B-123620, JUN. 9, 1955

B-123620: Jun 9, 1955

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO YOUR LETTER OF JUNE 1. INSOFAR AS IS HERE MATERIAL. ON ITEMS 1 AND 7 OF THIS AMOUNT WAS SHOWN AS $0.323 PER TON FOR RAIL DELIVERIES AND $0.78 PER TON FOR TRUCK DELIVERIES. IT APPEARS THAT THE HANDLING COST FOR TRUCK DELIVERIES WAS QUESTIONED BY THE NAVY FUEL SUPPLY OFFICE AND THE DEPARTMENT OF THE ARMY VERIFIED THE CORRECTNESS THEREOF. A. HANNA COMPANY CALLED THE NAVY FUEL SUPPLY OFFICE AND INQUIRED IF THE HANDLING COST FOR TRUCK DELIVERIES WAS CORRECT. THE COMPANY WAS ADVISED THAT THE AMOUNT WAS IN ACCORDANCE WITH THE COST FURNISHED BY THE DEPARTMENT OF THE ARMY. THE SECOND-LOW BID ON THE TWO ITEMS WAS SUBMITTED BY INDIAN HEAD COAL COMPANY.

B-123620, JUN. 9, 1955

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 1, 1955, FURNISHING THE REPORT REQUESTED RELATIVE TO THE PROTESTS OF THE M. A. HANNA COMPANY AND THE INDIAN HEAD COAL COMPANY WITH RESPECT TO INVITATION FOR BIDS NO. IFB-424- 1178-55.

THE INVITATION REQUESTED BIDS FOR FURNISHING COAL TO VARIOUS DESTINATIONS. ITEMS 1 AND 7 REQUESTED BIDS ON A QUANTITY OF ANTHRACITE, BUCKWHEAT NO. 1 AND CHESTNUT, TO BE DELIVERED BY RAIL OR TRUCK TO FORT DIX, NEW JERSEY. INSOFAR AS IS HERE MATERIAL, THE INVITATION PROVIDED THAT, IN EVALUATING THE BIDS, A CERTAIN AMOUNT PER TON, IF APPLICABLE, WOULD BE ADDED TO THE PRICES QUOTED TO COVER THE COST OF UNLOADING, HANDLING AND STOCKPILING, INCLUDING ADMINISTRATIVE COSTS. ON ITEMS 1 AND 7 OF THIS AMOUNT WAS SHOWN AS $0.323 PER TON FOR RAIL DELIVERIES AND $0.78 PER TON FOR TRUCK DELIVERIES. IT APPEARS THAT THE HANDLING COST FOR TRUCK DELIVERIES WAS QUESTIONED BY THE NAVY FUEL SUPPLY OFFICE AND THE DEPARTMENT OF THE ARMY VERIFIED THE CORRECTNESS THEREOF. ALSO, UPON RECEIPT OF THE INVITATION, THE M. A. HANNA COMPANY CALLED THE NAVY FUEL SUPPLY OFFICE AND INQUIRED IF THE HANDLING COST FOR TRUCK DELIVERIES WAS CORRECT. THE COMPANY WAS ADVISED THAT THE AMOUNT WAS IN ACCORDANCE WITH THE COST FURNISHED BY THE DEPARTMENT OF THE ARMY, OFFICE OF CHIEF OF ENGINEERS, AND THAT BIDS WOULD BE EVALUATED ACCORDINGLY.

ON THE BASIS OF THE PROVISIONS OF THE INVITATION, THE M. A. HANNA COMPANY SUBMITTED THE LOWEST BID ON ITEMS 1 AND 7, PROPOSING TO MAKE DELIVERY BY RAIL. THE SECOND-LOW BID ON THE TWO ITEMS WAS SUBMITTED BY INDIAN HEAD COAL COMPANY, PROPOSING TO MAKE DELIVERY BY TRUCK.

THE INDIAN HEAD COAL COMPANY MADE A PROTEST AGAINST AWARD UNDER THE INVITATION ON THE BASIS THAT THE $0.78 PER TON HANDLING CHARGE FOR DELIVERIES BY TRUCK IS EXCESSIVE, DISCRIMINATORY, AND DOES NOT REFLECT THE ACTUAL COST WHICH WOULD BE INVOLVED. IN VIEW OF THE PROTEST, THE QUESTION OF THE CORRECTNESS OF THE HANDLING CHARGE WAS AGAIN REFERRED TO THE DEPARTMENT OF THE ARMY. THE OFFICE OF CHIEF OF ENGINEERS THEN REPUDIATED THE AMOUNT OF THE HANDLING COSTS WHICH THEY HAD FURNISHED AND VERIFIED, AND ADVISED THAT THE CORRECT HANDLING COSTS WERE $0.07 PER TON FOR TRUCK DELIVERIES AND $0.299 PER TON FOR RAIL DELIVERIES.

THE M. A. HANNA COMPANY HAS PROTESTED AGAINST THE DISREGARDING OF THE BIDS ON ITEMS 1 AND 7 ON THE BASIS THAT ITS BID WAS SUBMITTED IN GOOD FAITH, AFTER QUESTIONING THE CORRECTNESS OF THE HANDLING CHARGE; THAT TO DISREGARD THE BIDS AFTER OPENING IS UNFAIR; AND THAT THE INDIAN HEAD COAL COMPANY, IF IT IS SO DESIRED, SHOULD HAVE PROTESTED AGAINST THE HANDLING CHARGE PRIOR TO THE TIME OF THE OPENING OF BIDS.

ALTHOUGH IT CONSISTENTLY HAS BEEN HELD THAT BIDS SHOULD BE DISREGARDED AFTER THE OPENING ONLY FOR COMPELLING REASONS, THE HANDLING CHARGE FOR TRUCK DELIVERIES SPECIFIED IN THE INVITATION WAS GREATLY EXCESSIVE AND DISCRIMINATORY. IN THE CIRCUMSTANCES, WE AGREE WITH THE VIEW OF YOUR DEPARTMENT THAT ALL BIDS ON ITEMS 1 AND 7 SHOULD BE DISREGARDED AND THE REQUIREMENT SHOULD BE READVERTISED UNDER PROPER SPECIFICATIONS.

THE PAPERS, WITH THE EXCEPTION OF THE STATEMENT OF FACTS BY THE CONTRACTING OFFICER, ARE RETURNED.