B-116236, JUNE 1, 1954, 33 COMP. GEN. 573

B-116236, JUNE 1, 1954, 33 COMP. GEN. 573

CONTRACTS - SPECIFICATIONS - PREPARATION SPECIFICATIONS ISSUED WITH INVITATION FOR BIDS FOR HEATER UNITS WHICH CONTAIN AN UNCONDITIONAL REQUIREMENT THAT THE EQUIPMENT BEAR UNDERWRITERS' LABORATORIES LABEL IS UNDULY RESTRICTIVE. SPECIFICATIONS MAY INCLUDE A REQUIREMENT THAT ARTICLES SHALL CONFORM TO STANDARD ADOPTED BY A RECOGNIZED INDEPENDENT LABORATORY OR TESTING ORGANIZATION IN THE ABSENCE OF GOVERNMENT PRESCRIBED STANDARDS OR SPECIFICATIONS, BUT THE ABSENCE OF A CERTIFICATE, LABEL OR APPROVAL FROM SUCH ORGANIZATION SHOULD NOT AUTOMATICALLY EXCLUDE OTHERWISE ACCEPTABLE PRODUCTS. SPECIFICATIONS ISSUED WITH INVITATION FOR BIDS FOR HEATER UNITS, WHICH PRESCRIBE IN DETAIL THE FEATURES OF A PARTICULAR MANUFACTURER'S PRODUCT, ARE RESTRICTIVE IN THE ABSENCE OF INFORMATION THAT ONLY ONE PRODUCT IS CAPABLE OF RENDERING SATISFACTORY SERVICE.

ACTING COMPTROLLER GENERAL WEITZEL TO THE SECRETARY OF THE AIR FORCE, JUNE 1, 1954:

REFERENCE IS MADE TO THE PROTEST OF QUIET AUTOMATIC BURNER CORPORATION, RELATIVE TO THE AWARD OF A CONTRACT TO HARVEY WHIPPLE CO., FOR THE FURNISHING OF THREE HEATING UNITS, WHICH WAS FORWARDED TO YOU BY OFFICE LETTER OF SEPTEMBER 28, 1953, AND WAS THE SUBJECT OF A REPORT TRANSMITTED BY THE AIR FORCE FINANCE CENTER UNDER DATE OF MARCH 19, 1954.

ACCORDING TO THE RECORD, THE DETERMINATION TO REJECT THE LOW BID OF THE QUIET AUTOMATIC BURNER CORPORATION AND TO MAKE THE AWARD IN QUESTION WAS INFLUENCED PRIMARILY BY A PRIOR PROCUREMENT OF FORTY OIL BURNING HEATING UNITS UNDER CONTRACT NO. AF 28 (604/-87, DATED FEBRUARY 19, 1953, WITH THAT CORPORATION. THAT CONTRACT WAS AWARDED BY THE NEWARK TRANSPORTATION CONTROL DEPOT, UPON REQUISITION AND SPECIFICATIONS FURNISHED BY MILITARY AIR TRANSPORT SERVICE. THE PROCUREMENT AGENCY EVALUATED THE PROPOSALS, DETERMINED COMPLIANCE WITH SPECIFICATIONS, EXECUTED THE CONTRACT, ACCEPTED DELIVERY AFTER INSPECTION AND APPROVAL AT THE MANUFACTURER'S PLANT AND THE UNITS WERE SHIPPED TO GOOSE AIR FORCE BASE, ICELAND. HOWEVER, THE REQUIRING AGENCY REFUSED TO ACCEPT THE ARTICLES PURCHASED, ORDERED THEM RETURNED FROM ICELAND, AND REQUIRED IMMEDIATE REPLACEMENT BY A SECOND PROCUREMENT OF HEATERS OF THE MAKE DESIRED. THE DISPOSITION MADE OF THESE HEATERS IS NOT DISCLOSED, BUT IT WAS INDICATED THAT IT WAS THE INTENTION OF MATS TO ASSIGN THEM FOR USE ELSEWHERE.

THIS INSTANCE OF DISAGREEMENT BETWEEN THE REQUISITIONING AND PROCURING AGENCY SUGGESTS AN UNDESIRABLE CONFLICT OR DIVISION OF AUTHORITY OR LACK OF ADEQUATE COORDINATION WHICH COULD CONCEIVABLY PRODUCE SERIOUS FINANCIAL CONSEQUENCES. IN THIS CASE, THERE HAS RESULTED AT LEAST A WASTE OF SHIPPING COSTS. IN ADDITION, AND IN THE LIGHT OF THE CONTROVERSY WITH RESPECT TO THE INSTRUCTIVE NATURE OF THE SPECIFICATIONS, IT WOULD SEEM EITHER THAT THE GOVERNMENT WAS PAID FOR FORTH HEATERS WHICH ARE NOT ADEQUATE, OR THAT IT HAS PAID AN UNNECESSARILY HIGH PRICE FOR PROBABLY CONSIDERABLY LARGER NUMBER OF HEATERS WHICH ARE MORE THAN ADEQUATE TO MEET THE ACTUAL REQUIREMENTS.

