B-166788, JUL. 31, 1969

B-166788: Jul 31, 1969

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FOR FURNISHING COTTON BAKERY PADS TO GENERAL SERVICES ADMINISTRATION ON BASIS THAT SPECIFICATIONS WERE RESTRICTIVE AND LIMITED TO ONE MANUFACTURER. IN VIEW OF ADMINISTRATIVE REPORT IT CANNOT BE CONCLUDED THAT SPECIFICATIONS WERE RESTRICTIVE. GAO WILL OVERTURN SUCH ADMINISTRATIVE DETERMINATION ONLY WHERE CLEAR ABUSE OF DISCRETION RESERVED TO CONTRACTING OFFICERS IS SHOWN. TO THE FRED EHRICK COMPANY: REFERENCE IS MADE TO YOUR LETTER DATED APRIL 24. ON THE GROUNDS THAT THE SPECIFICATIONS WERE UNDULY RESTRICTIVE. ALTHOUGH THE INVITATION WAS FURNISHED TO 54 PROSPECTIVE BIDDERS. THE ONLY BID RECEIVED WAS FROM PANHANDLER. AWARD WAS MADE TO PANHANDLER. WHICH IS APPLICABLE TO THE INSTANT PROCUREMENT.

B-166788, JUL. 31, 1969

BID PROTEST - RESTRICTIVE SPECIFICATIONS DECISION DENYING PROTEST OF THE FRED EHRICK COMPANY AGAINST AWARD TO PANHANDLER, INC., FOR FURNISHING COTTON BAKERY PADS TO GENERAL SERVICES ADMINISTRATION ON BASIS THAT SPECIFICATIONS WERE RESTRICTIVE AND LIMITED TO ONE MANUFACTURER. IN VIEW OF ADMINISTRATIVE REPORT IT CANNOT BE CONCLUDED THAT SPECIFICATIONS WERE RESTRICTIVE. GAO WILL OVERTURN SUCH ADMINISTRATIVE DETERMINATION ONLY WHERE CLEAR ABUSE OF DISCRETION RESERVED TO CONTRACTING OFFICERS IS SHOWN.

TO THE FRED EHRICK COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED APRIL 24, 1969, PROTESTING THE AWARD OF A CONTRACT UNDER GENERAL SERVICES ADMINISTRATION (GSA), REGION 3, INVITATION FOR BIDS NO. FPNGA-G-18634-A-4-21-69, ON THE GROUNDS THAT THE SPECIFICATIONS WERE UNDULY RESTRICTIVE.

THE SUBJECT INVITATION REQUESTED BIDS FOR A REQUIREMENTS CONTRACT FOR THE SUPPLY OF FSC CLASS 7330, COTTON BAKERY PADS, THROUGH SEPTEMBER 30, 1969. ALTHOUGH THE INVITATION WAS FURNISHED TO 54 PROSPECTIVE BIDDERS, THE ONLY BID RECEIVED WAS FROM PANHANDLER, INC., AT A UNIT PRICE OF $0.4875 EACH. AWARD WAS MADE TO PANHANDLER, INC. ON APRIL 23, 1969.

YOU PROTEST THAT MILITARY SPECIFICATION MIL-P-40154A, DATED JULY 31, 1968, WHICH SUPERSEDED MILITARY SPECIFICATION MIL-P-40154, DATED NOVEMBER 15, 1960, AND WHICH IS APPLICABLE TO THE INSTANT PROCUREMENT, IS RESTRICTIVE OF COMPETITION BECAUSE IT "LIMITS THE MANUFACTURER TO THE PAD MANUFACTURED BY PANHANDLER, INC. * * *" YOU STATE THAT THE NEW SPECIFICATION REQUIRES THAT THE FACE OF THE BAKERY PAD BE MADE OF FLAMEPROOF KNITTED TERRY CLOTH AND THAT NONE OF THE APPROVED SOURCES FOR FIRE RETARDANT TREATMENTS SET OUT IN THE SPECIFICATION ARE CAPABLE OF COMPLYING WITH THIS REQUIREMENT. YOU FURTHER STATE THAT DYERSBURG MILLS OF DYERSBURG, TENNESSEE, PANHANDLER, INC.'S SUPPLIER, WOULD NOT GIVE YOU A REALISTIC DELIVERY DATE. FINALLY, AS ADDITIONAL EVIDENCE OF THE RESTRICTIVENESS OF THE NEW SPECIFICATION, YOU ENCLOSE A 1964 LETTER FROM PANHANDLER, INC., TO YOUR COMPANY, THREATENING LEGAL ACTION FOR ALLEGED PATENT INFRINGEMENT, STATING THAT UNTIL ISSUANCE OF THE NEW SPECIFICATION YOUR COMPANY WAS ABLE TO MANUFACTURE ACCEPTABLE PADS WITHOUT INFRINGING THE PANHANDLER PATENT, BUT THAT THE NEW SPECIFICIATION SO CLOSELY FOLLOWS THE PANHANDLER PATENT THAT NO VARIATIONS ARE POSSIBLE SO THAT ANY MANUFACTURER OTHER THAN PANHANDLER WILL BE SUBJECT TO A SUIT FOR PATENT INFRINGEMENT. YOU CONCLUDE THAT,"THE REVISED SPECIFICATION DOES NOT IMPROVE THE PRODUCT PROCURED AND RESULTS IN AN ITEM THAT CAN ONLY BE OBTAINED FROM A SINGLE SOURCE WHICH WE BELIEVE IS AGAINST PUBLIC POLICY.'

