B-148280, JUN. 1, 1962

B-148280, JUN. 1, 1962

WESTERN X-RAY COMPANY:

FURTHER REFERENCE IS MADE TO A LETTER DATED FEBRUARY 26, 1962, WITH ENCLOSURES, FROM YOUR ATTORNEY, RAYMOND A. REISER, ESQUIRE, PROTESTING ON YOUR BEHALF THE ACTION TAKEN BY THE UNITED STATES PUBLIC HEALTH SERVICE AND BY THE DEPARTMENT OF THE AIR FORCE IN AWARDING CONTRACTS TO THE GENERAL ELECTRIC COMPANY UNDER TWO SEPARATE PROCUREMENTS.

THE FIRST PROTEST SET FORTH IN THE LETTER OF FEBRUARY 26, 1962, RELATED TO INVITATION FOR BIDS NO. 1106-1-12-62, ISSUED BY THE PUBLIC HEALTH SERVICE HOSPITAL, SEATTLE, WASHINGTON, UNDER DATE OF JANUARY 12, 1962. OUR LETTER OF MARCH 6, 1962, TO MR. REISER, WE ADVISED THAT THE MATTER OF THE PROTEST HAD BEEN TAKEN UP WITH THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE. THE SECOND PROTEST IN THE INDICATED LETTER RELATED TO INVITATION FOR BIDS NO. 45-613-62-25, ISSUED BY THE FAIRCHILD AIR FORCE BASE, WASHINGTON, AND FOR THE REASONS SET FORTH IN OUR DECISION DATED MAY 4, 1962, B-148296, WE DENIED YOUR PROTEST CONCERNING THE LATTER PROCUREMENT.

AS A BASIS FOR PROTESTING THE ACTION TAKEN UNDER THE FIRST CITED INVITATION FOR BIDS, YOUR ATTORNEY STATED THAT WHILE THE GENERAL ELECTRIC COMPANY WAS THE LOW BIDDER ITS BID DID NOT MEET THE SPECIFICATIONS CONTAINED IN THE INVITATION, BUT THAT THE DEVIATIONS WERE TREATED AS BEING OF MINOR CONSEQUENCE, PURPORTEDLY NOT AFFECTING THE BID PRICE. YOUR ATTORNEY STATED FURTHER THAT BECAUSE OF PRIOR EXPERIENCE, YOUR COMPANY ATTEMPTED TO AND DID COMPLY WITH THE REQUIREMENTS OF THE SPECIFICATIONS AND THEREBY MADE A SLIGHTLY HIGHER BID THAN THAT SUBMITTED BY THE GENERAL ELECTRIC COMPANY, WHICH, YOUR ATTORNEY ALSO ALLEGED, HAD THE ADVANTAGE OF AN "ORAL ALLOWANCE OF EXCEPTIONS" PRIOR TO THE SUBMISSION OF ITS BID. FOR THOSE REASONS, YOUR ATTORNEY STATED THAT THE ACTION TAKEN IN CONNECTION WITH THIS PROCUREMENT HAD THE EFFECT OF PLACING ALL OTHER BIDDERS AT A DEFINITE DISADVANTAGE AND ACTUALLY ELIMINATED ANY POSSIBILITY OF COMPETITION.

BY LETTER DATED APRIL 20, 1962, THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE MADE A REPORT CONCERNING THE PROTEST FILED ON BEHALF OF YOUR COMPANY, THERE BEING TRANSMITTED THEREWITH A COPY OF THE CITED INVITATION FOR BIDS WHICH CALLED FOR FURNISHING AND INSTALLING A RADIOGRAPHIC AND FLUOROSCOPIC UNIT WITH IMAGE INTENSIFIER, 16 MM CINE SYSTEM, AND SIMULTANEOUS BIPLANE FILM CHANGERS. THE INVITATION ALSO CALLED FOR THE REMOVAL AND REINSTALLATION OF EXISTING HOSPITAL X-RAY EQUIPMENT IN ORDER TO PERMIT INSTALLATION OF THE NEW UNIT. THE INVITATION FOR BIDS (AT PAGE TWO) INCLUDED THE FOLLOWING STATEMENT:

"THE BIDDER IS SPECIFICALLY REFERRED TO "INTERIM FEDERAL SPECIFICATIONS, X-RAY APPARATUS SET, RADIOGRAPHIC AND FLUOROSCOPIC, MEDICAL" GG-X00635B (VA-MED). THESE SPECIFICATIONS WILL APPLY IN ALL PARTICULARS WHERE APPLICABLE WITH EXCEPTIONS AS NOTED WHERE MORE DETAILED REQUIREMENTS OR REQUIREMENTS EXCEEDING THE ABOVE SPECIFICATIONS WILL BE STATED AND EXPLAINED IN SUBMITTED BIDS AND MAY BE CAUSE FOR REJECTION.'

