B-168881, MAR. 31, 1970

B-168881: Mar 31, 1970

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AWARD IS UPHELD SINCE LOW BID WAS RESPONSIVE AS PRODUCT MET ALL SPECIFICATION REQUIREMENTS AND WAS SUPERIOR IN SOME RESPECTS. BIDDER WAS OBLIGATED TO FURNISH GOODS OF U.S. THERE WAS EVIDENCE OF HIS STATUS AS MANUFACTURER AND ACCEPTANCE OF LATE DELIVERY PENALTY AGREEMENT AND ALLEGED BID DEFICIENIES WERE INFORMAL NOT SUBSTANTIAL DEVIATIONS. THE ITEMS ARE FOR USE IN A MINE EXPANSION PROGRAM IN TURKEY WHICH IS FINANCED UNDER AID (AGENCY FOR INTERNATIONAL DEVELOPMENT) LOAN NO. 277- H-070. THE CONTRACT AWARD WAS SUBJECTTO AID APPROVAL. THE SUBJECT PROCUREMENT WAS ADVERTISED UNDER INVITATION FOR BIDS (IFB) 108-GLD/2311. WHICH WAS PREPARED FOR TKI BY ITS CONSULTING ENGINEERS. WAS PUBLISHED BY THE AID OFFICE OF SMALL BUSINESS.

B-168881, MAR. 31, 1970

BIDS--COMPETITIVE SYSTEM--FOREIGN AID, LOANS, ETC; PROGRAMS UNDER IFB FOR PURCHASE OF BLAST HOLE DRILLS FINANCED BY AID ANKARA BY LOAN REQUIRING PROCUREMENT ON FAIR COMPETITIVE BASIS, AWARD IS UPHELD SINCE LOW BID WAS RESPONSIVE AS PRODUCT MET ALL SPECIFICATION REQUIREMENTS AND WAS SUPERIOR IN SOME RESPECTS, AID MANUAL MC 1442.1 STATE GUIDELINES NOT OF THEMSELVES BINDING ON BORROWERS, CONTRACTORS OR OTHERS, BIDDER WAS OBLIGATED TO FURNISH GOODS OF U.S. SOURCE, THERE WAS EVIDENCE OF HIS STATUS AS MANUFACTURER AND ACCEPTANCE OF LATE DELIVERY PENALTY AGREEMENT AND ALLEGED BID DEFICIENIES WERE INFORMAL NOT SUBSTANTIAL DEVIATIONS. SEE COMP. GEN. DECS. CITED.

TO INGERSOLL-RAND COMPANY:

WE REFER TO YOUR PROTEST, BY TELEGRAM AND LETTER DATED JANUARY 26, 1970, AGAINST THE AWARD OF A CONTRACT TO SCHRAMM, INC. (SCHRAMM), FOR FURNISHING TWO BLAST HOLE DRILLS AND RELATED ITEMS TO TURKISH COAL ENTERPRISES (TKI). THE ITEMS ARE FOR USE IN A MINE EXPANSION PROGRAM IN TURKEY WHICH IS FINANCED UNDER AID (AGENCY FOR INTERNATIONAL DEVELOPMENT) LOAN NO. 277- H-070, PURSUANT TO THE FOREIGN ASSISTANCE ACT OF 1961, AS AMENDED, 22 U.S.C. 2151, ET SEQ. UNDER THE TERMS OF THE LOAN AGREEMENT, THE CONTRACT AWARD WAS SUBJECTTO AID APPROVAL. THE LOAN AGREEMENT ALSO LIMITS THE AID FINANCING TO PURCHASES OF GOODS AND SERVICES OF UNITED STATES SOURCE AND ORIGIN AND, EXCEPT AS AID MAY OTHERWISE AGREE IN WRITING, REQUIRES THAT ALL ELIGIBLE ITEMS SHALL BE PROCURED ON A FAIR COMPETITIVE BASIS.

THE SUBJECT PROCUREMENT WAS ADVERTISED UNDER INVITATION FOR BIDS (IFB) 108-GLD/2311, WHICH WAS PREPARED FOR TKI BY ITS CONSULTING ENGINEERS, PAUL WEIR CO. OF CHICAGO, ILLINOIS, AND WAS PUBLISHED BY THE AID OFFICE OF SMALL BUSINESS.

THREE BIDS WERE RECEIVED, OFFERING THE FOLLOWING EVALUATED PRICES, INCLUDING THE COMMISSION, IF ANY, TO BE PAID IN TURKISH CURRENCY:

BIDDER PRICE SCHRAMM, INC.

