B-128475, SEPTEMBER 5, 1956, 36 COMP. GEN. 193

B-128475: Sep 5, 1956

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BIDS - QUALIFIED - REJECTION ON THE BASIS OF SUPPLEMENTAL EVIDENCE WHICH INDICATES THAT A CERTIFICATION OF PERFORMANCE BY A BIDDER IS AMBIGUOUS AND AN INDEPENDENT TEST REPORT WHICH INDICATES THAT THE EQUIPMENT OFFERED BY THE BIDDER WOULD NOT MEET THE ADVERTISED SPECIFICATIONS. THE BID MUST BE REGARDED AS UNRESPONSIVE AND OBJECTION TO THE REJECTION OF THE BID WILL NOT BE CONTINUED. 1956: REFERENCE IS MADE TO LETTER DATED AUGUST 30. WHICH PROTEST WAS THE SUBJECT OF OUR DECISION OF AUGUST 9. IT IS STATED IN THE LETTER OF AUGUST 30. THAT STEWART AND STEVENSON WERE NOTIFIED TO STOP PERFORMANCE UNDER THE CONTRACT BUT THAT THE CONTRACT HAD NOT BEEN CANCELED DUE TO THE RECEIPT OF INFORMAL ADVICE FROM OUR OFFICE THAT THE CONTRACTOR WOULD BE AFFORDED AN OPPORTUNITY TO PRESENT ITS VIEWS IN REGARD TO THE DECISION AS IT HAD REQUESTED.

B-128475, SEPTEMBER 5, 1956, 36 COMP. GEN. 193

BIDS - QUALIFIED - REJECTION ON THE BASIS OF SUPPLEMENTAL EVIDENCE WHICH INDICATES THAT A CERTIFICATION OF PERFORMANCE BY A BIDDER IS AMBIGUOUS AND AN INDEPENDENT TEST REPORT WHICH INDICATES THAT THE EQUIPMENT OFFERED BY THE BIDDER WOULD NOT MEET THE ADVERTISED SPECIFICATIONS, THE BID MUST BE REGARDED AS UNRESPONSIVE AND OBJECTION TO THE REJECTION OF THE BID WILL NOT BE CONTINUED.

TO THE SECRETARY OF THE ARMY, SEPTEMBER 5, 1956:

REFERENCE IS MADE TO LETTER DATED AUGUST 30, 1956, WITH ENCLOSURES, FROM MR. F. H. HIGGINS, ASSISTANT SECRETARY OF THE ARMY ( LOGISTICS), WITH FURTHER REFERENCE TO THE PROTEST OF THE CONSOLIDATED DIESEL ELECTRIC CORPORATION AGAINST THE ACTION OF THE ENGINEER CORPS OF YOUR DEPARTMENT IN REFUSING TO AWARD A CONTRACT TO THAT CORPORATION PURSUANT TO INVITATION NO. DA-ENG-11-184-56-F-609, ISSUED BY THE CHICAGO PROCUREMENT OFFICE, CORPS OF ENGINEERS, U.S. ARMY, WHICH PROTEST WAS THE SUBJECT OF OUR DECISION OF AUGUST 9, 1956, B-128475, 36 COMP. GEN. 102, TO YOU, HOLDING THAT THE CONTRACT AWARDED TO STEWART AND STEVENSON SERVICES, INC., SHOULD BE CANCELED.

IT IS STATED IN THE LETTER OF AUGUST 30, 1956, THAT STEWART AND STEVENSON WERE NOTIFIED TO STOP PERFORMANCE UNDER THE CONTRACT BUT THAT THE CONTRACT HAD NOT BEEN CANCELED DUE TO THE RECEIPT OF INFORMAL ADVICE FROM OUR OFFICE THAT THE CONTRACTOR WOULD BE AFFORDED AN OPPORTUNITY TO PRESENT ITS VIEWS IN REGARD TO THE DECISION AS IT HAD REQUESTED. IT WAS STATED FURTHER THAT THE DEPARTMENT OF THE ARMY HAD MADE A FURTHER REVIEW OF THE INFORMATION PREVIOUSLY SUBMITTED TO OUR OFFICE AND, AS A RESULT, THE OFFICE OF THE CHIEF OF ENGINEERS HAD PREPARED AN ADMINISTRATIVE REPORT DATED AUGUST 28, 1956, SIGNED BY BRIGADIER GENERAL DAVID W. HEIMAN, USA, ASSISTANT CHIEF OF ENGINEERS FOR MILITARY SUPPLY " FOR THE CHIEF OF ENGINEERS," WHICH WAS FORWARDED WITH LETTER OF AUGUST 30, 1956, WITH THE REQUEST THAT OUR DECISION BE RECONSIDERED IN THE LIGHT OF THE ADDITIONAL INFORMATION CONTAINED THEREIN.

