A-81145, NOVEMBER 3, 1936, 16 COMP. GEN. 464

A-81145: Nov 3, 1936

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WHERE A LOW BID IS REJECTED BECAUSE OF A DEFICIENCY IN TRACTOR WEIGHT AND DRAWBAR PULL AS REQUIRED BY THE SPECIFICATIONS. ALTHOUGH THE DEFICIENCY WAS NOT UNREASONABLE. THE EQUIPMENT OFFERED WAS ADMINISTRATIVELY CONSIDERED ADEQUATE. AFTER AN INTERMEDIATE PROTESTED ADVERTISEMENT IN WHICH THE REQUIREMENTS WERE REDUCED BELOW THOSE OF THE ORIGINAL LOW BIDDER. AS FOLLOWS: REQUISITIONS WERE RECEIVED BY THE PURCHASING OFFICER FOR THIS DEPARTMENT FROM THE COMMISSIONER OF INDIAN AFFAIRS FOR FOUR TRACTORS OF THE DIESEL. STATING THAT THEIR SERVICE REQUIREMENTS WERE SUCH AS TO REQUIRE HEAVY TRACTORS IN ORDER TO OPERATE EFFICIENTLY AND ECONOMICALLY HEAVY ROAD MAINTENANCE EQUIPMENT. WHEN LIGHTER TRACTORS ARE USED IN THE OPERATION OF SUCH EQUIPMENT THEY FREQUENTLY ARE DAMAGED.

A-81145, NOVEMBER 3, 1936, 16 COMP. GEN. 464

CONTRACTS - SPECIFICATIONS - MINIMUM TRACTOR REQUIREMENTS MINIMUM SPECIFICATIONS SHOULD NOT BE USED EXCEPT FOR THE PURPOSE OF INDICATING TO BIDDERS THE GENERAL CLASS OR TYPE--- NOT THE IDENTITY--- OF THE EQUIPMENT DESIRED, AND, WHERE USED, A REASONABLE DEFICIENCY IN EQUIPMENT OFFERED DOES NOT JUSTIFY REJECTION OF AN OTHERWISE ACCEPTABLE LOW BID UNLESS SUCH SPECIFICATIONS REFLECT A PARTICULAR GOVERNMENT NEED. WHERE A LOW BID IS REJECTED BECAUSE OF A DEFICIENCY IN TRACTOR WEIGHT AND DRAWBAR PULL AS REQUIRED BY THE SPECIFICATIONS, ALTHOUGH THE DEFICIENCY WAS NOT UNREASONABLE, AND THE EQUIPMENT OFFERED WAS ADMINISTRATIVELY CONSIDERED ADEQUATE, BIDS RECEIVED UPON SPECIFICATIONS INCREASING THESE REQUIREMENTS IN ORDER TO ADMIT COMPETITION AT HIGHER PRICES AND IN A FIELD BEYOND THE GOVERNMENT NEEDS, AFTER AN INTERMEDIATE PROTESTED ADVERTISEMENT IN WHICH THE REQUIREMENTS WERE REDUCED BELOW THOSE OF THE ORIGINAL LOW BIDDER, SHOULD BE REJECTED AND READVERTISEMENT HAD, SETTING FORTH THE ACTUAL NEEDS OF THE GOVERNMENT AND ADMITTING ALL EQUIPMENT TO COMPETITION, WITH ACCEPTANCE OF THE BID MOST ADVANTAGEOUS TO THE UNITED STATES.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, NOVEMBER 3, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF OCTOBER 17, 1936, WITH ENCLOSURES, AS FOLLOWS:

REQUISITIONS WERE RECEIVED BY THE PURCHASING OFFICER FOR THIS DEPARTMENT FROM THE COMMISSIONER OF INDIAN AFFAIRS FOR FOUR TRACTORS OF THE DIESEL, OR SOLID FUEL INJECTION TYPE, OF APPROXIMATELY 70 HP., TO BE PURCHASED FOR THE USE OF THE INDIAN FIELD SERVICE.

THE SUPERINTENDENTS OFFERED AMPLE JUSTIFICATION FOR THE PURCHASE OF TRACTORS IN THE HEAVY-WEIGHT CLASS, STATING THAT THEIR SERVICE REQUIREMENTS WERE SUCH AS TO REQUIRE HEAVY TRACTORS IN ORDER TO OPERATE EFFICIENTLY AND ECONOMICALLY HEAVY ROAD MAINTENANCE EQUIPMENT, SUCH AS SCRAPERS, TRAILBUILDERS, ROAD RIPPERS, ETC. WHEN LIGHTER TRACTORS ARE USED IN THE OPERATION OF SUCH EQUIPMENT THEY FREQUENTLY ARE DAMAGED, CAUSING LOSS OF TIME, NECESSITATING LARGE EXPENDITURES FOR REPAIRS, AND CONSIDERABLY REDUCING THE LIFE OF THE TRACTORS.

IN ORDER TO COMPLY WITH THE REQUESTS FROM THE INDIAN OFFICE, ADVERTISEMENT U.S.D.I. NO. 1685 WAS ISSUED BY THE PURCHASING OFFICER FORTHIS DEPARTMENT UNDER DATE OF AUGUST 7, CALLING FOR BIDS TO BE OPENED AUGUST 17, INCLUDED IN WHICH WAS THE FOLLOWING ITEM:

"TRACTOR, FULL TRACK LAYING TYPE, WITH DIESEL OR SOLID FUEL INJECTION TYPE ENGINE, WITH STANDARD GAUGE AND STANDARD TRACT SHOES OF NOT LESS THAN 17,750 LBS. DRAWBAR PULL, WEIGHING NOT LESS THAN 22,000 LBS., AND TO BE IN ACCORDANCE WITH THE ATTACHED SPECIFICATIONS, UNLESS OTHERWISE SPECIFIED.'

A COPY OF ADVERTISEMENT U.S.D.I. NO. 1685, WITH ADDENDUM NO. 1, IS ENCLOSED HEREWITH.

