B-171919, MAY 28, 1971

B-171919: May 28, 1971

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THE INCLUSION WAS ERRONEOUS AS THE PRODUCT DID NOT MEET REQUIREMENTS OF THE PUBLIC HEALTH SERVICE. THEREFORE THE PROTESTANT WAS PROPERLY EXCLUDED FROM CONSIDERATION. THE SPECIFICATION WAS IN VIOLATION OF PHS REGULATIONS IN THAT IT LISTED. IT WILL BE RECOMMENDED TO HEW THAT MORE CARE BE TAKEN IN THE FUTURE TO ENSURE EITHER THE LISTING OF ALL ACCEPTABLE BRANDS OR JUSTIFICATION FOR LISTING ONLY ONE. TO VALLEY SOUND: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 18. FEDERAL FUNDS HAVE BEEN COMMITTED FOR THE PROJECT UNDER TITLE VI OF THE PUBLIC HEALTH SERVICE ACT. THAT THE DESIGNATION OF THE BRAND -NAME MODELS WAS INTENDED TO INDICATE THE "TYPE AND QUALITY OF DESIGN AND MATERIAL AS WELL AS EXACT OPERATING FEATURES REQUIRED".

B-171919, MAY 28, 1971

BID PROTEST - SPECIFICATIONS - USE OF BRAND NAMES PROTEST OF VALLEY SOUND, DIVISION OF VALLEY VENDORS CORP., AGAINST AWARD OF CONTRACT TO SUPPLY ELECTRICAL SUBCONTRACTOR WITH NURSE CALL SYSTEM TO ANY OTHER FIRM UNDER CONSTRUCTION PROJECT FOR ADDITION TO HOSPITAL IN GLOBE, ARIZONA, UNDER TITLE VI OF THE PUBLIC HEALTH SERVICES ACT. ALTHOUGH THE INVITATION LISTED THE EKTRACOM PRODUCT, WHICH PROTESTANT SUPPLIES, THE INCLUSION WAS ERRONEOUS AS THE PRODUCT DID NOT MEET REQUIREMENTS OF THE PUBLIC HEALTH SERVICE; THEREFORE THE PROTESTANT WAS PROPERLY EXCLUDED FROM CONSIDERATION. THE SPECIFICATION WAS IN VIOLATION OF PHS REGULATIONS IN THAT IT LISTED, WITHOUT JUSTIFICATION, ONLY ONE ACCEPTABLE BRAND. ACCORDINGLY, IT WILL BE RECOMMENDED TO HEW THAT MORE CARE BE TAKEN IN THE FUTURE TO ENSURE EITHER THE LISTING OF ALL ACCEPTABLE BRANDS OR JUSTIFICATION FOR LISTING ONLY ONE.

TO VALLEY SOUND:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 18, 1971, CONCERNING THE REJECTION OF YOUR CONCERN AS A PROSPECTIVE SUPPLIER OF A NURSES' CALL SYSTEM TO THE ELECTRICAL SUBCONTRACTOR UNDER A CONSTRUCTION PROJECT FOR ADDITIONS TO THE GILA GENERAL HOSPITAL IN GLOBE, ARIZONA. FEDERAL FUNDS HAVE BEEN COMMITTED FOR THE PROJECT UNDER TITLE VI OF THE PUBLIC HEALTH SERVICE ACT, AS AMENDED (POPULARLY KNOWN AS THE HILL-BURTON ACT), 42 U.S.C. 291.

SECTION 16D OF THE SPECIFICATIONS FOR THE PROJECT STIPULATED, AMONG OTHER THINGS, THAT NURSES' CALL SYSTEMS FOR THE PROJECT SHALL BE EQUAL IN EVERY WAY TO THOSE MANUFACTURED BY EXECUTONE, INC., RADIO CORPORATION OF AMERICA (RCA), AND EKTACOM OR AN APPROVED EQUAL; THAT THE DESIGNATION OF THE BRAND -NAME MODELS WAS INTENDED TO INDICATE THE "TYPE AND QUALITY OF DESIGN AND MATERIAL AS WELL AS EXACT OPERATING FEATURES REQUIRED"; THAT THE CONTRACTOR MUST PROVIDE PROOF OF SATISFACTORY SERVICE OF THE CALL SYSTEMS IN THREE SIMILAR INSTALLATIONS IN AREAS REMOTE FROM THE MAIN OFFICE OF THE CONTRACTOR; AND THAT THE CONTROL STATIONS HAVE THE CAPACITY OF CALLING GROUPS OF PATIENTS SIMULTANEOUSLY.

