B-136440, JUL. 14, 1958

B-136440, JUL. 14, 1958

TO HONORABLE FRANKLIN FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF JULY 3, 1958, FORWARDING A REPORT REGARDING THE PROTEST ON BEHALF OF THE BREADY TRACTOR AND IMPLEMENT CO., SOLON, OHIO, RESULTING FROM THE REJECTION OF ITS BID WHICH WAS SUBMITTED IN RESPONSE TO INVITATION NO. FN-3G-9938-A-4-15 58, ISSUED BY THE GENERAL SERVICES ADMINISTRATION ON APRIL 1, 1958.

THERE IS ENCLOSED A COPY OF OUR LETTER OF TODAY TO MR. ROBERT SHERIFFS MOSS, ATTORNEY FOR THE BREADY COMPANY.

YOUR LETTER OF JULY 3, 1958, ALSO REFERS TO A PROTEST THAT HAS BEEN FILED HERE ON BEHALF OF THE ESHELMAN MOTORS CORPORATION, BALTIMORE, MARYLAND, AND YOU SUBMIT FOR OUR CONSIDERATION AND DECISION THE MATTER OF A MISTAKE IN BID ALLEGED BY ESHELMAN TO HAVE BEEN MADE IN THE SUBMISSION OF ITS BID. IN ADDITION, YOU REQUEST OUR VIEWS AS TO WHETHER, IN CONNECTION WITH THE EVALUATION OF BIDS, THE BIDS OF ESHELMAN AND ANOTHER BIDDER, HIGHWAY PRODUCTS, INC., WERE RESPONSIVE TO THE PROVISIONS OF PARAGRAPH 7.2 OF THE SPECIFICATION, ENTITLED "REPAIR PARKS AND SERVICES.'

THE ALLEGED MISTAKE ON THE PART OF ESHELMAN CONCERNS THAT PORTION OF ITEM 1 OF THE INVITATION WHICH IS AS FOLLOWS:

TABLE

"BID PRICES FOB POINT OF ORIGIN --------------

(SPECIFY)

A. TOTAL QUANTITY 3400 EACH ----- -----

B. TOTAL QUANTITY FOR DELIVERY

EAST OF MISSISSIPPI RIVER 1622 EACH ----- --- -

C. TOTAL QUANTITY FOR DELIVERY

WEST OF MISSISSIPPI RIVER 1778 EACH ----- -----

AWARD WILL BE MADE FOR THE TOTAL ONLY ON SUB-ITEM A OR FOR THE TOTAL ONLY ON EACH OF THE SUB-ITEMS B AND C AS MAY BE IN THE BEST INTERESTS OF THE GOVERNMENT ON THE BASIS OF LOWEST COST, TRANSPORTATION INCLUDED. BIDS WILL BE EVALUATED ON TOTAL COST OF VEHICLES PLUS RAILROAD TRANSPORTATION COSTS, IN CARLOAD LOTS, TO EACH BASING POINT. BASING POINTS ARE SHOWN ON PAGE 8.'

THE RECORD SHOWS THAT ESHELMAN QUOTED A UNIT PRICE OF $777.76 FOR THE TOTAL QUANTITY OF VEHICLES SPECIFIED UNDER SUB-ITEM A; $818.49 EACH FOR THE QUANTITY SPECIFIED UNDER SUB-ITEM B FOR DELIVERY EAST OF THE MISSISSIPPI RIVER; AND $872.62 EACH FOR THE QUANTITY SPECIFIED UNDER SUB- ITEM C FOR DELIVERY WEST OF THE MISSISSIPPI. IT WAS NOTED THAT THE UNIT PRICE QUOTED FOR DELIVERY WEST OF THE MISSISSIPPI RIVER WAS HIGHER THAN THE UNIT PRICE OFFERED FOR VEHICLES TO BE DELIVERED EAST OF THE MISSISSIPPI, WHEREAS THE WESTERN QUANTITY EXCEEDED THE EASTERN QUANTITY AND SHOULD HAVE CARRIED A LESSER PRICE. UPON BEING REQUESTED BY THE CONTRACTING OFFICER TO VERIFY ITS BID, THE BIDDER, BY LETTER DATED MAY 8, 1958, ADVISED THAT ITS QUOTED PRICE FOR SUB-ITEM A WAS AN F.O.B. ORIGIN PRICE WHEREAS ITS PRICES FOR SUB-ITEMS B AND C "REPRESENT THE TOTAL COST DELIVERED TO THE DESTINATIONS AS SPECIFIED IN THE INVITATION.' NO MISTAKE IN BID WAS ALLEGED AT THIS TIME AND THE BID OF ESHELMAN WAS CONSIDERED AS BEING NON-RESPONSIVE WITH HIGHWAY PRODUCTS, INC., THE LOWEST RESPONSIVE BIDDER AS TO SUB-ITEM A, ALTHOUGH THIS COMPANY DID NOT BID ON SUB-ITEMS B AND C.

