BNUMBER:  B-272370
DATE:  September 30, 1996
TITLE:  Innovative Refrigeration Concepts

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Matter of:Innovative Refrigeration Concepts

File:     B-272370

Date:September 30, 1996

Roger K. Singh for the protester.
Matthew W. Bowman, Esq., Maj. Michael J. O'Farrell, Jr., and Col. 
Nicholas P. Retson, Department of the Army, for the agency.
Paul E. Jordan, Esq., and Paul Lieberman, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

Protest that agency's specifications for air conditioning chillers 
were overly restrictive because they required a particular type of 
heat exchanger and digital controller is denied where the agency 
reasonably found that these features reflected its minimum needs as 
they would ensure less maintenance, more efficient cooling, and more 
efficient troubleshooting and control of problems.

DECISION

Innovative Refrigeration Concepts (IRC) protests the amended 
specifications to request for proposals (RFP) No. DABT23-96-R-0049, 
issued by the Department of the Army for air cooled water chillers at 
Fort Knox, Kentucky.  IRC contends that the amended specifications are 
overly restrictive.

We deny the protest. 

The RFP contemplated award of a firm, fixed-price contract for three 
60-ton air conditioning chillers, specified on a brand name Trane or 
equal basis.  The RFP listed a number of salient characteristics 
including a power control transformer, a microprocessor controller, 
and a requirement that each unit be air cooled.  These chiller units 
are installed outside of buildings and operate to cool water that is 
then pumped inside the building through the air conditioning system.  
Fort Knox has approximately 400 chillers, some 15 to 30 of which are 
replaced annually.  Award was to be made to the low responsive, 
responsible offeror, but the RFP provided for a 10-percent price 
evaluation preference for qualified small disadvantaged business (SDB) 
offerors.

IRC and eight other offerors submitted proposals by the May 2, 1996, 
closing date for receipt of offers.  All were technically acceptable 
and, after application of the 
10 percent evaluation preference, IRC's proposal was the apparent low 
offer.  The contracting officer contacted the Heating, Ventilation and 
Air Conditioning (HVAC) Branch of the Fort Knox Directorate of Public 
Works to ensure that IRC's unit complied with all salient 
characteristics.  On May 6, before the HVAC Branch replied, the 
contracting officer notified IRC that it was the apparent low offeror 
and requested verification that the IRC unit met certain certification 
requirements.

The HVAC Branch advised the contracting officer that Fort Knox 
currently had two IRC units installed.  While they met the salient 
characteristics set forth in the RFP, the units presented various 
maintenance problems.  For example, the IRC unit used a plate design 
heat exchanger, which was less efficient than the tube-in-shell design 
offered by the other firms.  This chiller design made it more 
difficult to clear clogs and to prepare the units for winter shutdowns 
since the plate design units could not be drained.  Instead, each had 
to be filled with glycol (antifreeze), which had to be pumped out in 
the spring, resulting in the generation of hazardous waste.  In 
addition, the IRC chiller included an obsolete controller while all 
other recently installed units, as well as all others proposed under 
this RFP, used a menu driven controller that provided more extensive 
processing, monitoring, and diagnostic functions.  The HVAC Branch 
also questioned the amount of manufacturing contributed by IRC to its 
chiller units and whether IRC was therefore entitled to the SDB 
preference.

On May 14, the contracting officer advised IRC that its SDB status was 
in question and requested IRC to verify its level of manufacturing.  
According to IRC, it submitted "voluminous" information in 
response.[1]  On June 11, the contracting officer amended the RFP to 
provide that the power control transformer "shall be a stand-alone, 
menu-driven digital controller with processing, monitoring and 
diagnostic capabilities" and the chiller unit "shall possess a 
tube-in-shell heat exchanger designed with internally-finned copper 
tubes."  Offerors were instructed to incorporate these changes into 
their best and final offers (BAFO).  Instead of submitting a BAFO, IRC 
protested the amendment to our Office. 

IRC protests that the amended specifications are overly restrictive 
because both the tube-in-shell design and plate-type heat exchangers 
can handle the cooling function.  By specifying the type of heat 
exchanger, IRC contends that the agency excludes  manufacturers other 
than Trane from the competition.  IRC also contends that the amended 
controller design features are unique to the Trane Company and that 
the design should be immaterial so long as all vital control functions 
are included in the product.

Agencies are required to specify their needs in a manner designed to 
promote full and open competition and thus may include restrictive 
requirements only to the extent necessary to satisfy their minimum 
needs.  Moore Heating & Plumbing, Inc., B-254024, Nov. 16, 1993, 93-2 
CPD  para.  276; Johnson Controls, Inc., B-243605, Aug. 1, 1991, 91-2 CPD  para.  
112.  The contracting agency, which is most familiar with its needs 
and how best to fulfill them, must make the determination as to what 
its minimum needs are in the first instance, and we will not question 
that determination unless it has no reasonable basis.  Moore Heating & 
Plumbing, Inc., supra; Johnson Controls, Inc., supra.  Here, we find 
that the agency has demonstrated reasonable bases for the amended 
requirements.

