B-154575, SEP. 11, 1964

B-154575, SEP. 11, 1964

TO DEMPSTER BROTHERS, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 24, 1964, PROTESTING AGAINST ANY AWARD OF ITEMS NOS. 22-30, INCLUSIVE; 32-34, INCLUSIVE, AND 36 TO THE COBEY CORPORATION UNDER INVITATION FOR BIDS NO. AMC-20-113-64-0672 (T), DEPARTMENT OF THE ARMY.

THE INVITATION WAS ISSUED ON MARCH 2, 1964, BY ARMY TANK AUTOMOTIVE CENTER (ATAC). IT COVERED 19 LINE ITEMS FOR REFUSE COLLECTION AND MATERIAL HANDLING VEHICLES PLUS NUMEROUS SUB-LINE ITEMS FOR CONTAINERS. NINE AMENDMENTS TO THE IFB WERE SUBSEQUENTLY ISSUED. AMENDMENT NO. 1, ISSUED ON MARCH 27, 1964, DELETED SOME OF THE ORIGINAL LINE ITEMS AND ADDED LINE ITEMS 20A THROUGH 45, RESULTING IN AN OVERALL INCREASE IN THE NUMBER OF UNITS OF THE TYPES OF EQUIPMENT MENTIONED ABOVE. AMENDMENT NO. 1 ALSO CHANGED THE SPECIFICATIONS AND EXTENDED THE OPENING DATE. AMENDMENT NO. 8 EXTENDED THE OPENING DATE TO MAY 14, 1964, AT 11:00 A.M., E.S.T.

OF THE 9 BIDS RECEIVED, ONLY YOUR FIRM AND COBEY BID ON ITEMS 22 THROUGH 30; 32 THROUGH 34; 36 AND 45. YOUR FIRM SUBMITTED A BID FOR BOTH ORIGIN AND DESTINATION ON ITEMS 22 THROUGH 28; 32 THROUGH 34, AND 36, AND FOR ORIGIN ONLY ON ITEMS 29, 30 AND 45. COBEY SUBMITTED AN ORIGIN ONLY BID ON ALL OF THE SAME LINE ITEMS. THE BID PRICES OF COBEY WITH FREIGHT ADDED WERE LOWER THAN THE ORIGIN AND/OR DESTINATION PRICES SUBMITTED BY YOUR FIRM FOR LINE ITEMS 22 THROUGH 28, AND THE EVALUATED PRICES OF COBEY FOR LINE ITEMS 29, 30, 32 THROUGH 34; 36 AND 45 WERE LOWER THAN THE EVALUATED ORIGIN OR THE DESTINATION PRICES OF YOUR FIRM ON THE LATTER LINE ITEMS.

LINE ITEMS 22 THROUGH 31 SEPARATELY CALLED FOR ONE OR MORE UNITS OF THE SAME VEHICLE TO BE SHIPPED TO VAROUS DESTINATIONS. COBEY BID THE SAME ORIGIN UNIT PRICE FOR ALL OF THE SAID LINE ITEMS. HOWEVER, WHILE LINE ITEMS 22 THROUGH 30 CALLED FOR CONTINENTAL UNITED STATES DESTINATIONS, THEREBY REQUIRING THE INCLUSION OF FEDERAL EXCISE TAX IN THE UNIT VEHICLE PRICE, ITEM 31 STATED BERMUDA AS THE DESTINATION POINT, AND THE VEHICLE UNIT BID PRICE THEREFORE SHOULD NOT HAVE INCLUDED FEDERAL EXCISE TAX. SINCE COBEY HAD BID THE SAME VEHICLE UNIT PRICE FOR ITEMS 22 THROUGH 31, ATAC WAS UNABLE TO DETERMINE FROM THE BID ITSELF WHETHER THE FEDERAL EXCISE TAX HAD BEEN OMITTED FROM LINE ITEMS 22 THROUGH 30 OR HAD BEEN ERRONEOUSLY INCLUDED IN LINE ITEM 31. THEREFORE, THE COBEY CORPORATION WAS CONTACTED AND THE POSSIBILITY OF A MISTAKE WAS CALLED TO THEIR ATTENTION. IN REPLY, COBEY ADVISED THAT IT HAD ERRONEOUSLY INCLUDED THE FEDERAL EXCISE TAX IN LINE ITEM 31. COBEY REQUESTED THE RIGHT TO CORRECT ITS BID ON ITEM 31 AND CONFIRMED SUCH REQUEST BY LETTERS DATED MAY 21 AND 26, 1964, SUPPORTED BY DOCUMENTATION OF MISTAKE.

