B-152946, MAY 14, 1964

B-152946, MAY 14, 1964

TO SELLERS, CONNER AND CUNEO:

WE HAVE YOUR TELEGRAM OF NOVEMBER 20, 1963, AND LETTERS OF NOVEMBER 27, 1963, AND JANUARY 17 AND 31, 1964, PROTESTING THE FAILURE OF HOLMES AND NARVER, INC. (H AND N), TO AWARD AN ATOMIC ENERGY COMMISSION (AEC)CONTRACT FOR THE PURCHASE AND INSTALLATION AT JOHNSTON ISLAND OF 6 DIESEL ELECTRIC GENERATING UNITS TO YOUR CLIENT, NORDBERG MANUFACTURING COMPANY.

THE RECORD IN THIS CASE ESTABLISHES THAT H AND N WAS ACTING AS A PURCHASING AGENT FOR THE COMMISSION UNDER AUTHORITY OF PROVISIONS IN ITS CONTRACT NO. AT/29-2/-20 WITH THE COMMISSION FOR PERFORMING VARIOUS SERVICES. ARTICLE 17 (A) OF MODIFICATION NO. 108 TO THE CONTRACT PROVIDES THAT H AND N SHALL USE PURCHASING METHODS, PRACTICES OR PROCEDURES WHICH ARE ACCEPTABLE TO THE COMMISSION. PARAGRAPH 9 2.102 (B) OF TITLE 41 OF THE CODE OF FEDERAL REGULATIONS (CFR) PROVIDES THAT WHILE EXACT COMPLIANCE WITH THE COMPETITIVE BIDDING PROCEDURES ESTABLISHED IN PART 1-2 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) IS NOT REQUIRED OF CONTRACTORS SUCH AS H AND N, THESE PROCEDURES "SHOULD BE FOLLOWED TO THE GREATEST EXTENT PRACTICABLE IN ORDER TO ASSURE THE AWARD OF BUSINESS ON AN IMPARTIAL BASIS.'

ON SEPTEMBER 25, 1963, H AND N ISSUED REQUEST FOR QUOTATION (RFQ) NO. JHG -894 TO SOLICIT OFFERS FOR THE GENERATOR UNITS. ALTHOUGH THE SOLICITATION FORM USED BY H AND N NOMINALLY WAS ONE THE GOVERNMENT CONSIDERS PROPER FOR NEGOTIATED PROCUREMENTS, IT REFERRED TO OFFERORS AS "BIDDERS," AND IN THE "INSTRUCTIONS TO BIDDERS" STATED THAT "QUOTATIONS SUBMITTED SHALL BE FIRM AND BINDING OFFERS FOR ACCEPTANCE * * *.' THE TWO DOCUMENTS PROVIDED FOR THE OPENING OF SEALED OFFERS AT A SPECIFIED TIME, AND FOR THE REJECTION OF "BIDS" RECEIVED THEREAFTER. FURTHERMORE, THE INSTRUCTIONS CONTAINED PARAGRAPHS ON AWARDS AND ON MISTAKES IN AND WITHDRAWALS OF OFFERS WHICH ARE MORE COMPATIBLE WITH ADVERTISED BIDDING THAN WITH NEGOTIATION. PARTICULAR, PARAGRAPH 9 OF THE INSTRUCTIONS, TITLED "AWARD," AND PHRASED IN LANGUAGE ESSENTIALLY SIMILAR TO THAT IN PARAGRAPH 8 "AWARD") OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS FOR GOVERNMENT STANDARD FORMS 30 AND 33, PROVIDES IN PART:

"PURCHASE ORDER SHALL BE AWARDED TO THAT RESPONSIBLE BIDDER WHOSE QUOTATION, CONFORMING TO THE REQUEST FOR QUOTATION, WILL BE MOST ADVANTAGEOUS TO HOLMES AND NARVER, INC., PRICE AND OTHER FACTORS CONSIDERED.'

THEREFORE, WE THINK IT IS PROPER TO ASSUME, AS YOUR PROTEST IMPLIES, THAT H AND N WAS CONDUCTING THE SUBJECT PROCUREMENT UNDER RULES SIMILAR TO THOSE SET OUT IN THE FPR FOR ADVERTISED BIDDING, RATHER THAN THE RULES APPLICABLE TO NEGOTIATED PROCUREMENTS, NOTWITHSTANDING THAT THE SOLICITATION FORM IS TITLED "REQUEST FOR QUOTATION.' IT FOLLOWS THAT AN OFFER WHICH DID NOT CONFORM TO THE MATERIAL PROVISIONS OF H AND N'S RFQ WOULD NOT BE RESPONSIVE AND SHOULD NOT BE CONSIDERED FOR AWARD.

