B-151968, AUG. 22, 1963, 43 COMP. GEN. 209

B-151968: Aug 22, 1963

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BIDS - QUALIFIED - IMPROVEMENTS PROPOSED BY BIDDER AN AWARD OF A CONTRACT TO A BIDDER WHO OFFERS AN ITEM WHICH DIFFERS FROM THE SPECIFICATIONS IN VARIOUS MATERIAL ASPECTS AFFECTING PRICE AND QUALITY BUT WHICH WOULD BETTER SERVE THE NEEDS OF THE PROCURING AGENCY IS AN AWARD ON THE BASIS OF A NONRESPONSIVE BID PREJUDICIAL TO THE OTHER BIDDERS AND. 1963: REFERENCE IS MADE TO THE LETTER DATED JULY 26. THE REPORT WAS SUBMITTED IN CONNECTION WITH THE PROTEST OF THE LAWSON COMPANY. WAS ISSUED ON JUNE 4. THE MACHINE SHALL HAVE THE CAPACITY TO CUT AND SQUARE ON ALL SIZES OF SHEETS UP TO AND INCLUDING 42 INCHES. * * * THE MACHINE SHALL HAVE AN OPENING UNDER THE CLAMP OF NO LESS THAN 6 1/4 INCHES AND SHALL BE CAPABLE OF SATISFACTORILY CUTTING A FULL LIFT UP TO AND INCLUDING 6 1/4 INCHES WITHOUT STRAIN. 3. * * * THE CUTTER BAR SHALL HAVE A TWO END PULL. 6.

B-151968, AUG. 22, 1963, 43 COMP. GEN. 209

BIDS - QUALIFIED - IMPROVEMENTS PROPOSED BY BIDDER AN AWARD OF A CONTRACT TO A BIDDER WHO OFFERS AN ITEM WHICH DIFFERS FROM THE SPECIFICATIONS IN VARIOUS MATERIAL ASPECTS AFFECTING PRICE AND QUALITY BUT WHICH WOULD BETTER SERVE THE NEEDS OF THE PROCURING AGENCY IS AN AWARD ON THE BASIS OF A NONRESPONSIVE BID PREJUDICIAL TO THE OTHER BIDDERS AND, THEREFORE, DOES NOT RESULT IN A VALID AND BINDING CONTRACT.

TO THE SECRETARY OF LABOR, AUGUST 22, 1963:

REFERENCE IS MADE TO THE LETTER DATED JULY 26, 1963, FROM THE OFFICE OF THE ADMINISTRATIVE ASSISTANT SECRETARY SIGNED BY MR. JOHN F. NEAFSEY AS CONTRACTING OFFICER AND DIRECTOR, OFFICE OF ADMINISTRATIVE SERVICES, WHICH CONSTITUTED A REPORT ON THE AWARD OF A CONTRACT LET UNDER INVITATION FOR BIDS NO. L-3813 (63) TO THE HARRIS-SEYBOLD DIVISION OF THE HARRIS INTERTYPE CORPORATION FOR ONE "CITATION 42" PAPER CUTTER IN THE NET AMOUNT OF $7,994.20. THE REPORT WAS SUBMITTED IN CONNECTION WITH THE PROTEST OF THE LAWSON COMPANY, DIVISION OF MIEHLE-GOSS-DEXTER, INCORPORATED.

THE INVITATION, CALLING FOR DELIVERY AND INSTALLATION IN THE UNITED STATES DEPARTMENT OF LABOR, OFFICE OF ADMINISTRATIVE SERVICES, BRANCH OF PRINTING AND REPRODUCTION, IN WASHINGTON, D.C., OF A PAPER CUTTER, SIZE 42 INCHES, WAS ISSUED ON JUNE 4, 1963, WITH BID OPENING SCHEDULED FOR JUNE 17, 1963. THE INVITATION STATED AS FOLLOWS UNDER "TERMS AND CONDITIONS" AT PARAGRAPH 8 (B):

THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS AND TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN BIDS RECEIVED.

