B-159188, AUG. 26, 1966

B-159188, AUG. 26, 1966

TO THE ENSIGN-BICKFORD COMPANY:

REFERENCE IS MADE TO YOUR ATTORNEY'S LETTER OF JULY 6, 1966, AND SUBSEQUENT CORRESPONDENCE, WRITTEN IN YOUR BEHALF, PROTESTING AGAINST THE AWARD OF CONTRACT NO. DA-11-173-AMC-861 (A) TO THE CANADIAN COMMERCIAL CORPORATION (CCC) UNDER REQUEST FOR PROPOSALS (RFP) NO. APC 729-66, ISSUED BY THE AMMUNITION PROCUREMENT AND SUPPLY AGENCY,DEPARTMENT OF THE ARMY ON APRIL 5, 1966.

THE RFP, AS AMENDED, SOLICITED OFFERS--- TO BE OPENED APRIL 22, 1966 -- FOR FURNISHING 19,925,000 FEET OF DETONATING CORD, TYPE I, CLASS E, ON AN F.O.B. ORIGIN BASIS ONLY. THREE PROSPECTIVE OFFERORS WERE REQUESTED TO SUBMIT PROPOSALS, AND THREE PROPOSALS WERE RECEIVED AS FOLLOWS:

A. CANADIAN COMMERCIAL CORPORATION, OTTAWA, CANADA (CANADIAN SAFETY FUSE COMPANY, LIMITED, BROWNSBURG, QUEBEC, CANADA)

UNIT PRICE: $23.90 PER THOUSAND FEET TOTAL $476,207.50

B. THE ENSIGN-BICKFORD COMPANY, SIMSBURY, CONNECTICUT

UNIT PRICE: $23.95 PER THOUSAND FEET (INCLUDES FIVE EXCEPTIONS TO TECHNICAL DATA) TOTAL $477,203.75

C. COAST MANUFACTURING AND SUPPLY COMPANY, LIVERMORE, CALIFORNIA

UNIT PRICE: $24.45 PER THOUSAND FEET TOTAL $487,166.25

AFTER EVALUATION OF THE FOREGOING PROPOSALS IN ACCORDANCE WITH THE REQUEST FOR PROPOSALS, AWARD WAS MADE TO CCC AS THE LOWEST OFFEROR PURSUANT TO THE RFP EVALUATION PROVISIONS WHICH READ AS FOLLOWS:

"A. EVALUATION OF THE PROPOSALS WILL BE BASED ON TOTAL COST TO THE GOVERNMENT AND INCLUDES THE FOLLOWING:

"/1) ITEM COST PROPOSED

"/2) DISCOUNT OFFERED

"/3) FACILITIES SCHEDULE B PLUS GOVERNMENT-OWNED SPECIAL TOOLING

YOUR PROTEST IS DIRECTED TO THE MANNER IN WHICH THE PROPOSALS WERE EVALUATED IN THIS PROCUREMENT. PARTICULARLY, IT IS CONTENDED THAT YOUR BID WAS ONLY ?05 PER 1,000 FEET HIGHER THAN THAT SUBMITTED BY CCC AND SINCE BIDS WERE SUBMITTED F.O.B. ORIGIN, IT IS QUESTIONED WHETHER THE PRICE DIFFERENTIAL WILL, IN FACT, RESULT IN A COST ADVANTAGE TO THE GOVERNMENT, WHEN THE FREIGHT COSTS TO THE GOVERNMENT ARE CONSIDERED. YOU THEREFORE BELIEVE THAT THE CONTRACTING OFFICER HAD NO AUTHORITY UNDER ARMED SERVICES PROCUREMENT REGULATION (ASPR) 1-1305 TO DISREGARD TRANSPORTATION COSTS AND MAKE AN AWARD TO CCC WITHOUT FURTHER NEGOTIATION.

AS A GENERAL RULE, THE COST OF TRANSPORTATION FROM THE F.O.B. ORIGIN DELIVERY POINT TO DESTINATION IS A MATTER FOR CONSIDERATION BY THE GOVERNMENT IN EVALUATING BID OR OFFER MOST ADVANTAGEOUS TO IT. 10 COMP. GEN. 402, 404; 37 ID. 162. IN VIEW THEREOF, YOU SUBMITTED EVIDENCE TO SHOW THAT THE ADDITION OF TRANSPORTATION COSTS TO THE PRICES OFFERED WOULD HAVE ESTABLISHED, IN EVERY ONE OF THE TEN POSSIBLE DESTINATIONS, THAT IT WOULD HAVE ULTIMATELY COST THE GOVERNMENT LESS IF THE CONTRACT HAD BEEN AWARDED TO YOU. THIS IS BASED ON THE THEORY THAT THE INVOLVED TRANSPORTATION COSTS FROM BROWNSBURG, QUEBEC (CANADIAN COMMERCIAL) ARE GREATER IN EVERY INSTANCE THAN TRANSPORTATION COSTS FROM SIMSBURY, CONNECTICUT (YOUR PLANT).

