B-157158, OCT. 15, 1965

B-157158, OCT. 15, 1965

TO CATERPILLAR TRACTOR COMPANY:

YOUR TELEGRAM OF JULY 1, 1965, AS SUPPLEMENTED BY YOUR LETTER OF JULY 13, PROTESTS AWARD OF A CONTRACT TO ALLIS-CHALMERS MANUFACTURING COMPANY FOR THE PURCHASE OF THREE TRACTOR SHOVELS PURSUANT TO INVITATION FOR BIDS NO. BIA-0650-370, ISSUED JUNE 3, 1965, BY THE BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR.

THE INVITATION DESCRIPTION OF THE PROCUREMENT ITEM READS, IN PERTINENT PART, AS FOLLOWS:

"TRACTOR SHOVEL, ARTICULATED FRAME, SELF-PROPELLED, TUBELESS TIRES, FOUR- WHEEL DRIVE, DIESEL ENGINE DRIVEN, HYDRAULIC CONTROLLED SINGLE SEGMENT STANDARD BUCKET HAVING AN SAE RATED CAPACITY OF NOT LESS THAN 2 1/4 CUBIC YARDS FOR MATERIAL WEIGHING 3,000 LBS. PER CUBIC YARD.'

THE GENERAL SPECIFICATIONS, SET FORTH ON PAGES 11 TO 15 OF THE INVITATION, INCLUDE THE FOLLOWING REQUIREMENT:

"B-4 TRANSMISSION:

THE ENGINE SHALL TRANSMIT POWER THROUGH A TORQUE CONVERTER DRIVE CAPABLE OF TRANSMITTING THE FULL TORQUE OF THE ENGINE UNDER MAXIMUM LOAD WITHOUT SLIPPAGE OR EVIDENCE OF OVERLOAD. THE TRANSMISSION SHALL BE A POWER SHIFT, FULL REVERSING TRANSMISSION OF NOT LESS THAN 3 SPEEDS FORWARD AND 3 REVERSE. SPEEDS SHALL BE AS STATED BY THE MANUFACTURER IN HIS LITERATURE UNLESS SPECIFIC SPEEDS ARE SPECIFIED IN THE INVITATION.'

UNDER PARAGRAPH 8 (B), TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, THE GOVERNMENT RESERVED THE RIGHT TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN BIDS. ON PAGE 10 OF THE INVITATION, BIDDERS WERE INFORMED THAT DEVIATIONS FROM THE SPECIFICATION SHOULD BE FULLY DESCRIBED IN THE QUESTIONNAIRE INCLUDED IN THE BID PAPERS AND WERE CAUTIONED THAT DEVIATIONS JUDGED MAJOR BY THE CONTRACTING OFFICER WOULD CAUSE BID REJECTION.

TWO BIDS WERE RECEIVED, ONE FROM YOU OFFERING YOUR CATERPILLAR 950 AT A UNIT PRICE OF $21,457.28, TOTAL $64,371.84 F.O.B. ORIGIN OR $65,629.44 F.O.B. DESTINATIONS, AND THE OTHER FROM ALLIS-CHALMERS OFFERING ITS TL-645 AT A UNIT PRICE OF $19,858, TOTAL $59,574 F.O.B. ORIGIN OR $60,615 F.O.B. DESTINATIONS. YOUR BID LISTED AN EXCEPTION TO THE SPECIFICATIONS, WHICH IS NOT IN ISSUE. ALLIS-CHALMERS ALSO LISTED AN EXCEPTION, THE SUBJECT OF YOUR PROTEST, READING AS FOLLOWS:

"ALLISON TRANSMISSION HAS TWO GEAR SPEEDS FORWARD AND ONE GEAR SPEED REVERSE, WITH ALLISON TWIN TURBINE TORQUE CONVERTER PROVIDING FUNCTIONAL EQUIVALENT OF FOUR WORKING GEARS FORWARD AND TWO GEARS IN REVERSE.'

PURSUANT TO A DETERMINATION BY THE CONTRACTING OFFICER THAT THE DEVIATION DESCRIBED IN THE ALLIS-CHALMERS BID DID NOT AFFECT THE PERFORMANCE REQUIREMENTS, PRICE OR QUALITY OF THE PROCUREMENT ITEM AND, THEREFORE, THE BID WAS RESPONSIVE TO THE INVITATION, ALLIS-CHALMERS WAS AWARDED CONTRACT NO. 14-20-0650-1511 ON JUNE 30. THE RECORD INDICATES THAT THE ITEMS WERE SHIPPED BY ALLIS-CHALMERS TO THE DESIGNATED DESTINATIONS ON AUGUST 13.

