B-146261, OCTOBER 16, 1961, 41 COMP. GEN. 242

B-146261, OCTOBER 16, 1961, 41 COMP. GEN. 242

CONTRACTS - SPECIFICATIONS - RESTRICTIVE - PARTICULAR MAKE--- CONTRACTS AWARDS - CANCELLATION ERRONEOUS AWARDS A BRAND NAME OR EQUAL INVITATION ISSUED PURSUANT TO AN ADVERTISED MILITARY PROCUREMENT WHICH DID NOT CONTAIN SUFFICIENT DATA ON BRAND NAME ITEMS TO PERMIT BIDDERS TO BID RESPONSIVELY SO THAT THE BIDDERS WERE REQUIRED EITHER TO REQUEST THE NECESSARY DATA FROM THE MAKER OF THE ITEMS, A COMPETING BIDDER, OR TO GUESS AT THE ESSENTIAL QUALITIES OF THE ITEMS PUTS THE BIDDERS IN A HIGHLY DISADVANTAGEOUS COMPETITIVE POSITION AND MAY NOT BE REGARDED A SUFFICIENTLY DESCRIPTIVE INVITATION TO PERMIT FULL AND FREE COMPETITION, AND THE "OR EQUAL" PROVISION IN AN INVITATION WHICH STATES THAT THE CONTRACTING AGENCY POSSESSES THE INFORMATION NECESSARY FOR PREPARATION OF BIDS SERVES NO USEFUL PURPOSE BUT MUST BE REGARDED AS AN ATTEMPT TO MEET THE LANGUAGE OF THE COMPETITIVE BIDDING STATUTE WHILE DISREGARDING ITS SPIRIT. ALTHOUGH AN AWARD FOR THE MANUFACTURE OF AIR START SYSTEMS FOR JET AIRCRAFT TO THE MAKER OF BRAND NAME ITEMS USED IN THE SYSTEMS UNDER AN INVITATION WHICH DID NOT CONTAIN SUFFICIENT DATA ON THE BRAND NAME ITEMS TO PERMIT OTHER BIDDERS TO BID RESPONSIVELY WAS IMPROPER, IN VIEW OF THE URGENT NEED FOR THE SYSTEMS, THE LACK OF TIME IN WHICH TO DRAFT AND ISSUE A NEW INVITATION FOR BIDS, AND THE PROBABILITY THAT NEGOTIATION OF A NEW CONTRACT WITH THE CONTRACTOR FOR THE SYSTEMS ALREADY PARTIALLY CONSTRUCTED WOULD BE REQUIRED, OBJECTION TO THE CONTINUANCE OF THE CONTRACT WOULD NOT BE JUSTIFIED AND CANCELLATION WOULD SERVE NO USEFUL PURPOSE; HOWEVER, FUTURE BRAND NAME OR EQUAL INVITATIONS SHOULD CONTAIN NECESSARY AVAILABLE INFORMATION TO PERMIT RESPONSIVE BIDS FROM BIDDERS OFFERING OTHER THAN THE BRAND NAME ITEMS.

TO THE SECRETARY OF THE NAVY, OCTOBER 16, 1961:

REFERENCE IS MADE TO A LETTER OF JULY 25, 1961, SIGNED BY THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, TRANSMITTING A REPORT AND OTHER DATA IN CONNECTION WITH A PROTEST BY KAHN AND COMPANY, INC., WETHERSFIELD, CONNECTICUT, AGAINST THE REJECTION OF ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 600-1052-61, ISSUED APRIL 24, 1961, BY THE NAVY PURCHASING OFFICE.

THE INVITATION REQUESTED BIDS ON 4 ITEMS. ITEM 1, WITH WHICH WE ARE PRIMARILY CONCERNED HERE, CALLED FOR FURNISHING 11 AIR START SYSTEMS FOR STARTING JET AIRCRAFT. THE INVITATION PROVIDED FOR THE SUBMISSION OF BIDS ON AN ALTERNATE BASIS OF DELIVERY TO DESTINATION OR DELIVERY AT ORIGIN, OR BOTH, WITH THE GOVERNMENT RESERVING THE RIGHT TO AWARD ON SUCH BASIS AS THE CONTRACTING OFFICER DETERMINED TO BE MOST ADVANTAGEOUS TO THE GOVERNMENT. ITEM 2 CALLED FOR FURNISHING REVISIONS TO DRAWINGS (REVISIONS TO GOVERNMENT-FURNISHED DRAWINGS, AS MIGHT BE NECESSARY, TO KEEP THE MANUFACTURING DRAWINGS CURRENT); ITEM 3 CALLED FOR THE FURNISHING OF PUBLICATIONS (TECHNICAL PUBLICATIONS FOR EQUIPMENT); AND ITEM 4 CALLED FOR FURNISHING SPARE PARTS AT FAIR AND REASONABLE PRICES TO BE AGREED UPON BETWEEN THE PARTIES.

THE 11 AIR START SYSTEMS UNDER ITEM 1 WERE TO BE FURNISHED IN ACCORDANCE WITH ACCOMPANYING SPECIFICATIONS AND BUREAU OF NAVAL WEAPONS ( BUWEPS) DRAWING NO. 59A122. A VENDOR LIST PROVISION ON PAGE 7 OF THE INVITATION PROVIDED AS FOLLOWS:

VENDOR LIST

ALL VENDOR ITEMS SPECIFIED IN BUWEPS DRAWING 59A122 ARE ON AN "OR EQUAL" BASIS. THE LIST OF VENDOR ITEMS TO BE PROVIDED SHALL INCLUDE ALL VENDOR ITEMS USED IN THE CONSTRUCTION OF THE AIR START SYSTEM. THOSE VENDOR ITEMS WHICH ARE DIFFERENT FROM THE MANUFACTURER'S MODEL NUMBER CALLED FOR IN THE DRAWING SHALL BE SUBMITTED IN A LIST WITH THE INVITATION FOR BID. ANY VENDOR ITEM PROPOSED MUST MEET THE "OR EQUAL" DEFINITION WHICH FOLLOWS:

" THE BUREAU OF NAVAL WEAPONS DEFINITION OF " OR EQUAL" VENDOR ITEMS ARE ITEMS WHICH POSSESS IDENTICAL OR SUPERIOR PERFORMANCE CHARACTERISTICS, WHICH CAN BE INSTALLED WITHOUT REDESIGN OR REWORK OF THE START SYSTEM ASSEMBLY AND WHICH PROVIDES INTERCHANGEABILITY WITH INDICATED VENDOR ITEM.' IN CONJUNCTION WITH THIS, ANY BID REVIEWED WHICH FAILS TO INDICATE THAT THE SYSTEMS TO BE FURNISHED ARE IDENTICAL TO THE DRAWINGS, OR WITHOUT A LIST OF "OR EQUAL" VENDOR ITEMS SHALL BE CONSIDERED NON-RESPONSIVE TO THE INVITATION AND WILL BE REJECTED.

