B-162607, NOV. 30, 1967

B-162607, NOV. 30, 1967

BIDS - NEGOTIATION - BRAND NAME OR EQUAL DECISION TO VIC MANUFACTURING CO., DENYING PROTEST AGAINST PROCEDURE USED BY PHILADELPHIA NAVAL SHIPYARD IN PROCUREMENT OF DRY CLEANING EQUIPMENT. PROTESTING BIDDER WHOSE MACHINE DID NOT MEET THE SPECIFICATION REQUIREMENTS AND WAS DETERMINED ON BASIS OF TECHNICAL EVALUATION NOT TO BE "EQUAL" TO BRAND NAME ITEM MAY NOT HAVE PROTEST CONSIDERED VALID SINCE PROCURING AGENCY HAS SHOWN JUSTIFICATION FOR ITS REQUIREMENTS AND IN ABSENCE OF BAD FAITH OR ABUSE OF DISCRETION DETERMINATION TO NEGOTIATE CONTRACT WITH BRAND NAME MANUFACTURER WILL NOT BE QUESTIONED.

TO VIC MANUFACTURING COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 23, 1967, PROTESTING AGAINST THE MANNER IN WHICH THE PHILADELPHIA NAVAL SHIPYARD, PHILADELPHIA, PENNSYLVANIA, HANDLED THE PROCUREMENT OF DRY CLEANING EQUIPMENT UNDER INVITATION FOR BIDS (IFB) NO. N00151-67-B-1270.

THE INVITATION, ISSUED ON MARCH 27, 1967, SOLICITED BIDS FOR FURNISHING THREE DRY CLEANING MACHINES, 12-POUND CAPACITY, "TURBOCLENE" MODEL FDC- 4CN, AS MANUFACTURED BY THE TURBOCLENE DIVISION, ENGELHARD HANOVIA, INC., OR EQUAL, FOR INSTALLATION AND USE ABOARD LST 1179, -1180 AND -1181. ONLY ONE BID, THAT OF YOUR FIRM, WAS RECEIVED IN RESPONSE TO THIS SOLICITATION. THE INVITATION FORM WAS NOT FILLED OUT BY YOUR FIRM BUT WAS RETURNED WITH A LETTER CONTAINING THE NECESSARY INFORMATION AND ELEMENTS FOR A BID. YOUR LETTER BID, ALONG WITH VIC INSTRUCTION AND OPERATION MANUALS FOR YOUR OFFERED MODELS 140 AND 141 MACHINES, WAS REFERRED FOR TECHNICAL EVALUATION TO THE DESIGN DIVISION, PHILADELPHIA NAVAL SHIPYARD. THE RESULTS OF THE TECHNICAL EVALUATION OF THE MACHINE OFFERED BY YOUR FIRM WAS THAT IT WAS NOT SATISFACTORY AND THAT IT WAS NOT CONSIDERED "EQUAL TO" THE UNIT SPECIFIED IN THE SOLICITATION BECAUSE OF ITS SMALLER LOAD CAPACITY. THE SOLICITATION SPECIFIED A MACHINE WITH A 12-POUND CAPACITY, WHEREAS THE MACHINE OFFERED BY YOUR FIRM HAD ONLY AN 8-POUND CAPACITY. BASED UPON THE RECOMMENDATION RESULTING FROM THE TECHNICAL EVALUATION, THE BID OF YOUR FIRM WAS REJECTED AS BEING NONRESPONSIVE TO THE INVITATION FOR BIDS.

SINCE NO RESPONSIVE BIDS WERE RECEIVED AFTER FORMAL ADVERTISING UNDER IFB -1270, THE CONTRACTING OFFICER DECIDED TO PROCURE THE DRY CLEANING MACHINES UNDER THE AUTHORITY OF ASPR 3-210.2 (III) AUTHORIZING NEGOTIATION PURSUANT TO 10 U.S.C. 2304 (A) (10) "WHEN BIDS HAVE BEEN SOLICITED PURSUANT TO THE REQUIREMENTS OF SECTION II, AND NO RESPONSIVE BID (A RESPONSIVE BID IS ANY BID WHICH CONFORMS TO THE ESSENTIAL REQUIREMENTS OF THE SOLICITATION) HAS BEEN RECEIVED FROM A RESPONSIBLE BIDDER.'

