B-126830, FEB. 21, 1956

B-126830: Feb 21, 1956

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TO THE HONORABLE SECRETARY OF THE INTERIOR: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 1. SEPARATE BIDS WERE REQUESTED ON ITEMS NOS. 1. PARAGRAPH 1 OF THE TERMS AND CONDITIONS PROVIDES IN PART AS FOLLOWS: "THE RIGHT IS RESERVED. WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT. WILL BE TAKEN INTO CONSIDERATION IN MAKING THE AWARD.'. THE FOLLOWING BIDS WERE RECEIVED (TOTAL COSTS F.O.B. ITS BIDS ARE THE ONLY BIDS RESPONSIVE TO THE SPECIFICATIONS. ARE ALSO THE LOWEST BIDS. CLARK BROTHERS' BID IS THE ONLY ONE SUBMITTED. THE CONTRACTING OFFICER REPORTS THAT IT IS RESPONSIVE TO THE SPECIFICATIONS AND IS IN A REASONABLE AMOUNT. WHICH IS ITS SALES REPRESENTATIVE. HAS BY LETTERS BOTH TO YOUR DEPARTMENT AND TO OUR OFFICE DISPUTED THE CONCLUSIONS OF THE CONTRACTING OFFICER AND URGED THAT THE BID OF THAT COMPANY IS FULLY RESPONSIVE AND THAT AWARD OF ITEMS 1 AND 2 SHOULD BE MADE TO IT AS THE LOWEST BIDDER.

B-126830, FEB. 21, 1956

TO THE HONORABLE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 1, 1956, WITH ENCLOSURES, REQUESTING ADVICE AS TO THE ACTION TO BE TAKEN BY YOUR DEPARTMENT IN AWARDING A CONTRACT UNDER INVITATION NO. 656-18, ISSUED OCTOBER 18, 1955, BY THE BUREAU OF MINES HELIUM ACTIVITY, AMARILLO, TEXAS.

SEPARATE BIDS WERE REQUESTED ON ITEMS NOS. 1, 2, AND 3 FOR FURNISHING NATURAL GAS COMPRESSORS, NITROGEN COMPRESSORS, AND HELIUM COMPRESSORS, RESPECTIVELY, IN ACCORDANCE WITH ATTACHED SPECIFICATIONS, TERMS, AND CONDITIONS, FOR USE IN THE HELIUM PLANT EXPANSION PROGRAM AT EXELL, TEXAS.

PARAGRAPH 1 OF THE TERMS AND CONDITIONS PROVIDES IN PART AS FOLLOWS:

"THE RIGHT IS RESERVED, AS THE INTEREST OF THE GOVERNMENT MAY REQUIRE, TO REJECT ANY OR ALL BIDS AND TO WAIVE ANY MINOR INFORMALITY OR IRREGULARITY IN BIDS RECEIVED. THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY BID UNLESS QUALIFIED BY SPECIFIC LIMITATION OF THE BIDDER. * * * THE CONTRACT SHALL BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.'

PARAGRAPH 15 OF THE SUPPLEMENTAL TERMS AND CONDITIONS PROVIDES:

"WHENEVER APPLICABLE, ELEMENTS OR FACTORS NOT SPECIFICALLY MENTIONED OR PROVIDED FOR HEREIN, SUCH AS THE COST OF INSPECTION (INCLUDING SALARIES, TRAVEL, AND SUBSISTENCE EXPENSES) OR ANY OTHER ELEMENT OR FACTOR IN ADDITION TO THAT OF PRICE WHICH WOULD AFFECT THE FINAL COST TO THE GOVERNMENT, WILL BE TAKEN INTO CONSIDERATION IN MAKING THE AWARD.'

