B-169290, JUN. 1, 1970

B-169290: Jun 1, 1970

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PROCEDURAL REQUIREMENTS UNDER INVITATION FOR SCOOP LOADERS REQUIRING USE OF ENGINE APPROVED OR LISTED ON QUALIFIED PRODUCTS LIST (QPL) PRIOR TO BID OPENING PROTEST TO AWARD ON BASIS LOW BIDDER'S ENGINE WAS NOT ON QPL IS DENIED. BID WAS PROPERLY DETERMINED FULLY RESPONSIVE TO INVITATION AND AWARD MADE CONFORMED TO ADVERTISED SPECIFICATIONS. TO ALLIS-CHALMERS MANUFACTURING COMPANY: REFERENCE IS MADE TO YOUR LETTER OF MARCH 23. IF SUCH IS NOT THE CASE. THE INVITATION WAS ISSUED ON MAY 29. AWARDS WILL BE MADE ONLY FOR SUCH PRODUCTS AS HAVE. BEEN TESTED AND APPROVED FOR INCLUSION IN THE APPLICABLE QUALIFIED PRODUCTS LIST WHETHER OR NOT SUCH PRODUCTS HAVE ACTUALLY BEEN SO LISTED BY THAT DATE.".

B-169290, JUN. 1, 1970

CONTRACTS--SPECIFICATIONS--QUALIFIED PRODUCTS--LISTING--PROCEDURAL REQUIREMENTS UNDER INVITATION FOR SCOOP LOADERS REQUIRING USE OF ENGINE APPROVED OR LISTED ON QUALIFIED PRODUCTS LIST (QPL) PRIOR TO BID OPENING PROTEST TO AWARD ON BASIS LOW BIDDER'S ENGINE WAS NOT ON QPL IS DENIED. SINCE SOLICITATION CONTAINED NO PROVISION REQUIRING OFFERORS TO LIST THEIR PROPOSED ENGINE AND LOW BIDDER DID NOT INDICATE ENGINE PROPOSED TO BE UTILIZED NOR INTERPOSE EXCEPTION TO QPL REQUIREMENT, NO BASIS EXISTED FOR CONTRACTING OFFICER TO QUESTION RESPONSIVENESS OF BID SUBMITTED. BID WAS PROPERLY DETERMINED FULLY RESPONSIVE TO INVITATION AND AWARD MADE CONFORMED TO ADVERTISED SPECIFICATIONS. SEE COMP. GEN. DECS. AND CT. CASE CITED.

TO ALLIS-CHALMERS MANUFACTURING COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 23, 1970, AND PRIOR CORRESPONDENCE, PROTESTING THE AWARD OF CONTRACT NO. DAAK-01-69-C-A817 TO THE J. I. CASE COMPANY UNDER INVITATION FOR BIDS (IFB) NO. DAAK-01 69-B- 9258, ISSUED BY THE U. S. ARMY MOBILITY EQUIPMENT COMMAND. YOU REQUEST OUR OFFICE TO DETERMINE WHETHER THE SUBJECT CONTRACT HAS BEEN AWARDED AND ADMINISTERED IN ACCORDANCE WITH THE APPLICABLE PROCUREMENT STATUTES AND REGULATIONS AND, IF SUCH IS NOT THE CASE, TO TAKE APPROPRIATE ACTION TO VOID THE AWARD OF THE CONTRACT.

