B-144975, MAY 9, 1961

B-144975: May 9, 1961

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER AND ENCLOSURES. THE THREE OTHER PROPOSALS RECEIVED WERE IN THE AMOUNTS OF $60. INCLUDING THE ESTIMATED COST OF TRANSPORTING THE TANKS FROM OLMSTED AIR FORCE BASE TO THE PLANTS OF THE OFFERORS AND FROM THOSE PLANTS TO THE FOUR AREAS WHERE THE REPAIRED TANKS ARE TO BE DELIVERED. THE TOTAL COST TO THE GOVERNMENT UNDER YOUR PROPOSAL IS REPORTED TO BE $118. WHEREAS THE TOTAL COST UNDER THE OTHER THREE PROPOSALS IS IN THE AMOUNTS OF $108. YOU STATE ALSO THAT YOU WERE ADVISED BY THE CONTRACTING OFFICER THAT YOU WERE LOW BIDDER. THAT A PREAWARD SURVEY OF YOUR PLANT WAS MADE BY THE GOVERNMENT. IT WAS OBVIOUS THAT THE COST OF ALL TRANSPORTATION WOULD BE PAID BY THE GOVERNMENT AND NOT BY THE CONTRACTOR.

B-144975, MAY 9, 1961

TO AV-OX, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER AND ENCLOSURES, ACKNOWLEDGED FEBRUARY 10, 1961, PROTESTING AGAINST AWARD TO ANOTHER BIDDER UNDER REQUEST FOR PROPOSALS NO. 36-600-61-5120 ISSUED NOVEMBER 25, 1960, BY HEADQUARTERS, MIDDLETOWN AIR MATERIEL AREA, OLMSTED AIR FORCE BASE, PENNSYLVANIA, INVOLVING A NEGOTIATED PROCUREMENT COVERING THE REPAIR OF APPROXIMATELY 180 LIQUID OXYGEN STORAGE TANKS LOCATED AT OLMSTED AIR FORCE BASE.

IN RESPONSE TO THE REQUEST, YOU SUBMITTED A PROPOSAL IN THE TOTAL AMOUNT OF $34,958.25 FOR REPAIRING THE TANKS, NOT INCLUDING ANY COST OF TRANSPORTATION. THE THREE OTHER PROPOSALS RECEIVED WERE IN THE AMOUNTS OF $60,250, $63,366 AND $68,900. HOWEVER, INCLUDING THE ESTIMATED COST OF TRANSPORTING THE TANKS FROM OLMSTED AIR FORCE BASE TO THE PLANTS OF THE OFFERORS AND FROM THOSE PLANTS TO THE FOUR AREAS WHERE THE REPAIRED TANKS ARE TO BE DELIVERED, THE TOTAL COST TO THE GOVERNMENT UNDER YOUR PROPOSAL IS REPORTED TO BE $118,827.10, WHEREAS THE TOTAL COST UNDER THE OTHER THREE PROPOSALS IS IN THE AMOUNTS OF $108,316.05 (HERRICK L. JOHNSTON, INC.), $109,815.95 (CONTAINER SERVICE, INC.), AND $117,666.30 (GAS EQUIPMENT ENGINEER CORPORATION).

YOU CONTEND THAT TRANSPORTATION COSTS SHOULD NOT BE CONSIDERED IN EVALUATING THE BIDS, SINCE THE REQUEST FOR PROPOSALS DID NOT SPECIFICALLY STATE THAT TRANSPORTATION COSTS WOULD BE CONSIDERED IN MAKING AN AWARD AND SINCE YOU STATE THAT THE CONTRACTING OFFICER ADVISED YOU BY TELEPHONE THAT TRANSPORTATION COSTS WOULD NOT BE CONSIDERED. YOU STATE ALSO THAT YOU WERE ADVISED BY THE CONTRACTING OFFICER THAT YOU WERE LOW BIDDER; THAT A PREAWARD SURVEY OF YOUR PLANT WAS MADE BY THE GOVERNMENT; AND THAT YOU MADE ARRANGEMENTS TO PERFORM THE CONTRACT WORK.

