B-153983, AUG. 21, 1964

B-153983, AUG. 21, 1964

TO COMPUDYNE CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED APRIL 16, AND LETTERS DATED APRIL 17 AND JULY 2, 1964, PROTESTING THE CONTEMPLATED AWARD OF A CONTRACT TO THOMPSON CONTROLS, INC., UNDER DEPARTMENT OF THE ARMY INVITATION FOR BIDS NO. CIVENG-22-079-64-26, FOR WATER FLOW CONTROL SYSTEMS, VICKSBURG, MISSISSIPPI.

ADVANCE NOTICE TO BIDDERS WAS ISSUED DECEMBER 18, 1963, AND THE INVITATION FOR BIDS WAS ISSUED JANUARY 2, 1964, WITH DATE OF OPENING SET FOR APRIL 2, 1964. SIX BIDS WERE RECEIVED RANGING FROM $157,728 TO $465,800. THE LOW BIDDER WAS THOMPSON CONTROLS, INC., BIRMINGHAM, ALABAMA, AT $157,728; THE SECOND LOW BIDDER WAS YOUR COMPANY AT $158,091.57. IMMEDIATELY UPON CONCLUSION OF THE READING OF THE BIDS, YOUR REPRESENTATIVE REQUESTED PERMISSION TO EXAMINE THE LITERATURE SUBMITTED BY THE LOW BIDDER. YOUR PROTEST FOLLOWED AND LISTED, BASICALLY, FOUR INSTANCES OF THE ALLEGED FAILURE OF THE LOW BIDDER, THOMPSON CONTROLS, INC., TO COMPLY WITH THE REQUIREMENTS OF THE SPECIFICATIONS. THESE WERE THAT THERE WAN AN OMISSION OF DESIGN CRITERIA FOR TANKS, ORIFICES, ACTUATORS AND ASSEMBLY OF THESE ITEMS; THAT THE HEAD CONTROL VALVES PROPOSED DID NOT PROVIDE ANY OVERLAP IN FLOWS; THAT THE 1-1/4-INCH AND 4- INCH HEAD CONTROL VALVES PROPOSED FOR THE SIZE A AND SIZE C CONTROLLERS WOULD NOT MEET THE SPECIFIED FLOW OF 100 AND 1050 GPM., RESPECTIVELY; AND THAT THE HEAD CONTROL VALVE POSITIONERS PROPOSED DID NOT HAVE POSITION GUAGES.

