B-135640, APR. 17, 1958

B-135640, APR. 17, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER OF APRIL 1, 1958, FROM THE ASSISTANT SECRETARY (LOGISTICS), FORWARDING A PROTEST DATED MARCH 5, 1958, BY UNDERWOOD MACHINERY COMPANY AGAINST THE AWARD OF CONTRACT DA-19-066 505- ORD-479, TO NEWAYGO ENGINEERING COMPANY.

BY INVITATION NO. ORD-19-066-58-45, THE WATERTOWN ARSENAL, WATERTOWN, MASSACHUSETTS, INVITED BIDS, TO BE OPENED DECEMBER 16, 1957, FOR THE FURNISHING AND INSTALLATION AT THE ARSENAL OF CERTAIN SAND HANDLING AND CONDITIONING EQUIPMENT, COMPLETE, IN ACCORDANCE WITH PURCHASE REQUIREMENT NO. 248, DATED NOVEMBER 15, 1957. THE INVITATION PROVIDED THAT "BIDDERS MUST SUBMIT WITH BID EVIDENCE OF HAVING SUCCESSFULLY FURNISHED SIMILAR EQUIPMENT OUTLINED ABOVE, TO EITHER THE GOVERNMENT OR PRIVATE INDUSTRY.'

THE RECORD SHOWS THAT THE BID OF UNDERWOOD MACHINERY COMPANY, IN THE AMOUNT OF $65.712, WITH DISCOUNT OF ONE-HALF PERCENT FOR PAYMENT WITHIN 10 DAYS, WAS THE LOWEST BID RECEIVED IN RESPONSE TO THE INVITATION AND THAT NEWAYGO ENGINEERING COMPANY WAS THE NEXT LOWEST BIDDER IN THE AMOUNT OF $74,127. CERTAIN ALTERNATE EQUIPMENT OFFERED BY NEWAYGO FOR THE PRICE OF $1,657 WAS ACCEPTED BY THE ARSENAL AND THE CONTRACT WAS AWARDED TO THAT CONCERN ON FEBRUARY 12, 1958, FOR THE TOTAL AMOUNT OF $75,785. IT APPEARS THAT THE AWARD WAS MADE TO NEWAYGO, INSTEAD OF TO THE LOW BIDDER, BECAUSE THE CONTRACTING OFFICER MADE THE FOLLOWING ADMINISTRATIVE DETERMINATION UNDER DATE OF FEBRUARY 10, 1958:

"3. IT HAS BEEN DETERMINED THAT UNDERWOOD MACHINERY CO. HAS NOT ESTABLISHED ITSELF AS A CONTRACTOR WITH THE NECESSARY EXPERIENCE, ORGANIZATION, AND TECHNICAL QUALIFICATIONS TO PERFORM THE PROPOSED CONTRACT; THAT IT HAS NOT DEMONSTRATED THAT IT IS A MANUFACTURER WITH PRIOR EXPERIENCE IN THE PRODUCTION OF THE SPECIFIED EQUIPMENT, NOR HAS THE NECESSARY QUALIFICATIONS FOR THE ENGINEERING, LAYOUT, ASSEMBLY, CONSTRUCTION, AND INSTALLATION THEREOF REQUIRED TO MAKE IT A RESPONSIBLE BIDDER FOR THIS HIGHLY SPECIALIZED EQUIPMENT.

"4. IT HAS THEREFORE BEEN DETERMINED TO BE IN THE BEST INTEREST OF THE GOVERNMENT TO REJECT THE BID OF UNDERWOOD MACHINERY CO. AND MAKE THE AWARD TO THE LOWEST RESPONSIBLE BIDDER, THE NEWAYGO ENGINEERING CO.'

UNDERWOOD'S PROTEST IS SET FORTH IN IDENTICAL LETTERS ADDRESSED TO HONORABLE JOSEPH MARTIN AND SENATOR LEVERETT SALTONSTALL UNDER DATE OF MARCH 5, 1958. THIS LETTER IS QUOTED BY UNDERWOOD IN A LETTER WHICH IT ADDRESSED TO THIS OFFICE UNDER DATE OF MARCH 26, 1958, WHERE IT REQUESTS THAT THE AWARD TO NEWAYGO BE SET ASIDE. THE BASIS FOR THE PROTEST, AS SET FORTH IN THE LETTER TO MR. MARTIN AND SENATOR SALTONSTALL, IS THAT UNDERWOOD HAS FURNISHED EVIDENCE TO THE PROCURING AGENCY OF HAVING SUPPLIED EQUIPMENT SIMILAR TO THAT CALLED FOR BY THE INVITATION TO OTHERS, AND THAT IT IS FULLY CAPABLE OF PERFORMING THE CONTRACT. THE PROTESTANT CONTENDS, THEREFORE, THAT NO BASIS EXISTED FOR THE REJECTION OF ITS LOW BID.