FOUR BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION AND THE SAME WERE OPENED ON FEBRUARY 12, 1962. THE BIDS RECEIVED FOR ITEM 1, AND THE BIDS RECEIVED FOR ITEM 1 LESS THE PRICE OF THE AUTOMATIC INJECTOR, WERE AS FOLLOWS:

CHART

PRICE OF BID PRICE

BID PRICE AUTOMATIC ITEM 1 LESS FIRM ITEM 1

INJECTOR INJECTOR --------------------------------------------- --------- ----------- GENERAL ELECTRIC CO. $67,018 $ 815 $66,203 WESTINGHOUSE ELECTRIC CORP.

67,869 3,000 64,869 WESTERN X-RAY CO. 69,419* 1,795

67,624 PICKER X-RAY CORP. 74,900 1.750 73,150

* ($70,462 LESS OPTIONAL TABLE FEATURES NOT SPECIFIED IN THE

INVITATION.)

AN AWARD WAS MADE ON FEBRUARY 21, 1962, TO THE GENERAL ELECTRIC COMPANY AS THE LOWEST BIDDER MEETING THE ESSENTIAL REQUIREMENTS OF THE SPECIFICATIONS AS DETERMINED BY THE CONTRACT TEAM CONSISTING OF THE CHIEF RADIOLOGIST, THE ADMINISTRATIVE OFFICER, AND THE SUPPLY OFFICER OF THE HOSPITAL.

IT WILL BE NOTED FROM THE ABOVE TABULATION OF BIDS THAT THE WESTINGHOUSE ELECTRIC CORPORATION SUBMITTED THE LOWEST BID. HOWEVER, ITS BID WAS REJECTED BECAUSE OF A NUMBER OF MAJOR EXCEPTIONS TO THE SPECIFICATIONS.

UPON THE BASIS OF THE RECORD BEFORE US WE DO NOT FIND ANY EVIDENCE TO SUPPORT MR. REISER'S STATEMENT THAT THE GENERAL ELECTRIC COMPANY WAS "PRE- SELECTED" TO FURNISH THE EQUIPMENT IN QUESTION, AND THAT THE ISSUANCE OF AN INVITATION TO BID WAS A MERE FORMALITY. IT WAS POINTED OUT BY THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE THAT THE SPECIFICATIONS FOR THE EQUIPMENT WERE THE INTERIM FEDERAL SPECIFICATIONS, WITH CERTAIN EXCEPTIONS TO MEET THE PARTICULAR REQUIREMENTS OF THE HOSPITAL. IT WAS REPORTED FURTHER THAT BOTH YOUR COMPANY AND THE GENERAL ELECTRIC COMPANY SUBMITTED BIDS WHICH CONTAINED MINOR DEVIATIONS FROM THE SPECIFICATIONS BUT THAT BOTH BIDS WERE CONSIDERED TO BE RESPONSIVE TO THE INVITATION FOR BIDS.

WITH THE LETTER OF APRIL 20, 1962, THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE ENCLOSED A COPY OF A LETTER DATED FEBRUARY 19, 1962, FROM DR. DONALD A. CARLYLE, CHIEF OF THE RADIOLOGY DEPARTMENT OF THE HOSPITAL, TO YOUR COMPANY, WHEREIN THE NATURE OF THE DEVIATIONS FROM SPECIFICATIONS IN THE BIDS SUBMITTED BY YOUR COMPANY AND THE GENERAL ELECTRIC COMPANY WAS DISCUSSED. IT WAS CONCLUDED BY DR. CARLYLE THAT THE GENERAL ELECTRIC COMPANY WAS THE LOWEST RESPONSIVE BIDDER AND THAT ANY EXCEPTIONS IN THAT COMPANY'S BID WERE MINOR AND ACCEPTABLE AND WOULD NOT BE USED TO JUSTIFY THE REJECTION OF THAT COMPANY'S BID.

RESPECTING MR. REISER'S STATEMENT THAT THE GENERAL ELECTRIC COMPANY HAD THE ADVANTAGE OF AN ,ORAL ALLOWANCE OF EXCEPTIONS" PRIOR TO THE SUBMISSION OF ITS BID, THE ADMINISTRATIVE OFFICE REPORTS THAT THE GENERAL ELECTRIC COMPANY WAS ORALLY INFORMED BEFORE THE BIDS WERE SUBMITTED THAT A TUBE SUBSTITUTION OFFERED BY THAT COMPANY UNDER ITEM 3.7.2.2 OF THE SPECIFICATIONS WAS CONSIDERED ACCEPTABLE BY THE HOSPITAL. IN HIS LETTER OF FEBRUARY 19, 1962, MR. CARLYLE POINTED OUT THAT THE LIST PRICE OF THE SUBSTITUTED TUBE WAS HIGHER THAN THAT OF THE TUBE LISTED IN THE SPECIFICATIONS. IN OUR OPINION, THE "ORAL ADVICES" GIVEN THE GENERAL ELECTRIC COMPANY REGARDING THE SUBSTITUTION DID NOT IN ANY WAY PLACE THE OTHER BIDDERS AT A DISADVANTAGE.

