A-76944, JULY 14, 1936, 16 COMP. GEN. 21

A-76944: Jul 14, 1936

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ADVERTISING - BIDS - AWARD ON BASIS OF ELEMENT NOT MENTIONED IN SPECIFICATIONS WHERE BIDS ARE SOLICITED F.O.B. AS FOLLOWS: INCLOSED HEREWITH ARE COPIES OF BIDS SUBMITTED BY THE SEVERAL PROPELLER MANUFACTURERS UNDER CONTRACT TEG-25504. WHICH WAS AWARDED TO THE COLUMBIAN BRONZE CORPORATION. ON THE GROUNDS THAT THE COLUMBIAN BRONZE CORPORATION'S BID WAS NOT RESPONSIVE TO THE SPECIFICATIONS CONTAINED IN THE "INVITATION TO BID.'. THE BIDS WERE SOLICITED BY THE COMMANDER. DUE TO THE ABOVE CONDITIONS IT WAS IMPOSSIBLE TO SPECIFY IN THE SPECIFICATIONS DELIVERY TO ANY CERTAIN POINT AND DELIVERY WAS SPECIFIED "F.O.B. IT IS A PLEASURE FOR US TO STATE WHILE DELIVERY IS SPECIFIED ON AN F.O.B. WE ARE WILLING TO AUTOMATICALLY INCORPORATE AN F.O.B.

A-76944, JULY 14, 1936, 16 COMP. GEN. 21

ADVERTISING - BIDS - AWARD ON BASIS OF ELEMENT NOT MENTIONED IN SPECIFICATIONS WHERE BIDS ARE SOLICITED F.O.B. FACTORY, COMPETITION ON AN EQUAL BASIS REQUIRES THAT AWARD BE NOT MADE F.O.B. DESTINATION, ALTHOUGH MORE FAVORABLE TO THE GOVERNMENT, THE PROCEDURE IN SUCH CASE BEING READVERTISEMENT AND OPPORTUNITY FOR SUBMISSION OF BIDS ON AN F.O.B. DESTINATION, AS WELL AS F.O.B. FACTORY, BASIS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, JULY 14, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF JUNE 27, 1936, AS FOLLOWS:

INCLOSED HEREWITH ARE COPIES OF BIDS SUBMITTED BY THE SEVERAL PROPELLER MANUFACTURERS UNDER CONTRACT TEG-25504, DATED 21 MAY 1936, WHICH WAS AWARDED TO THE COLUMBIAN BRONZE CORPORATION. THIS AWARD HAS BEEN PROTESTED TO THE COAST GUARD BY THE MICHIGAN WHEEL CORPORATION AND BOWLER HOLMES AND HECKER COMPANY, AS PER COPIES OF THEIR TELEGRAMS ALSO INCLOSED HEREWITH, ON THE GROUNDS THAT THE COLUMBIAN BRONZE CORPORATION'S BID WAS NOT RESPONSIVE TO THE SPECIFICATIONS CONTAINED IN THE "INVITATION TO BID.'

THE BIDS WERE SOLICITED BY THE COMMANDER, NEW YORK DIVISION, U.S. COAST GUARD, FOR PROPELLERS TO BE USED AS REPLACEMENTS FOR VESSELS IN HIS DIVISION THROUGHOUT THE FISCAL YEAR 1937.

THE NEW YORK DIVISION COVERS TERRITORY INCLUDING THE ENTIRE STATES OF NEW JERSEY AND CONNECTICUT, AND PARTS OF PENNSYLVANIA AND NEW YORK, EXTENDING NORTHWARD IN NEW YORK TO CANADA AND WESTWARD TO THE GREAT LAKES, AND ALSO COVERS TWO COAST GUARD VESSELS STATIONED IN PUERTO RICO AND THE VIRGIN ISLANDS. DUE TO THE ABOVE CONDITIONS IT WAS IMPOSSIBLE TO SPECIFY IN THE SPECIFICATIONS DELIVERY TO ANY CERTAIN POINT AND DELIVERY WAS SPECIFIED "F.O.B. CONTRACTOR'S NT," IT BEING THE INTENTION TO AWARD THE BID TO THE CONTRACTOR OFFERING THE MOST FAVORABLE PRICES, TAKING INTO CONSIDERATION THE COST TO THE GOVERNMENT OF TRANSPORTING THE PROPELLERS FROM THE CONTRACTOR'S PLANT TO THE UNITS WHO WOULD ORDER PROPELLERS UNDER THE CONTRACT.

AS YOU CAN SEE ALL THE BIDDERS SPECIFIED DELIVERY "F.O.B. THEIR PLANT" IN THEIR RESPONSE, BUT IN ADDITION, THE COLUMBIAN BRONZE CORPORATION INCLUDED IN THEIR LETTER ACCOMPANYING THEIR BID THE FOLLOWING CLAUSE:

"IN CONNECTION WITH THE BID INCLOSED HEREWITH, IT IS A PLEASURE FOR US TO STATE WHILE DELIVERY IS SPECIFIED ON AN F.O.B., FACTORY BASIS, WE ARE WILLING TO AUTOMATICALLY INCORPORATE AN F.O.B., DESTINATION BASIS, THAT IS, IN CONNECTION WITH ALL INDIVIDUAL SHIPMENTS MADE TO ANY POINT IN THE NEW YORK DIVISION. SHOULD IT BE A CONVENIENCE TO YOUR OFFICE, ALL EXPENSE ATTACHED TO THE SHIPMENTS WOULD BE TAKEN CARE OF BY US.

"FURTHERMORE, PRACTICALLY ALL OF THESE PROPELLER COMBINATIONS ARE CARRIED IN STOCK, SO THAT VERY PROMPT SHIPMENTS CAN BE MADE, AND AS IN THE PAST, OUR OWN TRUCK WOULD HANDLE DELIVERIES IN THE METROPOLITAN AREA.'