ON MAY 30, 1967, REQUEST FOR PROPOSALS (RFP) NO. N00151-67-R-1545 WAS ISSUED AND SENT TO EIGHT COMPANIES AND SYNOPSIZED IN THE COMMERCE BUSINESS DAILY. SINCE THERE WERE NO RESPONSES TO THIS RFP, AN INVESTIGATION WAS THEN CONDUCTED BY THE PHILADELPHIA NAVAL SHIPYARD AS TO WHY THE BRAND NAME MANUFACTURER, TURBOCLENE DIVISION OF ENGELHARD HANOVIA, INC., HAD NOT RESPONDED TO THIS PROCUREMENT. IT WAS DISCOVERED THAT THE BRAND NAME MANUFACTURER HAD MOVED ITS MANUFACTURING OPERATIONS AND THAT IT HAD NO KNOWLEDGE OF THE PROCUREMENT. THE RECORD INDICATES THAT THE SOLICITATIONS HAD BEEN MAILED TO THE OLD ADDRESS OF THE MANUFACTURER AND HAD NOT BEEN RECEIVED BY THIS MANUFACTURER.

ON JULY 17, 1967, REQUEST FOR PROPOSALS NO. N00151-67-R-2099 WAS ISSUED AND SENT TO NINE MANUFACTURERS REQUESTING OFFERS TO SUPPLY THE EQUIPMENT. IT IS REPORTED THAT COPIES OF THIS RFP AND THE PREVIOUS RFP WERE NOT SENT TO YOUR FIRM BECAUSE IT WAS APPARENT FROM YOUR PREVIOUS BID, SUBMITTED IN RESPONSE TO IFB -1270, THAT YOUR FIRM DID NOT AND WOULD NOT MANUFACTURE A DRY CLEANING MACHINE HAVING A 12-POUND CAPACITY. THE RECORD INDICATES THAT THE TURBOCLENE DIVISION OF ENGELHARD HANOVIA, INC., WAS THE ONLY FIRM WHICH SUBMITTED A PROPOSAL IN RESPONSE TO RFP -2099. THE PROPOSAL OF TURBOCLENE WAS, AFTER EVALUATION, DETERMINED TO BE RESPONSIVE TO THE SOLICITATION AND CONTRACT NO. N00151-68-C-0496/X) WAS AWARDED TO THAT FIRM ON SEPTEMBER 25, 1967.

IN YOUR LETTER OF AUGUST 23, 1967, YOU STATE THAT YOUR LINE OF PRODUCTS INCLUDES A DRY CLEANING MACHINE BUILT SPECIFICALLY AROUND GOVERNMENT SPECIFICATION MIL-D-18163A AND AMENDMENTS FOR USE ON BOARD NAVY SHIPS. YOU STATE THAT ALTHOUGH THE SUBJECT IFB CALLED FOR DRY CLEANING MACHINERY FOR USE ON BOARD SHIP, IT ALSO SPECIFIED A MACHINE THAT DOES NOT COMPLY WITH THE REFERRED-TO APPROVED GOVERNMENT SPECIFICATION. YOU CONTEND THAT YOUR FIRM AND ANY OTHER COMPANY IN THE INDUSTRY THAT MANUFACTURES A SHIPBOARD MACHINE AND THAT NORMALLY BIDS ON THE MACHINERY USED FOR DRY CLEANING PURPOSES ON BOARD THIS SHIP WERE AUTOMATICALLY OMITTED FROM BIDDING UNDER IFB-1270.

YOU PROTEST THE FACT THAT THE EQUIPMENT BEING PROCURED DOES NOT COMPLY WITH THE EQUIPMENT SPECIFIED IN SPECIFICATION MIL-D-18163A. EXAMINATION OF SPECIFICATION MIL-D-18163A INDICATES THAT IT COVERS DRYCLEANING MACHINES WITH A 25- TO 35-POUND LOAD CAPACITY FOR SHIPBOARD USE. THE RECORD INDICATES THAT THE MACHINE IN QUESTION IS FOR ABOARD AN LST AND THE REQUIREMENT IS FOR A MACHINE HAVING A 12 POUND LOAD CAPACITY. IT IS REPORTED THAT THE LARGER MACHINE, AS COVERED BY SPECIFICATION MIL-D- 18163A, IS NOT REQUIRED ABOARD AN LST OF THIS NEW DESIGN AND, THEREFORE, IS NOT A MANDATORY SPECIFICATION FOR THIS TYPE OF VESSEL. IT IS APPARENT THAT EACH PROCUREMENT MUST BE BASED UPON INDIVIDUAL CRITERIA AND REQUIREMENTS. IN THIS INSTANCE, A MACHINE HAVING A SPECIFIC LOAD CAPACITY OF 12 POUNDS WAS REQUIRED BECAUSE OF THE TYPE OF VESSEL ON WHICH IT WAS TO BE INSTALLED. SINCE THE MACHINE SPECIFIED IN SPECIFICATION MIL-D-18163A HAS A LOAD CAPACITY OF 25 TO 35 POUNDS, IT DOES NOT MEET THE REQUIREMENTS OF THIS PARTICULAR PROCUREMENT AND, THEREFORE, IT WAS NOT CITED AS THE APPLICABLE SPECIFICATION.