REGARDING THE OMISSION OF DESIGN CRITERIA, IT IS REPORTED THAT PARAGRAPH 2 OF THE GENERAL SPECIFICATIONS REQUIRES THE BIDDER TO SUBMIT DESCRIPTIVE LITERATURE WITH HIS BID TO SHOW THAT THE PRODUCTS OFFERED CONFORM TO THE SPECIFICATIONS. THE LITERATURE SUBMITTED IS REQUIRED TO ESTABLISH "DETAILS OF THE PRODUCTS THE BIDDER PROPOSES TO FURNISH AS TO DESIGN, MATERIALS, COMPONENTS, PERFORMANCE CHARACTERISTICS, METHODS OF MANUFACTURE, CONSTRUCTION, ASSEMBLY AND OPERATION.' THIS PARAGRAPH ALSO PROVIDES THAT "FAILURE OF DESCRIPTIVE LITERATURE TO SHOW THAT THE PRODUCT OFFERED CONFORMS TO THE SPECIFICATIONS AND OTHER REQUIREMENTS OF THIS INVITATION FOR BIDS WILL REQUIRE REJECTION OF THE BID.' IN ADDITION, A CAUTION NOTE TO BIDDERS WAS ATTACHED TO EACH INVITATION STATING "FAILURE TO FURNISH DESCRIPTIVE LITERATURE ADEQUATE FOR THE STATED PURPOSES WILL RESULT IN REJECTION OF YOUR BID.' IN ORDER TO STRICTLY CONFORM TO THE SPECIFICATION REQUIREMENTS, COMPLETE INFORMATION IS REQUIRED ON EACH ITEM OF EQUIPMENT PROPOSED. THE PROPOSAL BY THOMPSON INCLUDED A GENERAL WRITTEN DESCRIPTION OF THE MAJOR ITEMS OF EQUIPMENT AND THEIR OPERATION; A TABLE LISTING THE TYPE OR MODEL, MANUFACTURER AND RATINGS FOR THE DIFFERENTIAL PRESSURE REGULATOR ASSEMBLIES AND HEAD CONTROL VALVE ASSEMBLIES; AND EITHER PRODUCT DATA SHEETS OR PRICE SHEETS FOR DIFFERENTIAL PRESSURE TRANSMITTERS, HEAD VALVE CONTROLLERS, AIR GUAGES, AIR SUPPLY AND SET-POINT REGULATORS AND HEAD CONTROL VALVES AND POSITIONERS. THE ADMINISTRATIVE OFFICE FURTHER REPORTED THAT, EXCEPT FOR THE GENERAL DESCRIPTION, THE DESIGN CRITERIA WERE NOT INCLUDED IN THE DESCRIPTIVE LITERATURE AND, IN ADDITION, NO INFORMATION WAS FURNISHED ON THE VARIOUS SWITCHES, INDICATING LIGHTS, TERMINAL BLOCKS AND NUMEROUS OTHER ITEMS. IT WAS CONCLUDED THAT THE FAILURE TO SUBMIT THE DESCRIPTIVE LITERATURE REQUIRED BY THE SPECIFICATIONS WAS A MAJOR DEVIATION FROM THE SPECIFICATIONS AND, THEREFORE, THE BID OF THOMPSON WAS NONRESPONSIVE.

RESPECTING THE OTHER BASES OF YOUR PROTEST AGAINST AWARD TO THOMPSON, IT IS REPORTED THAT GENERAL SPECIFICATION PARAGRAPH 13C/4) REQUIRES A HEAD CONTROL VALVE ASSEMBLY THAT WILL PROVIDE A LOW-FLOW START-UP WITHOUT A LARGE INRUSH OF WATER AND A WIDE RANGE. THE THOMPSON EQUIPMENT PROPOSED WILL MEET THIS REQUIREMENT. THE SPECIFICATIONS DO NOT REQUIRE OVERLAPPING OF THE FLOWS IF A TWO-VALVE ASSEMBLY IS PROPOSED, AND FAILURE TO PROVIDE OVERLAPPING VALVES IS NOT CONSIDERED A DEVIATION FROM THE SPECIFICATIONS. IF OVERLAPPING OF FLOWS WAS A REQUIREMENT, IT SHOULD HAVE BEEN SO STATED. HOWEVER, SPECIFICATION PARAGRAPH 13B DOES REQUIRE FLOW RANGES FOR THE SIZE A AND SIZE C CONTROLLERS OF 0 TO 100 AND 0 TO 1050 GPM., RESPECTIVELY. ENGINEERING CALCULATIONS CONFIRM THAT THE VALVES PROPOSED ARE NOT LARGE ENOUGH TO GIVE THE MAXIMUM FLOW REQUIRED AT MINIMUM SUPPLY PRESSURE. FAILURE TO PROPOSE ADEQUATE VALVES WAS CONSIDERED A MAJOR DEVIATION SINCE THIS COULD MATERIALLY AFFECT THE BID PRICE. IT IS ESTABLISHED THAT HEAD CONTROL VALVE POSITION GUAGES WERE SHOWN ON PHOTOGRAPH A-2193 INCLUDED WITH THE INVITATION FOR BIDS AND THAT THE REQUIREMENT FOR THE INDICATORS WAS CONFIRMED BY TELEPHONE BETWEEN THE WATERWAYS EXPERIMENT STATION AND YOUR COMPANY BEFORE BID OPENING. PHOTOGRAPHS, NUMBERED A-2192 TO A-2199, WERE INCLUDED WITH THE INVITATION TO SHOW DETAILS OF THE EXISTING EQUIPMENT. GENERAL SPECIFICATION PARAGRAPH 11D STATES THAT THE NEW EQUIPMENT MUST BE COMPATIBLE WITH THE EXISTING FACILITIES BUT DUPLICATION OF HARDWARE IS NOT REQUIRED. VALVE POSITION INDICATORS WERE NOT SPECIFIED AND FAILURE TO INCLUDE THEM IN THE PROPOSAL IS NOT CONSIDERED A DEVIATION. IF THE INDICATORS ARE REQUIRED AS STATED TO YOUR COMPANY BY THE WATERWAYS EXPERIMENT STATION, AN AMENDMENT TO THE INVITATION SHOULD HAVE BEEN ISSUED. AN ADMINISTRATIVE REVIEW OF THE THOMPSON BID HAS RESULTED IN THE CONCLUSION THAT IT WAS OTHERWISE NONRESPONSIVE IN THE ABOVE ASPECTS.

