B-160692, NOVEMBER 13, 1967, 47 COMP. GEN. 236

B-160692: Nov 13, 1967

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WERE UNJUSTIFIED. WERE INCONSISTENT WITH THE FULL AND FREE COMPETITION CONTEMPLATED BY 10 U.S.C. 2305 AND. GENERAL ACCOUNTING OFFICE DECISIONS - "DICTUM" A RECOMMENDATION BY THE COMPTROLLER GENERAL OF THE UNITED STATES THAT IS CONTAINED IN A LETTER TO THE HEAD OF AN AGENCY RATHER THAN IN THE DECISION SENT TO THE PROTESTING BIDDER CONCERNING AREAS IN THE AGENCY'S PROCUREMENT PRACTICES WHICH WERE BROUGHT TO LIGHT BY THE PROTEST IS NOT "DICTUM". - AND THE RECOMMENDATION MAY NOT BE DISREGARDED AS A COMMENT WHICH IS NOT ESSENTIAL AND IS LESS AUTHORITATIVE THAN THE ACTUAL DECISION TO THE PROTESTANT. ANY ACTION BY A PROCURING AGENCY THAT IS CONTRARY TO A RECOMMENDATION MAY RESULT IN THE DISALLOWANCE OF CREDIT IN THE DISBURSING OFFICER'S ACCOUNTS.

B-160692, NOVEMBER 13, 1967, 47 COMP. GEN. 236

CONTRACTS - SPECIFICATIONS - RESTRICTIVE - DISPOSAL AREAS UNDER DREDGING CONTRACTS THE RESTRICTIONS CONTAINED IN AN INVITATION FOR BIDS THAT PRECLUDED CONSIDERATION OF A MORE ECONOMICAL AND PRACTICAL METHOD OF RIVER DREDGING TO BE ACCOMPLISHED BY MEANS OF ALTERNATE REHANDLING OPERATIONS AND USE OF OTHER THAN GOVERNMENT FURNISHED DISPOSAL AREAS, ALTHOUGH THE INVITATION PROVIDED FOR NEGOTIATION OF ALTERNATE DISPOSAL AREAS AFTER CONTRACT AWARD, WERE UNJUSTIFIED, AND THE ALTERNATE BIDDING METHOD NOT PER SE INVALID NOR CONSIDERED BIDDING ON A DIFFERENT JOB BUT RATHER BIDDING ON A COMMON BASIS WITH OTHER BIDDERS, MEETING THE NEEDS OF THE GOVERNMENT, THE RESTRICTIONS ON A BIDDER'S CUSTOMARY INTERNAL OPERATIONS, EVEN IF INTENDED TO ENCOURAGE OTHER BIDDERS, WERE INCONSISTENT WITH THE FULL AND FREE COMPETITION CONTEMPLATED BY 10 U.S.C. 2305 AND, THEREFORE, THE INVITATION SHOULD BE CANCELED AND REISSUED, OR MODIFIED. HOWEVER, IF THE FULL AND FREE COMPETITION REQUIRED UNDER SECTION 2305 CREATES DREDGING PROCUREMENT PROBLEMS, THE MATTER SHOULD BE PRESENTED TO THE CONGRESS. GENERAL ACCOUNTING OFFICE DECISIONS - "DICTUM" A RECOMMENDATION BY THE COMPTROLLER GENERAL OF THE UNITED STATES THAT IS CONTAINED IN A LETTER TO THE HEAD OF AN AGENCY RATHER THAN IN THE DECISION SENT TO THE PROTESTING BIDDER CONCERNING AREAS IN THE AGENCY'S PROCUREMENT PRACTICES WHICH WERE BROUGHT TO LIGHT BY THE PROTEST IS NOT "DICTUM"--- THE TERM USED AS AN ABBREVIATION OF "OBITER DICTUM" THAT MEANS A REMARK OR OPINION UTTERED BY THE WAY--- AND THE RECOMMENDATION MAY NOT BE DISREGARDED AS A COMMENT WHICH IS NOT ESSENTIAL AND IS LESS AUTHORITATIVE THAN THE ACTUAL DECISION TO THE PROTESTANT. THEREFORE, ANY ACTION BY A PROCURING AGENCY THAT IS CONTRARY TO A RECOMMENDATION MAY RESULT IN THE DISALLOWANCE OF CREDIT IN THE DISBURSING OFFICER'S ACCOUNTS.

TO THE SECRETARY OF THE ARMY, NOVEMBER 13, 1967:

REFERENCE IS MADE TO THE PROTEST OF AMERICAN DREDGING COMPANY (ADC)CONCERNING CERTAIN RESTRICTIONS CONTAINED IN INVITATION FOR BIDS NO. DACW 61-67-B-0037 ISSUED ON DECEMBER 27, 1966, BY THE PHILADELPHIA DISTRICT OF THE ARMY CORPS OF ENGINEERS FOR MAINTENANCE DREDGING OF AN ESTIMATED 2,222,600 CUBIC YARDS OF MATERIAL FROM FOUR SEPARATE AREAS OF THE MARCUS HOOK ANCHORAGE IN THE DELAWARE RIVER. BY AMENDMENT NO. 0004 OF FEBRUARY 14, 1967, THE DATE FOR OPENING BIDS WAS POSTPONED UNTIL FURTHER NOTICE.

THE IFB PROVIDED UNDER PARAGRAPH TP-3 OF THE TECHNICAL PROVISIONS AS FOLLOWS:

"TP-3 DISPOSAL OF EXCAVATED MATERIAL

"A. THE MATERIAL EXCAVATED SHALL BE TRANSPORTED, DEPOSITED, CONFINED, AND GRADED TO DRAIN WITHIN THE LIMITS OF THE GOVERNMENT FURNISHED DISPOSAL AREA SHOWN ON THE DRAWINGS. BIDS RECEIVED WILL BE BASED ON UTILIZING ONLY THE ABOVE DESCRIBED AREA. ALTERNATE AREAS WILL NOT BE CONSIDERED UNTIL AFTER THE AWARD OF THE CONTRACT. REHANDLING OPERATIONS WILL NOT BE PERMITTED.

"B. IF, AFTER THE AWARD OF THE CONTRACT, A DISPOSAL AREA OTHER THAN THAT STIPULATED IN THESE SPECIFICATIONS IS PROPOSED, ITS ACCEPTANCE WILL BE SUBJECT TO THE APPROVAL OF THE CONTRACTING OFFICER AFTER AN ADJUSTMENT OF THE CONTRACT PRICE IF FOUND NECESSARY BY THE CONTRACTING OFFICER TO PROTECT THE GOVERNMENT INTEREST. THE CONTRACTOR SHALL OBTAIN THE WRITTEN CONSENT OF THE OWNERS OF THE SUBSTITUTE GROUNDS AND FURNISH EVIDENCE THEREOF TO THE CONTRACTING OFFICER. ALL EXPENSES INCURRED IN CONNECTION WITH PROVIDING AND MAKING AVAILABLE SUCH DISPOSAL AREAS SHALL BE BORNE BY THE CONTRACTOR, AND ALL MATERIALS DEPOSITED THEREON, AND ALL OPERATIONS IN CONNECTION THEREWITH SHALL BE AT THE CONTRACTOR'S RISK.

"SUBSTITUTION OF DISPOSAL AREAS IS NOT CONSIDERED TO BE -VALUE ENGINEERING- WITHIN THE MEANING OF THE VALUE ENGINEERING INCENTIVE CLAUSE OF THE CONTRACT, AND THE GOVERNMENT WILL BE ENTITLED TO THE FULL AMOUNT OF ANY REDUCTION IN CONTRACT COST FOR PERMITTING THE USE OF ALTERNATE DISPOSAL AREAS.

"C. MATERIALS EXCAVATED BY HYDRAULIC DREDGES SHALL BE TRANSPORTED BY PIPELINE DIRECTLY TO FINAL POSITION IN THE APPROVED DISPOSAL AREA WITHOUT REHANDLING OR PLACING IN SCOWS OR OTHER VESSELS.

"D. ANY MATERIAL THAT IS DEPOSITED ELSEWHERE THAN IN PLACES DESIGNATED OR APPROVED BY THE CONTRACTING OFFICER WILL NOT BE PAID FOR AND THE CONTRACTOR MAY BE REQUIRED TO REMOVE SUCH MISPLACED MATERIAL AND DEPOSIT IT WHERE DIRECTED AT HIS EXPENSE.'

AFTER THE CONTRACTING OFFICER DENIED ADC'S REQUEST OF JANUARY 9, 1967, THAT THE ABOVE PROVISION BE REVISED TO PERMIT BIDDING ON USE OF ALTERNATE DISPOSAL AREAS AND REHANDLING OPERATIONS, THAT COMPANY PROTESTED TO THE PHILADELPHIA DISTRICT ENGINEER AND TO THIS OFFICE BY TELEGRAM OF JANUARY 17, 1967, THE RESTRICTIONS WHICH PROHIBIT RESPONSIVE BIDS BASED ON THE REHANDLING OF MATERIALS BY BUCKET DREDGING OPERATIONS AND THE USE OF ALTERNATE DISPOSAL AREAS. CITING 43 COMP. GEN. 643 AND B-158933, APRIL 29, 1966, ADC STATED THE GROUNDS FOR ITS PROTEST AS "THE SAID RESTRICTIVE LANGUAGE PRECLUDES BIDDERS FROM SUBMITTING BIDS PREDICATED ON ACCOMPLISHING THE DREDGING WORK AND DISPOSING OF THE SPOIL BY THE MOST ECONOMICAL MEANS AVAILABLE TO THEM THEREBY DEPRIVING THE GOVERNMENT OF POSSIBLE SAVINGS IN PROJECT COSTS.' AMERICAN DREDGING COMPANY'S PROTEST WAS EITHER ENDORSED, OR ADDITIONAL PROTESTS FILED, BY ATKINSON DREDGING COMPANY, GAHAGAN DREDGING CORPORATION, NORFOLK DREDGING COMPANY, GREAT LAKES DREDGE AND DOCK COMPANY, ATLANTIC GULF AND PACIFIC COMPANY, SOUTHEASTERN DREDGE OWNERS ASSOCIATION (WITH MEMBERSHIP OF 16 DREDGING COMPANIES) AND THE NATIONAL ASSOCIATION OF RIVER AND HARBOR CONTRACTORS (REPRESENTING 22 DREDGING COMPANIES) ALL OF WHICH OPPOSE THE RESTRICTIONS ON BIDDING ON ALTERNATE AREAS, AND MOST OF WHICH ADVOCATE THAT BIDDERS BE PERMITTED TO SUBMIT BIDS BASED ON UTILIZING THE MOST ECONOMICAL DREDGING MEANS AND METHODS SUITABLE FOR THE PERFORMANCE OF THE WORK. BY LETTER OF JUNE 2, 1967, BAUER DREDGING AND CONSTRUCTION CO., INC., ADVISED THIS OFFICE THAT IT HAD DECLINED TO JOIN ADC IN THE PROTEST, AND STATED THAT IT FAVORED ALL FIRMS BIDDING ON USE OF AN AREA FURNISHED BY THE GOVERNMENT WITH CONSIDERATION OF ALTERNATE AREAS BEING RESERVED UNTIL AFTER AWARD.

