B-164632, AUG. 22, 1968

B-164632, AUG. 22, 1968

TO RADIATION FACILITIES, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 13, 1968, WITH ENCLOSURES, PROTESTING THE BIDDER'S QUALIFICATIONS REQUIREMENTS UNDER INVITATION FOR BIDS NO. ARS-71-B-68, ISSUED BY AGRICULTURAL RESEARCH SERVICES (ARS), HYATTSVILLE, MARYLAND, FOR COBALT IRRADIATORS.

THE INVITATION WAS ISSUED ON MAY 17, 1968, AND INVITATIONS WERE SENT TO 16 CONCERNS, IT HAVING BEEN DETERMINED AFTER CONSULTATION WITH THE ATOMIC ENERGY COMMISSION THAT AN AMPLE NUMBER OF BIDDERS COULD MEET THE ARS REQUIREMENTS. BY TELEGRAM OF MAY 31, 1968, YOU REQUESTED THAT THE REQUIREMENTS OF THE DEPARTMENT OF TRANSPORTATION FOR SHIPPING RADIOACTIVE MATERIALS BE DELETED AND THAT ONLY THE SHIPPING REQUIREMENTS OF THE ATOMIC ENERGY COMMISSION BE RETAINED. YOU ALSO REQUESTED CLARIFICATION OF THE FOLLOWING UNDERLINED LANGUAGE APPEARING IN THE PROVISION RELATING TO THE QUALIFICATIONS OF BIDDERS:

"/A) THE GOVERNMENT HAS PREVIOUSLY EXPERIENCED CONSIDERABLE DIFFICULTY, INCONVENIENCE, AND COSTLY DELAYS IN OBTAINING THIS TYPE OF EQUIPMENT. GUARD AGAINST REPETITION OF SOME OF THESE PROBLEMS, IT HAS BEEN DETERMINED THAT IN ORDER TO QUALIFY FOR AWARD OF A CONTRACT UNDER THIS INVITATION FOR BIDS A BIDDER, IN ADDITION TO HAVING IRRADIATOR DESIGN AND CONSTRUCTION ABILITIES, MUST HAVE FACILITIES FOR FABRICATING THE COBALT 60 SOURCE AND MUST ALSO HAVE IN HIS OWN PLANT A HOT CELL CAPABLE OF LOADING THE COBALT. THE GOVERNMENT RESERVES THE RIGHT TO MAKE A PRE-AWARD ON-SITE INSPECTION OF ANY PROSPECTIVE CONTRACTOR'S PLANT TO ASSURE THAT THESE REQUIREMENTS ARE .'

THEREAFTER, THE INVITATION WAS AMENDED AS FOLLOWS:

"THIS IS TELEGRAPHIC ADDENDUM NO. 1 TO BID INVITATION NO. ARS-71-B 68 OPENING JUNE 6, 1968, FOR THREE COBALT-60 IRRADIATORS DELIVERED AND INSTALLED AT THREE LOCATIONS. PARAGRAPH 1A UNDER SPECIAL PROVISIONS AND REQUIREMENTS, PAGE 10 OF THE INVITATION, IS CLARIFIED AS FOLLOWS: IN ADDITION TO HAVING IRRADIATOR DESIGN AND CONSTRUCTION ABILITIES, BIDDER MUST ALSO HAVE FACILITIES FOR ENCAPSULATION OF THE COBALT-60 SOURCE AND ASSEMBLING IT INTO THE PROPER SOURCE ARRAY. ALL OTHER PROVISIONS OF THE INVITATION, AS WELL AS THE DATE AND HOUR FOR OPENING BIDS, REMAIN UNCHANGED.'

CONCERNING YOUR QUERY AS TO SHIPPING REQUIREMENTS AND BIDDERS' QUALIFICATIONS, YOU WERE DVISED:

"REURTEL MAY 31 RE INVITATION NO. ARS-71-B-68. TELEGRAPHIC ADDENDUM NO. 1 ISSUED TODAY TO RESTATE PROVISIONS OF SECOND SENTENCE, PARAGRAPH 1A, PAGE 10. COPY SENT YOU.

