A-83158, JANUARY 29, 1937, 16 COMP. GEN. 708

A-83158: Jan 29, 1937

Additional Materials:

Contact:

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

 

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

THAT "THE CONTRACTOR SHALL BE ABLE TO SHOW AT LEAST TWO INSTALLATIONS OF A SIMILAR AND COMPARABLE NATURE THAT HAVE BEEN IN OPERATION AT LEAST TWO YEARS. " IS IN PROTECTION OF THE INTERESTS OF THE UNITED STATES. THAT SEPARATE BIDS WERE TAKEN ON SEVEN DIFFERENT PARTS OF THE JOB. IT APPEARS THAT THE LOW BIDDER FOR AIR CONDITIONING THE HOUSE OFFICE BUILDING AND THE NEW HOUSE OFFICE BUILDING WAS THE PENNSYLVANIA ENGINEERING CO. ALL PROSPECTIVE BIDDERS WERE ADVISED THAT EVIDENCE MUST BE FURNISHED AS TO CERTAIN QUALIFICATIONS. WHO HAVE ESTABLISHED A SATISFACTORY RECORD IN THE PAST FOR COMPLETION OF CONTRACTS OF SIMILAR CHARACTER AND EXTENT. THE FACT THAT DRAWINGS AND SPECIFICATIONS HAVE BEEN FURNISHED TO INTENDING BIDDERS WILL NOT LIMIT THE GOVERNMENT'S RIGHT TO JUDGE AS TO COMPETENCY AFTER BIDS HAVE BEEN RECEIVED.

A-83158, JANUARY 29, 1937, 16 COMP. GEN. 708

ADVERTISING - BIDDERS - QUALIFICATIONS - REQUIREMENTS FOR GOVERNMENT, AND NOT COMPETING BIDDERS-, BENEFIT THE STIPULATION IN AN ADVERTISEMENT FOR BIDS TO AID IN DETERMINING THE QUALIFICATIONS OF RESPECTIVE BIDDERS, THAT "THE CONTRACTOR SHALL BE ABLE TO SHOW AT LEAST TWO INSTALLATIONS OF A SIMILAR AND COMPARABLE NATURE THAT HAVE BEEN IN OPERATION AT LEAST TWO YEARS," IS IN PROTECTION OF THE INTERESTS OF THE UNITED STATES, AND NOT FOR THE BENEFIT OF COMPETING BIDDERS, AND MAY NOT BE MADE THE BASIS FOR JUSTIFIABLE PROTEST OF A PROPOSED AWARD TO THE LOWEST BIDDER NOT SO QUALIFIED WHERE THERE HAS BEEN A BONA FIDE ADMINISTRATIVE DETERMINATION OF QUALIFICATION OTHERWISE.

ACTING COMPTROLLER GENERAL ELLIOTT TO RIGGS DISTLER AND COMPANY, INC., JANUARY 29, 1937:

THERE HAS BEEN INVESTIGATED YOUR PROTEST OF JANUARY 14, 1937, TO THE PROPOSED AWARD OF A CONTRACT BY THE ARCHITECT OF THE CAPITOL FOR AIR CONDITIONING FOR THE NEW HOUSE OFFICE BUILDING UNDER BIDS OPENED NOVEMBER 20, 1936.

THE RECORD DISCLOSES THAT THE ADVERTISED SPECIFICATIONS FULLY SET FORTH THE NEEDS OF THE UNITED STATES WITH RESPECT TO THE AIR CONDITIONING EQUIPMENT REQUIRED, AND THAT SEPARATE BIDS WERE TAKEN ON SEVEN DIFFERENT PARTS OF THE JOB, AS FOLLOWS:

1. AIR CONDITIONING THE CAPITOL.

2. AIR CONDITIONING SENATE OFFICE BUILDING.

3. AIR CONDITIONING NEW HOUSE OFFICE BUILDING.

4. AIR CONDITIONING HOUSE OFFICE BUILDING.

5. REFRIGERATION APPARATUS.

6. REFRIGERATION APPARATUS BUILDING.

7. CHILLED WATER LINES AND TUNNEL.

IT APPEARS THAT THE LOW BIDDER FOR AIR CONDITIONING THE HOUSE OFFICE BUILDING AND THE NEW HOUSE OFFICE BUILDING WAS THE PENNSYLVANIA ENGINEERING CO. YOU PROTEST THE AWARD OF THE CONTRACT TO THE SAID COMPANY, ASSERTING THAT THE SAID COMPANY LACKS THE PROPER QUALIFICATIONS IN THAT IT DOES NOT COMPLY WITH THE REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS IN THIS RESPECT.

