B-129018, SEPTEMBER 28, 1956, 36 COMP. GEN. 251

B-129018, SEPTEMBER 28, 1956, 36 COMP. GEN. 251

CONTRACTS - SPECIFICATIONS - GOVERNMENT REQUIREMENTS - RESTRICTIVE - DEVIATIONS FROM SPECIFICATIONS THE DRAFTING OF PROCUREMENT SPECIFICATIONS TO REFLECT THE REQUIREMENTS OF THE GOVERNMENT AND THE FACTUAL EVALUATION OF THE CONFORMABILITY OF EQUIPMENT OFFERED BY BIDDERS ARE PRIMARILY THE RESPONSIBILITY OF THE ADMINISTRATIVE AGENCY AND, IN THE ABSENCE OF EVIDENCE WHICH INDICATES THAT THE SPECIFICATIONS PRECLUDED ALL BUT THE SUCCESSFUL BIDDER FROM MEETING THE REQUIREMENTS, THE SPECIFICATIONS MAY NOT BE REGARDED AS RESTRICTIVE OF COMPETITION. THE FAILURE OF REFRIGERATION EQUIPMENT OFFERED BY THE LOW BIDDER TO MEET THE CAPACITY REQUIREMENTS OF THE SPECIFICATIONS SHOULD BE REGARDED AS A MAJOR DEVIATION WHICH MAY NOT BE WAIVED WITHOUT PREJUDICING THE RIGHTS OF OTHER BIDDERS. A LOW BIDDER'S OFFER, AFTER BID OPENING, TO SUPPLY EQUIPMENT OF A DIFFERENT DESIGN TO MEET THE SPECIFICATIONS AT NO ADDITIONAL COST WOULD NOT MAKE THE ORIGINAL BID RESPONSIVE TO THE INVITATION AND CONSIDERATION WOULD BE CONTRARY TO OPEN, COMPETITIVE BIDDING ON PUBLIC CONTRACTS.

TO YORK CORPORATION, SEPTEMBER 28, 1956:

REFERENCE IS MADE TO YOUR TELEGRAMS DATED AUGUST 20, 1956, ADVISING THAT YOU WERE THE LOW BIDDER UNDER INVITATIONS FOR BIDS NOS. N140-1396 56 AND N140-1397-56, AND PROTESTING THE ACTION OF THE DEPARTMENT OF THE NAVY IN AWARDING CONTRACTS THEREUNDER TO CARRIER CORPORATION.

WITH RESPECT TO INVITATION FOR BIDS NO. N140-1396-56, A REPORT FROM THE DEPARTMENT OF THE NAVY HAS NOW BEEN RECEIVED WHICH INDICATES THAT BIDS WERE SOLICITED ON APRIL 23, 1956, FOR A SHIP'S STORES REFRIGERATION PLANT AS PER PURCHASE SPECIFICATION DLG-9-503-M1044, TOGETHER WITH ON BOARD REPAIR PARTS, TECHNICAL DATA, ETC. YOUR BID IN THE AMOUNT OF $32,293.76, INCLUDING ENGINEERING SERVICES, AND A BID FROM CARRIER CORPORATION IN THE AMOUNT OF $36,711, WERE THE ONLY BIDS RECEIVED. THE CONTRACTING OFFICER FORWARDED BOTH BIDS TO THE SUPERVISOR OF SHIPBUILDING FOR TECHNICAL REVIEW. EXAMINATION OF YOUR BID BY THAT OFFICIAL INDICATED THAT THE COMPRESSOR UNITS YOU PROPOSED TO SUPPLY HAD A CAPACITY RATING OF 2.0 TONS AT 100 DEGREES F DISCHARGE TEMPERATURE, WHILE THE PURCHASE SPECIFICATIONS, WHICH INCLUDED MILITARY SPECIFICATION MIL-R-16743C BY REFERENCE, REQUIRED SUCH UNITS TO HAVE A MINIMUM CAPACITY OF 2 TONS AT 105 DEGREES F DISCHARGE TEMPERATURE. PURSUANT TO THE REQUEST OF THE SUPERVISOR OF SHIPBUILDING FOR ADDITIONAL INFORMATION, UNDER DATE OF JULY 30, 1956, YOUR SALES ENGINEER ADVISED THAT CAPACITY OF THE COMPRESSOR UNITS OFFERED, WHEN COMPUTED AT A DISCHARGE TEMPERATURE OF 105 DEGREES F. AS PER PARAGRAPH 3.4, MIL-R-16743C, WOULD BE 1.95 TONS, BUT WOULD HAVE A CAPACITY OF 2 TONS AT A 100 DEGREES F. CONDENSING TEMPERATURE. ACCORDINGLY, ON AUGUST 7, 1956, THE SUPERVISOR OF SHIPBUILDING ADVISED THE CONTRACTING OFFICER THAT THE MATERIAL OFFERED BY YOUR BID DID NOT CONFORM TO THE ADVERTISED SPECIFICATIONS, AND RECOMMENDED AWARD OF CONTRACT TO THE NEXT LOW BIDDER. SUCH RECOMMENDATION WAS CONCURRED IN BY THE REVIEW BOARD OF THE NAVY PURCHASING OFFICE, NEW YORK, WHICH RECOMMENDED AWARD TO CARRIER CORPORATION BASED ON ITS OFFER OF MATERIAL MEETING ALL ESSENTIAL REQUIREMENTS OF THE INVITATION FOR BIDS.

