B-163550, JUN. 28, 1968

B-163550, JUN. 28, 1968

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DATED JUNE 4, 1968, FILE REFERENCE SUP 0232, FROM THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND, FURNISHING A REPORT RELATIVE TO THE PROTEST OF RADIATION SYSTEMS, INC. (RSI), AGAINST THE AWARD TO ANY OTHER BIDDER OF LOT III OF INVITATION FOR BIDS N60921-68-B-0085 ISSUED BY THE NAVAL ORDNANCE LABORATORY (NOL), WHITE OAK, SILVER SPRING, MARYLAND.

THE INVITATION SOLICITED BIDS FOR FURNISHING FOUR LOTS OF MISSILE CRADLES IN STEPLADDER QUANTITIES, F.O.B. ORIGIN. EIGHTEEN BIDS WERE RECEIVED AND OPENED ON DECEMBER 22, 1967.

LOT I PROVIDES FOR STEPLADDER QUANTITIES FROM 500 TO 820 OF THE MARK 12, SPARROW CRADLE; LOT II PROVIDES FOR STEPLADDER QUANTITIES FROM 80 TO 807 OF THE MARK 14, SHRIKE CRADLE; LOT III PROVIDES FOR STEPLADDER QUANTITIES FROM 100 TO 235 OF THE MARK 13, WALLEYE CRADLE. DUE TO THE SIMILARITY BETWEEN THE MARK 12 AND MARK 14 CRADLES, AND IN AN EFFORT TO OBTAIN A PRICE BREAK ON A PRODUCTION LOT, LOT IV PROVIDES FOR STEPLADDER QUANTITIES IN VARYING INCREMENTS FROM 500 TO 720 OF THE MARK 12 AND FROM 80 TO 807 OF THE MARK 14 CRADLES. EACH LOT PROVIDES FOR TWO FIRST ARTICLE SAMPLES OF EACH TYPE OF CRADLE AND INSPECTION AND TEST REPORTS.

IT HAS BEEN DETERMINED BY THE DEPARTMENT OF THE NAVY THAT AN AWARD SHOULD BE MADE UNDER LOT III, ITEMS 5A, 5B AND 6, FOR A TOTAL OF 235 UNITS OF MARK 13, WALLEYE CRADLES, AND UNDER LOT IV, ITEMS 7A, 7B, 9A, 9B, 8 AND 10, FOR A TOTAL OF 720 UNITS OF MARK 12, SPARROW CRADLES, AND 807 UNITS OF MARK 14, SHRIKE CRADLES.

THE TRANSPORTATION RATES USED IN ESTABLISHING TRANSPORTATION COSTS WERE FURNISHED BY THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE (MTMTS), BROOKLYN, NEW YORK (RATE QUOTATION SECTION). APPLYING THESE RATES, TRANSPORTATION COSTS WERE COMPUTED AND VERIFIED BY THE LAND TRANSPORTATION BRANCH OF THE NAVAL SUPPLY SYSTEM COMMAND. IT HAS BEEN DETERMINED THAT RAIL TRANSPORTATION WILL RESULT IN THE LOWEST COST TO THE GOVERNMENT AND HAS BEEN USED IN THE EVALUATION OF THE BIDS.

