B-148780, MAY 18, 1962, 41 COMP. GEN. 773

B-148780: May 18, 1962

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FURTHER WOULD LIMIT THE LIABILITY OF CARRIERS IN CUSTOMARY TRADE TERMS AND CONDITIONS WILL PROVIDE A UNIFORM AND ACCURATE EVALUATION METHOD FOR SELECTING THE CARRIER OFFERING THE LOWEST OVERALL COST OF SERVICE AND. SUCH EVALUATION PLAN IS CONSISTENT WITH DECISIONS HOLDING THAT THE BASIS FOR EVALUATION OF BIDS SHOULD BE CLEAR AND EXACT AND MADE KNOWN TO BIDDERS IN ADVANCE OF BID PREPARATION. 1962: WE ARE ASKED IN A LETTER OF FEBRUARY 21. GENERAL MORRIS EXPLAINS THAT THE TRANSPORTATION OFFICERS OF THE MILITARY SERVICES ARE FACED WITH A VEXING PROBLEM IN THE EVALUATION OF TENDERS SINCE TENDERS NOW BEING RECEIVED FROM THE UNREGULATED CARRIERS- - ALTHOUGH NOT NECESSARILY VARYING AS TO RATES. THE FOLLOWING EXAMPLES ARE FURNISHED OF SUBMISSIONS FROM CARRIERS WHICH REFLECT THE EXTENT OF VARIANCE IN THIS AREA: A.

B-148780, MAY 18, 1962, 41 COMP. GEN. 773

CONTRACTS - SPECIFICATIONS - EVALUATION FACTORS A PLAN FOR THE EVALUATION OF RATE TENDERS SUBMITTED BY CARRIERS, REGULATED AND UNREGULATED, FOR THE SHIPMENT OF HOUSEHOLD EFFECTS OF MILITARY AND CIVILIAN PERSONNEL WHICH WOULD REQUIRE, AS A CONDITION PRECEDENT TO CONSIDERATION, A 30-CENT PER POUND PER ARTICLE RELEASED VALUATION, WOULD SPECIFY THAT RELEASED VALUATIONS OF HIGHER AMOUNTS WOULD NOT BE CONSIDERED FOR BID EVALUATION PURPOSES, AND FURTHER WOULD LIMIT THE LIABILITY OF CARRIERS IN CUSTOMARY TRADE TERMS AND CONDITIONS WILL PROVIDE A UNIFORM AND ACCURATE EVALUATION METHOD FOR SELECTING THE CARRIER OFFERING THE LOWEST OVERALL COST OF SERVICE AND, THEREFORE, SUCH EVALUATION PLAN IS CONSISTENT WITH DECISIONS HOLDING THAT THE BASIS FOR EVALUATION OF BIDS SHOULD BE CLEAR AND EXACT AND MADE KNOWN TO BIDDERS IN ADVANCE OF BID PREPARATION.

TO THE DIRECTOR, DEFENSE SUPPLY AGENCY, MAY 18, 1962:

WE ARE ASKED IN A LETTER OF FEBRUARY 21, 1962, FROM MAJOR GENERAL I. SEWELL MORRIS, COMMANDER, DEFENSE TRAFFIC MANAGEMENT SERVICE, FOR OUR COMMENTS ON A PROPOSED STANDARD TO BE USED IN THE EVALUATION OF RATE TENDERS SUBMITTED BY CARRIERS COVERING THE MOVEMENT OF UNCRATED HOUSEHOLD GOODS OF MILITARY AND CIVILIAN MEMBERS OF THE DEPARTMENT OF DEFENSE.

GENERAL MORRIS EXPLAINS THAT THE TRANSPORTATION OFFICERS OF THE MILITARY SERVICES ARE FACED WITH A VEXING PROBLEM IN THE EVALUATION OF TENDERS SINCE TENDERS NOW BEING RECEIVED FROM THE UNREGULATED CARRIERS- - ALTHOUGH NOT NECESSARILY VARYING AS TO RATES--- MAY CONTAIN RELEASED VALUATION PROVISIONS WHICH VARY AS TO THE EXTENT OF CARRIER LIABILITY FOR LOSS AND DAMAGE. THESE VARIATIONS RUN NOT ONLY TO THE STATED DOLLAR VALUATIONS--- RANGING FROM 30 CENTS A POUND PER ARTICLE TO FULL VALUATION--- BUT TO VARIOUS LIABILITY EXCLUSIONS. THE FOLLOWING EXAMPLES ARE FURNISHED OF SUBMISSIONS FROM CARRIERS WHICH REFLECT THE EXTENT OF VARIANCE IN THIS AREA:

A. CARRIER CITES EXACTLY THE SAME RATE BETWEEN TWO POINTS FOR HOUSEHOLD GOODS RELEASED (1) AT 30 CENTS PER POUND PER ARTICLE OR (2) AT FULL VALUE, EXCEPT TO THE EXTENT LIMITED BY CARRIER'S TARIFF.

