B-127647, JUL. 16, 1956

B-127647, JUL. 16, 1956

TO THE HONORABLE FRANKLIN G. FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED JUNE 25, 1956, WITH ENCLOSURES, FROM THE COMMISSIONER, FEDERAL SUPPLY SERVICE, FURNISHING THE REPORT REQUESTED BY OUR OFFICE RELATIVE TO AN ERROR THE INTERNATIONAL FERMONT MACHINERY COMPANY, INC., RAMAPO, NEW YORK, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. GS-00S-2536-ICA, DATED APRIL 6, 1956, WAS AWARDED. THE REPORT ALSO COVERS AN ERROR ALLEGED BY THE WINPOWER MANUFACTURING COMPANY, NEWTON, IOWA, TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. GS-00S- 2535-ICA, DATED APRIL 6, 1956, WAS AWARDED.

THE FEDERAL SUPPLY SERVICE, NATIONAL BUYING DIVISION, WASHINGTON, D.C., BY INVITATION NO. FNW-3J-66271/1/-A-N-2-23-56 REQUESTED BIDS--- TO BE OPENED FEBRUARY 23, 1956--- FOR FURNISHING DIESEL AND GASOLINE ENGINE DRIVEN ELECTRIC GENERATOR SETS, WITH SPARE PARTS, AS DESCRIBED UNDER ITEMS 1 TO 4, INCLUSIVE. IT IS REPORTED THAT BIDS FOR THE SAME TYPE OF EQUIPMENT WERE SIMULTANEOUSLY REQUESTED BY THE EMERGENCY PROCUREMENT SERVICE, TOKYO, JAPAN, AND LONDON, ENGLAND, AND THAT THE BIDS RECEIVED WERE SUBMITTED TO THE FEDERAL SUPPLY SERVICE, WASHINGTON, D.C. FOR EVALUATION AGAINST THE BIDS RECEIVED BY THAT OFFICE. IN RESPONSE THE WINPOWER MANUFACTURING COMPANY SUBMITTED A BID DATED FEBRUARY 21, 1956, IN PART, AS FOLLOWS:

CHART

ITEM QUANTITY UNIT

NO. SUPPLIES OR SERVICES (NO. OF UNITS) UNIT PRICE AMOUNT

2 2 EACH ONLY - CODE 720 DIESEL ELECTRIC UNITS, PORTABLE, XXXXXXXXXX

(10) MINIMUM 25 KW, STANDARD DIESEL

ENGINE DRIVEN, DIRECT-CONNECTED

TO AC GENERATOR. GENERATOR OUT-

PUT SHALL BE 220/380 VOLTS, WYE

WOULD, 3-PHASE, CAPABLE OF DELIVERING

EITHER 50 OR 60 CYCLES. TAPE OFF

SHALL PROVIDE 110 VOLTS IN EACH

PHASE OUTPUT. POWER FACTOR SHALL

BE 80 PERCENT. SWITCHBOARD SHALL

BE INTEGRALLY MOUNTED WITH THE UNIT.

UNITS TO BE ELECTRICALLY STARTED.

1 EACH ONLY -

BATTERY CHARGING SET (NOT INTEGRAL

WITH UNIT) XXXXXXXXXXX

4 COPIES ONLY -

CATALOGS AND INSTRUCTION BOOKS FOR SPARES,

MAINTENANCE AND OPERATIONS. XXXXXXXXXXX

2 SETS ONLY -

STANDARD AND SPECIAL TOOLS NECESSARY

FOR MAINTENANCE. XXXXXXXXXXX

NOTE: - UNIT PRICE FOR EACH SUB-ITEM

IS REQUESTED. AWARD OF THE ABOVE LOT

SHALL BE MADE IN THE AGGREGATE. BIDS

FOR LESS THAN A COMPLETE LOT WILL NOT

BE CONSIDERED.

FOB POINT OF ORIGIN PACKED FOR EXPORT 1 LOT 3175.00 $3175.00

ALSO IN RESPONSE TO THE SAME INVITATION THE INTERNATIONAL FERMONT MACHINERY COMPANY, INC., SUBMITTED AN UNDATED BID OFFERING TO FURNISH UNDER ITEM 3, TWO 15 KW PORTABLE DIESEL ELECTRIC UNITS WITH SPARE PARTS FOR THE "LOT" PRICE OF $2,522, THIS FIGURE APPEARING IN THE SAME SCHEDULE FORM AND SET-UP AS ABOVE INDICATED.