YOU CONTEND THAT THE EXCEPTION TAKEN BY ALLIS-CHALMERS TO THE TRANSMISSION SPEED REQUIREMENTS OF THE SPECIFICATIONS IS A MAJOR DEVIATION. IN THIS REGARD, YOU MAKE THE FOLLOWING STATEMENTS:

"PARAGRAPH B-4 OF THE BID SPECIFICATIONS STATES IN PART THAT THE TRANSMISSION SHALL BE A POWER SHIFT, FULL REVERSING TRANSMISSION OF NOT LESS THAN THREE SPEEDS FORWARD AND THREE REVERSE. THE MODEL TL-645 OFFERED BY THE ALLIS-CHALMERS COMPANY, AND AS STATED IN THEIR BID, HAS ONLY TWO FORWARD AND ONE REVERSE SPEED. CERTAINLY THIS DOES NOT MEET THE MINIMUM REQUIREMENT OF "NOT LESS THAN THREE FORWARD AND THREE REVERSE," FOR THE TRANSMISSION OFFERED IN THIS MODEL HAS NOT PROVIDED THE MINIMUM NUMBER OF SPEEDS IN EITHER FORWARD OR REVERSE.

"CONTRACTORS HAVE LONG RECOGNIZED THE NEED FOR HIGH REVERSE SPEEDS THROUGH SEVERAL GEAR RANGES BECAUSE OF THE TRACTOR-SHOVEL APPLICATION. BELIEVE THE GOVERNMENT APPLICATIONS NOT TO BE EXCEPTIONS FOR WE FEEL THE NEED IS CONFIRMED BY THE DEPARTMENT OF INTERIOR SPECIFICATION REQUIRING A POWER SHIFT, FULL REVERSING TRANSMISSION OF NOT LESS THAN THREE FORWARD AND THREE REVERSE GEARS.'

THE DEPARTMENT OF THE INTERIOR ADVISES THAT THE SPECIFICATIONS WERE DEVELOPED ON THE BASIS OF PRODUCTION MODELS AVAILABLE ON THE COMPETITIVE MARKET. AT THE TIME THE INVITATION WAS ISSUED, IT WAS THE UNDERSTANDING OF THE BUREAU OF INDIAN AFFAIRS THAT THE ONLY KNOWN MANUFACTURERS OF THE ARTICULATED FRAME MACHINE IN THE SIZE CATEGORY REQUIRED BY THE BUREAU WERE ALLIS-CHALMERS, YOU, AND ANOTHER FIRM; ALSO, THE AVAILABLE DESCRIPTIVE LITERATURE OF ALL THREE FIRMS INDICATED THAT THEIR CURRENT PRODUCTION MODELS MET THE TRANSMISSION SPECIFICATION OF THREE FORWARD AND THREE REVERSE SPEEDS. HOWEVER, EXAMINATION OF THE ALLIS-CHALMERS BID REVEALED THAT THE ITEM OFFERED WAS NOT THE MODEL TL-20 WITH A THREE-FORWARD, THREE- REVERSE POWER SHIFT TRANSMISSION PREVIOUSLY FOUND ACCEPTABLE BY THE BUREAU BUT WAS, INSTEAD, A NEW MACHINE, MODEL TL-645, WITH A REDESIGNED POWER SHIFT TRANSMISSION CONSISTING OF A TWIN-TURBINE TORQUE CONVERTER TYPE WITH TWO FORWARD RANGES AND ONE REVERSE RANGE.

IN SUPPORT OF ITS POSITION THAT THE DEVIATION IN THE ALLIS-CHALMERS BID IS MINOR, THE DEPARTMENT STATES:

