B-180647, JUN 14, 1974

B-180647: Jun 14, 1974

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ALTHOUGH NOT SPECIFICALLY MENTIONED IN AMENDMENT TO RFP WAS PROPERLY CONSIDERED AS PART OF AMENDMENT AND AS FACTOR IN TRANSPORTATION COST EVALUATION INASMUCH AS IT WAS INCLUDED WITH AMENDMENT AND WAS NOTED IN WR-53/737 - ALSO MADE PART OF AMENDMENT - AS CONTROLLING QUESTION OF TRUCKLOADING. 2. WHERE OFFEROR COULD HAVE SUBMITTED RATE TENDER FROM ITS FREIGHT HAULER WITH ITS OFFER FOR EVALUATION PURPOSE. IT CANNOT BE SAID THAT FREIGHT COST EVALUATION BY GOVERNMENT IS ARBITRARY OR CREATES INEQUITIES BECAUSE FORMER CONTRACTORS HAD SPECIAL SECTION 22 RATES. GOVERNMENT IS UNABLE TO DETERMINE FROM WHOM ITEMS IN QUESTION CAN BE PROCURED MOST INEXPENSIVELY. THE TRANSPORTATION COSTS OF THESE SHIPMENTS WERE TO BE CONSIDERED IN EVALUATING EACH OFFEROR'S PRICE.

B-180647, JUN 14, 1974

1. REQUIREMENT OUTLINING MANDATORY METHOD OF TRUCKLOADING WEAPONS (WR- 51/67), ALTHOUGH NOT SPECIFICALLY MENTIONED IN AMENDMENT TO RFP WAS PROPERLY CONSIDERED AS PART OF AMENDMENT AND AS FACTOR IN TRANSPORTATION COST EVALUATION INASMUCH AS IT WAS INCLUDED WITH AMENDMENT AND WAS NOTED IN WR-53/737 - ALSO MADE PART OF AMENDMENT - AS CONTROLLING QUESTION OF TRUCKLOADING. 2. WHERE OFFEROR COULD HAVE SUBMITTED RATE TENDER FROM ITS FREIGHT HAULER WITH ITS OFFER FOR EVALUATION PURPOSE, IT CANNOT BE SAID THAT FREIGHT COST EVALUATION BY GOVERNMENT IS ARBITRARY OR CREATES INEQUITIES BECAUSE FORMER CONTRACTORS HAD SPECIAL SECTION 22 RATES, ADDITIONALLY, ABSENT SUCH EVALUATION, GOVERNMENT IS UNABLE TO DETERMINE FROM WHOM ITEMS IN QUESTION CAN BE PROCURED MOST INEXPENSIVELY.

TO MURDOCK MACHINE AND ENGINEERING COMPANY OF UTAH:

REQUEST FOR PROPOSALS (RFP) NO. N00104-74-R-TJ18, ISSUED NOVEMBER 28, 1973, BY THE UNITED STATES NAVY SHIPS PARTS CONTROL CENTER, REQUESTED OFFERS FOR THE APPLICATION OF THERMAL PROTECTION MATERIALS TO ZUNI ROCKET LAUNCHERS. THE SOLICITATION PROVIDED THAT THE GOVERNMENT WOULD SHIP THE LAUNCHERS FROM THE NAVAL AMMUNITION DEPOT, MCALISTER, OKLAHOMA, TO THE CONTRACTOR'S PLANT AND THAT THE ITEMS WOULD THEN BE SHIPPED BACK TO THE DEPOT AFTER COMPLETION OF THE APPLICATION. THE TRANSPORTATION COSTS OF THESE SHIPMENTS WERE TO BE CONSIDERED IN EVALUATING EACH OFFEROR'S PRICE.

BY AMENDMENT NO. 0003 TO THE RFP, VARIOUS CLAUSES WERE INCORPORATED INTO THE SOLICITATION AND SEVERAL CLARIFICATIONS WERE MADE AS A RESULT OF QUESTIONS RAISED BY OFFERORS IN THE INITIAL OFFERS. THE AMENDMENT ALSO ADVISED THAT THE LAUNCHERS WERE TO BE "SHIPPED IN CONTAINERS AS INDICATED IN WR53/737 WHICH IS FURNISHED HEREWITH." ALSO FURNISHED WITH THE AMENDMENT WAS A COPY OF WR-51/67, WHICH SET FORTH THE METHOD OF TRUCKLOADING AND SHIPMENT THAT WOULD BE REQUIRED. THIS LATTER DOCUMENT WAS NOT SPECIFICALLY MENTIONED IN, ALTHOUGH IT WAS ENCLOSED WITH, THE AMENDMENT FORM (STANDARD FORM 30) AS WAS WR-53/737. THE CONTRACTING OFFICER EVALUATED TRANSPORTATION COSTS FOR EACH OFFER IN THE LIGHT OF THE REQUIREMENTS SET FORTH IN WR-51/67. IT IS CONTENDED BY MURDOCK THAT EVALUATION IN THIS MANNER WAS INCORRECT INASMUCH AS WR 51/67 WAS NOT INCORPORATED INTO THE SOLICITATION AND THAT THE EVALUATION SHOULD HAVE CONSIDERED THE LEAST EXPENSIVE METHOD OF TRANSPORTATION AVAILABLE (E.G., USE OF 27 OR 29-FOOT TRAILERS INSTEAD OF 40-FOOT TRAILERS AS PROVIDED FOR IN WR-51/67 OR USE OF RAIL TRANSPORTATION) SO AS TO ARRIVE AT THE LOWEST POSSIBLE TRANSPORTATION COSTS TO THE GOVERNMENT.

