B-165160, SEP. 30, 1968

B-165160, SEP. 30, 1968

TO WACHTEL AND WIENER:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 16, 1968, ON BEHALF OF SENTINEL ELECTRONICS, INCORPORATED, CONCERNING THE QUESTION WHETHER THE LOW BID SUBMITTED BY WILLIAM WALTERS, INCORPORATED, UNDER INVITATION FOR BIDS NO. N00039-68-B-2052, ISSUED BY THE NAVAL ELECTRONIC SYSTEMS COMMAND, IS RESPONSIVE.

THE INVITATION INCLUDED A GUARANTEED MAXIMUM SHIPPING WEIGHTS AND DIMENSIONS (GMSWD) CLAUSE AND THE FOLLOWING CLAUSE FOR THE PURPOSE OF DETERMINING TRANSPORTATION COSTS: "FOR THE PURPOSE OF EVALUATING OFFERS AND FOR NO OTHER PURPOSE, THE FINAL DESTINATION FOR THE SUPPLIER WILL BE CONSIDERED TO BE AS FOLLOWS:

ITEM QUANTITY

1 50 PERCENT OAKLAND

2 50 PERCENT NORFOLK" THE TRANSPORTATION DATA SHEET (TDS) SUBMITTED AS A PART OF WALTERS' BID DID NOT LIST THE MAXIMUM SHIPPING WEIGHT, INCLUDING CONTAINER, OF ITS PRODUCT.

HOWEVER, THE CONTRACTING OFFICER POINTS OUT THAT WALTERS DID STATE ON THE TDS THAT FIBRE BOARD WOULD BE THE PACKING MATERIAL USED; THAT PARAGRAPH 3.3.2 OF THE PACKING SPECIFICATIONS PROVIDES THAT FIBRE BOARD BOXES WILL CONFORM TO CLASS-WEATHER RESISTENT SPECIAL REQUIREMENTS OF PPP-B-636, WHICH LIMITS THE WEIGHT OF THE FIBRE BOARD BOX AND CONTENTS TO A MAXIMUM OF 70 POUNDS; THAT THE SPECIFICATIONS LIMIT THE WEIGHT OF THE EQUIPMENT, INCLUDING ACCESSORIES, TO A MAXIMUM OF 65 POUNDS; AND THAT WHEN TRANSPORTATION COSTS BASED UPON A MAXIMUM WEIGHT OF 70 POUNDS ARE ADDED TO BOTH BIDS, WALTERS' BID IS STILL APPROXIMATELY $15,700 LOWER THAN SENTINEL -S. THEREFORE, HE PROPOSES TO AWARD THE CONTRACT TO WALTERS.

IN CASES INVOLVING SIMILAR CIRCUMSTANCES, WE HAVE HELD THAT THE FAILURE OF A BIDDER TO COMPLY EXACTLY WITH THE GMSWD CLAUSE DOES NOT REQUIRE REJECTION OF HIS BID WHERE, AS HERE, 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. B-160494, MARCH 3, 1967; B 155691, FEBRUARY 26, 1965.

HOWEVER, YOU CONTEND THAT WALTERS' BID IS NONRESPONSIVE FOR ANOTHER REASON. YOU POINT OUT THAT THE GMSWD CLAUSE INCLUDES THE FOLLOWING PROVISION: "* * * THE OFFEROR 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 OFFEROR'S GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE) AND THE TRANSPORTATION COSTS THAT SHOULD HAVE BEEN USED FOR OFFEROR'S EVALUATION PURPOSES BASED ON CORRECT SHIPPING DATA.' FROM WALTERS' FAILURE TO STATE ITS GUARANTEED MAXIMUM SHIPPING WEIGHTS, YOU CONCLUDE THAT IT DID NOT "AGREE" TO BE BOUND BY THE ABOVE PROVISION AND, THEREFORE, ITS CONTRACT WOULD NOT BE SUBJECT TO A PRICE REDUCTION FOR ANY EXCESS TRANSPORTATION COSTS.

EVEN IF IT IS CONCEDED THAT YOUR ARGUMENT IS VALID WITH RESPECT TO THE GOVERNMENT'S RIGHT OF RECOVERY FOR EXCESS TRANSPORTATION COSTS UNDER THE ABOVE CONTRACTUAL PROVISION, IT IS OUR OPINION THAT THE GOVERNMENT WOULD HAVE A RIGHT OF RECOVERY UNDER ANOTHER THEORY. UNDER THE DEFAULT CLAUSE OF STANDARD FORM 36, JULY 1966 EDITION, IN ADDITION TO THE RIGHTS AND REMEDIES THEREIN PROVIDED, THE GOVERNMENT SPECIFICALLY RESERVES "ANY OTHER RIGHTS AND REMEDIES PROVIDED BY LAW OR UNDER THIS CONTRACT". SINCE WALTERS WOULD BE BOUND BY THE SPECIFICATION REQUIREMENTS THAT THE EQUIPMENT NOT EXCEED 65 POUNDS AND THE FIBRE BOARD BOX AND CONTENTS NOT EXCEED 70 POUNDS, ANY EXCESS WEIGHT WOULD BE A BREACH OF CONTRACT FOR WHICH THE GOVERNMENT WOULD BE ENTITLED TO RECOVER SUCH DAMAGES AS ARE THE DIRECT, NATURAL, AND PROXIMATE RESULT OF THE BREACH. IN THE INSTANT CASE THE MEASURE OF DAMAGES WOULD BE THE DIFFERENCE BETWEEN THE ACTUAL TRANSPORTATION COSTS AND THOSE COMPUTED FOR EVALUATION PURPOSES BASED ON THE 70 POUND LIMIT.