B-124259, JUL. 5, 1955

B-124259, JUL. 5, 1955

TO MURRAY AND COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 6, 1955, AND ITS ENCLOSURES, PROTESTING THE PROPOSED REJECTION OF YOUR BID FOR FURNISHING COAL FOR USE BY THE DEPARTMENT OF THE ARMY AT FORT BENNING, GEORGIA, DURING THE FISCAL YEAR 1956, THE SAID BID HAVING BEEN SUBMITTED ON ITEM2 OF INVITATION NO. IFB-424-1196-55 ISSUED APRIL 8, 1955, BY THE U.S. NAVY PURCHASING OFFICE, WASHINGTON, D.C. ALSO, RECEIPT IS ACKNOWLEDGED OF YOUR LETTERS DATED JUNE 22, AND 25, 1955, THE FIRST ADVISING OF A FREIGHT RATE OF $4.04 PER TON ON COAL EFFECTIVE JUNE 23, 1955, AND THE LATTER ADVISING OF THE AWARD OF CONTRACT N42S-1592 TO YOU WHICH YOU STATE WAS BASED UPON FURNISHING THE SAME COAL AT THE SAME PRICE AND SUBJECT TO THE SAME ANALYSIS AS THAT INVOLVED IN YOUR PROTEST.

IN THE APPEAL FORWARDED WITH YOUR LETTER OF JUNE 6, 1955, YOU, IN EFFECT, PROTEST THE PROPOSED REJECTION OF YOUR BID ON THE FOLLOWING GROUNDS:

"/1) THE ANALYSIS WE USED IN THE BID WAS THE PROPER "AVERAGE BUREAU OF MINES ANALYSIS" AS DEFINED IN THE INVITATION, AND IT SHOULD BE USED IN EVALUATING THE COAL.

(2) THE FUEL SUPPLY OFFICE ERRED IN NOT ACCEPTING IT AS SUCH.

(3) HAVING ERRED, THEY ATTEMPTED TO HOLD TO THEIR DECISION IN SPITE OF OVERWHELMING EVIDENCE THAT IT SHOULD BE REVERSED.

(4) THE FORT BENNING JUNCTION RATE FROM ALABAMA MINES TO SAND HILL, GEORGIA, SHOULD IMMEDIATELY BE REQUESTED BY THE GOVERNMENT IF IT HAS NOT BEEN PUT IN DURING THE MEANTIME.

(5) THE CONTRACT SHOULD BE AWARDED US.

(6) THE AWARDING OF THE CONTRACT TO ANY OTHER BIDDERS WOULD BE UNBUSINESSLIKE AND NOT IN THE BEST INTEREST OF THE GOVERNMENT.'

IN RESPONSE TO OUR REQUEST FOR A REPORT IN THE MATTER OF YOUR PROTEST, THE DEPARTMENT OF THE NAVY HAS FURNISHED A COPY OF THE INVITATION FORBIDS, THE BIDS SUBMITTED BY SIX BIDDERS QUOTING PRICES FOR FURNISHING THE COAL, INCLUDING YOUR BID, AND A STATEMENT OF FACTS BY THE CONTRACTING OFFICER. THE INVITATION UNDER ITEM NO. 2 REQUESTED BIDS FURNISHING 28,000 NET TONS OF BITUMINOUS COAL FOR DELIVERY TO FORT BENNING, GEORGIA. BIDDERS WERE REQUIRED TO STATE THEIR GUARANTEED ANALYSIS OF THE COAL OFFERED, AND WERE ADVISED THAT COAL WAS REQUIRED OF A QUALITY EQUAL TO OR BETTER THAN THAT REPRESENTED BY THE FOLLOWING ANALYSIS:

TABLE

"MOISTURE, AS RECEIVED, MAXIMUM 9 PERCENT

ASH, DRY, MAXIMUM 15.0 PERCENT

B.T.U., DRY, MINIMUM 12,400"

THE SCHEDULE FOR COAL ADVISED BIDDERS OF CERTAIN FACTORS THAT WOULD BE CONSIDERED IN MAKING AWARD, WHICH INCLUDED THE NUMBER OF "AS RECEIVED B.T.U. PER ONE CENT AT DESTINATION" OF THE COAL OFFERED, TO BE COMPUTED BY A FORMULA SET FORTH IN DETAIL IN THE SCHEDULE. THE PRINCIPAL FACTOR IN THE FORMULA WAS THE "AVERAGE BUREAU OF MINES ANALYSIS," AS DEFINED IN THE SCHEDULE.

