B-146507, AUG. 24, 1961

B-146507, AUG. 24, 1961

TO ARNDT AND DAY:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 28, 1961, WRITTEN IN BEHALF OF TROWBRIDGE CONVEYOR COMPANY AND PROTESTING AGAINST THE ACTION OF THE DEPARTMENT OF THE NAVY IN AWARDING A CONTRACT TO KORNYLAK ENGINEERING CORPORATION UNDER IFB 600-1182-61.

THE INVITATION IN QUESTION REQUESTED BIDS ON FOUR CONVEYORS, WHICH WERE LISTED AS ITEMS 1, 2 AND 3, FOR INSTALLATION ON THE U.S.S. KITTY HAWK AT SAN FRANCISCO, CALIFORNIA, TOGETHER WITH SPARE PARTS, DRAWINGS, MANUALS AND OTHER ITEMS LISTED AS ITEMS 4 THROUGH 11. BIDS ON ITEMS 1, 2 AND 3 WERE REQUESTED ON DESTINATION AND/OR ORIGIN BASIS. SPARE PARTS UNDER ITEM 4 WERE TO BE SHIPPED WITH ITEMS 1, 2 AND 3, WHILE BIDS ON ALL OTHER ITEMS WERE REQUIRED TO BE ON THE BASIS OF DESTINATION ONLY.

THE BID SUBMITTED BY KORNYLAK ON ITEMS 1, 2 AND 3 WAS IN THE FOLLOWING FORM:

CHART.

QUANTITY ITEM (NUMBER OF

NO. SUPPLIES OR SERVICES UNITS) UNIT UNIT PRICE AMOUNT

LOT 1 1. UNIT NO. 1 - FRAME 39 DESTINATION 1 EACH SEE ITEM 3

ORIGIN 1 2. UNIT NO. 2 - FRAME 58 DESTINATION 1

SEE ITEM 3

ORIGIN 1

TOTAL FOR ITEMS

1, 2 AND 3 3. UNIT NOS. 3 AND

4-FRAMES DESTINATION 2 EACH (4 CONVEYORS)

$37,900.

204-206 ORIGIN2

ADDITIONALLY, THE PROVISIONS OF THE INVITATION ENTITLED "PLACE OF DELIVERY: ORIGIN" AND ,SHIPPING DATA" HAD BEEN COMPLETED AS FOLLOWS IN KORNYLAK'S BID:

"PLACE OF DELIVERY:ORIGIN: (APPLICABLE TO ITEMS 1, 2, 3 AND 4)

(A) THE ARTICLES TO BE FURNISHED HEREUNDER SHALL BE DELIVERED FREE OF EXPENSE TO THE GOVERNMENT AND, AT THE GOVERNMENT'S OPTION, (I) LOADED, BLOCKED, AND BRACED ON BOARD CARRIER'S EQUIPMENT, (II) AT THE FREIGHT STATION, OR (III) PLACED ON WHARF OF WATER CARRIER (WHERE MATERIAL WILL ORIGINATE WITHIN OR ADJACENT TO A PORT AREA AND IS ADAPTABLE TO WATER MOVEMENT), AT OR NEAR CONTRACTOR'S PLANT AT

SCHEDULE. (1) JERSEY CITY (BIDDER INSERT CITY

OR TOWN IN WHICH PLANT IS

LOCATED) (2) PENNSYLVANIA R.R., HENDERSON ST. (BIDDER INSERT EXACT LOCATION

OF PRIVATE SIDING OR NEAREST

RAIL TERMINAL FROM WHICH RAIL

SHIPMENTS WILL BE MADE,

TOGETHER WITH THE NAME OF

SERVING RAILROAD (S) (, AND (3) 515 COMMUNIPAW AVENUE (BIDDER INSERT THE EXACT

LOCATION FROM WHICH TRUCK

SHIPMENTS WILL BE MADE,

INCLUDING THE NAME OF THE

STREET OR HIGHWAY), (4) HOBOKEN, N.Y.C. OR PORT NEWARD (BIDDER INSERT THE PORT, OR

THE SPECIFIC AREA WITHIN SUCH

PORT, TO WHICH SUPPLIES WILL

BE DELIVERED),

FOR SHIPMENT AT GOVERNMENT EXPENSE (NORMALLY ON GOVERNMENT BILL OF LADING) TO DESTINATIONS SPECIFIED HEREIN.

(B) THE METHOD OF SHIPMENT SHALL BE SPECIFIED BY THE GOVERNMENT WHEN MATERIAL IS READY FOR SHIPMENT.