THE FOLLOWING BIDS WERE RECEIVED (TOTAL COSTS F.O.B. DESTINATION):

CHART

ITEM 1 ITEM 2 ITEM 3 A. M. LOCKETT AND COMPANY, LTD. $347,237 $403,652 NO BID CLARK BROTHERS COMPANY 357,456 455,925 $62,379 COOPER-BESSEMER CORPORATION 353,688 411,867 NO BID

THE CONTRACTING OFFICER HAS RECOMMENDED THAT AWARD BE MADE TO CLARK BROTHERS COMPANY FOR ALL ITEMS ON THE GROUNDS THAT, AS TO ITEMS NOS 1 AND 2, ITS BIDS ARE THE ONLY BIDS RESPONSIVE TO THE SPECIFICATIONS, AND ARE ALSO THE LOWEST BIDS, ON THE BASIS OF HIS EVALUATION OF ULTIMATE COST TO THE GOVERNMENT, INCLUDING COSTS OF INSTALLATION AND OPERATION OVER A TEN- YEAR PERIOD. AS TO ITEM NO. 3, CLARK BROTHERS' BID IS THE ONLY ONE SUBMITTED, AND THE CONTRACTING OFFICER REPORTS THAT IT IS RESPONSIVE TO THE SPECIFICATIONS AND IS IN A REASONABLE AMOUNT.

WORTHINGTON CORPORATION, THE MANUFACTURER OF THE EQUIPMENT OFFERED BY A. M. LOCKETT AND COMPANY, WHICH IS ITS SALES REPRESENTATIVE, HAS BY LETTERS BOTH TO YOUR DEPARTMENT AND TO OUR OFFICE DISPUTED THE CONCLUSIONS OF THE CONTRACTING OFFICER AND URGED THAT THE BID OF THAT COMPANY IS FULLY RESPONSIVE AND THAT AWARD OF ITEMS 1 AND 2 SHOULD BE MADE TO IT AS THE LOWEST BIDDER. COOPER-BESSEMER CORPORATION, THE NEXT-LOW BIDDER ON THOSE ITEMS, CONTENDS THAT AWARD SHOULD BE MADE TO IT ON THE GROUND THAT THE WORTHINGTON EQUIPMENT DOES NOT MEET THE GENERAL REQUIREMENT OF THE INVITATION THAT EQUIPMENT OFFERED "SHALL BE OF A TYPE HAVING SHOWN RELIABLE AND EFFICIENT OPERATION UNDER CONDITIONS SIMILAR TO THE REQUIREMENTS OF THE SPECIFICATIONS," AND THAT IT IS THEREFORE THE LOWEST RESPONSIVE BIDDER.

THE PROVISIONS OF THE LAST SENTENCE OF PARAGRAPH 1 OF THE INVITATION,

QUOTED ABOVE, ARE IDENTICAL WITH THE REQUIREMENTS OF SECTION 3 OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, 62 STAT. 22, AND OF SECTION 303 OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 393, AND ARE FULLY IN ACCORD WITH THE SETTLED INTERPRETATION OF SECTION 3709 OF THE REVISED STATUTES (41 U.S.C. 5). UNDER SUCH PROVISIONS, ESPECIALLY WHEN COUPLED, AS HERE, WITH AN EXPRESS RESERVATION OF THE RIGHT TO REJECT ANY OR ALL BIDS, THE COURTS HAVE HELD IN MANY CASES THAT THE ACTIONS OF THE ADMINISTRATIVE OFFICIALS WILL NOT BE INTERFERED WITH BY THE COURTS, EVEN IF ERRONEOUS, PROVIDED SUCH ACTIONS WERE BASED UPON A SOUND AND REASONABLE DISCRETION FOUNDED ON FACTS AND EXERCISED IN GOOD FAITH, IN THE INTEREST OF THE PUBLIC, WITHOUT COLLUSION OR FRAUD, NOR CORRUPTLY, NOR FROM MOTIVES OF PERSONAL FAVORITISMOR ILL-WILL, AND NOT ABUSED. SEE ANNOTATION 38 LRA (NS) 653; DOWING V. ROSS, 1 APP. D.C. 251.

