B-173519, DEC 1, 1971

B-173519, DEC 1, 1971

BID PROTEST - DELAYED INSTALLATION - OPTION - CONTRACT SPECIFICATIONS AFFIRMING PRIOR DECISION WHICH DENIED PROTEST BY SCHMID-DEWLAND ASSOCIATES' WASHINGTON REPRESENTATIVE, COOPER EQUIPMENT COMPANY, AGAINST AWARD OF A CONTRACT TO DISTRICT EQUIPMENT CORPORATION UNDER AN IFB ISSUED BY THE DISTRICT OF COLUMBIA GOVERNMENT FOR 72 OVENS TO BE INSTALLED IN SEVERAL PUBLIC SCHOOLS. THERE WAS NO FIXED DATE FOR INSTALLATION SPECIFIED IN THE IFB AND THE OVENS WERE NOT PROMPTLY INSTALLED DUE TO THE NEED FOR PUBLIC SCHOOL PERSONNEL TO REMOVE WALLS, ETC., TO ACCOMODATE THE OVENS. FURTHER, WHILE THE WORD "OPTION" DOES NOT APPEAR IN THE INCREASE IN QUANTITIES CLAUSE, THE PROVISION EFFECTIVELY GAVE THE DISTRICT GOVERNMENT AN OPTION TO PURCHASE AN UNSTATED NUMBER OF ADDITIONAL OVENS AND SINCE THE AMOUNT OF ADDITIONAL FUNDS THAT MIGHT BECOME AVAILABLE WAS UNKNOWN, IT IS UNDERSTANDABLE WHY NO QUANTITY LIMITATION WAS INCLUDED. FINALLY, WHILE THE IFB SPECIFIED DUTCH-TYPE DOORS, THE GOVERNMENT WAS NOT PRECLUDED FROM ACCEPTING SUPERIOR EQUIPMENT (FRENCH-TYPE DOORS) AT NO INCREASE IN THE CONTRACT PRICE. IN THE CIRCUMSTANCES, THE PROTEST MUST BE DENIED.

TO SCHMID-DEWLAND ASSOCIATES:

WE REFER TO YOUR LETTERS OF SEPTEMBER 17 AND 21 AND NOVEMBER 8, 1971, RELATING TO CONTRACT NO. S-22390, WHICH THE GOVERNMENT OF THE DISTRICT OF COLUMBIA AWARDED TO DISTRICT EQUIPMENT CORPORATION FOR THE FURNISHING OF ELECTRIC OVENS FOR DISTRICT PUBLIC SCHOOLS. A PROTEST BY COOPER EQUIPMENT COMPANY, INC., YOUR REPRESENTATIVE IN WASHINGTON, D.C., AGAINST THE AWARD OF THE CONTRACT WAS DENIED BY OUR DECISION B 173519, SEPTEMBER 27, 1971. THE ISSUES YOU NOW RAISE RELATE PRIMARILY TO THE PERFORMANCE OF THE CONTRACT.

YOU STATE THAT IT WAS YOUR UNDERSTANDING THAT THE OVENS WERE TO BE INSTALLED IN THE SCHOOLS BEFORE SCHOOL OPENING; HOWEVER, A VISIT BY A MEMBER OF YOUR FIRM TO THREE OF THE SCHOOLS IN SEPTEMBER REVEALED THAT THE OVENS HAD BEEN DELIVERED TO THE SCHOOLS BUT HAD NOT BEEN INSTALLED. THE OVENS, YOU FURTHER STATE, DID NOT MEET THE GOVERNMENT SPECIFICATIONS GOVERNING DOOR CONSTRUCTION AND MOTOR ARRANGEMENT, THE QUALITY OF WORKMANSHIP IS POOR, AND THE ELECTRICAL ARRANGEMENTS APPEAR TO BE SHODDY AND POSSIBLY DANGEROUS.

YOU FURTHER STATE THAT IT IS YOUR UNDERSTANDING THAT DUE TO AVAILABILITY OF ADDITIONAL APPROPRIATED MONEYS WHICH WERE REQUIRED TO BE "SPENT BY A SPECIFIC DATE," THE ORIGINAL CONTRACT QUANTITY OF 11 UNITS HAS BEEN INCREASED BY 45 UNITS. SUCH CIRCUMSTANCES, YOU COMMENT, EVIDENCE THAT WHEN MONEY IS APPROPRIATED, THE THEORY IS TO SPEND IT IN A RUSH REGARDLESS OF THE QUALITY OR QUANTITY (OF THE ITEMS) PURCHASED.

