B-178718, FEB 28, 1974

B-178718, FEB 28, 1974

1. CONTENTION THAT IFB INSPECTION AND ACCEPTANCE CLAUSE PROVIDING FOR EQUIPMENT TO PERFORM IN ACCORDANCE WITH SPECIFICATIONS MAKES LITTLE SENSE BECAUSE THERE ARE NO SPECIFICATIONS, ONLY SALIENT CHARACTERISTICS IN IFB, IS UNFOUNDED SINCE SALIENT CHARACTERISTICS ARE THE SPECIFICATIONS IN IFB. 2. ASSERTION THAT IFB INSPECTION AND ACCEPTANCE CLAUSE DELAYING PAYMENT UNTIL EQUIPMENT HAS OPERATED FOR 30 CONSECUTIVE DAYS IS "WIDE OPEN" IS WITHOUT MERIT, SINCE IT IS NOT UNREASONABLE TO DELAY PAYMENT UNTIL TEST PERIOD IS COMPLETED AND CLAUSE WOULD DELAY PAYMENT FOR NO MORE THAN TIME PROVIDED. 3. CONTENTION THAT CONFUSION IS CREATED BY REFERENCE IN INSPECTION AND ACCEPTANCE CLAUSE IN IFB SCHEDULE TO INSPECTION CLAUSE IN GENERAL PROVISIONS IN VIEW OF PRECEDENCE CLAUSE OVER GENERAL PROVISIONS IN THE EVENT OF AN INCONSISTENCY IS NOT SUPPORTABLE, SINCE THE CLAUSES ARE NOT IN CONFLICT. 4. CONTRACTING AGENCY HAS NOT ABUSED DISCRETION IN PROVIDING IN IFB INSPECTION AND ACCEPTANCE CLAUSE DELAYING PAYMENT UNTIL EQUIPMENT HAS OPERATED FOR 30 CONSECUTIVE DAYS, SINCE COMPLEXITY AND DELICACY OF EQUIPMENT SEEMS TO WARRANT EXTENDED TESTING UNDER ACTUAL USE CONDITIONS.

TO PARTICLE DATA, INC.:

ON MAY 25, 1973, INVITATION FOR BIDS NIH-73B-(SS)-408 (IFB -408) WAS ISSUED BY THE NATIONAL INSTITUTES OF HEALTH, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, FOR A "PARTICLE COUNTER, FOR BLOOD CELL COUNTING AND ANALYSIS." THE COULTER ELECTRONICS MODEL ZF "OR EQUAL" WAS SPECIFIED. ON JANUARY 31, MAY 25, AND JUNE 4, 1973, INVITATIONS FOR BIDS NIH-73B-(SS)-203 (IFB -203), NIH-73B-(SS)-400 (IFB -400), AND NIH-73B-(SS) -423 (IFB -423) WERE ISSUED RESPECTIVELY. EACH OF THESE SOLICITATIONS SPECIFIED A COULTER ELECTRONICS MODEL ZBI PARTICLE COUNTER "OR EQUAL."

ALL THE SOLICITATIONS WERE PROTESTED BEFORE AWARD BY PARTICLE DATA, INC. IN EACH CASE, EXCEPT IFB -408, PARTICLE DATA PROTESTED AMONG OTHER CONTENTIONS THAT THE SPECIFICATIONS WERE UNDULY RESTRICTIVE. IN IFB 408, THE ONLY ISSUE RAISED BY THE PROTESTANT RELATED TO THE "INSTALLATION AND ACCEPTANCE CLAUSE" (I AND A CLAUSE).

ON NOVEMBER 28, 1973, THERE WAS A CONFERENCE OF REPRESENTATIVES OF OUR OFFICE AND ALL INTERESTED PARTIES TO DISCUSS THE VARIOUS TECHNICAL POINTS RAISED BY PARTICLE DATA IN RELATION TO THE SOLICITATIONS SPECIFYING THE COULTER MODEL ZBI. AT THAT TIME, NIH WAS REQUESTED TO FURNISH ADDITIONAL INFORMATION REGARDING THE COULTER ZBI MODEL AND THE PARTICLE COUNTER THAT PARTICLE DATA CLAIMS IS EQUAL. THAT INFORMATION DOES NOT RELATE TO THE ISSUES RAISED IN THE PROTEST ON IFB -408. THEREFORE, IN ORDER TO AVOID FURTHER DELAY IN THE AWARD OF A CONTRACT UNDER IFB -408, THE PROTEST ON THAT SOLICITATION ONLY WILL BE DECIDED AT THIS TIME.

