B-158338, MAY 16, 1966

B-158338, MAY 16, 1966

TO MR. RICHARD T. PUELICHER, E. E.:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 13, 1966, APPARENTLY WRITTEN ON BEHALF OF THE R. G. RUSSELL COMPANY, INC., BOSTON, MASSACHUSETTS, CONCERNING THE REJECTION OF THAT COMPANY'S ELECTRICAL LOAD TRANSFER SWITCH FOR INSTALLATION IN THE VETERANS ADMINISTRATION HOSPITAL AT FRESNO, CALIFORNIA.

IT IS NOTED THAT THIS MATTER HAS BEEN THE SUBJECT OF SEVERAL PREVIOUS COMMUNICATIONS BY YOU WITH MEMBERS OF CONGRESS AND THE VETERANS ADMINISTRATION (VA) IN WHICH YOU MADE ALLEGATIONS OF IMPROPRIETY IN THE VA ACTIONS. IN YOUR SUBJECT LETTER YOU MAKE VARIOUS CHARGES, SEVERAL OF WHICH ARE NOT PRESENTED FOR THE FIRST TIME, AND YOU CONTEND THAT VA OFFICIALS ACTED BOTH ILLEGALLY AND IN BAD FAITH IN NOT PERMITTING THE INSTALLATION OF THE RUSSELL SWITCH AND REQUIRING INSTALLATION OF A SWITCH HAVING ARCING CONTACTS WHICH YOU STATE IS A PROPRIETARY ITEM. YOU ALSO ALLEGE THAT THE AUTOMATIC SWITCH COMPANY AND VA OFFICIALS IMPROPERLY INTERFERED WITH THE PERFORMANCE OF A GOVERNMENT CONTRACT ALREADY COMPLETED AS FAR AS THE R. G. RUSSELL COMPANY WAS CONCERNED. YOU STATE "THE VETERANS ADMINISTRATION HAS STEADFASTLY IGNORED THE FACT THAT THE CONTRACTOR, SHERWIN ELECTRIC SERVICE, HAS FOLLOWED TO THE MINUTEST DETAIL THE REGULATIONS AND PROCEDURES CALLED FOR IN HIS CONTRACT" AND THAT "I LEARNED BY THE PHONE THIS MORNING THAT THE VETERANS ADMINISTRATION HAS JUST, THIS WEEK, REFUSED THE CONTRACTOR THE ADDED COSTS OF FOLLOWING THEIR REQUESTS IN THE MINUTEST DETAIL.' FINALLY, YOU SAY TO THIS OFFICE "IT WOULD BE VERY MUCH APPRECIATED IF YOU WOULD RENEW YOUR INVESTIGATION OF THIS MATTER, NOT ALONG THE TECHNICAL LINES, WHICH IS WHAT THE VETERANS ADMINISTRATION HAS SUCCESSFULLY SO FAR SIDETRACKED YOU INTO DOING, BUT ALONG THE LINES OF WHETHER THEIR ACTIONS WERE LEGAL AND COMMITTED IN GOOD FAITH. I SAY THEY WERE BOTH ILLEGAL AND COMMITTED IN BAD FAITH.'