IN SUPPORT OF ITS OBJECTION TO THE PROSCRIPTION AGAINST REHANDLING, ADC CONTENDED THAT THE TWO SHOALING AREAS ON EACH SIDE OF THE ANCHORAGE NEAR THE CENTER OF THE WORK AREA, CONTAINING ESTIMATED QUANTITIES OF 41,000 AND 10,000 CUBIC YARDS OF MATERIAL, COULD BE MORE ECONOMICALLY REMOVED BY USE OF A BUCKET DREDGE (WITH ATTENDANT REHANDLING OF THE MATERIAL) INSTEAD OF BY USE OF A HYDRAULIC PIPELINE DREDGE, AND THAT IT WOULD BE UNECONOMICAL AND IMPRACTICAL TO RUN A PIPELINE THE ENTIRE DISTANCE ACROSS THE BUSY ANCHORAGE TO REMOVE THE ISOLATED 41,000 CUBIC YARDS OF SHOALING MATERIAL SITUATED NEAR THE CHANNEL, OR TO REMOVE BY SUCH HYDRAULIC DREDGING SKIPPED SPOTS OR SPOT SHOALS SHOWN ON THE AFTER-DREDGING SOUNDINGS. BASED ON ITS PAST EXPERIENCE OF DREDGING IN THE MARCUS HOOK AREA, ADC STATES IT BELIEVES THAT AT LEAST 20 TO 25 PERCENT OF THE TOTAL MATERIALS REMOVED WILL BE GRANULAR TYPE MATERIALS WHICH THE SUCCESSFUL BIDDER SHOULD BE PERMITTED TO CONSERVE THROUGH BUCKET DREDGING AND REHANDLING OPERATIONS, AND THAT BIDDERS SHOULD NOT BE PREVENTED FROM ESTIMATING THE VALUE OF SUCH MATERIALS AND MAKING ALLOWANCE THEREFOR IN PREPARING THEIR BID PRICES.

CONCERNING ADC'S CONTENTION THAT IT WAS UNECONOMICAL AND IMPRACTICAL TO REMOVE THE ESTIMATED 41,000 CUBIC YARDS OF SHOALING MATERIAL SITUATED NEAR THE CHANNEL BY HYDRAULIC DREDGING PIPELINE EQUIPMENT, IT IS STATED IN THE CONTRACTING OFFICER'S SUPPLEMENTAL REPORT OF JUNE 6, 1967:

"REMOVAL OF THE -ISOLATED- SHOAL ON THE NORTHERLY EDGE OF THE ANCHORAGE IS NO LONGER MOOT; THE SHOAL DOES NOT EXIST. CONTINUING ACCUMULATION MADE ITS EXISTENCE UNDESIRABLE, AND IT WAS THEREFORE REMOVED BY GOVERNMENT FORCES BETWEEN 30 APRIL AND 13 MAY 1967.' IT IS ASSUMED THAT THE REMOVAL WAS EFFECTED BY GOVERNMENT HOPPER DREDGE. ALTHOUGH, AS INDICATED ABOVE, THE REMOVAL OF THE SHOAL RENDERS ACADEMIC THE ISSUE OF WHETHER IT WAS UNECONOMICAL AND IMPRACTICAL TO REMOVE THE SHOAL BY HYDRAULIC PIPELINE DREDGING, THE CONTRACTING OFFICER HAS STATED AS A MATTER OF INTEREST THAT HYDRAULIC DREDGING IN BUSY ANCHORAGES, INCLUDING THE SUBJECT ONE, IS COMMONPLACE AND FEASIBLE. WE OBSERVE THAT SUCH STATEMENT DOES NOT ASSERT THAT IT IS COMMONPLACE TO REMOVE SIMILARLY SITUATED SHOALS BY HYDRAULIC DREDGING, NOR DOES IT REFUTE THE SPECIFIC CONTENTION THAT IT WAS UNECONOMICAL TO DO SO IN THE INSTANT SITUATION. WHILE IT IS STATED THAT "CONTINUING ACCUMULATION" MADE THE SHOAL'S EXISTENCE UNDESIRABLE, THE EXTENT OF SUCH ACCUMULATION IS NOT SHOWN NOR IS IT INDICATED THAT THE SHOAL CONSTITUTED A SHIPPING HAZARD. IN SUCH CONNECTION, IT WOULD APPEAR THAT THE EXISTENCE OF THE SHOAL WAS CONSIDERED TO BE "UNDESIRABLE" WHEN IT WAS ORIGINALLY INCLUDED IN THE PROJECT WORK, AND IT IS NOTED THAT THE 230 DAYS ALLOWED BY THE IFB FOR COMPLETION OF THE WORK EXTENDS CONSIDERABLY BEYOND THE PERIOD WHEN THE REMOVAL WAS PERFORMED. SUCH CIRCUMSTANCES DO NOT PRECLUDE THE POSSIBILITY THAT UPON FURTHER CONSIDERATION IT WAS, IN FACT, RECOGNIZED AS UNECONOMICAL TO REMOVE THE SHOAL BY HYDRAULIC PIPELINE DREDGING, AS CONTENDED BY ADC, AND THAT SAVINGS WERE TO BE REALIZED BY REMOVING THE SHOAL FROM THE PROJECT WORK AND PERFORMING THE DREDGING "IN HOUSE.' IN SUPPORT OF ITS CONTENTION ADC STATED:

"AT THE MEETING HELD ON JANUARY 5, 1967, WHICH IS REFERRED TO IN THE REPORT, THE CONTRACTING OFFICER (COL. WATKINS) TOLD MR. GREASER THAT HE AGREED THAT IT WOULD BE MORE ECONOMICAL TO REMOVE THE ISOLATED SHOALING AREAS AND -SPOT SHOALS' AFTER DREDGING, WITH BUCKET DREDGING EQUIPMENT. HE STATED THAT AFTER AWARD OF THE CONTRACT HE WOULD CONSIDER SUCH A PROPOSAL BASED ON A CREDIT TO THE CONTRACT PRICE. HE ALSO INDICATED IT WOULD BE ACCEPTABLE TO HIM, AFTER AWARD OF THE CONTRACT, FOR THE SUCCESSFUL BIDDER TO PLACE SAND AND GRAVEL INTO SCOWS AS A CONSERVATION MEASURE PROVIDED A CREDIT TO THE CONTRACT PRICE WAS OFFERED.'

THE CONTRACTING OFFICER'S COMMENTS THEREON, WHICH DO NOT DISAVOW THE STATEMENTS ATTRIBUTED TO HIM, ARE AS FOLLOWS:

"CONTRACT REQUIREMENTS ARE ESTABLISHED, NOT IN INFORMAL MEETINGS WITH THE CONTRACTING OFFICER, BUT IN FORMAL INVITATIONS FOR BIDS, AND WRITTEN AMENDMENTS THERETO, PROMULGATED TO ALL BIDDERS. THE CONTRACTING OFFICER WILL, AS A MATTER OF POLICY, CONSIDER ANY PROPOSAL FROM ANY BIDDER OR CONTRACTOR AT ANY TIME. MANIFESTLY HE HAS NOT ACCEPTED THE PROPOSAL TO AMEND THE SPECIFICATIONS; WHAT HE WILL DO AFTER AWARD IS NOT AT ISSUE, AND WILL ABIDE THE EVENT.'

REGARDING THE REHANDLING PROVISION, THE CONTRACTING OFFICER REPORTED (FEBRUARY 20, 1967):

"14. THE -REHANDLING- PROSCRIBED BY THE SPECIFICATIONS IS A METHOD OF DREDGING IN WHICH BOTTOM MATERIAL IS REMOVED FROM THE RIVER BED BY A CLAM SHELL DREDGE, A BUCKET DREDGE, OR A DIPPER DREDGE. THE MATERIAL IS PLACED IN A SCOW AND HAULED TO A SELECTED -REHANDLING BASIN,- WHERE IT IS DUMPED, SUBSEQUENTLY TO BE PUMPED ASHORE. SUCH REHANDLING OPERATIONS' ARE PERMISSIBLE IF HEAVY MATERIAL, SUCH AS COARSE SAND OR GRAVEL, IS TO BE DREDGED. SUCH OPERATIONS ARE NECESSARY, WHERE LIGHT MATERIAL IS TO BE DREDGED, IF THERE IS NO DISPOSAL AREA IN THE VICINITY TO WHICH THE MATERIAL CAN ECONOMICALLY BE PUMPED.

"15. NEITHER OF THE ABOVE SITUATIONS OBTAINS IN THIS CASE. THE BORINGS INDICATE THE MATERIAL TO BE, OVERWHELMINGLY, LIGHT, SOFT, ORGANIC CLAY--- IN LAYMEN'S TERMS, MUD. ITS VERY PRESENCE IN THE ANCHORAGE INDICATES ITS MOBILITY. IN SUCH SITUATION, REHANDLING OPERATIONS PERMIT A PORTION OF THE DREDGED MATERIAL TO ESCAPE DURING THE PROCESS AND TO RETURN TO THE RIVER, A CIRCUMSTANCE INIMICAL TO, AND AT VARIANCE WITH, THE GOVERNMENT'S INTENT TO GET ALL OF THE MATERIAL ASHORE AND PROPERLY SECURED. FURTHER, THERE IS HERE NO NECESSITY FOR REHANDLING, BECAUSE THE GOVERNMENT- FURNISHED DISPOSAL AREA IS NEARBY, WITHIN REACH OF A HYDRAULIC DISCHARGE LINE.

"16. THIS JOB IS BASICALLY A HYDRAULIC DREDGING OPERATION, WHOLLY AND COMPLETELY. THE USE OF BUCKET, CLAMSHELL, OR DIPPER DREDGES IS UNECONOMICAL AND UNNECESSARY. IN VIEW OF THE NATURE OF THE MATERIAL, AND THE LOCATION OF THE GOVERNMENT DISPOSAL AREA, IT IS DIFFICULT TO CONCEIVE OF A JOB IN WHICH HYDRAULIC DREDGING IS MORE OBVIOUSLY CALLED FOR.

"17. ON 5 JANUARY 1967 THE PROTESTER CONFERRED WITH THE CONTRACTING OFFICER UPON THE MATTERS INVOLVED IN THIS PROTEST AND SET FORTH IN TH E PROTESTER'S 9 JANUARY LETTER. IN VIEW OF THAT DISCUSSION, WE BELIEVE THAT THE PROTESTER CONCURS IN OUR ANALYSIS OF THE JOB AS BASICALLY A HYDRAULIC OPERATION. IT HAPPENS, HOWEVER, THAT IN HYDRAULIC DREDGING, CERTAIN SPOTS ON THE RIVER BED ARE OCCASIONALLY MISSED DURING THE INITIAL PASS, TO AWAIT DISCOVERY DURING THE GOVERNMENT'S AFTER-DREDGING SURVEY. SPECIFICATION PARAGRAPH SP-12, FINAL EXAMINATION AND ACCEPTANCE, REQUIRES REMOVAL OF SUCH -SHOALS, LUMPS, OR OTHER LACK OF CONTRACT DEPTH-. IT IS THE PROTESTER'S APPARENT CONTENTION THAT SUCH SMALL SHOALS CAN BE REMOVED MORE ECONOMICALLY BY BUCKET DREDGE THAN BY HYDRAULIC DREDGE--- THAT IT IS CHEAPER TO UTILIZE A BUCKET DREDGE FOR SUCH SPOT OPERATIONS THAN TO RELOCATE, SAY, A 27 INCH HYDRAULIC DREDGE AND ITS APPURTENANT DISCHARGE LINE FOR ACCOMPLISHING THAT KIND OF WORK. HE FURTHER CONTENDS THAT USE OF BUCKET DREDGES AND SCOWS WOULD -PERMIT THE CONTRACTORS TO CONSERVE MATERIALS AND TO USE SUCH MATERIALS FOR BACKFILLING OR OTHER PURPOSES, THEREBY BRINGING ABOUT FURTHER REDUCTION OF COSTS TO THE GOVERNMENT-.

