B-147604, JAN. 22, 1962

B-147604: Jan 22, 1962

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

DIVISION-UNION TANK CAR COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTERS OF NOVEMBER 20 AND DECEMBER 15. BOTH INVITATIONS WERE ISSUED BY THE LANGLEY RESEARCH CENTER. BIDDERS WERE PERMITTED TO EMPLOY IN THEIR DESIGNS FOR THE VACUUM HELIUM PUMPING SYSTEM EITHER ONE OF TWO GUIDELINE SPECIFICATIONS. FIVE BIDS WERE RECEIVED AND THEY WERE OPENED ON OCTOBER 23. THE LOWEST BID WAS SUBMITTED BY THE CHICAGO BRIDGE AND IRON COMPANY AND THE SECOND LOWEST BID WAS SUBMITTED BY THE JOINT VENTURE OF YOUR FIRM AND TEARS ENGINEERS. THE DESIGNS OF THE OTHER FOUR BIDDERS WERE BASED ON THE CONDITION "A" GUIDELINE SPECIFICATION. THE JOINT VENTURERS CONTENDED THAT THE LOWEST BID WAS INADEQUATE IN SEVERAL RESPECTS.

B-147604, JAN. 22, 1962

TO GRAVER TANK AND MFG.CO., DIVISION-UNION TANK CAR COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF NOVEMBER 20 AND DECEMBER 15, 1961, RELATIVE TO THE REJECTION OF ALL BIDS RECEIVED UNDER NATIONAL AERONAUTICS AND SPACE ADMINISTRATION INVITATION NO. L-1871, AND A READVERTISEMENT UNDER INVITATION NO. L-1871-A ON THE BASIS OF CHANGED SPECIFICATIONS. BOTH INVITATIONS WERE ISSUED BY THE LANGLEY RESEARCH CENTER, LANGLEY FIELD, VIRGINIA.

UNDER THE ORIGINAL INVITATION THE GOVERNMENT REQUESTED BIDS FOR THE DESIGN, FABRICATION AND INSTALLATION OF TWO VACUUM SYSTEMS FOR A PARTICULAR FACILITY. BIDDERS WERE PERMITTED TO EMPLOY IN THEIR DESIGNS FOR THE VACUUM HELIUM PUMPING SYSTEM EITHER ONE OF TWO GUIDELINE SPECIFICATIONS, REFERRED TO AS CONDITION "A" AND CONDITION "B.' FIVE BIDS WERE RECEIVED AND THEY WERE OPENED ON OCTOBER 23, 1961. THE LOWEST BID WAS SUBMITTED BY THE CHICAGO BRIDGE AND IRON COMPANY AND THE SECOND LOWEST BID WAS SUBMITTED BY THE JOINT VENTURE OF YOUR FIRM AND TEARS ENGINEERS, INC. THE BID OF THE JOINT VENTURERS PROPOSED A VACUUM HELIUM PUMPING SYSTEM DESIGNED ON THE BASIS OF THE CONDITION "B" GUIDELINE SPECIFICATION, AND THE DESIGNS OF THE OTHER FOUR BIDDERS WERE BASED ON THE CONDITION "A" GUIDELINE SPECIFICATION. THE JOINT VENTURERS CONTENDED THAT THE LOWEST BID WAS INADEQUATE IN SEVERAL RESPECTS, INCLUDING APPARENT DEVIATIONS FROM SOME OF THE STRUCTURAL REQUIREMENTS OF THE INVITATION WHICH RELATE TO THE LOW BIDDER'S PROPOSALS TO USE 36 CONCRETE FOUNDATION PILES AND TO DRILL HOLES THROUGH THE EXISTING PAVEMENT WITHOUT REMOVING THE PAVEMENT.

