B-165600, SEP 12, 1969

B-165600, SEP 12, 1969

BID PROTEST - AID FINANCED PROCUREMENT DECISION TO ADMINISTRATOR OF AGENCY FOR INTERNATIONAL DEVELOPMENT CONCERNING PROTEST OF RILEY STOKER CORP., AGAINST AWARD TO COMBUSTION ENGINEERING, INC. FOR FURNISHING STEAM GENERATING UNIT FOR KOREA UNDER AID LOAN. IN VIEW OF SPECIFIC PROVISION IN E.O. NO. 11223 THAT CONTRACTS RELATING TO FOREIGN ASSISTANCE MAY BE MADE WITHOUT REGARD TO 41 U.S.C. 5; IT FOLLOWS THAT SUCH CONTRACTS MAY BE MADE WITHOUT REGARD TO THE ADVERTISING REQUIREMENTS IN 41 U.S.C. 252(C). IF INSTANT PROTEST WERE BEFORE COMPTROLLER GENERAL AS DIRECT FEDERAL PROCUREMENT ACCEPTANCE OF SUCCESSFUL BID BECAUSE OF DEFICIENCY WOULD BE QUESTIONED.

TO MR. HANNAH:

THIS IS IN REFERENCE TO THE LETTER OF JANUARY 27, 1969, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT ADMINISTRATOR, EAST ASIA, FURNISHING OUR OFFICE WITH A REPORT IN REGARD TO THE PROTEST BY THE RILEY STOKER CORPORATION (RILEY) AGAINST THE AWARD OF A CONTRACT TO COMBUSTION ENGINEERING, INCORPORATED (CE), FOR FURNISHING THE STEAM GENERATING UNIT FOR KOREA'S YONGNAM THERMAL POWER STATION, ULSAN, KOREA, FINANCED UNDER AGENCY FOR INTERNATIONAL DEVELOPMENT (AID) LOAN NO. 489-H-046.

AN INVITATION FOR BIDS ON THE WORK WAS FIRST ISSUED ON DECEMBER 21, 1967. ALL FOUR BIDS SUBMITTED WERE FOUND TO BE NONRESPONSIVE. BY LETTER OF JUNE 10, 1968, THE FOUR BIDDERS WERE INVITED TO SUBMIT NEW BIDS BY JUNE 21, 1968. IN ADDITION TO A LOW BID WHICH, IT IS AGREED, IS NONRESPONSIVE, CE SUBMITTED AN ALTERNATE IDENTIFIED AS OPTION A WHICH IS FURTHER DESCRIBED BELOW. THE CONSULTING ENGINEER'S TABULATION WHICH WAS THE BASIS FOR AWARD INDICATES A TOTAL COST OF $4,193,491 UNDER RILEY'S BID AND AND $4,178,935 UNDER CE'S OPTION A BID.

THE BIDDING DOCUMENTS INCLUDED THE "BIDDER'S DATA SHEET" (BDS) ON WHICH BIDDERS WERE TO INSERT VARIOUS DESCRIPTIVE DATA IN RELATION TO THE BOILERS WHICH WOULD BE FURNISHED.

THE FOLLOWING UNSOLICITED NOTATION ENTITLED OPTION A WAS INCLUDED WITH CE'S BID:

"THE COMPANY HAD DONE ITS BEST TO PREPARE A BASE BID IN ACCORDANCE WITH THE AID REQUIREMENTS AND THE SPECIFICATIONS, HOWEVER IN PREPARING THIS BASE BID, THE COMPANY HAS MADE CERTAIN CLARIFICATIONS REGARDING THE INTENT OF THE SPECIFICATIONS.

"IF IT IS THE INTENTION OF AID TO ONLY MAKE THIS AWARD TO THAT COMPANY MAKING NO EXCEPTIONS OR CLARIFICATIONS TO THE SPECIFICATIONS, THE COMPANY CAN AGREE TO ELIMINATE ALL SUCH REFERENCES AT A TOTAL CONTRACT PRICE OF THREE MILLION, NINE HUNDRED AND THIRTY-ONE THOUSAND DOLLARS ($3,931,000.00) EUSD, WHICH PRICE INCLUDES NINE THOUSAND, NINE HUNDRED DOLLARS ($9,900.00) EUSD PAYABLE IN KOREAN WON."

THE DIFFERENCE BETWEEN CE'S BID AND ITS OPTION A OFFER IS ABOUT $100,000.

