B-160494, MAR. 3, 1967

B-160494: Mar 3, 1967

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TO CONSOLIDATED DIESEL ELECTRIC COMPANY: FURTHER REFERENCE IS MADE TO THE PROTEST OF CONSOLIDATED DIESEL ELECTRIC COMPANY AGAINST AWARD OF A CONTRACT TO ELECTRO-POWER DIVISION OF IRVIN PARA-SPACE CENTER BY THE SACRAMENTO AIR MATERIEL AREA UNDER INVITATION FOR BIDS NO. WAS INITIATED UNDER TWO STEP FORMAL ADVERTISING PROCEDURES PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-501 ET SEQ. FOUR ACCEPTABLE TECHNICAL PROPOSALS WERE RECEIVED UNDER STEP ONE. THE FOLLOWING BIDS WERE RECEIVED AND OPENED OCTOBER 21: TABLE ELECTRO-POWER (ELECTRO) $3. THE INVITATION INCLUDED THE FOLLOWING PROVISION PURSUANT TO ASPR 2-201 (B) (13): "GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE) EACH BID WILL BE EVALUATED TO THE DESTINATION SPECIFIED BY ADDING TO THE F.O.B.

B-160494, MAR. 3, 1967

TO CONSOLIDATED DIESEL ELECTRIC COMPANY:

FURTHER REFERENCE IS MADE TO THE PROTEST OF CONSOLIDATED DIESEL ELECTRIC COMPANY AGAINST AWARD OF A CONTRACT TO ELECTRO-POWER DIVISION OF IRVIN PARA-SPACE CENTER BY THE SACRAMENTO AIR MATERIEL AREA UNDER INVITATION FOR BIDS NO. FO4606-67-B-3482.

THE SUBJECT PROCUREMENT FOR A MINIMUM QUANTITY OF TWO (PROTOTYPES) AND A MAXIMUM QUANTITY OF 1,000, 10 KW DIESEL ENGINE DRIVEN GENERATOR SETS, SPARE PARTS AND DATA, WAS INITIATED UNDER TWO STEP FORMAL ADVERTISING PROCEDURES PURSUANT TO ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-501 ET SEQ. FOUR ACCEPTABLE TECHNICAL PROPOSALS WERE RECEIVED UNDER STEP ONE. STEP TWO, INVITATION FOR BIDS NO. F04606 67-B-3482, SOLICITED BIDS ON THE BASIS OF DELIVERY F.O.B. ORIGIN FROM THE FOUR FIRMS SUBMITTING THE ACCEPTABLE TECHNICAL PROPOSALS. THE FOLLOWING BIDS WERE RECEIVED AND OPENED OCTOBER 21:

TABLE

ELECTRO-POWER (ELECTRO) $3,505,982

CONSOLIDATED DIESEL (CONDEC) 4,545,844

SUB ELECTRIC CORP. 5,992,815

JOHN B. ADT CO. 7,086,994

WITH REGARD TO EVALUATION OF BIDS, THE INVITATION INCLUDED THE FOLLOWING PROVISION PURSUANT TO ASPR 2-201 (B) (13):

"GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE)

EACH BID WILL BE EVALUATED TO THE DESTINATION SPECIFIED BY ADDING TO THE F.O.B. ORIGIN PRICE ALL TRANSPORTATION COSTS TO SAID DESTINATION. THE GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE) ARE REQUIRED FOR DETERMINATION OF TRANSPORTATION COSTS. BIDDER MUST STATE THE WEIGHTS (AND DIMENSIONS IF APPLICABLE) IN HIS BID OR IT WILL BE REJECTED. IF DELIVERED ITEMS EXCEED THE GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE), THE BIDDER AGREES THAT THE CONTRACT PRICE SHALL BE REDUCED BY AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN THE TRANSPORTATION COSTS COMPUTED FOR EVALUATION PURPOSES BASED ON BIDDER'S GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE) AND THE TRANSPORTATION COSTS THAT SHOULD HAVE BEEN USED FOR BID EVALUATION PURPOSES BASED ON CORRECT SHIPPING DATA. (MAY 1961)"

