B-179237, MAR 5, 1974

B-179237: Mar 5, 1974

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NEGOTIATIONS UNDER 10 U.S.C. 2304(A)(10) WOULD HAVE BEEN PREFERABLE TO FORMAL ADVERTISING FOR BIDS ON REFUSE TRUCKS. SINCE USING ACTIVITY WAS AWARE THAT THE CONTAINER MODIFICATION KITS REQUIRED BY IFB ONLY OF DUAL PICKUP POINT TRUCK MANUFACTURERS AND NOT OF SOLE SINGLE POINT MANUFACTURER HAD COST IMPLICATIONS TO DUAL POINT MANUFACTURERS WHICH WOULD MAKE IT IMPRACTICABLE TO OBTAIN COMPETITION. 2. WHILE GENERAL WEIGHT OF LOADS TO BE LIFTED IS ONLY 2. SERIOUS DOUBT IS CAST ON ADMINISTRATIVE DETERMINATION TO UTILIZE 6. CORRECTIVE ACTION WILL NOT BE RECOMMENDED. SINCE ESSENTIALLY SOLE-SOURCE MANUFACTURER WOULD HAVE BID ITS 6. INC.: INVITATION FOR BIDS (IFB) DAAE07-73-B-0097 WAS ISSUED BY THE UNITED STATES ARMY TANK-AUTOMOTIVE COMMAND.

B-179237, MAR 5, 1974

1. NEGOTIATIONS UNDER 10 U.S.C. 2304(A)(10) WOULD HAVE BEEN PREFERABLE TO FORMAL ADVERTISING FOR BIDS ON REFUSE TRUCKS, SINCE USING ACTIVITY WAS AWARE THAT THE CONTAINER MODIFICATION KITS REQUIRED BY IFB ONLY OF DUAL PICKUP POINT TRUCK MANUFACTURERS AND NOT OF SOLE SINGLE POINT MANUFACTURER HAD COST IMPLICATIONS TO DUAL POINT MANUFACTURERS WHICH WOULD MAKE IT IMPRACTICABLE TO OBTAIN COMPETITION. 2. WHERE SPECIFICATION ON REFUSE TRUCK CALLS FOR 6,000-POUND LIFTING CAPACITY, WHILE GENERAL WEIGHT OF LOADS TO BE LIFTED IS ONLY 2,800 POUNDS, AND PROTESTER STATES THAT 4,500-POUND ARM WOULD BE SUFFICIENT TO PROVIDE RESIDUAL LIFT CAPACITY, SERIOUS DOUBT IS CAST ON ADMINISTRATIVE DETERMINATION TO UTILIZE 6,000-POUND ARM. SEE 53 COMP. GEN. (B-178740, JANUARY 18, 1974). CORRECTIVE ACTION WILL NOT BE RECOMMENDED, HOWEVER, SINCE ESSENTIALLY SOLE-SOURCE MANUFACTURER WOULD HAVE BID ITS 6,000-POUND EQUIPMENT AT SIMILAR PRICES EVEN IF SPECIFICATION HAD CALLED FOR 4,500- POUND ARM.

TO DEMPSTER BROTHERS, INC.:

INVITATION FOR BIDS (IFB) DAAE07-73-B-0097 WAS ISSUED BY THE UNITED STATES ARMY TANK-AUTOMOTIVE COMMAND, WARREN, MICHIGAN. ALTHOUGH THE PROCUREMENT WAS THE RESPONSIBILITY OF THE ARMY, THE SUBJECT IFB WAS ISSUED IN RESPONSE TO AN AIR FORCE REQUIREMENT FOR 21 FRONT CONTAINER HOIST, COMPACTION TYPE BODY, REFUSE COLLECTION TRUCKS. THESE VEHICLES WERE TO BE REPLACEMENTS FOR SIMILAR TRUCKS WHICH USE A SINGLE POINT HOISTING AND CONTAINER SYSTEM.