WE HAVE HELD THAT AWARD OF A CONTRACT PURSUANT TO THE FORMAL ADVERTISING REQUIREMENTS OF THE SEVERAL STATUTES APPLICABLE TO THE VARIOUS AGENCIES OF THE GOVERNMENT MAY BE LIMITED TO THOSE BIDDERS MEETING SPECIFIED QUALITATIVE AND QUANTITATIVE EXPERIENCE REQUIREMENTS IN A SPECIALIZED FIELD WHERE THE INVITATION SO PROVIDES AND UPON A PROPER DETERMINATION THAT THE INTERESTS OF THE GOVERNMENT WOULD THEREBY BE SERVED. SEE 37 COMP. GEN. 196; ALSO, OUR DECISION OF FEBRUARY 26, 1958, B-131078, 37 COMP. GEN. - , TO YOU.

IN THE PRESENT INSTANCE, IT APPEARS THAT UNDERWOOD MACHINERY COMPANY FAILED TO SUBMIT WITH ITS BID EVIDENCE OF HAVING SATISFACTORILY FURNISHED EQUIPMENT SIMILAR TO THAT REQUIRED BY THE INVITATION TO OTHERS AND THAT, IN RESPONSE TO A REQUEST FROM WATERTOWN ARSENAL THAT THE BIDDER COMPLY WITH THIS REQUIREMENT OF THE INVITATION, THE CONCERN SUBMITTED A LETTER DATED DECEMBER 20, 1957, AS EVIDENCE OF HAVING SUCCESSFULLY FURNISHED SIMILAR EQUIPMENT TO THE WALWORTH COMPANY, SOUTH BOSTON, MASSACHUSETTS, AND OTHERS. AS A RESULT OF THE INFORMATION CONTAINED IN THIS LETTER, AND PRESUMABLY FOR THE PURPOSE OF VERIFYING IT, TECHNICAL REPRESENTATIVES FROM THE ARSENAL VISITED BOTH THE UNDERWOOD PLANT AND THE WALWORTH PLANT. THEY DETERMINED THAT THE EQUIPMENT WHICH HAD BEEN FURNISHED TO WALWORTH WAS COMPLETELY DESIGNED BY THAT CONCERN, WITH COMPONENTS BEING FURNISHED BY THE LINK-BELT COMPANY, AND THAT IT HAD MERELY BEEN MODIFIED BY THE UNDERWOOD MACHINERY COMPANY.

UNDER DATE OF JANUARY 8, 1958, UNDERWOOD SUBMITTED " CLARIFICATION OF THE ITEMS OUR COMPANY WILL FURNISH AS SHOWN ON THE INVITATION FOR BID ORD-19- 066-58-45.' THIS WAS, IN EFFECT, UNDERWOOD'S PROPOSED DESIGN FOR THE SAND HANDLING AND CONDITIONING EQUIPMENT BEING PROCURED. ALSO, UNDER DATE OF JANUARY 14, 1958, UNDERWOOD FORWARDED BLUEPRINTS, OR DRAWINGS, OF EQUIPMENT ,FURNISHED TO FOUNDRIES AND OTHER CONCERNS WHEREIN SAND OR SIMILAR MATERIAL WAS HANDLED.'

UNDER DATE OF JANUARY 16, 1958, THE TECHNICAL REPRESENTATIVES OF WATERTOWN ARSENAL SUBMITTED THE FOLLOWING REPORT AND RECOMMENDATION CONCERNING UNDERWOOD'S QUALIFICATIONS FOR PERFORMING THE CONTRACT:

"5. TRACINGS SUBMITTED WITH UNDERWOOD LETTER, DATED 14 JANUARY 1958, WERE REVIEWED BY THE UNDERSIGNED. THERE IS NO INDICATION THAT ANY OF THE EQUIPMENT ON THESE TRACINGS WAS DESIGNED FOR THE HANDLING OF BONDED SANDS (4.5 PERCENT BENTONITE, 4 PERCENT WATER). UNITS "L" AND "M" MUST HANDLE THIS BONDED SAND AND FREELY DISCHARGE IT AS REQUIRED BY THE MOLDERS. THERE IS NOT SUFFICIENT EVIDENCE TO INSURE THAT THE ITEMS TO BE USED FOR HANDLING THE BONDED SANDS WILL BE PROPERLY DESIGNED SO THAT THE SAND WILL FLOW IN A SATISFACTORY MANNER.

"6. LETTER DATED 8 JANUARY 1958 OF UNDERWOOD MACHINERY COMPANY WAS REVIEWED BY THE UNDERSIGNED. THIS LETTER DETAILED SPECIFICATIONS OF THE ITEMS TO BE DESIGNED AND MANUFACTURED BY UNDERWOOD.

"/A) IT WAS NOTED THAT UNIT "B" CONVEYOR IS POWERED WITH A 1 HP MOTOR. COMPARISON WITH OTHER BIDS SHOWS THAT THOSE WITH RECOGNIZED FOUNDRY EXPERIENCE OFFER AT LEAST A 2 HP MOTOR WITH THE MAJORITY OFFERING A 3 HP MOTOR FOR THE SAME UNIT.