(C) THE GOVERNMENT SHALL HAVE THE RIGHT TO CHANGE THE DESTINATION (S) SPECIFIED HEREIN. ANY ADJUSTMENT IN THE CONTRACT PRICE OR TIME OF DELIVERY DUE TO RESULTING CHANGES IN PACKING OR MARKING SHALL BE SUBJECT TO THE CLAUSE OF THIS CONTRACT ENTITLED "CHANGES.'

"SHIPPING DATA:

FOR EACH ITEM ON F.O.B. ORIGIN BIDS, BIDDER MUST FURNISH THE FOLLOWING INFORMATION FOR BID EVALUATION PURPOSES. (FAILURE TO SUPPLY DATA WILL RESULT IN THE REJECTION OF THE BID.)

"DATA FOR PACKAGED MULTI-UNIT SHIPMENTS

SCHEDULE. 1. NUMBER OF UNITS IN ONE CONTAINER OR

PACKAGE ITEM 1 5 CRATES

ITEM 2 4 CRATES

ITEM 3 8 CRATES

ITEM 4 1 CRATE 2. GROSS WEIGHT OF ONE PACKAGE,

PACKED FOR SHIPMENT ITEM 1 1600 POUNDS

ITEM 2 1600 POUNDS

ITEM 3 1600 POUNDS

ITEM 4 1200 POUNDS 3. GROSS DIMENSIONS OF ONE PACKAGE ITEM 1 2 1/2 FT. BY 6 FT. BY

9 FT.

ITEM 2 2 1/2 FT. BY 6 FT. BY

9 FT.

ITEM 3 2 1/2 FT. BY 6 FT. BY

9 FT.

ITEM 4 3 FT. BY 3 FT. BY

3 FT.

"SHIPPING DATA GUARANTEE:

IF THE BID IS ACCEPTED AND IT IS DETERMINED THAT BIDDER UNDER ESTIMATED THE SHIPPING DATA, THE BIDDER AGREES THAT THE CONTRACT PRICE SHALL BE REDUCED BY AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN THE TRANSPORTATION COSTS COMPUTED FOR EVALUATION PURPOSES BASED ON BIDDER'S GUARANTEED SHIPPING DATA AND THE TRANSPORTATION COSTS THAT SHOULD HAVE BEEN USED FOR BID EVALUATION PURPOSES BASED ON CORRECT SHIPPING DATA.'

THE REPORT ON YOUR PROTEST FROM THE CONTRACTING AGENCY STATES THAT BIDS WERE OPENED AT 10:30 A.M. ON JUNE 9, 1961, AND THAT THERE WAS A QUESTION AS TO WHETHER KORNYLAK'S BID WAS MEANT TO BE F.O.B. DESTINATION OR F.O.B. ORIGIN DUE TO THE WAY ITS BID PRICES ON ITEMS 1, 2 AND 3 WERE TYPED ON THE BID FORM. BEFORE THE BIDS COULD BE EVALUATED, MR. KORNYLAK CALLED AT THE NAVAL PURCHASING OFFICE AND CONTENDED HIS COMPANY'S BID OF $37,900 F.O.B. DESTINATION WAS LOW. MR. KORNYLAK WAS ADVISED AT THAT TIME THAT NPO QUESTIONED HIS BID ON ITEMS 1, 2 AND 3 AS PRICED F.O.B. ORIGIN.

BY LETTER DATED JUNE 19, 1961, KORNYLAK SUBMITTED THE FOLLOWING EVIDENCE THAT ITS BID PRICE ON ITEMS 1, 2 AND 3 WAS INTENDED TO BE F.O.B. DESTINATION:

1. A COPY OF AN ORIGINAL WORKSHEET PREVIOUSLY USED TO COMPUTE ITS BID ON IDENTICAL EQUIPMENT TO BE INSTALLED IN THE U.S.S. CONSTELLATION AT BROOKLYN, NEW YORK. THIS WORKSHEET SHOWED A DESTINATION PRICE OF $37,900, AND CONTAINED THE FOLLOWING EXPLANATORY NOTE. "WHEN BIDDING ON THE KITTY HAWK, WE DECIDED THAT IN ORDER TO BEAT TROWBRIDGE WE WOULD HAVE TO ABSORB THE ADDITIONAL FREIGHT OUT OF OUR * * * GROSS PROFIT AND THEREFORE BID DELIVERED TO DESTINATION.'

2. A COPY OF PAGE 4 OF THE BID FORM SUBMITTED BY M-H STANDARD CORPORATION SHOWING PRICES ON ITEMS 1, 2 AND 3 QUOTED IN THE SAME MANNER AS ON KORNYLAK'S BID, BUT WITH THE PRICE WHOLLY ABOVE THE LEVEL OF THE LINE ON WHICH THE WORK "ORIGIN" APPEARED.

