B-143318, OCT. 7, 1960

B-143318: Oct 7, 1960

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TO THE YALE AND TOWNE MANUFACTURING COMPANY: REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 24. THE ENGINES TO BE INCORPORATED IN THE FORKLIFT TRUCKS WERE TO BE FURNISHED BY THE GOVERNMENT. 23 UNITS WERE TO BE DELIVERED TO ALBANY (DOSAGA). 43 UNITS WERE TO BE DELIVERED TO BARSTOW. BIDS WERE INVITED ON AN F.O.B. THREE BIDS WERE RECEIVED. THE LOW BID OF CLARK EQUIPMENT COMPANY OFFERED VEHICLES WHICH DID NOT CONFORM TO THE SPECIFICATIONS AND WAS THEREFORE REJECTED AS NONRESPONSIVE. ITS DESTINATION BIDS WERE LOWER THAN ITS ORIGIN BIDS PLUS ESTIMATED TRANSPORTATION COSTS. DESTINATION BASIS WAS IN THE AMOUNT OF $1. FREIGHT COSTS WERE DERIVED BY USING RATES APPLICABLE ON VEHICLES. THE TRANSPORTATION COSTS ON ENGINES WERE COMPUTED ON SHIPMENT FROM DETROIT.

B-143318, OCT. 7, 1960

TO THE YALE AND TOWNE MANUFACTURING COMPANY:

REFERENCE IS MADE TO YOUR TELEGRAM OF JUNE 24, 1960, AND YOUR LETTERS OF JUNE 27 AND JULY 28, 1960, PROTESTING THE AWARD OF A CONTRACT TO BAKER INDUSTRIAL TRUCK DIVISION, OTIS ELEVATOR COMPANY, AS A RESULT OF BIDS SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. IFB600-1634-60 ISSUED BY THE U.S. NAVY PURCHASING OFFICE, WASHINGTON, D.C., ON APRIL 6, 1960.

THE INVITATION SOLICITED BIDS--- TO BE OPENED MAY 20, 1960--- FOR FURNISHING 66 TRUCKS, FORKLIFT, DIESEL ENGINE DRIVEN (ITEM NO. 1) AS WELL AS MAINTENANCE TOOLS, TECHNICAL MANUALS AND OTHER RELEVANT DATA (ITEMS NOS. 2 TO 4, INCLUSIVE). THE ENGINES TO BE INCORPORATED IN THE FORKLIFT TRUCKS WERE TO BE FURNISHED BY THE GOVERNMENT. OF THE 66 UNITS INVOLVED, 23 UNITS WERE TO BE DELIVERED TO ALBANY (DOSAGA), GEORGIA, AND 43 UNITS WERE TO BE DELIVERED TO BARSTOW, CALIFORNIA. BIDS WERE INVITED ON AN F.O.B. ORIGIN BASIS AND ALSO, ON AN F.O.B. DESTINATION BASIS, AND THE GOVERNMENT RESERVED THE RIGHT TO AWARD ON SUCH BASIS AS THE CONTRACTING OFFICER DETERMINED TO BE MOST ADVANTAGEOUS TO THE GOVERNMENT.