DURING THE EVALUATION AND PRIOR TO AWARD, THE INVITATION WAS DETERMINED TO BE INCOMPLETE IN THAT IN THE REPRODUCTION OF THE BID PACKAGE, PAGE 2 OF STANDARD FORM 33,"REPRESENTATIONS, CERTIFICATIONS, AND ACKNOWLEDGEMENTS," WAS OMITTED FROM THE BID PACKAGE FORWARDED TO SEVERAL BIDDERS. THE INVITATION WAS CANCELED ON FEBRUARY 7, 1968, BY TELEGRAM TO ALL BIDDERS. BY LETTERS OF FEBRUARY 12, 1968, TO OUR OFFICE, THE FTS CORPORATION, DENVER, COLORADO, AND KLAGSBRUNN AND HANES, ATTORNEYS FOR RADIATION SYSTEMS, INC., MCLEAN, VIRGINIA, PROTESTED THE CANCELLATION OF THE INVITATION. BY DECISION B-163550 OF MAY 3, 1968, THE INVITATION WAS REINSTATED. BY NAVAL ORDNANCE LABORATORY TELEGRAM OF MAY 9, 1968, ALL BIDDERS WERE REQUESTED TO EXTEND ACCEPTANCE OF BIDS TO JUNE 30, 1968. HAYES INTERNATIONAL ADVISED BY TELEGRAM OF MAY 20, 1968, THAT IT WAS NOT EXTENDING ITS BID. CONTAINER RESEARCH DID NOT AGREE TO AN EXTENSION ON LOT III BUT EXTENDED AS TO LOT IV BY LETTER OF MARCH 13, 1968. NO REPLY WAS RECEIVED FROM RECEIVED FROM RAVENS METAL PRODUCTS AND MERIT METAL CRAFT, INC. ALL OTHER BIDS HAVE BEEN EXTENDED TO JUNE 30, 1968.

PRIOR TO CANCELLATION OF THE INVITATION SEVERAL COMPANIES TOOK EXCEPTION TO THE BIDS SUBMITTED BY THE APPARENT LOW BIDDERS. BY TELEGRAM OF DECEMBER 26, 1967, AND LETTER OF JANUARY 3, 1968, TO THE NAVAL ORDNANCE LABORATORY, RADIATION SYSTEMS, INC., THROUGH ITS ATTORNEYS, KLAGSBRUNN AND HANES, QUESTIONED THE RESPONSIVENESS OF THE BIDS SUBMITTED BY COSMODYNE CORPORATION, FTS CORPORATION AND CONSOLIDATED DIESEL ELECTRIC COMPANY. LETTER OF JANUARY 24, 1968, TO THE SUPPLY OFFICER, UNITED STATES NAVAL ORDNANCE LABORATORY, CONSOLIDATED DIES ELELECTRIC COMPANY RAISED THE ISSUE AS TO THE RESPONSIVENESS OF THE FTS CORPORATION AND COSMODYNE CORPORATION BIDS. THE ISSUE RAISED WITH RESPECT TO THE FTS BID WENT TO THE QUESTION WHICH WAS RESOLVED BY THE DECISION OF MAY 3, 1968. CONSOLIDATED DIESEL ELECTRIC COMPANY ALSO QUESTIONED THE BID OF COSMODYNE CORPORATION ON THE BASIS THAT THE BID WAS BASED ON LESS THAN CARLOAD LOTS IN VIEW OF THE ENTRY MADE UNDER PARAGRAPH 4.8.1 OF THE SOLICITATION AND THE FACT THAT THE BIDDER INDICATED THAT NO RAIL SIDING OR TERMINAL WAS AVAILABLE AS REQUIRED BY PARAGRAPH 4.5 (A) (2) OF THE SOLICITATION.

