B-169147, APR 10, 1972

B-169147, APR 10, 1972

CONTRACT - EXISTENCE OF - ALLEGED NONRESPONSIVENESS - FACTUAL DETERMINATION CONCERNING A REQUEST OF LINEGEAR, LTD., OXFORDSHIRE, ENGLAND, THAT ITS CONTRACT WITH THE BONNEVILLE POWER ADMINISTRATION (BPA), DEPARTMENT OF THE INTERIOR, BE DECLARED NULL AND VOID; THAT THE FIRM BE RELIEVED OF ANY OBLIGATION FOR THE EXCESS REPROCUREMENT COST ASSESSMENT; AND THAT IT BE PAID UNDER QUANTUM MERUIT FOR CERTAIN ITEMS ALREADY DELIVERED AND ACCEPTED BY THE GOVERNMENT. LINEGEAR CONTENDS THAT ITS BID WAS NONRESPONSIVE AND, THEREFORE, A LEGALLY BINDING CONTRACT WAS NOT CONSUMMATED, WHILE INTERIOR'S POSITION IS THAT THE BID CONTAINED ONLY MINOR DEVIATIONS FROM THE SPECIFICATIONS AND, THEREFORE, A VALID CONTRACT RESULTED. UNDER THE DISPUTES CLAUSE OF THE PURPORTED CONTRACT, QUESTIONS OF FACT ARE TO BE DETERMINED BY THE INTERIOR BOARD OF CONTRACT APPEALS AND SUCH DETERMINATIONS ARE CONCLUSIVE IF THEY MEET THE STANDARDS OF REVIEW OF THE WUNDERLICH ACT, 41 U.S. C. 321-322. SINCE THE SAME FACTS ARE DETERMINATIVE OF BOTH THE VALIDITY OF THE DEFAULT TERMINATION AND THE VALIDITY OF THE CONTRACT, A DECISION AT THIS TIME WOULD BE PREMATURE AND UNWARRANTED. ACCORDINGLY, THE COMP. GEN. MUST DECLINE TO RULE ON LINEGEAR'S REQUEST FOR RELIEF.

TO STEPTOE & JOHNSON:

FURTHER REFERENCE IS MADE TO YOUR REQUEST ON BEHALF OF LINEGEAR, LTD., OXFORDSHIRE, ENGLAND, THAT CONTRACT NO. 14-03-9068A, WITH THE BONNEVILLE POWER ADMINISTRATION (BPA), DEPARTMENT OF THE INTERIOR, BE DECLARED NULL AND VOID; THAT THE FIRM BE RELIEVED OF ANY OBLIGATION FOR AN EXCESS REPROCUREMENT COST ASSESSMENT OF ABOUT $11,000; AND THAT IT BE PAID UNDER QUANTUM MERUIT FOR CERTAIN ITEMS ALREADY DELIVERED AND ACCEPTED BY THE GOVERNMENT.

THE SUBJECT CONTRACT WAS AWARDED TO LINEGEAR ON JUNE 30, 1969, IN THE AMOUNT OF $20,266.20 FOR FIVE GROUPS OF DISCONNECT TYPE AIR SWITCHES, PURSUANT TO INVITATION FOR BIDS NO. 9068, ISSUED ON MAY 16, 1969, AND OPENED ON JUNE 10, 1969. THE INVITATION SOLICITED BIDS ON 15KV THROUGH 230KV AIR SWITCHES IN ACCORDANCE WITH REFERENCED BPA SPECIFICATIONS, AND INCLUDED A REQUIREMENT FOR THE SUBMISSION OF DESCRIPTIVE LITERATURE AND DATA, INCLUDING OUTLINE DRAWINGS, "TO ESTABLISH, FOR THE PURPOSES OF OFFER EVALUATION AND AWARD, DETAILS OF THE PRODUCTS THE OFFEROR PROPOSES TO FURNISH AS TO DESIGN, MATERIALS, COMPONENTS, AND PERFORMANCE CHARACTERISTICS." LINEGEAR'S BID INCLUDED "TENDER DRAWINGS" FOR EACH OF THE SIX GROUPS OF SWITCHES IT BID ON. ITS BID ON THE 15KV THROUGH 115KV SWITCHES WAS ACCEPTED. HOWEVER, BY LETTER DATED JULY 1, 1969, THE CONTRACTING OFFICER ADVISED LINEGEAR THAT ITS BID ON THE 230KV SWITCHES WAS REJECTED AS NONRESPONSIVE BECAUSE THE TOP SURFACE OF THE SWITCH BASE WAS NOT FLAT AS REQUIRED.