THE REPORT FURNISHED OUR OFFICE BY THE GSA STATES WITH REGARD TO THE REASONS FOR THE SPECIFICATION REVISION AS FOLLOWS:

"THE SPECIFICATION APPLICABLE TO THIS PROCUREMENT WAS REVISED IN JULY 1968. THE IMPORTANT CHANGES WERE IN THE TYPE OF CLOTH TO BE USED FOR THE FACE OF THE PAD AND IN THE FLAMMABILITY TESTS. THE EARLIER SPECIFICATION * * * PROVIDED THAT THE FACE AND BACK OF THE PAD BE MADE OF APPROPRIATE NON-TOXIC FABRIC * * *. BECAUSE, HOWEVER, IT WAS FOUND THAT TERRYCLOTH PROVIDED GREATER TRACTION AND, FOR THAT REASON, A BETTER GRIP WHICH IS IMPORTANT IN HANDLING HOT PANS AND OTHER BAKING UTENSILS, THE CURRENT SPECIFICATION * * * REQUIRES THAT THE FACE OF THE PAD SHALL BE TERRYCLOTH OR TERRYKNIT TYPE OF FABRIC * * *. HOWEVER, THERE IS NO REQUIREMENT THAT THE FABRIC BE OF A PARTICULAR MANUFACTURE OR DESIGN. IT IS QUICKLY APPARENT FROM AN EXAMINATION OF BAKERY PADS WITH AND WITHOUT A TERRYCLOTH FACE THAT THE FORMER IS SUPERIOR * * *.'

THE REPORT FURTHER STATES THAT THE LIST OF APPROVED SOURCES LISTED IN THE SPECIFICATION IS A LIST OF FIRMS WHICH MANUFACTURE CHEMICALS USED TO RETARD FLAMES, NOT A LIST OF FIRMS ENGAGED IN FLAMEPROOFING, AND THAT REPUTABLE TRADE PUBLICATIONS LIST 56 COMPANIES CLAIMING THE ABILITY TO FLAMEPROOF COTTON CLOTH AND 12 COMPANIES WHICH MANUFACTURE TERRYCLOTH. AN INDICATION OF THE ABILITY OF COMPANIES OTHER THAN PANHANDLER, INC. TO FURNISH PADS MEETING THE REVISED SPECIFICATION, GSA FURNISHED A SAMPLE OF A FLAMEPROOF TERRYCLOTH PAD SUPPLIED BY YOUR COMPANY UNDER ANOTHER CONTRACT WHICH REPORTEDLY WAS ACCEPTED BY THE GOVERNMENT AS MEETING THE REVISED SPECIFICATION REQUIREMENT.

ON THE QUESTION OF POTENTIAL PATENT INFRINGEMENT, THE REPORT STATES THAT,"NEITHER EHRICK NOR PANHANDLER HAS CITED ANY BASIS FOR A CLAIM OF POSSIBLE PATENT INFRINGEMENT BY THE LATTER IN THE EVENT THAT EHRICK MANUFACTURES FOR THE UNITED STATES A BAKERY PAD WHICH MEETS SPECIFICATION REQUIREMENTS.'

ON THE BASIS OF THE PRESENT RECORD, WE CANNOT CONCLUDE THAT THE SPECIFICATION OF WHICH YOU COMPLAIN IS UNDULY RESTRICTIVE OF COMPETITION. THE DRAFTING OF SPECIFICATIONS TO MEET THE MINIMUM NEEDS OF THE GOVERNMENT IS PRIMARILY A FUNCTION OF THE ADMINISTRATIVE AGENCY AS THAT AGENCY IS UNIQUELY KNOWLEDGEABLE AS TO WHAT WILL SERVE THE GOVERNMENT'S MINIMUM NEEDS IN A GIVEN INSTANCE. ACCORDINGLY, OUR OFFICE WILL OVERTURN SUCH DETERMINATIONS ONLY WHERE A CLEAR ABUSE OF THE DISCRETION RESERVED TO THE CONTRACTING OFFICIALS IS SHOWN. IN THE INSTANT CASE, IT IS OUR OPINION THAT THE JUSTIFICATION FOR THE CHANGE IN THE APPLICABLE SPECIFICATION QUOTED ABOVE ADEQUATELY DEMONSTRATES THE REASONABLENESS OF THE CHANGE AND ITS NECESSITY IN ORDER TO MEET THE LEGITIMATE NEEDS OF THE GOVERNMENT.

INASMUCH AS PROVISION IS MADE IN 28 U.S.C. 1498 FOR SUIT AGAINST THE GOVERNMENT IN THE COURT OF CLAIMS FOR ANY PATENT INFRINGEMENTS REQUIRED BY THE GOVERNMENT OF ITS CONTRACTORS, NO BASIS WOULD EXIST FOR RELAXING THE SUBJECT SPECIFICATION EVEN IF IT COULD BE SHOWN THAT THE SPECIFICATION ACTUALLY DID INFRINGE ANY EXISTING PANHANDLER PATENTS.

IN ACCORDANCE WITH THE ABOVE CONSIDERATIONS, YOUR PROTEST MUST BE DENIED.