AS STATED IN OUR DECISION OF OCTOBER 29, 1973:

"THE SINGLE PICK-UP POINT SYSTEM IS PRESENTLY COVERED BY A PATENT HELD BY LODAL INC. A PRIOR ATTEMPT TO PROCURE SUCH SINGLE PICK-UP POINT EQUIPMENT WAS CANCELLED DUE TO A PROTEST BY DEMPSTER WHICH ALLEGED THAT THE SOLICITATION WAS RESTRICTIVE IN THAT ONLY LODAL COULD SUPPLY THE TRUCKS AS DESCRIBED IN THE SPECIFICATIONS. THEREUPON, THE AIR FORCE DECIDED THAT SINCE LODAL WOULD HAVE A DEFINITE COMPETITIVE ADVANTAGE OVER ANY DUAL POINT TRUCK MANUFACTURER, THE SOLICITATION WAS DRAFTED TO ALLOW DUAL POINT TRUCK MANUFACTURERS TO BID, PROVIDED THAT SUCH BIDDERS AGREE TO MAKE THE EXISTING SINGLE POINT CONTAINERS COMPATIBLE WITH THEIR HOIST MECHANISMS BY AGREEING TO FURNISH A MODIFICATION KIT. SUCH A KIT WOULD ALLOW FOR DUAL AS WELL AS SINGLE POINT PICK-UP."

DEMPSTER, IN ITS INITIAL PROTEST, COMPLAINED AGAINST THE INCLUSION OF THE KIT PROVISIONS OF THE IFB SINCE LODAL, INC., THE SOLE SINGLE POINT MANUFACTURER, IF BIDDING ITS SINGLE POINT SYSTEM, NEED NOT FURNISH THE KIT, WHEREAS, ALL DUAL POINT MANUFACTURERS WOULD BE REQUIRED TO DO SO. DEMPSTER THUS ASSERTS THAT LODAL WAS GIVEN A DISTINCT COMPETITIVE ADVANTAGE.

IN ITS REQUEST FOR RECONSIDERATION, DEMPSTER ITERATES THIS CONTENTION. MOREOVER, DEMPSTER SUBMITS LABOR FIGURES COMPUTED BY THE AIR FORCE WHICH INDICATE THAT WITHOUT ANY CONSIDERATION OF MATERIAL COSTS, THE KIT WOULD ADD AN ADDITIONAL $209,902.56 TO A DUAL POINT BIDDER'S COST ($9,995.36 PER TRUCK) BUT $0 TO LODAL'S COST, SINCE LODAL NEED NOT PROVIDE SUCH A KIT.

DEMPSTER ASSERTS THAT THIS UNABSORBABLE AND EXTENSIVE COST WAS THE FACTOR WHICH CAUSED ONLY ONE BID, LODAL'S, TO BE RECEIVED. (SUBSEQUENT TO THE RECEIPT OF THIS ONE BID, THE CONTRACT WAS AWARDED TO LODAL ON NOVEMBER 26, 1973.) INDEED, DEMPSTER IN A PREBID OPENING LETTER OF NOVEMBER 2, 1973, STATED THAT:

"*** WE CONSIDER THAT -0097 AS NOW CONSTITUTED WILL NOT RESULT IN A COMPETITIVE BID AND THAT LODAL WILL BE THE SOLE BIDDER AND THUS WILL OBTAIN THIS CONTRACT ON THEIR TERMS. ***"

IN OUR PREVIOUS DECISION, WE STATED:

"ON THIS RECORD, WE FEEL THAT THE REQUIREMENT IN THE IFB FOR THE CONTAINER MODIFICATION KITS WOULD PROVIDE SOME INCENTIVE FOR MANUFACTURERS OTHER THAN LODAL TO PARTICIPATE IN THE PROCUREMENT. WHILE THIS PROCUREMENT DOES CONTAIN SOME RESTRICTIVE FEATURES, TO THE EXTENT THAT LODAL MAY HAVE SOME ADVANTAGE OVER OTHER PROSPECTIVE MANUFACTURERS, THERE IS NO REASON APPARENT FROM THE RECORD WHY REPUTABLE MANUFACTURERS COULD NOT FURNISH APPROPRIATE EQUIPMENTS BY ALSO FURNISHING MODIFICATION KITS."

