TITLE: C. Lawrence Construction Company, Inc., B-290709, September 20, 2002
BNUMBER: B-290709
DATE: September 20, 2002
**********************************************************************
C. Lawrence Construction Company, Inc., B-290709, September 20, 2002
Decision
Matter of: C. Lawrence Construction Company, Inc.
File: B-290709
Date: September 20, 2002
Charles A. Lawrence, Jr., for the protester.
Frank P. Buckley, Esq., Department of Labor, for the agency.
Jennifer D. Westfall-McGrail, Esq., and Christine S. Melody, Esq., Office
of the General Counsel, GAO, participated in the preparation of the
decision.
DIGEST
Protest of invitation for bid's terms is sustained where protester
reasonably interpreted specification governing interior signs to be
installed as requiring named manufacturer's signs and there is no evidence
in the record that only named manufacturer's signs will satisfy the
agency's needs.
DECISION
C. Lawrence Construction Company, Inc. protests the terms of invitation
for bids (IFB) No. IFB-02-DCS-32-JC, issued by the Department of Labor,
Employment and Training Administration, for construction of educational
and vocational buildings at the Turner Job Corps Center in Albany,
Georgia. Lawrence contends that the specification governing signs to be
installed in the buildings is unduly restrictive of competition.[1]
We sustain the protest.
The IFB, which contemplated the award of a fixed-price contract, requested
lump-sum prices on a base item and four additive alternate items. The
base item encompassed the construction of two new buildings with complete
mechanical, electrical, and plumbing systems and interior and exterior
finishes, as well as site improvement work. A number of the
specifications describing the work to be performed identified acceptable
products and/or acceptable manufacturers. In some cases, the
specifications indicated that products equal to those identified would be
permissible,[2] while other specifications made no allowance for equal
products.[3] With specific relevance to this protest, the specification
governing interior modular and interchangeable signs identified as
*[a]cceptable [m]anufacturers* of the signs to be furnished *ASI Sign
Systems . . . [o]r pre-approved manufacturer with an equal product.* The
specification also identified *ASI INTERIOR 20 Series* as an acceptable
product and furnished a detailed description of the characteristics of the
ASI Interior 20 signs. IFBS: 10447, P:P: 2.01 and 2.02.
In addition to the above specification describing the signs to be
furnished, the IFB contained a more general Materials and Equipment
specification, which provided as follows:
Procedures governing product selection include the following:
1. Proprietary Specification Requirements: Where Specifications name
only a single product or manufacturer, provide the product indicated. No
substitutions will be permitted.
2. Semiproprietary Specification Requirements: Where Specifications
name 2 or more products or manufacturers, provide 1 of the products
indicated. No substitutions will be permitted.
a) Where Specifications specify products or manufacturers by name,
accompanied by the term *or equal* or *or approved equal,* comply with the
Contract Document provisions concerning *substitutions* to obtain approval
for use of an unnamed product.
3. Nonproprietary Specifications: When Specifications list products
or manufacturers that are available and may be incorporated in the Work,
but do not restrict the Contractor to use of these products only, the
Contractor may propose any available product that complies with Contract
requirements. Comply with Contract Document provisions concerning
*substitutions* to obtain approval for use of an unnamed product.
IFB at S: 01600, P: 2.01(B)(2).[4]
The IFB also contained the following guidance:
References in the specifications to any article, device, product,
materials, fixture, form or type of construction by name, make, or catalog
number, shall be interpreted as establishing a standard of quality, and
not as limiting competition. The Contractor may make substitutions equal
to the items specified if approved prior to the bid opening through the
issuance of addenda. If approval is requested after the award of the
contract, substitutions may or may not be approved. Approval will be
granted for any substitution which is in the Government's interest. The
Contractor bears the risk in the event a substitution proposed after award
is not approved.
Attach. B, Additional Instructions to Bidders.
Lawrence filed its protest with our Office on June 12, prior to the time
set for bid opening. Despite the protest, the agency proceeded with bid
opening. Twelve bids were received. Lawrence did not submit a bid. The
agency has withheld award pending our decision.
Lawrence argues that the sign specification is restrictive of competition
because it requires the contractor to furnish ASI signs despite the fact
that equivalent signs manufactured by other companies will also meet the
agency's needs. In this regard, the protester notes that while the
specification permits equal products of other *pre-approved*
manufacturers, no other manufacturer had been approved as of the date of
bid opening, leaving ASI as the single named manufacturer for purposes of
section 01600, which prohibits substitutions where the specifications name
only a single product or manufacturer and do not contain the words *or
equal* or *or approved equal.*
The agency argues in response that the sign specification does not require
ASI signs, but rather permits the contractor to use the product of another
manufacturer so long as the product is equal to ASI's and approved by the
agency.[5] The agency contends that even assuming that the signage
specification itself is ambiguous, the Additional Instructions to Bidders
*make[] it clear that the reference to a product in the specifications is
not intended to restrict competition but merely to establish a standard of
quality,* and that a bidder desiring to provide an equal product had two
options open to it: the bidder could seek approval from the agency of an
equal product prior to bid opening, which, if approved, would be included
in an amendment to the solicitation, or the bidder could seek approval of
an equal product after award, in which case the contractor would bear the
risk that the proposed substitution might not be approved. Agency Report
at 5-6. The agency further argues that the cost of the signs is in any
event de minimis when compared with the overall value of the contract.
The initial question for our consideration is whether the IFB is
reasonably susceptible of the interpretation advanced by the protester.
