B-159921, OCTOBER 10, 1966, 46 COMP. GEN. 281

B-159921, OCTOBER 10, 1966, 46 COMP. GEN. 281

CONTRACTS - MISTAKES - CONTRACTING OFFICER'S ERROR DETECTION DUTY - NOTICE OF ERROR. ALTHOUGH A CONTRACTING OFFICER WHO AWARDED A CONTRACT FOR FOOD MACHINERY TO THE ONLY BIDDER WHO DID NOT TAKE EXCEPTION TO THE MOTOR HORSEPOWER SPECIFICATION AND WHO QUOTED A PRICE SUBSTANTIALLY HIGHER THAN THAT OFFERED BY THE OTHER TWO BIDDERS, WHO TOOK EXCEPTION TO THE SPECIFICATION, MAY NOT BE CONSIDERED TO HAVE BEEN ON CONSTRUCTIVE NOTICE THAT THE SUCCESSFUL BIDDER, A MAJOR MANUFACTURER OF THE EQUIPMENT, WAS ACTUALLY BIDDING ON A LESS POWERFUL MACHINE THAN THAT CALLED FOR IN THE SPECIFICATIONS, THE FAILURE OF THE OTHER BIDDERS TO OFFER EQUIPMENT MEETING THE SPECIFICATIONS SHOULD HAVE ALERTED THE CONTRACTING OFFICER TO THE NEED TO REQUEST VERIFICATION; HOWEVER, A VALID AND BINDING CONTRACT FOR THE MACHINERY SPECIFIED RESULTED WHEN THE AWARD WAS MADE. CONTRACTS - SPECIFICATIONS - CONFORMABILITY OF EQUIPMENT, ETC; OFFERED - CONTRACTING OFFICER'S DUTY. THE FACT THAT A PROCURING AGENCY DID NOT MAKE ANY EFFORT TO ASCERTAIN WHETHER ANY MANUFACTURER COULD SUPPLY THE EQUIPMENT IT DESIRED MAY NOT BE CONSTRUED AS NOTICE THAT THE EQUIPMENT OFFERED BY THE SUCCESSFUL BIDDER DOES NOT MEET THE SPECIFICATIONS; HOWEVER, CONTRACTING AGENCIES SHOULD MAKE REASONABLE EFFORTS, BEFORE SOLICITATION, TO DETERMINE WHETHER A PARTICULAR ITEM IS AVAILABLE. CONTRACTS - MODIFICATION - PROPRIETY. MODIFICATION OF A CONTRACT FOR FURNISHING FOOD PREPARATION EQUIPMENT AWARDED TO THE ONLY BIDDER, WHO DID NOT TAKE EXCEPTION TO THE MOTOR SPECIFICATION, TO PERMIT HIM TO FURNISH A STANDARD MODEL WITH A LESS POWERFUL MOTOR BECAUSE THE MODEL REQUESTED WOULD NOT ACCOMMODATE THE MOTOR SPECIFIED WOULD BE TANTAMOUNT TO PRECLUDING ALL PROSPECTIVE BIDDERS FROM HAVING AN OPPORTUNITY TO SUBMIT BIDS ON THE LESS POWERFUL EQUIPMENT CONTRARY TO THE COMPETITIVE BIDDING STATUTE, 41 U.S.C. 253/A), WHICH REQUIRES THAT ALL INTERESTED PARTIES BE GIVEN AN EQUAL OPPORTUNITY TO COMPETE FOR THE PROCUREMENT AND, THEREFORE, SUCH MODIFICATION MAY NOT BE AUTHORIZED. CONTRACTS - SPECIFICATIONS - MINIMUM NEEDS REQUIREMENT. SINCE MODIFICATION OF A CONTRACT TO PERMIT THE CONTRACTOR TO SUBSTITUTE FOR ONE ITEM AN ARTICLE WITH A LESS POWERFUL MOTOR THAN THAT REQUIRED UNDER THE INVITATION IS NOT LEGALLY PROPER, THE PROCURING AGENCY SHOULD DETERMINE IF THE HEAVIER MOTOR IS ESSENTIAL TO ITS NEEDS AND, IF SO, ATTEMPT TO PROCURE THE EQUIPMENT IN THE OPEN MARKET, CHARGING THE CONTRACTOR WITH ANY EXCESS COST, BUT IF THE LESS POWERFUL MOTOR WOULD MEET THE NEEDS OF THE AGENCY, THAT ITEM COULD BE DELETED FROM THE CONTRACT AND THE PROCUREMENT READVERTISED.