BIDS ON THIS ITEM WERE RECEIVED AS FOLLOWS:

BID NO. 1: CATERPILLAR TRACTOR COMPANY, PEORIA, ILLINOIS, OFFERING TO MAKE DELIVERY OF ,CATERPILLAR" DIESEL RD7 60-INCH GAUGE TRACTORS F.O.B. PEORIA, ILLINOIS, FOR $4,281, LESS $50 DISCOUNT FOR PAYMENT WITHIN 30 DAYS, OR $4,231 NET. THE "EXCEPTIONS TO SPECIFICATIONS" QUESTIONNAIRE SHEET ATTACHED TO THIS PROPOSAL STATED THAT THE TRACTOR OFFERED DID NOT MEET THE SPECIFICATIONS, AND FURTHER EXPLAINED THIS STATEMENT AS FOLLOWS:

"NEBRASKA TEST NO. 254, ATTACHED, ILLUSTRATES THE MODEL RD7 TRACTOR OFFERED AGAINST ITEM 7. EXCEPTIONS TO SPECIFICATIONS ARE TAKEN PER SCHEDULE BELOW:

CHART

MINIMUM PERCENT

REQUIREMENTS WE OFFER DEFICIENT WEIGHT -- STD. MODEL -------- 22,000 LBS ----- 20,410 LBS --- 7.2 DRAWBAR PULL (CORRECTED) ---- 17,750 LBS ----- 17,197 LBS --- 3.1

"IF THESE SMALL DIFFERENCES CANNOT BE WAIVED, CATERPILLAR TRACTOR CO. AGREES TO PLACE THE TRACTOR AS OFFERED AGAINST ITEM 7 ON THE WORK AT FORT BROWNING, MONT., WITHOUT ANY OBLIGATION TO THE GOVERNMENT TO PURCHASE UNLESS IT WILL SATISFACTORILY PERFORM THE WORK WHICH THE GOVERNMENT HAS TO DO AND FOR WHICH THE TRACTOR OF 22,000 LB. WEIGHT AND 17,750 LB. DRAWBAR PULL IS BEING ADVERTISED.

"NO OTHER EXCEPTIONS.'

BID NO. 2: CLEVELAND TRACTOR COMPANY, CLEVELAND, OHIO, OFFERING TO MAKE DELIVERY OF CLETRAC ,FD" TRACTORS, F.O.B. CLEVELAND, OHIO, FOR $4,861, LESS 2 PERCENT OR $57.22 DISCOUNT FOR PAYMENT WITHIN 30 DAYS, MAKING THE NET PRICE $4,803.78. THIS TRACTOR HAS A DRAWBAR PULL OF 19,000 LBS. AND WEIGHT OF 26,423 LBS.

NO OTHER BIDS WERE RECEIVED ON THIS ITEM. THE LOCAL WASHINGTON REPRESENTATIVE OF THE ALLIS-CHALMERS MANUFACTURING COMPANY EXPLAINED TO THE PURCHASING OFFICER VERBALLY THAT THE REASON HIS COMPANY DID NOT SUBMIT A PROPOSAL ON THIS ITEM WAS BECAUSE IT HAD SO MANY ORDERS IN ADVANCE FOR ITS TRACTORS IN THIS CLASS THAT THE COMPANY COULD NOT OFFER DELIVERY IN LESS THAN 60 DAYS. FOR THIS REASON THE COMPANY THOUGHT IT WOULD BE UNFAIR TO BID, AND SHOULD IT RECEIVE THE AWARD, PREVENT THE INDIAN SERVICE FROM HAVING THE USE OF THE TRACTORS UNTIL IT COULD DELIVER THEM.

AS THE SPECIFICATIONS IN THE ADVERTISEMENT WERE TOO HIGH TO PERMIT THE ACCEPTANCE OF THE BID OF THE CATERPILLAR TRACTOR COMPANY OFFERING ITS MODEL RD7, AND IT WAS NOT CONSIDERED THAT THE PURCHASE OF A CLETRAC "FD" TRACTOR AT AN ADDITIONAL EXPENDITURE OF $580 WAS JUSTIFIED, THESE BIDS WERE REJECTED, AND A READVERTISEMENT WAS ISSUED BY THE PURCHASING OFFICER ON AUGUST 21 IN THE FORM OF U.S.D.I. NO. 1762, CALLING FOR TELEGRAPHIC BIDS TO BE OPENED ON AUGUST 25. COPIES OF THIS INVITATION WERE SENT BY AIR MAIL TO THE PRINCIPAL MANUFACTURERS OF TRACTORS. THE SPECIFICATIONS IN THIS READVERTISEMENT WERE AS FOLLOWS:

"TRACTOR, FULL TRACK LAYING TYPE, WITH DIESEL OR SOLID FUEL INJECTION TYPE ENGINE, WITH STANDARD GAUGE AND STANDARD TRACK SHOES, OF NOT LESS THAN 17,750 LBS. DRAWBAR PULL, WEIGHING NOT LESS THAN 22,000 LBS., AND TO BE IN ACCORDANCE WITH THE ATTACHED SPECIFICATIONS UNLESS OTHERWISE SPECIFIED.'

AFTER RECEIVING A COMPLAINT FROM THE LOCAL OFFICE OF THE CATERPILLAR TRACTOR COMPANY THAT THESE SPECIFICATIONS WERE TOO HIGH IN ORDER TO PERMIT THAT COMPANY TO OFFER ITS MODEL RD7, A TELEGRAPHIC ADDENDUM NO. 1 TO THIS READVERTISEMENT WAS ISSUED ON AUGUST 24, WHICH READ AS FOLLOWS:

"ADDENDUM NUMBER ONE USDI SEVENTEEN SIXTY TWO FOR TRACTORS. TELEGRAPHIC BIDS OPENING AUGUST TWENTY FIVE TWO PM DATE OF OPENING ADVANCED TO AUGUST TWENTY SIX TWO PM. SPECIFICATION PAGE TWELVE CHANGE AS FOLLOWS MINIMUM DRAWBAR PULL CORRECTED SEVENTEEN THOUSAND POUNDS MINIMUM WEIGHT TWENTY THOUSAND POUNDS. TO PARAGRAPH FOUR STARTER ADD AUXILIARY GASOLINE ENGINE. ADD ITEM ONE D FORT BROWNING MONTANA MAKING TOTAL FOUR TRACTORS.'

