B-145140, MAY 3, 1961

B-145140, MAY 3, 1961

TO THE INTERNATIONAL BOILER WORKS CO.:

WE REFER TO YOUR LETTER OF FEBRUARY 22, 1961, PROTESTING THE SPECIFICATIONS COVERING HIGH TEMPERATURE WATER BOILERS USED IN P.H.A. AIDED PROJECT NO. I11-2-37, STAGE III, CHICAGO, ILLINOIS, AND TO YOUR LETTERS OF MARCH 6, MARCH 29 AND APRIL 4, 1961, WHICH FURNISHED FURTHER INFORMATION REGARDING THE BASIS FOR YOUR PROTEST.

BRIEFLY STATED, YOU PROTEST THAT THE BOILER SPECIFICATIONS PREPARED BY THE FIRM OF JOHN DOLIO AND ASSOCIATES FOR USE IN THE HOUSING PROJECT IN CHICAGO WERE RESTRICTIVE IN THAT THE PRODUCT OF ONLY ONE BOILER MANUFACTURER, THE COMBUSTION ENGINEERING COMPANY, COULD QUALIFY UNDER THE SPECIFICATIONS. YOU FURNISHED PERFORMANCE DATA AND TEST RESULTS SHOWING THE EFFICIENCY OF YOUR BOILER UNITS UNDER VARYING DEGREES OF LOAD RANGING FROM 20 PERCENT TO 80 PERCENT OF FULL LOAD AND INFORMATION ON THE RELATIVE MERITS OF THE COUNTER FLOW UNITS WHICH YOU SUPPLY AS COMPARED TO THE PARALLEL FLOW DESIGN CALLED FOR IN THE SPECIFICATIONS.

WE HAVE RECEIVED A REPORT FROM THE COMMISSIONER OF PUBLIC HOUSING WHICH STATES IN PERTINENT PART AS FOLLOWS:

"1. THE SUB-CONTRACT UNDER WHICH THIS EQUIPMENT IS BEING SUPPLIED, COMES UNDER A GENERAL CONSTRUCTION CONTRACT AWARDED ON DECEMBER 15, 1960 TO GUST K. NEWBURG CONSTRUCTION COMPANY BY THE CHICAGO HOUSING AUTHORITY AND IS THEREFORE NOT A DIRECT FEDERAL GOVERNMENT CONTRACT.

"2. PROJECT ILL-2-37 IS COVERED BY AN ANNUAL CONTRIBUTION CONTRACT FOR THE DEVELOPMENT OF 4,415 DWELLING UNITS. THE CONSTRUCTION CONTRACT AWARD CITED ABOVE, ALTHOUGH IDENTIFIED AS "STAGE III" IS ACTUALLY THE FIRST SEGMENT TO BE OFFERED FOR BIDS AND WAS FOR 1,262 UNITS INCLUDING A CENTRAL HEATING PLANT DESIGNED TO SERVE ALL 4,415 UNITS. SINCE THE INITIAL BID OPENING, TWO ADDITIONAL STAGES HAVE BEEN AWARDED SO THAT THE TOTAL NUMBER OF UNITS UNDER CONSTRUCTION IS NOW 3,154. THE FINAL STAGE IS SCHEDULED FOR BID OPENING DURING JUNE OF THIS YEAR.

"3. PROJECT ILL-2-37 IS UNIQUE IN SIZE AND EXTENT. IT RUNS APPROXIMATELY 2 MILES PARALLEL WITH SOUTH STATE STREET, CHICAGO AND ITS HEATING SYSTEM IS DESIGNED TO USE FORCED HIGH-TEMPERATURE, HIGH PRESSURE HOT WATER.

"4. ALTHOUGH AN INITIAL REVIEW OF THE CONTRACT DRAWINGS AND SPECIFICATION LEFT THE IMPRESSION THAT BOILERS, AS MANUFACTURED BY THE COMBUSTION ENGINEERING COMPANY, MIGHT BE FAVORED, THIS IS REFUTED BY THE FACT THAT THE BOILERS ARE ACTUALLY BEING SUPPLIED BY THE BABCOCK AND WILCOX COMPANY.

"5. THE SUB-CONTRACTOR'S ORDER FOR THESE BOILERS WAS PLACED ON FEBRUARY 7, 1961 IN THE AMOUNT OF $360,000. IT CALLS FOR DELIVERY BY JULY 15 AND FINAL TESTS BY SEPTEMBER 15, 1961. FABRICATION IS UNDER WAY AND THE FOUNDATIONS AND LOWER WALLS OF THE BOILER-HOUSE STRUCTURE, ARE IN PLACE.

"IT IS THE POLICY OF THIS AGENCY TO REQUIRE LOCAL HOUSING AUTHORITIES TO ENCOURAGE THEIR ARCHITECTS TO DESIGN THEIR PROJECTS FOR OPEN COMPETITIVE BIDDING. CONSIDERING THE SPECIALIZED NATURE OF THE HEATING PROBLEM AT PROJECT ILL-2-37, AND THE FACT THAT THE AWARD HAS BEEN MADE TO BABCOCK AND WILCOX, WE FEEL THAT THIS REQUIREMENT HAS BEEN ADEQUATELY MET.'

