B-148704, JUN. 5, 1962

TO MR. T. S. WHITE, PRESIDENT, RYAN INDUSTRIES, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED APRIL 19 AND 24, 1962, RESPECTIVELY, PROTESTING THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. 600-936-62, ISSUED MARCH 2, 1962, BY THE NAVY PURCHASING OFFICER.

BIDS WERE INVITED FOR THE FURNISHING OF NINE LIQUID OXYGEN STORAGE AND TRANSFER TANKS WITH INSTALLATION KITS, TECHNICAL AND CATALOGING DATA, PUBLICATIONS AND DATA SHEETS. THE ADVERTISED SPECIFICATIONS INCLUDED MILITARY SPECIFICATION NO. MIL-T-4829A/ASG) OF MARCH 10, 1958, AS MODIFIED BY THE TERMS OF THE INVITATION FOR BIDS. BIDDING WAS RESTRICTED TO SMALL BUSINESS CONCERNS. ON MARCH 27, 1962, NINE BIDS WERE OPENED AND TABULATED. ON THE BASIS OF ADDING ASSUMED TRANSPORTATION COSTS TO THE F.O.B. ORIGIN BID PRICES, THE CONTRACTING OFFICER DETERMINED THAT YOUR COMPANY'S BID, EVALUATED AT $88,498.75, WAS THE LOWEST RECEIVED. THE NEXT TWO LOWEST BIDS, EVALUATED AT $89,241.70 AND $93,649.56, WERE SUBMITTED BY THE PANTEX MANUFACTURING CORPORATION, PAWTUCKET, RHODE ISLAND, AND THE COSMODYNE CORPORATION, HAWTHORNE, CALIFORNIA. AWARD OF THE CONTRACT WAS MADE TO THE COSMODYNE CORPORATION AFTER THE CONTRACTING OFFICER RECEIVED A REPORT FROM THE BUREAU OF NAVAL WEAPONS, THE REQUISITIONING ACTIVITY, INDICATING THAT THE LOWEST AND SECOND LOWEST BIDDERS DID NOT OFFER EQUIPMENT WHICH FULLY MET THE REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS.

THE INVITATION FOR BIDS CONTAINED A REQUIREMENT FOR THE SUBMISSION OF DESCRIPTIVE LITERATURE AS A PART OF ANY BID AND STATED THAT: "FAILURE OF DESCRIPTIVE LITERATURE TO SHOW THAT THE PRODUCT OFFERED CONFORMS TO THE SPECIFICATIONS AND OTHER REQUIREMENTS OF THIS INVITATION FOR BIDS WILL REQUIRE REJECTION OF THE BID.' CERTAIN TYPES OF DESCRIPTIVE LITERATURE WERE SPECIFIED, INCLUDING A PIPING LAYOUT SHOWING THE LOCATION OF ALL PIPING, VALVES AND INSTRUMENTS. IN MAKING A TECHNICAL EVALUATION OF YOUR BID, THE BUREAU OF NAVAL WEAPONS DETERMINED THAT THE DESCRIPTIVE MATERIAL WHICH YOU SUBMITTED FAILED TO MEET SPECIFICATIONS IN AT LEAST ONE, AND POSSIBLY TWO, PARTICULARS. IT WAS INDICATED IN THE BUREAU'S REPORT THAT YOUR DRAWING NO. C-6959-3S SHOWS THE VAPORIZING WITHDRAWAL LINE PROTRUDING THROUGH THE LOWER FACE OF THE PIPING CABINET AND DIRECTED TO THE FRONT OF THE TANK, WHEREAS PARAGRAPH 3.8 OF MILITARY SPECIFICATION NO. MIL-T- 4829A/ASG), AS MODIFIED IN THE INVITATION, REQUIRES THE DISCHARGE CONNECTION TO BE LOCATED ON AND DIRECTED TO ,THE TANKS OWN RIGHT SIDE.' THE BUREAU'S REPORT FURTHER INDICATED THAT IT WOULD BE IMPOSSIBLE TO DETERMINE COMPLIANCE WITH PARAGRAPH 3.3.8.1.1 OF THE SAME MODIFIED SPECIFICATION UNLESS YOU SUBMITTED THE DRAWING NO. 3-2004, REFERRED TO AT ITEM NO. 38, PAGE 3, OF YOUR LIST OF MATERIAL.

