B-161485, SEP. 21, 1967

B-161485, SEP. 21, 1967

BIDS - DEVIATIONS - DELIVERY POSITIONS DECISION TO AMERICAN TRADING CO., INC., RE PROTEST OF CONTRACT BY GOVT. OF KOREA TO C.A. BEAN CO. FOR STEEL TOWERS FINANCED BY AID. A LOW BIDDER WHO DID NOT SUBMIT A REVISED BID AS DID THE ONLY OTHER BIDDER WHEN EXCEPTION TO A REQUIREMENT FOR GUARANTEED WEIGHT IN THE ORIGINAL INVITATION WAS MADE AND WHO QUESTIONS THE REQUIREMENT IS ADVISED THAT THE INVITATION WAS SUFFICIENTLY DEFINITE TO PERMIT BIDDING ON AN EQUAL BASIS AND THE FACTORS THAT WOULD BE CONSIDERED IN EVALUATION, AND THEREFORE NO BASIS IS PRESENTED ON WHICH TO QUESTION THE AWARD.

TO AMERICAN TRADING COMPANY, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MAY 10, 1967, PROTESTING THE AWARD OF A CONTRACT BY THE OFFICE OF SUPPLY, GOVERNMENT OF THEREPUBLIC OF KOREA (OSROK), TO THE C.A. BEAN COMPANY (CABCO INTERNATIONAL INCORPORATED, SAN FRANCISCO, CALIFORNIA), FOR THE FURNISHING OF UNASSEMBLED GALVANIZED STRUCTURAL STEEL TOWERS REQUIRED FOR 161 KV ELECTRICAL TRANSMISSION LINES ON A PROJECT OF THE KOREAN ELECTRIC COMPANY (KECO).

THE CONTRACT WAS AWARDED TO CABCO ON APRIL 29, 1967, PURSUANT TO INVITATION FOR BIDS NO. AID/L-6209-P DATED NOVEMBER 24, 1966, AS AMENDED. THE PROCUREMENT IS TO BE FINANCED UNDER AGENCY FOR INTERNATIONAL DEVELOPMENT LOAN NO. 489-H-023.

THE PRINCIPAL BASIS FOR YOUR PROTEST IS THAT THE STEEL TOWERS TO BE DELIVERED UNDER THE CONTRACT WILL BE BILLED AT A PRICE WHICH IS $63.80 HIGHER THAN THE PRICE PER TON WHICH WAS QUOTED IN YOUR BID.

THE INVITATION FOR BIDS, ISSUED ON NOVEMBER 24, 1966, CALLED FOR FURNISHING GALVANIZED STRUCTURAL STEEL FOR TOWERS CONFORMING TO STATED CRITERIA. WITHIN THE STATED CRITERIA THE DESIGN WAS THE RESPONSIBILITY OF THE BIDDER. BIDS WERE REQUIRED TO BE EXPRESSED IN TERMS OF PRICE PER TON OF STEEL, PLUS SHIPPING, INSURANCE AND INSPECTION. THE INVITATION SET FORTH KECO'S ESTIMATED STEEL REQUIREMENT OF APPROXIMATELY 3,500 SHORT TONS AND ADVISED THAT EVALUATION WOULD BE BASED ON SUPPLYING 3,500 SHORT TONS OF STEEL. BIDDERS WERE REQUIRED TO GUARANTEE THAT THE BILLED WEIGHT OF ALL TOWERS WOULD NOT EXCEED 3,900 SHORT TONS.

THE ORIGINALLY SCHEDULED BID OPENING DATE OF DECEMBER 15, 1966, WAS EXTENDED TO JANUARY 9, 1967. TWO BIDS WERE RECEIVED AS OF SUCH DATE. ONE OF THE BIDS (HEREAFTER REFERRED TO AS YOUR BID) WAS SUBMITTED BY YOUR AFFILIATE, AMERICAN TRADING COMPANY, KOREA, LTD., LISTING YOUR COMPANY AS SUPPLIER AND UNITED STATES STEEL INTERNATIONAL (NEW YORK), INCORPORATED, AS MANUFACTURER. THE OTHER BID WAS SUBMITTED BY CABCO, LISTING ANCHOR METALS OF HURST, TEXAS, AS MANUFACTURER. YOUR BID WAS SUBMITTED ON AN ALTERNATIVE BASIS AND THE PRINCIPAL BID WAS IN THE TOTAL AMOUNT OF $1,474,845, WHICH INCLUDED A COST PER TON OF $376.20 FOR 3,500 SHORT TONS OF STEEL PLUS TRANSPORTATION, INSPECTION AND INSURANCE COSTS OF $158,145. THE ALTERNATE BID AT $1,468,325 DIFFERED ONLY IN SLIGHTLY LOWER INSURANCE COST. THE BID OF CABCO WAS IN THE TOTAL AMOUNT OF $1,695,232, WHICH INCLUDED 3,500 SHORT TONS OF STEEL AT $440 PER TON FOR A TOTAL OF $1,540,000 AND TRANSPORTATION, INSPECTION AND INSURANCE COSTS OF $155,232.

