B-162303, OCT. 27, 1967

B-162303: Oct 27, 1967

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LOW BIDDER WHOSE BID WOULD REQUIRE ALTERATIONS TO BUILDING TO ACCOMMODATE EQUIPMENT AND SUCH COST WOULD EXCEED DIFFERENCE BETWEEN LOW BID AND NEXT LOW BID AND UNDER TERMS OF INVITATION SUCH ALTERATION COSTS ARE FOR CONSIDERATION THERE IS NOT PRESENTED ANY BASIS FOR OBJECTION TO REJECTION OF LOW BID. TO TROY LAUNDRY MACHINERY: FURTHER REFERENCE IS MADE TO A COPY OF YOUR LETTER DATED AUGUST 15. FIVE BIDS WERE RECEIVED AND OPENED ON APRIL 26. THE LOWEST BID ON THE WASHER- EXTRACTOR COMBINATIONS WAS SUBMITTED BY YOUR FIRM IN THE AMOUNT OF $34. YOUR BID WAS REJECTED BY THE CONTRACTING OFFICE BECAUSE THE EQUIPMENT OFFERED BY YOUR FIRM WOULD REQUIRE THE REBUILDING OF THE DRAIN TROUGH AND THAT THE COST OF THIS WORK WOULD MORE THAN OFFSET THE $672.10 DIFFERENCE IN THE PRICE QUOTED BY YOUR FIRM AND THE NEXT LOWEST BIDDER.

B-162303, OCT. 27, 1967

BIDS - EVALUATION - COST FACTORS DECISION TO TROY LAUNDRY MACHINERY RE PROTEST AGAINST REJECTION OF BIDS FOR WASHING MACHINES AND AWARD TO PELLERIN MILNOR CORP. BY V.A. MARKETING DIVISION, HINES, ILL. LOW BIDDER WHOSE BID WOULD REQUIRE ALTERATIONS TO BUILDING TO ACCOMMODATE EQUIPMENT AND SUCH COST WOULD EXCEED DIFFERENCE BETWEEN LOW BID AND NEXT LOW BID AND UNDER TERMS OF INVITATION SUCH ALTERATION COSTS ARE FOR CONSIDERATION THERE IS NOT PRESENTED ANY BASIS FOR OBJECTION TO REJECTION OF LOW BID. IN ABSENCE OF EVIDENCE SUFFICIENTLY CONVINCING TO OVERCOME CORRECTNESS OF ADMINISTRATIVE REPORT, ADMINISTRATIVE VERSION OF DISPUTED FACTS MUST BE ACCEPTED BY GAO.

TO TROY LAUNDRY MACHINERY:

FURTHER REFERENCE IS MADE TO A COPY OF YOUR LETTER DATED AUGUST 15, 1967, WITH ENCLOSURES, TO THE DIRECTOR, SUPPLY SERVICE, VETERANS ADMINISTRATION CENTRAL OFFICE, WASHINGTON, D.C., PROTESTING AGAINST THE REJECTION OF YOUR BID AND THE AWARD OF A CONTRACT TO PELLERIN MILNOR CORPORATION UNDER INVITATION FOR BIDS NO. M3-97-67, ISSUED ON MARCH 24, 1967, BY THE VETERANS ADMINISTRATION MARKETING DIVISION, HINES, ILLINOIS.