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, OCTOBER 10, 1966:

REFERENCE IS MADE TO A LETTER DATED AUGUST 19, 1966, WITH ENCLOSURES, FROM THE DEPUTY ADMINISTRATOR, WHEREIN OUR DECISION IS REQUESTED CONCERNING A PROPOSAL TO REFORM A CONTRACT WITH THE HOBART MANUFACTURING COMPANY UNDER PURCHASE ORDER NUMBER 3035 FOR A 30-QUART ELECTRIC FOOD MIXER.

THE INVITATION REQUESTED BIDS FOR FOOD MIXERS, AMONG OTHER KITCHEN EQUIPMENT, IN ACCORDANCE WITH FEDERAL SPECIFICATION 00-M-38D, EXCEPT THAT A ONE-HORSEPOWER MOTOR WAS SPECIFIED FOR THE CLASS A HEAVY DUTY 30-QUART MIXER SOUGHT TO BE PROCURED UNDER ITEM 2 OF THE INVITATION. THE FEDERAL SPECIFICATION FOR THE CLASS A MIXER REQUIRES A THREE-QUARTERS HORSEPOWER MOTOR (MINIMUM), WHEREAS ONLY A HALF HORSEPOWER MOTOR (MINIMUM) IS REQUIRED FOR A CLASS B MEDIUM DUTY 30 QUART MIXER.

SEVENTEEN FIRMS WERE SOLICITED AND THREE BIDS WERE SUBMITTED ON ITEM 2. TWO OF THE BIDS DID NOT OFFER MORE THAN A THREE-QUARTERS HORSEPOWER MOTOR FOR THE MIXER, AND DID NOT OFFER MORE THAN A THREE QUARTERS HORSEPOWER MOTOR FOR THE MIXER, AND DID NOT OFFER FINISHES THAT MET THE SPECIFICATIONS. A CONTRACT FOR A ONE-HORSEPOWER 30-QUART MIXER UNDER ITEM 2 OF THE INVITATION WAS AWARDED TO HOBART ON MARCH 24, 1966. WHILE THE CONTRACTOR DID NOT TAKE EXCEPTION TO THE HORSEPOWER SPECIFICATION IN ITS BID, IT STATES THAT ITS BID WAS BASED ON THE STANDARD MODEL 30-QUART MIXER, EQUIPPED WITH A HALF-HORSEPOWER MOTOR, REGULARLY MANUFACTURED BY THAT COMPANY. IN ADDITION, IT APPEARS THAT THE HOBART 30-QUART MIXER CAN NOT ACCOMMODATE A ONE HORSEPOWER MOTOR, AND THE CONTRACTOR HAS THEREFORE OFFERED TO SUBSTITUTE ITS STANDARD MODEL MIXER IN PLACE OF THE ARTICLE CALLED FOR BY THE INVITATION.

THE VIEWS OF YOUR ADMINISTRATION ARE STATED AS FOLLOWS:

WHETHER OR NOT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF A MISTAKE IS DIFFICULT TO RESOLVE. THE CONTRACTING OFFICER STATES,"AT THE TIME OF AWARD, THERE WAS NO OBVIOUS REASON TO DOUBT THAT THE BID WAS RESPONSIVE, EXCEPT THAT THE OTHER TWO BIDDERS ON THIS ITEM DID QUALIFY THEIR BIDS;, THIS POINT OF VIEW IS UNDERSTANDABLE BECAUSE OF THE BELIEF THAT THE FEDERAL SPECIFICATION PERMITTED THE STIPULATION OF A LARGER MOTOR, AND WE HAVE NO REASON TO DOUBT THAT THE AWARD WAS MADE IN GOOD FAITH. ON THE OTHER HAND, HOBART'S LITERATURE SHOWED A 1/2 HORSEPOWER MOTOR AND NO EFFORT HAD BEEN MADE TO FIND OUT WHETHER ANY MANUFACTURER COULD FURNISH A THIRTY QUART MIXER WITH A ONE HORSEPOWER MOTOR. CONSEQUENTLY, THE FACT THAT THE TWO OTHER BIDDERS TOOK EXCEPTION TO THE HORSEPOWER REQUIREMENT COULD BE CONSIDERED AS A REASON FOR THE CONTRACTING OFFICER TO HAVE SUSPECTED AN ERROR IN HOBART'S BID AND REQUESTED VERIFICATION.