CE ALSO INSERTED IN ITS BID PAGES NUMBER 19, 19A AND 19B HEADED "INTENT". THE PURPOSE OF THE INSERTION WAS STATED TO BE AS FOLLOWS:

"IT IS THE INTENT OF THE COMPANY TO OFFER SERVICES AND EQUIPMENT AS CALLED FOR IN THE KULJIAN CORPORATION SPECIFICATION IB, K-2685, DATED SEPTEMBER 1967 AND ADDENDUM NO. 1 THRU 5. THE FOLLOWING COMMENTS AND CLARIFICATIONS WILL APPLY."

BASICALLY THE CONTENTION IN THE LETTER OF JUNE 20, 1969, FROM COUNSEL FOR RILEY (COPY ENCLOSED), IS THAT THE DESCRIPTIVE DATA IN CE'S BIDDER'S DATA SHEETS WAS SO INADEQUATE THAT THE ACCEPTANCE OF CE'S BID COULD NOT RESULT IN A BINDING CONTRACT. IT IS URGED THAT THE SPECIFICATIONS ARE OF THE PERFORMANCE TYPE AND ONLY GIVE VARIOUS MAXIMUMS OR MINIMUMS WITHIN WHICH THE BIDDER'S PRODUCT MUST FUNCTION. IN THIS CONNECTION SIX DEFICIENCIES WERE RAISED IN RILEY'S LETTER OF AUGUST 14, 1968, TO THE KOREA ELECTRIC COMPANY (KECO), ENCLOSED WITH RILEY'S PROTEST LETTER OF NOVEMBER 7, 1968 TO OUR OFFICE. SINCE THE LETTER OF JUNE 20, 1969, DOES NOT SPECIFICALLY RAISE ANY ADDITIONAL EXCEPTIONS WE REGARD THOSE LISTED ON THE CHART ON THE LAST PAGE OF THE LETTER OF AUGUST 14 AS THE ONLY ONES IN ISSUE.

THE FIRST TWO EXCEPTIONS LISTED IN RILEY'S LETTER OF AUGUST 14, 1968, WILL BE TREATED TOGETHER. FIRST IT IS URGED THAT CE TOOK AN EXCEPTION TO THE 1005 DEGREES F. STEAM TEMPERATURE REQUIREMENT IN THE SPECIFICATIONS RELATING TO THE SUPERHEATER AND THE REHEATER BY INSERTING 990 DEGREES F. ON PAGE 10, SUBPARAGRAPH Y.3.B. AND 950 DEGREES F. ON PAGE 10, SUBPARAGRAPH Y.5.C. IT IS URGED THAT THESE EXCEPTIONS APPLY TO BOTH THE BASE BID AND OPTION A BID OF CE.

THE THIRD EXCEPTION IN CE'S BID, LISTED BY RILEY IS THAT CE'S BASE BID AND OPTION A BID OFFERED 90 DECIBLES THIRD OCTAVE BAND AS THE NOISE LEVEL FOR THE FORCED DRAFT FAN WHEREAS 90 DECIBLES FOR THE SECOND OCTAVE BAND WAS REQUIRED BY THE SPECIFICATIONS.

THE LETTER OF AUGUST 14, 1968, URGES THAT THE SPECIFICATION REQUIRED 130 POUNDS PER SQUARE INCH PRESSURE DROP FOR THE SUPERHEATER AND THAT CE'S BASE BID AND OPTION A BID OFFERED 160 POUNDS PER SQUARE INCH PRESSURE DROP.

IT IS URGED IN THE LETTER OF AUGUST 14 THAT SOOTBLOWERS WERE REQUIRED BY THE SPECIFICATIONS BUT THAT CE'S BID AND OPTION A BID DID NOT INCLUDE AN OFFER TO FURNISH SOOTBLOWERS.

THE SIXTH EXCEPTION SET FORTH IN RILEY'S LETTER IS THAT THE SPECIFICATIONS REQUIRED A 20 PERCENT LOAD RATE OF CHANGE CAPABILITY AND THAT CE'S BASE BID AND OPTION A BID WERE BLANK WITH RESPECT TO THIS REQUIREMENT.

WITH RESPECT TO THE STEAM TEMPERATURE REQUIREMENT FOR THE SUPERHEATER OUTLET, ADDENDUM NO. 2 TO SPECIFICATION NO. 1B, PAGE 6, PROVIDED AS FOLLOWS:

"A) SUPERHEATER OUTLET 1BS/HR PSIG 0F.T.T.

AT 2 HR PEAK 1,521,000 2080 1005

AT M C R 1,350,000 2080 1005

AT 200 MW 1,296,710 2080 1005

AT 150 MW 929,070 2080 1005

AT 100 MW 609,910 2080 1005"

A SIMILAR PROVISION APPEARS WITH RESPECT TO THE REHEATER.