"18. HOWEVER VALID THE ABOVE CONTENTIONS MAY BE, THE CONTRACTING OFFICER FINDS THEM TO BE INSUFFICIENT JUSTIFICATION FOR PERMITTING REHANDLING. HIS REASONS FOLLOWS:

"A. THE INCIDENCE OF SKIPPED SPOTS--- -HOLIDAYS-, AS IT WERE--- IS A MATTER WITHIN THE CONTRACTOR'S CONTROL. THE MORE CAREFULLY THE INITIAL PASSES ARE MADE, THE LESS RETURN TRIPS WILL BE NECESSARY TO REMOVE ISOLATED SHOALS THAT WERE MISSED. IN THIS MAINTENANCE JOB, INVOLVING SOFT MATERIALS, THERE IS A GENEROUS ALLOWANCE OF TWO FEET FOR OVERDEPTH DREDGING (TP-4A.), TO BE PAID FOR AT THE CONTRACT PRICE. ACCORDINGLY, THE EXERCISE OF ORDINARY CARE ON THIS JOB SHOULD REDUCE -SPOT SHOALS' TO A MINIMUM, THUS ELIMINATING RETURN TRIPS, WITHOUT WHICH THERE NEED BE NO CONJECTURE UPON THE ALLEGED ECONOMIES ESPOUSED BY THE PROTESTER.

"B. PARAGRAPH SP-12, WHICH REQUIRES REMOVAL OF SPOT SHOALS, ALSO PROVIDES, -BUT IF THE BOTTOM IS SOFT AND THE SHOAL AREAS ARE SMALL AND FORM NO MATERIAL OBSTRUCTION TO NAVIGATION, THE REMOVAL OF SUCH SHOAL MAY BE WAIVED BY (SIC) THE DISCRETION OF THE CONTRACTING OFFICER-. EXERCISE OF SUCH DISCRETION IS CLEARLY INDICATED IN THIS PROJECT. "C. THE BORINGS ON THIS JOB FAIL TO DISCLOSE ANY MATERIAL SUITABLE FOR -BACKFILLING OR OTHER PURPOSES-, AND ACCORDINGLY THERE WILL BE NO OCCASION FOR -THE CONTRACTORS TO CONSERVE MATERIALS-. ALTHOUGH IT IS TRUE THAT ISOLATED POCKETS OF HEAVY MATERIAL MAY NOW AND THEN BE ENCOUNTERED, SUCH OCCURENCES WITHIN THE PROJECT LIMITS WILL BE MINIMAL, AND COULD HAVE LITTLE OR NO EFFECT UPON THE CONTRACT PRICE. SHOULD HEAVY MATERIAL BE ENCOUNTERED, AND CONSERVATION THEREOF IS INDICATED, SUCH CAN BE ACCOMPLISHED UNDER THE - CHANGES' ARTICLE OF THE CONTRACT.

"D. THE SPECIFICATION AT ISSUE HAS BEEN USED BY THE PHILADELPHIA DISTRICT FOR MANY YEARS, WHENEVER THE NATURE OF THE WORK REQUIRED ITS USE. AMERICAN DREDGING COMPANY HAS MANY TIMES IMPORTUNED DISTRICT PERSONNEL TO DELETE THE CLAUSE. NO OTHER FIRM HAS EVER COMPLAINED, NOR HAS AMERICAN HERETOFORE MADE FORMAL PROTEST, NOTWITHSTANDING USE OF THE CLAUSE IN MANY EARLIER AMERICAN DREDGING CONTRACTS. THE CONTRACTING OFFICER PRECEIVES NO BASIS FOR CHANGING A SPECIFICATION PROVISION TO PERMIT A CONSTRUCTION PROCEDURE WHICH WOULD NOT BE COMPATIBLE WITH THE JOB REQUIREMENT OR PURPOSE.

"19. THE REASON FOR THE PROHIBITION AGAINST REHANDLING, NAMELY, THE GOVERNMENT'S REQUIREMENT THAT ALL MATERIAL REMOVED FROM THE RIVER BED BE PREVENTED FROM REENTERING THE STREAM, APPLIES WITH GREATER FORCE TO THE PROHIBITION AGAINST PUMPING INTO SCOWS. SETTLEMENT OF SOFT DREDGED MATERIAL REQUIRES A DISPOSAL AREA OF MANY ACRES; SUCH SETTLEMENT CANNOT BE ACCOMPLISHED WITHIN THE LIMITED CONFINES OF A SCOW. ON THE CONTRARY, ONLY HEAVY MATERIAL, SUCH AS SAND OR GRAVEL, WILL SETTLE OUT IN A SCOW. LIGHT MATERIAL SIMPLY FLOWS OVER THE COAMINGS AND RETURNS TO THE RIVER. THAT KIND OF OPERATION CANNOT BE COUNTENANCED IN THIS PROJECT, IN WHICH VIRTUALLY ALL OF THE WORK INVOLVES LIGHT MATERIAL.

"20. IT IS THE CONTRACTING OFFICER'S PREROGATIVE TO DELINEATE THE WORK TO BE DONE, AND THE METHOD BY WHICH IT WILL BE DONE. HE HAS ESTABLISHED THE METHOD IN THIS CASE, FOR THE VALID REASONS HERETOFORE MENTIONED. THE CONTRACTING OFFICER REQUIRES A -CLEAN- JOB, WITHOUT THE INEVITABLE ESCAPE OF QUANTITIES OF SPOIL DURING REHANDLING AND SCOW OPERATIONS. THE MATERIAL IS NOT TO BE IN PART REMOVED FROM THE RIVER AND IN PART RELOCATED IN THE RIVER; ON THE CONTRARY, ALL OF THE MATERIAL IS TO BE REMOVED. THOSE CONSIDERATIONS FAR OUTWEIGH THE SUPPOSED ECONOMIES ALLEGED BY THE PROTESTER. THE CONTRACTING OFFICER HAVING WRITTEN A SPECIFICATION PROVISION NECESSARY FOR PROPER PERFORMANCE OF THE JOB, APPLICABLE TO ALL BIDDERS AND GIVING PERFERENCE TO NONE, SUCH PROVISION SHOULD REMAIN UNDISTURBED: -IT IS, OF COURSE, NOT WITHIN THE PROVINCE OF THIS OFFICE TO DRAFT SPECIFICATIONS FOR THE CONTRACTUAL NEEDS OF ADMINISTRATIVE DEPARTMENTS AND AGENCIES OF THE GOVERNMENT-, 33 COMP. GEN. 586 (1954).' THE CONTRACTING OFFICER HAS FURTHER POINTED OUT IN HIS SUPPLEMENTAL REPORT OF JUNE 6 THAT THE PROHIBITION IS NOT AGAINST USE OF THE BUCKET DREDGE, BUT AGAINST DUMPING THE SCOW AND THE ATTENDANT PUMPING ASHORE (REHANDLING).

WHILE ATTENTION IS GIVEN ABOVE (PARAGRAPH NO. 19) TO THE PROHIBITION AGAINST PUMPING DREDGED MATERIALS HYDRAULICALLY INTO SCOWS (TP-3C), THE ORIGINAL PROTEST DID NOT MENTION SUCH PROSCRIPTION, AND, ALTHOUGH REFERENCE WAS MADE THERETO IN SUBSEQUENT COMMUNICATIONS, ADC HAS CLARIFIED ITS PROTEST AS NOT CONTESTING THE PUMPING INTO SCOWS PROVISION.

IN RESPONSE TO THE CONTRACTING OFFICER'S POSITION, ADC REAFFIRMS ITS BELIEF THAT THERE ARE SIGNIFICANT QUANTITIES OF GOOD GRANULAR MATERIALS AVAILABLE FROM VIRGIN MATERIALS TO BE FOUND WITHIN ALLOWABLE OVERDEPTH, INCLUDING SIDE SLOPES, AND NON-PAY YARDAGE, WHICH ARE SUITABLE FOR BACKING -UP OR RAISING DIKES OR FOR OTHER PURPOSES, AND, STATES THAT, IF PERMITTED TO DO SO, IT PLANS TO BID THE JOB BASED ON CONSERVING OR UTILIZING SUCH ANTICIPATED MATERIALS BY USE OF BUCKET DREDGES AND REHANDLING IN ITS ENCLOSED REHANDLING BASIN. AS SURMISED BY THE CONTRACTING OFFICER, ADC CONCURS IN HIS VIEW THAT THE JOB IS BASICALLY A HYDRAULIC DREDGING OPERATION, BUT NOT "WHOLLY AND COMPLETELY" FOR THE STATED REASONS THAT HYDRAULIC PIPELINE DREDGINGIS ONLY ECONOMICAL FOR CONTINUOUS DREDGING OVER A LARGE AREA, AND THAT THE COMBINED USE OF BUCKET DREDGING PERMITS CONSERVATION OF GRANULAR TYPE MATERIALS WHEN ENCOUNTERED, AND IS NOT ONLY LESS COSTLY, BUT ALSO MINIMIZES THE OBSTRUCTING OF NAVIGATION, IN REMOVING COMPARATIVELY SMALL ISOLATED SHOALS AND IN CLEANING UP SKIPPED SPOTS OR SUBSEQUENT SHOALING BASED ON AFTER-DREDGING SOUNDINGS. ADC ALSO STATES THAT "THE DREDGING PROCESS IS NOT AN EXACT SCIENCE, AND NO MATTER HOW MUCH CARE IS EXERCISED BY THE DREDGE CREW IN INITIAL PASSES THERE ARE BOUND TO BE -SPOT SHOALS' SHOWN ON THE AFTER-DREDGING SOUNDINGS.' IN SUCH CONNECTION IT IS NOTED THAT THE CONTRACTING OFFICER ALSO STATES THAT IN HYDRAULIC DREDGING CERTAIN SPOTS IN THE RIVER BED ARE OCCASIONALLY MISSED ON THE INITIAL PASS AND HE DOES NOT CONTEND THAT EXERCISE OF ORDINARY CARE WOULD COMPLETELY ELIMINATE SKIPPED SPOTS BUT ONLY THAT IT WOULD REDUCE THEM TO A MINIMUM. THAT SUCH SKIPPED SPOTS SEEM TO BE EXPECTED IS INDICATED BY THE PROVISION FOR FINAL EXAMINATION AND ACCEPTANCE (SP-12) WHICH PROVIDES IN PART: "SHOULD ANY SHOALS, LUMPS, OR OTHER LACK OF CONTRACT DEPTH BE DISCOLSED BY THIS EXAMINATION, THE CONTRACTOR WILL BE REQUIRED TO REMOVE SAME BY DRAGGING THE BOTTOM OR BY DREDGING AT THE CONTRACT RATE FOR DREDGING, BUT IF THE BOTTOM IS SOFT AND THE SHOAL AREAS ARE SMALL AND FORM NO MATERIAL OBSTRUCTION TO NAVIGATION, THE REMOVAL OF SUCH SHOAL MAY BE WAIVED BY THE DISCRETION OF THE CONTRACTING OFFICER.' SUCH PROVISION DOES NOT DEFINE SMALL SHOAL AREAS OR PROVIDE ANY ASSURANCE THAT REMOVAL OF ANY OF SUCH AREAS WILL, IN FACT, BE WAIVED SO AS TO PROVIDE A CLEAR UNDERSTANDING ON WHICH BIDDERS CAN EVALUATE SUCH FACTOR IN PREPARING THEIR BIDS. FURTHER, IT APPEARS THAT IN A "DRAGGING" OPERATION- -- THE USE OF WHICH SEEMS TO BE WITHIN THE DISCRETION OF THE CONTRACTOR--- THE SHOAL IS NOT REMOVED BUT IS MERELY RELOCATED, AND CONSIDERABLE DISTURBANCE COULD BE INVOLVED WHERE THE SHOALS ARE LARGE AND COMPRISED OF SOFT MATERIAL. WE ALSO FIND IT SOMEWHAT DIFFICULT TO RECONCILE THE CONTRACTING OFFICER'S STATEMENT THAT "EXERCISE OF SUCH DISCRETION IS CLEARLY INDICATED IN THIS PROJECT" WITH HIS OTHER STATEMENTS REGARDING "THE GOVERNMENT'S INTENT TO GET ALL OF THE MATERIAL ASHORE AND PROPERLY SECURED" AND "THE MATERIAL IS NOT TO BE IN PART REMOVED FROM THE RIVER AND IN PART RELOCATED IN THE RIVER; ON THE CONTRARY, ALL OF THE MATERIAL IS TO BE REMOVED.' CONCERNING THE CONTRACTING OFFICER'S FURTHER CONTENTION IN SUCH RESPECT THAT "THE CONTRACTING OFFICER REQUIRES A-CLEAN- JOB, WITHOUT THE INEVITABLE EXCAPE OF QUANTITIES OF SPOIL DURING REHANDLING AND SCOW OPERATIONS" AS JUSTIFICATION FOR PROHIBITING REHANDLING OPERATIONS, WE REFER TO THE FOLLOWING EXCERPT FROM A PRESENTATION MADE BY THE CONTRACTING OFFICER ON BEHALF OF THE CORPS OF ENGINEERS (NORTH ATLANTIC DIVISION) TO REPRESENTATIVES OF THE DREDGING INDUSTRY IN PHILADELPHIA ON APRIL 17, 1967, CONCERNING THE RELATIONSHIP OF DREDGING TO POLLUTION:

"NOW I WOULD LIKE TO REVIEW WITH YOU SOME OF THE WAYS IN WHICH OUR DREDGING METHODS CAN, AND DO, AFFECT WATER QUALITY.

"A. IN BUCKET DREDGING WITH SCOWS--- DISTURBANCE OF THE BOTTOM DURING DREDGING, SPILLAGE DURING THE OPERATION, AND BOTTOM DUMPING FROM SCOWS CAUSE INCREASED TURBIDITY AND INCREASED OXYGEN DEMAND.

"B. IN HYDRAULIC PIPE-LINE DREDGING--- AGITATION AND LEAKAGE ALONG PIPELINES CAN CAUSE SIMILAR PROBLEMS.

"C. IN HOPPER DREDGING--- FREE DUMPING ADDS POLLUTION DIRECTLY TO THE DUMPING AREA AND AGITATION DREDGING ADDS POLLUTION TO SUSPENDED LOAD IN DREDGING AREA.

"D. IN REHANDLING OPERATIONS--- IMPROPERLY ENCLOSED BASINS CAUSE LOSS OF POLLUTED MATERIAL TO TIDAL CURRENTS BOTH DURING DUMPING AND REHANDLING OPERATIONS.

"E. IN DISPOSAL AREA OPERATION, LOW-QUALITY EFFLUENT WILL SERIOUSLY AFFECT QUALITY OF ADJACENT WATERS, NO MATTER HOW MUCH CARE IS EXERCISED IN DELIVERING THE SPOIL TO THE AREA.

"OUR PRESENT METHODS, THEN, CAN ALL BE CONSIDERED -DIRTY- METHODS, TO VARYING DEGREES. IT IS UP TO US, THE CORPS OF ENGINEERS AND THE DREDGING INDUSTRY, TO RESEARCH AND DEVELOP CLEANER METHODS. STRICTER QUALITY STANDARDS AND CRITERIA WILL FORCE THE ISSUE.' IT IS NOTED THAT THE PRESENTATION REFERS TO "IMPROPERLY" ENCLOSED BASINS AS CAUSING LOSS OF POLLUTED MATERIAL, AND THAT HYDRAULIC PIPELINE DREDGING CAN CAUSE PROBLEMS SIMILAR TO THOSE FOUND IN BUCKET DREDGING WITH SCOWS. FURTHER RECOGNITION THAT DISTURBANCE PROBLEMS EXIST IN HYDRAULIC DREDGING IS INDICATED BY SPECIFICATION TP-3F WHICH REQUIRES THAT THE DAILY SAMPLES OF SURFACE WATER BE TAKEN "UP CURRENT" FROM THE DREDGES.

IN A REPLY TO THE PRESENTATION ADDRESSED TO THE DIVISION ENGINEER UNDER DATE OF JUNE 12, 1967, BY A SPECIAL COMMITTEE OF THE DREDGING INDUSTRY, MADE UP OF THE PRESIDENTS OF SEVEN DREDGING FIRMS INCLUDING THOSE PROTESTING THE SUBJECT SOLICITATION, IT IS STATED THAT BUCKET DREDGING IS NOT ,DIRTIER" THAN HYDRAULIC DREDGING AS "IT CAN BE DEMONSTRATED BY ENGINEERING COMPUTATIONS THAT APPROXIMATELY TWICE THE SURFACE AREA PER UNIT OF MATERIAL DREDGED IS EXPOSED TO POSSIBLE SUSPENSION IN THE STREAM BY HYDRAULIC DREDGE METHOD AS COMPARED WITH BUCKET DREDGING METHOD.' IS ALSO STATED THEREIN THAT WHERE ENCLOSED REHANDLING BASINS ARE USED THERE IS NO SIGNIFICANT LOSS OF MATERIALS BY BOTTOM DUMPING FROM SCOWS. THE COMMITTEE'S STATEMENT CONCERNING THE EFFECT OF DREDGING OPERATIONS UPON POLLUTION IS AS FOLLOWS:

"EXECUTIVE ORDER NO. 11288

"THE ORDER WHICH IS ENTITLED -PREVENTION, CONTROL AND ABATEMENT OF WATER POLLUTION BY FEDERAL ACTIVITIES' IS PRIMARILY DIRECTED AT WATER POLLUTION CAUSED BY WASTE FROM FEDERAL FACILITIES, BUILDINGS, AND INSTALLATIONS. PROVISION IS ALSO MADE FOR REVIEW BY THE SECRETARY OF INTERIOR OF ANY REPORT PROPOSING AUTHORIZATION OR CONSTRUCTION OF ANY FEDERAL WATER RESOURCE DEVELOPMENT PROJECT. THE ONLY PERTINENT POLICY PROVISION (SECTION 1. (3) ( STATES: "-POLLUTION CAUSED BY ALL OTHER OPERATIONS OF THE FEDERAL GOVERNMENT, SUCH AS WATER RESOURCES PROJECTS AND OPERATIONS UNDER FEDERAL LOANS, GRANTS, OR CONTRACTS, SHALL BE REDUCED TO THE LOWEST LEVEL PRACTICABLE.-

"SECTION 7 PROVIDES FOR A REVIEW OF GOVERNMENT CONTRACTORS' OPERATIONS ONLY WHERE THEY CONTRIBUTE TO POLLUTION AND -FOR WHICH THERE IS A SIGNIFICANT POTENTIAL FOR REDUCTION OF WATER POLLUTION.- OBVIOUSLY, THIS EXECUTIVE ORDER DOES NOT JUSTIFY THE UNREASONABLE REQUIREMENTS WHICH THE CORPS CONTEMPLATES IMPOSING ON DREDGING CONTRACTORS.

"THE INFINITESIMAL EFFECT OF DREDGING OPERATIONS UPON POLLUTION AND SILTATION

"THE VARIOUS PAPERS PRESENTED BY THE CORPS OF ENGINEERS REPRESENTATIVES AT THE MEETING OF APRIL 17, 1967 FAILED TO PUT THE POLLUTION PROBLEM IN ITS PROPER PERSPECTIVE IN RELATION TO THE EFFECTS OF DREDGING. BEFORE THE VARIOUS FEDERAL AGENCIES SHOULD BECOME OVERLY CONCERNED WITH THE MINUTE DETAILS OF QUANTITY AND QUALITY OF DREDGE EFFLUENT, ITS MAGNITUDE SHOULD BE COMPARED TO THAT OF THE WATERSHED IN QUESTION, FOR EXAMPLE THE DELAWARE RIVER BASIN.

"THE CORPS CLAIMS THAT IN ITS PRINCIPAL STREAM, THE DELAWARE RIVER, THEY ANTICIPATE 6,000,000 CUBIC YARDS OF MAINTENANCE DREDGING ANNUALLY. THIS QUANTITY OF MATERIAL COULD EASILY BE REMOVED BY A 27 INCH HYDRAULIC DREDGE WORKING 12 MONTHS OF THE YEAR. DURING THIS YEARLY PERIOD, U.S. GEOLOGICAL SURVEY RECORDS INDICATE THAT A MEDIAN MINIMUM FLOW OF 4,130 CFS. (CUBIC FEET PER SECOND), A MAXIMUM TO 24,500 CFS. AND A MEAN FLOW OF 12,400 CUBIC FEET PER SECOND. A 27 INCH DREDGE, DURING OPERATIONS, MIGHT POSSIBLY RETURN TO THE RIVER A MAXIMUM OF 80 CFS. WITH A MORE REALISTIC AVERAGE OF 65 CFS., HOWEVER, WITH THE EFFLUENT RETURN TO THE RIVER FROM A DISPOSAL AREA OVER THE ENTIRE 12 MONTHS OF THE YEAR, THE AVERAGE SPILLWAY DISCHARGE WOULD BE APPROXIMATELY 37 CFS. THIS MEANS THAT THE AVERAGE DISCHARGE FROM A 27 INCH DREDGE REPRESENTS ONE PART IN 333 OF THE AVERAGE RIVER FLOW.