OF THE TWO RESPONSIVE OFFERS, MURDOCK SUBMITTED THE LOWER PRICED OFFER, INCLUDING PROMPT PAYMENT DISCOUNT. HOWEVER, AFTER FREIGHT TRANSPORTATION COSTS WERE ADDED TO THE PRICE OF EACH OFFER TO DETERMINE THE TOTAL EVALUATED COST, MURDOCK WAS NOT THE LOW OFFEROR. AWARD WAS MADE ON FEBRUARY 8, 1973, TO THAT OFFEROR WHOSE TOTAL EVALUATED PRICE WAS LOW. IS THE MANNER IN WHICH THE OFFERS WERE EVALUATED AS TO THE TRANSPORTATION COSTS THAT IS THE BASIS OF THE MURDOCK PROTEST.

ALTHOUGH WR-51/67 WAS NOT SPECIFICALLY MENTIONED IN THE AMENDMENT, IT WAS INCLUDED, AS WAS WR-53/737, WITH THE AMENDMENT, AND WR-53/737 STATED THAT WR-5167 WAS TO APPLY TO TRUCKLOADING. FURTHER, ALTHOUGH MURDOCK DENIES THAT SUCH OCCURRED, THE CONTRACTING OFFICER ADVISED THAT HE ORALLY INFORMED ALL OFFERORS THAT SHIPMENT WOULD BE MADE IN ACCORDANCE WITH WR- 51/67. IN ADDITION, IN ITS FINAL OFFER MURDOCK NOTED THAT ITS PRICING ASSUMED THAT THE UNITS WOULD BE SHIPPED ON FLAT BED TRUCKS IN ACCORDANCE WITH WR-51/67. MURDOCK NOW STATES THAT IT NOTED THIS IN ITS OFFER SO THAT IT WOULD LATER BE ENTITLED TO A PRICE ADJUSTMENT IN THE EVENT THAT SHIPMENTS OR RECEIPTS WERE SUBSEQUENTLY CHANGED. WHILE THIS LATTER CONTENTION IS SOMEWHAT PLAUSIBLE, WE NONETHELESS BELIEVE THAT THE RECORD CLEARLY EVIDENCES THE INTENT, WHICH WAS KNOWN TO ALL OFFERORS, TO MAKE WR- 51/67 A PART OF AMENDMENT NO. 0003 AND TO MAKE WR-51/67 THE BASIS FOR THE EVALUATION OF TRANSPORTATION COSTS.

IN THIS REGARD, WE HAVE BY LETTER OF TODAY BROUGHT TO THE ATTENTION OF THE CONTRACTING ACTIVITY THE APPLICABILITY OF ASPR 19-207, WHICH STATES THAT AS A RULE "SOLICITATIONS SHALL NOT SPECIFY A PARTICULAR METHOD OR MODE OF TRANSPORTATION *** FOR DELIVERY OF SUPPLIES." WHILE CERTAIN EXCEPTIONS ARE PERMITTED IN THE CITED ASPR SECTION, IT WOULD APPEAR FROM THE RECORD THAT NO BASIS EXISTED IN THIS INSTANCE FOR LIMITING THE PERMISSABLE MODES OF TRANSPORTATION. FURTHER, WHERE THE MODE OF TRANSPORTATION IS TO BE SO LIMITED, WE BELIEVE THAT THE SOLICITATION SHOULD MAKE THIS CLEAR. THE SOLICITATION IN THIS CASE, APART FROM THE INTENT SHOWN BY THE ACTIONS OF ALL THE PARTIES, IS EQUIVOCAL ON THE SUBJECT INASMUCH AS IT ALSO REQUESTS RAILROAD SIDING INFORMATION FROM EACH OFFEROR. CORRECTIVE ACTION BY THE CONTRACTING ACTIVITY IN THESE AREAS WOULD SEEM TO BE REQUIRED.

FINALLY, REGARDING MURDOCK'S CONTENTION THAT USE OF TRANSPORTATION RATES AS PART OF THE EVALUATION OF PRICE IS INEQUITABLE AND ARBITRARY INASMUCH AS IT GIVES AN ADVANTAGE TO PRIOR CONTRACTORS WHO HAVE ESTABLISHED SPECIAL SECTION 22 RATES, WE NOTE THAT THE EVALUATION CRITERIA FOR EVALUATION OF TRANSPORTATION COSTS ALLOW CONSIDERATIONS OF RATE TENDERS. IN VIEW OF THIS IT WOULD NOT APPEAR THAT MURDOCK COULD NOT OBTAIN A SPECIAL RATE QUOTATION FROM ITS SHIPPERS FOR INCLUSION IN ITS OFFER FOR EVALUATION PURPOSES. CONSEQUENTLY, WE AGREE WITH THE POSITION OF THE ACTIVITY THAT IN VIEW OF THESE CIRCUMSTANCES, EVALUATION OF FREIGHT RATES WOULD NOT CREATE THE ALLEGED INEQUITIES. AS REGARDS THE BELIEF THAT TRANSPORTATION COSTS SHOULD PLAY NO ROLE AT ALL IN PRICE EVALUATION, WE NOTE THAT UNLESS THE GOVERNMENT CAN INSERT ITS FREIGHT COSTS INTO THE OFFEROR'S PRICE THERE IS NO WAY TO DETERMINE FROM WHOM THE GOVERNMENT CAN MOST INEXPENSIVELY PROCURE THE ITEMS IN QUESTION.

ACCORDINGLY, THE PROTEST IS DENIED.