THE INVITATION SOLICITED BIDS FOR FURNISHING THREE COMMERCIAL LAUNDRY WASHER-EXTRACTOR COMBINATIONS, ITEMS 1 AND 2, TO BE INSTALLED IN THE VETERANS ADMINISTRATION HOSPITAL, SEATTLE, WASHINGTON. FIVE BIDS WERE RECEIVED AND OPENED ON APRIL 26, 1967. THE LOWEST BID ON THE WASHER- EXTRACTOR COMBINATIONS WAS SUBMITTED BY YOUR FIRM IN THE AMOUNT OF $34,915. HOWEVER, YOUR BID WAS REJECTED BY THE CONTRACTING OFFICE BECAUSE THE EQUIPMENT OFFERED BY YOUR FIRM WOULD REQUIRE THE REBUILDING OF THE DRAIN TROUGH AND THAT THE COST OF THIS WORK WOULD MORE THAN OFFSET THE $672.10 DIFFERENCE IN THE PRICE QUOTED BY YOUR FIRM AND THE NEXT LOWEST BIDDER, PELLERIN MILNOR CORPORATION. ON JUNE 23, 1967, CONTRACT NO. V797P -3075 WAS AWARDED TO PELLERIN MILNOR CORPORATION IN THE AMOUNT OF $36,587.10, LESS DISCOUNT OF $1,000, OR A NET CONTRACT PRICE OF $35,587.10. BY LETTER OF THE SAME DATE YOUR FIRM WAS ADVISED OF THE AWARD MADE TO PELLERIN AND OF THE REASONS WHY YOUR COMPANY'S BID WAS REJECTED.

BIDS WERE EVALUATED IN ACCORDANCE WITH PARAGRAPH 32 (A) OF THE ADDITIONAL BIDDING INSTRUCTIONS, TERMS AND CONDITIONS OF THE INVITATION FOR BIDS. THAT PROVISION READS:

"SPECIAL CONDITIONS: (WASHER-EXTRACTOR COMBINATION)

(A) THE VETERANS ADMINISTRATION RESERVES THE RIGHT TO CONSIDER THE ESTIMATED COST OF INSTALLING NEW MACHINE, CONSTRUCTING OR MODIFYING CHUTE SYSTEMS (INCLUDING REMOVAL OF OLD CHUTES IF REQUIRED), AND CONSTRUCTING ADEQUATE FOUNDATIONS OR SUPPORTS IN DETERMINING AWARD OF EQUIPMENT CONTRACTS.'

BY LETTER DATED JULY 11, 1967, TO THE CONTRACTING AGENCY, YOU PROTESTED THE REJECTION OF YOUR BID ON THE GROUNDS THAT YOUR BID PRICE FOR THE EQUIPMENT WAS $672 LOWER THAN THE PRICE QUOTED BY THE NEXT LOWEST BIDDER AND THAT THE INSTALLATION OF YOUR EQUIPMENT IN THE HOSPITAL WOULD NOT REQUIRE ANY MODIFICATION OF THE EXISTING DRAIN TROUGH. BY LETTER DATED JULY 27, 1967, THE CONTRACTING OFFICER DENIED YOUR PROTEST.

IN YOUR LETTER OF AUGUST 15, 1967, YOU STATE THAT YOU DO NOT CONCUR WITH THE FINDING OF THE VA CENTRAL ENGINEERING OFFICE TO THE EFFECT THAT MODIFICATION OF THE EXISTING DRAIN TROUGH WOULD BE REQUIRED FOR THE INSTALLATION OF YOUR FIRM'S EQUIPMENT. YOU ALLEGE THAT PRIOR TO THE SUBMISSION OF YOUR BID, YOUR SALES SUPERVISOR INSPECTED THE JOB SITE AND NOTED THAT NO MODIFICATIONS WOULD BE REQUIRED FOR INSTALLATION OF YOUR FIRM'S EQUIPMENT. ALSO, YOU STATE THAT DRAWINGS OF THE EXISTING FOUNDATIONS UPON WHICH THE LAUNDRY EQUIPMENT IS TO BE INSTALLED HAD BEEN EXAMINED BY YOUR ENGINEERING DEPARTMENT AND THAT THEY HAD CONCLUDED THAT NO MODIFICATION OF THE EXISTING DRAIN TROUGH WOULD BE NECESSARY FOR INSTALLATION OF YOUR FIRM'S EQUIPMENT.