LINE ITEMS 32 THROUGH 36 CALLED FOR FURNISHING THE SAME VEHICLES AS DESCRIBED IN LINE ITEMS 22 THROUGH 31 EXCEPT FOR THE ADDITIONAL REQUIREMENT OF AN AIR BRAKE EMERGENCY SYSTEM. COBEY BID THE SAME ORIGIN UNIT PRICE FOR THE VEHICLES TO BE FURNISHED UNDER LINE ITEMS 32 THROUGH 36. ALL OF THE SAID LINE ITEMS EXCEPT 35 CALLED FOR CONTINENTAL UNITED STATES DESTINATIONS. ITEM 35 HAD THE STATE OF HAWAII AS ITS DESTINATION POINT, AND THEREFORE WAS SUBJECT TO THE FEDERAL EXCISE TAX THE SAME AS LINE ITEMS 32 THROUGH 34, AND ITEM 36; HOWEVER, THE INVITATION ERRONEOUSLY STATED THAT ITEM 35 WAS NOT SUBJECT TO FEDERAL EXCISE TAX. SINCE COBEY HAD BID THE SAME UNIT VEHICLE PRICE FOR ITEMS 32 THROUGH 36, ATAC WAS UNABLE TO DETERMINE FROM THE BID ITSELF WHETHER FEDERAL EXCISE TAX HAD BEEN OMITTED FROM LINE ITEMS 32 THROUGH 34, AND 36, OR HAD BEEN INCLUDED IN ALL LINE ITEMS 32 THROUGH 36 EVEN THOUGH THE INVITATION ERRONEOUSLY STATED THAT IT SHOULD NOT BE INCLUDED IN LINE ITEM 35.

LINE ITEMS 44 AND 45 CALLED FOR DESTINATIONS THAT MADE THE VEHICLES TO BE SUPPLIED PURSUANT TO SAID LINE ITEMS SUBJECT TO FEDERAL EXCISE TAX; HOWEVER, THE INVITATION ERRONEOUSLY STATED THAT THE FEDERAL EXCISE TAX WAS NOT APPLICABLE TO SAID LINE ITEMS. THEREFORE, ATAC COULD NOT DETERMINE FROM THE COBEY BID WHETHER THE VEHICLE UNIT PRICES QUOTED FOR LINE ITEMS 44 AND 45 INCLUDED THE FEDERAL EXCISE TAX.

THE COBEY CORPORATION WAS CONTACTED AND THE POSSIBILITY OF A MISTAKE WITH RESPECT TO LINE ITEMS 35, 44 AND 45 WAS ALSO CALLED TO THEIR ATTENTION. IN REPLY, COBEY ADVISED THAT IT HAD INCLUDED THE FEDERAL EXCISE TAX IN THE UNIT PRICES FOR SAID LINE ITEMS DESPITE THE LANGUAGE OF THE INVITATION TO THE CONTRARY, SINCE THEY UNDERSTOOD THAT SHIPMENTS TO HAWAII, THE STATED DESTINATION FOR LINE ITEMS 35 AND 44, WERE SUBJECT TO THE FEDERAL EXCISE TAX; ALSO THAT THEY HAD INCLUDED THE TAX IN THE UNIT PRICE OF LINE ITEM 45 AS THE SHIPPING DESTINATION WAS NOT CLEAR. COBEY CONFIRMED SUCH STATEMENTS BY LETTER DATED JUNE 23, 1964, ACCOMPANIED BY SUPPORTING DOCUMENTS.

YOUR PROTEST RAISES TWO QUESTIONS. THE FIRST IS WHETHER COBEY'S BID WAS NONRESPONSIVE WITH RESPECT TO ITEMS 22 THROUGH 30; 32 THROUGH 34, AND 36 OF THE INVITATION.

