B-143647, SEP. 23, 1960

B-143647: Sep 23, 1960

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TO THE DAVEY COMPRESSOR CO.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 29. THREE BIDS WERE RECEIVED AND OPENED ON JUNE 24. THE JOY MANUFACTURING COMPANY'S BID WAS IN THE AMOUNT OF $860. IT WAS ADMINISTRATIVELY DETERMINED TO USE THAT WEIGHT PLUS 550 POUNDS TO COVER THE PACKAGING AND PACKING WEIGHT IN EVALUATING SHIPPING CHARGES TO THE DESTINATIONS. SUCH BASIS OF SHIPMENT WAS USED IN THE EVALUATION OF BIDS. THE ACTUAL TRANSPORTATION COSTS WERE COMPUTED ON LESS-THAN-CARLOAD LOTS PLUS WATER RATES AS DETERMINED BY THE MILITARY TRAFFIC MANAGEMENT AGENCY. AS YOU WERE INFORMED BY LETTER DATED JULY 6. AWARD WAS MADE TO INGERSOLL-RAND AS THE LOWEST OVER-ALL BIDDER. YOUR COMPANY WOULD HAVE BEEN THE LOWEST BIDDER.

B-143647, SEP. 23, 1960

TO THE DAVEY COMPRESSOR CO.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 29, 1960, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD OF A CONTRACT TO THE INGERSOLL- RAND COMPANY UNDER INVITATION FOR BIDS NO. 383-1000-60, ISSUED ON MAY 27, 1960, BY THE AVIATION SUPPLY OFFICE, DEPARTMENT OF THE NAVY.

THE INVITATION REQUESTED BIDS, ON AN F.O.B. ORIGIN BASIS--- DESTINATIONS TO BE SPECIFIED AT A LATER DATE--- FOR FURNISHING 132 AIR COMPRESSORS, AND PROVIDED ON PAGE 21 THAT, FOR THE PURPOSE OF EVALUATING BIDS, THE FINAL DESTINATION OF HALF OF THE COMPRESSORS WOULD BE NORFOLK, VIRGINIA, AND THE REMAINING HALF WOULD BE DESTINED FOR OAKLAND, CALIFORNIA. HOWEVER, THE INVITATION DID NOT REQUIRE BIDDERS TO FURNISH EITHER GUARANTEED OR ESTIMATED SHIPPING WEIGHTS. THREE BIDS WERE RECEIVED AND OPENED ON JUNE 24, 1960, AND IT APPEARS FROM THE ABSTRACT OF BIDS THAT INGERSOLL-RAND SUBMITTED THE LOWEST BID IN THE AMOUNT OF $850,256 AND THAT YOUR COMPANY SUBMITTED THE NEXT LOWEST BID IN THE AMOUNT OF $850,276. THE JOY MANUFACTURING COMPANY'S BID WAS IN THE AMOUNT OF $860,840. SINCE PARAGRAPH 3.18 OF SPECIFICATION NO. XMA-107 SPECIFIED A MAXIMUM WEIGHT OF 1,950 POUNDS FOR THE COMPRESSOR COVERED BY THE INVITATION, IT WAS ADMINISTRATIVELY DETERMINED TO USE THAT WEIGHT PLUS 550 POUNDS TO COVER THE PACKAGING AND PACKING WEIGHT IN EVALUATING SHIPPING CHARGES TO THE DESTINATIONS. ALSO, SINCE IT HAD BEEN THE EXPERIENCE OF THE PROCUREMENT AGENCY IN HANDLING MATERIAL OF THIS NATURE TO MAKE SHIPMENTS IN LESS-THAN- CARLOAD LOTS, SUCH BASIS OF SHIPMENT WAS USED IN THE EVALUATION OF BIDS. THE ACTUAL TRANSPORTATION COSTS WERE COMPUTED ON LESS-THAN-CARLOAD LOTS PLUS WATER RATES AS DETERMINED BY THE MILITARY TRAFFIC MANAGEMENT AGENCY. AS YOU WERE INFORMED BY LETTER DATED JULY 6, 1960, FROM THE PROCUREMENT AGENCY, AWARD WAS MADE TO INGERSOLL-RAND AS THE LOWEST OVER-ALL BIDDER, F.O.B. FREIGHT COSTS CONSIDERED. YOU CONTEND THAT HAD TRANSPORTATION COSTS BEEN EVALUATED ON A CARLOAD LOT BASIS, YOUR COMPANY WOULD HAVE BEEN THE LOWEST BIDDER. HOWEVER, WE ARE OF THE VIEW THAT BIDS WERE PROPERLY EVALUATED AND THAT THE AWARD AS MADE WAS MADE TO THE LOWEST BIDDER, PRICE AND OTHER FACTORS CONSIDERED.