THE VETERANS ADMINISTRATION HAS FURNISHED OUR OFFICE A COPY OF A REPORT DATED SEPTEMBER 15, 1967, IN WHICH THE DIRECTOR, ENGINEERING SERVICE, ADVISED AS FOLLOWS WITH REFERENCE TO YOUR CONTENTIONS: "1. THE PROBLEM IN THIS CASE RESULTS FROM SPACE RESTRICTIONS IMPOSED BY THE EXISTING STRUCTURE. "2. THE LAUNDRY ROOM FLOOR IS A CONCRETE BEAM AND SLAB SYSTEM LOCATED OVER THE BOILER ROOM WITH EXTENSIVE BOILER ROOM AND LAUNDRY PIPING LOCATED DIRECTLY UNDER THE LAUNDRY FLOOR. "3. THE EXISTING DRAIN TRENCH IS LOCATED ADJACENT TO AN EXTERIOR WALL AND SPANS TWO BAYS WITH THE SIDES OF THE TRENCH DESIGNED AS CONTINUOUS SUPPORTING BEAMS. THE TRENCH IS ALSO LOCATED IMMEDIATELY IN FRONT OF WALL COLUMN PILASTERS WHICH EXTEND 3 FEET 2-1/4 INCHES INTO THE ROOM AND ABUT THE OUTER TRENCH BEAMS. "4. IF THE MACHINE DRAIN VALVES ARE TO BE PLACED OVER THE EXISTING TRENCH, IT IS NECESSARY THAT THE MACHINES FIT BETWEEN THE PILASTERS. "5. THE EQUIPMENT OFFERED BY TROY IS TOO WIDE TO FIT BETWEEN PILASTERS AND WOULD, THEREFORE, REQUIRE ONE OF THE MACHINES TO BE MOVED OUTWARD INTO THE ROOM AND PLACED IN FRONT OF THE CENTER PILASTER. WITH THE MACHINE IN THIS POSITION, THE DRAIN VALVE WOULD NOT BE OVER THE TRENCH. THIS SITUATION WOULD REQUIRE CUTTING OF THE FRONT TRENCH BEAM, PATCHING IN A SHORT LATERAL TRENCH AND INSTALLING IMPROVISED STEEL BEAM SUPPORTS UNDER THE TRENCH BEAMS. THE TRENCH BEAMS ARE DESIGNED AS CONTINUOUS BEAMS AND DESTRUCTION OF THIS CONTINUITY BY CUTTING ONE SPAN WOULD WEAKEN THE ADJACENT SPAN AND REQUIRE SUPPLEMENTAL SUPPORT THEREUNDER. "6. THE NARROWER PELLERIN MILNOR EQUIPMENT WILL FIT BETWEEN THE PILASTERS. NO DISTURBANCE OF THE EXISTING STRUCTURAL SYSTEMS WILL BE REQUIRED. BY UTILIZING THE OPTIONAL VALVE POSITIONING, THE REAR TROUGHBEAM CAN BE USED TO SUPPORT THE REAR LEGS OF THE MACHINES SO THAT ONLY SUPPLEMENTAL SLAB SUPPORT IS REQUIRED UNDER THE FRONT LEGS. "7. AS WE HAVE POINTED OUT IN THE PAST, DISRUPTIONS OF CONCRETE STRUCTURAL SYSTEMS AND THE CONSEQUENT IMPROVISION OF SUBSTITUTE SUPPORT CREATES UNCERTAINTY THAT CANNOT BE EVALUATED IN TERMS OF COST. CERTAINLY, THE COST MUST BE PLACED AT A FIGURE APPROXIMATING THAT NECESSARY TO RESTORE THE STRUCTURE TO ITS ORIGINAL CONDITION SHOULD THE AVAILABLE IMPROVISIONS PROVE TO BE UNSATISFACTORY. RESTORATION WOULD, OF COURSE, BE A MAJOR UNDERTAKING. "8. THREE COPIES OF DRAWING WX-1 DATED SEPTEMBER 5, 1967, ARE ATTACHED. THIS DRAWING SHOWS THE STRUCTURAL WORK INVOLVED IN THE INSTALLATION OF EQUIPMENT OFFERED BY BOTH TROY AND PELLERIN MILNOR. WE HAVE NOT INVESTED THE TIME REQUIRED TO PREPARE DETAILED COST ESTIMATES OF BOTH INSTALLATIONS. WORK REQUIRED FOR THE INSTALLATION OF THE TROY EQUIPMENT IS SOME THREE TO FOUR TIMES THAT REQUIRED FOR PELLERIN-MILNOR INSTALLATION WHICH IS ESTIMATED TO COST $1,680. "9. AS MENTIONED IN PARAGRAPH 2, THERE IS EXTENSIVE BOILER ROOM AND LAUNDRY PIPING UNDER THE LAUNDRY ROOM FLOOR. THE STRUCTURAL STEEL MEMBERS LOCATED BELOW THE FLOOR BEAMS, AS REQUIRED IN THE TROY INSTALLATION, WOULD CAUSE INTERFERENCE WITH PIPING AND IMPOSE ADDITIONAL COSTS FOR PIPE RELOCATION. COST OF SUCH ITEMS AS DISRUPTION IN OPERATION OF THE BOILER PLANT AND LAUNDRY HAVE NOT BEEN COMPUTED BUT WOULD ACCUMULATE TO INCREASE THE TOTAL INSTALLED COST OF THE TROY EQUIPMENT OVER THAT OF THE PELLERIN-MILNOR EQUIPMENT.'