AT THE OUTSET IT IS FOR NOTING THAT THE ADMINISTRATIVE ACTIONS WHICH ARE THE PRIMARY OBJECT OF YOUR ALLEGATIONS AND CONTENTIONS OCCURRED IN THE ADMINISTRATION OF THE GOVERNMENT'S CONTRACT WITH THE SHERWIN ELECTRIC SERVICE AND THAT SUCH ACTIONS TRANSPIRED BETWEEN THE REPRESENTATIVES OF THAT COMPANY AND OF THE VETERANS ADMINISTRATION. THE RECORD BEFORE THIS OFFICE DOES NOT SHOW THAT SHERWIN ELECTRIC SERVICE HAS AUTHORIZED, OR EXPRESSED A DESIRE FOR, YOU TO REPRESENT IT IN THIS MATTER. THEREFORE, A DISCUSSION WITH YOU OF THOSE FACTORS WHICH BASICALLY PERTAIN ONLY TO THE GOVERNMENT AND ITS DEALINGS WITH THE PRIME CONTRACTOR, SHERWIN ELECTRIC SERVICE, WOULD APPEAR TO BE NEITHER APPROPRIATE NOR WARRANTED. IT IS A LONG-ESTABLISHED RULE OF LAW THAT CONTRACTS OR AGREEMENTS TO PERFORM WORK FOR, OR TO FURNISH SUPPLIES TO, PRIME CONTRACTORS ENGAGED IN THE PERFORMANCE OF CONTRACTS WITH THE GOVERNMENT DO NOT CREATE PRIVITY OF CONTRACT BETWEEN THE SUBCONTRACTOR AND THE UNITED STATES. 26 COMP. GEN. 303, 305; JOSEPH PETRIN, ET AL. V. UNITED STATES, 90 CT.CL. 670; UNITED STATES V. DRISCOLL, 96 U.S. 421.

HERE, THE RUSSELL COMPANY IS INVOLVED AS THE MANUFACTURER OF A TRANSFER SWITCH WHICH WAS FURNISHED TO, AND WAS PROPOSED TO BE INSTALLED IN THE HOSPITAL BY, THE PRIME CONTRACTOR, SHERWIN ELECTRIC SERVICE. ANY LEGAL OBLIGATIONS OR RESPONSIBILITIES OF THE GOVERNMENT ARISING OUT OF AN ACCEPTANCE AND REJECTION OF THE SWITCH BY THE VETERANS ADMINISTRATION WOULD BE TO THE PRIME CONTRACTOR, RATHER THAN TO ITS SUPPLIER. WHILE IT IS UNDERSTANDABLE THAT THE REJECTION OF THE RUSSELL SWITCH IS OF MAJOR CONCERN TO ITS MANUFACTURER, SUCH REJECTION WAS ADMINISTRATIVELY SUSTAINED ON THE BASIS THAT THE SWITCH DOES NOT POSSESS ARCING CONTACTS AS REQUIRED BY THE CONTRACT SPECIFICATIONS AND AS DETERMINED BY THE VETERANS ADMINISTRATION TO BE AN ESSENTIAL PART OF ITS MINIMUM NEEDS. YOUR ASSERTION THAT THE ARCING CONTACTS REQUIREMENT IS A RESTRICTIVE PROPRIETARY FEATURE MAY BE TRUE TO THE EXTENT THAT IT PREVENTED THE RUSSELL COMPANY FROM SUBMITTING A CONFORMING SWITCH WITHOUT CHANGING ITS COMMERCIAL OR STANDARD EQUIPMENT TO INCORPORATE THAT FEATURE. IN THIS SENSE, OF COURSE, ALL SPECIFICATIONS ARE RESTRICTIVE SINCE THE REQUIREMENTS THEY NECESSARILY ESTABLISH PRECLUDE THE ACQUISITION OF NONCONFORMING ITEMS. IN REPORTING ON A SIMILAR SPECIFICATION FOR A TRANSFER SWITCH USED IN APRIL 1960, FOR THE INSTALLATION OF AN EMERGENCY DIESEL GENERATOR IN THE UNITED STATES PUBLIC HEALTH SERVICE HOSPITAL, BALTIMORE, MARYLAND, THE GENERAL SERVICES ADMINISTRATION REPORTED:

"THE SPECIFICATION IS NOT BELIEVED TO BE RESTRICTIVE BECAUSE THE REQUIREMENT AS SPECIFIED IS NOT AN EXCLUSIVE PATENTED DEVICE, PARTLY OR OTHERWISE. IT IS SIMPLE IN CONSTRUCTION AND DOES NOT REQUIRE ANY APPRECIABLE AMOUNT OF EQUIPMENT OR TOOLING TO CONSTRUCT THIS EQUIPMENT. ANY MANUFACTURER, WHO SO WISHES, CAN BUILD THIS TO MEET THE SUBJECT SPECIFICATIONS.'