IF IT IS DETERMINED THAT THE CONTRACTING OFFICER SHOULD NOT HAVE BEEN "ON NOTICE" AND THE CONTRACT MADE TO STAND THE RESULT WILL BE A DEFAULT ACTION WHICH WOULD SERVE NO PURPOSE AS THE ITEM IS NOT AVAILABLE. IF IT IS DETERMINED THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN "ON NOTICE" THE CONTRACT CAN BE REFORMED TO EITHER DELETE THE ITEM OR TO PERMIT ACCEPTANCE OF HOBART'S 1/2 HORSEPOWER THIRTY QUART MIXER. BECAUSE THE EXCEPTION TAKEN TO THE FEDERAL SPECIFICATION MAY HAVE HAD THE EFFECT OF LIMITING COMPETITION, IT WOULD APPEAR THAT DELETION OF THE ITEM IS THE PROPER COURSE. IN THIS CASE, HOWEVER, OF THE SEVENTEEN BIDDERS SOLICITED, BIDS WERE RECEIVED FROM HOBART AND TWO OTHER BIDDERS WHO CANNOT MEET OUR REQUIREMENTS FOR THE FINISH, SO IT WOULD SEEM THAT NOTHING WOULD BE GAINED BY REPROCUREMENT. THEREFORE, WE FEEL THE CONTRACTING OFFICER'S RECOMMENDATION TO PERMIT ACCEPTANCE OF THE 1/2 HORSEPOWER MOTOR HAS SOME MERIT.

CONCERNING THE QUESTION OF WHETHER THE CONTRACTING OFFICER MAY BE CONSIDERED TO HAVE HAD CONSTRUCTIVE NOTICE OF HOBART'S MISTAKE ON THE BASIS THAT (1) HOBART'S LITERATURE SHOWED A HALF-HORSEPOWER MOTOR, (2) NO EFFORT HAD BEEN MADE TO FIND OUT WHETHER ANY MANUFACTURER COULD FURNISH THE MIXER AS SPECIFIED, AND (3) THE TWO OTHER BIDDERS TOOK EXCEPTION TO THE HORSEPOWER REQUIREMENT, IT IS NOTED THAT THE INVITATION DID NOT REQUIRE SUBMISSION OF LITERATURE WITH THE BIDS, AND THAT THE LITERATURE PROVIDED BY HOBART WAS FURNISHED WITH THAT FIRM'S LETTER OF JULY 13, AFTER THE CONTRACT HAD BEEN AWARDED. WHILE WE CONSIDER THE EXPENDITURE OF REASONABLE EFFORTS, PRIOR TO SOLICITATION TO FIND OUT WHETHER A DESIRED PRODUCT IS AVAILABLE TO BE A PROPER COURSE OF ACTION, WE DO NOT PERCEIVE HOW AN ABSENCE OF SUCH EFFORTS MAY REASONABLY BE CONSTRUED AS NOTICE THAT THE PRODUCT IS NOT AVAILABLE WHEN IT IS OFFERED BY A BIDDER. ALTHOUGH WE FIND MORE MERIT IN THE VIEW THAT THE FAILURE OF THE OTHER BIDDERS TO OFFER ONE-HORSEPOWER EQUIPMENT COULD BE CONSIDERED AS REASON FOR REQUESTING A VERIFICATION FROM HOBART, WE DO NOT FEEL THAT IT IS ADEQUATE TO CONSTITUTE CONSTRUCTIVE NOTICE TO THE CONTRACTING OFFICER THAT HOBART, A MAJOR AND RELIABLE MANUFACTURER OF FOOD MIXERS WHOSE PRICE WAS SUBSTANTIALLY HIGHER THAN THAT OF THE OTHER TWO BIDDERS, WAS ACTUALLY BIDDING ON A LESS POWERFUL MIXER THAN THAT CALLED FOR BY THE INVITATION. ACCORDINGLY, IT IS OUR VIEW THAT THE GOVERNMENT HAS A VALID AND SUBSISTING CONTRACT WITH HOBART FOR ITEM 2.

