B-160542, MAR. 28, 1967

B-160542, MAR. 28, 1967

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO THE LETTER DATED JANUARY 12, 1967, (ENGGC-M) FROM THE OFFICE OF THE CHIEF OF ENGINEERS SIGNED BY MR. E. MANNING SELTZER, GENERAL COUNSEL, ALONG WITH A REPORT ON THE AWARD OF A CONTRACT LET UNDER INVITATION FOR BIDS NO. DACA61-67-B-0002 TO KING KNIGHT COMPANY, (HEREAFTER KING-KNIGHT) EMERYVILLE, CALIFORNIA, FOR EIGHT 200 KW UNINTERRUPTED POWER GENERATOR SETS AND RELATED EQUIPMENT IN THE AMOUNT OF $515,683.66, WITH AN OPTION TO PURCHASE A NINTH UNIT OF 150 KW AND RELATED EQUIPMENT IN THE AMOUNT OF $107,341.36. THE REPORT WAS SUBMITTED IN CONNECTION WITH THE PROTEST OF CUSTOM APPLIED POWER CORPORATION, ALEXANDRIA, VIRGINIA (HEREAFTER CAPCO).

THE INVITATION, CALLING FOR DELIVERY AT VARIOUS POINTS THROUGHOUT THE UNITED STATES ON SPECIFIED DATES BETWEEN MAY 20, 1967, AND AUGUST 1, 1967, WAS ISSUED ON AUGUST 10, 1966, BY THE UNITED STATES ARMY ENGINEER DISTRICT, PHILADELPHIA, PENNSYLVANIA. BID OPENING WAS SCHEDULED FOR SEPTEMBER 8, 1966, AND EXTENDED TO SEPTEMBER 22, 1966.

THIRTY TWO PAGES OF SPECIFICATIONS CONSTITUTED THE PROCUREMENT DESCRIPTION ENGMC-EV DATED JULY 1966. GENERALLY, THE SETS ARE TO BE RATED FOR CONTINUOUS DUTY AND CONSIST OF A SYNCHRONOUS MOTOR, A.C. GENERATOR, INERTIA FLYWHEEL, INDUCTION-EDDY-CURRENT COUPLING, AND DIESEL ENGINE, ALL MOUNTED ON A SKID BASE. THE SETS ARE TO BE INSTALLED IN HEATED BUILDINGS, AND THE ROTATING COMPONENTS ARE TO BE COUPLED TOGETHER IN AN IN-LINE CONFIGURATION.

PURSUANT TO THE AUTHORITY CONTAINED IN ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-202.5 (D) THE INVITATION INCLUDED THE FOLLOWING REQUIREMENT FOR DESCRIPTIVE LITERATURE:

"REQUIREMENT FOR DESCRIPTIVE LITERATURE (OCT 1960)

(A) DESCRIPTIVE LITERATURE AS SPECIFIED IN THIS INVITATION FOR BIDS MUST BE FURNISHED AS A PART OF THE BID AND MUST BE RECEIVED BEFORE THE TIME SET FOR OPENING BIDS. THE LITERATURE FURNISHED MUST BE IDENTIFIED TO SHOW THE ITEM IN THE BID TO WHICH IT PERTAINS. THE DESCRIPTIVE LITERATURE IS REQUIRED TO ESTABLISH, FOR THE PURPOSES OF BID EVALUATION AND AWARD, DETAILS OF THE PRODUCTS THE BIDDER PROPOSES TO FURNISH AS TO DESIGN, DIMENSIONS, WEIGHT AND DETAILED DESCRIPTION OF MAJOR COMPONENTS AND ACCESSORY EQUIPMENT, AS DETAILED IN PARAGRAPH 4A OF THE PROCUREMENT DESCRIPTION.

(B) 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. FAILURE TO FURNISH THE DESCRIPTIVE LITERATURE BY THE TIME SPECIFIED IN THE INVITATION FOR BIDS WILL REQUIRE REJECTION OF THE BIDS, EXCEPT THAT IF THE MATERIAL IS TRANSMITTED BY MAIL AND IS RECEIVED LATE, IT MAY BE CONSIDERED UNDER THE PROVISIONS FOR CONSIDERING LATE BIDS, AS SET FORTH ELSEWHERE IN THIS INVITATION FOR BIDS.'