HOWEVER, WE HAVE NO INFORMATION AS TO THE ULTIMATE DESTINATION POINTS. PAGE 5 OF THE RFP ADVISED OFFERORS OF THE POSSIBILITY THAT AN AWARD MAY BE MADE WITHOUT DISCUSSION AND THAT, FOR SUCH REASON, ANY PROPOSAL SHOULD BE SUBMITTED INITIALLY ON THE MOST FAVORABLE TERMS TO THE GOVERNMENT. THIS NOTICE WAS IN CONSONANCE WITH ASPR 3-805.1 (A) (V). UPON REVIEW OF THE RECORD WE DO NOT FEEL THAT THE CONTRACTING OFFICER HAD BEFORE HIM INADEQUATE OR UNACCEPTABLE INITIAL PROPOSALS OR THAT SUCH TECHNICAL UNCERTAINTIES THEN EXISTED AS WOULD HAVE WARRANTED FURTHER NEGOTIATION. IT IS APPARENT THAT PRICE COMPETITION WAS OBTAINED FROM QUALIFIED OFFERORS. HENCE, THE CONTRACTING OFFICER WAS REQUIRED UNDER THE EVALUATION CRITERIA SET OUT ON PAGE 5, SUPRA, OF THE RFP TO DETERMINE WHICH PROPOSAL OFFERED THE LOWEST TOTAL F.O.B. ORIGIN COST TO THE GOVERNMENT. ESPECIALLY SIGNIFICANT IS THAT PAGE 14 OF THE RFP EXPRESSLY EXCLUDED ANY TRANSPORTATION COSTS TO THE GOVERNMENT. THAT PROVISION READS: "GOVERNMENT TRANSPORTATION COSTS WILL NOT BE A FACTOR IN EVALUATING THE OFFER.' IT THUS MAY BE CONCLUDED THAT ALL OFFERORS WERE SPECIFICALLY CAUTIONED TO SUBMIT THEIR BEST INITIAL PROPOSALS WITHOUT REFERENCE TO ANY COST FACTORS ATTRIBUTABLE TO DESTINATION DELIVERIES BY THE GOVERNMENT.

THE RECORD BEFORE US ESTABLISHES THAT THE PROCUREMENT AFFORDED NO REALISTIC BASIS TO EVEN DESIGNATE GENERAL DESTINATION LOCATIONS AS CONTEMPLATED BY ASPR 1-1305.5 WHICH READS AS FOLLOWS:

"1-1305.5 DESTINATION UNKNOWN. WHEN THE EXACT DESTINATIONS OF THE SUPPLIES BEING PURCHASED ARE NOT KNOWN AT THE TIME BIDS OR PROPOSALS ARE SOLICITED, BUT THE GENERAL LOCATION OF THE DESTINATION, SUCH AS EAST COAST, MIDDLE WEST, OR WEST COAST, IS KNOWN, A DEFINITE PLACE OR PLACES SHALL BE DESIGNATED AS THE POINT TO WHICH TRANSPORTATION COSTS WILL BE COMPUTED--- BUT ONLY FOR THE PURPOSE OF EVALUATING BIDS OR PROPOSALS. THE SOLICITATION SHALL SPECIFY THAT BIDS OR PROPOSALS SHOULD BE SUBMITTED F.O.B. ORIGIN AND THAT SHIPMENTS WILL BE MADE ON GOVERNMENT BILLS OF LADING. THE SOLICITATION SHALL STATE:

FOR THE PURPOSE OF EVALUATING (BIDS) (PROPOSALS), AND FOR NO OTHER PURPOSE THE FINAL DESTINATION FOR THE SUPPLIES WILL BE CONSIDERED TO BE AS FOLLOWS: (NAME DESTINATIONS) -------------------

INVITATIONS FOR BIDS SHALL CONTAIN A STATEMENT THAT BIDS SUBMITTED ON A BASIS OTHER THAN F.O.B. ORIGIN WILL BE REJECTED AS NONRESPONSIVE.'

THEREFORE, AND IN VIEW OF THE FACT THAT DESTINATION DELIVERY COSTS WERE INTANGIBLE AND NOT ASCERTAINABLE EVEN AS TO GENERAL LOCATIONS, TRANSPORTATION COSTS TO BE INCURRED BY THE GOVERNMENT WERE NOT APPROPRIATE EVALUATION FACTORS. CF. 45 COMP. GEN. 59, 68.

ACCORDINGLY, WE FIND NO BASIS TO QUESTION THE CONTRACT AWARDED TO THE CANADIAN COMMERCIAL CORPORATION. YOUR PROTEST IS THEREFORE DENIED.