B-139919, SEP. 21, 1959

B-139919, SEP. 21, 1959

TO THE AMERICAN COLEMAN COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF JUNE 12, JUNE 22, JUNE 23, JUNE 30, JULY 20 AND AUGUST 7, 1959, AND YOUR MEMORANDUM OF JUNE 20, WITH THEIR ENCLOSURES, RELATIVE TO THE REJECTION OF YOUR BID SUBMITTED ON ITEM 10 OF INVITATION NO. BPR-3-61-32 ISSUED BY THE BUREAU OF PUBLIC ROADS, DEPARTMENT OF COMMERCE.

THE INVITATION WAS ISSUED APRIL 1, 1959, ON STANDARD FORM 33 (OCTOBER 1957 EDITION), REQUESTING BIDS--- TO BE OPENED APRIL 21, 1959 -- FOR FURNISHING 30 DUMP TRUCKS. THE FOLLOWING PROVISIONS ARE CONTAINED IN THE INVITATION:

"NOTE: TRUCKS ARE TO BE PREPARED (STANDARD COMMERCIAL) FOR EXPORT SHIPMENT TO BANDAR SHANPUR, IRAN. SEE PARA. 12 OF SPECIAL BID CONDITIONS (FORM PR-152), AND PARA. 16 OF SPECIFICATIONS.

"IMPORTANT NOTICE: NO AWARD WILL BE MADE TO ANY BIDDER WHOSE DEALER OR OTHER AGENCY ESTABLISHED IN IRAN FOR PROVIDING SERVICE AND PARTS HAS NOT, WITHIN 10 DAYS FROM THE DATE OF OPENING THE BIDS, ENTERED INTO A SERVICE AND SPARE PARTS AGREEMENT WITH THE IRANIAN MINISTRY OF ROADS. THE CONTRACTING OFFICER RESERVES THE RIGHT, WITHIN HIS DISCRETION, TO EXTEND THE 10 DAY PERIOD HEREIN IF HE DEEMS IT TO BE IN THE INTEREST OF IRAN.

"1. SERVICE REQUIREMENTS: TRUCKS TO BE PURCHASED UNDER THIS SPECIFICATION WILL BE USED IN IRAN FOR HAULING DIRT, ROCK, SNOW REMOVAL, ETC., ON HIGHWAY MAINTENANCE AND OFF HIGHWAY CONSTRUCTION PROJECTS,TRAVEL WILL FREQUENTLY BE OVER ROUGH ROADS AND STEEP GRADES AND UP TO ALTITUDES OF 10,000 FEET BOTH ON AND OFF HIGHWAY.'

PARAGRAPH 8 (B) OF THE TERMS AND CONDITIONS OF THE INVITATION PROVIDES:

"/B) THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS AND TO WAIVE INFORMALITIES AND MINOR IRREGULARITIES IN BIDS RECEIVED.'

IN RESPONSE TO THE INVITATION, YOU SUBMITTED A BID AT UNIT PRICES OF $16,390 F.A.S. HOUSTON OR $16,127 F.O.B. DENVER. THE FIVE OTHER BIDS RECEIVED RANGED FROM $13,476.83 TO $18,757.50 F.A.S. VARIOUS POINTS AND FROM $16,035 TO $20,922.29 F.O.B. VARIOUS POINTS.

BY LETTERS DATED JUNE 5, 1959, THE BUREAU OF PUBLIC ROADS ADVISED THE BIDDERS THAT ALL BIDS WERE REJECTED AND THAT NEW INVITATIONS WOULD BE ISSUED BY JUNE 15 "UNDER SPECIFICATIONS AND REQUIREMENTS WHICH HAVE BEEN APPROVED BY THE IRANIAN GOVERNMENT.' IN THE LETTERS IT WAS STATED: "THIS ACTION WAS DUE TO THE SPECIFICATIONS NOT BEING ENTIRELY SATISFACTORY SINCE THE INVITATION DID NOT ADEQUATELY PROVIDE FOR EXCLUDING BIDDERS NOT HAVING BONA FIDE DEALERS AND MECHANICAL FACILITIES IN IRAN FOR REPAIR AND MAINTENANCE OF THE EQUIPMENT BID UPON.' A NEW INVITATION WAS ISSUED ACCORDINGLY TO BIDDERS WHO HAD BEEN APPROVED BY THE MINISTRY OF PUBLIC ROADS OF IRAN. NO INVITATION WAS SENT TO YOU AND THE BID SUBMITTED BY YOU WAS RETURNED TO YOU UNOPENED FOR THE REPORTED REASON THAT YOU DID NOT HAVE A DEALER OR AGENCY IN IRAN AND HAD NOT ENTERED INTO A SERVICE AND SPARE PARTS AGREEMENT WITH THE IRANIAN MINISTRY OF ROADS.