THE INVITATION WAS ISSUED ON MAY 29, 1969, FOR 171 SCOOP LOADERS CONFORMING TO MILITARY SPECIFICATION MIL-L-52385B DATED MAY 23, 1968. PARAGRAPH 3.9 OF THAT SPECIFICATION REQUIRES THE USE OF A DIESEL ENGINE CONFORMING TO MILITARY SPECIFICATION MIL-E-11276. THE APPLICABLE ENGINE SPECIFICATION, MIL-E-11276C DATED JANUARY 10, 1964, PROVIDES IN PARAGRAPH 3.1 THAT UNLESS WAIVED "THE ENGINE FURNISHED UNDER THIS SPECIFICATION SHALL BE A PRODUCT WHICH HAS BEEN TESTED, HAS PASSED THE QUALIFICATION TESTS SPECIFIED HEREIN, AND HAS BEEN LISTED ON OR APPROVED FOR LISTING ON THE APPLICABLE QUALIFIED PRODUCTS LIST." PARAGRAPH 6.4 OF AMENDMENT 3 TO MIL-E-11276C DATED NOVEMBER 18, 1966, STATES THAT "WITH RESPECT TO PRODUCTS REQUIRING QUALIFICATION, AWARDS WILL BE MADE ONLY FOR SUCH PRODUCTS AS HAVE, PRIOR TO THE TIME SET FOR OPENING OF BIDS, BEEN TESTED AND APPROVED FOR INCLUSION IN THE APPLICABLE QUALIFIED PRODUCTS LIST WHETHER OR NOT SUCH PRODUCTS HAVE ACTUALLY BEEN SO LISTED BY THAT DATE."

TWENTY-NINE FIRMS WERE SOLICITED AND BIDS WERE OPENED ON JUNE 23, 1969. SEVEN BIDS WERE RECEIVED AND THE EVALUATED LOW BID IN THE AMOUNT OF $3,213,800.97 WAS SUBMITTED BY THE J. I. CASE COMPANY. THE SECOND LOW BID, AS EVALUATED, WAS SUBMITTED BY ALLIS-CHALMERS IN THE AMOUNT OF $3,232,270.88. THE RECORD INDICATES THAT A BOARD OF AWARDS WAS CONVENED AND RECOMMENDED COMPLETE AWARD TO CASE AS THE LOWEST RESPONSIVE RESPONSIBLE BIDDER. THE AWARD WAS MADE TO CASE ON JUNE 30, 1969, IN THE AMOUNT OF $3,157,961.

YOU STATE THAT AFTER THE CONTRACT AWARD, IT CAME TO THE ATTENTION OF YOUR COMPANY THAT THE DIESEL ENGINE MANUFACTURED BY CASE WHICH REASONABLY WOULD BE REGARDED AS THE ENGINE TO BE USED IN THE FRONT-END LOADERS WAS NOT ON THE QUALIFIED PRODUCTS LIST (QPL). IT IS YOUR CONTENTION THAT THE USE OF SUCH ENGINE WOULD BE CONTRARY TO THE REQUIREMENTS OF THE INVITATION WHICH SPECIFIED THAT ONLY ENGINES QUALIFIED BEFORE OPENING OF BIDS ARE TO BE FURNISHED.

THE CONTRACTING OFFICER STATES THAT ON SEPTEMBER 16, 1969, YOUR COMPANY VISITED THE U. S. ARMY MOBILITY COMMAND AND INQUIRED WHETHER THE J. I. CASE COMPANY WOULD FURNISH AN ENGINE THAT WAS QUALIFIED UNDER MIL-E- 11276. ON SEPTEMBER 19, 1969, YOUR COMPANY SENT A TELEGRAM TO THE COMMANDING GENERAL MECOM, REQUESTING CORRECTION OF THE ALLEGED ERRONEOUS AWARD OF THE CONTRACT BECAUSE CASE DID NOT OFFER A QPL ENGINE IN RESPONSE TO THE IFB. A REVIEW OF THE FACTS AND CIRCUMSTANCES RESULTING IN THE AWARD WAS MADE AND IN A LETTER DATED SEPTEMBER 26, 1969, FROM THE PROCUREMENT ACTIVITY, YOUR FIRM WAS ADVISED IN PERTINENT PART AS FOLLOWS:

"AS YOU ARE AWARE FROM HAVING SUBMITTED A BID IN RESPONSE TO THE SAME INVITATION, THERE WAS NO PROVISION IN THE SOLICITATION REQUIRING OFFERORS TO LIST THEIR PROPOSED ENGINE. IN FACT, J. I. CASE CO. DID NOT INDICATE WHICH ENGINE IT WOULD UTILIZE UNDER THE RESULTING CONTRACT. THUS, THERE WAS NO BASIS FOR QUESTIONING THAT J. I. CASE CO. WOULD FURNISH AN ENGINE LISTED ON THE QUALIFIED PRODUCTS LIST PRIOR TO THE BID OPENING.

