B-150698, FEB. 28, 1963

B-150698, FEB. 28, 1963

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 19, 1963 (RL.2), WITH ENCLOSURES, FROM MR. C. A. APPLEBY, ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, RELATIVE TO THE PROTEST FILED BY MINK DAYTON, INC., AGAINST THE AWARD OF CONTRACT TO OTHER THAN THAT CONCERN UNDER INVITATION FOR BIDS NO. 600-371-63, ISSUED BY THE U.S. NAVY PURCHASING OFFICE, WASHINGTON, D.C., UNDER DATE OF NOVEMBER 15, 1962, FOR THE PRODUCTION OF MISSILE CONTAINERS AND PALLETS.

AS A BASIS FOR ITS PROTEST MINK-DAYTON ALLEGED THAT THE AWARD MADE TO THE NUBAR TOOL AND ENGINEERING COMPANY, INC; AROSE OUT OF AN IMPROPER EVALUATION OF THE BIDS, IT BEING CONTENDED THAT THE STATED WEIGHTS INCLUDED IN THE NUBAR BID WERE INCORRECT. MINK-DAYTON ALLEGED FURTHER THAT THERE WAS SO GREAT A VARIANCE BETWEEN THE DIMENSIONS OF THE CONTAINERS AS SET FORTH IN NUBAR'S BID AND THE ACTUAL DIMENSIONS OF THE CONTAINERS AS TO RENDER THE BID OF THAT CONCERN NON-RESPONSIVE.

UPON RECEIPT OF THE PROTEST THE CONTRACTING OFFICER IMMEDIATELY CANCELED THE AWARD TO THE NUBAR COMPANY, AND WE HAVE SINCE RECEIVED A PROTEST ON BEHALF OF THE NUBAR TOOL AND ENGINEERING COMPANY, INC., AGAINST THAT ACTION.

ON BEHALF OF THE NUBAR TOOL AND ENGINEERING COMPANY, INC., IT IS URGED THAT IT FULFILLED IN GOOD FAITH ALL OF THE REQUIREMENTS OF THE INVITATION; THAT THE ERROR IN OMITTING THE GUARANTEED SHIPPING CLAUSE WAS THAT OF THE NAVY--- NOT OF THE BIDDER--- AND THAT, THEREFORE, THAT CONCERN SHOULD NOT HAVE TO BEAR THE PENALTY FOR THE NAVY'S OMISSION. IT IS ALSO POINTED OUT THAT SINCE NUBAR WAS AWARDED THE CONTRACT AFTER PUBLIC DISCLOSURE OF HIS BID A REBIDDING ON A SIMILAR PROCUREMENT, WITH NUBAR'S COST AND STATISTICAL DATA AND OTHER INFORMATION ALREADY PUBLIC KNOWLEDGE, WOULD PLACE THAT COMPANY AT A DISTINCT DISADVANTAGE, AND WE ARE CONSEQUENTLY ASKED TO EXAMINE THE MATTER FOR THE PURPOSE OF DETERMINING WHETHER THE ACTION OF YOUR DEPARTMENT IN REJECTING THE BIDS WAS CORRECT IN ALL RESPECTS AND WHETHER OR NOT YOUR DEPARTMENT MAY NOW REINSTATE THE CONTRACT ON THE ORIGINAL BID SUBMITTED BY NUBAR.

WITH THE LETTER OF FEBRUARY 19, 1963, THERE WAS SUBMITTED A STATEMENT OF FACTS DATED FEBRUARY 14, 1963, BY THE CONTRACTING OFFICER, SHOWING THAT NINE BIDS WERE RECEIVED IN RESPONSE TO THE INDICATED INVITATION FOR BIDS. UPON AN EVALUATION OF THE BIDS IT WAS DETERMINED THAT THE NUBAR TOOL AND ENGINEERING COMPANY, INC., WAS THE LOW BIDDER AND THAT MINK-DAYTON, INC., WAS THE SECOND LOW BIDDER, AFTER ADJUSTMENTS FOR COST OF TESTING, DISCOUNT AND FREIGHT COSTS, THE LATTER HAVING BEEN FIGURED ON THE BASIS OF THE SHIPPING DATA FURNISHED BY EACH BIDDER. THE COMPUTATIONS MADE BY YOUR DEPARTMENT FOR THE PURPOSE OF EVALUATING THE BIDS ARE AS FOLLOWS:

TABLE

MINK-DAYTON BID NUBAR BID BID (ORIGIN

$282,334.00 $288,132.00 LESS: COST OF TESTING 2,925.00

$279,409.00

---------- LESS: DISCOUNT 698.52

2,881.32

$278,710.48 $285,250.68

PLUS: FREIGHT 20,429.36 13,279.84

$299,139.84 $298,530.52

ON THE BASIS OF THE FOREGOING COMPUTATIONS CONTRACT NO. N600/19/ 59796 WAS AWARDED TO THE NUBAR TOOL AND ENGINEERING COMPANY, INC., UNDER DATE OF JANUARY 22, 1963. HOWEVER, FOR THE REASONS SET FORTH HEREIN THE CONTRACT WAS CANCELED THE NEXT DAY.