THE "I AND A CLAUSE" IN IFB -408 PROVIDED:

"THE CONTRACTOR SHALL AFTER INSTALLATION OF THE EQUIPMENT CONDUCT TESTS NECESSARY TO DEMONSTRATE TO THE PROJECT OFFICERS THAT THE COUNTER IS IN CONFORMANCE WITH ALL THE REQUIREMENTS STATED IN THE SPECIFICATIONS. THIS DEMONSTRATION SHALL BE WITHIN THE DELIVERY TIME SPECIFIED IN THE CONTRACT. IN ADDITION, THE EQUIPMENT MUST OPERATE IN CONFORMANCE WITH THE SPECIFICATIONS FOR A PERIOD OF NOT LESS THAN 30 CONSECUTIVE DAYS PRIOR TO THE FINAL ACCEPTANCE AND THE AUTHORIZATION FOR PAYMENT BY THE GOVERNMENT. CONSECUTIVE DAYS SHALL HAVE THE MEANING OF CALENDAR DAYS BETWEEN THE HOURS 8:30 A.M. TO 5:00 P.M., EXCLUDING SATURDAYS, SUNDAYS AND LEGAL HOLIDAYS. IN THE EVENT OF DOWN-TIME OF ANY PART OF THE COUNTER WITHIN THIS 30 DAYS, THE PROVISION OF SUBPARAGRAPH (B) OF CLAUSE NO. 5 ENTITLED INSPECTION OF THE GENERAL PROVISIONS, STANDARD FORM 32 SHALL BE INVOKED.

"ANY DISCOUNT OFFERED UNDER THE PROVISIONS OF PARAGRAPH 9 ENTITLED DISCOUNTS OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS, STANDARD FORM 33A, THE TIME WILL BE COMPUTED FROM DATE OF FINAL ACCEPTANCE OF THE COUNTER BY THE GOVERNMENT AS DEFINED IN THE PRECEDING PARAGRAPH SPECIFIED HEREIN OR FROM DATE OF ACCEPTANCE BY THE GOVERNMENT OF THE INSTRUCTIONS MANUALS IF THE LATTER DATE IS LATER THAN THE FINAL ACCEPTANCE DATE."

PARTICLE DATA, IN ITS LETTER OF JUNE 12, 1973, STATED THREE MAJOR OBJECTIONS TO THE CLAUSE. FIRST IT STATED THAT THE CLAUSE "FAILS TO MAKE TOO MUCH SENSE." IT CONTENDED THAT THE CLAUSE CALLS FOR THE PARTICLE COUNTER TO PERFORM IN ACCORDANCE WITH THE SPECIFICATION, BUT THAT THERE ARE NO SPECIFICATIONS, ONLY "SALIENT CHARACTERISTICS," WHICH "ARE CONCERNED WITH PHYSICAL DESCRIPTIONS OF HARDWARE, NOT HOW IT IS TO OPERATE OR PERFORM." SECONDLY, IT IS CONTENDED THAT THE TIME FOR PAYMENT IS MADE "WIDE-OPEN" AND "CLEARLY ONE SIDED IN FAVOR OF NIH." FINALLY, IT IS CONTENDED THAT CONFLICTS ARE CREATED WHEN THE PRECEDENCE CLAUSE (PARAGRAPH 19 OF STANDARD FORM 33A) IS APPLIED TO THE SOLICITATION.

PARTICLE DATA CONTENDS THAT SALIENT CHARACTERISTICS ARE CONCERNED ONLY WITH A PHYSICAL DESCRIPTION OF THE EQUIPMENT INVOLVED. THIS IS NOT IN ACCORD WITH FEDERAL PROCUREMENT REGULATIONS (FPR) SEC 1-1.307 4(B) WHICH REQUIRES "'BRAND NAME OR EQUAL' PURCHASE DESCRIPTIONS SHOULD SET FORTH THOSE SALIENT PHYSICAL, FUNCTIONAL, OR OTHER CHARACTERISTICS OF THE REFERENCED PRODUCTS ***."