UPON COMPLETION OF EVALUATION, THE ARGUMENTS AGAINST AWARD OF LOT III TO ANY BIDDER OTHER THAN RSI WERE CONSIDERED BY THE DEPARTMENT OF THE NAVY AND IT WAS CONCLUDED THAT RSI IS NOT THE LOW RESPONSIVE BIDDER ENTITLED TO AWARD OF LOT III, AND THAT COSMODYNE CORPORATION IS THE LOW BIDDER FOR LOT III. HOWEVER, THE BID IS CONSIDERED TO BE NONRESPONSIVE AS IT INDICATED "NONE AVAILABLE" IN THE SECOND BLANK IN SECTION 4.5 OF THE SCHEDULE WHICH CALLED FOR INSERTION OF THE "EXACT LOCATION OF PRIVATE OR NEAREST RAIL TERMINAL FROM WHICH RAIL SHIPMENT WILL BE MADE, TOGETHER WITH THE NAME OF THE SERVING RAILROAD/S).' THE WORDS "NONE AVAILABLE" INSERTED BY COSMODYNE CORPORATION ARE CONSIDERED TO RESTRICT THE OPTION OF THE GOVERNMENT TO HAVE SHIPMENT BY TRUCK OR WATER CARRIER, AND TO REMOVE THE OPTION TO HAVE THE MATERIAL DELIVERED FREE OF EXPENSE TO THE GOVERNMENT FOR SHIPMENT BY RAIL. THIS CONCLUSION IS BASED ON B-144682 OF FEBRUARY 15, 1961, WHICH CONSIDERED A BID LIMITING THE TERMS OF DELIVERY. IN THAT CASE, THE LOW BIDDER INSERTED "WE WILL SHIP BY MOTOR TRUCK ONLY FROM 190 GREENWOOD AVENUE, MIDLAND PARK, N.J.' THE BIDDER PROTESTED REJECTION OF ITS BID AND THE PROTEST WAS DENIED.

AFTER THE BIDS ON INVITATION N60921-68-B-0085 WERE OPENED, COSMODYNE CORPORATION ADVISED THE NAVAL ORDANCE LABORATORY BY TELEGRAM OF JANUARY 17, 1968, THAT THERE IS IN FACT A RAIL SIDING AT ITS PLANT BUT THAT IT WAS UNUSABLE UNLESS REPAIRS WERE MADE AND, FURTHER, THAT COSMODYNE CORPORATION WOULD DECIDE WHETHER OR NOT IT WOULD REPAIR THE SIDING WHEN IT LEARNED THE QUANTITY OF MATERIAL TO BE AWARDED. COSMODYNE ALSO STATED IN THE TELEGRAM THAT THERE IS A TEAM TRACK AVAILABLE AT TORRANCE, CALIFORNIA, FROM WHICH SHIPMENT COULD BE MADE. COSMODYNE FURTHER ADVISED BY LETTER OF JANUARY 11, 1968, THAT IN VIEW OF THE PROXIMITY OF ITS PLANT TO THE WEST COAST DESTINATION, SHIPMENTS DESIGNATED FOR SEAL BEACH, CALIFORNIA, COULD BE DELIVERED AT NO COST TO THE GOVERNMENT. ALSO, IN LETTER OF JUNE 19, 1968, COSMODYNE ALLEGES THAT IT MISCONSTRUED THE INFORMATION CALLED FOR BY SECTION 2.8 AND SECTION 4.5 OF THE INVITATION AS REQUESTING ONLY WHETHER A PRIVATE RAIL SIDING WAS AVAILABLE AND THAT IT OVERLOOKED THE REQUEST FOR INFORMATION AS TO THE NEAREST RAIL TERMINAL. COSMODYNE CONTENDS THAT THE INFORMATION PROPERLY MAY BE FURNISHED AFTER BID OPENING AND CITES OFFICE DECISIONS TO SUPPORT ITS CONTENTION.

OUR OFFICE HAS PERMITTED THE FURNISHING OF INFORMATION AS TO WHETHER RAIL, TRUCK OR WATER TRANSPORTATION FACILITIES WERE AVAILABLE AT THE SHIPPING POINT AFTER BID OPENING. 42 COMP. GEN. 434; B-161876, OCTOBER 20, 1967. HOWEVER, IN VIEW OF THE WORDS "NONE AVAILABLE" INCLUDED IN THE BID OF COSMODYNE WITH RESPECT TO THE NEAREST RAIL TERMINAL, WE AGREE WITH THE ADMINISTRATIVE OFFICE THAT SUCH WORDS COULD BE CONSTRUED AS REMOVING THE OPTION OF THE GOVERNMENT TO HAVE THE MATERIAL DELIVERED BY THE CONTRACTOR FREE OF EXPENSE TO THE GOVERNMENT FOR SHIPMENT BY RAIL.

