B-148063, MAR. 29, 1962

B-148063, MAR. 29, 1962

TO TROY LAUNDRY MACHINERY:

FURTHER REFERENCE IS MADE TO THE COPY OF YOUR LETTER DATED JANUARY 25, 1962, ADDRESSED TO THE ADMINISTRATOR OF VETERANS AFFAIRS, PROTESTING THE ACTION TAKEN BY THE VETERANS ADMINISTRATION HOSPITAL, PITTSBURGH, PENNSYLVANIA, IN AWARDING A CONTRACT UNDER INVITATION NO. 62-34.

IN RESPONSE TO INVITATION NO. 62-28, ISSUED SEPTEMBER 11, 1961, YOU OFFERED TO FURNISH ITEM NO. 1, COVERING ONE FOLDING MACHINE, LAUNDRY, COMMERCIAL, ETC., FOR $6,741. ONE OTHER BID WAS RECEIVED IN THE AMOUNT OF $9,876 FROM THE AMERICAN LAUNDRY MACHINERY INDUSTRIES. IT IS REPORTED THAT ON OCTOBER 12, 1961, THE DAY AFTER BIDS WERE OPENED, YOU AND MR. J. C. BARDELLO, YOUR COMPANY'S SALES SUPERVISOR, CALLED IN PERSON ON THE CHIEF OF THE HOSPITAL'S PURCHASE AND CONTRACT DIVISION AT WHICH TIME YOU CLAIMED THAT CERTAIN EXCEPTIONS WHICH HAD BEEN TAKEN IN THE INVITATION TO PARTS OF THE APPLICABLE FEDERAL SPECIFICATION OO-L 131E WERE RESTRICTIVE AND FAVORED THE FLAT WORK FOLDER OF ONE PARTICULAR MANUFACTURER. IN VIEW OF THIS, THE HOSPITAL FILE ON INVITATION NO. 62-28 WAS CAREFULLY REVIEWED AND IT WAS DETERMINED THAT THE SPECIFICATIONS WERE RESTRICTIVE AND, THEREFORE, THE PROCUREMENT SHOULD BE READVERTISED. REPLACEMENT INVITATION NO. 62-34 CONTAINING CERTAIN REVISED SPECIFICATIONS WAS ACCORDINGLY ISSUED BY THE HOSPITAL ON NOVEMBER 24, 1961, AND RESULTED IN THE RECEIPT OF A LOW BID FROM THE AMERICAN LAUNDRY MACHINERY INDUSTRIES IN THE AMOUNT OF $6,631 AND THE BID OF YOUR COMPANY OF $6,741. A CONTRACT WAS AWARDED BY THE HOSPITAL TO THE AMERICAN LAUNDRY MACHINERY INDUSTRIES ON DECEMBER 27, 1961.

IT APPEARS FROM THE LETTER OF JANUARY 25, 1962, THAT YOUR PROTEST IS BASED PRIMARILY ON YOUR OBJECTIONS TO CERTAIN VETERANS ADMINISTRATION HOSPITAL PROCUREMENT OFFICIALS TAKING UNWARRANTED EXCEPTIONS TO FEDERAL SPECIFICATIONS TO FAVOR A PARTICULAR MANUFACTURER'S PRODUCT; ALSO, TO THE READVERTISING AT WILL OF SUCH PROCUREMENTS AFTER THE LOW BID PRICES OF BIDDERS HAVE BEEN EXPOSED.

THE VETERANS ADMINISTRATION REPORTS THAT THE FILE ON INVITATION NO. 62-28 INDICATED THAT YOUR PROTEST WAS DIRECTED MORE SPECIFICALLY TO EXCEPTIONS NOS. 2 AND 4 TO FEDERAL SPECIFICATION OO-L-131E ON PAGE 3 OF THE INVITATION. IT APPEARS THAT UPON RECEIPT OF YOUR PROTEST THE ADMINISTRATION IMMEDIATELY REVIEWED THE FILE, PARTICULARLY WITH RESPECT TO EXCEPTION NO. 2 WHICH HAD TO DO WITH THE TYPE AND OPERATION OF THE FOLDING BLADES TO BE USED, AND TO EXCEPTION NO. 4 WHICH REQUIRED THE FOLDER TO BE "V" BELT AND ROLLER CHAIN DRIVEN, ETC. THE REVIEW SHOWED, AS CONTENDED BY YOU, THAT INVITATION NO. 62-28 DID, IN FACT, CONTAIN EXCEPTIONS TO THE APPLICABLE FEDERAL SPECIFICATION WHICH FAVORED THE FLAT WORK FOLDER OF ONE MANUFACTURER. WHILE THERE IS GENERALLY NO LEGAL OBJECTION TO EXCEPTIONS TO PARTS OF FEDERAL SPECIFICATIONS AS MIGHT INSURE THE RECEIPT OF EQUIPMENT MORE ADAPTABLE TO ITS INTENDED USE PROVIDED, OF COURSE, THAT COMPETITION WOULD IN NO WAY BE RESTRICTED BY THE USE OF SUCH EXCEPTIONS, THERE CAN BE NO DOUBT THAT WHEN EXCEPTIONS ARE TAKEN, THROUGH OVERSIGHT OR OTHERWISE, AND THEY DO ACTUALLY RESULT IN RESTRICTING COMPETITION BY FAVORING A PARTICULAR MANUFACTURER'S PRODUCT IT IS ONLY PROPER THAT THE PROCUREMENT ACTIVITY CANCEL SUCH AN INVITATION, AS WAS DONE IN THIS CASE.

ADMITTEDLY THE REJECTION OF BIDS AFTER THEY HAVE BEEN OPENED AND EACH BIDDER HAS LEARNED HIS COMPETITOR'S PRICES IS A SERIOUS MATTER AND SHOULD NOT BE DONE EXCEPT FOR COGENT REASONS. NEVERTHELESS, OUR OFFICE HAS RECOGNIZED THAT UNDER CERTAIN CIRCUMSTANCES SUCH A PROCEDURE IS NECESSARY. FOR THE REASONS STATED ABOVE, IT IS CONCLUDED THAT SUCH CIRCUMSTANCES EXISTED IN THIS CASE. ALSO, WE NOTE IN THIS REGARD THAT YOU APPARENTLY DID NOT PROTEST THE EXCEPTIONS TAKEN TO THE FEDERAL SPECIFICATIONS IN INVITATION NO. 62-28 UNTIL OCTOBER 12, 1961, WHICH WAS THE DAY AFTER THE OPENING OF BIDS. IT WOULD APPEAR THAT AT THE TIME OF THE PREPARATION OF YOUR BID YOU WERE AWARE OF THE RESTRICTIVE EFFECT OF THESE EXCEPTIONS AND, THEREFORE, IT IS ONLY REASONABLE TO ASSUME THAT HAD YOU OBJECTED TO THEIR USE AT THAT TIME THE VETERANS ADMINISTRATION WOULD HAVE BEEN IN A POSITION TO CONSIDER YOUR OBJECTIONS WITH A VIEW TOWARD ELIMINATING THE RESTRICTIVE FEATURES OF THE SPECIFICATIONS PRIOR TO THE BID OPENING.

IN VIEW OF THE FOREGOING, WE MUST CONCLUDE THAT THE ACTION TAKEN BY THE VETERANS ADMINISTRATION IN THE MATTER IS NOT SUBJECT TO LEGAL OBJECTION.