B-148200, SEP. 26, 1962

B-148200: Sep 26, 1962

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WIENER AND ROSS: FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF AMERICAN ART WORKS. BY AMENDMENT NO. 1 TO THE INVITATION THE SPECIFICATIONS WERE REVISED TO PERMIT THE SIGNS TO BE COATED BY A SILK-SCREEN PROCESS WITH REFLECTIVE GLASS BEADS IMBEDDED IN THE COATING MATERIAL AS AN OPTION IN LIEU OF THE REFLECTIVE FABRIC ORIGINALLY SPECIFIED. THE 19 BIDS RECEIVED WERE OPENED ON FEBRUARY 6. AMONG THE BIDS RECEIVED WERE BIDS FROM THE AMERICAN ART WORKS AND 3-M.THE 3-M BID. THE FIRST THREE BIDS WERE FOR ALUMINUM BACKING AND THE LAST THREE WERE FOR STEEL BACKING. SAMPLES OF EACH TYPE OF SIGN BID UPON WERE SUBMITTED WITH THE BID. THE AWARD WAS MADE TO THE 3-M CORPORATION ON THE BASIS OF ITS "B" BID (LARGE EXPOSED BEADS).

B-148200, SEP. 26, 1962

TO WACHTEL, WIENER AND ROSS:

FURTHER REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF AMERICAN ART WORKS, DIVISION OF RAPID-AMERICAN CORPORATION, AGAINST THE AWARD MADE TO THE MINNESOTA MINING AND MANUFACTURING COMPANY (HEREINAFTER REFERRED TO AS 3-M), UNDER INVITATION FOR BIDS NO. ENG-18-020-62-28, ISSUED BY THE U.S. ARMY ENGINEER DISTRICT, BALTIMORE, MARYLAND.

THE INVITATION, ISSUED ON JANUARY 3, 1962, REQUESTED BIDS FOR FURNISHING 400,000 ALUMINIUM OUTDOOR (TYPE 1) FALLOUT SHELTER SIGNS TO BE MANUFACTURED IN ACCORDANCE WITH MILITARY SPECIFICATIONS MIL-S-43046 (CE), DATED NOVEMBER 24, 1961, AS MODIFIED. BY AMENDMENT NO. 1 TO THE INVITATION THE SPECIFICATIONS WERE REVISED TO PERMIT THE SIGNS TO BE COATED BY A SILK-SCREEN PROCESS WITH REFLECTIVE GLASS BEADS IMBEDDED IN THE COATING MATERIAL AS AN OPTION IN LIEU OF THE REFLECTIVE FABRIC ORIGINALLY SPECIFIED. THE INVITATION REQUIRED BIDDERS TO SUBMIT WITH THEIR BIDS TWO SAMPLES OF THE SIGN AND OVERLAYS TO BE USED, AND PROVIDED THAT THE SAMPLES WOULD BE TESTED TO ESTABLISH WHETHER OR NOT THEY COMPLIED WITH THE SPECIFICATION REQUIREMENTS.

THE 19 BIDS RECEIVED WERE OPENED ON FEBRUARY 6, 1962. AMONG THE BIDS RECEIVED WERE BIDS FROM THE AMERICAN ART WORKS AND 3-M.THE 3-M BID, SIGNED BY E. V. JARVINEN, CHIEF CLERK, QUOTED PRICES ON SIX TYPES OF SIGNS, DESIGNATED AS BIDS A THROUGH F. DUE TO THE LIMITED AMOUNT OF SPACE PROVIDED FOR QUOTING PRICES ON PAGE 3 OF THE BID SCHEDULE, 3-M ATTACHED TWO PAGES DESIGNATED AS ,PRICE SHEET--- PAGE 3 A" AND "PRICE SHEET--- PAGE 3 B.' THE FIRST THREE BIDS WERE FOR ALUMINUM BACKING AND THE LAST THREE WERE FOR STEEL BACKING. THE "A" BID OFFERED SCOTCHLITE, AND "B" AND ,C" BIDS OFFERED EXPOSED GLASS BEAD REFLECTIVE MATERIAL WITH LARGE AND SMALL BEADS, RESPECTIVELY. SAMPLES OF EACH TYPE OF SIGN BID UPON WERE SUBMITTED WITH THE BID.