THE SUBJECT RFQ AS ORIGINALLY ISSUED ON SEPTEMBER 25, 1963, SPECIFIED NO DELIVERY DATE FOR THE GENERATOR UNITS, ALTHOUGH PARAGRAPH 16 OF THE RFQ'S SPECIFICATION DID REQUIRE BIDDERS TO DELIVER SETS OF DRAWINGS PERTAINING TO THE UNITS WITHIN 14 AND 30 DAYS AFTER AWARD. DUE TO AN URGENT NEED FOR THE UNITS, AS SUBSEQUENTLY DETERMINED BY THE COMMANDER, JOINT TASK FORCE-8 (JTF-8), AN ADDENDUM WAS ISSUED ON OCTOBER 3, 1963, WHICH ADVANCED BID OPENING FROM OCTOBER 28 TO OCTOBER 21, 1963, AND REQUIRED DELIVERY OF ALL UNITS BY MARCH 1, 1964.

H AND N'S EVALUATION OF OFFERS RECEIVED BY OCTOBER 21 DISCLOSED THAT ACCEPTANCE OF NORDBERG'S BID WOULD RESULT IN THE LOWEST COST TO THE GOVERNMENT, AND FOR THAT REASON, IT RECOMMENDED YOUR CLIENT FOR AWARD, HOWEVER, IT APPEARS THAT NEITHER NORDBERG NOR THE SECOND AND FIFTH LOW OF FIVE RESPONDING BIDDERS PROMISED DELIVERY OF ALL GENERATOR UNITS BY MARCH 1, AND THE NORDBERG QUALIFIED ITS DELIVERY OF THE SPECIFIED DRAWINGS BY STIPULATING SUCH DELIVERY WITHIN 60 DAYS AFTER AWARD. CONSEQUENTLY, AFTER REVIEW OF NORDBERG'S BID BY THE AEC, H AND N AGREED THAT NORDBERG'S BID SHOULD BE REJECTED AS NOT RESPONSIVE TO THE RFQ, AND ACCORDINGLY AWARDED THE CONTRACT TO ENTERPRISE ENGINE AND MACHINE, THE LOWEST RESPONSIVE BIDDER.

IT IS WELL ESTABLISHED THAT UNDER COMPETITIVE BIDDING PROCEDURES THE FAILURE OF A BID TO CONFORM TO THE REQUIRED DELIVERY SCHEDULE MUST BE REGARDED AS A MATERIAL DEVIATION WHICH CANNOT BE WAIVED AND WHICH REQUIRES REJECTION OF SUCH BID. 34 COMP. GEN. 24. THE PROTEST IN THE INSTANT CASE IS BASED IN LARGE PART ON THE ALLEGATION THAT NORDBERG'S LACK OF RESPONSIVENESS RESULTED FROM HAVING BEEN MISLED BY EMPLOYEES OF H AND N INTO BELIEVING THAT THE NORDBERG BID WOULD BE CONSIDERED ACCEPTABLE EVENIF IT DID NOT AGREE TO DELIVER THE DRAWINGS AND THE 6 GENERATOR UNITS WITHIN THE TIME SPECIFICALLY STIPULATED IN THE RFQ. YOU CONTEND THAT AN AFFIDAVIT OF MR. HERBERT I. ANDERSON, A REPRESENTATIVE OF NORDBERG, SHOWS THAT MESSRS. GLEN KROLL AND J. H. GLASS, RESPECTIVELY THE SENIOR MECHANICAL ENGINEER AND THE BUYER FOR H AND N, TOLD HIM THESE DELIVERY DATES FOR THE DRAWINGS AND GENERATOR UNITS WERE UNREALISTIC, IMPOSSIBLE OF PERFORMANCE, AND PREFERABLY TO BE DISREGARDED BY BIDDERS IN FAVOR OF A MORE REALISTIC SCHEDULE.