$129,356.00 WESTINGHOUSE AIR BRAKE CO. (WABCO) 144,775.14INGERSOLL RAND, INC. 163,000.00

THE CONSULTING ENGINEERS, WHO EVALUATED THE BIDS, FOUND THAT WABCO WAS NONRESPONSIVE TO THE SPECIFICATION REQUIREMENT FOR A MAST LENGTH SUITABLE TO HANDLE A DRILL ROD OF AT LEAST 33 FEET IN LENGTH (SINGLE) FOR DRILLING PURPOSES IN THAT WABCO OFFERED DRILL PIPES ONLY 20 FEET LONG. YOUR BID AND SCHRAMM'S BID WERE BOTH DETERMINED TO BE RESPONSIVE, AND AWARD WAS MADE, AFTER APPROVAL BY AID, TO SCHRAMM AS THE LOWEST BIDDER. YOUR PROTEST IS BASED UPON THE CONTENTION THAT SCHRAMM'S BID WAS NOT RESPONSIVE IN SEVERAL RESPECTS TO THE TERMS OF THE INVITATION.

THE TERMS AND CONDITIONS OF THE IFB INCLUDED THE FOLLOWING PERTINENT PROVISIONS:

"5. AWARD OF CONTRACT:

"(A) THE CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE AND RESPONSIVE BIDDER WHOSE BID, CONFORMING TO THE INVITATION FOR BIDS, IS OF THE LOWEST COST TO THE OWNER, AS DELIVERED ON FAS U. S. PORT BASIS (SEE PARAGRAPH 13- PRICE BASIS).

"(B) THE OWNER RESERVES THE RIGHT TO REJECT ALL BIDS AND TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN BIDS RECEIVED.

"8. CONTRACTOR'S STATEMENT OF CONTINGENT OR OTHER FEES FOR SOLICITING OR SECURING CONTRACT:

"BIDDER SHALL ATTACH A STATEMENT ADVISING WHETHER HE IS, OR IS NOT, A SMALL BUSINESS CONCERN THAT HE IS OR IS NOT, A MANUFACTURER OF THE SUPPLIES BID UPON; AND WHETHER HE HAS, OR HAS NOT, EMPLOYED OR RETAINED ANY COMPANY OR PERSON (OTHER THAN A FULL TIME BONAFIDE EMPLOYEE WORKING SOLELY FOR THE BIDDER) TO SOLICIT OR SECURE THIS CONTRACT, AND WHETHER HE HAS PAID OR AGREED TO PAY ANY SUCH COMPANY OR PERSON A FEE OR COMMISSION, CONTINGENT UPON OR RESULTING FROM THE AWARD OF THIS CONTRACT AND ALSO WHETHER SUCH COMPANY OR PERSON IS DOMICILED IN TURKEY.

"IF THE BIDDER HAS RETAINED A COMPANY OR PERSON DOMICILED IN TURKEY TO WHOM HE WILL PAY A FEE OR COMMISSION, HE SHALL STATE IN HIS BID THE AMOUNT THEREOF, OR THE PERCENTAGE OF THE BID TOTAL COST FIGURE, THAT WILL BE PAID TO SUCH AGENT. SUCH ALLOWANCE FOR COMMISSION SHALL BE CONSIDERED AS PAYABLE IN TURKISH LIRAS.

"11. ELIGIBLE SOURCE OF PROCUREMENT:

"EACH BIDDER IS REQUIRED TO FURNISH A STATEMENT TO THE EFFECT THAT ALL GOODS AND SERVICES WILL HAVE BOTH THEIR ORIGIN IN AND SHALL BE PROCURED FROM THE UNITED STATES OF AMERICA. (SEE PARAGRAPH GC-13.4).

"12. DELIVERY PERIOD:

"THE TIME REQUIRED FOR DELIVERY OF ALL UNITS AT U. S. PORT WILL NOT EXCEED 240 DAYS AFTER LETTER OF CREDIT ESTABLISHED.

"13. PRICE BASIS:

"PRICE SHALL BE QUOTED ON THE DELIVERY BASIS OF FAS U.S. ATLANTIC OR GULF PORT. PRICE QUOTED SHALL BE NET TO THE OWNER, AND INCLUDE ALL COST OF PACKING, INLAND FREIGHT, REPRESENTATIVE'S COMMISSION, FORWARDING AND HANDLING CHARGES AND ALL OTHER APPLICABLE EXPENSES."

PERTINENT PROVISIONS OF THE GENERAL CONDITIONS OF THE IFB WERE:

"GC-1 STATEMENT OF WORK:

"(C) FINANCING - ALL MATERIAL AND EQUIPMENT SHALL BE U.S. MANUFACTURE, AND WILL BE FINANCED BY FUNDS TO BE PROVIDED BY THE AGENCY FOR INTERNATIONAL DEVELOPMENT OF THE UNITED STATES UNDER AID LOAN AGREEMENT NO. 277-H-70.