THUS, IT IS THE POSITION OF THE VETERANS ADMINISTRATION THAT THE GOVERNMENT CANNOT BE EXPECTED, NOR REQUIRED, TO MAKE EXTENSIVE ALTERATIONS TO A BUILDING IN ORDER TO ACCOMMODATE A LOW BIDDER'S EQUIPMENT WHERE THE COST OF ALTERATIONS WOULD EXCEED THE DIFFERENCE BETWEEN THE PRICE QUOTED BY THAT BIDDER AND THE NEXT LOWEST BIDDER WHOSE EQUIPMENT DOES NOT REQUIRE SUCH ALTERATIONS FOR INSTALLATION. MOREOVER, AS ABOVE INDICATED, UNDER THE TERMS OF THE INVITATION THE COST OF NECESSARY ALTERATIONS TO ACCOMMODATE A PARTICULAR BIDDER'S EQUIPMENT WAS A FACTOR WHICH THE PROCUREMENT AGENCY WAS REQUIRED TO CONSIDER IN DETERMINING THE LOWEST RESPONSIVE BIDDER.

THE QUESTION WHETHER EXTENSIVE ALTERATIONS WERE, IN FACT, REQUIRED IN THE CASE OF YOUR EQUIPMENT NECESSARILY IS FOR DETERMINATION BY THE PROCUREMENT AGENCY WHICH IS CHARGED WITH THE RESPONSIBILITY OF SATISFYING THE GOVERNMENT'S NEEDS AT THE LOWEST OVERALL COST. MOREOVER, WE HAVE CONSISTENTLY HELD THAT WHERE, AS HERE, THERE ARE DISPUTED FACTUAL QUESTIONS, THIS OFFICE WILL ACCEPT THE ADMINISTRATIVE VERSION OF THE FACTS IN THE ABSENCE OF EVIDENCE SUFFICIENTLY CONVINCING TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS OF THE ADMINISTRATIVE REPORT. IN VIEW THEREOF, AND SINCE IT IS REPORTED THAT REPRESENTATIVES OF YOUR FIRM HAVE NOT INDICATED TO THE ADMINISTRATION IN WHAT WAY YOUR EQUIPMENT COULD BE PLACED WITHOUT RELOCATION OF THE DRAIN TROUGH, WE MUST CONCLUDE THAT THE AWARD MADE TO PELLERIN MILNOR UNDER THE CIRCUMSTANCES REPORTED IS NOT SUBJECT TO QUESTION BY OUR OFFICE. ACCORDINGLY, YOUR PROTEST IS DENIED.