B-155931, JUL. 27, 1965

B-155931: Jul 27, 1965

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TO THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO THE REPORT DATED MAY 25. IT IS REPORTED THAT BECK ENGINEERING COMBUSTION COMPANY SUBMITTED THE LOW BID FOR ITEM 3 AND WAS AWARDED THE CONTRACT FOR THAT ITEM ON JANUARY 4. WAS ISSUED AGAINST THE CONTRACT. THAT THE CONTRACTING OFFICER HAS ADVISED THAT THE REQUIREMENT FOR THE FURNACES HAS BEEN CANCELLED DUE TO CONDEMNATION OF THE BUILDINGS IN WHICH THE FURNACES WERE TO BE INSTALLED. THAT IN VIEW OF THE CIRCUMSTANCES IT IS PROPOSED TO TERMINATE THE CONTRACT FOR CONVENIENCE OF THE GOVERNMENT AND NEGOTIATE A SETTLEMENT WITH BECK IN ACCORDANCE WITH THE TERMINATION PROVISION OF THE CONTRACT. OUR APPROVAL IS SOUGHT BECAUSE OF A QUESTION WHETHER THE BID SPECIFICATION (PARAGRAPH 1.04 (A).

B-155931, JUL. 27, 1965

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO THE REPORT DATED MAY 25, 1965, OF THE CHIEF, PROCUREMENT OPERATIONS DIVISION, DIRECTORATE POLICY, DCS/S AND L, ON THE PROTEST OF JAMES E. MILLER COMPANY, RICHMOND, VIRGINIA, AGAINST THE AWARD OF A CONTRACT FOR ITEM 3 OF INVITATION FOR BIDS NO. 40-602-65 30, SEWART AIR FORCE BASE, TENNESSEE.

ITEM 3 OF THE INVITATION SOLICITED BIDS FOR THE FURNISHING OF A QUANTITY OF 33 WARM AIR FURNACES WITH A CAPACITY OF NOT LESS THAN 400,000 BTU-S. THE INVITATION PROVIDED UNDER SPECIAL CONDITION 16 ENTITLED "REQUIREMENT FOR DESCRIPTIVE LITERATURE" THE FURNISHING OF THE NECESSARY DATA ON OR BEFORE THE TIME SCHEDULED FOR BID OPENING. IN THE EVENT SUCH DATA FAILED TO SHOW THAT THE EQUIPMENT OFFERED MET THE INVITATION REQUIREMENTS, THIS PROVISION REQUIRED A REJECTION OF THAT BID. IN ADDITION, THE INVITATION UNDER PARAGRAPH 1.04 (A) OF THE "SPECIFICATIONS FOR GAS FIRED FURNACE BASEMENT TYPE" PROVIDED THAT "GAS FIRED FURNACES SHALL BE A TYPE APPROVED AND LISTED BY THE AMERICAN GAS ASSOCIATION "DIRECTORY OF APPROVED APPLIANCES AND LISTED ACCESSORIES," AND THE CAPACITY SHALL BE DETERMINED ON THE BASIS OF THE OUTPUT RATING SHOWN THEREIN.'

IT IS REPORTED THAT BECK ENGINEERING COMBUSTION COMPANY SUBMITTED THE LOW BID FOR ITEM 3 AND WAS AWARDED THE CONTRACT FOR THAT ITEM ON JANUARY 4, 1965; THAT A STOP WORK ORDER EFFECTIVE JANUARY 29, 1965, WAS ISSUED AGAINST THE CONTRACT; THAT THE CONTRACTING OFFICER HAS ADVISED THAT THE REQUIREMENT FOR THE FURNACES HAS BEEN CANCELLED DUE TO CONDEMNATION OF THE BUILDINGS IN WHICH THE FURNACES WERE TO BE INSTALLED; AND THAT IN VIEW OF THE CIRCUMSTANCES IT IS PROPOSED TO TERMINATE THE CONTRACT FOR CONVENIENCE OF THE GOVERNMENT AND NEGOTIATE A SETTLEMENT WITH BECK IN ACCORDANCE WITH THE TERMINATION PROVISION OF THE CONTRACT, SUBJECT TO OUR APPROVAL. OUR APPROVAL IS SOUGHT BECAUSE OF A QUESTION WHETHER THE BID SPECIFICATION (PARAGRAPH 1.04 (A), QUOTED ABOVE) MANDATORILY REQUIRED THE SUBMISSION OF DATA, PRIOR TO BID OPENING, SHOWING THAT THE ITEM BEING FURNISHED HAD BEEN APPROVED AND LISTED BY THE AMERICAN GAS ASSOCIATION (AGA).

