B-152165, OCT. 14, 1963

B-152165, OCT. 14, 1963

TO R. G. WRIGHT COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTERS OF JULY 29 AND AUGUST 21, 1963, PROTESTING THE MANNER IN WHICH A CONTRACT WAS NEGOTIATED FOR THE LABORATORY EQUIPMENT FOR FEDERAL OFFICE BUILDING NO. 8, WASHINGTON, D.C.

THE CONTRACT FOR THE CONSTRUCTION OF FEDERAL OFFICE BUILDING NO. 8, WAS AWARDED TO J. W. BATESON COMPANY, INC., ON DECEMBER 1, 1960. THE ORIGINAL PLAN CONTEMPLATED THE COMPLETION OF THE BUILDING UNDER THE CONSTRUCTION CONTRACT WITH THE FURNISHING AND INSTALLATION OF LABORATORY EQUIPMENT FOR THE FOOD AND DRUG ADMINISTRATION (FDA) TO BE ACCOMPLISHED UNDER SEPARATE COMPETITIVE BID CONTRACTS HAVING NO TIE-IN WITH EACH OTHER NOR WITH THE CONSTRUCTION CONTRACT. YOU HAD OFFERED ASSISTANCE IN PLANNING THE ORIGINAL LAYOUT AND DESIGN IN THIS MATTER TO THE FOOD AND DRUG ADMINISTRATION AND CONTRACT ARCHITECTS. WHEN THE BIDS SOLICITED FOR THE WASHING EQUIPMENT WERE OPENED ON AUGUST 23, 1962, IT WAS FOUND THAT ALL BIDS WERE CONSIDERABLY IN EXCESS OF THE GOVERNMENT ESTIMATES. IT WAS THEREFORE DECIDED THAT ALL BIDS SHOULD BE REJECTED AND THAT THE DRAWINGS AND SPECIFICATIONS SHOULD BE REVISED BEFORE READVERTISEMENT. HOWEVER, BEFORE THE READVERTISEMENT OF THIS CATEGORY OR SOLICITATION ON THE REMAINING CATEGORIES A REVIEW OF THE PROBLEMS INVOLVED WAS MADE. IT WAS DECIDED THAT HAVING THE WORK DONE UNDER FIVE SEPARATE CONTRACTS WOULD BE HIGHLY UNDESIRABLE FOR TWO REASONS. FIRST, THE PIECEMEAL INSTALLATION BY SEVERAL CONTRACTORS WORKING INDEPENDENTLY OF ONE ANOTHER WOULD LACK OVER- ALL DIRECTION AND COORDINATION, AND SECONDLY, THIS APPROACH WOULD NECESSITATE EXTENSIVE REMOVAL AND REPLACEMENT OF CONSTRUCTION WORK PERFORMED BY THE CONSTRUCTION CONTRACTOR AT A CONSIDERABLE COST TO THE GOVERNMENT. IT WAS THEREFORE DETERMINED THAT IT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT TO PROVIDE FOR FURNISHING, INSTALLING AND CONNECTING ALL LABORATORY EQUIPMENT UNDER THE CONSTRUCTION CONTRACT IN ORDER TO ACHIEVE COORDINATED AND ORDERLY INSTALLATION. ALSO, IT WAS FELT THAT SUCH AN APPROACH WOULD HAVE THE ADDITIONAL ADVANTAGES OF LESSER TOTAL COST TO THE GOVERNMENT AND EARLER OCCUPANCY OF THE BUILDINGS.

