B-161839, NOV. 2, 1967

B-161839: Nov 2, 1967

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A SUCCESSFUL BIDDER WHO DID NOT HAVE EQUIPMENT APPROVAL BY THE UNDERWRITERS LABORATORIES AT TIME OF BID OPENING BUT WHO WAS FOUND TO HAVE OFFERED EQUIPMENT THAT COMPLIED WITH ALL OF THE STANDARDS SHOULD NOT HAVE ITS BID REJECTED AS NONRESPONSIVE SINCE SUCH FAILURE WAS NOT PREJUDICIAL TO THE PROTESTANT OR TO ANY OTHER POTENTIAL BIDDERS. THE RECORD DOES NOT SUPPORT THE CONTENTION THAT THE SPECIFICATIONS WERE RESTRICTIVE SINCE BOTH PROTESTANT AND SUCCESSFUL BIDDER WERE ABLE TO BID ON THE EQUIPMENT. FEDERAL SUPPLY SCHEDULE PURCHASE IS SUPPORTED BY THE AGENCY REPORT. TO AMPEX CORPORATION: REFERENCE IS MADE TO YOUR LETTERS OF JUNE 16. THE IFB WAS FOR A FEDERAL SUPPLY SCHEDULE CONTRACT FOR FSC GROUP 58.

B-161839, NOV. 2, 1967

BIDS - QULAIFIED PRODUCTS DECISION TO AMPEX CORP. CONCERNING PROTEST AGAINST AWARD TO SCULLY RECORDING INSTRUMENTS CORP. UNDER INVITATION FOR COMMUNICATION EQUIPMENT BY GSA. A SUCCESSFUL BIDDER WHO DID NOT HAVE EQUIPMENT APPROVAL BY THE UNDERWRITERS LABORATORIES AT TIME OF BID OPENING BUT WHO WAS FOUND TO HAVE OFFERED EQUIPMENT THAT COMPLIED WITH ALL OF THE STANDARDS SHOULD NOT HAVE ITS BID REJECTED AS NONRESPONSIVE SINCE SUCH FAILURE WAS NOT PREJUDICIAL TO THE PROTESTANT OR TO ANY OTHER POTENTIAL BIDDERS. THE RECORD DOES NOT SUPPORT THE CONTENTION THAT THE SPECIFICATIONS WERE RESTRICTIVE SINCE BOTH PROTESTANT AND SUCCESSFUL BIDDER WERE ABLE TO BID ON THE EQUIPMENT. A REPRESENTATION THAT THE GOVERNMENT CAN OBTAIN OPTIMUM QUALITY AT THE LOWEST COST BY USE OF A SPECIFICATION TYPE PROCUREMENT RATHER THAN BY USE OF A MULTIPLE AWARD. FEDERAL SUPPLY SCHEDULE PURCHASE IS SUPPORTED BY THE AGENCY REPORT.

TO AMPEX CORPORATION:

REFERENCE IS MADE TO YOUR LETTERS OF JUNE 16, JULY 17 AND SEPTEMBER 25, 1967, AND ENCLOSURES, CONCERNING YOUR PROTEST AGAINST ANY AWARD TO SCULLY RECORDING INSTRUMENTS CORPORATION (SCULLY) UNDER INVITATION FOR BIDS (IFB) NO. FPNHO-R-27480-A-3-24-67, ISSUED BY GENERAL SERVICES ADMINISTRATION (GSA), FEDERAL SUPPLY SERVICE.

THE IFB WAS FOR A FEDERAL SUPPLY SCHEDULE CONTRACT FOR FSC GROUP 58, PART III, COMMUNICATION EQUIPMENT. UNDER CLASS 5835, WHICH COVERS SOUND RECORDING AND REPRODUCING EQUIPMENT, AMPEX BID ON ITEMS 998 2121, 2122, 2124, 2125, 2142 AND 2144, CONSISTING OF RECORDER/REPRODUCERS IN ACCORDANCE WITH INTERIM FEDERAL SPECIFICATION W-R-00168A/GSA-FSS), DATED DECEMBER 12, 1966. THE ONLY OTHER BIDDER ON THESE ITEMS WAS SCULLY, WHICH WAS LOW ON ALL OF THEM.