"GC-13 AID STANDARD PROVISIONS:

"4. U.S. SOURCE AND ORIGIN:

"ALL GOODS PURCHASED BY THE CONTRACTOR HEREUNDER AND TO BE FINANCED BY THE PROCEEDS OF THE LOAN MUST BE OF UNITED STATES SOURCE AND ORIGIN WHICH IS DEFINED AS FOLLOWS:

(1) SUCH GOODS ARE SHIPPED FROM A U.S. PORT OR FROM A FREE PORT OR BONDED WAREHOUSE IF SHIPPED FROM SAID PORT OR BONDED WAREHOUSE IN THE FORM IN WHICH RECEIVED WHEN SHIPPED THERE FROM A U.S. PORT; AND

(2) SUCH GOODS ARE MINED, GROWN AND PRODUCED THROUGH MANUFACTURING PROCESSING OR ASSEMBLY IN THE U.S.; AND

(3) NOT MORE THAN 10 PERCENT OF THE LOWEST PRICE (EXCLUDING OCEAN TRANSPORTATION AND MARINE INSURANCE) AT WHICH THE SUPPLIER MAKES THE GOODS AVAILABLE FOR EXPORT SALE REPRESENTS THE COST (DELIVERED TO POINT OF PRODUCTION) OF IMPORTED COMPONENTS; AND

(4) ALL IMPORTED COMPONENTS OF SUCH GOODS WERE IMPORTED FROM CERTAIN FREE -WORLD COUNTRIES (AID GEOGRAPHIC CODE 935); AND

(5) NEITHER THE COMMODITY NOR THE TRANSACTION MAY BE ONE WHICH IS PROHIBITED BY THE FOREIGN ASSETS CONTROL REGULATIONS (COMMUNIST CHINA).

NONE OF THE FUNDS PROVIDED BY A.I.D. FOR FINANCING GOODS AND SERVICES SHALL BE USED FOR EXPENSES OTHER THAN PAYMENT FOR GOODS AND SERVICES OF UNITED STATES SOURCE AND ORIGIN."

PARAGRAPH SC-2 OF THE SPECIAL CONDITIONS OF THE IFB, RELATING TO FAILURE TO MEET DELIVERY, READ IN PART AS FOLLOWS:

"(A) THE BIDS MUST CLEARLY INDICATE THAT THE CONTRACTOR ALLOWS IN ADVANCE THE OWNER TO DEDUCT FROM THE AMOUNT OTHERWISE DUE TO HIM A PENALTY CORRESPONDING TO 0.07 PERCENT OF THE COST (FAS) OF THE DELIVERED ITEMS OF THE ORDER, AS FINAL AND LIQUIDATED DAMAGES FOR EVERY CALENDAR DAY THAT THE DELIVERY IS DELAYED BEYOND THE DATE AGREED UPON IN THE PURCHASE ORDER AND ANY EXTENSION DULY GRANTED BY THE OWNER. * * * AMOUNT OF PENALTY WILL BE CALCULATED ON THE COST OF THAT PORTION OF EQUIPMENT WHICH IS NOT DELIVERED IN DUE TIME. TOTAL AMOUNT OF PENALTY SHALL NOT EXCEED 5% OF THE TOTAL VALUE OF THE ORDER (FAS U.S. PORT)."

IN ADDITION, THE PAYMENT TERMS IN THE SPECIAL CONDITIONS PROVIDED FOR SEPARATION OF THE COMMISSION PAYABLE TO AGENTS IN TURKEY FROM THE MATERIAL AND EQUIPMENT COSTS, PAYMENT OF THE COMMISSION TO BE MADE IN TURKISH CURRENCY BY TKI.

THE SPECIFICATIONS FOR THE DRILLS AND ACCESSORIES INCLUDED THE FOLLOWING PERTINENT PROVISIONS:

"A. VERIFICATION OF SPECIFICATION COMPLIANCE:

"THE BIDDER SHALL READ CAREFULLY THE FOLLOWING TECHNICAL SPECIFICATION AND WILL CHECK YES, OR NO IN THE COLUMNS PROVIDED OPPOSITE EACH SPECIFICATION ITEM. YES WILL INDICATE HE MEETS OR EXCEEDS THE SPECIFICATION ITEM. NO, WILL INDICATE HE DOES NOT MEET THE SPECIFICATION ITEM. FAILURE TO CHECK ANY INDIVIDUAL ITEM WILL RESULT IN THE BID BEING REJECTED AS NONRESPONSIVE. SHOULD THE BIDDER DESIRE TO CLARIFY ANY ITEM, HE IS FREE TO DO SO ON A SEPARATE SHEET ATTACHED TO HIS BID.