IN THE AFFIDAVIT, MR. ANDERSON SAYS THAT WHEN, ABOUT 2 WEEKS BEFORE THE RFQ WAS ISSUED, MR. KROLL TOLD HIM THAT DELIVERY WAS URGENT, AND THAT ALL GENERATOR UNITS MIGHT BE CALLED FOR IN 14 TO 16 WEEKS, HE SUGGESTED THAT SUCH A STRINGENT DELIVERY REQUIREMENT MIGHT NOT BE NECESSARY TO FIT IN WITH THE INSTALLATION PROGRAM. ON SEPTEMBER 26, WHICH WAS THE DAY AFTER THE RFQ WAS ISSUED, MR. ANDERSON SAYS HE AGAIN DISCUSSED DELIVERY WITH MESSRS. KROLL AND GLASS, AND EXPLAINED TO MR. KROLL "THAT THE DELIVERY CALLED FOR IN THE SPECIFICATIONS WAS UNREALISTIC AND WOULD NOT BE POSSIBLE.' HE SAYS MR. KROLL SAID HE REALIZED THE DELIVERY DATES "WOULD PROBABLY NOT BE MET," AND THAT NORDBERG SHOULD "PUT DOWN WHAT WE FELT WE COULD HONESTLY MEET.' MR. ANDERSON SAYS THAT MR. GLASS AGREED THAT NOT ALL UNITS COULD BE USED AT ONCE, AND THEREFORE, THAT "THEY WOULD TAKE THIS INTO CONSIDERATION.'

BEFORE CONSIDERING THE REMAINDER OF THE AFFIDAVIT, WE MUST INTERPOSE THE OBSERVATION THAT, AT THE TIME THE ABOVE STATEMENTS ARE ALLEGED TO HAVE BEEN MADE, THERE WAS NO DELIVERY REQUIREMENT FOR THE GENERATOR UNITS "CALLED FOR IN THE SPECIFICATIONS.' WE MUST THEREFORE PRESUME THAT IF THE DISCUSSIONS DESCRIBED ABOVE TOOK PLACE AS ALLEGED, THEY WERE DIRECTED, AT LEAST IN PART AND POSSIBLY COMPLETELY, TO THE CONSIDERATIONS WHICH WOULD BE TAKEN INTO ACCOUNT IN DECIDING THE NATURE OF ANY DELIVERY REQUIREMENT WHICH MIGHT SUBSEQUENTLY BE ISSUED. SUCH REQUIREMENT WAS ISSUED IN WRITING, AND TO ALL POTENTIAL BIDDERS, BY AN ADDENDUM DATED OCTOBER 3, 1963. PRESUMABLY, IT TOOK INTO CONSIDERATION THE OBJECTIONS WHICH MR. ANDERSON SAYS HE RAISED REGARDING THE DELIVERY OF THE UNITS. INSOFAR AS THOSE OBJECTIONS WERE ALSO DIRECTED TO THE DELIVERY DATES FOR THE DRAWINGS, WE NOTE AT THIS POINT THAT WHETHER H AND N EMPLOYEES ADVISED NORDBERG IN EFFECT TO IGNORE THESE DATES, AND WHETHER SUCH DELIVERY SCHEDULE WAS UNREASONABLE, MAY NOT BE CRITICAL TO OUR DECISION, SINCE A FINDING FAVORABLE TO YOUR CLIENT ON THESE ISSUES WOULD NOT IN ANY EVENT ESTABLISH ITS RIGHT TO HAVE BEEN GIVEN THE AWARD, UNLESS WE FIRST DETERMINE THAT REJECTION OF NORDBERG'S BID WAS NOT REQUIRED EVEN THOUGH IT WAS NOT RESPONSIVE TO THE SPECIFIED DELIVERY DATE FOR THE GENERATOR UNITS THEMSELVES.

MR. ANDERSON'S AFFIDAVIT ALSO STATES THAT ON OCTOBER 4, THE DAY AFTER ISSUANCE OF THE ADDENDUM WHICH CONTAINED THE MARCH 1 DELIVERY REQUIREMENT, HE AGAIN TOLD MR. GLASS THAT DELIVERY OF "ALL UNITS AT ONE TIME WAS NOT PRACTICAL; " THAT "MR. GLASS REFLECTED ON THE LACK OF UNDERSTANDING OF THE ENGINEERS WHO HAD PUT IN THE DELIVERY REQUIREMENT AND AGAIN TOLD ME THEY WANTED REALISTIC DELIVERIES RATHER THAN PROMISES JUST TO MEET SPECIFICATIONS; " AND THAT ON NOVEMBER 7, 1963, AFTER BIDS HAD BEEN OPENED, MR. GLASS SAID THAT HE REALIZED THE RFQ CALLED FOR "A FIRM DELIVERY DATE * * * AND ADJUSTMENTS WOULD BE MADE ACCORDINGLY.'