THE REPORT POINTS OUT THAT THE FEDERAL GOVERNMENT IS NOT A PARTY TO THE GENERAL CONSTRUCTION CONTRACT BETWEEN THE CHICAGO HOUSING AUTHORITY AND THE GUST K. NEWBURG CONSTRUCTION COMPANY. OUR OFFICE HAS RECOGNIZED THAT THE LOW-RENT HOUSING PROGRAM, ALTHOUGH ASSISTED BY FEDERAL SUBSIDIES, IS ESSENTIALLY A LOCAL PROGRAM. SEE OUR DECISION B 126528, DATED FEBRUARY 17, 1956, A COPY OF WHICH IS ENCLOSED. THE CHICAGO HOUSING AUTHORITY IS NOT AN AGENCY OF THE FEDERAL GOVERNMENT, BUT IS SEPARATE AND APART AND IS NOT SUBJECT TO SECTION 3709 OF THE REVISED STATUTES, AS AMENDED, OR OTHER STATUTES WHICH REQUIRE ADVERTISING FOR BIDS.

THE RESPONSIBILITY FOR DRAFTING PROPER SPECIFICATIONS RESTS UPON THE LOCAL HOUSING AUTHORITY UNDER SECTION 106 OF THE TERMS AND CONDITIONS OF THE CONTRACT BETWEEN PHA AND THE CHICAGO HOUSING AUTHORITY AS FOLLOWS:

"SEC. 106. ARCHITECTURAL AND ENGINEERING SERVICES

"/A) UNLESS OTHERWISE APPROVED BY THE PHA, THE LOCAL AUTHORITY SHALL PROVIDE BY CONTRACT IN FORM AND SUBSTANCE APPROVED BY THE PHA FOR THE SERVICES OF QUALIFIED ARCHITECTS AND ENGINEERS FOR THE PREPARATION OF PLANS, DRAWINGS, SPECIFICATIONS, AND RELATED DOCUMENTS, AND FOR THE GENERAL SUPERVISION AND FOR THE INSPECTION OF THE CONSTRUCTION OF EACH PROJECT.

"/B) THE LOCAL AUTHORITY SHALL SUBMIT TO THE PHA FOR ITS APPROVAL PLANS, DRAWINGS, SPECIFICATIONS, AND ITEMIZED ESTIMATES OF DEVELOPMENT COST FOR EACH PROJECT, IN SUCH FORM, AT SUCH STAGES, AND AT SUCH TIMES AS THE PHA MAY REQUIRE.

"/C) PLANS, DRAWINGS, AND SPECIFICATIONS FOR MATERIALS, PRODUCTS, OR EQUIPMENT TO BE SUPPLIED SHALL PERMIT AND ENCOURAGE FULL AND FREE COMPETITION.

"/D)THE LOCAL AUTHORITY SHALL FURNISH THE PHA, AT SUCH TIME OR TIMES AS THE PHA MAY REQUIRE, AND IN ANY EVENT PRIOR TO THE RELEASE OF ANY DOCUMENT FOR THE TAKING OF BIDS, EVIDENCE SATISFACTORY TO THE PHA, SHOWING THAT THE PLANS, DRAWINGS, SPECIFICATIONS, AND RELATED DOCUMENTS ARE IN ACCORDANCE WITH THE PROVISIONS OF THIS CONTRACT AND WITH ALL APPLICABLE LAWS, ORDINANCES, AND REGULATIONS, EXCEPT TO THE EXTENT THAT VALID WAIVERS HAVE BEEN OBTAINED FROM THE APPROPRIATE AUTHORITIES. THE LOCAL AUTHORITY SHALL OBTAIN ALL NECESSARY PERMITS OR APPROVALS OF STATE AND LOCAL HOUSING, PLANNING, ZONING, BUILDING, AND OTHER BOARDS, BODIES, OR OFFICERS HAVING JURISDICTION, AND SHALL FURNISH TO THE PHA A CERTIFICATE LISTING SUCH APPROVALS BEFORE ANY MAIN CONSTRUCTION CONTRACT IS LET.'

IN AN ANALOGOUS SITUATION INVOLVING A PROTEST AGAINST SPECIFICATIONS ALLEGEDLY FAVORING ONE MANUFACTURER FOR ELEVATORS TO BE USED IN A HOSPITAL PROJECT INVOLVING FEDERAL ASSISTANCE FUNDS, WE HELD IN DECISION B-141932, DATED MAY 2, 1960, THAT IT WAS THE DUTY OF THE SURGEON GENERAL TO DETERMINE COMPLIANCE WITH THE REGULATIONS IMPOSED BY HIM, AND NO ACTION BY OUR OFFICE WAS WARRANTED AFTER THE SURGEON GENERAL HAD APPROVED THE SPECIFICATIONS.

WE BELIEVE THE SAME PRINCIPLE APPLIES IN THE INSTANT MATTER. ALTHOUGH THE PHA REQUIRES THAT SPECIFICATIONS "SHALL PERMIT AND ENCOURAGE FULL AND FREE COMPETITION," THE PHA STATES THAT ITS REQUIREMENT IN THIS REGARD HAS BEEN ADEQUATELY MET. MOREOVER, WE ARE ADVISED THAT THE GENERAL CONTRACT AND THE SUBCONTRACT BETWEEN THE GENERAL CONTRACTOR, GUST K. NEWBURG CONSTRUCTION COMPANY, AND THE GREAT LAKES PLUMBING AND HEATING COMPANY ARE FOR LUMP SUMS, SO THERE WOULD NOT APPEAR TO BE ANY ADDITIONAL EXPENDITURE OF FEDERALLY GUARANTEED CONSTRUCTION MONEY REGARDLESS OF WHICH BOILERS ARE PURCHASED BY GREAT LAKES.

UNDER THE CIRCUMSTANCES, OUR OFFICE IS NOT WARRANTED IN ATTEMPTING ANY ACTION WITH RESPECT TO THE SPECIFICATIONS FOR WATER BOILERS USED IN THE INSTANT PHA AIDED PROJECT.