A COPY OF U.S.D.I. NO. 1762 WITH ADDENDUM NO. 1 IS ENCLOSED HEREWITH.

IN RESPONSE TO THIS READVERTISEMENT THE PURCHASING OFFICE RECEIVED ONE BID FROM THE CATERPILLAR TRACTOR COMPANY, OFFERING TO MAKE DELIVERY OF "CATERPILLAR" DIESEL RD7 TRACTORS, 60-INCH GAUGE, FOR $4,281, LESS $50 DISCOUNT FOR CASH PAYMENT WITHIN 30 DAYS OR $4,231 NET, F.O.B. PEORIA, ILLINOIS. THIS TRACTOR FULLY COMPLIES WITH THE SPECIFICATIONS IN THE ADVERTISEMENT.

THERE WAS ALSO RECEIVED ONE BID FROM LEWIS TRACTOR MACHINERY COMPANY, THE FARGO, NORTH DAKOTA, REPRESENTATIVE OF ALLIS-CHALMERS MANUFACTURING COMPANY, OFFERING ONE ALLIS-CHALMERS MODEL "LO" TRACTOR F.O.B. GARRISON, NORTH DAKOTA, FOR $6,345, LESS 2 PERCENT DISCOUNT FOR PAYMENT WITHIN 30 DAYS. REJECTION OF THIS BID WAS OBVIOUSLY NECESSARY ON ACCOUNT OF THE EXORBITANT PRICE QUOTED.

AS A RESULT OF THIS READVERTISEMENT THE PURCHASING OFFICER RECEIVED THE FOLLOWING TELEGRAM FROM THE CLEVELAND TRACTOR COMPANY:

"REFERENCE YOUR INVITATION USDI SEVENTEEN SIXTY TWO AMENDED FOR OPENING AT TWO P.M. AUGUST TWENTY SIXTH, NINETEEN THIRTY SIX; WE ARE NOT BIDDING DUE TO CHANGE IN SPECIFICATIONS AS PER WIRE ADDENDUM DATED AUGUST TWENTY FOURTH, NINETEEN THIRTY SIX.'

THE LOCAL REPRESENTATIVE OF THE ALLIS-CHALMERS MANUFACTURING COMPANY ALSO INFORMED THE PURCHASING OFFICER VERBALLY THAT NO PROPOSAL WOULD BE ISSUED BY HIS COMPANY, AS IT DID NOT CONSIDER ITS MODEL "LO" TRACTOR IN THE SAME CLASS AS THE CATERPILLAR RD7, WHICH WAS ACCEPTABLE UNDER THE SPECIFICATIONS.

ON ACCOUNT OF THE COMPLAINTS DESCRIBED ABOVE AND ALSO BECAUSE OF THE FACT THAT NO REAL COMPETITION WAS OBTAINED, NO PURCHASE WAS MADE UNDER THIS READVERTISEMENT, AND A SECOND READVERTISEMENT, U.S.D.I. NO. 1777, WAS ISSUED BY THE PURCHASING OFFICER ON SEPTEMBER 1, OPENING DATE SEPTEMBER 9, USING SPECIFICATIONS CALLING FOR A SLIGHTLY HEAVIER TRACTOR IN THE HOPE THAT COMPARABLE BIDS WOULD BE RECEIVED. THE FOLLOWING SPECIFICATIONS WERE USED IN THE READVERTISEMENT:

"TRACTORS, FULL TRACK LAYING TYPE, WITH DIESEL OR SOLID FUEL INJECTION TYPE ENGINE, WITH STANDARD GAUGE AND STANDARD TRACK SHOES, OF NOT LESS THAN 19,000 LBS. DRAWBAR PULL, WEIGHING NOT LESS THAN 23,000 LBS., AND TO BE IN ACCORDANCE WITH THE ATTACHED SPECIFICATION, UNLESS OTHERWISE HEREWITH SPECIFIED.'

A COPY OF U.S.O.F. NO. 1777 IS ENCLOSED HEREWITH.

IN RESPONSE TO THIS ADVERTISEMENT BIDS WERE RECEIVED AS FOLLOWS:

BID NO. 1: ALLIS-CHALMERS MANUFACTURING COMPANY, MILWAUKEE, WISCONSIN, OFFERING TO MAKE DELIVERY OF ALLIS-CHALMERS MODEL "LO" TRACTORS, F.O.B. SPRINGFIELD, ILLINOIS, FOR $5,510.70 EACH, NET. THIS TRACTOR WEIGHS 24,017 LBS. AND HAS A DRAWBAR PULL OF 20,600 LBS.

BID NO. 2: CLEVELAND TRACTOR COMPANY, CLEVELAND, OHIO, OFFERING TO MAKE DELIVERY OF CLETRAC MODEL "FD" TRACTORS, F.O.B. CLEVELAND, FOR $4,850, LESS 2 PERCENT, OR $91 DISCOUNT, FOR PAYMENT WITHIN 30 DAYS, MAKING THE NET COST $4,753. THIS TRACTOR WEIGHS 26,705 LBS. AND HAS A DRAWBAR PULL OF 20,675 LBS.

BID. NO. 3: LEWIS TRACTOR AND MACHINERY COMPANY, FARGO, NORTH DAKOTA, OFFERING TO MAKE DELIVERY OF ONLY ONE ALLIS-CHALMERS MODEL "LO" TRACTOR, F.O.B. GARRISON, NORTH DAKOTA, FOR $6,488, LESS 2 PERCENT DISCOUNT FOR PAYMENT WITHIN 30 DAYS.