"B. GENERAL PROVISIONS:

"2- THE BLAST HOLE DRILLS AND ACCESSORIES SHALL BE OF THE STANDARD AND LATEST SERIES PRODUCTION OF THE MANUFACTURER.

"4- CORRESPONDING PARTS AND ACCESSORIES OF ALL DRILLS SHALL BE IDENTICAL.

"C. CAPACITY AND TYPE:

"1- 6" BLAST HOLE SHALL BE DRILLED USING A 4" DIAMETER DRILL PIPE.

"F. DRILL MAST:

"2- THE MAST SHALL HAVE LENGTH SUITABLE TO HANDLE A DRILL ROD AT LEAST 33 FEET IN LENGTH (SINGLE) FOR DRILLING PURPOSES.

"H. ROTARY:

"1- THE ROTARY CONTROL SHALL BE SUCH THAT THE ROTATION IN ONE DIRECTION CAN BE VARIABLE FROM 0 UP TO AT LEAST 100 RPM.

"3- INFINITELY VARIABLE ROTATION SPEED IS PREFERABLE.

"4- BIDDERS WILL STATE THE MAXIMUM LOAD THAT CAN BE ROTATED AT DIFFERENT RPMS AND AT MAXIMUM ROTATING RPM OF THE UNIT IF THIS INFORMATION IS AVAILABLE.

"P. DRILLING EQUIPMENT:

"2- DRILL PIPES (FIVE FOR EACH DRILL. THIS IS TO BE QUOTED AS AN OPTIONAL ITEM).

2.2. THE DRILL PIPES WILL HAVE A MINIMUM OF 4" OUTSIDE DIAMETER.

2.3. THE DRILL PIPES SHALL BE AT LEAST 33' IN LENGTH AND SHALL BE SUCH THAT FIT THE DRILL ROD CARRIAGE.

2.6. IF THE BIDDER HAS A STANDARD WARRANTY COVERING THE DRILL PIPES HE IS OFFERING, HE MUST ATTACH IT WITH HIS BID.

"Q. ACCESSORIES:

"THE DRILL SHALL BE COMPLETE WITH ALL THE STANDARD ACCESSORIES NORMALLY FURNISHED BY THE MANUFACTURER THOUGH SUCH ITEMS MAY NOT HAVE BEEN INDICATED HEREIN."

A QUESTIONNAIRE REGARDING THE DRILLS, WHICH WAS INCLUDED IN THE SPECIFICATIONS FOR ANSWER AND SUBMISSION WITH EACH BID, CALLED FOR THE MAKE AND MODEL OF THE DRILL, THE LENGTH OF THE TOWER, AND THE LENGTH OF THE DRILL ROD TOGETHER WITH OTHER INFORMATION.

IN TWO PREAWARD VISITS TO AID'S OFFICE IN ANKARA, TURKEY, YOUR REPRESENTATIVE CHARGED THAT SCHRAMM'S BID WAS NONRESPONSIVE BY REASON OF ITS FAILURE TO ATTACH TO ITS BID THE STATEMENTS REGARDING ITS STATUS AS A MANUFACTURER OF THE EQUIPMENT OFFERED, THE SOURCE OF SUCH EQUIPMENT, AND THE LIQUIDATED DAMAGES AGREEMENT. IN ADDITION, YOUR REPRESENTATIVE CLAIMED THAT SCHRAMM'S LITERATURE DESCRIBED A 25-FOOT MAST AND THEREFORE ITS BID OF A 40-FOOT MAST DID NOT OFFER A STANDARD ARTICLE; THAT SCHRAMM'S OFFER OF A DRILL PIPE 4 1/2" IN DIAMETER DOES NOT COMPLY WITH THE REQUIREMENT FOR A DRILL PIPE 4" IN DIAMETER; AND THAT SCHRAMM'S DRILL RUNS AT THREE STANDARD AND SPECIFIC SPEEDS, ACCORDING TO ITS LITERATURE, AND THEREFORE CANNOT OPERATE AT "INFINITELY VARIABLE ROTATION SPEED" AS INDICATED IN THE IFB.

