B-161045, MAY 10, 1967

B-161045, MAY 10, 1967

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO THE LETTERS OF MARCH 28, APRIL 7, AND APRIL 18, 1967, FROM THE NAVAL FACILITIES ENGINEERING COMMAND, NFEC, IN CONNECTION WITH THE PROTEST FROM THE INTERNATIONAL BOILER WORKS COMPANY (IBW) AGAINST SECTION 15B OF SPECIFICATION NO. 66213/65, UNDER INVITATION FOR BIDS NO. N62477-67-B-0914, FOR THE CONSTRUCTION OF A CENTRAL HEATING PLANT AT THE UNITED STATES NAVAL ACADEMY, ANNAPOLIS, MARYLAND.

IBW, A POTENTIAL SUPPLIER OF THE HIGH TEMPERATURE WATER (HTW) GENERATORS, INITIALLY PROTESTED AGAINST THE DESIGN REQUIREMENTS OF PARAGRAPH 15B.3.2.8.2 OF THE SPECIFICATIONS. HOWEVER, WE HAVE BEEN ADVISED BY COUNSEL FOR IBW THAT IBW NO LONGER REQUESTS A DECISION ON THE QUESTION WHETHER THE DESIGN REQUIREMENTS OF 15B.3.2.8.2 OF THE SPECIFICATIONS ARE UNJUSTIFIABLY RESTRICTIVE.

BY ITS LETTER OF MARCH 7, 1967, THE CHESAPEAKE DIVISION OF NFEC REQUESTED THAT IBW COMPETE WITH OTHER BOILER MANUFACTURERS AND THAT IBW SUBMIT A BID IN ACCORDANCE WITH THE SPECIFICATIONS. BY TELEGRAM OF MARCH 22, 1967, COUNSEL FOR IBW ADVISED NFEC THAT IBW WAS WILLING TO FURNISH THE SUCCESSFUL BIDDER WITH BOILERS WHICH COMPLY WITH SPECIFICATION REQUIREMENTS. HOWEVER, IBW APPARENTLY WILL NOT BE ABLE TO MEET THE TWO- YEAR EXPERIENCE REQUIREMENT OF PARAGRAPH 15B.3.1.2 OF THE SPECIFICATIONS, WHICH PROVIDES:

"PROVEN DESIGN.--- EQUIPMENT FURNISHED UNDER THIS SPECIFICATION SHALL BE OF PROVEN DESIGN AND THE PRODUCT OF AN ORGANIZATION SUCCESSFULLY ENGAGED IN THE MANUFACTURE OF THE EQUIPMENT REQUIRED. THE MANUFACTURERS OF THE HIGH TEMPERATURE WATER BOILERS AND THE HIGH TEMPERATURE WATER PUMPS SHALL FURNISH DOCUMENTARY EVIDENCE OF INSTALLATIONS HAVING SUCCESSFULLY USED EQUIPMENT, IDENTICAL EXCEPT FOR SIZE, FOR A PERIOD OF TWO YEARS UNDER COMPARABLE OPERATING AND CAPACITY CONDITIONS.'

BY LETTER OF APRIL 7, 1967, NFEC ADVISED OUR OFFICE AS FOLLOWS:

"THIS COMMAND ACKNOWLEDGES THAT THE INTERNATIONAL BOILER WORKS COMPANY IS AN ESTABLISHED FIRM THAT HAS FABRICATED AND INSTALLED NUMEROUS BOILERS OVER A PERIOD OF MANY YEARS. NOTWITHSTANDING THE FOREGOING, IT IS CONSIDERED THAT THE EQUIPMENT TO BE FURNISHED UNDER THIS CONTRACT IS OF A SPECIALIZED MECHANICAL NATURE AND THE FACT THAT A FIRM HAS PREVIOUSLY FURNISHED BOILERS IN NO WAY ASSURES THAT A FIRM HAS THE CAPABILITY TO FURNISH UNITS MEETING THE SPECIFICATIONS. THE ONLY WAY OF ESTABLISHING THE SOUNDNESS OF DESIGN, FABRICATION TECHNIQUES, AND SIMILAR FACTORS CRITICAL TO THIS TYPE OF EQUIPMENT, IS TO HAVE PREVIOUSLY PROVIDED SUCH EQUIPMENT AND PLACED IT IN SUCCESSFUL OPERATION FOR A REASONABLE PERIOD OF TIME.'