BID NO. 4: CATERPILLAR TRACTOR COMPANY, PEORIA, ILLINOIS, OFFERING TO MAKE DELIVERY OF CATERPILLAR RD7 TRACTOR, 74-INCH GAUGE (WIDE GAUGE), FOR $4,350 LESS $50 DISCOUNT FOR CASH WITHIN 30 DAYS, OR $4,300 NET. THIS TRACTOR HAS ONLY 17,197 LBS. DRAWBAR PULL, AND THE PROPOSAL SHOWS THE WEIGHT TO BE "22,178 LBS. EQUIPPED AS SPECIFIED OR 21,130 LBS, ACTUAL WEIGHT WITHOUT EQUIPMENT.' ATTACHED TO THIS BID IS THE CATERPILLAR TRACTOR COMPANY'S LETTER OF SEPTEMBER 5, 1936, A COPY OF WHICH IS ENCLOSED HEREWITH. FROM THE STATEMENTS MADE IN THIS LETTER, IT IS OBVIOUS THAT THIS TRACTOR DOES NOT MEET THE SPECIFICATIONS IN THE ADVERTISEMENT.

YOUR ATTENTION IS CALLED TO THE FOLLOWING FACTS IN REGARD TO THESE THREE ADVERTISEMENTS:

IN RESPONSE TO U.S.D.I. NO. 1685, THE CATERPILLAR TRACTOR COMPANY OFFERED ITS RD7, WHICH DID NOT MEET THE SPECIFICATIONS. THE ALLIS CHALMERS COMPANY OFFERED NO PROPOSAL. THE CLEVELAND TRACTOR COMPANY OFFERED ITS MODEL "FD" TRACTOR, WHICH COMPLIED WITH THE SPECIFICATIONS, QUOTING A PRICE OF $580 IN EXCESS OF THAT OFFERED BY THE CATERPILLAR TRACTOR COMPANY. THE CATERPILLAR TRACTOR COMPANY COULD HAVE OFFERED ITS RD8, WHICH WOULD HAVE FULLY COMPLIED WITH THE SPECIFICATIONS IN THE ADVERTISEMENT.

IN RESPONSE TO ADVERTISEMENT U.S.D.I. NO. 1762, THE CATERPILLAR TRACTOR COMPANY OFFERED ITS RD7, WHICH FULLY COMPLIED WITH THE SPECIFICATIONS; BUT BOTH THE ALLIS-CHALMERS MANUFACTURING COMPANY AND THE CLEVELAND TRACTOR COMPANY REFUSED TO SUBMIT BIDS ON THEIR MODELS "LO" AND CLETRAC "FD," RESPECTIVELY.

IN RESPONSE TO U.S.D.I. NO. 1777, THE ALLIS-CHALMERS MANUFACTURING COMPANY AND THE CLEVELAND TRACTOR COMPANY BOTH OFFERED MODELS MEETING THE REQUIREMENTS OF THE SPECIFICATIONS; BUT THE CATERPILLAR TRACTOR COMPANY, WHICH COULD HAVE OFFERED ITS RD8, PUT IN A BID ON ITS RD7 WIDE GAUGE TRACTOR, WHICH DOES NOT MEET THE REQUIREMENTS OF THE SPECIFICATIONS OF THE ADVERTISEMENT. THIS WAS DONE TO INCREASE WEIGHT. THE SPECIFICATIONS DID NOT REQUIRE, NOR IS A WIDE GAUGE TRACTOR DESIRED BY THE INDIAN SERVICE.

THE PURCHASING OFFICER WISHES TO POINT OUT THAT THESE THREE ADVERTISEMENTS VERY CLEARLY ILLUSTRATE A DISAGREEMENT BETWEEN THE TRACTOR MANUFACTURERS WHICH HAS CAUSED CONSIDERABLE CONTROVERSY BETWEEN THE LOCAL REPRESENTATIVES OF THE TRACTOR MANUFACTURERS AND THE PURCHASING OFFICER AND WHICH MAKES IT VERY DIFFICULT TO OBTAIN ACCEPTABLE BIDS OR TO MAKE AN AWARD.

TO ILLUSTRATE THIS DIFFICULTY, THERE IS SHOWN BELOW A TABLE IN WHICH IS SET OUT THE VARIOUS TRACTORS IN THE MEDIUM-WEIGHT AND HEAVY-WEIGHT CLASSES:

CHART NEBRASKA TEST NO. MODEL NO. DRAWBAR HORSE WEIGHT,

PULL POWER LBS.

CATERPILLAR RD6 --------- 10,274 45.38 14,820

CLETRAC DD -------------- 11,134 61.18 12,700

ALIS-CHALMERS KO -------- 11,100 49.58 11,012

INTERNATIONAL TD40 ------ 9,818 44.68 12,400 253 -------------- CATERPILLAR RD7 --------- 14,746 60.32 21,020 254 -------------- CATERPILLAR RD7 --------- 16,098 65.22 21,020 256 -------------- CATERPILLAR RD8 --------- 20,485 91.75 33,690 268 -------------- CLETRAC FD -------------- 19,152 86.18 27,370 262 -------------- CLETRAC FG ------ -------- 19,107 87.02 26,670