AS STATED IN OUR DECISION, THE INVITATION REQUESTED BIDS TO BE OPENED ON MAY 31, 1956, FOR FURNISHING 334 ELECTRIC GENERATOR SETS CONFORMING TO PURCHASE DESCRIPTION DATED FEBRUARY 29, 1956, AND AMENDMENT NO. 1, DATED MARCH 13, 1956, INCLUDING THE "EXCEPTIONS AND ADDITIONS" THERETO AS SET FORTH IN THE INVITATION. ADDENDA NOS. 2, 3 AND 4 CHANGED SOME OF THE SPECIFICATIONS REQUIREMENTS FOR THE GENERATOR SETS AS ORIGINALLY CALLED FOR UNDER THE INVITATION.

BIDDERS WERE REQUESTED TO QUOTE AS BID "A" A UNIT PRICE FOR FURNISHING THE 334 GENERATOR SETS F.O.B. CARRIER, ORIGIN, LOADED, BLOCKED AND BRACED AND/OR TO QUOTE AS BID "B" A UNIT PRICE FOR FURNISHING 117 GENERATOR SETS, F.O.B. GRANITE CITY, ILLINOIS, 151 SETS F.O.B. GUILDERLAND CENTER, NEW YORK, AND 66 SETS F.O.B. LATHROP, CALIFORNIA. IT WAS PROVIDED ALSO THAT AWARD WOULD BE MADE FOR ONE TYPE OF DELIVERY, THAT IS, EITHER UNDER BID "A" OR BID "B" BUT NOT UNDER BOTH AND THAT THE 334 SETS WOULD BE AWARDED BY LOT. IN CONNECTION WITH BIDS SUBMITTED UNDER BID "A" (F.O.B. ORIGIN) IT WAS SPECIFICALLY PROVIDED IN PARAGRAPH 7 OF THE SPECIAL TERMS AND CONDITIONS THAT SUCH BIDS WOULD BE EVALUATED ON THE BASIS OF THE LOWEST OVER-ALL COST TO THE GOVERNMENT AND THAT APPLICABLE COMMERCIAL RAIL AND/OR TRUCK TRANSPORTATION COSTS WHICH WOULD BE MOST FAVORABLE, AS DETERMINED BY THE GOVERNMENT, BETWEEN BIDDER'S SHIPPING POINT AS SET FORTH BY THE BIDDER, AND THE DESIGNATED DESTINATION, WOULD BE CONSIDERED IN DETERMINING THE LOWEST ESTIMATED COST TO THE GOVERNMENT.

IT WAS REPORTED BY THE CONTRACTING OFFICER IN AN ADMINISTRATIVE REPORT FURNISHED BEFORE OUR FIRST DECISION WAS RENDERED THAT 65 SUPPLIERS WERE INVITED TO BID ON FURNISHING THE EQUIPMENT AND THAT 9 BIDS ONLY WERE RECEIVED. NO EXPLANATION HAS BEEN SUBMITTED OR SUGGESTED AS TO WHY NO BIDS WERE RECEIVED FROM THE OTHER 56 PROSPECTIVE BIDDERS. IT WAS REPORTED THAT IN EVALUATING THE BIDS RECEIVED IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 7 THE DETERMINATION WAS MADE THAT THE BIDS SUBMITTED BY CONSOLIDATED DIESEL ELECTRIC CORPORATION AND STEWART AND STEVENSON SERVICES, INC., WERE THE TWO LOWEST BIDS RECEIVED. IT WAS REPORTED ALSO THAT CONSOLIDATED SUBMITTED AN ALTERNATE BID WHICH WAS NOT LOW. THE BID OF CONSOLIDATED WAS ACCOMPANIED BY A COVERING LETTER DATED MAY 29, 1956, IN WHICH THE BIDDER POINTED OUT THE FOLLOWING:

(1) PAGE 3 OF THE INVITATION TO BID COVERING EXCEPTIONS AND ADDITIONS TO THE PROCUREMENT DESCRIPTION STATES " PARAGRAPHS 4.2.2 THROUGH 4.3.2: DELETE IN THEIR ENTIRETY AND SUBSTITUTE: THE DIESEL ENGINE TESTS SHALL CONFORM TO METHODS 201.0 THRU 305.0 OF SPECIFICATION MIL-E-11278A.' THIS PARTICULAR PARAGRAPH WAS DELETED BY AMENDMENT NO. 1, BUT THEN LATER REINSERTED BY AMENDMENT NO. 1, BUT THEN LATER REINSERTED BY AMENDMENT NO. 3 TO THE INVITATION. WE THEREFORE HAVE DELETED THE TESTING COVERED UNDER PARAGRAPHS 4.2.2 THROUGH 4.3.2 OF THE PROCUREMENT DESCRIPTION DATED 29 FEBRUARY 1956 AND AMENDMENT NO. 1 DATED 13 MARCH 1956.