The agency explains that plate design units, such as IRC's, require 
more maintenance at an increased cost.  While tube-in-shell units can 
be drained of water to prevent freezing and breaking in the winter, 
the plate design units, as proposed by IRC, could not be drained.  
Instead, they have to be pumped full of glycol, which requires 3 hours 
for 3 maintenance workers to accomplish.  In the spring the same crew 
requires 8 hours to flush the unit.  Additional expense is associated 
with the disposal of the hazardous waste that is flushed out.  The 
plate design also makes it more difficult to clear clogs.  While clogs 
in a tube-in-shell exchanger can be cleared by use of a rod, the plate 
design requires use of chemicals for clog removal or reduction.  
According to the agency, this process also produces hazardous waste 
that must be properly disposed of at additional expense.  Further, 
because most of the 400 chillers currently in service are of 
tube-in-shell design, the Fort Knox air conditioning technicians have 
extensive training and experience with this design, and very little 
training for servicing the labor-intensive plate design.  The 
tube-in-shell design, with a flow rate of more than 200 gallons per 
minute (gpm), also is more efficient than the plate design, which has 
a flow rate of less than 140 gpm.  The greater flow rate results in 
higher efficiency in cooling a building and therefore less energy 
consumption.  

With regard to the specified stand-alone transformer and more advanced 
controller, the agency explains that the unit proposed by IRC 
represents 10-year old technology.  While IRC's proposed controller 
may handle all vital functions, it lacks additional features that 
promote the overall maintenance and efficiency of the units.  For 
example, the specified controller allows extensive flexibility in 
programming operating control strategies and provides extensive 
diagnostic information in readout form.  These displays notify the 
operator of any fault condition for easy troubleshooting, will 
anticipate potential problems, and will initiate corrective action to 
prevent nuisance shutdowns.  The type of controller proposed by IRC is 
more limited in this respect and shuts down the unit more frequently.  

We believe that the agency has reasonably supported its determination 
of its minimum needs.  The specified design is less labor intensive to 
maintain, does not produce hazardous waste as a by-product of annual 
maintenance, is more efficient in cooling, and features a controller 
that makes trouble-shooting easier with fewer unneeded shutdowns.  
Features that result in more effective maintenance and are more 
cost-effective are legitimate considerations in an agency's 
determination of its minimum needs.  See Moore Heating & Plumbing, 
Inc., supra; LaBarge Prods., Inc., B-232201, Nov. 23, 1988, 88-2 CPD  para.  
510.    

IRC contends that these specifications restrict the competition only 
to Trane products.  However, the agency advises that its market 
research confirms that all manufacturers, apart from IRC, offer the 
tube-in-shell design and the more advanced controllers in their 
chillers.  In this procurement alone, the agency received proposals 
offering the products of Trane, Carrier, and Dunham-Bush.  

IRC questions the agency's timing of the amendment, noting that in 
1994, 
IRC won a contract to supply its chillers to Fort Knox, and that 
solicitations since then have not used the restrictive specifications.  
We find nothing improper about the issuance of the amendment.  
Agencies may amend their specifications when necessary and are simply 
required, as the agency did here, to ensure that the offerors are 
advised and provided an opportunity to amend their proposals in a 
BAFO.  See Federal Acquisition Regulation  sec.  15.606 (FAC 90-31).  Here, 
until the evaluation of IRC's apparently low offer, the agency was not 
aware of any need to clarify the specifications.  Using the original 
specifications, the agency had obtained competitive proposals and 
awarded several contracts to offerors proposing only tube-in-shell 
designs with the more advanced controllers.  The agency also explains 
that the disadvantages associated with the IRC chillers were not noted 
until several months after their purchase, and that IRC had not 
submitted proposals for its chillers on the intervening procurements.  
Further, there is no evidence that the agency included the more 
restrictive specifications in order to eliminate IRC from the 
competition.  In fact, though claiming the specifications are unduly 
restrictive, IRC does not argue that it is unable to offer compliant 
chillers.  To the contrary, its comments on the agency's protest 
report suggest that it could manufacture chillers meeting the agency's 
requirements.  The mere fact that a particular prospective offeror is 
unable or unwilling to compete under specifications that reflect the 
agency's needs does not establish that the specifications are unduly 
restrictive.  Interscience Sys., Inc., B-205458, Mar. 9, 1982, 82-1 
CPD  para.  220.

Well after commenting on the agency's report IRC raised a number of 
additional arguments about its units for our consideration in 
resolving the protest.  Our Bid Protest Regulations, however, do not 
contemplate the unwarranted piecemeal development of protest issues.  
Little Susitna Co., 65 Comp. Gen. 652 (1986), 86-1 CPD  para.  560.  In any 
event, we note that IRC argues it could include a drainage system on 
its units that actually would answer the agency's design concerns.  
However, this potential design change does not address the controller 
design and resolves only one of the problems with the plate design; it 
does nothing to resolve other maintenance issues such as the flow 
rate, clog problems, and the lack of expertise at Fort Knox for 
maintaining the IRC design.  In addition, IRC has submitted 
information indicating that other manufacturers use the plate design 
because it is more advantageous than the tube-in-shell design; the 
information sheets, however, concern 10- to 40- ton units whereas the 
agency here is procuring 60-ton units.  Finally, with regard to the 
controller, IRC maintains that its proposed controller will do all 
required tasks, but concedes that it requires "supplemental 
electromechanical logic" to do so. 

The protest is denied.

Comptroller General 
of the United States

1. As part of its protest, IRC complains that the agency needlessly 
required it to submit information in support of its claimed SDB 
status, only to then change the specifications.  We find nothing 
improper in the agency's actions.  The contracting officer has a 
responsibility to ensure that offerors obtaining the benefit of an SDB 
preference are entitled to it.  Here, but for the preference, IRC 
would not be in line for the award.  The amendment of the 
specifications changed nothing in this regard.