"REGARDING PARAGRAPH 1, GENERAL, PAGE 6, YOUR WIRE SUGGESTS ONLY USAEC REQUIREMENTS SHOULD BE APPLICABLE. THE REQUIREMENTS OF BOTH DEPARTMENT OF TRANSPORTATION AND USAEC APPLY.'

SEVEN BIDS WERE RECEIVED ON JUNE 6, 1968, RANGING FROM A LOW OF $51,000 TO THE HIGH BID SUBMITTED BY YOU IN THE AMOUNT OF $80,970. A CONTRACT WAS AWARDED TO THE LOW BIDDER, U.S. NUCLEAR CORPORATION, BURBANK, CALIFORNIA, ON JUNE 24, 1968. UPON REVIEW OF THE PROCUREMENT, WE FIND NO LEGAL OBJECTION TO THE USE OF THE QUESTIONED PROVISIONS OR THE SPECIFICATION REQUIREMENT FOR COMPLIANCE WITH CERTAIN SHIPPING CRITERIA.

YOU PROTEST ON THE BASIS THAT PROVISIONS RELATING TO THE QUALIFICATIONS OF BIDDERS ARE RESTRICTIVE AND ARBITRARY, AND THAT THEY DISCRIMINATE AGAINST SMALL BUSINESS "CONTRARY TO GENERAL ACCEPTED PROCUREMENT POLICIES AND GOVERNMENT REGULATIONS.'

IT IS ADMINISTRATIVELY REPORTED THAT NONE OF THE OTHER SIX BIDDERS COMPLAINED THAT THE INVITATION WAS RESTRICTIVE OR ARBITRARY. WE ARE FURTHER ADVISED THAT THE QUESTIONED PROVISIONS WERE INCLUDED BECAUSE THEY WERE NECESSITATED BY PAST EXPERIENCE WHICH RESULTED IN COSTLY DELAYS TO THE ARS RESEARCH PROGRAM. YOUR COMPANY RECENTLY COMPLETED A SIMILAR CONTRACT WITH ARS WHICH PROVIDED FOR DELIVERY OF FOUR UNITS WITHIN 150 TO 180 CALENDAR DAYS. ALTHOUGH THE 150 TO 180-DAY PERIOD WAS SPECIFIED IN YOUR BID, IT IS REPORTED TO HAVE TAKEN YOUR COMPANY MORE THAN 2 YEARS TO COMPLETE THE CONTRACT. ARS PROVIDED YOUR COMPANY WITH MAXIMUM COOPERATION SO AS TO AVOID THE NECESSITY OF A DEFAULT TERMINATION. YOUR COMPANY CONTRACTED WITH A CANADIAN FIRM,ATOMIC ENERGY OF CANADA LIMITED (AECL), TO FABRICATE AND LOAD THE COBALT SOURCES, SINCE YOU DID NOT HAVE THE EQUIPMENT TO DO THIS PART OF THE CONTRACT WORK. ON MAY 25, 1967, AFTER MANY DELAYS, YOUR COMPANY INFORMED ARS THAT THE FIRST UNIT WOULD BE READY FOR SHIPMENT TO CANADA ON JUNE 20, 1967, FOR LOADING AND THAT LL FOUR UNITS WOULD BE DELIVERED AND INSTALLED BY JULY 15, 1967. WHEN THIS WAS NOT DONE, THE ARS RADIOLOGICAL SAFETY OFFICER VISITED YOUR PLANT TO DETERMINE THE CAUSE OF DELAY. THIS OFFICER WAS ADVISED THAT THERE WOULD BE FURTHER DELAYS BECAUSE AECL WOULD NOT AGREE TO LOAD THE COBALT UNITS UNLESS THEY WERE REDESIGNED TO MEET CANADIAN BUREAU OF TRANSPORTATION SHIPPING REQUIREMENTS. THIS CAUSED A LENGTHY REDESIGN DELAY THAT WOULD NOT HAVE OCCURRED IF YOUR COMPANY HAD ADEQUATE FACILITIES. ON ANOTHER RECENT OCCASION, IT IS REPORTED, A CONTRACT WAS AWARDED TO ANOTHER FIRM TO RECHARGE TWO UNITS VITAL TO THE ARS SCREWWORM ERADICATION PROJECT. HERE AGAIN THE CONTRACTOR, EVEN THOUGH IT HAD COBALT, DID NOT HAVE THE LOADING EQUIPMENT. AS A RESULT, SEVERAL MONTHS OF VALUABLE PROGRAM TIME WAS LOST WHILE IT WAS ATTEMPTING TO HAVE ANOTHER FIRM DO THE WORK. ARS FINALLY DEFAULTED THAT FIRM AND NEGOTIATIONS WERE UNDERTAKEN WITH ANOTHER PRODUCER WHICH HAD ALL THE NECESSARY EQUIPMENT TO PERFORM SATISFACTORILY.

