B-152996, APR. 8, 1964

B-152996, APR. 8, 1964

TO GENERAL ELECTRIC COMPANY:

THIS REFERS TO YOUR LETTERS OF DECEMBER 3, 1963, AND FEBRUARY 6, 1964, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD OF A SUBCONTRACT BY THAT BOARD OF TRUSTEES OF THE LELAND STANFORD, ., UNIVERSITY UNDER ITS PRIME COST-TYPE CONTRACT NO. AT/04-3/-400 WITH THE ATOMIC ENERGY COMMISSION (AEC), TO THE SANGAMO ELECTRIC COMPANY FOR THE FURNISHING OF 5,000 PULSE CAPACITORS. YOU ALLEGE THAT THE BID OF SANGAMO DEVIATED FROM THE REQUIREMENTS OF PARAGRAPH 3.2 OF PERFORMANCE SPECIFICATION PS 730-506-R2 AND THAT AWARD TO THAT BIDDER WAS CONTRARY TO THE ADVERTISED SPECIFICATIONS.

ON AUGUST 28, 1963, STANFORD UNIVERSITY ISSUED INVITATION FOR BIDS NO. 308123 FOR THE PROCUREMENT AND DELIVERY OF 5,000 PULSE CAPACITORS FOR USE IN CONNECTION WITH THE AEC--- STANFORD LINEAR ACCELERATOR PROJECT IN ACCORDANCE WITH THE TECHNICAL REQUIREMENTS OF SPECIFICATION NO. PS-730-506 -R2. EIGHT BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 26, 1963, AND IT APPEARED THAT SANGAMO SUBMITTED THE LOWEST BID IN THE AMOUNT OF $345,000, FOLLOWED BY THE BID OF YOUR FIRM IN THE AMOUNT OF $349,700.

WE UNDERSTAND THAT A PULSE CAPACITOR IS AN ELECTRICAL CONDENSER AND IS FORMED OF SEVERAL CAPACITOR ELEMENTS; EACH CAPACITOR ELEMENT CONSISTS OF PLATES SEPARATED BY A DIELECTRIC. THE PLATES AND DIELECTRIC ARE PUT IN COMPACT FORM, GENERALLY A ROLL, AND THE NECESSARY NUMBER OF ELEMENTS ARE THE PRINCIPLE CONSTITUENTS OF A PULSE CAPACITOR AND THE INSULATING MATERIAL AND INSERTED IN AN OUTER METAL CASE. THE CAPACITOR ELEMENTS ARE THE PRINCIPLE CONSTITUENTS OF A PULSE CAPACITOR AND THE BASIS FOR THE OVER -ALL CAPACITOR DESIGN. WE FURTHER UNDERSTAND THAT A PERCEPTIBLE AMOUNT OF CAPACITANCE MIGHT BE MEASURED BETWEEN THE CAPACITOR ELEMENTS AND THE METAL CASE BUT THAT THIS GENERALLY IS MINIMUM, ABOUT 1.5 PERCENT OF THE TOTAL ENERGY IS STORED IN THE REGION BETWEEN THE CAPACITOR ELEMENTS AND THE METAL CASE.

IT IS CONTENDED THAT SANGAMO'S BID DEVIATED FROM THE FOLLOWING SPECIFICATION REQUIREMENT:

"3.2 MECHANICAL--- UNIT SHALL MEET FOLLOWING REQUIREMENTS:

"A. DIELECTRIC: POLYETHYLENE AND SILICON OIL.'

SANGAMO STATED ON PAGE 4 OF ITS CAPACITOR SPECIFICATIONS THAT:

"THE MAJOR INSULATION WRAP SHALL CONSIST OF A SUITABLE NUMBER OF 10 MIL WRAP AROUND LAYERS OF KRAFT TISSUE TO INSURE A TERMINAL TO CASE POTENTIAL OF 100 KVDC.'

THE POSITION IS ADVANCED BY YOUR COMPANY THAT THE USE BY SANGAMO OF A POLYETHYLENE AND SILICONE OIL DIELECTRIC IN THE CAPACITOR ELEMENT, IN COMBINATION WITH A KRAFT PAPER AND OIL WRAP BETWEEN THE CAPACITOR ELEMENT AND CONTAINER, RENDERED SANGAMO'S BID NONRESPONSIVE TO THE INVITATION REQUIREMENTS, SPECIFICALLY SECTION 3.2 OF THE PERFORMANCE SPECIFICATION. IN THAT CONNECTION, IT IS POINTED OUT THAT THE TERM "DIELECTRIC" WHEN USED WITH SPECIFIC REFERENCE TO A CAPACITOR IS A TERM OF ART AND HAS A SPECIFIC MEANING. YOU ADVISE THAT A "DIELECTRIC" IS DEFINED IN THE ,STANDARD HANDBOOK FOR ELECTRICAL ENGINEERS," 9TH EDITION, AS (1) AN INSULATOR; AND (2) AS A MEDIUM HAVING THE PROPERTY THAT THE ENERGY REQUIRED TO ESTABLISH AN ELECTRIC FIELD (VOLTAGE STRESS) IS RECOVERABLE IN WHOLE OR IN PART AS ELECTRIC ENERGY.

