B-164631, SEPT. 13, 1968

B-164631, SEPT. 13, 1968

TO MR. DAVID H. FOSTER:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 19, 1968, AND LETTERS OF JUNE 20 AND 26, 1968, PROTESTING AGAINST THE AWARD OF A CONTRACT TO THE ADMIRAL CORPORATION UNDER DEPARTMENT OF THE NAVY INVITATION FOR BIDS NO. N00383-68 -B-1064.

THE SUBJECT INVITATION WAS ISSUED ON MAY 10, 1968, REQUESTING BIDS ON ALTERNATE QUANTITIES OF COMPONENTS OF THE AN/ARC-51A/AX/BX RADIO SET AND ON CERTAIN DATA ITEMS CONNECTED THEREWITH. TWO BIDS WERE RECEIVED AND OPENED ON MAY 28, 1968. THE TOTAL PRICE SUBMITTED BY YOUR FIRM ON THE QUANTITIES SELECTED FOR AWARD WAS $3,925,704. THE TOTAL PRICE SUBMITTED BY ADMIRAL CORPORATION, THE OTHER BIDDER, WAS $3,926,385. BOTH PRICES WERE BASED ON WAIVER OF FIRST ARTICLE APPROVAL. PAGE 38 OF THE INVITATION CONTAINED A CLAUSE ENTITLED "GUARANTEED SHIPPING WEIGHT" WHICH REQUESTED BIDDERS TO (1) INSERT THE GROSS SHIPPING WEIGHT OF ONE EACH OF THE ARTICLES TO BE FURNISHED; (2) ADVISED BIDDERS THAT THE WEIGHTS SO INSERTED WOULD BE CONSIDERED THE GUARANTEED SHIPPING WEIGHT OF THE ARTICLES AND WOULD BE USED IN THE EVALUATION OF BIDS; (3) ADVISED BIDDERS THAT IF THE GROSS SHIPPING WEIGHT OF AN ARTICLE DELIVERED UNDER A RESULTING CONTRACT EXCEEDED THE GUARANTEED SHIPPING WEIGHT OF THE ARTICLE, THE CONTRACT PRICE FOR SUCH ARTICLE WOULD BE REDUCED BY AN AMOUNT EQUAL TO THE DIFFERENCE IN THE COST THAT WOULD BE INCURRED BY THE GOVERNMENT IN SHIPPING THE ARTICLE TO THE DESTINATION POINT AND THE COST OF SHIPPING AN ARTICLE OF THE WEIGHT ESTABLISHED THEREIN AS THE GUARANTEED SHIPPING WEIGHT TO THE DESTINATION POINT; AND (4) SPECIFIED THE GROSS SHIPPING WEIGHTS FOR EACH ARTICLE COVERED BY THE INVITATION TO BE USED AS THE GUARANTEED SHIPPING WEIGHTS THEREOF IN THE EVENT THE BIDDER FAILED TO INSERT GROSS SHIPPING WEIGHTS.

IN YOUR BID YOU INSERTED GROSS SHIPPING WEIGHTS FOR EACH OF THE ARTICLES AS FOLLOWS:

ITEM POUNDS

1, 2, 3 40

4, 5, 6 8

7, 8, 9 4

10 2 ADMIRAL DID NOT INCLUDE ANY GROSS SHIPPING WEIGHTS IN ITS BID. VIEW THEREOF THE CONTRACTING OFFICER EVALUATED ADMIRAL'S BID ON THE WEIGHTS INSERTED IN THE CLAUSE BY THE GOVERNMENT WHICH WERE AS FOLLOWS:

ITEM POUNDS

1, 2, 3 29.2

4, 5, 6 3.8

7, 8, 9 1.1

10 0.5 YOUR BID WAS EVALUATED ON THE BASIS OF THE GROSS SHIPPING WEIGHTS FURNISHED IN YOUR BID AND ADMIRAL'S BID WAS EVALUATED BASED UPON THE SHIPPING WEIGHTS INSERTED IN THE CLAUSE BY THE GOVERNMENT. ON THE BASIS OF THIS EVALUATION ADMIRAL'S BID WAS LOW BY $510.11. HAD THE FREIGHT EVALUATION OF BOTH BIDS BEEN MADE ON THE BASIS OF THE WEIGHTS SUBMITTED BY YOU, WHICH THE GOVERNMENT ADMITS MORE NEARLY APPROXIMATE THE GROSS SHIPPING WEIGHTS OF THE ARTICLES, YOUR BID WOULD HAVE BEEN LOW BY $645.95.