FPR SEC 1-1.305 DEFINES SPECIFICATIONS AS "A CLEAR AND ACCURATE DESCRIPTION OF THE TECHNICAL REQUIREMENTS FOR A MATERIAL, PRODUCT, OR SERVICE ***." THESE TWO TERMS ARE NOT ABSOLUTELY INTERCHANGEABLE IN THE CONTEXT OF IFB -408. HOWEVER, THE SALIENT CHARACTERISTICS ARE THE ONLY SPECIFICATIONS IN THE IFB. THEREFORE, IT IS CLEAR THAT THE "I AND A CLAUSE" MEANS THAT THE EQUIPMENT MUST PERFORM IN CONFORMANCE WITH THE REQUIREMENTS OF THE SALIENT CHARACTERISTICS.

PARTICLE DATA'S CONTENTION THAT THE TIME FOR PAYMENT IS LEFT "WIDE OPEN" BY THE "I AND A CLAUSE" IS WITHOUT MERIT. THE CLAUSE WOULD DELAY PAYMENT FOR THE 30 CONSECUTIVE DAYS PROVIDED AND NO MORE. THE CLAUSE REQUIRING MORE THAN A SHORT DEMONSTRATION OF THE EQUIPMENT IS A VALID EXERCISE OF THE PROCURING AGENCY'S POWER TO DRAW ITS OWN SPECIFICATIONS AND CONTRACTS, AND IT IS NOT UNREASONABLE TO DELAY PAYMENT, AT LEAST, UNTIL THE TESTING PERIOD IS COMPLETED.

PROTESTANT'S LAST CONTENTION IS THAT CONFUSION IS CREATED BY REFERENCE TO SUBPARAGRAPH (B) OF THE INSPECTION CLAUSE, PARAGRAPH 5 OF THE GENERAL PROVISIONS IN STANDARD FORM 32. SPECIFICALLY, PARAGRAPH 5(B) OF THE GENERAL PROVISIONS, STANDARD FORM 32, STATES:

"(B) IN CASE ANY SUPPLIES OR LOTS OF SUPPLIES ARE DEFECTIVE IN MATERIAL OR WORKMANSHIP OR OTHERWISE NOT IN CONFORMITY WITH THE REQUIREMENTS OF THIS CONTRACT, THE GOVERNMENT SHALL HAVE THE RIGHT EITHER TO REJECT THEM (WITH OR WITHOUT INSTRUCTIONS AS TO THEIR DISPOSITION) OR TO REQUIRE THEIR CORRECTION. SUPPLIES OR LOTS OF SUPPLIES WHICH HAVE BEEN REJECTED OR REQUIRED TO BE CORRECTED SHALL BE REMOVED OR, IF PERMITTED OR REQUIRED BY THE CONTRACTING OFFICER, CORRECTED IN PLACE BY AND AT THE EXPENSE OF THE CONTRACTOR PROMPTLY AFTER NOTICE, AND SHALL NOT THEREAFTER BE TENDERED FOR ACCEPTANCE UNLESS THE FORMER REJECTION OR REQUIREMENT OF CORRECTION IS DISCLOSED. IF THE CONTRACTOR FAILS PROMPTLY TO REMOVE SUCH SUPPLIES OR LOTS OF SUPPLIES WHICH ARE REQUIRED TO BE REMOVED, OR PROMPTLY TO REPLACE OR CORRECT SUCH SUPPLIES OR LOTS OF SUPPLIES, THE GOVERNMENT EITHER (I) MAY BY CONTRACT OR OTHERWISE REPLACE OR CORRECT SUCH SUPPLIES AND CHARGE TO THE CONTRACTOR THE COST OCCASIONED THE GOVERNMENT THEREBY, OR (II) MAY TERMINATE THIS CONTRACT FOR DEFAULT AS PROVIDED IN THE CLAUSE OF THIS CONTRACT ENTITLED 'DEFAULT.' UNLESS THE CONTRACTOR CORRECTS OR REPLACES SUCH SUPPLIES WITHIN THE DELIVERY SCHEDULE, THE CONTRACTING OFFICER MAY REQUIRE THE DELIVERY OF SUCH SUPPLIES AT A REDUCTION IN PRICE WHICH IS EQUITABLE UNDER THE CIRCUMSTANCES. FAILURE TO AGREE TO SUCH REDUCTION OF PRICE SHALL BE A DISPUTE CONCERNING A QUESTION OF FACT WITHIN THE MEANING OF THE CLAUSE OF THIS CONTRACT ENTITLED 'DISPUTES.'"