THE EVIDENCE SUBMITTED BY COBEY IN SUPPORT OF THEIR REQUESTS FOR CORRECTION OF UNIT BID PRICES CONSISTS OF QUOTATIONS FROM SUPPLIERS WHICH IDENTIFY THE AMOUNTS OF APPLICABLE FEDERAL EXCISE TAX, TOGETHER WITH WORKSHEETS COMPILED BY COBEY ON THE BASIS OF THE QUOTATIONS SUBMITTED BY SUCH SUPPLIERS. BASED THEREON, IT WOULD APPEAR TO BE ESTABLISHED THAT COBEY DID INCLUDE THE FEDERAL EXCISE TAX IN THE VEHICLE PRICES FOR LINE ITEMS 22 THROUGH 30, AND THEREFORE, WAS RESPONSIVE TO THE TERMS OF THE INVITATION ON THOSE ITEMS. IT ALSO ERRONEOUSLY INCLUDED THE TAX IN THE UNIT VEHICLE PRICE FOR ITEM 31. AS PREVIOUSLY STATED, COBEY REQUESTED PERMISSION TO CORRECT ITS BID ON ITEM 31; HOWEVER, AS IT WAS IMPOSSIBLE TO DETERMINE MERELY FROM EXAMINATION OF THE BID WHETHER THE MISTAKE WAS IN FAILING TO INCLUDE THE TAX IN LINE ITEMS 22 THROUGH 30 OR BY ERRONEOUSLY INCLUDING THE TAX IN LINE ITEM 31, IT WAS THE POSITION OF ATAC THAT CORRECTION COULD NOT BE PERMITTED ON THE GROUND OF APPARENT MISTAKE. SEE ASPR 2 406.2. ALSO, CORRECTION WAS NOT PERMITTED UNDER ASPR 2-406.3 (3) EVEN THOUGH THE EVIDENCE INDICATED A MISTAKE WAS MADE AND THE AMOUNT INTENDED TO BE BID, SINCE SUCH A CORRECTION WOULD RESULT IN DISPLACING THE LOWER BID BY YOUR FIRM. WE UNDERSTAND ITEM 31 HAS SINCE BEEN AWARDED TO YOUR FIRM.

THE EVIDENCE ALSO INDICATES THAT COBEY INCLUDED THE FEDERAL EXCISE TAX IN THE VEHICLE UNIT PRICES FOR ITEMS 32 THROUGH 36 AND FOR LINE ITEMS 44 AND 45. HOWEVER, SINCE THE INVITATION ERRONEOUSLY STATED THAT LINE ITEMS 35, 44 AND 45 WERE NOT SUBJECT TO FEDERAL EXCISE TAX, IT IS APPARENT THAT YOUR FIRM, THE ONLY BIDDER ON SAID LINE ITEMS EXCEPT FOR COBEY, WAS MISLED AS YOU FAILED TO INCLUDE THE FEDERAL EXCISE TAX FOR SAID LINE ITEMS. ALTHOUGH YOUR FIRM IS LOW ON SAID ITEMS PURSUANT TO THE ERRONEOUS TERMS OF THE INVITATION, IF AN AWARD WERE MADE TO YOUR FIRM YOU WOULD HAVE TO PAY THE FEDERAL EXCISE TAX ON THESE LINE ITEMS AND THEN COULD RECOVER IT FROM THE GOVERNMENT. THIS WOULD RESULT IN THE GOVERNMENT PAYING MORE THAN THE UNIT VEHICLE PRICE BID BY COBEY FOR LINE ITEMS 35, 44 AND 45. THEREFORE ATAC CANCELLED SAID ITEMS FROM THE INVITATION IN THE BEST INTERESTS OF THE GOVERNMENT. WITH LINE ITEMS 35, 44 AND 45 CANCELLED, THE INVITATION PROPERLY PROVIDED THAT LINE ITEMS 32 THROUGH 34, AND 36 WERE SUBJECT TO FEDERAL EXCISE TAX. THE BID SUBMITTED BY COBEY WAS RESPONSIVE TO THOSE LINE ITEMS.

THE SECOND QUESTION RAISED BY YOUR PROTEST IS WHETHER ATAC SHOULD AWARD LINE ITEMS 22 THROUGH 34, AND 36 TO YOUR FIRM RATHER THAN TO COBEY.

IN VIEW OF THE FOREGOING, IT MUST BE CONCLUDED THAT THE COBEY CORPORATION WAS THE LOW RESPONSIVE BIDDER ON LINE ITEMS 22 THROUGH 30; 32 THROUGH 34, AND 36. AS SUCH, COBEY IS ENTITLED TO AN AWARD FOR THOSE LINE ITEMS. ITEM 45 HAS BEEN CANCELLED FROM THE INVITATION AND NO AWARD WILL BE MADE ON THAT ITEM.

SINCE YOU WERE NOT THE LOW RESPONSIVE BIDDER ON ANY OF THE LINE ITEMS, OTHER THAN ITEM 31, WHICH YOU BELIEVE SHOULD BE AWARDED TO YOUR FIRM, YOUR PROTEST IS DENIED.