THE DIVISION COUNSEL FOR H AND N STATES THAT "NEITHER MR. GLASS NOR MR. KROLL OF HOLMES AND NARVER, INC., EVER AGREED WITH MR. ANDERSON, EXPRESSLY OR IMPLIEDLY, THAT THE DELIVERY DATES WERE UNREALISTIC OR IMPOSSIBLE," ALTHOUGH THEY PROBABLY "EXPRESSED SYMPATHY WITH REGARD TO MR. ANDERSON'S COMPLAINTS, TOLD HIM THAT OTHER BIDDERS HAD ALSO COMPLAINED, AND, QUITE NATURALLY, SUGGESTED THAT ALL BIDDERS SHOULD SUBMIT HONEST, REALISTIC DELIVERY SCHEDULES.' HE ALSO SAYS MESSRS. GLASS AND KROLL HAD NO AUTHORITY TO ALTER, AMEND, OR WAIVE THE BID REQUIREMENTS IN ANY WAY.

WHETHER THE QUOTED ADVICE OF THE DIVISION COUNSEL FOR H AND N ACCURATELY REFLECTS THE VIEWS OF THE SUBJECT EMPLOYEES OF THE FIRM DOES NOT APPEAR TO HAVE ANY BEARING ON THE CONCLUSION WE BELIEVE WE MUST REACH IN THIS PROTEST, SINCE WE HAVE HELD THAT MATERIAL REQUIREMENTS STATED IN THE IFB ARE NOT WAIVED BY THE CONTRACTING OFFICER'S PROMISE TO DO SO, WHERE SUCH WAIVER WOULD UNDERMINE THE PURPOSE OF COMPETITIVE BIDDING STATUTES REQUIRING THE SAME MATERIAL CONDITIONS OF RESPONSIVENESS FOR ALL BIDDERS. B-145624, DATED JUNE 5, 1961, CITING B-106183, DATED NOVEMBER 7, 1951, AND FPR 1-2.207 (D), WHICH PROVIDES:

"ANY INFORMATION GIVEN TO A PROSPECTIVE BIDDER CONCERNING AN INVITATION FOR BIDS SHALL BE FURNISHED PROMPTLY TO ALL OTHER PROSPECTIVE BIDDERS, AS AN AMENDMENT TO THE INVITATION, IF SUCH INFORMATION IS NECESSARY TO BIDDERS IN SUBMITTING BIDS ON THE INVITATION OR IF THE LACK OF SUCH INFORMATION WOULD BE PREJUDICIAL TO UNINFORMED BIDDERS. NO AWARD SHALL BE MADE ON THE INVITATION UNLESS SUCH AMENDMENT HAS BEEN ISSUED IN SUFFICIENT TIME TO PERMIT ALL PROSPECTIVE BIDDERS TO CONSIDER SUCH INFORMATION IN SUBMITTING OR MODIFYING THEIR BIDS.'

MOREOVER, EVEN IF MR. GLASS DID INDICATE THAT THE ENGINEERS WHO DETERMINED THE DELIVERY DATE HAD A "LACK OF UNDERSTANDING," SUCH INDICATION WOULD CLEARLY BE AN EXPRESSION OF HIS OPINION ON THE QUESTION RATHER THAN A POSITIVE STATEMENT OF FACT; AND EVEN IF MR. GLASS PROMISED TO MAKE ,ADJUSTMENTS," WHATEVER THAT MAY MEAN, SUCH PROMISE COULD NOT IN ITSELF HAVE MISLED NORDBERG, SINCE IT IS NOT ALLEGED THAT SUCH PROMISE WAS MADE UNTIL AFTER THE BIDS HAD BEEN OPENED. SEE B-129371, DATED NOVEMBER 7, 1956, WHERE THE GOVERNMENT SOLICITED BID PRICES "PER STORAGE MONTH" FOR STORAGE SERVICES, AND THE CONTRACTING OFFICER FOR BUYING, AN AGENT FOR THE GOVERNMENT, WAS ALLEGED TO HAVE GIVEN BIDDERS POSITIVE ORAL ASSURANCE THAT THE ESTIMATED NUMBER OF MONTHS OF STORAGE, WHICH WAS UNKNOWN AT THE TIME THE IFB WAS ISSUED, WOULD NOT BE TAKEN INTO CONSIDERATION IN THE EVALUATION OF BIDS. THE RECORD THERE, AS HERE, SHOWED THAT THE PROCUREMENT PERSONNEL ACTED WITHOUT EXPRESS AUTHORITY, AND WE HELD (AS WE DO HERE WITHOUT REFERENCE TO WHETHER H AND N HAD THE POWER TO EXPRESSLY DELEGATE TO ITS EMPLOYEES THE AUTHORITY TO ALTER THE RFQ IN THE MANNER ALLEGED) THAT IN VIEW OF THE OBVIOUS IMPORTANCE OF THE SPECIFICATION REQUIREMENT TO A PROPER EVALUATION OF BIDS ON A COMMON BASIS, THE AUTHORITY TO ALTER OR WAIVE SUCH REQUIREMENT MAY NOT BE IMPLIED.

