B-144682, FEB. 15, 1961

B-144682, FEB. 15, 1961

TO MR. ROBERT Y. ABRAMSON, PRESIDENT, NORTH PRODUCTS, INCORPORATED:

WE REFER TO YOUR LETTER OF DECEMBER 20, 1960, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION FOR BIDS NO. 600- 272-61, WHICH MATTER IS THE SUBJECT OF A REPORT DATED JANUARY 9, 1961, FORWARDED TO THIS OFFICE FROM THE DEPARTMENT OF THE NAVY.

THE RECORD SHOWS THAT THE SUBJECT INVITATION WAS ISSUED ON OCTOBER 6, 1960, BY THE U.S. NAVY PURCHASING OFFICE, WASHINGTON, D.C., BASED ON MIPR NO. 40-604-61-3950-306 FROM THE 2709TH AIR FORCE VEHICLE CONTROL GROUP, MEMPHIS, TENNESSEE. THE INVITATION WITH SUBSEQUENT AMENDMENT, DATED OCTOBER 27, 1960, CALLED FOR BIDS ON TWELVE (12) 8000 POUND CAPACITY TRESTLE TYPE CRANES (ITEM NO. 1); TECHNICAL PUBLICATIONS (ITEM NO. 2); AND NEGATIVES AND PHOTOGRAPHS (ITEM NO. 3). THREE CITIES WERE DESIGNATED AS THE FINAL DESTINATION FOR PURPOSES OF BID EVALUATION, EACH FOR 4 REQUIRED UNITS. THE INVITATION ALSO CONTAINED THE FOLLOWING:

"PLACE OF DELIVERY: ORIGIN

"/A) THE ARTICLES TO BE FURNISHED HEREUNDER SHALL BE DELIVERED FREE OF EXPENSE TO THE GOVERNMENT AND, AT THE GOVERNMENT'S OPTION (I) LOADED, BLOCKED AND BRACED ON BOARD CARRIER'S EQUIPMENT, (II) AT THE FREIGHT STATION, OR (II) PLACED ON WHARF OF WATER CARRIER (WHERE MATERIAL WILL ORIGINATE WITHIN OR ADJACENT TO A PORT AREA AND IS ADAPTABLE TO WATER MOVEMENT), AT OR NEAR CONTRACTOR'S PLANT AT

(1) -------- (BIDDER INSERT CITY OR TOWN IN WHICH PLANT IS LOCATED)

(2) -------- (BIDDER INSERT EXACT LOCATION OF PRIVATE SIDING OR

NEAREST RAIL TERMINAL FROM WHICH RAIL SHIPMENT WILL BE

MADE, TOGETHER WITH THE NAME OF SERVING RAILROAD/S) ).

(3) -------- (BIDDER INSERT THE EXACT LOCATION FROM WHICH TRUCK

SHIPMENTS WILL BE MADE, INCLUDING THE NAME OF THE

STREET OR HIGHWAY), AND

(4) -------- (BIDDER INSERT THE PORT, OR THE SPECIFIC AREA WITHIN

SUCH PORT, TO WHICH SUPPLIES WILL BE DELIVERED), FOR SHIPMENT AT GOVERNMENT EXPENSE (NORMALLY ON GOVERNMENT BILL OF LADING) TO DESTINATIONS SPECIFIED AT A LATER DATE.

"/B) THE METHOD OF SHIPMENT SHALL BE SPECIFIED BY THE GOVERNMENT WHEN MATERIAL IS READY FOR SHIPMENT.

"/C) THE GOVERNMENT SHALL HAVE THE RIGHT TO CHANGE THE DESTINATION/S) SPECIFIED HEREIN. ANY ADJUSTMENT IN CONTRACT PRICE OR TIME OF DELIVERY DUE TO RESULTING CHANGES IN PACKING OR MARKING SHALL BE SUBJECT TO THE CLAUSE OF THIS CONTRACT ENTITLED "CHANGES.'

"BIDS OFFERING DELIVERY ON A BASIS OTHER THAN THAT SPECIFIED ABOVE WILL BE REJECTED.'