"THERE ARE OTHER FACTORS THAT AFFECT THE QUALITY OF THE WATER OF THIS MEAN RIVER DISCHARGE. IT IS ESTIMATED THAT THE SEDIMENTATION LOAD FROM UPLAND SOURCES IN THE DELAWARE RIVER IS FROM 4 TO 6 MILLION CUBIC YARDS ANNUALLY. IN SOME TRIBUTARIES UP TO 50 PERCENT OF THIS LOAD IS FOUND TO BE COMBUSTIBLE MATERIAL, PRIMARILY COAL CULM, AND IN OTHERS A HIGH CONCENTRATION OF RAW SEWAGE. THE CITY OF PHILADELPHIA HAS A DRAINAGE AREA OF 83,000 ACRES. RAINFALL AT THE INTENSITY OF ONE INCH PER HOUR, WHICH OCCURS AT LEAST FIVE TIMES ANNUALLY ON 100 ACRES OF PAVED CITY STREETS WILL RESULT IN A RUN-OFF OF APPROXIMATELY 80 CFS., WHICH IS EQUAL TO THE PEAK FLOW OF A 27 INCH DREDGE. HOWEVER, THE CITY HAS A DRAINAGE AREA OF 1000 TIMES THIS EXAMPLE, AND THE DELAWARE RIVER BASIN 100 TIMES THAT OF THE CITY. ONE INCH OF DUST, DIRT AND ASHES WASHED DOWN THE STORM SEWERS COULD DEPOSIT 1-1/3 MILLION CUBIC YARDS ANNUALLY INTO THE DELAWARE RIVER. "WITHIN THE TIDAL ESTUARY OF THE DELAWARE RIVER ALONE, DECOMPOSING VEGETATION FROM THE MEADOW AREA IS PRODUCING ORGANIC SOIL AT THE RATE OF ONE FOOT IN 480 YEARS, OR EACH ACRE IS PRODUCING 3-1/3 CUBIC YARDS OF MATERIAL THAT IS RETURNED TO THE RIVER; OR APPROXIMATELY 500,000 C.Y. ANNUALLY. OBVIOUSLY THERE ARE MANY FACTORS THAT AFFECT THE QUALITY OF RIVER WATER IN AN INTENSITY MANY TIMES THE ORDER OF MAGNITUDE THAN DREDGE EFFLUENT.

"MUCH HAS BEEN SAID ABOUT POLLUTION. THERE ARE NO STUDIES THAT INDICATE DREDGING POLLUTES A WATERWAY. THE WORST THAT CAN BE SAID ABOUT DREDGING IS THAT IT DISTURBS POLLUTED MATERIAL. WHAT IS SO UNDESIRABLE ABOUT THE SO-CALLED POLLUTED MATERIALS THAT ARE DISTURBED BY DREDGING? THE BASIC PROBLEM IS THAT THE OXIDATION OF THIS POLLUTED MATERIAL HAS A LARGE OXYGEN DEMAND UPON THE WATER. POLLUTED MATERIAL THAT IS DREDGED AND PLACED ON AN UPLAND DISPOSAL AREA RETURNS THE RIVER WATER INTO THE STREAM AT A HIGHER QUALITY DUE TO THE AERATING EFFECTS OF THE DREDGING PROCESS AND THE RETENTION IN THE DISPOSAL AREA. IT HAS BEEN DEMONSTRATED THAT IN SOME INSTANCES POLLUTED WATER DREDGED FROM THE RIVER HAS IMPROVED IN QUALITY TO THE EXTENT THAT IT IS FIT FOR HUMAN CONSUMPTION BY THE TIME IT REACHES THE DISPOSAL AREA WEIR.

"THE INFINITESIMAL EFFECT OF DREDGING OPERATIONS ON SEDIMENTATION AND POLLUTION IS OBVIOUSLY APPARENT WHEN THE RATE OF RIVER FLOW IS COMPARED WITH THE RATE OF MATERIALS RETURNED TO THE RIVER BY A 27 INCH DREDGE. THE POWER OF THE RIVER IS BEYOND IMAGINATION. REGARDLESS OF THE QUALITY OF DREDGE EFFLUENT, IT CAN NOT HAVE ANY SIGNIFICANT EFFECT ON THE QUALITY OF THE RIVER WATER SINCE THE RIVER FLOW IS MANY TIMES GREATER. THIS CAN BE ILLUSTRATED BY THE FOLLOWING TABLE:

"DREDGE EQUIVALENTS OF VARIOUS RIVER STAGES AT

MARCUS HOOK ANCHORAGE

(MAXIMUM DISCHARGE 27 INCH DREDGE EQUALS 80 CFS.)

NO. OF

CFS. DREDGES MEAN

MINIMUM RIVER FLOW 4,130 52 MEAN

AVERAGE FLOW 12,400

155 MEAN MAXIMUM FLOW 24,500 305 MAXIMUM FLOOD TIDE 300,000 3,750 MAXIMUM EBB TIDE 255,000 3,180

"OTHER FORCES OF NATURE MUST ALSO BE CONSIDERED TO PUT THIS ISSUE INTO A PROPER PERSPECTIVE. WIND PICKS UP FANTASTIC AMOUNTS OF SOIL, REDISTRIBUTING IT OVER OTHER LAND AND WATER AREAS. IN 1934, ONE SINGLE WIND STORM BLEW OVER 300,000,000 TONS OF DUST FROM DRY WESTERN PLAINS, CARRYING MUCH OF IT EASTWARD TO THE ATLANTIC OCEAN. THUS, ANY SPILLAGE OR LOSS OF MATERIALS FROM A DREDGE, OR FROM A DISPOSAL AREA, IN RELATION TO THE OVERALL PROBLEM, IS INFINITESIMAL.'

IN HIS REPLY OF AUGUST 25, 1967, TO THE COMMITTEE, THE DIVISION ENGINEER ADDRESSED THE COMMITTEE'S RECOMMENDATION--- THAT PROHIBITION ON REHANDLING MATERIALS BE ELIMINATED FROM DREDGING SPECIFICATIONS--- AS FOLLOWS: "AS FOR REHANDLING MATERIAL, REFERRED TO IN SUB-ITEM E, THE NATURE OF MATERIAL TO BE DREDGED REQUIRES INDIVIDUAL CONSIDERATION IN EACH CASE; REHANDLING WILL BE PERMITTED WHERE FOUND TO HAVE NO ADVERSE EFFECT ON NAVIGATION OR FOUND TO CREATE NO POLLUTION PROBLEM.'

CONCERNING THE OPERATION SINCE 1961 OF ITS ENCLOSED REHANDLING BASINS SITUATED ADJACENT TO THE MARCUS HOOK AND THE MANTUA CREEK ACHORAGES, ADC STATES:

"AT NO TIME DURING THE OPERATION OF THESE ENCLOSED-REHANDLING BASINS HAS THE CORPS OF ENGINEERS EVER CONTENDED THAT DREDGED MATERIALS WERE LOST DURING THE DUMPING OR REHANDLING OPERATIONS. NOT ONCE HAS THE PERMITTEE BEEN REQUESTED BY THE CORPS TO REMOVE SHOALING AT THE ENTRANCE OR IN THE VICINITY OF THE REHANDLING BASINS. PAST EXPERIENCE SHOWS THAT IN A PROPERLY ENCLOSED-REHANDLING BASIN, SUCH AS THOSE OPERATED BY AMERICAN DREDGING COMPANY, THERE IS NO -EXCESSIVE ESCAPE OF FINES' INTO THE STREAM. THIS IS IRREFUTABLE. THUS, IT IS PLAIN THAT THE PROHIBITION OF - REHANDLING OPERATIONS' IN THE SUBJECT IFB, FOR THE REASONS STATED, CANNOT BE JUSTIFIED. THERE IS NO -VALID- OPERATIONAL REASON TO PROHIBIT - REHANDLING OPERATIONS' WHERE A BIDDER HAS AVAILABLE TO HIM AN ENCLOSED- REHANDLING BASIN CONSTRUCTED IN ACCORDANCE WITH THE REQUIREMENTS OF THE CORPS OF ENGINEERS.' ADC FURTHER CONTENDS THAT OTHER DISTRICTS OF THE CORPS OF ENGINEERS DO NOT PROHIBIT REHANDLING OPERATIONS, EVEN IN OPEN BASINS, AND THAT SINCE THE PHILADELPHIA DISTRICT STARTED USING THE PROVISION IN INVITATIONS FOR BIDS IN ABOUT 1962 IT HAS BEEN DELETED BY THE CONTRACTING OFFICER AT THE REQUEST OF ADC AND THE ENCLOSED REHANDLING BASIN PROVISION INSERTED. WHILE THE CONTRACTING OFFICER STATES THAT THE REQUIREMENTS OF OTHER DISTRICTS ARE NOT AT ISSUE, AND THAT THE PHILADELPHIA DISTRICT WILL PERMIT REHANDLING IN THE FUTURE WHENEVER THE CIRCUMSTANCES "REQUIRE" SUCH METHOD, ADC CONTENDS THAT THE PRACTICE IN OTHER DISTRICTS IS RELEVANT IN DETERMINING WHETHER THERE IS A VALID OPERATIONAL REASON FOR PROHIBITING REHANDLING OPERATIONS AND WE BELIEVE THERE IS MERIT TO SUCH CONTENTION. CONCERNING SUCH VARIATIONS IN SPECIFICATIONS THE INDUSTRY COMMITTEE IN THE REPORT REFERRED TO EXPRESSED THE FOLLOWING VIEWS:

"REPRESENTATIVES OF CORPS SEEK TO JUSTIFY VARIATIONS IN THEIR SPECIFICATIONS ON THE BASIS OF (I) NATURE OF THE MATERIALS, (II) OPTIONS AVAILABLE FOR DISPOSAL, (III) REGIONAL OR LOCAL INTERESTS, (IV) FISH AND WILDLIFE, ECOLOGIC AND ANTI-POLLUTION INTERESTS, AND (V) DRAINAGE PROBLEMS. THESE ARE NOT VALID REASONS FOR OPPOSING STANDARDIZATION SINCE THE PROBLEMS ARE COMMON TO ALL DISTRICTS. EACH DISTRICT HAS THE SAME RANGE OF MATERIALS. WHAT IS GOOD FOR SILT OR SAND IN NORFOLK, VA. SHOULD BE EQUALLY APPLICABLE TO ANY OTHER DISTRICT. THE OPTIONS AVAILABLE FOR DISPOSAL SHOULD NOT VARY. WHAT IS GOOD FOR ONE DISTRICT SHOULD NOT BE BAD FOR ANOTHER DISTRICT. LOCAL INTEREST IS THE SAME. DRAINAGE PROBLEMS ARE SIMILAR. THE SAME FISH AND WILDLIFE POLICY APPLIES. THERE ARE NO PECULIAR CONDITIONS BETWEEN THE VARIOUS DISTRICTS WHICH WOULD JUSTIFY A DEPARTURE FROM A STANDARD POLICY.'

WHILE THE CONTRACTING OFFICER STATES THAT THE REASON FOR PROHIBITING REHANDLING OPERATIONS IS TO INSURE THAT ALL MATERIAL REMOVED FROM THE RIVER BED BE PREVENTED FROM RE-ENTERING THE STREAM, IT APPEARS FROM THE FOREGOING THAT NEITHER 100 PERCENT HYDRAULIC PIPELINE DREDGING, WITH ITS ATTENDANT AGITATION, LEAKAGES AND RETURN OF PERMISSIBLE QUANTITIES OF SUSPENDED MATERIALS FROM THE DISPOSAL AREA, NOR THE PROHIBITING AGAINST REHANDLING OPERATIONS UNDER THE SUBJECT SPECIFICATIONS, WOULD INSURE SUCH A RESULT. FURTHER, IN OUR VIEW THE RECORD DOES NOT REQUIRE A CONCLUSION THAT ENCLOSED REHANDLING BASINS, SUCH AS THAT OWNED BY ADC NEAR THE MARCUS HOOK ANCHORAGE, CANNOT BE USED UNDER REASONABLE INSPECTION AND OPERATING REQUIREMENTS FOR THE LIMITED PURPOSES PROPOSED, SO AS TO PREVENT THE ESCAPE OF A SUBSTANTIAL AMOUNT OF SOFT MATERIAL OUT OF THE PROJECT AREAS, OR WITHOUT CREATING A SIGNIFICANT POLLUTION PROBLEM, OR WITHOUT OTHERWISE FAILING TO COMPLY WITH THE REQUIREMENTS SPECIFIED IN THE DIVISION ENGINEER'S LETTER OF AUGUST 25, UNDER WHICH REHANDLING OPERATIONS ARE CONSIDERED TO BE PERMISSIBLE.

