B-153067, MARCH 20, 1964, 43 COMP. GEN. 613

B-153067, MARCH 20, 1964, 43 COMP. GEN. 613

BIDS - EVALUATION - DELIVERY PROVISIONS - LOADING CHARACTERISTICS - BIDDER V. GOVERNMENT RESPONSIBILITY AN EVALUATION OF THE TRANSPORTATION DATA FURNISHED BY BIDDERS ON CARGO TRAILERS IN ACCORDANCE WITH THE LOADING CHARACTERISTICS AND QUANTITIES STIPULATED BY THEM, UNDER WHICH THE SECOND LOW BIDDER OFFERING TO LOAD 8 UNITS ON A TRUCK AT NO CHARGE DISPLACED THE LOW BIDDER OFFERING TO LOAD 4 UNITS, IS NOT AN EVALUATION ON THE LOWEST OVERALL COST TO THE GOVERNMENT REQUIRED BY PAR. 1-1305.4 OF THE ARMED SERVICES PROCUREMENT REGULATION, IN VIEW OF THE FACT THAT THE LOW BID WOULD NOT HAVE BEEN DISPLACED BUT FOR LIMITING THE BID EVALUATION TO THE LOADING CHARACTERISTICS STIPULATED BY THE BIDDERS, AN EVALUATION EMPHASIZING A MINOR ASPECT OF THE PROCUREMENT PROVING DETRIMENTAL TO THE GOVERNMENT, AND THE PLACING OF THE ENTIRE RESPONSIBILITY OF STIPULATING LOADING CHARACTERISTICS ON BIDDERS WHERE THE OPTIMUM LOADING CHARACTERISTICS ARE KNOWN TO THE GOVERNMENT IS INCONSISTENT WITH 10 U.S.C. 2305/C) PROVIDING FOR AWARD TO THAT BIDDER WHOSE BID CONFORMS TO THE INVITATION, PRICE AND OTHER FACTORS CONSIDERED.

TO THE SECRETARY OF THE ARMY, MARCH 20, 1964:

WE REFER TO THE LETTERS, WITH ENCLOSURES, DATED JANUARY 9, 1964, AND FEBRUARY 17, 1964, FROM THE DIRECTOR OF PROCUREMENT AND PRODUCTION, HEADQUARTERS, UNITED STATES ARMY MATERIEL COMMAND, WASHINGTON, D. C., 20315, FURNISHING US WITH A REPORT AND SUPPLEMENTAL REPORT IN CONNECTION WITH A PROTEST FROM DOC-O MANUFACTURING COMPANY, SAND SPRINGS, OKLAHOMA, TO AWARD OF A CONTRACT PURSUANT TO INVITATION FOR BIDS NO. AMC-20-113-63- 2096/T).

THE INVITATION WAS ISSUED BY THE INDUSTRIAL DIRECTORATE, ARMY TANK AUTOMOTIVE CENTER, MICHIGAN MISSILE PLANT, 38111 VAN DYKE, CENTER LINE, MICHIGAN, FOR THE PROCUREMENT OF 4,400 M 105A2, 1 1/2 TON, 2 WHEEL CARGO TRAILERS IN ACCORDANCE WITH APPLICABLE SPECIFICATIONS AND ENGINEERING ORDERS. THE PROCUREMENT WAS DIVIDED INTO TWO ITEMS WITH 2,200 OF THE UNITS COMPRISING EACH ITEM. PAGE 3C OF THE INVITATION PROVIDED THAT BIDS WOULD BE F.O.B. ORIGIN. PAGE 3D OF THE INVITATION LISTED 11 TENTATIVE DESTINATIONS, BOTH DOMESTIC AND FOREIGN, FOR THE ITEMS, ALSO THE NUMBER OF VEHICLES THAT WOULD BE DELIVERED TO EACH DESTINATION. THIS PAGE STATED THAT SUCH INFORMATION WOULD BE USED FOR EVALUATION PURPOSES. ON JULY 5, 1963, THE PROCURING ACTIVITY ISSUED AMENDMENT NO. 2 TO THIS INVITATION WHICH DELETED PAGE 3D OF THE INVITATION IN ITS ENTIRETY AND SUBSTITUTED THEREFOR PAGE 24, WHICH WAS IDENTICAL TO PAGE 3D. CLAUSE (A) ON PAGE 3H OF THE INVITATION PROVIDED AS FOLLOWS:

A. BIDDERS, IN ADDITION TO THE OTHER PROVISIONS OF THIS BID, MUST FURNISH THE TRANSPORTATION DATA SET FORTH ON HPC FORM 4059A WHICH IS NECESSARY IN EVALUATING THE GOVERNMENT'S COST OF TRANSPORTATION AND FOR USE IN THE SELECTION OF THE MODE OF SHIPMENT. FAILURE TO FURNISH THE DATA REQUESTED WILL CAUSE THE BID TO BE NON-RESPONSIVE. FORM HPC 4059A WAS DIVIDED INTO 13 COLUMNS IN WHICH BIDDERS WERE TO INSERT THE NUMBER OF VEHICLES WHICH WOULD BE LOADED. THE GENERAL HEADING FOR THE FIRST FIVE COLUMNS WAS "RAIL.' UNDER THE GENERAL HEADING AND OVER EACH OF THE FIVE COLUMNS THE FOLLOWING RESPECTIVE HEADINGS APPEARED: "CONV., TTX, BI-LEVEL, TRI-LEVEL, OTHER.' THE GENERAL HEADING FOR THE NEXT SEVEN COLUMNS WAS "MOTOR" AND UNDER THE GENERAL HEADING FOR THE SEVEN COLUMNS THE FOLLOWING RESPECTIVE HEADINGS APPEARED: "SD, CD, SM, FM, 3 WAY, TL, HH.' THE HEADING APPEARING OVER THE LAST COLUMN WAS "WATER" AND UNDERNEATH, "PORT FAS.' IN REGARD TO MOTOR, ONLY THE HEADINGS "TL" REPRESENTING TRUCKLOAD AND "HH" REPRESENTING HEAVY HAULER ARE MATERIAL HERE. IN EACH COLUMN UNDER THE BIDDERS' STIPULATION AS TO THE NUMBER OF UNITS WHICH WOULD BE LOADED THE BIDDER WAS ALSO TO INSERT THE LOADING CHARGE FOR EACH VEHICLE. THERE WAS NO PROVISION IN THE INVITATION REQUIRING THE GOVERNMENT TO SHIP IN ACCORDANCE WITH THE LOADING CHARACTERISTICS INDICATED BY THE BIDDERS.

BIDS WERE OPENED ON JULY 17, 1963. DOC-O QUOTED A PRICE FOR THE 2,200 UNITS UNDER ITEM 2, INCLUDING EXCISE TAX WHERE APPLICABLE, OF $1,916,868.69. ATLANTIS ELECTRONICS CORPORATION, ROCKWALL DEFENSE DIVISION, P.O. BOX 451, GARLAND, TEXAS, QUOTED A PRICE FOR THE 2,200 UNITS UNDER ITEM 2, INCLUDING EXCISE TAX WHERE APPLICABLE, OF $1,942,850.93. BOTH BIDS PROVIDED FOR PROMPT PAYMENT DISCOUNTS OF 1/2 PERCENT. OTHER BIDDERS WHICH QUOTED PRICES LOWER THAN THE BIDS OF DOC O AND ATLANTIS FOR ITEM 2 WERE CONSIDERED INELIGIBLE FOR AWARD, AND WILL NOT BE CONSIDERED FURTHER.

DOC-O FILLED OUT FORM HPC 4059A, DESCRIBED ABOVE, IN THE FOLLOWING MANNER: 4 UNITS LOADED ON A TRUCK LOAD, NO CHARGE; 6 UNITS LOADED ON A HEAVY HAULER, NO CHARGE; 6 UNITS LOADED ON A CONVENTIONAL RAIL CAR, LOADING CHARGE $10.00 PER VEHICLE; 8 UNITS ON A TTX RAIL CAR, LOADING CHARGE $10.00 PER VEHICLE. ATLANTIS PROVIDED THE FOLLOWING INFORMATION ON FORM HPC 4059 A: 6 UNITS LOADED ON A CONVENTIONAL RAIL CAR, LOADING CHARGE $10.00 PER VEHICLE; 8 UNITS LOADED ON A TRUCKLOAD, NO CHARGE.