PARAGRAPH 4A OF THE PROCUREMENT DESCRIPTION SPECIFIED THAT THE FOLLOWING DESCRIPTIVE LITERATURE WOULD BE REQUIRED:

"A. DESCRIPTIVE LITERATURE. (1) CATALOG DATA, SKETCHES, AND OTHER PERTINENT INFORMATION REQUIRED TO SHOW THE GENERAL ARRANGEMENT AND ADEQUACY OF THE EQUIPMENT, INCLUDING CONSOLE, SHALL BE SUBMITTED WITH THE BID. IF THE BIDDER SUBMITS STANDARD DRAWINGS AND/OR STANDARD PUBLISHED DESCRIPTIVE DATA OF HIS PRODUCT, WITH THE INTENTION OF MAKING MODIFICATIONS TO MEET THE REQUIREMENTS OF THE SPECIFICATIONS, THE PROPOSED CHANGES SHALL BE FULLY DESCRIBED IN THE MITTAL.'

PARAGRAPH 4C OF THE PROCUREMENT DESCRIPTION FURTHER REQUIRED THAT THE BIDDER SUBMIT A BRIEF RESUME OF HIS SERVICE ORGANIZATION SUPPORTING THIS EQUIPMENT AND STATED AT PARAGRAPH 4D THAT,"IN THE EVENT OF CONFLICT BETWEEN DESCRIPTIVE LITERATURE AND THE SPECIFICATIONS, DISCOVERED AFTER AWARD, THE SPECIFICATIONS WILL CONTROL, AND ESTABLISH THE CONTRACT REQUIREMENT.'

SEVEN BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 22, 1966. THE THREE LOWEST BIDS WERE SUBMITTED BY UNITEC INDUSTRIES, $468,132.00; CAPCO, $512,554.00; AND KING-KNIGHT, $515,683.66. UNITEC WAS NOT CONSIDERED FOR AWARD. ACCORDING TO THE REPORT SUBMITTED BY THE CONTRACTING OFFICER, A PRE-AWARD SURVEY, CONDUCTED IN CONJUNCTION WITH THE SMALL BUSINESS ADMINISTRATION, REVEALED THAT UNITEC WAS NOT A RESPONSIBLE BIDDER ON THIS PROCUREMENT, AND IT WAS NOT ISSUED A CERTIFICATE OF COMPETENCY. REJECTION OF CAPCO'S BID AND SUBSEQUENT AWARD TO KING-KNIGHT ON NOVEMBER 10, 1966, RESULTED IN THIS PROTEST.

CAPCO WAS INFORMED BY THE CONTRACTING OFFICER ON NOVEMBER 10, 1966, THAT ITS BID WAS REJECTED BECAUSE IT WAS NOT RESPONSIVE TO THE TECHNICAL REQUIREMENTS OF THE SOLICITATION WITH REGARD TO THE INDUCTION EDDY CURRENT COUPLING, AND THAT AWARD HAD BEEN MADE TO KING KNIGHT. THE CONTRACTING OFFICER STATED:

"* * * THE METHOD OF MOUNTING THE COUPLING DOES NOT CONFORM TO PARAGRAPH 3 OF THE PROCUREMENT DESCRIPTION WHICH REQUIRES IT TO BE MOUNTED ON THE RIGID STRUCTURAL STEEL BASE. CAPCO DRAWING NO. BID226 SHOWS THIS COUPLING SUSPENDED BETWEEN THE FLYWHEEL SHAFT BEARING AND THE ENGINE POWER TAKE- OFF. PARAGRAPH 3 ALSO REQUIRES ALL COMPONENTS INCLUDING THE COUPLING TO BE MOUNTED TO PERMIT HANDLING AND LIFTING INTO POSITION WITHOUT AFFECTING ALINEMENT OF THE EQUIPMENT, AND THEREBY PERMITTING REPLACEMENT WITH MINIMUM DISTURBANCE TO THE OTHER ELEMENTS. DATA SUBMITTED WITH YOUR BID INDICATE THAT THE FLYWHEEL OR THE ENGINE WOULD HAVE TO BE REMOVED OR DISTURBED TO REMOVE THIS COUPLING * * *.'

CAPCO PROTESTED REJECTION OF ITS BID DIRECTLY TO THE CONTRACTING OFFICER BY TELEGRAM DATED NOVEMBER 12, 1966, AND BY LETTER DATED NOVEMBER 14, 1966. THE DECISION TO REJECT WAS AFFIRMED BY THE CONTRACTING OFFICER ON DECEMBER 5, 1966, AND REAFFIRMED DECEMBER 20, 1066. THE PROTEST WAS LODGED WITH THE GENERAL ACCOUNTING OFFICE ON DECEMBER 12, 1966.