IN THE REPORT FROM THE MILITARY AIR TRANSPORT SERVICE TO THE AIR MATERIAL COMMAND, BY 6TH ENDORSEMENT DATED JANUARY 23, 1954, IT IS STATED:

AS A MATTER OF COMMON EVERY DAY PRACTICE AN OVERALL DESCRIPTION OF THE DESIRED ITEM MUST BE INCLUDED IN THE INVITATION AS A BASIS FOR THE BID. THIS MAY BE ACCOMPLISHED BY TWO DIFFERENT MEANS, FIRST BY NAMING A SPECIFIC ITEM OR UNIT FOLLOWED BY THE WORDS "OR EQUAL" SECONDLY A DESCRIPTION OF THE DESIRED UNIT MAY BE USED WITHOUT USING THE NAME OF A SPECIFIC MANUFACTURER.

THIS STATEMENT WHICH IS CONSTRUED AS MEANING THAT SPECIFICATIONS MAY BE DRAWN TO COVER THE PRODUCT OF A PARTICULAR MANUFACTURER, INDICATES A SERIOUS MISCONCEPTION OF THE BASIC PRINCIPLES OF PROCUREMENT BY COMPETITIVE BIDDING AS FREQUENTLY DECLARED BOTH BY THIS OFFICE AND BY THE COURTS.

IN UNITED STATES V. BROOKRIDGE FARM, 111 F.2D 461, IT WAS SAID, WITH RESPECT TO STATUTES AND REGULATIONS REQUIRING THE AWARD OF CONTRACTS AFTER PUBLIC ADVERTISING AND BIDDING:

THE PURPOSE OF THESE STATUTES AND REGULATIONS IS TO GIVE ALL PERSONS EQUAL RIGHT TO COMPETE FOR GOVERNMENT CONTRACT; TO PREVENT UNJUST FAVORITISM, OR COLLUSION OR FRAUD IN THE LETTING OF CONTRACTS FOR THE PURCHASE OF SUPPLIES; AND THUS TO SECURE FOR THE GOVERNMENT THE BENEFITS WHICH ARISE FROM COMPETITION. IN FURTHERANCE OF SUCH PURPOSE, INVITATIONS AND SPECIFICATIONS MUST BE SUCH AS TO PERMIT COMPETITORS TO COMPETE ON A COMMON BASIS. CONDITIONS OR LIMITATIONS WHICH HAVE NO REASONABLE RELATION TO THE ACTUAL NEEDS OF THE SERVICE AND WHICH ARE DESIGNED TO LIMIT BIDDING TO ONE OF SEVERAL SOURCES OF SUPPLY ARE INTERDICTED, AND RENDER THE AWARD OF A CONTRACT MADE IN SUCH CIRCUMSTANCES VOIDABLE.

IT IS TRUE THAT IN A NUMBER OF CASES, WHERE UNDUE DIFFICULTY WOULD BE ENCOUNTERED IN DRAWING DETAILED SPECIFICATIONS, THE NAMING OF A PARTICULAR COMMERCIAL PRODUCT, WITH THE WORDS "OR EQUAL," HAS BEEN ACQUIESCED IN BY THIS OFFICE. HOWEVER, AS WAS SAID IN DECISION OF MARCH 26, 1951, B-96279, TO YOUR PREDECESSOR, THAT PRACTICE "SHOULD BE AVOIDED WHEN IT IS POSSIBLE TO DESCRIBE THE NEEDS OF THE GOVERNMENT IN SPECIFICATIONS WITH SUFFICIENT CLARITY TO APPRISE PROSPECTIVE BIDDERS OF WHAT IS REQUIRED. ALSO, THIS OFFICE HAS HELD THAT IF BIDS DEVIATING FROM THE ADVERTISED SPECIFICATIONS ARE DESIRED THE INVITATION SHOULD STATE IN PLAIN AND SIMPLE TERMS THE EXTENT OF SUCH DEVIATIONS AND THE BASIS OR BASES UPON WHICH THEY WILL BE ACCEPTABLE.'