THE BIDS OF DOC-O AND ATLANTIS WERE EVALUATED IN ACCORDANCE WITH THE LOADING CHARACTERISTICS AND QUANTITIES STIPULATED BY THESE BIDDERS ON FORM HPC 4059A. IN THIS REGARD YOUR SUPPLEMENTAL REPORT DATED FEBRUARY 17, 1964, STATES THAT DOC-O'S BID MUST BE EVALUATED IN THIS MANNER SINCE IT WOULD BE MORE COSTLY TO LOAD 8 UNITS PER TRUCK THAN TO LOAD 4 UNITS PER TRUCK, BOTH VIA TRUCK AWAY, AND THE GOVERNMENT WOULD BE LIABLE FOR ANY EXCESS COSTS. THUS, THE EVALUATION OF ATLANTIS' TRANSPORTATION COSTS WAS BASED ON ATLANTIS SHIPPING 8 UNITS PER TRUCKLOAD VIA TRUCK AWAY TO THE VARIOUS ESTIMATED DESTINATIONS LISTED IN THE INVITATION WHILE DOC-O'S BID WAS EVALUATED FOR FREIGHT ON THE BASIS OF SHIPPING 4 UNITS PER TRUCKLOAD VIA TRUCK AWAY, 6 UNITS PER CONVENTIONAL RAIL CARRIER, AND 8 UNITS PER TTX RAIL CARRIER, WHICHEVER WAS LOWER. DOC-O WAS NOT EVALUATED ON SHIPPING 6 UNITS PER HEAVY HAULER, SINCE ARMY CONSIDERED THIS TYPE OF CARRIAGE TO BE A "GRAY EA.' YOUR SUPPLEMENTAL REPORT STATES THAT ALL BIDDERS WERE GIVEN THE LOWEST FREIGHT RATES AVAILABLE AS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION, PARAGRAPH 1-1305.4. PURSUANT TO THIS PROCEDURE, DOC-O'S BID WAS EVALUATED AS INCLUDING TRANSPORTATION CHARGES OF $325,290.04, AND THE TRANSPORTATION CHARGES FOR ATLANTIS WERE DETERMINED TO BE $276,769.74. DOC-O'S EVALUATED BID TOTALED $2,242,158.73 AND THE EVALUATED BID OF ATLANTIS TOTALED $2,219,620.40. ON THIS BASIS ARMY DETERMINED THAT ATLANTIS WAS ENTITLED TO AN AWARD FOR ITEM 2 AS THE LOW EVALUATED BIDDER.

ON JANUARY 13, 1964, DOC-O DIRECTED A TELEGRAM TO THIS OFFICE PROTESTING ARMY'S FREIGHT EVALUATION. WE ALSO RECEIVED A FREIGHT ANALYSIS PREPARED BY DOC-O, WHICH INDICATED THAT IF DOC-O WERE EVALUATED ON THE BASIS OF SHIPPING 8 UNITS PER TRUCKLOAD, DOC-O WOULD BE THE LOW EVALUATED BIDDER FOR ITEM 2. ON JANUARY 17, 1964, WE REQUESTED YOUR ADDITIONAL COMMENTS REGARDING THE FREIGHT EVALUATION FOR ITEM 2, AND UPON RECEIPT OF YOUR SUPPLEMENTAL REPORT THE MATTER WAS SUBMITTED TO OUR TRANSPORTATION DIVISION FOR VERIFICATION OF YOUR FREIGHT EVALUATION. TO FACILITATE THIS VERIFICATION WE OBTAINED COPIES OF THE WORKPAPERS USED IN THE PREPARATION OF THE EVALUATION OF TRANSPORTATION CHARGES FOR ATLANTIS AND DOC-O, AND A CONFERENCE WAS HELD BETWEEN THE EXECUTIVE ASSISTANT AND THE SENIOR TRAFFIC OFFICER, OF THE TRAFFIC MANAGEMENT BRANCH, UNITED STATES ARMY COMMAND, AND REPRESENTATIVES OF THIS OFFICE.

THE FINDINGS OF OUR TRANSPORTATION DIVISION ARE AS FOLLOWS: IF THE BIDS OF DOC-O AND ATLANTIS WERE EVALUATED PURSUANT TO YOUR PROCEDURE THE FREIGHT COST FOR DOC-O WOULD BE $322,913.04, AND THE FREIGHT COST FOR ATLANTIS WOULD BE $276,691.41. IF DOC-O'S BID WERE EVALUATED ON THE BASIS OF SHIPPING 8 UNITS PER TRUCKLOAD VIA TRUCK AWAY, FREIGHT FOR DOC-O WOULD BE $272,760.34, AND IF DOC-O'S BID WERE EVALUATED ON THE BASIS OF SHIPPING 6 UNITS VIA HEAVY HAULER, WHEN LOWER, DOC-O'S FREIGHT WOULD BE $298,055.24. COPIES OF THE WORKPAPERS PREPARED BY THIS OFFICE TO SUPPORT THIS TRANSPORTATION EVALUATION ARE AVAILABLE IN THE TRANSPORTATION DIVISION. WE ALSO FOUND THAT ATLANTIS SHIPPED 8 UNITS PER TRUCKLOAD VIA TRUCK AWAY UNDER CONTRACT NO. DA-20-113-ORD 29227, WHICH WAS ALSO FOR THE PROCUREMENT OF M 105A2 CARGO TRAILERS, IN MAY AND JUNE OF 1963, AND THAT HEAVY HAULERS ARE BEING USED TO TRANSPORT M. 105E AND M 104 TRAILERS, LOADED 7 TO THE TRUCK, WHICH HAVE ESSENTIALLY THE SAME SHIPPING CHARACTERISTICS AS THE M 105A2, THE UNIT IN THIS PROCUREMENT.