IN OUR OPINION, A MODIFICATION CHANGING THE CONTRACT REQUIREMENTS FROM A HEAVY DUTY CLASS A MIXER TO A MEDIUM DUTY CLASS B MIXER WOULD VIOLATE 41 U.S.C. 253/A), WHICH REQUIRES THAT ,INVITATIONS FOR BIDS SHALL PERMIT SUCH FULL AND FREE COMPETITION AS IS CONSISTENT WITH THE PROCUREMENT OF TYPES OF PROPERTY AND SERVICES NECESSARY TO MEET THE REQUIREMENTS OF THE AGENCY CONCERNED;, THIS STATUTORY PROVISION WAS DESIGNED TO OBTAIN FOR THE GOVERNMENT THE MOST ADVANTAGEOUS PRICES RESULTING FROM THE WIDEST COMPETITION REASONABLE UNDER THE CIRCUMSTANCES AND TO AFFORD ALL INTERESTED PARTIES AN EQUAL OPPORTUNITY TO COMPETE FOR THE PROCUREMENT. SEE B-146508, NOVEMBER 7, 1961. THERE APPEARS TO BE NO LEGAL BASIS FOR MODITYING THE INSTANT CONTRACT SINCE THE GOVERNMENT DID NOT OFFER PROSPECTIVE BIDDERS AN OPPORTUNITY TO OFFER BIDS ON THE LESS POWERFUL CLASS B MIXER.

ADDITIONALLY, WE DO NOT CONSIDER THE FACT THAT ONLY THREE BIDS WERE SUBMITTED AS AN ADEQUATE BASIS FOR CONCLUDING THAT A 30-QUART MIXER WITH ONE HORSEPOWER CANNOT BE SECURED FROM THE OPEN MARKET. HOWEVER, SUCH A MIXER MAY EXCEED THE ACTUAL NEEDS OF THE REQUISITIONING ACTIVITY SINCE IT APPEARS THAT THE ACTIVITY IS NOW WILLING TO ACCEPT A MIXER HAVING A HALF- HORSEPOWER MOTOR, ON CLASS B MACHINE. IN THIS REGARD WE NOTE PARAGRAPH 6.1 OF THE REFERENCED FEDERAL SPECIFICATION STATES THAT CLASS A MACHINES ARE PRIMARILY INTENDED FOR MIXING BREAD DOUGH AND CLASS B MACHINES ARE INTENDED FOR OTHER LIGHTER MIXING AND WHIPPING OPERATIONS. IT APPEARS THEREFORE THAT THE PRIMARY FACTOR FOR DETERMINATION IS THE USE INTENDED FOR THE MACHINE. IF THE MACHINE WILL BE USED FOR THE LIGHTER OPERATIONS, READVERTISEMENT WOULD APPEAR TO BE IN ORDER FOR A CLASS B MIXER. IF THE MACHINE IS TO BE USED SUBSTANTIALLY FOR MIXING BREAD DOUGH, THEN CAREFUL CONSIDERATION SHOULD BE GIVEN TO THE ACTIVITY'S ACTUAL NEEDS AS TO POWER. IF THE ONE HORSEPOWER FEATURE IS ESSENTIAL, ATTEMPTS SHOULD BE MADE TO PROCURE THE ITEM FROM THE OPEN MARKET AND ANY EXCESS COST SHOULD BE CHARGED TO HOBART. IF EITHER THE ONE-HALF OR THREE-QUARTERS HORSEPOWER MIXER SPECIFIED IN THE FEDERAL SPECIFICATION WILL SUFFICE, IT WOULD APPEAR THE DELETION OF ITEM 2 FROM HOBART'S CONTRACT COULD BE PROPER, AND THAT READVERTISEMENT SHOULD BE ACCOMPLISHED IN ACCORDANCE WITH SPECIFICATIONS FOR A CLASS A OR CLASS B MIXER, PROVIDED THE ACTIVITY'S ACTUAL NEEDS REGARDING FINISH ARE OBTAINABLE, SINCE THE RECORD INDICATES THAT BOTH ONE- HALF AND THREE-QUARTERS HORSEPOWER MIXERS ARE AVAILABLE.

