B-144138, DEC. 13, 1960

B-144138: Dec 13, 1960

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BIDDERS WERE REQUIRED TO FURNISH INFORMATION RESPECTING THE WARRANTED CHARACTERISTICS OF THE BOILER UNIT. THAT IS. THE FOLLOWING SPECIFIC FACTORS WILL BE USED FOR THE PURPOSE OF COMPARISON OF BIDS: "/1) LUMP SUM PRICE. "/2) COST OF SERVICES OF ERECTING ENGINEER (SEE PARAGRAPH B-17) "/3) DELIVERY TIME IF IN EXCESS OF THE DESIRED TIME SPECIFIED IN THE APPROPRIATE SCHEDULE. BIDS WERE PUBLICLY OPENED ON JULY 26. YOUR BID ALSO WAS THE LOWEST RECEIVED. YOU CLAIMED THAT AN ERROR HAD BEEN MADE IN YOUR FUEL CONSUMPTION GUARANTEE IN THAT THE 510 GALLONS PER HOUR FIGURE ON PAGE VI OF YOUR BID SHOULD HAVE BEEN 560 GALLONS PER HOUR. YOUR BID UNDER THE EVALUATION CRITERIA OF PARAGRAPH B-6 WAS INCREASED FROM $5.

B-144138, DEC. 13, 1960

TO STRUTHERS WELLS CORPORATION:

BY LETTER DATED SEPTEMBER 29, 1960, WITH ENCLOSURES, YOU PROTESTED AGAINST THE AWARD OF A CONTRACT TO THE SPRINGFIELD BOILER COMPANY UNDER INVITATION FOR BIDS (CONTRACT VI-33) DATED JUNE 28, 1960, ISSUED BY THE VIRGIN ISLANDS CORPORATION, FOR THE FURNISHING OF A BOILER PLANT AT ST. THOMAS, VIRGIN ISLANDS.

THE INVITATION REQUIRED BIDDERS TO SUBMIT A LUMP-SUM BID FOR THE BOILER PLANT AND, FOR THE PURPOSE OF EVALUATING BIDS, THE TOTAL AMOUNTS FOR THE SERVICES OF AN ERECTING ENGINEER. ALSO, FOR BID EVALUATION PURPOSES, BIDDERS WERE REQUIRED TO FURNISH INFORMATION RESPECTING THE WARRANTED CHARACTERISTICS OF THE BOILER UNIT, THAT IS, FUEL OIL, ELECTRIC POWER AND SUPERHEATED STEAM CONSUMPTION. PARAGRAPH B-6 OF THE SPECIAL REQUIREMENTS OF THE INVITATION PROVIDED, IN PERTINENT PART:

"COMPARISON OF BIDS

"WHENEVER APPLICABLE, EQUALIZING ELEMENTS OR FACTORS NOT SPECIFICALLY MENTIONED OR PROVIDED FOR HEREIN, SUCH AS THE COST OF TRANSPORTATION, OF INSPECTION (INCLUDING SALARIES, TRAVEL, AND SUBSISTENCE EXPENSES), OR OF ANY OTHER ELEMENT OR FACTOR IN ADDITION TO THAT OF PRICE WHICH WOULD AFFECT THE FINAL COST TO THE GOVERNMENT, MAY BE TAKEN INTO CONSIDERATION IN MAKING AWARD OF CONTRACT.

"/A) IN ADDITION TO THE FOREGOING, THE FOLLOWING SPECIFIC FACTORS WILL BE USED FOR THE PURPOSE OF COMPARISON OF BIDS:

"/1) LUMP SUM PRICE.

"/2) COST OF SERVICES OF ERECTING ENGINEER (SEE PARAGRAPH B-17)

"/3) DELIVERY TIME IF IN EXCESS OF THE DESIRED TIME SPECIFIED IN THE APPROPRIATE SCHEDULE. (SEE PARAGRAPH B-9)

"/4) UTILITY CONSUMPTION FOR 7,000 FULL DAYS (24 HOURS) OF OPERATION UNDER CAPACITY CONDITIONS SPECIFIED IN BIDDING SCHEDULE, AS FOLLOWS:

"/A) FUEL OIL AT THE RATE OF FIVE AND ONE-HALF CENTS (5.5 CENTS) PER GALLON.