IF THE TESTS CALLED OUT UNDER PARAGRAPHS 4.2.2 AND 4.2.3 OF THE PROCUREMENT DESCRIPTION MENTIONED ABOVE ARE DESIRED AT SOME LATER DATE, OUR PRICE PER UNIT WILL INCREASE $70.00, OR A TOTAL CONTRACT PRICE INCREASE OF $23,380.00.

(2) WE PROPOSE FURNISHING THE BUDA MODEL 516 DIESEL ENGINE. THIS ENGINE HAS A DISPLACEMENT OF 516 CUBIC INCHES AND A CONTINUOUS RATING AT SEA LEVEL OF 128 BRAKE HORSEPOWER. WITH DEDUCTIONS FOR ALTITUDE OF 15 PERCENT, TEMPERATURE 2 PERCENT, THE ENGINE PRODUCES 106 BHP FOR CONTINUOUS OPERATION AT 5,000 FT. AND 107 DEGREES F. THE PROCUREMENT DESCRIPTION REQUESTS 100 BRAKE HORSEPOWER CONTINUOUS FOR THE ABOVE ENVIRONMENTAL CONDITIONS. THE OUTPUT OF THIS ENGINE WILL ADEQUATELY POWER THE 45 KW GENERATING UNITS UNDER ALL OPERATING CONDITIONS SPECIFIED IN THE ENVIRONMENTAL CONDITIONS COVERED BY THE SUBJECT INVITATION.

IF IT IS REQUIRED THAT A LARGER ENGINE BE FURNISHED, THE SUPERCHARGED VERSION OF THE 516 BUDA ENGINE, RATED AT 140 HORSEPOWER, IS OFFERED WITH A NET INCREASE IN PRICE PER UNIT OF $331.50, OR A TOTAL INCREASE IN CONTRACT PRICE FOR 334 UNITS OF $110,721.00.

AS THE CONTRACTING OFFICER WAS IN DOUBT AS TO WHETHER THE ENGINE OFFERED WOULD COMPLY FULLY WITH THE ADVERTISED REQUIREMENTS, THE BIDDER WAS REQUESTED TO FURNISH A CERTIFICATION, SUPPORTED BY A CERTIFICATION BY THE ENGINE MANUFACTURER, THAT THE ENGINE WITHOUT THE SUPERCHARGER WOULD DEVELOP 100 HP NET CONTINUOUS 1714 TO 2000 RPM INCLUDING ALL ACCESSORIES AT AN ALTITUDE OF 5000 FEET (24.9 INCH MERCURY) AT AN AMBIENT TEMPERATURE OF 107 DEGREES F. WHEN TESTED IN ACCORDANCE WITH MIL-E-11278A TEST METHOD 107.3. IN RESPONSE TO THAT TELEGRAM, CONSOLIDATED WIRED THE CONTRACTING OFFICER THAT IT WOULD FURNISH AT ITS BID PRICE OF $7,950 EACH GENERATING SETS EQUIPPED WITH ENGINES RATED AT 100 HP NET CONTINUOUS AT 1714 TO 2000 RPM, INCLUDING ALL ACCESSORIES AS REQUIRED AND IN ACCORDANCE WITH THE SPECIFICATIONS AND TEST METHOD REFERRED TO, AND QUOTED FROM A TELEGRAM FROM ALLIS CHALMERS WHICH STATED THAT THE 516 DIESEL WITHOUT SUPERCHARGER WOULD DEVELOP 100 HORSEPOWER NET CONTINUOUS AT 1846 RPM INCLUDING ALL ACCESSORIES AS REQUIRED. THE CONTRACTING OFFICER REPORTED THAT IN THE FINAL EVALUATION OF THE BIDS IT WAS DETERMINED BY HIM THAT THE LOW BID OF $7,950 WAS QUALIFIED AND THAT CONSOLIDATED LIMITED ITS LIABILITY WHEN IT SPECIFIED A PARTICULAR MAKE AND MODEL ENGINE AND ADDED THAT A LARGER ENGINE, IF REQUIRED, WOULD BE FURNISHED AT AN INCREASE IN PRICE. THE CONTRACT WAS THEN AWARDED TO STEWART AND STEVENSON ON THE BASIS OF THAT CONCERN'S BID F.O.B. HOUSTON, TEXAS.

