM AN EXAMINATION OF THE SPECIFICATIONS IN CONNECTION WITH THE FACTS OF RECORD THAT THEY WERE NOT DESCRIPTIVE OF THE ACTUAL NEEDS, BUT THAT THEY WERE DRAWN TO COVER A CERTAIN PATENTED PRODUCT (CAR) MANUFACTURED UNDER LICENSE BY ONE PRODUCER, ONLY, THE PURPOSE AND EFFECT OF WHICH WOULD TEND TO RESTRICT COMPETITION.

THIS IS EVIDENCED BY THE FACT THAT THE LOW BIDDER WAS FORCED TO SUBMIT AN ALTERNATE BID NOT IN STRICT ACCORDANCE WITH THE SPECIFICATIONS, AND THAT AN EXAMINATION OF THE CAR OFFERED BY THE SAID LOW BIDDER DISCLOSED THAT IT WILL ANSWER IN EVERY RESPECT THE NEEDS OF THE ALASKA RAILROAD AND THAT IN SOME RESPECTS IT IS MORE SUITABLE TO THIS SERVICE THAN THE PARTICULAR MAKE OF CAR SPECIFIED IN THE ADVERTISEMENT FOR BIDS. THE SPECIFICATIONS HAVING ADVISED PROSPECTIVE BIDDERS THAT A CERTAIN MAKE AND TYPE OF BALLAST CAR WAS REQUIRED, AND IT NOW APPEARING THAT THERE ARE OTHER MAKES AND TYPES THAT WILL MEET THE NEEDS OF THE SERVICE, IT WOULD APPEAR THAT THE ACCEPTANCE OF THE HIGHER BID OF THE PACIFIC CAR AND FOUNDRY CO. WOULD BE UNFAIR TO THE UNITED STATES AS WELL AS THE LOW BIDDER, AND THAT ACCEPTANCE OF THE LOW BID WOULD BE UNFAIR TO OTHER POSSIBLE BIDDERS.

ANSWERING YOUR QUESTIONS SPECIFICALLY, YOU ARE ADVISED THAT AWARD OF THE CONTRACT TO EITHER OF THE THREE BIDDERS MENTIONED, SUPRA, IS NOT AUTHORIZED. IT WOULD APPEAR THAT THE INTERESTS OF THE UNITED STATES REQUIRE THAT ALL BIDS BE REJECTED AND THAT NEW BIDS BE ASKED ON SPECIFICATIONS SO DRAWN AS TO MEET WHAT CAN BE SHOWN TO BE THE ACTUAL NEEDS OF THE SERVICE--- THAT IS, THE JOB REQUIRED TO BE DONE BY THE EQUIPMENT.