YOUR PROTEST IS BASED ON THE GROUNDS (1) THAT NO SCULLY RECORDER/REPRODUCER OFFERED UNDER THE IFB HAD BEEN APPROVED BY UNDERWRITERS' LABORATORIES AT THE TIME OF BID OPENING AND (2) THAT THE SPECIFICATIONS ARE UNREASONABLY AND UNNECESSARILY RESTRICTIVE AND ARE ALSO INCOMPLETE, AMBIGUOUS AND INCLUDE DESIGN RATHER THAN PERFORMANCE REQUIREMENTS.

PARAGRAPH 3.1.1 OF THE CITED SPECIFICATION PROVIDES, WITH RESPECT TO FIRE AND CASUALTY HAZARDS, THAT EACH CONTRACTOR SHALL SUBMIT TO THE CONTRACTING AGENCY PROOF THAT THE EQUIPMENT HE PROPOSES TO SUPPLY UNDER THIS SPECIFICATION CONFORMS TO THE APPLICABLE REQUIREMENTS OF UNDERWRITERS' LABORATORIES INC. STANDARD UL-813. THE IFB FURTHER PROVIDES ON PAGE 8 THAT "BIDDER MUST SUBMIT WITH BID PROOF OF CONFORMITY WITH UNDERWRITER'S LABORATORIES, INC., AS REQUIRED IN PARA. 3.1.1.' GSA HAS ADVISED US THAT THIS REFERENCE TO SUBMISSION OF PROOF WITH THE BID WAS INADVERTENTLY INCLUDED IN THE IFB, THAT IT WAS NOT INTENDED THAT EVIDENCE OF COMPLIANCE BE SUBMITTED "WITH" THE BIDS, AND THAT NEITHER AMPEX NOR SCULLY SUBMITTED SUCH EVIDENCE WITH ITS BID. HOWEVER, YOU SUBMITTED WITH YOUR LETTER OF SEPTEMBER 25 A COPY OF A "NOTICE OF ACCEPTABILITY FOR LISTING" FROM UNDERWRITERS' LABORATORIES, INC., COVERING THE ITEMS UPON WHICH YOU BID AND DATED PRIOR TO THE BID OPENING DATE, AND YOU TAKE THE POSITION THAT SCULLY'S FAILURE TO SUBMIT EVIDENCE OF COMPLIANCE WITH ITS BID RENDERED THE BID NONRESPONSIVE, BUT THAT THE INADVERTENT OMISSION FROM YOUR BID OF EVIDENCE OF COMPLIANCE CAN BE WAIVED AS A DEFICIENCY MERELY OF FORM. YOU ARE THEREFORE ARGUING, IN EFFECT, THAT THE IFB REQUIRES THE ITEMS OFFERED TO HAVE BEEN UL APPROVED PRIOR TO BID OPENING, BUT THAT EVIDENCE OF APPROVAL MAY BE SUBMITTED AFTER OPENING. WE CANNOT AGREE.

WHETHER AN ITEM MEETS THE UL STANDARD IS A QUESTION OF FACT TO BE DETERMINED BY MAKING THE NECESSARY TESTS, AND SCULLY'S FAILURE TO SUBMIT ITS PRODUCTS FOR TESTING DOES NOT JUSTIFY YOUR CONCLUSION THAT THEY DID NOT MEET THE UL STANDARD, OR THAT THE SCULLY EQUIPMENT EXAMINED BY GSA DID NOT EXIST IN UNMODIFIED FORM PRIOR TO BID OPENING. UL PUBLICATIONS SETTING FORTH THE VARIOUS STANDARDS ARE AVAILABLE UPON REQUEST AT ANY UL OFFICE AND, AS INDICATED ON PAGE 5 OF UL STANDARD 813, COPY OF WHICH WAS FORWARDED WITH YOUR LETTER OF SEPTEMBER 25, THE TESTS MAY BE PERFORMED BY THE MANUFACTURER. SCULLY THEREFORE COULD, AND REASONABLY SHOULD HAVE SATISFIED ITSELF THAT THE EQUIPMENT BEING OFFERED MET THE UL STANDARD, AND WE HAVE BEEN ADVISED BY GSA THAT THE SCULLY EQUIPMENT HAS BEEN EXAMINED AND FOUND TO BE IN COMPLIANCE WITH ALL OF THE REQUIRED STANDARDS.

