B-206641.2, B-206728.2, B-207421.2, DEC 30, 1983

B-206641.2,B-207421.2,B-206728.2: Dec 30, 1983

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DECISION HOLDING THAT AN INSULATION SPECIFICATION WAS UNDULY RESTRICTIVE IS AFFIRMED WHERE THE AGENCY REQUESTS RECONSIDERATION BASED ON THE FACT THAT THE SPECIFICATION WAS NOT RESTRICTED TO A SINGLE TYPE OF INSULATION. SINCE THE DECISION WAS BASED ON THE UNJUSTIFIED EXCLUSION OF THE INSULATION USED BY THE PROTESTER. NOT THE FACT THAT ONLY ONE KIND OF INSULATION WAS ACCEPTABLE. 2. GAO WILL NOT ASSUME THAT PLASTIC CONDUIT IS UNSUITABLE FOR PARTICULAR SITE CONDITIONS WHERE NOTHING IN THE RECORD SUPPORTS SUCH A CONCLUSION. AN ARGUMENT ON RECONSIDERATION THAT GAO SHOULD HAVE MADE THIS ASSUMPTION. 3. RECOMMENDED CANCELLATION OF SOLICITATION AND RESOLICITATION OF REQUIREMENT IS RESCINDED WHERE GAO IS ADVISED IN AGENCY REQUEST FOR RECONSIDERATION THAT AT THE TIME OF ISSUANCE OF ITS DECISION SUSTAINING THE PROTEST.

B-206641.2, B-206728.2, B-207421.2, DEC 30, 1983

DIGEST: 1. DECISION HOLDING THAT AN INSULATION SPECIFICATION WAS UNDULY RESTRICTIVE IS AFFIRMED WHERE THE AGENCY REQUESTS RECONSIDERATION BASED ON THE FACT THAT THE SPECIFICATION WAS NOT RESTRICTED TO A SINGLE TYPE OF INSULATION, SINCE THE DECISION WAS BASED ON THE UNJUSTIFIED EXCLUSION OF THE INSULATION USED BY THE PROTESTER, NOT THE FACT THAT ONLY ONE KIND OF INSULATION WAS ACCEPTABLE. 2. GAO WILL NOT ASSUME THAT PLASTIC CONDUIT IS UNSUITABLE FOR PARTICULAR SITE CONDITIONS WHERE NOTHING IN THE RECORD SUPPORTS SUCH A CONCLUSION, AND AN ARGUMENT ON RECONSIDERATION THAT GAO SHOULD HAVE MADE THIS ASSUMPTION. 3. RECOMMENDED CANCELLATION OF SOLICITATION AND RESOLICITATION OF REQUIREMENT IS RESCINDED WHERE GAO IS ADVISED IN AGENCY REQUEST FOR RECONSIDERATION THAT AT THE TIME OF ISSUANCE OF ITS DECISION SUSTAINING THE PROTEST, CONSTRUCTION ON THE PROJECT ALREADY WAS SUBSTANTIALLY COMPLETED; CORRECTIVE ACTION UNDER THESE CIRCUMSTANCES IS IMPRACTICABLE.

PHILCON CORP. - RECONSIDERATION:

THE DEPARTMENT OF THE NAVY REQUESTS THAT WE RECONSIDER OUR DECISION PHILCON CORP., B-206641, ET SEQ., APRIL 12, 1983, 83-1 CPD 380, SUSTAINING PHILCON'S PROTESTS THAT CERTAIN SPECIFICATIONS FOR UNDERGROUND HEAT DISTRIBUTION (UHD) SYSTEMS IN TWO SOLICITATIONS FOR CONSTRUCTION WORK WERE UNDULY RESTRICTIVE. WE AFFIRM OUR DECISION, AS MODIFIED BELOW.