SUBSEQUENT TO THE OPENING OF BIDS AND AFTER FURTHER ENGINEERING EVALUATION, THE LANGLEY RESEARCH CENTER DETERMINED THAT THE PROJECT SHOULD BE READVERTISED ON THE BASIS OF NEW SPECIFICATIONS WHICH WOULD ELIMINATE THE CONDITION "B" GUIDELINE SPECIFICATION AND PERMIT THE USE OF STEEL OR CONCRETE PILES AS WELL AS THE ORIGINALLY SPECIFIED TREATED LUMBER PILES IN THE CONSTRUCTION OF THE SPHERE FOUNDATIONS. WE ARE ADVISED BY THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION THAT, UPON READVERTISEMENT, THE CHICAGO BRIDGE AND IRON COMPANY AND THE JOINT VENTURERS AGAIN SUBMITTED THE TWO LOWEST BIDS AND THE TWO BIDDERS REMAIN IN THE SAME RELATIVE POSITION INSOFAR AS BID PRICES ARE CONCERNED. WE UNDERSTAND THAT THE SECOND BID OF THE CHICAGO BRIDGE AND IRON COMPANY WAS APPROXIMATELY $19,000 LESS THAN ITS ORIGINAL BID; THAT IT PROPOSED TO USE TREATED LUMBER PILES; AND THAT THIS MAY HAVE HAD SOME BEARING ON THE BIDDER'S DECISION TO

REDUCE ITS ORIGINAL BID PRICE BY AS MUCH AS $19,000.

IN YOUR ORIGINAL COMPLAINT TO OUR OFFICE, IT WAS CONTENDED THAT THE JOINT VENTURERS HAD COMPLIED WITH ALL REQUIREMENTS OF THE ORIGINAL INVITATION AND WERE ENTITLED TO AN AWARD. YOU REFERRED TO CERTAIN ALLEGED PROPERTY RIGHTS IN THE MATERIAL SUBMITTED WITH THE BID, REQUESTED INFORMATION AS TO THE STATUS OF YOUR PRIOR PROTEST TO THE LANGLEY RESEARCH CENTER, AND PRESENTED ADDITIONAL QUESTIONS CONCERNING THE AUTHORITY AND FACTUAL BASIS FOR THE REJECTION OF THE BID OF THE JOINT VENTURERS AND THE MATTER OF THE PROPRIETY OF PERMITTING A PREVIOUSLY NONRESPONSIVE BIDDER A SECOND OPPORTUNITY TO BID TO THE DETRIMENT OF OTHER PREVIOUSLY QUALIFIED BIDDERS.

IT WAS CONTENDED IN YOUR LETTER OF DECEMBER 15, 1961, THAT THE SPECIFICATIONS ACCOMPANYING THE READVERTISEMENT ARE ARBITRARY BECAUSE THEY MAKE THE PREVIOUSLY NONRESPONSIVE BID OF THE CHICAGO BRIDGE AND IRON COMPANY RESPONSIVE; THAT THE REVISED SPECIFICATIONS WERE NOT PREPARED IN GOOD FAITH BECAUSE THEY ARE MORE OR LESS RESTRICTIVE AND CONFORM TO THE OFFERING OF THE PREVIOUSLY NONRESPONSIVE BIDDER THEREBY MAKING AN IMPROVEMENT IN THAT BIDDER'S COMPETITIVE PETITION; AND THAT THE REVISED SPECIFICATIONS ARE NOT IN THE BEST INTERESTS OF THE GOVERNMENT BECAUSE THE PUMPING SYSTEMS AS SPECIFIED DO NOT PERMIT THE MOST EFFECTIVE UTILIZATION OF THE REQUIRED VACUUM PUMPING EQUIPMENT.

