B-125542, JAN. 13, 1956

B-125542: Jan 13, 1956

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO LETTER DATED NOVEMBER 17. THE RECORD SHOWS THAT A REQUISITION WAS RECEIVED BY THE FEDERAL SUPPLY SERVICE FROM THE FOREIGN OPERATIONS ADMINISTRATION FOR 15 TRUCKS. THAT IN ADDITION TO THE SPECIFICATIONS ONE OF THE REQUIREMENTS WAS THAT. THE REQUIREMENT FOR THE TRUCKS WAS ADVERTISED UNDER INVITATION 4N 50405 AND PAGE 5 OF THE INVITATION STATED: "ALL THE ABOVE TRUCKS SHOULD BE PROCURED IN COMPLETELY KNOCKED DOWN CONDITION AND CONSIGNED TO: "THE INVITATION PROVIDED FOR BIDDERS TO QUOTE PRICES F.O.B. BIDDERS WERE REQUIRED TO SHOW THE WEIGHTS AND MEASUREMENTS OF THE EQUIPMENT. IT IS REPORTED THAT PRIOR TO THE OPENING OF THE BIDS. THAT HE WAS INFORMED THAT COMPLETELY KNOCKED DOWN UNITS WERE REQUIRED AS STUDENTS IN INDIA WERE TO ASSEMBLE A COMPLETE TRUCK FROM PARTS AND COMPONENTS FURNISHED AND THAT.

B-125542, JAN. 13, 1956

TO HONORABLE EDMUND F. MANSURE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO LETTER DATED NOVEMBER 17, 1955, FROM THE ASSISTANT ADMINISTRATOR, FURNISHING THE REPORT RELATIVE TO A DISPUTE BETWEEN ROCKY MOUNTAIN EXPORT COMPANY AND FEDERAL SUPPLY SERVICE, REGION THREE, REGARDING INVITATION FOR BIDS 4N-50405-R-4-22-55.

THE RECORD SHOWS THAT A REQUISITION WAS RECEIVED BY THE FEDERAL SUPPLY SERVICE FROM THE FOREIGN OPERATIONS ADMINISTRATION FOR 15 TRUCKS, HEAVY DUTY, 6-WHEEL, 4-WHEEL DRIVE, ETC., FOR DELIVERY TO BOMBAY, INDIA, AND THAT IN ADDITION TO THE SPECIFICATIONS ONE OF THE REQUIREMENTS WAS THAT, "ALL THE ABOVE TRUCKS SHOULD BE PROCURED IN COMPLETELY KNOCKED DOWN CONDITION.'

THE REQUIREMENT FOR THE TRUCKS WAS ADVERTISED UNDER INVITATION 4N 50405 AND PAGE 5 OF THE INVITATION STATED: "ALL THE ABOVE TRUCKS SHOULD BE PROCURED IN COMPLETELY KNOCKED DOWN CONDITION AND CONSIGNED TO: "THE INVITATION PROVIDED FOR BIDDERS TO QUOTE PRICES F.O.B. POINT OF SHIPMENT AND/OR F.A.S., U.S. PORT OF SHIPMENT. ALSO, BIDDERS WERE REQUIRED TO SHOW THE WEIGHTS AND MEASUREMENTS OF THE EQUIPMENT. PAGE 7 OF THE INVITATION PROVIDED A SPACE FOR BIDDERS TO INDICATE ALL DEVIATIONS FROM SPECIFICATIONS.

IT IS REPORTED THAT PRIOR TO THE OPENING OF THE BIDS, MR. REYNOLDS OF ROCKY MOUNTAIN EXPORT COMPANY CONTACTED FEDERAL SUPPLY SERVICE, REGION THREE, REQUESTING INFORMATION AS TO THE REQUIREMENT RELATING TO THE FURNISHING OF THE VEHICLES COMPLETELY KNOCKED DOWN; THAT HE WAS INFORMED THAT COMPLETELY KNOCKED DOWN UNITS WERE REQUIRED AS STUDENTS IN INDIA WERE TO ASSEMBLE A COMPLETE TRUCK FROM PARTS AND COMPONENTS FURNISHED AND THAT, THEREFORE, BIDS ON ASSEMBLED TRUCKS WOULD NOT BE CONSIDERED.

