B-160727, APR. 4, 1967

B-160727: Apr 4, 1967

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO ULTRASONIC INDUSTRIES: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 4. THE SUBJECT INVITATION WAS ISSUED ON NOVEMBER 17. BIDS WERE REQUESTED FOUR WAYS. THAT IS. THE IFB STATED UNDER BIDDER'S NOTE (PAGE 6) THAT BIDS WERE TO BE SUBMITTED ON THE TOTAL QUANTITY TO BE CONSIDERED FOR AWARD AND THAT ANY AWARD WOULD BE MADE TO ONE BIDDER BASED ON THE LOWEST OVERALL COST TO THE GOVERNMENT. THE FOLLOWING TWO BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION: CHART ITEM KLEER FLO ULTRASONIC 1. THE TWO BIDS WERE EVALUATED AS FOLLOWS: CHART "ITEM 1 ITEM 2 ITEM 3 ITEM 4 "KLEER-FLO $167.66 $159.91 $167.16 $159.41 LESS DISCOUNT (1 PERCENT) 1.68 1.60 1.68 1.59 $158.31 $157.82 PLUS FREIGHT5.525 5.525 TOTAL $165.98 $163.835 $165.48 $163.345 "ULTRASONIC $164.50 $160.00 $164.50 $160.00 LESS DISCOUNT ( 1/4 OF 1 PERCENT) .41 .40 .41 .40 $159.60 PLUS FREIGHT 7.85 7.85 TOTAL $164.09 $167.45 $164.09 $167.45 "KLEER-FLO'S BID PRICE ON ITEM 4.

B-160727, APR. 4, 1967

TO ULTRASONIC INDUSTRIES:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JANUARY 4, 1967, PROTESTING THE AWARD OF A CONTRACT TO THE KLEER FLO COMPANY BY THE DEPARTMENT OF THE ARMY UNDER INVITATION FOR BIDS (IFB) NO. DAAG-11-67-B 0116.

THE SUBJECT INVITATION WAS ISSUED ON NOVEMBER 17, 1966, CALLING FOR 523 DEGREASERS, SOLVENT, TANK IMMERSION, IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-D-12491B, TYPE I, PACKING TO BE IN ACCORDANCE WITH THE LEVEL "A" REQUIREMENTS OF THAT SPECIFICATION. BIDS WERE REQUESTED FOUR WAYS, THAT IS, WITH FIRST ARTICLE TESTING F.O.B. DESTINATION AND F.O.B. ORIGIN AND WITHOUT FIRST ARTICLE TESTING F.O.B. DESTINATION AND F.O.B. ORIGIN. THE IFB STATED UNDER BIDDER'S NOTE (PAGE 6) THAT BIDS WERE TO BE SUBMITTED ON THE TOTAL QUANTITY TO BE CONSIDERED FOR AWARD AND THAT ANY AWARD WOULD BE MADE TO ONE BIDDER BASED ON THE LOWEST OVERALL COST TO THE GOVERNMENT. THE IFB ALSO STATED ON PAGE 8 THAT EVALUATION OF F.O.B. ORIGIN BIDS WOULD BE MADE ON THE BASIS OF BID PRICES PLUS TRANSPORTATION COST TO THE GOVERNMENT FROM BIDDERS' SHIPPING POINTS TO THE CITED DESTINATIONS USING A GROSS SHIPPING WEIGHT OF 200 POUNDS AND 2.40 CUBIC INCHES PER UNIT.

THE FOLLOWING TWO BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION:

CHART

ITEM KLEER FLO ULTRASONIC 1. F.O.B. DESTINATION, WITH

TESTING $167.66 EACH $164.50 EACH 2. F.O.B. ORIGIN, WITH TESTING 159.91 160.00 3. F.O.B. DESTINATION, LESS

TESTING 167.16 164.50 4. F.O.B. ORIGIN, LESS TESTING 159.41 160.00

LESS CASH DISCOUNT, 20 DAYS 1 PERCENT ONE-FOURTH

OF 1 PERCENT

IN ITS BID ON PAGE 10 OF THE IFB UNDER PARAGRAPH "WAIVER OF FIRST ARTICLE TESTING" KLEER FLO STATED THAT ITS PRODUCT HAS BEEN APPROVED BY THE GOVERNMENT UNDER CONTRACT NO. DA-11-070-AMC-1415 (W), UNDER DATE OF JANUARY 14, 1966.

BASED UPON A TRANSPORTATION EVALUATION FURNISHED BY THE TRANSPORTATION SPECIALIST OF THE DEPARTMENT OF THE ARMY AND WAIVER OF THE TESTING REQUIREMENTS FOR KLEER FLO, THE TWO BIDS WERE EVALUATED AS FOLLOWS:

CHART

"ITEM 1 ITEM 2 ITEM 3 ITEM 4 "KLEER-FLO $167.66 $159.91 $167.16 $159.41

LESS DISCOUNT

(1 PERCENT) 1.68 1.60 1.68 1.59

$158.31 $157.82

PLUS FREIGHT5.525 5.525

TOTAL $165.98 $163.835 $165.48 $163.345 "ULTRASONIC $164.50 $160.00 $164.50 $160.00

LESS DISCOUNT

( 1/4 OF 1 PERCENT) .41 .40 .41 .40

$159.60

PLUS FREIGHT 7.85 7.85

TOTAL $164.09 $167.45 $164.09 $167.45

"KLEER-FLO'S BID PRICE ON ITEM 4, F.O.B. ORIGIN, WITHOUT TESTING, WAS EVALUATED AT $163.345, $0.745 PER UNIT LOWER THAN THE F.O.B. DESTINATION PRICE OF ULTRASONIC ON ITEM 1. AWARD WAS ACCORDINGLY MADE ON 16 DECEMBER 1966 TO KLEER-FLO AS THE LOWEST RESPONSIBLE, RESPONSIVE BIDDER AT A UNIT PRICE OF $159.41, F.O.B. ORIGIN, TESTING WAIVED, TOTAL DOLLAR VALUE $83,371.43.'