YOU CONTEND THAT AWARD SHOULD HAVE BEEN MADE TO YOU AS LOWEST RESPONSIVE BIDDER UNDER THE FIRST INVITATION AND THAT YOU HAD SUBSTANTIALLY COMPLIED WITH THE PROVISION REQUIRING A DEALER OR AGENCY IN IRAN. IN YOUR MEMORANDUM TYPED JUNE 20, 1959, HOWEVER, YOU STATE IN SUBSTANCE THAT THE DIESEL WHITE COMPANY, LTD., IN IRAN AGREED BY TELEGRAM DATED APRIL 29 TO BECOME YOUR DEALER AND ENTER INTO A PARTS AND SERVICE AGREEMENT WITH THE IRANIAN MINISTRY OF ROADS BUT THAT YOU LEARNED ON JUNE 8 THAT THE COMPANY HAD WITHDRAWN AS YOUR DEALER. BY A CABLEGRAM DATED JUNE 16 FROM THE AMERICAN EMBASSY IN TEHERAN TO THE BUREAU OF PUBLIC ROADS, IT WAS STATED THAT YOU HAD NO DEALER THERE.

IN A REPORT TO OUR OFFICE THE BUREAU OF PUBLIC ROADS (BPR) STATED THAT APPROPRIATED FUNDS OF THE UNITED STATES ARE NOT INVOLVED SINCE THE FUNDS WERE BORROWED BY IRAN FROM THE EXPORT-IMPORT BANK AND, THEREFORE,FEDERAL STATUTES AND REGULATIONS DO NOT APPLY TO THE PROCUREMENT. THEY STATED ALSO THAT IN MAKING PROCUREMENTS OF ROAD EQUIPMENT FOR IRAN THEIR RELATIONSHIP WITH IRAN HAS BEEN BASICALLY THAT OF TECHNICAL ADVISOR ON HIGHWAY ENGINEERING AND COLLATERALLY THAT OF PURCHASING AGENT. THEY STATED FURTHER THAT, ALTHOUGH PURCHASING UNDER ADVERTISED BID INVITATIONS PREVIOUSLY HAD BEEN SATISFACTORY TO IRAN, SUBSEQUENT TO THE BID OPENING ON APRIL 21, 1959, AN OFFICIAL OF THE IRANIAN GOVERNMENT EXPRESSED DISSATISFACTION WITH THE RESULTS OF ADVERTISING AND REQUESTED THAT ALL BIDS BE REJECTED AND READVERTISED ON A SELECTIVE BASIS. A MAJOR CONSIDERATION FOR LIMITING THE PROCUREMENT IS STATED TO HAVE BEEN THE PROVEN PERFORMANCE OF SERVICE AND SPARE PARTS FACILITIES IN IRAN WITH RESPECT TO CERTAIN LINES OF EQUIPMENT.

IN ADDITION, BPR ADVISED US THAT FOR THE FOLLOWING REASONS THE BID OF YOUR COMPANY WAS CONSIDERED TO BE NON-RESPONSIVE. UNDER SPECIAL BID CONDITION 1 (B) IT IS STIPULATED THAT THE ,ITEMS QUOTED ABOVE SHALL HAVE DEMONSTRATED IN AMERICAN ROAD BUILDING OR RELATED OPERATIONS TO BE OF A TYPE THAT WILL ASSURE THE MAXIMUM ECONOMY AND RELIABILITY WHEN OPERATED UNDER THE CONDITIONS ABOVE SPECIFIED.' INFORMATION SUBMITTED WITH YOUR BID INDICATED THAT THE ITEM BID UPON WAS NOT IN PRODUCTION BY YOU AND THAT YOU PROPOSED TO ASSEMBLE THE TRUCK FROM VARIOUS STANDARD COMPONENTS OBTAINED FROM SEVERAL MANUFACTURERS. ITIS POINTED OUT THAT YOU CONTEND THAT AN ASSEMBLY OF PROVEN COMPONENTS IS IN COMPLIANCE WITH SPECIAL BID CONDITION 1 (B). BPR STATES THAT IT WOULD AGREE WITH SUCH CONTENTION IF YOU HAD SUBMITTED EVIDENCE OF HAVING PREVIOUSLY ASSEMBLED THE PARTICULAR COMBINATION OF COMPONENTS AND THAT SUCH COMBINATION WAS PROVEN IN AMERICAN ROAD BUILDING. LACKING SUCH EVIDENCE BPR CONCLUDED THAT YOUR BID WAS NOT RESPONSIVE.