WE SUSTAINED PHILCON'S PROTEST UNDER IFB NO. N62474-79-B-5541 (IFB 5541) BECAUSE THAT SOLICITATION REQUIRED THAT THE UHD SYSTEM FURNISHED BE COVERED BY A TRI-SERVICE LETTER OF ACCEPTABILITY (LOA), AND THAT THE SYSTEM BE CONSTRUCTED USING CALCIUM SILICATE INSULATION. THE TRI SERVICE LOA REQUIREMENT WAS UNDULY RESTRICTIVE IN OUR VIEW BECAUSE THOSE LOAS BECAME VOID IN 1980 WHEN THE TRI-SERVICE PREQUALIFICATION PROCEDURES WERE SUPERSEDED BY THE FEDERAL AGENCY PREQUALIFICATION PROCEDURES. THAT IS, WE FOUND UNDULY RESTRICTIVE A REQUIREMENT THAT UHD SYSTEM SUPPLIERS POSSESS A VOID LOA. THE NAVY DOES NOT QUESTION THIS PORTION OF OUR DECISION IN ITS RECONSIDERATION REQUEST.

WE FOUND THE INSULATION REQUIREMENT RESTRICTIVE BECAUSE IT PRECLUDED PHILCON FROM USING THE TYPE OF INSULATION MATERIAL (FOAM GLASS) FOR WHICH ITS UHD SYSTEM HAD BEEN PREQUALIFIED, AND THUS RENDERED ITS SYSTEM UNACCEPTABLE FOR THE PROJECT. THERE WAS NO EVIDENCE THAT PHILCON'S INSULATION COULD NOT MEET THE NAVY'S MINIMUM NEEDS. THE NAVY STILL DOES NOT ATTEMPT TO JUSTIFY EXCLUDING PHILCON'S INSULATING MATERIAL. CHALLENGES OUR CONCLUSION SOLELY ON THE BASIS THAT THE IFB DID NOT REQUIRE CALCIUM SILICATE INSULATION, AS INDICATED IN OUR DECISION, BUT IN FACT PERMITTED THE USE OF THREE ADDITIONAL MATERIALS - MINERAL FIBER, PHENOLIC FOAM AND CELLULAR GLASS. IT CONCLUDES THAT SINCE THE IFB WAS NOT RESTRICTED TO CALCIUM SILICATE "NO VIOLATION APPEARS TO BE EVIDENT."

WE FAIL TO SEE HOW OUR DECISION WOULD BE CHANGED BY THE FACT THAT THE IFB PERMITTED THE USE OF MINERAL FIBER, PHENOLIC FOAM AND CELLULAR GLASS AS INSULATING MATERIALS. IT REMAINS THAT FOAM GLASS INSULATION WAS NOT ACCEPTABLE (THE NAVY DOES NOT REPRESENT THAT ANY OF THE LISTED MATERIALS ARE THE SAME AS FOAM GLASS). WHILE OUR DECISION MAY HAVE IMPROPERLY CHARACTERIZED THE IFB AS BEING RESTRICTED TO CALCIUM SILICATE INSULATION, THIS FACT WAS ONLY INCIDENTAL TO OUR CONCLUSION WHICH, AGAIN, WAS BASED ON THE UNJUSTIFIED EXCLUSION OF PHILCON'S FOAM GLASS INSULATION.

THE NAVY ALSO INDICATES THAT IT WAS NOT AWARE THAT THE INSULATION REQUIREMENT WAS IN ISSUE IN THE PROTEST. INCLUDED IN THE PROTEST RECORD, HOWEVER, WAS AN APRIL 5, 1982 LETTER FROM PHILCON IN WHICH IT STATES AS ONE OF THE SPECIFICS OF ITS PROTEST THAT IT "CANNOT COMPLY WITH THE SPECIFICATIONS BECAUSE OUR APPROVED INSULATION COMPONENT IS NOT CALCIUM SILICATE." THE LETTER INDICATES THAT A COPY WAS BEING SENT TO THE NAVY. OUR OFFICE ALSO SENT THE NAVY A COPY OF THE LETTER. IN ANY EVENT, GIVEN THAT EVEN NOW THE NAVY DOES NOT JUSTIFY THE RESTRICTIVE INSULATION SPECIFICATION, THE FACT THAT THE NAVY MAY NOT HAVE BEEN AWARE OF THIS ISSUE BEFORE RECEIVING OUR DECISION IS OF NO CONSEQUENCE AT THIS POINT.