BY LETTER TO THE CONTRACTING OFFICER DATED AUGUST 20, 1956, YOUR MARINE MANAGER ADVISED THAT YOUR OFFER OF UNITS WITH 1.95 TONS CAPACITY RESULTED FROM APPLICATION OF INSTRUCTIONS AND FACTORS FOR CAPACITY CALCULATIONS CONTAINED IN DDS59-2, THAT THE UNITS OFFERED BY YOU WERE ADEQUATE TO MEET THE GOVERNMENT'S NEEDS, THAT THE AMOUNT BY WHICH THEY FAILED TO MEET THE SPECIFICATIONS WAS A MINOR DEVIATION WHICH COULD HAVE BEEN WAIVED BY THE CONTRACTING OFFICER AND THAT THE SPECIFIED MINIMUM CAPACITY OF TWO TONS DISCRIMINATED AGAINST YOUR COMPANY.

THE RESPONSIBILITY FOR DRAFTING PROPER SPECIFICATIONS WHICH REFLECT THE NEEDS OF THE GOVERNMENT AND FOR DETERMINING FACTUALLY WHETHER ARTICLES OFFERED BY BIDDERS MEET THOSE SPECIFICATIONS IS PRIMARILY FOR ADMINISTRATIVE AGENCIES. 17 COMP. GEN. 554. WHILE IT IS THE DUTY OF THIS OFFICE TO DETERMINE WHETHER SPECIFICATIONS AS WRITTEN ARE UNDULY RESTRICTIVE OF COMPETITION, THE FACT THAT A PARTICULAR BIDDER MAY BE UNABLE OR UNWILLING TO MEET THE MINIMUM REQUIREMENTS FOR SUPPLYING THE GOVERNMENT'S NEED IS NOT SUFFICIENT TO WARRANT A CONCLUSION THAT THE SPECIFICATIONS ARE UNDULY RESTRICTIVE. 30 COMP. GEN. 368; 33 ID. 586. THERE IS NO REQUIREMENT THAT THE UNITED STATES PURCHASE EQUIPMENT MERELY BECAUSE IT IS OFFERED AT A LOWER PRICE, WITHOUT INTELLIGENT REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED; NOR IS THE GOVERNMENT TO BE PLACED IN THE POSITION OF ALLOWING BIDDERS TO DICTATE SPECIFICATIONS WHICH WILL PERMIT ACCEPTANCE OF EQUIPMENT WHICH DOES NOT, IN THE CONSIDERED JUDGMENT OF THE CONTRACTING AGENCY, REASONABLY MEET THE AGENCY'S NEED.

THE RECORD BEFORE THIS OFFICE CONTAINS NO EVIDENCE THAT THE SPECIFICATIONS PRECLUDED ALL BUT THE SUCCESSFUL BIDDER FROM MEETING THE REQUIREMENTS SET OUT THEREIN, OR THAT REJECTION OF YOUR BID WAS BASED ON PERSONAL PREFERENCE OR FAVORITISM. CONVERSELY, THE FACT THAT THE PURCHASE SPECIFICATIONS FOR THIS PARTICULAR PROCUREMENT WERE SUBJECT TO THE PROVISIONS OF MILITARY SPECIFICATIONS APPLICABLE GENERALLY TO NAVAL SHIPBOARD REFRIGERATING SYSTEMS INDICATES THAT THE REQUIREMENTS PRESCRIBED BY THE INVITATION FOR BIDS REFLECTED A BONA FIDE DETERMINATION OF THE MINIMUM NEEDS OF THE GOVERNMENT, ADAPTED AFTER A CAREFUL STUDY OF THE NEED TO BE MET, IN THE LIGHT OF PAST EXPERIENCE.