ALLIS-CHALMERS LO ------- 19,600 68.00 23,100

WHERE NO NEBRASKA TEST NUMBER IS SHOWN THE FIGURES WERE OBTAINED FROM COMPARATIVE SPECIFICATIONS OF TRACK TYPE TRACTORS ISSUED BY THE ALLIS- CHALMERS TRACTOR COMPANY AND FOR THE MODEL "LO" DIRECTLY FROM THE ALLIS- CHALMERS COMPANY. THESE TWO PAPERS ARE ENCLOSED HEREWITH. IT WILL BE NOTED THAT IN THE THREE GROUPS SHOWN ABOVE THERE IS A WIDE VARIATION BETWEEN THE DIFFERENT TRACTORS IN WEIGHT AND IN HORSEPOWER WITHIN EACH GROUP. HOWEVER, THE VARIATION SHOWN IN THE DRAWBAR PULL FOR EACH GROUP IS NOT SO GREAT AND IS, IN FACT, VERY CLOSE. THE PURCHASING OFFICER, REALIZING THAT THE THING ACTUALLY PURCHASED WHEN A TRACTOR IS BOUGHT IS THE ABILITY TO PULL, OR, AS EXPRESSED IN THE TABLES, THE DRAWBAR PULL, HAS ENDEAVORED IN ALL CASES TO RESTRICT THE BIDDING SO THAT ALL MANUFACTURERS WITHIN A CLASS ESTABLISHED BY THE DRAWBAR PULL DELIVERED BY EACH OF THE MACHINES WOULD BE ABLE TO BID AND HAS DISREGARDED THE FACTORS OF HORSEPOWER AND WEIGHT, WHICH SHOW SUCH A WIDE VARIATION. IN THE TABLES SHOWN ABOVE IT IS VERY CLEAR THAT IN THE MEDIUM-WEIGHT-TRACTOR CLASS FOUR COMPANIES MAY COMPETE AND IN THE HEAVY-WEIGHT CLASS THAT THREE MAY COMPETE. IT IS ALSO CLEAR THAT THE CATERPILLAR TRACTOR COMPANY MANUFACTURES TWO MACHINES, BOTH OF WHICH ARE DESIGNATED AS MODEL RD7, BUT WHICH ARE IN FACT QUITE DIFFERENT, AS IT IS SHOWN BY THE DRAWBAR PULL THAT THEY ARE IN BETWEEN THE MEDIUM-WEIGHT CLASS AND THE HEAVY-WEIGHT CLASS, WITH NO OTHER COMPANY MANUFACTURING A COMPARABLE TRACTOR. IN THE CASE HERE PRESENTED THE CATERPILLAR TRACTOR COMPANY IS ENDEAVORING TO BREAK DOWN THE LIMITATIONS SET BY THE PURCHASING OFFICER, WHICH ARE BELIEVED TO BE FAIR TO ALL COMPANIES, AND TO FORCE THE GOVERNMENT TO ACCEPT A MACHINE WHICH IS NOT COMPARABLE TO ANY OTHER MODEL. AS CAN BE SEEN BY THE EXAMPLES SET FORTH HEREIN, NO COMPETITION IS OBTAINABLE WHEN BIDS ARE REQUESTED ON TRACTORS IN THE RD7 CLASS; CONSEQUENTLY, YOU ARE REQUESTED TO ADVISE WHETHER OR NOT THE BID OF THE CATERPILLAR TRACTOR COMPANY ON ITS WIDE-GAUGE MODEL RD7, WHICH DOES NOT MEET THE SPECIFICATIONS OF THE LAST ADVERTISEMENT, MAY BE DISREGARDED AND AWARD MADE TO THE CLEVELAND TRACTOR COMPANY, THE LOWEST BIDDER MEETING THE SPECIFICATIONS.

FOR YOUR CONVENIENCE IN CONSIDERING THIS CASE, THERE ARE ENCLOSED THE BIDS RECEIVED IN RESPONSE TO THE LAST ADVERTISEMENT AND ALL OTHER PERTINENT CORRESPONDENCE. PLEASE RETURN THE PAPERS WITH YOUR REPLY.

AS THE TRACTORS ARE VERY URGENTLY NEEDED BY THE INDIAN SERVICE TO COMPLETE PROJECTS ON WHICH WORK HAS ALREADY COMMENCED, IT WILL BE APPRECIATED IF A DECISION IS RENDERED AT YOUR EARLIEST CONVENIENCE.

INVITATION FOR BIDS U.S.D.I. NO. 1685 COVERED FOUR TYPES OF TRACTORS WITH SPECIFIED WEIGHTS AND DRAWBAR PULLS AS FOLLOWS:

CHART

WEIGHT, POUNDS: DRAWBAR PULL,

POUNDS

1. 10,500 ------------------------------- 9,000

2. 10,650 ------------------------------- 9,800

3. 22,000 ------------------------------- 17,750

4. 23,000 ------------------------------- 20,400

ITEM NUMBERED 3 ABOVE APPARENTLY IS THE ONE IN CONTROVERSY, ALTHOUGH THE INVITATION FOR BIDS ON THAT ITEM COVERED TRACTORS POWERED WITH GASOLINE ENGINE AND NOT WITH DIESEL OR SOLID-FUEL INJECTION TYPE, AS STATED IN YOUR LETTER.

YOU STATE THAT LIGHTER WEIGHT TRACTORS HAVE PROVED UNSATISFACTORY IN THE TYPE OF WORK CONTEMPLATED, BUT NO INDICATION IS GIVEN AS TO THE APPROXIMATE WEIGHT AND DRAWBAR PULL OF THE TRACTORS WHICH HAVE BEEN SHOWN TO BE INSUFFICIENT, NOR IS THERE ANY SHOWING THAT THE INDIAN SERVICE HAS EMPLOYED TRACTORS OF THE APPROXIMATE WEIGHT AND DRAWBAR PULL OF THE CATERPILLAR RD-7 ON THAT TYPE OF WORK, OR OF ANY EXPERIENCE ESTABLISHING THE FACT THAT SUCH TRACTORS WOULD NOT BE ADEQUATE FOR THAT SERVICE. WHY THE PARTICULAR FIGURES USED AS TO WEIGHT AND DRAWBAR PULL WERE SPECIFIED IN THE FIRST PLACE DOES NOT APPEAR, AND SUBSEQUENT ADMINISTRATIVE ACTION WOULD INDICATE THESE FIGURES WERE NOT DEEMED ESSENTIAL. THE ONLY REASON ASSIGNED FOR REJECTING THE LOW BID UNDER THE ORIGINAL ADVERTISEMENT IS THAT THE SPECIFICATIONS IN THE ADVERTISEMENT WERE TO HIGH TO PERMIT ITS ACCEPTANCE, AND NOWHERE IN YOUR LETTER IS THERE ANY SUGGESTION THAT THE TRACTORS THERE OFFERED BY THE LOW BIDDER WERE NOT ADEQUATE TO THE WORK TO BE PERFORMED. PRESUMABLY THE TRACTOR DATA FORWARDED WITH YOUR SUBMISSION WAS ACCESSIBLE TO YOUR DEPARTMENT WHEN THE SPECIFICATIONS WERE DRAWN, AND THERE FOLLOWS THE POSSIBILITY THAT THE FIGURES WERE FIXED FOR THE PURPOSE OF EXCLUDING THAT TRACTOR FROM COMPETITION.