CONSOLIDATED PROTESTED TO OUR OFFICE AGAINST THE ACTION OF THE CONTRACTING OFFICER IN REFUSING TO AWARD THE CONTRACT TO THAT BIDDER ON THE BASIS THAT ITS BID COMPLIED FULLY WITH ALL THE ADVERTISED REQUIREMENTS AND THAT THE COVERING LETTER OF MAY 29, 1956, IF FOR CONSIDERATION AT ALL, HAVING BEEN SIGNED BY AN EMPLOYEE WHO WAS NOT AUTHORIZED TO SIGN BIDS ON BEHALF OF THE CORPORATION, WAS INFORMATIONAL ONLY AND WAS NOT INTENDED TO LIMIT THE BIDDER'S LIABILITY. ON THE BASIS OF THE INFORMATION THUS BEFORE US WE HELD THAT CONSOLIDATED'S BID SHOULD HAVE BEEN REGARDED AS RESPONSIVE TO THE ADVERTISED REQUIREMENTS OF THE SPECIFICATIONS.

REPRESENTATIVES OF STEWART AND STEVENSON APPEARED BEFORE THIS OFFICE ON AUGUST 24, 1956, AND PROTESTED THE CONCLUSION REACHED IN THE DECISION, CONTENDING THAT CONSOLIDATED'S BID WAS NOT ONLY NOT RESPONSIVE BUT IN FACT WAS NOT THE LOWEST RECEIVED. THEIR POSITION WAS SET FORTH IN A LETTER DATED AUGUST 27, 1956, WHEREIN IT WAS POINTED OUT THAT THE COVERING LETTER OF MAY 29, 1956, DID NOT OFFER AN ENGINE THAT WOULD DEVELOP 100 HP NET CONTINUOUS AS REQUIRED BY THE APPLICABLE SPECIFICATIONS AND WAS CONTENDED THAT CONSOLIDATED CHANGED ITS BID WHEN IT MADE THE CERTIFICATION AFTER THE BIDS WERE OPENED AND DID NOT REFER TO THE SO-CALLED BUDA 516 ENGINE. ALSO, STEWART AND STEVENSON FURNISHED IN SUBSTANTIATION OF ITS CONTENTION THAT THE BUDA MODEL 516 NATURALLY ASPIRATED WOULD NOT MEET THE HORSEPOWER REQUIREMENTS COPIES OF NEBRASKA TRACTOR TEST NO. 581, CONDUCTED JULY 9 TO 13, 1956, BY THE UNIVERSITY OF NEBRASKA. IN ADDITION TO THE FOREGOING, STEWART AND SEVENSON MAKE THE POINT THAT CONSOLIDATED'S BID OF $7,950 PER UNIT WAS NOT LOW BECAUSE THE TESTS COVERED BY PARAGRAPHS 4.2.2 THRU 4.3.2 OF THE PURCHASE DESCRIPTION, WHICH PARAGRAPHS WERE ELIMINATED, CAN BE REQUIRED BY THE CONTRACTING OFFICER UNDER PARAGRAPHS 4.1 THROUGH 4.1.3 OF THE PURCHASE DESCRIPTION AND THE CONTRACTOR HAS FURNISHED A COPY OF A LETTER DATED JUNE 5, 1956, TO THE CHICAGO PROCUREMENT OFFICE, CORPS OF ENGINEERS, SUPPLEMENTING A LETTER DATED JUNE 4, 1956, WHICH IN TURN HAD CONFIRMED A TELEPHONE CONVERSATION BETWEEN REPRESENTATIVES OF THE COMPANY AND THE CHICAGO PROCUREMENT OFFICE. THE LETTER OF JUNE 5 STATED STEWART AND STEVENSON'S INTERPRETATION TO BE THAT ALL TESTS OUTLINED IN PARAGRAPHS 4.2.2 THROUGH 4.3.2 OF THE PURCHASE DESCRIPTION WOULD ACTUALLY BE REQUIRED AND THAT ,IN PRICING AND SUBMITTING OUR BID WE HAVE INCLUDED ALL THE TESTS COVERED BY PARAGRAPHS 4.2.2 THROUGH 4.3.2 IN THE BID WHICH WE SUBMITTED.'

