B-150067, JAN. 14, 1963

B-150067: Jan 14, 1963

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TO RBM ENTERPRISES: FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 5. THE PROPOSED PURCHASES UNDER BOTH INVITATIONS WERE TO BE FINANCED WITH FUNDS PROVIDED BY THE UNITED STATES THROUGH THE AGENCY FOR INTERNATIONAL DEVELOPMENT. THREE BIDS WERE RECEIVED IN RESPONSE TO INVITATION NO. THE LOWEST BID WAS REJECTED BECAUSE THE BIDDER OFFERED TRUCKS WHICH WERE NOT CONSIDERED TO BE EQUAL TO THE SPECIFIED WILLYS MODEL. ENTERPRISE WAS THE SECOND LOWEST BIDDER AND THE HIGHEST BID WAS SUBMITTED BY THE THAI YARNYON COMPANY. ALLEGED AFTER OPENING OF BIDS THAT IT INTENDED TO BID ON A DIFFERENT MODEL OF TRUCK THAN WAS SPECIFIED IN THE INVITATION AT ITEM NO. 48. ENTERPRISE WERE REJECTED AND CONTRACTS WERE AWARDED TO THE THAI YARNYON COMPANY.

B-150067, JAN. 14, 1963

TO RBM ENTERPRISES:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 5, 1962, PROTESTING THE REJECTION OF BIDS SUBMITTED BY S.B. ENTERPRISE, YOUR AGENT IN BANGKOK, THAILAND, IN RESPONSE TO INVITATIONS FOR BIDS NOS. PH-TTEC-548 AND PH-TTEC -552, ISSUED IN MAY AND JUNE 1962 BY A PROCUREMENT AGENCY OF THE GOVERNMENT OF THAILAND.

INVITATION NO. PH-TTEC-548 COVERED A PROPOSED PURCHASE OF 50 WILLYS TRUCKS, MODEL 475 4 BY 4, OR EQUAL, WITH 50 SETS OF SPARE PARTS. INVITATION NO. PH-TTEC-552 LISTED VARIOUS ITEMS OF SUPPLIES AND EQUIPMENT, INCLUDING EIGHT 1-TON JEEPS, WILLYS MODEL FC 150, OR EQUAL, WITH EIGHT SETS OF SPARE PARTS (ITEMS NOS. 48 AND 48A). THE PROPOSED PURCHASES UNDER BOTH INVITATIONS WERE TO BE FINANCED WITH FUNDS PROVIDED BY THE UNITED STATES THROUGH THE AGENCY FOR INTERNATIONAL DEVELOPMENT, DEPARTMENT OF STATE.

THREE BIDS WERE RECEIVED IN RESPONSE TO INVITATION NO. PH-TTEC-548, QUOTING PRICES WHICH AGGREGATED THE SUMS OF $125,250, $154,925 AND $157,697.50. THE LOWEST BID WAS REJECTED BECAUSE THE BIDDER OFFERED TRUCKS WHICH WERE NOT CONSIDERED TO BE EQUAL TO THE SPECIFIED WILLYS MODEL. S.B. ENTERPRISE WAS THE SECOND LOWEST BIDDER AND THE HIGHEST BID WAS SUBMITTED BY THE THAI YARNYON COMPANY, LIMITED, AN AUTHORIZED DISTRIBUTOR OF WILLYS PRODUCTS IN THAILAND.