B. CARRIER CITES A RATE (1) AT A RELEASED VALUE OF 30 CENTS PER POUND PER ARTICLE; (2) AT FULL LIABILITY, EXCEPT TO THE EXTENT LIMITED BY CARRIER'S TARIFF, AND WITH 25 CENTS PER CWT INCREASE OVER THE RATE; (3) THIS CARRIER'S SO-CALLED FULL LIABILITY ACCORDING TO HIS TARIFF IS $6.500.

C. CARRIER CITES A RATE (1) AT FULL VALUE, EXCEPT TO THE EXTENT LIMITED BY CARRIER'S TARIFF, AND (2) AT RELEASED VALUE OF 30 CENTS PER POUND PER ARTICLE THE RATE IS REDUCED BY 55 CENTS PER CWT.

D. CARRIER A. AND CARRIER B. CITE THE SAME RATE BETWEEN TWO POINTS: (1) CARRIER A. HAS A RELEASED VALUATION OF 30 CENTS PER POUND PER ARTICLE; (2) CARRIER B. HAS FULL VALUATION, EXCEPT TO THE EXTENT LIMITED BY CARRIER'S TARIFF.

THUS, GENERAL MORRIS POINTS OUT THAT THERE IS NO UNIFORM METHOD, MATHEMATICAL OR OTHERWISE, TO ACCURATELY EVALUATE SUCH TENDERS FOR SELECTION OF THE CARRIER PROVIDING THE LOWEST OVERALL COST OF SERVICE.

THE PLAN PROPOSED TO STABILIZE THIS SITUATION WOULD PROVIDE THAT HOUSEHOLD GOODS TENDERS FROM BOTH REGULATED AND UNREGULATED CARRIERS MUST CONTAIN, AS A CONDITION PRECEDENT TO INITIAL CONSIDERATION, A 30 CENT PER POUND PER ARTICLE RELEASED VALUATION AND THAT RELEASED VALUATIONS OF HIGHER AMOUNTS WILL NOT BE CONSIDERED FOR BID EVALUATION PURPOSES. ALSO, THE CARRIERS' LIABILITY WOULD BE FURTHER LIMITED BY CERTAIN TERMS AND CONDITIONS OF CARRIAGE--- CUSTOMARY IN THE TRADE--- DESIGNATED BY THE DEPARTMENT OF DEFENSE TO APPLY TO ALL HOUSEHOLD GOODS SHIPMENTS AND MADE A PART OF THE CARRIERS' TENDERS. SINCE IT IS SAID THAT OTHER TERMS AND CONDITIONS LIMITING THE CARRIERS' LIABILITY WILL NOT BE ACCEPTED, IT IS PRESUMED THAT BIDS SO SUBMITTED WOULD BE REJECTED.

WE RECOGNIZE YOUR DEPARTMENT'S DESIRE TO ESTABLISH POLICIES THAT ASSURE FAIR AND IMPARTIAL CONSIDERATION IN THE DISTRIBUTION OF BUSINESS TO ALL QUALIFIED HOUSEHOLD GOODS CARRIERS. WE HAVE TAKEN THE POSITION THAT THE BASIS FOR THE EVALUATION OF BIDS SHOULD BE CLEAR AND EXACT AND SHOULD BE MADE KNOWN TO BIDDERS IN ADVANCE OF BID PREPARATION. 36 COMP. GEN. 380, 385. ALSO, WE HAVE HELD THAT WHERE BID EVALUATION BECOMES COMPLICATED BY VARIABLE FACTORS NOT CAPABLE OF EXACT CALCULATION BEFOREHAND, IT IS WITHIN THE ADMINISTRATIVE DISCRETION OF THE DEPARTMENT CONCERNED TO CANCEL EXISTING INVITATIONS FOR SUCH BIDS, NOTIFY PROSPECTIVE BIDDERS THAT BIDS OF THIS TYPE WILL NOT BE ACCEPTABLE IN THE FUTURE, AND READVERTISE THE REQUIREMENTS ON A FIRM BASIS. 35 COMP. GEN. 689, 682. CONSISTENT WITH SUCH VIEWS WE WOULD HAVE NO REASON TO OBJECT TO YOUR PROPOSED PLAN.

WE SUGGEST, HOWEVER, THAT THE RATE TENDERS INVOLVED BE REQUIRED TO PROVIDE LANGUAGE WHICH WOULD MAKE THEM SUBJECT TO THE MINIMUM VALUATION INCREASE--- NOW 30 CENTS PER POUND--- BEING CONSIDERED BY THE INTERSTATE COMMERCE COMMISSION IN EX PARTE DOCKET NO. MC-61, IN THE EVENT THE PROPOSED INCREASE BECOMES EFFECTIVE. WE FEEL THAT OPERATIONS UNDER THE CONTEMPLATED PLAN SHOULD BE CLOSELY CHECKED FOR PROBLEM AREAS AS THEY MIGHT DEVELOP, AND THAT EFFORT SHOULD BE MADE TO MAINTAIN SOME EXPERIENCE STATISTICS AS A GUIDE FOR FUTURE ACTION.