EXAMINATION OF THE SAMPLES FURNISHED BY AMERICAN ART WORKS DISCLOSED THAT THEY FAILED TESTS PRESCRIBED BY PARAGRAPH 4.4.2.2 OF THE SPECIFICATIONS, INDICATING THAT THE SIGNS WOULD LOSE THEIR REFLECTIVE QUALITIES AFTER PROLONGED EXPOSURE TO RAIN--- A CONDITION TO WHICH THEY WOULD NECESSARILY BE SUBJECTED. THE AWARD WAS MADE TO THE 3-M CORPORATION ON THE BASIS OF ITS "B" BID (LARGE EXPOSED BEADS).

YOU DO NOT QUESTION THE VALIDITY OF THE REJECTION OF THE BID OF AMERICAN ART WORKS AS NOT COMPLYING WITH THE REQUIREMENTS OF THE SPECIFICATIONS. NOR DO YOU QUESTION THE TEST RESULTS OF THE 3-M BID SAMPLES ON THE ITEM AWARDED AS COMPLYING WITH THE REQUIREMENTS OF THE SPECIFICATIONS. THE GROUNDS OF YOUR PROTEST FALL IN TWO MAJOR CATEGORIES, NAMELY, TECHNICAL DEFECTS IN 3-M'S BIDS AND RESTRICTIVE SPECIFICATIONS.

YOU ARE NOW AWARE THAT MR. E. V. JARVINEN, CHIEF CLERK, WAS DULY AUTHORIZED TO SIGN BIDS ON BEHALF OF 3-M AT THE TIME OF THE SUBMISSION OF THE BID HERE INVOLVED, AS EVIDENCED BY A CERTIFIED COPY OF A RESOLUTION OF THE BOARD OF DIRECTORS DATED MAY 9, 1961, WHICH YOU SAW IN THIS OFFICE. IT IS REPORTED THAT THE DELEGATION OF AUTHORITY DATED FEBRUARY 12, 1962 (A DATE AFTER THE BID OPENING), WHICH YOU SAW IN THE ADMINISTRATIVE OFFICE, WAS A COPY OF HIS CURRENT DELEGATION OF AUTHORITY INADVERTENTLY FURNISHED, AND THAT MR. JARVINEN HAS HELD CONTRACTING AUTHORITY FOR SEVERAL YEARS BY VIRTUE OF ANNUAL RESOLUTIONS OF THE BOARD OF DIRECTORS.

IT IS ALLEGED THAT 3-M'S QUOTATIONS, OTHER THAN ITS "A" BID, ARE QUALIFIED AND ARE NOT RESPONSIVE TO THE REQUIREMENTS OF THE SPECIFICATIONS IN SEVERAL RESPECTS. IT IS URGED, IF EFFECT, THAT THE 3-M "PRICE SHEETS" (PAGES 3 A AND 3 B) ARE SEPARATE PROPOSALS NOT SUBJECT TO THE PROVISIONS OF THE INVITATION AND THAT THEY ARE EITHER NOT COMPLETE OR TAKE EXCEPTIONS TO THE SPECIFICATIONS.

THE "D," "E" AND "F" BIDS, WHICH OFFERED SIGNS WITH STEEL BACKING, CLEARLY WERE NONRESPONSIVE, SINCE THE SPECIFICATIONS REQUIRED ALUMINUM. THESE BIDS, HOWEVER, WERE NOT CONSIDERED FOR AWARD. THE "A," "B" AND "C" BIDS, COVERING ALUMINUM-BACKED SIGNS, WERE ALL IN ACCORDANCE WITH THE REQUIREMENTS OF THE SPECIFICATIONS AS MODIFIED, WHICH PERMITTED THE USE OF REFLECTORIZED SHEETING OR EXPOSED GLASS BEAD REFLECTIVE MATERIAL AT BIDDER'S OPTION. THE SIZE OF THE BEADS WAS NOT SPECIFIED AND, THEREFORE, THE BIDS ON TWO SIZES OF BEADS WERE PERMISSIBLE.

