B-141871, MAR. 15, 1960

B-141871, MAR. 15, 1960

TO CLARK BROS. CO.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAMS OF JANUARY 29, 1960, AND LETTER OF FEBRUARY 26, 1960, FROM YOUR ATTORNEY PROTESTING AGAINST THE REJECTION OF THE BID YOU SUBMITTED IN RESPONSE TO INVITATION 01 601-60- 1279 SOLICITING BIDS FOR FURNISHING CERTAIN COMPRESSORS AND ENGINEERING DATA RELATED THERETO.

THE CONTRACTING OFFICER REJECTED YOUR BID BECAUSE OF CERTAIN QUALIFIED STATEMENTS MADE IN THE LETTER ACCOMPANYING YOUR BID. FIRST HE EXCEPTED TO PARAGRAPH 2 OF THE LETTER WHEREIN YOU STATE:

"ENGINEERING DATA AS REQUIRED FOR ITEM 2A OF THE SCHEDULE ARE DEEMED TO BE, AND SHALL BE CONSIDERED AS PROPRIETARY DATA RELATED TO STANDARD COMMERCIAL ITEMS OR MODIFICATIONS THEREOF OF THE MANUFACTURER AND ARE OFFERED IN ACCORDANCE WITH ASPR 9-203.1, ASPR 9-203.2 AND SUBJECT TO LIMITATIONS OF ITS USE AS PROVIDED FOR IN ASPR 9-203.3. SPECIFIED DATA WILL BE FURNISHED IN ACCORDANCE WITH THE ABOVE REGULATIONS TO THE EXTENT AGREEABLE TO OUR SUPPLIERS, AND IN THE EVENT A SUPPLIER REFUSES TO FURNISH SAID DATA TO CLARK BROS. CO. OR THE AIR FORCE, A LETTER OF REFUSAL WILL BE FURNISHED.'

ITEM 2A OF THE INVITATION REFERRED TO IN THE SECOND PARAGRAPH OF YOUR LETTER PROVIDES:

"THE CONTRACTOR SHALL FURNISH ENGINEERING DATA FOR ITEM 2 IN ACCORDANCE WITH PAR. 3.1.2 OF TABLE 253 INCORPORATED HEREIN BY SPECIFIC REFERENCE AND HEREBY MADE A PART HEREOF.'

NEXT, THE CONTRACTING OFFICER TOOK EXCEPTION TO PARAGRAPHS 4 AND 5 OF YOUR LETTER WHICH STATE:

"CLARK BROS. CO.'S ONLY WARRANTIES ARE THAT THE MACHINERY OF ITS OWN MAKE IS WELL MADE, OF GOOD MATERIAL AND IS IN ACCORDANCE WITH THE SPECIFICATIONS OF THIS IFB. THE ONLY WARRANTIES OF MACHINERY INCLUDED IN THE IFB, BUT MADE BY OTHER THAN CLARK BROS. CO., AND NOT AN INTEGRAL PART OF CLARK MACHINERY, ARE THE WARRANTIES OF THE MAKERS OF SUCH MACHINERY, WHICH WARRANTIES WHATEVER THEY MAY BE ARE HEREBY ASSIGNED TO THE PURCHASER WITHOUT RECOURSE TO CLARK BROS. CO.

"IN NO EVENT SHALL CLARK BROS. CO. BE LIABLE FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS CONTRACT, EXCEPT AS AGREED BY CLARK BROS. CO. ACCEPTANCE OF PARAGRAPH 11, PAGE 2 OF STANDARD FORM 32. CLARK BROS. SHALL NOT BE LIABLE FOR DAMAGES CAUSED BY DEFECTIVE MATERIAL, AND NO ALLOWANCE WILL BE MADE FOR REPAIRS OR ALTERATIONS, UNLESS WITH ITS WRITTEN CONSENT.'