THREE PAGES OF SPECIFICATIONS OUTLINED THE CHARACTERISTICS OF THE MACHINE SOUGHT IN CONSIDERABLE DETAIL. THE SPECIFICATIONS STATED IN PERTINENT PART AS FOLLOWS:

1. FURNISH AND INSTALL * * * ONE (1) PAPER CUTTING MACHINE AND AUXILIARY EQUIPMENT (SEYBOLD SABER OR EQUAL) AS HEREINAFTER DESCRIBED AND SPECIFIED.

2. THE MACHINE SHALL HAVE THE CAPACITY TO CUT AND SQUARE ON ALL SIZES OF SHEETS UP TO AND INCLUDING 42 INCHES. * * * THE MACHINE SHALL HAVE AN OPENING UNDER THE CLAMP OF NO LESS THAN 6 1/4 INCHES AND SHALL BE CAPABLE OF SATISFACTORILY CUTTING A FULL LIFT UP TO AND INCLUDING 6 1/4 INCHES WITHOUT STRAIN.

3. * * * THE CUTTER BAR SHALL HAVE A TWO END PULL.

6. EQUIPMENT FOR THE CUTTING MACHINE SHALL INCLUDE:

A FLEXIBLE, DETACHABLE, 5 INCHES WIDE, APPROXIMATELY, PAPER CLAMP. * *

A LEFT HAND AND A RIGHT HAND AUXILIARY TABLE, 40 INCHES IN LENGTH, APPROXIMATELY, COMPLETE WITH AIR-FILM OUTLETS * * *

SLOT CLOSING DEVICE TO CLOSE BACK GAUGE SLOT.

15. BIDS ON A MACHINE DIFFERING IN MINOR ASPECTS FROM THE SPECIFIED DETAILS WILL BE CONSIDERED, PROVIDED THAT THE MACHINE OFFERED WILL GIVE EQUAL SERVICE TO THAT SPECIFIED. IF THE MACHINE PROPOSED VARIES IN ANY PART FROM THE SPECIFICATIONS, SPECIAL MENTION MUST BE MADE OF SUCH POINTS APART FROM THE GENERAL DESCRIPTION SUBMITTED. WHEN VARIATIONS ARE NOT STATED CLEARLY AND IN DETAIL IT SHALL BE UNDERSTOOD THAT THE BIDDER PROPOSES TO FURNISH EQUIPMENT MEETING ALL DETAILS OF THE ORIGINAL SPECIFICATIONS AND THE CONTRACTOR WILL BE HELD TO STRICT COMPLIANCE THEREWITH.

A TELEGRAPHIC MODIFICATION TO THE INVITATION ISSUED LATER ALLOWED THE BIDDERS TO INCLUDE IN THEIR BIDS AN OFFER ON A HARRIS-SEYBOLD 44 INCH MACHINE AS A TRADE-IN.

THREE BIDS WERE SUBMITTED IN RESPONSE TO THE INVITATION AS FOLLOWS: GANE BROTHERS AND COMPANY OF NEW YORK, INC., $5,978 (CONSISTING OF $8,978 MINUS $3,000 TRADE-IN ALLOWANCE); HARRIS-SEYBOLD COMPANY, $7,994.20 ($12,283.40 MINUS $4,289.20); THE LAWSON COMPANY, DIVISION OF MIEHLE-GOSS-DEXTER, INCORPORATED, $11,074.30 ($13,449.30 MINUS $2,375). THE BID SUBMITTED BY THE GANE BROTHERS WAS PREDICATED ON DELIVERY OF A FOREIGN-MADE ITEM AND WAS F.O.B. PORT OF ENTRY AND THUS DID NOT INCLUDE THE COST OF DELIVERY OR INSTALLATION AS REQUESTED BY THE INVITATION. ALTHOUGH THE DESCRIPTIVE LITERATURE FURNISHED WITH THE LAWSON BID DID NOT INDICATE COMPLIANCE WITH THE SPECIFICATIONS IN EVERY RESPECT, THE COMPANY TOOK NO WRITTEN EXCEPTIONS TO THE SPECIFICATIONS AND HENCE MUST BE DEEMED IN ACCORDANCE WITH PARAGRAPH 15 TO HAVE OFFERED A MODIFIED VERSION OF THE MACHINE DESCRIBED IN THE LITERATURE AND TO HAVE BEEN FULLY RESPONSIVE TO THE TERMS OF THE INVITATION.