AID ANKARA REVIEWED SCHRAMM'S BID AND FOUND THAT SCHRAMM STATED IT WAS OFFERING ITS MODEL C66-B; THAT THE DESCRIPTIVE LITERATURE STATED THAT THE MAST ON THE MODEL C66-B IS 40 FEET LONG TO PROVIDE A 35-FOOT HEAD TRAVEL (STANDARD); THAT THE 4 1/2" DRILL PIPE IS ACCEPTABLE SINCE IT MEETS AND EXCEEDS THE 4" MINIMUM DIAMETER IN THE SPECIFICATIONS; AND THAT SCHRAMM'S LITERATURE SHOWS ITS EQUIPMENT CAN BE OPERATED AT VARIABLE SPEEDS FROM 0 TO 118 RPM. AID ANKARA, HOWEVER, POINTED OUT THAT THE STATEMENT IN THE SPECIFICATION ABOUT OPERATION AT "INFINITELY VARIABLE SPEED" WAS WORDED AS A PREFERENCE, NOT A REQUIREMENT. IN ADDITION, AID ANKARA VIEWED THE OMISSION FROM SCHRAMM'S BID OF THE VARIOUS STATEMENTS REGARDING STATUS AS A MANUFACTURER, ETC; AS MINOR DEFICIENCIES IN THE BID WHICH COULD BE WAIVED, AND THEREFORE RECOMMENDED AWARD TO SCHRAMM. YOUR REPRESENTATIVE WAS ADVISED ACCORDINGLY, AND AWARD TO SCHRAMM WAS APPROVED BY AID ON JANUARY 15, 1970.

IN YOUR TELEGRAM AND LETTER OF JANUARY 26, 1970, YOU ADHERE TO THE VIEW THAT THE ABSENCE FROM SCHRAMM'S BID OF THE STATEMENTS REFERRED TO ABOVE RENDERED THE BID NONRESPONSIVE. YOU ALSO CLAIM THAT THE OFFER OF PIPES 4 1/2" IN DIAMETER CONSTITUTES A MATERIAL DEVIATION FROM THE SPECIFICATIONS ON THE BASIS THAT THE DIAMETER OF 4" WAS SPECIFIED IN ORDER TO STANDARDIZE THE NEW EQUIPMENT WITH EXISTING 4" PIPE. YOU THEREFORE URGE THAT THE CAPITAL GUIDELINES APPLICABLE TO AID FINANCED PROJECTS AND GOOD BIDDING PRACTICE HAVE BEEN IGNORED IN THIS PROCUREMENT, AND YOU REQUEST THAT THE AWARD BE SET ASIDE AND MADE TO YOU IN THE EVENT YOUR POSITION IS CONFIRMED BY OUR REVIEW OF THE MATTER.

EXAMINATION OF A COPY OF SCHRAMM'S BID, WHICH HAS BEEN MADE AVAILABLE TO OUR OFFICE, SHOWS THAT THE 21 PAGES OF THE IFB CARRYING ALL OF THE TERMS AND CONDITIONS, AS WELL AS THE GENERAL AND SPECIAL CONDITIONS REFERRED TO ABOVE, WERE RETURNED TO TKI WITH SCHRAMM'S BID, AND EACH OF THE PAGES BORE THE TYPEWRITTEN NAME OF THE FIRM FOLLOWED BY THE HANDWRITTEN SIGNATURE "LIELIE B. SCHRAMM" AND THE TYPEWRITTEN TITLE "VICE PRESIDENT". ON THE SIX PAGES OF SPECIFICATIONS, WHICH WERE ALSO RETURNED AS PART OF THE BID, SCHRAMM CHECKED "YES" FOR EACH ITEM, AS INSTRUCTED IN PARAGRAPH A OF THE SPECIFICATIONS, AND IN THE QUESTIONNAIRE SCHRAMM IDENTIFIED THE DRILLS AS ITS MODEL ROTADRILL C66 B AND STATED THAT IT HAS A 40' TOWER AND A 33' DRILL ROD AMONG OTHER FEATURES. IN ADDITION TO A PRINTED WARRANTY AND DESCRIPTIVE LITERATURE EVIDENCING THAT THE C66-B ROTADRILL EQUALS OR EXCEEDS THE SPECIFICATIONS, SCHRAMM'S BID WAS ACCOMPANIED BY A LETTER DATED SEPTEMBER 2, 1969, WHICH INCLUDED THE FOLLOWING STATEMENTS:

"WE HAVE ACCEPTED ALL CONDITIONS IN YOUR BID INVITATION.

