B-154571, OCT. 12, 1964

B-154571: Oct 12, 1964

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TO THE DETROIT ELEVATOR COMPANY: REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 26. BIDDERS WERE REQUIRED TO FURNISH. A LIST OF THREE OR MORE INSTALLATIONS OF MANUFACTURER'S EQUIPMENT OF THE TYPE INVOLVED IN THE PROJECT WHICH WERE IN EFFICIENT OPERATION FOR AT LEAST THREE YEARS. IT IS ADMINISTRATIVELY REPORTED THAT ONLY TWO BIDS WERE RECEIVED ON THE PROJECT. THE RECORD OF EXPERIENCE AND QUALIFICATIONS WHICH YOU SUBMITTED STATED THAT YOUR PROPOSAL WAS PREDICATED ON F. THERE WAS NO INDICATION OF A JOINT VENTURE OR PARTICIPATION WITH THE PAYNE COMPANY. IT WAS DETERMINED BY THE PROCURING AGENCY THAT YOU DID NOT QUALIFY AS THE LOW BIDDER FOR THE FOLLOWING REASONS: "/A) THE WAYNE COUNTY BUILDING INSTALLATION WAS ONLY A TWO CAR SYSTEM.

B-154571, OCT. 12, 1964

TO THE DETROIT ELEVATOR COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 26, 1964, AND YOUR LETTER OF AUGUST 10, 1964, PROTESTING THE REJECTION OF YOUR BID SUBMITTED ON VETERANS ADMINISTRATION PROJECT NO. 21-5186, SPECIFICATION NO. 6441-S.

THE PROJECT COVERS THE CONVERSION OF OUR PASSENGER ELEVATORS AT THE VETERANS ADMINISTRATION HOSPITAL, ANN ARBOR, MICHIGAN, IN ORDER TO PROVIDE AUTOMATIC OPERATION, FEATURING "WITHOUT ATTENDANT OPERATION" ONLY, AND CONTROLLED BY A SPECIFIED GROUP SUPERVISORY SYSTEM. BIDDERS WERE REQUIRED TO FURNISH, AS EVIDENCE OF THEIR QUALIFICATIONS, A LIST OF THREE OR MORE INSTALLATIONS OF MANUFACTURER'S EQUIPMENT OF THE TYPE INVOLVED IN THE PROJECT WHICH WERE IN EFFICIENT OPERATION FOR AT LEAST THREE YEARS. THE SPECIFICATIONS PROVIDED, HOWEVER, THAT A BIDDER'S FAILURE TO MEET SUCH EXPERIENCE QUALIFICATIONS WOULD NOT PREVENT CONSIDERATION OF A PROPOSED SUPPLIER.

IT IS ADMINISTRATIVELY REPORTED THAT ONLY TWO BIDS WERE RECEIVED ON THE PROJECT--- YOUR BID IN THE AMOUNT OF $94,377 AND THE BID OF THE HAUGHTON ELEVATOR COMPANY OF TOLEDO, OHIO, IN THE AMOUNT OF $124,696. THE RECORD OF EXPERIENCE AND QUALIFICATIONS WHICH YOU SUBMITTED STATED THAT YOUR PROPOSAL WAS PREDICATED ON F. S. PAYNE COMPONENTS, BUT THERE WAS NO INDICATION OF A JOINT VENTURE OR PARTICIPATION WITH THE PAYNE COMPANY, AN EXPERIENCED ELEVATOR MANUFACTURER. WITH SUCH RECORD, YOU FURNISHED A LIST OF 28 PROJECTS INSTALLED BY THE PAYNE COMPANY AND 2 PROJECTS INSTALLED BY YOU--- THE WAYNE COUNTY BUILDING AND THE FOUR FREEDOM HOUSE, BOTH LOCATED IN DETROIT.