THE BID OF THE HARRIS-SEYBOLD COMPANY WAS PREDICATED UPON FURNISHING A NEW OFF-THE-SHELF MODEL, THE SEYBOLD "CITATION 42," WHICH, ACCORDING TO THE COMPANY, HAD REPLACED THE NOW OBSOLETE AND DISCONTINUED SEYBOLD "SABER 41" LINE. BY LETTERS DATED JUNE 12 AND 13, 1963, THE LATTER OF WHICH FORMED A PART OF ITS BID, THE BIDDER TOOK EXCEPTION TO THE SPECIFICATIONS AND UNDERTOOK TO SUPPLY A MACHINE WITH THE FOLLOWING CHARACTERISTICS: THE OPENING UNDER THE CLAMP WOULD BE 5 1/2 AND NOT 6 1/4 INCHES; THE CUTTER BAR WOULD HAVE "DUAL DRIVE" RATHER THAN "TWO END PULL; " THE SLOT CLOSING DEVICE WAS TO BE OMITTED UNLESS DEMANDED SINCE IT WAS NOT STANDARD EQUIPMENT ON THE CITATION; A 3-INCH CLAMP WAS OFFERED RATHER THAN A 5-INCH CLAMP AS REQUIRED BY PARAGRAPH 6; THE RIGHT AND LEFT HAND AUXILIARY TABLES WERE TO BE 13 7/8 INCHES BY 23 INCHES IN LENGTH WHICH ARE STANDARD WITH THE MACHINE INSTEAD OF APPROXIMATELY 40 INCHES IN LENGTH AS REQUIRED BY PARAGRAPH 6.

THE DAY AFTER BID OPENING, JUNE 18, 1963, THE LAWSON COMPANY SENT A TELEGRAM TO THE DEPARTMENT OF LABOR ASSERTING THAT IT WAS THE ONLY RESPONSIVE BIDDER AND REQUESTING TO KNOW WHEN IT COULD EXPECT THE AWARD. AN INTRADEPARTMENTAL MEMORANDUM TO THE CONTRACTING OFFICER DATED JUNE 20, 1963, DETERMINED THAT THE EXCEPTIONS TAKEN BY HARRIS SEYBOLD CONSTITUTED MINOR DEVIATIONS FROM SPECIFICATIONS, DECLARED THE BID ON THE "CITATION 42" RESPONSIVE, STATED THAT IT MET THE MINIMUM NEEDS OF THE GOVERNMENT, AND RECOMMENDED THE HARRIS-SEYBOLD BID FOR AWARD. A PURCHASE ORDER WAS ISSUED TO HARRIS-SEYBOLD COMPANY ON JUNE 21, 1963.

THE PROTEST OF THE LAWSON COMPANY WAS RECEIVED BY THE GENERAL ACCOUNTING OFFICE ON JULY 5, 1963, AND FOLLOW-UP LETTERS ON JULY 15 AND 16. THE GRAVAMEN OF THE LAWSON PROTEST IS THAT THE HARRIS-SEYBOLD BID SUBSTANTIALLY DEVIATED FROM THE ADVERTISED SPECIFICATIONS AND THAT THE CONTRACTING OFFICER LACKED AUTHORITY TO WAIVE THE SEYBOLD EXCEPTIONS AS MINOR DIFFERENCES.

THE ADMINISTRATIVE REPORT FROM THE DEPARTMENT OF LABOR DATED JULY 26, 1963, STATED THAT THE DEVIATIONS OF THE HARRIS-SEYBOLD BID "WERE CONSIDERED * * * AND IT WAS CONCLUDED THAT THE "SEYBOLD CITATION 42"WAS CAPABLE OF GIVING EQUAL SERVICE TO EQUIPMENT OF THE PRECISE SPECIFICATION ANNOUNCED.'

