B-136107, AUG.8, 1958

B-136107: Aug 8, 1958

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TO INDUS CORPORATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 6. BY THE REFERRED TO INVITATION BIDS WERE REQUESTED. PROSPECTIVE BIDDERS WERE ADVISED THAT ALL BIDS WHICH HAD BEEN RECEIVED PURSUANT TO INVITATION NO. 2424 WHICH COVERED THE SAME ITEMS HAD BEEN REJECTED. THE RECORD SHOWS THAT THIRTEEN BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION AND THAT THE EIGHT LOWEST BIDS. WERE REJECTED BECAUSE THEY FAILED TO MEET THE SPECIFICATIONS IN VARIOUS MATERIAL RESPECTS. THE DEPARTMENT'S COMMENTS RELATING TO THE MATTER WERE SET FORTH IN A LETTER DATED APRIL 23. WE ARE NOW INRECEIPT OF A FURTHER REPORT FROM THE ADMINISTRATIVE OFFICE RELATING TO THE VARIOUS CONTENTIONS COMPRISING YOUR PROTEST.

B-136107, AUG.8, 1958

TO INDUS CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 6, 1958, WITH ENCLOSURES, PROTESTING THE AWARD OF A CONTRACT TO ANOTHER BIDDER IN CONNECTION WITH INVITATION NO. 2701, ISSUED BY THE POST OFFICE DEPARTMENT ON FEBRUARY 25, 1958.

BY THE REFERRED TO INVITATION BIDS WERE REQUESTED--- TO BE OPENED MARCH 26, 1958--- FOR FURNISHING 15,000 UTILITY WHEELED CARRIERS IN ACCORDANCE WITH DESIGNATED SPECIFICATIONS AND DRAWINGS. PROSPECTIVE BIDDERS WERE ADVISED THAT ALL BIDS WHICH HAD BEEN RECEIVED PURSUANT TO INVITATION NO. 2424 WHICH COVERED THE SAME ITEMS HAD BEEN REJECTED.

THE RECORD SHOWS THAT THIRTEEN BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION AND THAT THE EIGHT LOWEST BIDS, INCLUDING YOUR OWN IN THE TOTAL AMOUNT OF $470,550, WERE REJECTED BECAUSE THEY FAILED TO MEET THE SPECIFICATIONS IN VARIOUS MATERIAL RESPECTS. FOLLOWING THE REJECTION OF YOUR BID, YOU CALLED THE MATTER TO THE ATTENTION OF THE HONORABLE HOMER E. CAPEHART, UNITED STATES SENATE, WHO FORWARDED YOUR "OUTLINE OF DETAILS AS TO INDUS CORPORATION'S PARTICIPATION IN THE BIDDING" ON INVITATION NO. 2701 TO THE POST OFFICE DEPARTMENT FOR ITS COMMENTS. THE DEPARTMENT'S COMMENTS RELATING TO THE MATTER WERE SET FORTH IN A LETTER DATED APRIL 23, 1958, TO SENATOR CAPEHART. IN A LETTER DATED APRIL 29, 1958, TO SENATOR CAPEHART YOU TOOK ISSUE WITH THE CONCLUSIONS REACHED BY THE POST OFFICE DEPARTMENT AND FORWARDED A COPY THEREOF TO OUR OFFICE FOR OUR CONSIDERATION. WE ARE NOW INRECEIPT OF A FURTHER REPORT FROM THE ADMINISTRATIVE OFFICE RELATING TO THE VARIOUS CONTENTIONS COMPRISING YOUR PROTEST.