THE SPECIFIC REASONS FOR REJECTION OF CONSOLIDATED'S BID AS REPORTED IN THE ADMINISTRATIVE REPORT FORWARDED WITH THE LETTER OF AUGUST 30, 1956, ARE AS FOLLOWS:

A CONSOLIDATED DIESEL PROPOSED TO FURNISH A BUDA MODEL 516 DIESEL ENGINE AS A COMPONENT TO THE GENERATOR UNIT WITHOUT COMMITTING ITSELF TO MEET ALL SPECIFICATION REQUIREMENTS BOTH FOR THE ENGINE AND THE COMPLETE GENERATOR UNIT. SINCE AN AWARD CAN ONLY BE MADE ON AN ACCEPTANCE OF A BID AS SUBMITTED BY THE BIDDER, ACCEPTANCE OF THIS BID WOULD PERMIT CONSOLIDATED DIESEL TO USE THE BUDA BUDA MODEL 516 DIESEL ENGINE, WITH THE STATED CHARACTERISTICS, WHETHER IT COMPLIED WITH SPECIFICATION REQUIREMENTS OR NOT. USE OF THIS ENGINE AS BID COULD RESULT IN CONFLICTS WITH OVER-ALL REQUIREMENTS SET FORTH IN PARAGRAPH 3.6 OF THE PURCHASE DESCRIPTION FOR THE GENERATOR UNIT: VIZ., ITEM 1- - WEIGHT, ITEM 2--- DIMENSIONS, ITEM 3C- -- VIBRATION, ITEM 6--- STORAGE, ITEM 8--- EASE OF MAINTENANCE, ITEM 17--- LUBRICATION, ITEM 18--- RESISTANCE TO NATURAL CONDITIONS, ITEM 21--- STABILITY AND ITEM 57--- PARALLEL OPERATION. IN ADDITION TO OVER-ALL GENERATOR REQUIREMENTS, IT WOULD APPEAR THAT CONSOLIDATED COULD IGNORE THE MANY ENGINE REQUIREMENTS SET FORTH IN PARAGRAPH 3.6 OF THE PURCHASE DESCRIPTION FOR THE GENERATOR SET AND IN THE PURCHASE DESCRIPTION OF THE DIESEL ENGINE ITSELF TO THE EXTENT THAT THEY ARE IN CONFLICT WITH THE SPECIFIC MAKE AND MODELENGINE, AS BID.

B. THE STATEMENT IN THE BID THAT "THE OUTPUT OF THIS ENGINE WILL ADEQUATELY POWER THE 45 KW GENERATING UNITS UNDER ALL OPERATING CONDITIONS SPECIFIED IN THE INVITATION" CANNOT BE INTERPRETED TO MEAN THAT ALL SPECIFICATION REQUIREMENTS FOR THE ENGINE AND THE GENERATOR UNIT WILL BE MET WITH THIS ENGINE. THE STATEMENT GOES ONLY TO THE HORSEPOWER OUTPUT UNDER ALL OPERATING CONDITIONS WHICH IS ONLY PART OF THE FULL SPECIFICATION REQUIREMENTS. MOREOVER, THE STATEMENT IS CONSIDERED TO BE ALSO QUALIFIED AS TO HORSEPOWER OUTPUT AS STATED IN THE FOLLOWING SUBPARAGRAPH.

C. BIDDER'S STATEMENT THAT AN INCREASE IN PRICE OF $110,712.00 WILL BE MADE IF A LARGER ENGINE, THE SUPERCHARGED VERSION OF THE 516 BUDA ENGINE, IS REQUIRED SHOWS THAT THE BIDDER DID NOT INTEND ITS BASIC BID TO UNCONDITIONALLY MEET ALL HORSEPOWER REQUIREMENTS UNDER ALL SPECIFICATION ENVIRONMENTAL CONDITIONS. THE SUPERCHARGED VERSION OF THE 516 BUDA ENGINE MAY VERY WELL BE REQUIRED TO MEET CONTRACT SPECIFICATIONS AS CONTENDED BY STEWART AND STEVENSON SERVICES. IF SUCH TURNS OUT TO BE THE CASE THE GOVERNMENT WILL BE OBLIGATED TO PAY AN ADDITIONAL $110,712.00 SINCE THE BID IS ALL TOO CLEAR ON THIS POINT, AND UNDER SUCH CIRCUMSTANCES IT IS DIFFICULT TO UNDERSTAND HOW THE BASIC BID ON THE BUDA MODEL 516 DIESEL ENGINE CAN BE CONSTRUED TO BE AN UNQUALIFIED BID.

