________________________ GRANTED: August 28, 1997 ________________________ GSBCA 13551 GRUNLEY CONSTRUCTION CO., INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Charles F. Mitchell, Rockville, MD, counsel for Appellant. Robert C. Smith, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges PARKER, VERGILIO, and GOODMAN. VERGILIO, Board Judge. On March 4, 1996, Grunley Construction Co., Inc. filed this appeal involving a contract with the respondent, the General Services Administration. At issue are the requirements of the contract regarding the provision of an automatic control system. The agency maintains that the contract requires the product of a specific make and manufacturer. The contractor asserts that the materials and workmanship clause permits the contractor to provide a functionally equivalent system, which it proposed to do after award, but the agency rejected. The contractor correctly interprets the contract; the agency's interpretation is at odds with the materials and workmanship clause. The agency precluded the contractor from providing a product permitted under the contract. The contractor is entitled to an adjustment under the changes clause, because the agency demanded a more expensive item. The Board grants the appeal. Having resolved the question of entitlement in favor of the contractor, by stipulation of the parties, the contractor is entitled to recover $585,000, plus interest as provided in statute. Findings of Fact The solicitation 1. The agency issued a solicitation to obtain bids for the renovation of a building (the Fallon Building). Exhibit 1 (all exhibits are in the appeal file). Award would be made to the lowest-priced, responsible bidder, without discussions. Id. at 120 ( 3.03), and GSA Form 3501 (Oct. 1990) at 2-3 ( 15). One aspect of the renovation is the provision of an automatic control system, described in the "mechanical" portion of the solicitation. Id. at 15950-1 to -33 ( 15950, Automatic Control Systems) and 15985-1 to -6 ( 15985, Sequence of Operation). 2. The solicitation contains a materials and workmanship clause which gives the contractor discretion regarding the selection of products to be utilized. The clause states, in pertinent part: References in the specifications to equipment, material, articles, or patented processes by trade name, make, or catalog number, shall be regarded as establishing a standard of quality and shall not be construed as limiting competition. The Contractor may, at its option, use any equipment, material, article, or process that, in the judgment of the Contracting Officer, is equal to that named in the specifications, unless otherwise specifically provided in this contract. Exhibit 1, GSA Form 3506 (Mar. 1995) at 11 ( 36(a)) (FAR 52.236-5, Materials and Workmanship (APR 1984)). 3. The general requirements portion of the solicitation contains a section on products. The section both expressly references the materials and workmanship clause, and states: Unless otherwise specifically provided in this contract, reference to any equipment, material, article, or patented process by trade name, make, or catalog number, shall be regarded as establishing a standard of quality and shall not be construed as limiting competition. Subject to compliance with specified requirements, the Contractor may, at his option, use any equipment, material, article, or process which, in the judgment of the Contracting Officer, is equal to that named. Exhibit 1 at 1632-1 ( 1.1.A), 15010-1 ( 1.1.B). The section addresses general product compliances and general product requirements; the latter emphasizes compliance with the materials and workmanship clause. Id. at 1632-1 to -6 ( 2.1, 2.2). 4. The automatic control system falls within division 15, the mechanical portion, of the solicitation. As to mechanical basic requirements, the solicitation states under products, "MANUFACTURERS (Not Used)" and as to "DIVISION 15 SECTIONS": "General: Conform to the requirements of Division 15 sections for all products furnished under this Contract." Exhibit 1 at 15010-5 ( 2.1, 2.2). 5. A general summary describes the scope of the work concerning the automatic control system: The extent of automatic controls work is indicated on the drawings and schedules and by the requirements of this Section, and Section 15010, "Mechanical Basic Requirements." The work includes: 1. The provision of a complete and operational control system, including all devices necessary to perform the functions herein described or indicated on the drawings. [Two items follow, not here relevant.] Exhibit 1 at 15950-1 ( 1.1.A). 6. The automatic control system section states in the "products" subsection: "MANUFACTURERS A. Manufacturer shall be as indicated in Section 15985." Exhibit 1 at 15950-4 ( 2.1.A). Other portions of this section describe generally and specifically the attributes of the components to be furnished. Id. at 15950-4 to -25 (Part 2). 7. Section 15985, referenced in the above finding, pertains to sequence of operation work, with specified related sections involving automatic control systems as well as testing, adjusting and balancing. Exhibit 1 at 15985-1 to -6 ( 15985). Under a caption of "products," a single paragraph is found, it with the caption of "manufacturers": The Automatic Temperature Controls & Energy Management System shall be Network 8000 Manufactured by SIEBE ENVIRONMENTAL CONTROLS. The system is based upon Network 8000 systems compat[i]ble with the GSA's SIGNAL (Host 3 off site location) monitoring & controls software. Additional copies of SIGNAL & monitoring computers shall be furnished as part of the contract. Id. at 15985-1 ( 2.1.A); Exhibit 2 at 5 ( AF). 