UPON OPENING AND EXAMINATION OF THE BIDS THE CONTRACTING OFFICER DETERMINED, ON THE BASIS OF BUREAU OF MINES ANALYSES, THAT THE COAL OFFERED BY YOU FAILED TO MEET THE MINIMUM ANALYSIS REQUIRED, IN THAT IT CARRIED AN ASH CONTENT OF 15.2 PERCENT. THE CONTRACTING OFFICER REPORTS THAT YOU PROTESTED THE USE OF THE AVERAGE BUREAU OF MINES ANALYSIS REPORTS ON THE BASIS THAT A LATER TIPPLE ANALYSIS REPORT WAS ON FILE WHICH INDICATED THAT THE COAL OFFERED MET THE ANALYTICAL REQUIREMENTS. IT IS ADMITTED THAT A TIPPLE SAMPLE DATED DECEMBER 16, 1952, WAS ON FILE IN THE NAVY FUEL SUPPLY OFFICE, BUT THE SAMPLE COVERED BY THIS ANALYSIS REPORT CONSISTED OF 4 INCHES AND UP LUMP COAL, WHICH WAS LARGER THAN THAT CALLED FOR BY THE INVITATION. THE CONTRACTING OFFICER STATES IT WOULD BE HIGHLY IMPROPER TO USE AN ANALYSIS ON THE LARGER SIZE COAL, WHEN ANALYSIS REPORTS WERE AVAILABLE COVERING THE EXACT SIZE OR NEARLY THE EXACT SIZE REQUIRED AS IN THIS INSTANCE. HOWEVER, IN VIEW OF YOUR PROTEST, THE CONTRACTING OFFICER AGREED TO REQUEST THE BUREAU OF MINES TO TAKE NEW SAMPLES AT THE MINE AND FURNISH A NEW ANALYSIS, WITH RESPECT TO WHICH HE REPORTS AS FOLLOWS:

"13. * * * THIS ACTION WAS DEEMED ENTIRELY APPROPRIATE BECAUSE OF THE AGE OF THE EXISTING SAMPLE REPORTS AND THE CLAIM THAT NEW PREPARATION EQUIPMENT HAD BEEN INSTALLED AT THE MINE SINCE THE LAST SAMPLES HAD BEEN TAKEN. IT THEREFORE APPEARED TO BE BENEFICIAL IN THE INTEREST OF THE GOVERNMENT AND THE BIDDER. MR. MURRAY RAISED NO OBJECTION TO THIS PROCEDURE. IN FACT, HE EXPRESSED HIS DEEP APPRECIATION FOR THE CONSIDERATION HE WAS BEING GIVEN. THE RIGHT OF THE GOVERNMENT TO HAVE SPECIAL ANALYSIS REPORTS IS SPECIFICALLY STATED IN SUB-PARAGRAPH (H), "AVERAGE BUREAU OF MINES ANALYSIS," PAGE 4 OF THE TERMS AND CONDITIONS OF THE SCHEDULE.

"14. A NEW SAMPLE WAS TAKEN AT THE TAYLOR STRIP BY THE BUREAU OF MINES ON 20 MAY 1955, LABORATORY NO. 74428, AND AN ANALYSIS REPORT ISSUED ON 27 MAY 1955, (ENCLOSURE (10) ). THIS ANALYSIS REPORT REFLECTED THAT THE SIZE SHOWN IN THE BID OF MURRAY AND COMPANY MET ALL ANALYTICAL REQUIREMENTS.

"15. EVALUATION OF THE MURRAY AND COMPANY BID, BASED ON THE BUREAU OF MINES ANALYTICAL REPORT REFERRED TO IN PARAGRAPH 14, ABOVE, AND IN ACCORDANCE WITH THE FORMULA REFERRED TO IN PARAGRAPH 3, ABOVE, REFLECTS THE BID OF THAT COMPANY TO BE THE FIFTH LOW BID, AS SHOWN IN ENCLOSURES (7) AND (8). THIS IS ACCOUNTED FOR BY THE INCREASE IN THE PERCENTAGE OF MOISTURE.'

THE MATTER OF EVALUATION OF BIDS AND DETERMINATION OF THE QUALITY OF COAL THAT WILL BEST MEET THE NEEDS OF THE GOVERNMENT IS PRIMARILY WITHIN THE JURISDICTION OF THE DEPARTMENT OF THE NAVY. IN THIS CASE THE ANALYTICAL REQUIREMENTS OF THE COAL FURNISHED WERE CLEARLY STATED IN THE INVITATION, AND REVIEW OF THE RECORD SHOWS THAT THE CONTRACTING OFFICER DID NOT IN ANY WAY GO BEYOND THE PROPER LIMITS OF HIS AUTHORITY, BUT MADE EVERY REASONABLE EFFORT TO ASSURE A PROPER EVALUATION OF YOUR BID ACCORDING TO THE TERMS OF THE INVITATION.

WHILE YOU DISPUTE THE ACCURACY OF THE ANALYSIS REPORTS OF THE BUREAU OF MINES USED, IT IS CLEAR THAT UNDER THE EXPRESS TERMS OF THE SCHEDULE THE CONTRACTING OFFICER COULD NOT EVALUATE ON ANY OTHER BASIS.