SINCE BOTH BIDS TOOK EXCEPTION TO THE REQUIRED GUARANTEE THAT THE BILLED WEIGHT OF ALL TOWERS WOULD NOT EXCEED 3,900 SHORT TONS, THEY WERE CONSIDERED TO BE NONRESPONSIVE. BY LETTER DATED FEBRUARY 16, 1967, THE TWO BIDDERS WERE REQUESTED TO SUBMIT REVISED BIDS NOT LATER THAN 2:00 .M., MARCH 8, 1967, UNLESS AN EARLIER DATE WAS AGREED TO BY ALL PARTIES. THE LETTER WAS ACCOMPANIED BY REVISED SPECIAL TERMS AND CONDITIONS WHICH INCLUDED PROVISIONS THAT A LATE BID WOULD NOT BE CONSIDERED AND THAT A FAILURE TO GUARANTEE A BILLING WEIGHT OF NOT TO EXCEED 3,900 SHORT TONS WOULD BE CAUSE FOR REJECTION OF A BID. THE REVISED SPECIAL TERMS AND CONDITIONS CONTAINED AN ADDITIONAL PROVISION CONCERNING THE EXTENT TO WHICH GUARANTEED DELIVERY DATES WOULD BE CONSIDERED IN EVALUATING BIDS.

CABCO SUBMITTED A FULLY RESPONSIVE BID ON MARCH 8, 1967, QUOTING THE SAME AMOUNTS AS OFFERED IN ITS PREVIOUS BID OF JANUARY 9, 1967. BY LETTER DATED MARCH 9, 1967, YOU DECLINED TO SUBMIT A REVISED BID BUT INDICATED THAT YOUR PREVIOUSLY GUARANTEED DELIVERY DATE COULD BE ACCELERATED FROM 545 DAYS TO 450 DAYS AFTER RECEIPT OF NOTIFICATION OF THE ESTABLISHMENT OF A SATISFACTORY LETTER OF CREDIT. THE LETTER OF MARCH 9, 1967, WAS RECEIVED TOO LATE FOR CONSIDERATION UNDER THE TERMS AND CONDITIONS OF THE AMENDED INVITATION FOR BIDS. IN ADDITION, THERE WAS STILL NO COMPLIANCE WITH THE REQUIREMENT FOR A GUARANTEED MAXIMUM BILLING WEIGHT NOT TO EXCEED 3,900 SHORT TONS. SINCE YOUR BID REMAINED NON-RESPONSIVE, THERE WAS NO BASIS ON WHICH IT COULD BE CONSIDERED FOR AWARD.

THE RESONABLENESS OF USING 3,500 SHORT TONS OF STEEL IN THE EVALUATION OF BIDS AND OF REQUIRING A GUARANTEED MAXIMUM BILLING WEIGHT OF 3,900 SHORT TONS HAS BEEN QUESTIONED.

OUR OFFICE HAS CONSISTENTLY TAKEN THE POSITION THAT THE DRAFTING OF SPECIFICATIONS TO MEET THE NEEDS OF THE GOVERNMENT IS A MATTER PRIMARILY WITHIN THE JURISDICTION OF THE PROCURING AGENCY BUT THAT THE SPECIFICATIONS MUST BE SUFFICIENTLY DEFINITE TO PERMIT THE PREPARATION AND EVALUATION OF BIDS ON A COMMON BASIS, 36 COMP. GEN. 380; 43 ID. 544. HOWEVER, THE ADVERTISING STATUTES DO NOT PRECLUDE THE USE OF PERFORMANCE TYPE SPECIFICATIONS AND THE PROCURING AGENCY CONCERNED DETERMINES IN A PARTICULAR CASE WHETHER IT WOULD BE IN THE BEST INTERESTS OF THE GOVERNMENT TO SOLICIT BIDS ON THE BASIS THAT THE SUCCESSFUL BIDDER WOULD BE RESPONSIBLE FOR THE PREPARATION OF DESIGNS AND DETAILED DRAWINGS WHICH WOULD MEET THE PERFORMANCE REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS.

WHETHER OR NOT IT WOULD HAVE BEEN PRACTICABLE OR FEASIBLE TO SPECIFY THE WEIGHTS OF THE TOWERS AND ALL TOWER DETAILS IN THIS CASE, WE FIND NO BASIS FOR CONCLUDING THAT THE INVITATION FOR BIDS WAS NOT SUFFICIENTLY DEFINITE TO PERMIT BIDDING ON AN EQUAL BASIS. IN OUR OPINION, THE INVITATION PROVIDED SUFFICIENT INFORMATION CONCERNING THE PURCHASER'S REQUIREMENTS AND THE FACTORS WHICH WOULD BE FOR CONSIDERATION IN BID EVALUATION.

WE ARE ADVISED BY AID THAT CABCO WILL BE REQUIRED TO COMPLY FULLY WITH THE REQUIREMENTS OF THE SPECIFICATIONS IN THE DESIGN AND FABRICATION OF THE TOWERS, AND AID HAS AGREED TO GIVE US A REPORT ON THIS ASPECT OF THE MATTER. THIS, OF COURSE, IS A QUESTION OF CONTRACT ADMINISTRATION, AND DOES NOT AFFECT THE RESPONSIVENESS OF CABCO'S BID.