ALL PROSPECTIVE BIDDERS WERE ADVISED THAT EVIDENCE MUST BE FURNISHED AS TO CERTAIN QUALIFICATIONS, IT BEING PROVIDED THAT:

QUALIFICATIONS OF BIDDERS.--- BIDDERS MUST BE INDIVIDUALS, FIRMS, OR CORPORATIONS REGULARLY ENGAGED IN THE BUSINESS COVERED BY THESE SPECIFICATIONS AND POSSESSED OF SATISFACTORY FINANCIAL AND TECHNICAL ABILITY AND OF EQUIPMENT AND AN ORGANIZATION TO INSURE A SATISFACTORY COMPLETION OF THE CONTRACT, AND WHO HAVE ESTABLISHED A SATISFACTORY RECORD IN THE PAST FOR COMPLETION OF CONTRACTS OF SIMILAR CHARACTER AND EXTENT. THE ARCHITECT OF THE CAPITOL SHALL BE THE JUDGE OF THE FACTS SUBMITTED IN SUPPORT OF BIDDERS' CLAIMS AS TO COMPETENCY. THE FACT THAT DRAWINGS AND SPECIFICATIONS HAVE BEEN FURNISHED TO INTENDING BIDDERS WILL NOT LIMIT THE GOVERNMENT'S RIGHT TO JUDGE AS TO COMPETENCY AFTER BIDS HAVE BEEN RECEIVED. THE CONTRACTOR SHALL BE ABLE TO SHOW AT LEAST TWO INSTALLATIONS OF A SIMILAR AND COMPARABLE NATURE THAT HAVE BEEN IN OPERATION AT LEAST 2 YEARS.

WITH REFERENCE TO THE MATTER OF DETERMINING THE LOWEST RESPONSIBLE BIDDER, ATTENTION IS INVITED TO THE DECISION OF THE SUPREME COURT OF PENNSYLVANIA IN HIBBS V. ARENSBERG, 119 ATL. 727, WHEREIN IT WAS SAID:

THE TERM "LOWEST RESPONSIBLE BIDDER" DOES NOT MEAN THE LOWEST BIDDER IN DOLLARS; NOR DOES IT MEAN THE BOARD MAY CAPRICIOUSLY SELECT A HIGHER BIDDER REGARDLESS OF RESPONSIBILITY OR COST. WHAT THE LAW REQUIRES IS THE EXERCISE OF A SOUND DISCRETION BY THE DIRECTORS. THEY SHOULD CALL TO THEIR ASSISTANCE THE MEANS OF INFORMATION AT HAND TO FORM AN INTELLIGENT JUDGMENT. THEY SHOULD INVESTIGATE THE BIDDERS TO LEARN THEIR FINANCIAL STANDING, REPUTATION, EXPERIENCE, RESOURCES, FACILITIES, JUDGMENT, AND EFFICIENCY AS BUILDERS. THIS WAS NOT DONE. THE COURT CENSURES THE BOARD FOR OMITTING THIS IMPORTANT STEP, BUT IT HOLDS, INASMUCH AS THEY HAD AMPLE KNOWLEDGE OF THE SUCCESSFUL BIDDER AND MERIT OF ITS WORK, THE CONTRACT COULD BE AWARDED. THIS MIGHT DO IN PRIVATE AFFAIRS BUT WILL NOT PASS WHEN PUBLIC FUNDS ARE AT STAKE; IT IS NOT THE EXERCISE OF DISCRETION. THOUGH THE DIRECTORS WERE NOT BOUND IN LAW TO GIVE THE CONTRACT TO THE LOWEST BIDDER, WHO MIGHT BE IRRESPONSIBLE, THEY WERE BOUND TO INVESTIGATE, AND IF A BIDDER MEASURED UP TO THE LAW'S REQUIREMENTS AS A RESPONSIBLE PARTY, THE BOARD COULD NOT CAPRICIOUSLY AWARD THE CONTRACT TO ANOTHER. GIVING A BOND ALONE DOES NOT MAKE UP FOR RESPONSIBILITY; WE HAVE TOO MANY BONDING COMPANIES WILLING TO INDEMNIFY ALMOST ANYTHING. BUT THERE SHOULD BE A SUFFICIENT REASON WHERE A BIDDER IS LOWEST AND RESPONSIBLE, WHY THE JOB WAS NOT GIVEN TO HIM. AND WHERE SUCH REASON APPEARS, THE ACTION OF THE BOARD IS GENERALLY CONCLUSIVE.

