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For your information, our general manager, Mr. John R. Campbell, at a conference with your Mr. L. E. Clayton today, offered to substantiate each of the above points by presenting conclusive physical evidence of nonconformity, and your special assistant refused to permit Mr. Campbell to present this evidence.

B. If it be determined by the Army that the quoted Westinghouse models are in acceptable conformity with the specification, and that, therefore, the above ground of protest is untenable, this Agency is forced to allege that the exceptions to the specification, as set forth in the subject invitation for bids and in the three addenda thereto were deliberately "tailor made" to fit only the quoted Westinghouse models, thereby being restrictive to such a degree as to preclude any competitive bidding from suppliers of water coolers other than Westinghouse, with the resultant assurance that Westinghouse could and would be the only possible recipient of the award.

We fully realize the serious implications of the above allegation, and would normally be reluctant to make such a change. However, the contents of the Westinghouse quotation with its accompanying letter, and your pending or completed acceptance thereof, leads us inalterably to the above conclusion, which conclusion, we are convinced, can be verified upon proper investigation of the facts and circumstances surrounding the drafting of the exceptions to the specification.

If either ground A or B, above, is substantiated, the Army has no alternative than: (1) to cause the outright elimination of the Westinghouse bid, and (2) to determine that the award for this procurement be made forthwith to this agency.

Respectfully submitted.

CAPITOL SUNROC AGENCY, INC.,
RICHARD K. LYON, President.

CC: Quartermaster General, Department of the Army, Washington, D. C. Mr. KEATING. You did simultaneously notify the Quartermaster General?

Mr. LYON. I did, sir. The letter went out-I took it over to the airport on the evening of October 10, and took it to the post office at the airport, to be sure it got there in hopes before the award was made, and the following morning a copy of the letter was delivered by me personally to the office of the Quartermaster General down here in Temporary B, I believe. I took it down to the office myself, so that simultaneously he would have knowledge of what was going on out in Chicago.

I merely enclosed a copy of my Chicago protest with a transmittal letter addressed to the Quartermaster General, and I said:

DEAR SIR: We respectfully enclose herewith, for your information and appropriate action, copies of the formal protest lodged this date against the Chicago quartermaster purchasing office, the contents of which protest are selfexplanatory.

We strongly urge the Quartermaster General to take such steps as may be necessary to delay the making of the subject award, or to have the award withdrawn, until a full and unbiased investigation has been conducted into all the facts and circumstances of this matter.

The cooperation of the Quartermaster General in complying with this request is most sincerely solicited.

Respectfully yours, etc.

That was delivered on the morning of the 11th of October.

In the meantime, I was advised by Campbell that apparently the award had been made to Westinghouse.

I wanted to get some answer from my appeal to the Quartermaster General, so I sent him a follow-up, expediting telegram as follows: Would you be good enough to advise us at your earliest convenience as to the action taken in response to our letter to you of October 10, 1949, relating to the

protest lodged by this agency of award to Westinghouse Electric Corp. under Chicago quartermaster purchasing office invitation for bid

the same number.

This matter is of vital importance to our company and our supplier, and we respectfully urge your early attention to this situation.

In response to that telegram, I got a reply from, I think, Colonel Cook, who was the initiator of this, as follows:

Reurtel 12 October concerning your protest of award under

same Quartermaster bid number

reply follows by mail. End. Cook.

I thereafter was in receipt of a letter over the signature of Brig. Gen. A. D. Hopping, who is the Chief of the Supply Division, dated Oc

tober 13.

I would like to break the continuity for a minute and go back, because after Campbell found out that the award had been made to Westinghouse, he still said, "How could you make the award to Westinghouse when it quoted models which do not comply with the specification?"

It was then revealed out in Chicago to my general manager, that after the bid opening and after Westinghouse, on the face of its bid had quoted a model which did not comply with the specifications, because the WW22 admittedly was single-wall construction when the specification called for double-wall construction, the Chicago quartermaster went out to Westinghouse, and gave it an opportunity to take another bite of the apple, to elaborate upon an unresponsive bid, and this letter was in the record out there, and came to the attention of my man Campbell after the award was made.