IT APPEARS THAT NO PROSPECTIVE BIDDER UNDER THE READVERTISEMENT WAS IN A POSITION TO UTILIZE THE IDEAS OR DESIGN CONCEPTS OF THE JOINT VENTURERS SET FORTH IN THE DRAWINGS AND RELATED ENGINEERING DATA SUBMITTED WITH THEIR ORIGINAL BID. THE PROPERTY RIGHTS IN SUCH MATERIAL APPEAR TO HAVE BEEN PROTECTED BY THE GOVERNMENT TO AN EXTENT CONSISTENT WITH FORMAL ADVERTISING PROCEDURE WHICH REQUIRES A PUBLIC OPENING OF BIDS. ANY RESTRICTION ON THE PUBLIC DISCLOSURE OF ACCOMPANYING BID DATA AND DESCRIPTIVE LITERATURE WOULD REQUIRE A BID TO BE CONSIDERED AS NONRESPONSIVE, PROVIDED THAT THE BIDDER DID NOT PROHIBIT THE DISCLOSURE OF SUFFICIENT INFORMATION TO COMPETING CONCERNS TO SHOW THE ESSENTIAL NATURE OF THE BID INSOFAR AS IT RELATES TO COMPLIANCE WITH THE REQUIREMENTS OF THE INVITATION FOR BIDS.

THE PRIOR PROTEST OF THE JOINT VENTURERS APPEARS TO HAVE BEEN FULLY CONSIDERED IN CONNECTION WITH THE DECISION WHICH WAS MADE TO READVERTISE UNDER CHANGED SPECIFICATIONS. IT WAS CONSIDERED THAT THE BID OF THE JOINT VENTURERS WAS NONRESPONSIVE AND A DOUBT EXISTED AS TO THE RESPONSIVENESS OF THE BID OF THE CHICAGO BRIDGE AND IRON COMPANY, INASMUCH AS THE TYPE OF PILE FOUNDATION CONSTRUCTION PROPOSED BY THAT COMPANY, ALTHOUGH REPRESENTING A DEVIATION FROM THE ADVERTISED SPECIFICATIONS, WAS FOUND TO BE SUPERIOR TO THAT SPECIFIED BY THE GOVERNMENT.

UNDER A READVERTISEMENT FOR BIDS A PREVIOUSLY NONRESPONSIVE BIDDER OBVIOUSLY WOULD BE GIVEN A SECOND OPPORTUNITY TO BID BUT A READVERTISEMENT CANNOT BE HELD TO BE LEGALLY OBJECTIONABLE WHERE THERE ARE COGENT OR COMPELLING REASONS FOR REJECTING ALL BIDS AND READVERTISING THE PARTICULAR REQUIREMENTS OF THE GOVERNMENT. SEE 40 COMP. GEN. 671, 674. THE AUTHORITY FOR THE DECISION TO READVERTISE IS SECTION 2305 (C) OF TITLE 10, U.S.C. WHICH PROVIDES IN PART THAT "ALL BIDS MAY BE REJECTED IF THE HEAD OF THE AGENCY DETERMINES THAT REJECTION IS IN THE PUBLIC EREST.'

ORIGINALLY, THE FACTUAL BASIS FOR THE REJECTION OF ALL BIDS AND THE DECISION TO READVERTISE APPEARS TO BE SUBSTANTIALLY AS FOLLOWS:

1. THE EXISTING DOUBT AS TO THE RESPONSIVENESS OF THE BID OF THE CHICAGO BRIDGE AND IRON COMPANY.

2. THE APPARENT FACT THAT THE BID OF THE JOINT VENTURERS WAS NONRESPONSIVE BECAUSE OF DESIGN DEFICIENCIES WHICH WOULD PERMIT THE ENTRY OF UNWANTED OIL INTO THE VACUUM SYSTEM.

3. THE PROBABILITY THAT A SATISFACTORY VACUUM HELIUM PUMPING SYSTEM COULD NOT BE DESIGNED WITH THE USE OF THE CONDITION "B" GUIDELINE SPECIFICATION AND THE APPARENT FACT THAT A PUMPING SYSTEM DESIGNED UNDER THE CONDITION "A" GUIDELINE SPECIFICATION WOULD BE MORE SATISFACTORY THAN ONE DESIGNED UNDER THE CONDITION "B" GUIDELINE SPECIFICATION FROM THE STANDPOINT OF A LESSER DEGREE OF COMPLEXITY IN OPERATING CONTROLS.

