Matter of: Bardex Corporation File: B-252208 Date: June 14, 1993
B-252208: Jun 14, 1993
PROCUREMENT Specifications Minimum needs standards Competitive restrictions Performance specifications Overstatement Protest is sustained where record shows that solicitation's specifications exceed agency's minimum needs by requiring a shiplift employing electromechanical hoisting devices. Bardex argues that the RFP's specifications are unduly restrictive. The device is to be used to move large Coast Guard vessels into and out of the water. Will replace a number of floating drydocks. The acquisition of the shiplift is part of a larger redesign and modernization effort at the Curtis Bay facility. A general contractor will be responsible for various civil construction projects and will be required to install the shiplift.
Matter of: Bardex Corporation File: B-252208 Date: June 14, 1993
PROCUREMENT Specifications Minimum needs standards Competitive restrictions Performance specifications Overstatement Protest is sustained where record shows that solicitation's specifications exceed agency's minimum needs by requiring a shiplift employing electromechanical hoisting devices, wire ropes and articulated platform.
DECISION Bardex Corporation protests the terms of request for proposals (RFP) No. N00600-92-R-3786, issued by the Department of the Navy to acquire a shiplift on behalf of the United States Coast Guard. Bardex argues that the RFP's specifications are unduly restrictive, and that another prospective offeror, NEI Syncrolift, Inc., has an impermissible conflict of interest.
We sustain the protest.
The RFP calls for offers to design and furnish a shiplift for the Coast Guard's facility at Curtis Bay, Maryland. Essentially, the device is to be used to move large Coast Guard vessels into and out of the water, and will replace a number of floating drydocks. The acquisition of the shiplift is part of a larger redesign and modernization effort at the Curtis Bay facility, replacing the drydock ship maintenance facility with a land- based ship handling facility (LBSHF). A general contractor will be responsible for various civil construction projects and will be required to install the shiplift, to be provided as government furnished property. The civil construction portion of the requirement is the subject of a separate Coast Guard acquisition, and the Navy is procuring the shiplift on behalf of the Coast Guard.
During the initial stages of the acquisition, the Coast Guard published a Commerce Business Daily (CBD) announcement seeking information from shiplift manufacturers. The agency also solicited information regarding shiplift manufacturers from Lloyd's Register of Shipping, an internationally recognized entity which issues uniform standards for the shipping industry and certifies to manufacturers' compliance with those standards when they have constructed facilities. Based on the information obtained from its inquiries, the Coast Guard decided that it would acquire a Syncrolift shiplift on a sole-source basis, and informed the Navy of its conclusions in this respect. The Navy, as part of its procurement action, published notice of the intended sole-source award in the CBD. In response to the announcement, the Navy received an expression of interest from another firm which stated that it could manufacture a shiplift reflecting all of the design characteristics outlined in the announcement. Based on this expression of interest, the Navy determined that it could not conduct a sole-source acquisition, and began preparing the procurement for full and open competition pursuant to the Competition in Contracting Act of 1984 (CICA), 10 U.S.C. Sec. 2304(a)(1)(A) (1988).
After the determination to compete the acquisition had been made, but before the current RFP was issued, the Coast Guard reconsidered its decision to procure a Syncrolift shiplift. There are essentially two types of shiplifts, those featuring electromechanical lifting devices (offered by Syncrolift), and those featuring hydraulic lifting devices (offered by Bardex, and other firms). The Coast Guard investigated these two approaches by visiting a total of six shiplift installations in Europe, three hydraulic systems and three Syncrolift installations. After performing its site visits, the Coast Guard determined that it still preferred the electromechanical shiplifts. The Navy therefore issued the current RFP, which contains the specification drafted for the sole-source acquisition, that is, it essentially outlines the design parameters of the Syncrolift shiplift.
Bardex argues that several requirements for the shiplift are unduly restrictive because they exceed the agency's minimum needs and preclude Bardex from offering its system. Solicitations may only include restrictive provisions to the extent that they are necessitated by the agency's minimum needs. Federal Acquisition Regulation (FAR) Sec. 10.002. We thus consider protests that provisions contained in solicitations are overly restrictive because they are not reasonably related to the agency's minimum needs. Hewlett-Packard Co., 69 Comp.Gen. 750 (1990), 90-2 CPD Para. 258.
