B-135113, MAR. 6, 1958

B-135113: Mar 6, 1958

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TO THE VICTOR ENGINEERING CORPORATION: REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 27. THE EQUIPMENT WAS DESCRIBED AS FOLLOWS: ITEM NO. 1. FOUR OTHER BIDS WERE RECEIVED. WAS ACCEPTED AND AWARD WAS ISSUED TO YOU ON PURCHASE ORDER NO. 1451. EXCEPT "VALOR MODEL II" WAS SUBSTITUTED FOR "TARGET "TOLL-O-MATIC" OR EQUAL" AS TO THE SAW. THE MOTOR WAS WIRED FOR 115 VOLTS WITH A START AND STOP SWITCH. WIRING CHANGES WOULD BE NECESSARY IN THE ELECTRICAL BOX EACH TIME VOLTAGE WAS CHANGED. THERE WAS NO SAW HEAD ELEVATING MECHANISM. THE GUIDE STOP WAS FOR 90 DEGREE CUTS ONLY. NO BLADE WAS RECEIVED WITH THE SHIPMENT. YOU WERE ADVISED BY THE CHIEF. THAT THE SAW WAS BEING REJECTED SINCE IT DID NOT MEET THE SPECIFICATIONS AS SET OUT IN THE INVITATION AND THE PURCHASE ORDER.

B-135113, MAR. 6, 1958

TO THE VICTOR ENGINEERING CORPORATION:

REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 27, 1957, FORWARDING CHECK FOR $65.32 IN PAYMENT OF YOUR INDEBTEDNESS TO THE UNITED STATES DUE TO YOUR DEFAULT IN THE PERFORMANCE OF PURCHASE ORDER NO. 1451, AND PROTESTING THE ACTION OF THE VETERANS ADMINISTRATION CENTER, WACO, TEXAS, IN REJECTING THE EQUIPMENT FURNISHED BY YOU THEREUNDER.

BY INVITATION NO. 57-56, ISSUED NOVEMBER 14, 1956, VETERANS ADMINISTRATION CENTER, WACO, TEXAS, REQUESTED BIDS FOR FURNISHING ONE EACH OF TWO ITEMS OF EQUIPMENT IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATIONS SET OUT IN THE INVITATION. THE EQUIPMENT WAS DESCRIBED AS FOLLOWS:

ITEM NO. 1. SAW, MASONRY, TO BE USED WITH 14 INCH BLADES;

1 1/2 HP MOTOR TOTALLY ENCLOSED; BALLBEARING

CART 24 INCHES WIDE; FINGERTIP VOLTAGE CONTROL

TO CHANGE MOTOR FROM 115 TO 230 VOLTS OR VICE

VERSA; COMPLETE WITH WET CUTTING ATTACHMENT;

"ANGLE-SET" FOR INSTANT ADJUSTMENT; CUTTING

HEAD ANCHORED TO SAW FRAME WITH TOGGLE PINS;

BUILT-IN BELT ADJUSTMENT AND ADJUSTABLE

GUIDE STOP FOR 45 DEGREE AND 90 DEGREE CUTS;

SELF PRIMING FREEZE PROOF PUMP, AND SAW

HEAD ELEVATING MECHANISM; TARGET

"HOLL-O-NATIE" OR EQUAL

ITEM NO. 2. BLADE. WET CUT, 14 INCHES, BLACK CARBON

DIAMOND, BLUE, NO. 3 TARGET OR EQUAL

(FOR USE ON ABOVE SAW).

IN RESPONSE TO THE INVITATION, YOU SUBMITTED AN UNQUALIFIED BID IN THE TOTAL AMOUNT OF $425, F.O.B. WACO, TEXAS, OFFERING TO FURNISH EQUIPMENT MANUFACTURED BY YOU, INCLUDING ONE "VALOR MODEL II" SAW AT $325. BROCHURE COVERING THE EQUIPMENT ACCOMPANIED YOUR BID. FOUR OTHER BIDS WERE RECEIVED, RANGING IN THE AGGREGATE FOR THE TWO ITEMS FROM $436.55 TO $584. AS YOUR EQUIPMENT APPARENTLY MET SPECIFICATIONS, YOUR BID, BEING THE LOWEST, WAS ACCEPTED AND AWARD WAS ISSUED TO YOU ON PURCHASE ORDER NO. 1451, DATED NOVEMBER 28, 1956. THE PURCHASE ORDER SET FORTH THE SAME DESCRIPTIONS FOR THE SAW AND BLADE AS CONTAINED IN THE INVITATIONS, EXCEPT "VALOR MODEL II" WAS SUBSTITUTED FOR "TARGET "TOLL-O-MATIC" OR EQUAL" AS TO THE SAW.