ON PAGE 8 OF THE INVITATION APPEARED THE FOLLOWING " BRAND NAME OR EQUAL" CLAUSE:

BRAND NAME OR EQUAL

( APPLICABLE TO THE COMPONENTS LISTED ON BUREAU OF WEAPONS DRAWING

NO. 59A122 UNDER MANUFACTURER'S NAMES)

AS USED IN THIS CLAUSE, THE TERM "BRAND NAME" INCLUDES IDENTIFICATION OF SUPPLIES BY MAKE AND MODEL. CERTAIN SUPPLIES CALLED FOR BY THIS INVITATION FOR BIDS ( REQUEST FOR PROPOSALS) ARE IDENTIFIED IN THE SCHEDULE BY A BRAND NAME "OR EQUAL" DESCRIPTION. THIS IDENTIFICATION IS DESCRIPTIVE RATHER THAN RESTRICTIVE. BIDS ( PROPOSALS) OFFERING "OR EQUAL" SUPPLIES WILL BE CONSIDERED FOR AWARD IF SUCH SUPPLIES ARE CLEARLY IDENTIFIED IN THE BIDS (PROPOSALS) AND ARE DETERMINED BY THE GOVERNMENT TO BE EQUAL TO THE BRAND NAMED SUPPLIES IN ALL MATERIAL RESPECTS. BIDDERS ( OFFERORS) MUST CLEARLY INDICATE WHETHER THEIR BIDS (PROPOSALS) ARE BASED ON A BRAND NAME ITEM OR ON AN "EQUAL" ITEM BY FURNISHING THE INFORMATION REQUIRED BELOW: IF THE BIDDER ( OFFEROR)DOES NOT IDENTIFY THE BRAND NAME OR DESCRIBE IN FULL THE " OR EQUAL" ITEM WHICH IS OFFERED, AS PROVIDED IN (1) AND (2) BELOW, THE BID ( PROPOSAL) WILL BE REJECTED.

(1) IF THE BIDDER (OFFEROR) PROPOSES TO FURNISH A BRAND NAME ITEM SPECIFIED IN THIS INVITATION FOR BIDS ( REQUEST FOR PROPOSALS), SUCH BRAND NAME SHALL BE INSERTED IN THE SPACE PROVIDED AFTER EACH ITEM SO DESCRIBED.

(2) IF THE BIDDER (OFFEROR) PROPOSES TO FURNISH AN "OR EQUAL" ITEM, THE BRAND NAME OF THE ITEM PROPOSED TO BE FURNISHED, IF ANY, SHALL BE INSERTED IN THE SPACE PROVIDED AFTER EACH ITEM SO DESCRIBED, AND IN ADDITION, THE FOLLOWING DESCRIPTIVE DATA MUST BE FURNISHED:

A FULL DESCRIPTION THEREOF, INCLUDING PERTINENT PHYSICAL, MECHANICAL, ELECTRICAL, AND CHEMICAL DETAILS AND A STATEMENT EXPLAINING THE DIFFERENCES BETWEEN THE ITEM BEING OFFERED AND ANY ONE OF THE CORRESPONDING BRAND NAME ITEMS CALLED FOR BY THIS INVITATION FOR BIDS ( REQUEST FOR PROPOSALS). ( THIS INFORMATION MAY BE SUPPLIED BY SEPARATE ATTACHMENTS TO THE BID (PROPOSAL) ).

PAGE 9 OF THE INVITATION CONTAINED A PROVISION WITH REGARD TO THE AVAILABILITY OF SPECIFICATIONS AND DRAWINGS WHICH PROVIDED, IN SUBSTANCE, THAT COPIES OF ANY AND ALL FEDERAL, MILITARY, JOINT ARMY, NAVY AND AIR FORCE SPECIFICATIONS AND MIL STANDARDS, INCLUDING AMENDMENTS THERETO, COULD BE OBTAINED UPON REQUEST TO THE COMMANDING OFFICER, NAVAL SUPPLY DEPOT, PHILADELPHIA, PENNSYLVANIA. THE PAGE 9 PROVISION FURTHER PROVIDED THAT COPIES OF BUREAU OF WEAPONS DRAWING NO. 59A122 COULD BE OBTAINED UPON APPLICATION TO THE NAVY PURCHASING OFFICE IN WASHINGTON, D.C. IT APPEARS, HOWEVER, THAT IN THE PRESENT CASE BUWEPS DRAWING NO. 59A122, WHICH LISTED THE VARIOUS MANUFACTURERS' PARTS OR COMPONENTS INVOLVED IN THE AIR START SYSTEM, WAS ENCLOSED WITH THE INVITATION FOR BIDS FURNISHED PROSPECTIVE BIDDERS.