The agency states that it is Coast Guard policy to avoid potential environmental risks whenever possible, and that a hydraulic lifting system is inherently riskier than an electromechanical system because hydraulic fluids must be pumped out along the piers which support the shiplift device. According to the agency, this poses the risk of a hydraulic fluid spill (which would potentially subject the agency to compliance with a host of environmental safety statutes and regulations), a risk it is not willing to accept, and which is avoidable by using electromechanical systems.
The Coast Guard's policy here is based on the potential for an environmentally hazardous leak or spill of hydraulic fluid. However, the record does not establish that a hydraulic system such as Bardex's poses any practical risk of environmental harm, or that the agency actually considered the system offered by Bardex. The agency's determination to exclude the Bardex system for this reason was based on its review of other hydraulic systems, and did not take into consideration the specific features of the Bardex system. This is significant because Bardex's system presents two apparently unique means of minimizing the risk of a damaging leak or spill--a double containment system and "environmentally friendly" hydraulic fluid. We fail to see how an agency legitimately could arrive at a policy to preclude the use of a product without even considering features of that product designed to eliminate the concerns underlying the policy.
Even assuming that the Bardex system properly was considered to present environmental concern, the record shows that the agency never gave equal consideration to the environmental impact of using an electromechanical system. The electromechanical system uses a large number of wire rope hoists to lift the shiplift platform out of the water. In order for the wire ropes to be properly maintained, they must be lubricated every 1-2 weeks, which results in the direct exposure of the marine environment to the lubricant. Agency officials testified at the hearing on this matter that they did not consider the environmental impact of these lubricants when preparing the environmental impact statement for the project (Hearing videotape (VT) 17:03:30). The record also shows that the Coast Guard's current spill prevention and countermeasure plan does not take into consideration the introduction of these lubricants into the marine environment; indeed, the Coast Guard specifically stated that it did not know how it would mitigate this environmental problem (VT 17:03:20).
Agencies properly may adopt otherwise restrictive specifications to implement legitimate environmental considerations. See Trilectron Indus., Inc., B-248475, Aug. 27, 1992, 92-2 CPD Para. 130. In this case, the Navy could not reasonably use the Coast Guard's policy of avoiding environmental risks to exclude one approach and at the same time ignore that policy in accepting another approach. See Hewlett-Packard Co., supra. Under these circumstances, the agency's environmental concerns were not a proper basis for excluding Bardex's system.
The agency states that it requires the "syncronous" lifting motion of an electromechanical system. This results in each of the hoist motors lifting at a constant speed, regardless of shifts or changes in the weight being borne by any given motor, which in turn results in the lifting platform's moving up uniformly throughout the lifting procedure. This reportedly minimizes potential damage to the ship's hull from "bending moments," which result from inordinate stress at a particular hoisting point, and can potentially result in damage to a ship's hull. The agency states that the electromechanical design also employs "load sensing cells" which automatically shut the device down if the weight at any given hoist becomes too great, thereby further reducing the risk of bending moments. The agency contrasts this with the operation of hydraulic systems, which it states rely on complex feedback systems that adjust the speed of any given hoist to compensate for shifts in weight. The agency maintains that this is a more complicated approach which makes the system more difficult to operate and therefore less dependable.
The record does not support the agency's position that only electromechanical systems satisfy this requirement. Bardex has provided documentation (unrefuted by the Navy) showing that at least one hydraulic system in the North Sea has a demonstrated capability of providing completely level and simultaneous lifting for four large independent platforms to within 2 millimeters (mm) of one another. This is well within the tolerance required under the RFP here (alignment with the adjacent shore structure to within plus or minus 10 mm), despite the fact that the load is substantially greater than the load requirements here. In addition, the protester's product literature shows that the Bardex shiplift provides completely syncronous motion by having each hydraulic jack simultaneously lift the platform a single chain link at a time. This occurs at a constant rate at all hoisting points, regardless of differences or shifts in weight at the various hoisting points. The protester's product also has a load sensing system which automatically shuts the system down in the event of an overload at any given hoisting point. Finally, the protester's product literature shows that its system is easily operated from a single control console comparable in ease of operation to the electromechanical system to be acquired.