CE'S PREDICTED PERFORMANCE UNDER THE LOAD CONDITIONS STATED IN THE BDS IN PARAGRAPH Y.3.B. ON PAGE 10 AND PARAGARAPH Y.5.C. ON PAGE 10 WERE AS FOLLOWS RELATING TO THE SUPERHEATER AND THE REHEATER, RESPECTIVELY:

"Y PREDICTED PERFORMANCE

LOAD 609,910 29,070 M C R

3.B. TEMPERATURE 0F 990 1005 1005

5.C. TEMPERATURE TEMP 9501005 1005"

ON PAGE 16 IN THE GUARANTEED PERFORMANCE SECTION, PARAGRAPH CC.6, CE'S BID PROVIDED THAT THE AVERAGE STEAM TEMPERATURE LEAVING THE SUPERHEATER AT A STEADY LOAD FROM 750 K 1BS/HR TO 139.2 K 1BS/HR WILL BE 1005 DEGREES F. PLUS OR MINUS 10 DEGREES F. A SIMILAR INSERTION WAS MADE IN REGARD TO THE REHEATER.

PAGE 2 OF ADDENDUM NO. 5 OF THE PROJECT SPECIFICATIONS UNDER THE PERFORMANCE GUARANTEES PROVIDED AS FOLLOWS WITH REGARD TO THE SOUND PRESSURE LEVEL ABOUT THE FORCE DRAFT FAN:

"THE SOUND PRESSURE LEVEL RE 0.0002 MICROBARS SHALL NOT EXCEED 90 DB FOR THE 2ND OCTAVE BAND AT 5 FEET IN ANY DIRECTION ABOUT EITHER FORCED DRAFT FAN."

ON PAGE 16, PARAGRAPH CC.10, CE OFFERED 90 DB FOR THE THIRD OCTAVE BAND ONLY.

PAGE 8 OF ADDENDUM NO. 2 OF THE PROJECT SPECIFICATIONS PROVIDED AS FOLLOWS:

"15) THE PRESSURE DROP THROUGH THE SUPERHEATERS SHALL NOT EXCEED 130 PSI AND THE PRESSURE DROP THROUGH THE ECONOMIZER SHALL NOT EXCEED 20 PSI EXCLUDING ENTRANCE LOSS."

ON PAGE 10A OF ITS BID, CE INSERTED THE FOLLOWING FIGURES FOR THE PREDICTED PERFORMANCE UNDER SUBPARAGRAPHS Y.2 AND Y.3.A:

"Y. PREDICTED PERFORMANCE LOAD 2 HOUR PEAK

609,.10

2. DRUM PRESSURE PSIG* 2240

3. SUPERHEATER OUTLET STEAM

A. PRESSURE PSIG 2808"

*POUNDS PER SQUARE INCH GAGE

THE DIFFERENCE BETWEEN Y.2 AND Y.3.A. IS 160 PSIG; THEREFORE, IT IS URGED THAT CE DID NOT COMPLY WITH THE REQUIREMENT THAT THE PRESSURE DROP THROUGH THE SUPERHEATER SHALL NOT EXCEED 130 PSIG. ON PAGE 10, UNDER MCR, CE INSERTED 2210 PSIG AS THE DRUM PRESSURE AND 2080 PSIG AS THE SUPERHEATER OUTLET STEAM PRESSURE WHICH INDICATES A PRESSURE DROP OF 130 PSIG.

PARAGRAPH 11A, ON PAGE 10 OF THE PROJECT SPECIFICATIONS PROVIDED AS FOLLOWS:

"A. THE MANUFACTURER SHALL FURNISH DIAMOND, VULCAN, OR APPROVED EQUAL SOOT BLOWERS FOR THE BOILER, FURNACE, SUPERHEATERS, REHEATER, ECONOMIZER, GAS RECIRCULATION FAN, AND AIR HEATER, COMPLETE WITH ALL PIPING AND ACCESSORIES, INCLUDING VALVES, CONTROLS, AND CONTROL PANELS AS REQUIRED FOR GOOD OPERATION."

ON PAGE 6, PARAGRAPH R.2.C., CE INSERTED "NONE" IN THE SPACE WHERE BIDDERS WERE TO INSERT THE NUMBER OF SOOTBLOWERS FOR THE ECONOMIZER.