IN THESE CIRCUMSTANCES WE DO NOT AGREE THAT THE EVALUATION OF THE TRANSPORTATION COSTS FOR DOC-O COULD ONLY BE IN ACCORDANCE WITH THE LOADING CHARACTERISTICS SET FORTH IN DOC-O'S BID. IN THIS REGARD THERE WOULD BE NO PROHIBITION TO REQUIRING DOC-O TO LOAD 8 UNITS PER TRUCK VIA TRUCK AWAY AT THE TIME THESE GOODS ARE ACTUALLY TRANSPORTED BY THE GOVERNMENT IF THE GOVERNMENT ISSUED AN APPROPRIATE CHANGE ORDER. MOREOVER, A TYPE OF TRUCK AWAY SERVICE SIMILAR TO A "CAR CARRIER" WOULD APPARENTLY BE AVAILABLE FOR TRANSPORTING THESE UNITS FROM SAN SPRINGS, OKLAHOMA, AND THE LOADING OPERATION WOULD BE SIMILAR FOR LOADING 4 OR 8 OF THE UNITS ON THE TRUCK AWAY. IT IS CLEAR THAT IF DOC-O LOADED 8 UNITS ON A TRUCK AWAY ONLY HALF AS MANY TRUCKS WOULD REQUIRE LOADING. WE NOTE ALSO THAT ATLANTIS STIPULATED NO CHARGE FOR LEADING 8 UNITS ON A TRUCK AWAY. CONSEQUENTLY, WE QUESTION THE CONCLUSION IN THE SUPPLEMENTAL REPORT THAT IT WOULD BE MORE COSTLY PER UNIT TO LOAD 8 UNITS VIA TRUCK AWAY THAN IT WOULD BE TO LOAD 4 UNITS BY TRUCK AWAY OR CONVENTIONAL TRUCK. IF DOC-O'S BID WERE EVALUATED ON THE BASIS OF SHIPPING 8 UNITS PER TRUCK AWAY, DOC- O'S EVALUATED BID WOULD BE SOME $30,000 LOWER THAN THE EVALUATED BID OF ATLANTIS. IN VIEW OF THE FOREGOING IT IS OUR CONCLUSION THAT DOC-O SUBMITTED THE LOW ELIGIBLE EVALUATED BID FOR ITEM 2.

WITH RESPECT TO THE QUESTION WHETHER DOC-O'S BID SHOULD HAVE BEEN EVALUATED ON THE BASIS OF SHIPPING 6 UNITS PER HEAVY HAULER, WE POINT OUT SUCH MODE OF TRANSPORTATION APPARENTLY WOULD BE AVAILABLE AND IS BEING USED TO SHIP UNITS WHICH ARE SIMILAR TO THE UNITS IN THIS PROCUREMENT. CONSEQUENTLY, THE CONCLUSION THAT DOC-O'S BID WAS EVALUATED ON THE BASIS OF THE LOWEST OVERALL COST TO THE GOVERNMENT AS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION, PARAGRAPH 1-1305.4, BASED ON THE LOADING CHARACTERISTICS SET FORTH IN DOC-O'S BID, WOULD ALSO APPEAR QUESTIONABLE. IF DOC-O'S BID WERE EVALUATED ON THE BASIS OF SHIPPING 6 UNITS PER HEAVY HAULER WHEN LOWER, DOC-O'S EVALUATED BID WOULD BE SOME $4,700 LOWER THAN THE EVALUATED BID OF ATLANTIS.

MOREOVER, 10 U.S.C. 2305/C) PROVIDES THAT AWARD SHALL BE MADE TO THAT BIDDER WHOSE BID CONFORMS TO THE INVITATION, PRICE AND OTHER FACTORS CONSIDERED. THE USE OF FORM HPC 4059A IN THE MANNER SET FORTH IN THIS CASE PLACES TOO GREAT AN EMPHASIS ON ONE ASPECT OF THE PROCUREMENT, THE BIDDERS EXPERTISE IN THE LOADING CHARACTERISTICS OF THE ITEMS TO BE TRANSPORTED BY THE GOVERNMENT. THUS, WHAT WOULD OTHERWISE BE A MINOR ASPECT OF THE EVALUATION BECOMES MATERIAL POSSIBLY TO THE DETRIMENT OF THE GOVERNMENT BECAUSE OF LACK OF SUCH EXPERTISE ON THE PART OF SOME BIDDERS. FOR THESE REASONS IT APPEARS THAT PLACING THE ENTIRE RESPONSIBILITY OF STIPULATING LOADING CHARACTERISTICS ON BIDDERS WHERE OPTIMUM LOADING CHARACTERISTICS ARE KNOWN TO THE GOVERNMENT, AS INDICATED BY THE PRIOR PROCUREMENTS OF THIS ITEM, WOULD NOT BE CONSISTENT WITH THE INTENT OF 10 U.S.C. 2305/C).