BIDS WERE OPENED ON MAY 31, 1961. FOUR BIDS WERE RECEIVED RANGING IN TOTAL PRICE ON ITEM 1 AS FOLLOWS:

CHART

ORIGIN DESTINATION HENRY SPEN AND COMPANY, INC. $511,111.04 $544,831.77 KAHN AND COMPANY, INC. 647,900.00

675,270.00 WELLS INDUSTRIES CORPORATION 655,842.00 679,832.00 ACCESSORY CONTROLS AND EQUIPMENT CORP. 692,800.00 581,400.00

IN THE CONTRACTING OFFICER'S STATEMENT OF FACTS DATED JULY 21, 1961, IT IS REPORTED THAT THE LOW BID OF HENRY SPEN AND COMPANY WAS REJECTED AS NONRESPONSIVE, INASMUCH AS NO INFORMATION WAS RECEIVED IN CONNECTION WITH THE PERTINENT PORTIONS OF THE BID INVITATION ENTITLED " VENDOR LIST" AND " BRAND NAME OR EQUAL.' WITH REGARD TO THE BID OF ACCESSORY CONTROLS AND EQUIPMENT CORPORATION, A NOTATION ON THE ABSTRACT OF BIDS DATED MAY 31, 1961, STATES THAT THE BID SUBMITTED BY THAT CORPORATION "OFFERED ALTERNATE EQUIPMENT WHICH DID NOT MEET THE SPECIFICATIONS.' KAHN AND COMPANY'S BID WAS REJECTED AS NONRESPONSIVE FOR THE REASON WHICH WAS STATED IN THE CONTRACTING OFFICER'S STATEMENT OF FACTS AS FOLLOWS:

* * * THE SECOND BID CONSIDERED WAS FROM KAHN AND COMPANY, INC. AND DATA ON ENCLOSURE (3) INCLUDED A VENDORS LIST OF "OR EQUAL" ITEMS WHICH WAS ATTACHED TO, AND MADE A PART OF KAHN AND COMPANY, INC. BID.

4. SINCE "OR EQUAL" ITEMS WERE OFFERED, AND SOME DATA ON SAME WAS RECEIVED, A TECHNICAL EVALUATION OF THE DATA SUBMITTED WAS REQUESTED FROM THE TECHNICAL PERSONNEL OF BUREAU OF NAVAL WEAPONS. WHEN THE TECHNICAL PERSONNEL STATED THEY WERE UNABLE TO EVALUATE THE "OR EQUAL" ITEMS ON THE BASIS OF THE DATA RECEIVED FROM KAHN AND COMPANY, CONFERENCES WERE HELD WITH THE TECHNICAL PERSONNEL OF BUREAU OF NAVAL WEAPONS AND LEGAL PERSONNEL ATTACHED TO THIS OFFICE AND TO THE BUREAU OF SUPPLIES AND ACCOUNTS. THE CONSENSUS OF THE CONFERENCES WAS THAT THE KAHN AND COMPANY, INC. BID WAS NON-RESPONSIVE TO THE TERMS OF THE INVITATION FOR BID AS INFORMATION SUBMITTED BY THE ATTACHMENT TO ENCLOSURE (3) WAS CONSIDERED INSUFFICIENT TO ADEQUATELY EVALUATE THE PROPOSAL. ENCLOSURES (3) AND (4) ARE SUBMITTED AS JUSTIFICATION FOR THE REJECTION OF THE KAHN AND COMPANY, INC. BID.

AWARD OF THE CONTRACT WAS MADE TO WELLS INDUSTRIES CORPORATION AS THE LOWEST RESPONSIVE BIDDER ON JUNE 27, 1961.

THE LETTER CONTAINING THE VENDOR LIST OF "OR EQUAL" ITEMS ATTACHED TO, AND MADE A PART OF, KAHN'S BID REFERRED TO IN THE STATEMENT OF FACTS ABOVE READS AS FOLLOWS:

LIST OF " OR EQUAL ITEMS"

KAHN AND COMPANY, INC., PROPOSES TO FURNISH THE FOLLOWING ITEMS AS EQUIVALENT TO THE PARTICULAR UNITS CALLED OUT IN THE SPECIFICATIONS:

SPECIFIED IN DRAWING DESCRIPTION REPLACING WITH

KAHN AND CO. 3 FT.

DIAMETER X 18 FEET (1) WELLS PART NO. 1386-540 AIR RECEIVER LONG

115 CUBIC FEET INTERNAL VOLUME AIR RECEIVER. UNIT WILL BE BUILT

TO IDENTICAL CONFIGURATION AS WELLS UNIT, TO ASME UNFIRED

PRESSURE VESSEL STANDARDS, INSPECTED AND STAMPED BY CERTIFIED

INSPECTOR FROM HARTFORD STEAM BOILER COMPANY.

REPLACING WITH (2) WELLS PART NO. 1386-53D AIR AFTER COOLER R. P. ADAMS

NO. SAF-32-600HD. THIS UNIT HAS 500 PSI WORKING PRESSURE,

STAINLESS STEEL (STEEL) TUBE, STEEL SHELL, 4 INCH 300 NO.

FLANGES, 252 SQUARE FEET OF WATER COOLED AREA AND IS THE SAME IN

SIZE AND HEAT TRANSFER PERFORMANCE AS THE WELLS UNIT.

REPLACING WITH (3) WELLS PART NO. 1341-01C DEHYDRATION CHAMBER KAHN AND CO.

500 PSI WORKING PRESSURE DEHYDRATORS WITH 28 VDC 2200 WATT HEATING

COILS. UNITS WILL CONTAIN 35 LB. SILICA GEL AND WILL BE ASME

CODED. TOWERS WILL BE IDENTICAL IN SIZE AND MOUNTING

CONFIGURATION TO THE WELLS COUNTERPART. DRYING PERFORMANCE WILL

BE EQUAL.

AN UNDATED MEMORANDUM SUBMITTED BY THE NAVY DEPARTMENT AS A PART OF THE RECORD SHOWS A COMPARISON BETWEEN THE WELLS INDUSTRIES' UNITS SPECIFIED IN BUWEPS DRAWING NO. 59A122 AND THE UNITS OFFERED AS EQUAL IN THE KAHN LETTER QUOTED ABOVE. THE MEMORANDUM IS QUOTED IN FULL: 1. THE FOLLOWING INFORMATION COVERS THE DETAIL PERFORMANCE, SIZE AND CAPACITIES OF THOSE COMPONENTS SPECIFIED BY IFB 600-1052-61 AS COMPARED TO THE ALTERNATE "VENDOR ITEMS" OFFERED BY KAHN AND COMPANY.

A. AIR RECEIVERS--- WELLS P/N 1386-540

KAHN AND COMPANY

SPECIFIED ITEMP/N UNKNOWN

CAPACITY 115 CU. FT. 115 CU. FT.