FINALLY, YOU REFER TO A GOVERNMENT PROCUREMENT OF DEEP FAT FRYERS, ON WHICH YOU WERE THE LOWEST BIDDER. YOU STATE THAT BOTH YOU AND YOUR SUPPLIER, THE FRYMASTER CORPORATION, WERE NOTIFIED BY THE PROCUREMENT AGENCY INVOLVED THAT PRIOR TO AWARD A PRODUCTION FRYER WOULD BE REQUIRED TO BE COMPLETELY DISASSEMBLED, REASSEMBLED AND TESTED IN THE PRESENCE OF GOVERNMENT REPRESENTATIVES. CONVERSELY, YOU STATE, IN THE INSTANT CASE NO INSPECTION, STANDARDS OR TESTS WERE REQUIRED, AND THE DISTRICT OF COLUMBIA WAS QUITE WILLING TO ACCEPT A PRODUCT WHICH WAS NEVER COMMERCIALLY PROVEN AND WHICH WAS STRICTLY A PROTOTYPE OF THE MANUFACTURER. YOU ACCORDINGLY QUESTION WHAT YOU REGARD AS INCONSISTENCY OF THE REQUIREMENTS OF THE RESPECTIVE PROCUREMENTS.

REFERENCE TO INVITATION FOR BIDS (IFB) 73-134-1-0688-GW/1, PURSUANT TO WHICH CONTRACT NO. S-22390 WAS AWARDED, SHOWS THAT THE FACE SHEET CARRIED A STATEMENT THAT ALL EQUIPMENT SPECIFIED "SHALL BE FURNISHED, DELIVERED, SET UP, COMPLETE AND READY FOR USE AND INSTALLED AS NECESSARY." ITEMS 1 THROUGH 12 COVERED ONE OVEN EACH FOR INSTALLATION IN 12 DIFFERENT SCHOOLS, AND ITEMS 13 THROUGH 17 COVERED A TOTAL QUANTITY OF 24 OVENS TO BE DELIVERED TO A WAREHOUSE. AN INCREASE IN QUANTITIES CLAUSE IN THE SPECIAL CONDITIONS OF THE IFB READ AS FOLLOWS:

"INCREASE IN QUANTITIES: DUE TO THE FACT THAT ADDITIONAL IMPACT AID OR OTHER FEDERAL EDUCATIONAL FUNDS MAY BE ALLOTTED FOR EXPANSION OF VARIOUS PROGRAMS IN THE PUBLIC SCHOOLS, D.C., THE PROCUREMENT OFFICER RESERVES THE RIGHT TO PURCHASE WITHIN ONE HUNDRED EIGHTY (180) DAYS FROM DATE OF AWARD SUCH ADDITIONAL QUANTITIES AS MAY BE REQUIRED AT THE NET PRICES QUOTED. THIS INCREASE IN QUANTITY CLAUSE MAY BE TERMINATED BY THE CONTRACTOR UPON THIRTY (30) DAYS NOTICE IN WRITING TO THE PROCUREMENT OFFICER, D.C."

GENERAL CONDITIONS ON PAGE 2 OF THE IFB INCLUDED THE FOLLOWING INSPECTIONS CLAUSE:

"9. INSPECTIONS: - INSPECTION AND ACCEPTANCE OF MATERIALS OR SUPPLIES WILL BE MADE AFTER DELIVERY AT DESTINATION HEREIN SPECIFIED UNLESS OTHERWISE STATED. IF INSPECTION IS MADE AFTER DELIVERY AT DESTINATION HEREIN SPECIFIED, THE DISTRICT WILL BEAR THE EXPENSE OF INSPECTION EXCEPT FOR THE VALUE OF SAMPLES USED IN CASE OF REJECTION. FINAL INSPECTION SHALL BE CONCLUSIVE EXCEPT AS REGARDS LATENT DEFECTS, FRAUD, OR SUCH GROSS MISTAKES AS AMOUNT TO FRAUD. FINAL INSPECTION AND ACCEPTANCE OR REJECTION OF THE MATERIALS OR SUPPLIES WILL BE MADE AS PROMPTLY AS PRACTICABLE, BUT FAILURE TO INSPECT AND ACCEPT OR REJECT MATERIALS OR SUPPLIES SHALL NOT IMPOSE LIABILITY ON THE DISTRICT FOR SUCH MATERIALS OR SUPPLIES AS ARE NOT IN ACCORDANCE WITH THE SPECIFICATIONS."

SUCH INSPECTIONS ARE IN ADDITION TO THE INSPECTION TO BE PERFORMED BY THE ELECTRICAL ENGINEER FOR THE DISTRICT OF COLUMBIA UNDER THE ELECTRICAL REQUIREMENTS PROVISIONS OF THE IFB, WHICH WERE QUOTED IN OUR DECISION OF SEPTEMBER 27, 1971.