D. CLARIFICATIONS SUBMITTED BY CONSOLIDATED DIESEL SUBSEQUENT TO BID OPENING ARE NOT CONSIDERED PROPER FOR CONSIDERATION IN THIS CASE SINCE SUCH CLARIFICATIONS CLEARLY ATTEMPT TO REMOVE QUALIFIED ASPECTS OF THE BID AND THEREFORE OPERATES TO AMEND THE BID. TO PERMIT SUCH PRACTICE GIVES THE BIDDER THE OPPORTUNITY SUBSEQUENT TO BID OPENING TO WITHDRAW OR VALIDATE HIS BID. AMENDMENT OF BIDS SUBSEQUENT TO BID OPENING IS NOT ONLY CONTRARY TO THE TERMS AND CONDITIONS OF THE INVITATION BUT IS PREJUDICIAL TO OTHER BIDDERS. THE VIEWS OF THE CONTRACTING OFFICER WITH RESPECT TO THE TESTING AND INSPECTION SERVICES COVERED BY 4.2.2 THRU 4.3.2 ARE SET FORTH IN A TELETYPE MESSAGE DATED AUGUST 28, 1956, WHICH WAS QUOTED IN THE ABOVE ADMINISTRATIVE REPORT, AS FOLLOWS:

IT IS OPINION OF THE CONTRACTING OFFICER UNDER INVITATION NO. DA-ENG 11- 184-56-F-609, THE CONTRACTOR WAS REQUIRED UNDER PARAGRAPH 4.1 AND 4.1.2 OF THE PURCHASE DESCRIPTION DATED 29 FEBRUARY 1956 TO PERFORM SUCH TESTS OF THE COMPLETE GENERATOR SET AS MAY BE DEEMED NECESSARY AND REQUIRED BY THE CONTRACTING OFFICER, INCLUDING BUT NOT LIMITED TO ANY ONE OR ALL OF THE TESTS SET FORTH UNDER THE ELIMINATED PARAGRAPH 4.2.2 THROUGH 4.3.2. THE SPECIFIC ELIMINATION OF PARAGRAPHS 4.2.2 THROUGH 4.3.2 DID NOT PRECLUDE THE GOVERNMENT FROM HAVING THE CONTRACTOR PERFORM ANY ONE OR ALL OF THESE TESTS, AS THESE TESTS ARE SPECIFICALLY SET FORTH IN MIL-G-10228. PARAGRAPH 4.1.1 OF THE PURCHASE DESCRIPTION GIVES THE GOVERNMENT THE RIGHT TO REQUIRE THE CONTRACTOR TO PERFORM SUCH INSPECTION AND TEST OF THE EQUIPMENT AS IT MAY DEEM NECESSARY TO DETERMINE CONFORMANCE WITH THE PURCHASE DESCRIPTION. PARAGRAPH 4.1.2 SPECIFICALLY PROVIDES THAT SUCH TESTS AS ARE REQUIRED SHALL BE CONDUCTED IN ACCORDANCE WITH THE TEST METHODS FOR SUCH TESTS AS ARE SET FORTH IN SPECIFICATION MIL-G-10228 AS APPLICABLE AND THAT ANY OF THESE TESTS WHICH ARE DETERMINED TO BE REQUIRED BY THE GOVERNMENT "SHALL BE CONDUCTED BY THE CONTRACTOR UNDER THE SUPERVISION OF THE GOVERNMENT PECTOR.' IN OTHER WORDS, THE COST OF CONDUCTING SUCH OF THESE TESTS AS ARE REQUIRED ARE TO BE BORNE BY THE CONTRACTOR.

THE CONSOLIDATED DIESEL ELECTRIC CORPORATION IN ITS LETTER ACCOMPANYING ITS BID STATED THAT IF THE TESTS AS COVERED BY PARAGRAPHS 4.2.2 AND 4.3.2 ARE REQUIRED, $70 WOULD HAVE TO BE ADDED TO ITS UNIT PRICES AS BID. WITH THIS CONDITION IN CONSOLIDATED'S BID IF THE GOVERNMENT SOUGHT TO TEST THE UNIT UNDER 4.2.2 AND 4.3.2 OF THE PURCHASE DESCRIPTION, THE GOVERNMENT WOULD BE LIABLE FOR THIS ADDITIONAL $70 PER UNIT, AND IF TESTS IN THE OTHER ELIMINATED PARAGRAPHS ARE REQUIRED, THE GOVERNMENT WOULD BE REQUIRED TO NEGOTIATE AN ADDITIONAL PRICE THEREFOR. ON THIS BASIS, AT LEAST $70 WOULD BE REQUIRED TO BE ADDED TO CONSOLIDATED'S UNIT PRICE AS BID AND ITS BID WOULD THEREFORE NOT BE LOW AND THEREFORE UNACCEPTABLE FOR AWARD.