"/B) ELECTRIC POWER AT THE RATE OF EIGHT-TENTHS CENTS (0.8 CENTS) PER KILOWATT HOUR.

"/C) SUPERHEATED STEAM AT THE RATE OF FIFTY CENTS (50 CENTS) PER THOUSAND POUNDS.'

BIDS WERE PUBLICLY OPENED ON JULY 26, 1960, AND IT APPEARED THAT YOU SUBMITTED THE LOWEST LUMP-SUM BID FOR THE BOILER UNIT IN THE AMOUNT OF $179,904. IN ADDITION, ON THE BASIS OF THE EVALUATION OF YOUR BID UNDER PARAGRAPH B-6, YOUR BID ALSO WAS THE LOWEST RECEIVED. AS INDICATED ON THE ABSTRACT OF BIDS, YOUR BID, AS EVALUATED UNDER THE PROVISIONS OF PARAGRAPH B-6, TOTALED $5,132,844 AS COMPARED TO THE NEXT LOW TOTAL EVALUATED BID OF $5,242,265 SUBMITTED BY THE SPRINGFIELD BOILER COMPANY.

ON JULY 27, 1960, THE DAY FOLLOWING THE BID OPENING, YOU CLAIMED THAT AN ERROR HAD BEEN MADE IN YOUR FUEL CONSUMPTION GUARANTEE IN THAT THE 510 GALLONS PER HOUR FIGURE ON PAGE VI OF YOUR BID SHOULD HAVE BEEN 560 GALLONS PER HOUR. HOWEVER, BY LETTER DATED AUGUST 15, 1960, YOUR MR. SCORDATO ADVISED THAT THE FUEL CONSUMPTION SHOULD PROPERLY BE 557 GALLONS PER HOUR AND THAT THE ELECTRIC POWER AND SUPERHEATED STEAM CONSUMPTION SHOULD BE CORRECTED FROM 624 KW.-HR. TO 430 KW.-HR. AND FROM 2400 LBS/HR. TO 1326 LBS/HR., RESPECTIVELY. IN VIEW THEREOF, THE VIRGIN ISLANDS CORPORATION REQUESTED ITS ARCHITECT-ENGINEER--- THE BECHTEL CORPORATION--- TO EVALUATE THESE REVISED CONSUMPTION FIGURES. ON THE BASIS OF YOUR REVISED FUEL CONSUMPTION GUARANTEE FIGURE OF 557 GALLONS PER HOUR, YOUR BID UNDER THE EVALUATION CRITERIA OF PARAGRAPH B-6 WAS INCREASED FROM $5,132,844 TO $5,567,124 AND, ON THE BASIS OF ALL YOUR REVISED CONSUMPTION FIGURES, YOUR BID WAS AGAIN RE-EVALUATED TO SHOW A TOTAL EVALUATED BID PRICE OF $5,462,064.