THOSE TWO FIRMS SUBMITTED THE ONLY BIDS UNDER ITEMS NOS. 48 AND 48A OF INVITATION NO. PH-TTEC-552. S.B. ENTERPRISE QUOTED PRICES AGGREGATING THE AMOUNT OF $28,233.20, BUT ALLEGED AFTER OPENING OF BIDS THAT IT INTENDED TO BID ON A DIFFERENT MODEL OF TRUCK THAN WAS SPECIFIED IN THE INVITATION AT ITEM NO. 48. THE THAI YARNYON COMPANY, LIMITED, QUOTED ALTERNATE AGGREGATE PRICES OF $31,899.60 AND $30,397.20, BASED UPON FURNISHING EITHER THE SPECIFIED MODEL FC 150 WILLYS TRUCK OR WILLYS MODEL 475 4 BY 4. S.B. ENTERPRISE REQUESTED IN EFFECT THAT IT BE PERMITTED TO CHANGE ITS BID TO PROVIDE FOR THE FURNISHING OF THE WILLYS MODEL 475 4 BY 4 WITHOUT CERTAIN OF THE ACCESSORIES LISTED IN THE DESCRIPTION OF ITEM NO. 48.

THE BIDS OF S.B. ENTERPRISE WERE REJECTED AND CONTRACTS WERE AWARDED TO THE THAI YARNYON COMPANY, LIMITED, FOR DELIVERY OF ALL THE 58 TRUCKS AND SPARE PARTS.

IT IS ALLEGED IN YOUR LETTER OF OCTOBER 5, 1962, THAT S.B. ENTERPRISE WOULD HAVE PURCHASED THE TRUCKS THROUGH AN AUTHORIZED DEALER IN THE UNITED STATES WITH THE FULL KNOWLEDGE AND APPROVAL OF THE MANUFACTURER. IT IS STATED THAT WHEN BIDS WERE OPENED YOU WERE INFORMED BY YOUR BANGKOK AGENT THAT THE THAILAND PROCUREMENT AGENCY DEMANDED A DIRECT WARRANTY FROM THE WILLYS MOTOR COMPANY BUT SUBSEQUENTLY INDICATED THAT IT WOULD BE SATISFIED WITH A CERTIFICATE FROM THE WILLYS MOTOR COMPANY STATING THAT THE VEHICLES WERE BRAND NEW. YOU CONTEND THAT THE REQUEST FOR A WARRANT WAS UNREASONABLE SINCE NO AUTOMOBILE MANUFACTURER IN THE UNITED STATES WARRANTS DIRECT TO THE PURCHASER BUT SUPPLIES SUCH WARRANTY THROUGH ITS DEALER ORGANIZATIONS. YOU STATE THAT YOUR PROPOSED WILLYS DEALER WAS AUTHORIZED TO ISSUE ANY CERTIFICATE REQUIRED AND TO ISSUE THE NORMAL WARRANTY AND SERVICE POLICY WHICH IS GIVEN WITH ANY NEW VEHICLE PURCHASE.

IT IS ALSO ALLEGED IN YOUR LETTER THAT YOU WERE INFORMED BY YOUR BANGKOK AGENT THAT "THE AWARDS WOULD BE GIVEN TO US" IF A GRATUITY WERE PAID TO A THAILAND PROCUREMENT OFFICIAL.

THE AGENCY FOR INTERNATIONAL DEVELOPMENT HAS TAKEN THE POSITION THAT THE BIDS OF S.B. ENTERPRISE SHOULD NOT HAVE BEEN ACCEPTED. WE ARE ADVISED THAT THE CHARGE MADE CONCERNING THE INTEGRITY OF A THAILAND PROCUREMENT OFFICIAL IS STILL UNDER INVESTIGATION IN BANGKOK.

IN VIEW OF THE ALLEGED MISTAKE IN BID UNDER INVITATION NO. PH-TTEC 552, IT IS APPARENT THAT THE BID OF S.B. ENTERPRISE SHOULD NOT HAVE BEEN GIVEN FAVORABLE CONSIDERATION. VARIOUS OTHER FACTORS BEARING ON THE QUESTION AS TO THE RESPONSIBILITY OF YOUR FIRM AND ITS BANGKOK AGENT WERE CONSIDERED BY THE AGENCY FOR INTERNATIONAL DEVELOPMENT IN REACHING THE CONCLUSION THAT BOTH BIDS OF S.B. ENTERPRISE WERE PROPERLY REJECTED.