BIDS WERE OPENED ON NOVEMBER 3, 1960, AND A TOTAL OF 5 BIDS WERE TABULATED AS FOLLOWS:

CHART

BIDDER ADDRESS ITEM 1 ITEM 2 ITEM 3

------ ------- PER UNIT LOT LOT

"BOGG FORCE AND MACHINE 4,748.00 240.00 INCL. IN

WKS. INC. BROOKLYN, N.Y. ITEM 1

WALTER DANKAS AND CO. SAN FRANCISCO,

CALIF. 2,040.00 N/C GRAND SPECIALTIES CO. CHICAGO, ILL. 1,741.00 INCL. INCL. NORTH PRODUCTS, INC.MIDLAND PARK, 1,080.00 200.00 50.00

N.J. REGENT JACK MFG. CO. INC. DOWNEY, CALIF. 1,843.00 N/C

N/C"

NORTH PRODUCTS, INC. WAS CLEARLY LOW AS TO PRICE, HOWEVER, IT WAS NOTED THAT UNDER THE ABOVE QUOTED DELIVERY CLAUSE, THE BIDDER FILLED IN ONLY LINE (3) BY STATING "WE WILL SHIP BY MOTOR TRUCK ONLY FROM 190 GREENWOOD AVENUE, MIDLAND PARK, N.J.' THE CONTRACTING OFFICER REPORTS THAT THE WORTENDYKE FREIGHT STATION IS APPROXIMATELY 100 YARDS FROM THE BIDDER'S PLANT, AND THE MIDLAND PARK FREIGHT STATION IS ABOUT 1.7 MILES FROM THE PLANT. HE DETERMINED THAT THE NORTH PRODUCTS' BID WAS NONRESPONSIVE TO THE INVITATION AS IT RESTRICTED THE GOVERNMENT'S OPTION TO SPECIFY THE METHOD OF SHIPMENT.

YOU CONTEND THAT ALTHOUGH YOUR PRICE WAS CONDITIONED ON THE LOADING OF THE REQUIRED ITEMS ON A TRUCK AT YOUR PLANT, THE GOVERNMENT WAS NOT RESTRICTED TO TRUCK MOVEMENT SINCE IT COULD HAVE MOVED SUCH TRUCK TO A RAIL FREIGHT STATION. ACCORDINGLY, THE TOTAL COST TO THE GOVERNMENT OF MOVING THE SHIPMENT FROM YOUR PLANT TO FINAL DESTINATION SHOULD HAVE BEEN ADDED TO YOUR BID PRICE AND IF YOUR BID WAS STILL LOW, AS YOU ALLEGE, IT SHOULD HAVE BEEN ACCEPTED. YOU FURTHER CONTEND THAT IF YOUR BID WAS PROPERLY REJECTED, THE ADMINISTRATIVE OFFICE SHOULD HAVE REJECTED ALL BIDS AND THEN READVERTISED.

UNDER THE INVITATION HERE, BIDDERS WERE REQUIRED TO INDICATE THEIR RESPECTIVE F.O.B. POINTS FOR FURNISHING THE UNITS LOADED, BLOCKED AND BRACED ON BOARD CARRIER'S EQUIPMENT AT OR NEAR BIDDER'S PLANT, FOR RAIL, TRUCK OR WATER SHIPMENT, AT THE GOVERNMENT'S OPTION. IT WAS STIPULATED THAT SHIPPING INSTRUCTIONS WOULD BE ISSUED AFTER AWARD. YOU OFFERED TO SHIP F.O.B. ONLY BY MOTOR TRUCK FROM YOUR PLANT, BUT YOU DID NOT UNDERTAKE, CONTRARY TO THE TERMS OF THE DELIVERY CLAUSE CONTAINED IN THE INVITATION, TO ABSORB ANY COSTS OF DELIVERY TO A RAIL OR WHARF TERMINAL AT OR NEAR YOUR PLANT. WE AGREE THAT YOUR BID DOES NOT RESTRICT THE SHIPMENT TO TRUCK MOVEMENT. THE INVITATION SETS FORTH TERMS OF DELIVERY, BUT THE METHOD OF SHIPMENT WAS TO BE SPECIFIED BY THE GOVERNMENT WHEN THE MATERIAL WAS READY FOR SHIPMENT.

