B-159038, AUGUST 16, 1966, 46 COMP. GEN. 142

B-159038, AUGUST 16, 1966, 46 COMP. GEN. 142

CONTRACTS - SUBCONTRACTS - ADMINISTRATIVE APPROVAL. THE AWARD OF A SUBCONTRACT TO THE HIGH BIDDER WITH THE CONSENT OF THE CONTRACTING AGENCY ADMINISTERING THE PRIME CONTRACT AND HAVING KNOWLEDGE THAT THE PRIME CONTRACTOR DID NOT CONSIDER INFORMATION FURNISHED BY A LOWER BIDDER THAT A CABLE SPECIFICATION WAS NOT INCLUDED IN ITS PROPOSAL AS ONLY ONE MANUFACTURER COULD SUPPLY THE CABLE, WILL NOT BE DISTRIBUTED EVEN THOUGH IT IS UNCERTAIN THAT THE MOST ADVANTAGEOUS AWARD WAS MADE, THE CONTRACTING AGENCY HAVING THE RESPONSIBILITY IN BEHALF OF THE GOVERNMENT FOR DETERMINING WHETHER OR NOT AN AWARD IS ADVANTAGEOUS. HOWEVER, IN FUTURE PROCUREMENTS GOVERNMENT APPROVAL OF SUBCONTRACT AWARDS SHOULD NOT BE PRO FORMA, BUT SHOULD BE BASED ON CAREFUL CONSIDERATION OF THE FULL RECORD.

TO THE SECRETARY OF THE NAVY, AUGUST 16, 1966:

WE REFER TO YOUR LETTERS OF JUNE 10 AND JULY 6, 1966, WITH ENCLOSURES (REFERENCE: ORD 02C-EWW: AVS), REGARDING THE PROTEST OF AMERICAN CONTRACTING, INCORPORATED, AGAINST THE AWARD OF A SUBCONTRACT TO GENERAL ELECTRIC COMPANY BY THE UNIVERSITY OF WASHINGTON, APPLIED PHYSICS LABORATORY (APL), SEATTLE, WASHINGTON, A PRIME CONTRACTOR UNDER BUREAU OF NAVAL WEAPONS CONTRACT NOW 65-0207-D.

THE SUBCONTRACT IS FOR THE EXPANSION OF THE UNDERWATER TRACKING RANGE AT ST. CROIX, VIRGIN ISLANDS. A REQUEST FOR PROPOSALS WAS ISSUED BY APL FOR THIS WORK ON JANUARY 24, 1966. THE SPECIFICATION CALLED FOR THE FURNISHING AND INSTALLATION OF UNDERWATER EQUIPMENT AND CABLE. BIDDERS WERE INSTRUCTED TO DESCRIBE IN THEIR BIDS THE EQUIPMENT WHICH THEY WOULD USE FOR HANDLING AND PLANTING OR LAYING THE UNDERWATER UNITS AND CABLES AND TO PROVIDE A SCHEDULE OF WORK ACCOMPLISHMENT. IN ADDITION, A SHORT TECHNICAL PROPOSAL WAS REQUIRED OUTLINING THE BIDDER'S PROPOSED APPROACH TO IMPLEMENT THE WORK DISCRIBED IN THE SPECIFICATION. A COMPLETE CABLE SPECIFICATION WAS ATTACHED TO THE RFP, BUT BIDDERS WERE ADVISED (PARAGRAPH 4.1.3.2 OF THE SPECIFICATION) THAT THEY COULD PROPOSE ALTERNATE CABLE SPECIFICATIONS, SUBJECT TO APPROVAL.