IN ADDITION TO THE ABOVE DEFICIENCIES IN THOMPSON'S BID, HOWEVER, IT WAS DETERMINED THAT YOUR COMPANY'S BID WAS ALSO NONRESPONSIVE TO THE SPECIFICATIONS WITH PARTICULAR REFERENCE TO PARAGRAPH 2 OF THE SPECIFICATIONS AS CITED ABOVE. THE DATA SUBMITTED BY YOUR COMPANY, ALTHOUGH IN CONSIDERABLE DETAIL, DOES NOT ESTABLISH THE DETAILS AS REQUIRED BY THAT PARAGRAPH. NO INFORMATION OF THAT DESIGN, MATERIALS, COMPONENTS, PERFORMANCE CHARACTERISTICS, METHODS OF MANUFACTURE OR CONSTRUCTION WAS SUBMITTED BY YOUR COMPANY FOR PRESSURE CONTROLLERS, PRESSURE INDICATORS AND GUAGES, PRESSURE REDUCING VALVES AND AIR FILTERS. NO INFORMATION ON THE PERFORMANCE CHARACTERISTICS, METHODS OF MANUFACTURE OR OPERATION WAS SUBMITTED FOR SUCH PROPOSED PRODUCTS AS CYLINDER ACTUATORS, ORIFICE PLATES, PRESSURE TRANSMITTERS, RELIEF VALVES AND BOOSTER PILOT VALVES. NO INFORMATION ON THE MATERIALS OR METHODS OF MANUFACTURE WAS SUBMITTED FOR PRESSURE SWITCHES, SOLENOID VALVES AND LIMIT SWITCHES. NO INFORMATION WAS INCLUDED ON CONTROL AND TOGGLE SWITCHES, INDICATING LIGHTS, TERMINAL BLOCKS, CONTROL TRANSFORMERS, AND CABLE AND CABLE CONNECTORS. SINCE THE ABOVE INFORMATION WAS REQUIRED BY THE INVITATION, THE FAILURE TO FURNISH SUCH INFORMATION MADE YOUR BID NONRESPONSIVE.

IT WAS ADMINISTRATIVELY DECIDED TO REJECT ALL BIDS AND REVISE THE SPECIFICATIONS REQUIRING DESCRIPTIVE LITERATURE. YOUR COMPANY WAS TOLD, INFORMALLY, OF THE PROPOSED ACTION WHICH YOU PROTESTED. REPRESENTATIVES OF THE CORPS OF ENGINEERS AFFORDED YOUR COMPANY A HEARING UPON YOUR REQUEST. NOTHING WAS BROUGHT OUT AT THIS HEARING TO CHANGE THE DECISION TO READVERTISE UNDER REVISED SPECIFICATIONS.