4. A READVERTISEMENT WOULD TEND TO INSURE A FAIR COMPETITION BECAUSE A COMPARABILITY OF BIDS WOULD BE CLEAR.

WITH RESPECT TO THE VARIOUS CONTENTIONS MADE IN YOUR LETTER DATED DECEMBER 15, 1961, WE HAVE RECEIVED A DETAILED REPORT FROM THE LANGLEY RESEARCH CENTER WHICH STATES AS FOLLOWS:

"1. A REVIEW HAS BEEN MADE OF GRAVER TANK AND MANUFACTURING COMPANY'S LETTER, DATED DECEMBER 15, 1961, BY LANGLEY ENGINEERING. AS A RESULT OF THIS REVIEW, THE FOLLOWING COMMENTS ARE OFFERED TO THE VARIOUS PARAGRAPHS OF THE LETTER:

"/A) THIRD PARAGRAPH:

"THE REVISIONS TO THE SPECIFICATIONS ARE IN NO WAY ARBITRARY, BUT ARE BASED ON SOUND ENGINEERING REVISIONS CONSIDERED IN THE BEST INTEREST OF THE GOVERNMENT.

"/B) FOURTH PARAGRAPH:

"THE SPECIFICATIONS ARE ALSO NOT ARBITRARY IN THAT THEY ARE NOT ADDITIONALLY MORE OR LESS RESTRICTIVE THAN THE ORIGINAL SPECIFICATIONS. THE ORIGINAL SPECIFICATIONS ALLOWED BIDDERS TO SUBMIT BIDS ON A VACUUM SYSTEM BASED ON CONDITION "A" OR CONDITION "B.' ALL BIDDERS, EXCEPT THE PROTESTANT, GRAVER TANK AND MANUFACTURING COMPANY (JOINT VENTURE WITH TEARS ENGINEERS, INCORPORATED) SUBMITTED BIDS ON CONDITION "A.' GRAVER AND TEARS SUBMITTED ITS BID ON CONDITION ,B.' THE ENGINEERING EVALUATION OF THE CONDITION "B" PROPOSAL LED THE ENGINEERS TO THE CONCLUSION THAT THE DESIGN OF THE VACUUM SYSTEM UNDER CONDITION "B" SPECIFICATIONS WOULD BE UNDESIRABLE BECAUSE OF THE HIGHER DEGREE OF COMPLEXITY OF OPERATING CONTROLS THAN UNDER CONDITION "A" AND, MORE IMPORTANTLY, THE INHERENT CHARACTERISTICS OF THE VACUUM PUMPING SYSTEM THAT WOULD PERMIT THE ENTRY OF UNWANTED OIL INTO THE VACUUM SYSTEM.

"/C) FIFTH PARAGRAPH:

"THE TWO (2) PUMPING SYSTEMS ARE THE SAME AS ORIGINALLY SPECIFIED UNDER CONDITION "A" IN THE ORIGINAL ADVERTISEMENT. THE ONLY MAJOR CHANGE IN ORIGINAL SPECIFICATIONS WAS THE ELIMINATION OF CONDITION "B," AS OUTLINED IN (B) ABOVE.

"LANGLEY ENGINEERING DOES NOT CONSIDER THE SPECIFICATIONS FOR PUMPING SYSTEMS TO BE RESTRICTIVE AS THEY WERE WRITTEN TO DESCRIBE PERFORMANCE REQUIREMENTS TO SPECIFIC NEEDS OF THE GOVERNMENT.

"LANGLEY ENGINEERING EVALUATED THE BIDS FROM FOUR (4) OF THE BIDDERS ON THE ORIGINAL ADVERTISEMENT AND FOUND THESE ACCEPTABLE TO MEET THE PERFORMANCE REQUIREMENTS.

