B-134704, MAR. 10, 1958

B-134704: Mar 10, 1958

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED JANUARY 16. BIDS WERE REQUESTED WITH BIDS SCHEDULED FOR OPENING ON NOVEMBER 13. SUBMITTED THE LOWEST BIDS AND AWARDS WERE MADE ONLY TO THOSE CONCERNS. ITS BID WAS ACCOMPANIED BY LETTER OFFERING AN ADDITIONAL DISCOUNT OF FIVE-NINTHS OF ONE PERCENT IF AWARDED ALL ITEMS. PROPOSING TO REDUCE ITS UNIT PRICES BY $0.60 "IF AWARD IS MADE F.O.B. DISCOUNT OFFERS WERE NOT CONSIDERED IN EVALUATING THE BIDS. WAS AWARDED A CONTRACT IN THE TOTAL AMOUNT OF $117. WAS AWARDED A CONTRACT IN THE TOTAL AMOUNT OF $138. 17 AND 18 WHICH WERE AWARDED TO AVIATORS CLOTHING COMPANY. IT WAS CONTENDED ON BEHALF OF ALBERT TURNER AND COMPANY. WAS NOT RESPONSIVE TO THE INVITATION SINCE THE INVITATION HAD REQUESTED BIDS ONLY ON THE BASIS OF MAKING DELIVERY TO THE SPECIFIED DESTINATIONS.

B-134704, MAR. 10, 1958

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED JANUARY 16, 1958, R11.1 L4 1/L4/NT4- 12, FROM MR. R. A. WILLIAMS, ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, FURNISHING THE REPORT REQUESTED IN OUR LETTER TO YOU OF DECEMBER 26, 1957, ON THE *PROTEST OF ALBERT TURNER AND COMPANY, INC., AGAINST THE AWARD OF A CONTRACT TO AVIATORS CLOTHING COMPANY, INC., PURSUANT TO INVITATION FOR BIDS NO. JD-IFB-383 184-58, ISSUED OCTOBER 15, 1957, BY THE AVIATION SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA.

BIDS WERE REQUESTED WITH BIDS SCHEDULED FOR OPENING ON NOVEMBER 13, 1957, FOR FURNISHING 5,170 WINTER FLYING JACKETS, ITEMS 1 THROUGH 8, AND 8,231 PAIRS OF WINTER FLYING TROUSERS, ITEMS 9 THROUGH 20. THE INVITATION CALLED FOR THE SUPPLIES TO BE DELIVERED, ALL TRANSPORTATION CHARGES PAID, TO THE DESTINATIONS AS SPECIFIED THEREIN. EACH ITEM OF THE BIDDING SCHEDULE INCLUDED TWO OR MORE SUBITEMS LISTING QUANTITIES TO BE DELIVERED TO SEPARATE DESTINATIONS AND THE GOVERNMENT RESERVED THE RIGHT TO MAKE AWARD BY SUBITEM.

AVIATORS CLOTHING COMPANY, INC., AND ALBERT TURNER AND COMPANY, INC., SUBMITTED THE LOWEST BIDS AND AWARDS WERE MADE ONLY TO THOSE CONCERNS. AVIATORS CLOTHING COMPANY, INC., QUOTED THE UNIT PRICES OF $17.91 FOR THE JACKETS AND $20.97 FOR THE TROUSERS, AND OFFERED A DISCOUNT OF ONE-NINTH OF ONE PERCENT FOR PAYMENT WITHIN 20 DAYS. HOWEVER, ITS BID WAS ACCOMPANIED BY LETTER OFFERING AN ADDITIONAL DISCOUNT OF FIVE-NINTHS OF ONE PERCENT IF AWARDED ALL ITEMS, AND PROPOSING TO REDUCE ITS UNIT PRICES BY $0.60 "IF AWARD IS MADE F.O.B. OUR PLANT.' ALBERT TURNER AND COMPANY, INC., QUOTED UNIT PRICES RANGING FROM $18.25 TO $18.55 FOR THE JACKETS AND FROM $19.80 TO $20.50 FOR THE TROUSERS. IT OFFERED A DISCOUNT OF 4 PERCENT, 20 DAYS, AND AGREED TO ALLOW AN ADDITIONAL DISCOUNT OF ONE-FOURTH OF ONE PERCENT IF AWARDED ALL ITEMS.