PERTINENT PROVISIONS OF THE PURCHASE DESCRIPTION, ATTACHED TO AND MADE A PART OF THE INVITATION ARE AS FOLLOWS:

"3.2 BID DATA AND SAMPLES REQUIRED--- EACH PROPOSAL SHALL INCLUDE THE FOLLOWING:

"A. TWO COPIES OF 1/4 (OR LARGER) SCALE DRAWINGS SHOWING IN COMPLETE DETAIL THE CARRIER PROPOSED BY THE BIDDER. DETAILS SHALL INCLUDE SECTIONS AND ENLARGED VIEWS OF FABRICATION FEATURES TO PERMIT FULL EVALUATION. PARTICULAR ATTENTION WILL BE GIVEN TO THE HINGE ARRANGEMENT, NESTING FEATURES, MATERIAL ALLOYS AND HEAT TREATMENTS. NESTING CAPABILITY MUST BE SHOWN.

"B. TWO COPIES OF FULL SCALE ASSEMBLY DRAWINGS SHOWING IN COMPLETE DETAIL THE RIGID AND SWIVEL CASTERS PROPOSED FOR USE BY THE BIDDER. DRAWINGS MUST BE ADEQUATELY CROSS-SECTIONED TO SHOW ALL COMPONENTS. EACH COMPONENT IS TO BE DESIGNATED BY ITS NAME, MATERIAL ALLOY, SIZE, FINISH AND HARDNESS VALUE AS APPLICABLE.

"C. A WRITTEN STATEMENT INDICATING WILLINGNESS TO COMPLY WITH THE GUARANTEE MUST BE FURNISHED FOR BID CONSIDERATION.

"D. THE BIDDER SHALL CERTIFY IN WRITING THAT THE UNITS OFFERED WILL COMPLY IN EVERY RESPECT WITH THE TERMS OF THIS PURCHASE DESCRIPTION. THE EVENT THAT THE CARRIERS DO NOT FULLY COMPLY, THE BIDDER SHALL STATE DEFINITELY, REFERRING TO THE APPLICABLE PARAGRAPH OF THIS PURCHASE DESCRIPTION WHEREIN THE CARRIER HE PROPOSES TO FURNISH DOES NOT COMPLY. WHERE NO STATEMENT IS RECEIVED, THE SUCCESSFUL BIDDER WILL BE REQUIRED TO MEET ALL REQUIREMENTS HEREIN. DETERMINATION ASTO ACCEPTABILITY OF DEVIATIONS SHALL BE MADE AND EVALUATED SOLELY BY THE POST OFFICE DEPARTMENT WHOSE DECISION SHALL BE FINAL.'

REGARDING YOUR COMPLAINT THAT THE POST OFFICE DEPARTMENT FOUND IT NECESSARY TO REJECT THE EIGHT LOWEST BIDS AND AWARD THE CONTRACT TO THE NINTH BIDDER "AT AN ADDITIONAL CHARGE OF $250,000," WE WOULD LIKE TO POINT OUT THAT THE NEEDS OF THE GOVERNMENT AND THE DRAFTING OF SPECIFICATIONS SETTING FORTH THOSE NEEDS ARE NECESSARILY FOR DETERMINATION IN THE FIRST INSTANCE BY THE ADMINISTRATIVE PURCHASING AGENCIES. IT IS NOT WITHIN THE PROVINCE OF OUR OFFICE TO DECIDE WHAT THE NEEDS OF A PARTICULAR AGENCY MAY BE OR TO DRAFT THE APPLICABLE SPECIFICATIONS FOR THOSE NEEDS. IN THIS REGARD, WE HAVE HELD THAT THERE IS NO REQUIREMENT THAT THE UNITED STATES PURCHASE EQUIPMENT MERELY BECAUSE IT IS OFFERED AT A LOWER PRICE, WITHOUT INTELLIGENT REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED; NOR IS THE GOVERNMENT TO BE PLACED IN THE POSITION OF ALLOWING BIDDERS TO DICTATE SPECIFICATIONS WHICH WILL PERMIT ACCEPTANCE OF EQUIPMENT WHICH DOES NOT, IN THE CONSIDERED JUDGMENT OF THE CONTRACTING AGENCY, REASONABLY MEET THE AGENCY'S NEED. 36 COMP. GEN. 251, 252. IN THE PRESENT CASE, INVITATION NO. 2424 ADMITTEDLY DID NOT AFFORD BIDDERS SUFFICIENT TIME, AND SINCE NONE OF THE BIDS RECEIVED WAS RESPONSIVE, ALL THE BIDS PROPERLY WERE REJECTED. SEE PARAGRAPH 8 (B) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS WHICH RESERVES THIS RIGHT TO THE GOVERNMENT.