APART FROM THAT STATED ABOVE, IT APPEARS THAT THE BID OF COSMODYNE IS OTHERWISE NONRESPONSIVE. IN ITS LETTER OF DECEMBER 18, 1967, TRANSMITTING ITS BID COSMODYNE REQUESTED PROGRESS PAYMENTS OF 75 PERCENT OF THE TOTAL COSTS INCURRED. THE INVITATION MADE CLAUSE E 510.1, "PROGRESS PAYMENTS" (NOVEMBER 1964), OF THE ARMED SERVICES PROCUREMENT REGULATION SPECIFICALLY APPLICABLE TO ANY RESULTING CONTRACT. THAT CLAUSE PROVIDES FOR PROGRESS PAYMENTS OF 70 PERCENT OF TOTAL COSTS. IN OUR DECISION OF MARCH 20, 1968, B-163140, WE CONSIDERED THE QUESTION AS TO THE EFFECT OF A REQUEST FOR A 75-PERCENT PROGRESS PAYMENT UNDER A SIMILAR PROGRESS PAYMENT CLAUSE AND WE CONCLUDED THAT SUCH REQUEST RENDERED THE BID NONRESPONSIVE BECAUSE IT IMPOSED A CONDITION AT VARIANCE WITH THAT EXTENDED BY THE INVITATION TO ALL BIDDERS. WHAT WE SAID IN THAT DECISION IS EQUALLY APPLICABLE TO THE BID OF COSMODYNE.

THE SECOND LOW BIDDER ON LOT III IS CONSOLIDATED DIESEL ELECTRIC COMPANY. RADIATION SYSTEMS, INC., CLAIMS THAT THE BID OF CONSOLIDATED IS NONRESPONSIVE BECAUSE THAT COMPANY'S BID LEFT BLANK PARAGRAPH 4.5 (4) WHERE BIDDERS WERE ASKED TO INSERT "THE PORT, OR THE SPECIFIC AREA WITHIN SUCH PORT, TO WHICH SUPPLIES WILL BE DELIVERED.' THE ADMINISTRATIVE OFFICE POINTS OUT THAT IN 42 COMP. GEN. 434 THE COMPTROLLER GENERAL CONSIDERED AN INSTANCE WHERE A BIDDER DID NOT INCLUDE THE INFORMATION AS TO WHETHER RAIL, TRUCK OR WATER TRANSPORTATION FACILITIES WERE AVAILABLE AT THE SHIPPING POINT AND HELD THAT PERMITTING THE DATA TO BE FURNISHED AFTER THE BID OPENING DATE WOULD NOT HAVE A SERIOUS ADVERSE EFFECT ON THE INTEGRITY OF THE FORMAL ADVERTISING SYSTEM. IT WAS CONCLUDED THAT THE FAILURE TO SUBMIT THE DATA PRIOR TO BID OPENING MAY BE WAIVED AND A CONTRACT AWARDED ON THE BID. IN AN UNPUBLISHED DECISION, B-153161 OF MARCH 5, 1964, WE AGAIN CONCLUDED THAT A BIDDER WHO HAD NOT SUBMITTED SIMILAR TRANSPORTATION DATA SHOULD HAVE BEEN PERMITTED TO FURNISH THE DATA AFTER BID OPENING WITHOUT REGARD TO A WARNING IN THE INVITATION THAT SUCH FAILURE WOULD RESULT IN BID REJECTION. WE AGREE WITH THE NAVY THAT THE PRINCIPLE ENUNCIATED IN THOSE DECISIONS IS APPLICABLE AND THAT THE FAILURE OF CONSOLIDATED TO DESIGNATE A PORT BEFORE BID OPENING DOES NOT RENDER ITS BID NONRESPONSIVE.