YOU SUBMITTED WITH YOUR LETTER OF APRIL 24, 1962, A COPY OF YOUR DRAWING NO. C-6959-3S. IT IS STATED THAT LINE "C" OF THE DRAWING IS "LOCATED ON AND DIRECTED TO THE TANKS OWN RIGHT SIDE" AND IS BROUGHT BELOW THE BOTTOM OF THE CABINET SO THAT THE LINE CONNECTING IT TO THE NAVY-SUPPLIED EXTERNAL VAPORIZING SYSTEM CAN BE READILY JOINED TO IT. IT IS ARGUED THAT YOUR DRAWINGS WERE PREPARED ONLY FOR BIDDING PURPOSES AND ARE NOT THE FULL SHOP DRAWINGS THAT YOU WOULD PREPARE UPON BEING AWARDED THE CONTRACT; AND THAT THE DEVIATION, IF ANY, SHOULD HAVE BEEN WAIVED AS A MINOR INFORMALITY OR IRREGULARITY, INASMUCH AS THE DIFFERENCE BETWEEN YOUR BID AND THAT OF THE COSMODYNE CORPORATION WAS MORE THEN $5,000 AND IT WOULD NOT APPEAR TO HAVE BEEN TO THE GOVERNMENT'S ADVANTAGE TO REJECT YOUR BID BECAUSE OF THE DOUBTFUL LOCATION OF A $0.60 PIECE OF COPPER TUBING. YOU ALLEGE THAT YOUR FIRM IS A MAJOR SUPPLIER OF CRYOGENIC EQUIPMENT TO LIQUID GAS PRODUCERS, THAT THE TANKS WHICH THE GOVERNMENT PROPOSED TO PURCHASE ARE SIMILAR TO EQUIPMENT YOU HAVE BEEN AND ARE BUILDING IN SUBSTANTIAL QUANTITIES, AND THAT "IF THE REQUIREMENTS OF PARAGRAPH 3.8 ARE DELINEATED IN DETAIL WE CAN BUILD THE EQUIPMENT IN ACCORDANCE WITH SUCH DETAILS.'

THE BUREAU OF NAVAL WEAPONS, AFTER CONSIDERING THE STATEMENTS MADE IN YOUR LETTER, ADVISED THE NAVY PURCHASING OFFICER THAT ITS PREVIOUS COMMENTS ON THE RESPONSIVENESS OF YOUR BID WERE CORRECT AND ARE STILL VALID. UPON OUR EXAMINATION OF YOUR DRAWING NO. C-6959-3S, THE MODIFIED PARAGRAPH 3.8 OF MILITARY SPECIFICATION NO. MIL-T-4829A (ASG), AND THE CLARIFICATION STATEMENT AT PAGE 6 OF THE INVITATION, QUOTED IN YOUR LETTER, THERE APPEARS TO BE NO BASIS FOR YOUR APPARENT BELIEF THAT THE MODIFIED SPECIFICATION COULD BE INTERPRETED AS MEANING THAT ANY ARRANGEMENT WOULD BE SATISFACTORY IF THE DISCHARGE CONNECTION WERE LOCATED ANYWHERE ON THE RIGHT SIDE OF THE TANK'S CENTER LINE. IN SPECIFYING THAT THE DISCHARGE CONNECTION FOR THE VAPORIZING SYSTEM'S WITHDRAWAL LINE BE LOCATED ON AND DIRECTED TO THE RIGHT SIDE OF THE TANK, IT SEEMS CLEAR THAT THE GOVERNMENT DID NOT DESIRE A TYPE OF EQUIPMENT WHICH WOULD HAVE THE DISCHARGE LINE EXTEND THROUGH THE BOTTOM OF THE TANK CABINET, WHETHER TO THE RIGHT OR TO THE LEFT OF THE TANK'S CENTER LINE.