We think that it is.
In our view, Lawrence and other bidders could reasonably have understood
the requirement that the signs be manufactured by either ASI or *a
pre-approved manufacturer with an equal product* as a requirement that any
manufacturer other than ASI have been approved prior to bid opening. The
use of the prefix *pre-* in *pre-approved* implies that the approval was
required to have been obtained prior to some other event, and in this
context it clearly is reasonable to interpret that event as bid opening.
In this regard, the interpretation of *pre-approved* as signifying
approval prior to bid opening is consistent with the distinction drawn in
the Additional Instructions to Bidders between pre- and post-bid opening
requests for approval of substitutions.
Further, regarding the agency's argument that the Additional Instructions
to Bidders made it clear that the substitution of items equivalent to
those named in the specification would be permitted, the Additional
Instructions in fact placed bidders on notice that substitutions of equal
items requested after award of the contract might not be approved and that
the contractor bore the risk of non-approval. Moreover, to the extent
that the Additional Instructions appear to provide for post-award
substitutions found to be in the government's interest even where
specifications are proprietary, they are in conflict with the provisions
of the Materials and Equipment specification, which strictly prohibits
substitutions where the specifications name specific products or products,
unaccompanied by the words *or equal* or *or approved equal.*
In our view, the provisions of this IFB were at best ambiguous and could
reasonably have been interpreted by bidders such as Lawrence as requiring
them to furnish ASI signs since no manufacturers other than ASI had been
approved prior to bid opening. Given that the agency has not argued that
only ASI signs will meet its needs, not only is this interpretation
contrary to the statutory requirement that solicitations include
specifications that permit full and open competition and contain
restrictive provisions only to the extent necessary to satisfy the needs
of the agency, 41 U.S.C.
S: 253a(a)(2) (2000), National Customer Eng'g, B-231135, Mar. 11, 1993,
93-1 CPD
P: 225 at 4, and potentially prejudicial to bidders who reasonably
believed themselves to be precluded from using lower-priced quotations
from other sign manufacturers in formulating their bid prices, see Pavel
Enters., B-249382, Nov. 9, 1992, 92-2 CPD
P: 330 at 5, but it apparently is not what the agency intended.
We find unpersuasive the agency's argument that because the cost of the
signs is
de minimis when compared with the overall value of the contract, any
defect in the specification does not give rise to prejudice. The record
reveals that despite the considerable overall value of the work solicited,
some of the bids were tightly grouped. For example, the third lowest bid
was only $2,300 lower than the fourth lowest bid. The record also shows
that ASI's quoted price for the signs of $12,535.14, Protester's Comments,
July 2, 2002, at 2, exceeded the agency estimate of $4,329 by over $8,000,
suggesting that a bidder such as Lawrence might well have been able to
reduce its overall price by up to $8,000 by obtaining quotations from sign
manufacturers other than ASI. Given these two factors, we are not
persuaded that the cost of the signs was de minimis in the sense the
agency argues, since it is not unreasonable to conclude that the
difference in bids on that item could affect the bidders' competitive
standing.
Because bidders could reasonably have interpreted the IFB's terms in a
manner restrictive of competition, we sustain the protest.
Since the agency's position in this protest appears to be that it in fact
intended to request the signage systems on a brand name or equal basis, we
recommend that it revise the specifications to reflect this intent and
solicit new bids. We also recommend that the agency reimburse the
protester for its costs of filing and pursuing the protest. Bid Protest
Regulations, 4 C.F.R. S: 21.8(d)(1) (2002). In accordance with section
21.8(f) of our Regulations, Lawrence's claim for such costs, detailing the
time expended and costs incured, must be submitted directly to the agency
within 60 days of receipt of the decision.
The protest is sustained.
Anthony H. Gamboa
General Counsel
------------------------
[1] In a subsequent submission to our Office, filed after bid opening, the
protester argued that other specifications in the IFB were also
restrictive of competition. These arguments are untimely because they
were not raised prior to bid opening; accordingly, we will not consider
them. Our Bid Protest Regulations require that protests based upon
alleged improprieties in a solicitation that are apparent prior to bid
opening be filed prior to bid opening. 4 C.F.R. S: 21.2(a)(1) (2002). To
the extent that the protester argues that it did raise the matters in its
initial protest by stating that *there are other problems related to
semiproprietary specification requirements paragraph 2.01.5.2, which we do
not have time to address,* Protest at 2, this was not a sufficiently
detailed allegation.
[2] For example, P: 2.01 of section 10810 provided that *Toilet
[a]ccessories [s]pecified shall be equal to products listed herein . . .
.*
[3] See, e.g., P: 2.06 of section 08710.
[4] Section 01631 summarized the procedures for obtaining approval of a
substitution. Paragraph 1.04 of the section required the contractor
requesting the substitution to provide the following information, as
appropriate:
--coordination information
--a detailed comparison of significant qualities of the proposed
substitution with those of the item specified
--product data
--samples
--a statement indicating the substitution's effect on the construction
schedule
--cost information, including a proposal of the net change, if any, in the
contract sum
--the contractor's certification that the proposed substitution conforms
to requirements in the contract documents
--the contractor's waiver of rights to additional payment or time that may
subsequently become necessary because of the failure of the substitution
to perform adequately.
The section further stated that acceptance of the substitution would be in
the form of a change order.
[5] In this regard, the agency has not argued that only ASI signs will
meet its needs; its argument is that the IFB does not restrict the
contractor to furnishing ASI signs.