ALTHOUGH ELECTRO'S BID CONTAINED GUARANTEED MAXIMUM SHIPPING WEIGHTS, NO DIMENSIONS WERE GIVEN. HOWEVER, THE DIMENSIONS OF ELECTRO'S PRODUCT WITHOUT PACKAGING WERE INCLUDED IN ITS TECHNICAL PROPOSAL, WHICH WAS INCORPORATED IN THE INVITATION BY REFERENCE. IN CONNECTION WITH HIS EVALUATION OF THE BIDS THE CONTRACTING OFFICER REQUESTED AND RECEIVED ADVICE FROM THE TRANSPORTATION SUPPORT DIVISION REGARDING THE TRANSPORTATION COSTS APPLICABLE TO ELECTRO'S BID. USING THE UNPACKAGED DIMENSIONS OF ELECTRO'S GENERATOR SET OF 65 INCHES BY 40 INCHES BY 44 INCHES STATED IN ITS PROPOSAL, A PACKAGING SPECIALIST COMPUTED THE PACKAGED DIMENSIONS AS 78 INCHES BY 47 INCHES BY 56 INCHES BY APPLYING THE CRATING REQUIREMENTS OF FEDERAL CONTAINER SPECIFICATION PPP-C-650, STYLE A, TYPE V, CLASS 2, AS CALLED FOR IN AFLC FORM 872, ATTACHMENT NO. 1, WHICH IS A PART OF THE INVITATION FOR BIDS. THIS INFORMATION, ALONG WITH THE GUARANTEED SHIPPING WEIGHT OF 2,500 POUNDS, WAS USED BY MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE PERSONNEL WHO COMPUTED THE MAXIMUM TRANSPORTATION COST AT $11,500. SUBSEQUENT TO BID OPENING ELECTRO SENT A TELEGRAM TO THE PROCURING ACTIVITY GUARANTEEING MAXIMUM PACKAGE DIMENSIONS OF 72 INCHES BY 46 INCHES BY 50 INCHES. SINCE ELECTRO'S BID, AS EVALUATED, THE AIR FORCE HAS MADE AN AWARD TO ELECTRO AFTER BID, AS EVALUATED, THE AIR FORCE HAS MADE AN AWARD TO ELECTRO AFTER NOTIFYING OUR OFFICE ON FEBRUARY 16 OF ITS INTENTION TO DO SO PURSUANT TO ASPR 2-407.9 (B) (2).

IT IS YOUR PRIMARY CONTENTION THAT THE OMISSION OF THE GUARANTEED MAXIMUM SHIPPING DIMENSIONS FROM THE INVITATION FOR BIDS IS A MATERIAL DEVIATION WHICH CANNOT BE WAIVED AND, THEREFORE, ELECTRO'S BID IS NON RESPONSIVE AND MUST BE REJECTED. YOU CONTEND THAT THIS INFORMATION IS MATERIAL SINCE IT GOES TO THE SUBSTANCE OF THE BID AS IT AFFECTS PRICE AND IS ESSENTIAL IN FIXING THE SUCCESSFUL BIDDER'S LIABILITY FOR EXCESS TRANSPORTATION COSTS DUE TO EXCESS SIZE. YOU ALSO CONTEND THAT THE STATEMENT OF DIMENSIONS IN THE FIRST STEP MAY NOT PROPERLY BE USED TO COMPUTE THEORETICAL DIMENSIONS AS THE FIRST STEP WAS CONCERNED ONLY WITH THE METHOD OF COMPLYING WITH TECHNICAL REQUIREMENTS AND NOT THE SPECIFIC REQUIREMENTS OF THE INVITATION FOR BIDS REGARDING PRICE AND OTHER TERMS AND CONDITIONS. MOREOVER, YOU CONTEND THAT THE DIMENSIONS IN THE FIRST STEP ARE NOT GUARANTEED AND COULD BE CHANGED IF NECESSARY TO COMPLY WITH THE SPECIFICATIONS. IT IS ALSO YOUR POSITION THAT ELECTRO HAS NOT EVIDENCED AN INTENTION TO BE LIABLE FOR ANY EXCESS TRANSPORTATION COSTS. AS A FINAL ARGUMENT CONCERNING RESPONSIVENESS, YOU CONTEND THAT OUR DECISION B-155691, FEBRUARY 26, 1965, CITED BY THE AIR FORCE IN SUPPORT OF ITS POSITION, IS NOT ANALOGOUS TO THE CASE AT HAND AS THE ELECTRO BID NEITHER MANIFESTED ITS INTENTION TO BE BOUND BY BOTH WEIGHT AND DIMENSIONS NOR INCLUDED SUFFICIENT DATA TO DETERMINE THE PRECISE DIMENSIONS AS IN THE CITED CASE. WITH REGARD TO THE MORE THAN $1 MILLION DIFFERENCE IN THE BIDS YOU CITE THE PRINCIPLE OFTEN STATED BY OUR OFFICE THAT IT IS INFINITELY MORE IN THE PUBLIC INTEREST TO MAINTAIN THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM THAN TO GAIN A PECUNIARY ADVANTAGE IN A SPECIFIC CASE BY VIOLATION THEREOF.