OPERATION PRESSURE 600 PSI

SIZE 36 IN. O.D. X 3 FT. X 18 FT.

17 FT. 9 IN. LONG

SADDLES 2 NOT SPECIFIED

INSPECTION PORTS 2 NOT SPECIFIED

DRAIN PORT 1 NOT SPECIFIED

INLET PORT 1 NOT SPECIFIED

MATERIAL GRADE 212B STEEL NOT SPECIFIED

MAXIMUM TEMPERATURE 400 DEGREES F NOT SPECIFIED

OPERATION

B. AFTER-COOLER--- WELLS P/N 1386-53D

ADAMS P/N

SPECIFIED ITEM SAF-32-600HD

OPERATION PRESSURE 500 PSI 500 PSI

DIFFERENTIAL TEMP. 10 DEGREES F NOT SPECIFIED

CAPACITY 300 CFM NOT SPECIFIED

SIZE 42 IN. O.D. X 12 FT. INDICATES 25.2 SQ.

LONG FT. OF WATER AREA

PRESSURE DROP 10.5 PSI NOT SPECIFIED

(TUBE SIDE)

PRESSURE DROP 2.0 PSI NOT SPECIFIED

(SHELL SIDE)

SQ. FT. OF COOLING 25.4 SQ. FT. NOT SPECIFIED

SURFACE

FLANGE 500 PSI AT 400 DEGREES 4 IN.--- 300 LB.

F. TEMP. NOT SPECIFIED IN ADDITION, KAHN AND COMPANY INDICATES STAINLESS STEEL TUBE AND STEEL SHELL AND NO OTHER INFORMATION RELATIVE TO MATERIAL. SPECIFIED PART HAS 13 STAINLESS STEEL TUBES, STAINLESS HEADER, EXPANSION JOINT TYPE TUBE SHEET, STAINLESS STEEL BAFFLES AND TIE RODS, FLOATING SELF CENTERING TYPE PACKING GLAND, COUNTER FLOW SINGLE PASS TYPE HEAT EXCHANGER AND THERMOMETER WELL.

C. DEHYDRATION TOWER--- WELLS P/N 1341-0IC

KAHN AND COMPANY

SPECIFIED ITEM P/N UNKNOWN

OPERATION PRESSURE 600 PSI 500 PSI

OPERATION TEMP. 450 DEGREES F NOT SPECIFIED

HEATERS AND CAPACITY 4-28VDC-1000 WATT 2-28VDC-2200 WATT

SILICA GEL 40 LBS 35 LBS

HEATER MATERIAL INCONEL NOT SPECIFIED

GASKET 500 DEGREES F NOT SPECIFIED

DEW POINT OPERATION -80 DEGREES NOT SPECIFIED

SIZE 8 5/8 IN. O.D. X 41 NOT SPECIFIED

IN. OVERALL SPECIAL FEATURES 2 IN. NPT MACHINE NOT SPECIFIED

SPECIAL FOR

VICTAULIC COUPLING IN ADDITION, THE SPECIFIED PART HAS STAINLESS STEEL RETAINERS, FIBERGLAS PACKING, WATER PROOF HEATER TERMINAL HOUSING, QUICK DISCONNECT TYPE PORTS, HIGH TEMPERATURE EXTERNAL SURFACE FINISH, CONTINUOUS DUTY AND SELF-REACTIVATING. 2. IN ALL CASES THE PROPOSED ALTERNATES ARE CLAIMED BY THE BIDDER TO BE EITHER IDENTICAL IN SIZE, CAPACITY AND MOUNTING CONFIGURATION, HOWEVER, WHERE DIMENSIONS ARE GIVEN THEY APPEAR TO BE DIFFERENT THAN THE SPECIFIED ITEM. KAHN AND COMPANY PROTESTED THE REJECTION OF ITS BID TO THIS OFFICE BY TELEGRAM DATED JUNE 27, 1961, AND LETTERS DATED JULY 14 AND AUGUST 24, 1961. IN SUPPORT OF ITS PROTEST, KAHN AND COMPANY ALLEGES THAT THE REJECTION OF ITS BID ON THE BASIS THAT IT DID NOT COMPLY FULLY WITH THE "BRAND NAME OR EQUAL" PROVISIONS OF THE INVITATION FOR BIDS WAS IMPROPER. KAHN STATES THE BUWEPS DRAWING ON THE AIR RECEIVER, AIR AFTER COOLER AND DEHYDRATION CHAMBER UNITS GAVE ONLY THE WELLS' PART NUMBERS AND NO FURTHER DATA WITH THE INVITATION FOR BIDS; THAT AT THE TIME OF BID OPENING, OR PRIOR THERETO, NO CATALOG OR COMMERCIAL BROCHURES WERE AVAILABLE ON THE WELLS' ITEMS ON WHICH KAHN QUOTED "OR EQUAL: " THAT KAHN'S "OR EQUAL" BID ON THE WELLS' ITEMS WAS BASED ON A WELLS' QUOTATION TO KAHN DATED MAY 22, 1961, IN WHICH WELLS DESCRIBED THE ITEMS QUOTED UPON, WHICH DESCRIPTION, IN TURN, WAS USED BY KAHN IN ITS BID. KAHN AND COMPANY CONCLUDES THAT IF THE WELLS' DESCRIPTION OF PARTS GIVEN IN THE WELLS' QUOTATION IS NOW CLAIMED TO BE INCORRECT AND KAHN'S BID REJECTED THEREFOR, WELLS COULD NOT BE GIVEN THE AWARD ON EQUALLY WRONG PARTS.