BY LETTER DATED AUGUST 23, 1960, THE VIRGIN ISLANDS CORPORATION ADVISED MR. SCORDATO THAT TWO ALTERNATIVES EXISTED WITH RESPECT TO THE CLAIMED ERRORS IN BID; (1) TO ENTER INTO A CONTRACT ON THE BASIS OF YOUR BID AS SUBMITTED; OR (2) TO SUBMIT CLEAR AND CONVINCING EVIDENCE AS TO THE EXISTENCE OF THE MISTAKES, REFERRING TO THE PERTINENT PROVISIONS OF SECTION 1.2.406-3 (A) (1) OF THE FEDERAL PROCUREMENT REGULATIONS. SEPTEMBER 6, 1960, YOU FURNISHED AN EXPLANATION OF THE FUEL CONSUMPTION ERROR AND REQUESTED THAT YOUR ORIGINAL CONSUMPTION FIGURE BE WITHDRAWN AND THAT AN AWARD BE MADE TO YOU ON THE BASIS OF YOUR REVISED CONSUMPTION FIGURES. SUBSEQUENTLY, ON THE BASIS OF EVIDENCE SUBMITTED, IT WAS CONCLUDED BY THE VIRGIN ISLANDS CORPORATION, AFTER SECURING THE VIEWS OF THE ARCHITECT-ENGINEER, THAT CLEAR AND CONVINCING EVIDENCE OF ERROR HAD BEEN FURNISHED SO AS TO JUSTIFY WITHDRAWAL OF YOUR BID. SINCE THE SPRINGFIELD BOILER COMPANY HAD SUBMITTED THE NEXT LOWEST BID, AS EVALUATED UNDER PARAGRAPH B-6, QUOTED ABOVE, WHICH HAD BEEN DETERMINED TO BE ACCEPTABLE FROM AN ENGINEERING STANDPOINT, AWARD WAS MADE TO THAT BIDDER, EFFECTIVE SEPTEMBER 22, 1960.

YOU PROTEST THE AWARD AS MADE ON THE FOLLOWING BASES:

1. THAT SPRINGFIELD'S FUEL CONSUMPTION FIGURE OF 528.5 GALLONS PER HOUR WAS BASED UPON ERRONEOUS ASSUMPTIONS;

2. THAT THE INFORMATION REGARDING FUEL OIL CONSUMPTION WAS FURNISHED TO SPRINGFIELD BOILER BUT NOT TO THE OTHER BIDDERS; AND

3. THAT THERE WAS SOME CONNECTION BETWEEN THE SELECTION OF THE DISTILLATION UNIT AND THE BOILER IN CONNECTION WITH SPRINGFIELD BOILER'S FUEL CONSUMPTION GUARANTEE.

IT IS CLEAR THAT YOUR BID, AS REVISED BECAUSE OF ERROR, WAS NOT THE LOWEST BID RECEIVED. THAT BEING THE CASE, YOUR CORRECTED BID COULD NOT HAVE BEEN CONSIDERED FOR AWARD UNDER THE COMPETITIVE BIDDING STATUTE CODIFIED AT 41 U.S.C. 253 (B) WHICH REQUIRES THAT AN AWARD BE MADE "TO THAT RESPONSIBLE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.' IT IS EQUALLY TRUE THAT NO VALID AWARD COULD HAVE BEEN MADE TO YOU UNDER YOUR ORIGINAL BID SINCE THE GOVERNMENT WAS ON NOTICE OF ERROR, ALLEGED AND SATISFACTORILY EXPLAINED. MOFFETT HODGKINS AND CLARKE CO. V. ROCHESTER, 178 U.S. 73; 37 COMP. GEN. 579, 582.

SPECIFICALLY, THE ARCHITECT-ENGINEER CONSIDERED YOUR ALLEGATIONS AND REPORTED TO THE VIRGIN ISLANDS CORPORATION AS FOLLOWS:

"TITUSVILLE IN THEIR LETTER OF SEPTEMBER 29 REFER TO FUEL CONSUMPTION CALCULATIONS, STATING THEY USED 150,000 BTU PER GALLON OF FUEL OIL IN COMPUTING THEIR FUEL OIL CONSUMPTION. SPRINGFIELD BOILER IN THEIR PROPOSAL STATED THEY HAD USED 155,300 BTU PER GALLON IN COMPUTING THEIR FUEL CONSUMPTION. EITHER OF THESE VALUES IS WITHIN THE BTU CONTENT RANGE FOR COMMERCIAL FUEL OIL.