THE RECORD SHOWS THAT UPON DELIVERY OF YOUR VALOR MODEL II SAW, ON DECEMBER 18, 1956, THE VETERANS ADMINISTRATION CENTER ENGINEERING OFFICER FOUND UPON INSPECTION THAT THE SAW DID NOT MEET THE ADVERTISED SPECIFICATIONS AND THAT IT DEVIATED MATERIALLY THEREFROM IN THE FOLLOWING ESPECTS:

THE SAW HAD NO FINGERTIP VOLTAGE CONTROL TO CHANGE THE MOTOR VOLTAGE FROM 115 TO 230 VOLTS, OR VICE VERSA. THE MOTOR WAS WIRED FOR 115 VOLTS WITH A START AND STOP SWITCH. WITH THIS ARRANGEMENT,WIRING CHANGES WOULD BE NECESSARY IN THE ELECTRICAL BOX EACH TIME VOLTAGE WAS CHANGED.

THERE WAS NO SAW HEAD ELEVATING MECHANISM.

THE SAW HAD NO "ANGLE-SET" FOR INSTANT ADJUSTMENT.

THE GUIDE STOP WAS FOR 90 DEGREE CUTS ONLY, RATHER THAN FOR 45 DEGREE AND 90 DEGREE CUTS.

THE PUMP DID NOT APPEAR TO BE FREEZE PROOF.

ALSO, NO BLADE WAS RECEIVED WITH THE SHIPMENT.

BY LETTER DATED DECEMBER 18, 1957, YOU WERE ADVISED BY THE CHIEF, PROCUREMENT SECTION, SUPPLY DIVISION, OF THE VETERANS ADMINISTRATION CENTER, THAT THE SAW WAS BEING REJECTED SINCE IT DID NOT MEET THE SPECIFICATIONS AS SET OUT IN THE INVITATION AND THE PURCHASE ORDER, AND YOU WERE REQUESTED TO FURNISH A SAW MEETING SPECIFICATIONS. IN LETTER DATED DECEMBER 27, 1956, YOU PROTESTED THE ACTION OF THE PROCUREMENT OFFICE IN REJECTING THE SAW AND STATED THAT THE VALOR MODEL II SAW WAS EQUAL TO THE TARGET MACHINE SPECIFIED IN THE INVITATION. BY LETTER DATED JANUARY 7, 1957, YOU WERE AGAIN REQUESTED TO FURNISH A MASONRY SAW IN ACCORDANCE WITH SPECIFICATIONS IN THE BID INVITATION AND THE PURCHASE ORDER, AND YOU WERE ADVISED THAT IF THE SAW WAS NOT RECEIVED BY JANUARY 22, IN ACCORDANCE WITH THE TERMS OF THE BID INVITATION YOUR RIGHT TO EFFECT DELIVERY WOULD BE CANCELED AND A SAW WOULD BE PURCHASED IN THE OPEN MARKET AND ANY ADDITIONAL COSTS OCCASIONED THEREBY CHARGED TO YOUR ACCOUNT.