IN RESPONSE TO THE INVITATION, ROCKY MOUNTAIN EXPORT COMPANY SUBMITTED A BID DATED APRIL 19, 1955, OFFERING TO FURNISH THE TRUCKS FOR A PRICE OF $10,209.61 EACH, F.O.B. TULSA, OKLAHOMA, AND FOR $10,865.87 EACH, F.A.S. NEW ORLEANS PRICE AND REFERRED TO THE FOLLOWING STATEMENT ON THE BID FORM: "THIS PRICE INCLUDES COMPLETE KNOCKED-DOWN CONDITION AND EXPORT BOXING AS CALLED FOR BY THE BID INVITATION, PAGE 5: THE CHASSIS, WINCH, AND OILFIELD BODY IN BOX 1; MOTOR AND DIFFERENTIAL IN BOX 2; CAB, HOOD, FENDERS, ETC., IN BOX 3.' NO STATEMENT WAS MADE WITH REFERENCE TO THE F.O.B. TULSA PRICE.

THE BID WAS ACCOMPANIED BY LETTER OF THE SAME DATE STATED TO BE AN INTEGRAL PART OF THE BID, WHEREIN IT WAS STATED,"THE TRUCKS * * * WILL BE COMPLETELY KNOCKED DOWN, AS CALLED FOR BY THE INVITATION.' THERE WAS NO STATEMENT ON PAGE 7 OF THE INVITATION THAT EITHER OF THE PRICES QUOTED CONTEMPLATED FURNISHING TRUCKS IN A CONDITION OTHER THAN THAT REQUIRED BY THE INVITATION.

THE RECORD SHOWS THAT IN THE EVALUATION OF THE BIDS RECEIVED, TAKING INTO CONSIDERATION ALL COSTS TO THE GOVERNMENT FOR DELIVERY TO BOMBAY, INDIA, THE TOTAL COST PER TRUCK WAS $11,905.65 ON THE BASIS OF ROCKY MOUNTAIN EXPORT COMPANY'S BID PRICE F.O.B. TULSA. THE SECOND LOW BID WAS IN THE AMOUNT OF $12,110.70. THE BID OF THE ROCKY MOUNTAIN EXPORT COMPANY, F.O.B. TULSA, OKLAHOMA, WAS ACCEPTED ON JUNE 14, 1955.

UPON RECEIPT OF THE CONTRACT, ROCKY MOUNTAIN EXPORT COMPANY ADVISED BY LETTER DATED JUNE 20, 1955, THAT THE PRICE QUOTED FOR F.O.B. TULSA, WAS ESTABLISHED ON THE BASIS OF FURNISHING THE TRUCKS COMPLETELY ASSEMBLED AND SET UP AT TULSA, OKLAHOMA, AND THAT ITS BID PRICE F.A.S. NEW ORLEANS, LOUISIANA, AS INDICATED BY THE STATEMENT MADE IN CONNECTION THEREWITH, WAS FOR THE TRUCKS IN A COMPLETELY KNOCKED DOWN CONDITION AND EXPORT BOXED. THE COMPANY REQUESTED THAT, SINCE THE EQUIPMENT WAS DESIRED IN A KNOCKED DOWN CONDITION, THE CONTRACT BE AMENDED TO ACCEPT DELIVERY AT ITS BID PRICE F.A.S. NEW ORLEANS, LOUISIANA.

BY LETTER DATED JUNE 28, 1955, THE CONTRACTING OFFICER ADVISED THE COMPANY THAT HE HAD NO OTHER RECOURSE BUT TO MAKE AWARD F.O.B. TULSA, SINCE THE BID AND ACCOMPANYING LETTER MADE NO MENTION THAT THE F.O.B. TULSA, OKLAHOMA, PRICE DID NOT COVER THE EQUIPMENT IN A KNOCKED DOWN CONDITION AS REQUIRED BY THE SPECIFICATIONS AND THE EVALUATION OF THE BIDS SHOWED THAT THE F.O.B. TULSA PRICE WAS THE MOST ADVANTAGEOUS TO THE GOVERNMENT.

