B-145557, AUG. 11, 1961

B-145557, AUG. 11, 1961

TO R. H. SHEPPARD CO., INC.:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 26, 1961, REQUESTING RECONSIDERATION OF OUR DECISION OF JUNE 16, 1961, TO YOU IN REGARD TO YOUR REJECTION AS A SUPPLIER OF AN UNINTERRUPTED POWER SOURCE IN CONNECTION WITH CONTRACT NO. ENG-49-080-61-25-/25) ENTERED INTO WITH GRUNLEY-WALSH CONSTRUCTION COMPANY, INC.

IN YOUR LETTER YOU REQUEST AN INTERPRETATION OF PARAGRAPH 43.06C OF THE SPECIFICATIONS WHICH PROVIDED:

"C. SIMILAR UNINTERRUPTED POWER SUPPLY UNITS OF THE SAME TYPE SHALL HAVE BEEN PREVIOUSLY MANUFACTURED, INSTALLED, AND TESTED BY THE MANUFACTURER.'

YOU PROTEST THE INTERPRETATION OF THIS PROVISION BY THE GOVERNMENT CONTRACTING OFFICER WHEN HE REJECTED YOU AS A SUPPLIER TO THE ELECTRICAL SUBCONTRACTOR FOR THE REASON THAT YOU HAD SUBMITTED TEST INFORMATION ON A 12.5 KW POWER UNIT ONLY. WHILE THE RECORD SUPPORTS TO SOME EXTENT YOUR CONTENTION THAT THE CONTRACTING OFFICER HAD REJECTED YOUR COMPANY BECAUSE YOU HAD NOT SUBMITTED DESCRIPTIVE DATA, WIRING DIAGRAM, OR OPERATIONAL DATA ON A 150 KW UNIT, IT IS STATED BY THE CONTRACTING OFFICER IN HIS REPORT SUBMITTED TO OUR OFFICE ON MAY 19, 1961, THAT:

"4. AS STATED ABOVE THE R. H. SHEPPARD COMPANY, INC., WAS NOT ACCEPTABLE AS A QUALIFIED MANUFACTURER OF THE 150-KW UNINTERRUPTED POWER-SUPPLY UNITS BECAUSE THEY COULD NOT FURNISH TEST DATA FOR A PREVIOUSLY MANUFACTURED UNIT SIMILAR TO THAT TO BE FURNISHED UNDER THIS CONTRACT. TO BE "SIMILAR" THE PREVIOUSLY MANUFACTURED UNIT MUST REASONABLY APPROXIMATE THE SIZE OF THE UNITS SPECIFIED. IT IS TRUE THAT A UNIT, REGARDLESS OF SIZE, WOULD CONTAIN STANDARD COMPONENTS AND, AS THE PROTESTOR STATES, THE 150-KV UNIT WHICH HE "PRESENTED TO THE CORPS OF ENGINEERS, EMBODIES EVERY ENGINEERING PRINCIPLE OF THE UNITS THAT WE NOW HAVE OPERATING IN THE FIELD, ACCEPT WITH RESPECT TO CAPACITY.' HOWEVER, DATA FROM THE TESTING OF A UNIT 1/10TH OF THE SIZE OF THAT TO BE FURNISHED ARE NECESSARILY INCONCLUSIVE AS TO THE ABILITY OF THE PROPOSED LARGER UNIT TO OPERATE SATISFACTORILY. THE UNIT WHICH THE SHEPPARD COMPANY PROPOSES TO FURNISH WOULD BE AN UNPROVED PROTOTYPE, AND BOTH THE MANUFACTURER AND THE GOVERNMENT ARE UNABLE TO DETERMINE WITH ANY DEGREE OF CERTAINTY THAT IT WILL OPERATE SATISFACTORILY UPON INSTALLATION. THE REQUIREMENT THAT THIS FACILITY BE FULLY OPERABLE ON THE DATA OF COMPLETION BY THE CONSTRUCTION CONTRACTOR COULD NOT BE MET UNLESS THE SPECIFICATIONS REQUIRED AN UNINTERRUPTED-POWER UNIT THAT COULD BE ACCEPTED WITHOUT TIME CONSUMING TESTING TO REMOVE ALL DOUBT OF ITS ABILITY TO PERFORM.

"IT IS MY CONCLUSION THAT 12.5-KW UNINTERRUPTED-POWER SOURCE IS NOT SIMILAR TO AN UNINTERRUPTED POWER SOURCE HAVING AN OUTPUT OF 150 KW TO BE FURNISHED UNDER THE CONTRACT TERMS, AND THEREFORE THE R. H. SHEPPARD COMPANY, INC., IS NOT A QUALIFIED MANUFACTURER FOR FURNISHING THE REQUIRED UNIT. I ALSO CONCLUDE THAT IN STATING THE MINIMUM REQUIREMENTS FOR THE UNIT, INCLUDING THE ALL IMPORTANT ONE OF SUCCESSFUL PREVIOUS PERFORMANCE, THE GOVERNMENT HAS FULFILLED ITS OBLIGATION TO PERMIT FULL AND FREE COMPETITION CONSISTENT WITH ITS NEEDS, AND THAT THE R. H. SHEPPARD COMPANY'S PROTEST, BASED ON ITS INABILITY TO MEET THESE MINIMUM REQUIREMENTS, IS NOT VALID AND SHOULD BE DENIED.'

OUR OFFICE, OF COURSE, HAS NO FIRSTHAND KNOWLEDGE AS TO WHETHER A 12.5 KW POWER SUPPLY UNIT MAY BE REGARDED AS SIMILAR, FOR OPERATIONAL PURPOSES, TO A 150 KW POWER SUPPLY UNIT AND WHETHER EVIDENCE OF A SATISFACTORY INSTALLATION AND TEST OF THE SMALLER UNIT COULD BE REGARDED AS SATISFYING THE EXPERIENCE REQUIREMENT. WE MUST NECESSARILY ACCEPT, AS A GENERAL RULE, THE DETERMINATION OF THE PROCURING AGENCIES ON SUCH MATTERS. VIEW OF THE QUOTED STATEMENT OF THE CONTRACTING OFFICER IN THIS CASE, OUR OFFICE WOULD NOT BE WARRANTED IN QUESTIONING THE DETERMINATION MADE BY HIM. ASIDE FROM THE FOREGOING, AND AS POINTED OUT IN OUR DECISION OF JUNE 16, 1961, THE PRIME CONTRACT IN THIS CASE WAS ON A FIXED-PRICE BASIS AND THE CONTRACT MADE WITH THE ELECTRICAL SUBCONTRACTOR WAS ON A FIXED-PRICE BASIS. THERE WAS NO PRIVITY OF CONTRACT BETWEEN THE GOVERNMENT AND YOU, AND THE ACTION TAKEN BY THE SUBCONTRACTOR IN PLACING AN ORDER FOR THE SUPPLY UNITS IN QUESTION WITH CONSOLIDATED DIESEL ELECTRIC CORPORATION DID NOT CAUSE ANY INCREASED EXPENDITURE OF FUNDS BY THE GOVERNMENT, INSOFAR AS IS SHOWN BY THE RECORDS OF OUR OFFICE.