IN LIGHT OF SUBSEQUENT DEVELOPMENTS AND THE UNCONTROVERTED COST FIGURES PRESENTED BY DEMPSTER, IT DOES NOT APPEAR THAT COMPETITION EXISTED ON THE PROCUREMENT SINCE DUAL POINT MANUFACTURERS WERE ESSENTIALLY UNABLE TO BID DUE TO THE MODIFICATION KIT REQUIREMENT OF THE SOLICITATION.

SINCE IT APPEARS THAT THE AIR FORCE WAS AWARE OF THE COST IMPLICATIONS OF THE MODIFICATION KIT REQUIREMENT AND SHOULD THEREFORE HAVE BEEN AWARE OF THE IMPRACTICABILITY OF OBTAINING COMPETITION ON THIS PROCUREMENT, NEGOTIATION UNDER 10 U.S.C. 2304(A)(10) WOULD HAVE BEEN PREFERABLE IN THIS INSTANCE TO FORMALLY ADVERTISING FOR BIDS. SEE 53 COMP. GEN. (B-178740, JANUARY 18, 1974). WE WILL NOT, HOWEVER, RECOMMEND ANY CORRECTIVE ACTION ON THE BASIS OF A FAILURE TO DO SO IN THIS INSTANCE.

THE HISTORY OF AIR FORCE PROCUREMENT OF THIS TYPE OF EQUIPMENT INDICATES THAT AFTER THE INITIAL DECISION TO BUY SINGLE POINT EQUIPMENT WAS MADE IN 1962, DUAL POINT TRUCK MANUFACTURERS HAVE BEEN SUBJECT TO DE FACTO EXCLUSION FROM PARTICIPATION ON REPLACEMENT PURCHASES. WHEN SINGLE POINT CONTAINERS WORE OUT THEY WERE REPLACED BY OTHER SINGLE POINT CONTAINERS AND WHEN SINGLE POINT TRUCKS WORE OUT (AS HERE) REPLACEMENT TRUCKS WERE REQUIRED TO BE COMPATIBLE WITH THE EXISTING SINGLE POINT CONTAINERS AS THEY EXISTED OR ELSE DUAL POINT TRUCK MANUFACTURERS WERE REQUIRED TO MODIFY THESE EXISTING CONTAINERS TO ACCEPT DUAL POINT EQUIPMENT. THUS, THE CYCLE OF BUYING SINGLE POINT CONTAINERS BECAUSE OF THE EXISTENCE OF SINGLE POINT TRUCKS AND VICE VERSA HAS EXISTED FOR 12 YEARS AND, INDEED, MAY EXTEND INTO THE FUTURE.

THE AIR FORCE HAS, HOWEVER, RECOMMENDED A CHANGE IN THE SPECIFICATIONS FOR THE TYPE OF CONTAINER PRESENTLY BEING UTILIZED, WHICH WOULD INSURE THAT ALL CONTAINERS PURCHASED IN THE FORESEEABLE FUTURE POSSESS DUAL CAPACITY (CAPACITY TO BE USED WITH BOTH SINGLE AND DUAL POINT TRUCKS). WHEN THESE DUAL CAPACITY CONTAINERS ARE SITUATED AT THE VARIOUS INSTALLATIONS PRESENTLY USING A SINGLE POINT SYSTEM, FUTURE PROCUREMENTS FOR TRUCKS WILL ALLOW BOTH SINGLE POINT AND DUAL POINT MANUFACTURERS TO COMPETE ON AN EQUAL BASIS.

