B-163186, FEB. 21, 1968

B-163186: Feb 21, 1968

Additional Materials:

Contact:

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

 

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

ORIGIN BID WHICH WAS EVALUATED ON BASIS OF TRANSPORTATION RATE IN EFFECT ON BID OPENING RATHER THAN A LOWER SECTION 22 RATE THAT WAS ESTABLISHED 46 DAYS AFTER OPENING. WAS A PROPERLY EVALUATED BID. TO CARRIER AIR CONDITIONING COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 28. PROTESTING AGAINST THE MANNER IN WHICH BIDS WERE EVALUATED UNDER INVITATION FOR BIDS NO. THE INVITATION WAS ISSUED ON SEPTEMBER 13. FOUR BIDS WERE RECEIVED. THE BIDS WERE EVALUATED ON THE BASIS OF THE FREIGHT RATES IN EFFECT AT THE TIME OF BID OPENING WITH THE RESULT THAT THE COST TO THE GOVERNMENT UNDER YOUR BID WOULD BE $348. SINCE KECO WAS THE LOW BIDDER ON ITEM 2 AND ITS EVALUATED BID FOR ITEM 3 WAS LESS THAN $50 GREATER THAN YOUR EVALUATED BID FOR ITEM 3.

B-163186, FEB. 21, 1968

BIDS - DELIVERY PROVISION DECISION TO CARRIER AIR CONDITIONING COMPANY DENYING PROTEST AGAINST REJECTION OF BID ON BASIS OF IMPROPER TRANSPORTATION RATE USED IN EVALUATION. AN F.O.B. ORIGIN BID WHICH WAS EVALUATED ON BASIS OF TRANSPORTATION RATE IN EFFECT ON BID OPENING RATHER THAN A LOWER SECTION 22 RATE THAT WAS ESTABLISHED 46 DAYS AFTER OPENING, WAS A PROPERLY EVALUATED BID.

TO CARRIER AIR CONDITIONING COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 28, 1967, PROTESTING AGAINST THE MANNER IN WHICH BIDS WERE EVALUATED UNDER INVITATION FOR BIDS NO. F41608-68-B-0158, ISSUED BY THE SAN ANTONIO AIR MATERIEL AREA, KELLY AIR FORCE BASE, TEXAS.

THE INVITATION WAS ISSUED ON SEPTEMBER 13, 1967, REQUESTING BIDS FOR FURNISHING THREE TYPES OF AIR CONDITIONERS UNDER ITEMS 1, 2 AND 3 AND ESTABLISHED OCTOBER 26, 1967, AS THE BID OPENING DATE. ITEM 3 CALLED FOR BIDS ON AN INCREMENTAL BASIS FOR QUANTITIES OF 24 THROUGH 125 AIR CONDITIONERS. THE EVALUATION PROVISION OF THE INVITATION, PART XV, SECTION II OF THE SCHEDULE, INCLUDED A REQUIREMENT FOR THE ADDITION TO THE BID PRICES OF $50 AS THE COST OF AWARDING AND ADMINISTERING AN ADDITIONAL CONTRACT AND ALSO REQUIRED THE INCLUSION OF TRANSPORTATION COSTS IN THE BID PRICE EVALUATED. THE INVITATION FURTHER CALLED FOR THE FURNISHING OF A GUARANTEED SHIPPING WEIGHT FOR ITEM 3 AND PROVIDED FOR DELIVERY OF THE SUPPLIES AT A RATE OF 10 UNITS PER MONTH, F.O.B. ORIGIN, CONSIGNED TO KELLY AIR FORCE BASE.