ON FEBRUARY 7, 1966, PURSUANT TO A BIDDER'S CONFERENCE HELD ON JANUARY 27, 1966, AN AMENDMENT NO. 1 TO THE RFP WAS ISSUED. THE COVER LETTER TO THE AMENDMENT NOTED THAT SEVERAL POTENTIAL PROBLEMS WERE RAISED REGARDING THE "COAXIAL SUBMARINE CABLE SPECIFICATION" ACCOMPANYING THE RFP. AS A RESULT, A REVISED "COAXIAL SUBMARINE CABLE SPECIFICATION" DATED FEBRUARY 7, 1966, WAS FURNISHED TO REPLACE THE PRIOR CABLE SPECIFICATION, AND PARAGRAPH 4.1.3.2 WAS CHANGED TO READ AS FOLLOWS:

4.1.3.2 CABLE SPECIFICATION. THE COAXIAL SUBMARINE CABLE SPECIFICATION, REVISED 7 FEBRUARY 1966, IS GENERAL ENOUGH TO ALLOW ALTERNATE TYPES OF CONSTRUCTION AND A CHOICE OF PHYSICAL DIMENSIONS. HOWEVER, THE CONTRACTOR MUST SUBMIT AS PART OF HIS TECHNICAL PROPOSAL A COMPLETE SPECIFICATION OF THE CABLE HE INTENDS TO PROVIDE, INCLUDING DIMENSIONS, CONSTRUCTION AND TESTING METHODS.

THE INTRODUCTORY PARAGRAPH OF THE REVISED SPECIFICATION ADVISED THAT THE CABLE MAKEUP WAS NOT COMPLETELY SPECIFIED BECAUSE OF VARIANCES IN MANUFACTURER'S EQUIPMENTS; AND THAT EACH BIDDER WAS THEREFORE REQUIRED TO SUBMIT A DETAILED SPECIFICATION OF THE CABLE, CABLE TESTS, CONSTRUCTION, AND SPLICING METHODS HE WOULD USE IF SELECTED.

FURTHER AMENDMENTS TO THE RFP WERE ISSUED TO CLARIFY PORTIONS OF THE CABLE SPECIFICATION AS WELL AS OTHER SPECIFICATION REQUIREMENTS. THE COVER LETTER ACCOMPANYING THE LAST AMENDMENT (AMENDMENT NO. 4, DATED MARCH 4, 1966) AGAIN STRESSED THE NEED FOR A CABLE SPECIFICATION WITH THE PROPOSAL.

BIDS WERE OPENED ON MARCH 18, 1966, AND THE 3 LOWEST BASE BIDS OF 7 BIDS RECEIVED WERE AS FOLLOWS:

WEST COAST ELECTRIC COMPANY $749,000

AMERICAN CONTRACTING, INC. 792,400

GENERAL ELECTRIC 851,130

(THE OTHER 4 BIDS RANGED FROM $884,955 TO $967,802.) AMERICAN CONTRACTING ACKNOWLEDGE RECEIPT OF ALL THE ADDENDA. ITS PROPOSAL CONTAINED A DESCRIPTION OF THE FLOATING EQUIPMENT WHICH IT PROPOSED TO USE TO PERFORM THE INSTALLATION, A LISTING OF ITS PROPOSED TOP PERSONNEL FOR THE JOB, A PROPOSED SCHEDULE OF PERFORMANCE, AND BRIEF OUTLINES OF HOW IT PROPOSED TO PLANT THE ARRAYS AND HOW IT WOULD RUN THE CABLE ASHORE. CABLE SPECIFICATION WAS INCLUDED WITH THE PROPOSAL.

ON APRIL 14, 1966, APL INFORMED THE BIDDERS OF AN AWARD TO GENERAL ELECTRIC. AMERICAN CONTRACTING WAS SUBSEQUENTLY ADVISED THAT ITS BID HAD BEEN REJECTED FOR FAILURE TO INCLUDE A CABLE SPECIFICATION. IT IS REPORTED THAT THE OFFICE OF NAVAL RESEARCH REPRESENTATIVE ADMINISTERING THE PRIME CONTRACT FOR THE FORMER BUREAU OF NAVAL WEAPONS WAS AWARE OF APL'S EVALUATION OF PROPOSALS AND CONSENTED TO THE AWARD.