WITH RESPECT TO THE LOAD RATE OF CHANGE CAPABILITY, PAGE 8 OF ADDENDUM NO. 2 TO THE PROJECT SPECIFICATIONS PROVIDED AS FOLLOWS:

"7) THE STEAM GENERATING UNIT SHALL BE DESIGNED AND GUARANTEED TO BE CAPABLE OF BEING INCREASED AND/OR DECREASED IN LOAD AT A RATE OF 20% OF THE INITIAL LOAD IN ANY ONE (1) MINUTE WHILE MAINTAINING THE FOLLOWING:

A) MAIN STEAM PRESSURE WITHIN PLUS OR MINUS 2%

B) EXCESS AIR IN THE FURNACE WITHIN PLUS OR MINUS 5%

C) DRUM LEVEL WITHIN PLUS OR MINUS THREE (3) INCHES."

ON PAGE 16, PARAGRAPH CC.8, CE INSERTED "SEE INTENT" IN THE BLANK WHERE THE BIDDER WAS TO INSERT THE LOAD RATE OF CHANGE CAPABILITY. BY "SEE INTENT," CE WAS REFERRING TO THE ADDITIONAL PAGES IT INCLUDED WITH ITS BID AND PAGE 19A OF THIS MATERIAL PROVIDED AS FOLLOWS:

"THE STEAM GENERATING UNIT IS CAPABLE OF BEING INCREASED OR DECREASED IN LOAD AT A RATE OF 20% OF THE INITIAL LOAD IN ANY ONE MINUTE WITH VARIATION OF STEAM PRESSURE, DRUM LEVEL AND EXCESS AIR WITHIN ACCEPTABLE OPERATING LIMITS. THE EXACT AMOUNT OF THESE VARIATIONS IS DEPENDENT ON THE CONTROL SYSTEM WHICH WILL BE SUPPLIED BY OTHERS AND THEREFORE IS NOT THE RESPONSIBILITY OF THE COMPANY."

KECO'S RECOMMENDATION THAT AWARD BE MADE TO CE WAS APPROVED BY AID ON NOVEMBER 7, 1968. ABOUT A WEEK AFTER ITS APPROVAL, AID WAS ADVISED THAT RILEY HAD PROTESTED THIS MATTER TO OUR OFFICE. ON NOVEMBER 15, 1968, AID DETERMINED THAT AWARD OF THIS CONTRACT SHOULD NOT BE DELAYED SINCE TIMELY DELIVERY OF THE BOILER WAS CRITICAL TO THE IMPORTANT YONGNAM PROJECT. NOVEMBER 15, 1968, AID ADVISED OUR OFFICE THAT IT WOULD NOT ASK KECO OR THE CONSULTING ENGINEERS TO STOP PROCUREMENT ACTION.

THE VIEWS OF AID AND THE CONSULTING ENGINEERS (KULJIAN) WITH RESPECT TO RILEY'S TECHNICAL CONTENTIONS ARE AS FOLLOWS:

"8. TURNING TO EACH ENGINEERING SPECIFICATION IN THIS CHART OR TABLE, RILEY ASSERTED FIRST THAT AS TO STEAM TEMPERATURE AT 100MW, THE IFB HAD CALLED FOR 1005 DEGREES F PLUS OR MINUS 10 DEGREES F, BUT THE COMBUSTION BASE BID AND OPTION A OFFERED ONLY 990 AND 950 DEGREES F AT LOW LOADS. (SEE ITEMS Y.3.B. AND Y.5.C. ON PAGE 10 OF COMBUSTION'S BIDDER'S DATA SHEETS.)

"KULJIAN, IN RESPONDING, NOTED THAT OPTION A CLEARLY CALLED FOR COMPLIANCE WITH THE SPECIFICATIONS AND THUS WAS CONSIDERED A BINDING OFFER ON THIS ITEM TO COMPLY WITH THE 1005 DEGREES REQUIREMENT OF THE SPECIFICATIONS. MOREOVER, KULJIAN INDICATED TO A.I.D, *** THAT WHILE IN ITS BASE BID COMBUSTION HAD NOT NOTED THIS ISSUE AS AN EXCEPTION ON PAGES 19, 19A, AND 19B, OPTION A, IN ITS SWEEPING OFFER TO COMPLY, DID NOT LIMIT ITSELF TO CORRECTING EXCEPTIONS, CLARIFICATIONS OR OMISSIONS ON THOSE THREE PAGES ALONE.

"FURTHER, KULJIAN INDICATED TO A.I.D. THAT COMBUSTION ON THE BASE BID ALONE COMPLIED WITH ALL OTHER TEMPERATURE LOAD REQUIREMENTS AND MOST IMPORTANT, SUBMITTED DATA COMPLYING WITH THE GUARANTEED PERFORMANCE REQUIREMENT ON ALL ITEMS AT THE IFB PRESCRIBED LEVELS. (SEE ITEMS CC.6. AND CC.7. ON PAGE 16 OF COMBUSTION'S BIDDER'S DATA SHEETS.)