THE CONTRACTING OFFICER REPORTED THAT UPON RECEIPT OF THE PROTEST BY MINK -DAYTON, A RE-EXAMINATION WAS MADE OF THE INVITATION FOR BIDS WHICH DISCLOSED THAT THE PRESCRIBED FORM STIPULATING GUARANTEED MAXIMUM SHIPPING WEIGHTS, DIMENSIONS AND RELATED DATA HAD INADVERTENTLY BEEN OMITTED THEREFROM. IT WAS THEREFORE DETERMINED THAT THE INVITATION FOR BIDS WAS DEFECTIVE SINCE WITHOUT THE GUARANTEE THE GOVERNMENT WOULD NOT BE SURE IT WAS DEALING WITH THE LOW BIDDERS. IT WAS FOR THAT REASON THAT THE CONTRACT AWARDED TO NUBAR WAS CANCELED.

PARAGRAPH 1-1305.1 OF THE ARMED SERVICES PROCUREMENT REGULATIONS, AUGUST 21, 1961, PROVIDES, IN EFFECT, THAT IN CONNECTION WITH THE SOLICITATION FOR SUPPLIES TO BE PURCHASED ON ANY OF THE BASES INDICATED THEREIN--- FOR EXAMPLE, F.O.B. ORIGIN SHIPMENTS--- THERE SHALL BE INCLUDED A GUARANTEED WEIGHT, IF APPLICABLE. IT IS OUR VIEW THAT IF A CONTRACT WAS AWARDED AFTER EVALUATION OF TRANSPORTATION COSTS COMPUTED ON THE BASIS OF THE BIDDER'S STATED WEIGHTS, BUT WITH NO PROVISION FOR A GUARANTEED SHIPPING WEIGHT, AND IT SUBSEQUENTLY DEVELOPED UPON SHIPMENT THAT THE ACTUAL WEIGHT WAS GREATER THAN THE STATED WEIGHTS, THE GOVERNMENT WOULD INCUR INCREASED FREIGHT COSTS WITHOUT ANY RECOURSE AGAINST THE CONTRACTOR. FOR THE REASONS SET FORTH ABOVE WE CONCLUDE THAT THE ACTION TAKEN BY YOUR DEPARTMENT IN CANCELING THE CONTRACT WAS CORRECT. THE DISCLOSURE OF THE PRICES BID IS A REGRETTABLE INCIDENT OF THE ACTION TAKEN, WHICH SHOULD BE AVOIDED WHENEVER POSSIBLE. HOWEVER, IN THE INSTANT MATTER IT APPEARS THAT THE AWARD MADE WAS ERRONEOUS, PARTICULARLY IN VIEW OF THE FACT THAT, WITHOUT ALLOWANCE FOR DIFFERENCE IN TRANSPORTATION COSTS, NUBAR WAS NOT THE LOWEST BIDDER.

UNDER DATE OF JANUARY 25, 1963, THE NAVY PURCHASING OFFICE RECEIVED NOTICE OF SUBSTANTIAL ADDITIONAL REQUIREMENTS FOR THE SAME TYPE MISSILE CONTAINERS AND PALLETS AS ADVERTISED UNDER THE CANCELED INVITATION. THE TOTAL REQUIREMENTS WERE THEREFORE INCLUDED IN A READVERTISEMENT UNDER INVITATION FOR BIDS NO. 600-716-63, ISSUED BY THE U.S. NAVY PURCHASING OFFICE UNDER DATE OF FEBRUARY 5, 1963, TO ALL NINE BIDDERS WHO HAD BID UNDER THE CANCELED INVITATION. IT WAS REPORTED THAT THE NEW INVITATION FOR BIDS CONTAINED THE GUARANTEED MAXIMUM SHIPPING WEIGHT CLAUSE WITH A BID OPENING DATE OF FEBRUARY 25, 1963. IT HAS BEEN LEARNED INFORMALLY THAT THE BID OPENING DATE HAS BEEN EXTENDED TO MARCH 1, 1963.

IN RESPONSE TO THE REQUEST CONTAINED IN THE LETTER OF FEBRUARY 19, 1963, THE ENCLOSURES TO THE CONTRACTING OFFICER'S STATEMENT ARE RETURNED HEREWITH.