THE APPLICATION OF THIS RATIONALE TO THE INSTANT PROTEST SEEMS ESPECIALLY WARRANTED IN VIEW OF THE FACT THAT H AND N ISSUED A FORMAL AND WRITTEN ADDENDUM, AND THEREBY ESTABLISHED DELIVERY DATES FOR ALL BIDDERS, APPARENTLY WITH FULL KNOWLEDGE OF NORDBERG'S OBJECTIONS THERETO. THERE IS NO INDICATION IN THE FILE THAT EMPLOYMENT OF ADVERTISED BIDDING PROCEDURES BY H AND N TO ESTABLISH OR CHANGE DELIVERY DATES WAS IN ANY WAY IMPRACTICABLE, AND IN VIEW OF THE MANNER IN WHICH THE MARCH 1 DELIVERY REQUIREMENT WAS ESTABLISHED, A MANNER PROPERLY AND WHOLLY IN ACCORD WITH THE ADVERTISED BIDDING PROCEDURE SET FORTH IN FPR 1-2.207 (D) AND WITH THE INTENT OF 41 CFR 9-2.102 (B), BOTH OF WHICH ARE QUOTED ABOVE, WE DO NOT BELIEVE THAT NORDBERG WAS IN A POSITION TO PROPERLY DISREGARD THE FORMAL, WRITTEN, AND COMMON DELIVERY REQUIREMENT SIMPLY ON THE STRENGTH OF PRIVATE ORAL REPRESENTATIONS MADE BY PROCUREMENT PERSONNEL. SEE 8 COMP. GEN. 52, 53.

FROM THE FOREGOING, IT APPEARS THAT THE DELIVERY DATES WERE ESTABLISHED AND COMMUNICATED TO ALL BIDDERS IN ACCORDANCE WITH COMPETITIVE BIDDING PROCEDURE, AND UNDER THE CIRCUMSTANCES COULD NOT BE WAIVED IN A MANNER INCONSISTENT WITH THOSE PROCEDURES. HOWEVER, WE MUST OBSERVE THAT H AND N'S USE OF A SOLICITATION FORM ENTITLED "REQUEST FOR QUOTATION," AND ITS FAILURES TO HOLD A PUBLIC OPENING OF BIDS AND TO REJECT NORDBERG'S BID IN THE FIRST INSTANCE AS NONRESPONSIVE, INDICATE EITHER AN IGNORANCE OF OR INDIFFERENCE TO FUNDAMENTAL PROCEDURES ASSOCIATED WITH COMPETITIVE BIDDING. CONSEQUENTLY, WE ARE TODAY ADVISING THE ADMINISTRATIVE AGENCY TO RE EVALUATE THE PROCUREMENT PROCEDURES EMPLOYED BY H AND N, AND TO TAKE APPROPRIATE STEPS TO INSURE THAT FUTURE PROCUREMENTS BY COST-TYPE CONTRACTORS SUCH AS H AND N WILL BE CONDUCTED UNDER PROCEDURES WHICH CONFORM TO THE GOVERNMENT'S COMPETITIVE BIDDING METHODS TO THE GREATEST EXTENT PRACTICABLE. YOU ALSO QUESTION THE NEED FOR REQUIRING DELIVERY OF THE 6 GENERATOR UNITS BY FEBRUARY 15, 1964, WHICH REQUIREMENT YOU ALLEGE RESULTED IN A LOSS TO THE GOVERNMENT OF APPROXIMATELY $95,000, THE DIFFERENCE BETWEEN THE BIDS OF NORDBERG AND ENTERPRISE. (WE NOTE PARENTHETICALLY THAT WHILE ENTERPRISE AND THE FOURTH LOW BIDDER OFFERED DELIVERY BY FEBRUARY 15, THE RFQ DID NOT REQUIRE DELIVERY UNTIL MARCH 1, 1964.)