3. A LETTER FROM THE EMPLOYEE WHO TYPED THE BID STATING THAT THE QUOTATION WAS FOR CONVEYORS F.O.B. DESTINATION; THAT IN TYPING SHE SQUEEZED ALL THE INFORMATION IN THE UPPER PORTION OF THE SPACE TO BE OPPOSITE THE WORD "DESTINATION; " AND THAT THE SPREAD SO THAT IT MIGHT BE CONSTRUED TO INDICATE "ORIGIN" WAS NOT INTENDED.

BY LETTER DATED JUNE 23, 1961, MR. KORNYLAK EXPLAINED THE SUBMISSION OF "ORIGIN" SHIPPING INFORMATION AND DATA IN HIS COMPANY'S BID AS FOLLOWS:

"WE HAD WORKED OUT ALL OUR SHIPPING DATA WHEN FIGURING THE TOTAL COST OF THIS QUOTATION AND THEREFORE THE SECTION ON PAGE 15 AND 16 MARKED PLACE OF DELIVERY: ORIGIN AND THE SECTION ON PAGE 16 MARKED SHIPPING DATA WERE FILLED IN MECHANICALLY WITH THE INFORMATION ON HAND AND WITHOUT READING THE PAGE TOO CAREFULLY.'

THE CONTRACTING OFFICER IS OF THE OPINION THAT, WITHOUT REGARD TO THE INFORMATION SUBMITTED BY KORNYLAK AFTER BID OPENING, A REASONABLE READING OF THE BIDDER'S NOTATIONS ON ITEMS 1, 2 AND 3 AND ITS PRICE ON ITEM 3, TOGETHER WITH THE JUXTAPOSITION OF SAME, REQUIRES A CONCLUSION THAT A DESTINATION BID WAS MADE AND INTENDED, AND THAT THE INFORMATION GIVEN UNDER THE "SHIPPING DATA" AND "PLACE OF DELIVERY: ORIGIN" CLAUSES WAS SUPERFLUOUS.

UPON REVIEW OF ALL OF THE FACTS AS SET OUT ABOVE, IT IS THE OPINION OF THE DEPARTMENT, AS INDICATED BY THE REPORT TO THIS OFFICE FROM THE BUREAU OF SUPPLIES AND ACCOUNTS, THAT THE BID WAS F.O.B. DESTINATION AND THAT THE CONTRACT WAS CORRECTLY AWARDED TO KORNYLAK.

IN ESSENCE, YOUR PROTEST IS BASED UPON THE FOLLOWING:

1. THAT IT MUST BE DETERMINED FROM THE BID ITSELF, AND WITHOUT REFERENCE TO EXTRANEOUS EVIDENCE SUCH AS THAT SUBMITTED BY KORNYLAK AFTER BID OPENING, WHETHER THE BID PRICE WAS ON AN ORIGIN OR A DESTINATION BASIS.

2. THAT THE BID PRICE OF $37,900 UNDER ITEM 3 WAS SO PLACED AS TO BE OPPOSITE THE WORK ORIGIN" RATHER THAN "DESTINATION," AND MUST THEREFORE BE CONSTRUED AS AN ORIGIN BID.

3. THAT IT IS IMMATERIAL WHETHER THE BID PRICE OF $37,900 IS DETERMINED TO BE OPPOSITE ORIGIN" OR "DESTINATION," SINCE COMPLETION OF THE "PLACE OF DELIVERY: ORIGIN" AND "SHIPPING DATA" PROVISIONS OF THE BID CLEARLY BOUND KORNYLAK ONLY TO DELIVER AT "ORIGIN" AND THE BID MUST THEREFORE BE CONSTRUED AS AN ORIGIN BID.

WHETHER AMBIGUOUS OR INCONSISTENT TERMS IN A BID MAY BE CLARIFIED BY A BIDDER AFTER BID OPENING WAS THOROUGHLY DISCUSSED IN OUR RECENT DECISION REPORTED AT 40 COMP. GEN. 393. IN THAT CASE WE CONCLUDED (PAGE 397) THAT "WHERE EACH OF TWO POSSIBLE MEANINGS CAN BE REACHED FROM THE TERMS OF A BID, THE BIDDER SHOULD NOT BE ALLOWED TO EXPLAIN HIS MEANING WHEN HE IS IN A POSITION THEREBY TO PREJUDICE OTHER BIDDERS OR TO AFFECT THE RESPONSIVENESS OF HIS BID.' AS INDICATED BY YOUR LETTER OF JULY 28 AND BY THE PORTIONS OF THE REPORT FROM THE CONTRACTING AGENCY REFERRED TO ABOVE, THE BID SUBMITTED BY KORNYLAK IN THIS CASE AS SUBJECT TO INTERPRETATION AS EITHER AN ORIGIN OR A DESTINATION BID. WE ARE THEREFORE IN AGREEMENT WITH YOUR CONTENTION THAT THE BID MUST BE CONSTRUED WITHOUT REFERENCE TO THE INFORMATION SUBMITTED BY KORNYLAK SUBSEQUENT TO BID OPENING.