IN THE LETTER OF JUNE 25, 1956, IT IS STATED THAT, BY TELEGRAMS AND TELEPHONE, THE WINPOWER MANUFACTURING COMPANY AND THE INTERNATIONAL FERMONT MACHINERY COMPANY, INC., WERE REQUESTED TO CLARIFY THE SPECIFICATION FOR THE BATTERY CHARGING SET AND EXTENDED THE PERIOD FOR ACCEPTANCE OF THEIR BIDS. THE BIDS OF WINPOWER MANUFACTURING COMPANY AND THE INTERNATIONAL FERMONT MACHINERY COMPANY, INC., WERE ACCEPTED AS TO ITEMS 2 AND 3, RESPECTIVELY, ON APRIL 6, 1956.

BY LETTER DATED APRIL 17, 1956, ADDRESSED TO OUR OFFICE, THE INTERNATIONAL FERMONT MACHINERY COMPANY, INC., REQUESTED THAT EITHER CONTRACT NO. GS-00S-2536-ICA BE CANCELLED OR THE CONTRACT PRICE FOR THE TWO 15 KW DIESEL ELECTRIC UNITS COVERED BY ITEM 3 BE INCREASED TO $5,004-- - THE BASIS THEREFOR BEING THAT IT HAD OVERLOOKED THE FACT THAT THE WORD "ECT" APPEARING IN THE UNIT COLUMN WAS TO INCLUDE TWO UNITS AND THAT IT HAD THEREFORE SUBMITTED ITS QUOTATION OF $2,522 FOR THAT ITEM ON THE BASIS OF FURNISHING ONLY ONE UNIT. THE COMPANY ALSO STATED THAT IT HAD MADE THE SAME TYPE OF ERROR IN INSERTING ITS BID PRICE OF $3,452 FOR ITEM 2 WHICH WAS AWARDED TO THE WINPOWER MANUFACTURING COMPANY, AND THAT THE SAME TYPE OF ERROR MADE BY IT HAD BEEN MADE BY THAT COMPANY. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED A COST BREAKDOWN OF ITS ORIGINAL BID PRICE OF $2,522 AND SUPPORTING DATA.

BY LETTER DATED APRIL 16, 1956, THE WINPOWER MANUFACTURING COMPANY ADVISED THE FEDERAL SUPPLY SERVICE THAT IT HAD RECEIVED A TELEPHONE CALL FROM R. SUGARMAN OF THE INTERNATIONAL FERMONT MACHINERY COMPANY, INC., INQUIRING AS TO WHETHER ITS BID PRICE ON ITEM 2 WAS BASED ON FURNISHING ONE OF TWO UNITS; THAT UPON CHECKING ITS BID IT DISCOVERED THAT ITS BID PRICE OF $3,175 FOR ITEM 2 WAS BASED ON FURNISHING ONLY ONE UNIT; THAT THE SAME TYPE OF ERROR HAD BEEN MADE BY THE COMPANY IN INSERTING ITS BID PRICE OF $2,540 FOR ITEM 3 WHICH WAS AWARDED TO THE INTERNATIONAL FERMONT MACHINERY COMPANY, INC. IN A LETTER DATED APRIL 19, 1956, THE WINPOWER MANUFACTURING COMPANY REQUESTED THAT EITHER CONTRACT NO. GS-00S-2535-ICA BE CANCELLED OR THAT THE CONTRACT PRICE OF ITEM 2 BE INCREASED TO $6,350-- - TWICE THE PRICE ORIGINALLY QUOTED BY IT. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED THE ESTIMATE SHEETS USED IN COMPUTING ITS BID PRICE FOR ITEM 2. THE ESTIMATE SHEETS, CONSISTING OF TWO PAGES, SHOW VARIOUS ITEMS OF COST OF A SINGLE UNIT TOTALING $3,176.83, WHICH THE COMPANY REDUCED TO $3,175, ITS BID PRICE, AND ON TOP OF PAGE ONE, IN THE SPACE FOR SHOWING THE QUANTITY OF UNITS, THERE APPEARS THE NUMERAL "1.'