THE NAVY'S RECONSIDERATION REQUEST THUS PRESENTS NO BASIS FOR ALTERING THIS PORTION OF OUR ORIGINAL DECISION.

WE SUSTAINED PHILCON'S PROTEST UNDER IFB NO. N62474-78-B-0780 (IFB 0780) ON THE GROUND THAT THE NAVY FAILED TO ADEQUATELY JUSTIFY REQUIREMENTS THAT THE UHD SYSTEM BE CONSTRUCTED WITH METALLIC CONDUIT (THE PROTECTIVE SHELL SURROUNDING THE CARRIER PIPING) AND CALCIUM SILICATE INSULATION. SINCE PHILCON'S SYSTEM WAS PREFABRICATED WITH PLASTIC CONDUIT AND, AS ALREADY DISCUSSED, FOAM GLASS INSULATION, PHILCON WAS PRECLUDED FROM COMPETING AS A SYSTEM SUPPLIER. THE NAVY REPORT IN RESPONSE TO THE PROTEST OFFERED NO EXPLANATION FOR ITS CALCIUM SILICATE INSULATION RESTRICTION. JUSTIFICATION FOR THE REQUIREMENT THAT METALLIC CONDUIT BE USED, THE NAVY REPORTED IN A BRIEF MANNER THAT USE OF METALLIC CONDUIT WAS CONSIDERED "GOOD ENGINEERING PRACTICE" SINCE THIS CONDUIT CURRENTLY WAS IN USE AT THE SITE AND HAD SATISFACTORILY PROTECTED THE EXISTING UHD SYSTEM FROM FLASH FLOODS AND EARTH MOVEMENT. WHILE WE DID NOT QUESTION THE NAVY'S ENGINEERING DETERMINATION THAT METALLIC CONDUIT COULD PERFORM, WE FOUND THE NAVY'S EXPLANATION INSUFFICIENT TO JUSTIFY THE METALLIC RESTRICTION BECAUSE THE NAVY PRESENTED NO EVIDENCE THAT IT EVER HAD CONSIDERED WHETHER PHILCON'S PLASTIC CONDUIT ALSO COULD PERFORM. WE REASONED, SIMPLY, THAT THE FACT THAT METALLIC CONDUIT IS SATISFACTORY DOES NOT ESTABLISH THAT PHILCON'S PLASTIC CONDUIT IS UNSATISFACTORY.

AGAIN STATING THAT IT WAS UNAWARE THAT THE CALCIUM SILICATE INSULATION RESTRICTION WAS IN ISSUE, THE NAVY ARGUES IN ITS RECONSIDERATION REQUEST THAT IT WOULD HAVE BEEN "CONTRACTUALLY INFEASIBLE AND DESTRUCTIVE OF THE CONCEPT OF PREQUALIFICATION" TO SPECIFY PHILCON'S FOAM GLASS INSULATION SINCE ONLY PHILCON HAS BEEN APPROVED FOR USE OF THIS TYPE OF INSULATION. (THE NAVY DOES NOT CONTEND HERE, AS IT DID IN CONNECTION WITH IFB-5541, THAT THE SPECIFICATION IN IFB-0780 PERMITS THE USE OF ANY MATERIAL OTHER THAN CALCIUM SILICATE FOR INSULATION.) THE AGENCY'S REASONING ESCAPES US. AS ALREADY DISCUSSED, THE INSULATION SPECIFICATION WAS RESTRICTIVE BECAUSE IT PRECLUDED PHILCON FROM OFFERING ITS PREQUALIFIED UHD SYSTEM. IT WAS, AND REMAINS, OUR VIEW THAT SINCE THE NAVY APPEARS UNABLE TO OFFER A SUBSTANTIAL REASON FOR EXCLUDING PHILCON'S FOAM GLASS INSULATION, THE INSULATION SPECIFICATION SHOULD HAVE BEEN DRAWN SO THAT ALL PREQUALIFIED SUPPLIERS, INCLUDING PHILCON, COULD COMPETE BY OFFERING THE INSULATION WITH WHICH THEIR APPROVED SYSTEMS WERE CONSTRUCTED.