THERE IS NOTHING IN THE BID OF THE APPARENT LOW BIDDER FOR THE PRIME CONTRACT WHICH WOULD INDICATE HIS PROPOSED SUPPLIER FOR THE BOILERS.

THE OTHER QUESTION FOR CONSIDERATION IS THEREFORE WHETHER IBW MAY BE CONSIDERED AS A RESPONSIBLE SUPPLIER OF THE HTW GENERATORS SPECIFIED.

IT IS OUR VIEW THAT THE TWO-YEAR EXPERIENCE REQUIREMENT IN PARAGRAPH 15B.3.1.2 OF THE SPECIFICATIONS IS A MATTER RELATING TO A BIDDER'S RESPONSIBILITY. SEE 37 COMP. GEN. 420; B-152896, FEBRUARY 13, 1964; AND 45 COMP. GEN. 4.

IN 45 COMP. GEN. 4, HEREAFTER REFERRED TO AS THE LORAL CASE, WE CONSIDERED THE EFFECT OF AN EXPERIENCE QUALIFICATIONS IN THE "CAUTION TO BIDDERS" CLAUSE. THIS CLAUSE CONTAINED ELEMENTS RELATING TO QUALIFICATIONS OF THE PRODUCT AS WELL AS OF THE PRODUCER AS DOES THE CLAUSE IN PARAGRAPH 15B.3.1.2 OF THE INSTANT SPECIFICATIONS. THE "CAUTION TO BIDDERS" CLAUSE IN THE LORAL CASE DID NOT CONTAIN A REQUIREMENT AS DOES PARAGRAPH 15B.3.1.2 OF THE INSTANT SPECIFICATIONS THAT THE MANUFACTURERS OF THE BOILERS FURNISH DOCUMENTARY EVIDENCE OF INSTALLATIONS HAVING SUCCESSFULLY USED EQUIPMENT, IDENTICAL EXCEPT FOR SIZE, FOR A PERIOD OF TWO YEARS UNDER COMPARABLE OPERATING AND CAPACITY CONDITIONS. HOWEVER, THE RATIONALE OF THE LORAL CASE, NAMELY, THAT WHERE AN EXPERIENCE CLAUSE HAS ELEMENTS OF PRODUCT QUALIFICATION AS WELL AS A PRODUCER QUALIFICATION, THERE DOES NOT NECESSARILY HAVE TO BE A LITERAL COMPLIANCE WITH THE CLAUSE, IS IN OUR OPINION APPLICABLE IN THE INSTANT CASE.

RESPONSIBILITY HAS BEEN DEFINED AS INCLUDING, AMONG OTHER THINGS, ORGANIZATION, TECHNICAL EXPERIENCE, KNOWLEDGE, SKILLS,"KNOW-HOW," TECHNICAL EQUIPMENT AND FACILITIES. SEE 45 COMP. GEN. 4, 7.

CONSEQUENTLY, IT IS OUR VIEW THAT IN DETERMINING WHETHER IBW WOULD BE A RESPONSIBLE SUBCONTRACTOR FOR THE HTW GENERATORS SPECIFIED, ALL OF THE FACTS AND CIRCUMSTANCES REGARDING THE POTENTIAL SUPPLIER'S ABILITY TO PERFORM SHOULD BE CONSIDERED.

WE DO NOT FIND IT NECESSARY TO COMMENT ON B-156889, OCTOBER 5, 1965, CITED IN NFEC'S LETTER OF APRIL 7, 1967, EXCEPT TO SAY THAT THE SUBCONTRACTOR'S PROPOSED EQUIPMENT WAS REJECTED IN THAT CASE PRIMARILY BECAUSE IT DID NOT MEET SPECIFICATION REQUIREMENTS. IN REGARD TO THE EXPERIENCE CLAUSE IN B-156889, WE MERELY SAID THAT WE HAD NO BASIS TO QUESTION NAVY'S DETERMINATION TO INCLUDE THE ..END :