BY LETTER OF DECEMBER 2, 1963, THE ATOMIC ENERGY COMMISSION ADVISED YOUR COMPANY THAT, AFTER A THOROUGH REVIEW, IT HAD BEEN DETERMINED THAT THE BID OF SANGAMO WAS TECHNICALLY RESPONSIVE TO THE INVITATION. STANFORD UNIVERSITY ADVISED YOUR COMPANY ON THE SAME DAY THAT SANGAMO HAD BEEN AWARDED THE SUBCONTRACT AS THE LOWEST RESPONSIVE BIDDER UNDER THE INVITATION.

IT SHOULD BE UNDERSTOOD, AS YOU WERE ADVISED DURING A CONFERENCE HELD HERE ON JANUARY 29, 1964, THAT OUR OFFICE HAS NEITHER AN ENGINEERING STAFF NOR THE FACILITIES TO MAKE EVALUATION REGARDING THE CONFORMITY OF BIDS TO THE TECHNICAL ASPECTS OF SPECIFICATIONS. FURTHERMORE, WHERE THERE ARE INVOLVED DISPUTED QUESTIONS OF FACT BETWEEN A PROTESTANT AND A GOVERNMENT AGENCY OR A CONTRACTOR ACTING AS THE GOVERNMENT'S PROCUREMENT AGENCY, WE ARE USUALLY REQUIRED TO ACCEPT THE ADMINISTRATIVE REPORT AS CORRECT. SEE B-139830, AUGUST 29, 1959. THE JURISDICTION OF OUR OFFICE IN THIS REGARD MAY BE STATED, GENERALLY, AS FOLLOWS, QUOTING FROM 17 COMP. GEN. 554, 557:

"IT IS THE PROVINCE OF ADMINISTRATIVE OFFICERS TO DRAFT PROPER SPECIFICATIONS NECESSARY TO SUBMIT FOR FAIR COMPETITIVE BIDDING PROPOSED CONTRACTS TO SUPPLY GOVERNMENTAL NEEDS, AND TO DETERMINE FACTUALLY WHETHER ARTICLES OFFERED MEET THOSE SPECIFICATIONS. * * *"

IT IS NOT WITHIN OUR FUNCTIONS TO DETERMINE INDEPENDENTLY WHETHER THE USE BY SANGAMO OF POLYETHYLENE AND SILICONE OIL AS THE INSULATING DIELECTRIC IN THE CAPACITOR ELEMENT, IN COMBINATION WITH A KRAFT PAPER AND OIL WRAP BETWEEN THE CAPACITOR ELEMENT AND THE CONTAINER WOULD CONSTITUTE A MATERIAL DEVIATION FROM ADVERTISED SPECIFICATIONS WHICH REQUIRED THAT THE DIELECTRIC SHALL BE POLYETHYLENE AND SILICON OIL. IN VIEW THEREOF, WE ADVISED YOU THAT YOUR PRESENTATION ON THE TECHNICAL MERITS OF THE POSITION TAKEN BY AEC IN ITS REPORT OF JANUARY 3, 1964, TO OUR OFFICE, WOULD BE SUBMITTED TO AEC FOR EVALUATION AND COMMENT.

THE REPLY OF AEC WHICH, IN OUR OPINION, IS RESPONSIVE TO YOUR PRESENTATION, IS QUOTED BELOW IN PERTINENT PART:

"AS WE INTERPRET MR. DOBBINS' LETTER, BASICALLY IT ASSERTS THE FOLLOWING POSITION:

"A. THAT THE USE BY SANGAMO ELECTRIC COMPANY OF A POLYETHYLENE AND SILICONE OIL DIELECTRIC IN THE CAPACITOR ELEMENT, IN COMBINATION WITH A KRAFT PAPER AND OIL WRAP BETWEEN THE CAPACITOR ELEMENT AND THE CONTAINER, MAKES SANGAMO'S BID NON-RESPONSIVE TO THE SPECIFICATIONS.