IT IS YOUR CONTENTION THAT: (A) ADMIRAL'S BID SHOULD HAVE BEEN REJECTED AS NONRESPONSIVE FOR FAILURE TO INSERT GROSS SHIPPING WEIGHTS IN PARAGRAPH (A) OF THE CLAUSE; (B) THE CLAUSE WAS ERRONEOUSLY INSERTED IN THE INVITATION AND SHOULD BE IGNORED FOR BID EVALUATION PURPOSES; (C) THE WEIGHTS INSERTED BY THE GOVERNMENT IN PARAGRAPH (C) OF THE CLAUSE WERE INCLUDED BY MISTAKE; AND (D) THE PRICE REDUCTION PROVISIONS OF PARAGRAPH (B) OF THE CLAUSE ARE NOT UNIFORMLY AND CONSISTENTLY APPLIED BY THE GOVERNMENT AND, THEREFORE, SHOULD NOT BE APPLIED IN THE EVALUATION OF BIDS.

WE DO NOT AGREE WITH YOUR CONTENTION THAT THE BID OF ADMIRAL SHOULD HAVE BEEN REJECTED AS NONRESPONSIVE BECAUSE IT FAILED TO INCLUDE GROSS SHIPPING WEIGHTS THEREIN. CONTRARY TO YOUR CONTENTION, WE THINK PARAGRAPH (C) OF THE GUARANTEED SHIPPING WEIGHT CLAUSE CLEARLY COVERS A SITUATION WHERE A BIDDER FAILS TO SPECIFY A GUARANTEED SHIPPING WEIGHT. WHILE, AS YOU ALLEGE, PARAGRAPH (C) DOES NOT SPECIFICALLY ADVISE BIDDERS THAT THE GROSS SHIPPING WEIGHTS INSERTED BY THE GOVERNMENT WOULD BE USED IN EVALUATING BIDS WHERE BIDDERS FAILED TO INSERT GROSS SHIPPING WEIGHTS IN PARAGRAPH (A) OF THE CLAUSE, IN OUR VIEW THE USE OF SUCH WEIGHTS FOR EVALUATION PURPOSES IS THE ONLY REASONABLE INTERPRETATION OF THE CLAUSE.

ON PAGE 3 OF YOUR LETTER OF JUNE 12, 1968, TO THE AVIATION SUPPLY OFFICE YOU STATE THAT "A BIDDER MIGHT WELL HAVE ASSUMED THAT THE SOLE PURPOSE OF PARAGRAPH (C) WAS TO PROVIDE CRITERIA TO DETERMINE IF THE GOVERNMENT IS ENTITLED TO A CONTRACT PRICE REDUCTION UNDER PARAGRAPH (B).' THIS INTERPRETATION, IN OUR OPINION, IS INSUPPORTABLE. THERE CANNOT, OF COURSE, BE ANY PRICE ADJUSTMENT WITHOUT A CONTRACT. IF YOUR POSITION THAT A BID MUST BE REJECTED IF GUARANTEED WEIGHTS ARE NOT INSERTED IN PARAGRAPH (A) IS CORRECT, THERE THEN WOULD BE NO CONTRACT AND, THEREFORE, THE WEIGHTS INSERTED BY THE GOVERNMENT IN PARAGRAPH (C) COULD NOT BE USED AS A MEASURE OF PRICE ADJUSTMENT. ON THE OTHER HAND, WHERE WEIGHTS ARE INSERTED BY THE BIDDER IN PARAGRAPH (A), THOSE WEIGHTS ARE USED FOR BOTH BID EVALUATION PURPOSES AND "PRICE REDUCTION" PURPOSES IN LIEU OF THE WEIGHTS SET FORTH BY THE GOVERNMENT IN PARAGRAPH (C). UNDER YOUR INTERPRETATION, THEREFORE, THE WEIGHTS IN PARAGRAPH (C) WOULD HAVE NO APPLICABILITY WHATSOEVER.