It is addressed to the Chicago Quartermaster Purchasing Office, and refers to the subject invitation for bids and says:

GENTLEMEN: The water coolers offered meet the requirements of Federal Specification 00-C-566B, July 31, 1947, with revision stated in the bid invitation, I would like to explain that this revision related to the kraft paper, the packing paper-with the one single exception noted in the following paragraph:

Paragraph D-2 stipulates that the "coolers offered by the bidder shall be all models in current production." Paragraph C-1 requires that we be prepared "upon 10 days' notice to make available a sample of each item bid upon." Items 1, 2, 3, and 4 are and have been in production all this year.

Now, here is the important point:

Item 4 digresses from the specification only

and it is underlined

in that it has not been converted as yet to the double wall type, as required in paragraph C amended. We are planning this conversion on Model WW22 for 1950. It is evident that as of the present we cannot meet the requirements in D-2 in paragraph C as stated above.

In making a strict interpretation of the specification we must take exception to these specifications on this one point only in offering our WW22 coolers in item 4. Please note no exceptions are taken for items 1, 2, and 3.

Mr. KEATING. Signed by the Westinghouse Corp.?

Mr. LYON. Signed by Mr. K. W. Berkey, Washington Office, Electrical Appliance Division.

Mr. BRYSON. So he admitted that Westinghouse did not comply with the specification?

Mr. LYON. On the face of the record it is admitted that Westinghouse's bid was unresponsive on item 4. We did not know that this letter had ever been elicited from Westinghouse. It was not obtained until after the bids were opened, and it gave Westinghouse an opportunity after the bids were opened, to modify its bid.

Now, to me, as a lawyer, that is certainly most irregular. There were bidders lower than Westinghouse on this procurement, but just because on the face of their bid they admitted they did not make coolers with double-wall construction, they were eliminated, but the Army gave Westinghouse an opportunity, when it concealed the fact that the WW22 was not double-wall construction, to have another bite at the apple, and to rectify its inability to produce by a subsequent opportunity.

To me that is highly irregular from the point of view of Government procurement.

Then, we ran into this situation-am I talking too long, gentlemen? I mean, would you bear with me a little bit longer?

Mr. BRYSON. We have to reconvene at 2:30. Summarize your statement as rapidly as possible.

Mr. LYON. The essence of our protest is, one, that the award made to Westinghouse was illegal and invalid because it was based on specifications which we believe were drawn in conjunction with Westinghouse.

Two, the Westinghouse bid that was submitted was not responsive to the invitation for bids, because it quoted coolers which clearly did not meet the specification.

Thirdly, the procurement was irregular because of the fact that Westinghouse was given an opportunity, after bid opening, to modify its bid to put it in conformity with the specifications.

Now, that is essentially our position from a legal point of view and a moral point of view.

I would like to stress this point: We protested this matter 3 days before the award. We called to the Army's attention the fact that the coolers quoted by Westinghouse did not meet the specifications. Why there were in such a rush and hurry to make this award to Westinghouse, I will never know. The delivery of the coolers is not called for until next March. It is not as if soldiers were waiting for these water coolers.

In spite of our verbal protest, confirmed by telegram, the Chicago October, after giving Westinghouse the most preferential treatment possible, by giving it a chance to augment its bid after the opening, after we had put the Army on notice of these existing deviations from the specifications.

There is another point that is very relevant: In the invitation for bids, itself, it contemplates a preaward inspection of the coolers of the low bidder. That was contemplated. It would have been so easy for the Army to substantiate whether or not the quoted Westinghouse models met the specifications, by calling upon Westinghouse to produce those coolers and testing them.

The Army has now done that, a month or two after the award was made. Presumably they never would have done it if we had not filed this appeal with the Assistant Secretary.

Now, one other point, and I will stop, gentlemen.
Mr. KEATING. Have they made a finding?

Mr. LYON. I do not know where they are being tested. General Brannon may have that information.

The thing that worries me is that the Army has said that even if they find that the quoted models do not measure up to the specifications, that has no bearing on the award.

It is feeble consolation to us, since we were the low bidder, to have Westinghouse subsequently change its models to meet the specifications; that means nothing to us.

If the models Westinghouse quoted, upon test, do not meet the specifications, and we know the WW22 did not, because they admitted that on the face of that letter which they were asked to file subsequently, but if they do not, the bid which Westinghouse submitted was not a responsive bid, and the award, made upon such an unresponsive bid, is an illegal award.

Mr. KEATING. Do you have any legal remedy in court?

Mr. LYON. Well, that is another thing. We have worked up the chain of command.

In Chicago and in General Feldman's office they took the position that these Westinghouse specification sheets and the quoted models meant nothing; that Westinghouse was offering to meet the specifications.