IT IS CLEAR THAT THE ONLY REASON PAGES 3 A AND 3 B WERE ANNEXED TO THE BID WAS A LACK OF SPACE ON PAGE 3 OF THE BID SCHEDULE FOR 3-M TO SET FORTH ITS VARIOUS OFFERINGS. IN OUR OPINION SUCH PAGES ARE A PART OF THE BID AND AS SUCH ARE SUBJECT TO THE VARIOUS PROVISIONS OF THE INVITATION, UNLESS SPECIFICALLY PROVIDED OTHERWISE. ESTABLISHED PRINCIPLES PROVIDE THAT "WRITINGS WHICH ARE MADE A PART OF A CONTRACT BY ANNEXATION OR REFERENCE WILL BE SO CONSTRUED," AND THAT "A CONTRACT MUST BE CONSTRUED AS A WHOLE AND, WHEREVER POSSIBLE, EFFECT WILL BE GIVEN TO ALL OF ITS PARTS.' 17 C.J.S. CONTRACTS SECS. 299 AND 3297. IN ACCORDANCE WITH SUCH PRINCIPLES, EXCEPT WHERE SPECIFICALLY PROVIDED TO THE CONTRARY--- AS IN THE CASE OF STEEL BACKING MATERIAL--- THE ALTERNATE BIDS SET FORTH ON PAGES 3 A AND 3 B ARE SUBJECT TO ALL OF THE PROVISIONS OF THE INVITATION. THEREFORE, THE FACT THAT THE WORDS USED ON PAGES 3 A AND 3 B MAY VARY SOMEWHAT OR MAY NOT SET FORTH COMPLETELY THE REQUIREMENTS OF THE INVITATION DO NOT RENDER SUCH BIDS QUALIFIED AND NONRESPONSIVE. ANY DOUBTS IN THIS REGARD WOULD SEEM TO BE DISPELLED BY THE FACT THAT THE SAMPLES FURNISHED WERE FOUND TO COMPLY WITH THE REQUIREMENTS OF THE SPECIFICATIONS IN ALL RESPECTS.

WITH REGARD TO THE ALLEGATION THAT THE SPECIFICATIONS ARE RESTRICTIVE, IT IS REPORTED THAT IN PREPARING THE SPECIFICATIONS FOR THESE SIGNS IT WAS RECOGNIZED THAT IN CASE OF ENEMY ATTACK MANY LIVES WOULD DEPEND ON THEIR EFFECTIVENESS. THEREFORE, IT WAS CONSIDERED THAT THEY MUST BE CLEARLY VISIBLE AND LEGIBLE UNDER ADVERSE LIGHTING CONDITIONS, AS IN BLACKOUTS OR POWER FAILURES, AND MUST BE DURABLE, RETAINING THE DESIRED CHARACTERISTICS OVER A PERIOD OF YEARS AND RESISTING THE INROADS OF WEATHER AND ROUGH HANDLING. FOR SUCH REASONS, IT WAS CONSIDERED ESSENTIAL THAT THE SIGNS MAINTAIN A HIGH DEGREE OF REFLECTIVITY AFTER PROLONGED EXPOSURE TO HEAVY, DRIVING, RAINS TO WHICH THEY WILL BE SUBJECTED IN ACTUAL USE. UPON THE ISSUANCE OF THE INVITATION, OBJECTIONS WERE MADE BY THE INDUSTRY THAT THE SPECIFICATIONS WERE UNDULY RESTRICTIVE. UPON REVIEW, THE SPECIFICATIONS WERE REVISED TO PERMIT THE SIGNS TO BE COATED BY A SILK SCREEN PROCESS WITH REFLECTIVE GLASS BEADS IMBEDDED IN THE COATING MATERIAL AS AN OPTION IN PLACE OF THE REFLECTIVE FABRIC ORIGINALLY REQUIRED. THE REVISED SPECIFICATIONS WERE INCORPORATED IN AMENDMENT NO. 1 TO THE INVITATION FOR BIDS.