"CONSIDERED ON ITS OWN MERITS, THE BID AS SUBMITTED WAS DETERMINED TO BE FULLY RESPONSIVE TO THE INVITATION."

THE RECORD SHOWS THAT THE CONTRACTING OFFICER SENT A LETTER DATED SEPTEMBER 26, 1969, TO J. I. CASE ADVISING THAT THE GOVERNMENT EXPECTS PERFORMANCE IN ACCORDANCE WITH THE TERMS OF THE CONTRACT, WHICH REQUIRES THE USE OF AN ENGINE WHICH HAD BEEN TESTED AND APPROVED FOR INCLUSION IN THE APPLICABLE QPL PRIOR TO THE TIME SET FOR OPENING OF BIDS. THE LETTER FURTHER STATED AS FOLLOWS:

"IT IS, OF COURSE, YOUR PRIVILEGE TO SUBMIT A PROPOSAL TO MODIFY THE CONTRACT TERMS IN THIS OR ANY OTHER REGARD, AND IF SUCH A PROPOSAL WERE TO INCLUDE APPROPRIATE CONSIDERATION MOVING TO THE GOVERNMENT, WE WOULD HAVE TO CAREFULLY CONSIDER MAKING SUCH A CHANGE."

BY LETTER DATED OCTOBER 17, 1969, CASE ADVISED THE PROCUREMENT ACTIVITY THAT IT WOULD COMPLY WITH THE REQUIREMENTS STATED IN THE LETTER OF SEPTEMBER 26, 1969. THE RECORD INDICATES THAT THE J. I. CASE ENGINE MODEL A504BDT WAS APPROVED AND QUALIFIED TO MIL-E-11276C ON DECEMBER 24, 1969, AND INCORPORATED INTO THE SUBJECT CONTRACT BY MODIFICATION NO. P007 DATED FEBRUARY 26, 1970, WITH A REDUCTION IN THE CONTRACT PRICE. THE CONTRACTING OFFICE STATES THAT THE REDUCTION WAS DETERMINED TO BE A REASONABLE ESTIMATE OF THE ENGINEERING COSTS ENTAILED IN INSTALLING AN ALTERNATE ENGINE IN THE CONTRACT LOADERS AND REPRESENTED FAIR AND REASONABLE CONSIDERATION TO THE GOVERNMENT.

YOU STATE THAT THE GOVERNMENT, PURSUANT TO THE CHANGES CLAUSE OF THE CONTRACT, INTENDED TO ACCEPT THE J. I. CASE ENGINE AS A COMPONENT OF THE FRONT-END LOADERS EVEN THOUGH THIS ENGINE WAS NOT ON THE QPL PRIOR TO BID OPENING. IT IS YOUR CONTENTION THAT CASE WAS REQUIRED TO FURNISH AN ENGINE THAT WAS ON THE QPL BEFORE BID OPENING AND THAT THE PROCUREMENT ACTIVITY CANNOT ACCEPT AN ENGINE THAT WAS NOT ON THE QPL AT THE TIME OF BID OPENING. IN SUPPORT OF YOUR POSITION, YOU REFER TO THE CASE OF PRESTEX, INC. V. UNITED STATES, 162 CT. CL. 620, 320 F. 2D 367 (1963), AND TO OUR DECISIONS, B-168557, JANUARY 23, 1970; AND 41 COMP. GEN. 124, 126 (1961). THE PERTINENCY OF THESE DECISIONS ARE DISCUSSED BELOW.

WE CONCUR WITH THE CONTRACTING OFFICER'S DETERMINATION THAT CASE'S BID WAS RESPONSIVE AND THAT THE AWARD AS MADE CONFORMED TO THE ADVERTISED SPECIFICATIONS. 10 U.S.C. 2305(C), DEALING WITH FORMAL ADVERTISEMENTS FOR BIDS, PROVIDES THAT AWARDS SHALL BE MADE TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE THE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED.