"9. RILEY'S OBJECTION TO THE FORCED DRAFT FAN NOISE LEVEL WAS THAT COMBUSTION'S BIDS OFFERED ONLY THE THIRD OCTAVE BAND RATHER THAN THE REQUIRED SECOND OCTAVE BAND. THIS EXCEPTION WAS INCLUDED IN COMBUSTION'S PAGES 19, 19A, AND 19B.

"KULJIAN'S RESPONSE WAS THAT OPTION A, CONTRARY TO RILEY'S ASSERTION, REMOVED THE EXCEPTION AND OFFERED COMPLIANCE AT THE IFB REQUIRED SECOND BAND.

"10. AS TO THE ITEM ON SUPERHEATER PRESSURE DROP, RILEY ASSERTED THAT COMBUSTION OFFERED 160 PSI RATHER THAN THE REQUIRED 130 PSI MAXIMUM.

"KILJIAN INDICATED THAT RILEY HAD MISCONSTRUED THE SPECIFICATION AND COMBUSTION'S RESPONSE IN THE BASE BID. THE SPECIFICATION CALLED FOR 130 PSI AT MCR ONLY; COMBUSTION'S DATA ON THE BIDDER'S DATA SHEET, PAGE 10, ITEMS Y.2 AND Y.3.A, AND ON PAGE 16 ITEM CC.9. INDICATED IT WAS COMPLYING WITH THIS REQUIREMENT. IT WAS ONLY AT TWO HOUR PEAK THAT COMBUSTION'S DATA (ITEM Y.2. AND Y.3.A. ON PAGE 10A) INDICATED 160 PSI. ACCORDINGLY, KULJIAN REJECTED THIS ASSERTED DEFICIENCY WITHOUT RELIANCE ON OPTION A.

"11. RILEY'S NEXT ALLEGED DEFICIENCY WAS THAT THE SPECIFICATIONS CALLED FOR SOOT BLOWERS AND COMBUSTION'S BID INDICATED IT WAS SUPPLYING NONE. *** COMBUSTION'S BASE BID (PAGE 6, SPECIFICATION NO. 1B) INDICATED NO SOOT BLOWERS FOR THE ECONOMIZER IN ITS SUBMISSION.

"KULJIAN INDICATED THAT BY OPTION A, COMBUSTION WOULD FURNISH SOOT BLOWERS IF REQUIRED. COMBUSTION ACCEPTED THIS POSITION (AFTER BID) BUT ALSO POINTED OUT THAT IN ITS EXPERIENCE SOOT BLOWERS ARE NOT REQUIRED FOR GOOD OPERATION. THE SPECIFICATION APPEARS TO LEAVE OPEN TO JUDGMENT WHETHER SOOT BLOWERS ARE REQUIRED FOR GOOD OPERATION OF EACH OF THE NAMED PIECES OF EQUIPMENT."

WITH RESPECT TO THE LOAD RATE OF CHANGE CAPABILITY, AID'S REPORT STATES AS FOLLOWS:

"3. THE THIRD ASSERTED DEFICIENCY IN RILEY'S AUGUST 14 LETTER CONCERNED THE LOAD-RATE-OF-CHANGE CAPABILITY. RILEY ASSERTED THAT ON PAGE 16, SPECIFICATION NO. 18 OF THE BIDDER'S DATA SHEET, SECTION CC, ITEM 8, COMBUSTION HAD INSERTED THE BLANK PROVIDED IN THE REQUIREMENT 'LOAN RATE CHANGE CAPABILITY WILL BE PERCENT A MINUTE,' THE WORDS 'SEE INTENT.' RILEY ARGUED THAT THIS WAS INAPPROPRIATE AND THAT THE WORDS 'SEE EXCEPTION' SHOULD HAVE BEEN USED. "ON ITS THREE PAGES NUMBERED 19, 19A, AND 19B, AND ENTITLED 'INTENT', COMBUSTION HAD STATED WITH REFERENCE TO THIS ITEM 'THE STEM GENERATING UNIT IS CAPABLE OF BEING INCREASED OR DECREASED IN LOAD AT A RATE OF 20% OF THE INITIAL LOAD IN ANY ONE MINUTE WITH VARIATION OF STEAM PRESSURE, DRUM LEVEL AND EXCESS AIR WITHIN ACCEPTABLE OPERATING LIMITS. THE EXACT AMOUNT OF THESE VARIATIONS IS DEPENDENT ON THE CONTROL SYSTEM WHICH WILL BE SUPPLIED BY OTHERS AND THEREFORE IS NOT THE RESPONSIBILITY OF THE COMPANY.' RILEY'S FINAL ASSERTED DEFICIENCY ON PAGE 3 OF ITS AUGUST 14 LETTER WAS THAT IN VIEW OF THESE FACTS, COMBUSTION WAS NOT MEETING THE TWENTY PERCENT FIGURE REQUIRED BY THE SPECIFICATIONS. "KULJIAN'S RESPONSE *** TO THE FIRST OF THESE CONTENTIONS WAS THAT THE WORDS 'SEE INTENT' CLEARLY REFERRED TO THOSE PAGES CONTAINING CERTAIN OF COMBUSTION'S EXCEPTIONS, CLARIFICATIONS AND COMMENTS. IN ANY EVENT, KULJIAN CONCLUDED THAT OPTION A OVERCAME THE EXCEPTION TAKEN ON PAGE 19A AND PROVIDED FOR COMBUSTION'S ACCEPTANCE, AT A MINIMUM, OF THE TWENTY PERCENT FIGURE FOR LOAD-RATE-OF-CHANGE CAPABILITY AS REQUIRED."