UPON DETAILED TECHNICAL REVIEW OF THE INFORMATION SUBMITTED WITH EACH BID, IT WAS DETERMINED BY THE PROCURING AGENCY THAT YOU DID NOT QUALIFY AS THE LOW BIDDER FOR THE FOLLOWING REASONS:

"/A) THE WAYNE COUNTY BUILDING INSTALLATION WAS ONLY A TWO CAR SYSTEM. THIS SYSTEM CONTAINED ONLY FIVE OPENINGS EACH WITH MODIFIED CONTROLS NOT OF A TYPE SPECIFIED OR SIMILAR IN DESIGN TO THE MORE COMPLEX INSTALLATION TO BE MADE AT THE ANN ARBOR HOSPITAL.

"/B) THE FOUR FREEDOM HOUSE OF DETROIT INSTALLATION WAS NOT OF A FOUR CAR GROUP AUTOMATIC CLASSIFICATION AND DID NOT QUALIFY AS AN ACCEPTABLE PROJECT AS TO SIMILARITY IN DESIGN OR NUMBER OF YEARS OF SATISFACTORY PERFORMANCE. AT THE TIME BIDS WERE OPENED IN JUNE, 1964, THE INSTALLATION OF THE ABOVE ELEVATOR SYSTEM HAD NOT BEEN STARTED BY THE DETROIT ELEVATOR COMPANY.

"/C) WHILE THE DETROIT ELEVATOR COMPANY IS UNDOUBTEDLY A WELL ESTABLISHED FIRM OF REPUTABLE STANDING, IT WAS EVIDENT FROM THEIR JUNE 16 SUBMISSION THAT THEY HAD NO PRIOR EXPERIENCE IN THE INSTALLATION OF A COMPLEX ELEVATOR SYSTEM AS PRESCRIBED FOR THE HOSPITAL AT ANN ARBOR.'

THE RECORD INDICATES YOU WERE NOTIFIED OF THE ADVERSE DETERMINATION REGARDING YOUR BID AND ADVISED THAT AWARD OF THE CONTRACT WOULD BE MADE BY THE END OF THE MONTH.

YOU PROTESTED AWARD TO ANY OTHER BIDDER IN TELEGRAMS DATED JUNE 26, 1964, ADDRESSED TO THE VETERANS ADMINISTRATION AND OUR OFFICE, READING AS FOLLOWS:

"RE PROJECT NUMBER 21-5186 WE PROTEST THE AWARD TO ANYONE OTHER THAN THE LOW BIDDER DETAILS WILL FOLLOW BY LETTER"

IN THE ABSENCE OF EVIDENCE, HOWEVER, WARRANTING A CHANGE IN THE ADMINISTRATIVE DETERMINATION TO REJECT YOUR BID, AWARD OF THE CONTRACT TO HAUGHTON WAS NOT WITHHELD.

IN YOUR LETTER OF AUGUST 10, 1964, YOU ALLEGE THAT THE EXPERIENCE REQUIREMENT IN THE PROJECT SPECIFICATIONS IS RESTRICTIVE. YOU STATE THAT YOUR NORMAL PRACTICE ON SUCH A PROJECT WOULD BE TO WORK WITH THE PAYNE COMPANY. YOU IMPLY THAT THE TIME BETWEEN THE DATE OF THE REJECTION OF YOUR BID AND THE DATE OF THE CONTEMPLATED AWARD DID NOT AFFORD YOU AN OPPORTUNITY TO SUBSTANTIATE YOUR PROTEST AND, THEREFORE, THE CONTRACT WAS LOST TO YOU. ALSO, YOU REQUEST SUGGESTIONS REGARDING THE PROCEDURE TO BE FOLLOWED IN ANY SIMILAR SITUATION.

WE HAVE HELD THAT WHERE THE NECESSARY QUALITY OF PERFORMANCE CAN BEST BE ASSURED BY MAKING AWARD TO A CONTRACTOR WITH A RECORD OF EXPERIENCE AND ACCOMPLISHMENT DEMONSTRATING THE REQUIRED DEGREE OF RESPONSIBILITY, SUCH STANDARD OF EXPERIENCE AND ACCOMPLISHMENT MAY BE REQUIRED BY THE TERMS OF THE INVITATION FOR BIDS AS A PREREQUISITE TO A CONTRACT AWARD. 20 COMP. GEN. 862, 865; 26 ID. 676; 35 ID. 161. IN ADDITION, PARAGRAPH 1-1.310-5 OF THE FEDERAL PROCUREMENT REGULATIONS SETS FORTH "NECESSARY EXPERIENCE" AS ONE OF THE STANDARDS TO BE MET BY RESPONSIBLE PROSPECTIVE CONTRACTORS.