"OBVIOUSLY IF WE TAKE THE LOWER VALUE OF BTU CONTENT AND MULTIPLY BY THE FUEL OIL CONSUMPTION GUARANTEED, WE OBTAIN A LOWER BTU INPUT TO THE BOILER AND THUS A HIGHER APPARENT EFFICIENCY. SINCE SPRINGFIELD STATED IN THEIR PROPOSAL THAT THEIR GUARANTEED FUEL OIL CONSUMPTION WAS BASED ON 155,300 BTU/GAL FUEL OIL, TITUSVILLE ERRED IN USING 150,000 BTU/GAL IN THEIR CALCULATIONS CHECKING THE SPRINGFIELD EFFICIENCY.

"BASED ON THE ABOVE FACTS, ANY DISCUSSION RELATIVE TO AN EFFICIENCY OF 89 PERCENT FOR A PACKAGE BOILER IS IRRELEVANT AND INCONSEQUENTIAL.

"* * * THE SPRINGFIELD BOILER FUEL CONSUMPTION FIGURE IS BASED SOLELY ON INFORMATION SUBMITTED BY THEM IN THEIR PROPOSAL. THERE HAVE BEEN NO DISCUSSIONS OR DISCLOSURES RELATIVE TO THE FUEL OIL CONSUMPTION BETWEEN ANYONE ASSOCIATED WITH BECHTEL AND SPRINGFIELD OR CLEAVER BROOKS, PRIOR TO THE AWARD.

"WE ARE AT A LOSS TO UNDERSTAND WHY TITUSVILLE SHOULD IMPLY THERE IS SOME CONNECTION BETWEEN THE SELECTION OF THE DISTILLATION UNIT AND THE BOILERS, WHICH IS REFLECTED IN THE FUEL CONSUMPTION GUARANTEED BY SPRINGFIELD. CAN STATE IN NO UNCERTAIN TERMS THAT SUCH A CONNECTION COULD NOT AND DOES NOT EXIST.

"FINALLY, THE EFFICIENCY OF 86.5 PERCENT STATED BY SPRINGFIELD IN THEIR PROPOSAL CAN BE VERIFIED FROM OTHER DATA LIKEWISE SUBMITTED IN THE SPRINGFIELD PROPOSAL. IT WAS NOT POSSIBLE TO DO THIS IN THE CASE OF THE FIGURES SUBMITTED BY TITUSVILLE IN THEIR PROPOSAL.'

THE VIRGIN ISLANDS CORPORATION SUBSTANTIATED THE ABOVE OBSERVATIONS AND REPORTED:

"* * * (2) THE METHOD USED IN COMPARING BIDS WAS DEVELOPED AND RECOMMENDED TO THE VIRGIN ISLANDS CORPORATION BY THE BECHTEL CORPORATION, AND THE VIRGIN ISLANDS CORPORATION CONSIDERED IT MOST SUITABLE IN THE CIRCUMSTANCES; MOREOVER, THE SAME METHOD HAD BEEN USED IN PROCURING THE DISTILLATION UNIT AND THE TURBINE GENERATOR, AS WELL AS IN BOTH ADVERTISEMENTS FOR THE BOILER, AND AT NO TIME HAD ANY COMPANY, INCLUDING TITUSVILLE WHICH HAD TWICE BID PRESUMABLY WITH KNOWLEDGE OF THE COMPARISON FACTORS TO BE USED, RAISED ANY QUESTION OR OBJECTION CONCERNING IT; (3) THE BECHTEL CORPORATION ADVISED THE VIRGIN ISLANDS CORPORATION THAT THE SPRINGFIELD BID (WHICH APPEARED NEXT LOW, FOLLOWING TITUSVILLE'S ORIGINAL UNCORRECTED BID), WAS NOT DEFICIENT FROM AN ENGINEERING STANDPOINT, AND STATED IN ITS SEPTEMBER 13 LETTER THAT THE FACTS THEREIN SET FORTH ,MAKE THE SPRINGFIELD OFFERING THE MOST ATTRACTIVE ON A STRICTLY ENGINEERING BASIS, AND ARE CONSISTENT WITH THEIR CLAIMS FOR THE HIGHEST EFFICIENCY; " AND (4) THE NAVY STUDY RELATES TO A UNIT MARKEDLY DIFFERENT FROM THAT SOUGHT BY THE VIRGIN ISLANDS CORPORATION. * * *"