We argued vehemently that Westinghouse had incorporated this data by reference into its bid. We have now gotten an opinion from the Judge Advocate General's office of the Army, with which General Brannon is fully familiar, that our contention was correct, and that these specification sheets, and the quoted models, were a part of the Westinghouse bid.

Now, that J. A. G. opinion was accompanied by a transmittal memo; they sent an inter-Army departmental letter, which was between their Judge Advocate General and their Legal Department and Archibald Alexander, their Assistant Secretary for Procurement-they forwarded that to Mr. Morrison, and a copy to my Agency, although my Agency was the actual bidder on this equipment, and Mr. AlexanderI have his letter, in which he states-it is not too long, and if you are interested in their final decision, let me read it:

Reference is made to the protest of Sunroc Refrigeration Co. and Capitol Sunroc Agency of the award of the contract to Westinghouse Electric Corp. by the Chicago quartermaster purchasing office under invitation for bid No. QM-so and so.

In addition to certain letters, the grounds upon which this protest is based were set forth in detail at a conference with you and your associates which was held in my office on November 3, 1949. Following this conference you confirmed the fact that the protest primarily involved questions whether the Westinghouse bid was responsive to the invitation, and whether the coolers to be furnished under the contract will comply with Government specifications.

The bid submitted by Westinghouse Electric Corp. and approved by the purchasing officer has been referred to the Judge Advocate General of the Army for consideration of its responsiveness and sufficiency. I am advised that the bid was legally responsive and sufficient, and that the award of the contract to Westinghouse was properly made. A copy of the opinion of the Judge Advocate General is enclosed for your information. Model coolers have been requested of

Westinghouse by the purchasing officer and are to be subjected to tests to determine whether they meet the requirement of the specifications. These tests concern compliance with the contract, of course, and do not affect the validity of the award.

When I got this letter, my copy and the copy of the Judge Advocate General's memorandum, I read the Judge Advocate Goneral's memorandum as a lawyer should read another legal document and, frankly, sir, it is replete, in my opinion, with argumentative inconsistencies, and I have no hesitancy in saying that General Brannon and I had a little misunderstanding over the telephone because I made the allegation, in all sincerity and I did not mean to be disrespectful—that I felt that the Judge Advocate General's memorandum was deliberately written to validate the award which had been made out in Chicago on October 10, and perhaps the General was fully justified in resenting what I had said, but I sincerely felt that way.

Mr. KEATING. Now, assuming that the Judge Advocate General was wrong in his conclusions

Mr. LYON. Yes.

Mr. KEATING. Or assuming that his opinion did not bear out Mr. Alexander's conclusion, either one of those assumptions—

Mr. LYON. Yes.

Mr. KEATING. Do you have a remedy in the Court of Claims?
Mr. LYON. No, sir. I was going to lead up to that.

After I got these letters, I talked to Archibald Alexander, and I said, "Are we to construe this letter of yours of November 17 as a final administrative decision of the Army Department on this protest?" He said, "Yes, you may assume so." He said "Well, now, if the tests come out a little different, if the tests come out that the coolers do not meet the specifications, then that might have some bearing on it." But I said, "In your letter it states that it will not affect the validity of the award. Are we to assume as the basis of judicial action or an appeal to Congress, that this is your final action?"

He said, "Yes, this is.'

So, I immediately, after that, after that telephone conversation on November 18, sent a telegram, because I wanted to establish my record as the basis for review under the Administrative Procedures Actperhaps we have a right to go into the courts to determine whether this award was validly made-and I said:

This is to confirm the understanding reached during our telephone conversation this afternoon to the effect that your letter of November 17, 1949, with enclosed Judge Advocate General's memorandum to you of November 14, 1949, sets forth the final administrative decision of the Department of the Army with respect to the protest lodged against the award of the contract for electric water coolers to Westinghouse Corp. by the Chicago quartermaster purchasing office under invitation for bids No. QM

And so forth.

In view of such unwarranted and illegal decision adverse to the interests of this agency and the Sunroc Co., we are obliged forthwith to take whatever action before the courts and Congress we may deem appropriate and justified.

Mr. KEATING. In your opinion as a lawyer, you do have a right to review this administrative decision, do you?

Mr. LYON. If we can get a hearing before the courts on the bald legal questions involved, was this procurement made according to ⚫ established law, I think we might get a decision.

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