IT IS THEREFORE OUR OPINION THAT THE PRESENT RECORD DOES NOT SUPPORT YOUR CONTENTION THAT THE SPECIFICATIONS REFLECTED REQUIREMENTS WHICH RESULTED IN DISCRIMINATION AGAINST YOUR COMPANY.

ACCORDINGLY, ACCEPTANCE OF YOUR BID COULD ONLY HAVE BEEN ACCOMPLISHED BY A WAIVER OF REQUIREMENTS SET OUT IN THE INVITATION FOR BIDS. SUCH ACTION WOULD HAVE BEEN MANIFESTLY UNFAIR, NOT ONLY TO THE OTHER BIDDER WHO, IF HE HAD HAD KNOWLEDGE OF A RELAXATION OF THE REQUIREMENTS, MAY HAVE BEEN ABLE TO SUBMIT A LOWER BID, BUT ALSO TO OTHERS MANUFACTURERS WHO POSSIBLY WERE UNABLE TO MEET THE ORIGINAL REQUIREMENTS BUT WHOSE PRODUCTS WOULD HAVE BEEN ACCEPTABLE IN THE EVENT OF SOME RELAXATION IN SUCH REQUIREMENTS. WHILE IT IS TRUE THAT MINOR DEVIATIONS FROM THE CONDITIONS SET OUT IN THE INVITATION FOR BIDS MAY BE WAIVED, A DEVIATION WHICH AFFECTS THE QUALITY, QUANTITY OR PRICE OF THE ARTICLES OFFERED, SO AS TO BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS, MUST BE CONSIDERED A MAJOR DEVIATION AND MAY NOT BE WAIVED. 30 COMP. GEN. 179; 17 ID. 554. CONSEQUENTLY, WE ARE CONSTRAINED TO AGREE WITH THE DETERMINATION OF THE CONTRACTING OFFICIALS THAT THE FAILURE OF YOUR COMPRESSOR UNITS TO MEET THE CAPACITY REQUIREMENTS OF THE SPECIFICATIONS WAS A MAJOR DEVIATION WHICH COULD NOT BE WAIVED.

WITH RESPECT TO INVITATION FOR BIDS NO. N140-1397-56, THE REPORT BY THE DEPARTMENT OF THE NAVY INDICATES THAT BIDS WERE ALSO SOLICITED THEREUNDER ON APRIL 23, 1956, FOR A MECHANICAL COOLING (AIR CONDITIONING) PLANT AS PER PURCHASE SPECIFICATION DLG-9-502-M1042, TOGETHER WITH ON BOARD REPAIR PARTS, TECHNICAL DATA, ETC. YOUR BID IN THE AMOUNT OF $118,827.62, INCLUDING ENGINEERING SERVICES, AND THE BID OF CARRIER CORPORATION IN THE AMOUNT OF $142,096 WERE THE ONLY BIDS RECEIVED IN RESPONSE THERETO. THESE BIDS WERE ALSO FORWARDED TO THE SUPERVISOR OF SHIPBUILDING FOR TECHNICAL REVIEW AND RECOMMENDATIONS. SUCH REVIEW INDICATED THAT THE COMPRESSOR UNIT OFFERED BY YOUR BID CONTAINED ONLY ONE STEP OF CAPACITY VARIATION IN THE AMOUNT OF 50 PERCENT, WHEREAS PARAGRAPH 3.5.1.6 OF MILITARY SPECIFICATIONS MIL-R 16743C, APPLICABLE BY REFERENCE IN THE PURCHASE SPECIFICATIONS, REQUIRED CAPACITY VARIATION IN TWO OR MORE INCREMENTS OF PARTIAL CAPACITY WITH THE LOWEST CAPACITY STEP NOT MORE THAN 33 1/3 PERCENT OF TOTAL CAPACITY. BY LETTER DATED JULY 25, 1956, YOUR SALES ENGINEER VERIFIED YOUR BID DESCRIPTION OF THE CAPACITY VARIATION ON THE COMPRESSOR UNIT OFFERED, AND BY LETTER DATED JULY 30, FURTHER ADVISED THAT, ALTHOUGH NOT A STANDARD FEATURE, YOUR FACTORY ENGINEERING DEPARTMENT HAD AGREED TO FURNISH AN ADDITIONAL STEP OF CAPACITY REDUCTION ON EACH COMPRESSOR TO COMPLY WITH MIL-R-16743C AT NO INCREASE IN THE BID PRICE. HOWEVER, SINCE ACCEPTANCE OF SUCH OFFER WOULD HAVE EFFECTED A MODIFICATION IN YOUR BID AFTER THE TIME SET FOR BID OPENING, IT WAS NOT CONSIDERED IN EVALUATION OF YOUR BID AND AWARD OF CONTRACT TO CARRIER CORPORATION BASED ON FAILURE OF YOUR BID TO MEET ESSENTIAL REQUIREMENTS OF THE SPECIFICATIONS WAS RECOMMENDED BY BOTH THE SUPERVISOR OF SHIPBUILDING AND BY THE BOARD OF REVIEW. BY LETTER DATED AUGUST 20, 1956, YOUR MARINE MANAGER PROTESTED THE AWARD TO CARRIER CORPORATION ON THE BASIS THAT YOUR BID WAS LOW, IT CONFORMED WITH APPLICABLE SPECIFICATIONS, AND YOU ARE A RESPONSIBLE BIDDER.