"/B) UNIT "D" HAMMERMILL AS OFFERED IS A JEFFREY TYPE 2A, 36 INCH BY 36 INCH HAVING A 75 HP MOTOR. THIS SIZE CONSIDERABLY EXCEEDS THE SIZES AND CAPACITIES OF THE HAMMERMILL OFFERED BY OTHER QUALIFIED SOURCES, I.E., JEFFREY COMPANY OFFERS A 26 INCH BY 18 INCH, 20 HP UNIT AND SOME OTHER BIDDERS WITH CONSIDERABLE FOUNDRY EXPERIENCE, OFFER EVEN SMALLER UNITS.

"/C) IT WAS ALSO NOTED THAT UNITS "F" ,"G" AND "I" BUCKET ELEVATOR, BIN TOP BELT CONVEYOR AND FEEDER BELT CONVEYOR ARE OFFERED WITH 1 15/16" DIAMETER HEAD SHAFTS AND 1 7/16 INCH DIAMETER TAIL SHAFTS, WHEREAS MOST OTHER BIDDERS OFFER HEAD AND TAIL SHAFTS FOR THESE SAME UNITS 1/2 INCH LARGER IN DIAMETER.

"/D) COMPARISON OF UNITS "B" AND "I" BELT CONVEYORS SHOWS THAT A 1 1/2 HP MOTOR IS USED TO DIRVE THE SHORT HORIZONTAL BELT UNIT "T" , WHEREAS A 1 HP MOTOR IS USED TO DRIVE THE LONGER INCLINED BELT UNIT "B" , WHICH MOVES THE SAND FROM THE MOLDING PIT UP TO THE VIBRATING SCREEN AND HAMMERMILL. THIS DOES NOT APPEAR TO BE CONSISTENT AS BOTH BELTS WILL HAVE EQUAL CAPACITY IN TERMS OF TONS PER HOUR OF MATERIAL MOVED, WHILE THE LONGER BELT, WHICH IS ALSO LIFTING THE MATERIAL APPROXIMATELY 10 FEET AND TRAVELING TWICE THE DISTANCE THE LONGER BELT, HAS ONLY 2/3 THE HP OF THE SMALLER UNIT.

"II. CONCLUSIONS AND RECOMMENDATIONS:

"1. THE UNDERSIGNED ARE OF THE OPINION THAT THE UNDERWOOD COMPANY HAS NOT SATISFACTORILY DEMONSTRATED THAT IT HAS FURNISHED EQUIPMENT SIMILAR TO THAT REQUIRED BY THE IFB.

"2. IN THIS INSTANCE, THE PURCHASE REQUIREMENT SPECIFIES PERFORMANCE FOR AN INTEGRATED SYSTEM AND IT WILL BE NECESSARY FOR THE SUCCESSFUL BIDDER TO DESIGN AS WELL AS MANUFACTURE AND INSTALL THE EQUIPMENT. THERE EXISTS NO GUARANTEE THAT A SYSTEM DESIGNED BY THE UNDERWOOD MACHINERY COMPANY WOULD PROVIDE THE REQUIRED PERFORMANCE AND SERVICE CONSISTENT WITH A FIRST CLASS COMMERCIAL TYPE AS REQUIRED BY THE P.R.

"3. UNDER THESE CIRCUMSTANCES, IT IS BELIEVED THAT ACCEPTANCE OF THE UNDERWOOD MACHINERY COMPANY PROPOSAL AND GUARANTEE WOULD RESULT IN AN UNREASONABLE BURDEN TO THEM AND FROM A TECHNICAL AND ENGINEERING STANDPOINT, WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT.'

IN THE MEMORANDUM CONTAINING THE DETERMINATION WHICH THE CONTRACTING OFFICER MADE UNDER DATE OF FEBRUARY 10, 1958, QUOTED HEREINABOVE, THAT OFFICIAL REFERS TO THE ABOVE-QUOTED REPORT OF THE TECHNICAL REPRESENTATIVES OF THE ARSENAL AND TO A MEMORANDUM DIRECTED TO HIM UNDER DATE OF FEBRUARY 6, 1958, BY THE CONTRACT SPECIALIST (THE GOVERNMENT REPRESENTATIVE CONCERNED WITH THE ACTUAL NEGOTIATION OF A CONTRACT) EXPRESSING CONCURRENCE WITH THE VIEWS EXPRESSED THEREIN.

IT THUS APPEARS THAT THE CONTRACTING OFFICER'S DETERMINATION THAT UNDERWOOD HAS NOT ESTABLISHED ITSELF AS QUALIFIED TO PERFORM THE CONTRACT MAY NOT BE SAID TO BE LACKING IN SUBSTANTIAL EVIDENCE TO SUPPORT IT. ACCORDINGLY, WE FIND NO BASIS FOR CONCLUDING THAT THE AWARD OF THE CONTRACT AS MADE WAS NOT LEGAL AND PROPER.