PARAGRAPH 2 OF YOUR LETTER QUALIFIED THE ENGINEERING DATA AS PROPRIETARY DATA. IN THAT CONNECTION, THE DEPARTMENT OF THE AIR FORCE HAS REPORTED THAT SUCH DATA IS NOT NECESSARILY ,PROPRIETARY INFORMATION.' THE CONTRACT CLAUSES REQUIRED BY ASPR 9-203.1 AND 9 203.2 ARE FOUND IN SECTION 45 OF THE GENERAL PROVISIONS OF THE INVITATION WHICH DEFINES PROPRIETARY DATA AND PROVIDES IN EFFECT THAT IT NEED NOT BE FURNISHED UNDER THE SUBJECT INVITATION. ASPR 9-203.3, WHICH UNDER ITS OWN TERMS IS APPLICABLE ONLY TO NEGOTIATED CONTRACTS, PROVIDES THE LIMITED CIRCUMSTANCES IN WHICH PROPRIETARY DATA WILL BE USED. THEREFORE, THE EFFECT OF PARAGRAPH 2 OF YOUR LETTER IS TO CATEGORIZE ENGINEERING DATA AS PROPRIETARY DATA AND TO OFFER TO SUPPLY IT PROVIDED THE RESTRICTIONS ORDINARILY IMPOSED UPON THE USE OF PROPRIETARY DATA FURNISHED UNDER NEGOTIATED CONTRACTS ARE MET. THE OFFER TO FURNISH ENGINEERING DATA SO CONDITIONED IS INCONSISTENT WITH THE REQUIREMENTS OF THE DATA CLAUSE CONTAINED IN SECTION 45 OF THE ADVERTISED INVITATION WHICH, EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPH (H) THEREOF WITH RESPECT TO PROPRIETARY DATA AND PARAGRAPH (B) THEREOF WITH RESPECT TO COPYRIGHTED OR COPYRIGHTABLE DATA, REQUIRES THAT ALL DATA UNDER THE CONTRACT BE FURNISHED WITHOUT LIMITATION ON USE. THEREFORE, SINCE ACCEPTANCE OF YOUR BID CLASSIFYING THE ENGINEERING DATA AS PROPRIETARY WOULD RESTRICT THE USE OF THE DATA THAT MIGHT OTHERWISE ORDINARILY BE CONSIDERED AS ENGINEERING DATA, SUCH CLASSIFICATION OF THE DATA TO BE FURNISHED WOULD MATERIALLY VARY THE TERMS OF THE INVITATION. ALSO, RESERVING TO THE SUBCONTRACTORS THE RIGHT TO REFUSE TO FURNISH DATA IS A FURTHER MATERIAL DEVIATION FROM THE TERMS OF THE INVITATION.

PARAGRAPH 4 APPEARS TO LIMIT YOUR LIABILITY UNDER THE CONTRACT. THE CONTRACT DOES NOT CONTAIN A WARRANTY PROVISION, BUT DOES REQUIRE THAT THE SUPPLIES BE FURNISHED IN ACCORDANCE WITH ITS TERMS. THE LIABILITY IMPOSED UPON THE SUCCESSFUL BIDDER BY THE "INSPECTION" CLAUSE IN THE INVITATION, WHICH REQUIRES THE SUCCESSFUL BIDDER TO BE RESPONSIBLE FOR THE COMPLETE END PRODUCT FURNISHED, IS GREATER THAN THAT SOUGHT TO BE IMPOSED UNDER YOUR "WARRANTIES," WHICH LIMITS LIABILITY FOR MACHINERY WHICH IS NOT AN INTEGRAL PART OF THE FURNISHED PRODUCT. THERE IS NOTHING IN PARAGRAPH 4 OF YOUR LETTER THAT INDICATES THAT THE WARRANTIES YOU MAKE ARE INTENDED TO BE IN ADDITION TO THE "INSPECTION" CLAUSE AND TO APPLY AFTER DELIVERY. USE OF THE WORD "ONLY" IN CONNECTION WITH THE WARRANTIES IMPLIES A RESTRICTIVE RATHER THAN AN ADDITIVE FEATURE. IN OTHER WORDS, SINCE THERE IS NO WARRANTY CLAUSE, IDENTIFIED AS SUCH, IN THE CONTRACT PROPOSED BY THE GOVERNMENT, YOUR STATEMENTS CONCERNING THE "ONLY WARRANTIES" YOU MAKE ARE CONSTRUED AS REFLECTING AN INTENTION TO LIMIT THE ACTUAL LIABILITIES THAT WOULD BE IMPOSED BY THE CONTRACT AWARDED.

IN VIEW OF THESE RESTRICTIVE FEATURES IN YOUR BID, AS MANIFESTED BY THE APPARENT LIMITATIONS ON THE REQUIREMENTS AND LIABILITIES IMPOSED BY THE INVITATION, AND OF THE STATUTORY REQUIREMENT THAT AWARD BE MADE TO THE LOWEST RESPONSIBLE BIDDER WHOSE BID "CONFORMS" TO THE REQUIREMENTS OF THE INVITATION (10 U.S.C. 2305), IT FOLLOWS THAT IT WAS NOT IMPROPER FOR THE CONTRACTING OFFICER TO REJECT YOUR BID. FURTHER, SINCE THE RESTRICTIONS IMPOSED BY YOUR BID GO TO THE SUBSTANCE OF THE ADVERTISED INVITATION, WE CANNOT AUTHORIZE THEIR WAIVER. 17 COMP. GEN. 554.