THE RECORD DOES NOT INDICATE THAT YOU MADE ANY ATTEMPT TO FURNISH AN ACCEPTABLE SUBSTITUTE SAW. ACCORDINGLY, BY LETTER DATED JANUARY 24, 1957, THE SUPPLY OFFICER, VETERANS ADMINISTRATION CENTER, WACO, TEXAS, ADVISED YOU THAT, SINCE A REPLACEMENT HAD NOT BEEN RECEIVED, YOU HAD BEEN DECLARED IN DEFAULT AND PURCHASE ORDER NO. 1451 HAD BEEN CANCELED. YOU WERE AGAIN ADVISED THAT A MASONRY SAW MEETING THE ADVERTISED SPECIFICATIONS WOULD BE PURCHASED IN THE OPEN MARKET AND ANY ADDITIONAL COST OCCASIONED THEREBY WOULD BE CHARGED TO YOUR ACCOUNT AS THE GOVERNMENT DID NOT WAIVE ITS RIGHTS UNDER THE TERMS AND CONDITIONS OF THE CONTRACT. THE VALOR MODEL II SAW WAS RETURNED TO YOU, FREIGHT COLLECT, ON JANUARY 24, 1957.

A MASONRY SAW AND BLADE MEETING THE ADVERTISED SPECIFICATIONS WERE SUBSEQUENTLY PURCHASED IN THE OPEN MARKET AT AN ADDITIONAL COST TO THE GOVERNMENT OF $65.32 ABOVE YOUR BID PRICE, AND THIS AMOUNT WAS CHARGED TO YOUR ACCOUNT. THE DEBT WAS REFERRED BY THE VETERANS ADMINISTRATION TO OUR OFFICE FOR COLLECTION ACTION. IN RESPONSE TO OUR DEMANDS FOR PAYMENT YOU REMITTED BY CHECK THE AMOUNT OF $65.32 UNDER PROTEST.

YOUR PROTEST APPEARS TO BE BASED ON THE CONTENTIONS THAT THE SPECIFICATIONS IN BID INVITATION NO. 57-56 WERE SO DRAFTED AS TO FIT ONLY THE TARGET MACHINE AND THUS RESTRICTED COMPETITIVE BIDDING BY PROHIBITING ALL OTHER MANUFACTURERS FROM BIDDING; THAT THE VALOR MODEL II SAW MANUFACTURED BY YOU AND DELIVERED BY YOU TO VETERANS ADMINISTRATION CENTER, WACO, TEXAS, PURSUANT TO PURCHASE ORDER NO. 1451, ALTHOUGH ADMITTEDLY NOT COMPLYING WITH THE SPECIFICATIONS SET FORTH IN THE BID INVITATION, IS EQUAL TO THE TARGET MACHINE AND IS CAPABLE OF PERFORMING EFFICIENTLY THE JOB OF CUTTING MASONRY REQUIRED BY THE VETERANS ADMINISTRATION CENTER; AND THAT THE BROCHURE TRANSMITTED WITH YOUR BID DESCRIBED YOUR SAW AND, SINCE THE PURCHASE ORDER SPECIFIED A VALOR MODEL II SAW, YOUR EQUIPMENT SHOULD HAVE BEEN ACCEPTED.

YOUR CONTENTION THAT THE BID SPECIFICATIONS WERE SO RESTRICTIVE AS TO PREVENT COMPETITIVE BIDDING WILL BE CONSIDERED FIRST. THE PURPOSE OF STATUTES REQUIRING THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDER AFTER ADVERTISING IS TO GIVE ALL PERSONS AN EQUAL RIGHT TO COMPETE FOR GOVERNMENT CONTRACTS, TO PREVENT UNJUST FAVORITISM, COLLUSION, OR FRAUD IN AWARDING GOVERNMENT CONTRACTS, AND TO SECURE FOR THE GOVERNMENT THE BENEFITS WHICH FLOW FROM FREE AND UNRESTRICTED COMPETITION. 36 COMP. GEN. 380, 384.

IT IS HARDLY OPEN TO QUESTION, HOWEVER, THAT THE GOVERNMENT ENGINEERS AND OFFICERS FAMILIAR WITH THE CONDITIONS UNDER WHICH EQUIPMENT IS TO BE USED AND WITH RESULTS PREVIOUSLY OBTAINED IN THE USE OF SIMILAR EQUIPMENT ARE, OR SHOULD BE, BETTER QUALIFIED TO DETERMINE WHAT IS NEEDED THAN ANY REPRESENTATIVE OF A PARTICULAR MANUFACTURER WHOSE ONLY INTEREST IS TO SELL HIS PRODUCT TO THE GOVERNMENT. THE DECISIONS OF OUR OFFICE ARE, WITHOUT EXCEPTION, TO THE EFFECT THAT THE UNITED STATES IS NOT TO BE PLACED IN THE POSITION OF HAVING A BIDDER DICTATE AS TO ITS REQUIREMENTS, OR DEMAND THAT HIS PRODUCT BE ACCEPTED WITHOUT REGARD TO ACTUAL CONDITIONS.

