B-152465, JAN. 20, 1964

B-152465: Jan 20, 1964

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TO PACIFIC CORRUGATED CULVERT CO.: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 6. YOU STATE THAT A CONTRACTOR PLACED AN ORDER FOR CORRUGATED METAL PIPE WITH YOUR FIRM AND THAT THE MATERIAL WAS DELIVERED TO THE JOB SITE. YOU FURTHER REPORT THAT THE CONTRACTOR WAS PREPARING HIS SITE FOR INSTALLATION OF YOUR PIPE WHEN HE WAS STOPPED BY AN FHA INSPECTOR WHO STATED THAT YOUR PIPE DID NOT MEET THE SPECIFICATIONS OF THE FHA ON THIS PROJECT. AS FOLLOWS: "APPARENTLY THE SITUATION IS AS FOLLOWS: ON FHA SUPPORTED PROJECTS THE ARCHITECT DRAWING THE PLANS FOR SAID PROJECT MUST STIPULATE ONE MANUFACTURER OR SOURCE OF SUPPLY FOR EACH BUILDING MATERIAL PRODUCT USED. WHICH IN THIS INSTANCE WAS ARMCO STEEL CORP.

B-152465, JAN. 20, 1964

TO PACIFIC CORRUGATED CULVERT CO.:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 6, 1963, PROTESTING AGAINST THE STIPULATION OF ONE MANUFACTURER'S PRODUCT FOR USE IN A FEDERAL HOUSING ADMINISTRATION (FHA) SUPPORTED MULTIPLE UNIT DWELLING KNOWN AS MONTE VISTA LOCATED IN LEMON GROVE, CALIFORNIA.

YOU STATE THAT A CONTRACTOR PLACED AN ORDER FOR CORRUGATED METAL PIPE WITH YOUR FIRM AND THAT THE MATERIAL WAS DELIVERED TO THE JOB SITE. YOU FURTHER REPORT THAT THE CONTRACTOR WAS PREPARING HIS SITE FOR INSTALLATION OF YOUR PIPE WHEN HE WAS STOPPED BY AN FHA INSPECTOR WHO STATED THAT YOUR PIPE DID NOT MEET THE SPECIFICATIONS OF THE FHA ON THIS PROJECT. YOUR LETTER CONTINUES, IN PART, AS FOLLOWS:

"APPARENTLY THE SITUATION IS AS FOLLOWS: ON FHA SUPPORTED PROJECTS THE ARCHITECT DRAWING THE PLANS FOR SAID PROJECT MUST STIPULATE ONE MANUFACTURER OR SOURCE OF SUPPLY FOR EACH BUILDING MATERIAL PRODUCT USED, WHICH IN THIS INSTANCE WAS ARMCO STEEL CORP. TO OUR UNDERSTANDING FREE ENTERPRISE AND THE ENCOURAGEMENT OF SMALL BUSINESS IS STILL A PREREQUISITE OF OUR DEMOCRATIC WAY OF LIFE. THE STIPULATING OF ONE MANUFACTURER OR ONE SPECIFIC BRAND NAME WITHOUT THE FREEDOM OF SELECTION OF EQUAL PRODUCTS DOES NOT FALL WITHIN THE DEFINITION OF THIS PHILOSOPHY. WE HAVE ON A NUMBER OF OCCASIONS BEEN PUT TO THE TEST OF MEETING SPECIFICATIONS THAT CALL FOR INSTANCE,"ARMCO OR EQUAL.' ALTHOUGH A FAIRER METHOD WOULD BE TO REFER TO A NATIONAL SPECIFICATION SUCH AS AASHO M-36, REFERENCE TO SPECIFIC MANUFACTURERS SPECIFICATION, BUT WITH THE FREEDOM STILL ALLOWED FOR OUR FIRM TO FURNISH MATERIALS BY PROVING EQUAL WOULD BE UNDERSTANDABLE.'

BY LETTER DATED DECEMBER 30, 1963, THE FHA, IN RESPONSE TO YOUR PROTEST, FURNISHED OUR OFFICE WITH THE FOLLOWING COMMENTS:

"FHA PROCEDURES REQUIRE A SPECIFIC, SINGLE ITEM SPECIFICATION TO ESTABLISH QUALITY AND INTENT, WITHOUT ALTERNATES OR MULTIPLE CHOICE ITEMS. MATERIAL ITEMS CAN BE SPECIFIED BY REFERENCE TO AN APPROPRIATE NATIONAL STANDARD OR BY REFERENCE TO THE PRODUCT OF A SPECIFIC MANUFACTURER. THE ARCHITECT IN THE CASE IN POINT CHOSE THE LATTER METHOD OF SPECIFICATION.

"WHERE A CHANGE IN SPECIFICATIONS IS DESIRED, OUR PROCEDURES PROVIDE FOR THE SUBMISSION OF A REQUEST FOR CONSTRUCTION CHANGE. THIS REQUEST MUST BE INITIATED BY THE CONTRACTOR AND APPROVED BY THE MORTGAGEE. HAD SUCH A REQUEST BEEN INITIATED IN THIS CASE, ACTUAL CONSIDERATION OF THE MERITS COULD HAVE BEEN QUICKLY ACCOMPLISHED BY OUR FIELD OFFICE. HOWEVER, AFTER BEING PROPERLY INFORMED BY OUR INSPECTOR THAT THE MATERIAL OF THE PACIFIC CORRUGATED CULVERT COMPANY DID NOT COMPLY WITH THE APPROVED SPECIFICATIONS, THE CONTRACTOR APPARENTLY ELECTED TO INSTALL THE PIPE CALLED FOR BY THE SPECIFICATIONS RATHER THAN FILE A REQUEST FOR CONSTRUCTION CHANGE.'

IT SHOULD BE NOTED THAT THE FHA DOES NOT MAKE LOANS OR BUILD HOUSING. THE FHA IS PRIMARILY CONCERNED WITH PROVIDING INSURANCE AGAINST LOSS ON HOME AND HOUSING PROJECT MORTGAGES MADE BY PRIVATE LANDING INSTITUTIONS. SEE 24 CFR 200.5. THE FEDERAL GOVERNMENT IS NOT A PARTY TO THE CONTRACT AND NO FEDERAL FUNDS ARE INVOLVED IN THE INSTANT CASE. CONTRACTS AWARDED BY OTHER THAN AGENCIES OF THE FEDERAL GOVERNMENT ARE NOT SUBJECT TO THE LAWS GOVERNING THE AWARD OF CONTRACTS BY THE FEDERAL GOVERNMENT UNLESS GOVERNMENT FUNDS ARE USED FOR SUCH CONTRACTS AND THE COMPETITIVE BID PROCEDURES ARE REQUIRED TO BE UTILIZED EITHER BY STATUTE OR REGULATION. THEREFORE, NOTWITHSTANDING WHAT OUR DETERMINATION MAY HAVE BEEN HAD THIS MATTER BEEN SUBJECT TO THE RULES GENERALLY APPLICABLE TO PROCUREMENT BY GOVERNMENT AGENCIES UNDER COMPETITIVE BID PROCEDURES, THERE IS NO BASIS UPON WHICH WE MAY CONCLUDE THAT SUCH PROCEDURES SHOULD HAVE BEEN APPLIED IN THIS SITUATION ACCORDINGLY, CONSIDERATION OF YOUR PROTEST IS NOT WITHIN OUR JURISDICTION, B-132796, AUGUST 30, 1957.