IN A LETTER DATED JANUARY 11, 1967, TO THE PROCURING ACTIVITY, CONDEC MAKES THE FURTHER CONTENTION THAT PROCUREMENT OF THESE GENERATORS WOULD BE CONTRARY TO THE POLICIES RECOMMENDED IN THE REPORT OF SEPTEMBER 28, 1966, OF THE AD HOC STUDY GROUP ON ENGINE GENERATORS, APPOINTED BY THE ASSISTANT SECRETARY OF DEFENSE FOR INSTALLATION AND LOGISTICS TO STUDY PROBLEMS EXPERIENCED IN THE PROCUREMENT OF GENERATORS. IT IS STATED THAT THIS PROCUREMENT UNNECESSARILY CALLS FOR A TYPE OF GENERATOR NEVER BEFORE PRODUCED WHICH IS CONTRARY TO THE STUDY GROUP'S RECOMMENDATION. FURTHERMORE, IT IS STATED THAT AWARD SHOULD NOT BE MADE TO ELECTRO AS IT HAS HAD NO EXPERIENCE IN THIS FIELD AND THE STUDY GROUP HAS SPECIFICALLY ADMONISHED AGAINST AN AWARD IN THESE CIRCUMSTANCES.

THE SHORT ANSWER TO THE CONTENTIONS IN THE PRECEDING PARAGRAPH IS THAT THE STUDY GROUP'S REPORT HAS NOT RECEIVED THE NECESSARY APPROVAL OR BEEN IMPLEMENTED IN DEPARTMENT OF DEFENSE DIRECTIVES OR ASPR. UNTIL SUCH TIME AS IT DOES BECOME THE POLICY OF THE DEPARTMENT OF DEFENSE, THE DRAFTING OF GENERATOR SPECIFICATIONS TO MEET THE NEEDS OF THE GOVERNMENT AND THE DETERMINATION OF WHETHER EQUIPMENT OFFERED CONFORMS TO THOSE SPECIFICATIONS ARE MATTERS FOR THE PROCUREMENT AGENCY. THE QUESTION OF ELECTRO'S RESPONSIBILITY IS FOR DETERMINATION UNDER PRESENT REGULATIONS WHICH ARE FOUND IN ASPR 1-900 ET SEQ. PURSUANT TO THESE REGULATIONS THE CONTRACTING OFFICER REQUESTED A PREAWARD SURVEY, WHICH WAS AFFIRMATIVE ON THE QUESTION OF ELECTRO'S RESPONSIBILITY AND RECOMMENDED AWARD TO IT. IN THE ABSENCE OF EVIDENCE THAT THIS DETERMINATION WAS ARBITRARY, CAPRICIOUS, OR NOT BASED UPON SUBSTANTIAL EVIDENCE, WE MUST ACCEPT ITS VALIDITY.

THE REMAINING QUESTION FOR CONSIDERATION IN DETERMINING THE VALIDITY OF THE AWARD TO ELECTRO IS THE EFFECT OF ITS FAILURE TO STATE GUARANTEED SHIPPING DIMENSIONS IN THE SPACE PROVIDED IN THE INVITATION AS REQUIRED BY THE GMSWD CLAUSE, WHICH YOU CONTEND REQUIRED REJECTION OF ITS BID AS NONRESPONSIVE. A PROVISION IN AN INVITATION REQUIRING BIDDERS TO STATE GUARANTEED MAXIMUM SHIPPING WEIGHTS AND DIMENSIONS IS INTENDED TO FIX THE TOTAL MAXIMUM COST TO THE GOVERNMENT OF A PARTICULAR PROCUREMENT AND, WHERE BIDS ARE REQUESTED ON AN F.O.B. ORIGIN BASIS, THE COST OF TRANSPORTATION SHOULD BE CONSIDERED AS AN ELEMENT OF BID EVALUATION. THUS, WHERE THE PROCURING ACTIVITY IS UNABLE TO DETERMINE FROM THE BID THE MAXIMUM POSSIBLE WEIGHTS, AND DIMENSIONS WHERE NECESSARY, OF THE ITEMS BEING PROCURED, AND THEREBY COMPUTE THE TRANSPORTATION COSTS AND MAXIMUM COST OF THE PROCUREMENT, THE BID MUST BE REJECTED AS NONRESPONSIVE. COMP. GEN. 819. HOWEVER, WE HAVE HELD THAT THE FAILURE OF A BIDDER TO COMPLY EXACTLY WITH THE GMSWD CLAUSE DOES NOT REQUIRE REJECTION OF HIS BID WHERE THE BID INCLUDES SUFFICIENT INFORMATION FOR DETERMINING THE MAXIMUM POSSIBLE TRANSPORTATION COSTS AND EVALUATION OF THE BIDS CONCLUSIVELY SHOWS THAT HIS BID IS LOWER THAN ANY OTHER. SEE B-155691, FEBRUARY 26, 1965.