ON THE BASIS OF THE SUPPLEMENTAL INFORMATION AND EVIDENCE PRESENTED IT NOW APPEARS REASONABLY ESTABLISHED THAT THE BID OF THE PROTESTING BIDDER AS FIRST SUBMITTED WAS NOT SUFFICIENTLY RESPONSIVE TO CONSTITUTE AN UNQUALIFIED COMMITMENT TO CONFORM TO THE SPECIFICATION REQUIREMENTS. THE BIDDER'S CLARIFYING CERTIFICATION THAT IT WOULD FURNISH FOR THE PRICE OF $7,950 EACH GENERATING SETS EQUIPPED WITH ENGINES RATED 100 HP NET AS REQUIRED SHOWS THAT IT SUPPLIED THE WORD "NET" IN ITS CERTIFICATION WHICH HAD BEEN OMITTED IN THE COVERING LETTER AND AT THE SAME TIME FAILED TO MENTION THE BUDA ENGINE BY NAME. THIS COULD HAVE BEEN AN ATTEMPT TO QUALIFY THE STATEMENT IN THE COVERING LETTER WHICH THE CONTRACTING OFFICER CONTENDS WAS INTENDED TO LIMIT THE BIDDER'S LIABILITY TO THE BUDA MODEL 516 UNLESS A LARGER ENGINE SHOULD BE REQUIRED, IN WHICH EVENT THE SUPERCHARGE VERSION OF THE 516 INCH BUDA WAS OFFERED AT ADDITIONAL COMPENSATION TO THE UNITED STATES. CONSIDERING THE CONFUSED AND AMBIGUOUS MANNER IN WHICH THE LETTER WAS WRITTEN AND THE INDEPENDENT EVIDENCE NOW AT HAND IN THE FORM OF THE NEBRASKA TEST REPORT REFERRED TO ABOVE WHICH INDICATES THAT THE ALLIS-CHALMERS ENGINE HAVING A DISPLACEMENT OF 516 CUBIC INCHES WOULD NOT MEET THE FULL NET HORSEPOWER REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS, ON THIS POINT ALONE WE WOULD NOT FEEL JUSTIFIED IN HOLDING THAT THE ACTION OF THE CONTRACTING OFFICER IN DISREGARDING CONSOLIDATED'S BID WAS SO CLEARLY ERRONEOUS AS TO REQUIRE FURTHER OBJECTION TO THE AWARD AS MADE.