8. Amendment three to the solicitation contains agency responses to questions, including the two following: Q. In the Sequence of Operation (Section 15985, Part 2.1.A.) only Siebe Environmental Controls is listed as a Manufacturer for the Automatic Temperature Controls & Energy Management Systems. However, under Products (Section 06132, Part 1.1.A.) it states that listed equipment, materials, etc., are regarded as establishing a standard of quality and shall not be construed as limiting competition (emphasis added). "In the judgment of the Contracting Officer" please provide the names of "equal" manufacturers to that of Siebe Environmental Controls (i.e. Johnson Controls, Honeywell, Landis & Gyr/Powers, etc.) A. The specifications clearly indicate the building's operation objectives. Exhibit 4 at 4 ( B.10). Q. The controls specifications identify Siebe as the sole provider and installe[r] of the DDC/Automatic Temperature Controls on the subject project. The controls on this project could be as much as $2 [million]. The only interface to an existing system is through a modem communication to the existing Siebe system in the Customs House. Does the project have to be sole source. A standalone PC could be provided in the Custom House for communication with the Fallon Federal Building for less than $10,000. A. The control specifications outlines the GSA's objective, which is inter-building communications. Id. ( B.12). 9. A question and response found in a subsequent amendment address question and answer ten from amendment three: Q. (Refers to Amendment #3, Q.& A. #10). If Johnson Controls is the low bidder on the project, meets the intent of the specifications and provides communications between the Custom House and the Fallon Building as shown on the contract drawings will Johnson Controls be accepted and approved? R. Approvals and disapprovals are determined after contract award, at the time of submittal of documents[.] Exhibit 6 at 18 ( D.54) (amendment five). 10. One further amendment addresses the matter at issue: Q. Since the Government did not indicate that bidders must use Siebe Environmental Controls as a sole source, proprietary item (See Amendment 3, Q&R #10) bidders must assume that pursuant to the Materials and Workmanship Clause, the Government will accept any controls vendor which can meet the salient characteristics of spec Section 15985 and related plans and specs. Please advise if the understanding is incorrect and the true intent of the specs is to specify Siebe as a proprietary sole source. Otherwise, bidders will rely on their interpretation that the Materials and Workmanship Clause permits open competition. R. The intent of the specification is to provide a control system that can communicate to other GSA buildings that are equipped with Siebe Environmental controls. The proposed system must be able to provide this communication link without utilizing multiple terminals as required by GSA. Exhibit 7 at 4 ( C.2) (amendment six). 11. Other than what is set forth and referenced in findings above, the solicitation, as amended, provides no greater details as to the agency's alleged requirement for the Siebe control system. Exhibits 1-8. The contract and performance 12. Grunley submitted a bid, relying on the pricing of potential subcontractors for mechanical portions of the work, including the automatic control system. The pricing was based upon other than a Siebe system. Exhibit 34 ( 1). 13. The agency awarded the contract to Grunley on September 27, 1995. Exhibit 9. The contract contains the provisions of the solicitation, including a changes clause. Exhibit 1, GSA Form 3506 (Mar. 1995) at 27-28 ( 89) (FAR 52.243-4, Changes (AUG 1987)); Exhibits 2-8. 14. The contractor provided a pre-qualification submittal for an automatic control system utilizing other than the make and manufacturer named in the solicitation and contract. Exhibit 12. The agency disapproved the submittal; the agency required the contractor to proceed utilizing the Siebe system described in the contract. Exhibits 13, 14. 15. The parties stipulate that should the Board find in favor of the contractor on the issue of entitlement, the contractor shall be entitled to recover $585,000, plus interest pursuant to the Contract Disputes Act of 1978, as amended, as its additional cost of performance. Exhibit 34 ( 2). Functionality of the contractor-proposed system 16. The contractor-proposed control system does not utilize a Siebe Network 8000 system or the related Signal software, Finding 7. Rather, it is based around hardware and software produced by a different company. Through a single personal computer, the system would enable an individual to monitor and control the given building, as well as permit inter-building communication (that is, communicate with buildings equipped with Siebe controls). The software of the Siebe and contractor-proposed systems would run on the system simultaneously, using split screens if desired. Transcript at 78-79, 82-84, 97-99; Exhibit 38. 17. The expert presented by the agency concluded that there exist differences in the functionality of the proposed control system compared with that of the Siebe (contract-identified) system. Eight differences he classifies as minor--not grounds for rejecting the submittal, because it is customary to allow for such minor differences. A ninth distinction he views as critical: the proposed system is not the one identified in the contract. He concludes, in terms of the specified performance requirements, the proposed system would provide everything except that it would utilize software that was not the software specified. Transcript at 250-53, 268-69; Exhibit 48. 18. The expert presented by the contractor concludes that the contractor-proposed control system satisfies the specifications. Transcript at 133-34. He notes that the solicitation requires compatibility, Finding 7, and the agency's responses to questions highlight the ability to communicate between buildings, Finding 8- 10, requirements which he views as distinct from inter-operability or integration, which the solicitation does not specify as an essential element of the functioning system. Transcript at 137-40, 143-44. Requirements of the agency 19. With an effective date of June 1994, and expiration date of September 30, 1996 (unless a global protocol was earlier developed), the agency had established a class justification to permit contracting officers to specify a brand name product when acquiring energy management systems to be integrated with existing systems. Exhibit 11. The contracting officer and the project manager each testified that, prior to issuance of the solicitation, she had signed a certificate that the contract is within the scope of the class justification. Id. at 6; Transcript at 170, 214-15. This certificate was not released to bidders; the contractor and the relevant potential subcontractors were not aware of its existence until after the agency had rejected the pre-qualification submittal. Transcript at 44, 101-02, 169. The solicitation does not use the term "integration" with respect to the functionality of the control system to be obtained. Exhibits 1-8. 