IN GENERAL, THE DRAFTING OF SPECIFICATIONS BY ADOPTING THE MANUFACTURER'S DESCRIPTION OF A PARTICULAR COMMERCIAL ARTICLE MAY BE EVEN MORE REPREHENSIBLE, SINCE IT AMOUNTS IN EFFECT TO A REPRESENTATION THAT EVERY DETAIL, EXCEPT AS OTHERWISE CLEARLY INDICATED, HAS BEEN DETERMINED BY RESPONSIBLE AUTHORITY TO BE NECESSARY TO MEET THE REASONABLE REQUIREMENTS OF THE GOVERNMENT. IF SUCH IS IN FACT THE CASE, CONSIDERATION OF NEGOTIATION AS AUTHORIZED BY SECTION 2 (C) (10) OF THE ARMED SERVICES PROCUREMENT ACT, 62 STAT. 21, IS INDICATED; IF NOT, THE PURPOSES OF THE COMPETITIVE BIDDING PROCESS ARE LARGELY DEFEATED, AND THE SUSPICION OF PARTIALITY, COLLUSION, OR FRAUD CANNOT BE AVOIDED.

THE DRAFTING OF PROPER SPECIFICATIONS IS, OF COURSE, AN ADMINISTRATIVE RESPONSIBILITY, AND, IN THE ABSENCE OF STANDARDIZED SPECIFICATIONS OR OF ELABORATE STUDY, RESEARCH, EXPERIMENTATION, AND TESTING, MAY PRESENT PROBLEMS OF CONSIDERABLE DIFFICULTY. THIS, HOWEVER, SHOULD NOT GENERALLY BE CONSIDERED AN ADEQUATE REASON FOR ADOPTING THE DECEPTIVELY EASY COURSE OF REFERRING TO PARTICULAR COMMERCIAL ARTICLES ON A BASIS OF PERSONAL PREFERENCE.

THIS OFFICE HAS NO WAY OF DETERMINING, EXCEPT FROM ADMINISTRATIVE REPORTS, WHETHER PARTICULAR FEATURES OF A MANUFACTURED ARTICLE, SUCH AS INVOLVED IN THE INSTANT CASE, ARE OR ARE NOT REASONABLY NECESSARY FOR THE NEEDS TO BE FILLED. IN THIS INSTANCE, NO SUBSTANTIAL UNDERLYING FACTS HAVE BEEN FURNISHED AS A BASIS FOR THE DETERMINATION THAT ONLY THE PARTICULAR APPARATUS SPECIFIED WAS CAPABLE OF SATISFYING THE REQUIREMENTS. IT CANNOT, THEREFORE, BE SAID THAT THE DETERMINATION WAS NOT JUSTIFIED. HOWEVER, IN THE ABSENCE OF FURTHER INFORMATION IT SEEMS REMARKABLE THAT OF ALL THE GREAT NUMBER OF COMMERCIAL OIL-BURNING FURNACES AND HEATERS PRODUCED BY AMERICAN INDUSTRY, THERE IS ONLY ONE CAPABLE OF RENDERING SATISFACTORY SERVICE IN HEATING AIRCRAFT HANGERS. THE FACT THAT BIDS WERE RECEIVED FROM THREE MANUFACTURERS IS NOT A DEMONSTRATION THAT THE SPECIFICATIONS WERE NOT RESTRICTIVE, IN VIEW OF THE FACT THAT TWO OF THE THREE BIDS WERE DETERMINED NOT TO MEET THE SPECIFICATIONS.

THE MOST SERIOUS CONTENTION IN SUPPORT OF THE REJECTION OF THE BID OF THE QUIET AUTOMATIC BURNER CORPORATION IS THAT THE PRODUCT OFFERED WAS NOT ELIGIBLE TO BEAR THE LABEL OF UNDERWRITERS' LABORATORIES, INC., AS REQUIRED BY THE SPECIFICATIONS, AND WAS NOT LISTED BY THAT ORGANIZATION AS COMPLYING WITH COMMERCIAL STANDARDS PRESCRIBED BY THE NATIONAL BUREAU OF STANDARDS.

