B-153833, JUN. 3, 1964

B-153833: Jun 3, 1964

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SECRETARY-TREASURER: FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED MARCH 26. OFFERS TO SUPPLY 767 M5A2 BALLISTIC DRIVES WERE SOLICITED BY INVITATION FOR BIDS AMC (A) 36-038-64-459 (M). SINCE EXACT DESTINATIONS WERE NOT KNOWN PRIOR TO OPENING DATE. DELIVERY FOB CONTRACTOR'S PLANT WAS SPECIFIED AND. WAS DESIGNATED AS THE FINAL DESTINATION. 393.83 WAS RECEIVED FROM SPERRY FARRAGUT AND A QUOTATION OF $649. 932.79 WAS RECEIVED FROM CHRYSLER. THIS WAS REVEALED UPON VERIFICATION OF ITS QUOTATION BY GOVERNMENT EVALUATING PERSONNEL. IT WAS FOUND THAT THE FINALLY WEIGHTED QUOTATIONS WERE $660. AWARD THEREFORE WAS MADE TO THE FORMER AS THE ACTUAL LOW BIDDER AFTER EVALUATION OF THE FINAL COST TO THE GOVERNMENT CONSIDERING THE CONDITIONS SPECIFIED IN THE INVITATION FOR BIDS TO PROVIDE ALL INTERESTED FIRMS AN EQUAL OPPORTUNITY TO COMPETE.

B-153833, JUN. 3, 1964

TO MR. WESLEY M. STEINHILBER, SECRETARY-TREASURER:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM DATED MARCH 26, 1964, PROTESTING THE AWARD OF CONTRACT DA 36-038-AMC-1263 (A) BY FRANKFORD ARSENAL, UNITED STATES ARMY, TO SPERRY FARRAGUT COMPANY OVER THE REPORTED LOW BID OF AIRTEMP DIVISION, CHRYSLER CORPORATION.

OFFERS TO SUPPLY 767 M5A2 BALLISTIC DRIVES WERE SOLICITED BY INVITATION FOR BIDS AMC (A) 36-038-64-459 (M). SINCE EXACT DESTINATIONS WERE NOT KNOWN PRIOR TO OPENING DATE, DELIVERY FOB CONTRACTOR'S PLANT WAS SPECIFIED AND, FOR PURPOSES OF EVALUATING BIDS, ROCK ISLAND, ILLINOIS, WAS DESIGNATED AS THE FINAL DESTINATION. A QUOTATION OF $655,393.83 WAS RECEIVED FROM SPERRY FARRAGUT AND A QUOTATION OF $649,932.79 WAS RECEIVED FROM CHRYSLER.

HOWEVER, CHRYSLER INCORRECTLY COMPUTED A CONSTITUENT FACTOR OF ITS BID DEALING WITH THE "USE AND EVALUATION OF GOVERNMENT-OWNED FACILITIES AND SPECIAL TOOLING," CONTAINED IN THE INVITATION AT PAGES 13 THROUGH 17. THIS WAS REVEALED UPON VERIFICATION OF ITS QUOTATION BY GOVERNMENT EVALUATING PERSONNEL. PARAGRAPH "M" OF THE PERTINENT CLAUSE REQUIRED EACH BIDDER TO MULTIPLY THE RENTAL RATE OF GOVERNMENT OWNED FACILITIES TO BE UTILIZED BY THE FULL PERIOD OF PRODUCTION SPECIFIED. INSTEAD OF DOING SO, CHRYSLER STRUCK A PERCENTAGE BETWEEN THE PROPOSED PRODUCTION PERIOD AND THE ACTUAL TIME IT INTENDED TO TAKE, THEREBY CONSIDERABLY REDUCING THE PROJECTED COST TO THE GOVERNMENT ENTERING INTO ITS QUOTATION.

AFTER VERIFICATION OF THE QUOTATIONS RECEIVED, INCLUDING CORRECTION AND ADJUSTMENT OF THE EVALUATION FACTOR FOR GOVERNMENT-OWNED FACILITIES IN CHRYSLER'S CASE, AND INCLUDING ADDITIONS OF APPROPRIATE TRANSPORTATION ALLOWANCES IN ACCORDANCE WITH THE TERMS OF THE INVITATION, IT WAS FOUND THAT THE FINALLY WEIGHTED QUOTATIONS WERE $660,456.03 IN THE CASE OF SPERRY FARRAGUT AND $671,845.98 IN THE CASE OF CHRYSLER. AWARD THEREFORE WAS MADE TO THE FORMER AS THE ACTUAL LOW BIDDER AFTER EVALUATION OF THE FINAL COST TO THE GOVERNMENT CONSIDERING THE CONDITIONS SPECIFIED IN THE INVITATION FOR BIDS TO PROVIDE ALL INTERESTED FIRMS AN EQUAL OPPORTUNITY TO COMPETE.

WE TRUST THAT THIS INFORMATION WILL EXPLAIN THE PROPRIETY OF THE ADMINISTRATIVE ACTION TO YOUR SATISFACTION.