AS TO YOUR CLAIM THAT THE SAMPLE OF COAL TAKEN BY THE BUREAU OF MINES, WHICH SHOWED A MOISTURE CONTENT OF 4.4 PERCENT, WAS TAKEN DURING RAINY WEATHER, THE REPRESENTATIVE OF THE BUREAU OF MINES THE SAMPLED THE COAL STATES AS FOLLOWS:

"IN REGARDS TO THE SAMPLE COLLECTED AT THE TAYLOR MINE, JASPER, ALABAMA. THE M/S SIZE COAL WAS AIR DRIED AS SHOWN ON THE REPORT. THE EGG COAL WAS VERY DRY. WE DID HAVE LIGHT SHOWERS IN THE MORNING OF THE DAY THE SAMPLE WAS COLLECTED. THE TIPPLE IS SUCH THAT THE SAMPLING TRUCK AND ALL SAMPLES WERE KEPT OUT OF THE RAIN ALL MORNING, IN FACT WHEN I CRUSHED THE SAMPLE IT WAS VERY DUSTY. IN MY OPINION THE EGG SIZE COAL WAS DRIER THAN IT WOULD HAVE BEEN UNDER NORMAL OPERATIONS THE COAL LOADED THE DAY SAMPLES WERE COLLECTED HAS BEEN UNCOVERED FOR OVER 2 MONTHS AND HAD AMPLE TIME TO DRY OUT. I MENTIONED THAT FACT TO MR. LEE AT THE TIME WE CRUSHED THE SAMPLES. HE SEEMED TO BE WELL SATISFIED AT THE TIME I COLLECTED THE SAMPLES. WE DID HAVE A HEAVY SHOWER AFTER THE EGG COAL WAS PREPARED SO WE WAITED A FEW HOURS AND DRIED OUT THE M/S SAMPLE. AS DUSTY AS THE COAL WAS WHEN WE PREPARED IT I JUST CAN-T SEE WHERE THE SHOWER HAD ANY ILL EFFECT ON THE MOISTURE ON THE EGG SIZE COAL.'

IT WOULD APPEAR FROM THIS STATEMENT THAT THE COAL WAS PROTECTED AND THAT THERE IS NO PROPER BASIS FOR CONCLUDING THAT THE ANALYTICAL REPORT SHOULD BE DISREGARDED AS AN IMPROPER REPRESENTATION OF THE COAL SAMPLE.

THE REDUCTION IN FREIGHT RATE FROM THE MINE TO SAND HILL, GEORGIA, WAS NOT MADE EFFECTIVE UNTIL JUNE 23, 1955, LONG AFTER ALL BIDS HAD BEEN OPENED AND THEIR CONTENTS MADE PUBLIC. YOU HAD INDICATED IN YOUR BID A FREIGHT RATE OF $4.25 PER NET TON. APPARENTLY THIS RATE WAS IN EFFECT ON THE DATE ALL BIDS WERE OPENED, AND EVALUATION ON THAT BASIS WAS REQUIRED. IT HAS BEEN CONSISTENTLY HELD BY OUR OFFICE AND THE COURTS THAT--- EXCEPT IN CERTAIN CASES INVOLVING OBVIOUS ERROR WHERE THE INTENDED BID IS CONCLUSIVELY ESTABLISHED--- BIDDERS SHOULD NOT BE PERMITTED TO VARY THEIR PROPOSALS AFTER THE BIDS ARE OPENED, IT BEING CONSIDERED THAT THE PRESERVATION OF THE COMPETITIVE-BID SYSTEM IS INFINITELY MORE IN THE PUBLIC INTEREST THAN OBTAINING AN APPARENT PECUNIARY ADVANTAGE IN A PARTICULAR CASE. NO GREATER REASON APPEARS FOR EVALUATION OF BIDS INVOLVING TRANSPORTATION COSTS ON THE BASIS OF RATES ESTABLISHED AFTER THE PROPER TIME OF EVALUATION.

WITH REFERENCE TO THE STATEMENTS IN YOUR LETTER OF JUNE 25, 1955, THAT YOU HAVE RECEIVED NOTICE OF AN AWARD STATING THAT YOUR BID TO FURNISH THE SAME COAL ON ITEM NO. 4 OF THE INVITATION HERE INVOLVED HAD BEEN ACCEPTED, THE CONTRACTING OFFICER REPORTS THAT ITEM NO. 4 WAS AWARDED TO YOU ON THE BASIS THAT EVALUATION OF ALL BIDS RECEIVED FOR THAT ITEM SHOWED THAT THE AWARD TO YOU WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT, SINCE YOUR BID ON THAT ITEM OFFERED THE MOST B.T.U.'S PER PENNY, WHEREAS, AS PREVIOUSLY INDICATED, EVALUATION OF THE BIDS ON ITEM 2 SHOWED FOUR BETTER BIDS THAN YOURS ON THAT ITEM.

ON THE RECORD BEFORE US, WE CANNOT CONCLUDE THAT THE PROPOSED AWARD BY THE DEPARTMENT OF THE NAVY OF ITEM 2 TO OTHER BIDDERS WOULD BE IMPROPER.