THE PURCHASING OF THE FEDERAL GOVERNMENT IS GOVERNED, IN GENERAL, BY THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 377, 41 U.S.C. 253, WHICH ADMONISHES PROCUREMENT OFFICIALS THAT:

SECTION 303. WHENEVER ADVERTISING IS REQUIRED--- (A) * * * SPECIFICATIONS AND INVITATIONS FOR BIDS SHALL PERMIT SUCH FULL AND FREE COMPETITION AS IS CONSISTENT WITH THE PROCUREMENT OF TYPES OF SUPPLIES AND SERVICES NECESSARY TO MEET THE REQUIREMENTS OF THE AGENCY CONCERNED.

(B) * * * AWARD SHALL 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 .......

THE IMPLEMENTING FEDERAL PROCUREMENT REGULATIONS, EXPATIATING UPON THE CONCEPTS IMPLICIT IN THE STATUTE, REQUIRE THAT:

1-1.307-2 * * * PURCHASE DESCRIPTIONS SHALL CLEARLY AND ACCURATELY DESCRIBE THE TECHNICAL REQUIREMENTS * * * OF THE SUPPLIES OR SERVICES TO BE PROCURED;

1-1.307-4 (B) "BRAND NAME OR EQUAL" PURCHASE DESCRIPTIONS SHOULD SET FORTH THOSE SALIENT PHYSICAL, FUNCTIONAL, OR OTHER CHARACTERISTICS OF THE REFERENCED PRODUCTS WHICH ARE ESSENTIAL TO THE NEEDS OF THE GOVERNMENT * *

"BRAND NAME OR EQUAL" PROVISIONS ARE TO BE AVOIDED IN DRAFTING INVITATIONS WHENEVER POSSIBLE AS THEY ARE APT TO CONFUSE OR MISLEAD BIDDERS AND TO RESTRICT COMPETITION. 38 COMP. GEN. 380. FOR EXAMPLE, IN THIS CASE THE SEYBOLD "SABER II 41," ITSELF, THOUGH NOT THE "SABER 47" OR "54," WOULD HAVE TO HAVE BEEN DECLARED NONRESPONSIVE TO THE INVITATION SINCE IT WOULD NOT CUT AND SQUARE ON ANY SIZES OF SHEETS IN EXCESS OF 41 INCHES.

THE APPLICABLE REGULATIONS FURTHER STATE THAT:

1-2.301 (A). TO BE CONSIDERED FOR AWARD, A BID MUST COMPLY IN ALL MATERIAL RESPECTS WITH THE INVITATION FOR BIDS SO THAT, AS TO THE SUBSTANCE OF ANY RESULTING CONTRACT, ALL BIDDERS MAY STAND ON AN EQUAL FOOTING AND THE INTEGRITY OF THE FORMAL ADVERTISING SYSTEM MAY BE MAINTAINED.'

1-1.307-7 (A) * * * BIDS SHALL NOT BE REJECTED BECAUSE OF MINOR DIFFERENCES IN DESIGN, CONSTRUCTION OR FEATURES WHICH DO NOT AFFECT THE SUITABILITY OF THE PRODUCTS FOR THEIR INTENDED USE.

THE CONTRACTING OFFICER HAS AUTHORITY TO REJECT ALL BIDS, CANCEL THE INVITATION, AND READVERTISE WHEN IT IS BROUGHT TO HIS ATTENTION THAT THE SPECIFICATIONS ARE AMBIGUOUS OR WHEN THE BIDS RECEIVED INDICATE THAT THE NEEDS OF THE GOVERNMENT CAN BE SATISFIED BY A LESS EXPENSIVE ARTICLE DIFFERING FROM THAT ON WHICH THE BIDS WERE INVITED. FEDERAL PROCUREMENT REGULATIONS 1-2.404 (B/1 AND 4.