AMERICAN CONTRACTING HAS SUBMITTED A LETTER DATED FEBRUARY 16, 1966, FROM APL ADDRESSED TO ALL THE PROSPECTIVE BIDDERS CONTAINING A LISTING OF POSSIBLE MANUFACTURERS OF THE SPECIFIED CABLE. THE BIDDER REPORTS THAT ALL THE MANUFACTURERS NAMED ON THE LIST WERE SOLICITED BY IT AND THAT THE ONLY MANUFACTURER ON THE LIST WHO QUOTED THE PROJECT WAS THE CONDEX CORPORATION; THAT, AS FAR AS IT KNOWS, ALL BIDDERS, EXCEPT ONE, WHICH MANUFACTURES CABLE ITSELF, USED THE CONDEX CABLE; AND THAT THIS INFORMATION WAS MADE KNOWN TO APL IN SEVERAL TELEPHONE CONVERSATIONS HELD PRIOR TO THE AWARD. AMERICAN CONTRACTING CONTENDS THAT THE FAILURE TO LIST THE CABLE MANUFACTURER WAS A MINOR INFORMALITY WHICH, IN ACCORDANCE WITH APPLICABLE GOVERNMENT REGULATIONS, SHOULD HAVE BEEN WAIVED IN FAVOR OF ACCEPTING THE LOWER PRICE. IN THIS CONNECTION, AMERICAN CONTRACTING REPORTS THAT GENERAL ELECTRIC DID NOT NAME THE CABLE MANUFACTURER EITHER, BUT DID SUBMIT CABLE DATA BASED ON THE CONDEX CABLE.

CERTAINLY THE AMERICAN CONTRACTING PROPOSAL WAS INCOMPLETE IN THAT IT FAILED TO INCLUDE THE REQUIRED CABLE SPECIFICATION. YOUR DEPARTMENT'S APPROVAL OF THE AWARD TO THE HIGHER BIDDER RESTS ON THIS POINT. AMERICAN CONTRACTING ACKNOWLEDGES THAT THE CABLE INFORMATION WAS MISSING FROM ITS PROPOSAL, BUT GOES ON TO ASSERT THAT AS A PRACTICAL MATTER KNOWN TO APL, ALL THE BIDDERS, EXCEPTING ONE, BUT INCLUDING AMERICAN CONTRACTING, HAD NO CHOICE BUT TO FURNISH THE RECOMMENDED CONDEX CABLE. THE BIDDER QUESTIONS, THEREFORE, WHETHER IT WAS REALLY ESSENTIAL TO DETAIL INFORMATION IN ITS PROPOSAL WHICH, IT BELIEVES, WAS ALREADY KNOWN TO APL. WE DO NOT REGARD THIS AS A SPURIOUS QUESTION, BUT THE RECORD FAILS TO SHOW THAT YOUR DEPARTMENT CONSIDERED THE MATTER IN APPROVING THE AWARD TO THE HIGHER BIDDER. THIS IS NOT TO SAY THAT THE AMERICAN CONTRACTING BID, OR THE LOWEST BID, SHOULD HAVE BEEN ACCEPTED. APL ACTUALLY MIGHT NOT HAVE KNOWN ONLY ONE CABLE SUPPLIER WAS AVAILABLE TO THE BIDDERS. THERE COULD BE OTHER FACTORS WHICH WERE CONSIDERED IN REJECTING THE LOW BIDS. THE NEED FOR THE CABLE INFORMATION WAS MADE PLAIN BY APL, AND THE FAILURE TO INCLUDE THIS INFORMATION INDICATES NEGLECT OR LACK OF CARE ON THE PART OF THE BIDDER.

WE ARE NOT SURE THAT THE MOST ADVANTAGEOUS AWARD WAS MADE. HOWEVER, YOUR DEPARTMENT HAD THE RESPONSIBILITY TO MAKE THIS DETERMINATION IN BEHALF OF THE GOVERNMENT. ACCORDINGLY, WE HAVE NO BASIS TO DISTURB THE AWARD. COMP. GEN. 311; 41 ID. 424,427. THE MATTER IS CALLED TO YOUR ATTENTION PRIMARILY TO EMPHASIZE THAT GOVERNMENT APPROVAL OF SUBCONTRACT AWARDS SHOULD NOT BE PRO FORMA, BUT SHOULD BE BASED ON CAREFUL CONSIDERATION OF THE FULL RECORD.

ENCLOSED IS A COPY OF OUR LETTER OF TODAY NOTIFYING AMERICAN CONTRACTING THAT ITS PROTEST IS DENIED.