REGARDING YOUR CONTENTION THAT THE CLAUSE WAS ERRONEOUSLY INCLUDED IN THE INVITATION AND, THEREFORE, SHOULD BE IGNORED FOR BID EVALUATION PURPOSES, YOU STATE THAT ASPR 1-1305.1 PROVIDES THAT A GUARANTEED SHIPPING WEIGHT CLAUSE SHOULD BE USED ONLY WHEN SHIPPING WEIGHTS "MAY VARY AMONG PROSPECTIVE SUPPLIERS WITH A RESULTANT VARIATION IN TRANSPORTATION COSTS.' YOU SAY THAT NO POSSIBILITY EXISTS THAT THE SHIPPING WEIGHTS WOULD VARY IN THE INSTANT CASE. THE CONTRACTING OFFICER DENIES THAT THE CLAUSE WAS INCLUDED BY MISTAKE. HE REPORTS THAT THE CLAUSE WAS INSERTED IN THE INVITATION BECAUSE IT WAS KNOWN THAT THE SPECIFICATION IS A PERFORMANCE-TYPE SPECIFICATION AND IT WAS BELIEVED THAT THE GROSS SHIPPING WEIGHTS MIGHT VARY SIGNIFICANTLY FROM MANUFACTURER TO MANUFACTURER. WHILE THE CONTRACTING OFFICER CONCEDES THAT THE WEIGHTS OF THE ARTICLES THEMSELVES MIGHT NOT DIFFER SIGNIFICANTLY, HE CONSIDERS THAT THE GROSS SHIPPING WEIGHTS MIGHT VARY CONSIDERABLY BECAUSE OF A VARIANCE IN THE WEIGHTS OF PACKAGING AND PACKING MATERIALS USED. IN VIEW THEREOF WE CANNOT AGREE THAT THE CLAUSE WAS IMPROPERLY OR ERRONEOUSLY INCLUDED IN THE INVITATION. FURTHERMORE, EVEN IF IT NOW BE SHOWN THAT THE WEIGHT VARIANCE WOULD NOT BE SIGNIFICANT WE BELIEVE EFFECT MUST BE GIVEN TO THE CLAUSE SINCE IT WAS INCLUDED IN THE INVITATION AND BIDDERS MAY HAVE SUBMITTED BIDS IN RELIANCE ON THE GOVERNMENT'S USE OF THE CLAUSE IN THE EVALUATION OF BIDS.

REGARDING YOUR CONTENTION THAT THE PRICE REDUCTION PROVISIONS OF PARAGRAPH (B) OF THE CLAUSE ARE NOT APPLIED BY THE GOVERNMENT, THE CONTRACTING OFFICER STATES THAT HE HAS NO KNOWLEDGE THAT THE CLAUSE HAS NOT BEEN CONSISTENTLY APPLIED BY THE GOVERNMENT. ALSO, OUR OFFICE HAS NO FIRSTHAND KNOWLEDGE THAT THE CONTRACTING AGENCIES ARE NOT COMPLYING WITH THE PROVISIONS OF THE CLAUSE. IN ANY EVENT, THE CONTRACTING OFFICER STATES THAT THE SHIPPING WEIGHTS WILL BE CAREFULLY CHECKED AND THE PROVISIONS OF THE CLAUSE WILL BE APPLIED UNDER THE INSTANT CONTRACT WITH ADMIRAL.

THE ADMINISTRATIVE OFFICE REPORTS THAT ADMIRAL DID NOT RECEIVE APPROVAL TO USE AN RCA 8727 TUBE. IN VIEW THEREOF AND YOUR LETTER OF JUNE 20, 1968, WITHDRAWING THAT PART OF YOUR PROTEST, NOTHING FURTHER NEED BE SAID IN THAT REGARD.