THE ABSTRACTS OF BIDS SHOW THAT NINE DOMESTIC AND FOREIGN BIDS WERE RECEIVED ON ITEM 2 AND THAT THE BIDS FALL INTO TWO PRICE-RANGE GROUPS. THE LOW PRICE-RANGE GROUP CONSISTS OF THE BIDS OF THE WINPOWER MANUFACTURING COMPANY AND THE INTERNATIONAL FERMONT MACHINERY COMPANY, INC., WHICH ARE IN THE AMOUNTS OF $3,175 AND $3,452, RESPECTIVELY; AND THE HIGHER PRICE-RANGE GROUP CONSISTS OF SEVEN BIDS IN AMOUNTS RANGING FROM $5,938.92 TO $10,444. THE ABSTRACTS ALSO SHOW THAT EIGHT DOMESTIC AND FOREIGN BIDS WERE RECEIVED ON ITEM 3, WHICH ALSO FALL INTO TWO PRICE-RANGE GROUPS. THE LOW GROUP CONSISTS OF THE BIDS OF THE INTERNATIONAL FERMONT MACHINERY COMPANY, INC., AND THE WINPOWER MANUFACTURING COMPANY, IN THE AMOUNTS OF $2,522 AND $2,540, RESPECTIVELY; AND THE HIGHER GROUP CONSISTS OF SIX BIDS RANGING FROM $4,754.52 TO $9,660,80. THE PRICES QUOTED BY THE WINPOWER MANUFACTURING COMPANY AND THE INTERNATIONAL FERMONT MACHINERY COMPANY, INC., FOR ITEMS 2 AND 3 ARE APPROXIMATELY ONE-HALF OF THE AVERAGE PRICES QUOTED BY THE OTHER BIDDERS ON THOSE ITEMS. NO SUCH CLEAR DIVISIONS APPEAR IN THE ABSTRACTS OF BIDS OBTAINED ON PRIOR PROCUREMENTS, WHICH WERE RELIED ON BY THE CONTRACTING OFFICER TO SHOW THAT THE PRICE- RANGE WAS NOT UNUSUAL. IN HIS REPORT THE CONTRACTING OFFICER STATES THAT HIGHER PRICES ON THE PART OF THE OTHER BIDDERS UNDER ITEMS 2 AND 3 SEEMED JUSTIFIED DUE TO LARGER AND HEAVIER EQUIPMENT. IN THAT REGARD, THE PRESIDENT OF THE WINPOWER MANUFACTURING COMPANY STATED IN HIS LETTER OF APRIL 16, 1956, THAT THE PRICES QUOTED BY THE INTERNATIONAL FERMONT MACHINERY COMPANY, INC. AND HIS COMPANY FOR THE EQUIPMENT COVERED BY ITEMS 2 AND 3 WERE APPROXIMATELY ONE-HALF OF THE PRICES QUOTED BY THE OTHER BIDDERS FOR SIMILAR SIZES OF EQUIPMENT. IT IS ALSO NOTED THAT THE FERMONT COMPANY'S BULLETIN NO. AD-20, WHICH WAS SUBMITTED WITH ITS BID AS DESCRIPTIVE OF THE PLANT OFFERED UNDER ITEM 3, SHOWS UNIT SHIPPING WEIGHTS AND MEASUREMENTS WHICH CANNOT BE RECONCILED WITH THE FIGURES INCLUDED IN ITS BID IF THOSE FIGURES ARE APPLICABLE TO TWO UNITS. CONSIDERING THESE FACTS, AND THE SOMEWHAT DECEPTIVE FORMAT OF THE SCHEDULE, WE CONCLUDE THAT THE LOW BIDDERS SHOULD HAVE BEEN REQUESTED TO VERIFY THEIR BIDS AS TO ITEMS 2 AND 3 PRIOR TO AWARD.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, IT IS APPARENT THAT THE WINPOWER MANUFACTURING COMPANY AND THE INTERNATIONAL FERMONT MACHINERY COMPANY, INC., INTENDED THEIR BID PRICES FOR ITEMS 2 AND 3 TO BE FOR SINGLE UNITS ONLY. IT IS UNDERSTOOD INFORMALLY THAT THE COMPANIES HAVE WITHHELD DELIVERY OF THE REQUIRED EQUIPMENT PENDING A DECISION BY OUR OFFICE IN THE MATTER. ACCORDINGLY, CONTRACTS NOS. GS 00S-2535-ICA AND GS- 00S-2536-ICA MAY BE CANCELLED WITHOUT LIABILITY TO THE COMPANIES.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S REPORTS AND A COPY OF THE ABSTRACT OF BIDS RECEIVED ON INVITATION NO. FNW-3J 6627) (1) A -N-2-23-56, ARE RETURNED.