IN 33 COMP. GEN. 573 WE HELD THAT SPECIFICATIONS ARE UNDULY RESTRICTIVE OF COMPETITION WHEN THEY CONTAIN AN UNCONDITIONAL REQUIREMENT THAT THE EQUIPMENT BEAR ONLY AN UNDERWRITERS' LABORATORIES LABEL, BUT THAT IT MAY BE PROPER IN THE ABSENCE OF STANDARDS OR SPECIFICATIONS PRESCRIBED BY PROPER GOVERNMENTAL AUTHORITY, IF ADMINISTRATIVELY DETERMINED TO BE IN THE INTEREST OF THE GOVERNMENT, TO INCLUDE IN ADVERTISED SPECIFICATIONS FOR ARTICLES OF APPROPRIATE CLASSES A REQUIREMENT THAT SUCH ARTICLES SHALL CONFORM TO STANDARDS ADOPTED BY THE UNDERWRITERS' LABORATORIES, OR SIMILAR ORGANIZATIONS, WHERE SUCH STANDARDS ARE GENERALLY RECOGNIZED AND ACCEPTED IN THE INDUSTRIES INVOLVED AND ARE PERTINENT TO THE GOVERNMENT'S NEEDS. IT WAS FURTHER POINTED OUT IN THE CITED DECISION THAT PRESCRIBING MINIMUM STANDARDS TO WHICH ARTICLES REQUIRED BY THE GOVERNMENT SHALL CONFORM IS THE PROPER FUNCTION OF SPECIFICATIONS, BUT DETERMINING WHETHER ARTICLES OFFERED TO THE GOVERNMENT IN FACT CONFORM TO THESE STANDARDS IS THE DUTY PRIMARILY OF PROCUREMENT OFFICIALS, AND WHILE THE CERTIFICATE, LABEL, OR OTHER TOKEN OF APPROVAL OF A RECOGNIZED INDEPENDENT LABORATORY OR TESTING ORGANIZATION MAY, UNDER PROPER CIRCUMSTANCES, BE ACCEPTABLE AS EVIDENCE OF CONFORMITY, THE ABSENCE OF SUCH APPROVAL SHOULD NOT AUTOMATICALLY EXCLUDE PRODUCTS WHICH MAY BE EQUALLY IN CONFORMITY.