REGARDING INVITATION NO. 2701, IT IS REPORTED THAT THE POST OFFICE DEPARTMENT WAS SEEKING BIDS ON A NEW AND DIFFERENT ITEM OF EQUIPMENT FOR WHICH IT HAD NO PREVIOUS PURCHASE PRICE EXPERIENCE. THEREFORE, IT COULD NOT CALCULATE A TRULY SIGNIFICANT PRICE ESTIMATE AND IT IS UNDERSTANDABLE THAT THE FINAL ACTUAL COST OF THE EQUIPMENT COULD GREATLY EXCEED THE ESTIMATE WHICH HAD BEEN CALCULATED FROM THE THOMPSON AND BISHOP UNIT WHICH WAS SUBSTANTIALLY DISSIMILAR TO THE WHEELED UTILITY CARRIERS FOR WHICH BIDS WERE SOLICITED. SINCE THE DEPARTMENT REPORTEDLY DOES NOT REVEAL ITS ESTIMATED PRICES TO PROSPECTIVE BIDDERS, WE AGREE WITH ITS OBSERVATION THAT THE FACT THAT ITS ESTIMATED PRICE FOR THE PROCUREMENT MAY HAVE BEEN CONSIDERABLY UNDERSTATED COULD NOT BE DEEMED TO BE PREJUDICIAL TO YOU OR ANY OTHER BIDDER.

ADMITTEDLY, A LETTER WAS RECEIVED FROM THE U.S. STEEL AND WIRE COMPANY IN WHICH COMPLAINT WAS MADE THAT THE SPECIFICATIONS WERE SO AMBIGUOUS AND SO INADEQUATE THAT A RESEARCH AND DEVELOPMENT CONTRACT SHOULD HAVE BEEN INSTITUTED. SIGNIFICANTLY, HOWEVER, IT IS REPORTED THAT ONLY ONE WOULD-BE BIDDER FILED SUCH A COMPLAINT AND IT WAS ONLY AFTER YOUR BID WAS REJECTED AS NOT MEETING THE SPECIFICATIONS THAT YOU RAISED THE POINT. CERTAINLY, HAD YOUR BID BEEN ACCEPTED, IT SEEMS REASONABLE TO ASSUME THAT YOU WOULD NOT HAVE REGISTERED A COMPLAINT AS TO AMBIGUITY OR INADEQUACY OF THE SPECIFICATIONS AND IF, AS A MATTER OF FACT, THE SPECIFICATIONS WERE SO AMBIGUOUS OR INADEQUATE, NO CONTRACT COULD HAVE BEEN AWARDED TO ANY BIDDER. HOWEVER THAT MAY BE, IT IS NOT WITHIN THE PROVINCE OF OUR OFFICE TO QUESTION THE METHODS OF PROCUREMENT EMPLOYED BY THE VARIOUS AGENCIES SO LONG AS SUCH METHODS ARE NOT CONTRARY TO ANY SPECIFIC REQUIREMENTS OF LAW OR REGULATIONS PROMULGATED PURSUANT THERETO.

