B-180598, JUN 14, 1974

B-180598, JUN 14, 1974

BIDDER'S PROTEST AGAINST PROPRIETY OF SOLICITATION PROVISION WHICH PERMITTED BIDDERS TO UNDERESTIMATE ACTUAL WEIGHTS AND DIMENSIONS OF FURNITURE SHIPMENTS OVERSEAS IN GUARANTEED MAXIMUM SHIPPING WEIGHT CLAUSE ON THE BASIS THAT SUCH PRACTICE RESULTED IN UNFAIRNESS TO OTHER BIDDERS WHO STATED CORRECT SHIPPING WEIGHTS AND DIMENSIONS IN BIDS, AND IN ECONOMIC EXPENSE TO GOVERNMENT IN RECOUPING ADDITIONAL TRANSPORTATION COSTS FROM BIDDERS, IS WITHOUT MERIT, SINCE GAO HAS CONSISTENTLY HELD THAT IN ORDER TO MEET COMPETITION, BIDDER MAY GUARANTEE WEIGHT WHICH IS LESS THAN ACTUAL RATHER THAN REDUCE PRICE FOR ITEM ITSELF, AND SINCE BIDDER, NOT GOVERNMENT, BEARS LOSS FOR TRANSPORTATION COSTS IN EXCESS OF GUARANTEED MAXIMUM SHIPPING WEIGHT CHARGES.

TO DREXEL CONTRACT FURNITURE:

INVITATIONS FOR BIDS (IFB'S) NOS. FPNFH-M2-63315-12-4-73 AND FPNFH-M2 63314-12-11-73 WERE ISSUED SIMULTANEOUSLY ON AUGUST 17, 1973, BY THE GENERAL SERVICES ADMINISTRATION (GSA), FOR THE PROCUREMENT OF HOUSEHOLD FURNITURE FOR USE IN GOVERNMENT INSTALLATIONS ABROAD.

THE METHOD OF AWARD CLAUSE IN EACH SOLICITATION PROVIDED THAT:

"AWARD WILL BE MADE ITEM-BY-ITEM ON THE BASIS OF THE LOWEST DELIVERED COST TO THE GOVERNMENT EVALUATED TO A PORT OF DEBARKATION FOR THE ULTIMATE DESTINATION SHOWN FOR THE ITEMS) IN THE ITEM LISTING. OFFERS WILL BE EVALUATED BY ADDING TO THE OFFERED PRICE THE COMBINED OCEAN AND PORT HANDLING CHARGES APPLICABLE TO WHICHEVER OF THE PORTS OF EXPORTATION LISTED HEREIN IS SPECIFIED BY THE OFFEROR."

IN ADDITION, THE IFB CONTAINED CLAUSE 38 ENTITLED "GUARANTEED MAXIMUM SHIPPING WEIGHTS," OF GSA FORM 1424 (MARCH 11, 1972), WHICH ACTS AS A SAFEGUARD AGAINST LIABILITY FOR ADDITIONAL TRANSPORTATION CHARGES NOT INCLUDED IN A BID AS OFFERED. CLAUSE 38 PROVIDES AS FOLLOWS:

"THE GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE) ARE REQUIRED FOR DETERMINATION OF TRANSPORTATION COSTS. BIDDER MUST STATE HIS GUARANTEED WEIGHTS (AND DIMENSIONS IF APPLICABLE) IN THE BID OR IT WILL BE REJECTED. IF DELIVERED ITEMS EXCEED THE GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE), THE BIDDER AGREES THAT THE CONTRACT PRICE SHALL BE REDUCED BY AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN THE TRANSPORTATION COSTS COMPUTED FOR BID EVALUATION PURPOSES BASED ON BIDDER'S GUARANTEED MAXIMUM SHIPPING WEIGHTS (AND DIMENSIONS IF APPLICABLE) AND THE TRANSPORTATION COSTS THAT SHOULD HAVE BEEN USED FOR BID EVALUATION PURPOSES BASED ON CORRECT SHIPPING DATA. IN THIS REGARD, SELLER'S INVOICES SHALL SHOW THE ACTUAL SHIPPING WEIGHT (AND ACTUAL CUBE, WHERE APPLICABLE), IN ADDITION TO THE OTHER REQUIREMENTS OF ARTICLE 13, STANDARD FORM 33A, SOLICITATION INSTRUCTIONS AND CONDITIONS."