YOUR LETTER BID WAS EVALUATED AND FOUND TO BE NONRESPONSIVE TO IFB 1270 INASMUCH AS YOU OFFERED TO FURNISH A MACHINE WITH A LOAD CAPACITY OF 8 POUNDS, WHEREAS THE INVITATION CALLED FOR A MACHINE WITH A 12 POUND LOAD CAPACITY. YOUR MACHINE WAS NOT CONSIDERED "EQUAL TO" THE MACHINE SPECIFIED IN THE INVITATION BECAUSE OF ITS SMALLER LOAD CAPACITY. THE RECORD DISCLOSES THAT THERE WAS NO NEED FOR A MACHINE WITH A LOAD CAPACITY OF 25 TO 35 POUNDS, THE TYPE COVERED BY SPECIFICATION MIL-D-18163A, BUT THAT A MACHINE HAVING A LOAD CAPACITY OF 12 POUNDS WAS REQUIRED BECAUSE OF THE TYPE OF VESSEL ON WHICH IT WAS TO BE INSTALLED.

THE DRAFTING OF PROPER SPECIFICATIONS REFLECTING THE ACTUAL NEEDS OF THE GOVERNMENT IS A FUNCTION RESERVED TO THE PROCURING AGENCY. 17 COMP. GEN. 554. OUR OFFICE WILL NOT SUBSTITUTE ITS JUDGMENT FOR THAT OF THE ADMINISTRATIVE AGENCY IN THE ABSENCE OF CLEAR AND CONVINCING EVIDENCE THAT THE AGENCY DETERMINATION IS IN ERROR AND THAT A CONTRACT AWARDED ON THE BASIS OF SUCH SPECIFICATIONS WOULD BE UNDULY RESTRICTIVE OF COMPETITION OR OTHERWISE IN VIOLATION OF LAW. SEE 40 COMP. GEN. 294, 297. WHILE THE LAW CONTEMPLATES FAIR AND UNRESTRICTED COMPETITION, THE FACT THAT A PARTICULAR BIDDER MAY BE UNABLE OR UNWILLING TO MEET THE REQUIREMENTS OF AN INVITATION IS NOT SUFFICIENT TO WARRANT A CONCLUSION THAT THE SPECIFICATIONS ARE UNDULY RESTRICTIVE. 30 COMP. GEN. 368; B-142595, JULY 25, 1960.

IN VIEW OF THE INFORMATION SUBMITTED BY THE CONTRACTING AGENCY DEMONSTRATING THAT THERE WAS A NEED FOR A DRY CLEANING MACHINE WITH A LOAD CAPACITY OF 12 POUNDS, WE FIND NO BASIS TO OBJECT TO THE ADMINISTRATIVE POSITION IN THIS MATTER.

YOU ALSO CONTEND THAT THE PROCUREMENT UNDER IFB-1270 SHOULD NOT HAVE BEEN MADE UNDER A BRAND NAME OR EQUAL BASIS. YOU INFER THAT THE "OR EQUAL" DETERMINATION IS MADE UNFAIRLY BY THE PROCURING ACTIVITY. YOU STATE THAT THE INVITATION CALLED FOR A TURBOCLENE MODEL FDC-4CN DRY CLEANING MACHINE AS MANUFACTURED BY TURBOCLENE DIVISION OF ENGELHARD HANOVIA, INC., OR EQUAL; THAT THE TURBOCLENE MACHINE IS A MACHINE MANUFACTURED FOR USE WITH DUPONT'S VALCLENE SOLVENT; AND THAT THE TURBOCLENE MACHINE AND THE MACHINE MANUFACTURED BY YOUR FIRM ARE THE ONLY TWO MACHINES MANUFACTURED FOR THAT SOLVENT. YOU STATE, HOWEVER, THAT YOUR MACHINE DOES NOT OPERATE MECHANICALLY IN THE SAME MANNER AS THE TURBOCLENE MACHINE AND, CONSEQUENTLY, YOUR FIRM WAS UNABLE TO OFFER YOUR MACHINE AS AN "OR EQUAL.' IT IS ALSO STATED THAT THE GOVERNMENT'S INTERPRETATION OF AN "OR EQUAL" IS BASED UPON THE MECHANICAL DESIGN OF THE MACHINERY RATHER THAN THE END PRODUCT OR, AS IN THIS CASE, SO MANY POUNDS OF DRY CLEANING PRODUCED PER HOUR.