THROUGHOUT THE COURSE OF THIS PROTEST THE REASONING GIVEN BY THE PROCURING OFFICE FOR REJECTING THE CAPCO BID HAS BEEN CONSISTENT WITH THE REASONING CONTAINED IN THE CONTRACTING OFFICER'S REPORT FURNISHED US BY THE CORPS OF ENGINEERS. THE REPORT CENTERED ITS ARGUMENT FOR REJECTION OF CAPCO'S BID ON AN INTERPRETATION OF TWO DRAWINGS SUBMITTED ALONG WITH THE DESCRIPTIVE LITERATURE EXPLAINING THE COMPONENTS TO BE FURNISHED. THE PROCUREMENT DESCRIPTION REQUIRES THAT RIGID MECHANICAL COUPLINGS CONNECT THE TWO HALVES OF THE INDUCTION-EDDY-CURRENT COUPLING (CLUTCH) TO THEIR RESPECTIVE SHAFTS. THE COUPLINGS ATTACH THE CLUTCH ON ONE SIDE TO THE FLYWHEEL, AND ON THE OTHER SIDE TO THE ENGINE. PILLOW BLOCKS ARE TO ACT AS SUPPORT BETWEEN THE CLUTCH AND THE NON-SKID BASE. ONE DRAWING SUBMITTED BY CAPCO SHOWED THE GENERAL ARRANGEMENT FOR THE POWER GENERATOR SET AND THE OTHER SHOWED THE CLUTCH. THE LATTER DRAWING WAS MADE BY WER INDUSTRIAL CORPORATION, WHOSE CLUTCH CAPCO INTENDS TO SUPPLY.

THE DRAWING OF THE GENERAL ARRANGEMENT OF THE POWER GENERATOR SET SHOWED THE IN-LINE LOCATION OF THE ENGINE, CLUTCH AND FLYWHEEL BUT WAS NOT SO DETAILED AS TO INCLUDE COUPLINGS BETWEEN THEM. ON THIS BASIS, THE CONTRACTING OFFICER DETERMINED THAT NO COUPLINGS WOULD BE FURNISHED. FURTHERMORE, THE WER DRAWING WAS INTERPRETED BY THE CONTRACTING OFFICER AS BEING AMBIGUOUS WITH RESPECT TO PILLOW BLOCK SUPPORTS, EVEN THOUGH IT HAD DOTTED LINES REPRESENTING THE PILLOW BLOCKS, BECAUSE OF A NOTATION CONTAINED THEREON STATING,"PILLOW BLOCKS BY CUSTOMER.' THE CONTRACTING OFFICER REASONED THAT SINCE THE GOVERNMENT IS THE CUSTOMER FOR THE PURPOSE OF THIS PROCUREMENT THE BIDDER DID NOT INTEND TO FURNISH PILLOW BLOCKS WITH THE GENERATOR SETS. THE CONTRACTING OFFICER ALSO NOTED THAT CAPCO SUBMITTED NO INFORMATION CONCERNING HIS SERVICE ORGANIZATION.

THE PRIMARY ISSUE PRESENTED BY THE FOREGOING CIRCUMSTANCES IS THE VALIDITY OF THE CONTRACTING OFFICER'S DETERMINATION IN REJECTING THE LOW BID. IN CONJUNCTION WITH THIS THE QUESTION MUST BE RAISED AS TO WHETHER THE INVITATION FOR BIDS SPECIFIED THE NATURE AND EXTENT OF THE REQUESTED DESCRIPTIVE DATA WITH SUFFICIENT PARTICULARITY TO PUT THE BIDDER ON NOTICE OF WHAT WAS DESIRED. WE THINK THERE CAN BE NO DOUBT AS TO THE JUSTIFICATION FOR INCLUDING THE DESCRIPTIVE LITERATURE REQUIREMENT IN THE INVITATION. THIS IS PARTICULARLY SO SINCE SINCE THE VARIOUS COMPONENTS CAN BE MANUFACTURED BY MANY DIFFERENT COMPANIES AND YET STILL MEET THE PERFORMANCE SPECIFICATIONS SET OUT IN THE PROCUREMENT DESCRIPTION. NOTE, HOWEVER, THAT THERE IS NO MEMORANDUM INCLUDED IN THE RECORD FORMALLY SETTING FORTH THE REASONS WHY ACCEPTABLE PRODUCTS COULD BE PROCURED WITHOUT THE SUBMISSION OF DESCRIPTIVE LITERATURE, AS REQUIRED BY ASPR 2- 202.5 (C).