"THE TWIN TURBINE TORQUE CONVERTER OFFERED BY ALLIS-CHALMERS AUTOMATICALLY CONTROLS A CHANGE IN RATIO WHICH HAS THE SAME EFFECT AS ADDITIONAL GEAR RATIOS IN THE TRANSMISSION. THE RATIO OF TORQUE INCREASE (FULL STALL) ON THE MODEL TL-645, AS STATED IN THE MANUFACTURER'S LITERATURE, IS 5.1:1, WHEREAS THE CATERPILLAR MODEL 950, WITH A SINGLE STAGE TORQUE CONVERTER, HAS A RATIO OF .2:1. BECAUSE OF ITS SIGNIFICANTLY HIGHER STALL RATIO, THE ALLIS-CHALMERS MACHINE IS ABLE TO PROVIDE A SMOOTH FLOW OF POWER WITHOUT STALLING THROUGH THE FULL RANGE OF EACH OF ITS TWO STATED SPEED RANGES. ON MACHINES SUCH AS THE CATERPILLAR MODEL 950 WITH A LESSER STALL RATIO, THE SAME RANGE OF POWER MUST BE ACCOMPLISHED BY INTERMEDIATE GEAR CHANGES TO PREVENT STALLING. IT IS FOR THIS REASON THAT THE CATERPILLAR TRANSMISSION HAS TWO DISTINCT RANGES (WORK AND TRAVEL), EACH WITH A HIGH AND LOW GEAR SPEED. THE ALLIS-CHALMERS TRANSMISSION, WITH ITS TWIN TURBINE CONVERTER PROVIDES OPERATING CAPABILITY FULLY EQUIVALENT TO A FOUR SPEED FORWARD, TWO SPEED REVERSE TRANSMISSION. THE BUREAU CONSIDERS THIS DEVELOPMENT TO BE A DISTINCT AND SUBSTANTIAL IMPROVEMENT OVER THE THREE-SPEED POWER SHIFT TYPE OF TRANSMISSION PREVALENT IN THIS TYPE OF EQUIPMENT.

"CATERPILLAR, IN ITS PROTEST, HAS EMPHASIZED THE IMPORTANCE OF REVERSE SPEED IN THE PERFORMANCE OF A FRONT-END LOADER. THE LAST SENTENCE OF PARAGRAPH B-4 OF THE SPECIFICATIONS, WITH REGARD TO SPEED, READS:

"SPEEDS SHALL BE AS STATED BY THE MANUFACTURER IN HIS LITERATURE.'

"NO MINIMUM REQUIREMENT FOR SPEED WAS STATED IN THE ADVERTISED SPECIFICATIONS SINCE ATTAINABLE ,MILES PER HOUR" WAS NOT CONSIDERED AN IMPORTANT FACTOR IN THE PERFORMANCE OF THE MACHINE. THE CATERPILLAR MODEL 950 IS CAPABLE OF HIGHER SPEEDS THAN THE ALLIS-CHALMERS MODEL TL 645. HOWEVER, THE DIFFERENCE IS NOT MATERIAL IN TERMS OF PERFORMANCE, AND THE SPEED AVAILABLE WITH THE TL-645 IS MORE THAN ADEQUATE.

"HIGHER REVERSE SPEED CAPABILITY IS IMPORTANT ONLY WHEN TRANSPORTING THE MACHINE FROM PLACE TO PLACE, AND OBVIOUSLY WHEN THIS MOVEMENT IS IN REVERSE GEAR. ALTHOUGH REAR-END STEER, FRONT-END LOADERS OFTEN ARE DRIVEN IN REVERSE GEAR IN THIS FASHION, THE BUREAU CONSIDERS THIS PRACTICE TO BE EXTREMELY HAZARDOUS. SINCE THE ARTICULATED FRAME LOADER OFFERED BY ALLIS- CHALMERS STEERS AT THE FRONT, THE MACHINE WHEN TRANSPORTED OVER THE ROAD WILL TRAVEL IN FORWARD RANGE. CONSEQUENTLY, A REVERSE SPEED CAPABILITY OF MORE THAN 7.4 MPH IS NOT A FACTOR IN DETERMINING THE TRANSPORTABILITY OF THE MACHINE.

"IT IS TRUE, AS CATERPILLAR STATES, THAT THE CYCLE TIME IS IMPORTANT TO PRODUCTION ECONOMY AND SPEED. IN THE ACTUAL LOADING OPERATION, THE AVERAGE DISTANCE TRAVELLED IN REVERSE GEAR IS 40 TO 50 FEET. AT THIS DISTANCE, A SPEED OF 7.4 MPH AS OFFERED BY ALLIS-CHALMERS IS MORE THAN ADEQUATE. IN ADDITION, THE ROUGH TERRAIN IN WHICH SUCH A MACHINE OFTEN OPERATES, THE TENDENCY FOR THE MACHINE TO STALL AT HIGHER SPEEDS UNDER HEAVY LOADS, AND THE DANGER OF TIPPING OVER, PRECLUDE USE OF HIGH SPEEDS DURING LOADING OPERATIONS.