IN OFFICE DECISION B-97153, DECEMBER 8, 1950, THERE WAS APPROVED A PROPOSAL BY THE PUBLIC BUILDINGS SERVICE TO INCLUDE IN THE SPECIFICATIONS FOR BOILERS AND OTHER PRESSURE VESSELS, TO BE INSTALLED IN THE CONSTRUCTION, REPAIR AND ALTERATION OF PUBLIC BUILDINGS, A PROVISION THAT EACH PIECE OF EQUIPMENT OFFERED CONTAIN A STAMP OR LABEL SHOWING THAT IT MEETS ALL REQUIREMENTS OF SAFETY CODES ESTABLISHED BY SUCH ORGANIZATIONS AS THE AMERICAN SOCIETY OF MECHANICAL ENGINEERS AND THE NATIONAL BOARD OF FIRE UNDERWRITERS AND GENERALLY RECOGNIZED THROUGHOUT THE PARTICULAR INDUSTRY. THAT AUTHORIZATION, HOWEVER, WAS BASED UPON EXPRESS ADMINISTRATIVE ASSURANCE THAT THE INCLUSION OF SUCH A REQUIREMENT WOULD NOT PREVENT ANY MANUFACTURER FROM BIDDING ON THE ARTICLES IN QUESTION.

ALSO, THERE WERE ISSUED IN APRIL, 1937, BY THE CHAIRMAN OF THE FEDERAL SPECIFICATIONS EXECUTIVE COMMITTEE, INSTRUCTIONS THAT SPECIFICATIONS PROMULGATED BY THAT COMMITTEE FOR ELECTRICAL EQUIPMENT AND OTHER SUPPLIES INVOLVING FIRE RISK SHOULD INCLUDE THE FOLLOWING:

THE BIDDER SHALL SUBMIT PROOF THAT THE MATERIAL OR APPLIANCE HE PROPOSED TO SUPPLY UNDER THIS SPECIFICATION CONFORMS TO THE STANDARDS OF THE UNDERWRITERS' LABORATORIES, INC., AS REGARDS FIRE AND CASUALTY HAZARDS. THE LABEL OF THE UNDERWRITERS' LABORATORIES WILL BE ACCEPTED AS CONFORMING WITH THIS REQUIREMENT.

IN LIEU OF THE LABEL, THE BIDDER MAY SUBMIT INDEPENDENT PROOF SATISFACTORY TO THE PURCHASING AGENCY THAT HIS MATERIAL OR APPLIANCE CONFORMS TO THE PUBLISHED STANDARDS, INCLUDING METHODS OF TEST, OF THE UNDERWRITERS' LABORATORIES.

IT IS TO BE NOTED THAT THE QUOTED PROVISIONS DO NOT AUTHORIZE THE REQUIREMENT OF THE UNDERWRITERS' LABEL AS AN ABSOLUTE CONDITION OF ACCEPTABILITY OR AS THE EXCLUSIVE METHOD OF PROOF OF COMPLIANCE WITH THE APPLICABLE STANDARDS.

IN B-115667, OCTOBER 27, 1953, IT WAS HELD THAT AMENDMENT OF A CONTRACT FOR LIGHTING EQUIPMENT, AFTER AWARD TO THE LOW BIDDER ON AN INVITATION REQUIRING THAT "CONSTRUCTION AND MATERIALS SHALL BE APPROVED BY THE UNDERWRITERS' LABORATORIES," TO PERMIT THE INSTALLATION OF MATERIALS NOT APPROVED BY THE UNDERWRITERS' LABORATORIES, BUT APPROVED BY FACTORY MUTUAL LABORATORIES AND DETERMINED BY THE OFFICER- IN/CHARGE TO BE COMPARABLE TO THOSE ORIGINALLY SPECIFIED, WAS IN NO WAY ILLEGAL OR IMPROPER, AND IT WAS THERE ALSO SUGGESTED THAT IT WOULD HAVE BEEN SOUNDER ADMINISTRATIVE PRACTICE TO HAVE CONDUCTED A THOROUGH INVESTIGATION IN ADVANCE OF ADVERTISING OR AWARD.