REGARDING THE METALLIC CONDUIT RESTRICTION, THE NAVY STATES THAT IT FURNISHED OUR OFFICE NO STATEMENT OR PROOF THAT PLASTIC CONDUIT COULD NOT WITHSTAND THE SEVERE SITE CONDITIONS BECAUSE SUCH PROOF WAS "CONTRA INDICATED BY THE VERY NATURE OF PLASTIC PIPE." BY THIS STATEMENT, THE NAVY SEEMS TO IMPLY THAT WE SHOULD HAVE UPHELD ITS POSITION BASED ON SOME INHERENT UNSUITABILITY OF PLASTIC CONDUIT FOR UNSTABLE SOIL CONDITIONS. THERE WAS NO EVIDENCE IN THE RECORD, HOWEVER, THAT PLASTIC CONDUIT WOULD BE LESS SUITABLE FOR THE SITE THAN METALLIC CONDUIT, AND WE THUS HAD NO BASIS FOR ASSUMING THAT THIS WAS THE NAVY'S REASON FOR EXCLUDING PLASTIC CONDUIT. WE REITERATE THE GENERAL RULE THAT WHERE A PROTESTER CHALLENGES A REQUIREMENT AS UNDULY RESTRICTIVE OF COMPETITION, IT IS INCUMBENT UPON THE AGENCY TO ESTABLISH PRIMA FACIE SUPPORT FOR ITS CONTENTION THAT THE RESTRICTION IS NECESSARY. AMRAY, INC., B-208308, JANUARY 17, 1983, 83-1 CPD 43. THE NAVY DID NOT MEET THIS STANDARD. THE FACT THAT PHILCON'S CONDUIT WAS PLASTIC DID NOT BY ITSELF SATISFY THE NAVY'S BURDEN.

THE NAVY FURTHER STATES THAT PROOF OF THE ACCEPTABILITY OF PLASTIC CONDUIT WAS UNAVAILABLE SINCE IT NEVER HAD BEEN USED AT THE SITE AND ALSO NEVER HAD BEEN SUBJECTED TO PREQUALIFICATION TESTING TO ESTABLISH ITS ABILITY TO WITHSTAND THE SEVERE SITE CONDITIONS. IF THIS WAS THE SITUATION DURING OUR REVIEW OF PHILCON'S PROTEST, THE NAVY SHOULD CERTAINLY HAVE SO STATED IN ITS REPORT. THE FACT THAT PLASTIC CONDUIT NEVER HAD BEEN TESTED FOR THE EXTANT SITE CONDITIONS WOULD HAVE BEEN GERMANE TO OUR CONSIDERATION OF WHETHER THE EXCLUSION OF PLASTIC CONDUIT WAS REASONABLY JUSTIFIED. IN ANY EVENT, THE NAVY ADVISES US THAT AWARD UNDER BOTH IFBS WERE MADE NOTWITHSTANDING PHILCON'S PROTESTS AND THAT AS OF APRIL 1983 THE PROJECTS WERE 75 TO 90 PERCENT COMPLETE. HAD WE BEEN AWARE THAT THE PROJECTS WERE SUBSTANTIALLY COMPLETE, WE WOULD HAVE FOUND CORRECTIVE ACTION IMPRACTICABLE. WE ACCORDINGLY RESCIND OUR RECOMMENDATION THAT THE IFBS BE CANCELED AND THE REQUIREMENTS RESOLICITED. WE DO RECOMMEND THAT THE NAVY TAKE STEPS TO ASSURE THAT RESTRICTIVE SPECIFICATIONS ARE NOT INCLUDED IN FUTURE SOLICITATIONS INVOLVING THE INSTALLATION OF UHD SYSTEMS.

BY LETTER OF TODAY, WE ARE NOTIFYING THE RELEVANT CONGRESSIONAL COMMITTEES - PREVIOUSLY NOTIFIED PURSUANT TO SECTION 236 OF THE LEGISLATIVE REORGANIZATION ACT, 31 U.S.C. SEC. 720, AS ADOPTED BY PUBLIC LAW 97-258 - THAT WE HAVE MODIFIED OUR RECOMMENDATION IN THIS MATTER.

WE AFFIRM OUR DECISION AS MODIFIED.