IN REGARD TO THE NEED FOR DELIVERY BY MARCH 1, AEC REPORTS THAT IN CONNECTION WITH THE NUCLEAR TEST BAN TREATY, THE DEPARTMENT OF DEFENSE HAD COMMITTED ITSELF TO CONGRESS TO MAINTAIN THE FACILITIES AND RESOURCES NECESSARY TO PROMPTLY INSTITUTE NUCLEAR TESTS IN THE ATMOSPHERE SHOULD THEY BE DEEMED ESSENTIAL TO OUR NATIONAL SECURITY OR SHOULD THE TREATY OR ANY OF ITS TERMS BE ABROGATED BY THE SOVIET UNION. THE IMPLEMENTATION OF THIS COMMITMENT, THE DEPARTMENT OF DEFENSE ESTABLISHED CERTAIN PROJECTS AT JOHNSTON ISLAND WHICH HAVE THE HIGHEST MILITARY PRIORITY AND INVOLVED MEETING SPECIFIC READINESS DATES. IN ORDER TO MEET SUCH READINESS DATES FOR THE PROJECTS, IT WAS NECESSARY THAT RELATED ACTION SUCH AS CONSTRUCTION OF FACILITIES AND THE PROCUREMENT OF THE NECESSARY SUPPLIES AND EQUIPMENT BE TAKEN WITHIN THE PROPER LEAD TIME.

IN COORDINATION WITH JTF-8, THE AEC IS RESPONSIBLE FOR PERFORMANCE OF THE NECESSARY CONSTRUCTION, PROCUREMENT OF SUPPLIES AND EQUIPMENT AND PROVISION OF OTHER NECESSARY SERVICES FOR THESE PROJECTS. THE ACTIVITIES OF THE AEC IN THIS CONNECTION ARE PERFORMED IN LARGE PART THROUGH ITS CONTRACTOR, H AND N.

WITH RESPECT TO THE SUBJECT PROCUREMENT, WE ARE INFORMED THAT STUDIES MADE OF POWER REQUIREMENTS AT JOHNSTON ISLAND INDICATED THAT THERE WOULD BE INCREASING POWER SHORTAGES AS FOLLOWS IF ADDITIONAL GENERATING UNITS WERE NOT PROCURED:

JANUARY 1, 1964 0 KW

APRIL 1, 1964 2000 KW

MAY 1, 1964 5000 KW

IN ADDITION TO THE ABOVE STATED 5000 KW REQUIREMENTS, ADDITIONAL GENERATING CAPACITY IS NEEDED TO COVER ANTICIPATED DOWNTIME OF EXISTING EQUIPMENT, WHICH IS WORN OUT AND IN POOR CONDITION, IN ORDER TO HAVE FIRM POWER AVAILABLE.

IN ORDER TO HAVE THE NECESSARY POWER GENERATING CAPACITY AT JOHNSTON ISLAND, H AND N AT THE REQUEST OF THE COMMISSION, ISSUED THE SUBJECT RFQ WHICH ASKED FOR BIDS ON FIVE, SIX, OR SEVEN 1300 TO 1400 KW GENERATOR UNITS. THE INVITATION DID NOT ORIGINALLY SPECIFY A DELIVERY DATE BUT, FOLLOWING CONSIDERATION OF THE URGENCY OF THE POWER NEEDS AT JOHNSTON ISLAND, THE COMMANDER, JTF-8 REQUESTED THAT PROCUREMENT OF ADDITIONAL GENERATORS BE EXPEDITED TO THE MAXIMUM PRACTICABLE EXTENT.