WHILE THE ACCOUNTING OFFICERS OF THE GOVERNMENT, BY REASON OF THEIR STATUTORY DUTY TO RENDER ADVANCE DECISIONS AS TO ANY QUESTION INVOLVING THE EXPENDITURE OF APPROPRIATED FUNDS (SECTION 8, ACT OF JULY 31, 1894, 28 STAT. 207 AS AMENDED; 31 U.S.C. 74) ARE NOT SUBJECT TO ALL THE LIMITATIONS WHICH IN MANY CASES RESTRICT THE SCOPE OF JUDICIAL REVIEW OF SUCH ADMINISTRATIVE ACTION, WE HAVE TRIED ALWAYS TO AVOID DICTATING TO THE ADMINISTRATIVE OFFICERS OF THE GOVERNMENT AS TO MATTERS PROPERLY WITHIN THEIR DISCRETION, AND HAVE CONSISTENTLY ADHERED TO THE RULE THAT THEIR CONCLUSIONS IN SUCH MATTERS WILL NOT BE QUESTIONED SO LONG AS THEY ARE ARRIVED AT FAIRLY AND IMPARTIALLY AND UPON REASONABLE FACTUAL GROUNDS.

IN THE EVALUATION OF COMPETITIVE BIDS, THE RULE HAS BEEN ESTABLISHED THAT ONLY SUCH FACTORS (OTHER THAN PRICES BID) MAY BE CONSIDERED AS HAVE BEEN CLEARLY INDICATED BY THE INVITATION OR MAY BE CONSIDERED TO HAVE BEEN NECESSARILY KNOWN TO ALL PARTIES, SUCH AS TRANSPORTATION COSTS WHERE THE ARTICLES OFFERED ARE PRICED AT A POINT OTHER THAN THAT AT WHICH THEY ARE DESIRED. THE LANGUAGE OF PARAGRAPH 15 OF THIS INVITATION, QUOTED ABOVE, THAT ANY ELEMENT "WHICH WOULD AFFECT THE FINAL COST TO THE GOVERNMENT" WOULD BE CONSIDERED, MAY BE SUFFICIENT TO JUSTIFY THE USE OF INSTALLATION COSTS OF THE EQUIPMENT INVOLVED--- FOUNDATION, BUILDING, AND COOLING APPARATUS--- AS FACTOR IN EVALUATING THE BIDS RECEIVED, SINCE THE NECESSITY FOR SUCH INSTALLATION WAS OBVIOUS FROM THE VERY NATURE OF THE REQUIREMENTS STATED. WE DO NOT, HOWEVER, FEEL THAT OPERATING COSTS OVER A TEN-YEAR PERIOD CAN PROPERLY BE USED AS AN EVALUATING FACTOR UNDER THAT PROVISION. IN THE ABSENCE OF SPECIFIC REFERENCE TO OPERATING COST, THE WORDS "FINAL COST" WOULD NORMALLY BE CONSTRUED AS REFERRING TO THE COST OF THE ITEMS BEING BOUGHT, THE COMPRESSORS, WHEN FINALLY READY FOR USE, RATHER THAN TO THE ULTIMATE COST OF PRODUCTION OF HELIUM GAS TO BE DERIVED FROM THEIR USE, IN WHICH THE COST OF OPERATION WOULD BE A FACTOR. ALSO, NOWHERE IN THE INVITATION IS THERE ANY INFORMATION OR REFERENCE WHICH WOULD INDICATE THAT OPERATING COSTS, IF APPLICABLE AT ALL, WOULD BE APPLIED ON THE BASIS OF TEN YEARS' OPERATION, RATHER THAN OF ONE YEAR, OR OVER THE PROBABLE LIFE OF THE COMPRESSORS.