IT IS THE GOVERNMENT'S VIEW THAT SINCE THE WATERWAYS EXPERIMENT STATION PREVIOUSLY PROCURED AND HAS USED INSTRUMENTS OF THE DESIRED TYPE FOR MANY YEARS, DEFINITIVE SPECIFICATIONS COULD HAVE BEEN WRITTEN AROUND EXISTING EQUIPMENT. THIS, HOWEVER, WAS NOT DONE. RATHER, HOPING FOR A BREAKTHROUGH OF SOME TYPE WHICH MIGHT RESULT IN A LOWER PRICE, IT WAS THE INTENT TO DRAW A COMBINATION DEFINITIVE-PERFORMANCE SPECIFICATION. THE DEFINITIVE PART OF THE SPECIFICATIONS WOULD LIMIT THE SIZE AND CONNECTIONS TO THOSE OF THE EXISTING SYSTEMS AND REQUIRED INTERCHANGEABILITY AND COMPATIBILITY WITH THESE SYSTEMS. OTHER THAN THIS, THE SPECIFICATIONS WERE TO BE STRICTLY PERFORMANCE TYPE, PERMITTING FREE SYSTEM DESIGN BY THE BIDDERS AND REQUIRING ONLY THAT THE SYSTEMS DEMONSTRATE IN ACCEPTANCE TESTS THAT THEY WILL PERFORM AS SPECIFIED.

BECAUSE IT WAS REALIZED THAT BIDS MIGHT BE RECEIVED WITH DESIGNS BASED ON ENTIRELY NEW CONCEPTS, AND BECAUSE OF THE DESIRE OF THE WATERWAYS EXPERIMENT STATION TO ISSUE PERFORMANCE TYPE SPECIFICATIONS, THERE WAS AN OBVIOUS NEED FOR DESCRIPTIVE LITERATURE FOR BID EVALUATION PURPOSES. CONSEQUENTLY, IT WAS DECIDED THAT THE INVITATION FOR BIDS SHOULD CONTAIN THE STANDARD DESCRIPTIVE LITERATURE PARAGRAPH IN ARMED SERVICES PROCUREMENT REGULATION 2-202.5/D). BECAUSE OF RECENT EXPERIENCE THAT BIDDERS EITHER WERE OVERLOOKING THE DESCRIPTIVE LITERATURE REQUIREMENT COMPLETELY OR FURNISHING GENERAL BROCHURES NOT SUFFICIENTLY RESPONSIVE TO INVITATION REQUIREMENTS, A CAUTION NOTICE REGARDING SUCH LITERATURE WAS SENT WITH EACH INVITATION.

UNFORTUNATELY, THE CLAUSE (SPECIFICATION PARAGRAPH 2) INCLUDED IN THE INVITATION BECAME OF SUCH NATURE THAT IT WAS PRACTICALLY IMPOSSIBLE FOR ANY BIDDER TO COMPLETELY RESPOND TO IT. A DEFINITIVE SPECIFICATION WAS CREATED WITH WHICH NO BIDDER COULD COMPLY. COMPLETE INFORMATION WAS REQUIRED ON EACH ITEM OF EQUIPMENT. ANYTHING LESS WOULD "RESULT IN REJECTION" OF A BID. ALTHOUGH A PREBID CONFERENCE WAS HELD TO EXPLAIN ANY AREAS OF THE INVITATION NOT UNDERSTOOD, THE INVITATION REMAINED UNCHANGED. IN THIS PROCUREMENT THE DESCRIPTIVE LITERATURE REQUIREMENT WAS FOR TECHNICAL DATA TO BE USED FOR PURPOSES OF BID EVALUATION. TECHNICAL DATA REQUIRED TO BE SUBMITTED WITH A BID FOR THIS PURPOSE AS DISTINGUISHED FROM MATERIAL REQUIRED FOR A DETERMINATION OF THE BIDDER'S RESPONSIBILITY MUST BE REGARDED AS A PART OF THE BID SO THAT FAILURE TO INCLUDE THE REQUIRED INFORMATION IN THE TECHNICAL DATA MAKES THE BID NONRESPONSIVE TO THE INVITATION. 40 COMP.GEN. 132.