DISCOUNT OFFERS WERE NOT CONSIDERED IN EVALUATING THE BIDS. AVIATORS CLOTHING COMPANY, INC., WAS AWARDED A CONTRACT IN THE TOTAL AMOUNT OF $117,073.68 FOR DELIVERY, F.O.B. ITS PLANT, OF 5,170 JACKETS AT A PRICE OF $17.31 EACH ($17.91 LESS $0.60), AND FOR DELIVERY, F.O.B. ITS PLANT, OF 1,354 PAIRS OF TROUSERS AT A PRICE OF $20.37 PER PAIR ($20.97 LESS $0.60). ALBERT TURNER AND COMPANY, INC., WAS AWARDED A CONTRACT IN THE TOTAL AMOUNT OF $138,758.80 FOR DELIVERY OF THE REMAINING QUANTITIES OF TROUSERS (6,877 PAIRS) LISTED UNDER ITEMS 9 THROUGH 20 OF THE INVITATION FOR BIDS. ON THE SUBITEMS OF ITEMS 12, 13, 17 AND 18 WHICH WERE AWARDED TO AVIATORS CLOTHING COMPANY, INC., ALBERT TURNER AND COMPANY, INC., HAD QUOTED A PRICE OF $20.50 PER PAIR.

IT WAS CONTENDED ON BEHALF OF ALBERT TURNER AND COMPANY, INC., THAT THE BID OF AVIATORS CLOTHING COMPANY, INC., WAS NOT RESPONSIVE TO THE INVITATION SINCE THE INVITATION HAD REQUESTED BIDS ONLY ON THE BASIS OF MAKING DELIVERY TO THE SPECIFIED DESTINATIONS. A SECOND CONTENTION WAS MADE TO THE EFFECT THAT THE CONTRACTING OFFICER SHOULD HAVE CONSIDERED THE DISCOUNT OFFERS IN EVALUATING THE BIDS, IN WHICH EVENT THE TOTAL BID OF ALBERT TURNER AND COMPANY, INC., WOULD HAVE BEEN LESS THAN THE TOTAL OF THE AWARDS WHICH WERE MADE TO THE TWO CONCERNS. WITH REFERENCE TO THIS FEATURE OF THE CASE, ATTENTION WAS INVITED TO THE FACT THAT THE INVITATION PROVIDED THAT A DISCOUNT OFFERED BY THE SUCCESSFUL BIDDER WAS TO FORM A PART OF THE AWARD, WITH BIDDERS BEING ADVISED THAT THE DISCOUNT WOULD BE TAKEN IF PAYMENT WERE MADE WITHIN THE DISCOUNT PERIOD.

WE ARE ADVISED THAT PARAGRAPH 7 OF THE INVITATION FOR BIDS INCORPORATES BY REFERENCE A PROVISION FOR THE CONSIDERATION OF DISCOUNT OFFERS IN THE EVALUATION OF BIDS. AS APPLIED TO DELIVERIES AT MULTIPLE POINTS OF DESTINATION, HOWEVER, THE QUOTED PROVISION REQUIRED THE CONTRACTING OFFICER TO DISREGARD DISCOUNT OFFERS WHICH DID NOT ALLOW A MINIMUM OF 30 DAYS FOR PAYMENT. THUS, IT IS APPARENT, AS SUGGESTED IN THE REPORT OF JANUARY 16, 1958, THAT THE CONTRACTING OFFICER WAS JUSTIFIED IN REFUSING TO CONSIDER THE 20-DAY DISCOUNT OFFERS IN EVALUATING THE BIDS OF THE TWO COMPANIES.

WITH RESPECT TO THE FACT THAT THE CONTRACT AWARDED TO AVIATORS CLOTHING COMPANY, INC., WAS BASED ON THAT COMPANY'S F.O.B. PLANT PRICES, THE REPORT OF JANUARY 16, 1958, SETS FORTH THAT IT IS THE INTENT OF THE GOVERNMENT TO AWARD A CONTRACT WHICH IS MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED, AND THAT "WHENEVER FOB ORIGIN BIDS ARE SUBMITTED, IN THE ABSENCE OF ANY PROVISIONS TO THE CONTRARY IN THE INVITATION FOR BIDS, THE COST OF TRANSPORTATION IS ALWAYS A MATTER FOR CONSIDERATION IN DETERMINING WHICH, IN FACT, IS THE LOWEST BID RECEIVED.'

