B-130412, OCT. 2, 1957

B-130412, OCT. 2, 1957

TO CARL L. SHIPLEY, ESQUIRE:

YOUR LETTER OF AUGUST 30, 1957, REQUESTS, ON BEHALF OF HEYER PRODUCTS COMPANY, INC., OF 471 CORTLANDT STREET, BELLEVILLE, NEW JERSEY, RECONSIDERATION OF OUR DECISION, B-130412, JUNE 13, 1957 (36 COMP. GEN. 809).

IN OUR EARLIER DECISION, WE CONCLUDED THAT THE AWARD OF A CONTRACT TO ANOTHER BIDDER PURSUANT TO INVITATION FOR BIDS NO. 33-600-57-96, ISSUED NOVEMBER 27, 1956, BY THE DEPARTMENT OF THE AIR FORCE, WAS NOT LEGALLY INVALID. IN YOUR LETTER OF AUGUST 30, 1957, YOU REQUEST THAT OUR EARLIER DECISION BE RECONSIDERED IN THE LIGHT OF SENATE REPORT NO. 1111, 85TH CONGRESS, FIRST SESSION, ORDERED TO BE PRINTED AUGUST 23, 1957. THE REPORT DISCUSSES THE PARTICULAR PROCUREMENT AND RELATED MATTERS AT PAGES 13 THROUGH 20.

THE FIRST BASIS FOR YOUR REQUEST FOR RECONSIDERATION IS THAT THE SENATE SMALL BUSINESS COMMITTEE CONCLUDES ON PAGE 19 OF THE REPORT "THAT THE AIR FORCE MADE A MISTAKE IN AWARDING THE CONTRACT.' WE ASSUME THAT YOU ALLUDE THE CONCLUSION NO. 1 MADE BY THE COMMITTEE WHICH STATES IN PART:

"THE "MISTAKE" THE AIR FORCE CONCEDES IT MADE BY NOT CIRCULARIZING INDUSTRY AT THE TIME THE POWER-SUPPLY UNIT WAS PLACED ON A QUALIFIED PRODUCTS LIST WAS A FUNDAMENTAL VIOLATION OF EXISTING PROCUREMENT REGULATIONS.'

THE COMMITTEE CONCLUSION HAS REFERENCE TO THE FACT THAT, EXCEPT FOR AN INDICATION IN THE OCTOBER 1, 1956, ISSUE OF THE "INDEX OF SPECIFICATIONS AND RELATED PUBLICATIONS USED BY THE UNITED STATES AIR FORCE," ONLY MANUFACTURERS WHO HAD PREVIOUSLY EXPRESSED AN INTEREST IN PRODUCING THE PRODUCT UNDER PROCUREMENT IN THE CITED INVITATION HAD BEEN ADVISED THAT THE PROCUREMENT WOULD BE LIMITED TO THOSE MANUFACTURERS WHO HAD SUCCEEDED IN QUALIFYING THEIR PRODUCTS FOR INCLUSION ON THE APPROPRIATE QUALIFIED PRODUCTS LIST.

AS WE STATED IN OUR EARLIER DECISION, THE REPORT RECEIVED FROM THE DEPARTMENT OF THE AIR FORCE CONCEDED THAT INDUSTRY IN GENERAL SHOULD HAVE BEEN CIRCULARIZED WITH REGARD TO THE INCLUSION OF THE ITEM ON THE QUALIFIED PRODUCTS LIST AT THE TIME THE MANUFACTURERS WHO PREVIOUSLY HAD SHOWN AN INTEREST WERE CIRCULARIZED AND THAT, IN ANY CASE, UNDER NORMAL CIRCUMSTANCES ALL INTERESTED PRODUCERS WOULD HAVE BEEN ADVISED EITHER BY CIRCULARIZATION OR BY AN INVITATION FOR BIDS IN SUFFICIENT TIME TO PERMIT QUALIFICATION. THIS WAS NOT DONE IN THE CASE OF THE PROCUREMENT UNDER CONSIDERATION BECAUSE THE SPECIFICATIONS RELATING TO THE UNIT WERE NOT NEW BUT REPRESENTED A MODIFICATION, ALBEIT AN IMPORTANT ONE, TO AN EARLIER SPECIFICATION AND AT THAT TIME THE AIR FORCE REGULATIONS WERE NOT CLEAR AS TO THE CIRCULARIZATION TO BE GIVEN SUCH CHANGE IN SPECIFICATIONS. SEE IN THIS REGARD THE TESTIMONY AT PAGE 117 OF THE HEARINGS BEFORE A SUBCOMMITTEE OF THE SELECT COMMITTEE ON SMALL BUSINESS, UNITED STATES SENATE, 85TH CONGRESS, FIRST SESSION, ON CASE, STUDIES IN GOVERNMENT PROCUREMENT, MARCH 11, 12 AND 13, 1957. THE INVITATION WAS NOT ISSUED IN SUFFICIENT TIME TO PERMIT ALL INTERESTED PRODUCERS TO QUALIFY PRIOR TO BID OPENING BECAUSE OF THE NECESSITY OF SYNCHRONIZING RECEIPT OF THE UNITS WITH AIRCRAFT PRODUCTION SCHEDULES. IT SHOULD BE NOTED THAT WE HAVE BEEN ADVISED THAT THE REGULATIONS RELATING TO CIRCULARIZATION HAVE BEEN AMENDED TO FIX SPECIFIC RESPONSIBILITY FOR ADVISING ALL PROSPECTIVE PRODUCERS WHEN A MAJOR CHANGE IS MADE IN SPECIFICATIONS IN ORDER TO AVOID REPETITION OF THE "MISTAKE.' SEE AFPI 2-503.1.