IN A LETTER DATED SEPTEMBER 16, 1955, THE COMPANY STATES, IN PART, AS FOLLOWS:

"THE INVITATION DID NOT SPECIFICALLY DIRECT THAT THE BIDDERS QUOTE "KNOCKED DOWN AND EXPORT BOXED.'

"IT IS TRUE THAT THE INVITATION INCORPORATED BY REFERENCE SPECIAL PROGRAM CONTRACT PROVISIONS (FORM R3-184) PARAGRAPH 9.A, WHICH PROVIDED: " "UNLESS OTHERWISE PROVIDED IN THE INVITATION FOR BIDS, ALL MATERIALS OR ARTICLES FURNISHED UNDER THIS CONTRACT SHALL BE PACKED FOR EXPORT. SUCH PACKING MUST BE SUFFICIENT TO INSURE SAFE ARRIVAL AT THE FOREIGN DESTINATION FULLY COVERING SUCH OVERSEAS HAZARDS AS ROUGH HANDLING AND POSSIBLE CORROSION DUE TO EXPOSURE TO SALT ATMOSPHERE, SALT SPRAY, OR OPEN STORAGE.'

"IT IS RESPECTFULLY SUBMITTED THAT "PACKING FOR EXPORT" MEANS MUCH LESS THAN "KNOCKED DOWN AND BOXED.'

"THE STATEMENT APPEARING ON PAGE 5 OF THE INVITATION,"ALL THE ABOVE TRUCKS SHOULD BE PROCURED IN COMPLETELY KNOCKED DOWN CONDITION..., " COULD REASONABLY BE UNDERSTOOD TO CONSTITUTE PART OF THE INSTRUCTIONS TO THE GENERAL SERVICES ADMINISTRATION, NOT A PART OF THE INVITATION FOR BIDS.

"NEVERTHELESS, THIS COMPANY, IN ORDER TO MEET ALL EVENTUALITIES, QUOTED TWO PRICES:

"$153,144.15 F.O.B. U.S. PORT OF ORIGIN (TULSA, OKLAHOMA), AND $162,988.05 F.A.S. U.S. VESSEL PORT OF SHIPMENT (NEW ORLEANS, LA.), SPECIFYING THAT THIS LATTER "INCLUDES COMPLETE KNOCKED DOWN CONDITION AND EXPORT BOXING...'"

IT WOULD APPEAR THAT ANY REASONABLE INTERPRETATION OF THE LANGUAGE OF THE INVITATION REQUIRED THE EQUIPMENT COVERED THEREBY TO BE FURNISHED IN A KNOCKED DOWN CONDITION. FURTHERMORE, ROCKY MOUNTAIN EXPORT COMPANY WAS ADVISED, BEFORE THE BID OPENING, THAT THE EQUIPMENT WAS TO BE FURNISHED IN A KNOCKED DOWN CONDITION. ALSO, IN VIEW OF THE STATEMENT MADE ON THE BID FORM RELATIVE TO THE F.A.S. PRICE AND THE STATEMENT CONTAINED IN THE ACCOMPANYING LETTER, IT APPEARS THAT THE COMPANY WAS FULLY AWARE OF THE REQUIREMENTS. UNDER THE CIRCUMSTANCES, THE REASON FOR THE COMPANY TO HAVE QUOTED A PRICE F.O.B. ORIGIN ON ANY OTHER BASIS WITHOUT AN EXPLANATION OR QUALIFICATION IS NOT UNDERSTOOD.