"B. THAT THE COMPLETE HISTORY OF THE DISCUSSIONS BETWEEN STANFORD LINEAR ACCELERATOR CENTER AND THE VARIOUS POSSIBLE CAPACITOR SUPPLIERS LEFT NO ROOM FOR INTERPRETATION BY GENERAL ELECTRIC OR OTHER BIDDERS AS FAR AS A CHOICE OF A DIELECTRIC IS CONCERNED.

"THE KEY TO GENERAL ELECTRIC'S COMPLAINT IS THE MEANING TO BE PLACED UPON THE TERM "DIELECTRIC" AS USED IN THE SLAC SPECIFICATION, NO. PS 730-506- R2, WHICH READS IN PERTINENT PART:

" "3.2--- MECHANICAL--- UNIT SHALL MEET THE FOLLOWING REQUIREMENTS:

" "/A) DIELECTRIC--- POLYETHYLENE AND SILICONE OIL ...;,"

"IN ESSENCE, STANFORD'S POSITION IS THAT THE TERM "DIELECTRIC" WHEN USED WITH SPECIFIC REFERENCE TO A CAPACITOR IS A TERM OF ART AND HAS A SPECIALIZED MEANING:

" "DIELECTRIC--- THE INSULATING MEDIUM THAT SEPARATES THE PLATES OF THE CONDENSER AND PLAYS AN IMPORTANT ROLE IN DETERMINING THE CHARACTERISTICS OF THE CONDENSER.' (P. 110, RADIO ENGINEERING HANDBOOK, F. E. TERMAN; PUBLISHED BY MCGRAW F. HILL, INC.)

"GENERAL ELECTRIC, ON THE OTHER HAND, USES A MORE GENERAL DEFINITION WHICH IS SET FORTH IN ITS LETTER OF FEBRUARY 6, 1964, AS FOLLOWS:

" "1) INSULATOR (MORE CORRECTLY CALLED A DIELECTRIC);

" "2) DIELECTRIC IS A MEDIUM HAVING THE PROPERTY THAT THE ENERGY REQUIRED TO ESTABLISH AN ELECTRIC FIELD (VOLTAGE STRESS) IS RECOVERABLE IN WHOLE OR IN PART AS ELECTRICAL ENERGY.' (STANDARD HANDBOOK OF ELECTRICAL ENGINEERS, 9TH ED., SECT. 2-9 AND 4-359)

"IN SHORT, SLAC INTERPRETS THE TERM "DIELECTRIC" TO APPLY TO THE MEDIUM SEPARATING THE PLATES OF A CONDENSER, WHEREAS GENERAL ELECTRIC CONSIDERS A DIELECTRIC TO BE ANY INSULATING MEDIUM IN THE CONDENSER.

"AS THIS IS A TERM OF ART, WE HAVE REVIEWED THE INTERPRETATION USED BY THE OTHER BIDDERS IN THIS INSTANCE; SIX OTHER FIRMS, ALL WELL QUALIFIED, THAT SUBMITTED BIDS FOR THESE PULSE CAPACITORS.

"1. BECAUSE THE CORNELL-DUBILIER BID GOES INTO MORE DETAIL THAN ANY OF THE OTHERS, WE ARE ATTACHING A COPY OF THE PERTINENT PAGE OF ITS BID. CONDENSATION OF THIS PAGE STATES, BASICALLY:

" "THE CAPACITOR ELEMENTS ... ARE ... POLYETHYLENE FILM ... AND ... ALUMINUM FOIL ... THESE CAPACITOR ELEMENTS ARE ASSEMBLED IN A WELL INSULATED BAKELITE FORM ... THE ASSEMBLED CAPACITOR ELEMENT IS THEN INSULATED BY A CONTINUOUS POLYETHYLENE WRAP WHICH IS THEN INSERTED IN A WELDED STEEL CONTAINER.'

"2. THE WESTINGHOUSE ELECTRIC BID STATES:

" "TYPE OF CONSTRUCTION IS OF THE TAB TYPE WITH WRAPPED OR MOLDED CASE INSULATION.'

"BOTH OF THESE BIDDERS MADE A POSITIVE DIFFERENTIATION BETWEEN THE DIELECTRIC AND THE CASE INSULATION.

"IN ADDITION, THE FOLLOWING BIDDERS STATE:

"3. CORSON ELECTRIC:

" "THE CONSTRUCTION WILL BE OF POLYETHYLENE-SILICONE OIL DIELECTRIC WITH ALUMINUM FOIL ELECTRODES IN FLAT SECTIONS WITH EXTENDED FOIL.'

"4. GENERAL CAPACITOR:

" "CONSTRUCTION--- EXTENDED FOIL WITH IRRADIATED POLYETHYLENE DIELECTRIC, IMPREGNATED WITH SILICONE OIL.'