IN THE INSTANT CASE, WE DO NOT BELIEVE ELECTRO'S FAILURE TO INCLUDE DIMENSIONS IN THE GMSWD CLAUSE REQUIRED REJECTION OF ITS BID AS THE INFORMATION NECESSARY TO DETERMINE THE MAXIMUM POSSIBLE TRANSPORTATION COSTS IS INCLUDED IN ITS BID, ALTHOUGH IT IS GREATER THAN THE $11,500 FIGURE COMPUTED BY THE AGENCY. THE INVITATION PROVIDES BOTH IN PART 1, PAGE 11, AND PART 9, PAGE 17, THAT PRESERVATION, PACKAGING, PACKING AND MARKING SHALL BE IN ACCORDANCE WITH AFLC 53A AND AFLC 872, WITH ATTACHMENT NO. 1, BOTH ATTACHED THERETO AND MADE A PART THEREOF. ATTACHMENT NO. 1 TO AFLC 872 PROVIDES THAT EACH GENERATOR SET SHALL BE PACKED IN CONTAINERS IN ACCORDANCE WITH STYLE A, TYPE V, CLASS 2 OF FEDERAL SPECIFICATION PPP-C- 650. AN EXAMINATION OF THIS SPECIFICATION SHOWS THAT THE CRATE CALLED FOR ACCOMMODATES A MAXIMUM NET LOAD OF 2,500 POUNDS AND HAS MAXIMUM INSIDE DIMENSIONS OF 12 FEET BY 6 FEET BY 6 FEET. THE SIZE OF ALL LUMBER AND EXACT CONSTRUCTION OF THE SPECIFIED CRATE ARE ALSO GIVEN. IT IS CLEAR, THEREFORE, THAT COMPLIANCE WITH THE PACKAGING SPECIFICATIONS, WHICH ARE A BINDING PART OF THE CONTRACT, LIMITS THE WEIGHT AND SIZE OF THE CRATES AND THEREBY FIXES THE MAXIMUM POSSIBLE TRANSPORTATION COSTS WHICH THE GOVERNMENT MUST BEAR. IF ELECTRO SHOULD DELIVER THE GENERATOR SETS OTHER THAN IN A CRATE MEETING THE SPECIFICATIONS REFERENCED IN THE INVITATION, AND TRANSPORTATION COSTS WERE THEREBY INCREASED OVER AN AMOUNT COMPUTED IN ACCORDANCE WITH THE ABOVE WEIGHT AND DIMENSIONS, BOTH THE LIABILITY OF ELECTRO AND AMOUNT THEREOF WOULD BE CLEARLY FIXED BY THE CONTRACT. ALTHOUGH THESE COSTS MAY BE DOUBLE THOSE COMPUTED BY THE AGENCY AND ARE CONSIDERABLY MORE THAN THOSE GUARANTEED BY YOUR CLIENT, THEIR ADDITION TO ELECTRO'S BID PRICE CANNOT POSSIBLY RESULT IN A CHANCE IN THE RELATIVE STANDING OF THE BIDDERS AND IT WILL STILL BE VERY SUBSTANTIALLY LOWER THAN YOUR CLIENT. OF COURSE, WE DO NOT BELIEVE THERE IS ANY REASONABLE POSSIBILITY THAT THE PACKAGED GENERATOR SETS WILL APPROACH THE MAXIMUM SPECIFICATION SIZE.

ALTHOUGH YOU HAVE ATTEMPTED TO DISTINGUISH THE INSTANT CASE FROM THE SITUATION IN B-155691, SUPRA, WE DO NOT BELIEVE THE DISTINCTIONS YOU HAVE POINTED OUT ARE MATERIAL. THE NUMBER OF CRATES (1000) IS FIXED IN THE INSTANT CASE AS PRECISELY AS THE NUMBER OF CONTAINERS IN THE CITED DECISION. THE MAXIMUM WEIGHT AND DIMENSIONS ARE LIKEWISE PRECISELY FIXED. ALTHOUGH ELECTRO DID NOT WRITE THE WORD "VARIOUS" IN THE SPACE PROVIDED FOR DIMENSIONS AS THE BIDDER HAD DONE IN THE CITED CASE, IT IS NOT LESS BOUND TO FURNISH 1000 GENERATOR SETS PACKAGED IN ACCORDANCE WITH THE SPECIFICATIONS THAN WAS THE BIDDER IN THE CITED CASE BOUND TO FURNISH 252 UNITS AND CONTAINERS WEIGHING A MAXIMUM OF 110 POUNDS AND HAVING INSIDE DIMENSIONS OF A MAXIMUM OF 100 INCHES.

WE HAVE EXAMINED THE OTHER DECISIONS OF OUR OFFICE CITED BY YOU, BUT BELIEVE A DISCUSSION OF THEM IS UNNECESSARY IN VIEW OF THE FOREGOING.

ACCORDINGLY, WE FIND NO BASIS UPON WHICH WE MAY PROPERLY OBJECT TO THE AWARD OF A CONTRACT TO ELECTRO AND YOUR PROTEST MUST, THEREFORE, BE DENIED.