A SIDE BENEFIT OF PROCURING SUCH DUAL CAPACITY CONTAINERS IS THAT SINCE THEY DO HAVE DUAL AS WELL AS SINGLE POINT PICKUP CAPACITY, THE AIR FORCE MAY, IF IT CHOOSES, EASILY AVAIL ITSELF OF CERTAIN MORE ADVANCED REFUSE EQUIPMENT (TILT-FRAME UNITS) WHICH PRESENTLY IS AVAILABLE, FROM A NUMBER OF SOURCES, BUT ONLY IN TWO-POINT PICKUP CONFIGURATIONS.

DEMPSTER ALSO CONTENDS THAT THE AIR FORCE IN THE IFB OVERSTATED ITS NEEDS WITH REGARD TO THE REQUIREMENT FOR TRUCK HOISTING ARM CAPACITY. THE SPECIFICATIONS CALL FOR HOIST EQUIPMENT WITH A 6,000-POUND ARM CAPACITY. IN OUR EARLIER DECISION, WE STATED THAT: "*** SUFFICIENT EVIDENCE HAS NOT BEEN PRODUCED WHICH WOULD CAUSE OUR OFFICE TO QUESTION THE REASONABLENESS OF THE STATED NEED FOR THE USE OF A 6,000 LBS. ARM IN THIS PROCUREMENT."

DEMPSTER NOW SUBMITS THE FOLLOWING UNREFUTED INFORMATION. THE 8 CUBIC- YARD LODAL CONTAINERS WHICH WILL BE HOISTED WEIGH APPROXIMATELY 1,200 POUNDS EMPTY. THE WEIGHT OF NORMAL REFUSE IS APPROXIMATELY 125 POUNDS PER CUBIC YARD. EVEN ASSUMING, AS THE CONTAINER SPECIFICATIONS DO, THAT THE REFUSE WILL WEIGH 200 POUNDS PER CUBIC YARD, A FULLY LOADED LODAL CONTAINER WOULD ONLY WEIGH:

200 LBS/CUBIC YD. X 8 CUBIC YDS. 1,600 LBS. REFUSE

1,200 LBS. CONTAINER

2,800 LBS.

YET, THE AIR FORCE STATED THAT A 6,000-POUND LIFT CAPACITY IS REQUIRED. TO REACH THIS MAXIMUM LIFT CAPACITY REFUSE MUST WEIGH 600 POUNDS PER CUBIC YARD.

WE UNDERSTAND WHY THE AGENCY MIGHT DESIRE SOME RESERVE LIFT CAPACITY IN ITS HOIST TRUCKS, AS THERE IS NO WAY TO ABSOLUTELY REGULATE THE TYPE OF REFUSE MATERIAL (HENCE THE WEIGHT) PLACED INSIDE A GIVEN CONTAINER. DEMPSTER SUGGESTS THAT A 4,500-POUND LIFT CAPACITY WOULD PROVIDE SUFFICIENT RESERVE CAPACITY, HAVING AN ABILITY IN THIS SITUATION TO ACCOMMODATE REFUSE WEIGHING UP TO 412.5 POUNDS PER CUBIC YARD, WHILE THE SPECIFIED CONTAINER INTO WHICH THE REFUSE IS PLACED CONTEMPLATES ONLY A 200-POUND-PER-CUBIC-YARD REFUSE WEIGHT.

LODAL INDICATES THAT IT DOES NOT BUILD EQUIPMENT WITH ANYTHING UNDER A 6,000-POUND ARM. THEREFORE, EVEN HAD THE SPECIFICATION BEEN STATED FOR A 4,500-POUND ARM, LODAL WOULD HAVE BID ITS 6,000-POUND EQUIPMENT.

