B-140863, DEC. 3, 1959

B-140863, DEC. 3, 1959

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO THE PROTEST FILED WITH US BY GENERAL ELECTRIC COMPANY AGAINST THE AWARD OF A CONTRACT TO WESTINGHOUSE ELECTRIC CORPORATION UNDER INVITATION FOR BIDS NO. 151-40-60, ISSUED BY THE PHILADELPHIA NAVAL SHIPYARD.

THE INVITATION REQUESTED BIDS FOR FURNISHING TWO TURBINE GENERATOR SETS AND RELATED MATERIAL. ONLY TWO BIDS WERE RECEIVED, AND, AFTER BID OPENING ON AUGUST 25, 1959, THE BID OF WESTINGHOUSE WAS EVALUATED AT $1,214,924.05 AND THAT OF GENERAL ELECTRIC AT $1,371,067.50. WHILE THAT EVALUATION OF THE GENERAL ELECTRIC BID INCLUDES ESCALATION OF TEN PERCENT, THE GENERAL ELECTRIC BID WITHOUT ESCALATION IS STILL HIGHER THAN THE WESTINGHOUSE BID.

TWO PRINCIPAL OBJECTIONS ARE MADE BY GENERAL ELECTRIC TO THE WESTINGHOUSE BID. THE FIRST PERTAINS TO A STATEMENT INCLUDED IN A 17 PAGE PROPOSAL ACCOMPANYING THE BID TO THE EFFECT THAT CONDENSER TUBING IS TO BE FURNISHED BY THE GOVERNMENT. THE SECOND RELATES TO ANOTHER STATEMENT IN THAT PROPOSAL, WHICH LISTS CERTAIN GENERATOR CONSTANTS AS FOLLOWS:

CHART

SHORT CIRCUIT RATIO 1.12 APPROX.

TRANSIENT REACTANCE 19 PERCENT APPROX.

SUB-TRANSIENT REACTANCE 15 PERCENT APPROX.

AS TO THE FIRST OBJECTION, IT IS EXPLAINED BY WESTINGHOUSE THAT THE INCLUSION OF THE STATEMENT CONCERNING THE FURNISHING OF TUBING BY THE GOVERNMENT WAS UNINTENTIONAL AND DUE TO OVERSIGHT. THE EXPLANATION FOR THIS INADVERTENCE IS THAT THE WESTINGHOUSE PROPOSAL WAS PRINTED FROM STENCILS WHICH WERE USED FOR A PROPOSAL FURNISHED BY WESTINGHOUSE IN CONNECTION WITH THE PROCUREMENT OF IDENTICAL TURBINE GENERATORS UNDER A PREVIOUS INVITATION ISSUED IN THE FALL OF 1958. UNDER THAT INVITATION THE CONDENSER TUBING WAS FURNISHED BY THE GOVERNMENT. WESTINGHOUSE STATES THAT IN MODIFYING THE STENCILS FOR USE IN CONNECTION WITH THE PRESENT INVITATION, ALL STATEMENTS CONCERNING THE FURNISHING OF TUBING BY THE GOVERNMENT WERE INTENDED TO BE DELETED BUT THAT THIS ONE WAS OVERLOOKED. THERE IS CONVINCING EVIDENCE THAT THIS IS WHAT HAPPENED. FOR EXAMPLE, THE SAME STATEMENT WAS DELETED FROM THE STENCIL FOR ANOTHER PAGE OF THE PROPOSAL. ALSO, THE RECOMMENDED REPAIR PARTS LIST, ACCOMPANYING THE PROPOSAL, LISTS TUBES FOR TWO CONDENSERS AT A PRICE OF $250. WE ARE OF THE OPINION THAT THE WESTINGHOUSE BID WAS COMPUTED ON THE BASIS OF FURNISHING THE TUBING, AS WE ARE ALSO CONVINCED THAT, CONSIDERING ITS BID AS A WHOLE, IT WOULD BE REQUIRED THEREUNDER TO FURNISH SUCH TUBING. WHILE IT COULD BE CONTENDED THAT THE BIDDER'S ACTION CREATED AN AMBIGUITY IN ITS BID, THE RULE IS WELL ESTABLISHED THAT AN AMBIGUITY IN A CONTRACT OR BID IS TO BE CONSTRUED AGAINST THE PARTY WHO CREATED THE AMBIGUITY. SEE 12 AM.JUR., CONTRACTS, SEC. 252; WILLISTON ON CONTRACTS, SECTIONS 37 AND 621; 16 COMP. GEN. 569; B-133769, SEPTEMBER 20, 1957.