WE ALSO FAIL TO FIND ANY REASONABLE BASIS FOR THE FINAL EVALUATION MADE IN TERMS OF DOLLARS PER HORSEPOWER, SINCE HORSEPOWER WAS NOT PRESCRIBED IN ANY WAY AS A LIMITING OR DECISIVE FACTOR OF THE SPECIFICATIONS. THE ADVERTISED SPECIFICATIONS WERE ESSENTIALLY PERFORMANCE SPECIFICATIONS, CALLING ONLY FOR COMPRESSORS OF A CERTAIN GENERAL TYPE HAVING STATED OUTPUT CAPACITIES UNDER SPECIFIED OPERATING CONDITIONS, WITHOUT ANY DEFINED LIMITATIONS AS TO POWER OR OTHER DETAILED DESIGN OR CONSTRUCTION REQUIREMENTS. AS BETWEEN TWO COMPRESSORS, BOTH FULLY MEETING THE STATED OUTPUT REQUIREMENTS, BUT ONE USING A 2,000 HORSEPOWER ENGINE AND THE OTHER ONE OF 1,800 HORSEPOWER, THE CHOICE SHOULD PROPERLY BE MADE SOLELY ON THE BASIS OF TOTAL PRICE, AND WE WOULD FIND NO VALID REASON FOR PAYING MORE FOR THE 2,000 HORSEPOWER UNIT MERELY BECAUSE THE PRICE PER HORSEPOWER OF THE DRIVING ENGINE MIGHT BE LESS. THE RESULT OF SUCH A METHOD OF EVALUATION WOULD APPEAR TO BE EITHER THAT THE GOVERNMENT WOULD BE PAYING FOR EQUIPMENT MORE THAN ADEQUATE FOR ITS STATED NEEDS, OR THAT THE OFFEROR OF THE MORE EFFICIENT MACHINE WOULD BE PENALIZED FOR ITS EFFICIENCY.

CONSIDERING ONLY THE INSTALLATION COSTS OF THE SEVERAL MAKES OF EQUIPMENT OFFERED, THE PRICES OF THE CLARK EQUIPMENT REMAIN HIGHER THAN THOSE OF THE COMPETING BIDDERS, AND ITS PURCHASE CANNOT BE JUSTIFIED ON THE BASIS OF THE EVALUATION REPORTED.

AS TO THE WORTHINGTON EQUIPMENT OFFERED BY THE LOCKETT COMPANY, THE CONTRACTING OFFICER TAKES THE POSITION THAT IT DOES NOT MEET THE REQUIREMENT OF PARAGRAPH 1 OF THE SUPPLEMENTAL TERMS AND CONDITIONS, AS FOLLOWS:

"* * * IT IS ESSENTIAL THAT THE EQUIPMENT FURNISHED UNDER THIS BID INVITATION BE NEW AND OF THE LATEST MODEL, PROPERLY DESIGNED AND CONSTRUCTED FOR PERFORMING THE SERVICE DESCRIBED, AND ALL THE COMPONENTS OF THE EQUIPMENT SHALL BE OF A TYPE HAVING SHOWN RELIABLE AND EFFICIENT OPERATION UNDER CONDITIONS SIMILAR TO THE REQUIREMENTS OF THE SPECIFICATIONS.'

IT IS CONCEDED THAT WORTHINGTON COMPRESSORS OF THE SAME GENERAL CLASSIFICATION AS THOSE OFFERED ON THIS INVITATION, BUT WITHOUT THE TURBO- CHARGING FEATURE REQUIRED, HAVE AMPLY DEMONSTRATED THEIR RELIABILITY AND EFFICIENCY IN ACTUAL OPERATION IN MANY INSTALLATIONS, BUT THAT NO ACTUAL INSTALLATIONS OF TURBO-CHARGED UNITS OF THE EXACT TYPE OFFERED HAVE BEEN PROVEN IN USE. THE MANUFACTURER REFERS TO TWO SIMILAR UNITS ORIGINALLY INSTALLED ON LINES OF THE TENNESSEE GAS COMPANY WHICH WERE CONVERTED TO TURBO-CHARGED OPERATION IN 1954 AND HAVE SINCE BEEN IN CONTINUOUS OPERATION WITH SUCH SATISFACTORY RESULTS THAT ORDERS HAVE BEEN RECEIVED FOR SEVEN ADDITIONAL UNITS FROM THAT COMPANY. IT ALSO REPORTS AN ORDER FROM THE STANDARD OIL COMPANY OF INDIANA FOR TEN SUCH UNITS, NINE OF WHICH HAVE BEEN COMPLETED AND FACTORY TESTED TO THE COMPLETE SATISFACTION OF THE PURCHASER'S REPRESENTATIVES.