WE HAVE HELD THAT IT IS WITHIN THE PROVINCE OF ADMINISTRATIVE OFFICERS, FIRST, TO DRAFT SPECIFICATIONS WHICH WILL REFLECT THE NEEDS OF THE GOVERNMENT AND INSURE FAIR COMPETITIVE BIDDING AND, SECOND, TO DETERMINE FACTUALLY WHETHER ARTICLES OFFERED MEET THOSE SPECIFICATIONS. SEE 17 COMP. GEN. 554; 557; 36 ID. 376, 378.

THE QUESTION WHETHER SUCH SPECIFICATIONS ARE SO RESTRICTIVE AS TO PROHIBIT COMPETITIVE BIDDING WITHIN THE REASONABLE REQUIREMENTS OF THE STATUTE IS ONE WHICH GOES TO LEGALITY OF THE CONTRACT AND USES OF APPROPRIATED MONEYS AND IS NOT FOR DETERMINATION BY THE PURCHASING AGENCY, BUT IS FOR DETERMINATION BY THE GENERAL ACCOUNTING OFFICE. 13 COMP. GEN. 318; 17 ID. 554; 20 ID. 903, 912, AND CASES CITED THEREIN; 21 ID. 1132, 1136.

IN THE INSTANT CASE, IT WAS THE RESPONSIBILITY OF THE VETERANS ADMINISTRATION CENTER, WACO, TEXAS, TO DETERMINE THE EQUIPMENT NEEDS OF THAT FACILITY, AND TO DRAFT SPECIFICATIONS FOR SUCH EQUIPMENT. BID INVITATION NO. 57-56 CLEARLY SET FORTH THE SPECIFICATIONS OF THE EQUIPMENT REQUIRED TO BE FURNISHED. THE ENGINEERING OFFICER WHO MADE THE INSPECTION OF YOUR EQUIPMENT UPON DELIVERY AT THE FACILITY STATED IN HIS REPORT THAT THERE ARE AT LEAST TWO MASONRY SAWS ON THE MARKET WHICH HAVE THE SAME FEATURES AS THOSE SPECIFIED IN THE BID INVITATION. THE RECORD SHOWS THAT FOUR OTHER BIDS, IN ADDITION TO YOURS, WERE RECEIVED IN RESPONSE TO THE INVITATION. IN THESE CIRCUMSTANCES, AND IN THE ABSENCE OF A SHOWING THAT THE SPECIFICATIONS WERE SO DRAFTED AS TO REQUIRE PARTICULAR FEATURES IN THE EQUIPMENT TO BE FURNISHED BUT NOT NECESSARY TO THE ACTUAL NEEDS FOR WHICH THE EQUIPMENT WAS TO BE USED AND THUS RESTRICT BIDDING TO AN ITEM OF A PARTICULAR MANUFACTURER, IT MUST BE CONCLUDED THAT THE SPECIFICATIONS CONTAINED IN INVITATION TO BID NO. 57-56 WERE NOT IN FACT RESTRICTIVE WITHIN THE REASONABLE REQUIREMENTS OF THE STATUTES.

ALSO, IT MAY BE POINTED OUT THAT UNDER THE TERMS AND CONDITIONS OF THE INVITATION TO BID AND THE SPECIAL CONDITIONS CONTAINED IN THE INVITATION, AS WELL AS PROVISIONS APPLICABLE TO FEDERAL SUPPLY CONTRACTS GENERALLY, PROSPECTIVE BIDDERS WERE CAUTIONED, IN THE PREPARATION OF BIDS, TO EXAMINE THE DRAWINGS, SPECIFICATIONS, SCHEDULES AND ALL INSTRUCTIONS, AND THAT FAILURE TO DO SO WOULD BE AT THE BIDDER'S RISK.