YOU STATE THAT THE ELECTRICAL SUBCONTRACTOR FOR THE PROJECT INFORMED YOU IN OCTOBER 1970 THAT YOUR CONCERN, WHICH IS THE ARIZONA DISTRIBUTOR OF THE EKTACOM NURSES' CALL SYSTEM, SUBMITTED THE LOWEST BID TO THE SUBCONTRACTOR, AND YOU WERE ASKED TO SUBMIT LITERATURE CONCERNING YOUR PRODUCT TO THE CONSULTING ELECTRICAL ENGINEER FOR THE PROJECT TO OBTAIN HIS APPROVAL OF YOUR SYSTEM.

YOU FURTHER STATE THAT YOUR SYSTEM WAS NOT APPROVED BECAUSE THE ENGINEER RAISED SEVERAL MINOR TECHNICAL OBJECTIONS CONCERNING YOUR SYSTEM AND BECAUSE HE DOUBTED THE ABILITY OF YOUR CONCERN TO PROVIDE PROPER SERVICE FOR THE SYSTEM BECAUSE GLOBE IS LOCATED IN A REMOTE AREA.

IT IS YOUR POSITION THAT THE MODEL NUMBERS AND CHARACTERISTICS WHICH WERE SET FORTH IN SECTION 16D OF THE SPECIFICATIONS FOR THE PROJECT WERE THOSE OF THE EXECUTONE MODEL ONLY; THAT RCA DOES NOT MANUFACTURE ANY NURSES' CALL EQUIPMENT; AND THE SPECIFICATIONS, THEREFORE, IMPROPERLY RESTRICTED COMPETITION TO SUPPLIERS OF THE EXECUTONE MODEL. YOU ALSO CONTEND THAT YOUR MODEL IS THE EQUAL OF THE REFERENCED EXECUTONE MODEL IN ALL ESSENTIAL RESPECTS AND THAT YOUR COMPANY HAS AN ADEQUATE SERVICE CAPABILITY FOR THE SYSTEM.

THE HEALTH SERVICES AND MENTAL HEALTH ADMINISTRATION OF THE PUBLIC HEALTH SERVICE OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW) HAS PROVIDED THIS OFFICE WITH A REPORT ON YOUR PROTEST, AS FOLLOWS:

"WE UNDERSTAND THAT THE SPECIFICATIONS NAMED EXECUTONE, RCA, EKTACOM, OR APPROVED EQUAL. MODEL NUMBERS GIVEN WERE OF ONE OF THE MANUFACTURERS LISTED. THIS IS STANDARD PROCEDURE IN THIS TYPE OF DOCUMENT. THE SPECIFICATIONS ALSO REQUIRED THAT THE BIDDER SHOW CAPABILITIES OF SERVICE BY EVIDENCE OF THREE SIMILAR INSTALLATIONS REMOTE FROM THE BIDDER'S HOME OFFICE. THIS LAST ITEM WAS FELT IMPORTANT BY THE ENGINEER IN ORDER TO INSURE PROPER SERVICE TO THE REMOTE AREA OF GLOBE. WE ARE TOLD THAT THE LIST OF INSTALLATIONS BY VALLEY SOUND INCLUDED ONE HOSPITAL IN PHOENIX, ARIZONA, THEIR HOME OFFICE. THE OTHER INSTALLATIONS LISTED WERE SCHOOLS AND COMMERCIAL PAGING SYSTEMS WHICH WERE NOT CONSIDERED COMPARABLE TO HOSPITAL NURSE CALL SYSTEMS. ADDITIONALLY, THE PRODUCT SUBMITTED WAS NOT CAPABLE OF CALLS WITH ONE OPERATION THROUGHOUT THE BUILDING IN EMERGENCY BUT OPERATED IN ZONES WITH SEPARATE CALLS REQUIRED FOR EACH ZONE.

