B-139876, OCT. 12, 1959

B-139876: Oct 12, 1959

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BOTH BIDDERS WERE REJECTED IN THE FIRST INSTANCE. ALTHOUGH ONLY WAVEGUIDE'S NONRESPONSIVE BID WAS REQUIRED TO BE REJECTED ON THE SECOND INVITATION. BOTH BIDS WERE REJECTED AND THE PROCUREMENT ADVERTISED A THIRD TIME. BIDS RECEIVED IN CONNECTION WITH THE THIRD INVITATION ARE THE SUBJECT OF THE INSTANT CASE. THE EXECUTONE BID IS $50.02 LESS THAN WAVEGUIDE. THE EXECUTONE BID WAS CONSIDERED LOWER. PARAGRAPH 3 OF THE GENERAL CONDITIONS PROVIDES IN PART AS FOLLOWS: "BIDDER * * * WILL FURNISH DESCRIPTIVE CATALOGUE LITERATURE FOR MAJOR COMPONENT ITEMS OF EQUIPMENT * * *. FAILURE TO SUBMIT INFORMATION REQUESTED HEREIN WILL BE CAUSE FOR REJECTION OF BID.'. FROM AN ANALYSIS OF THE DESCRIPTIVE LITERATURE IT APPEARS THAT THE EXECUTONE EQUIPMENT IS DESIGNED WITH ROWS OR BANKS OF BUTTONS IN SUCH A FASHION THAT A RELEASE BUTTON MUST BE DEPRESSED AT THE BOTTOM OF A ROW TO DISENGAGE A SELECTOR BUTTON BEFORE A SECOND SELECTOR BUTTON IN ANOTHER BANK MAY BE ENGAGED.

B-139876, OCT. 12, 1959

TO THE POSTMASTER GENERAL:

IN A LETTER DATED JUNE 23, 1959, WAVEGUIDE ELECTRONICS, THROUGH ITS ATTORNEY, ALEXANDER BOSKOFF, PROTESTED THE AWARD OF A CONTRACT TO EXECUTONE, INC., UNDER POST OFFICE INVITATION NO. 216. THE GENERAL COUNSEL FURNISHED US A FULL REPORT ON AUGUST 3, 1959.

THIS PROCUREMENT FOR AN INTERCOMMUNICATION AND SOUND SYSTEM IN THE OUTGOING MAILS SECTION OF THE MAIN POST OFFICE BUILDING, NEW YORK CITY, HAS REQUIRED THREE SEPARATE INVITATIONS FOR BIDS. IN EACH INSTANCE THE SAME TWO BIDDERS, WAVEGUIDE ELECTRONICS AND EXECUTONE, INC., RESPONDED. BOTH BIDDERS WERE REJECTED IN THE FIRST INSTANCE. ALTHOUGH ONLY WAVEGUIDE'S NONRESPONSIVE BID WAS REQUIRED TO BE REJECTED ON THE SECOND INVITATION, BOTH BIDS WERE REJECTED AND THE PROCUREMENT ADVERTISED A THIRD TIME. BIDS RECEIVED IN CONNECTION WITH THE THIRD INVITATION ARE THE SUBJECT OF THE INSTANT CASE. THE THIRD TIME EXECUTONE BID $43,964, LESS PROMPT PAYMENT DISCOUNT OF 2 PERCENT IN 20 DAYS, 1 PERCENT IN 30 DAYS, AND WAVEGUIDE BID $43,134.74. THE EXECUTONE BID IS $50.02 LESS THAN WAVEGUIDE, PROVIDED THE GOVERNMENT TAKES ADVANTAGE OF THE 20-DAY DISCOUNT PERIOD. SINCE SECTION 7 OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS PROVIDES FOR THE EVALUATION OF BIDS OFFERING PROMPT PAYMENT DISCOUNTS, THE EXECUTONE BID WAS CONSIDERED LOWER.

PARAGRAPH 3 OF THE GENERAL CONDITIONS PROVIDES IN PART AS FOLLOWS:

"BIDDER * * * WILL FURNISH DESCRIPTIVE CATALOGUE LITERATURE FOR MAJOR COMPONENT ITEMS OF EQUIPMENT * * *. FAILURE TO SUBMIT INFORMATION REQUESTED HEREIN WILL BE CAUSE FOR REJECTION OF BID.'

ALSO, PARAGRAPH 20 PROVIDES:

"THE NUMBER OF STATIONS TO WHICH A MASTER STATION SHALL ORIGINATE CALLS SHALL BE LIMITED ONLY BY THE SELECTOR BUTTONS ON THE MASTER STATION. * * * SELECTOR BUTTONS SHALL BE ARRANGED SO THAT DEPRESSING ANY INDIVIDUAL SELECTOR BUTTON SHALL AUTOMATICALLY DISENGAGE ANY PREVIOUSLY DEPRESSED BUTTON.'