SINCE NO APPROPRIATED FUNDS OF THE UNITED STATES ARE INVOLVED IN THE SUBJECT PROCUREMENT AND THE BUREAU OF PUBLIC ROADS IS ACTING ON THE BEHALF OF THE GOVERNMENT OF IRAN, THERE IS NOT PERCEIVED ANY ACTION WHICH OUR OFFICE PROPERLY MAY TAKE IN THE MATTER. IT MAY BE STATED, HOWEVER, THAT THE PROVISIONS OF THE INVITATION REQUIRING THAT A BIDDER'S DEALER OR AGENCY IN IRAN ENTER INTO A SERVICE AND SPARE PARTS AGREEMENT WITH THE IRANIAN MINISTRY OF ROADS WITHIN 10 DAYS FROM THE DATE OF OPENING BIDS SEEM UNDESIRABLE. SUCH AN AGREEMENT WOULD BE UNNECESSARY FOR ANY EXCEPT THE SUCCESSFUL BIDDER AND THE MAKING OF THE AWARD WELL MIGHT BE DELAYED FOR A CONSIDERABLE TIME. THE FILE INDICATES THAT YOU PROBABLY COULD AND WOULD HAVE MET THE REQUIREMENTS AS TO A DEALER IN IRAN WITHIN A REASONABLE TIME IF GIVEN AN OPPORTUNITY TO DO SO.

IT APPEARS UNFORTUNATE, ALSO, THAT THE RESTRICTION TO CERTAIN BIDDERS APPROVED BY THE IRANIAN GOVERNMENT WAS IMPOSED ONLY AFTER THE INVITATION WAS ISSUED AND BIDS WERE PREPARED AND SUBMITTED, THUS SUBJECTING TO UNNECESSARY EFFORT AND EXPENSE ANY BIDDER SUBSEQUENTLY BARRED FROM SUBMITTING A BID.

OUR VIEWS REGARDING THE POINTS ABOVE MENTIONED WILL BE BROUGHT TO THE ATTENTION OF THE BUREAU OF PUBLIC ROADS BUT, FOR THE REASONS ABOVE INDICATED, NO FURTHER ACTION WILL BE TAKEN IN THE MATTER BY OUR OFFICE.

IN THE FINAL PARAGRAPH OF YOUR LETTER OF AUGUST 7, 1959, YOU PRESENT A QUESTION AS FOLLOWS: ,DO YOU CONCUR WITH MY PROPOSAL TO HAVE THE AGENCIES WRITE A STATEMENT OF REASONS FOR DISQUALIFICATION TO A BIDDER, AND ALLOW 5 DAYS FOR THE BIDDER TO SUBMIT FACTS TO SUPPORT HIS BID? " IT IS OUR VIEW THAT, IN THE INTEREST OF ECONOMICAL PROCUREMENT AS WELL AS FAIRNESS TO BIDDERS, CONTRACTING OFFICERS SHOULD USE GREAT CARE IN DETERMINING WHETHER BIDS ARE RESPONSIVE TO THE INVITATION AND SHOULD NOT REJECT AN OTHERWISE FAVORABLE BID UNLESS IT FAIRLY APPEARS AFTER DUE CONSIDERATION THAT THE BID IS NOT RESPONSIVE. HOWEVER, ALTHOUGH A PROCEDURE SUCH AS YOU PROPOSE WELL MIGHT BE PROPER AND USEFUL IN SOME INSTANCES, IT IS NOT BELIEVED THAT SUCH A GENERAL REQUIREMENT WOULD BE PRACTICAL IN ALL INSTANCES.