IN FORMAL ADVERTISEMENTS, 10 U.S.C. 2305 REQUIRES THAT THE SPECIFICATIONS AND INVITATIONS FOR BIDS "SHALL PERMIT SUCH FREE AND FULL COMPETITION" AS IS CONSISTENT WITH THE PROCUREMENT OF THE PROPERTY AND SERVICES NEEDED BY THE AGENCY CONCERNED. AS STATED IN 33 COMP. GEN. 586, CITED BY THE CONTRACTING OFFICER, IT IS NOT WITHIN THE PROVINCE OF THIS OFFICE TO DRAFT SPECIFICATIONS FOR THE CONTRACTUAL NEEDS OF THE DEPARTMENTS AND AGENCIES. IT IS, HOWEVER, A PROPER AND SIGNIFICANT FUNCTION OF THIS OFFICE, IN CONNECTION WITH OUR AUDIT OF EXPENDITURES OF APPROPRIATED FUNDS IN PAYMENT OF OBLIGATIONS ARISING UNDER PUBLIC CONTRACTS, TO INSIST UPON VALID JUSTIFICATION FOR RESTRICTIONS OR PROHIBITIONS PLACED IN INVITATIONS FOR BIDS WHICH DO NOT DIRECTLY SERVE AN ACTUAL NEED AND DO NOT PERMIT BIDDERS TO COMPETE FULLY, AS PROVIDED BY THE ABOVE STATUTE, BY RESTRICTING THEIR OPERATIONS AND PREVENTING THEM FROM OFFERING THEIR LOWEST PRICES FOR FURNISHING THE DESCRIBED NEEDS OF THE GOVERNMENT. THE ESTABLISHMENT OF SUCH JUSTIFICATION IS A POSITIVE REQUIREMENT CONCOMITANT WITH THE DECISION TO INCLUDE THE PROSCRIPTION IN THE INVITATION FOR BIDS, AND, WHEN CALLED UPON, IT IS THE RESPONSIBILITY OF THE AGENCY TO SUBSTANTIATE THE VALIDITY OF THE RESTRICTIVE PROVISION OR OTHERWISE TO AMEND OR DELETE IT. HERE, THE GOVERNMENT'S ACTUAL NEED IS TO HAVE THE MATERIAL REMOVED FROM THE BOTTOM OF THE ANCHORAGE TO A SPECIFIED DEPTH AND PROPERLY SECURED ASHORE. WHILE WE DO NOT QUESTION THAT THE JOB CAN, AND SHOULD, BE PERFORMED WITHOUT CREATING SIGNIFICANT POLLUTION PROBLEMS OR THAT RELOCATION IN THE RIVER OF A SUBSTANTIAL PORTION OF THE MATERIAL IS "A CIRCUMSTANCE INIMICAL TO, AND AT VARIANCE WITH," THE GOVERNMENT'S NEED, WE DO NOT BELIEVE, AS INDICATED ABOVE, THAT ADEQUATE JUSTIFICATION HAS BEEN SHOWN FOR PROHIBITING ALL REHANDLING OPERATIONS, WHICH IN OUR VIEW PREVENTS ONE PROSPECTIVE BIDDER, AT LEAST,FROM COMPETING FULLY AND OFFERING ITS MOST FAVORABLE PRICE FOR FULFILLING THE GOVERNMENT'S ACTUAL NEEDS.

IN RESPONSE TO AN INQUIRY BY THIS OFFICE TO THE DEPARTMENT OF THE ARMY CONCERNING WHETHER BUCKET DREDGE AND REHANDLING OPERATIONS COULD BE EMPLOYED WITHOUT THE ESCAPE OF A "PROHIBITIVE AMOUNT" OF THE SOFT MATERIALS HERE INVOLVED TO OTHER PARTS OF THE ANCHORAGE OR RIVER, WE WERE ADVISED TO THE EFFECT THAT SINCE SUCH OPERATIONS WERE NOT "ESSENTIAL," THE AMOUNT OF SOFT MATERIALS ESCAPING WOULD THEREFORE BE PROHIBITIVE. CANNOT ACCEPT THE VIEW THAT ANY ADDITIONAL AMOUNT OF MATERIAL WHICH MAY ESCAPE INTO OTHER AREAS THROUGH THE COMBINED HYDRAULIC AND BUCKET DREDGE OPERATIONS, AS PROPOSED, WOULD BE PROHIBITIVE WITHOUT COMPARATIVE REFERENCE TO THE SIGNIFICANCE OF THE AMOUNTS AND EFFECTS OF SUCH ESCAPING MATERIALS, AND TO THE POSSIBLE COST FACTORS INVOLVED. WHEN DRAFTING SPECIFICATIONS OR INVITATIONS FOR BIDS WHICH RESTRICT THE APPLICATION OF TECHNIQUES, METHODS OR OPERATIONS TO A SINGLE, OR ADMINISTRATIVELY PREFERRED, PROCESS UNDER WHICH PROSPECTIVE CONTRACTORS ARE REQUIRED TO PERFORM THE WORK, THE CRITERION FOR INCLUSION OF SUCH RESTRICTIONS IS NOT WHETHER ALTERNATE PROCESSES ARE "REQUIRED" OR "ESSENTIAL" BUT IS, INSTEAD, WHETHER A VALID JUSTIFICATION HAS BEEN ESTABLISHED FOR PROHIBITING BIDDERS FROM BASING THEIR BIDS ON THE USE OF ANY CUSTOMARY METHODS OF OPERATION WHICH, IN THEIR CONSIDERED JUDGMENT, PROVIDE THE MOST ECONOMICAL MEANS AVAILABLE TO THEM AND WILL RESULT IN THE LOWEST COST TO THE GOVERNMENT. THAT IN THE OPINION OF PROCUREMENT OFFICIALS CONCERNED A PARTICULAR OPERATION CANNOT BE ECONOMICALLY EMPLOYED IN THE WORK PERFORMANCE BY A BIDDER, OR BY ALL BIDDERS, PROVIDES NO VALID BASIS FOR PROHIBITING SUCH OPERATIONS, SINCE DETERMINATIONS AS TO THE OPERATIONAL AREAS IN WHICH ECONOMICS MAY BE EFFECTED BY THE INDIVIDUAL PROSPECTIVE CONTRACTOR, IN PERFORMING A PARTICULAR JOB RESIDE MORE PROPERLY WITH THE CONTRACTOR THAN WITH THE PROCUREMENT OFFICIALS, AND CONSTITUTE AN ESSENTIAL ELEMENT TO HIS COMPETING FREELY AND FULLY FOR THE PROCUREMENT AS INTENDED BY 10 U.S.C. 2305. SEE ALSO 15 U.S.C. 631 (A) WHERE IT IS STATED IN CONNECTION WITH SMALL BUSINESS CONCERNS "THE ESSENCE OF THE AMERICAN ECONOMIC SYSTEM OF PRIVATE ENTERPRISE IS FREE COMPETITION. ONLY THROUGH FULL AND FREE COMPETITION CAN FREE MARKETS, FREE ENTRY INTO BUSINESS, AND OPPORTUNITIES FOR THE EXPRESSION AND GROWTH OF PERSONAL INITIATIVE AND INDIVIDUAL JUDGMENT BE ASSURED.'

REGARDING THE PROVISIONS IN TP-3 REQUIRING THAT BIDS BE BASED ON UTILIZING THE GOVERNMENT FURNISHED DISPOSAL AREA, AND SPECIFYING THAT ALTERNATE AREAS WILL NOT BE CONSIDERED UNTIL AFTER AWARD OF THE CONTRACT, THE PROPRIETY OF USE OF DISPOSAL AREAS, OTHER THAN THE GOVERNMENT FURNISHED AREAS SET FORTH IN THE IFB-S, HAS BEEN CONSIDERED BY THIS OFFICE ON PRIOR OCCASIONS. IN OUR JULY 1959 REPORT TO THE CONGRESS, REVIEWING SPOIL ACTIVITIES OF THE CORPS OF ENGINEERS, WE NOTED THAT THE CORPS POLICY DID NOT PROVIDE FOR ACCRUAL TO THE GOVERNMENT OF BENEFITS OBTAINABLE THROUGH USE OF ALTERNATE AREAS, AND WE RECOMMENDED THAT DREDGING CONTRACTS BE EXECUTED TO ALLOW FOR AN ADJUSTMENT OF PRICE IN THE EVENT A CONTRACTOR'S COSTS ARE SUBSTANTIALLY REDUCED THROUGH USE OF SUCH AREAS. WHILE WE DID NOT ADDRESS THEREIN THE QUESTION OF BIDDING AND AWARDING CONTRACTS, IN THE FIRST INSTANCE, ON THE BASIS OF THE USE OF DISPOSAL AREAS OTHER THAN THOSE PROVIDED BY THE GOVERNMENT, THE CORPS RECOGNIZED THAT BENEFITS TO THE GOVERNMENT WERE DERIVED FROM SUCH BIDDING IN THE FOLLOWING STATEMENT CONTAINED IN ITS COMMENTS OF MAY 14, 1959, ON THE PROPOSED REPORT:

"* * * MOREOVER, MAJOR BENEFITS HAVE BEEN REALIZED BY THE UNITED STATES THROUGH COMPETITIVE BIDDING PROCEDURES IN CASES WHERE THE SPOIL WAS KNOWN BY THE CONTRACTOR TO BE SALEABLE AND ITS VALUE WAS REFLECTED IN THE BIDS RECEIVED FOR THE DREDGING WORK.' THE QUESTION OF BIDDING ON THE USE OF ALTERNATE AREAS WAS CONSIDERED IN OUR LETTER TO YOU OF APRIL 1, 1964, B- 153004, PUBLISHED AT 43 COMP. GEN. 643. IN THE CASE REFERRED TO THEREIN WE DECLINED TO INTERFERE WITH THE CONTRACT--- WHICH HAD BEEN AWARDED PURSUANT TO THE CONTRACTING OFFICER'S DECISION NOT TO REJECT ALL BIDS AND READVERTISE UNDER SPECIFICATIONS PERMITTING USE OF ALTERNATE DISPOSAL AREAS--- SINCE THE DREDGING WAS URGENTLY NEEDED AND WE DID NOT CONSIDER THE AWARD MADE TO BE CLEARLY CONTRARY TO THE PUBLIC INTEREST OR IN VIOLATION OF LAW (SEE B-158933, APRIL 29, 1966, TO GREAT LAKES DREDGE AND DOCK COMPANY). HOWEVER, WE EXPRESSED OUR DOUBT TO YOU AS TO WHETHER THE COMPETITIVE BIDDING SYSTEM PERMITS THE ELIMINATION OF POSSIBLE BIDS BASED ON USE OF ALTERNATE AREAS, IF BIDDERS THROUGH THE EXERCISE OF THEIR OWN INITIATIVE AND EFFORTS ARE ABLE TO LOCATE AND WISH TO BID UPON USE OF SUCH AN AREA. FURTHER, WE SUGGESTED THAT CONSIDERATION BE GIVEN TO REVISING THE EXISTING PROCUREMENT PROCEDURE SO AS TO PERMIT BIDDERS, WHENEVER PRACTICABLE, TO SUBMIT RESPONSIVE BIDS BASED UPON USE OF ALTERNATE DISPOSAL AREAS.