THE COST TO THE GOVERNMENT OF SHIPMENTS TO DESTINATIONS UNDER INVITATIONS REQUESTING BIDS ON AN F.O.B. ORIGIN BASIS IS ALWAYS AN IMPORTANT FACTOR IN DETERMINING THE LOWEST RESPONSIVE BID. AND IN EVALUATING SUCH BIDS, THE GOVERNMENT IS REQUIRED TO APPLY THE LOWEST FREIGHT RATES TO THE DESTINATIONS NAMED. IN THIS CASE, THE LESS-THAN CARLOAD RATES PLUS WATER RATES REPRESENTED THE MOST ECONOMICAL SHIPPING CHARGES TO THE GOVERNMENT. EVEN APPLYING FREIGHT CHARGES ON A CARLOAD BASIS IN THE EVALUATION OF BIDS, AS YOU CONTEND, INGERSOLL RAND WOULD STILL REMAIN THE LOWEST BIDDER. MOREOVER, IT IS CLEAR THAT THE PROCEDURES USED IN DETERMINING THE LOWEST OVER-ALL BIDDER WERE IN ACCORDANCE WITH SECTION 1.1305.3 OF THE ASPR.

CONCERNING THE 2,500 POUND WEIGHT FACTOR USED IN THE EVALUATION, IT IS APPARENT THAT NO BIDDER WAS PREJUDICED THEREBY SINCE IT WAS APPLIED ACROSS -THE-BOARD AND WAS BASED UPON A REALISTIC ESTIMATE OF THE PROBABLE WEIGHT OF THE ITEM.

WHILE, AS CONTENDED BY YOU, IT IS TRUE THAT SHIPPING WEIGHTS WERE FURNISHED BOTH BY YOUR COMPANY AND INGERSOLL-RAND PURSUANT TO A PREVIOUS INVITATION FOR BIDS, IT CANNOT BE SAID THAT THE SHIPPING WEIGHTS OF THE COMPRESSORS THAT MIGHT HAVE BEEN SHIPPED BY YOUR COMPANY IN CONNECTION WITH THE INSTANT PROCUREMENT WERE KNOWN TO THE PROCUREMENT AGENCY. THE AWARD MADE UNDER THE PREVIOUS INVITATION WAS NOT MADE TO YOUR COMPANY OR INGERSOLL-RAND, BUT TO ANOTHER COMPANY WHOSE SHIPPING WEIGHT WAS ABOUT 2,100 POUNDS. THE COMPRESSORS TO BE PROCURED HERE ARE TO BE MANUFACTURED IN ACCORDANCE WITH SPECIFICATION NO. XMA-107 AND SINCE NO SPECIFIC PART NUMBERS IDENTIFIED TO ANY SPECIFIC WEIGHTS WERE OFFERED BY YOU OR INGERSOLL-RAND, THE MAXIMUM SPECIFICATION WEIGHT OF 1,950 POUNDS WAS USED IN THE BID EVALUATION. MOREOVER, SINCE THE WEIGHTS OF DIFFERENT COMPRESSORS MAY VARY, THERE WAS NO ASSURANCE THAT EITHER BIDDER CONTEMPLATED FURNISHING A COMPRESSOR OF THE WEIGHT PREVIOUSLY OFFERED UNDER THE EARLIER INVITATION.

ACCORDINGLY, WE FIND NO LEGAL BASIS TO OBJECT TO THE AWARD MADE UNDER THE SUBJECT INVITATION FOR BIDS.