WHEN ALL THE DRAWINGS AND SPECIFICATIONS FOR ALL OF THE LABORATORY EQUIPMENT WERE COMPLETED BY THE CONTRACT ARCHITECTS THEY WERE GIVEN TO THE CONSTRUCTION CONTRACTOR, J. W. BATESON COMPANY, C., WITH A REQUEST THAT IT SOLICIT BIDS FOR THE VARIOUS CLASSIFICATIONS OF WORK FROM QUALIFIED AND INTERESTED EQUIPMENT MANUFACTURERS AND SUBMIT PROPOSALS THEREON (TOGETHER WITH BIDS RECEIVED) FOR REVIEW AND CONSIDERATION BY THE GENERAL SERVICES ADMINISTRATION (GSA). A LIST OF POTENTIAL SUBCONTRACTORS, CONSIDERED BY FOOD AND DRUG ADMINISTRATION, GSA, AND THE CONTRACT ARCHITECTS TO BE QUALIFIED, WAS FURNISHED TO BATESON FOR ITS USE IN SOLICITING COMPETITIVE BIDS. BATESON WAS ALSO ENCOURAGED TO CONTACT ADDITIONAL FIRMS. YOU WERE AMONG THE FIRMS FROM WHICH BATESON SOLICITED BIDS ON THE WASHING MACHINERY EQUIPMENT. ON MAY 28, 1963, BATESON SUBMITTED A LUMP-SUM PROPOSAL TO GSA IN THE AMOUNT OF $6,605,407 COVERING ALL THE LABORATORY EQUIPMENT, INSTALLATION AND CONNECTIONS. THIS PRICE ALSO INCLUDED THE AMOUNT OF $225,755 AS THE COST OF CONSTRUCTION WORK INVOLVED IN INSTALLATION OF THE LABORATORY EQUIPMENT. IN ORDER TO EVALUATE THE REASONABLENESS OF THE PROPOSAL SUBMITTED BY BATESON AND THE QUALIFICATIONS OF THE PROSPECTIVE SUBCONTRACTORS, THE BIDS RECEIVED BY BATESON WERE REVIEWED BY GSA. AFTER NEGOTIATION WITH BATESON A FINAL FIGURE OF $6,303,104 WAS AGREED UPON. TRANSMITTING AMENDMENT NO. 1 TO THE CONTRACT TO BATESON FOR SIGNATURE, GSA REQUESTED TO BE FURNISHED THE NAMES AND ADDRESSES OF EACH SUBCONTRACTOR AS THE AWARDS WERE MADE BY BATESON. THE AMENDMENT WAS EXECUTED ON AUGUST 26, 1963, AND AS OF SEPTEMBER 25, 1963, THE NAMES OF THE SUBCONTRACTORS SOLICITED BY BATESON HAVE NOT BEEN SUBMITTED TO GSA.

YOUR COMPLAINT IN THE MATTER IS THAT YOU HAVE NOT BEEN INFORMED BY BATESON AS TO WHY YOUR BID SUBMITTED TO IT HAS NOT BEEN ACCEPTED. ALSO, YOU FEEL THAT YOU SHOULD BE FURNISHED A LIST OF THE BID PRICES, THE DESIGN AND CONSTRUCTION SPECIFICATIONS WHICH YOU SUGGEST WERE SO DRAWN AS TO ELIMINATE COMPETITION AND INFORMATION AS TO THE DEGREE OF QUALIFICATION REQUIRED BY GSA.

THE REPORT OF GSA STATES THAT IT HAS NO POSITIVE ULTIMATE CONTROL OVER BATESON'S FINAL CHOICE OF ITS SUBCONTRACTORS ON THE BASIS OF THE LOWEST BIDS. ALTHOUGH GSA DID REVIEW THE BIDS RECEIVED BY BATESON IN THE PRELIMINARY STAGES OF NEGOTIATING A CONTRACT AMENDMENT THE PURPOSE AT THE TIME WAS TO EVALUATE WHETHER OR NOT ITS PROPOSAL ON LABORATORY EQUIPMENT WAS REASONABLE AND TO EXERCISE THE NEGATIVE RIGHT TO ELIMINATE ANY POTENTIAL SUBCONTRACTORS LACKING SUFFICIENT EXPERIENCE, ORGANIZATION, ETC. ONCE THE CONTRACT AMENDMENT WAS SIGNED THE PRIME CONTRACTOR (BATESON) WAS AT LIBERTY TO MAKE THE FINAL SELECTION OF SUBCONTRACTORS SUBJECT ONLY TO THE SPECIFICATION REQUIREMENTS ESTABLISHED IN THE AMENDMENT BETWEEN GSA AND BATESON. SINCE BATESON HAS NOT AS YET SUBMITTED TO GSA THE NAMES OF THE SUBCONTRACTORS SELECTED, THE OCCASION HAS NOT ARISEN TO REQUEST SUBMISSION BY THE WASHING EQUIPMENT SUPPLIER OF EVIDENCE OF A PREVIOUS SIMILAR INSTALLATION IN SATISFACTORY OPERATION FOR ONE YEAR AS REQUIRED BY THE SPECIFICATION. GSA THEREFORE HAS BEEN UNABLE TO COMMENT UPON YOUR ALLEGATION THAT YOU ARE THE ONLY MANUFACTURER IN THE FIELD THAT CAN SATISFY THIS REQUIREMENT OF THE SPECIFICATIONS.