AS WAS NOTED BY THE COURT IN UNITED STATES V. BROOKRIDGE FARM, 111 F.2D 461:

THE PURPOSE OF THESE STATUTES AND REGULATIONS IS TO GIVE ALL PERSONS EQUAL RIGHTS TO COMPETE FOR GOVERNMENT CONTRACTS * * * AND THUS TO SECURE FOR THE GOVERNMENT THE BENEFITS WHICH ARISE FROM COMPETITION. FURTHERANCE OF SUCH PURPOSE, INVITATIONS AND SPECIFICATIONS MUST BE SUCH AS TO PERMIT COMPETITORS TO COMPETE ON A COMMON BASIS * * *.

A DEVIATION MAY NOT BE WAIVED IF IT GOES TO THE SUBSTANCE OF THE BID OR WORKS INJUSTICE TO OTHER BIDDERS. PRESTEX, INC. V. UNITED STATES, CT.CL. NO. 415-61, DECIDED JULY 12, 1963. THIS OFFICE HAS DEFINED A SUBSTANTIAL DEVIATION AS ONE WHICH AFFECTS EITHER THE PRICE, QUANTITY, OR QUALITY OF THE ARTICLE OFFERED. 30 COMP. GEN. 179, 181.

THE RECORD SHOWS THAT THE SEYBOLD "SABER 41" PAPER CUTTER, NOW DISCONTINUED, HAD A CLAMP OPENING OF 6 1/4 INCHES, A MAXIMUM KNIFE SPEED OF 40 STROKES PER MINUTE, A MAXIMUM CLAMP PRESSURE OF 8,000 P.S.I., A DOUBLE END KNIFE BAR PULL, AN ELECTRIC SPACING DEVICE, A NET WEIGHT OF 7,900 POUNDS AND A COST OF $13,100 WITHOUT ACCESSORIES AS OF AUGUST 19, 1960. THE SEYBOLD "CITATION 42" HAS A 5 1/2 INCH MAXIMUM CLAMP OPENING, A MAXIMUM KNIFE SPEED OF 35 STROKES PER MINUTE, A MAXIMUM CLAMP PRESSURE OF 6,000 P.S.I., "DUAL DRIVE" (A SINGLE ENDED LINKAGE SYSTEM), A NET WEIGHT OF 5,200 POUNDS AND A MAGNETIC TAPE SPACING DEVICE.

FROM THIS INFORMATION IT MAY BE INFERRED THAT THE "SABER 41" WAS A HEAVIER, MORE POWERFUL, AND MORE EXPENSIVE MACHINE TO MANUFACTURE THAN THE NEW "CITATION 42.' PROTESTANT URGES THAT IT WAS MISLED BY THE PHRASEOLOGY OF THE SPECIFICATIONS INTO BIDDING ON A MORE EXPENSIVE MACHINETHAN IT WOULD OTHERWISE HAVE BID ON. PROTESTANT ASSERTS THAT ITS BID WAS HIGHER BY THE FOLLOWING AMOUNTS BECAUSE OF THE FEATURES TO WHICH HARRIS-SEYBOLD TOOK EXCEPTION: OPENING UNDER CLAMP OF 6 1/4 INCHES RATHER THAN 5 1/2 INCHES--- $500; DOUBLE END PULL RATHER THAN SINGLE END PULL--- $1,500; SLOT CLOSING DEVICE--- $300; DETACHABLE PAPER CLAMP 5 INCHES WIDE RATHER THAN 3 INCHES- -- $500; LEFT AND RIGHT HAND AUXILIARY TABLES 40 INCHES IN LENGTH RATHER THAN 13 7/8 BY 23 INCHES--- $400. IT SEEMS APPARENT THAT THESE DEVIATIONS RESULTED IN COST SAVINGS TO HARRIS-SEYBOLD. FURTHERMORE, PROTESTANT POINTS OUT THAT THE OMISSION OF THESE VARIOUS FEATURES AFFECTS THE POWER, CAPACITY, SPEED AND SAFETY OF THE MACHINE.