FROM AN ANALYSIS OF THE DESCRIPTIVE LITERATURE IT APPEARS THAT THE EXECUTONE EQUIPMENT IS DESIGNED WITH ROWS OR BANKS OF BUTTONS IN SUCH A FASHION THAT A RELEASE BUTTON MUST BE DEPRESSED AT THE BOTTOM OF A ROW TO DISENGAGE A SELECTOR BUTTON BEFORE A SECOND SELECTOR BUTTON IN ANOTHER BANK MAY BE ENGAGED. IN SHORT, IT IS A 2-STAGE OPERATION RATHER THAN THE AUTOMATIC FEATURE REQUIRED IN THE SPECIFICATIONS.

IN A LETTER TO THE POST OFFICE DEPARTMENT, WAVEGUIDE PROTESTED ANY CONSIDERATION OF THE EXECUTONE BID ON THE BASIS, DESCRIBED ABOVE, THAT THE MASTER UNITS DO NOT MEET THE SPECIFICATIONS. ALSO, THE PROTESTANT STATED IN ITS LETTER TO THE DEPARTMENT THAT SPECIFICATIONS FOR SYSTEMS INSTALLED AT GRAND CENTRAL POST OFFICE IN NEW YORK CITY AND THE WASHINGTON CITY POST OFFICE IN THE DISTRICT OF COLUMBIA CONTAINED A PROVISION IDENTICAL TO PARAGRAPH 20, QUOTED ABOVE, YET EXECUTONE INSTALLED EQUIPMENT WITHOUT THE AUTOMATIC FEATURE.

IN THE LETTER OF AUGUST 3, 1959, THE FOLLOWING STATEMENT IS MADE WITH RESPECT TO THE WAVEGUIDE CONTENTION:

"* * * EQUIPMENT FURNISHED BY EXECUTONE AT THE GRAND CENTRAL STATION AND THE WASHINGTON CITY POST OFFICE WAS SO ARRANGED THAT DEPRESSING ANY INDIVIDUAL SELECTOR BUTTON, AUTOMATICALLY DISENGAGES ANY PREVIOUSLY DEPRESSED BUTTON IN THE SAME BANK. THIS WAS DEEMED COMPLIANCE WITH THE REQUIREMENT IN THE LAST SENTENCE OF PARAGRAPH (20).'

ON THE BASIS OF THAT INFORMATION WE UNDERSTAND THE DEPARTMENT'S POSITION TO BE THAT EXECUTONE EQUIPMENT, WHICH HAS A MANDATORY THIRD BUTTON RELEASE FEATURE WHEN THERE IS AN ATTEMPT TO DEPRESS BUTTONS FROM DIFFERENT BANKS IN SUCCESSION, COMPLIES WITH THE SPECIFICATION.

FURTHERMORE, IT APPEARS THAT EXECUTONE SUBMITTED ITS BID ON THE BASIS OF THE NONAUTOMATIC EQUIPMENT. ON TWO PREVIOUS OCCASIONS EXECUTONE SUPPLIED NONAUTOMATIC EQUIPMENT WHEN THE INVITATION REQUIRED FULLY AUTOMATIC EQUIPMENT. IN THE INSTANT CASE EXECUTONE SUBMITTED DESCRIPTIVE CATALOGUE LITERATURE, REQUIRED BY THE INVITATION, WHICH INDICATED EXECUTONE OFFERED OTHER THAN AUTOMATIC EQUIPMENT. FINALLY, AFTER THE PROTEST BUT BEFORE AWARD, EXECUTONE EXPLAINED ITS BID IN A LETTER TO THE DEPARTMENT AS FOLLOWS:

"EXECUTONE HAS INDICATED FULL COMPLIANCE WITH THE POST OFFICE DEPARTMENT'S SPECIFICATIONS. IN THIS CONNECTION, OUR DESCRIPTIVE MATERIAL, SUBMITTED WITH THE BID PAPERS IN NO WAY IMPLIES AN OPERATION OF SELECTOR SWITCHING IN CONFLICT WITH PARAGRAPH 20.'

SINCE THE DESCRIPTIVE MATERIAL PICTURES EQUIPMENT OTHER THAN AUTOMATIC AND IN VIEW OF EXECUTONE'S PREVIOUS CONTRACT EXPERIENCE IT IS CLEAR THAT EXECUTONE BELIEVED ITS NONAUTOMATIC EQUIPMENT TO BE IN COMPLIANCE WITH THE SPECIFICATIONS. AS WE NOTED ABOVE THE DEPARTMENT'S INTERPRETATION OF THE SPECIFICATION IS TO THE SAME EFFECT; NAMELY, THE EXECUTONE NONAUTOMATIC EQUIPMENT IS IN COMPLIANCE.