HOWEVER, THE FACT REMAINS THAT THE ONLY POSSIBLE DIFFERENCE BETWEEN THE PRICE QUOTED F.O.B. TULSA, AND F.A.S. NEW ORLEANS, IS THE COST OF TRANSPORTATION BETWEEN THE TWO POINTS. THE DIFFERENCE BETWEEN SUCH PRICES IS $656.26 PER UNIT OR $9,843.90 FOR THE 15 UNITS. IN THE EVALUATION OF THE BIDS RECEIVED, IT WAS NECESSARY TO AND THE CONTRACTING OFFICER DID COMPUTE THE FREIGHT COST BETWEEN THE TWO POINTS. SUCH COST IS SHOWN TO BE $459.82. THUS, THERE IS AN UNEXPLAINED DIFFERENCE OF APPROXIMATELY $200 PER UNIT BETWEEN THE F.O.B. TULSA AND F.A.S. NEW ORLEANS PRICES. FURTHER APPEARS THAT THE ROCKY MOUNTAIN EXPORT COMPANY WOULD HAVE BEEN THE LOW BIDDER ON EITHER BASIS. THE TOTAL COST TO THE GOVERNMENT ON THE F.A.S. NEW ORLEANS PRICE WOULD E:

TABLE

F.A.S. NEW ORLEANS, LOUISIANA $10,865.87

COST AND FREIGHT TO INDIA 483.75

HEAVY LIFT CHARGES 125.78

EXCISE TAX 634.36

$12,109.76 DISCOUNT

7.67 -----------

$12,102.09

THE SECOND LOW BID IS SHOWN AS $12,110.70.

IN VIEW OF THE UNEXPLAINED DIFFERENCE BETWEEN THE BID PRICES; THE FACT THAT THE F.A.S. NEW ORLEANS PRICE ONLY REFERRED TO THE STATEMENT ON THE BID FORM "THIS PRICE INCLUDES COMPLETE KNOCKED-DOWN CONDITION AND EXPORT BOXING * * *; " AND THE FACT THAT THE LANGUAGE OF THE INVITATION WAS NOT AS CLEAR AS IT COULD HAVE BEEN, THERE IS A SUBSTANTIAL BASIS FOR DOUBT AS TO WHETHER THE ACCEPTANCE OF THE BID ON THE F.O.B. TULSA BASIS CONSUMMATED A VALID AND BINDING CONTRACT REQUIRING THE CONTRACTOR TO FURNISH THE EQUIPMENT IN A KNOCKED DOWN CONDITION.

THE RECORD INDICATES THAT THE CONTRACT WAS AMENDED, APPARENTLY AT THE CONTRACTOR'S REQUEST, IN ORDER THAT THE TRUCKS COULD BE KNOCKED DOWN AND EXPORT BOXED IN NEW ORLEANS, TO PROVIDE FOR DELIVERY F.A.S. NEW ORLEANS, LOUISIANA, RATHER THAN F.O.B. TULSA, OKLAHOMA, AND THAT AS A RESULT OF SUCH CHANGE THE CONTRACT PRICE WAS INCREASED BY $290 PER UNIT TO COVER THE COST OF TRANSPORTATION. IT FURTHER APPEARS THAT PAYMENT HAS BEEN MADE TO THE CONTRACTOR IN THE AMOUNT OF $153,552.28 BASED ON A UNIT PRICE OF $10,499.61 F.A.S. NEW ORLEANS, LOUISIANA, LESS $115 DISCOUNT AND $3,826.87 FOR EXCESS COST OF OCEAN FREIGHT.

UNDER THE CIRCUMSTANCES AND SINCE THERE APPEARS NO DOUBT THAT THE PRICE QUOTED F.O.B. TULSA, OKLAHOMA, WAS NOT INTENDED TO COVER THE FURNISHING OF THE TRUCKS IN A KNOCKED DOWN CONDITION, ROCKY MOUNTAIN EXPORT COMPANY MAY BE PAID FOR THE EQUIPMENT FURNISHED ON THE BASIS OF ITS BID PRICE OF $162,988.05 F.A.S. NEW ORLEANS, LOUISIANA, LESS, OF COURSE, DISCOUNT, THE EXCESS COST OF OCEAN FREIGHT INCURRED BY THE GOVERNMENT AND THE AMOUNT HERETOFORE PAID.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING PAYMENT MADE IN ACCORDANCE HEREWITH.