IN AN INFORMAL MEETING IN THIS OFFICE HELD ON AUGUST 17, 1961, KAHN AND COMPANY REPRESENTATIVES STATED THAT AT THE TIME KAHN SUBMITTED ITS BID IT FELT THAT THE INFORMATION FURNISHED IT BY THE WELLS' QUOTATION WAS SUFFICIENTLY COMPLETE TO ENABLE KAHN TO MANUFACTURE THE UNITS UPON WHICH IT BID "OR EQUAL.' AS THESE REPRESENTATIVES POINTED OUT, SINCE THE INVITATION FOR BIDS REQUIRED THE FURNISHING OF CERTAIN WELLS' PARTS "OR EQUAL," THE ONLY POSSIBLE WAY IN WHICH KAHN COULD COMPETE WITH WELLS INDUSTRIES, WHO IS THE PRESENT CONTRACTOR WITH THE NAVY ON A PRIOR PROCUREMENT OF THE SAME SYSTEM, AND ALSO A COMPETITOR ON THE PRESENT PROCUREMENT, WAS TO BID "OR EQUAL" AND MANUFACTURE THE AIR RECEIVERS AND DEHYDRATION CHAMBERS ITSELF. PARENTHETICALLY, IT MIGHT BE MENTIONED AT THIS POINT THAT AT A MEETING IN THIS OFFICE HELD ON AUGUST 22, 1961, NAVY PERSONNEL ACKNOWLEDGED THAT THE PRICES QUOTED KAHN BY WELLS WERE UNUSUALLY HIGH ON THOSE ITEMS UPON WHICH KAHN REQUESTED A QUOTATION. FURTHERMORE THE KAHN REPRESENTATIVES ALLEGED THAT BUWEPS PERSONNEL ADMITTED ON JULY 10, 1961, AT A MEETING BETWEEN KAHN REPRESENTATIVES AND NAVY PERSONNEL, THAT NO WELLS' CATALOG ON THE BRAND NAME PARTS WAS AVAILABLE; THAT THE DESCRIPTION OF THESE WELLS' CATALOG NUMBERS WAS "PROPRIETARY WELLS' INFORMATION" WHICH, WHILE IN THE NAVY SYSTEM, COULD NOT HAVE BEEN MADE AVAILABLE FOR THIS REASON EVEN IF BUWEPS COULD HAVE LOCATED THIS DATA. THIS LATTER POINT, NAVY REPRESENTATIVES AT THE MEETING ON AUGUST 22 STATED THAT INFORMATION ON THE METHOD OF MANUFACTURE WAS PROPRIETARY TO WELLS INDUSTRIES BUT THAT INFORMATION WITH REGARD TO PERFORMANCE CHARACTERISTICS AND STANDARDS ON THE WELLS' PARTS IN DISPUTE WAS NOT PROPRIETARY. THEY ALSO STATED THAT THIS LETTER INFORMATION WAS IN THEIR POSSESSION AT THE TIME OF, AND PRIOR TO, BID OPENING AND THAT IT WOULD HAVE BEEN GIVEN OUT TO KAHN AND COMPANY HAD KAHN REQUESTED IT, BUT THAT NO REQUEST FOR SUCH INFORMATION PRIOR TO BID OPENING WAS MADE. FURTHERMORE, IN CONNECTION WITH THE QUESTION AS TO THE AVAILABILITY OF A WELLS' CATALOG, THE CONTRACTING OFFICER'S STATEMENT OF FACTS REPORTS THAT:

6. IN RESPONSE TO THE STATEMENT IN THE KAHN AND COMPANY PROTEST LETTER THAT THE COMMERCIAL ITEMS LISTED IN THE BUREAU OF NAVAL WEAPONS DRAWINGS WERE NOT CONTAINED IN A CATALOG, IT HAS BEEN DETERMINED THAT THE WELLS INDUSTRIES PARTS FOR WHICH KAHN AND COMPANY OFFERED "OR EQUAL" ITEMS WERE COMMERCIAL PARTS AND WERE DESCRIBED IN DETAIL ON WELLS INDUSTRIES CORPORATION COMMERCIAL BROCHURES AND THAT THESE BROCHURES WERE AVAILABLE TO THE BUYING PUBLIC.

AT THE AUGUST 22 MEETING IN THIS OFFICE, NAVY REPRESENTATIVES STATED THAT THE INFORMATION APPEARING IN THIS PARAGRAPH OF THE STATEMENT OF FACTS WITH REGARD TO THE AVAILABILITY OF THE WELLS' CATALOG WAS NOT INDEPENDENTLY VERIFIED BY THE DEPARTMENT OF THE NAVY BUT WAS BASED UPON A STATEMENT TO THAT EFFECT MADE BY WELLS INDUSTRIES TO THE NAVY. COPIES OF TWO WELLS INDUSTRIES' BROCHURES OR ,CATALOGS" WERE FURNISHED BY THE DEPARTMENT OF THE NAVY REPRESENTATIVES AT THE MEETING OF AUGUST 22. THESE CONSISTED OF FOUR SHEETS AND TWO DRAWINGS DESCRIBING WELLS INDUSTRIES SERIES 1341 DEHYDRATION TOWERS ( CATALOG SHEET 1341-0IC) AND WELLS INDUSTRIES SERIES 1386 AFTER COOLERS ( CATALOG SHEET SK-1386). NO BROCHURE DESCRIBING THE AIR RECEIVERS WAS FURNISHED. THE DRAWING ON THE DEHYDRATION TOWER CONTAINS A NOTICE WHICH READS:

THIS DRAWING IS THE PROPERTY OF WELLS INDUSTRIES CORPORATION AND EMBODIES A PROPRIETARY DESIGN ORIGINATED BY WELLS INDUSTRIES CORPORATION AND ALL DESIGN, MANUFACTURING, REPRODUCTION, USE AND SALE RIGHTS REGARDING THE SAME ARE EXPRESSLY RESERVED. THIS DRAWING CANNOT BE REPRODUCED OR INFORMATION HEREIN TRANSMITTED IN ANY WAY WITHOUT WRITTEN CONSENT FROM THIS COMPANY. ALL PATENT RIGHTS HERETO ARE EXPRESSLY RESERVED BY WELLS INDUSTRIES CORPORATION, NORTH HOLLYWOOD, CALIFORNIA.