WHILE DISCLOSURE OF THE BIDS RECEIVED IS REQUIRED IN CONNECTION WITH PUBLIC CONTRACTS WE ARE NOT AWARE OF ANY STATUTE OR REGULATION WHICH REQUIRES THE DISCLOSURE OF THE BIDS RECEIVED BY A PRIME CONTRACTOR FOR THE PURPOSE OF SELECTING HIS SUBCONTRACTORS. AS STATED ABOVE, THE ONLY PURPOSE FOR WHICH GSA HAD INSTRUCTED BATESON TO SECURE BIDS WAS TO EVALUATE THE REASONABLENESS OF THE PROPOSAL PRESENTED BY BATESON AND TO EXAMINE THE QUALIFICATIONS OF PROSPECTIVE SUBCONTRACTORS.

WITH REGARD TO THE QUESTION OF EQUIPMENT SPECIFICATIONS RAISED BY YOU AND YOUR ALLEGATION THAT THE SPECIFICATIONS WERE SO PREPARED AS TO COMPEL SELECTION OF PROPRIETARY ITEMS, GSA REPORTS THAT IT DOES NOT CONSIDER THE SPECIFICATIONS AS CONSTITUTING RESTRICTIVE DESCRIPTIONS OF PROPRIETARY ITEMS. IT REPORTS FURTHER THAT THE DRAWINGS AND SPECIFICATIONS WERE DEVELOPED BY THE CONTRACT ARCHITECTS AFTER EXHAUSTIVE RESEARCH AND CONSULTATION WITH GSA, THE FDA AND MANY EQUIPMENT SUPPLIERS, TO MEET THE FDA'S SPECIAL NEEDS. IT MAY BE THAT SOME PROPRIETARY ITEMS WERE OFFERED IN THE BIDS SUBMITTED TO BATESON AND THAT IT MAY ACCEPT SOME OF THESE OFFERS. IT DOES NOT FOLLOW THAT THE SPECIFICATIONS WOULD THEN COMPEL SELECTION OF OTHER PROPRIETARY ITEMS OFFERED BY OTHER BIDDERS. IN THE EVENT THAT ANY ACTION ON BATESON'S PART GIVES RISE TO A CHARGE OF PATENT INFRINGEMENT IT MAY BE POINTED OUT THAT IT HAS ASSUMED FULL RESPONSIBILITY THEREFOR UNDER ITS CONTRACT WITH THE GOVERNMENT. BATESON HAS AGREED TO FURNISH EQUIPMENT AS CALLED FOR BY THE AMENDATORY SPECIFICATIONS AND ANY FAILURE TO DO SO CONCERNS THE PERFORMANCE OF ITS CONTRACT AND DOES NOT PERTAIN TO THE VALIDITY OF THE AMENDMENT TO THE CONTRACT.

IN VIEW OF THE FOREGOING WE FIND NO BASIS FOR QUESTIONING THE PROPRIETY OF THE AMENDMENT OF AUGUST 26, 1963, AND YOUR PROTEST IS DENIED.