THUS, A BIDDER WOULD HAVE TO ASSUME RESPONSIBILITY FOR THE DIFFERENCE BETWEEN THE TRANSPORTATION COSTS COMPUTED FOR BID EVALUATION PURPOSES BASED ON HIS GUARANTEED MAXIMUM SHIPPING WEIGHT AND DIMENSIONS, AND THE TRANSPORTATION COSTS THAT SHOULD HAVE BEEN USED FOR BID EVALUATION PURPOSES BASED ON CORRECT SHIPPING DATA. WHERE THE BIDDER HAS UNDERESTIMATED THE ACTUAL WEIGHT AND DIMENSIONS OF HIS SHIPMENTS, HE AGREES TO COMPENSATE THE GOVERNMENT FOR THE EXCESS TRANSPORTATION CHARGES.

IT IS THE EMPLOYMENT OF THIS METHOD OF EVALUATION WHICH GIVES RISE TO THE BASIS OF DREXEL CONTRACT FURNITURE'S (DREXEL) PROTEST.

SPECIFICALLY, DREXEL CONTENDS THAT IN ORDER FOR A MANUFACTURER TO COMPLY WITH THE SPECIFICATIONS OF GSA, HE MUST MEET THE STATED NET SIZE OF EACH ITEM MANUFACTURED. SINCE EACH ITEM WILL BE EXACTLY THE SAME NET SIZE, THE PACKING SPECIFICATION WOULD BE THE SAME FOR ALL MANUFACTURERS WITH NO ROOM FOR A SIGNIFICANT DEVIATION FROM A STANDARD MINIMUM CUBE. AS A RESULT, DREXEL ARGUES THAT IT WOULD BE PHYSICALLY IMPOSSIBLE TO PACK AN ITEM IN A CRATE WITH CUBIC DIMENSIONS BELOW A STANDARD MINIMUM CUBE SIZE, AND TO ALLOW ANY BIDDER TO USE A CUBE IN ITS BID BELOW THE STANDARD MINIMUM PERMITS THE INTRODUCTION OF A FRAUDULENT ELEMENT INTO A PART OF THE TOTAL PRICE FORMULA. SECONDLY, DREXEL ASSERTS THAT WHEN GSA ACCEPTS INCORRECT CUBES, THE TOTAL AMOUNT OF MONEY REQUIRED TO DELIVER THE ITEMS TO DESTINATION IS UNDERSTATED WHICH RESULTS IN EXCESS MONEY BEING SPENT BY THE CONTRACTING ACTIVITY IN INITIATING PROCEDURES TO RECOVER THE ADDITIONAL CHARGES FROM THE MANUFACTURER.

OUR OFFICE HAS APPROVED SUCH EVALUATION PRACTICES IN THE PAST. WE STATED IN B-175514, JUNE 29, 1972, THAT THE PURPOSE OF THE GUARANTEED MAXIMUM SHIPPING WEIGHT CLAUSE IS TWOFOLD: (1) TO ENABLE THE GOVERNMENT TO ACCURATELY ASCERTAIN ITS TOTAL COSTS FOR A PROPOSED CONTRACT; AND (2) TO ESTABLISH CONTRACT PRICE REDUCTION IN THE EVENT THE SHIPPING WEIGHT IS EXCEEDED. MOREOVER, WE HAVE RECOGNIZED THAT "IN ORDER TO MEET COMPETITION A BIDDER MAY GUARANTEE A WEIGHT WHICH IS LESS THAN ACTUAL RATHER THAN REDUCE THE PRICE FOR THE ITEM ITSELF." 38 COMP. GEN. 819, 821 (1959). SEE ALSO, 49 COMP. GEN. 558 (1970), AND B 176409, DECEMBER 14, 1972.

IN VIEW OF THIS FACT, WE ARE OF THE OPINION THAT NEITHER THE GOVERNMENT, NOR OTHER BIDDERS INVOLVED IN THE INSTANT PROCUREMENT HAVE BEEN FRAUDULENTLY VICTIMIZED, AS DREXEL CONTENDS, BY ANY BIDDER WHO CHOSE TO SUBMIT HIS BID WITH THE COMPETITIVE ELEMENT IN THE TRANSPORTATION COST RATHER THAN IN THE BID PRICE, FOR THE REASON THAT ALL BIDS CAN BE PROPERLY EVALUATED BY GSA IN TERMS OF THE RELATIVE STANDINGS OF THEIR ITEM PRICES AS ORIGINALLY OFFERED OR AS ADJUSTED WHICH, IN TURN, INSURES THAT ALL BIDS WILL BE EVALUATED FAIRLY AND ON AN EQUAL BASIS.

FINALLY, WHILE THE PROVISION MIGHT IMPOSE SOME ADMINISTRATIVE EXPENSE ON THE GOVERNMENT IN THE EVENT THE ESTIMATES ARE EXCEEDED, SUCH ACTION IS CONTEMPLATED BY THE IFB, AND DOES NOT PROVIDE A BASIS FOR LEGAL OBJECTION BY OUR OFFICE.

ACCORDINGLY, THE PROTEST IS DENIED.