ALTHOUGH THE REQUEST FOR PROPOSALS DID NOT SPECIFICALLY STATE THAT TRANSPORTATION COSTS WOULD BE CONSIDERED IN EVALUATING BIDS, IT WAS OBVIOUS THAT THE COST OF ALL TRANSPORTATION WOULD BE PAID BY THE GOVERNMENT AND NOT BY THE CONTRACTOR. PARAGRAPH L OF THE REQUEST SHOWED THAT TRANSPORTATION OF THE TANKS TO THE CONTRACTOR'S PLANT WOULD BE AT GOVERNMENT EXPENSE; AND CLAUSE 30 OF THE GENERAL PROVISIONS STATED THAT TRANSPORTATION FROM THE CONTRACTOR'S PLANT TO THE VARIOUS INTENDED DESTINATIONS WOULD BE ON AN F.O.B. CONTRACTOR'S PLANT BASIS. SEE, ALSO, CLAUSE 38 OF THE GENERAL PROVISIONS PROVIDING FOR SHIPMENT BY GOVERNMENT BILL OF LADING. PARAGRAPH T OF THE REQUEST FOR PROPOSALS STATED: "IT IS CONTEMPLATED A CONTRACT WILL BE AWARDED TO THAT RESPONSIBLE OFFEROR WHOSE PROPOSAL WILL BE MOST ADVANTAGEOUS TO THE GOVERNMENT, PRICE AND OTHER FACTORS CONSIDERED.'

SECTION 1, PART 13, ARMED SERVICES PROCUREMENT REGULATION, REQUIRES THAT TRANSPORTATION COSTS BE CONSIDERED IN EVALUATING BIDS, STATING THAT BIDS OR PROPOSALS "WILL BE EVALUATED ON THE BASIS OF THE LOWEST OVERALL COST TO THE GOVERNMENT; " AND SUCH HAS BEEN THE CONSISTENT HOLDING OF THE ACCOUNTING OFFICERS OF THE GOVERNMENT. IN 10 COMP. GEN. 402 IT WAS HELD (QUOTING SYLLABUS):

"THE COST OF DELIVERY OF EQUIPMENT, ETC., IS ALWAYS A MATTER FOR CONSIDERATION BY THE GOVERNMENT IN DETERMINING WHICH IS THE LOWEST BID RECEIVED. WHILE SPECIFICATIONS NEED NOT STATE SPECIFICALLY, WHERE EQUIPMENT, ETC., IS TO BE PURCHASED F.O.B. POINT OF SHIPMENT, THAT THE COST TO THE GOVERNMENT OF TRANSPORTING TO POINT EQUIPMENT IS TO BE SHIPPED WILL BE CONSIDERED IN MAKING THE AWARD, THEY SHOULD, WHERE POSSIBLE, INDICATE SUCH POINT IN ORDER THAT ALL BIDDERS MAY BE ADVISED AND HAVE AN OPPORTUNITY OF FIXING THEIR PRICES AND POINT OF SHIPMENT IN THE LIGHT REOF.'

SEE, ALSO, 16 COMP. GEN. 697; ID. 729; 18 ID. 44; 37 ID. 162.

WITH RESPECT TO YOUR CONTENTION THAT THE CONTRACTING OFFICER ADVISED YOU THAT TRANSPORTATION COSTS WOULD NOT BE CONSIDERED IN EVALUATING BIDS AND THAT YOU WERE LOW BIDDER, THE CONTRACTING OFFICER DENIES THAT HE MADE SUCH STATEMENTS. MOREOVER, IF SUCH STATEMENTS WERE MADE THEY WOULD BE UNAUTHORIZED AND NOT BINDING ON THE GOVERNMENT IN VIEW OF THE PROVISION OF THE ARMED SERVICES PROCUREMENT REGULATION AND THE DECISIONS ABOVE REFERRED TO.

IT IS NOT UNUSUAL FOR GOVERNMENT CONTRACTING AGENCIES TO MAKE SURVEYS OF PLANTS AND FACILITIES OF PROSPECTIVE CONTRACTORS PRIOR TO AWARD. BIDDER OR PROSPECTIVE CONTRACTOR IS JUSTIFIED IN ASSUMING THAT THE AWARD WILL BE MADE TO HIM UNTIL HE RECEIVES FORMAL ADVICE TO THAT EFFECT.

AS TO YOUR CONTENTION THAT YOU ARE "ENTITLED TO SOME DEGREE OF PREFERENCE" BECAUSE YOU ARE WITHIN THE CLASSIFICATION OF SMALL BUSINESS CONCERNS, IT IS TO BE OBSERVED THAT ONLY SUCH CONCERNS WERE ELIGIBLE TO SUBMIT PROPOSALS IN THIS MATTER AND ALL OFFERORS ARE ENTITLED TO EQUAL CONSIDERATION IN THAT RESPECT.

FOR THE REASONS ABOVE SET FORTH, IT IS CONCLUDED THAT THE COST OF TRANSPORTING THE TANKS TO AND FROM THE CONTRACTOR'S PLANT IS PROPERLY FOR CONSIDERATION IN EVALUATING THE BIDS, AND THAT YOUR PROTEST MUST BE DENIED.