SUBSEQUENT TO AWARD, AS REQUIRED BY SECTION 303 OF THE APPLICABLE SPECIFICATION, LINEGEAR SUBMITTED FOR APPROVAL DRAWINGS FOR FABRICATION PURPOSES. ONE OF THE DRAWINGS WAS APPROVED, AND THE OTHER TWO RETURNED FOR CORRECTION. THESE DRAWINGS WERE SUBSEQUENTLY RESUBMITTED AND APPROVED. ON SEPTEMBER 29, 1969, ELEVEN DRAWINGS WERE SUBMITTED. ALL BUT ONE OF THESE DRAWINGS WERE DISAPPROVED AND RETURNED ON OCTOBER 24, 1969. ON OCTOBER 29, 1969, THE PREVIOUS APPROVAL OF TWO DRAWINGS WAS WITHDRAWN. ON OCTOBER 23, 1969, LINEGEAR WAS ADVISED THAT ITS PRODUCT SCHEDULE HAD NOT BEEN RECEIVED WHEN DUE, ITEMS 3A AND 29A HAD NOT BEEN DELIVERED WHEN DUE, AND COMPLETE TEST DATA HAD NOT BEEN RECEIVED. ON NOVEMBER 3, 1969, LINEGEAR WAS NOTIFIED OF DISCREPANCIES AND OMISSIONS IN DESIGN TEST REPORTS. BY LETTER DATED NOVEMBER 12, 1969, CONFIRMING AN EARLIER TELEPHONE CALL, LINEGEAR ADVISED BPA THAT ITS PERFORMANCE WOULD BE DELAYED DUE TO THE NECESSITY TO REDESIGN TO BPA'S STRUCTURAL DIMENSIONS AND DIFFICULTY IN OBTAINING TIME IN AN ENVIRONMENTAL CHAMBER FOR ICE TESTING. THEREAFTER, LINEGEAR SUBMITTED A REVISED PRODUCTION SCHEDULE.

BY LETTER DATED DECEMBER 19, 1969, THE CONTRACTING OFFICER ACCEPTED THE REVISED SCHEDULE FOR THREE ITEMS AND TERMINATED THE REMAINDER OF THE CONTRACT FOR DEFAULT. ALTHOUGH THE DEFAULT TERMINATION WAS APPEALED TO THE INTERIOR BOARD OF CONTRACT APPEALS, THE BOARD DISMISSED THE APPEAL WITHOUT PREJUDICE TO ITS REINSTATEMENT FOLLOWING OUR DECISION. IN THIS CONNECTION, THE BOARD NOTED THAT ITS JURISDICTION PRESUPPOSES THE EXISTENCE OF A VALID CONTRACT AND OUR OFFICE HAD BEEN REQUESTED TO RULE ON THIS QUESTION.

IT IS LINEGEAR'S CONTENTION THAT ITS BID WAS NONRESPONSIVE AND, THEREFORE, A LEGALLY BINDING CONTRACT WAS NOT CONSUMMATED. IT IS CONTENDED THAT THE BID WAS NONRESPONSIVE BECAUSE THE "TENDER DRAWINGS" SUBMITTED WITH ITS BID CONTAINED SIGNIFICANT DEVIATIONS FROM THE SPECIFICATIONS. IN THIS CONNECTION, IT IS POINTED OUT THAT SECTION 305.B OF THE SPECIFICATIONS PROVIDES:

"B. UNLESS OTHERWISE SPECIFIED IN PART 200 - SPECIFIC TECHNICAL REQUIREMENTS, THE GENERAL ARRANGEMENT AND DIMENSIONAL DATA OF A SWITCH SHALL BE AS SHOWN ON ITS APPLICABLE DRAWING OR DRAWINGS. HOWEVER, AN OFFER PROPOSING A SWITCH DIFFERING SLIGHTLY IN DESIGN FROM THAT SHOWN ON THE DRAWING WILL BE CONSIDERED FOR ACCEPTANCE, PROVIDED THE BASE, THE BASE MOUNTING-HOLE DIMENSIONS, THE MINIMUM OPEN GAP (METAL TO METAL) SPACING, AND TERMINAL PAD REQUIREMENTS ARE AS REQUIRED EITHER ON THE DRAWING OR ELSEWHERE HEREIN."