IN THE EVALUATION OF COMPETITIVE BIDS, THE RULE HAS BEEN ESTABLISHED THAT ONLY SUCH FACTORS (OTHER THAN PRICES BID) MAY BE CONSIDERED AS HAVE BEEN CLEARLY INDICATED BY THE INVITATION OR MAY BE CONSIDERED TO HAVE BEEN NECESSARILY KNOWN TO ALL PARTIES, SUCH AS THE COSTS TO THE GOVERNMENT, AS HERE, IN OPERATING THE OFFERED BOILER PLANTS FOR A SPECIFIC PERIOD OF TIME. THE CONSUMPTION FACTORS ENUMERATED IN THE INVITATION CLEARLY REPRESENT THOSE ITEMS OF OPERATING COSTS WHICH THE GOVERNMENT MUST CONSIDER IN DETERMINING THE LOWEST BIDDER UNDER 41 U.S.C. 253 (B), QUOTED ABOVE.

WE ARE OF THE VIEW THAT THE EVALUATION OF YOUR BID AS SUBMITTED, AND AS REVISED, WAS STRICTLY IN ACCORDANCE WITH THE TERMS OF THE INVITATION. THE CONTRACTING AGENCY HAD NO ALTERNATIVE OTHER THAN TO DISREGARD YOUR BID UNDER THE EVALUATION CRITERIA OF THE INVITATION AND TO MAKE AN AWARD IN CONFORMITY THEREWITH.

CONCERNING THE THIRD BASIS OF YOUR PROTEST, WE ARE SATISFIED THAT THE RECORD ESTABLISHES THAT NO RELATIONSHIP EXISTED BETWEEN THE SELECTION OF THE DISTILLATION UNIT AND THE BOILER SO FAR AS FUEL CONSUMPTION GUARANTEES WERE CONCERNED. THE CONTRACT COVERING THE DISTILLATION UNIT WAS AWARDED TO SUBSIDIARIES OF THE CLEAVER-BROOKS COMPANY--- THE DISTILLATION UNIT TO CLEAVER-BROOKS SPECIAL PRODUCTS, INC., AND THE BOILER TO SPRINGFIELD BOILER--- BOTH OF WHICH SUBSIDIARIES WERE LOW BIDDERS UNDER COMPETITIVE ADVERTISEMENTS. MOREOVER, WE ARE ASSURED THAT NEITHER THE VIRGIN ISLANDS CORPORATION NOR THE ARCHITECT-ENGINEER MADE AVAILABLE TO SPRINGFIELD BOILER ANY INFORMATION NOT AVAILABLE TO ALL BIDDERS.

FINALLY, CONCERNING THE EVALUATION OF FUEL CONSUMPTION GUARANTEES SUPPLIED BY ALL BIDDERS, WE ARE ADVISED THAT THE ARCHITECT-ENGINEER REDUCED THE QUALITY OF THE FUEL ON WHICH EACH BID WAS BASED TO A STANDARD FUEL, THAT IS, TO THE SAME BTU CONTENT FOR EACH BIDDER. THEN THE BIDS WERE EVALUATED ON SUCH STANDARD FUEL BASIS EQUALLY. THIS EVALUATION, PURSUANT TO THE INVITATION, PROPERLY RESULTED IN AN AWARD TO THE LOWEST RESPONSIVE BIDDER AS TO WHICH WE FIND NO LEGAL BASIS TO OBJECT.

WE ARE NOT IN A POSITION TO MAKE AVAILABLE TO YOU THE "BID FORMS, BID TABULATION AND DATA SHEETS" SINCE THESE ARE RECORDS PRESENTLY IN THE CUSTODY, AND UNDER THE CONTROL, OF THE VIRGIN ISLANDS CORPORATION. THEREFORE, IT IS SUGGESTED THAT YOUR REQUEST BE DIRECTED TO THAT CORPORATION.