"THE PROTESTING BIDDER COMPARES THE CB AND I ARRANGEMENT WITH HIS OWN ARRANGEMENT AND CONTENDS THAT THE CB AND I BID DOES NOT USE THE EFFICIENT ARRANGEMENT OF VACUUM PUMP STAGING. THE MATTER OF INSTALLED HORSEPOWER HEATING DUTY OF THE DIFFUSION PUMPS AND OVER-ALL SYSTEM ARRANGEMENT OF THE TWO LOW BIDDERS HAS BEEN EVALUATED BY THE GOVERNMENT ENGINEERS. IT IS THEIR CONCLUSION THAT THE SYSTEM AS PROPOSED BY CB AND I, AND AT LEAST THREE OTHER BIDDERS UNDER THIS PROPOSAL, REPRESENTS A MORE CONVENTIONAL AND ACCEPTABLE OVER-ALL CONFIGURATION TO THE GOVERNMENT. THE PROTESTING BIDDERS ARRANGEMENT WOULD RESULT, AS HE POINTS OUT, IN LESS INSTALLED HORSEPOWER WITH LESS MACHINES WHICH CLEARLY SHOULD RESULT IN A LOWER VALUE SYSTEM TO THE GOVERNMENT. AN ANALYSIS OF THE PROTESTING BIDDERS' ARGUMENT WITH REGARD TO THE VACUUM PUMP STAGING ARRANGEMENTS DEMONSTRATES THE WEAKNESS OF HIS ARGUMENT SINCE THE PROTESTING BIDDERS MERELY USES THE NUMBER OF MACHINES TO MEASURE EFFICIENCY RATHER THAN ALL THE FACTORS, INCLUDING HORSEPOWER, OVER-ALL SYSTEM ARRANGEMENT AND OTHER GENERAL FEATURES USED BY THE EVALUATING ENGINEERS TO MEASURE EFFICIENCY.

"THE HELIUM PUMPING SYSTEM PERFORMANCE REQUIREMENTS ARE THE SAME AS ORIGINALLY SPECIFIED UNDER CONDITION "A.' LANGLEY EVALUATING ENGINEERS OF THE ORIGINAL ADVERTISEMENT DID NOT CONSIDER THE SYSTEM INSTALLED AT AMES TO BE IDENTICAL.

"THE SYSTEM PUMPING FACTORS AS OFFERED BY ALL THE BIDDERS WERE ACCEPTABLE AS FAR AS COULD BE DETERMINED. THE GOVERNMENT SPECIFICATION OUTLINED THE MINIMUM REQUIREMENTS.

"THE REVISED SPECIFICATIONS PROHIBITS THE CUT IN OF DIFFUSION PUMPS ABOVE 15 MICRONS. THIS WAS NOT DONE ARBITRARILY BUT WAS DONE SPECIFICALLY TO REDUCE BACK STREAMING BASED ON RECENT TECHNICAL INFORMATION OBTAINED FROM PAPERS PRESENTED AT A RECENT MEETING OF THE AMERICAN VACUUM SOCIETY IN WASHINGTON, D.C.

"IT IS TRUE THAT THE SPECIFICATIONS HAVE NOW BEEN REVISED TO PERMIT USE OF ANY OF THESE TYPES OF PILES. THE ORIGINAL SPECIFICATIONS, AS A MINIMUM, SPECIFIED THE USE OF FOUNDATION PILES TO BE TREATED TIMBER. THE ENGINEERS ARE NOW CONVINCED THAT THE METHOD OF INSTALLING THE FOUNDATION PILES, AS PROPOSED BY THE APPARENT LOW BIDDER, THE CHICAGO BRIDGE AND IRON COMPANY, UNDER THE ORIGINAL SPECIFICATIONS IS SUPERIOR IN EVERY WAY TO THE METHOD ORIGINALLY SPECIFIED. ACCORDINGLY, THE REVISED SPECIFICATIONS WILL NOW ALLOW THE USE OF SUPERIOR TYPE PILE CONSTRUCTION BASED ON STEEL OR CONCRETE PILES FOR THE SPHERE FOUNDATIONS. THE LATTER TYPE OF PILES ARE CONSIDERED SUPERIOR BY THE ENGINEERS BECAUSE THEY DO NOT GIVE AS MUCH GROUND HEAVING. BECAUSE OF THE SOIL CONDITIONS PREVALENT AT LANGLEY RESEARCH CENTER, THE ENGINEERS ARE FACED WITH THE CONDITION OF GROUND HEAVING SO THAT ANY PILING THAT IS USED WHICH WILL REDUCE THE GROUND HEAVING CONDITIONS WILL RESULT IN A BETTER FOUNDATION WITH THE ADDED BENEFIT OF A SIGNIFICANT LESSENING OF POSSIBLE DAMAGE TO SURROUNDING EQUIPMENT.