WHILE THE COMMITTEE'S FINDINGS AND THE ADMINISTRATIVE REPORT CONCLUDE, AND CONCEDE, RESPECTIVELY, THAT THERE SHOULD HAVE BEEN MORE COMPLETE CIRCULARIZATION OF THE INDUSTRY WHEN THE SPECIFICATIONS WERE REVISED, THE COMMITTEE'S FINDINGS CONCLUDE ONLY THAT THE FAILURE TO CIRCULARIZE WAS A "MISTAKE" AND NOT, AS YOU ALLEGE, THAT THE AIR FORCE MADE A MISTAKE IN AWARDING THE CONTRACT. AS TO THE VALIDITY OF AN AWARD WHERE THE INVITATION PROVIDED SO SHORT A PERIOD BETWEEN ISSUANCE AND BID OPENING THAT SOME BIDDERS WERE UNABLE TO SUBMIT BIDS WITHIN THE TIME ALLOWED, AND AS TO THE EFFECT OF THE FAILURE TO PROVIDE A COPY OF THE INVITATION TO A BIDDER ON THE REGULAR MAILING LIST, SEE OUR EARLIER DECISION IN THIS CASE.

IN YOUR LETTER OF AUGUST 30, YOU ALSO STATE THAT THE REPORT CONCLUDES THAT THE AIR FORCE HAS EXPOSED ITSELF TO LEGAL LIABILITY FOR THE COSTS OF PREPARING BIDS BY CERTAIN OF THE BIDDERS. THIS HAS REFERENCE TO THE FACT AS FOUND BY THE COMMITTEE THAT A NUMBER OF THE FIRST FROM WHOM BIDS WERE SOLICITED AND WHO SUBMITTED BIDS COULD NOT POSSIBLY HAVE QUALIFIED THEIR PRODUCTS, A PREREQUISITE TO CONSIDERATION OF THEIR BIDS FOR AWARD, WITHIN THE TIME PERMITTED. WITHOUT ATTEMPTING TO DECIDE WHETHER, IN THIS INSTANCE, THE AIR FORCE HAS, IN FACT, SUBJECTED ITSELF TO LEGAL LIABILITY, IT IS SUFFICIENT TO STATE THAT SUCH LEGAL LIABILITY CANNOT AFFECT THE VALIDITY OF THE AWARD ALREADY MADE; AND SHOULD IT BE HELD AT THIS TIME THAT THE AWARD WAS IMPROPER, THE GOVERNMENT MIGHT WELL BE SUBJECT TO SUIT BY THE BIDDER TO WHOM THE CONTRACT WAS AWARDED ON JANUARY 3, 1957.

YOU ALSO REFER TO THE FACT THAT THE COMMITTEE REPORT STATED IN CONCLUSION NO. 3, THAT:

"THE "MINOR" CHANGES TO THREE ITEMS IN THE SPECIFICATIONS MADE BY THE AIR FORCE THE DAY PRIOR TO THE OPENING OF BIDS, CAN ONLY BE VIEWED BY YOUR COMMITTEE AS A MEANINGLESS EFFORT ON THE PART OF THE AIR FORCE TO SET ITS BARRACKS IN ORDER AFTER THE INSPECTION HAD BEGUN. THE ONLY OTHER POSSIBILITY THAT OCCURS TO YOUR COMMITTEE, IN VIEW OF THE REQUIREMENT THAT SUPPLIERS QUALIFY THEIR PRODUCTS BEFORE THE OPENING OF THE BIDS, IS THAT THESE CHANGES WERE INTRODUCED IN ORDER TO QUALIFY ONE OR THE OTHER, OR BOTH, OF THE TWO ULTIMATELY RESPONSIVE BIDDERS. IN EITHER EVENT, YOUR COMMITTEE FEELS THAT A CHANGE IN SPECIFICATIONS ON THE 29TH DAY OF A 30- DAY OFFERING IS BOTH HIGHLY IRREGULAR AND IMPROPER.'