IN GENERAL IT IS WITHIN THE PROVINCE OF THE PROCURING ACTIVITY TO DECIDE WHETHER A GIVEN ITEM UPON WHICH A BID IS PREDICATED MEETS SPECIFICATIONS, AND THIS OFFICE WILL NOT ORDINARILY OVERTURN THIS DETERMINATION. 17 COMP. GEN. 554. BUT WHERE, AS HERE, A PROTESTING BIDDER PRESENTS CLEAR, CONVINCING, AND UNREBUTTED EVIDENCE TO THE CONTRARY, THIS RULE MUST FAIL. WE BELIEVE THE RECORD ESTABLISHES THAT THE SEYBOLD "CITATION 42" VARIES IN MATERIAL RESPECTS FROM EQUIPMENT OF THE PRECISE SPECIFICATION ANNOUNCED.

APPLYING THE TESTS FOR SUBSTANTIAL DEVIATIONS LAID DOWN IN THE DECISIONS OF THIS OFFICE OVER THE YEARS, THE EXCEPTIONS TO THE REQUIREMENTS OF THE SPECIFICATIONS TAKEN BY HARRIS-SEYBOLD COMPANY AFFECT BOTH PRICE AND QUALITY. THE SPECIFICATIONS STATED MANY CHARACTERISTICS OF THE PAPER- CUTTER SOUGHT. BIDDERS HAD THE RIGHT TO ASSUME THAT THESE CHARACTERISTICS WERE ESSENTIAL TO FULFILLING THE REQUIREMENTS OF THE GOVERNMENT IN FORMULATING THEIR BIDS, AND THE WAIVER OF SOME OF THESE CHARACTERISTICS BY THE DEPARTMENT OF LABOR PLACED THE BIDDERS ON AN UNEQUAL FOOTING.

THE DETERMINATION OF THE DEPARTMENT OF LABOR THAT THE "CITATION 42" MEETS THE MINIMUM NEEDS OF THE GOVERNMENT IS NOT HERE QUESTIONED. BUT IF IN FACT THE ACTUAL REQUIREMENTS OF THE PROCURING ACTIVITY COULD BE MET BY A MACHINE HAVING THE EXACT CHARACTERISTICS OF THE "CITATION 42," ALL BIDDERS SHOULD HAVE BEEN SO NOTIFIED AND AFFORDED THE OPPORTUNITY TO BID ON SUCH A MACHINE. 39 COMP. GEN. 832.

IN THE FUTURE, WHEN A BIDDER TAKES EXCEPTION TO SEVERAL MATERIAL FEATURES OF THE ITEM TO BE BOUGHT, AND WHERE THERE IS REASON TO BELIEVE THESE DEVIATIONS AFFECT PRICE AND QUALITY, IF THE PROCURING OFFICIALS BELIEVE THAT PURCHASE OF THE NONRESPONSIVE ITEM IS IN THE BEST INTERESTS OF THE GOVERNMENT, AWARD SHOULD NOT BE MADE TO THAT BIDDER BUT RATHER THE PROCUREMENT SHOULD BE READVERTISED USING SPECIFICATIONS WHICH BETTER EXPRESS THE ACTUAL NEEDS OF THE GOVERNMENT. IN THE INSTANT CASE, WE ARE COMPELLED TO CONCLUDE THAT THEHARRIS-SEYBOLD BID DID NOT CONFORM TO THE INVITATION FOR BIDS, AND THAT THE EXCEPTIONS TO THE SPECIFICATIONS TAKEN BY HARRIS-SEYBOLD HAD A MATERIAL BEARING, ADVANTAGEOUS TO HARRIS-SEYBOLD, ON PRICE AND QUALITY. WE THEREFORE FIND THAT THE AWARD TO HARRIS-SEYBOLD DID NOT RESULT IN A VALID AND ENFORCEABLE CONTRACT. CONSEQUENTLY, WE MUST ADVISE YOU THAT THE CONTRACT SHOULD BE CANCELED.