While the agency's determination regarding the relative syncronous lifting capabilities of hydraulic and electromechanical systems appears to have been based on its observation of some actual systems, the agency did not observe a Bardex system. This is significant in light of the clear indication in Bardex's literature that its system is capable of syncronous lifting, and the Navy's failure to refute the claims in this literature in either its report or its hearing testimony. We conclude that the agency improperly excluded Bardex's system based on syncronous motion and ease of operation concerns. See Moore Heating & Plumbing, Inc., B-247417, June 2, 1992, 92-1 CPD Para. 483.
The Navy argues that it requires an electromechanical system because such systems are easier and less costly to maintain than hydraulic systems. The agency asserts that it is necessary to inspect the hydraulic hose and filter systems quarterly and to replace the hose system every 5 years in order to guard against leaks and contamination of the hydraulic fluid. In addition, the agency contends that the cost of replacing the hydraulic hoses is approximately $11,000.
As we concluded with regard to environmental concerns, the record shows that the agency never considered the specific maintenance requirements of electromechanical systems as compared to hydraulic systems. The agency's report, while discussing at length the maintenance requirements for hydraulic systems, is completely silent on the question of the maintenance required for an electromechanical system. In particular, there is no evidence to show that the agency gave any consideration whatsoever to the effort or cost involved in maintaining the wire ropes in accordance with the standards set forth in Lloyd's Register, which provides for lubrication of the ropes every 1-2 weeks and replacement at least every 5 years. The Coast Guard official primarily responsible for developing the minimum needs for this acquisition testified that the agency had not conducted a "great study" of the maintenance requirements associated with wire rope (V.T. 16:45:15), and had performed no comparative analysis of the maintenance costs associated with wire rope versus the chains employed in hydraulic systems (V.T. 16:46:50).
In addition, to the extent that the agency's position is founded on the effort and cost of maintaining and replacing hydraulic hoses, Bardex explains that only a small portion of its system relies on hydraulic hoses; the vast majority of the system's hydraulic fluid is pumped through permanently installed steel pipes and hardened tubing. On this record, then, there is no basis to conclude that the maintenance costs of electromechanical systems are lower than those for Bardex's hydraulic system.
The agency states that the wire ropes used in an electromechanical system are preferable to the chains used in Bardex's and other hydraulic systems because shiplifts using chains are too slow and costly to maintain. However, a Coast Guard official testified that wire ropes in fact were specified because that was what came with an electromechanical system: "The Coast Guard wanted electromechanical, and electromechanicals come with cables. It seems an academic exercise whether you want chains or wire rope." (V.T. 16:48.) This same individual also testified that he had not investigated Lloyd's Register's differing maintenance requirements for chain versus wire rope (V.T. 16:46:50), and that, provided chains are properly inspected when acquired, the maintenance demands are less than those required for wire rope. (V.T. 17:34:46). In fact, the official ultimately concluded that "admittedly, chains have a little bit going for them above cables." (V.T. 17:37:10.)
Regarding the travel speed of chains versus wire rope, the agency has offered no support for its position that chains operate more slowly. On the other hand, the protester explains, and the agency does not dispute, that the speed of its shiplift is dependent, not on its use of chains, but on the amount of horsepower used to drive the system. Bardex states that it can achieve any number of lifting speeds (including that required by the agency) simply by providing the appropriate horsepower.
We conclude that the agency has not shown that it requires wire ropes rather than chains.
The agency states that it requires the articulated platform provided with the Syncrolift system. An articulated platform is essentially a series of smaller platforms which are joined together to form the larger platform, whereas a rigid platform (such as Bardex's) is a single large platform without joints. The agency states that articulated platforms are safer, since the joints prevent the transmittal of bending moments along the platform's length. The agency also states that an articulated platform is safer because all of its structural elements must function properly or the device will not operate, whereas a rigid platform will continue to operate even if one of its structural elements is not functioning. Finally, the agency contends that an articulated platform is more easily expanded because it only requires the addition of another section of platform.
While the two types of platform have different characteristics, the record does not show that the agency gave significant consideration to all safety aspects of the two platforms. In this regard, the record shows that the agency essentially discounted a well documented safety hazard associated with articulated platforms, while highlighting an alleged safety hazard associated with rigid platforms without providing support for its position in the record.