THE CHANGES IN THE SPECIFICATIONS REFERRED TO ARE INDICATED AT PAGES 127- 128 OF THE HEARINGS. THE FIRST CHANGE AMENDS PARAGRAPH 3.5.1.1 OF THE SPECIFICATION WHICH ORIGINALLY READ "THE TRANSFORMER RECTIFIER UNIT SHALL NOT OMIT ACRID SMOKE THAT WOULD ADVERSELY AFFECT PERSONNEL IN THE EVENT OF AN INTERNAL FAULT OR OVERLOAD," BY SUBSTITUTING "TOXIC FUMES" FOR "ACRID SMOKE.' THE FIRST DEFINITION SHOWN FOR "FUME" IN WEBSTER'S NEW INTERNATIONAL DICTIONARY, SECOND EDITION, IS ,SMOKE.' THE DICTIONARY DEFINES "ACRID" AS "HARSH OR BITTERLY PUNGENT TO THE TASTE, IRRITATING TO THE SKIN, NUCOUS MEMBRANCE, ETC; CORROSIVE; AS ACRID SALTS OR POISONS.' "TOXIC" IS DEFINED AS ,OF, PERTAINING TO, OR CAUSED BY, POISON * * *; " "POISON" IS DEFINED AS "ANY AGENT WHICH, INTRODUCED (ESP. IN SMALL AMOUNT) INTO AN ORGANISM, MAY CHEMICALLY PRODUCE AN INJURIOUS OR DEADLY EFFECT * * *.' WHILE "ACRID SMOKE" MAY BE UNPLEASANT AS DISTINGUISHED FROM POISONOUS AS WOULD BE "TOXIC FUMES," WE THINK THAT "ACRID SMOKE THAT WOULD ADVERSELY AFFECT PERSONNEL" (WHICH ADVERSE EFFECT OBVIOUSLY MUST INVOLVE THE ABILITY TO PROPERLY PERFORM THEIR ASSIGNED FUNCTIONS) MUST BE REGARDED AS SUBSTANTIALLY SYNONYMOUS WITH "TOXIC FUMES.' THEREFORE, WE MUST REGARD THE FIRST CHANGE IN THE SPECIFICATIONS AS CONSTITUTING MERELY A CLARIFICATION AND NOT A SUBSTANTIVE CHANGE IN THE SPECIFICATIONS.

THE SECOND CHANGE MODIFIES PARAGRAPH 3.5.9 TO REQUIRE THAT TWO OUTPUT TERMINALS WITH REMOVABLE NUTS SHOULD BE SIZE 1/4-28 RATHER THAN SIZE 1/4- 20. THIS CHANGE SIMPLY REQUIRES 28 THREADS TO THE INCH RATHER THAN 20. WHILE THIS CHANGE IS SUBSTANTIVE IT IS OF SUCH MINOR SIGNIFICANCE THAT IT COULD NOT BE CONSTRUED AS AFFECTING THE ACCEPTABILITY OR THE AMOUNT OF THE BID.

THE THIRD AND FINAL CHANGE SUBSTITUTES A NEW FIGURE TWO FOR THE OLD ONE. THE SUBSTITUTE IS IDENTICAL WITH THE ORIGINAL FIGURE EXCEPT THAT IT IS SOMEWHAT CLARIFIED, THE CHANGE IN THREAD OF THE TWO TERMINALS IS SPECIFICALLY NOTED, AND A BLOWUP OF THE TERMINALS IS PROVIDED INDICATING MORE SPECIFIC DIMENSIONS FOR SPACING AND REQUIRING THAT THE IDENTIFICATION MARKINGS BE 3/16 DEPRESSED CHARACTERS FILLED WITH WHITE, WHEREAS ORIGINALLY THE CHARACTERS WERE REQUIRED ONLY TO BE DURABLY AND LEGIBLY MARKED. HERE AGAIN THE CHANGE IS PRIMARILY ONE OF CLARIFICATION WHICH CAN HARDLY BE CONCEIVED AS AFFECTING ANY OF THE BIDS.

WHILE WE WOULD BE INCLINED TO REGARD A LAST-MINUTE CHANGE IN SPECIFICATIONS WITH DISFAVOR IF SUCH CHANGE COULD REASONABLY BE REGARDED AS TENDING TO FAVOR A PARTICULAR BIDDER OR CLASS OF BIDDERS, OR AS MAKING ANY SIGNIFICANT CHANGE IN THE SPECIFICATIONS WHICH COULD REASONABLY BE EXPECTED TO AFFECT THE RESPONSIVENESS OR THE PRICE OF ANY OF THE BIDS, IT DOES NOT APPEAR THAT THE CHANGE IN THIS CASE COULD HAVE ANY SIGNIFICANT EFFECT--- AT ANY RATE NONE IS IN FACT ALLEGED--- AND, THEREFORE, WE PERCEIVE NO LEGAL OBJECTION THERETO.

ON THE BASIS OF THE FOREGOING, THE REASONS STATED IN YOUR REQUEST FOR RECONSIDERATION OF OUR EARLIER DECISION DETERMINING THAT THE ORIGINAL AWARD WAS NOT INVALID ARE DEEMED TO BE LEGALLY INSUFFICIENT TO SUPPORT SUCH CONCLUSION BY OUR OFFICE. THEREFORE, WE MUST CONTINUE TO REGARD THE ORIGINAL AWARD AS VALID.