THE RECORD SHOWS THAT OTHER BIDDERS DID NOT MEET THE IFB REQUIREMENTS FOR THE EQUIPMENT'S FINISH. IN THIS REGARD WE WISH TO POINT OUT THAT THE FEDERAL SPECIFICATION'S "FINISH" PROVISIONS IN PARAGRAPH 3.13 PROVIDE FOR CORROSION RESISTING STEEL OR THAT THE METAL SURFACES BE PROTECTED BY A CORROSION-RESISTANT METALLIC COATING, AND WHERE NOT SO PROTECTED TO BE FINISHED IN ACCORDANCE WITH THE MANUFACTURER'S STANDARD PRACTICE. IN OUR DECISION OF APRIL 29, 1965, B-156477, WE STATED THAT:

WHILE THE PREPARATION OF SPECIFICATIONS STATING THE MINIMUM NEEDS OF THE GOVERNMENT IS PRIMARILY THE RESPONSIBILITY OF THE ADMINISTRATIVE AGENCY CONCERNED, THE PUBLIC ADVERTISING STATUTES HAVE CONSISTENTLY BEEN HELD TO REQUIRE THAT EVERY EFFORT SHOULD BE MADE BY THE PROCUREMENT AGENCIES OF THE GOVERNMENT TO STATE SPECIFICATIONS IN TERMS THAT WILL PERMIT THE BROADEST FIELD OF COMPETITION WITHIN THE NEEDS REASONABLY REQUIRED, NOT THE MAXIMUM DESIRED. SEE 32 COMP. GEN. 384 AND 41 ID. 348.

IN THE DRAFTING OF SPECIFICATIONS CAUTION SHOULD BE EXERCISED WHEN DEVIATING FROM GENERAL REQUIREMENTS OF ESTABLISHED SPECIFICATIONS WHICH ARE REASONABLY ADAPTABLE TO THE PROCUREMENT AT HAND. TO REDUCE COMPETITION EVEN IN A SMALL DEGREE BY ADDING TO THE SPECIFICATIONS RESTRICTIVE FEATURES NOT EMBODIED IN A STANDARD FEDERAL OR MILITARY SPECIFICATION PRESCRIBED FOR USE IN PROCUREMENT OF LIKE OR SIMILAR ITEMS IS A SERIOUS MATTER, AND SUCH ACTION SHOULD BE CONSIDERED AS REPRESENTATION THAT EACH OF SUCH FEATURES HAVE BEEN DETERMINED BY RESPONSIBLE AUTHORITY TO BE NECESSARY TO MEET THE MINIMUM REQUIREMENTS OF THE GOVERNMENT IN THE PARTICULAR PROCUREMENT.

ORIGINALLY THE INSTANT IFB REQUIRED A STAINLESS STEEL FINISH AND WAS LATER AMENDED TO INCLUDE ANODIZED ALUMINUM. THE RECORD DOES NOT SHOW THE REASON FOR SUCH AMENDMENT, HOWEVER IT IS NOTED THAT THE STANDARD HOBART MIXER RECOMMENDED FOR PURCHASE HAS AN ANODIZED ALUMINUM FINISH. THE QUESTION ARISES WHETHER THE AMENDMENT WAS MADE TO ACCOMMODATE THE HOBART PRODUCT, AND WHETHER FURTHER REVISION SHOULD BE MADE TO PERMIT THE FINISHES OFFERED BY OTHER MANUFACTURERS WHOSE BIDS WERE NONRESPONSIVE IN THAT RESPECT.

WE BELIEVE THEREFORE THAT IN ANY READVERTISEMENT OF THIS ITEM THE IFB SPECIFICATIONS SHOULD BE THOROUGHLY AND OBJECTIVELY EXAMINED IN RELATION TO THE HOSPITAL'S ACTUAL REQUIREMENTS. UNLESS IT IS ESTABLISHED CONCLUSIVELY THAT ONLY THE STAINLESS STEEL OR ANODIZED ALUMINUM FINISHES WILL SATISFY SUCH ESSENTIAL REQUIREMENTS THE SPECIFICATION SHOULD BE OPENED UP IN THAT RESPECT TO PERMIT MAXIMUM COMPETITION FOR THE CONTRACT.