THE DECISIONS OF THIS OFFICE ARE TO THE EFFECT THAT MINIMUM SPECIFICATIONS SHOULD NOT BE USED EXCEPT FOR THE PURPOSE OF INDICATING TO BIDDERS THE GENERAL CLASS OR TYPE--- NOT THE IDENTITY--- THE EQUIPMENT REQUIRED, AND THAT WHERE MINIMUM SPECIFICATIONS ARE USED, A REASONABLE DEFICIENCY DOES NOT JUSTIFY REJECTION OF AN OTHERWISE ACCEPTABLE LOW BID, IN THE ABSENCE OF FACTS SHOWING THAT SUCH MINIMUM SPECIFICATIONS REFLECT A PARTICULAR NEED OF THE GOVERNMENT IN A GIVEN INSTANCE. 16 COMP. GEN. 120. INSTEAD OF SPECIFYING ANY ARBITRARY MINIMUM REQUIREMENT IN ANY RESPECT, SPECIFICATIONS SHOULD INDICATE APPROXIMATE CHARACTERISTICS, LEAVING BIDDERS FREE TO OFFER WHAT GRADE OF EQUIPMENT THEY SEE FIT, AND THE GOVERNMENT AT LIBERTY TO ACCEPT EQUIPMENT VARYING IN REASONABLE MEASURE FROM THE ADVERTISED SPECIFICATIONS WITHOUT GROUND FOR PROTEST FROM OTHER BIDDERS. IN THIS INSTANCE THE SPECIFICATIONS REQUIRED TRACTORS OF NOT LESS THAN 17,750 POUNDS DRAWBAR PULL, WEIGHING NOT LESS THAN 22,000 POUNDS, THUS FIXING ABSOLUTE MINIMUMS IN THOSE RESPECTS. HOWEVER, BIDDERS WERE INFORMED THAT BIDS ON EQUIPMENT DIFFERING IN MINOR DETAILS FROM THE SPECIFICATIONS WOULD BE CONSIDERED, PROVIDED SUCH DIFFERENCES WERE CLEARLY NOTED AND DESCRIBED BY THE BIDDER, AND PROVIDED FURTHER THAT THE MACHINES OFFERED UNDER THOSE CONDITIONS WERE CONSIDERED BY THE PURCHASING OFFICE AND REQUISITIONING BUREAU TO BE IN ALL ESSENTIAL RESPECTS IN COMPLIANCE WITH THE SPECIFICATIONS.

UNDER THE ORIGINAL ADVERTISEMENT THE CATERPILLAR TRACTOR CO. OFFERED ITS RD-7 TRACTOR, WHICH, AS YOU STATE, WAS 7.2 PERCENT DEFICIENT IN WEIGHT AND 3.1 PERCENT IN DRAWBAR PULL AS COMPARED WITH THE ADVERTISED SPECIFICATIONS, WHILE THE TRACTOR OFFERED BY THE CLEVELAND TRACTOR CO., THE NEXT HIGHER BIDDER, EXCEEDED THE SPECIFICATIONS BY APPROXIMATELY 20 PERCENT IN WEIGHT AND 7 PERCENT IN DRAWBAR PULL, AND WAS OFFERED AT A PRICE NEARLY 14 PERCENT HIGHER THAN THAT OF THE CATERPILLAR TRACTOR. WAS SUGGESTED IN 16 COMP. GEN. 38 THAT IT WOULD APPEAR THE PERCENTAGE OF ALLOWABLE TOLERANCE IN WEIGHT WOULD BE GREATER IN THE HEAVIER TYPES OF VEHICLES THAN IN LIGHTER TYPES. WHILE THAT DECISION HAD PARTICULAR REFERENCE TO TRUCKS AND WEIGHT SPECIFICATIONS, THERE APPEARS NO REASON WHY THE RULE SHOULD NOT BE APPLICABLE HERE. AS WILL BE SEEN FROM THE COMPARISON ABOVE, THE TRACTOR OFFERED BY THE LOW BIDDER MUCH MORE NEARLY APPROXIMATED THE SPECIFICATIONS THAN THAT OFFERED BY THE HIGH BIDDER. A TRACTOR OF THE APPROXIMATE WEIGHT AND POWER SPECIFIED VARIATIONS OF 7.2 PERCENT AND 3.1 PERCENT, RESPECTIVELY, WOULD NOT APPEAR UNREASONABLE. THE ALTERNATIVE PROVISION OF THE SPECIFICATIONS COULD, AND IT APPEARS IN THIS INSTANCE SHOULD, HAVE BEEN APPLIED FOR THE ACCEPTANCE OF THE LOW BID, IN THE ABSENCE OF OTHER VALID OBJECTION.