MOREOVER, WITH FURTHER REFERENCE TO THE LAST SENTENCE OF PARAGRAPH 20, THE GENERAL COUNSEL REFERS IN HIS LETTER TO A TELEGRAM OF PROTEST SENT BY WAVEGUIDE LESS THAN TWO HOURS AFTER BID OPENING AND CONCLUDES THAT WAVEGUIDE UNDERSTOOD THE DEPARTMENT'S INTERPRETATION OF THE DISPUTED LANGUAGE PRIOR TO BID OPENING. WE DISAGREE WITH THE CONCLUSION IN VIEW OF THE WAVEGUIDE BID, WHICH OFFERED COMPLETELY AUTOMATIC RELEASE FEATURES IN ACCORDANCE WITH THE PLAIN, UNAMBIGUOUS WORDS OF THE INVITATION. ALSO, SINCE WAVEGUIDE DID OFFER A FULLY AUTOMATIC SYSTEM, THE VALIDITY OF AN AWARD TO ANY BIDDER NOT OFFERING FULLY AUTOMATIC EQUIPMENT CANNOT DEPEND UPON A PRESUMED MENTAL ATTITUDE HELD BY THE OFFICIALS OF WAVEGUIDE.

THE PURPOSE OF STATUTES REQUIRING THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDER AFTER ADVERTISING IS TO GIVE ALL PERSONS 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. SEE UNITED STATES V. BROOKRIDGE FARM, 111 F.2D 461. WHILE IT IS TRUE THAT ESTABLISHMENT OF SPECIFICATIONS AND THE DETERMINATION OF WHETHER PRODUCTS OFFERED MEET THE SPECIFICATIONS ARE WITHIN THE PROVINCE OF THE ADMINISTRATIVE OFFICE, 38 COMP. GEN. 71, 75, IT IS ALSO TRUE THAT THE CONTRACT AWARDED TO THE SUCCESSFUL BIDDER MUST BE THE SAME OFFERED IN THE INVITATION. 36 COMP. GEN. 181, 183. IT IS SELF-EVIDENT THAT SUCH A CONTRACT CANNOT BE PERFECTED IF, AFTER ADVERTISING FOR BIDS UNDER CERTAIN WELL-DEFINED TERMS AND CONDITIONS, AN AWARD IS MADE FOR A PRODUCT ESSENTIALLY DIFFERENT FROM THE ONE ADVERTISED. SEE 17 COMP. GEN. 554, 558 -559. IN A QUESTION REGARDING COMPLIANCE OF THE PRODUCT WITH THE SPECIFICATIONS, IT IS THE FUNCTION OF THIS OFFICE TO DETERMINE AS A MATTER OF LAW THE MEANING AND EFFECT OF THE TERMS AND SPECIFICATIONS USED. COMP. GEN. 554, 557. MOREOVER, IT IS WITHIN THE PROVINCE OF THIS OFFICE TO DETERMINE WHETHER SPECIFICATIONS ARE SUFFICIENTLY DEFINITE TO INSURE THE FREE AND FULL COMPETITION REQUIRED IN ORDER TO EFFECT A VALID AWARD UNDER THE STATUTES GOVERNING PROCUREMENT BY FORMAL ADVERTISING. 38 COMP. GEN. 190, 191.

BASED UPON THE FACTS WE CONCLUDE THAT PARAGRAPH 20 IS SUFFICIENTLY DEFINITE TO INSURE FREE COMPETITION AND IS CLEAR IN REQUIRING A FULLY AUTOMATIC RELEASE FEATURE ON THE MASTER STATIONS. IT IS EQUALLY CLEAR THAT THE DEPARTMENT CONSIDERED OTHER THAN AUTOMATIC EQUIPMENT AS BEING IN COMPLIANCE WITH THE SPECIFICATIONS. WE THINK IT IS NO LESS EVIDENT THAT EXECUTONE BELIEVED THAT ITS NONAUTOMATIC EQUIPMENT MET THE SPECIFICATIONS AND ACTUALLY OFFERED SUCH EQUIPMENT IN THE BID UNDER CONSIDERATION. THESE CIRCUMSTANCES IT APPEARS THAT COMPETITION WAS NOT SECURED IN THE BIDDING PROCESS SINCE BIDDERS WERE NOT SUBMITTING BIDS ON THE SAME BASIS. THE FACT THAT THE BIDDER WHO RECEIVED THE AWARD LATER AGREED TO CONFORM TO THE SPECIFICATIONS DOES NOT, OF COURSE, JUSTIFY THE PROCEDURE. COMPARE 17 COMP. GEN. 554. WHILE THE AWARD TO EXECUTONE IS NOT THE SAME OFFERED IN THE INVITATION, SINCE WE UNDERSTAND THAT THE SYSTEM IS APPROXIMATELY 70 PERCENT COMPLETED WE WILL NOT DISTURB THE AWARD AS MADE. IT IS OUR VIEW THAT THE CONTRACTOR SHOULD BE REQUIRED TO FURNISH AUTOMATIC EQUIPMENT IN STRICT ACCORDANCE WITH THE SPECIFICATION.