IT WOULD SEEM THAT YOUR PROTEST AGAINST AWARD TO CARRIER CORPORATION IS BASED UPON THE GROUND THAT YOUR OFFER, AFTER BID OPENING, TO SUPPLY AN ADDITIONAL STEP OF REDUCTION CAPACITY ON EACH COMPRESSOR AT NO ADDITIONAL COST, OPERATED TO MAKE YOUR ORIGINAL BID RESPONSIVE TO THE INVITATION FOR BIDS. HOWEVER, AS INDICATED BY YOUR CORRESPONDENCE WITH THE CONTRACTING OFFICER AND BY THE ADDITIONAL DRAWINGS YOU SUBMITTED SHOWING THE CAPACITY REDUCTION BYPASS ARRANGEMENT YOU PROPOSED TO MAKE IN ORDER TO ACHIEVE TWO PARTIAL CAPACITY INCREMENTS ON EACH COMPRESSOR, THE ARTICLES WHICH YOU FINALLY OFFERED WERE OF A SOMEWHAT DIFFERENT DESIGN THAN CONTEMPLATED IN YOUR ORIGINAL BID, AND IT IS A FAIR ASSUMPTION THAT NOTWITHSTANDING YOUR OFFER TO MAKE SUCH ADDITIONS AT NO ADDITIONAL COST, THE INCLUSION OF SUCH ADDITIONAL FEATURES IN YOUR ORIGINAL OFFER WOULD HAVE RESULTED IN A HIGHER BID PRICE. AS STATED AT 17 COMP. GEN. 554, 558, TO PERMIT BIDDERS TO VARY THEIR PROPOSALS TO SUCH EXTENT AFTER BID OPENING WOULD SOON REDUCE TO A FARCE THE WHOLE PROCEDURE OF LETTING PUBLIC CONTRACTS ON AN OPEN COMPETITIVE BASIS. SEE ALSO 30 COMP. GEN. 179; 31 ID. 660.

UNDER THE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE REJECTION OF YOUR BID UNDER THE INVITATION IN QUESTION WAS PROPER.

WITH RESPECT TO FUTURE PURCHASES OF SHIPBOARD REFRIGERATING AND AIR CONDITIONING EQUIPMENT, YOU ARE ADVISED THAT WE HAVE TODAY SUGGESTED TO THE SECRETARY OF THE NAVY THAT THE DEPARTMENT REVIEW ITS REASONABLE NEEDS AND TO CONSIDER ANY MODIFICATION OF PRESENT REQUIREMENTS, NOT INCONSISTENT WITH SUCH NEEDS, WHICH WOULD RESULT IN BROADENING THE COMPETITIVE BASE ON SUCH PROCUREMENT.