IT IS REPORTED THAT EVEN THOUGH THE BID OF YOUR FIRM WAS BASED ON FURNISHING A MACHINE WITH AN 8-POUND LOAD CAPACITY WHICH, ON THE FACEOF THE BID, WAS APPARENTLY NOT EQUAL TO THE BRAND NAMED WHICH COVERED A MACHINE WITH A LOAD CAPACITY OF 12 POUNDS, YOUR BID WAS REFERRED TO THE TECHNICAL DIVISION FOR TECHNICAL EVALUATION. THE DETERMINATION WAS MADE THAT THE MACHINE OFFERED BY YOUR FIRM WAS NOT EQUAL TO THE BRAND NAMED IN THE INVITATION FOR BIDS. WE CONCUR WITH SUCH DETERMINATION SINCE IT IS OBVIOUS THAT AN 8-POUND LOAD MACHINE, OFFERED BY YOUR FIRM, IS NOT EQUAL TO A 12-POUND LOAD MACHINE, THE TYPE SPECIFIED IN IFB-1270.

YOU CONTEND THAT THE USE OF THE "BRAND NAME OR EQUAL" DESCRIPTION WAS RESTRICTIVE. WE HAVE RECOGNIZED THE NECESSITY AT TIMES OF PROCURING ON A NAMED BRAND OR EQUAL BASIS. 5 COMP. GEN. 835. HOWEVER, WE HAVE STATED THAT IT SHOULD BE AVOIDED WHEREVER POSSIBLE. 38 COMP. GEN. 380. THE PROBLEMS INHERENT IN BRAND NAME OR EQUAL DESCRIPTIONS ARE RECOGNIZED IN PARAGRAPH 1-1206.1 (A) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WHICH PROVIDES THAT THIS TECHNIQUE SHOULD BE USED ONLY AS A LAST RESORT WHEN AN ADEQUATE SPECIFICATION OR MORE DETAILED DESCRIPTION CANNOT FEASIBLY BE MADE AVAILABLE IN TIME FOR THE PROCUREMENT UNDER CONSIDERATION. HOWEVER, IT MUST BE RESORTED TO ON OCCASION AND WHEN IT IS, AS IN OTHER TYPES OF PROCUREMENT, IT IS PRIMARILY THE FUNCTION OF THE PROCURING AGENCY TO DETERMINE WHETHER A PRODUCT OFFERED AS EQUAL IS, IN FACT, EQUAL TO THE BRAND NAME PRODUCT. 17 COMP. GEN. 554. WE MAY NOT INTERFERE EXCEPT WHERE IT IS CLEARLY ESTABLISHED THAT CONTRACTING OFFICIALS OF THE GOVERNMENT HAVE ABUSED THEIR AUTHORITY BY ACTING IN BAD FAITH OR IN DISREGARD OF APPLICABLE STATUTES OR REGULATIONS. SINCE IT APPEARS THAT THE AWARD WAS MADE BY THE CONTRACTING OFFICER IN GOOD FAITH AND IN THE EXERCISE OF HIS BEST INDEPENDENT JUDGMENT, WHICH IS NOT CONTROVERTED BY THE FACTS, WE WOULD NOT BE JUSTIFIED IN HOLDING THAT THE CONTRACT WAS IMPROPERLY AWARDED. SEE 36 COMP. GEN. 376; 35 ID. 174 AND CASES CITED.

WHILE IT IS THE DUTY OF OUR OFFICE TO DETERMINE WHETHER ADVERTISED SPECIFICATIONS ARE UNDULY RESTRICTIVE OF COMPETITION, WE CANNOT, ON THE PRESENT RECORD, CONCLUDE THAT THE PHILADELPHIA NAVAL SHIPYARD WAS NOT JUSTIFIED IN SPECIFYING THE REQUIREMENTS WHICH YOUR OFFERED EQUIPMENT FAILS TO MEET. AS STATED IN 36 COMP. GEN. 251, THERE IS NO REQUIREMENT THAT THE UNITED STATES PURCHASE EQUIPMENT MERELY BECAUSE IT IS OFFERED AT A LOWER PRICE, WITHOUT INTELLIGENT REFERENCE TO THE PARTICULAR NEEDS TO BE SERVED; NOR IS THE GOVERNMENT TO BE PLACED IN THE POSITION OF ALLOWING BIDDERS TO DICTATE SPECIFICATIONS WHICH WILL PERMIT ACCEPTANCE OF EQUIPMENT WHICH DOES NOT, IN THE CONSIDERED JUDGMENT OF THE CONTRACTING AGENCY, REASONABLY MEET THE AGENCY'S NEEDS. THE OBJECTIVE TO BE ACHIEVED IS THE DRAFTING OF SPECIFICATIONS WHICH WILL NOT BE UNDULY RESTRICTIVE OF COMPETITION. BUT IT IS NEVERTHELESS PROPER FOR THE GOVERNMENT CONTRACTING AGENCY TO ADVERTISE FOR BIDS ON THE BASIS OF OBTAINING EQUIPMENT WHICH WILL FULFILL ITS NEEDS.