B-142273, MAR. 30, 1960

B-142273, MAR. 30, 1960

TO HONORABLE E. R. QUESADA, ADMINISTRATOR, FEDERAL AVIATION AGENCY:

REFERENCE IS MADE TO LETTERS DATED MARCH 21 AND 24, 1960, WITH ENCLOSURES, FROM THE ACTING CHIEF, MATERIEL CONTRACTS BRANCH, BUREAU OF FACILITIES AND MATERIEL, RELATIVE TO THE PROTEST OF POWERCON CORPORATION AGAINST THE AWARD OF A CONTRACT TO WESTINGHOUSE ELECTRIC CORPORATION UNDER INVITATION NO. O-3353B1.

THE INVITATION INVOLVED REQUESTED BIDS COVERING THE ESTIMATED REQUIREMENTS OF THE FEDERAL AVIATION AGENCY FOR AUTOMATIC POWER TRANSFER SWITCHES. THE GOVERNMENT REQUIRED DELIVERY OF ONE UNIT AT THE CONTRACTOR'S PLANT FOR INSPECTION AND TESTS WITHIN 60 CALENDAR DAYS FROM THE EFFECTIVE DATE OF THE NOTICE TO PROCEED. THE REMAINDER OF THE UNITS WERE TO BE DELIVERED F.O.B. DESTINATION LILLARD PARK, OKLAHOMA, AT THE MINIMUM RATE OF FIVE UNITS EACH 30-CALENDAR-DAY PERIOD THEREAFTER UNTIL COMPLETION. THE INVITATION AND SUPPLEMENTAL GENERAL PROVISIONS, MADE A PART THEREOF, PROVIDE, IN PERTINENT PART, AS FOLLOWS:

"VI. LIQUIDATED DAMAGES: LIQUIDATED DAMAGES SHALL BE CHARGED AT THE FOLLOWING RATES PURSUANT TO THE PROVISIONS OF CLAUSE 11 OF STANDARD FORM 32 (GENERAL PROVISIONS - SUPPLY CONTRACT), AS AMENDED BY CLAUSE 37 OF THE SUPPLEMENTAL GENERAL PROVISIONS, UNTIL THE CONTRACTOR HAS DEMONSTRATED TO THE SATISFACTION OF THE GOVERNMENT THAT THE CONTRACT ITEMS COMPLY WITH THE TECHNICAL REQUIREMENTS OF THE CONTRACT:

CHART

"FOR THE UNIT REQUIRED BY PARAGRAPH (A)

OF CLAUSE II HEREOF $250.00 PER CALENDAR DAY

"FOR THE MANUSCRIPT COPY OF

THE INSTRUCTION BOOK REQUIRED BY

PARAGRAPH (B) OF CLAUSE II HEREOF 2.00 PER CALENDAR DAY

"FOR THE UNITS REQUIRED BY

PARAGRAPH (C) OF CLAUSE II HEREOF 25.00 PER UNIT PER

CALENDAR DAY"

"29. SUSPENSION OF WORK: THE GOVERNMENT SPECIFICALLY RESERVES THE RIGHT TO SUSPEND THE WORK WHOLLY, OR IN PART, BY WRITTEN OR TELEGRAPHIC STOP ORDER FOR SUCH PERIOD AS IS NECESSARY FOR THE PROTECTION OF THE GOVERNMENT'S INTEREST. SUCH STOP ORDERS SHALL REMAIN IN EFFECT UNTIL RELEASED IN WRITING OR BY TELEGRAM. THE GOVERNMENT ASSUMES NO LIABILITY FOR DAMAGES OR LOSS OF ANTICIPATED PROFITS FROM SUCH STOPPAGE OF WORK. THE RIGHT OF THE CONTRACTOR TO AN EXTENSION OF TIME BECAUSE OF THE STOP ORDER SHALL BE DETERMINED IN ACCORDANCE WITH CLAUSE II ENTITLED "DEFAULT" OF STANDARD FORM 32, GENERAL PROVISIONS (SUPPLY CONTRACT), AS AMENDED BY CLAUSE 37 HEREOF.'