PROSPECTIVE BIDDERS WERE ON NOTICE THAT, IN CASE ANY SUPPLIES OR LOTS OF SUPPLIES WERE NOT IN CONFORMITY WITH THE REQUIREMENTS OF THE CONTRACT, THE GOVERNMENT WOULD HAVE THE RIGHT EITHER TO REJECT THEM OR TO REQUIRE THEIR CORRECTION, AND THAT IF THE CONTRACTOR FAILED, WHEN REQUESTED BY THE CONTRACTING OFFICER, TO PROCEED WITHIN TEN DAYS OR SUCH EXTENSION OF TIME AS THE CONTRACTING OFFICER MIGHT AUTHORIZE IN WRITING WITH THE REPLACEMENT OR CORRECTION THEREOF, THE GOVERNMENT EITHER MIGHT BY CONTRACT OR OTHERWISE REPLACE OR CORRECT SUCH SUPPLIES AND CHARGE TO THE CONTRACTOR THE COST OCCASIONED THE GOVERNMENT THEREBY, OR TERMINATE THE CONTRACT FOR DEFAULT. IF THE GOVERNMENT TERMINATED THE CONTRACT IN WHOLE OR IN PART, AFTER WRITTEN NOTICE TO THE CONTRACTOR OF TERMINATION FOR DEFAULT, THE GOVERNMENT MIGHT PROCURE, UPON SUCH TERMS AND IN SUCH MANNER AS THE CONTRACTING OFFICER MIGHT DEEM APPROPRIATE, SUPPLIES OR SERVICES, SIMILAR TO THOSE TERMINATED, AND THE CONTRACTOR WOULD BE LIABLE TO THE GOVERNMENT FOR ANY EXCESS COSTS FOR SUCH SIMILAR SUPPLIES OR SERVICES.

IN SUBMITTING YOUR BID, YOU DID NOT INDICATE ANY CHANGES FROM THE BID SPECIFICATIONS OR OTHERWISE QUALIFY YOUR BID AND, SINCE THE BROCHURE ACCOMPANYING YOUR BID CONTAINED NO DETAILED PERTINENT SPECIFICATIONS OF THE VALOR MODEL II SAW WHICH YOU PROPOSED TO FURNISH, THE PURCHASING OFFICER HAD A RIGHT TO ASSUME THAT THE VALOR MODEL II SAW MET THE BID SPECIFICATIONS AND WAS EQUAL TO THE ITEM FOR WHICH THE VETERANS ADMINISTRATION CENTER HAD ADVERTISED. THE DEVIATIONS IN YOUR SAW FROM THE ADVERTISED SPECIFICATIONS DID NOT BECOME APPARENT TO THE PURCHASING OFFICER UNTIL AFTER AWARD TO YOU OF THE PURCHASE ORDER, AND AFTER THE SAW WAS INSPECTED BY THE VETERANS ADMINISTRATION ENGINEERING OFFICER UPON ITS DELIVERY.

THUS, IT APPEARS THAT YOUR BID WAS ACCEPTED WITHOUT NOTICE THAT THE SAW YOU PROPOSED TO FURNISH DID NOT MEET THE SPECIFICATIONS, AND THEREFORE, SUCH ACCEPTANCE MUST BE REGARDED AS RESULTING IN A VALID AND BINDING CONTRACT. 36 COMP. GEN. 377.

SINCE YOU FAILED TO COMPLY WITH THE CONTRACTUAL OBLIGATIONS IMPOSED UPON YOU BY YOUR BID AND PURCHASE ORDER NO. 1451, THE PURCHASING OFFICER HAD NO ALTERNATIVE BUT TO REJECT YOUR SAW, CANCEL THE PURCHASE ORDER AND DECLARE YOU IN DEFAULT, PURCHASE THE EQUIPMENT ELSEWHERE, AND CHARGE TO YOUR ACCOUNT $65.32, THE AMOUNT OF EXCESS COSTS INCURRED BY THE GOVERNMENT IN PROCURING EQUIPMENT FROM ANOTHER SOURCE. ACCORDINGLY, THE ACTION TAKEN IN THIS MATTER IS SUSTAINED.