IT IS YOUR CONTENTION THAT THERE ARE NO DEFINITE SPECIFICATIONS ON THE ITEM INVOLVED; THAT THE PROCURING AGENCY IS DEPENDING UPON A PILOT MODEL OR SO-CALLED PRODUCTION SAMPLE FOR EVALUATION AND FINAL APPROVAL; AND THAT, IN AN ATTEMPT TO CLARIFY THE SPECIFICATIONS, YOUR ENGINEERS WERE ADVISED THAT THE POST OFFICE DEPARTMENT WAS LOOKING TO THE BIDDERS FOR CERTAIN DETAILS RATHER THAN ISSUING SPECIFIC SPECIFICATIONS AS TO THEIR REQUIREMENTS. IT IS FUNDAMENTAL AND WE HAVE STATED MANY TIMES THAT SPECIFICATIONS MUST BE SO DRAWN AS TO STATE THE AGENCY'S ACTUAL NEEDS. THE PRESENT CASE, THE RECORD BEFORE OUR OFFICE CONTAINS NO EVIDENCE THAT THE SPECIFICATIONS PRECLUDED ALL BUT THE SUCCESSFUL BIDDER FROM MEETING THE REQUIREMENTS SET OUT THEREIN OR THAT THE REJECTION OF YOUR BID AND OTHERS THAT FAILED TO MEET THE SPECIFIED REQUIREMENTS IN MATERIAL RESPECTS WAS BASED ON PERSONAL PREFERENCE OR FAVORITISM. WE BELIEVE THAT THE REQUIREMENTS PRESCRIBED BY THE INVITATION FOR BIDS REFLECTED A BONA FIDE DETERMINATION OF THE MINIMUM NEEDS OF THE GOVERNMENT, ADOPTED AFTER A CAREFUL STUDY OF THE NEED TO BE MET, IN THE LIGHT OF THE PAST EXPERIENCE. IN PARAGRAPHS 1 AND 2 OF THE PURCHASE DESCRIPTION BIDDERS WERE ADVISED OF THE USE TO WHICH THE CARRIERS WOULD BE PUT AND THE DEPARTMENT'S REQUIREMENTS, WHILE PARAGRAPHS 3.1, 3.4, 3.5, AND 3.6 AND ITS SUBDIVISIONS, AND 3.8 AND ITS SUBDIVISIONS GAVE THE BIDDERS INFORMATION CONCERNING CONSTRUCTION, SHAPE, CAPACITY, ETC. AND, TO THE EXTENT THAT THEY STATED THE NEEDS OF THE GOVERNMENT IN TERMS OF PERFORMANCE RATHER THAN IN CONSTRUCTION DETAILS, THE SPECIFICATIONS CANNOT BE DEEMED IMPROPER.

YOU CONTEND FURTHER, IN EFFECT, THAT YOUR STIPULATION OF A 330-DAY DELIVERY SCHEDULE, WHEREAS THE INVITATION SPECIFIED A DELIVERY SCHEDULE OF 2,000 UNITS A MONTH, OR 225 DAYS FOR THE DELIVERY OF THE TOTAL QUANTITY OF 15,000, WAS A MINOR DEVIATION WHICH COULD BE WAIVED BY THE CONTRACTING OFFICER. WE HAVE CONSISTENTLY HELD THAT INFORMALITIES WHICH PROPERLY MAY BE WAIVED ARE THOSE THAT DO NOT GO TO THE SUBSTANCE OF THE BID SO AS TO BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS, BUT MATERIAL CONDITIONS, SUCH AS A QUALIFICATION OF THE STIPULATED DELIVERY SCHEDULE, IMPOSED BY A BIDDER MAY NOT BE WAIVED AS AN INFORMALITY OR MINOR IRREGULARITY. SEE, FOR EXAMPLE, 37 COMP. GEN. 110, 112, WHERE IT WAS STATED:

"* * * TO PERMIT PUBLIC OFFICERS TO ACCEPT BIDS NOT COMPLYING IN SUBSTANCE WITH THE ADVERTISED SPECIFICATIONS, OR TO PERMIT BIDDERS TO VARY THEIR PROPOSALS AFTER THE BIDS ARE OPENED, WOULD SOON REDUCE TO A FARCE THE WHOLE PROCEDURE OF LETTING PUBLIC CONTRACTS ON AN OPEN COMPETITIVE BASIS. THE STRICT MAINTENANCE OF SUCH PROCEDURE, REQUIRED BY LAW, IS INFINITELY MORE IN THE PUBLIC INTEREST THAN OBTAINING AN APPARENTLY PECUNIARY ADVANTAGE IN A PARTICULAR CASE BY A VIOLATION OF THE RULES. CF. UNITED STATES V. BROOKRIDGE, 111 F.2D 461, 464, AND THE OPINION OF THE SUPREME COURT OF ILLINOIS IN CITY OF CHICAGO V. MOHR, 74 N.E. 1056.'