HOWEVER, THE MORE LIMITED DELIVERY TERMS YOU OFFERED OBVIOUSLY PLACED YOU AT AN ADVANTAGE OVER OTHER BIDDERS FOR PURPOSES OF COMPUTING A BID PRICE BASED ON ANTICIPATED COSTS. RECOGNIZING SUCH FACT, YOU SUGGEST THAT THE ADVANTAGE CAN BE COMPENSATED FOR BID EVALUATION PURPOSES MERELY BY ADDING TO YOUR BID PRICE THE TOTAL COSTS OF DELIVERY FROM PLANT TO FINAL DESTINATION. THE LAW UNDER WHICH THIS PROCUREMENT WAS MADE (10 U.S.C. 2305) REQUIRES AWARD TO THAT RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND IS MOST ADVANTAGEOUS TO THE UNITED STATES, AND THIS OFFICE HAS REPEATEDLY HELD THAT A DEVIATION IN THE BID FROM THE TERMS OF THE INVITATION CONSTITUTES GROUND FOR REJECTING THE BID WHERE SUCH DEVIATION GOES TO THE SUBSTANCE OF THE BID SO AS TO AFFECT EITHER THE PRICE, QUANTITY, OR QUALITY OF THE ARTICLES OFFERED. 30 COMP. GEN. 179. THE DEVIATION CONTAINED IN YOUR BID PLACED YOU AT AN ADVANTAGE, WITH RESPECT TO PRICE, OVER THE CONFORMING BIDDERS. WE DO NOT BELIEVE THAT THE EFFECT PRODUCED BY SUCH DEVIATION IN THE COMPUTATION OF AN OFFERED PRICE IS A MATTER SUBJECT TO EXACT ASCERTAINMENT FOR BID EVALUATION PURPOSES. SINCE THE DEVIATION IN YOUR BID AFFECTS PRICE IN A MANNER FAVORABLE TO YOU, WE MUST DRAW THE CONCLUSION THAT THE DEVIATION IS PREJUDICIAL TO THE RIGHTS OF THE OTHER BIDDERS AND THE BID MUST BE REJECTED. FURTHERMORE, YOU WERE CLEARLY INFORMED BY THE INVITATION IN CONSPICUOUS TYPE THAT BIDS OFFERING DELIVERY ON A BASIS OTHER THAN AS SPECIFIED WOULD BE REJECTED.

YOU SAY THAT IF YOUR BID WAS PROPERLY REJECTED, ALL THE BIDS SHOULD HAVE BEEN REJECTED. IN THIS RESPECT, WE STATED IN A DECISION OF JULY 8, 1957, B-132120 (37 COMP. GEN. 12, 14), AS OLLOWS:

"* * * HOWEVER, IT MUST BE RECOGNIZED THAT, CONTRARY TO THE PURPOSES FOR WHICH THE PUBLIC PROCUREMENT STATUTES WERE ENACTED, THE REJECTION OF ALL BIDS--- WITHOUT ABANDONMENT OF THE PROPOSED PROCUREMENT -- TENDS TO DISCOURAGE COMPETITION BECAUSE IT RESULTS IN MAKING ALL BIDS PUBLIC WITHOUT AWARD, WHICH IS CONTRARY TO THE INTERESTS OF THE LOW BIDDER AND BECAUSE REJECTION OF ALL BIDS MEANS THAT BIDDERS HAVE EXPENDED MANPOWER AND MONEY ON THE PREPARATION OF THEIR BIDS WITHOUT ANY POSSIBILITY OF ACCEPTANCE. THEREFORE, THE AUTHORITY TO REJECT ALL BIDS MUST BE EXERCISED WITH CARE AND ONLY UPON A BONA FIDE DETERMINATION THAT THE PUBLIC INTEREST WOULD THEREBY BE SERVED. * * *" ..END :