B-146529, SEP. 27, 1961

B-146529: Sep 27, 1961

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TO GERARD DANIEL SUPPLY CORP.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 25. THERE HAVE BEEN RECEIVED ALSO YOUR LETTERS OF AUGUST 7 AND AUGUST 17. THE INVITATION WAS ISSUED MARCH 10 AND AMENDED MARCH 27. ON PAGE 2 OF THE INVITATION IT WAS PROVIDED: "BIDS ARE INVITED ON EITHER OR BOTH OF THE FOLLOWING BASES OF DELIVERY: "A. "BIDS WILL BE EVALUATED AND AWARD MADE ON WHICHEVER BASIS IS MORE ADVANTAGEOUS TO THE GOVERNMENT. BIDS FOB ORIGIN WILL BE EVALUATED ON THE BASIS OF BID PRICE PLUS TRANSPORTATION COST TO THE GOVERNMENT FROM POINT OF ORIGIN TO DESTINATION/S) NAMED. * * *" THE INVITATION SHOWED THAT PART OF THE ROPE WAS DESTINED FOR NEW CUMBERLAND GENERAL DEPOT. ON EACH ITEM OF THE INVITATION A BID WAS REQUESTED "FOB: ORIGIN (WITHIN THE USA) (BIDDER TO DESIGNATE POINT OF ORIGIN)" OR F.O.B.

B-146529, SEP. 27, 1961

TO GERARD DANIEL SUPPLY CORP.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 25, 1961, PROTESTING AGAINST THE AWARD OF A CONTRACT TO ANOTHER BIDDER UNDER INVITATION NO. IFB -TC-23-204-61-138 ISSUED BY THE U.S. ARMY TRANSPORTATION MATERIEL COMMAND, ST. LOUIS, MISSOURI. THERE HAVE BEEN RECEIVED ALSO YOUR LETTERS OF AUGUST 7 AND AUGUST 17, 1961.

THE INVITATION WAS ISSUED MARCH 10 AND AMENDED MARCH 27, 1961, REQUESTING BIDS--- TO BE OPENED APRIL 28, 1961--- FOR FURNISHING 3,527,900FEET OF STEEL WIRE ROPE OF VARIOUS SIZES DESCRIBED IN 33 ITEMS. ON PAGE 2 OF THE INVITATION IT WAS PROVIDED:

"BIDS ARE INVITED ON EITHER OR BOTH OF THE FOLLOWING BASES OF DELIVERY:

"A. FOB CARRIER'S EQUIPMENT, WHARF, OR FREIGHT STATION AT A SPECIFIED CITY OR SHIPPING POINT WITHIN THE U.S.A.

"B. ALL TRANSPORTATION CHARGES PAID TO DESTINATION.

"BIDS WILL BE EVALUATED AND AWARD MADE ON WHICHEVER BASIS IS MORE ADVANTAGEOUS TO THE GOVERNMENT. BIDS FOB ORIGIN WILL BE EVALUATED ON THE BASIS OF BID PRICE PLUS TRANSPORTATION COST TO THE GOVERNMENT FROM POINT OF ORIGIN TO DESTINATION/S) NAMED. * * *"

THE INVITATION SHOWED THAT PART OF THE ROPE WAS DESTINED FOR NEW CUMBERLAND GENERAL DEPOT, NEW CUMBERLAND, PENNSYLVANIA, AND PART FOR SHARPE GENERAL DEPOT, LATHROP, CALIFORNIA. ON EACH ITEM OF THE INVITATION A BID WAS REQUESTED "FOB: ORIGIN (WITHIN THE USA) (BIDDER TO DESIGNATE POINT OF ORIGIN)" OR F.O.B. DESTINATION (NEW CUMBERLAND GENERAL DEPOT OR SHARPE GENERAL DEPOT).

SEVENTEEN BIDS WERE RECEIVED. METIMPEX CORPORATION SUBMITTED A BID F.O.B. ORIGIN POINT AND ALSO F.O.B. DESTINATION. AS TO THE F.O.B. ORIGIN POINT, IT INSERTED IN ITS BID THE FOLLOWING PROVISION:

"FOR SHIPMENTS DESTINED FOR SHARPE, THE FOB ORIGIN POINT IS FOB DOCK SAN FRANCISCO

FOR SHIPMENTS DESTINED FOR NCGD THE FOB ORIGIN POINT IS FOB DOCK, BALTIMORE.'

YOUR BID QUOTED PRICES F.O.B. DESTINATION ONLY. BOTH YOUR BID AND THAT OF METIMPEX CORPORATION OFFERED ROPE OF FOREIGN MANUFACTURE.

EVALUATION OF THE BIDS, INCLUDING APPLICABLE TRANSPORTATION RATES, RESULTED IN AWARDS ON JUNE 30, 1961, TO YOU ON ITEMS 1 (THE PORTION DESTINED FOR NCGD) AND 25; TO A BELGIAN BIDDER ON 3 TEMS; AND TO METIMPEX CORPORATION ON 29 ITEMS, INCLUDING ITEMS NOS. 1 (THE PORTION DESTINED FOR SHARPE GENERAL DEPOT), 3 AND 5 (CONTRACT NO. DA-23-204-TC 1486).