THE BASIC LEGAL ARGUMENT IN THE LETTER OF JUNE 20, 1969, FROM COUNSEL FOR RILEY IS THAT THE INSTANT PROCUREMENT SHOULD BE TREATED IN THE SAME MANNER AS IF IT WERE A DIRECT FEDERAL PROCUREMENT AND THAT THE RULES GOVERNING SUCH PROCUREMENTS SHOULD APPLY IN THIS CASE. IN THIS CONNECTION IT IS URGED THAT OUR PRIOR DECISIONS WHEREIN IT WAS HELD THAT THE GENERAL RULES APPLICABLE TO DIRECT FEDERAL PROCUREMENTS DO NOT APPLY IN AID-FINANCED PROCUREMENTS SHOULD BE RECONSIDERED. THE BASIS FOR THIS CONTENTION IS AS FOLLOWS:

"THE PRESIDENT WAS EMPOWERED UNDER THE FOREIGN ASSISTANCE ACT TO WAIVE THE APPLICATION OF SPECIFIC LAWS IN FURTHERANCE OF THE POLICIES OF THAT ACT. 22 U.S.C. SEC. 2393 (SUPP. IV, 1968). HE HAS EXERCISED THIS AUTHORITY BY EXECUTIVE ORDER NO. 11223, 30 FED. REG. 6635, MAY 12, 1965, BUT HE HAS NOT WAIVED THE FEDERAL PROCUREMENT PROVISIONS OF TITLE 41 WITH RESPECT TO AID-FINANCED PROCUREMENT. THE EXECUTIVE ORDER DOES INDEED WAIVE SEVERAL PROVISIONS OF TITLE 41, SECS. 255, 5, 8, 10A, 13, 254(C). WAIVER OF SIX SECTIONS OF TITLE 41 SURELY MEANS THAT THE OTHER SECTIONS OF TITLE 41 HAVE NOT BEEN WAIVED AND ARE APPLICABLE TO AID. THESE INCLUDE THE SECTIONS SETTING FORTH CRITERIA FOR COMPETITIVE PROCUREMENT. CONSEQUENTLY, ALL FEDERAL PROCUREMENT REGULATIONS IMPLEMENTING THE REMAINING SECTIONS OF TITLE 41 ARE APPLICABLE TO AID. ***."

SEVERAL OF OUR DECISIONS DEALING WITH THE EFFECT OF AN OVERALL OFFER TO COMPLY ON OMISSIONS OF DESCRIPTIVE DATA AND SPECIFIC DEVIATIONS IN A BIDDER'S DESCRIPTIVE DATA FROM SPECIFICATION REQUIREMENTS ARE THEN CITED AND IT IS URGED THAT IN VIEW OF THESE DECISIONS CE'S BID WAS NONRESPONSIVE. IT IS URGED ON PAGE 14 OF THE LETTER OF JUNE 20 THAT THE PENALTIES PROVISION IN THE SUPPLEMENTAL GENERAL CONDITIONS ARE SPECIFICALLY GEARED TO THE DATA IN THE BIDDER'S DATA SHEET AND THAT THIS FURTHER INDICATES THAT THE PROCURING ACTIVITY NEEDED THIS DATA "TO TELL HOW A BIDDER WILL PERFORM: THE PENALTIES ARE EXPLICITLY KEYED TO DATA TO BE PROVIDED BY THE BIDDER ON THE BDS." AN ARGUMENT IS MADE THAT OUR OFFICE IS REQUIRED TO OBJECT TO THE AWARD TO CE AND THAT THIS AWARD SHOULD BE CANCELLED.