THE VETERANS ADMINISTRATION MAKES THE FOLLOWING STATEMENT REGARDING THE EXPERIENCE REQUIREMENT:

"TO ASSURE OBTAINING THE SERVICES OF A WELL QUALIFIED ELEVATOR CONTRACTOR TO INSTALL THE FOUR CAR GROUP AUTOMATIC CONTROL SYSTEM OF THE COMPLEXITY REQUIRED AT ANN ARBOR, AND TO PROTECT THE BEST INTEREST OF THE UNITED STATES GOVERNMENT, IT WAS DEEMED NECESSARY TO REQUIRE CERTAIN QUALIFICATIONS OF ALL PROSPECTIVE BIDDERS. TO THIS END, IT IS BELIEVED THAT THE ALLEGATIONS MADE BY THE DETROIT ELEVATOR COMPANY ARE NOT JUSTIFIED.

THE SITUATION HERE IS TO BE DISTINGUISHED FROM THE PROCUREMENT CONSIDERED IN 39 COMP. GEN. 173 WHERE THE RECORD INDICATED THAT THE LOW BIDDER, ALTHOUGH IT DID NOT MEET THE SPECIFIC EXPERIENCE QUALIFICATIONS STATED IN THE INVITATION NEVERTHELESS WAS REGARDED AS A COMPETENT AND RESPONSIBLE ELEVATOR CONSTRUCTOR CAPABLE OF MAKING A SATISFACTORY INSTALLATION. THEREFORE HELD THAT THE REJECTION OF THE LOW BID SHOULD BE SUPPORTED BY A SPECIFIC DETERMINATION, BASED ON SUCH BIDDER'S QUALIFICATIONS, THAT HE WAS NOT A RESPONSIBLE BIDDER WITHIN THE MEANING OF THE APPLICABLE PROCUREMENT STATUTE; OTHERWISE, THE QUALIFICATIONS PRESCRIBED BY THE INVITATION WERE TO BE REGARDED AS UNREASONABLY RESTRICTIVE, THEREBY NECESSITATING CANCELLATION OF THE INVITATION AND READVERTISEMENT OF THE PROCUREMENT UNDER PROPER SPECIFICATIONS.

IN THE PRESENT CASE IT SEEMS CLEAR FROM THE RECORD THAT THE CONTRACTING OFFICIALS DID NOT CONSIDER YOUR FIRM TO BE A "RESPONSIBLE" BIDDER FOR THE REQUIRED WORK WITHIN THE MEANING OF THE FEDERAL PROCUREMENT REGULATIONS, WHICH REQUIRE AN AFFIRMATIVE DETERMINATION OF RESPONSIBILITY AS A PREREQUISITE TO AWARD OF A CONTRACT, AND DEFINE RESPONSIBILITY AS INCLUDING, AMONG OTHER THINGS, EXPERIENCE, TECHNICAL QUALIFICATIONS, AND SKILLS. SEE FEDERAL PROCUREMENT REGULATIONS 1 1.310.

IN THE CIRCUMSTANCES, WE CANNOT FIND THAT THE ADMINISTRATIVE ACTION WAS ARBITRARY OR NOT BASED ON SUBSTANTIAL GROUNDS, AND THEREFORE WOULD NOT BE JUSTIFIED IN OBJECTING THERETO.

AS TO THE PROCEDURE TO BE FOLLOWED IN SIMILAR PROCUREMENTS, IT IS OUR SUGGESTION THAT YOU INCLUDE WITH YOUR BID A COMPLETE STATEMENT OF YOUR QUALIFICATIONS, INCLUDING EXPERIENCE, AND SPECIFIC INFORMATION AS TO ANY PROPOSED SUBCONTRACTING OR OTHER ARRANGEMENTS FOR ASSISTANCE OR PARTICIPATION BY OTHER FIRMS, WITH INFORMATION AS TO THEIR QUALIFICATIONS.