B-141933, MAR. 24, 1960

B-141933: Mar 24, 1960

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THE LOW BID ON THE ALTERNATE WAS SUBMITTED BY THE C. THE SECOND LOW BID WAS SUBMITTED BY THE NIXON MACHINERY AND SUPPLY CO. AFTER CONSIDERATION OF THE QUALITY AND THE CHARACTERISTICS OF THE PRODUCTS OFFERED IT WAS DETERMINED TO PROCURE THE ITEM FROM NIXON AND AWARD WAS MADE TO THAT FIRM ON JANUARY 27. IS OUR UNDERSTANDING THAT NO QUESTION WAS RAISED WITH RESPECT TO WHETHER EITHER THE LOW BID OR THE SECOND LOW BID MET THE SPECIFICATIONS. IT IS YOUR CONTENTION. THAT AWARD SHOULD HAVE BEEN MADE TO THE JOHNSON FIRM AS THE LOWEST RESPONSIBLE BIDDER MEETING THE SPECIFICATIONS. THE GENERAL RULE WITH RESPECT TO PROCUREMENTS ADVERTISED UNDER THE GENERAL STATUTORY REQUIREMENT IS THAT AWARD MAY BE MADE ONLY TO THE LOW RESPONSIBLE BIDDER MEETING THE ADVERTISED SPECIFICATIONS.

B-141933, MAR. 24, 1960

TO KOEHRING COMPANY:

WE REFER AGAIN TO YOUR TELEGRAMS OF FEBRUARY 8, 1960, AND TO YOUR LETTER OF FEBRUARY 16, 1960, PROTESTING THE REJECTION OF THE LOW BID SUBMITTED BY THE C. S. JOHNSON COMPANY, A DIVISION OF KOEHRING COMPANY, PURSUANT TO INVITATION NO. 37-71388 ISSUED DECEMBER 15, 1959, BY THE TENNESSEE VALLEY AUTHORITY FOR THE PURCHASE OF A CONCRETE MIXING PLANT.

SCHEDULE I OF THE INVITATION CALLED FOR A PLANT AS DESCRIBED IN THE ACCOMPANYING TVA SPECIFICATIONS AND TVA DRAWING NO. 64-CF-3-204-M1. SCHEDULE II CALLED FOR AN ALTERNATE PLANT IN ACCORDANCE WITH THE SPECIFICATIONS AND TVA DRAWING NO. 64-CP-3-204-N2. THE TVA DETERMINED TO MAKE AN AWARD ON THE BASIS OF THE ALTERNATE. THE LOW BID ON THE ALTERNATE WAS SUBMITTED BY THE C. S. JOHNSON COMPANY AT $125,348. THE SECOND LOW BID WAS SUBMITTED BY THE NIXON MACHINERY AND SUPPLY CO., INC., IN THE AMOUNT OF $129,768.77. AFTER CONSIDERATION OF THE QUALITY AND THE CHARACTERISTICS OF THE PRODUCTS OFFERED IT WAS DETERMINED TO PROCURE THE ITEM FROM NIXON AND AWARD WAS MADE TO THAT FIRM ON JANUARY 27, 1960. IS OUR UNDERSTANDING THAT NO QUESTION WAS RAISED WITH RESPECT TO WHETHER EITHER THE LOW BID OR THE SECOND LOW BID MET THE SPECIFICATIONS. IT IS YOUR CONTENTION, THEREFORE, THAT AWARD SHOULD HAVE BEEN MADE TO THE JOHNSON FIRM AS THE LOWEST RESPONSIBLE BIDDER MEETING THE SPECIFICATIONS.

THE GENERAL RULE WITH RESPECT TO PROCUREMENTS ADVERTISED UNDER THE GENERAL STATUTORY REQUIREMENT IS THAT AWARD MAY BE MADE ONLY TO THE LOW RESPONSIBLE BIDDER MEETING THE ADVERTISED SPECIFICATIONS, EVEN THOUGH A SOMEWHAT HIGHER BIDDER HAS OFFERED A PRODUCT DEEMED TO BE SUPERIOR. COMP. GEN. 991. THE BASIS FOR SUCH RULE IS THAT THE FREE AND OPEN COMPETITION REQUIRED BY THE USUAL ADVERTISING STATUTES CANNOT BE OBTAINED UNLESS ALL BIDDERS ARE BIDDING ON A COMMON BASIS. IN THIS INSTANCE, NOTWITHSTANDING THAT COMMON SPECIFICATIONS ARE BEING APPLIED, THE CONSIDERATION OF QUALITY AS WELL AS PRICE WITHOUT SOME OBJECTIVE MEANS OF EQUATING THE TWO IN EFFECT MEANS THAT THE BIDDERS ARE NOT BIDDING AGAINST THE SAME STANDARDS. HOWEVER, THE COMPETITIVE BID REQUIREMENT IS A CREATURE OF STATUTE AND IS FOR APPLICATION ONLY TO THE EXTENT ESTABLISHED BY LAW.