EXECUTIVE ORDER NO. 11223, MAY 12, 1965, 30 F.R. 6635, CITED IN THE LETTER OF JUNE 20, 1969, PROVIDES AS FOLLOWS IN PERTINENT PART:

"BY VIRTUE OF THE AUTHORITY VESTED IN ME BY SECTION 633 OF THE FOREIGN ASSISTANCE ACT OF 1961, AS AMENDED, 75 STAT. 454 (22 U.S.C. 2393) (THIS SECTION), IT IS HEREBY DETERMINED THAT, TO THE EXTENT HEREINAFTER INDICATED, THE PERFORMANCE OF FUNCTIONS AUTHORIZED BY THAT ACT, AS AMENDED (THIS CHAPTER), AND ANY PREDECESSOR LEGISLATION, WITHOUT REGARD TO THE LAWS SPECIFIED IN THE NUMBERED SUBDIVISIONS OF SECTIONS 1 AND 2 OF THIS ORDER AND WITHOUT REGARD TO CONSIDERATION AS SPECIFIED IN SECTIONS 3 AND 4 OF THIS ORDER WILL FURTHER THE PURPOSES OF THE FOREIGN ASSISTANCE ACT OF 1961, AS AMENDED (THIS CHAPTER):

"SECTION 1.

"(4) SECTION 3709 OF THE REVISED STATUTES, AS AMENDED (41 U.S.C. 5) (SECTION 5 OF TITLE 41, PUBLIC CONTRACTS)."

IN 41 U.S.C. 5 FORMAL ADVERTISING IS SPECIFIED AS THE MEANS FOR ENTERING INTO CONTRACTS FOR SUPPLIES OR SERVICES FOR THE GOVERNMENT UNLESS OTHERWISE PROVIDED BY LAW. SECTION 310(C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 41 U.S.C. 260(B), PROVIDES THAT A REFERENCE IN ANY ACT TO THE APPLICABILITY OF 41 U.S.C. 5, SHALL BE DEEMED TO BE A REFERENCE TO SECTION 302(C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 41 U.S.C. 252(C). THIS SECTION OF THE ACT DEALS WITH THE ADVERTISING REQUIREMENTS FOR PURCHASES AND CONTRACTS FOR SUPPLIES AND SERVICES AND THE EXCEPTIONS THERETO. IN VIEW OF THE SPECIFIC PROVISION IN EXECUTIVE ORDER 11223, THAT CONTRACTS RELATING TO FOREIGN ASSISTANCE FUNCTIONS MAY BE MADE WITHOUT REGARD TO THE REQUIREMENTS OF 41 U.S.C. 5, IT WOULD FOLLOW THAT THIS TYPE OF CONTRACT MAY ALSO BE MADE WITHOUT REGARD TO THE REQUIREMENTS OF 41 U.S.C. 252(C) AND REGULATIONS PROMULGATED PURSUANT THERETO. IN VIEW OF THE FOREGOING WE ADHERE TO OUR PRIOR DECISIONS TO THE EFFECT THAT AID IS NOT BOUND BY THE GENERAL RULES WHICH GOVERN DIRECT FEDERAL PROCUREMENTS. ACCORDINGLY, WE FIND NO BASIS FOR DISTURBING THE AWARD.

THE OFFER IN OPTION A TO FURNISH WHAT WAS REQUIRED FOR THE ADDITIONAL CONSIDERATION STATED THEREIN MAKES THIS CASE SOMEWHAT DIFFERENT FROM THE USUAL CASE WHERE WE HAVE CONSIDERED THE EFFECT OF AN OVERALL OFFER TO COMPLY ON AN OMISSION OR DEVIATION FROM DESCRIPTIVE DATA REQUIREMENTS. HOWEVER, DESPITE OPTION A THERE IS SOME QUESTION WHETHER, IN VIEW OF SOME OF THE DEFICIENCIES, CE'S BID WOULD HAVE BEEN CONSIDERED AS RESPONSIVE UNDER THE RULES APPLICABLE TO DIRECT FEDERAL PROCUREMENTS.