THE SECOND ADVERTISEMENT APPEARS TO HAVE BEEN IDENTICAL WITH THE FIRST, EXCEPT THAT A SOLID FUEL INJECTION TYPE OF ENGINE WAS REQUIRED, THE WEIGHT AND DRAWBAR PULL BEING THE SAME. YOU STATE THAT "AFTER RECEIVING A COMPLAINT FROM THE LOCAL OFFICE OF THE CATERPILLAR TRACTOR CO. THAT THESE SPECIFICATIONS WERE TOO HIGH IN ORDER TO PERMIT THAT COMPANY TO OFFER ITS MODEL RD-7 * * *," THIS ADVERTISEMENT WAS AMENDED TO REDUCE THE REQUIRED WEIGHT FROM 22,000 TO 20,000 POUNDS AND THE DRAWBAR PULL FROM 17,750 TO 17,000 POUNDS. AS HAS BEEN SUGGESTED, THIS ACTION WOULD INDICATE NOT ONLY THAT THE MINIMUM FIGURES USED IN THE ORIGINAL ADVERTISEMENT WERE NOT CONSIDERED ESSENTIAL, BUT THAT THE CATERPILLAR MODEL RD-7 WAS ADMINISTRATIVELY CONSIDERED ADEQUATE TO THE SERVICE TO BE RENDERED. THE CATERPILLAR TRACTOR CO. AGAIN OFFERED ITS RD-7 MODEL AT THE SAME PRICE, COMPLYING WITH THE ADVERTISED SPECIFICATIONS IN EVERY RESPECT, AND AGAIN IT WAS LOW BIDDER, BUT BY A MUCH WIDER MARGIN. THE BID OF THAT COMPANY SHOULD HAVE BEEN ACCEPTED IF OTHERWISE PROPER. YOU STATE THAT THE BID WAS NOT ACCEPTED FOR THE REASON THAT OTHER MANUFACTURERS--- THE CLEVELAND TRACTOR CO. AND THE ALLIS-CHALMERS CO.--- REFUSED TO SUBMIT BIDS ON THE SPECIFICATIONS AS AMENDED. YOUR DEPARTMENT THEN READVERTISED, PLACING THE SPECIFICATION REQUIREMENTS MATERIALLY HIGHER THAN THEY HAD BEEN BOTH AS TO WEIGHT AND DRAWBAR PULL, AND APPARENTLY WITHOUT RELATION TO THE ACTUAL NEEDS OF THE GOVERNMENT, "IN THE HOPE THAT COMPARABLE BIDS WOULD BE RECEIVED.' UNDER THE FINAL ADVERTISEMENT FOUR BIDS WERE RECEIVED, AND YOU PROPOSE TO REJECT THE LOW BID FOR THE REASON THAT IT OFFERS A WIDE GAGE TRACTOR INSTEAD OF A STANDARD-GAGE TRACTOR, AND THAT IT DOES NOT COMPLY WITH THE REVISED SPECIFICATIONS AS TO WEIGHT OR DRAWBAR PULL. THE TRACTOR OFFERED BY THE NEXT LOW BIDDER, THE CLEVELAND TRACTOR CO., VERY MATERIALLY EXCEEDS THE SPECIFICATIONS, AND THE BID PRICE IS APPROXIMATELY 10.5 PERCENT HIGHER THAN THE LOW BID.

THE PROCEDURE FOLLOWED IN THE ENTIRE TRANSACTION WOULD APPEAR TO DISCLOSE NOT ONLY ADMINISTRATIVE CONFUSION AND UNCERTAINTY AS TO THE NEEDS OF THE GOVERNMENT IN THIS INSTANCE BUT ALSO A MISCONCEPTION AS TO THE PURPOSE AND INTENT OF SECTION 3709, REVISED STATUTES. THAT STATUTE IS PRIMARILY FOR THE PROTECTION AND BENEFIT OF THE GOVERNMENT. THE SUPREME COURT SAID IN PURCELL ENVELOPE CO. V. UNITED STATES, 249 U.S. 313:

* * * BY IT THE GOVERNMENT IS GIVEN THE BENEFIT OF THE COMPETITION OF THE MARKET AND EACH BIDDER IS GIVEN THE CHANCE FOR A BARGAIN. * * *

THE BENEFIT OF THE COMPETITION OF THE MARKET IS THAT THE GOVERNMENT MAY HAVE ITS ACTUAL NEEDS SUPPLIED AT THE MOST REASONABLE PRICE OBTAINABLE. THE CHANCE FOR A BARGAIN AFFORDED A BIDDER BY THE STATUTE IS DEPENDENT UPON HIS ABILITY AND READINESS TO SUPPLY EQUIPMENT MEETING THE ACTUAL NEEDS OF THE GOVERNMENT AT A LOWER PRICE THAN ANOTHER. THE NEED OF THE GOVERNMENT IS PARAMOUNT, AND IT IS THAT NEED WHICH MUST JUSTIFY SPECIFICATIONS IN EVERY INSTANCE. SPECIFICATIONS SHOULD BE DRAWN TO SET FORTH FAIRLY AND CLEARLY THE NEEDS OF THE GOVERNMENT AND TO ADMIT TO COMPETITION ALL WHOSE PRODUCTS WILL MEET THE SERVICE REQUIREMENTS, WITHOUT REFERENCE TO A PARTICULAR PRODUCT OF A PARTICULAR MANUFACTURER. UPON SUCH SPECIFICATIONS THE GOVERNMENT IS NOT VITALLY CONCERNED AS TO WHETHER ONE BIDDER CAN PROFITABLY BID A HIGHER GRADE OF ARTICLE AGAINST THE CHEAPER PRODUCT OF ANOTHER BIDDER, WHICH WILL ADEQUATELY PERFORM THE WORK TO BE DONE. MANIFESTLY THE GOVERNMENT IS UNDER NO COMPULSION TO MAGNIFY OR EXAGGERATE ITS NEEDS, OR TO MAKE ADVERTISED SPECIFICATIONS MORE RESTRICTIVE, MERELY TO AFFORD MANUFACTURERS OF MORE EXPENSIVE EQUIPMENT A BETTER OPPORTUNITY TO COMPETE. WHEN SPECIFICATIONS ARE SO DRAWN AS TO EXCLUDE FROM COMPETITION OTHERWISE ACCEPTABLE EQUIPMENT OF A CHEAPER PRICE, THEY ARE RESTRICTIVE. IT IS HARDLY TO BE CONSIDERED THAT THE NEEDS OF THE GOVERNMENT SHOULD OR LEGALLY COULD BE OVERSTATED FOR THE ACCOMMODATION OF ANY BIDDER OR GROUP OF BIDDERS DESIRING TO OFFER HIGHER- PRICED EQUIPMENT THAN IS NEEDED.

IT APPEARS FROM YOUR SUBMISSION THAT THE TRACTOR NOW OFFERED BY THE CATERPILLAR TRACTOR CO. DOES NOT COMPLY WITH THE SPECIFICATIONS AS TO GAUGE, AND APPARENTLY IS NOT ACCEPTABLE FOR THAT REASON. ON THE OTHER HAND, ACCEPTANCE OF THE NEXT HIGHER BID WOULD RESULT IN A SUBSTANTIAL EXCESS COST TO THE GOVERNMENT, WITHOUT ANY SHOWING THAT THE LOWER PRICED TRACTOR WOULD NOT BE AMPLE TO DO THE WORK TO BE DONE.

