B-139942, SEP. 14, 1959

B-139942: Sep 14, 1959

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TO THE ENGLISH ELECTRIC EXPORT AND TRADING COMPANY LIMITED: REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 17. "IT IS CLEAR THAT OUR BID IS ENTIRELY RESPONSIVE. THAT WE ARE ENTITLED TO THE AWARD. IT MOST CERTAINLY IS IN THE INTEREST OF THE GOVERNMENT TO ABIDE BY ITS OWN TERMS AND ESPECIALLY WHEN BY DOING SO IT AFFECTS A SAVING FOR ITSELF OF SOME $1. IT APPEARS FROM THE RECORD BEFORE US THAT THE BIDS WERE EVALUATED ON THE BASIS OF (1) EFFICIENCIES HIGHER THAN THE MINIMUM ACCEPTABLE VALUE SPECIFIED. (3) ADDITIONAL 6 PERCENT ADDED TO FOREIGN BIDS WHERE LOW DOMESTIC BIDDER IS IN A LABOR SURPLUS AREA. THE ADJUSTMENTS WERE MADE AS PROVIDED FOR IN PARAGRAPH 6-104.4 OF THE ARMED SERVICES PROCUREMENT REGULATIONS.

B-139942, SEP. 14, 1959

TO THE ENGLISH ELECTRIC EXPORT AND TRADING COMPANY LIMITED:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 17, 1959, AND SUBSEQUENT CORRESPONDENCE, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANY OTHER BIDDER UNDER INVITATION FOR BIDS NO. CIVEMG-40-058-59-9, ISSUED BY THE DEPARTMENT OF THE ARMY FOR THE ALTERNATING CURRENT GENERATORS TO BE INSTALLED AT THE BARKLEY DAM RIVER PLANT.

IN YOUR LETTER OF AUGUST 3, 1959, YOU STATE THAT,"IT IS CLEAR THAT OUR BID IS ENTIRELY RESPONSIVE; THAT WE ARE ENTITLED TO THE AWARD; AND THAT ANY QUESTIONS HERETOFORE RAISED CONCERNING THE LIFTING DEVICE AND PROCEDURE SHOULD BE LEFT TO RESOLUTION AFTER THE AWARD TO US, IN COMPLIANCE WITH THE TERMS OF THE INVITATION. IT MOST CERTAINLY IS IN THE INTEREST OF THE GOVERNMENT TO ABIDE BY ITS OWN TERMS AND ESPECIALLY WHEN BY DOING SO IT AFFECTS A SAVING FOR ITSELF OF SOME $1,300,000.' YOU ALSO REFER TO THE LIFTING DEVICE PROPOSED BY YOU, AND STATE THAT THE ARMY ENGINEERS HERETOFORE APPROVED A SIMILAR DEVICE PREVIOUSLY SUPPLIED BY YOU AND SATISFACTORILY USED AT MCNARY DAM.

WITH RESPECT TO THE REPORTED COST DIFFERENTIAL, IT APPEARS FROM THE RECORD BEFORE US THAT THE BIDS WERE EVALUATED ON THE BASIS OF (1) EFFICIENCIES HIGHER THAN THE MINIMUM ACCEPTABLE VALUE SPECIFIED, (2) 6 PERCENT ADDED TO FOREIGN BIDS, (3) ADDITIONAL 6 PERCENT ADDED TO FOREIGN BIDS WHERE LOW DOMESTIC BIDDER IS IN A LABOR SURPLUS AREA, (4) $68,000 ADDED TO FOREIGN BIDS IN LIEU OF BID ITEM INCLUDED IN DOMESTIC BIDS TO COVER COST OF COMBINED GENERATOR-TURBINE SHAFT ALIGNMENT TEST BEING PERFORMED IN THE UNITED STATES, AND (5) $25,000 ADDED TO FOREIGN BIDS TO COVER ADDITIONAL COST FOR FOREIGN INSPECTION. THE ADJUSTMENTS WERE MADE AS PROVIDED FOR IN PARAGRAPH 6-104.4 OF THE ARMED SERVICES PROCUREMENT REGULATIONS. FOR PURPOSES OF AWARD, THE LOW EVALUATED DOMESTIC BID OF GENERAL ELECTRIC COMPANY EXCEEDS THE LOW EVALUATED FOREIGN BID BY $68,793.48. IN ADDITION, IT IS STATED THAT BASED UPON THE BID DATA FURNISHED WITH YOUR PROPOSAL CERTAIN STRUCTURAL AND MECHANICAL CHANGES WOULD BE REQUIRED TO BE INCORPORATED INTO THE BUILDING AND EQUIPMENT WHICH WOULD RESULT IN AN ESTIMATED INCREASED COST OF $98,525.