IN THE PROCUREMENT OF HIGHLY SPECIALIZED EQUIPMENT THE GOVERNMENT MAY REQUIRE BIDDERS TO SUPPLY SPECIFIC DESCRIPTIVE DATA ON SPECIFIC COMPONENTS OF ITEMS BEING PROCURED TO ENABLE IT TO CONCLUDE PRECISELY WHAT THE BIDDER PROPOSES TO FURNISH. FURTHERMORE, THE GOVERNMENT ISABLE TO KNOW EXACTLY WHAT IT IS BINDING ITSELF TO PURCHASE BY MAKING AN AWARD. IN CONJUNCTION WITH THIS GENERAL RULE, THOUGH, WE HELD IN 42 COMP. GEN. 598 (1963) THAT A REQUIREMENT THAT BIDDERS FURNISH UNSPECIFIED DATA WHICH IS "SUFFICIENT" TO PROVE COMPLIANCE WITH THE SPECIFICATIONS, MAY RENDER AN INVITATION DEFECTIVE FOR FAILURE TO PUT BIDDERS ON NOTICE OF THE EXTENT OF DETAIL THAT THE AGENCY REQUIRED THEIR DESCRIPTIVE DATA TO INCORPORATE.

OBVIOUSLY, CAPCO AND THE CORPS OF ENGINEERS DO NOT AGREE AS TO THE EXTENT OF DETAIL NEEDED TO SHOW THAT PILLOW BLOCKS WOULD BE FURNISHED BY THE BIDDER ON EACH SIDE OF THE CLUTCH AND THAT STANDARD COUPLINGS WOULD BE FURNISHED FOR EACH SIDE OF THE CLUTCH. THE QUOTED LANGUAGE FROM THE PROCUREMENT DESCRIPTION, PARAGRAPH 4A, DOES NOT SETTLE THE DISAGREEMENT IN THIS CASE. IT STATES ONLY THAT CATALOG DATA, SKETCHES, AND OTHER PERTINENT INFORMATION SHOWING THE GENERAL ARRANGEMENT AND ADEQUACY OF THE EQUIPMENT BE SUBMITTED, AND IT RECOGNIZES THAT STANDARD DRAWINGS MAY BE SUBMITTED.

WE NOTE THAT CAPCO DID SUBMIT CATALOG DATA INDICATING THAT SIER-BATH COUPLINGS WOULD BE SUPPLIED, AND STATED IN ITS MAJOR COMPONENT LIST, "STANDARD COUPLING, MODEL SIZE NO. 4, MANUFACTURED BY SIER-BATH CORPORATION, LITERATURE ENCLOSED.' CAPCO ALSO ENCLOSED CATALOG DATA INDICATING THAT "SPHERICAL" ROLLER BEARING PILLOW BLOCKS MANUFACTURED BY LINK BELT WOULD BE FURNISHED.

IF THE CORPS OF ENGINEERS WANTED SKETCHES OR DRAWINGS TO SHOW MORE THAN THE GENERAL ARRANGEMENT OF THE EQUIPMENT, WHICH THEY APPARENTLY DID IN THE LIGHT OF THE EVALUATION GIVEN THE DRAWINGS SUBMITTED BY CAPCO, THEN THEY SHOULD HAVE SPECIFICALLY REQUESTED DETAIL DRAWINGS. DRAWING NO. BID226 MAY NOT SHOW STANDARD COUPLINGS ON EACH SIDE OF THE CLUTCH, BUT IT ALSO DOES NOT SHOW SUCH THINGS AS THE VIBRATION ISOLATORS DESCRIBED IN THE SPECIFICATIONS, THE TYPE AIR CLEANER DESCRIBED IN THE SPECIFICATIONS, OR THE TYPE MUFFLER DESCRIBED IN THE SPECIFICATIONS. WHAT THE DRAWING DOES SHOW IS THAT ALL COMPONENTS WILL BE ASSEMBLED "IN-LINE" AS REQUIRED.

THIS OFFICE STATED IN A RECENT DECISION, B-158688, DATED MAY 19, 1966, THAT:

"ONE OF THE PRIMARY EVILS TO BE CURED BY SPELLING OUT DESCRIPTIVE LITERATURE REQUIREMENTS WITH PARTICULARITY ARISES WHERE A LOW BIDDER SUBMITS DATA WHICH HE MAY REASONABLY BELIEVE SATISFIES A BROADLY STATED REQUIREMENT FOR DESCRIPTIVE LITERATURE, BUT WHICH DOES NOT IN FACT PROVIDE THE INFORMATION THE PROCURING ACTIVITY NEEDS TO EVALUATE BIDS. OUR DECISIONS HAVE HELD IN THESE CIRCUMSTANCES THAT THE REJECTION OF THE LOW BID MAY BE PREJUDICIAL TO THE LOW BIDDER AND DEPRIVE THE GOVERNMENT OF THE LOWEST PRICE FOR THE ITEM BEING PROCURED.'