SECTION 2-301 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) PROVIDES IN CONNECTION WITH THE RESPONSIVENESS OF A BID:

"(A) TO BE CONSIDERED FOR AWARD, A BID MUST COMPLY IN ALL MATERIAL RESPECTS WITH THE INVITATION FOR BIDS SO THAT, BOTH AS TO THE METHOD AND TIMELINESS OF SUBMISSION AND AS TO THE SUBSTANCE OF ANY RESULTING CONTRACT, ALL BIDDERS MAY STAND ON AN EQUAL FOOTING AND THE INTEGRITY OF THE FORMAL ADVERTISING SYSTEM MAY BE MAINTAINED."

THE SUBJECT INVITATION DID NOT REQUIRE BIDDERS TO INDICATE IN THEIR BID THAT THE PARTICULAR ENGINE THEY INTENDED TO FURNISH WAS ON THE APPLICABLE QPL. WE ARE ADVISED THAT THERE WERE 14 FIRMS, INCLUDING J. I. CASE COMPANY, WHICH HAD QUALIFIED ENGINES ON THE APPLICABLE QPL AS OF THE TIME SET FOR OPENING OF BIDS. IN ITS BID, J. I. CASE COMPANY DID NOT INDICATE THE PARTICULAR ENGINE IT WOULD FURNISH NOR DID IT INTERPOSE ANY EXCEPTION TO THE QPL REQUIREMENTS OF THE INVITATION. UNDER THESE CIRCUMSTANCES, THE CONTRACTING OFFICER HAD NO BASIS TO QUESTION THE RESPONSIVENESS OF THE BID SUBMITTED BY CASE. UNDER THE TERMS OF THE INVITATION, THE CONTRACTOR MUST FURNISH AN ENGINE WHICH IS ON THE QPL AND WHICH SATISFIES THE CONTRACT SPECIFICATIONS. OUR OFFICE HAS HELD THAT THE QPL PROCEDURES DO NOT REQUIRE THAT THE QPL ITEM UPON WHICH A BID IS BASED MUST BE THE SAME QPL ITEM FURNISHED UNDER THE CONTRACT. SEE B-165179, B-165800, DECEMBER 16, 1969.

IN OUR DECISION B-168557, JANUARY 23, 1970, CITED BY YOU, WE HELD THAT SINCE THE QPL SYSTEM REQUIRES COMPANIES TO UNDERGO THE EXPENSE OF QUALIFICATION WITHOUT ANY ASSURANCE OF A CONTRACT AWARD, IT WAS UNFAIR TO PERMIT A BIDDER, AFTER BID OPENING, TO QUALIFY ITS PRODUCT FOR PURPOSES OF AN AWARD. HOWEVER, IN THE PRESENT SITUATION, BIDDERS WERE NOT REQUIRED TO INCUR THE EXPENSE OF QUALIFYING THEIR OWN ENGINES SINCE THEY COULD USE ANY ENGINE LISTED ON THE QPL. WE BELIEVE THAT ALL BIDDERS WERE BIDDING ON THE SAME BASIS AND WE DO NOT BELIEVE THAT CASE HAD AN UNFAIR ADVANTAGE OVER ANY OTHER BIDDER. THE RESPONSIBILITY FOR FURNISHING AN ENGINE MEETING THE REQUIREMENTS OF THE SPECIFICATIONS RESTED CLEARLY WITH THE CONTRACTOR. AGREE WITH THE CONTRACTING OFFICER THAT THE BID OF CASE EVIDENCED AN INTENTION TO COMPLY WITH THE SPECIFICATIONS SINCE NO EXCEPTIONS WERE TAKEN TO SUCH SPECIFICATIONS. THEREFORE, WE FIND NO BASIS TO QUESTION THE LEGALITY OF THE AWARD. ALSO, WE BELIEVE THIS CONCLUSION IS CONSISTENT WITH OUR DECISION REPORTED IN 41 COMP. GEN. 124 (1961). IN THAT DECISION WE STATED AT PAGE 127 IN PERTINENT PART AS FOLLOWS:

"IT IS THE POSITION OF THE PROCUREMENT AGENCY, WITH WHICH WE AGREE, THAT THE RESPONSIBILITY FOR FURNISHING AN ENGINE MEETING THE REQUIREMENTS OF THE SPECIFICATION RESTS CLEARLY WITH THE CONTRACTOR. THE FACT THAT THE ENGINE THE CONTRACTOR ORIGINALLY PROPOSED TO FURNISH WAS ON A QUALIFIED PRODUCTS LIST WHEN THE TECHNICAL PROPOSAL WAS SUBMITTED AND WAS SUBSEQUENTLY REMOVED FROM THAT LIST IS, IN OUR OPINION, IMMATERIAL WHEN CONSIDERING THE LEGALITY OF THE AWARD OR THE ENFORCEMENT OF THIS CONTRACT REQUIREMENT. AS STATED IN OUR ABOVE-CITED DECISION: (40 COMP. GEN. 514 (1961))

"' *** TO THE EXTENT THAT THE TECHNICAL PROPOSAL DOES NOT MEET THE GOVERNMENT SPECIFICATIONS, THE SPECIFICATIONS PREVAIL AND CONTROL. FOR THIS REASON IT IS INCUMBENT UPON EACH BIDDER TO ASSURE ITSELF BEFORE BIDDING THAT THE EQUIPMENT WILL SATISFY THE PERFORMANCE REQUIREMENTS OR ELSE FIND ITSELF REQUIRED TO MAKE ADJUSTMENTS WITHOUT COST TO THE GOVERNMENT IN THE EVENT THE EQUIPMENT FAILS TO MEET THE PERFORMANCE STANDARD AFTER A CONTRACT IS AWARDED AND THE EQUIPMENT IS TESTED.'"

IN THE PRESTEX CASE, CITED BY YOU, THE COURT HELD THAT THE ACCEPTANCE OF A BID SPECIFICALLY QUALIFIED BY THE BIDDER WHICH CONSTITUTED A DELIBERATE DEVIATION FROM MANDATORY SPECIFICATIONS COULD NOT RESULT IN A VALID CONTRACT UNDER WHICH THE GOVERNMENT WAS LEGALLY OBLIGATED TO SUCH BIDDER. THE RATIONALE OF THAT CASE IS INAPPLICABLE HERE WHERE THE BID ACCEPTANCE, IN OUR OPINION, RESULTED IN A VALID AND BINDING CONTRACT.

THE RECORD INDICATES THAT THE CASE MODEL A504BDT WAS APPROVED AND QUALIFIED UNDER MIL-E-11276C ON DECEMBER 24, 1969, AND WAS INCORPORATED INTO SUBJECT CONTRACT BY MODIFICATION ON FEBRUARY 26, 1970, WITH AN APPROPRIATE REDUCTION IN THE CONTRACT PRICE.

ON THE BASIS OF THE RECORD BEFORE US, WE FAIL TO SEE HOW IT CAN BE CONCLUDED THAT THE GOVERNMENT'S ACTION IN THIS PROCUREMENT RESULTED INEQUITABLE TREATMENT TO YOUR COMPANY. CASE'S OFFER WAS MEASURED AGAINST THE SAME SPECIFICATIONS THAT YOUR COMPANY WAS REQUIRED TO MEET IN ITS BID. THE RESPONSIVENESS OF CASE'S BID TO THE ESSENTIAL REQUIREMENTS OF THE INVITATION WAS FIXED AND DETERMINED AT THE TIME BIDS WERE OPENED, AND EVENTS AFTER AWARD WHICH WERE RESOLVED BY THE GOVERNMENT UNDER THE CONTRACT CHANGES CLAUSE ARE NOT FOR CONSIDERATION IN DETERMINING WHETHER CASE'S BID WAS IN FACT RESPONSIVE. SEE B 151643, AUGUST 7, 1963, AND CASES CITED THEREIN.