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

THE RECORD DISCLOSES THAT AFTER OPENING OF THE BIDS ATTEMPT WAS MADE TO SUPPLY THE DEFICIENCIES IN YOUR BID BY THE SUBMISSION OF ADDITIONAL DRAWINGS AND INFORMATION. UPON RECEIPT AND EXAMINATION OF SUCH INFORMATION AND PROCUREMENT OFFICIALS ADVISED YOU THAT HAD SUCH MATERIAL BEEN FURNISHED WITH YOU BID THE DEVICE OFFERED WOULD NOT HAVE BEEN ACCEPTABLE IN VIEW OF THE HAZARDS INVOLVED IN ITS USE. THE LIFTING OUT OR LOWERING OF THE ROTOR INTO THE STATOR IS ONE OF THE MOST CRITICAL OPERATIONS IN THE ASSEMBLY OR DISMANTLING OF A GENERATOR, AND WE ARE ADVISED THAT UNNECESSARY HAZARDS AS COMPARED TO THE CONVENTIONAL DEVICE ARE INVOLVED IN THE TWO-LIFT ARRANGEMENT PROPOSED BY YOU. WORKMEN HAVE TO BOLT AND UNBOLT THE ROTOR TO THE PLATE ON TOP OF THE SHAFT WHILE THE ROTOR IS SUSPENDED FROM THE CRANE AND IS SOME SIX FEET ABOVE THE STATOR. THE ROTOR IS APPROXIMATELY 38 FEET IN DIAMETER, WEIGHS 216 TONS, AND SUSPENDING IT ON TOP OF A TWO FOOT SHAFT INVOLVES AN UNNECESSARY RISK. THE ASSISTANT FOR DESIGN AND CONSTRUCTION, SAFETY DIVISION, CORPS OF ENGINEERS, BY MEMORANDUM DATED AUGUST 14, 1959, CONFIRMS THESE CONCLUSIONS, AND CITES SEVERAL UNDESIRABLE AND HAZARDOUS FEATURES WHICH WOULD BE ENCOUNTERED THROUGH THE USE OF THE DEVICE OFFERED.

WITH RESPECT TO YOUR ALLEGATION THAT A SIMILAR DEVICE WAS APPROVED FOR USE AT MCNARY DAM, IT IS OUR UNDERSTANDING THAT A COMPARISON OF THE LIFTING DEVICE REQUIRED FOR PLACING A GENERATOR ROTOR WITH THE LIFTING DEVICE USED ON MCNARY FOR PLACING THE UPPER BRACKET IS NOT APPROPRIATE. GENERATOR ROTOR AND AN UPPER BEARING BRACKET ARE NOT SIMILAR PIECES OF EQUIPMENT. THE LIFTING DEVICE WHICH WAS USED AT MCNARY DAM BY THE ENGLISH ELECTRIC EXPORT AND TRADING COMPANY LTD. TO INSTALL THE GENERATOR ROTORS WAS FURNISHED BY THE GOVERNMENT. THE LIFTING GEAR ARRANGEMENT FURNISHED FOR THE UPPER BRACKET WAS NOT SUITABLE FOR AND WAS NOT USED FOR HANDLING THE GENERATOR AT MCNARY. IN VIEW OF THE FOREGOING THE PROCUREMENT OFFICIALS PROPOSES TO AWARD THE CONTRACT TO THE LOWEST RESPONSIVE BIDDER.

THE ACTION CONTEMPLATED BY THE DEPARTMENT OF THE ARMY POSES THE QUESTION WHETHER THE LOWEST OFFER RECEIVED COMPLIES WITH THE SPECIFICATIONS TO SERVE THE ACTUAL NEEDS OF THE GOVERNMENT. THE DRAFTING OF SPECIFICATIONS WHICH AFFORD FAIR COMPETITIVE BIDDING AND THE DUTY TO DETERMINE FACTUALLY WHETHER MATERIALS OR EQUIPMENT OFFERED MEET THOSE SPECIFICATIONS ARE FUNCTIONS OF THE ADMINISTRATIVE OFFICERS RATHER THAN THE GENERAL ACCOUNTING OFFICE. IT IS THE PROVINCE OF THIS OFFICE IN THE SETTLEMENT OF ACCOUNTS TO SEE THAT CONTRACTS INVOLVING THE EXPENDITURE OF PUBLIC FUNDS BE LEGALLY MADE, INCLUDING OBSERVANCE OF THE LAW RESPECTING COMPETITIVE BIDDING, AND TO DETERMINE AS A MATTER OF LAW THE MEANING AND EFFECT OF CONTRACT OR BID TERMS AND SPECIFICATIONS. IN THAT REGARD IT MAY BE OBSERVED THAT THE UNITED STATES IS NOT REQUIRED TO PURCHASE EQUIPMENT MERELY BECAUSE IT IS OFFERED AT THE LOWEST PRICE WHEN, IN THE CONSIDERED JUDGMENT OF THE CONTRACTING AGENCY, THE ACTUAL NEEDS OF THE GOVERNMENT WOULD NOT THEREBY BE MET.

IN THE APPLICATION OF THOSE PRINCIPLES TO THE SUBJECT CASE WE FEEL THAT THE EVALUATION OF THE ADMINISTRATIVE OFFICE CONSTITUTES A BONA FIDE DETERMINATION ADEQUATELY SUPPORTED BY SUBSTANTIAL EVIDENCE. IN SUCH CASES THE COURTS AND THE ACCOUNTING OFFICERS OF THE GOVERNMENT HAVE HELD THAT IN THE ABSENCE OF FAVORITISM, BAD FAITH, OR A COMPLETE DISREGARD OF INDISPUTABLE FACTS, THE EXERCISE OF THE DISCRETION VESTED IN THE PROCUREMENT OFFICIALS IS NOT SUBJECT TO JUDICIAL REVIEW.

IN THE CIRCUMSTANCES, IT MUST BE CONCLUDED THAT YOUR PROTEST FURNISHES NO PROPER BASIS ON WHICH ..END :