A FEW OBSERVATIONS SHOULD BE MADE ON THE RECORD BEFORE US WITH REGARD TO KAHN'S BID AND THE QUESTION AS TO THE AVAILABILITY OF SUFFICIENT INFORMATION IN THE INVITATION FOR BIDS TO ENABLE BIDDERS TO PREPARE THEIR BIDS. IT SHOULD BE NOTED AT THE OUTSET THAT THE NAVY DEPARTMENT PLACES A GREAT DEAL OF EMPHASIS ON THE DEVIATIONS BETWEEN THE SPECIFIED ITEMS AND THE VENDOR ITEMS OFFERED BY KAHN, AS SHOWN ON THE MEMORANDUM SUBMITTED TO THIS OFFICE AS A PART OF THE RECORD, IN JUSTIFICATION FOR THE REJECTION OF KAHN'S BID AS NONRESPONSIVE. A COMPARISON OF THE WELLS' CATALOG WITH WELLS' QUOTATION TO KAHN, KAHN'S BID AND THE MEMORANDUM REVEALS SOME SIGNIFICANT FACTS ON THE 3 ITEMS WHICH KAHN OFFERED TO FURNISH AS EQUAL TO THE WELLS' BRAND NAME ITEMS SPECIFIED.

IN CONNECTION WITH THE AIR RECEIVERS ( WELLS' P/N 1386-54D), NO WELLS' CATALOG HAS BEEN SUBMITTED TO THIS OFFICE. HOWEVER, ON THE ELEMENT OF SIZE OF THE AIR RECEIVERS KAHN'S BID REITERATES THE SPECIFICATIONS FURNISHED TO IT BY THE WELLS' QUOTATION WHILE THE MEMORANDUM GIVES A DIFFERENT MEASUREMENT. ON THE OPERATION PRESSURE OF THE RECEIVERS, WELLS' QUOTATION TO KAHN (500 P.S.I.) DIFFERS WITH THE 600 P.S.I. GIVEN IN THE MEMORANDUM. KAHN DID NOT SPECIFY THIS ELEMENT IN ITS BID. WITH REGARD TO SPECIFICATIONS ON SADDLES, INSPECTION PORTS, DRAIN PORT, INLET PORT, MATERIAL AND MAXIMUM TEMPERATURE OPERATION, WELLS' QUOTATION AND KAHN'S BID DO NOT SPECIFY THESE ITEMS WHILE THE MEMORANDUM GIVES THE APPLICABLE SPECIFICATIONS.

IN CONNECTION WITH THE AFTER COOLERS, KAHN PROPOSED TO FURNISH AN ADAMS P/N SAF-32 600HD AS EQUAL TO THE WELLS' P/N 1386-53D. KAHN'S BID SPECIFIED 500 P.S.I. FOR THE ELEMENT OF OPERATION PRESSURE. WELLS' QUOTATION TO KAHN AND THE MEMORANDUM ALSO SPECIFY 600 P.S.I. FOR THAT ELEMENT. HOWEVER, THE WELLS' CATALOG SPECIFIED 600 P.S.I.G. FOR " DESIGN PRESSURE" WHICH, APPARENTLY, IS SYNONYMOUS WITH "OPERATION PRESSURE" SINCE THE CATALOG DOES NOT MENTION "OPERATION PRESSURE" ANYWHERE. WITH REGARD TO DIFFERENTIAL TEMPERATURE, CAPACITY, PRESSURE DROP (TUBE SIDE) AND PRESSURE DROP (SHELL SIDE) NEITHER THE WELLS' QUOTATION NOR KAHN'S BID SPECIFIES THE APPLICABLE VALUES WHEREAS THE WELLS' CATALOG AND THE MEMORANDUM GIVE THE APPROPRIATE SPECIFICATIONS ON THESE ELEMENTS. ON THE ELEMENT OF "SIZE," WELLS' QUOTATION TO KAHN SPECIFIED "25 SQ. FT. WATER COOLED AREA APPROX. 14 FT. LONG.' KAHN'S BID SPECIFIED 25.2 SQUARE FEET OF WATER-COOLED AREA AND ALSO STATED IT WAS THE SAME IN SIZE AND HEAT TRANSFER PERFORMANCE AS THE WELLS' UNIT. THE MEMORANDUM STATES THAT THE SIZE IS ,42 INCHES O.D. X 12 FEET LONG" AND ALSO STATES THAT KAHN'S BID DID NOT SPECIFY THE SQUARE FEET OF COOLING SURFACE. ON THE OTHER HAND, THE DESCRIPTIVE PORTION OF THE WELLS' CATALOG DOES NOT GIVE THE SIZE OF THE AFTER COOLER IN FEET AND INCHES BUT AN ACCOMPANYING DRAWING, WHICH DOES NOT CONTAIN THE PROPRIETARY NOTICE QUOTED ABOVE WITH REGARD TO THE DRAWING ON THE DEHYDRATION TOWER, GIVES AN OVERALL LENGTH OF 151 1/2 INCHES PLUS OR MINUS 1/2 INCH. AS TO THE COOLING SURFACE, THE WELLS' CATALOG SPECIFIES "25.4 SQ. FT.' IN CONNECTION WITH THE FLANGE SPECIFICATIONS, WELLS QUOTED KAHN ,4 INCHES 300 LB. FLANGES" AND KAHN'S BID ALSO GAVE THOSE MEASUREMENTS. THE MEMORANDUM GIVES "500 P.S.I. AT 400 DEGREES F.' THE DRAWING ATTACHED TO THE WELLS' CATALOG SPECIFIES AN " INLET FLANGE" OF 4 INCHES BUT NOWHERE DOES THE TEMPERATURE OF 400 DEGREES F. APPEAR. ALSO, WITH REGARD TO THIS ITEM, KAHN AND COMPANY CONTENDS THAT AMERICAN STANDARD PIPE FLANGES OF 300 LB. PRESSURE CLASS ARE RATED 540 P.S.I., NOT 500 P.S.I., AT 400 DEGREES F. AND FINALLY, WITH REGARD TO THE NUMBER OF TUBES, THE MEMORANDUM STATES THAT THE SPECIFIED PART HAS 13 STAINLESS STEEL TUBES. KAHN'S BID DID NOT SPECIFY THE NUMBER OF TUBES. NEITHER DID THE WELLS' QUOTATION TO KAHN. BUT, SIGNIFICANTLY, NOWHERE IN THE WELLS' CATALOG OR ACCOMPANYING DRAWING IS THE NUMBER OF TUBES SPECIFIED.