IT SHOULD BE POINTED OUT THAT THE BID OF $66,203 SUBMITTED BY THE GENERAL ELECTRIC COMPANY WAS $1,421 LOWER THAN YOUR COMPANY'S BID OF $67,624. WAS EXPLAINED IN THE LETTER OF APRIL 20, 1962, THAT IN DETERMINING YOUR COMPANY'S BID TO BE THE SUM OF $67,624, THE HOSPITAL TOOK INTO ACCOUNT THE REQUEST CONTAINED IN YOUR LETTER OF FEBRUARY 10, 1962, TO DEDUCT FROM YOUR BID THE VALUE OF THE OPTIONAL TABLE FEATURES, NAMELY, THE TRANSVERSE POWER DRIVEN TABLE TOP ($703) AND THE ELEVATING MECHANISM ($340). IT WAS STATED FURTHER IN YOUR LETTER OF FEBRUARY 10, 1962, THAT THE POWER ASSIST TO FLUOROSCOPIC CARRIAGE ($437) AND THE POWER ASSIST HANDLE ($74.80) WERE OPTIONAL AND COULD BE DEDUCTED FROM YOUR BID. RESPECTING THE LATTER DEDUCTIONS, THE ADMINISTRATIVE OFFICE REPORTED THAT IN VIEW OF THE FACT THAT PARAGRAPH 3.5.4 OF THE SPECIFICATIONS PROVIDED FOR A POWER ASSIST IF A FORCE IN EXCESS OF FIVE POUNDS WAS REQUIRED TO MOVE THE FLUOROSCOPIC ASSEMBLY, THAT THESE ITEMS WERE NOT DEDUCTED FROM YOUR BID PRICE SINCE YOUR BID DID NOT STATE THAT THE SPECIFICATIONS COULD BE MET WITHOUT THE POWER ASSIST EQUIPMENT.

THE RECORD INDICATES FURTHER THAT BY LETTER DATED FEBRUARY 14, 1962, YOUR COMPANY REQUESTED THE PRICE OF THE POWER ASSIST EQUIPMENT BE DEDUCTED, AN OFFER BEING MADE BY YOUR COMPANY TO FURNISH SUCH EQUIPMENT WITHOUT CHARGE IN THE EVENT IT WAS FOUND TO BE REQUIRED TO MEET THE SPECIFICATIONS. OBVIOUSLY, SUCH A REQUEST COULD NOT BE CONSIDERED SINCE IT WAS MADE AFTER THE BIDS WERE OPENED. IT WAS POINTED OUT BY THE ADMINISTRATIVE OFFICE THAT EVEN IF YOUR REQUEST HAD BEEN HONORED, THE GENERAL ELECTRIC COMPANY WOULD HAVE BEEN THE LOW BIDDER.

OUR OFFICE HAS HELD THAT THE PREPARATION OF SPECIFICATIONS STATING THE NEEDS OF THE GOVERNMENT AND THE FACTUAL DETERMINATION AS TO WHETHER THE EQUIPMENT OFFERED BY A BIDDER CONFORMS TO THOSE SPECIFICATIONS IS PRIMARILY WITHIN THE JURISDICTION OF THE ADMINISTRATIVE AGENCY CONCERNED. 38 COMP. GEN. 190; 35 COMP. GEN. 174. IN DECIDING THE CONFORMITY OF THE EQUIPMENT OFFERED, THE CONTRACTING OFFICER MAY WAIVE MINOR VARIANCES NOT AFFECTING PRICE, QUALITY OR QUANTITY. 30 COMP. GEN. 179. THE VARIANCES FROM THE REQUIREMENTS OF THE INVITATION WHICH MAY BE WAIVED, PROVIDING THAT SUCH WAIVER WOULD NOT WORK AN INJUSTICE ON OTHER BIDDERS, ARE THOSE MINOR INFORMALITIES OR DEFECTS OF FORM WHICH DO NOT GO TO THE SUBSTANCE OF THE BID. 37 COMP. GEN. 763, 765.

THE ADMINISTRATIVE OFFICE EXPRESSED THE OPINION THAT ANY EXCEPTIONS IN THE BID OF THE GENERAL ELECTRIC COMPANY WERE MINOR AND ACCEPTABLE AND COULD NOT BE USED TO JUSTIFY REJECTION OF THE BID. IN THE LIGHT OF OUR HOLDINGS, AS INDICATED IN THE PRECEDING PARAGRAPH, WE FEEL THAT THE ACTION TAKEN IN THIS CASE WAS JUSTIFIED AND, ACCORDINGLY, YOUR PROTEST MUST BE DENIED.