THREE BIDS WERE RECEIVED. THE LOW BID OF CLARK EQUIPMENT COMPANY OFFERED VEHICLES WHICH DID NOT CONFORM TO THE SPECIFICATIONS AND WAS THEREFORE REJECTED AS NONRESPONSIVE. BAKER INDUSTRIAL TRUCK DIVISION, OTIS ELEVATOR COMPANY, SUBMITTED BOTH DESTINATION AND ORIGIN BIDS. ITS DESTINATION BIDS WERE LOWER THAN ITS ORIGIN BIDS PLUS ESTIMATED TRANSPORTATION COSTS. YOUR FIRM (TROJAN DIVISION) SUBMITTED ONLY BIDS ON AN F.O.B. ORIGIN BASIS. YOUR BID COMPUTED BY THE ADMINISTRATIVE OFFICE ON THE BASIS OF THE APPLICABLE FREIGHT COSTS TO DESTINATION AMOUNTED TO $1,021,111.55, WHICH CONSISTED OF THE FOLLOWING ITEMS: ITEM NO. 1A, $342,585; ITEM NO. 1B, $640,485; ESTIMATED FREIGHT TO BOTH DESTINATIONS, $36,276.30; ESTIMATED FREIGHT, GOVERNMENT-FURNISHED MATERIAL, $65.25; AND ITEM NO. 3, $800. THE BID OF BAKER ON AN F.O.B. DESTINATION BASIS WAS IN THE AMOUNT OF $1,019,198.06, COMPRISING THE FOLLOWING ITEMS: ITEM NO. 1A, $348,358; ITEM NO. 1B, $660,351; ESTIMATED FREIGHT, GOVERNMENT-FURNISHED MATERIAL, $489.06; ITEM NO. 2, $4,000; AND ITEM NO. 3, $6,000. FREIGHT COSTS WERE DERIVED BY USING RATES APPLICABLE ON VEHICLES, MOTOR, LIFT TRUCK, AS DESCRIBED IN CONSOLIDATED FREIGHT CLASSIFICATION NO. 5, ITEM 93440, AND ON ENGINES, INTERNAL COMBUSTION, AS DESCRIBED IN ITEM 61410, AS FOLLOWS: (A) FROM BATAVIA, NEW YORK, TO DOSAGA, GEORGIA, 23 UNITS AT 17,000 LBS. EACH, TOTAL 391,000 LBS., AT $2.33 PER CWT., TOTAL $9,110.30; (B) FROM BATAVIA, NEW YORK, TO BARSTOW, CALIFORNIA, 39 UNITS AT 17,000 LBS. EACH, TOTAL 663,000 LBS. AT $3.68 PER CWT., TOTAL $24,398.40 AND THE BALANCE OF 4 UNITS AT 17,000 LBS. EACH,TOTAL 68,000 LBS., AT $4.07 PER CWT., TOTAL $2,767.60. THE TRANSPORTATION COSTS ON ENGINES WERE COMPUTED ON SHIPMENT FROM DETROIT, MICHIGAN, TO BATAVIA, NEW YORK, 66 EACH AT 1,950 LBS., TOTAL 128,700 LBS., AT $0.75 PER CWT., OR $965.25. THE TRANSPORTATION COSTS TO CLEVELAND, OHIO, FOR THE SAME ENGINES WERE COMPUTED ON THE BASIS OF $0.38 PER CWT., OR $489.06.

YOU PROTEST THE AWARD TO BAKER ON THE GROUND THAT THE ESTIMATED TRANSPORTATION COSTS USED BY THE DEPARTMENT OF THE NAVY IN THE BID EVALUATION WERE INCORRECT BECAUSE THE DEPARTMENT FAILED TO USE THE RATE OF $2.10 PER CWT., 24,000 POUNDS MINIMUM, AS SET FORTH IN A QUOTATION OFFERED ON JULY 19, 1960, EFFECTIVE JUNE 6, 1960, FOR TRANSPORTATION OF FORKLIFT TRUCKS FROM BATAVIA, NEW YORK, TO ALBANY AND DOSAGA, GEORGIA, AND BECAUSE THE DEPARTMENT USED THE WRONG COMMODITY CLASSIFICATION.

THE REDUCED RATE OF $2.10 PER CWT. OFFERED ON JULY 19, 1960, AND MADE RETROACTIVE TO JUNE 6, 1960, FOR TRANSPORTATION OF FORKLIFT, WAS OFFERED SPECIALLY UNDER SECTION 22 (1) OF THE INTERSTATE COMMERCE ACT OF 1887, 49 U.S.C. 22. IT WILL READILY BE SEEN THAT BECAUSE THE DETERMINATION TO OFFER A REDUCED RATE WAS NOT MADE UNTIL JULY 19, 1960, AND SINCE THE AWARD WAS MADE ON JUNE 24, 1960, THERE COULD NOT HAVE BEEN TAKEN INTO ACCOUNT THE REDUCED RATE WHEN THE BIDS WERE EVALUATED. FURTHERMORE, OUR OFFICE HAS HELD THAT IT WOULD NOT BE PROPER TO PERMIT A BIDDER AFTER BID OPENING TO OFFER SHIPMENT AT A REDUCED RATE UNDER A SECTION 22 QUOTATION, 49 U.S.C. 22, AND TO TAKE THIS REDUCED RATE INTO ACCOUNT IN EVALUATING BIDS. 39 COMP. GEN. 774.