YOU CONTEND THAT PROPER EVALUATION OF THE BIDS WOULD RESULT IN AWARD TO YOU AS LOW BIDDER ON ITEMS NOS. 1 (FOR DELIVERY TO BOTH DESTINATIONS), 3 AND 5, SINCE THE METIMPEX CORPORATION BID SHOULD NOT HAVE BEEN INTERPRETED AS INCLUDING LOADING THE ROPE INTO THE CARRIER'S EQUIPMENT AT THE DOCKS. METIMPEX CORPORATION HAS STATED THAT ITS BID WAS INTENDED TO INCLUDE SUCH LOADING. YOUR CONTENTION WAS CONSIDERED BY THE CONTRACTING OFFICE PRIOR TO AWARD AND THERE WAS OBTAINED FROM THE OFFICE OF THE COMMAND JUDGE ADVOCATE AN OPINION THAT THE BID OF METIMPEX CORPORATION WAS NOT AMBIGUOUS AND SHOULD BE INTERPRETED AS REQUIRING THE BIDDER TO PAY ALL EXPENSES NECESSARY FOR PLACING THE ROPE ABOARD THE CARRIER AT THE DOCKS.

ARMED SERVICES PROCUREMENT REGULATION 1-1302.1 PROVIDES IN PART:

"SHIPMENTS WITHIN THE UNITED STATES. UNLESS THERE ARE VALID REASONS TO THE CONTRARY, THE PROCUREMENT OF SUPPLIES FROM SOURCES WITHIN THE UNITED STATES FOR ULTIMATE DELIVERY TO DESTINATIONS WITHIN THE UNITED STATES SHALL BE IN ACCORDANCE WITH THE FOLLOWING POLICY:

"/I) WHEN IT IS ESTIMATED THAT A CONTRACT WILL REQUIRE NO SHIPMENT TO A SINGLE DESTINATION WHICH WILL EQUAL 20,000 POUNDS, DELIVERY SHALL BE ON THE BASIS OF ALL TRANSPORTATION CHARGES PAID TO DESTINATION; OR

"/II) WHEN IT IS ESTIMATED THAT A CONTRACT WILL REQUIRE ONE OR MORE SHIPMENTS OF 20,000 POUNDS OR MORE TO ANY SINGLE DESTINATION, DELIVERY SHALL BE ON THE BASIS OF WHICHEVER OF THE FOLLOWING IS MORE ADVANTAGEOUS TO THE GOVERNMENT;

"/A) F.O.B. CARRIER'S EQUIPMENT, WHARF, OR FREIGHT STATION, AT THE GOVERNMENT'S OPTION, AT A SPECIFIED POINT AT OR NEAR CONTRACTOR'S PLANT; OR

"/B) ALL TRANSPORTATION CHARGES PAID TO DESTINATION. SOLICITATIONS SHALL PROVIDE THAT BIDDERS OR OFFERORS MAY MAKE BIDS OR PROPOSALS ON THE BASIS DESCRIBED IN (A) OR (B) ABOVE OR BOTH.'

THE LANGUAGE OF ASPR 1-1302.1 (II) (A) AND (B) ABOVE-QUOTED WAS COPIED VERBATIM IN THE INVITATION AS THE BASIS FOR BIDDING. IT IS OUR VIEW THAT THE INTERPRETATION OF THE LANGUAGE BY THE PROCURING OFFICE AND THE METIMPEX CORPORATION IS REASONABLE AND PERMISSIBLE, VIZ, THAT THE SHIPMENT IS TO BE PLACED ON THE CARRIER'S EQUIPMENT AT THE WHARF OR FREIGHT STATION. THE LANGUAGE OF ASPR 1-1302.1, CONSIDERED AS A WHOLE, INDICATES THAT IT CONTEMPLATES ONLY TWO ALTERNATIVES--- (1) F.O.B. THE CARRIER'S EQUIPMENT AT THE WHARF OR FREIGHT STATION AT POINT OF ORIGIN OR (2) F.O.B. DESTINATION.

IN 26 C.J. 745 IT IS STATED:

"F.O.B. * * * AS APPLIED TO A SALE OF MERCHANDISE DESTINED FOR SHIPMENT, A TERM USED TO INDICATE THAT IT WILL BE PLACED ON A CAR OR VESSEL FREE OF EXPENSE TO A PURCHASER OR CONSIGNEE.'

IN WILLISTON ON SALES, REVISED EDITION, 1948, SECTION 280, IT IS STATED:

"SOMETIMES CONTRACTS ARE MADE "F.O.B. FACTORY," WHEN WHAT IS MEANT IS "F.O.B. RAILROAD CARS AT THE FACTORY.'"