TURNING NOW TO THE DEHYDRATION TOWER ( WELLS' P/N 1341-0IC), THE WELLS' QUOTATION AND KAHN'S BID SPECIFY 500 P.S.I. OPERATION PRESSURE WHEREAS THE WELLS' CATALOG SPECIFIED 600 P.S.I.G. THE MEMORANDUM AND THE WELLS' CATALOG SPECIFY 450 DEGREES F. OPERATION TEMPERATURE WHILE THE KAHN BID AND WELLS' QUOTATION GIVE NO SPECIFICATIONS ON TEMPERATURE. ON HEATERS AND CAPACITY, WELLS' QUOTATION TO KAHN STATES "28 VDC. HEATING COALS 2200 WATTS.' KAHN'S BID SPECIFIED 2-28 VDC 2200 WATT. THE MEMORANDUM STATES "4-28VDC-1000 WATT" WHILE WELLS' CATALOG GIVES "28 VOLT D.C., 2000 WATTS TOTAL.' ON THE PROPRIETARY DRAWING WHICH ACCOMPANIES THE WELLS' CATALOG ON THE DEHYDRATION TOWER APPEARS THE FOLLOWING: " HEATERS: TWO INCONEL HI- TEMP. COILS - 28 V.D.C. 1000 WATTS.' ON THE ELEMENT OF SILICA GEL, KAHN'S BID AND WELLS' QUOTATION GIVE A WEIGHT OF 35 POUNDS; THE MEMORANDUM GIVES A WEIGHT OF 40 POUNDS; THE CATALOG GIVES: " SILICA-GEL/1MOLECULAR SIEVE, APPROXIMATELY 40 LBS.' ( ITALICS SUPPLIED.) WITH REGARD TO GASKET, DEW POINT OPERATION, SIZE AND SPECIAL FEATURES (ALL OF WHICH ARE SPECIFIED IN THE MEMORANDUM), KAHN'S BID AND WELLS' QUOTATION ARE SILENT. HOWEVER, THE SPECIFICATIONS ON THESE ELEMENTS OF THE DEHYDRATION TOWER ARE NOT FOUND IN THE CATALOG PROPER, BUT CAN BE FOUND ONLY ON THE PROPRIETARY DRAWING.

ON THE BASIS OF THE ABOVE COMPARISON, THE FOLLOWING CONCLUSIONS APPEAR REASONABLE: (1) CERTAIN PORTIONS OF WELLS' QUOTATION TO KAHN WERE INACCURATE AND DEVIATED NOT ONLY FROM THE INFORMATION APPEARING ON THE MEMORANDUM FURNISHED BY THE DEPARTMENT OF THE NAVY, WHICH WAS EVIDENTLY USED IN EVALUATING KAHN'S BID, BUT ALSO FROM THE INFORMATION APPEARING IN WELLS' OWN CATALOG; (2) IN CERTAIN INSTANCES THE SPECIFICATIONS LISTED IN THE MEMORANDUM FURNISHED BY THE DEPARTMENT OF THE NAVY DEVIATED FROM THE SPECIFICATIONS LISTED IN THE WELLS' CATALOG; AND (3) WITH REGARD TO THE GASKET, DEW POINT OPERATION, SIZE AND SPECIAL FEATURES OF THE DEHYDRATION TOWER, THE SPECIFICATIONS, ALTHOUGH LISTED ON THE NAVY MEMORANDUM, APPEAR TO BE PROPRIETARY TO WELLS INDUSTRIES AND NOT AVAILABLE TO BIDDERS SINCE THE INFORMATION ON THESE ITEMS APPEARS ONLY ON THE PROPRIETARY DRAWING AND NOT IN THE CATALOG PROPER.

THE RECORD IN THIS CASE IS AN UNFORTUNATE EXAMPLE OF THE POSSIBLE DIFFICULTIES THAT MAY BE ENCOUNTERED IN PROCURING ON A "BRAND NAME OR EQUAL" BASIS. WE HAVE RECOGNIZED THE NECESSITY AT TIMES OF PROCURING ON SUCH A BASIS BUT HAVE ALSO RECOGNIZED THAT PROCUREMENTS ON THAT BASIS ARE GENERALLY UNDESIRABLE AND SHOULD BE RESERVED FOR EXCEPTIONAL CASES WHERE THE NEEDS OF THE GOVERNMENT CANNOT OTHERWISE BE ADEQUATELY DESCRIBED. COMP. GEN. 76, AUGUST 3, 1961, AND DECISIONS THEREIN CITED. SEE, ALSO, ASPR 1-1206 (B), WHICH STATES THAT A "BRAND NAME OR EQUAL" DESCRIPTION IS THE MINIMUM ACCEPTABLE PURCHASE DESCRIPTION AND SHOULD BE USED ONLY AS A LAST RESORT WHEN AN ADEQUATE SPECIFICATION OR MORE DETAILED DESCRIPTION CANNOT FEASIBLY BE MADE AVAILABLE IN TIME FOR THE PROCUREMENT UNDER CONSIDERATION.

