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B-154606, AUG. 20, 1964

B-154606 Aug 20, 1964
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THE CONSTRUCTION IS TO BE FINANCED IN PART BY A FEDERAL GRANT UNDER THE PUBLIC WORKS ACCELERATION ACT. "OR EQUAL" CLAUSE WHENEVER A MATERIAL OR ARTICLE REQUIRED IS SPECIFIED OR SHOWN ON THE PLANS BY USING THE NAME OF THE PROPRIETARY PRODUCT OR OF A PARTICULAR MANUFACTURER OR VENDOR. ANY MATERIAL OR ARTICLE WHICH WILL PERFORM ADEQUATELY THE DUTIES IMPOSED BY THE GENERAL DESIGN WILL BE CONSIDERED EQUAL AND SATISFACTORY PROVIDING THE MATERIAL OR ARTICLE SO PROPOSED IS OF EQUAL SUBSTANCE AND FUNCTION IN THE ARCHITECT/ENGINEER'S OPINION. BIDS WILL BE COMPARED ON THE BASIS OF THE SCHEDULE OF APPROXIMATE QUANTITIES CONTAINED THEREIN AND USING PRICES BID FOR SUB-ITEM (A) ON ALL MAJOR EQUIPMENT ITEMS.

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B-154606, AUG. 20, 1964

TO SELLERS, CONNER AND CUNEO:

THIS REFERS TO YOUR LETTERS OF JULY 1, 9 AND 21, 1964, IN BEHALF OF ROSS CONSTRUCTION CORPORATION, PROTESTING THE PROPOSED AWARD OF CONTRACT NO. APW-NJ-58G (CONTRACT 2A PHASE I) BY THE PASSAIC VALLEY WATER COMMISSION, CLIFTON, NEW JERSEY, TO THE MALAN CONSTRUCTION COMPANY.

THE RECORD SHOWS THAT THE CONTRACT COVERS THE GENERAL CONSTRUCTION PORTION OF A GRAVITY WATER FILTRATION PLANT TO BE LOCATED IN TOTOWA, NEW JERSEY. THE CONSTRUCTION IS TO BE FINANCED IN PART BY A FEDERAL GRANT UNDER THE PUBLIC WORKS ACCELERATION ACT, PUBLIC LAW 87-658, ADMINISTERED BY THE HOUSING AND HOME FINANCE AGENCY, COMMUNITY FACILITIES ADMINISTRATION (CFA). UNDER THE GRANT AGREEMENT, CFA REQUIRED THAT THE CONSTRUCTION CONTRACT INCLUDE (SO FAR AS POSSIBLE) THE GENERAL CONDITIONS OF FEDERAL FORM CFA-238; THAT AWARD BE MADE THROUGH OPEN, COMPETITIVE BIDDING OBTAINED THROUGH ADVERTISING, AND THAT HHFA CONCURRENCE BE OBTAINED IN THE PROPOSED AWARD.

CLAUSE 8 OF THE GENERAL CONDITIONS PROVIDES AS FOLLOWS:

"8. "OR EQUAL" CLAUSE

WHENEVER A MATERIAL OR ARTICLE REQUIRED IS SPECIFIED OR SHOWN ON THE PLANS BY USING THE NAME OF THE PROPRIETARY PRODUCT OR OF A PARTICULAR MANUFACTURER OR VENDOR, ANY MATERIAL OR ARTICLE WHICH WILL PERFORM ADEQUATELY THE DUTIES IMPOSED BY THE GENERAL DESIGN WILL BE CONSIDERED EQUAL AND SATISFACTORY PROVIDING THE MATERIAL OR ARTICLE SO PROPOSED IS OF EQUAL SUBSTANCE AND FUNCTION IN THE ARCHITECT/ENGINEER'S OPINION. SHALL NOT BE PURCHASES OR INSTALLED WITHOUT HIS WRITTEN APPROVAL.'

THE INVITATION PROVISIONS PERTINENT TO THE BID EVALUATION STATE IN PART THAT: "DETERMINATION OF THE LOW BIDDER: FOR UNIFORMITY, CONVENIENCE AND SIMPLICITY IN COMPARING PROPOSALS FOR CONTRACT 2A, PHASE I, GENERAL CONSTRUCTION, BIDS WILL BE COMPARED ON THE BASIS OF THE SCHEDULE OF APPROXIMATE QUANTITIES CONTAINED THEREIN AND USING PRICES BID FOR SUB-ITEM (A) ON ALL MAJOR EQUIPMENT ITEMS.