BY SIGNING THE BID, EACH BIDDER AGREED TO FURNISH EQUIPMENT WHICH WOULD COMPLY WITH ALL MATERIAL REQUIREMENTS OF THE IFB, AND ACCEPTANCE OF THE BID AS SUBMITTED WOULD OBLIGATE HIM TO DO SO. WE THEREFORE AGREE WITH GSA THAT SUBMISSION WITH THE BIDS OF PROOF OF CONFORMITY WOULD SERVE NO USEFUL PURPOSE, AND THAT FAILURE TO SUBMIT SUCH PROOF WITH THE BID WOULD NOT RENDER THE BID NONRESPONSIVE TO THE TERMS OF THE INVITATION. 41 COMP. GEN. 366. WE RECOGNIZE THAT THE PROVISION IN QUESTION CONSTITUTED A DEFECT IN THE IFB, BUT WE ALSO RECOGNIZE THE UNDESIRABILITY OF REJECTING BIDS AFTER OPENING AND, AS STATED IN 39 COMP. GEN. 563, 565,"ONE IMPORTANT FACTOR IN DECIDING WHETHER OR NOT TO CANCEL A DEFECTIVE INVITATION AND READVERTISE SHOULD BE, WE THINK, WHETHER BIDDERS HAVE BEEN PREJUDICED BY REASON OF THE DEFECT.' IN VIEW OF GSA'S STATEMENT THAT IT CONTACTED THE OTHER FOUR POTENTIAL SUPPLIERS OF THE ITEMS IN QUESTION WHO DID NOT SUBMIT BIDS AND THAT NONE OF THEM INDICATED THEIR FAILURE TO BID WAS AT ALL RELATED TO THE SUBJECT REQUIREMENT, WE DO NOT BELIEVE THEY WERE PREJUDICED. NOR DOES AMPEX APPEAR TO HAVE BEEN PREJUDICED, SINCE NEITHER AMPEX NOR SCULLY COMPLIED WITH THE TIME REQUIREMENT AND, AS STATED HEREIN, THE MATERIALITY OF THE PROVISION RELATES TO WHETHER THE ITEMS IN FACT CONFORM, RATHER THAN WHEN THE PROOF IS SUBMITTED.

THE QUESTIONS RAISED BY YOU AS TO THE ALLEGED DEFICIENCIES IN THE SPECIFICATION WERE ANSWERED IN DETAIL BY GSA'S LETTER OF AUGUST 25, 1967, A COPY OF WHICH WAS SUBMITTED FOR YOUR CONSIDERATION. IN YOUR LETTER OF SEPTEMBER 25, 1967, YOU FURTHER QUESTION CERTAIN PARTS OF THE SPECIFICATION, STATING WITH REFERENCE TO PARAGRAPH 3.4.2 THAT FOR ALL AMPEX KNEW PRIOR TO BID OPENING, A LITERAL COMPLIANCE WITH THE SPECIFICATION "COULD" REQUIRE THE MODIFICATION OF A COMMERCIAL PRODUCT. YOU DO NOT, HOWEVER, CLAIM THAT YOUR BID WAS SUBMITTED ON THIS BASIS, AND IN VIEW OF YOUR INSISTENCE ON THE IMPORTANCE OF BIDDING ON A UL APPROVED PRODUCT, THE CONCLUSION SEEMS JUSTIFIED THAT YOU DID NOT CONTEMPLATE A MODIFICATION. NOR IS THE SPECIFICATION UNDULY RESTRICTIVE BY VIRTUE OF THE FACT, IF SUCH IT BE, THAT THE REQUIREMENT FOR SOLID STATE CONSTRUCTION PRECLUDED AMPEX FROM BIDDING CERTAIN OF ITS PRODUCTS, SINCE OTHER OF ITS PRODUCTS WERE AVAILABLE WHICH MET THE REQUIREMENT. MOREOVER, THIS FEATURE WAS INCLUDED, ACCORDING TO GSA, BECAUSE OF INCREASED RELIABILITY AND EASE OF MAINTENANCE AND BECAUSE MOST PROFESSIONAL EQUIPMENT NOW BEING MANUFACTURED, INCLUDING THAT OF AMPEX, INCORPORATES THE SOLID STATE DESIGN.

YOU ALSO CONTINUE TO QUESTION THE REQUIREMENT FOR RUBBER MOUNTING FEET ON PORTABLE RECORDERS (3.4.3.1) AND THE USE OF FRICTION CLUTCHES IN LIEU OF EDDY CURRENT CLUTCHES (3.7.22.1), AND YOU STATE THAT BECAUSE OF THE REQUIREMENT FOR SUBMITTING PROOF OF UL COMPLIANCE WITH THE BIDS, AMPEX FELT THAT IT WAS PRECLUDED FROM DESIGNING AND OFFERING UNTESTED EQUIPMENT WHICH MET ONLY THE ESSENTIAL REQUIREMENTS OF THE SPECIFICATION, AND FELT INSTEAD THAT IT COULD ONLY OFFER A TESTED AND MORE EXPENSIVE PRODUCT WHICH CONTAINS VALUABLE FEATURES NOT REQUIRED BY THE SPECIFICATION.