IT APPEARS THAT BECK SUBMITTED WITH ITS BID CERTAIN LITERATURE ILLUSTRATING THE EQUIPMENT HE INTENDED TO PROVIDE, BUT THE LITERATURE DID NOT SHOW THAT THE EQUIPMENT HAD BEEN AMERICAN GAS ASSOCIATION (AGA) APPROVED AND LISTED. OTHER BIDDERS INTERPRETED THE SPECIFICATION AS REQUIRING AGA APPROVAL. THE CONTRACTING OFFICER, ON THE DETERMINATION BY THE BASE CIVIL ENGINEER THAT THE EQUIPMENT OFFERED BY BECK MET THE REQUIREMENT OF THE INVITATION AS BEING OF A TYPE APPROVED BY AGA, MADE THE AWARD TO BECK. IT ALSO APPEARS THAT THIS INTERPRETATION IS NOT THE INTENDED INTERPRETATION OF THE PARAGRAPH--- THAT IT WAS INTENDED THAT ONLY AGA APPROVED EQUIPMENT WOULD BE ACCEPTABLE.

WE ARE OF THE OPINION THAT THE SPECIFICATION IN QUESTION IS AMBIGUOUS AND SUSCEPTIBLE OF THE INTERPRETATION PLACED ON IT BY BECK AND BY THE CONTRACTING OFFICER, AND ALSO THE RESTRICTIVE INTERPRETATION INTENDED BY THE WRITERS OF THE SPECIFICATION AND THE OTHER BIDDERS. UNDER THIS CIRCUMSTANCE, IT MIGHT WELL BE THAT THE INVITATION SHOULD HAVE BEEN CANCELLED AND THE PROCUREMENT READVERTISED UNDER CLEARLY DEFINED REQUIREMENTS. IN THIS CONNECTION IT IS NOTED THAT AIR FORCE PERSONNEL WHO HAVE JURISDICTION OVER THE SPECIFICATION FOR THIS TYPE OF FURNACE, HAVE BEEN REQUESTED TO REVIEW THE APPROVAL REQUIREMENT FOR FURNACES AND INITIATE APPROPRIATE ACTION TO REVISE THE SPECIFICATION TO CLEARLY EXPRESS THAT THE FURNACE TO BE FURNISHED MUST BE APPROVED BY THE AMERICAN GAS ASSOCIATION OR AN EQUIVALENT ORGANIZATION PRIOR TO THE TIME SCHEDULED FOR BID OPENING. IN THIS REGARD ATTENTION IS INVITED TO DECISIONS OF OUR OFFICE IN 33 COMP. GEN. 573 AND 36 ID. 425.

IN THIS CASE, HOWEVER, SINCE (1) THE SPECIFICATION PROVIDED THAT THE FURNACE "SHALL BE OF A TYPE APPROVED AND LISTED BY THE AMERICAN GAS ASSOCIATION "DIRECTORY OF APPROVED APPLIANCES AND LISTED ACCESSORIES; " " (2) THE VARIOUS COMPONENTS OF THE FURNACE PROPOSED TO BE FURNISHED BY BECK WERE AGA APPROVED; (3) THERE WERE DETAILED SPECIFICATIONS FOR THE FURNACE; AND (4) IT WAS DETERMINED BY THE CONTRACTING OFFICER, PRIOR TO AWARD, THAT THE FURNACE OFFERED BY BECK MET THE ESSENTIAL REQUIREMENTS OF THE SPECIFICATIONS, WE DO NOT BELIEVE THAT IT CAN BE CONCLUDED THAT THE AWARD WAS ILLEGALLY MADE. SEE JOHN REINER AND COMPANY V. UNITED STATES (CT.CL. 1963), 325 F.2D 438; B-153717, JUNE 4, 1964, 43 COMP. GEN. 761. COMPARE B -154530, JULY 15, 1964, AND B 142931, OCTOBER 21, 1964, 44 COMP. GEN. - .

ACCORDINGLY, WE APPROVE THE PROPOSAL TO TERMINATE THE CONTRACT FOR THE CONVENIENCE OF THE GOVERNMENT AND NEGOTIATE A SETTLEMENT WITH BECK IN ACCORDANCE WITH THE TERMINATION PROVISION OF THE CONTRACT.

THERE IS ENCLOSED A COPY OF OUR LETTER OF TODAY TO THE JAMES E. MILLER COMPANY CONCERNING ITS PROTEST AGAINST THE AWARD MADE TO BECK.