THE INSTANT PROCUREMENT IS WITHIN THE PROVISIONS OF SECTION 9 (B) OF THE TVA ACT, AS AMENDED, 16 U.S.C. 831H, WHICH PROVIDES IN PERTINENT PART AS FOLLOWS:

"ALL PURCHASES AND CONTRACTS FOR SUPPLIES OR SERVICES, EXCEPT FOR PERSONAL SERVICES, MADE BY THE CORPORATION, SHALL BE MADE AFTER ADVERTISING, IN SUCH MANNER AND AT SUCH TIMES SUFFICIENTLY IN ADVANCE OF OPENING BIDS, AS THE BOARD SHALL DETERMINE TO BE ADEQUATE TO INSURE NOTICE AND OPPORTUNITY FOR COMPETITION * * * PROVIDED FURTHER, THAT IN COMPARING BIDS AND IN MAKING AWARDS THE BOARD MAY CONSIDER SUCH FACTORS AS RELATIVE QUALITY AND ADAPTABILITY OF SUPPLIES OR SERVICES * * *.'

IN A REPORT OF FEBRUARY 23, 1960, FROM TVA IT IS STATED THAT THE DIFFERENCE IN PRICE BETWEEN THE TWO BIDS IN QUESTION WAS DEEMED TO HAVE BEEN MORE THAN OFFSET BY CERTAIN FACTORS INCLUDING THE FOLLOWING:

"THE CHAIN BELT PRODUCT OFFERED BY NIXON IS EQUIPPED WITH A TURN HEAD OVER THE AGGREGATE BINS WHICH IS AUTOMATICALLY OPERATED BY REMOTE CONTROL. THE TURN HEAD IN THE KOEHRING PRODUCT OFFERED BY C. S. JOHNSON IS MANUALLY OPERATED.

"THE CHAIN BELT PRODUCT IS EQUIPPED WITH A FLOP GATE ABOVE THE MIXER FOR CEMENT AND FLY ASH WHICH IS ALSO AUTOMATICALLY OPERATED. THE FLOP GATE IN THE KOEHRING PRODUCT IS MANUALLY OPERATED.

"THE AIR COMPRESSOR IN THE CHAIN BELT PRODUCT IS 15 HORSEPOWER, THAT IN THE KOEHRING PRODUCT 7 1/2 HORSEPOWER.

"THE CONVEYOR IDLERS IN THE CHAIN BELT PRODUCT ARE 5 INCHES IN DIAMETER, THOSE IN THE KOEHRING PRODUCT 4 INCHES.

"THE DRUM IS THE CHAIN BELT MIXER IS IN THREE REMOVABLE SECTIONS. THE KOEHRING MIXER HAS A ONE-PIECE WELDED DRUM NOT CAPABLE OF DISASSEMBLY, WHICH IN THE OPINION OF OUR ENGINEERS WOULD MAKE FOR MORE COSTLY MAINTENANCE.

"THE MIXER IN THE CHAIN BELT PRODUCT HAS A REAR VENT WHICH ALLOWS AIR TO ESCAPE WHEN THE MIXER IS CHARGED. THE KOEHRING PRODUCT HAS NO REAR VENT, AND SINCE THE MIXER CHARGES AND DISCHARGES FROM THE SAME OPENING, AIR DISPLACED WHEN THE MIXER IS CHARGED MUST ESCAPE, ALONG WITH FLY ASH AND CEMENT DUST, FROM THE TOP OF THE MIXER OPENING. AS STATED BY OUR ENGINEERS IN THEIR RECOMMENDATION FOR AWARD DATED JANUARY 15, 1960, A COPY OF WHICH IS AMONG THE DOCUMENTS ENCLOSED, IN AN OPERATION USING FLY ASH THIS FEATURE WOULD PRESENT A SERIOUS DUST CONTROL PROBLEM, AND THE KOEHRING PRODUCT WOULD FOR THIS REASON BE "INADEQUATE AND UNSUITABLE" FOR TVA'S INTENDED USE. KOEHRING HAS CONTENDED, ALTHOUGH THE C. S. JOHNSON BID DOCUMENTS DID NOT SO STATE, THAT THE ELECTRIC CONTROLS FOR THEIR MIXER ARE HOUSED IN A DUSTPROOF CASE AND WOULD THEREFORE NOT BE AFFECTED BY DUST. ASSUMING THAT THIS IS TRUE, IT WOULD STILL NOT SOLVE THE PROBLEM OF THE EFFECT OF DUST ON THE OPERATORS AND OTHER PERSONNEL AND EQUIPMENT IN THE AREA NEAR THE MIXER. KOEHRING ALSO CONTENDS THAT THEIR MIXER WOULD IN FACT PRODUCE LESS DUST THAN A REAR-VENTED MIXER. ON THIS POINT, BASED ON OUR PAST EXPERIENCE IN THE HANDLING OF FLY ASH, WE ARE OF THE OPINION THAT THEY ARE CLEARLY WRONG.'

IN VIEW OF THE QUOTED CONCLUSIONS OF THE TVA AND OF THE CITED PROVISION OF LAW THERE APPEARS TO BE NO BASIS UPON WHICH WE COULD LEGALLY OBJECT TO THE ACTION TAKEN IN THIS MATTER IN THE ABSENCE OF A CLEAR SHOWING, WHICH HAS NOT BEEN MADE OR EVEN ALLEGED, THAT THE SELECTION OF THE SUCCESSFUL BIDDER WAS MOTIVATED BY BAD FAITH OR FRAUD.