"THE ADVERTISED SPECIFICATIONS TOOK INTO ACCOUNT THE FACTOR OF CYCLE TIME BY REQUIRING AN ARTICULATED FRAME, A RELATIVELY NEW DESIGN DEVELOPMENT. THE ARTICULATED FRAME PERMITS THE ENTIRE FRONT HALF OF THE MACHINE TO PIVOT 45 DEGREES EACH SIDE OF CENTER. THIS CAPABILITY SIGNIFICANTLY DECREASES THE TURNING RADIUS OF THE MACHINE AND GIVES INCREASED MOBILITY.

"THE ADVERTISED SPECIFICATIONS CALLED FOR THE MANUFACTURER'S CURRENT PRODUCTION MODEL. SINCE THE ALLIS-CHALMERS MODEL TL-645 TRANSMISSION CONTAINS IMPROVEMENTS AND TECHNICAL INNOVATIONS ON A PREVIOUS ACCEPTABLE UNIT, (MODEL TL-20), AND SINCE THE TL-645 MEETS THE BUREAU'S PERFORMANCE REQUIREMENTS IN ALL RESPECTS, THE DEVIATION FROM PARAGRAPH B-4 WAS CONSIDERED MINOR AND THE BID RESPONSIVE.'

WHILE WE HAVE HELD THAT WHERE MINIMUM SPECIFICATIONS ARE USED, A REASONABLE DEFICIENCY DOES NOT JUSTIFY REJECTION OF AN OTHERWISE ACCEPTABLE LOW BID IN THE ABSENCE OF EVIDENCE THAT THE SPECIFICATIONS REFLECT A PARTICULAR NEED OF THE GOVERNMENT IN A GIVEN INSTANCE, WE HAVE ALSO HELD THAT MINIMUM SPECIFICATIONS SHOULD NOT GENERALLY BE USED, BUT RATHER SPECIFICATIONS SHOULD INDICATE APPROPRIATE CHARACTERISTICS--- AS DISTINGUISHED FROM ABSOLUTE MINIMUMS--- SO AS TO LEAVE BIDDERS FREE TO OFFER DIFFERENT GRADES OF EQUIPMENT AND LEAVE THE GOVERNMENT FREE TO ACCEPT EQUIPMENT VARYING IN REASONABLE MEASURE FROM THE ADVERTISED SPECIFICATIONS WITHOUT GROUND FOR PROTEST. 16 COMP. GEN. 464, 469; B- 116109, NOVEMBER 23, 1953.

ON THE BASIS OF THE FACTS OF RECORD, IT IS OUR VIEW THAT SINCE THE TRANSMISSION SPEEDS WERE SET FORTH IN THE INVITATION AS AN ABSOLUTE REQUIREMENT WITH NO INDICATION THAT A MACHINE WITH OTHER THAN THREE FORWARD AND THREE REVERSE SPEEDS WOULD BE ACCEPTABLE, THE ALLIS CHALMERS BID OFFERING A MACHINE WITH A TRANSMISSION HAVING THE EQUIVALENT OF FOUR FORWARD SPEEDS BUT ONLY TWO REVERSE SPEEDS WAS NOT RESPONSIVE TO A MATERIAL REQUIREMENT OF THE SPECIFICATIONS. ACCORDINGLY, IT IS OUR FURTHER VIEW THE DEVIATION SHOULD NOT HAVE BEEN WAIVED AS A MINOR IRREGULARITY; RATHER THE PROPER PROCEDURE WOULD HAVE BEEN TO READVERTISE THE PROCUREMENT AS AUTHORIZED BY 41 U.S.C. 253 (B) IN THE EVENT IT WAS CONSIDERED THAT AWARD TO YOU, THE ONLY OTHER BIDDER, AT A PRICE MORE THAN $5,000 HIGHER THAN THE LOW BID, WOULD NOT BE IN THE PUBLIC INTEREST.

IN THE CIRCUMSTANCES OF THIS CASE, HOWEVER, PARTICULARLY THE FACT THAT THE MACHINES IN QUESTION MEET THE NEEDS OF THE PROCURING AGENCY AND HAVE ALREADY BEEN SHIPPED TO THE USING ACTIVITY, IT IS OUR OPINION THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD NOT BE SERVED BY CANCELLING THE CONTRACT. WE ARE, HOWEVER, RECOMMENDING TO THE SECRETARY OF THE INTERIOR THAT THE SPECIFICATIONS IN FUTURE PROCUREMENTS OF THESE ITEMS BE AMENDED TO ACCURATELY REFLECT THE RANGE OF TRANSMISSION SPEEDS WHICH WILL MEET THE DEPARTMENT'S REQUIREMENTS.