20. Although the contracting officer and project manager signed the certification, declaring the need to identify Siebe as the only product acceptable to the Government because of the need to integrate the system with existing systems, each testified that had the contractor made the request under the substitutions clause, Exhibit 1 at 1632-2 ( 1.2.A), to use other than Siebe hardware and software, she would have considered the suggestion for a reduced contract price. Transcript at 180-81, 220, 224-25. The agency would consider the alternative equipment only if it could obtain a value engineering credit. Id. at 40-41. 21. Despite the willingness to consider substitute hardware and software, the agency had what it purports to be reasons to insist upon the Siebe product line, such that systems in multiple buildings could talk with each other, and share information and data, while employees would need to learn only one system. Transcript at 171, 195-96, 214-15. The agency made no attempt to reveal any of these considerations to bidders, although the agency conducted a two-day tour of the building and pre-bid conference, with the stated purpose "to provide a briefing on the contacting concept, the scope of work, the specifications and to conduct a tour of the building and the requirements to be provided so that bidders can ascertain the general and local conditions which could materially affect conduct of operations or the cost thereof." Exhibit 1 at 2; Transcript at 26-27, 169. Discussion Contract interpretation This dispute initially focuses upon the interpretation of the solicitation and contract, particularly the materials and workmanship clause. The clause specifies that solicitation references to equipment by trade name and make shall be regarded as establishing a standard of quality and shall not be construed as limiting competition. Moreover, the contractor may utilize equipment which is functionally equal to that named in the specifications, unless otherwise specifically provided in the contract. Finding 2. In dictating the requirements regarding the automatic control system and sequence of operation work, the specification names Siebe products--Network 8000, as well as Signal monitoring and controls software. Finding 7. However, nothing in the language of the solicitation provides that this naming of products is other than a routine statement, falling within the express ambit of the materials and workmanship clause. Finding 11. For example, the discussion of products and manufacturer does not state something to the effect of the following: "notwithstanding the materials and workmanship clause, the contractor shall provide Siebe" or "no product other than that stated may be provided; this is not a simple reference to a standard of quality." Potential bidders, however, before formulating a bid utilizing a product not sought by the agency, submitted questions on the very subject on the scope of the materials and workmanship clause as it relates to the automatic control system. By its responses to four questions, the agency did not reveal its interpretation of the clause and its alleged desire to obtain only a Siebe product. Rather, the responses perpetuate a belief that other than Siebe products may be acceptable, and focus the concerns to the operational objectives of the system. By not explicitly stating that other than Siebe systems are not acceptable and by referencing objectives, the answers indicate that the solicitation represents a performance specification--a notion fully in keeping with the materials and workmanship clause. Findings 8-10. The agency's interpretation of the contract is inconsistent with the specification for the automatic control system and sequence of operation work when read with the materials and workmanship clause. The responses found in subsequent amendments only reinforced the reading of the solicitation as permitting other than a Siebe-based system. While the Board need not here address the validity of the class certification and the ultimate restriction on competition for the control system, the agency's willingness to consider a non-Siebe system under the substitutions clause belies its contention that a restrictive reading of the solicitation represents the agency's true requirements and justifies the expenditure of greater than one-half million dollars for the Siebe system in lieu of an alternative. The proposed control system The contractor-proposed system is not the Siebe system. However, that alone is not sufficient justification to reject the pre-qualification submittal. While differences exist between the system identified in the contract and that offered, the differences are minor in nature. The record reveals no basis to support the rejection of the pre-qualification submittal. Findings 16-18, 20. Thus, the agency should have permitted the contractor to utilize the control system of its choice. By precluding that option, the agency altered the contract. The agency's actions constitute a compensable change. The contractor priced its bid envisioning a system which was functionally equivalent to that identified and which meets all requirements enunciated in the solicitation. As a result of the change, the contractor was required to obtain a Siebe-based system. The parties have agreed that $585,000 reflects the increased costs resulting from the change. Finding 15. Decision The Board GRANTS the appeal. The contractor is entitled to recover $585,000, with interest as permitted under statute, 41 U.S.C.  611 (1994). ___________________________ JOSEPH A. VERGILIO Board Judge We concur: ____________________________ ___________________________ ROBERT W. PARKER ALLAN H. GOODMAN Board Judge Board Judge