"MR. ART KAUFMAN, PRESIDENT OF VALLEY SOUND, MENTIONS A SAVING OF $3,700 IF HIS PRODUCT IS USED. HOWEVER, IT SEEMS THAT THIS SAVING WOULD HAVE BEEN ADDED PROFIT FOR THE ELECTRICAL SUBCONTRACTOR RATHER THAN A SAVING TO THE APPLICANT AND GOVERNMENT, SINCE APPARENTLY NO PROPOSAL FOR A REDUCED PRICE HAD BEEN SUBMITTED. FROM THE ATTACHED COPIES OF LETTERS FROM SATISFIED CUSTOMERS, WE ARE ASSURED THAT MR. KAUFMAN HAS A GOOD PRODUCT SUITABLE FOR USE IN MANY FACILITIES. HOWEVER, WE FEEL THAT THE DESIGN ENGINEER HAS ACTED WITHIN HIS AUTHORITY IN JUDGING THE SUBMITTED PRODUCT."

WE HAVE ALSO BEEN FURNISHED A COPY OF THE PUBLIC HEALTH SERVICE'S POLICY ON SPECIFYING MATERIALS AND EQUIPMENT FOR HOSPITAL AND MEDICAL FACILITIES FOR GRANT-IN-AID PROJECTS. SECTION C OF THE POLICY PROVIDES IN PERTINENT PART:

"(C) *** WHEN SPECIFYING BY BRAND NAMES THE ARCHITECT OR ENGINEER SHOULD INCLUDE ALL THOSE BRANDS HE CONSIDERS TO BE SUITABLE FOR THE PROJECT AND OF EQUIVALENT QUALITY AND PERFORMANCE WITH THE UNDERSTANDING THAT ANY OF THE BRANDS SO NAMED WOULD BE ACCEPTABLE FOR USE ON THE PROJECT. THE USE OF A SINGLE MANUFACTURER'S BRAND AS A STANDARD OF QUALITY WILL BE ACCEPTABLE ONLY IN RARE CASES WHERE IN THE JUDGMENT OF THE ARCHITECT IT IS THE ONLY ONE THAT MEETS THE PROJECT REQUIREMENTS. IN SUCH INSTANCES THE ARCHITECT SHALL JUSTIFY, IN WRITING, THE USE OF A SINGLE BRAND. *** " IN THIS CONNECTION THE PUBLIC HEALTH SERVICE HAS INFORMALLY ADVISED OUR OFFICE THAT THE EKTACOM MODEL SHOULD NOT HAVE BEEN REFERENCED AS AN ACCEPTABLE BRAND NAME PRODUCT SINCE THE EKTACOM PRODUCT LACKS THE CAPACITY OF CALLING GROUPS OF PATIENTS SIMULTANEOUSLY.

THE INSTANT PROCUREMENT WAS NOT CONDUCTED BY AN AGENCY OF THE UNITED STATES GOVERNMENT. HOWEVER, THE PROVISIONS OF SECTION 53.128(C) OF THE PUBLIC HEALTH SERVICE REGULATIONS, 42 CFR 53.128(C), REQUIRE THAT THE APPLICANT FOR A FEDERAL CONSTRUCTION GRANT UNDER THE HILL-BURTON ACT PROVIDE THE FOLLOWING ASSURANCE TO THE GOVERNMENT:

"(C) THAT APPLICANT WILL PERFORM ACTUAL CONSTRUCTION WORK BY THE LUMP SUM (FIXED PRICE) CONTRACT METHOD; EMPLOY ADEQUATE METHODS OF OBTAINING COMPETITIVE BIDDING PRIOR TO AWARDING THE CONSTRUCTION CONTRACT, EITHER BY PUBLIC ADVERTISING OR CIRCULARIZING THREE OR MORE BIDDERS; AND AWARD THE CONTRACT TO THE RESPONSIBLE BIDDER SUBMITTING THE LOWEST ACCEPTABLE BID

