B-127397, JUN. 1, 1956

B-127397, JUN. 1, 1956

TO HONORABLE FRANKLIN G. FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 5, 1956, WITH ENCLOSURE, FURNISHING THE REPORT REQUESTED IN OUR LETTER OF MARCH 29, 1956, RELATIVE TO THE PROTEST OF ARTHUR S. LOWELL ON BEHALF OF HILLSIDE METAL PRODUCTS, INC., AGAINST THE ACTION OF THE FEDERAL SUPPLY SERVICE OF YOUR AGENCY IN REJECTING THAT CONCERN'S BID ON ITEM NO. 7110-270 9840 OF INVITATION NO. FNW-1.T-5-A-1-20-56.

THE INVITATION REQUESTED BIDS TO SUPPLY THE NEEDS OF THE GOVERNMENT FOR VARIOUS ITEMS OF STEEL OFFICE DESKS FOR THE PERIOD APRIL 1, 1956, THROUGH MARCH 31, 1957. THE PERTINENT PROVISIONS OF THE INVITATION ARE SUMMARIZED ON PAGES 1, 2 AND 3 OF YOUR LETTER IN SUBPARAGRAPHS (A) THROUGH (H), AND NEED NOT BE RESTATED HERE IN FULL. BRIEFLY, BIDS WERE REQUESTED ON 10 TYPES OF DESKS AND BIDDERS WERE REQUIRED TO INDICATE OPPOSITE EACH ITEM THE ESTIMATED SHIPPING WEIGHT IN POUNDS FOR THE DESKS OFFERED. BIDDERS WERE ALSO REQUESTED TO INDICATE IN THEIR BIDS THE NUMBER OF DESKS EACH WOULD AGREE TO ALLOCATE AND FURNISH THE GOVERNMENT MONTHLY DURING THE CONTRACT PERIOD, IF AWARDED A CONTRACT, TOGETHER WITH INFORMATION AS TO THE NUMBER OF DESKS OF EACH TYPE WHICH COULD BE LOADED INTO 40 AND 50-FOOT RAILROAD CARS. PRICES WERE REQUESTED TO BE QUOTED F.O.B. POINT OF ORIGIN (WHICH PRICES WERE TO INCLUDE FREE DELIVERY TO ANY POINT WITHIN THE COMMERCIAL ZONE AREA OF THE POINT OF ORIGIN), AND, FOR THE PURPOSE OF DETERMINING THE SUCCESSFUL BIDDER OR BIDDERS, THE INVITATION PROVIDED THAT BIDS WOULD BE EVALUATED ON THE BASIS OF TRANSPORTATION COSTS OF 40-FOOT CARS FULLY LOADED TO 12 REPRESENTATIVE POINTS LISTED IN THE INVITATION.

IT WAS STATED IN YOUR LETTER THAT FIVE BIDS WERE RECEIVED WITH RESPECT TO THE ITEM UNDER PROTEST--- THE ONLY ONE ON WHICH THE PROTESTANT BID--- AS FOLLOWS:

TABLE

"ART METAL CONSTRUCTION CO. $92.60 EACH F.O.B. JAMESTOWN, N.Y.

GENERAL FIREPROOFING CO. 87.75 EACH F.O.B. YOUNGSTOWN, OHIO

HARRISON SHEET STEEL CO. 79.05 EACH F.O.B. CHICAGO, ILL.

HILLSIDE METAL PRODUCTS, INC. 87.36 EACH F.O.B. NEWARK, N. J.

SECURITY STEEL EQUIPMENT CORP. 87.70 EACH F.O.B. AVENEL, N. J.'

WHEN IT WAS FOUND UPON OPENING THE BIDS THAT HILLSIDE METAL PRODUCTS,INC., DID NOT STATE THE ESTIMATED SHIPPING WEIGHT FOR THE ITEM BID UPON, THE CONTRACTING OFFICER CONCLUDED THAT THE FAILURE TO FURNISH SUCH WEIGHT WAS A MATERIAL DEFECT IN THE BID WHICH COULD NOT BE WAIVED, AND CONSEQUENTLY REJECTED THE BID ON THAT ITEM AS NOT RESPONSIVE TO THE INVITATION.