CONTRARY TO THIS SPECIFIC WARNING, YOU CONTEND THAT THE TENDER DRAWINGS CONTAINED DEVIATIONS IN THE BASE AND BASE MOUNTING-HOLE DIMENSIONS AS FOLLOWS:

"1. THE BPA SPECIFICATION FOR THE 15KV SWITCHES REQUIRED A WIDTH BETWEEN THE MOUNTING HOLES OF 3",8/. IN CONTRAST TO THIS REQUIREMENT, THE TENDER DRAWING NO. M148/B9/ CLEARLY SHOWED A WIDTH OF 6-1/2" BETWEEN THE MOUNTING HOLES. IN ADDITION, THE TENDER DRAWING'S 6-1/2" WIDTH BETWEEN THE MOUNTING HOLES ALSO MEANT THAT LINEGEAR'S SWITCH WOULD NOT COMPLY WITH THE OVERALL BASE WIDTH REQUIREMENT OF 6" SET FORTH IN THE BPA SPECIFICATIONS,10/.

"2. THE BPA SPECIFICATION FOR THE 34.5KV SWITCHES REQUIRED A WIDTH BETWEEN THE MOUNTING HOLES OF 3",11/. IN CONTRAST TO THIS REQUIREMENT, LINEGEAR'S TENDER DRAWING NO. M160/B12/ SHOWED A WIDTH BETWEEN MOUNTING HOLES OF 7". IT IS THEREFORE ALSO CLEAR IN THIS CASE THAT, SINCE THE WIDTH BETWEEN MOUNTING HOLES WAS 7" IN THE LINEGEAR TENDER DRAWING, THE BPA SPECIFICATION REQUIREMENT OF A 6" OVERALL BASE WIDTH WOULD NOT BE MET.

"3. THE BPA SPECIFICATION FOR THE 69 KV SWITCHES REQUIRED A WIDTH BETWEEN MOUNTING HOLES OF 4",13/. IN CONTRAST TO THIS REQUIREMENT, LINEGEAR'S TENDER DRAWING NO. M125/C14/ SHOWED A WIDTH OF 6-1/2" BETWEEN MOUNTING HOLES. ONCE AGAIN IT IS CLEAR THAT THE SWITCH CONTEMPLATED BY THE TENDER DRAWING COULD NOT POSSIBLY COMPLY WITH THE BPA OVERALL BASE WIDTH REQUIREMENT OF 6".

"4. THE BPA SPECIFICATION FOR THE 115KV SWITCHES REQUIRED AN OVERALL LENGTH OF BASE OF 8'0",15/. IN CONTRAST TO THIS REQUIREMENT, LINEGEAR'S TENDER DRAWING NO. 169/A16/ SHOWED AN OVERALL LENGTH OF 7'5". MOREOVER THE BPA SPECIFICATION REQUIRED A WIDTH BETWEEN THE MOUNTING HOLES OF A MINIMUM OF 9" AND A MAXIMUM OF 10" WHEREAS THE LINEGEAR DRAWING SHOWED A WIDTH OF 8"."

YOU ALSO POINT OUT THAT THE DRAWINGS WHICH WERE SUBMITTED FOR APPROVAL SUBSEQUENT TO AWARD WERE BASED ON AND CONSISTENT WITH THE TENDER DRAWINGS. ALTHOUGH THESE DRAWINGS CONTAINED THE SAME DEVIATIONS, THEY WERE INITIALLY APPROVED AND SOME OF THE ITEMS FABRICATED. ACCORDING TO LINEGEAR, IT WAS NOT UNTIL OCTOBER 24, 1969, MORE THAN FOUR MONTHS AFTER AWARD, WHEN TEN DRAWINGS WERE DISAPPROVED, THAT IT BECAME AWARE THAT THE DESIGN AS SHOWN IN ITS TENDER DRAWINGS WOULD NOT BE ACCEPTABLE AND REDESIGN WOULD BE NECESSARY. IN THIS CONNECTION, IT IS POINTED OUT THAT SINCE THE CONTRACTING OFFICER REJECTED ITS BID ON THE 230KV SWITCH APPARENTLY ON THE BASIS OF ITS NONCONFORMING TENDER DRAWING, HE SHOULD HAVE NOTICED THE DEVIATIONS IN THE TENDER DRAWINGS FOR THE OTHER SWITCHES. FURTHER, YOU CONTEND THAT THE COMMENTS ON THE DISAPPROVED DRAWINGS SHOW THAT THEY WERE REJECTED BECAUSE OF THE DEVIATIONS IN DIMENSIONS NOTED ABOVE.