FOR EXAMPLE, WITH REGARD TO THE SOOTBLOWERS, CE INSERTED "NONE" AS THE NUMBER OF SOOTBLOWERS WHICH WOULD BE FURNISHED FOR THE ECONOMIZER. APPARENTLY WAS THE VIEW OF THE CONSULTING ENGINEERS THAT UNDER OPTION A, CE WAS REQUIRED TO FURNISH SUCH SOOTBLOWERS AS MAY BE NECESSARY AND THAT OPTION A CURED ANY DEFECTS IN CE'S BID WITH REGARD TO THE SOOTBLOWERS. THIS REGARD AID'S REPORT STATES AS FOLLOWS:

"ONLY WITH REGARD TO THE SOOT BLOWERS WAS THERE NO FIGURE OR NUMBER REQUIREMENT IN THE IFB. AS DISCUSSED ABOVE, ONE CAN PLAINLY CONCLUDE FROM THE LANGUAGE OF THE SPECIFICATION FOR SOOT BLOWERS THAT IT WAS LEFT TO THE BIDDER'S DISCRETION AS TO WHETHER GOOD OPERATION OF EACH PIECE OF EQUIPMENT LISTED IN THIS SPECIFICATION ITEM REQUIRED ANY SOOT BLOWERS. THE FACT THAT NO PARTICULAR NUMBER OF SOOT BLOWERS WAS STATED IN THE IFB STRENGTHENS THIS ARGUMENT. IN ANY EVENT, EVEN IF THE IFB IS INTERPRETED TO REQUIRE SOME SOOT BLOWERS, IT IS CLEAR FROM OPTION A THAT THIS BIDDER WAS PREPARED TO INCLUDE SUCH NUMBER AS WOULD BE REQUIRED."

IT IS ALSO AID'S VIEW THAT NONE OF THE OTHER OF THE EXCEPTIONS OR DEVIATIONS IN CE'S BID WENT TO THE QUESTIONS OF "WHETHER" OR "HOW" A BIDDER WOULD MEET THE REQUIREMENTS OF THE SPECIFICATIONS SINCE, QUOTING FROM AID'S REPORT, "THE IFB ITSELF SET UP THE FIGURES WHICH HAD TO BE MET AND NO DRAWINGS OR DATA ON WHICH A JUDGMENT OF COMPLIANCE WAS NECESSARILY PREDICATED WERE INVOLVED." AID ARGUES THAT CE'S BID WOULD BE CONSIDERED AS RESPONSIVE EVEN UNDER THE RULES APPLICABLE TO DIRECT FEDERAL PROCUREMENTS.

AT LEAST WITH RESPECT TO THE SOOTBLOWERS QUESTION WE TAKE ISSUE WITH AID'S VIEW THAT THERE WOULD BE NO PROBLEM REGARDING THE RESPONSIVENESS OF CE'S BID UNDER THE RULES APPLICABLE TO DIRECT FEDERAL PROCUREMENTS. THE NUMBER OF SOOTBLOWERS WHICH A BIDDER MUST FURNISH UNDOUBTEDLY WOULD HAVE A MATERIAL EFFECT ON THE PRICE OF A BID. THERE IS NO QUESTION THAT CE'S BID LEAVES OPEN HOW MANY SOOTBLOWERS, IF ANY, WOULD BE FURNISHED FOR THE ECONOMIZER AND THERE IS NOTHING ON THE FACE OF OPTION A WHICH WOULD CURE THIS DEFECT. MOREOVER, IT IS CONCEDED THAT THERE IS NOTHING IN THE SPECIFICATIONS WHICH INDICATES HOW MANY SOOTBLOWERS WERE REQUIRED FOR THE ECONOMIZER. SOOTBLOWERS APPARENTLY ARE CONSIDERED NECESSARY FOR THE ECONOMIZER AND CE AGREED AFTER BID OPENING TO FURNISH THEM. IT IS OUR VIEW THAT CE'S BID, AT BEST, IS AMBIGUOUS WITH REGARD TO FURNISHING SOOTBLOWERS FOR THE ECONOMIZER AND THAT TO CURE THIS DEFICIENCY IN CE'S BID IT WAS NECESSARY TO OBTAIN CLARIFICATION OF THIS MATTER AFTER BID OPENING. IN A SITUATION WHICH IS ANALOGOUS TO THIS CASE IT WAS HELD THAT WHERE AN AMBIGUOUS BID WAS SUBJECT TO VARIOUS INTERPRETATIONS BECAUSE OF CERTAIN QUALIFICATIONS IN THE BID WHICH COULD NOT BE REGARDED AS IMMATERIAL, CLARIFICATION OF THE BID AFTER BID OPENING SHOULD NOT BE PERMITTED AND THAT SUCH A BID WAS PROPERLY REJECTED. SEE B-159691, MARCH 6, 1967. IF THE PRESENT RECORD WERE BEFORE OUR OFFICE IN A PROTEST INVOLVING A DIRECT FEDERAL PROCUREMENT, WE WOULD CONCLUDE THAT ACCEPTANCE OF CE'S OPTION A BID WOULD NOT BE IN ACCORDANCE WITH THE RULES GOVERNING FORMALLY ADVERTISED PROCUREMENTS.