SUBSEQUENTLY, WHEN AWARD TO HIGHWAY PRODUCTS, INC., BECAME IMMINENT, THE ATTORNEYS FOR ESHELMAN FILED TWO LETTERS OF PROTEST AGAINST SUCH AN AWARD, CONTENDING THAT THE LOWEST PRICE TO THE GOVERNMENT FOR THE TOTAL QUANTITY OF VEHICLES REQUIRED BY THE INVITATION WOULD BE ACHIEVED BY AWARDING A CONTRACT TO ESHELMAN FOR THE QUANTITY OF VEHICLES REQUIRED FOR DELIVERY EAST OF THE MISSISSIPPI RIVER UNDER SUB ITEM B AND BY AWARDING A SECOND CONTRACT TO CUSHMAN MOTOR WORKS, INC., FOR THE TOTAL QUANTITY OF VEHICLES REQUIRED FOR DELIVERY WEST OF THE MISSISSIPPI, PURSUANT TO SUB-ITEM C OF THE INVITATION. IN ADDITION, ESHELMAN, IN A LETTER DATED JUNE 5, 1958, TO YOU, STATED:

"SINCE ESHELMAN'S "B" BID OF $818.49 INCLUDED FREIGHT AS OF THE SUBMISSION OF THE BIDS, THE ADJUSTED BID (DEDUCTING ACTUAL FREIGHT COSTS AT THAT TIME) IS $778.36. HOWEVER, ESHELMAN FULLY INTENDED TO OFFER THE SAME F.O.B. PRICE ON ALL ITS BIDS AND WOULD BE WILLING TO HAVE ITS BID CONSTRUED AS $777.76, WHICH WOULD FURTHER REDUCE THE COST TO THE GOVERNMENT BY .60 PER VEHICLE, OR $973.20.'

SHOULD AWARDS BE MADE ON THE BASIS URGED BY ESHELMAN, THE TOTAL NUMBER OF VEHICLES REQUIRED COULD BE SECURED AT A PRICE WHICH IS $19,426.09 LESS THAN THE PRICE OF HIGHWAY PRODUCTS, INC., FOR SUB-ITEM A AS SEEN FROM THE FOLLOWING TABULATION:

TABLE

"BIDDER BID PRICES

"A" "B" "C"

HIGHWAY PRODUCTS, INC. $ 2,847,588.06 NONE NONE

CUSHMAN MOTOR WORKS, INC. 2,860,897.60 $ 1,375,004.74 $ 1,503,547.92

ESHELMAN MOTORS CORP. 2,863,792.79 1,324,614.05 1,539,178.74

COMBINATION:

ESHELMAN, BASIS "B")

CUSHMAN, BASIS "C") 2,828,161.97

DIFFERENCE BETWEEN

HIGHWAY PRODUCTS AND

COMBINATION 19,426.09"

AS STATED IN YOUR LETTER, ESHELMAN NOW HAS FILED A FORMAL PROTEST WITH OUR OFFICE AGAINST THE AWARD OF A CONTRACT ON ANY BASIS OTHER THAN THE AFOREMENTIONED COMBINATION OF CONTRACTS (ESHELMAN AND CUSHMAN) AND THE BASIS FOR THE PROTEST IS AN ALLEGED MISTAKE IN BID WITH RESPECT TO SUB- ITEMS B AND C. IN SUPPORT THEREOF THERE HAVE BEEN SUBMITTED AFFIDAVITS AND WORK SHEETS PREPARED BY A REPRESENTATIVE OF THE PENNSYLVANIA RAILROAD WHICH DEMONSTRATE CONCLUSIVELY THAT THE ORIGINAL ESHELMAN BID ON SUB-ITEMS B AND C OF THE INVITATION INCLUDED RAILROAD TRANSPORTATION CHARGES AS COMPUTED AT THE TIME THE BID WAS PREPARED, THUS MAKING THE BID PRICES ON THOSE TWO SUB-ITEMS F.O.B. DESTINATION.