A PRINCIPAL PURPOSE OF THE COMPETITIVE BIDDING STATUTES IS TO OBTAIN FOR THE GOVERNMENT THE BENEFITS OF FULL AND FREE COMPETITION. 40 COMP. GEN. 348. THIS REQUIRES THAT THE PROCUREMENT BE ADVERTISED ON AS BROAD A BASIS AS POSSIBLE CONSISTENT WITH THE LEGITIMATE NEEDS OF THE USING AGENCY. THE PRESENT CASE THE 3 ITEMS IN QUESTION WERE MERELY DESCRIBED BY REFERENCE TO WELLS INDUSTRIES' PARTS NUMBERS IN BUWEPS DRAWING NO. 59A122. THE INVITATION FOR BIDS DID NOT EVEN IDENTIFY THE APPLICABLE WELLS' CATALOGS NOR DID IT PROVIDE THE CORRESPONDING AND AVAILABLE CATALOG DESCRIPTIONS. NAVY REPRESENTATIVES, DURING THE MEETING OF AUGUST 22, STATED THAT THE NECESSARY NONPROPRIETARY INFORMATION ON PERFORMANCE CHARACTERISTICS AND STANDARDS OF THE WELLS' PARTS IN DISPUTE, WHICH WOULD HAVE ENABLED KAHN TO BID RESPONSIVELY, WAS IN THEIR POSSESSION PRIOR TO BID OPENING AND WOULD HAVE BEEN FURNISHED TO KAHN AND COMPANY HAD THE COMPANY REQUESTED SUCH INFORMATION BUT THAT NO REQUEST HAD BEEN MADE. NOTED EARLIER, THE INVITATION FOR BIDS CONTAINED A PROVISION ON PAGE 9 GIVING NOTICE THAT COPIES OF ANY AND ALL FEDERAL, MILITARY, JOINT ARMY, NAVY AND AIR FORCE SPECIFICATIONS AND MIL STANDARDS AND BUREAU OF WEAPONS DRAWING NO. 59A122 COULD BE OBTAINED UPON REQUEST, BUT IT CONTAINED NO NOTICE WITH RESPECT TO THE AVAILABILITY OF INFORMATION ON "BRAND NAME OR EQUAL" ITEMS CALLED FOR BY BUWEPS DRAWING NO. 59A122. WE DO NOT MEAN TO IMPLY HEREIN THAT KAHN AND COMPANY'S BID WAS RESPONSIVE TO THE REQUIREMENTS OF THE INVITATION FOR BIDS. INDEED, IT IS DIFFICULT TO CONCEIVE HOW KAHN, ON THE BASIS OF THE INFORMATION AVAILABLE IN THE INVITATION FOR BIDS, COULD HAVE BID RESPONSIVELY AND HAVE SUBMITTED SUFFICIENT DATA TO PERMIT ADEQUATE EVALUATION OF ITS BID. KAHN, ALONG WITH THE OTHER BIDDERS EXCEPT WELLS INDUSTRIES WHO HAD PREVIOUSLY MANUFACTURED THE AIR START SYSTEM, WAS PUT IN THE UNTENABLE POSITION OF EITHER GOING TO WELLS INDUSTRIES, A COMPETITOR, FOR THE NECESSARY INFORMATION TO ENABLE IT TO BID INTELLIGENTLY OR TO GUESS AT THE ESSENTIAL QUALITIES OF THE BRAND NAME ITEMS REQUIRED. THERE IS NO ASSURANCE THAT WELLS INDUSTRIES WOULD NOT, AS IT HAD A RIGHT TO DO, REFUSE REQUESTS FROM ITS COMPETITORS FOR INFORMATION OR COPIES OF APPLICABLE CATALOGS. INVITATION FOR BIDS WHICH IS DRAWN, AS HERE, IN SUCH A FASHION THAT IT PUTS BIDDERS IN A HIGHLY DISADVANTAGEOUS COMPETITIVE POSITION CANNOT BE SAID TO BE SUFFICIENTLY DESCRIPTIVE TO PERMIT FULL AND FREE COMPETITION. THIS IS ESPECIALLY TRUE WHEN THE AGENCY RESPONSIBLE FOR DRAFTING THE INVITATION STATES THAT IT HAD THE NECESSARY INFORMATION ON HAND TO PERMIT BIDDERS TO PREPARE THEIR BIDS INTELLIGENTLY. IN SUCH CASE, THE "OR EQUAL" PROVISION SERVES NO USEFUL PURPOSE AND APPEARS TO HAVE BEEN INCLUDED IN AN ATTEMPT TO MEET THE LANGUAGE OF THE COMPETITIVE BIDDING STATUTE WHILE DISREGARDING ITS SPIRIT. CF. 38 COMP. GEN. 636.

IT HAS BEEN REPORTED, INFORMALLY, BY THE DEPARTMENT OF THE NAVY THAT AS OF SEPTEMBER 20, 1961, PROGRESS PAYMENTS IN THE AMOUNT OF $93,319.98 HAVE BEEN MADE TO WELLS INDUSTRIES AND THAT DELIVERY OF THE AIR SYSTEMS HAS BEEN ACCELERATED, TO BEGIN DURING OCTOBER 1961 AND TO BE COMPLETED DURING JANUARY 1962. IT IS FURTHER REPORTED THAT ALL PARTS AND MATERIAL HAVE BEEN PURCHASED AND ARE IN THE CONTRACTOR'S PLANT AND THAT THE CONTRACTOR HAS STARTED FABRICATION AND ASSEMBLY OF THE SYSTEMS. AND, FINALLY, IT HAS BEEN STATED THAT SINCE THE AIR START SYSTEMS ARE URGENTLY NEEDED BY THE DEPARTMENT OF THE NAVY, TIME DOES NOT PERMIT THE DRAFTING AND ISSUANCE OF A NEW INVITATION FOR BIDS AND THAT IF THE PRESENT CONTRACT WERE CANCELED THE DEPARTMENT OF THE NAVY WOULD, IN ALL PROBABILITY, BE REQUIRED TO NEGOTIATE A NEW CONTRACT WITH WELLS INDUSTRIES FOR DELIVERY OF THE AIR START SYSTEMS ALREADY PARTIALLY CONSTRUCTED. AS A PRACTICAL MATTER, IN VIEW OF THESE CIRCUMSTANCES, THIS OFFICE WOULD NOT BE JUSTIFIED IN OBJECTING TO THE CONTINUANCE OF THE PRESENT CONTRACT WITH WELLS INDUSTRIES SINCE CANCELLATION WOULD SERVE NO USEFUL PURPOSE. HOWEVER, IT IS SUGGESTED IN FUTURE PROCUREMENTS INVOLVING INVITATIONS CONTAINING "BRAND NAME OR EQUAL" PROVISIONS THAT PROPER STEPS BE TAKEN WITHIN THE DEPARTMENT OF THE NAVY TO INSURE THAT THE INVITATION WILL CONTAIN THE NECESSARY AVAILABLE INFORMATION TO ALLOW RESPONSIVE, INTELLIGENT BIDS FROM BIDDERS OFFERING TO FURNISH AN ITEM OTHER THAN THE BRAND NAME SPECIFIED.