CONSIDERING THE RECORD AS A WHOLE, IT APPEARS THAT IT WAS THE PURPOSE AND INTENT OF THE FEDERAL SUPPLY SERVICE TO MAKE WHATEVER AWARDS MIGHT BE REQUIRED TO GIVE THE GOVERNMENT THE BENEFIT OF THE LOWEST POSSIBLE PRICE AT ANY DESIRED DESIGNATION AS WELL AS PROVIDE FOR ITS MAXIMUM PROBABLE NEEDS. NEITHER THE ACTUAL QUANTITIES TO BE PROCURED NOR THE AREAS IN WHICH THE DESKS WOULD BE NEEDED COULD BE FORECAST WITH ANY DEGREE OF ACCURACY. IT WAS ALSO ANTICIPATED THAT NO INDIVIDUAL MANUFACTURER WOULD BE ABLE OR WILLING TO ASSUME AN OBLIGATION TO FURNISH THE TOTAL REQUIREMENTS OF THE GOVERNMENT. BIDDERS WERE THEREFORE REQUESTED TO STATE THE NUMBER OF UNITS PER MONTH WHICH THEY COULD ALLOCATE FOR GOVERNMENT ORDERS AND THE FEDERAL SUPPLY SERVICE UNDERTOOK TO ISSUE QUARTERLY COMMITMENTS TO EACH BIDDER RECEIVING AN AWARD FOR DEFINITE QUANTITIES TO BE ORDERED DURING THE ENSUING QUARTER. PURCHASE ORDERS WERE TO BE ISSUED AGAINST THOSE COMMITMENTS UPON REQUISITIONS OR REQUESTS FROM THE SEVERAL REGIONAL OFFICES, EACH ORDER TO BE PLACED WITH THAT CONTRACTOR WHOSE DELIVERED COST AT THE DESIRED DESTINATION WOULD BE LOWEST, UNTIL ITS MONTHLY ALLOCATION SHOULD BE EXHAUSTED, IN WHICH EVENT THE ORDER WOULD GO TO THE CONTRACTOR NEXT IN LINE ON A DELIVERED COST BASIS.

THE ONLY JUSTIFICATION FOR REFUSAL OF AN AWARD TO THE PROTESTING BIDDER IS THE FACT THAT ITS FAILURE TO STATE AN ESTIMATED SHIPPING WEIGHT MADE IT IMPOSSIBLE TO EVALUATE THE COST OF ITS DESKS AT OTHER DESTINATIONS. HOWEVER, SINCE THE USE OF ESTIMATED WEIGHTS RATHER THAN GUARANTEED WEIGHTS RESULTS IN AWARDS BEING MADE ON AN ESTIMATED BASIS RATHER THAN ON THE BASIS OF FIXED COSTS, WE HAVE SERIOUS DOUBT THAT THE FAILURE OF THE HILLSIDE COMPANY TO STATE THE ESTIMATED WEIGHT OF ITS DESKS PROPERLY COULD BE CONSIDERED A MATERIAL DEFECT IN ITS BID. IN VIEW OF OUR DOUBT IN THIS REGARD AND OF THE PROVISION IN THE INVITATION FOR FREE DELIVERY WITHIN THE COMMERCIAL ZONE AT POINT OF ORIGIN WE DO NOT FEEL THAT THERE WAS SUFFICIENT JUSTIFICATION FOR THE REJECTION OF HILLSIDE'S LOW BID FOR THE NEWARK AREA. ACCORDINGLY, WE CONCLUDE THAT AN AWARD SHOULD BE MADE TO THE PROTESTING BIDDER IN ACCORDANCE WITH ITS BID FOR ORDERS FOR DELIVERY WITHIN THE NEWARK COMMERCIAL ZONE. SUCH CHANGES MAY BE MADE IN THE TERMS OF THE CONTRACT FORM AS MAY BE NECESSARY TO ACCOMPLISH THIS PURPOSE.