WE AGAIN CONSIDERED THE MATTER OF BIDDING ON USE OF ALTERNATE DISPOSAL AREAS IN OUR LETTER OF APRIL 29, 1966, B-158933, TO THE SECRETARY OF THE NAVY IN WHICH WE ASKED THAT THE EXISTING PROCUREMENT PROCEDURES OF THAT DEPARTMENT. "BE REVIEWED AND, IF NECESSARY, AMENDED TO INSURE THAT, IN KEEPING WITH THE SPIRIT AND BASIC PRINCIPLES OF THE COMPETITIVE ADVERTISING SYSTEM, BIDDERS IN FUTURE PROCUREMENTS ARE AFFORDED THE OPPORTUNITY WHENEVER PRACTICABLE TO INITIALLY SUBMIT BIDS BASED ON ACCOMPLISHING THE DESIRED DREDGING AND SATISFACTORILY DISPOSING OF THE SPOIL BY THE MOST ECONOMICAL MEANS AVAILABLE TO THEM.' IN THE CASE THERE UNDER CONSIDERATION--- WHICH INVOLVED THE REJECTION OF ALL BIDS RECEIVED (UNDER AN IFB REQUIRING BIDS TO BE BASED ON A SPECIFIC DISPOSAL AREA) AND READVERTISEMENT TO PERMIT SUBMISSION OF BIDS BASED ON EITHER CONTRACTOR OR GOVERNMENT SELECTED AREAS--- WE CONSIDERED AND SPECIFICALLY REJECTED THE PROTESTING BIDDER'S CONTENTIONS THAT IT IS AN IMPROPER AND IRREGULAR PROCEDURE TO PERMIT CONTRACTORS TO SELECT AND BID ON ALTERNATE DISPOSAL AREAS AND THAT DISPOSAL AREAS UNSPECIFIED BY THE GOVERNMENT SHOULD BE CONSIDERED ONLY AFTER AWARD. OUR LETTER TO THE SECRETARY OF THE NAVY OF APRIL 29, 1966, WAS INSERTED (ON SEPTEMBER 20, 1966) AT PAGE 3252 OF THE RECORD OF THE SENATE HEARINGS, PUBLIC WORKS APPROPRIATIONS FOR 1967, 89TH CONGRESS, SECOND SESSION, ON H.R. 17787 (MAKING APPROPRIATIONS FOR CERTAIN CIVIL FUNCTIONS--- DELAWARE RIVER, PHILADELPHIA TO THE SEA (ANCHORAGES), DELAWARE, NEW JERSEY, AND PENNSYLVANIA), BY THE CHAIRMAN OF THE SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS IN CONNECTION WITH TESTIMONY BY THE CORPS' DIRECTOR OF CIVIL WORKS THAT THE CORPS WOULD TO THE GREATEST EXTENT POSSIBLE CONFORM TO THE VIEWS AND RECOMMENDATIONS OF THE GENERAL ACCOUNTING OFFICE IN OUR REPORT OF JULY 1959 "AND IN SUBSEQUENT DECISIONS WITH RESPECT TO THE USE OF SPOIL DISPOSAL AREAS.' ITS REPORT OF OCTOBER 3, 1966 (NO. 1672), TO THE SENATE (TO ACCOMPANY H.R. 17787) THE COMMITTEE ON APPROPRIATIONS REPORTED AS FOLLOWS:

"DELAWARE RIVER, PHILADELPHIA TO THE SEA (ANCHORAGES)

DELAWARE, NEW JERSEY, AND PENNSYLVANIA

"THE COMMITTEE HAS BEEN ADVISED THAT THE CORPS OF ENGINEERS HAS RECONSIDERED ITS PREVIOUS PROPOSAL TO ACQUIRE DISPOSAL AREAS BY CONDEMNATION. IN THIS CONNECTION, THE COMMITTEE FEELS THAT THE CORPS OF ENGINEERS, AS A MATTER OF POLICY, SHOULD AVOID ACQUIRING FEE SIMPLE TITLE IN LAND FOR USE AS SPOIL DISPOSAL AREAS, PARTICULARLY IN LOCALITIES WHERE LAND SUITABLE FOR FUTURE INDUSTRIAL USE IS SCARCE, OR WHERE THE CORPS CAN MAKE SUITABLE ARRANGEMENTS FOR AN EASEMENT TO FILL LAND IN THE VICINITY.

"THE JULY 1959 REPORT TO CONGRESS BY THE COMPTROLLER GENERAL (SUBJECT: REVIEW OF SPOIL DISPOSAL ACTIVITIES, CORPS OF ENGINEERS, CIVIL FUNCTIONS, DEPARTMENT OF THE ARMY), CONCLUDED THAT -* * * THE CONGRESS MAY WISH TO GIVE FURTHER CONSIDERATION TO THE MATTER OF THE ADEQUACY OF THE GOVERNMENT'S CURRENT PARTICIPATION IN LAND ENHANCEMENT (RESULTING FROM THE DISPOSAL OF SPOIL ON LOW LANDS).- PURSUANT TO THE SECOND SPECIFIC RECOMMENDATION IN THAT REPORT, THE COMMITTEE BELIEVES THE GOVERNMENT WOULD REALIZE THE BENEFITS OF BROADER COMPETITION IF THE CORPS OF ENGINEERS IN PREPARING INVITATION FOR BIDS ON DREDGING WORK WOULD SET FORTH THE LOCATIONS OF ALL AVAILABLE DISPOSAL AREAS KNOWN TO THE CORPS INCLUDING SUCH INFORMATION AS MAY BE READILY AVAILABLE CONCERNING ACCEPTABLE ALTERNATE DISPOSAL AREAS WHICH MAY BE AVAILABLE FOR USE BECAUSE OF EXISTING NEEDS OF STATE OR LOCAL MUNICIPALITIES FOR SPOIL ON PROJECTS FINANCED WITH FEDERAL FUNDS. BIDDERS SHOULD NOT BE DISCOURAGED FROM EXERCISING THEIR OWN INITIATIVE IN LOCATING ACCEPTABLE ALTERNATE DISPOSAL AREAS WHERE THE USE OF SUCH AREAS ARE TO THE ADVANTAGE OF THE GOVERNMENT.'

ALTHOUGH THE POSITION OF THIS OFFICE REGARDING PRESCRIPTIONS IN IFBS AGAINST BIDDING ON USE OF DISPOSAL AREAS NOT DESCRIBED IN THE SPECIFICATIONS IS CLEARLY SHOWN IN THE ABOVE DECISIONS AND LETTERS, AND HAS BEEN RECOGNIZED ELSEWHERE, WE ARE ADVISED THAT IT IS STILL THE POLICY OF THE CORPS OF ENGINEERS TO PRECLUDE BIDS BASED ON THE USE OF ALTERNATE DISPOSAL AREAS, AND TO CONSIDER THE USE OF CONTRACTOR FURNISHED AREAS ONLY AFTER AWARD BY NEGOTIATIONS WITH THE SUCCESSFUL BIDDER. IN THE ADMINISTRATIVE REPORTS FURNISHED THIS OFFICE IT IS ARGUED AT LENGTH THAT PERMITTING BIDS BASED UPON USE OF ALTERNATE DISPOSAL AREAS VIOLATES THE UNDERLYING PRINCIPLES OF THE COMPETITIVE BIDDING SYSTEM, AND IS PER SE INVALID; THAT BIDS BASED UPON PLACING THE SPOIL IN AN AREA OTHER THAN THAT SPECIFIED IN THE IFB ARE NOT ON A COMMON BASIS BUT ARE BIDS "UPON DIFFERENT WORK, UPON A DIFFERENT JOB ALTOGETHER"; THAT IF BIDS BASED UPON USE OF ALTERNATE DISPOSAL AREAS WERE PERMITTED IN THIS CASE,"AMERICAN DREDGING WOULD HAVE AN APPARENT ADVANTAGE OVER OTHER BIDDERS WHICH WOULD TEND TO DISCOURAGE AND LESSEN COMPETITION"; THAT IT IS ,PROTESTER'S PLAIN INTENTION TO OBTAIN A CORNER ON ALL PRACTICABLE DISPOSAL AREAS ON ALL MAJOR PROJECTS IN THE DELAWARE RIVER * * * SHOULD HIS EFFORTS SUCCEED, AND HIS RIGHT BE UPHELD TO USE -ALTERNATE- AREAS, TO THE EXCLUSION OF OTHER BIDDERS, PROTESTER WILL HAVE OBTAINED, NOT MERELY THE ADVANTAGE OVER COMPETITION WHICH HE NOW ENJOYS, BUT A STRANGLEHOLD UPON COMPETITION IN THIS AREA" ; THAT IF LOCAL CONTRACTORS IN OTHER AREAS ARE "ENCOURAGED" TO OBTAIN EXCLUSIVE RIGHTS TO CHOICE DISPOSAL AREAS THIS WOULD HAVE THE EFFECT IN MANY INSTANCES OF ELIMINATING MUCH IF NOT ALL COMPETITION, TO THE ULTIMATE DISADVANTAGE OF THE GOVERNMENT; AND THAT WHILE THE CORPS HAS FOLLOWED THE SPECIFIC "DECISIONS" IN THE ABOVE CITED CASES (PRESUMABLY IN IDENTICAL FACTUAL SITUATIONS), THE VIEWS OF THIS OFFICE AS EXPRESSED IN OUR LETTER TO YOU AND TO THE SECRETARY OF THE NAVY CONCERNING THE UNDESIRABLE SITUATIONS EVIDENCED BY THOSE PROTESTS HAVE NOT BEEN FOLLOWED FOR THE REASON THAT SUCH LETTERS WERE CONSIDERED TO BE "DICTUM" ACCOMPANYING THE DECISIONS.

THE TERM "DICTUM" IS GENERALLY USED AS AN ABBREVIATION OF "OBITER DICTUM" WHICH MEANS A REMARK OR OPINION UTTERED BY THE WAY. 21 C.J.S.- - PAGE 311. WE FIND A DISTINCTION AS TO THE EFFECT (FOR ADMINISTRATIVE PURPOSES) BETWEEN THE ACTUAL DECISION TO A PROTESTING BIDDER IN A PARTICULAR CASE AND OUR LETTER TO THE HEAD OF THE AGENCY, CONCERNING AREAS IN THE AGENCY'S PROCUREMENT PRACTICES BROUGHT TO LIGHT BY THE PROTEST WHERE REVISIONS ARE CONSIDERED DESIRABLE, TO BE SOMEWHAT NOVEL. TO HAVE THE POSITIONS OF THIS OFFICE AS STATED IN SUCH LETTERS DISREGARDED BY A FEDERAL ORGANIZATION MERELY BY CATEGORIZING THEM AS DICTUM SEEMS PARTICULARLY FUTILE WHEN IT IS OBVIOUS THAT ADMINISTRATIVE ACTIONS TAKEN CONTRARY TO SUCH STATED POSITIONS MAY RESULT IN THE DISALLOWANCE OF CREDIT IN THE DISBURSING OFFICER'S ACCOUNTS. IN THIS CONNECTION IT IS NOTED THAT THE CHAIRMAN OF THE SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS INTENDED NO TECHNICAL DISTINCTION BETWEEN OUR LETTER TO THE SECRETARY OF THE NAVY OF APRIL 29, 1966, AND THE ATTENDANT DECISION TO GREAT LAKES DREDGE AND DOCK COMPANY, WHEN HE INSERTED SUCH LETTER INTO THE RECORD AS FOLLOWS:

"THE MOST RECENT DECISION OF THE GENERAL ACCOUNTING OFFICE ON THIS SUBJECT, OF WHICH I AM AWARE, IS THAT OF APRIL 29, 1966, COPY OF WHICH WILL BE INSERTED IN THE RECORD AT THIS POINT.' FURTHER, WE DO NOT ACCEPT THE CORPS' POSITION THAT "THE CASE AT HAND DIFFERS IN MATERIAL FACTS FROM THE CASES IN WHICH THE DICTA AROSE.' IN THE DECISIONS OF APRIL 1, 1964, AND APRIL 29, 1966, TO GAHAGAN DREDGING CORPORATION AND GREAT LAKES DREDGE AND DOCK COMPANY, THE DISPOSAL SPECIFICATIONS RESTRICTING BIDDING ON USE OF ALTERNATE DISPOSAL AREAS WERE QUOTED AND REGARDED AS A MATERIAL FACTOR IN DISPOSING OF THE PROTEST. IN QUOTING THE DISPOSAL SPECIFICATION IN OUR DECISION OF APRIL 29 WE STATED "THE DISPOSAL SPECIFICATIONS, WHICH MUST BE REGARDED AS THE BASIC FACTOR GIVING RISE TO THE SITUATION AT HAND, PROVIDED AS FOLLOWS * * *.' CLEARLY THE ALTERNATE AREA PROSCRIPTION, WAS A POINT WITHIN THE ISSUES PRESENTED IN THOSE CASES AND CONSIDERED IN ARRIVING AT OUR DECISIONS.