WE ARE OF THE OPINION THAT WHEN THE GOVERNMENT REQUESTS F.O.B. DESTINATION BIDS FOR DELIVERIES OF SUPPLIES, WITHOUT ADVISING BIDDERS THAT F.O.B. ORIGIN BIDS WOULD ALSO BE CONSIDERED, THERE IS ORDINARILY AN IMPLIED OBLIGATION TO REJECT ANY BID WHICH FAILS TO QUOTE F.O.B. DESTINATION PRICES. THE CONTRACT AWARDED TO THE SUCCESSFUL BIDDER MUST BE THE CONTRACT WHICH WAS SUBMITTED TO COMPETITION. SEE 16 COMP. GEN. 21, WHICH DISTINGUISHES, SO FAR AS THE MATTER OF CONSIDERING FREIGHT COSTS IS CONCERNED, THE SITUATION WHERE ONLY F.O.B. ORIGIN BIDS HAVE BEEN REQUESTED AND RECEIVED, AND THE SITUATION WHERE THE REQUEST IS FOR F.O.B. ORIGIN BIDS ONLY BUT ONE OF THE BIDDERS HAS QUOTED BOTH F.O.B. FACTORY AND F.O.B. DESTINATION PRICES.

NOWHERE IN THE PRESENT INVITATION FOR BIDS IS THERE ANY INDICATION TO THE EFFECT THAT THE GOVERNMENT MIGHT ELECT TO ACCEPT AN F.O.B. ORIGIN BID. BIDS WERE REQUESTED SOLELY ON THE BASIS OF MAKING DELIVERY, ALL TRANSPORTATION CHARGES PAID, TO THE PARTICULAR DESTINATIONS. IT IS APPARENT, THEREFORE, THAT THE F.O.B. PLANT BID OF AVIATORS CLOTHING COMPANY, INC., WAS NOT RESPONSIVE TO THE INVITATION. THE ENTIRE BID OF THAT COMPANY WAS NOT UNRESPONSIVE, HOWEVER, SINCE THE BIDDER ALSO QUOTED F.O.B. DESTINATION PRICES FOR EACH OF THE ITEMS.

THERE WOULD APPEAR TO BE NO OBJECTION TO THE AWARD MADE TO AVIATORS CLOTHING COMPANY, INC., FOR ITEMS 1 THROUGH 8 ON THE BASIS OF ITS F.O.B. PLANT PRICES BECAUSE THIS BIDDER SUBMITTED THE LOWEST BID ON THOSE ITEMS EVEN ON A DESTINATION BASIS. HOWEVER, THE CONCLUSION IS REQUIRED THAT THE CONTRACTING OFFICER WAS NOT AUTHORIZED TO MAKE AN AWARD TO THAT COMPANY FOR ANY OF THE SUBITEMS OF ITEMS 9 THROUGH 20 SINCE ITS DESTINATION UNIT BID PRICE OF $20.97 WAS HIGHER THAN THE VARIOUS UNIT PRICES QUOTED BY ALBERT TURNER AND COMPANY, INC., FOR ITEMS 9 THROUGH 20.

THIS CONCLUSION SHOULD BE APPLIED IN FUTURE SIMILAR PROCUREMENTS BY YOUR DEPARTMENT BUT, SINCE, AS WE ARE INFORMALLY ADVISED, SOME OF THE TROUSERS COVERED BY THE SUBITEMS IN QUESTION HAVE ALREADY BEEN MANUFACTURED, THE BULK OF THE MATERIAL FOR THE REMAINING TROUSERS HAS BEEN PURCHASED BY THE CONTRACTOR, AND THE PROCUREMENT THEREOF HAS BECOME URGENT, IT WOULD NOT BE IN THE BEST INTERESTS OF THE GOVERNMENT TO REQUIRE CANCELLATION OF THAT PART OF THE CONTRACT ENTERED INTO WITH AVIATORS CLOTHING COMPANY, INC., WHICH COVERS THE DELIVERY OF 1,354 PAIRS OF TROUSERS.