UPON FULL CONSIDERATION, IT IS THE VIEW OF THIS OFFICE THAT A REQUIREMENT THAT ARTICLES OFFERED OR SUPPLIED TO THE GOVERNMENT BEAR THE UNDERWRITERS' LABEL OR ANY SIMILAR EMBLEM OF A PRIVATE ORGANIZATION, IS NOT GENERALLY JUSTIFIABLE, AND THE REGULATIONS OF YOUR DEPARTMENT IN THAT RESPECT ARE NOT CONSONANT WITH THE PROVISIONS OF SECTION 3 (B) OF THE ARMED SERVICES PROCUREMENT ACT, 62 STAT. 23. IT MAY, HOWEVER, BE PROPER, IN THE ABSENCE OF STANDARDS OR SPECIFICATIONS PRESCRIBED BY PROPER GOVERNMENT AUTHORITY, IF ADMINISTRATIVELY DETERMINED TO BE IN THE INTEREST OF THE GOVERNMENT, TO INCLUDE IN ADVERTISED SPECIFICATIONS FOR ARTICLES OF APPROPRIATE CLASSES A REQUIREMENT THAT SUCH ARTICLES SHALL CONFORM TO STANDARDS ADOPTED BY THE UNDERWRITERS' LABORATORIES, OR SIMILAR ORGANIZATIONS, WHERE SUCH STANDARDS ARE GENERALLY RECOGNIZED AND ACCEPTED IN THE INDUSTRIES INVOLVED AND ARE PERTINENT TO THE GOVERNMENT'S NEEDS. PRESCRIBING MINIMUM STANDARDS TO WHICH ARTICLES REQUIRED BY THE GOVERNMENT SHALL CONFORM IS THE PROPER FUNCTION OF SPECIFICATIONS; BUT THE DETERMINING OF WHETHER ARTICLES OFFERED TO THE GOVERNMENT IN FACT CONFORM TO THOSE STANDARDS IS THE DUTY PRIMARILY OF THE PROCUREMENT OFFICIALS. THE CERTIFICATE, LABEL, OR OTHER TOKEN OF APPROVAL OF A RECOGNIZED INDEPENDENT LABORATORY OR TESTING ORGANIZATION MAY, UNDER PROPER CIRCUMSTANCES, BE ACCEPTABLE AS EVIDENCE OF CONFORMITY, BUT THE ABSENCE OF SUCH APPROVAL SHOULD NOT AUTOMATICALLY EXCLUDE PRODUCTS WHICH MAY BE EQUALLY IN CONFORMITY, AND MAY EVEN HAVE BEEN FOUND TO BE SO BY SUCH ORGANIZATION. IN THE CASE OF THE UNDERWRITERS' LABORATORIES, FOR EXAMPLE, IT APPEARS FROM ITS PUBLICATIONS THAT ANY MANUFACTURER MAY SUBMIT A DEVICE, SYSTEM, OR MATERIAL FOR EXAMINATION AND TEST, BUT THE PROMULGATION OF A " LISTING" OF SUCH PRODUCT IS CONTINGENT UPON THE ESTABLISHMENT OF ONE OF THE SEVERAL FORMS OF FOLLOW -UP SERVICE MAINTAINED BY THE LABORATORIES, ALL OF WHICH INVOLVE PERIODIC CHECKS ON THE PRODUCER'S OPERATIONS AND PRODUCT, AND ONLY ONE OF WHICH INVOLVES THE ISSUANCE OF THE UNDERWRITERS' LABEL.

IN THE CIRCUMSTANCES OF THE PROCUREMENT HERE UNDER CONSIDERATION, AS SHOWN BY THE RECORD SUBMITTED, IT IS BELIEVED THAT THE ACTION OF THE NEWARK TRANSPORTATION CONTROL DEPOT IN ACCEPTING THE BID OF QUIET AUTOMATIC BURNER CORPORATION, UPON THE REPORT OF UNDERWRITERS' LABORATORIES THAT THE EQUIPMENT OFFERED WAS SATISFACTORY EXCEPT FOR CERTAIN SPECIFIED MINOR MODIFICATIONS, CORRECTION OF WHICH COULD READILY HAVE BEEN ENFORCED BY THE AIR FORCE INSPECTORS, WAS CORRECT, AND THE REFUSAL OF THE MILITARY AIR TRANSPORT SERVICE TO ACCEPT THAT EQUIPMENT FOR ITS INTENDED USE WAS NOT JUSTIFIED. FURTHER, IT IS THE CONCLUSION OF THIS OFFICE THAT THE SPECIFICATIONS OF BOTH INVITATIONS INVOLVED WERE UNDULY RESTRICTIVE, IN THAT THE UNCONDITIONAL REQUIREMENT OF THE UNDERWRITERS' LABEL WAS NOT PROPER, AND THE NECESSITY FOR PRESCRIBING IN DETAIL THE FEATURES OF A PARTICULAR MANUFACTURER'S PRODUCT HAS NOT BEEN SATISFACTORILY ESTABLISHED.

SINCE THE PARTICULAR PROCUREMENTS HAVE BEEN CONSUMMATED BY DELIVERY AND PAYMENT, IN ACCORDANCE WITH THE CONTRACTS, NO ACTION WITH RESPECT THERETO IS NOW INDICATED. THE CONCLUSIONS HEREIN STATED ARE SUBMITTED FOR YOUR ATTENTION AND GUIDANCE IN FUTURE PROCUREMENTS.