CERTAINLY, SOME SPECIFIC DELIVERY SCHEDULE HAD TO BE PROVIDED FOR IN THE INVITATION AND THE PROCURING AGENCY STATES THAT IN ADVERTISING ITS NEEDS IT ATTEMPTS TO FIX A DELIVERY PERIOD WHICH IS NOT UNREALISTICALLY SHORT AND ONE WHICH IS NOT UNREASONABLY LONG. IN THE PRESENT CASE, THE FACT THAT A NUMBER OF BIDDERS TOOK NO EXCEPTION TO THE DELIVERY SCHEDULE LEADS US TO BELIEVE THAT THE DELIVERY REQUIREMENT SET FORTH IN THE INVITATION WAS REASONABLE, HAVING IN MIND THE URGENCY OF THE GOVERNMENT'S NEEDS FOR THE ITEMS INVOLVED.

YOU REFER TO CURRENT DECISIONS WHICH "MAKES IT MANDATORY TO AWARD A CONTRACT TO A LOW BIDDER WHERE THAT BIDDER IS FINANCIALLY RESPONSIBLE AND THE FACILITIES ARE SUCH AS TO MAKE THE CONTRACTING OFFICER REASONABLY SURE THAT THE PRODUCTION COULD BE PRODUCED.' IN THE LIGHT THEREOF, YOU REFER TO THE REQUIREMENT TO FURNISH A PILOT MODEL, OR A PRE-PRODUCTION MODEL, AND YOU STATE THAT THIS FEATURE ALONE SHOULD HAVE BEEN SUFFICIENT REASON FOR AWARDING TO THE LOW BIDDER OR AT LEAST TO A BIDDER FAR BELOW THE NINTH POSITION, CITING B-132399, 37 COMP. GEN. 143 AND 10 COMP. GEN. 160.

REGARDING THE PRE-PRODUCTION MODEL, IT IS STATED BY THE POST OFFICE DEPARTMENT THAT THE PURPOSE OF SUCH A MODEL IS TO FURNISH A STANDARD TO GUIDE THE PERSONS WHO INSPECT THE UNITS PRIOR TO THEIR ACCEPTANCE ON BEHALF OF THE GOVERNMENT. IF THE UNITS MEASURE UP TO THE STANDARDS OF THE APPROVED MODEL, THEY ARE ACCEPTABLE. IF THEY DO NOT, THEY ARE REJECTED. BY THIS METHOD, IT IS STATED, A SITUATION IS AVOIDED IN WHICH A CONTRACTOR GOES INTO FULL SCALE PRODUCTION, MANUFACTURES THOUSANDS OF UNITS HE BELIEVES TO BE IN CONFORMITY WITH THE SPECIFICATIONS, AND THEN HAS THEM REJECTED BY THE GOVERNMENT BECAUSE THEY DO NOT IN FACT CONFORM TO THE SPECIFICATIONS. WE THINK THIS PHASE OF THE MATTER NEEDS NO FURTHER ELABORATION OTHER THAN TO POINT OUT THAT THE PILOT MODEL REQUIREMENT BECOMES EFFECTIVE ONLY AFTER AWARD OF A CONTRACT AND THE PROVISION THEREFOR WAS NOT INTENDED, AND CANNOT PROPERLY BE INTERPRETED, AS TAKING THE PLACE OF THE ESTABLISHMENT OF THE SUFFICIENCY OF THE SPECIFIED ARTICLE AND OF THE QUALIFICATIONS OF THE BIDDER TO MANUFACTURE SAME IN COMPARING BIDS.