THE DRAFTING OF PROPER SPECIFICATIONS IS WITHIN THE PROVINCE OF THE CONTRACTING AGENCY. CONSISTENT WITH SUCH AUTHORITY, OUR OFFICE HAS TAKEN THE POSITION THAT AN INVITATION FOR BIDS MAY REQUIRE THAT DESCRIPTIVE LITERATURE CONFORM TO THE ADVERTISED SPECIFICATIONS WHEN IT APPEARS THAT SUCH A REQUIREMENT IS ESSENTIAL FOR A PROPER DETERMINATION AS TO THE RESPONSIVENESS OF BIDS. SEE 36 COMP. GEN. 415.

IT IS A WELL-ESTABLISHED PRINCIPLE OF FORMAL COMPETITIVE PROCUREMENT BY AGENCIES OF THE GOVERNMENT THAT ALL COMPETENT AND RELIABLE PERSONS SHOULD HAVE THE RIGHT TO COMPETE ON A COMMON BASIS AND FOR SUCH PURPOSE SPECIFICATIONS ARE PREPARED IN AN ATTEMPT TO SHOW EXACTLY THE REQUIREMENTS OF THE GOVERNMENT. WHERE ONE BIDDER TAKES EXCEPTION TO CERTAIN OF THE SPECIFIED REQUIREMENTS UNDER CIRCUMSTANCES NOT EXTENDED TO ALL BIDDERS, A CONTRACT AWARDED ON THE BASIS OF SUCH A BID WOULD NOT BE THE CONTRACT OFFERED TO ALL BIDDERS AND ACCEPTANCE OF THE BID WOULD WORK AN INJUSTICE TO OTHER BIDDERS WHOSE PROPOSALS FULLY MET THE REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS.

THERE IS NO AUTHORITY FOR THE WAIVER, AS AN INFORMALITY OR MINOR IRREGULARITY, OF MATERIAL EXCEPTIONS TO SPECIFICATIONS IMPOSED BY BIDDERS. IN THIS CASE THE EFFECT OF THE DEVIATION IN YOUR BID WAS TO GIVE YOUR COMPANY THE RIGHT TO SUBSTITUTE ITS OWN SPECIFICATIONS FOR THOSE ADVERTISED BY THE GOVERNMENT, WHETHER OR NOT YOU INTEND TO COMPLY WITH THE GOVERNMENT'S SPECIFICATIONS IF AWARDED THE CONTRACT. IT WAS A DEVIATION WHICH WAS OBVIOUSLY MATERIAL REGARDLESS OF THE RELATIVELY SMALL COST OF THE TUBING FOR THE DISCHARGE LINE WHICH WOULD BE REQUIRED TO PRODUCE THE TANKS IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATIONS.

ALTHOUGH THERE IS A CONSIDERABLE DIFFERENCE BETWEEN YOUR TOTAL BID PRICE AND THAT OF THE THIRD LOWEST BIDDER, OUR OFFICE HAS CONSISTENTLY ADHERED TO THE PROPOSITION THAT TO PERMIT BIDDERS TO CHANGE THEIR PROPOSALS AFTER BIDS ARE OPENED, OR TO PERMIT PUBLIC OFFICERS TO ACCEPT BIDS NOT COMPLYING IN SUBSTANCE WITH THE ADVERTISED SPECIFICATIONS, WOULD SOON REDUCE TO A FARCE THE WHOLE PROCEDURE OF LETTING PUBLIC CONTRACTS ON AN OPEN COMPETITIVE BASIS. THE STRICT MAINTENANCE OF SUCH PROCEDURE, REQUIRED BY LAW, IS INFINITELY MORE IN THE PUBLIC INTEREST THAN OBTAINING A PECUNIARY ADVANTAGE IN A PARTICULAR CASE BY A VIOLATION OF THE RULES. SEE UNITED STATES V. BROOKRIDGE FARM, 111 F.2D 461, 463; CITY OF CHICAGO V. MOHR, 74 N.E. 1056; COMP. GEN 179; AND 40 ID. 458.

IT THEREFORE APPEARS, WITHOUT CONSIDERATION OF THE SECOND OBJECTION TO THE DESCRIPTIVE LITERATURE MADE A PART OF YOUR BID, THAT THE ACTION OF THE CONTRACTING OFFICER IN REJECTING SUCH BID WAS PROPER. ACCORDINGLY, YOUR PROTEST IN THE MATTER MUST BE DENIED.