B-176704, MAR 12, 1973

B-176704, MAR 12, 1973

BID PROTEST - RECONSIDERATION DENIED DECISION SUSTAINING THE DECISION B-176704, JANUARY 8, 1973, WHICH DENIED A PROTEST BY SOUTHWEST MANUFACTURING CO. THERE IS NOTHING IN THE RECORD TO NECESSITATE A RECONSIDERATION OF THE PRIOR DECISION. THE FACT THAT THE LOW BIDDER DID NOT HAVE A RAIL SIDING AT PLANT IS IMMATERIAL SINCE BIDS WERE EVALUATED ON AN F.O.B. ORIGIN BASIS, AND COSTS OF TRANSPORTING THE GOODS FROM PLANT TO RAILHEAD ARE TO BE BORNE BY THE BIDDER. FURTHER, THE TRANSPORTATION AND ADMINISTRATIVE COSTS WERE PROPERLY EVALUATED.

TO SOUTHWEST MANUFACTURING CO.:

BY LETTERS DATED JANUARY 15 AND 30, 1973, YOU REQUESTED THAT OUR OFFICE RECONSIDER DECISION B-176704, JANUARY 8, 1973, ON THE BASES THAT OUR COMPUTATION OF TRANSPORTATION RATES DID NOT EMPLOY THE LOWEST AVAILABLE RATE TO THE GOVERNMENT; THAT BROWN'S EVALUATED UNIT PRICE DID NOT INCLUDE AN ESTIMATED ADDITIONAL ADMINISTRATIVE COST; AND THAT BROWN'S BID WAS A "BUY-IN".

AFTER CONSIDERATION OF YOUR CONTENTIONS, WE ARE NOT PERSUADED THAT OUR PRIOR DECISION WAS ERRONEOUS FACTUALLY OR LEGALLY. FOR REASONS STATED HEREAFTER, OUR DECISION OF JANUARY 8, 1973, IS AFFIRMED.

FIRST, YOU CONTEND THAT SINCE BIDS WERE SOLICITED F.O.B. ORIGIN AND BROWN DOES NOT HAVE A RAIL SIDING AT ITS PLANT, ANY EVALUATION OF TRANSPORTATION COSTS SHOULD HAVE INCLUDED THE COSTS OF SHIPPING THE SUPPLIES TO THE POINT OF ORIGIN. IN THIS REGARD, THE SUBSECTION D-11 PARAGRAPH ENTITLED "EVALUATION - F.O.B. ORIGIN" PROVIDES THAT EVALUATION OF TRANSPORTATION CHARGES WILL BE BASED UPON LAND METHODS BY REGULATED COMMON CARRIERS BETWEEN BIDDER'S SHIPPING POINT AND DESTINATION. AT PARAGRAPH B-12, BROWN LISTED ITS SHIPPING POINT AS L&N RAILROAD DEPOT, HUNTSVILLE, ALABAMA, WHICH WAS THE POINT USED IN THE EVALUATION OF ITS BID. ANY COSTS RELATED TO THE TRANSPORTATION OF THE SUPPLIES FROM THE POINT OF MANUFACTURE MUST THEREFORE BE BORNE BY BROWN WITHIN ITS BID PRICE.

SECOND, YOU ASSERT THAT THE RATE OF $6.00 PER UNIT QUOTED BY ICK WAS THE LOWEST AVAILABLE RATE THAT SHOULD HAVE BEEN USED BY THE GOVERNMENT. ARMED SERVICES PROCUREMENT REGULATION (ASPR) 19-301.1(A) PROVIDES IN PERTINENT PART:

*** THE BEST AVAILABLE TRANSPORTATION RATES AND RELATED COSTS IN EFFECT OR TO BECOME EFFECTIVE PRIOR TO THE EXPECTED DATE OF INITIAL SHIPMENT AND ON FILE OR PUBLISHED AT THE DATE OF BID OPENING, SHALL BE USED IN THE EVALUATION. ***

TO THE SAME EFFECT, SEE ALSO 39 COMP. GEN. 774 (1960). IN THIS CONNECTION, THE RATE QUOTED BY ICX WAS NOT ON FILE OR PUBLISHED AT THE TIME THE EVALUATION WAS CONDUCTED ON JULY 14, 1972, AND CONSEQUENTLY COULD NOT BE CONSIDERED. HOWEVER, EVEN IF THE $6.00 RATE WERE APPLIED, THE SOUTHWEST UNIT PRICE EVALUATED ON THAT BASIS WOULD NOT, AS INDICATED BELOW, BE LESS THAN THE BROWN UNIT PRICE EVALUATED AT $218.814.

THIRD, YOU ALLEGE THAT OUR CONSIDERATION OF THE MATTER OVERLOOKED THE ESTIMATED ADDITIONAL ADMINISTRATIVE COST OF $5.50 PER UNIT FOR A SINGLE YEAR CONTRACT. EMPLOYING RATES YOU DEEMED APPLICABLE, YOU ASSERT THAT CONSIDERATION OF THE ADMINISTRATIVE COSTS WOULD RENDER SOUTHWEST LOW AS FOLLOWS:

SOUTHWEST (MULTI-YEAR) BROWN (SINGLE YEAR)

PER UNIT $214 $200.00

TRANSPORTATION COST/UNIT 6 15.45

ADDITIONAL ADMINISTRATIVE

COST/UNIT - 5.50

$220 $220.95

HOWEVER, AS STATED IN OUR JANUARY 8, 1973, DECISION, THE MOST ADVANTAGEOUS TRANSPORTATION RATE AVAILABLE TO SOUTHWEST WAS $9.167 PER UNIT, WHICH RESULTS IN AN EVALUATED PER UNIT COST OF $223.167. ALSO, AS STATED IN THE PRIOR DECISION, BROWN'S LOWEST APPLICABLE TRANSPORTATION RATE WAS $13.314 PER UNIT, WHICH RESULTS IN AN EVALUATED PER UNIT COST OF $218.814, INCLUDING ADMINISTRATIVE COSTS. THE $15.45 TRANSPORTATION RATE THAT YOU APPLY TO BROWN IS THE MOTOR RATE THAT APPLIES TO SOUTHWEST. WHILE OUR JANUARY 8 DECISION DID NOT SPECIFICALLY TREAT THE $5.50 ADMINISTRATIVE COST, THE MATTER WAS CONSIDERED BUT NOT MENTIONED BECAUSE IT DID NOT AFFECT THE RESULT IN VIEW OF THE SIGNIFICANT OVERALL COST DIFFERENCE.

FINALLY, YOUR CONTENTIONS CONCERNING THE ALLEGED "BUY-IN" AND SMALL BUSINESS CONSIDERATIONS WERE TREATED IN OUR PRIOR DECISION AND WE WILL NOT CONSIDER THEM FURTHER.