THE CONTRACTING OFFICER, HOWEVER, REPORTS THAT HE HAS ASCERTAINED THAT SUCCESSFUL OPERATION OF THE CONVERTED UNITS REFERRED TO WAS ACHIEVED ONLY AFTER SIX MONTHS OF ADJUSTMENT AND EXPERIMENTATION TO OVERCOME DIFFICULTIES ENCOUNTERED IN INITIAL OPERATIONS; THAT THE UNITS OFFERED UNDER THE LOCKETT BID ARE NOT WHOLLY IDENTICAL WITH THOSE, BUT INCLUDE CERTAIN DESIGN MODIFICATIONS INTENDED AS IMPROVEMENTS BUT NOT PROVEN IN USE; AND THAT BLOCK-TESTING AT THE FACTORY CANNOT BE ACCEPTED AS EQUIVALENT TO ACTUAL USE UNDER FIELD CONDITIONS. IN AN INTERVIEW WITH REPRESENTATIVES OF THIS OFFICE THE CHIEF OF THE DIVISION OF ENGINEERING OF THE HELIUM ACTIVITY STRESSED THE FACT THAT THE MOST EXPERTLY DESIGNED AND ENGINEERED ENGINE WILL ALMOST INVARIABLY DEVELOP WHOLLY UNANTICIPATED QUIRKS OR DEFECTS WHEN FIRST PUT INTO ACTUAL USE UNDER OPERATING CONDITIONS, ELIMINATION OF WHICH REQUIRES FURTHER EXPERIMENTATION, MODIFICATION, OR ADJUSTMENT, AND THAT IT WAS THE INTENT OF THE QUOTED PROVISION THAT THE EQUIPMENT PROCURED BY THE GOVERNMENT SHOULD BE OF A TYPE WHICH HAD BEEN IN ALL RESPECTS PROVEN AND FROM WHICH ALL SUCH ,BUGS" HAD BEEN ELIMINATED.

UPON FULL CONSIDERATION OF ALL THAT HAS BEEN OFFERED ON BOTH SIDES OF THE QUESTION, WE ARE UNABLE TO CONCLUDE THAT THE POSITION OF THE ADMINISTRATIVE OFFICIALS IS UNREASONABLE OR ARBITRARY OR THAT IT IS WITHOUT SUBSTANTIAL FOUNDATION. WE CANNOT THEREFORE OBJECT TO THE REJECTION OF THE LOCKETT BID.

THERE REMAINS FOR CONSIDERATION THE BID OF THE COOPER-BESSEMER CORPORATION, WHICH ALSO IS LOWER ON BOTH ITEMS 1 AND 2 THAN THE CLARK BID. THE CONTRACTING OFFICER HAS REPORTED THAT THE BID IS NOT FULLY RESPONSIVE TO THE TERMS OF THE INVITATION AS TO EITHER ITEM AND SHOULD THEREFORE BE REJECTED.

TWO GROUNDS ARE STATED IN SUPPORT OF THE CONTRACTING OFFICER'S CONCLUSION: FIRST, THAT BY QUALIFYING ITS STATED OUTPUT CAPACITY OF THE COMPRESSORS OFFERED BY SPECIFYING A TOLERANCE FACTOR OF PLUS OR MINUS THREE PERCENT AS TO ITEM 1, AND SIX PERCENT AS TO ITEM 2, THE BIDDER FAILED TO MEET THE CAPACITY REQUIREMENT OF THE INVITATION; AND SECOND, THAT THE RATED HORSEPOWER STATED BY THE BIDDER FOR THE ENGINES OFFERED TO OPERATE THE COMPRESSORS AT THE SPECIFIED OPERATING CONDITIONS WAS INADEQUATE TO ATTAIN THE REQUIRED COMPRESSOR OUTPUT, ACCORDING TO CALCULATION OF THE POWER REQUIREMENTS FROM A STANDARD ENGINEERING TABLE.