"WE WISH TO POINT OUT, YOU ARE ASKING FOR ONLY 4" O.D. DRILL PIPE, BUT WE ARE BIDDING 4 1/2" O.D. BECAUSE WE FEEL THAT THIS WILL GIVE YOU BETTER HOLE CLEANING AND FASTER DRILLING BECAUSE OF THE INCREASED UP HOLE VELOCITY. ALSO, THE 4 1/2" O.D. DRILL PIPE IS MUCH STRONGER, WILL LAST LONGER AND GIVES BETTER PERFORMANCE THAN THE 4" O.D. DRILL PIPE. THIS DRILL PIPE HAS 3 1/2 API REGULAR THREADS, BOX AND PIN, WHICH ARE STANDARD IN THE INDUSTRY - WITH THIS 4 1/2" O.D. DRILL PIPE AND THE 6 1/4" DIAMETER HOLES, THE UP HOLE VELOCITY WILL BE NEARLY 5,000' PER MINUTE, WHICH WILL GIVE YOU NOT ONLY FASTER PENETRATION RATE, BUT MORE BIT LIFE.

"IN THE BLAST HOLE LITERATURE THAT WE HAVE SUPPLIED YOU, UNDER THE SPECIFICATION COLUMN FOR THE C66-B, YOU WILL NOTICE THAT THIS DOES NOT AGREE WITH THE ENCLOSED SPECIFICATION SHEET; IT IS BECAUSE IN THE LITERATURE, THE SPECIFICATIONS COVER THE 25' TRAVEL MAST - WE ARE BIDDING TO YOU THE 35' TRAVEL MAST, SO USE THE SPECIFICATIONS ON PAGES RM-111 TO AND INCLUDING RM-119.

"ON PAGE 3, ITEM H, TITLED 'ROTARY', WE HAVE CHECKED THAT WE WILL COMPLY WITH EVERYTHING, BUT I WANT TO POINT OUT HERE THAT AS FAR AS THE R.P.M.'S AND THE TORQUE THAT IS AVAILABLE AT THESE R.P.M.'S IS LISTED ON PAGE RM- 115-6 UNDER THE TITLE OF 'TOP DRIVE ROTATION HEAD', HERE YOU WILL NOTICE WE LIST THREE (3) R.P.M.'S AND THREE (3) DIFFERENT TORQUES - THE R.P.M. BEING VARIABLE FROM 0 TO 118."

BOTH THE LETTERHEAD ON THE ABOVE LETTER AND A FORM ATTACHED TO A LIST OF SPARE PARTS FOR THE DRILLS CARRY THE FIRM NAME, "SCHRAMM, INC." FOLLOWED BY THE WORDS, "MANUFACTURERS OF AIR COMPRESSORS".

THE BID PRICE SCHEDULE EXECUTED BY SCHRAMM REFLECTS AN AGENT'S COMMISSION OF 10 PERCENT, IN ADDITION TO THE BASIC BID PRICE, WHICH IS STATED IN BOTH UNITED STATES AND TURKISH CURRENCY. THE LETTER DATED SEPTEMBER 2, 1969, CARRIES A NOTATION INDICATING THAT A COPY WAS SENT TO MR. FARUK CAGLIN, AND THE BID FILE INCLUDES A LETTER DATED OCTOBER 13, 1969, FROM MR. CAGLIN TO TKI GIVING AN ADDRESS IN ANKARA AND IDENTIFYING MR. CAGLIN AS THE TURKISH DISTRIBUTOR FOR SCHRAMM.

IT IS THE POSITION OF AID THAT THE LANGUAGE OF PARAGRAPH A OF THE SPECIFICATIONS REQUESTING BIDDERS TO CHECK WHETHER ITEMS OFFERED MEET OR EXCEED THE SPECIFICATIONS CLEARLY INDICATES THAT ITEMS IN EXCESS OF THE STATED NEEDS COULD BE OFFERED. FURTHER, AID OBSERVES, NOWHERE IN THE IFB IS IT STATED THAT THE 4" DIAMETER IS AN ABSOLUTE REQUIREMENT FOR THE DRILL PIPE, NONCOMPLIANCE WITH WHICH WILL RESULT IN REJECTION OF A BID AS NONRESPONSIVE. CONVERSELY, IT IS STATED, THE LANGUAGE OF PARAGRAPH P.2.2 RELATING TO OPTIONAL DRILL PIPES CLEARLY SHOWS THAT THE 4" DIAMETER IS BUT A MINIMUM. ACCORDINGLY, AID CONCURS WITH THE VIEW OF THE CONSULTING ENGINEERS AND AID ANKARA THAT SCHRAMM'S BID WAS RESPONSIVE TO THIS REQUIREMENT OF THE SPECIFICATIONS.