OUR OFFICE HAS NOTED THAT THE HILL-BURTON ACT IMPOSES ON THE SURGEON GENERAL OF THE UNITED STATES THE DUTY OF APPROVING CONSTRUCTION PROJECTS UPON HIS FINDING THAT THE PLANS AND SPECIFICATIONS ARE IN ACCORD WITH THE REQUIREMENTS SET FORTH IN 42 U.S.C. 291E AND THAT THE APPLICANT HAS OFFERED THE ABOVE-QUOTED ASSURANCE. B-151187, JULY 11, 1963. THIS DUTY HAS BEEN TRANSFERRED TO THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE BY SECTION 1(A) OF REORGANIZATION PLAN NO. 3 OF 1966, AS SET FORTH IN 42 U.S.C. 202. IN VIEW THEREOF, THE PRIMARY AUTHORITY OF THE SECRETARY TO DETERMINE COMPLIANCE WITH THE REGULATIONS HE HAS IMPOSED MUST BE RECOGNIZED.

IN THIS REGARD THE ONLY REMEDY FOR VIOLATION OF THE REQUIREMENTS AND ASSURANCE IS THAT PROVIDED IN 42 U.S.C. 291(G), WHICH STIPULATES THAT THE SECRETARY MAY NOTIFY THE STATE AGENCY THAT NO FURTHER PAYMENTS FOR THE PROJECT WILL BE MADE. IT WILL BE NOTED THAT THE PROVISION PERMITS SUCH ACTION AT THE DISCRETION OF THE SECRETARY. IN THE INSTANT CASE IT IS THE APPARENT POSITION OF THE SECRETARY THAT THE CIRCUMSTANCES OF THE PRESENT CASE DO NOT CONSTITUTE A VIOLATION OF THE APPLICABLE REGULATION.

IN VIEW THEREOF, AND INASMUCH AS WE FIND NO BASIS IN THE PRESENT RECORD TO OBJECT TO THE TECHNICAL DETERMINATION THAT YOUR PRODUCT IS NOT THE FUNCTIONAL EQUAL OF THE EXECUTONE MODEL IN ALL ESSENTIAL RESPECTS, OR TO OBJECT TO THE FINDING THAT YOUR SERVICE CAPABILITY IS NOT SUFFICIENT FOR THE PURPOSES OF THIS PROJECT, WE CANNOT CONCLUDE THAT YOUR CONCERN WAS IMPROPERLY EXCLUDED FROM CONSIDERATION FOR THE SUBCONTRACT.

HOWEVER, WE AGREE THAT THE SUBJECT SPECIFICATION REFERENCED ONLY ONE ACCEPTABLE BRAND NAME PRODUCT. IN THIS REGARD, WE HAVE NOTED THAT THE PUBLIC HEALTH SERVICE HAS STATED THAT YOUR PRODUCT SHOULD NOT HAVE BEEN LISTED AS AN ACCEPTABLE BRAND NAME PRODUCT. FURTHERMORE, THE AGENCY HAS NOT DISPUTED YOUR STATEMENT THAT RCA DOES NOT MANUFACTURE A NURSE'S CALL SYSTEM.

ACCORDINGLY, WE ARE RECOMMENDING THAT THE SECRETARY OF HEW TAKE REMEDIAL ACTION TO ENSURE THAT IN THE FUTURE, WHERE PROCUREMENT ON A BRAND NAME OR EQUAL BASIS IS JUSTIFIED IN A GRANT-IN-AID PROJECT, GREATER CARE SHOULD BE TAKEN TO ENSURE THAT ALL ACCEPTABLE BRAND NAMES ARE LISTED AND THAT A WRITTEN JUSTIFICATION SHOULD BE PREPARED IN ACCORDANCE WITH THE ABOVE POLICY REQUIREMENT IF ONLY ONE BRAND NAME PRODUCT IS CONSIDERED TO BE ACCEPTABLE.

FOR THE REASONS SET FORTH ABOVE, YOUR PROTEST MUST BE DENIED.