IT WAS ADMINISTRATIVELY CONCLUDED, IN SUMMARY, THAT THE REQUIREMENT FOR DESCRIPTIVE LITERATURE IS SO DEFINITIVE IN ITS SCOPE THAT IT IS PRACTICALLY IMPOSSIBLE TO COMPLY WITH; THAT ALL BIDDERS WERE NONRESPONSIVE TO THE REQUIREMENT FOR FURNISHING DESCRIPTIVE LITERATURE, INCLUDING COMPUDYNE; THAT THOMPSON CONTROLS, INC., WAS NOT ONLY NONRESPONSIVE TO THE REQUIREMENT FOR DESCRIPTIVE LITERATURE BUT ITS BID WAS DEFICIENT IN THAT THE VALVES PROPOSED WERE NOT LARGE ENOUGH TO GIVE THE MAXIMUM FLOW REQUIRED AT MINIMUM SUPPLY PRESSURE; AND THAT THE SPECIFICATIONS WILL BE REVISED TO REQUIRE ONLY THAT INFORMATION REQUIRED FOR EVALUATION PURPOSES AND WHICH IT IS REASONABLE TO ASSUME CAN BE FURNISHED BY BIDDERS.

IT IS WELL SETTLED THAT THE GOVERNMENT HAS THE RIGHT TO REJECT ANY OR ALL BIDS RECEIVED UNDER AN INVITATION. THIS IS IN ACCORDANCE WITH THE PROVISION OF 10 U.S.C. 2305/C) WHICH AUTHORIZES THE REJECTION OF ALL BIDS IF THE HEAD OF THE AGENCY DETERMINES SUCH ACTION TO BE IN THE PUBLIC INTEREST. IN VIEW OF THE SPECIFIC REQUIREMENT FOR THE SUBMISSION OF DESCRIPTIVE LITERATURE, THE BIDDER'S FAILURE TO INCLUDE ALL THE DESCRIPTION NECESSARY FOR AN EVALUATION OF THE BID MAY NOT BE CONSIDERED AN INFORMALITY WHICH MAY BE WAIVED. UNLESS BIDS ARE EVALUATED SOLELY ON THE BASIS OF THEIR CONTEXT AT THE TIME OF BID OPENING, THE COMPETITIVE BID SYSTEM WOULD LOSE ITS INTEGRITY BECAUSE, CONTRARY TO THE PURPOSES OF THE ADVERTISING STATUTES, THE EFFECT WOULD BE THAT BIDS COULD BE VARIED AFTER OPENING AND PRIOR TO AWARD. 40 COMP. GEN. 132. THE QUESTION OF REJECTING ALL BIDS AND READVERTISING IS PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION AND A REQUEST FOR BIDS DOES NOT IMPORT ANY OBLIGATION TO ACCEPT ANY OF THE BIDS RECEIVED, INCLUDING THE LOWEST CORRECT BID. 17 COMP. GEN. 554; 26 COMP. GEN. 49; PERKINS V. LUKENS STEEL CO., 310 U.S. 113; O-BRIEN V. CARNEY, 6 F.SUPP. 761; COLORADO PAV. CO. V. MURPHY, 78 F. 28.

IN THE LIGHT OF THE FOREGOING, THE QUESTION OF REJECTING ALL BIDS AND READVERTISING BEING PRIMARILY A MATTER OF ADMINISTRATIVE DISCRETION, AND SINCE THE REASON FOR SUCH ACTION--- ASIDE FROM THE MATTER OF THE RESPONSIVENESS OF THE BIDS RECEIVED--- WAS FOR THE PURPOSE OF REVISING THE SPECIFICATIONS TO MOVE ADEQUATELY AND CLEARLY EXPRESS THE GOVERNMENT'S NEEDS, WE PERCEIVE NO LEGAL OBJECTION TO SUCH ACTION.