WE HAVE STATED THAT THE RULE THAT A BIDDER MAY NOT CHANGE A REQUIREMENT TO SUIT HIS OWN CONVENIENCE AND THEN INSIST THAT THE CHANGE BE REGARDED AS A MINOR DEVIATION WHICH DOES NOT PRECLUDE CONSIDERATION OF HIS BID FOR AWARD DOES NOT REQUIRE THE REJECTION OF A BID WHICH OFFERS A PRODUCT WHICH NOT ONLY MEETS ALL OF THE SPECIFICATION REQUIREMENTS AND THE NEEDS OF THE GOVERNMENT BUT IS ALSO SUPERIOR TO SUCH REQUIREMENTS IN CERTAIN RESPECTS. 38 COMP. GEN. 830 (1959). WE BELIEVE THE SAME PRINCIPLE IS FOR APPLICATION IN THIS CASE WITH RESPECT TO THE DRILL PIPES. NOT ONLY DOES PARAGRAPH A OF THE SPECIFICATIONS SOLICIT OFFERS OF ITEMS EXCEEDING THE STATED REQUIREMENTS, BUT THE USE OF THE TERM "MINIMUM" WITH RESPECT TO THE 4" DIAMETER OF THE OPTIONAL DRILL PIPES MAKES ALLOWANCE FOR BASIC EQUIPMENT WHICH IS ALREADY EQUIPPED WITH PIPES OF GREATER DIAMETER. ACCORDINGLY, WE CONCUR WITH AID'S POSITION THAT SCHRAMM WAS RESPONSIVE TO THIS REQUIREMENT OF THE SPECIFICATIONS.

THE CAPITAL PROJECTS GUIDELINES WHICH AID HAS ISSUED FOR USE IN BORROWER PROCUREMENT OF GOODS AND SERVICES OF UNITED STATES SOURCE AND ORIGIN ARE PUBLISHED IN AID MANUAL MC 1442.1. SECTION 1 OF THE GUIDELINES STATES, AMONG OTHER THINGS, THAT THE GUIDELINES IN AND OF THEMSELVES DO NOT BIND BORROWERS, CONTRACTORS OR OTHERS; RATHER, SUCH PARTIES MUST CONTINUE TO CONSULT LOAN AGREEMENTS, LETTERS OF IMPLEMENTATION AND OTHER RELATED DOCUMENTS, OR CONTRACTS AND OTHER DOCUMENTS, AS THE CASE MAY BE, TO DETERMINE THE RULES, INCLUDING THOSE WITH RESPECT TO WHICH INFORMATION IS GIVEN IN THE GUIDELINES, APPLICABLE TO A PARTICULAR PROJECT.

AID MANUAL CIRCULAR NO. 1442.1, NOVEMBER 3, 1966, RELATIVE TO THE GUIDELINES, STATES:

"* * * THESE GUIDELINES SHOULD GUIDE RELEVANT AID DECISIONS. SUGGESTED IN THE EARLIER M.C. 1442.1, IT IS OUR HOPE THAT THESE GUIDELINES WILL PERMIT PERSONS TO WHOM CAPITAL PROJECT APPROVAL AND IMPLEMENTATION AUTHORITIES HAVE BEEN DELEGATED TO FUNCTION MORE EFFICIENTLY AND THAT THESE GUIDELINES WILL PERMIT FURTHER DELEGATIONS OF AUTHORITY. THESE GUIDELINES ESTABLISH THE FRAMEWORK FOR THE CONSIDERATION OF CONTRACTING AND RELATED IMPLEMENTATION PROCEDURES. * * *"

WE HAVE HELD THAT SUCH PROVISIONS FALL FAR SHORT OF ESTABLISHING AN INTENT ON THE PART OF AID THAT THE GUIDELINES SHOULD ACT AS INFLEXIBLE RULES WHICH WOULD PRECLUDE AID FROM EXERCISING ITS JUDGMENT IN DETERMINING APPROPRIATE PROCEDURES. ACCORDINGLY, WE VIEW THE GUIDELINES AS NO MORE THAN INTERNAL GUIDES TO AID ACTIONS. B-164676, MARCH 7, 1969.

UNDER THE CONTRACT RULES IN THE GUIDELINES, GOODS AND SERVICES OF UNITED STATES ORIGIN ARE TO BE FURNISHED EXCEPT AS WAIVED BY AID TO MEET UNANTICIPATED EMERGENCY OR SPECIAL REQUIREMENTS. THE PROVISIONS OF SUBPARAGRAPH 4, PARAGRAPH G-13, OF THE GENERAL CONDITIONS OF THE IFB, QUOTED ABOVE, ARE IN ACCORD WITH THE GUIDELINES RULES, AND ACCEPTANCE OF SUCH TERMS BY A BIDDER IMPOSES UPON HIM AN OBLIGATION TO FURNISH GOODS OF UNITED STATES SOURCE AND ORIGIN AS DEFINED IN THE IFB. SCHRAMM'S BID TOOK NO EXCEPTION TO SUCH PROVISIONS OF THE IFB, AND THE SIGNATURE OF ITS VICE PRESIDENT ON THE PAGE CARRYING SUCH PROVISIONS INDICATES ACCEPTANCE THEREOF BY SCHRAMM. ACCORDINGLY, WE CONCUR WITH THE VIEW OF AID THAT, AT MOST, SCHRAMM'S FAILURE TO FURNISH A SEPARATE STATEMENT CONCERNING THE SOURCE AND ORIGIN OF THE ITEMS OFFERED IN ITS BID CONSTITUTED A MINOR DEFICIENCY IN BID WHICH DID NOT AFFECT ITS RESPONSIVENESS.