AS TO THE TOLERANCE FACTORS, THE BIDDER, IN RESPONSE TO A QUESTION BY THE CONTRACTING OFFICER SOME TIME AFTER THE BID OPENING, STATED IN A TELEGRAM DATED JANUARY 9, 1956, THAT IT DID NOT INTEND THAT THE CAPACITIES STATED IN ITS DATA SHEETS SHOULD BE SUBJECT TO THE TOLERANCES MENTIONED, AND REQUESTED THAT THEY BE DELETED.

THE TOLERANCE QUALIFICATIONS REFERRED TO ARE A PART OF A PRINTED FORM OF PROPOSAL USED BY THE BIDDER, THE PERTINENT PART OF WHICH IS AS FOLLOWS:

"CAPACITY* ----------------------------------------------

(*) PLUS OR MINUS 6 PERCENT FOR SUCTION PRESSURES 5 PSIG AND BELOW

(*) PLUS OR MINUS 3 PERCENT FOR SUCTION PRESSURES ABOVE 5 PSIG.'

IN ITS PROPOSAL COVERING ITEM 1, THERE WAS INSERTED ON THE BLANK LINE "SEE PERFORMANCE DATA, PAGE 1A," AND THE FIRST LINE FOLLOWING WAS X-ED OUT (PRESSURES SPECIFIED FOR ITEM 1 WERE ABOVE 5 PSIG). IN THE PROPOSAL FOR ITEM 2 THE BLANK LINE WAS FILLED IN THE SAME WAY, BUT NEITHER OF THE FOLLOWING LINES WAS ALTERED. THE CONTRACTING OFFICER ACCORDINGLY REDUCED THE CAPACITIES STATED ON THE FOLLOWING PAGES BY THREE PERCENT FOR ITEM 1 AND BY SIX PERCENT FOR ITEM 2 AND ARRIVED AT RESULTS OF 59.4 MILLION PER DAY FOR ITEM 1 AND 15 MILLION CUBIC FEET PER DAY FOR ITEM 2. SPECIFICATION REQUIREMENTS FOR THE TWO ITEMS WERE 60 AND 16 MILLION CUBIC FEET PER DAY, RESPECTIVELY. DESPITE THE BIDDER'S DISAVOWAL AND ATTEMPTED WITHDRAWAL OF THE QUALIFICATION, WE MUST REGARD THE FACTS REFERRED TO AN INDICATING THAT THE TOLERANCES STATED WERE INTENDED TO APPLY AND THAT IT WAS NOT THROUGH MERE INADVERTENCE ON THE PART OF THE BIDDER THAT THEY WERE NOT DELETED. SINCE SPECIFICATIONS FOR GOVERNMENT CONTRACTS ARE REQUIRED TO BE SO DRAWN AS TO STATE ONLY THE MINIMUM NEEDS TO BE MET, AND SINCE IN THIS INSTANCE THE CAPACITY OF THE COMPRESSORS WAS VIRTUALLY THE SOLE GOVERNING REQUIREMENT OF THE INVITATION, WE DO NOT FEEL THAT THE STATEMENT, APPARENTLY DELIBERATE, OF A TOLERANCE FACTOR APPLICABLE TO THAT SPECIFIC ELEMENT CAN BE WHOLLY DISREGARDED, OR THAT THE PROPOSED WITHDRAWAL OF THE QUALIFICATION, WHICH WOULD AMOUNT TO A MATERIAL AMENDMENT OF THE BID, MAY BE PERMITTED. SEE 34 COMP. GEN. 8.