THE ABSTRACT OF BIDS INDICATES THAT WESTINGHOUSE SUBMITTED THE LOWEST BID. THE NEXT LOWEST BID WAS SUBMITTED BY POWERCON. WESTINGHOUSE FORWARDED ITS BID BY LETTER OF FEBRUARY 15, 1960, STATING THAT "THIS LETTER SHOULD BE CONSIDERED A SUPPLEMENT TO OUR BID.' ALSO, IT WAS STATED IN THE LETTER AS FOLLOWS:

"WE BELIEVE CLAUSE VI, LIQUIDATED DAMAGES, IS INTERPRETED AS FOLLOWS:

"THE CONTRACTOR IS RESPONSIBLE FOR A REASONABLE PERIOD OF TIME FOR TESTING THIS PRODUCT AND DEMONSTRATING THAT THE EQUIPMENT MEETS THE SPECIFICATIONS. THE CONTRACTOR IS NOT RESPONSIBLE FOR DELAYS ON THE PART OF THE GOVERNMENT IN FURNISHING AN INSPECTOR OR FOR GUARANTEEING THE SPECIFICATIONS TO PROVIDE THEIR INTENDED FUNCTION. THE TIME PERIOD FOR DELIVERY, ON WHICH LIQUIDATED DAMAGES IS COMPUTED, ENDS WITH THE ACCEPTANCE OF THE EQUIPMENT BY THE INSPECTOR AT THE CONTRACTOR'S PLANT AND NOT WITH DELIVERY TO OKLAHOMA CITY, AS ON PREVIOUS INVITATIONS. THIS APPLIES TO ALL UNITS.

"SUPPLEMENTAL GENERAL PROVISION 29 "SUSPENSION OF WORK" APPEARS ON THE SURFACE TO BE A VERY UNFAIR CLAUSE. HOWEVER, WE UNDERSTAND THIS CLAUSE MAY BE INTERPRETED TO MEAN SUSPENSION FOR A REASONABLE PERIOD OF TIME (SAY THIRTY DAYS), AND THAT THE GOVERNMENT WILL ASSUME RESPONSIBILITY FOR DAMAGES SUFFERED BY THE CONTRACTOR RESULTING FROM AN EXTENDED DELAY CAUSED BY THE GOVERNMENT.'

WESTINGHOUSE BY ITS LETTER OF FEBRUARY 15, 1960, CONDITIONED ITS BID ON ALL UNITS BY LIMITING THE COMPUTATION OF THE PERIOD OF DELAY TO THE DATE OF THE ACCEPTANCE OF THE EQUIPMENT AT THE CONTRACTOR'S PLANT AND NOT TO THE DATE OF DELIVERY TO THE DESTINATION PROVIDED IN THE INVITATION. ALSO, WESTINGHOUSE LIMITED THE PERIOD OF TIME FOR WHICH THE WORK MIGHT BE SUSPENDED AND EXPRESSLY PROVIDED THAT THE GOVERNMENT "WILL ASSUME RESPONSIBILITY FOR DAMAGES SUFFERED BY THE CONTRACTOR RESULTING FROM AN EXTENDED DELAY CAUSED BY THE GOVERNMENT.'

WE HAVE HELD THAT A DEVIATION FROM ADVERTISED REQUIREMENTS IS MATERIAL IF IT GOES TO THE SUBSTANCE OF THE BID SO AS TO AFFECT EITHER THE PRICE, QUANTITY, OR QUALITY OF THE ARTICLES OFFERED, AND, THEREFORE, IS PREJUDICIAL TO THE RIGHTS OF THE OTHER BIDDERS. 30 COMP. GEN.179; 31 ID. 660; 33 ID. 421. IT CLEARLY APPEARS THAT THE CHANGES IN THE CONTRACT TERMS PROPOSED BY WESTINGHOUSE ARE, AS HERETOFORE INDICATED, OF SUCH SUBSTANCE AS TO HAVE AN EFFECT ON THE CONTRACT PRICE. TO ACCEPT THE BIDDER'S PROPOSAL UNDER THE CIRCUMSTANCES WOULD BE UNFAIR TO THOSE BIDDERS WHO HAVE NOT HAD AN OPPORTUNITY SIMILARLY TO QUALIFY THEIR BIDS. SEE 37 COMP. GEN. 110; ID. 410.

ACCORDINGLY, THE BID OF WESTINGHOUSE SHOULD BE REJECTED AS NONRESPONSIVE.