RADIATION SYSTEMS, INC., HAS TAKEN THE POSITION THAT CONSOLIDATED SHOULD HAVE DESIGNATED THE PORT OF ALBANY, NEW YORK, IN ITS BID SINCE SHIPMENTS WERE TO BE MADE FROM NISKAYUNA, NEW YORK, WHICH IS APPROXIMATELY 20 MILES FROM THE PORT OF ALBANY. CHIEF, RATE QUOTATIONS SECTION, MTMTS, BROOKLYN, NEW YORK, HAS ADVISED THE NAVY THAT THE PORT OF ALBANY HAS A DEPTH OF 30 TO 32 FEET WITH A TIDAL CHANGE OF 4-1/2 FEET. THERE ARE EIGHT BERTHS ON THE ALBANY SIDE AND TWO LUMBER BERTHS ON THE RENSSELAER SIDE OF THE HUDSON RIVER. SHIPS USING THIS PORT FACILITY ARE FROM 600 TO 700 FEET IN LENGTH AND CARRY BULK CARGO UP TO 24,000 SHORT TONS. FOREIGN FLAG VESSELS ONLY CONDUCT EXPORT SHIPPING FROM THE PORT WHICH CONSISTS PRINCIPALLY OF GRAIN AND SCRAP IRON FOR DELIVERY TO INDIA AND JAPAN. FOREIGN FLAG VESSELS DELIVER WOOD PULP, TOP TILE, HARDWOOD AND STEEL. AN AVERAGE OF TWO TO THREE BULK CARRIERS PER MONTH USE THE PORT FACILITY. NO AMERICAN FLAG VESSELS ARE AVAILABLE TO THE PORT FACILITY AND NO SHIPMENTS ARE MADE FROM THE PORT TO OTHER PORTS WITHIN THE CONTINENTAL UNITED STATES. THE CITY OF NISKAYUNA IS CONSIDERED TO BE WITHIN THE COMMERCIAL ZONE OF THE PORT AREA OF ALBANY. IN VIEW OF THE FOREGOING, WE AGREE THAT THE BID OF CONSOLIDATED IS RESPONSIVE AND THAT AWARD MAY BE MADE ON LOT III TO CONSOLIDATED AS THE LOWEST RESPONSIVE BIDDER.

AS IN THE CASE OF COSMODYNE, RADIATION SYSTEMS, INC., ALSO INCLUDED IN ITS BID A REQUEST FOR PROGRESS PAYMENTS AT 75 PERCENT OF TOTAL COSTS WITH LIQUIDATION AT 70 PERCENT. IN LETTER OF JUNE 20, 1968, THE ATTORNEYS FOR RADIATION SYSTEMS, INC., CONTEND THAT RSI SUBMITTED ITS BID WITH NO EXCEPTIONS AND THAT THE REQUEST FOR PROGRESS PAYMENT WAS A REQUEST ONLY FOR CONSIDERATION OF THE CUSTOMARY PERCENTAGE RATE. IT IS ALSO CONTENDED THAT THE BIDS IN THIS CASE WERE SUBMITTED PRIOR TO OUR DECISION OF MARCH 20, 1968, B-163140, AND THAT, THEREFORE, THE DECISION IS NOT APPLICABLE.

WE CANNOT AGREE THAT OUR DECISION OF MARCH 20, 1968, IS NOT APPLICABLE TO A BID SUBMITTED PRIOR TO THE ISSUANCE OF THE DECISION. ANY BID PENDING AFTER THE DATE OF OUR DECISION MUST BE CONSIDERED IN THE LIGHT OF THAT DECISION IRRESPECTIVE AS TO THE DATE OF SUBMISSION OF THE BID.

WHILE THE STATEMENT IS MADE THAT THE BID WAS SUBMITTED "WITH NO EXCEPTIONS," THAT STATEMENT IS CONTRADICTED BY THE REQUEST FOR A 75 PERCENT PROGRESS PAYMENT. ACCORDINGLY, THE BID OF RSI MUST BE CONSIDERED NONRESPONSIVE.