THE BIDDER'S FAILURE TO INCLUDE A BRIEF RESUME OF HIS SERVICE ORGANIZATION AS REQUIRED BY PARAGRAPH 4C OF THE PROCUREMENT DESCRIPTION IS NOT A MATERIAL DEFECT IN HIS BID THAT WOULD AFFECT ITS RESPONSIVENESS TO THE INVITATION. THE PROCUREMENT DESCRIPTION SPECIFICALLY PROVIDES IN PARAGRAPH 4 THAT BIDS UNACCOMPANIED BY THE DATA OUTLINED IN PARAGRAPH 4A WILL BE REJECTED. THERE WAS NO PROVISION FOR REJECTION IF THE REQUIRED RESUME OF THE CONTRACTOR'S SERVICE ORGANIZATION DID NOT ACCOMPANY THE BID. IN VIEW OF THE FACT THAT THERE WAS THIS DISTINCTION BETWEEN PARAGRAPH 4A AND 4C WE MUST CONCLUDE THAT THERE WAS SUBSTANTIAL GROUND FOR THE BIDDER TO BELIEVE THAT RECEIPT OF THE DATA BEFORE BID OPENING WAS NOT ESSENTIAL. FURTHERMORE, WE NOTED THAT IN THE CONTRACTING OFFICER'S LETTERS TO CAPCO, SUBSTANTIATING THE BID REJECTION BECAUSE OF INSUFFICIENTLY DETAILED DRAWINGS, AT NO TIME DID HE ADVANCE THE FACT THAT CAPCO'S FAILURE TO SUBMIT A SERVICE ORGANIZATION RESUME ALSO SERVED AS A BASIS FOR REJECTION OF ITS BID AS NONRESPONSIVE. PRESUMABLY, THE CONCLUSION OF THE PROCUREMENT OFFICE IS THAT CAPCO'S CAPABILITY TO SERVICE THE PRODUCT WAS A FACTOR RELATED TO THE FIRM'S RESPONSIBILITY, AND THEREFORE INFORMATION IN CONNECTION THEREWITH COULD BE SUBMITTED AFTER OPENING. WE CONCUR IN THIS CONCLUSION. SEE 39 COMP. GEN. 247, AND B 154734, AUGUST 26, 1964. WE ARE OF THE OPINION THAT IF IT WAS INTENDED THAT ALL OR CERTAIN DETAILS OF THE PROCUREMENT DESCRIPTION SHOULD BE SHOWN IN THE DRAWINGS IN ADDITION TO BEING DESCRIBED IN THE OTHER DESCRIPTIVE DATA SUBMITTED, IT WAS NOT SUFFICIENT TO TELL BIDDERS, AS WAS DONE IN PARAGRAPH 4A OF THE PURCHASE DESCRIPTION, THAT THEY SHOULD SUBMIT "SKETCHES * * * REQUIRED TO SHOW THE GENERAL ARRANGEMENT" OF THE EQUIPMENT. WE THEREFORE DISAGREE WITH THE CONTRACTING OFFICER'S CONCLUSION THAT THE CAPCO BID WAS NONRESPONSIVE.

THE FACT REMAINS, HOWEVER, THAT AWARD WAS MADE ON NOVEMBER 10, 1966. THE PROTEST WAS NOT RECEIVED BY OUR OFFICE UNTIL DECEMBER 12, 1966. ADDITIONAL TIME HAS BEEN REQUIRED FOR THE SECURING OF AN ADMINISTRATIVE REPORT ON THE CASE, A CONFERENCE THEREAFTER WITH A CAPCO REPRESENTATIVE, AND THE AFFORDING OF AN OPPORTUNITY TO THE SUCCESSFUL BIDDER TO PRESENT COMMENTS ON CAPCO'S REQUEST THAT THE AWARD BE CANCELLED. WE CONCLUDE WITH RELUCTANCE THAT IT WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT TO HAVE THE CONTRACT CANCELLED AT THIS TIME.

THE ATTACHMENTS TO LETTER OF JANUARY 12, 1967, ARE RETURNED HEREWITH AS REQUESTED.