THE SECOND OBJECTION RAISED BY GENERAL ELECTRIC REQUIRES CONSIDERATION OF CERTAIN LANGUAGE IN THE INVITATION AND SPECIFICATIONS, AS WELL AS IN THE WESTINGHOUSE PROPOSAL. PAGES 26 AND 27 OF THE INVITATION CONTAIN THE FOLLOWING SECTION:

"DESCRIPTIVE DATA

EACH BIDDER SHALL SUBMIT WITH HIS BID THREE (3) SETS OF DRAWINGS, SKETCHES, CATALOG CUTS OR OTHER DESCRIPTIVE DATA OF THE ITEM HE PROPOSES TO FURNISH. SUCH DATA SHALL INCLUDE, BUT SHALL NOT BE LIMITED TO, AN OUTLINE DRAWING OF THE UNIT GIVING THE OVERALL DIMENSIONS. IT SHOULD INCLUDE THE WEIGHT OF THE UNIT AND A PROPOSED "K" FACTOR FOR DESIGNING THE REDUCTION GEARS. IT SHALL INCLUDE THE AMOUNT OF COOLING WATER FOR CONDENSER REQUIRED PER MINUTE, THE AMOUNT OF CONDENSATE PER MINUTE, THE AMOUNT OF STEAM CONSUMPTION PER K.W.H. AT ALL LOADS, CAPACITY OF GLAND EXHAUST FAN AND CAPACITY OF CONDENSATE AND CIRCULATING PUMPS. IT SHALL ALSO INCLUDE THE DATA REQUIRED BY PARAGRAPH 6.2.1 OF MIL-G-3124C OF 10/14/55 AND AMEND. 1 OF 2/13/58. (IF AVAILABLE A COPY OF THE MASTER DRAWING SHOULD BE INCLUDED.)

"BIDS THAT ARE SUBMITTED WITHOUT DATA CLEARLY SHOWING COMPLIANCE WITH THE SPECIFICATIONS MAY BE REJECTED AS NON-RESPONSIVE.

"NOTWITHSTANDING ANY DATA RECEIVED, MATERIAL DELIVERED HEREUNDER SHALL BE IN STRICT ACCORDANCE WITH APPLICABLE SPECIFICATIONS.'

THE PARTICULAR REQUIREMENT INVOLVED IS THAT FOR DATA REQUIRED BY PARAGRAPH 6.2.1 OF SPECIFICATION MIL-G-3124C. THAT PARAGRAPH IS AS FOLLOWS:

"6.2.1 INVITATIONS FOR BIDS SHOULD STATE THAT IF NO MASTER DRAWING IS AVAILABLE AT THE TIME OF THE BID THE MANUFACTURER SHOULD INCORPORATE IN THE BID THE INFORMATION CONTAINED IN 3.8.2 (A) TO 3/8/2 (C), INCLUSIVE.'