PROTESTANT SEEMS TO FEEL THAT THIS REFERENCE IS CLOUDED OR NEGATED BY THE PRECEDENCE CLAUSE, PARAGRAPH 19 OF STANDARD FORM 33A. THE PRECEDENCE CLAUSE PROVIDES THAT:

"IN THE EVENT OF AN INCONSISTENCY BETWEEN PROVISIONS OF THIS SOLICITATION, THE INCONSISTENCY SHALL BE RESOLVED BY GIVING PRECEDENCE IN THE FOLLOWING ORDER: (A) THE SCHEDULE; (B) SOLICITATION INSTRUCTIONS AND CONDITIONS; (C) GENERAL PROVISIONS; (D) OTHER PROVISIONS OF THE CONTRACT, WHETHER INCORPORATED BY REFERENCE OR OTHERWISE; AND (E) THE SPECIFICATIONS."

SINCE THE "I AND A CLAUSE" IS PART OF THE SCHEDULE, IT TAKES PRECEDENCE OVER ANY CONFLICTING PROVISIONS. THE "I AND A CLAUSE" SPECIFICALLY STATES CONDITIONS UNDER WHICH THE PROVISIONS OF PARAGRAPH 5(B) OF THE INSPECTION CLAUSE WILL BE INVOKED. THE REFERENCE TO THE INSPECTION CLAUSE OF THE GENERAL PROVISIONS DOES NOTHING MORE THAN POINT OUT TO BIDDERS WHAT THE GOVERNMENT'S RIGHTS ARE WHEN NONCONFORMING EQUIPMENT IS DELIVERED. THESE RIGHTS ARE NOT CHANGED BY THE "I AND A CLAUSE."

THE CLAUSE CONTEMPLATES THE TESTING OF EQUIPMENT TO DEMONSTRATE CONFORMANCE TO THE SPECIFICATIONS. THE DRAFTING OF SOLICITATIONS AND SPECIFICATIONS, INCLUDING THE USE OF CLAUSES TAILORED TO THE REQUIREMENTS OF A PARTICULAR PROCUREMENT, IS THE RESPONSIBILITY OF THE ADMINISTRATIVE AGENCY INVOLVED, AND THIS OFFICE WILL NOT OBJECT UNLESS THERE HAS BEEN AN ABUSE OF ADMINISTRATIVE DISCRETION. B-169444, MAY 22, 1970.

FPR SEC 1-14.101(B) STATES THAT "THE TYPE AND EXTENT OF INSPECTION NEEDED DEPEND ON THE PARTICULAR PROCUREMENT." THE CONTRACTING OFFICER'S STATEMENT PROVIDES THE FOLLOWING JUSTIFICATION FOR THE INCLUSION OF THE "I AND A CLAUSE":

"THE INSTALLATION AND ACCEPTANCE CLAUSE WAS INCORPORATED INTO THIS SOLICITATION TO PUT ALL BIDDERS ON NOTICE THAT A MINIMUM OF 30 DAYS WAS REQUIRED BY THE GOVERNMENT TO TEST THE EQUIPMENT UNDER LABORATORY CONDITIONS PRIOR TO ACCEPTANCE AND PAYMENT. THIS DELAY IN ACCEPTANCE IS DEEMED NECESSARY TO ASSURE THAT THE GOVERNMENT RECEIVES AND ACCEPTS EQUIPMENT IN CONFORMANCE WITH THE MINIMUM NEEDS OF THE GOVERNMENT. ***"

PARTICLE DATA'S LETTER OF JUNE 9, 1973, WAS MAINLY DIRECTED TO IFB 423, BUT DID DISCUSS THE "I AND A CLAUSE" WHICH IS THE SAME IN IFB'S 408 AND - 423. THE FOLLOWING STATEMENT PROVIDES MORE THAN AMPLE SUPPORT FOR THE NIH POSITION:

"IN EQUIPMENT COMPONENTS, SUBASSEMBLIES, AND ASSEMBLIES, ESPECIALLY IN ELECTRONICS, FLAWS ARE TOTALLY UNDETECTABLE, IF THEY DO NOT SHOW UP IN FACTORY TESTING, UNTIL A FAILURE OF SOME SORT OCCURS."

THE COMPLEXITY AND APPARENT DELICACY OF THIS EQUIPMENT SEEMS TO WARRANT EXTENDED TESTING UNDER ACTUAL USE CONDITIONS, RATHER THAN A SHORT DEMONSTRATION UNDER IDEAL CONDITIONS. WE CANNOT SAY THAT THE AGENCY HAS ABUSED ITS DISCRETION BY THE INSERTION OF THE CLAUSE.

IN VIEW OF THE FOREGOING, THE PROTEST OF PARTICLE DATA, INC., UNDER IFB - 408 IS DENIED.