IN FORMING VA'S CONCLUSION THAT THE ARCING CONTACTS REQUIREMENT WAS NO MORE THAN AN EXPRESSION OF ITS BONA FIDE NEEDS, THE VETERANS ADMINISTRATION TECHNICIANS WITNESSED VARIOUS TESTS INVOLVING THE ARCING PHENOMENA WHICH REAFFIRMED THEIR OPINION THAT ARCING CONTACTS ARE A DEFINITE ASSET TO SUCH A SWITCH. IN ITS LETTER TO YOU OF MARCH 31, 1966, THE VETERANS ADMINISTRATION APTLY STATED THE MATERIAL FACTOR IN THAT CONNECTION AS "YOUR PROFESSIONAL OPINION AND THE OPINION OF OUR TECHNICAL STAFF DIFFER.' REGARDING ADMINISTRATIVE DETERMINATIONS AS TO THE TECHNICAL DETAILS OF NEEDED EQUIPMENT IT MAY BE STATED GENERALLY THAT APPLICABLE PROVISIONS OF THE LAW AND REGULATIONS PROVIDE THAT SPECIFICATION REQUIREMENTS IN A FORMALLY ADVERTISED PROCUREMENT SHALL NOT BE DRAWN SO AS TO UNDULY RESTRICT COMPETITION. WE HAVE NOT CONSTRUED SUCH PROVISIONS, HOWEVER, AS PERMITTING MANUFACTURERS TO DICTATE SPECIFICATIONS, OR AS PRECLUDING AN AGENCY FROM SPECIFYING AND REQUIRING A PARTICULAR FEATURE OR COMPONENT IN A PROCUREMENT OF AN ITEM, WHEN IN THE CONSIDERED JUDGMENT OF THE AGENCY'S TECHNICIANS AND PROCUREMENT OFFICIALS ONLY AN ITEM POSSESSING SUCH FEATURE OR COMPONENT WILL MEET THE AGENCY'S NEEDS. THE DRAFTING OF SPECIFICATIONS FOR A PROCUREMENT AND DETERMINATIONS AS TO WHETHER THE PRODUCTS PROPOSED TO BE FURNISHED MEET THE SPECIFICATION REQUIREMENTS ARE PRIMARILY THE FUNCTIONS OF THE PROCURING AGENCY. OUR OFFICE, HAVING NEITHER A SCIENTIFIC NOR ENGINEERING STAFF, WILL NOT INTERFERE EXCEPT WHERE IT IS CLEARLY ESTABLISHED THAT CONTRACTING OFFICIALS OF THE GOVERNMENT HAVE ABUSED THEIR AUTHORITY BY ACTING IN BAD FAITH, OR WITHOUT A REASONABLE FACTUAL BASIS, OR IN DISREGARD OF APPLICABLE STATUTES OR REGULATIONS. WE HAVE PREVIOUSLY FULLY CONSIDERED THE REJECTION OF THE RUSSELL SWITCH AND, CONTRARY TO YOUR CONTENTIONS, WE WERE UNABLE TO CONCLUDE THAT THE DECISION OF THE VETERANS ADMINISTRATION NOT TO PERMIT INSTALLATION OF THE SUBJECT SWITCH IN THE VA HOSPITAL AT FRESNO WAS DUE TO BAD FAITH, OR TO ARBITRARY OR CAPRICIOUS ACTION ON THE PART OF VA PERSONNEL, OR BEYOND REASONABLE LIMITS OF ADMINISTRATIVE AUTHORITY IN SUCH MATTERS.

IN THE LIGHT OF THE FOREGOING, WE DO NOT FIND ANY NEW EVIDENCE IN YOUR LETTER OF APRIL 13 WHICH WOULD REQUIRE OR JUSTIFY EITHER FURTHER INVESTIGATION OR A REVISION OF OUR PREVIOUS CONCLUSIONS, AND YOUR REQUEST FOR SUCH ACTION MUST THEREFORE BE DENIED.