YOUR OBJECTIONS TO CERTAIN TECHNICAL REQUIREMENTS OF THE SPECIFICATIONS APPEAR TO STEM, IN THE MAIN, FROM DIFFERENCES OF OPINION BETWEEN AMPEX AND GSA ENGINEERS AS TO WHAT MAY OR MAY NOT BE ,STANDARD" IN THE INDUSTRY; WHAT REPRESENTS THE LATEST APPROACH TO THE ACCOMPLISHMENT OF CERTAIN PERFORMANCE REQUIREMENTS; AND HOW THE NEEDS OF THE GOVERNMENT MAY BEST BE SERVED. WHEN WE ARE FACED WITH A DIFFERENCE IN TECHNICAL OPINION BETWEEN A BIDDER AND A CONTRACTING AGENCY WE WILL NOT SUBSTITUTE OUR JUDGMENT FOR THAT OF THE CONTRACTING AGENCY IN THE ABSENCE OF CLEAR AND CONVINCING EVIDENCE THAT THE AGENCY IS IN ERROR. B-151155, MAY 24, 1963. THE RECORD IN THIS CASE DOES NOT CONTAIN SUCH EVIDENCE.

AS WE HAVE SAID MANY TIMES, THE DETERMINATION OF THE NEEDS OF THE GOVERNMENT AND HOW THEY MAY BEST BE MET IS THE RESPONSIBILITY OF THE PROCURING AGENCY. WE ARE ADVISED THAT WHEN THE INVOLVED SPECIFICATION WAS BEING DEVELOPED IN MAY 1965, IT WAS DECIDED BY THE STANDARDIZATION DIVISION, FEDERAL SUPPLY SERVICE, THAT IT WOULD BE HELPFUL TO VISIT A CROSS-SECTION OF THE MANUFACTURERS FOR THE PURPOSE OF OBSERVING MANUFACTURING PROCEDURES AND DISCUSSING THE TECHNICAL REQUIREMENTS OF TAPE RECORDING EQUIPMENT WITH THE MANUFACTURERS' ENGINEERS. PURSUANT TO THIS DECISION, MR. ROGER DANIERO, AN ELECTRICAL ENGINEER ASSIGNED TO THE ELECTRICAL AND ELECTRONICS BRANCH OF THE STANDARDIZATION DIVISION, VISITED THE PLANTS OF SEVEN MANUFACTURERS, INCLUDING AMPEX. PREVIOUSLY ON MARCH 29, 1965, COPIES OF PROPOSED FEDERAL SPECIFICATION W-R-168 HAD BEEN SENT TO 22 MANUFACTURERS, INCLUDING AMPEX, FOR COMMENT. AFTER GIVING FULL CONSIDERATION TO ALL OF THE INFORMATION THUS DEVELOPED, INTERIM FEDERAL SPECIFICATION W-R-00168A/GSA-FSS), DATED DECEMBER 12, 1966, WAS DRAFTED AND APPEARS TO ADEQUATELY DESCRIBE EQUIPMENT WHICH, IN THE JUDGMENT OF GSA ENGINEERS, BASED ON AVAILABLE TECHNICAL INFORMATION, IS SUITABLE FOR WIDE USAGE BY VARIOUS GOVERNMENT AGENCIES. THE DRAFTING OF SPECIFICATIONS IS THE GOVERNMENT'S RESPONSIBILITY AND IS NOT SUBJECT TO DICTATION BY MANUFACTURERS, ALTHOUGH EVERY EFFORT SHOULD BE MADE, AND CLEARLY WAS IN THIS INSTANCE, TO SECURE THE BEST AVAILABLE TECHNICAL INFORMATION AND ADVICE.

THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE SPECIFICATION, BY DESIGN OR OTHERWISE, FAVORED OR WAS PREJUDICIAL TO THE PRODUCTS OF ANY PARTICULAR MANUFACTURER, AND GSA REPORTS THAT AMPEX WAS THE ONLY BIDDER WHO COMPLAINED THAT THE SPECIFICATION WAS UNDULY RESTRICTIVE. WITH REFERENCE TO THE FAILURE OF FOUR POTENTIAL SUPPLIERS TO SUBMIT BIDS, WE DO NOT BELIEVE THAT THIS REQUIRES THE CONCLUSION, AS STATED BY YOU, THAT GSA HAD SPECIFIED A RECORDER HAVING A SPECIAL CONFIGURATION, THE MINIMUM REQUIREMENTS FOR WHICH WERE NOT AVAILABLE IN THE COMMERCIAL MARKET. BOTH YOU AND SCULLY WERE ABLE TO BID ON EQUIPMENT WHICH APPARENTLY MORE THAN MET THE MINIMUM REQUIREMENTS, AND THERE IS NO EVIDENCE THAT ONE OR MORE OF THE OTHER FOUR POTENTIAL SUPPLIERS WAS NOT IN A POSITION TO DO LIKEWISE, BUT CHOSE NOT TO.

AS TO YOUR CONTENTION THAT AMPEX FELT IT WAS PRECLUDED FROM DESIGNING AND OFFERING UNTESTED EQUIPMENT, IT WOULD APPEAR THAT THIS CLEARLY COULD NOT HAVE BEEN ACCOMPLISHED WITHIN THE TIME AVAILABLE AFTER ISSUANCE OF THE SPECIFICATION, SINCE YOU STATE THAT IT NORMALLY REQUIRES A MINIMUM OF 1- 1/2 YEARS TO ACHIEVE THE FIRST SHIPMENTS OF A NEW PRODUCT.

YOU REFER TO OUR DECISION OF APRIL 12, 1966, B-114807, IN SUPPORT OF YOUR SUGGESTION THAT THE MULTIPLE AWARD SYSTEM OF CONTRACTING IS ACTUALLY MORE CONDUCIVE TO EFFECTIVE COMPETITION THAN THE ALTERNATIVE PROPOSED BY GSA. WHILE THAT DECISION DOES NOT SPECIFICALLY RECOMMEND FORMAL ADVERTISING, IT WAS DEFINITELY AIMED AT DEFICIENCIES IN THE MULTIPLE AWARD SYSTEM WHICH REQUIRED THE CONTRACTING OFFICER AS A MATTER OF POLICY TO AWARD A CONTRACT TO A SUPPLIER WITH WHOM HE COULD NOT NEGOTIATE A REASONABLE PRICE. THE PRINCIPAL OBJECTIVE OF THE DECISION WAS THEREFORE BETTER PRICES, AND WHILE WE ARE WELL AWARE OF THE FACT THAT THE LOWEST PRICE IS NOT ALWAYS THE BEST BUY, AWARD IS REQUIRED BY STATUTE AND REGULATION TO BE MADE TO THE LOW RESPONSIVE, RESPONSIBLE BIDDER. GSA REPORTS THAT THE PRICES BID FOR PROFESSIONAL TYPE TAPE RECORDERS RANGE BETWEEN $500 AND $1,700 PER UNIT LESS THAN PRICES FOR THE SAME EQUIPMENT LISTED ON THE MULTIPLE AWARD FEDERAL SUPPLY SCHEDULE IN EFFECT DURING THE 1967 FISCAL YEAR, AND THAT IN ITS VIEW, WHICH WE ARE NOT PREPARED TO QUESTION, THE DESIRED GOAL OF OBTAINING OPTIMUM QUALITY RECORDERS AT THE LOWEST COST CAN PROPERLY BE ACHIEVED THROUGH USE OF THE SPECIFICATION.

FOR THE REASONS STATED WE FIND NO LEGAL BASIS FOR DISTURBING THE AWARD TO SCULLY, AND YOUR PROTEST IS THEREFORE DENIED.