THE PURPOSE OF THE LIMITATIONS WHICH OUR OFFICE AND THE COURTS HAVE PLACED AGAINST THE MODIFICATION OF BIDS AFTER OPENING IS TO PRECLUDE ANY BIDDER FROM OBTAINING AN ADVANTAGE OVER OTHERS AFTER SECURING INFORMATION AS TO THE OTHER BIDS SUBMITTED. ACCORDINGLY, IN ORDER TO PERMIT CORRECTIONS, THE EVIDENCE MUST BE CONCLUSIVE IN ESTABLISHING THAT A MISTAKE HAS BEEN MADE, THE NATURE OF THE MISTAKE AND WHAT THE BID PRICE WOULD HAVE BEEN BUT FOR THIS MISTAKE. 18 FED. BAR JOURNAL 80. IN THE PRESENT CASE, IT IS CLEAR AND CONVINCING THAT THE CONTRACTING OFFICER KNEW OR SHOULD HAVE KNOWN AFTER VERIFICATION OF THE ESHELMAN BID FOR OTHER REASONS THAT THE FIRM MISCONSTRUED THE BASIC DELIVERY REQUIREMENT OF THE ADVERTISED INVITATION THAT BIDS WERE TO BE OFFERED ON ALL THREE SUB-ITEMS ON AN F.O.B. ORIGIN BASIS. ACCORDINGLY, WE DO NOT LOOK UPON THE PRESENT ALLEGATION OF ERROR BY ESHELMAN AS AN AFTERTHOUGHT, AS SUGGESTED BY ONE OF THE OTHER BIDDERS. RATHER, WE ARE OF THE VIEW THAT AN HONEST MISTAKE WAS MADE WHICH COULD HAVE BEEN CONCLUSIVELY ESTABLISHED AT ANY TIME AFTER THE OPENING OF BIDS.

THE SPECIFICATION PROVIDED THAT DELIVERY WAS TO BE F.O.B. POINT OF ORIGIN, IT BEING THE INTENTION TO AWARD THE CONTRACT/S) TO THE BIDDER/S) OFFERING THE MOST FAVORABLE PRICE PER VEHICLE, TAKING INTO CONSIDERATION THE COST TO THE GOVERNMENT OF TRANSPORTING THE VEHICLES TO EACH OF THE BASING POINTS SHOWN ON PAGE 8 OF THE INVITATION. IT IS CLEAR THAT CORRECTION OF THE BID OF ESHELMAN WOULD NOT ENTAIL PERMISSION TO LOWER ITS PRICE PER VEHICLE IN DEROGATION OF OTHER BIDDERS' RIGHTS BUT WOULD MERELY SERVE TO IDENTIFY THAT PORTION OF THE TOTAL BID PRICES ON SUB-ITEMS B AND C WHICH REPRESENTS TRANSPORTATION CHARGES COMPUTED BY THE PENNSYLVANIA RAILROAD COMPANY'S REPRESENTATIVE. WE, THEREFORE, HOLD THAT CORRECTION OF THE ESHELMAN BID PROPERLY MAY BE EFFECTED, AS REQUESTED, AND THAT THE USE OF ITS PRICE OF $777.76 PER VEHICLE FOR PURPOSES OF BID EVALUATION ON THE BASIS PROVIDED FOR IN THE INVITATION WOULD NOT BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS. WHILE AN ABSTRACT OF BIDS WAS NOT SUBMITTED WITH YOUR REPORT, WE HAVE BEEN INFORMALLY ADVISED BY A REPRESENTATIVE OF YOUR AGENCY THAT, OF THE FIVE BIDDERS WHO QUOTED F.O.B. ORIGIN PRICES ON ALL THREE SUB-ITEMS, THREE OF THOSE BIDDERS SUBMITTED IDENTICAL PRICES ON ALL THREE SUB-ITEMS. IN OUR VIEW, THIS WARRANTS THE CONCLUSION THAT THE EXTENT OF THE ERROR IN ESHELMAN'S BID NOT ONLY IS ESTABLISHED BY THE EVIDENCE SUBMITTED BUT IS REASONABLY APPARENT ON THE FACE OF THE BID ITSELF BY REASON OF THE UNIT PRICE QUOTED FOR SUB ITEM A. THEREFORE, WE DO NOT BELIEVE THAT CORRECTION OF THE ESHELMAN BID WOULD BE INCONSISTENT WITH OUT DECISIONS PRECLUDING DOWNWARD REVISION OF THE BID PRICE WHICH RESULTS IN CHANGING THE RELATIVE POSITION OF THE BIDDERS.

ACCORDINGLY, AS SUGGESTED IN YOUR LETTER, AN AWARD OF CONTRACT TO ESHELMAN AND TO CUSHMAN FOR SUB-ITEMS B AND C, RESPECTIVELY, SHOULD BE MADE THEREBY SECURING THE LOWEST TOTAL COST TO THE GOVERNMENT FOR THE TOTAL QUANTITY OF VEHICLES REQUIRED.