"2. ADDITIONAL REVIEW BY LANGLEY ENGINEERING GROUP REVEALS THAT BOTH TEARS ORIGINAL BID UNDER L-1871 AND THEIR BID UNDER L-1870-A SHOULD BE CONSIDERED NONRESPONSIVE BECAUSE OF THE FOLLOWING FACTS:

"/A) THE 100-FT. DIAMETER VACUUM SPHERE IS STATED TO BE TESTED TO ONLY 5 P.S.I. GAGE, WHEREAS PARAGRAPH 4B-03 (A) (2) OF SPECIFICATION L 1871-A AND THE ASME CODE REQUIRE 22 P.S.I. GAGE.

"/B) TEARS SUBMITTED NO DETAILS ON FOUNDATION REQUIREMENTS.

"/C) UNDER L-1871-A TEARS BID DID NOT MEET MINIMUM 15-FT. CLEARANCE AS SPECIFIED UNDER PARAGRAPH 4B-03 (A) (9).

"/D) ENGINEERING REVIEW OF THE GRAVES-TEARS 100-FT. DIAMETER VACUUM VESSEL SHOWS IT IS BASED ON SUBSTANDARD THICKNESS OF 5/8-IN. PLATE WHEN COMPARED WITH THE GREATER THICKNESS OF ALL OTHER BIDDERS.'

CONTRACTING AGENCIES OF THE GOVERNMENT HAVE THE RESPONSIBILITY FOR DRAFTING PROPER SPECIFICATIONS WHICH REFLECT THE NEEDS OF THE GOVERNMENT AND FOR DETERMINING FACTUALLY WHETHER BIDDERS HAVE SUBMITTED PROPOSALS WHICH MEET OR EXCEED SPECIFICATION REQUIREMENTS. IN OUR OPINION, WHEN IT IS DETERMINED THAT A READVERTISEMENT SHOULD BE UNDERTAKEN ON THE BASIS OF REVISED SPECIFICATIONS, THE OBJECTIVE TO BE ACHIEVED WOULD BE THE SAME AS IN THE CASE OF THE ORIGINAL ADVERTISEMENT, NAMELY, TO INSURE THAT THE PARTICULAR WORK OR SUPPLIES WILL MEET THE AGENCY'S NEED. THE REVISED SPECIFICATIONS CANNOT BE REGARDED AS BEING UNDULY RESTRICTIVE OF COMPETITION SOLELY ON THE GROUND THAT ONE OR MORE OF THE ORIGINAL BIDDERS MAY BE IN A BETTER POSITION THAN OTHERS TO SUBMIT BIDS WHICH WILL COMPLY WITH THE NEW SPECIFICATIONS. AS STATED IN 36 COMP. GEN. 251, THE GOVERNMENT IS NOT TO BE PLACED IN A POSITION OF ALLOWING BIDDERS TO DICTATE SPECIFICATIONS WHICH WILL PERMIT ACCEPTANCE OF EQUIPMENT WHICH DOES NOT, IN THE CONSIDERED JUDGMENT OF THE CONTRACTING AGENCY, REASONABLY MEET THE AGENCY'S NEED.

ON THE RECORD BEFORE US IT APPEARS THAT THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION HAS FURNISHED IN THIS CASE SUFFICIENT JUSTIFICATION FOR THE REJECTION OF ALL BIDS AND READVERTISING ON THE BASIS OF REVISED SPECIFICATIONS FOR THE TYPE OF JOB WHICH THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION THEN DETERMINED TO BE MOST DESIRABLE. ACCORDINGLY, YOUR PROTEST TO OUR OFFICE IN THE MATTER MUST BE DENIED.