"5. SPRAGUE ELECTRIC:

" "ROLLED POLYETHYLENE AND ALUMINUM FOIL SECTIONS IMPREGNATED WITH SILICONE OIL.'

"THESE THREE BIDDERS LIMITED THE DESCRIPTION OF THEIR USE OF THE POLYETHYLENE AND SILICONE OIL DIELECTRIC TO THE MAIN CAPACITOR SECTIONS AND DID NOT THINK IT IMPORTANT TO PROVIDE DETAIL AS A WRAP INSULATION FOR THE CASE, ALTHOUGH IT IS CLEAR SOME WRAPPING WAS CONTEMPLATED.

"6. THE SIXTH FIRM, AXEL ELECTRONICS, STATES ONLY,"THE DIELECTRIC WILL BE A HIGH DENSITY POLYETHYLENE.' HOWEVER, IN ITS LETTER SUBMITTING ITS BID, AXEL REFERRED US TO OTHER PULSE CAPACITORS PROVIDED TO ONE OF OUR OTHER PROJECTS AND DESCRIBED THEM AS HAVING POLYETHYLENE SILICONE OIL DIELECTRIC. A CHECK WITH THIS PROJECT (PRINCETON STELLERATOR) INDICATED THAT THE SUBJECT CONDENSERS ARE OF SOME DIFFERENCE IN SERVICE AND CAPACITY, BUT HAVE A PAPER PRODUCT WRAP BETWEEN THE CAPACITOR ELEMENTS AND THE METAL CASE.

"ACCORDINGLY, IT IS CLEAR THAT THE OTHER BIDDERS INTERPRETED THE TERM "DIELECTRIC" IN THIS CASE AS APPLICABLE ONLY TO THE INSULATING MEDIUM SEPARATING THE CAPACITOR PLATES; THIS WAS IN ACCORD WITH STANFORD'S INTERPRETATION. WE ARE INFORMED THAT AT NO TIME DID SLAC REPRESENT TO GENERAL ELECTRIC (OR OTHER BIDDERS) THAT THE DIELECTRIC INCLUDED THE CASE INSULATION OR ANY PORTION OF THE CAPACITOR BEYOND THE INSULATING MEDIUM SEPARATING THE PLATES OF THE CONDENSER. INDEED, WE ARE ALSO INFORMED THAT SLAC THOUGHT AT ALL TIMES PRIOR TO BID OPENING THAT GENERAL ELECTRIC INTERPRETED THE TERM "DIELECTRIC" IN THE SAME MANNER AS THE OTHER BIDDERS.

"FURTHERMORE, IT IS THE OPINION OF THE AEC THAT THE USE BY SANGAMO OF POLYETHYLENE AND SILICONE OIL DIELECTRIC IN COMBINATION WITH A KRAFT PAPER AND OIL WRAP BETWEEN THE CAPACITOR ELEMENT AND THE CONTAINER SATISFACTORILY MET PERFORMANCE SPECIFICATIONS AND THUS WAS COMPLETELY RESPONSIVE TO THE INVITATION. PRIOR TO BID OPENING, UNSOLICITED SAMPLE CAPACITORS WERE SUBMITTED BY SANGAMO (AND ONE OTHER BIDDER). SLAC ASCERTAINED THROUGH TESTS AT THAT TIME THAT SANGAMO'S PRODUCT DID MEET PERFORMANCE SPECIFICATIONS. * * *"

ON THE BASIS OF THE FOREGOING ANALYSIS OF YOUR PRESENTATION AND SINCE WE ARE REQUIRED, IN VIEW OF THE TECHNICAL ASPECTS OF THE PROCUREMENT, TO ACCEPT AS CONCLUSIVE THE FACTUAL DETERMINATIONS OF AEC IN THE MATTER, WE ARE NOT DISPOSED TO QUESTION THE DETERMINATION MADE.

CONCERNING YOUR STATEMENT THAT THE COMPANY'S MANUFACTURING PLANT IS LOCATED IN A DISTRESSED LABOR AREA, IT SHOULD BE NOTED THAT THIS PROCUREMENT WAS NOT PARTIALLY SET ASIDE FOR AWARD TO LABOR-SURPLUS-AREA CONCERNS PURSUANT TO SECTION 1-1.804 OF THE FEDERAL PROCUREMENT REGULATIONS. IN VIEW THEREOF, NO PREFERENTIAL CONSIDERATION COULD HAVE BEEN GIVEN TO BIDDERS LOCATED IN SUCH AREAS.

ACCORDINGLY, WE FIND NO LEGAL BASIS TO DISTURB THE AWARD MADE BY STANFORD UNIVERSITY UNDER ITS PRIME CONTRACT WITH THE GOVERNMENT.