IT MAY BE NOTED THAT, FROM A STRICTLY TECHNICAL STANDPOINT, PARAGRAPH 6/2/1 IS MERELY A STATEMENT AS TO WHAT INFORMATION SHOULD BE REQUIRED BY THE INVITATION IF NO MASTER DRAWING IS SUBMITTED AND DOES NOT IN ITSELF REQUIRE ANY DATA. WHILE THE INVITATION DID NOT SPECIFICALLY REQUIRE THE INFORMATION CONTAINED IN PARAGRAPHS 3.8.2 (A) THROUGH (C) AS SUGGESTED IN PARAGRAPH 6.2.1, WE BELIEVE THIS TO BE THE INTENT OF THE REFERENCE TO THE LATTER PARAGRAPH. PARAGRAPH 3.8.2 (B) PROVIDES THAT MASTER DRAWINGS SHALL INCLUDE THE FOLLOWING MINIMUM DATA:

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"/B) GENERATOR CONSTANTS (DESIGN VALUES):

(1) SHORT-CIRCUIT RATIO (GUARANTEED VALUE ONLY).

(2) TRANSIENT REACTANCE (GUARANTEED VALUE ONLY).

(3) SUB-TRANSIENT REACTANCE (GUARANTEED VALUE ONLY).

IT MAY BE NOTED THAT SPECIFICATION MIL-G-3124C IS SOME 71 PAGES LONG AND INCORPORATES BY REFERENCE 47 OTHER SPECIFICATIONS. PARAGRAPHS 3.2.9, 3.2.10, 3.2.11 THEREOF DEFINE SHORT-CIRCUIT RATIO, SUB TRANSIENT REACTANCE, AND TRANSIENT REACTANCE. PARAGRAPH 3.5.3 PROVIDES THAT THE SHORT-CIRCUIT RATIO SHALL BE NOT LESS THAN 1.0, AND PARAGRAPH 3.5.4 THAT THE MAXIMUM TRANSIENT REACTANCE SHALL BE 21 PERCENT AND THE MINIMUM SUB- TRANSIENT REACTANCE 13.2 PERCENT.

FROM THE FOREGOING IT WILL BE SEEN THAT IF THE STATEMENTS IN THE WESTINGHOUSE PROPOSAL ARE CONSIDERED AS INTEGRAL AND UNALTERABLE CONDITIONS OF ITS BID, THE BID OFFERS GENERATORS WITH A SHORT-CIRCUIT RATIO OF APPROXIMATELY 1.12 RATHER THAN A RATIO OF NOT LESS THAN 1.0, A TRANSIENT REACTANCE OF APPROXIMATELY 19 PERCENT RATHER THAN OF NOT MORE THAN 21 PERCENT, AND A SUB-TRANSIENT REACTANCE OF APPROXIMATELY 15 PERCENT RATHER THAN OF NOT LESS THAN 13.2 PERCENT. IT IS BY NO MEANS CERTAIN THAT THE BID SHOULD BE HELD NON-RESPONSIVE EVEN IF SO CONSIDERED. UNDER THIS CONSTRUCTION WESTINGHOUSE WOULD BE GUARANTEEING VALUES OF "APPROXIMATELY" THE FIGURES GIVEN. WHILE ADMITTEDLY THE QUALIFICATION OF THOSE FIGURES BY THE WORD "APPROXIMATELY" WOULD GIVE WESTINGHOUSE SOME LEEWAY ABOVE OR BELOW, THE ALLOWABLE VARIATION DEPENDS ON THE SUBJECT INVOLVED. ROSS V. KEATON TIRE AND RUBBER, 206 P. 645; AMERICAN TRUST AND SAFE V. ECKHARDT, 162 N.E. 843. WE BELIEVE THERE IS AT LEAST A POSSIBILITY THAT, EVEN WITHOUT MORE, WESTINGHOUSE MIGHT BE HELD TO COMPLIANCE WITHIN THE LIMITS SET BY THE SPECIFICATION. IT MAY ALSO BE NOTED IN THIS CONNECTION THAT IDENTICAL LANGUAGE WAS USED BY WESTINGHOUSE IN ITS PROPOSAL UNDER THE EARLIER INVITATION. THAT BID WAS ACCEPTED AND SO FAR AS WE HAVE BEEN INFORMED NO QUESTION HAS ARISEN AS TO WESTINGHOUSE'S OBLIGATION THEREUNDER TO COMPLY WITH THE REQUIREMENTS OF THE SPECIFICATION.