"THE LOWEST BID WILL BE DETERMINED UPON THE BASIS OF THE AGGREGATE BID PRICE.

"THE USE OF SUB ITEM (A) EQUIPMENT BID PRICES IS ONLY FOR UNIFORMITY, CONVENIENCE AND SIMPLICITY IN COMPARING PROPOSALS AND DOES NOT INDICATE A PREFERENCE FOR THE NAMED EQUIPMENT OVER ANY OTHER EQUIPMENT NAMED UNDER SUB-ITEMS (B) OR (C).

"AFTER THE LOW BIDDER IS DETERMINED BUT PRIOR TO AWARD OF THE CONTRACT THE COMMISSION WILL DETERMINE AND ESTABLISH THE SOURCE OF ALL ITEMS OF MAJOR EQUIPMENT TO BE INCORPORATED IN THIS PROJECT, BASED UPON DETAIL, EXPECTED PERFORMANCE, AND INSTALLED PRICES OF THE ITEMS OFFERED IN THE PROPOSALS ACCEPTED.'

BIDS WERE OPENED ON APRIL 7, 1964, AND THE COMMISSION EVALUATED MALAN CONSTRUCTION COMPANY AS THE LOW BIDDER AT $5,533,018 AND ROSS CONSTRUCTION CORPORATION AS THE SECOND LOW BIDDER AT $5,566,580.

WE ARE ADVISED THAT MALAN'S BID OF $5,533,018 IS THE LOWEST AGGREGATE BID RECEIVED, INCLUDING BIDS ON THE SUB-ITEMS (B), (C) AND (D) ALTERNATE EQUIPMENT. THE COMMISSION HAS MADE AWARD TO MALAN CONSTRUCTION COMPANY, SUBJECT TO HHFA APPROVAL, (IT IS REPORTED THAT THIS IS THE THIRD TIME BIDS WERE RECEIVED ON THIS WORK.)

YOU URGE THAT THE GOVERNMENT SHOULD NOT CONCUR IN AN AWARD UNDER THIS INVITATION. YOU CITE SEVERAL OF OUR DECISIONS TO SHOW THAT THIS INVITATION VIOLATED THE REQUIREMENTS OF COMPETITIVE BIDDING, AND YOU CITE 37 COMP. GEN. 251 AS HOLDING THAT FEDERAL PROCUREMENT RULES GOVERN THIS TYPE OF PROCUREMENT.

ENCLOSED IS A COPY OF OUR DECISION OF TODAY TO THE HOUSING AND HOME FINANCE AGENCY ON THE MATTER.

RELATIVE TO YOUR CONTENTION THAT FEDERAL PROCUREMENT RULES SHOULD GOVERN HERE, WE STATED IN 37 COMP. GEN. 251 THAT AWARD OF A NON FEDERAL CONSTRUCTION CONTRACT CONTRARY TO FEDERAL ADVERTISING PROCEDURES WOULD BE IMPROPER WHERE FEDERAL FUNDS WERE COMMITTED FOR THE PROJECT UNDER TITLE VI OF THE PUBLIC HEALTH SERVICE ACT, AS AMENDED (POPULARLY KNOWN AS THE HILL- BURTON ACT), 42 U.S.C. 291. THERE, THE SURGEON GENERAL BY REGULATION REQUIRED AWARD UNDER "COMPETITIVE BIDDING" PROCEDURES. FOR THE PRESENT GRANTS, HOWEVER, IT APPEARS THAT NO STATUTORY REGULATIONS, AS SUCH, HAVE BEEN PROMULGATED BY THE HHFA OR THE CFA WITH RESPECT TO CONTRACTING PROCEDURES WHICH MUST BE FOLLOWED BY GRANT APPLICANTS. THE GRANT AGREEMENT APPEARS TO CONTROL IN THIS REGARD. CONSEQUENTLY, UNLIKE A REGULATION WHICH HAS THE FORCE AND EFFECT OF STATUTORY LAW (SEE ATWOOD'S TRANSPORT LINES, INC. V. UNITED STATES, 211 F.SUPP. 168, 170 (1962), AFFIRMED 373 U.S. 377 (1963/), CFA COULD WAIVE ITS POLICY REQUIREMENT FOR COMPETITIVE BIDDING IN THIS INSTANCE.

IN THE CIRCUMSTANCES, WE SEE NO LEGAL BASIS UPON WHICH OUR OFFICE MAY QUESTION THE PROPOSED AWARD. SEE B-148036, MARCH 27, 1962; B 132796, AUGUST 30, 1957.

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