AS TO THE CONTINGENT FEE STATEMENT, WE HAVE HELD THAT FAILURE TO FURNISH THIS TYPE OF INFORMATION WITH A BID CONSTITUTES A MINOR BID DEVIATION, AND THE BIDDER MAY BE AFFORDED AN OPPORTUNITY TO FURNISH THE REQUIRED STATEMENT BEFORE AWARD. B-165186, NOVEMBER 7, 1968; B 149318, AUGUST 31, 1962; B-148548, APRIL 17, 1962. SCHRAMM'S BID SHOWED THE AMOUNT OF THE COMMISSION FOR ITS AGENT IN TURKEY, AND THE AGENT'S NAME WAS REFLECTED IN THE LETTER WHICH ACCOMPANIED SCHRAMM'S BID. FURTHER, THE AGENCY WAS CONFIRMED BY THE SUBSEQUENT PREAWARD LETTER OF THE AGENT TO TKI. IN THE CIRCUMSTANCES, IT IS OUR VIEW THAT SCHRAMM SUPPLIED TO TKI BEFORE AWARD THE INFORMATION WHICH THIS PROVISION IN THE IFB WAS INTENDED TO ELICIT. ACCORDINGLY, WE CONCUR WITH AID THAT THE DEFICIENCY IN THIS REGARD DID NOT RENDER THE BID NONRESPONSIVE.

AS TO THE STATEMENT REGARDING STATUS OF SCHRAMM AS A MANUFACTURER OF THE ITEMS BID UPON, THIS INFORMATION HAS NO BEARING ON THE RESPONSIVENESS OF THE BID AND COULD THEREFORE BE FURNISHED AFTER BID OPENING. 41 COMP. GEN. 591 (1962). IN OUR VIEW, HOWEVER, THE DESCRIPTIVE PHRASE "MANUFACTURERS OF AIR COMPRESSORS" ON SCHRAMM'S LETTERHEAD AND OTHER PAPERS FURNISHED WITH ITS BID, TOGETHER WITH THE INFORMATION INCLUDED IN ITS DESCRIPTIVE LITERATURE, EVIDENCED SCHRAMM'S STATUS AS A MANUFACTURER OF THE ITEMS OFFERED BY SCHRAMM AND OBVIATED THE NEED FOR A SEPARATE STATEMENT IN THIS RESPECT.

AS TO THE FURNISHING OF A STATEMENT AGREEING TO ACCEPT THE PENALTY PROVIDED FOR LATE DELIVERY, THE SIGNATURE OF SCHRAMM'S VICE PRESIDENT ON THE IFB PAGE WHICH BORE THE PROVISIONS IN QUESTION MUST BE REGARDED AS INDICATION OF SCHRAMM'S AGREEMENT TO SUCH TERMS ABSENT ANY EXCEPTION THERETO ELSEWHERE IN THE BID OR THE RELATED PAPERS.

IN LINE WITH THE FOREGOING, WE ARE UNABLE TO CONCLUDE THAT THE ITEMS OFFERED BY SCHRAMM WERE NOT PROPERLY REGARDED AS BEING IN FULL COMPLIANCE WITH THE ADVERTISED SPECIFICATIONS, NOR CAN WE DISAGREE WITH THE AID VIEW THAT THE DEFICIENCIES IN THE BID WITH RESPECT TO THE INFORMATION REQUESTED OF THE BIDDER CONCERNING MATTERS WHICH DID NOT RELATE TO THE SPECIFICATIONS WERE INFORMAL DEVIATIONS WHICH DID NOT AFFECT THE RESPONSIVENESS OF THE BID AND WERE THEREFORE CONTEMPLATED BY THE WAIVER PROVISIONS INCLUDED IN THE IFB.

IN THE CIRCUMSTANCES, WE FIND NO LEGAL BASIS TO REQUIRE THAT THE AWARD TO SCHRAMM BE CANCELLED OR TO OBJECT TO THE AID APPROVAL THEREOF FOR FINANCING UNDER THE LOAN AGREEMENT. YOUR PROTEST IS THEREFORE DENIED.