FURTHERMORE, IT HAS BEEN HELD THAT WHERE THERE IS ANY AMBIGUITY AS TO THE MEANING OF THE TERM F.O.B. THE CIRCUMSTANCES AND CONDITIONS UNDER WHICH IT IS USED MAY BE CONSIDERED IN ARRIVING AT THE TRUE INTENT OF THE PARTIES. BROOKS-SCANLON CO. V. ILLINOIS CENTRAL RAILROAD, 257 F. 235; ELECTRIC FURNACE CO. V. FIRE ASSOCIATION, 111 F.SUPP. 789.

IN THE INSTANT MATTER, IT WAS CONTEMPLATED BY ALL CONCERNED THAT THE ROPE WOULD BE SHIPPED FROM EUROPE AND THAT IT WOULD BE RESHIPPED FROM SOME PORT IN THE UNITED STATES TO ITS FINAL DESTINATION. IN SUCH A SITUATION, THE TERM "FOB DOCK" AS USED IN THE BID OF METIMPEX CORPORATION COULD PROPERLY BE INTERPRETED AS MEANING LOADED ON A CARRIER FOR SHIPMENT FROM THE DOCK TO DESTINATION. IN THIS CONNECTION, IT APPEARS TO BE WELL SETTLED THAT THE TERM "F.O.B. MINES" MEANS LOADED ON A CARRIER AT THE MINES READY FOR SHIPMENT. CONSOLIDATED COAL CO. V. JONES AND ADAMS O., 120 ILL.APP. 139, 147. SEE ALSO BERKSHIRE COTTON MANUFACTURING CO. V. COHEN, 198 NY SUPP. 240, 204 APP.DIV. 397, HOLDING THAT "F.O.B. MILL" MEANS LOADED ON A CARRIER AT THE MILL. IN HARDINGE CO. INC. V. EIMCO CORP., 266 PAC.2D. 494, THE COURT STATED (PAGE 495):

"* * * THE ABBREVIATION F.O.B. FOR "FREE ON BOARD" IS WELL KNOWN FOR ITS COMMERCIAL SIGNIFICANCE AND IS QUITE GENERALLY ACCEPTED BY THE COURTS WITHOUT PROOF. IT DENOTES THE DUTY OF THE SELLER TO DELIVER THE GOODS FREE FROM ALL CHARGES ON BOARD THE VEHICLES OF THE CARRIER, HARMAN V. WASHINGTON FUEL CO., 228 ILL. 298, 81 N.E. 1017; THAT GOODS ARE TO BE DELIVERED AT A CERTAIN PLACE F.O.B. MEANS THAT THEY WILL BE DELIVERED TO A CARRIER AT THAT PLACE FREE OF DRAYAGE CHARGES, ETC. MUSKEGON CURTAIN-ROLL CO. V. KEYSTONE MFG.CO., 135 PA. 132, 19 A. 1008. * * *"

THE COMPUTATIONS SUBMITTED IN YOUR LETTER OF JULY 25, 1961, FOR THE PURPOSE OF DEMONSTRATING THAT THE BID OF METIMPEX CORPORATION WAS NOT INTENDED TO INCLUDE THE COST OF LOADING THE WIRE ON CARRIERS AT THE DOCKS ARE NOT REGARDED AS DECISIVE SINCE METIMPEX CORPORATION STATES THAT ITS BID WAS INTENDED TO INCLUDE THAT COST AND SINCE, AS ABOVE-SET FORTH, A REASONABLE INTERPRETATION OF THE INVITATION AND THE BID OF METIMPEX CORPORATION WOULD REQUIRE THE BIDDER TO BEAR THE COST OF LOADING. IT IS TO BE OBSERVED ALSO THAT YOUR REFERRED-TO COMPUTATIONS ARE BASED ON CONJECTURE AS TO THE INTENTION OF METIMPEX CORPORATION; THAT NONE OF YOUR COMPUTATIONS PRECISELY EXPLAIN THE DIFFERENCE BETWEEN THE PRICES BID BY METIMPEX CORPORATION FOR DELIVERY AT ORIGIN POINT AND DELIVERY AT DESTINATION; AND THAT SUCH DIFFERENCE WELL MIGHT RESULT IN PART FROM FACTORS OTHER THAN THE COST OF LOADING AND TRANSPORTATION.

A PROCUREMENT AGENCY OF THE GOVERNMENT IS CHARGED WITH THE STATUTORY DUTY --- NOT ORDINARILY SUBJECT TO REVIEW--- OF DETERMINING THE LOWEST RESPONSIVE BIDDER UNDER THE TERMS OF AN INVITATION. IN THE INSTANT MATTER, THE EVALUATION OF BIDS WAS CAREFULLY CONSIDERED BY THE PROCUREMENT OFFICE AND WAS BASED ON THE LEGAL OPINION OF THE OFFICE OF THE COMMAND JUDGE ADVOCATE, THE AWARDS BEING DELAYED FOR TWO MONTHS AFTER THE OPENING OF BIDS.

FOR THE REASONS ABOVE SET FORTH, IT IS CONCLUDED THAT THERE IS NO LEGAL BASIS FOR OBJECTION BY OUR OFFICE TO THE ACTION OF THE PROCUREMENT OFFICE IN THIS MATTER. ACCORDINGLY, YOUR PROTEST IS DENIED.