WITH RESPECT TO THE INSPECTION AND TESTING SERVICES, IT WAS PROVIDED ON PAGE 3 OF THE INVITATION THAT PARAGRAPHS 4.2.2 THROUGH 4.3.2 OF THE PURCHASE DESCRIPTION SHOULD BE DELETED IN THEIR ENTIRETY AND THAT THERE SHOULD BE SUBSTITUTED THEREFOR THE STATEMENT " THE DIESEL ENGINE TESTS SHALL CONFORM TO METHODS 201.0 THROUGH 305.0 OF SPECIFICATION MIL-E 11278A DATED JANUARY 4, 1956.' THIS PARTICULAR PROVISION WAS DELETED BY ADDENDUM NO. 1, DATED MAY 7, 1956, BUT ADDENDUM NO. 1 WAS CANCELED IN ITS ENTIRETY BY ADDENDUM NO. 3, DATED MAY 16, 1956. UNDER THIS SUBSTITUTED PROVISION THE DIESEL ENGINE PRODUCTION CONTROL TESTS WERE TO CONFORM TO METHODS 201.0 THROUGH 206.0 AND THE PRODUCTION TESTS WERE TO CONFORM TO METHODS 301.0 THROUGH 305.0 OF SPECIFICATION MIL-E 11278A. AS STATED BY THE CONTRACTING OFFICER, PARAGRAPH 4.1 OF THE PURCHASE DESCRIPTION PROVIDES THAT " THE EQUIPMENT AND THE PREPARATION FOR DELIVERY THEREOF SHALL BE GIVEN SUCH INSPECTION AND TESTS AS MAY BE NECESSARY TO DETERMINE CONFORMANCE WITH THIS PURCHASE DESCRIPTION.' PARAGRAPH 4.1.1 CLASSIFIES INSPECTION AND TESTING AS PREPRODUCTION AND PRODUCTION CONTROL AND PARAGRAPH 4.1.2 PROVIDES THAT " TESTS SHALL BE CONDUCTED BY THE CONTRACTOR UNDER SUPERVISION OF THE GOVERNMENT INSPECTOR" AND THAT , UNLESS OTHERWISE SPECIFIED HEREIN, SUCH TESTS AS ARE REQUIRED SHALL BE CONDUCTED IN ACCORDANCE WITH SPECIFICATION MIL-G 10228 AS APPLICABLE.' THIS MILITARY SPECIFICATION IS AN OMNIBUS SPECIFICATION WHICH COVERS METHODS FOR TESTING GENERATORS AND ENGINE GENERATOR SETS. IT DOES NOT ESTABLISH LIMITING VALUES FOR THE RESULTS OF THE TESTS NOR DOES IT ENUMERATE THE TESTS REQUIRED FOR ANY SPECIFIC GENERATOR OR GENERATOR SETS. IT APPEARS, AS STATED BY THE CONTRACTING OFFICER IN THE TELETYPE REPORT QUOTED ABOVE, THAT THE INSPECTION AND TESTS COVERED BY PARAGRAPH 4.2.2 THROUGH 4.3.2, RESPECTIVELY, OF THE PURCHASE DESCRIPTION ARE PROVIDED FOR IN MIL-G-10228 AND THAT THEY WILL BE REQUIRED BY THE CONTRACTING OFFICER. AS INDICATED ABOVE, STEWART AND STEVENSON'S BID WAS BASED UPON SUCH TESTS BEING CONDUCTED. ALSO, AS POINTED OUT BY THE CONTRACTING OFFICER, IF THE INSPECTION AND TESTS IN QUESTION SHOULD BE REQUIRED THE GOVERNMENT WOULD BE LIABLE FOR AT LEAST THE ADDITIONAL SUM OF $70 PER UNIT UNDER THE BID OF CONSOLIDATED. INDEED, ON THE BASIS OF CONSOLIDATED'S OWN STATEMENT AS CONTAINED IN ITS LETTER OF MAY 29, 1956, THE ADDITIONAL CHARGE OF $70 WOULD COVER ONLY THE TESTS SPECIFIED IN PARAGRAPHS 4.2.2 AND 4.2.3, NOT ALL OF THE TESTS REQUIRED BY PARAGRAPHS 4.2.2. THROUGH 4.3.2.

CONSOLIDATED'S REPRESENTATIVES HAVE FILED WITH OUR OFFICE A LETTER OF AUGUST 31, 1956, QUESTIONING THE METHOD OF EVALUATING THE BIDS IN THIS CASE. IT IS CLAIMED THAT THE FREIGHT COST FROM STAMFORD, CONNECTICUT, ITS F.O.B. POINT OF DELIVERY, TO THE DESTINATIONS STATED IN THE BID SCHEDULE WAS NOT COMPUTED ON THE BASIS MOST FAVORABLE TO ITS BID AS REQUIRED BY PARAGRAPH 7 OF THE SPECIAL TERMS AND CONDITIONS AND THAT, IF THE BIDS HAD BEEN PROPERLY EVALUATED, ITS BID WOULD HAVE BEEN LOW EVEN WITH THE $70 PER UNIT ADDED TO ITS BID. IT AGAIN MUST BE CONSIDERED, HOWEVER, THAT THE PROTESTING BIDDER MADE NO REFERENCE TO CERTAIN OF THE TESTS WHICH IT CLAIMS WERE ELIMINATED FROM THE SPECIFICATIONS AND THAT IN THE EVENT THE GOVERNMENT SHOULD REQUIRE THE TESTS NOT MENTIONED--- WHICH IT IS UNDERSTOOD WILL BE REQUIRED--- AN ADDITIONAL PRICE THEREFOR WOULD HAVE HAD TO BE NEGOTIATED WITH CONSOLIDATED. IT WOULD THUS APPEAR THAT IN PROPERLY EVALUATING THE CONSOLIDATED BID THE COST OF THE TESTS COVERED BY THE UNMENTIONED PARAGRAPHS SHOULD BE ADDED TO THAT BIDDER'S PRICE. SUCH COST, NOT BEING PROVIDED FOR IN CONSOLIDATED'S BID, WOULD PRECLUDE AN EXACT EVALUATION OF THAT BID. THUS, THAT COMPANY'S BID, EVEN IF EVALUATED ON THE BASIS NOW CONTENDED FOR BY REPRESENTATIVES OF THE COMPANY, WOULD NOT NECESSARILY BE LOW.

IN VIEW OF ALL THESE FACTS WE WILL NOT CONTINUE OUR OBJECTION TO THE ADMINISTRATIVE ACTION TAKEN IN REJECTING THE BID OF CONSOLIDATED DIESEL ELECTRIC CORPORATION.

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