IT IS REPORTED THAT THERE IS NOTHING IN THE AVAILABLE DOCUMENTATION TO SUGGEST THAT S.B. ENTERPRISE REGULARLY SELLS AND SERVICES WILLYS VEHICLES, OR IN FACT HAS EVER DONE SO; AND THAT IT IS CLEAR THAT S.B. ENTERPRISE HAS NO REPAIR FACILITIES AND NO STOCK OF REPAIR PARTS. REFERENCE IS ALSO MADE TO THE FACT THAT YOUR FIRM HAD CITED NO PAST TRANSACTIONS OF A SIMILAR NATURE WHICH COULD BE USED TO ESTABLISH ITS QUALIFICATIONS AS A SUPPLIER WHO WOULD BE IN A POSITION TO GUARANTEE POST-SALE SERVICE. INVESTIGATION FURTHER DISCLOSED THAT YOUR FIRM IS IN THE BUSINESS OF SELLING OR ATTEMPTING TO SELL PRODUCTS OTHER THAN AUTOMOTIVE VEHICLES, THAT THIS BUSINESS IS CONDUCTED AT A RELATIVELY SMALL OFFICE AND THAT AT ONE POINT S.B. ENTERPRISE ADVISED THE THAILAND PROCUREMENT AGENCY THAT IT WOULD HAVE DIFFICULTY IN POSTING THE 5 PERCENT PERFORMANCE BOND REQUIRED OF THE SUCCESSFUL BIDDER UNDER INVITATION NO. PH-TTEC-548.

THE AGENCY FOR INTERNATIONAL DEVELOPMENT ALSO TAKES EXCEPTION TO YOUR CONTENTION THAT IT WAS UNREASONABLE TO REQUIRE A WARRANTY FROM THE WILLYS MOTOR COMPANY ON THE TRUCKS WHICH S.B. ENTERPRISE PROPOSED TO SELL. THE REPORT OF THE AGENCY FOR INTERNATIONAL DEVELOPMENT STATES THAT YOU COULD ONLY GUARANTEE THAT THE VEHICLES WOULD BE NEW AND THE REPORT REFERS TO THE FACT THAT THE WILLYS OWNER'S SERVICE POLICY IS SPECIFICALLY DESIGNATED AS NOT TRANSFERABLE. IT WOULD RUN TO YOUR FIRM AS THE ORIGINAL PURCHASER AND NOT TO THE THAILAND PROCUREMENT AGENCY. THE OPINION IS EXPRESSED IN THE REPORT THAT A SUGGESTED ARRANGEMENT WHEREBY S.B. ENTERPRISE WOULD FURNISH ITS OWN GUARANTEE AND ENGAGE AN INDEPENDENT GARAGE TO PROVIDE THREE FREE SERVICINGS COULD NOT HAVE AFFORDED ADEQUATE PROTECTION SUCH AS WOULD BE INHERENT IN DEALING WITH AN AUTHORIZED DEALER SUPPORTED BY THE MANUFACTURER.

ASSUMING THE PROCUREMENT HERE INVOLVED HAS SUBJECT TO THE USUAL FEDERAL STATUTORY REQUIREMENTS, WE PERCEIVE NO BASIS UPON WHICH WE MIGHT PROPERLY OBJECT TO THE AWARDS AS MADE. WE HAVE CONSISTENTLY TAKEN THE POSITION THAT THE QUESTION AS TO THE RESPONSIBILITY OF A BIDDER IS PRIMARILY FOR DETERMINATION BY THE ADMINISTRATIVE AGENCY CONCERNED AND THE REPORTED FACTS AND CIRCUMSTANCES OF THIS CASE DO NOT REFLECT ANY ARBITRARY ACTION ON THE PART OF THE THAILAND PROCUREMENT AGENCY IN REJECTING THE LOW BIDS OF S.B. ENTERPRISE.