IN 37 COMP. GEN. 143 (B-132339), REFERRED TO ABOVE, WE HELD (QUOTING FROM THE SYLLABUS):

"THE SUBMISSION OF SUPPLEMENTAL DATA AFTER OPENING BY A LOW BIDDER PURSUANT TO AN INVITATION WHICH SPECIFICALLY PROVIDES THAT THE TECHNICAL INFORMATION AND DATA WILL NOT BECOME A PART OF THE BID AND WILL BE USED SOLELY TO PREDETERMINE COMPLIANCE WITH THE SPECIFICATIONS IS NOT REGARDED AS PERMITTING THE BIDDER TO CHANGE HIS BID AFTER OPENING, AND THE BID DOES NOT HAVE TO BE REJECTED AS DEFECTIVE BECAUSE THE ORIGINAL INFORMATION AND DATA WERE INCOMPLETE.' IT WILL BE SEEN THAT, WHILE THE TECHNICAL INFORMATION AND DATA FURNISHED IN THAT INSTANCE WERE TO BE USED SOLELY IN ANALYZING BIDS IN AN ENDEAVOR TO PREDETERMINE COMPLIANCE WITH THE SPECIFICATIONS, THE FURTHER STATEMENT THAT THE DATA "WILL FORM NO PART OF THE BID" MADE IT CLEAR THAT THE DATA WOULD NOT BECOME A PART OF THE CONTRACT SO THAT THE CONTRACTOR'S OBLIGATION TO FURNISH THE EQUIPMENT WOULD BE GOVERNED OR CONTROLLED PRIMARILY BY THE SPECIFICATIONS RATHER THAN BY THE DETAILS OF THE DATA SUBMITTED. IN THE PRESENT CASE, PARAGRAPH 3.2 OF THE PURCHASE DESCRIPTION, QUOTED ABOVE, REQUIRED THE FURNISHING OF DESIGNS WITH EACH PROPOSAL SO AS TO PERMIT FULL EVALUATION, WITH PARTICULAR ATTENTION BEING GIVEN TO HINGE ARRANGEMENT NESTING FEATURES, MATERIAL ALLOYS AND HEAT TREATMENTS, NESTING CAPABILITY, RIGID AND SWIVEL CASTERS, ETC. THE REQUIRED DATA, THEREFORE, BECAME A PART OF THE BID AND SINCE THE DRAWINGS WHICH YOU FURNISHED FAILED TO MEET THE REQUIREMENTS OF THE SPECIFICATION IN SEVERAL MATERIAL RESPECTS (SEE POST OFFICE DEPARTMENT LETTER OF APRIL 23, 1958, TO HONORABLE HOMER E. CAPEHART), YOUR BID PROPERLY WAS REJECTED BY THE CONTRACTING OFFICER. 30 COMP. GEN. 179. THE CIRCUMSTANCES, WE FIND NO PROPER GROUND FOR QUESTIONING THE ACTION OF THE POST OFFICE DEPARTMENT IN REJECTING YOUR BID FOR THE REASON THAT THE DESCRIPTIVE DATA THAT YOU FURNISHED WAS SO DEFICIENT AS TO MAKE IT IMPOSSIBLE TO DETERMINE THAT THE ARTICLES PROPOSED TO BE FURNISHED BY YOU WOULD PERFORM IN ACCORDANCE WITH THE SPECIFICATIONS. CF. 36 COMP. GEN. 415, WHEREIN IT WAS HELD THAT A BLANKET OFFER TO COMPLY WITH SPECIFICATIONS CANNOT OVERCOME OR RENDER NUGATORY EITHER THE SPECIFIC REQUIREMENT IN AN INVITATION FOR THE FURNISHING OF DESCRIPTIVE DATA WHICH IS DEEMED MATERIAL, OR THE PROVISIONS THEREOF RELATING TO THE EXTENT TO WHICH SUCH DATA WILL BE CONSIDERED ..END :