UPON THE FACTS PRESENTED, IT WOULD APPEAR PROPER TO REJECT ALL BIDS AND READVERTISE UPON SPECIFICATIONS SETTING FORTH THE ACTUAL NEEDS OF THE GOVERNMENT, AND ADMITTING TO COMPETITION ALL DEALERS OF WHATEVER MAKE IN THAT OR SUPERIOR GRADES OF EQUIPMENT, WITH ACCEPTANCE OF THE BID MOST ADVANTAGEOUS TO THE GOVERNMENT. 15 COMP. GEN. 974; 5 ID. 776.

THERE HAS NOT BEEN OVERLOOKED YOUR SUGGESTION THAT THE CATERPILLAR TRACTOR CO. COULD HAVE OFFERED ITS RD-8 TRACTOR. REFERENCE TO THE ALLIS- CHALMERS TABLE OF COMPARATIVE SPECIFICATIONS SHOWS THAT THIS TRACTOR WEIGHS 32,790 POUNDS, ABOUT 49 PERCENT MORE THAN REQUIRED BY THE ORIGINAL ADVERTISEMENT, AND HAS A DRAWBAR PULL OF 21,350 POUNDS, ALMOST 21 PERCENT IN EXCESS OF THAT ORIGINALLY REQUIRED. THERE WOULD APPEAR LITTLE REASON WHY A MANUFACTURER WOULD OFFER A TRACTOR SO FAR EXCEEDING THE SPECIFICATION REQUIREMENTS. LIKEWISE, IT WOULD APPEAR THAT THE PURCHASE OF SUCH A TRACTOR, PRESUMABLY AT A SUBSTANTIALLY HIGHER PRICE, AND WITH A MATERIALLY HIGHER OPERATING COST, WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT IN THIS CASE IN ANY EVENT.

THE PAPERS TRANSMITTED WITH YOUR LETTER DO NOT APPEAR TO SUPPORT THE VIEW THAT THE CATERPILLAR TRACTOR CO. IS "ENDEAVORING TO BREAK DOWN THE LIMITATIONS SET BY THE PURCHASING OFFICER, WHICH ARE BELIEVED TO BE FAIR TO ALL COMPANIES, AND TO FORCE THE GOVERNMENT TO ACCEPT A MACHINE WHICH IS NOT COMPARABLE TO ANY OTHER MODEL.' ON THE CONTRARY, IT APPEARS THAT IN SUBMITTING ITS BID ON THE ORIGINAL INVITATION THE COMPANY STATED ITS EXCEPTIONS TO THE SPECIFICATIONS AND OFFERED, IF THE DIFFERENCES COULD NOT BE WAIVED, TO DELIVER ONE OF THE TRACTORS OFFERED "WITHOUT ANY OBLIGATION TO THE GOVERNMENT TO PURCHASE UNLESS IT WILL SATISFACTORILY PERFORM THE WORK WHICH THE GOVERNMENT HAS TO DO AND FOR WHICH THE TRACTOR OF 22,000 POUNDS WEIGHT AND 17,750 POUNDS DRAWBAR PULL IS BEING ADVERTISED.' AGAIN IN SUBMITTING ITS BID UPON THE LAST ADVERTISEMENT THAT COMPANY, UNDER DATE OF SEPTEMBER 5, 1936, WROTE IN PART AS FOLLOWS:

WE CLAIM THAT THE CATERPILLAR RD7 DIESEL TRACTOR, AS OFFERED BY US, WILL DO SATISFACTORILY THE WORK FOR WHICH TRACTORS ARE REQUIRED UNDER YOUR INVITATION U.S.D.I. 1777. IN SUPPORT OF THIS CLAIM, IN THE EVENT OUR BID PRICE IS LOW, WE OFFER AS A PART OF THIS BID TO SHIP TRACTORS TO ALL FOUR DESTINATIONS MENTIONED IN YOUR INVITATION, AND TO DEMONSTRATE TO THE SATISFACTION OF THE USING OFFICERS THAT THESE TRACTORS WILL DO THE WORK TO BE DONE. IF THE MACHINES DO THE JOB TO THE SATISFACTION OF THE USING OFFICERS--- WHO SHALL BE THE SOLE JUDGES -- WE WILL HOLD THE TRACTORS AT THE RESERVATIONS AND EXPECT TO RECEIVE PROMPTLY PURCHASE ORDERS FROM YOU REPRESENTING OUR FULL BID PRICE, UPON RECEIPT OF WHICH WE WILL PROMPTLY DELIVER THE MACHINES TO THE GOVERNMENT. IF THE MACHINES DO NOT PERFORM TO THE SATISFACTION OF THE USING OFFICERS, WE WILL REMOVE THEM FROM THE RESERVATIONS ENTIRELY AT OUR OWN EXPENSE. YOUR ATTENTION IS PARTICULARLY DIRECTED TO THE FACT THAT OUR OFFER CONTEMPLATES DEMONSTRATIONS AT ALL FOUR POINTS MENTIONED IN YOUR INVITATION.

SUCH OFFERS ON THE PART OF THE BIDDER WOULD APPEAR TO BETOKEN A COMPLETE CONFIDENCE IN THE ADEQUACY OF ITS TRACTOR FOR THE WORK REQUIRED AND A READINESS TO DEMONSTRATE ITS SUFFICIENCY AT ITS OWN RISK AND EXPENSE AND WITH NO OBLIGATION UPON THE GOVERNMENT SHOULD THE TRACTORS FAIL TO MEET ITS NEEDS. SUCH A PROPOSITION COULD NOT FAIRLY BE INTERPRETED AS AN EFFORT TO FORCE THE GOVERNMENT TO ACCEPT A MACHINE INADEQUATE TO THE SERVICE TO BE PERFORMED, WHETHER OR NOT ANY OTHER MANUFACTURER PRODUCES A COMPARABLE TRACTOR.

YOU ARE INFORMED THAT FOR THE FOREGOING REASONS THERE APPEARS NO LEGAL AUTHORITY FOR ACCEPTANCE OF THE HIGHER BID OF THE CLEVELAND TRACTOR CO. THE NEEDS OF THE GOVERNMENT SHOULD BE READVERTISED IN CONFORMITY WITH THE PRINCIPLES STATED HEREIN.