THIS CLAUSE WAS CONSIDERED IN MAKING THE AWARD AND AS IT WAS MANIFEST THOSE TERMS WERE MORE ADVANTAGEOUS TO THE GOVERNMENT AND WERE IN ACCORD WITH ARTICLE 668,"TREASURY DEPARTMENT, PAY AND SUPPLY INSTRUCTIONS, UNITED STATES COAST GUARD," WHICH STATES AS FOLLOWS:

"ART. 668. WHERE A BIDDER SPECIFIES A POINT OF DELIVERY OTHER THAN THAT STIPULATED IN THE INVITATION TO BID, HIS BID CANNOT BE REJECTED FOR THIS PARTICULAR REASON. BEFORE AN AWARD CAN BE PROPERLY MADE, IT BECOMES NECESSARY TO CONSIDER THE COST OF TRANSPORTATION INVOLVED.'

THE COLUMBIAN BRONZE CORPORATION WAS AWARDED THE CONTRACT, A CONTRACT NUMBER ASSIGNED THERETO, AND THE ORIGINAL FURNISHED YOUR OFFICE.

THE COMPANIES PROTESTING, DO SO, ON THE FACT THAT THE LETTER CONTAINING THE ABOVE CLAUSE SHOULD NOT HAVE BEEN CONSIDERED AND THAT THE BID SHOULD HAVE BEEN AWARDED AS TO LOWEST UNIT PRICE ONLY.

THE PROPELLERS TO BE FURNISHED BY ANY OF THE BIDDERS ARE ACCEPTABLE TO THE COAST GUARD AND SIMILAR CONTRACTS HAVE BEEN ENTERED INTO WITH MOST OF THEM IN THE PAST. AS A MATTER OF FACT, THE CONTRACT FOR THE FISCAL YEAR 1936 FOR THE SAME ARTICLES WAS AWARDED TO THE FEDERAL MOGUL CORPORATION.

NO PURCHASES HAVE BEEN MADE UNDER THIS NEW CONTRACT TEG-25504 AND ALL UNITS HAVE BEEN NOTIFIED TO MAKE NONE UNTIL FURTHER ORDERS. THE ABOVE INFORMATION IS FURNISHED YOU WITH THE REQUEST THAT YOU RENDER A DECISION WHETHER OR NOT THE CONTRACT IS LEGAL AND VALID.

THE DECISIONS OF THE COURTS AND THIS OFFICE HAVE BEEN TO THE EFFECT THAT COMPETITION MUST BE ON AN EQUAL BASIS AND ON COMMON GROUND, AND IN ORDER THAT THIS MAY BE ACCOMPLISHED THE NEEDS OF THE GOVERNMENT MUST BEFULLY SET FORTH IN THE ADVERTISED SPECIFICATIONS SO THAT ALL WHO WISH TO BID MAY BE INFORMED WITH RESPECT THERETO. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313. THE CONTRACT AWARDED THE SUCCESSFUL BIDDER MUST BE THE EXACT CONTRACT WHICH WAS SUBMITTED TO COMPETITION. SEE 8 COMP. GEN. 299; ID. 649.

IN THIS CASE IT APPEARS THAT THE ADVERTISED SPECIFICATIONS ADVISED PROSPECTIVE BIDDERS AS TO THE NEEDS OF THE UNITED STATES COAST GUARD WITH RESPECT TO THE PROPELLERS REQUIRED. IT WAS PROVIDED AMONG OTHER THINGS THAT DELIVERY WAS TO BE F.O.B. CONTRACTOR'S PLANT, IT BEING THE INTENTION TO AWARD THE BID TO THE CONTRACTOR OFFERING THE MOST FAVORABLE PRICES, TAKING INTO CONSIDERATION THE COST TO THE GOVERNMENT OF TRANSPORTING THE PROPELLERS TO DESTINATION. NOTWITHSTANDING THIS PROVISION OF THE ADVERTISEMENT FOR BIDS, ONE OF THE BIDDERS--- COLUMBIAN BRONZE CORPORATION --- SUBMITTED BIDS F.O.B. FACTORY, AND, ALSO, OFFERED THE SAME PRICES FOR F.O.B. DESTINATION BASIS FOR ALL SHIPMENTS IN THE NEW YORK DIVISION. WHILE THE COST TO THE GOVERNMENT IS ALWAYS A MATTER FOR CONSIDERATION IN DETERMINING WHICH, IN FACT, IS THE LOWEST BID RECEIVED, 10 COMP. GEN. 402, THE ADVERTISED SPECIFICATIONS IN THIS CASE AS NOTED, SUPRA, SPECIFICALLY ADVISED ALL PROSPECTIVE BIDDERS THAT BIDS WOULD BE RECEIVED ON THE BASIS OF DELIVERY F.O.B. FACTORY, THE REASON THEREFOR BEING SET FORTH IN YOUR LETTER, QUOTED ABOVE, AND TO GIVE CONSIDERATION TO THE BID OF THE COLUMBIAN BRONZE CORPORATION FOR DELIVERY F.O.B. DESTINATION AND MAKE AWARD AS ADMINISTRATIVELY PROPOSED WITHOUT GIVING OTHER BIDDERS AN OPPORTUNITY TO BID ON SUCH BASIS, WOULD NOT BE COMPETITION ON AN EQUAL BASIS OR ON COMMON GROUND. HENCE, ALL BIDDERS SHOULD BE GIVEN THE OPPORTUNITY OF SUBMITTING BIDS ON AN F.O.B. DESTINATION BASIS AS WELL AS ON AN F.O.B. FACTORY BASIS.

THE QUESTION PRESENTED IS ANSWERED ACCORDINGLY.