AS TO THE REQUIRED DATE FOR INSTALLATION OF THE OVENS, THE PROCUREMENT OFFICER FOR THE DISTRICT PUBLIC SCHOOLS STRESSES THAT NO FIXED DATE WAS SPECIFIED IN THE IFB AND STATES THAT THE DELAY IN INSTALLING THE OVENS WAS ATTRIBUTABLE IN PART TO THE NEED FOR PUBLIC SCHOOL PERSONNEL TO REMOVE WALLS, DOORS AND EQUIPMENT TO ACCOMMODATE THE OVENS.

WITH RESPECT TO THE TOTAL QUANTITY OF OVENS ACTUALLY ORDERED UNDER THE CONTRACT, THE DISTRICT PROCUREMENT OFFICE ADVISES THAT AT THE TIME THE IFB WAS ISSUED FUNDS WERE AVAILABLE FOR ONLY THE 36 UNITS SPECIFIED, BUT IT WAS ANTICIPATED THAT ADDITIONAL FUNDS WOULD BECOME AVAILABLE FOR THE PURCHASE OF ADDITIONAL OVENS NEEDED FOR THE SCHOOL LUNCH PROGRAM. THE INCREASE IN QUANTITIES CLAUSE WAS THEREFORE INCLUDED IN THE IFB TO COVER SUCH CONTINGENCY. AFTER THE OPENING OF BIDS ON JUNE 28, THE PROCUREMENT OFFICE FURTHER ADVISES, ADDITIONAL FUNDS WERE PROVIDED BY THE UNITED STATES DEPARTMENT OF AGRICULTURE, WHICH WERE SUFFICIENT TO COVER THE PROCUREMENT OF 36 ADDITIONAL OVENS BUT WHICH WERE REQUIRED TO BE OBLIGATED FOR EXPENDITURE NO LATER THAN JUNE 30, THE LAST DAY OF THE 1971 FISCAL YEAR. THE DISTRICT ACCORDINGLY INVOKED THE INCREASE IN QUANTITIES CLAUSE AND ISSUED TO THE CONTRACTOR ON JUNE 30 A PURCHASE REQUISITION COVERING 36 OVENS IN ADDITION TO THE BASIC QUANTITY OF 36 UNITS. THE PROCUREMENT OFFICE HAS ADVISED OUR OFFICE THAT NO ADDITIONAL OVENS WILL BE PROCURED UNDER THE CONTRACT.

WHILE THE TERM "OPTION" DOES NOT APPEAR IN THE INCREASE IN QUANTITIES CLAUSE, THE EFFECT OF THE PROVISION WAS TO GIVE THE DISTRICT OF COLUMBIA AN OPTION TO PURCHASE AN UNSTATED NUMBER OF ADDITIONAL OVENS DEPENDENT UPON THE AMOUNT OF ADDITIONAL FUNDS MADE AVAILABLE FOR THE PROCUREMENT OF THE OVENS. WE HAVE STATED THAT THE QUANTITIES COVERED BY AN OPTION, AS WELL AS THE TIME WITHIN WHICH THE OPTION MAY BE EXERCISED, SHOULD BE LIMITED. 41 COMP. GEN. 682 (1962). IN THIS CASE, SINCE THE DISTRICT APPARENTLY HAD NO INFORMATION AS TO THE AMOUNT OF ADDITIONAL FUNDS WHICH MIGHT BE MADE AVAILABLE FOR THE OVENS NEEDED FOR THE SCHOOL LUNCH PROGRAM UNTIL AFTER THE BIDS HAD BEEN OPENED UNDER THE IFB, IT IS UNDERSTANDABLE WHY NO QUANTITY LIMITATION WAS INCLUDED IN THE INCREASE IN QUANTITIES CLAUSE. ACCORDINGLY, AND SINCE TIME DID NOT PERMIT THE USE OF COMPETITIVE ADVERTISING FOR THE ADDITIONAL OVENS, THE OPTION BEING NECESSARILY EXERCISED WITHIN TWO DAYS AFTER THE OPENING OF THE BIDS, WE ARE UNABLE TO CONCLUDE THAT SUCH ACTION WAS NOT IN THE INTEREST OF THE GOVERNMENT.