FOUR BIDS WERE RECEIVED. YOUR COMPANY OFFERED TO DELIVER 105 AIR CONDITIONERS REQUIRED UNDER ITEM 3 WITH A GUARANTEED SHIPPING WEIGHT OF440 POUNDS F.O.B. SYRACUSE, NEW YORK, AT A TOTAL PRICE OF $346,080. KECO INDUSTRIES, INC., OFFERED TO DELIVER THESE SUPPLIES WITH A GUARANTEED UNIT SHIPPING WEIGHT OF 540 POUNDS F.O.B. CINCINNATI, OHIO, AT A TOTAL PRICE OF $346,500. THE BIDS WERE EVALUATED ON THE BASIS OF THE FREIGHT RATES IN EFFECT AT THE TIME OF BID OPENING WITH THE RESULT THAT THE COST TO THE GOVERNMENT UNDER YOUR BID WOULD BE $348,514.74 AND UNDER THE BID OF KECO $348,561.18 OR $46.44 MORE. SINCE KECO WAS THE LOW BIDDER ON ITEM 2 AND ITS EVALUATED BID FOR ITEM 3 WAS LESS THAN $50 GREATER THAN YOUR EVALUATED BID FOR ITEM 3, THE CONTRACT FOR BOTH ITEMS WAS AWARDED ON DECEMBER 20, 1967, TO KECO UNDER THE APPLICATION OF THE $50 RULE WHEN MAKING MULTIPLE AWARDS.

IN YOUR LETTER OF DECEMBER 28, 1967, YOU CONTEND THAT THE TRANSPORTATION RATE USED IN EVALUATING YOUR BID WAS NOT PROPER AND THAT A LOWER RATE, EFFECTIVE DECEMBER 11, 1967, ESTABLISHED UNDER SECTION 22 OF THE INTERSTATE COMMERCE ACT, 49 U.S.C. 22, SHOULD HAVE BEEN USED IN EVALUATING YOUR BID WHICH WOULD HAVE MADE YOUR COMPANY THE LOW BIDDER. IT IS THE POSITION OF THE CONTRACTING OFFICER THAT SINCE THE TARIFF WAS NOT IN EXISTENCE AT THE TIME OF BID OPENING THE REGULATIONS AND THE DECISIONS OF OUR OFFICE PRECLUDE THE USE OF THE SECTION 22 RATE WHICH WAS ESTABLISHED 46 DAYS AFTER THE BIDS WERE OPENED.

PARAGRAPH 1-1313.1 OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES THAT IN THE EVALUATION OF F.O.B. ORIGIN BIDS THE BEST AVAILABLE TRANSPORTATION RATES IN EFFECT AND ON FILE OR PUBLISHED AT THE DATE OF THE BID OPENING SHALL BE USED IN THE EVALUATION AND THAT TRANSPORTATION RATES PUBLISHED AFTER BID OPENING SHALL NOT BE USED UNLESS THEY COVER TRAFFIC FOR WHICH NO APPLICABLE TRANSPORTATION RATE WAS IN EXISTENCE ON DATE OF BID OPENING.

IN OUR DECISION PUBLISHED IN 39 COMP. GEN. 774, WE CONSIDERED A SIMILAR QUESTION REGARDING THE PROPRIETY OF EVALUATING A BID ON THE BASIS OF A SECTION 22 RATE WHICH WAS OBTAINED AFTER THE BIDS WERE OPENED. IN THAT CASE WE HELD THAT WHILE TRANSPORTATION COSTS MAY BE CALCULATED ON THE BASIS OF RATES TO BE EFFECTIVE AT THE TIME OF SHIPMENT, SUCH RATES MUST HAVE BEEN ACTUALLY FILED OR PUBLISHED AT THE TIME OF BID OPENING. WHAT WE HELD IN THAT DECISION IS EQUALLY APPLICABLE HERE. CONSEQUENTLY, WE AGREE WITH THE ADMINISTRATIVE ACTION IN REFUSING TO EVALUATE YOUR BID USING THE SECTION 22 RATE SECURED AFTER BID OPENING.

ACCORDINGLY, WE SEE NO LEGAL BASIS TO QUESTION THE CONTRACT AWARDED TO KECO AND YOUR PROTEST IS DENIED.