IN YOUR LETTER OF JANUARY 4, YOU STATE THAT THE EVALUATION FORMULA SET FORTH IN THE INVITATION IS ERRONEOUS; THAT THE TRUE CUBIC MEASUREMENT IS 57,600 CUBIC INCHES AND THE ACTUAL WEIGHT OF THE ITEM IS 300 POUNDS; AND THAT, BASED ON THESE MEASUREMENTS YOUR BID IS THE LOW BID. YOU ALSO CONTEND THAT THE GOVERNMENT HAD NO RIGHT TO WAIVE THE TESTING REQUIREMENT FOR KLEER FLO BECAUSE IT HAD NEVER DELIVERED A COMPARABLE DEGREASER WHICH HAD BEEN PREVIOUSLY TESTED.

AS CONTENDED BY YOU, THE ADMINISTRATIVE OFFICE REPORTS THAT THE WEIGHT AND CUBAGE OF THE SUPPLIES SHOWN IN THE EVALUATION FORMULA IN THE INVITATION WERE INCORRECT. CONSEQUENTLY, IT SEEMS APPARENT THAT THE USE OF A WEIGHT OF 200 POUNDS PER ITEM IN EVALUATING F.O.B. ORIGIN BIDS WOULD NOT REFLECT THE TRUE COST TO THE GOVERNMENT OF DELIVERY OF THE ITEM TO DESTINATION. FURTHERMORE, SINCE THE WEIGHT OF THE ITEM WOULD VARY BETWEEN BIDDERS, THE INVITATION SHOULD HAVE INCLUDED A PROVISION REQUIRING BIDDERS TO STATE A GUARANTEED MAXIMUM SHIPPING WEIGHT AND THE SUCCESSFUL BIDDER TO ABSORB THE TRANSPORTATION COSTS FOR ANY EXCESS WEIGHT. 39 COMP. GEN. 684, 695.

HOWEVER, WHILE THE INVITATION WAS DEFECTIVE IT DOES NOT APPEAR THAT COMPETITION WAS ADVERSELY AFFECTED OR THAT ANY BIDDER OBTAINED AN UNDUE ADVANTAGE BECAUSE OF THE DEFECT. IN SUCH CIRCUMSTANCES WE HAVE PERMITTED AWARD WITH THE OMISSION OR CORRECTION OF THE PROVISION WHICH WOULD OTHERWISE RENDER THE AWARD INVALID. 43 COMP. GEN. 23, 26; 40 COMP. GEN. 561, 563.

IN THIS CASE, THE WEIGHT OF THE KLEER FLO UNIT, AS EVIDENCED UNDER A PREVIOUS CONTRACT WHICH CONTAINED A GUARANTEED SHIPPING DATA CLAUSE, IS 246 POUNDS. SINCE YOU STATE THAT THE WEIGHT OF YOUR UNIT IS 300 POUNDS AND SINCE YOUR FREIGHT CHARGES FOR EQUAL WEIGHT ARE HIGHER THAN THOSE OF KLEER FLO, AND YOUR F.O.B. ORIGIN PRICE IS HIGHER THAN THAT OF KLEER FLO, IT IS APPARENT THAT YOUR EVALUATED F.O.B. ORIGIN PRICE NECESSARILY IS HIGHER THAN THE EVALUATED F.O.B. ORIGIN PRICE OF KLEER FLO. ALSO, YOUR F.O.B. DESTINATION PRICE IS HIGHER THAN THE F.O.B. ORIGIN PRICE OF KLEER FLO EVALUATED FOR FREIGHT ON THE BASIS OF THE ACTUAL WEIGHT OF 246 POUNDS PER UNIT. IN VIEW THEREOF, WE WOULD NOT BE JUSTIFIED IN DISTURBING THE AWARD AS MADE.

REGARDING YOUR CONTENTION THAT FIRST ARTICLE TESTING WAS IMPROPERLY WAVIED FOR KLEER FLO, THE ADMINISTRATIVE OFFICE REPORTS THAT ON JANUARY 14, 1966, CONTRACT NO. DA-11-070-AMC-1415 (W) WAS AWARDED TO KLEER FLO FOR 621 DEGREASERS TO BE FURNISHED TO THE SAME SPECIFICATION REQUIREMENTS, INCLUDING LEVEL "A" PACKING, AS THE 523 UNITS ON THE INSTANT CONTRACT. THE FIRST ARTICLE TESTING REQUIREMENTS WERE WAIVED BECAUSE PRIOR APPROVAL OF PREVIOUS UNITS HAD BEEN GRANTED ON CONTRACT NO. DA-11-070-AMC-683 (W). TEST REPORT, DATED NOVEMBER 1964, SIGNED BY THE CHICAGO PROCUREMENT DISTRICT, APPROVED KLEER FLO'S UNIT FURNISHED UNDER CONTRACT NO. DA-11-070 -AMC-683 (W) TO THE SAME SPECIFICATION AS THE INSTANT CONTRACT. IN VIEW THEREOF AND HAVING REGARD FOR THE PROVISIONS OF THE INVITATION REGARDING THE WAIVER OF FIRST ARTICLE TESTING WE THINK THAT THE ADMINISTRATIVE ACTION IN WAIVING THE TESTS WAS LEGALLY PROPER.