The record does show that articulated platforms eliminate the transmission of bending moments along the length of the platform, but Bardex maintains, and the agency has not shown otherwise, that this risk can be eliminated by proper blocking of the ship in the first instance. The agency has not explained why this approach is unacceptable (indeed, the record shows that blocking--using divers to emplace supports under the hull--is required for either platform). At the same time, the risk of catastrophic failure (that is, instantaneous or wholesale failure of the device resulting in the ship being dropped) is greater with an articulated platform because other portions of the platform cannot bear additional weight in the event that the device experiences failure at any one of the hoisting points. As the Coast Guard's official testified, "all the pieces have to work or a failure will occur." (V.T.17:45:20.) The agency's opinion (based on two informal telephonic inquiries) is that, in most instances, this type of failure results from improper wire rope maintenance. The agency's own report, however, contains extensive documentation relating to this type of safety hazard, with reference to a large number of incidents of either catastrophic shiplift failure (where ships were dropped) or malfunction resulting in significant risk. The agency admits that, aside from its two informal inquiries, it did not investigate these incidents.
While the agency's opinion as to these types of failures is that they resulted from improper wire rope maintenance, regardless of the origin of the failure, the design of an articulated platform is such that, unlike a rigid platform, all of its components must function or catastrophic failure will occur. This is in contrast to a rigid platform, which can experience a failure at any one hoisting point without experiencing a catastrophic failure; the increased weight which would result from failure at any given hoisting point is shifted or redistributed to all other hoisting points. The Coast Guard's official described the rigid platform as "more redundant," (V.T. 17:44:56), and as such, it significantly reduces the risk of catastrophic failure. For this reason, Lloyd's Register permits rigid platforms to have a higher maximum distributed load rating; simply stated, rigid platforms are better at distributing local load stress along the balance of the platform. While this is portrayed as a disadvantage by the agency because it leads to progressive failure (that is, failure of one hoisting element, followed by another and so on, ultimately resulting in catastrophic failure), in fact, the automatic shutdown feature of the Bardex system would in practice prevent further operation should failure occur at a particular lifting point.
As for platform expandability, Bardex explains that its rigid platforms are built by progressively welding sections of platform together, and can easily be expanded by simply welding additional sections to the preexisting platform. The agency has produced no evidence either to refute Bardex's position or to show that it even considered the expandability of the Bardex system.
We conclude that while there are safety risks inherent in Bardex's rigid platform, such risks also are present in the Syncrolift platform. On this record, there is no basis for concluding that the risks associated with the rigid platform are greater than those associated with an articulated platform.
We sustain Bardex's protest on the ground that the requirements in question exceed the agency's needs, resulting in the improper exclusion of Bardex's system from consideration. By separate letter of today to the Secretary of the Navy, we are recommending that the RFP be amended so that the Bardex can offer its shiplift system to be evaluated along with the Syncrolift system to determine which most advantageously meets the Coast Guard's actual needs. We also find Bardex entitled to the costs of filing and pursuing its protest, including reasonable attorneys' fees. 4 C.F.R. Sec. 21.6(d)(1) (1993).
We sustain the protest.
1. The hydraulic fluid Bardex's system uses is manufactured from food grade paraffinic mineral oils which, the manufacturer claims, has been shown not to cause harm to wildlife or the environment in the event of a spill.
2. The agency had initially argued that hydraulic systems also required more space to install that electromechanical systems. During the development of the record in this case, the protester showed that the "footprint" of its hydraulic jack was so much smaller than that of the electromechanical winches, that it could provide the agency with up to 33 percent additional usable pier space after installation.
3. The agency argues that this aspect of Bardex's protest is untimely, contending that the issue was raised for the first time in the protester's comments responding to the agency report. We disagree. Bardex's initial letter of protest challenged the solicitation on the basis that it improperly specified the Syncrolift shiplift design. In doing so, Bardex referenced the entire specification relating the design characteristics of the shiplift, which included the articulated platform. This was adequate to bring into issue the articulated platform requirement.
4. Bardex also alleges that Syncrolift has an impermissible organizational conflict of interest arising from its involvement in the preparation of the RFP's specifications. We need not decide this issue since our recommendation here will eliminate any competitive advantage Syncrolift may have had.