IT APPEARS THAT UPON THE OPENING AND CONSIDERATION OF THE BIDS, THE CONSULTING ENGINEERS EMPLOYED BY THE GOVERNMENT FOR THE PROJECT, AFTER A CAREFUL STUDY, RECOMMENDED THAT THE CONTRACT FOR THESE TWO BUILDINGS BE AWARDED TO THE PENNSYLVANIA ENGINEERING CO.; THAT IN ORDER TO ASCERTAIN WHETHER THIS COMPANY HAS THE NECESSARY QUALIFICATIONS TO UNDERTAKE THE WORK, IT WAS REQUESTED TO SUBMIT INFORMATION AS TO ITS EXPERIENCE AND FINANCIAL CONDITION; THAT IN REPLY THERETO, THE SAID COMPANY FURNISHED EVIDENCE OF WORK THAT HAD BEEN PERFORMED BY IT AND ENCLOSED COPIES OF LETTERS FROM CERTAIN OF ITS CLIENTS AND A PRINTED BOOKLET CONTAINING ILLUSTRATIONS OF THE WORK PERFORMED AND OTHER DETAILED INFORMATION AS TO ITS ACTIVITIES. THE SAID BIDDER ALSO ENCLOSED A DULY SIGNED FINANCIAL STATEMENT.

THE ARCHITECT OF THE CAPITOL SPECIFICALLY STATES, THAT WHILE THE PENNSYLVANIA ENGINEERING CO. HAS HAD EXTENSIVE EXPERIENCE IN THE MANUFACTURE AND INSTALLATION OF ICE-MAKING AND REFRIGERATION PLANT, AND CONSIDERABLE EXPERIENCE IN AIR-CONDITIONING WORK, IT IS NOT ABLE TO SHOW AT LEAST TWO INSTALLATIONS OF A NATURE SIMILAR AND COMPARABLE TO THE PROPOSED WORK AT THE HOUSE OFFICE BUILDING AS REQUIRED BY THE ABOVE-QUOTED PROVISIONS OF THE SPECIFICATIONS. HE HAS DETERMINED, HOWEVER, THAT THE FACTS PRESENTED ESTABLISH THAT THE SAID PENNSYLVANIA ENGINEERING CO. IS QUALIFIED BOTH IN EXPERIENCE AND FINANCIAL CONDITION TO SATISFACTORILY UNDERTAKE THE TWO CONTRACTS UNDER CONSIDERATION.

IT IS UNDERSTOOD, OF COURSE, THAT IT WOULD NOT BE PROPER OR IN THE INTERESTS OF THE UNITED STATES TO MAKE AN AWARD OF A CONTRACT FOR AIR CONDITIONING OR FOR ANY OTHER PURPOSE TO A BIDDER LACKING THE ESSENTIAL QUALIFICATIONS, INTENTIONS, AND MEANS OF FAIRLY AND SUCCESSFULLY PERFORMING ITS OBLIGATIONS, AND IN ORDER TO PROPERLY PROTECT THE INTERESTS OF THE UNITED STATES, A BIDDER MAY BE REQUIRED TO SHOW CERTAIN QUALIFICATIONS AS A CONDITION PRECEDENT TO THE LETTING OF THE CONTRACT. IN OTHER WORDS, THE CONTRACT IS REQUIRED TO BE LET TO THE LOWEST RESPONSIBLE BIDDER, WHICH NECESSARILY INCLUDES QUALIFICATIONS, FINANCIAL RESPONSIBILITY, ETC. SEE 10 COMP. GEN. 314, 316.

THE DECISIONS OF THIS OFFICE HAVING BEEN TO THE EFFECT THAT THE BIDDER SHOULD REQUIRED TO SUBMIT HIS QUALIFICATIONS WITH HIS BID, AND UPON THE OPENING AND CONSIDERATION OF THE BID, IF THERE BE DOUBT AS TO WHETHER OR NOT A PARTICULAR BIDDER HAS FURNISHED SUFFICIENT EVIDENCE SHOWING THE QUALIFICATIONS TO SATISFACTORILY PERFORM THE WORK, THE PROPER PROCEDURE IS TO REQUIRE ADDITIONAL INFORMATION WITH RESPECT THERETO. IT MUST BE OBSERVED IN THIS CONNECTION THAT THE PROVISIONS, SUPRA, WITH REFERENCE TO THE QUALIFICATIONS OF BIDDERS WERE INSERTED FOR THE PROTECTION OF THE UNITED STATES AND NOT FOR THE BENEFIT OF COMPETING BIDDERS.

THE ARCHITECT OF THE CAPITOL HAS DETERMINED THAT THE PENNSYLVANIA ENGINEERING CO. IS THE LOWEST RESPONSIBLE BIDDER AND IS QUALIFIED BOTH IN EXPERIENCE AND FINANCIAL CONDITION TO SATISFACTORILY UNDERTAKE THE TWO CONTRACTS UNDER CONSIDERATION. SUCH BEING THE CASE, THERE WOULD APPEAR TO BE NO LEGAL BASIS FOR HOLDING THAT THE APPROPRIATION INVOLVED MAY NOT BE USED FOR OTHERWISE PROPER PAYMENTS UNDER AN AWARD MADE TO THE SAID PENNSYLVANIA ENGINEERING CO. ..END :