THE JOHNSTON ISLAND POWER NEEDS, AND THE EXTENT TO AND SPEED AT WHICH THEY WERE INCREASING, WERE ESTABLISHED AS A RESULT OF EXTENSIVE DISCUSSIONS AMONG REPRESENTATIVES OF JTF-8, AEC AND H AND N, DURING WHICH IT WAS NOTED THAT THE TIME REQUIRED TO PUT A GENERATOR ON LINE AT THE ISLAND AFTER DELIVERY AT OAKLAND, CALIFORNIA, WAS ESTIMATED TO BE ABOUT 100 DAYS. ACCORDINGLY, THE AEC AND H AND N CONCLUDED THAT MARCH 1, 1964, WAS THE LATEST ACCEPTABLE DATE FOR DELIVERY OF THE GENERATORS TO SUPPORT THE READINESS POSTURE AS PROGRAMMED TO MEET THE JANUARY 1, 1965, OVER-ALL READINESS CAPABILITY DATE. FURTHERMORE, THE ADMINISTRATIVE AGENCY REPORTS THAT IF IT COULD NOT HAVE PURCHASED THE GENERATOR UNITS UNTIL NORDBERG COULD FURNISH THEM, IT WOULD HAVE HAD TO HAVE RENTED GENERATOR UNITS AT A COST OF OVER $100,000 FOR RENTALS, TRANSPORTATION, AND RELATED EXPENSES.

THE REASONS GIVEN ABOVE APPEAR TO JUSTIFY THE NEED FOR DELIVERY ON MARCH 1, 1964, AND NO BASIS HAS BEEN PRESENTED TO QUESTION THOSE REASONS.

YOU ALSO CONTEND THAT THE DELIVERY REQUIREMENTS WERE IMPRACTICAL OR IMPOSSIBLE TO MEET, AND YOU INDICATE YOU ARE ADVISED THAT ENTERPRISE FAILED TO DELIVER THE SPECIFIED SETS OF DRAWINGS WITHIN THE 14 AND 30 DAYS AFTER AWARD AS REQUIRED BY PARAGRAPH 60 OF THE SPECIFICATION. IN REGARD TO THE SUBMISSION OF DRAWINGS, AEC REPORTS THAT WHILE THE DRAWINGS AND DATA REQUIRED BY SUB-ITEM 16.1 (B), (C), AND (D) WERE TIMELY SUBMITTED, THOSE REQUIRED BY SUB-ITEMS 16.1 (A) AND (E) WERE SUBMITTED AFTER THE 14- DAY PERIOD, AND THAT THOSE REQUIRED BY SUB-ITEM 16.2 WERE NOT, EXCEPT FOR USB-ITEM 16.2 (C), SUBMITTED WITHIN 30 DAYS AFTER CONTRACT AWARD. IT GOES ON TO REPORT "THAT AT NO TIME DID LATE DELIVERY OF A DRAWING CAUSE ANY CRITICAL PROBLEM OR CAUSE DELAY IN THE DELIVERY OF THE GENERATOR UNITS," AND THAT "H AND N AND THE AEC'S NEVADA OPERATIONS OFFICE BELIEVE THAT THE DRAWINGS ARE ACCEPTABLE.' FROM THE FOREGOING, IT APPEARS THAT THE STIPULATED DELIVERY SCHEDULE MAY HAVE BEEN IN PART UNNECESSARY, AT LEAST TO THE EXTENT THAT THE LATENESS ADMITTEDLY DID NOT "CAUSE ANY CRITICAL PROBLEM," AND THIS OBSERVATION WILL BE BROUGHT TO THE ATTENTION OF THE AEC.

IN REGARD TO THE ALLEGED IMPRACTICALITY OF DELIVERING THE GENERATOR UNITS BY MARCH 1, 1964, AEC REPORTS THAT ENTERPRISE DELIVERED ALL UNITS AND AUXILIARY EQUIPMENT BETWEEN JANUARY 24 AND FEBRUARY 29, 1964.

IN VIEW OF THE FOREGOING, WE CONCLUDE THAT YOUR CLIENT'S OFFER WAS PROPERLY REJECTED AS NOT BEING RESPONSIVE TO THE SUBJECT SOLICITATION FOR BIDS BECAUSE IT DID NOT AGREE TO MEET A REASONABLE DELIVERY REQUIREMENT FOR THE SPECIFIED GENERATOR UNITS, AND THAT UNDER THE CIRCUMSTANCES SUCH REQUIREMENT COULD NOT BE WAIVED BY THE ORAL REPRESENTATIONS ALLEGED IN MR. ANDERSON'S AFFIDAVIT TO HAVE BEEN MADE BY PROCUREMENT PERSONNEL. YOUR PROTEST IS THEREFORE DENIED.