WITH RESPECT TO ITEM 2, THE COOPER-BESSEMER CORPORATION'S STATED CAPACITY WAS EXACTLY THAT SPECIFIED BY THE INVITATION, SO THAT ANY VARIATION AT ALL UNDER THE STATED CAPACITY WOULD RESULT IN INADEQUATE PERFORMANCE. CONSIDERING THE TOLERANCE FIGURE OF SIX PERCENT, IN CONNECTION STATED HORSEPOWER RATING OF THE ENGINES SPECIFIED BY COOPER BESSEMER WAS 4,118, WHEREAS A STANDARD ENGINEERING TABLE COMPILED BY THE AMERICAN GAS ASSOCIATION INDICATES THAT THE POWER REQUIRED FOR THE DESIRED COMPRESSOR OUTPUT UNDER THE SPECIFIED CONDITIONS IS 4,417, WE CONCLUDE THAT THE REJECTION OF ITS BID ON THAT ITEM IS NOT WITHOUT REASONABLE GROUNDS.

AS TO ITEM 1, HOWEVER, WE ARE NOT ENTIRELY SATISFIED THAT THE VARIATIONS FOUND ARE SUFFICIENT NECESSARILY TO REQUIRE REJECTION OF THE COOPER- BESSEMER BID. ON THAT ITEM THE STATED CAPACITY IS TWO PERCENT IN EXCESS OF THE SPECIFICATION REQUIREMENT, SO THAT THE MAXIMUM TOLERANCE VARIATION WOULD FALL SHORT OF THE REQUIREMENT BY ONLY ONE PERCENT. THE STATED HORSEPOWER OF THE ENGINES UNDER THE SPECIFIED OPERATING CONDITIONS IS 3,680, AS AGAINST A THEORETICAL POWER REQUIREMENT FROM THE TABLES OF 3,687. IT IS FURTHER NOTED, HOWEVER, THAT THE ENGINES OFFERED ARE RATED AT 2,000 HORSEPOWER EACH AT SEA LEVEL, WHICH IS IDENTICAL WITH THE RATING OF THE CLARK COMPANY'S ENGINES AT SEA LEVEL; THE COOPER-BESSEMER ENGINES ARE EIGHT CYLINDER, 18 INCH BORE BY 20 INCH STROKE, OPERATING AT 250 REVOLUTIONS PER MINUTE FOR RATED HORSEPOWER, WHILE THE CLARK ENGINES ARE SIX CYLINDER, SEVENTEEN INCH BORE BY NINETEEN INCH STROKE, OPERATING AT 300 RPM. THE CLARK COMPANY STATES THE HORSEPOWER OF ITS ENGINES AT THE ALTITUDE OF THE EXELL PLANT (3,740 FEET ABOVE SEA LEVEL) AT 1,850, WHEREAS COOPER-BESSEMER PUTS ITS EQUIVALENT RATING AT 1,840. IT DOES NOT APPEAR THAT ANY CHECK HAS BEEN MADE TO VERIFY THE CALCULATION OF THE RATINGS STATED, OR TO DETERMINE WHETHER THE DIFFERENCE IN RATINGS ACTUALLY REFLECTS MERELY A MORE CONSERVATIVE POLICY OF ONE BIDDER.

IN THE CIRCUMSTANCES WE BELIEVE THAT THE SPECIFICATIONS OF THE EQUIPMENT OFFERED BY THE TWO COMPANIES UNDER ITEM 1 SHOULD BE MORE THOROUGHLY REVIEWED, AND THAT THE COOPER-BESSEMER BID SHOULD BE REJECTED ONLY IF, AFTER SUCH REVIEW, IT BE DETERMINED THAT THERE IS AN ACTUAL AND SUBSTANTIAL, RATHER THAN MERELY THEORETICAL, DOUBT AS TO THE CAPABILITY OF THE COOPER-BESSEMER UNITS TO MEET THE PRODUCTION REQUIREMENTS OF THE INVITATION.