IN SUPPORT OF THE AIR FORCE'S STATED NEED, LODAL INDICATES THAT WITH THE USE OF CERTAIN STATIONARY COMPACTION EQUIPMENT (USED PRIOR TO PLACING REFUSE IN THE CONTAINERS) THE SUGGESTED 125-POUND-PER-CUBIC YARD UNCOMPACTED REFUSE WEIGHT COULD EASILY BECOME 500 POUNDS OR MORE PER CUBIC YARD OF COMPACTED REFUSE WEIGHT. THUS, IN AN 8-CUBIC-YARD CONTAINER, REFUSE WEIGHTS OF 4,000 POUNDS ARE QUITE POSSIBLE. LODAL SUGGESTS, THEREFORE, THAT THE EXTRA CAPACITY OF THE 6,000-POUND ARM IN QUESTION COULD READILY BE ADAPTED TO SUCH A COMPACTED REFUSE CONTAINER SYSTEM. HOWEVER, THE AIR FORCE DOES NOT PRESENTLY UTILIZE SUCH A COMPACTION SYSTEM AT ANY OF THE BASES INDICATED IN THE IFB. MOREOVER, THE AIR FORCE SIMILARLY DOES NOT HAVE, AT THESE FACILITIES, ANY OF THE 2,500-POUND NET WEIGHT SPECIAL COMPACTION CONTAINERS NECESSARY FOR THE UTILIZATION OF THE SYSTEM DISCUSSED BY LODAL.

FURTHERMORE, WE DOUBT THAT EVEN A 6,000-POUND ARM WOULD BE SUFFICIENT FOR SUCH A SYSTEM. LODAL STATES THAT THE FOLLOWING WEIGHTS ARE APPLICABLE TO ITS CONTAINER COMPACTION SYSTEM:

COMPACTED REFUSE 4,000 POUNDS

CONTAINER 2,500 POUNDS

TOTAL 6,500 POUNDS

ON THIS BASIS, WE DO NOT SEE HOW A 6,000-POUND ARM HAS MUCH ADVANTAGE OVER A 4,500 RELATIVE TO FUTURE UTILIZATION OF THE MORE MODERN OR EFFICIENT SYSTEM ESPOUSED BY LODAL, SINCE NEITHER ARM HAS THE CAPACITY TO LIFT THE WEIGHTS INVOLVED IN SUCH A SYSTEM.

LODAL DOES ASSERT, HOWEVER, THAT THE 6,000-POUND ARM REQUIRES CONSIDERABLY LESS MAINTENANCE THAN DOES A 4,500-POUND ARM. DEMPSTER, HOWEVER, DISPUTES THIS POINT.

IT IS OUR BELIEF THAT SERIOUS DOUBT HAS BEEN CAST ON THE ADMINISTRATIVE DETERMINATION TO UTILIZE A 6,000-POUND ARM. SEE 53 COMP. GEN., SUPRA. HOWEVER, WE FEEL THAT EVEN HAD THE SPECIFICATION INDICATED A 4,500-POUND ARM, BECAUSE OF THE INCLUSION OF THE MODIFICATION KIT REQUIREMENT, LODAL WOULD MOST PROBABLY HAVE BEEN THE SOLE BIDDER AND WOULD ACCORDINGLY HAVE OFFERED ITS 6,000-POUND EQUIPMENT AT PRICES EQUAL TO THAT PRESENTLY OBTAINED ON THE IFB.

ACCORDINGLY, WHILE WE APPROVE THE AIR FORCE'S DECISION TO RECONSIDER ITS EQUIPMENT REQUIREMENTS IN TERMS OF PRESENT NEED (AND PERHAPS WITH AN EYE TOWARD FUTURE ADAPTATION), WE CANNOT RECOMMEND THAT CORRECTIVE ACTION BE TAKEN ON THE INSTANT PROCUREMENT. ALSO, WE FEEL THAT THE AIR FORCE AND THE PROCURING ACTIVITY SHOULD TAKE STEPS TO ELIMINATE NONCOMPETITIVE SITUATIONS, SUCH AS THE ONE HEREIN ILLUSTRATED, WHEREVER POSSIBLE.

THEREFORE, THE DECISION OF OCTOBER 29, 1973, IS AFFIRMED.