CONCERNING YOUR APPRAISAL OF THE OVENS WHICH YOU CLAIM YOUR REPRESENTATIVE OBSERVED IN SEPTEMBER AT THREE OF THE DISTRICT SCHOOLS, THE PROCUREMENT OFFICER FOR THE SCHOOLS REPORTS THAT ALL OF THE OVENS DELIVERED AND INSTALLED BY THE CONTRACTOR HAVE BEEN INSPECTED ON THREE OCCASIONS, THE LATEST OF WHICH WAS OCTOBER 27, AND THE OVENS MEET THE CONTRACT SPECIFICATIONS. AS TO THE STYLE OF OVEN DOORS, THE PROCUREMENT OFFICER FOR THE DISTRICT STATES THAT DUTCH DOORS WERE SPECIFIED IN THE IFB BECAUSE THEY ARE LESS EXPENSIVE THAN FRENCH-TYPE DOORS, BUT THE DISTRICT ACCEPTED OVENS WITH FRENCH-TYPE DOORS FROM THE CONTRACTOR AT NO INCREASE IN THE CONTRACT PRICE.

THE PROCUREMENT RECORDS SHOW THAT THE CONTRACTOR TOOK NO EXCEPTION TO THE IFB REQUIREMENT FOR DUTCH-TYPE OVEN DOORS AND THAT CATALOG MATERIAL ON THE CONTRACTOR'S OVENS SHOWS THAT THEY ARE EQUIPPED WITH EITHER DUTCH-TYPE OR FRENCH-TYPE DOORS. THERE IS NO QUESTION, THEREFORE, AS TO THE RESPONSIVENESS OF THE CONTRACTOR'S BID. RATHER, THERE IS FOR DETERMINATION WHETHER THE DISTRICT IS REQUIRED TO DEMAND THAT THE CONTRACTOR FURNISH OVENS WITH DUTCH-TYPE DOORS AS ADVERTISED IN THE IFB AND OFFERED IN THE CONTRACTOR'S LOW BID.

WHILE A CONTRACTOR WHO FOR HIS OWN CONVENIENCE FURNISHES TO THE GOVERNMENT EQUIPMENT WHICH NOT ONLY MEETS BUT EXCEEDS THE CONTRACT REQUIREMENTS IS NOT ENTITLED TO ADDITIONAL COMPENSATION, THE GOVERNMENT IS NOT PRECLUDED FROM ACCEPTING THE SUPERIOR EQUIPMENT, SO LONG AS THE EQUIPMENT EXCEEDS THE GOVERNMENT'S STATED NEEDS, AT NO ADDITIONAL COST. 36 COMP. GEN. 469 (1956). ABSENT ANY PAYMENT BY THE DISTRICT TO THE CONTRACTOR OF ANY INCREASE IN THE CONTRACT PRICE INCIDENT TO THE FURNISHING OF THE OVENS EQUIPPED WITH FRENCH-TYPE DOORS, WE SEE NO LEGAL OBJECTION TO THE ACCEPTANCE BY THE DISTRICT OF SUCH OVENS FROM THE CONTRACTOR.

WITH REGARD TO THE DEEP FAT FRYER PROCUREMENT, THE DISTRICT REPORTS THAT IT IS UNABLE TO IDENTIFY ANY SUCH PROCUREMENT FROM ITS RECORD. THE NUMBER 400-72-B-0198 CITED IN YOUR LETTER OF NOVEMBER 8, 1971, HOWEVER, INDICATES THAT THE PROCUREMENT WAS CONDUCTED BY THE DEFENSE SUPPLY AGENCY, RICHMOND, VIRGINIA. SINCE EACH GOVERNMENT CONTRACTING AGENCY HAS PRIMARY RESPONSIBILITY FOR DETERMINING ITS OWN MINIMUM NEEDS AND FOR DRAFTING SPECIFICATIONS TO REFLECT SUCH NEEDS, IT IS APPARENT THAT THE DETERMINATION BY THE DEFENSE SUPPLY AGENCY OF ITS OWN REQUIREMENTS FOR DEEP FAT FRYERS IS NOT BINDING ON THE DISTRICT OF COLUMBIA PROCUREMENT OFFICE. IN ANY EVENT, FROM THE TERMS OF THE IFB IN QUESTION, AS DISCUSSED IN OUR DECISION OF SEPTEMBER 27 AND HEREIN, IT IS APPARENT THAT ALL OF THE OVENS WHICH THE DISTRICT IS PROCURING UNDER CONTRACT NO. S-22390 ARE SUBJECT TO INSPECTION BY THE DISTRICT NOT ONLY TO ASSURE COMPLIANCE WITH THE ADVERTISED SPECIFICATIONS BUT ALSO TO ASSURE PROPER AND SAFE PERFORMANCE WHEN INSTALLED UNDER REQUIREMENTS IMPOSED BY THE ELECTRICAL CODE OF THE DISTRICT OF COLUMBIA.

IN LINE WITH THE FOREGOING, OUR DECISION OF SEPTEMBER 27 RESPECTING THE VALIDITY OF THE CONTRACT IS AFFIRMED, AND WE SEE NO VALID BASIS ON WHICH TO QUESTION THE PERFORMANCE OF THE CONTRACT.