INITIALLY YOU URGED THAT LINEGEAR'S BID WAS NONRESPONSIVE BECAUSE THE TENDER DRAWINGS SHOWED THAT THE "BASE OF THE SWITCHES DID NOT CONFORM TO DIMENSIONAL STANDARDS AND DID NOT CONTAIN A FLAT SURFACE AS REQUIRED BY SPECIFICATION." THE ADMINISTRATIVE REPLY TO THIS CONTENTION CONCLUDED THAT "ALL THE MATERIAL OFFERED BY LINEGEAR AT THE TIME ITS PROPOSAL WAS SUBMITTED IDENTIFIED ITS PRODUCT AS FULLY CONFORMING TO THE SPECIFICATIONS, EXCEPT FOR THE 230KV SWITCH, WHICH ITEM WAS REJECTED BY BPA AS NONRESPONSIVE BECAUSE OF ITS CYLINDRICAL BASE." BOTH YOUR LETTER AND THE ADMINISTRATIVE REPLY THERETO WERE CONCERNED ONLY WITH THE QUESTION OF THE TUBULAR BASE AND DID NOT CONSIDER THE MATTER OF DIMENSIONS. IN A LETTER DATED JUNE 10, 1971, YOU CLARIFIED A MISUNDERSTANDING AS TO THE NONCONFORMING FEATURE OF THE 15KV THROUGH 115KV SWITCHES. THE ACTUAL DEVIATIONS IN THE TENDER DRAWINGS FOR THOSE SWITCHES RELATED TO THE BASE DIMENSIONS, AS SPECIFIED HERETOFORE, RATHER THAN TO THE SHAPE OF THE BASE. A COPY OF THIS LETTER WAS FORWARDED TO THE APPROPRIATE ADMINISTRATIVE OFFICE AND ON JULY 6, 1971, WE WERE INFORMALLY ADVISED THAT NO FURTHER COMMENT WOULD BE MADE.

HOWEVER, BY LETTER DATED NOVEMBER 24, 1971, WE ASKED THE DEPARTMENT OF THE INTERIOR TO ADVISE WHETHER LINEGEAR'S WORKING DRAWINGS WERE DISAPPROVED BECAUSE OF DEVIATIONS IN THE BASE AND MOUNTING-HOLE DIMENSIONS FROM THE CONTRACT SPECIFICATIONS AND WHETHER ITS TENDER DRAWINGS CONTAINED THE SAME DEVIATIONS. A MEMORANDUM FROM THE CONTRACTING OFFICER, COPY ENCLOSED, FORWARDED IN RESPONSE TO OUR REQUEST ADVISED THAT 10 OF THE SUBMITTED WORKING DRAWINGS WERE NOT APPROVED FOR A VARIETY OF REASONS, INCLUDING "COMMENTS ON PHYSICAL CLEARANCE OF OPERATING RODS, HEIGHT OF OPERATING HANDLE FROM GROUND, POLE LENGTH AND HEIGHT, BASE (AND) MOUNTING HOLD DIMENSIONS, TYPE OF INSULATOR, AND GROUNDING BRAID REQUIREMENTS." ALSO REPORTED THAT THE "TENDER DRAWINGS" CONTAINED DEVIATIONS AS TO BASE AND MOUNTING-HOLE DIMENSIONS AND, IN ADDITION, THAT THE "MATTER OF CHANNEL BASE LENGTH AND MOUNTING HOLES IS A MINOR DETAIL WHICH COULD BE EASILY CHANGED DURING THE DRAWING APPROVAL PROCESS."

WHERE, AS HERE, A CONTRACT IS REQUIRED BY STATUTE TO BE AWARDED PURSUANT TO FORMAL ADVERTISING, A BID WHICH VARIES MATERIALLY FROM THE SPECIFICATIONS MUST BE REJECTED. SEE 40 COMP. GEN. 447 (1961), AND CASES CITED. FURTHERMORE, AS NOTED IN THE FOREGOING DECISION, A CONTRACT AWARDED ON A BID CONTAINING MATERIAL VARIANCES FROM THE INVITATION HAS NO VALIDITY. IN 40 COMP. GEN. 447, SUPRA, WE RELIED ON UNITED STATES V ELLICOTT, 223 U.S. 524 (1911), AND STATED THE FOLLOWING, WHICH IS APPLICABLE TO THE SITUATION HERE:

"IN THE CASE OF UNITED STATES V. ELLICOTT, SUPRA, AN INVITATION HAD BEEN ISSUED INCORPORATING CERTAIN SPECIFICATIONS. THE LOW BID AS SUBMITTED CONTAINED EXCEPTIONS TO THOSE SPECIFICATIONS. AFTER CORRESPONDENCE BETWEEN THE CONTRACTING OFFICER AND THE BIDDER AS TO THE INTENT OF THE EXCEPTIONS, A CONTRACT WAS ENTERED INTO INCORPORATING THE EXCEPTIONS. AFTER AWARD, THE CONTRACTOR SUBMITTED DETAILED DRAWINGS WHICH, IT WAS DETERMINED, DEPICTED A PRODUCT MATERIALLY DEFICIENT FROM THE VIEWPOINT OF THE GOVERNMENT'S NEEDS. AFTER CANCELLATION, THE CONTRACTOR SUED FOR BREACH OF CONTRACT. THE SUPREME COURT HELD THAT IF THE ORIGINAL SPECIFICATIONS WERE TO BE FOLLOWED THERE WAS NO CONTRACT, SINCE THE BIDDER HAD NOT OFFERED SUCH PERFORMANCE, AND IF THE MODIFICATIONS OFFERED BY THE BIDDER WERE TO BE REGARDED AS HAVING BEEN ADOPTED THERE WAS NO CONTRACT '*** SINCE IT WOULD THEN COME TO PASS THAT THE CONTRACT WAS SO ERRONEOUS TO AND DESTRUCTIVE OF THE ADVERTISED PROPOSALS AS TO NULLIFY THEM, AND THEREFORE CAUSE IT TO RESULT THAT THE CONTRACT WAS ONE MADE WITHOUT THE COMPETITIVE BIDDING WHICH WAS NECESSARY TO GIVE IT VALIDITY.'"

IN THE INSTANT CASE, YOU CONTEND THAT LINEGEAR'S BID WAS NONRESPONSIVE BECAUSE THE TENDER DRAWINGS CONTAINED MATERIAL DEVIATIONS FROM THE ADVERTISED SPECIFICATIONS AND, THEREFORE, NO VALID CONTRACT WAS CONSUMMATED. ON THE OTHER HAND, IT IS INTERIOR'S POSITION THAT WHILE THE TENDER DRAWINGS CONTAINED CERTAIN DEVIATIONS FROM THE SPECIFICATIONS, THEY WERE MINOR AND A VALID CONTRACT RESULTED. FURTHER, IT IS THE CONTRACTING AGENCY'S POSITION THAT IN ADDITION TO CONTAINING THE MINOR DEVIATIONS INCLUDED IN THE TENDER DRAWINGS, THE WORKING DRAWINGS CONTAINED OTHER MATERIAL DEVIATIONS FROM THE SPECIFICATIONS WHICH RESULTED IN THEIR DISAPPROVAL. THE RECORD DOES NOT INDICATE WHETHER THE LATTER DEVIATIONS WERE ALSO INCLUDED IN THE TENDER DRAWINGS. RESOLUTION OF THESE FACTUAL DISPUTES IS ESSENTIAL TO A DETERMINATION OF THE EXISTENCE OF A CONTRACT AND THE TERMS THEREOF.

SINCE LINEGEAR UNDERTOOK PERFORMANCE OF THE SUBJECT CONTRACT AND WAS DEFAULTED, WE DO NOT BELIEVE OUR OFFICE IS THE PROPER FORUM TO RESOLVE THE FACTUAL DISPUTES. WHETHER THE DEFAULT TERMINATION WAS VALID WILL NECESSARILY INVOLVE CONSIDERATION OF THE SAME FACTS THAT HAVE BEEN REFERRED TO IN CONNECTION WITH THE QUESTION OF VALIDITY OF THE CONTRACT. UNDER THE DISPUTES CLAUSE OF THE PURPORTED CONTRACT ANY DISPUTE CONCERNING A QUESTION OF FACT ARISING UNDER THE CONTRACT IS TO BE DETERMINED BY THE INTERIOR BOARD OF CONTRACT APPEALS AND SUCH DETERMINATION IS FINAL AND CONCLUSIVE IF IT MEETS THE STANDARDS OF REVIEW OF THE WUNDERLICH ACT, 41 U.S.C. 321-322. ALSO, IN THIS CONNECTION SEE VITRO CORP. OF AMERICA, ASBCA NO. 14448, JANUARY 21, 1972.

SINCE THE SAME FACTS ARE DETERMINATIVE OF BOTH THE VALIDITY OF THE DEFAULT TERMINATION AND THE VALIDITY OF THE CONTRACT, AND IN VIEW OF THE FINALITY WHICH ATTACHES TO BOARD DETERMINATIONS OF FACTUAL ISSUES, WE BELIEVE THAT ANY DECISION BY OUR OFFICE AT THIS TIME WOULD BE PREMATURE AND UNWARRANTED. ACCORDINGLY, WE MUST DECLINE TO RULE ON YOUR REQUEST FOR RELIEF.