PARAGRAPH 7.2 OF THE SPECIFICATION, REFERRED TO IN YOUR LETTER OF JULY 3, 1958, PROVIDES:

"REPAIR PARTS AND SERVICES. - AS THE CONTINUOUS OPERATION OF THE VEHICLE CONTEMPLATED BY THIS SPECIFICATION IS OF THE UTMOST IMPORTANCE, IT IS NECESSARY THAT THE SUCCESSFUL BIDDER BE IN A POSITION TO RENDER PROMPT SERVICE AND TO FURNISH REPLACEMENT PARTS. ACCORDINGLY, ALL BIDDERS SHALL INDICATE THE EXTENT OF THEIR ABILITY TO RENDER PROMPT SERVICE BY FURNISHING A LIST OF BRANCH OFFICES OR AGENCIES WHERE COMPLETE STOCKS OF REPAIR PARTS ARE MAINTAINED AND CAN BE SECURED PROMPTLY.'

WITH REFERENCE TO THE FOREGOING, YOU QUESTION THE RESPONSIVENESS OF THE BIDS OF HIGHWAY PRODUCTS, INC., AND ESHELMAN MOTORS CORPORATION STATING IN YOUR LETTER, AS FOLLOWS:

"IN COMPLIANCE WITH THE ABOVE PARAGRAPH OF THE SPECIFICATIONS, HIGHWAY PRODUCTS, INC. STATED IN ITS LETTER OF APRIL 12, 1958, BY WHICH IT TRANSMITTED ITS BID TO THIS AGENCY, THAT "WE HAVE, OR WILL HAVE, AGENCIES IN ALL AREAS WHERE SERVICE OF THESE VEHICLES IS CONTEMPLATED, WHICH WILL PERFORM PROMPT SERVICE AND FURNISH REPLACEMENT PARTS.' BY LETTER DATED APRIL 17, 1958, HIGHWAY PRODUCTS, INC. SUPPLEMENTED ITS BID BY SUBMITTING A LIST OF "SERVICE FACILITIES COMPLETE" AND STATED THAT, IN ADDITION, IT HAD MADE ARRANGEMENTS WITH TWIN COACH COMPANY, KENT, OHIO, TO FURTHER SUPPLEMENT ANY SERVICE REQUIREMENT WITH THEIR NATIONAL FIELD ORGANIZATION.

"SIMILARLY, IN RESPONSE TO THE ABOVE QUOTED PARAGRAPH OF THE SPECIFICATIONS, ESHELMAN MOTORS CORPORATION INCLUDED IN ITS LETTER OF TRANSMISSION OF ITS BID A STATEMENT THAT THERE WAS ENCLOSED WITH ITS BID "THE BRIGGS AND STRATTON SERVICE STATIONS, IN TRIPLICATE, WHERE SERVICE ON THE ENGINE AND CAR WOULD BE AVAILABLE.' ATTACHED TO THE ESHELMAN BID WAS A DOCUMENT IDENTIFIED AS ,DIRECTORY, BRIGGS AND STRATTON ENGINE SERVICE ORGANIZATION.'

"NOTWITHSTANDING THE FIRST SENTENCE OF PARAGRAPH 7.2 OF THE SPECIFICATIONS WHICH ADMONISHES ALL BIDDERS THAT IT IS NECESSARY FOR THE SUCCESSFUL BIDDER TO BE IN A POSITION TO RENDER PROMPT SERVICE AND TO FURNISH REPLACEMENT PARTS, THE SPECIFIC REQUIREMENT OF THE PARAGRAPH, AS STATED IN THE SECOND SENTENCE THEREOF, IS THAT "ALL BIDDERS SHALL INDICATE THE EXTENT OF THEIR ABILITY TO RENDER PROMPT SERVICE BY FURNISHING A LIST OF BRANCH OFFICES OR AGENCIES WHERE COMPLETE STOCKS OF REPAIR PARTS ARE MAINTAINED AND CAN BE SECURED PROMPTLY.' IN THE LIGHT OF THE LANGUAGE IN WHICH THE REQUIREMENT IS EXPRESSED IN PARAGRAPH 7.2 OF THE SPECIFICATIONS, IT IS OUR BELIEF THAT BOTH HIGHWAY PRODUCTS, INC. AND ESHELMAN MOTORS CORPORATION COMPLIED WITH THIS REQUIREMENT OF THE SPECIFICATIONS IN THE MANNER ABOVE STATED. YOUR CONFIRMATION OF OUR POSITION IN THIS REGARD IS REQUESTED.'

ON THE BASIS OF THE INFORMATION FURNISHED, IT WOULD APPEAR THAT HIGHWAY PRODUCTS AND ESHELMAN HAVE COMPLIED WITH THE REQUIREMENTS OF THE SPECIFICATION PERTAINING TO REPAIR PARTS AND SERVICES.