TURNING THEN TO A FURTHER EXAMINATION OF THE BID, THE "PLACE OF DELIVERY: ORIGIN" PROVISION OF THE INVITATION SET OUT ABOVE IS SPECIFICALLY APPLICABLE TO ITEMS 1, 2, 3 AND 4. BY ITS TERMS A BIDDER WHO EXECUTES THIS PORTION OF THE INVITATION BINDS HIMSELF ONLY TO DELIVER ITEMS 1, 2, 3 AND 4 TO THE ORIGIN LOCATIONS HE INDICATES, WHILE THE GOVERNMENT SPECIFICALLY AGREES TO ASSUME THE FURTHER COST OF TRANSPORTATION TO DESTINATION. THIS PROVISION, TOGETHER WITH THE BIDDER'S GUARANTEE UNDER THE "SHIPPING DATA" CLAUSE, DIRECTLY AFFECTS THE COST OF CONTRACT PERFORMANCE BY THE BIDDER AND TO THE GOVERNMENT. AS SUCH THEY CONSTITUTE A MATERIAL PART OF THE INVITATION FOR BID EVALUATION PURPOSES, AND WHERE A BIDDER HAS EXECUTED THESE PROVISIONS OF THE BID FORM, SUCH EXECUTION MUST BE CONSTRUED AS EXPRESS STATEMENTS OF THE BIDDER AND CONDITIONS OF HIS BID. THEY MAY NOT BE CONSIDERED SUPERFLUOUS OR BE DISREGARDED SIMPLY BECAUSE THEY MAY BE INCONSISTENT OR IN CONFLICT WITH ANOTHER PORTION OF THE BID.

CONCEDING, ARGUENDO, THAT THE PRICE ENTRY ON ITEM 3 IN KORNYLAK'S BID MAY PROPERLY BE CONSTRUED AS EVIDENCING AN INTENT TO DELIVER TO DESTINATION AT THE PRICE BID, WE ARE THEN FACED WITH DIRECTLY CONFLICTING STATEMENTS BY THE BIDDER. UNDER ITEM 3 HE OFFERS TO DELIVER AT DESTINATION FOR $37,900. UNDER THE "PLACE FOR DELIVERY: ORIGIN" AND "SHIPPING DATA" CLAUSES HE SPECIFICALLY LIMITS HIS OBLIGATION TO DELIVER ONLY TO POINT OF ORIGIN. IT IS THEREFORE OUR OPINION THAT THE PRINCIPLES WHICH WERE FOR APPLICATION IN CONSTRUING KORNYLAK'S BID ARE IDENTICAL WITH THOSE APPLIED IN OUR DECISION REPORTED AT 40 COMP. GEN.393. FOR THE REASONS STATED THEREIN, IT IS OUR FURTHER OPINION THAT KORNYLAK'S BID SHOULD PROPERLY HAVE BEEN EVALUATED AS AN ORIGIN BID. IT NECESSARILY FOLLOWS THAT THE AWARD TO KORNYLAK WAS IMPROPER, AND WE HAVE TODAY SO ADVISED THE SECRETARY OF THE NAVY.

CONCERNING YOUR REQUEST FOR CANCELLATION OF THE AWARD, AND FOR AN AWARD TO THE TROWBRIDGE CONVEYOR COMPANY, WE ARE ADVISED BY THE DEPARTMENT OF THE NAVY THAT THE CONTRACTOR HAS ALREADY ORDERED ALMOST 100 PERCENT OF THE MATERIAL NECESSARY TO PERFORMANCE; THAT A SUBSTANTIAL PORTION OF SUCH MATERIAL HAS ALREADY BEEN RECEIVED; AND THAT A NUMBER OF THE NECESSARY PARTS HAVE ALREADY BEEN FABRICATED BY THE CONTRACTOR. IN VIEW THEREOF, AND SINCE THE CONTRACT APPEARS TO HAVE BEEN AWARDED IN GOOD FAITH, IT IS OUR OPINION THAT CANCELLATION AT THIS LATE DATE WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT. YOUR REQUEST THAT WE DIRECT SUCH CANCELLATION MUST THEREFORE BE DENIED.