CONCERNING THE CORPS' CONTENTION THAT ADC SHOULD NOT BE PERMITTED TO SUBMIT A BID BASED UPON USE OF ITS NEARBY RACCOON ISLAND DISPOSAL AREA FOR THE REASON THAT SUCH AN APPARENT ADVANTAGE WOULD TEND TO DISCOURAGE AND LESSEN COMPETITION, THE CLEAR MANDATE OF 10 U.S.C. 2305 IS THAT INVITATIONS "SHALL PERMIT" SUCH FREE AND FULL COMPETITION BY BIDDERS AS IS CONSISTENT WITH THE ACTUAL NEEDS OF THE GOVERNMENT BEING FULFILLED. THE GOVERNMENT'S ACTUAL NEEDS, AS STATED HEREINBEFORE, ARE TO HAVE THE SUBJECT MATERIAL REMOVED FROM THE ANCHORAGE AND SATISFACTORILY DISPOSED OF ASHORE. THERE IS NO NEED THAT ANY OF THE MATERIAL BE DEPOSITED IN THE DISPOSAL AREA DESIGNATED IN THE SPECIFICATIONS, NOR IS IT INCONSISTENT WITH THE PROCUREMENT OF SUCH PARTICULAR SERVICES FOR THE MATERIAL TO BE EVENTUALLY DEPOSITED IN THE RACCOON ISLAND, OR ANOTHER, DISPOSAL AREA, AS THE CORPS IS WILLING TO NEGOTIATE FOR USE OF ALTERNATE AREAS AFTER AWARD. WHILE WE HAVE IN A FEW LIMITED SITUATIONS APPROVED THE GOVERNMENT'S INTRODUCTION OF FACTORS TENDING TO OFFSET OR EQUALIZE TO SOME EXTENT THE COMPETITIVE ADVANTAGES OF PRODUCERS, PARTICULARLY WHERE THE ADVANTAGES WERE DERIVED FROM USE OF GOVERNMENT PROPERTY OR EQUIPMENT, OR WHERE THE GOVERNMENT HAS CAUSED OR CONTRIBUTED TO THE INEQUALITIES, WE HAVE ALSO POINTED OUT THAT THE GOVERNMENT IS NOT REQUIRED TO DO SO. WE FIND NOTHING IN 10 U.S.C. 2305 TO INDICATE THAT SUCH STATUTE CONTEMPLATES THAT A BIDDER'S RIGHT, AS PROVIDED THEREIN, TO COMPETE FREELY AND FULLY MAY BE ADMINISTRATIVELY RESTRICTED OR CONTROLLED BY PROCUREMENT OFFICIALS IN THE DRAFTING OF INVITATIONS FOR BIDS, FOR THE SOLE PURPOSE OF ENCOURAGING OTHER PROSPECTIVE CONTRACTORS TO PARTICIPATE IN THE BIDDING, TO THE EXTENT THAT ANY BIDDER IS PRECLUDED FROM COMPUTING HIS BID PRICE ON THE MAXIMUM UTILIZATION OF HIS OWN PROPERTY, FACILITIES AND EQUIPMENT. ACCORDINGLY, WE HOLD THAT SUCH ADMINISTRATIVE RESTRICTIONS IN THE AREAS OF A BIDDER'S INTERNAL OPERATIONS, EVEN FOR THE PURPOSE OF OBTAINING A LARGER NUMBER OF BIDDERS, IS BASICALLY INIMICAL TO FREE AND FULL COMPETITION BY THE INDIVIDUAL BIDDER, AND MAY BE CONDONED ONLY WHERE IT IS CLEARLY REQUIRED IN ORDER TO SECURE THE ACTUAL NEEDS BEING PROCURED. ALTHOUGH IT IS THE POLICY OF THE CORPS TO DRAFT INVITATIONS SO AS TO NOT ALLOW RESPONSIVE BIDDING ON ACCEPTABLE ALTERNATE DISPOSAL AREAS FURNISHED BY THE CONTRACTOR, THAT POLICY DOES NOT PERMIT BIDDERS TO COMPETE FREELY AND FULLY IN SITUATIONS SUCH AS THAT AT HAND FOR THE WORK ACTUALLY REQUIRED BY THE GOVERNMENT AND TO THE EXTENT THAT SUCH POLICY CONFLICTS WITH 10 U.S.C. 2305 THE STATUTE MUST PREVAIL.

FURTHER, WE ARE NOT PERSUADED BY THE CONTENTION THAT BIDS BASED UPON PLACING THE SPOIL IN AN AREA OTHER THAN THAT SPECIFIED IN THE IFB ARE NOT ON A COMMON BASIS BUT ARE "UPON DIFFERENT WORK, UPON A DIFFERENT JOB ALTOGETHER" SINCE THE "WORK," AS IT REQUIRES BIDDING ON USE OF A PARTICULAR DISPOSAL AREA, INTRODUCES A RESTRICTIVE BIDDING FACTOR NOT ESSENTIAL TO PROCURING THE END RESULT NEEDED BY THE GOVERNMENT, AND THE COMMON BASIS UPON WHICH BIDS ARE TO BE EVALUATED SHOULD NOT, AS A GENERAL RULE, INCLUDE MATTERS GOING BEYOND THE PROCUREMENT OF SUCH NEEDS. WE ARE ALSO UNABLE TO RATIONALIZE SUCH VIEW WITH THE ADDITIONAL CONTENTION THAT USE OF ALTERNATE AREAS SHOULD BE NEGOTIATED WITH THE SUCCESSFUL BIDDER AFTER AWARD. IF, AS CONTENDED, A BID ON USE OF AN ALTERNATE AREA CONSTITUTES A BID ON A DIFFERENT JOB THERE WOULD APPEAR TO BE NO BASIS FOR NEGOTIATING WITH THE SUCCESSFUL BIDDER FOR USE OF HIS ALTERNATE AREA SINCE IT WOULD BE FOR A JOB OTHER THAN THAT ACTUALLY NEEDED BY THE GOVERNMENT. ALSO, UNDER THIS THEORY THE CHANGE WOULD NOT BE WITHIN THE SCOPE OF THE CONTRACT AND WOULD THEREFORE BE UNAUTHORIZED, BUT WOULD HAVE TO BE ADVERTISED AND BID AS A DIFFERENT PROJECT. TO PURSUE SUCH CONTENTION FURTHER ONE COULD ARRIVE AT THE ERRONEOUS CONCLUSION THAT A FORMAL ADVERTISEMENT FOR BIDS MAY BE ISSUED ON A SPECIFIC JOB AND USED ONLY AS AN INSTRUMENT IN SELECTING A CONTRACTOR WITH WHOM NEGOTIATIONS MAY BE CONDUCTED FOR A DIFFERENT JOB ALTOGETHER. IT IS ELEMENTARY THAT INVITATIONS FOR BIDS WERE DESIGNED TO SECURE A FIRM CONTRACT PRICE FOR THE GOVERNMENT'S NEEDS DESCRIBED THEREIN AND NOT AS THE FIRST STEP FOR NEGOTIATION PROCEDURES.

THAT INVITATIONS PERMITTING BIDDING ON THE BASIS OF ALTERNATE FACTORS ARE NOT PER SE INVALID BY VIOLATING THE PRINCIPLE OF COMPETITIVE BIDDING ON A COMMON BASIS, SEE JOHN REINER AND COMPANY V. UNITED STATES, 163 CT. CL. 381. SHOULD THE CORPS FIND THAT ONE POTENTIAL BIDDER IS IN FACT IN SO ADVANTAGEOUS A POSITION WITH RESPECT TO PARTICULAR WORK THAT NO OTHER COULD COMPETE ON EVEN TERMS, NEGOTIATION WITH THAT BIDDER IN THE FIRST INSTANCE WOULD BE MORE IN KEEPING WITH THE LAW THAN THE PROCEDURES PROPOSED.

REGARDING THE CORPS' SPECULATIONS AS TO ADC'S INTENTIONS OF OBTAINING A CORNER ON ALL PRACTICABLE DISPOSAL AREAS ALONG THE DELAWARE RIVER, AND AS TO WHAT CONTRACTORS IN OTHER AREAS MAY DO, THE POSSIBLE EFFECTS AND CONSEQUENCES OF THE FORMAL ADVERTISEMENT PROVISIONS ARE MATTERS WHICH RECEIVED THE CONSIDERATION AND DELIBERATIONS OF THE LAW-MAKING BRANCH OF THE GOVERNMENT AT THE TIME THE STATUTE WAS BEING ENACTED INTO LAW. THAT AN AGENCY BELIEVES FUTURE PROBLEMS AND UNDESIRABLE SITUATIONS WILL ARISE FROM CONTRACTORS EXERCISING THE FREE AND FULL COMPETITION WHICH THE STATUTE DEMANDS BE AFFORDED BIDDERS IN FULFILLING THE AGENCYS' NEEDS, PROVIDES NO BASIS FOR NOT ADMINISTERING THE STATUTE IN ACCORDANCE WITH ITS CLEAR TERMS. IF THE SITUATIONS ENVISIONED BY THE CORPS EVENTUALLY OCCUR, AND IT FINDS THAT THE ACTIVITIES OF FAVORABLY SITUATED CONTRACTORS SEVERELY INTERFERES WITH ITS EFFORTS TO MAKE ARRANGEMENTS FOR SUITABLE DISPOSAL AREAS TO OFFER BIDDERS ON ITS DREDGING PROJECTS, A PROPER APPROACH TO A SOLUTION WOULD APPEAR TO BE IN AGAIN PRESENTING ITS DISPOSAL AREA PROBLEMS FOR THE CONSIDERATION OF CONGRESS.

FOR THE REASONS STATED WE CONCLUDE THAT THE INVITATION IN QUESTION SHOULD BE CANCELLED AND REISSUED, OR MODIFIED, IN ACCORDANCE WITH THESE VIEWS.