THE FOREGOING DEMONSTRATES THAT THE INCLUSION OF THE QUALIFICATION PROVISION IN QUESTION WAS NECESSARY TO PROTECT THE INTERESTS OF THE GOVERNMENT SO AS TO ASSURE TIMELY PERFORMANCE BY PRODUCERS WHO HAVE THE IN -HOUSE CAPABILITIES TO MEET THE GOVERNMENT'S ADVERTISED NEEDS. THE PROVISION WAS NOT INCLUDED TO DISCRIMINATE AGAINST ANY PARTICULAR PRODUCER BUT WAS INTENDED AS A MEANS OF DETERMINING THE RESPONSIBILITY OF BIDDERS TO ADEQUATELY PERFORM THE PROCUREMENT. SEE 20 COMP. GEN. 862.

THE QUALIFICATIONS OF BIDDERS AS SET FORTH ABOVE WERE IMPOSED BY THE PROCUREMENT AGENCY ON THE BASIS OF ITS PAST EXPERIENCES IN PROCURING IRRADIATORS. WHILE YOU ARGUE THAT THESE QUALIFICATION REQUIREMENTS ARE RESTRICTIVE OF COMPETITION SINCE BUT A FEW COMPANIES ARE QUALIFIED TO FABRICATE COBALT 60, WE HAVE HELD THAT LEGITIMATE RESTRICTIONS ON COMPETITION ARE PROPER WHEN THERE IS NO REASONABLE ASSURANCE THAT THE NEEDS OF THE AGENCY WILL BE MET IN THE ABSENCE OF SUCH RESTRICTIONS. THUS, IN 17 COMP. GEN. 1073, OUR OFFICE INTERPOSED NO OBJECTION TO AN INVITATION FOR THE CONSTRUCTION OF 12 VESSELS WHICH LIMITED BIDDING BY A COMPANY WITH ONLY ONE SHIPYARD TO 6 VESSELS, BUT PERMITTED A COMPANY WITH TWO SEPARATE SHIPYARDS TO BID ON THE TOTAL REQUIREMENT. SEE, ALSO, 36 COMP. GEN. 809. WHETHER THE RESTRICTIONS IN THE QUESTIONED PROVISION ARE ABSOLUTELY NECESSARY TO ASSURE PROPER CONTRACT PERFORMANCE CANNOT BE DETERMINED BY OUR OFFICE. SINCE THESE REQUIREMENTS RELATE DIRECTLY TO THE RESPONSIBILITY OF BIDDERS, THAT IS, WHETHER THEY CAN PERFORM IN A TIMELY AND EFFICIENT MANNER, AND SINCE THE PROCURING AGENCY IS IN THE BEST POSITION TO DETERMINE THE MEASURES REQUIRED TO ASSURE AWARD TO THAT BIDDER WHO CAN PERFORM MOST SATISFACTORILY, WE WILL NOT INTERPOSE OUR JUDGMENT IN THIS AREA. 42 COMP. GEN. 717, 720.

WE NOTE THAT THE SPECIFICATIONS REQUIRE THAT THE CONTRACTOR COMPLY WITH THE SHIPPING REQUIREMENTS OF BOTH THE DEPARTMENT OF TRANSPORTATION AND THE ATOMIC ENERGY COMMISSION. SINCE THERE IS INVOLVED THE CARRIAGE OF RADIOACTIVE MATERIALS, AND BOTH OF THESE AGENCIES ARE PARTICULARLY INVOLVED IN SUCH SHIPMENTS, WE FIND NO BASIS ON THE RECORD BEFORE US TO QUESTION THE REQUIREMENT FOR THE OBSERVANCE OF DUAL SHIPPING REGULATIONS.