THERE IS, HOWEVER, ANOTHER BASIS UPON WHICH IT REASONABLY CAN BE ARGUED THAT WESTINGHOUSE DID NOT INTEND TO DEVIATE FROM THE SPECIFICATION REQUIREMENTS AND THAT ACCEPTANCE OF ITS BID WOULD NOT PERMIT IT TO DO SO. THE "DESCRIPTIVE DATA" SECTION OF THE INVITATION CONTAINS THE FOLLOWING SPECIFIC STATEMENT:

"NOTWITHSTANDING ANY DATA RECEIVED, MATERIAL DELIVERED HEREUNDER SHALL BE IN STRICT ACCORDANCE WITH APPLICABLE SPECIFICATIONS.'

THE CLEAR EFFECT OF THIS LANGUAGE, WE BELIEVE, IS TO REQUIRE ANY BIDDER TO PERFORM PRECISELY AS REQUIRED BY THE SPECIFICATIONS UNLESS IT IS PLAIN FROM HIS BID THAT HE HAS SPECIFICALLY REJECTED THIS CONDITION AND DOES NOT INTEND TO BE BOUND THEREBY. WESTINGHOUSE'S BID CONTAINS NO SPECIFIC REJECTION OF THIS CONDITION. AND, AS HAS BEEN INDICATED ABOVE, THE VARIATION PERMISSIBLE BY REASON OF THE USE OF THE WORD "APPROXIMATELY" MAY WELL DEPEND UPON THE PARTICULAR CIRCUMSTANCES INVOLVED. THE "APPROXIMATE" VALUES STATED IN THE WESTINGHOUSE PROPOSAL ARE WITHIN THE LIMITS SET BY THE SPECIFICATION AND DO NOT INDICATE A CLEAR INTENT NOT TO COMPLY WITH THOSE LIMITS. SINCE WESTINGHOUSE MUST BE HELD TO HAVE AGREED TO THE REQUIREMENT THAT MATERIAL DELIVERED SHOULD MEET THE SPECIFICATIONS ABSENT A CLEARLY INDICATED CONTRARY INTENT, WE BELIEVE ITS BID AS SUBMITTED SHOULD NOT BE CONSIDERED NONRESPONSIVE.

IT SHOULD ALSO BE NOTED THAT SUBSEQUENT TO BID OPENING WESTINGHOUSE STATED UNEQUIVOCALLY THAT IT WOULD GUARANTEE THE VALUES STATED IN ITS PROPOSAL. THERE IS THEREFORE NOT THE SLIGHTEST QUESTION OF ITS LIABILITY TO MEET THE REQUIREMENTS OF THE SPECIFICATION IN THE EVENT ITS BID IS ACCEPTED. WHILE IT IS QUITE TRUE THAT BIDS MAY NOT BE MATERIALLY ALTERED AFTER BID OPENING, WE CONSIDER THIS SUBSEQUENT STATEMENT BY WESTINGHOUSE TO BE NO MORE THAN A CONFIRMATION OF ITS OBLIGATIONS UNDER ITS BID AS ORIGINALLY SUBMITTED. FURTHERMORE, EVEN THOUGH IT IS NOT A CONTROLLING CONSIDERATION IN MATTERS OF THIS NATURE, BOTH GENERAL ELECTRIC AND WESTINGHOUSE HAVE URGED STRONGLY THAT THE PROCUREMENT NOT BE READVERTISED.

IN VIEW OF THE RECORD BEFORE US, IT IS OUR CONCLUSION THAT THE WESTINGHOUSE BID MAY BE CONSIDERED RESPONSIVE TO THE INVITATION.