AS TO THE COMMODITY CLASSIFICATION, WE AGREE WITH THE DEPARTMENT OF THE NAVY IN THIS MATTER. THE INVITATION REQUIRED THAT THE VEHICLE FOR MANUFACTURE CONFORM TO SPECIFICATIONS MIL-T-21855 DATED DECEMBER 30, 1958, AS AMENDED, AND THIS SPECIFICATION COVERS "TRUCKS, FORK LIFT, DIESEL, ROUGH TERRAIN," 6,000 POUND CAPACITY. THE VEHICLES IN QUESTION ARE FOR USE IN MATERIAL HANDLING IN ROUGH TERRAIN SUPPLY REQUIREMENTS. THUS, WE BELIEVE THAT THE VEHICLES ARE COVERED BY ITEM 93440 UNDER THE GENERIC HEADING OF "VEHICLES MOTOR" IN UNIFORM FREIGHT CLASSIFICATION NO. 5, AND UNDER THE COMPARABLE COMMODITY ITEM 11727 IN TCFB TARIFF 1-I. WE DO NOT AGREE WITH YOUR CONTENTION THAT ITEM 62210 UNDER THE GENERAL HEADING OF "MACHINERY OR MACHINES OR PARTS NAMED" IN THE CLASSIFICATION AND THE COMPARABLE COMMODITY ITEM 7705-C (GRADING OR ROAD MAKING IMPLEMENTS, OR PARTS THEREOF AND OTHER ARTICLES AS DESIGNATED) IN TCFB TARIFF 1-I, ARE APPLICABLE.

WE HAVE COMPUTED THE TRANSPORTATION COSTS TO THE GOVERNMENT, BASED ON THE COMMODITY CLASSIFICATION CONSIDERED APPLICABLE AS STATED HEREINABOVE, AND FIND THAT THE TOTAL COST TO THE GOVERNMENT UNDER THE CONTRACT AS AWARDED, IS $1,020,211.26 WHEREAS THE COST TO THE GOVERNMENT UNDER YOUR BID WOULD HAVE BEEN $1,021,111,55. ALSO, WE HAVE COMPUTED THE TRANSPORTATION COSTS TO THE GOVERNMENT BY USING THE RATES APPLICABLE TO MATERIAL WHEN CLASSIFIED AS TRACTORS, AS YOU CONTEND, AND FIND THAT THE COST TO THE GOVERNMENT UNDER THE CONTRACT AS AWARDED WOULD HAVE BEEN $1,018,295.36 AND THE COST TO THE GOVERNMENT UNDER YOUR BID WOULD HAVE BEEN $1,019,182.05. A COMPARISON OF THE COSTS TO THE GOVERNMENT UNDER THE CONTRACT AS AWARDED AND THE COSTS UNDER YOUR BID, BY COMBINING THE SECTION 22 RATE WITH THE VARIOUS TARIFF RATES, HAS NOT BEEN SET OUT HEREIN FOR THE REASON STATED ABOVE, NAMELY, THAT THE SECTION 22 RATE WAS NOT ESTABLISHED UNTIL JULY 19, 1960, ALTHOUGH THE AWARD WAS MADE ON JUNE 24, 1960. IT MIGHT BE ADDED, HOWEVER, THAT EVEN ON THIS BASIS THE COSTS TO THE GOVERNMENT UNDER THE CONTRACT AS AWARDED WOULD HAVE BEEN LESS THAN UNDER YOUR BID.

IN VIEW OF THE FOREGOING, WE FIND NO BASIS FOR REGARDING THE AWARD IN THIS CASE AS BEING IMPROPER.