IT IS URGED THAT THE REVISION TO THE SPECIFICATIONS, WHICH PERMITTED THE USE OF EXPOSED GLASS BEAD REFLECTIVE MATERIAL IN LIEU OF SCOTCHLITE, DID NOT CURE THE RESTRICTIVE NATURE OF THE SPECIFICATIONS, SINCE 3-M WAS ABLE TO USE A PATENTED AND PROPRIETARY METALLIC-BASED TRANSLUCENT YELLOW BINDER WHICH ENHANCES THE REFLECTIVE QUALITY OF THE BEADED MATERIAL AND WHICH IS NECESSARY TO MEET THE "RAINFALL" TEST. IT IS STATED THAT NEITHER AMERICAN ART WORKS NOR OTHER BIDDERS HAD THIS MATERIAL AVAILABLE TO THEM AND THERE WAS THUS INADVERTENTLY CREATED A SITUATION WHERE NO COMPETITION EXISTED.

WE HAVE CONSISTENTLY HELD THAT THE ESTABLISHMENT OF SPECIFICATIONS REFLECTING THE ACTUAL NEEDS OF THE GOVERNMENT IS PRIMARILY THE RESPONSIBILITY OF THE ADMINISTRATIVE AGENCY. IT HAS ALSO BEEN HELD THAT THE ADVERTISING STATUTES REQUIRE EVERY EFFORT TO BE MADE TO DRAW SPECIFICATIONS IN SUCH TERMS AS WILL PERMIT THE BROADEST FIELD OF COMPETITION CONSISTENT WITH THE GOVERNMENT'S ACTUAL NEEDS. IT IS WELL ESTABLISHED THAT THE GOVERNMENT DOES NOT VIOLATE EITHER THE LETTER OR THE SPIRIT OF THE COMPETITIVE BIDDING STATUTES MERELY BECAUSE ONLY ONE FIRM CAN SUPPLY ITS NEEDS, PROVIDED THE SPECIFICATIONS ARE REASONABLE AND NECESSARY FOR THE PURPOSE INTENDED. 34 COMP. GEN. 336. IN THE INSTANT CASE, AFTER THE ISSUANCE OF THE ORIGINAL SPECIFICATIONS AND THE PROTESTS RECEIVED FROM THE INDUSTRY, THE SPECIFICATION REQUIREMENTS WERE MODIFIED TO SOME EXTENT. THE INDUSTRY APPARENTLY THOUGHT THAT UNDER THE REVISED REQUIREMENTS THEY MIGHT BE ABLE TO MEET SPECIFICATIONS, SINCE SEVERAL BIDDERS, INCLUDING AMERICAN ART WORKS, UNDERTOOK THE TROUBLE AND EXPENSE OF PREPARING BIDS AND BID SAMPLES IN THE HOPE THAT THEY COULD MEET THE REQUIREMENTS WHICH WERE CONSIDERED NECESSARY BY THE CONTRACTING OFFICIALS TO MEET THE NEEDS OF THE GOVERNMENT. THE FACT THAT MOST OR ALL OF THE SAMPLES SUBMITTED BY THE VARIOUS BIDDERS, OTHER THAN 3-M, DID NOT MEET REQUIREMENTS DOES NOT MEAN THAT THE REQUIREMENTS DO NOT REFLECT THE ACTUAL NEEDS OF THE GOVERNMENT OR THAT AN AWARD UNDER THE INVITATION WOULD BE IMPROPER DUE TO THE RESTRICTIVE NATURE OF THE SPECIFICATIONS. HOWEVER, IF THE SPECIFICATION REQUIREMENTS, EVEN AFTER REVISION, DO IN FACT CALL FOR A PRODUCT WHICH ONLY ONE FIRM CAN FURNISH, WE BELIEVE IT WOULD BE PREFERABLE TO UTILIZE A METHOD OF PROCUREMENT WHICH WOULD ENABLE THE GOVERNMENT TO ASSURE ITSELF OF THE REASONABLENESS OF THE PRICE.

FOR THE FOREGOING REASONS, WE FIND NO LEGAL BASIS TO QUESTION THE AWARD MADE TO MINNESOTA MINING AND MANUFACTURING COMPANY AS THE LOWEST BIDDER MEETING THE REQUIREMENTS OF THE SPECIFICATIONS.