B-153067, JUN. 2, 1964

B-153067, JUN. 2, 1964

TO THE SECRETARY OF THE ARMY:

WE REFER TO A LETTER FROM THE DEPUTY DIRECTOR, PROCUREMENT AND PRODUCTION, HEADQUARTERS, UNITED STATES ARMY MATERIEL COMMAND, DATED MAY 14, 1964, WITH ENCLOSURES, INCLUDING A LETTER DATED MAY 8, 1964, FROM HEADQUARTERS, UNITED STATES ARMY TANK-AUTOMOTIVE CENTER, WARREN, MICHIGAN, HEREAFTER REFERRED TO AS ATAC. THIS SUBMISSION REQUESTS WRITTEN CLARIFICATION BY OUR OFFICE REGARDING THE EVALUATION OF F.O.B. ORIGIN BIDS IN SITUATIONS SIMILAR TO THE SITUATION CONSIDERED IN OUR DECISION TO YOU, B-153067, MARCH 20, 1964, 43 COMP. GEN. - .

WE ARE ADVISED THAT ATAC HAS ISSUED INVITATION FOR BIDS NO. AMC-20 113-64 -698/T) WHICH IS FOR THE PROCUREMENT OF THE SAME TYPE ITEM SPECIFIED IN INVITATION FOR BIDS NO. AMC-20-113-63-2096/T), WHICH WAS THE SUBJECT OF OUR DECISION TO YOU, B-153067, SUPRA, AND THESE TWO INVITATIONS APPARENTLY ARE ALSO SIMILAR IN THAT BOTH INVITATIONS REQUIRE BIDDERS TO STIPULATE LOADING PATTERNS WITHOUT OPTIMUM LOADS BEING SET FORTH BY THE GOVERNMENT. ATAC ADVISES THAT OPTIMUM LOADS COULD NOT BE DETERMINED AND SET FORTH BY THE GOVERNMENT UNDER INVITATION FOR BIDS NO. AMC-20-113-64-698/T) BECAUSE OF MANY IMPONDERABLES AND UNKNOWN FACTORS RELATIVE TO BIDDER KNOW-HOW SUCH AS AVAILABILITY OF LOADING EQUIPMENT AND OTHER FACILITIES, NUMBER OF AND ABILITY OF PERSONNEL NEEDED FOR THE LOADING OPERATIONS OF THE SEPARATE BIDDERS, AND THE AMOUNT OF SUPPLIES NEEDED TO BLOCK AND BRACE THE ITEMS BEING PROCURED.

REGARDING THE EVALUATION OF TRANSPORTATION CHARGES FOR F.O.B. ORIGIN BIDS WHERE BIDDERS ARE TO STIPULATE THE LOADING PATTERNS WITHOUT OPTIMUM LOADS BEING DESIGNATED BY THE GOVERNMENT, ATAC'S LETTER STATES AS FOLLOWS:

"* * * EVALUATION OF TRANSPORTATION COSTS FROM F.O.B. ORIGIN POINTS SHOULD BE EFFECTED ON THE BASIS THAT EACH BID WILL BE EVALUATED IN ACCORDANCE WITH THE LOADING PATTERN ESTABLISHED IN THAT BID. AN EXCEPTION TO THIS METHOD OF EVALUATION WOULD OCCUR IF THE GOVERNMENT CAN DETERMINE FROM DATA AVAILABLE TO IT THAT MORE UNITS CAN BE LOADED ON THE TYPE OF CARRIER EQUIPMENT DESIGNATED BY THE BIDDER WITHOUT USING SPECIAL HANDLING OR SPECIAL LOADING EQUIPMENT. IN THE LATTER CASE, THE BID WILL BE EVALUATED ON THE BASIS OF LOADING THE LARGER NUMBER OF UNITS.'

IN THIS CONNECTION WE HAVE THE FOLLOWING COMMENTS. GENERALLY, IT IS TRUE THAT F.O.B. ORIGIN BIDS IN THIS TYPE OF SITUATION SHOULD BE EVALUATED IN ACCORDANCE WITH THE LOADING PATTERN SET FORTH BY THE BIDDER. SUCH LOADING DATA IS REQUESTED FOR EVALUATION PURPOSES IN EVALUATING THE GOVERNMENT'S COST OF TRANSPORTATION AND FOR USE IN SELECTING THE MODE OF SHIPMENT.

IF AFTER AWARD IS MADE TO A BIDDER DETERMINED TO BE LOW PURSUANT TO AN EVALUATION BASED ON THE LOADING PATTERN SET FORTH IN THE BID, IT IS DETERMINED THAT LOADING A GREATER NUMBER OF UNITS THAN DESIGNATED IN THE BID FOR A PARTICULAR MODE OF TRANSPORTATION WILL RESULT IN LOWER TRANSPORTATION COSTS TO THE GOVERNMENT, THE GOVERNMENT COULD SHIP THE GREATER NUMBER OF UNITS NOTWITHSTANDING THAT LOADING THE GREATER NUMBER OF UNITS WILL RESULT IN INCREASED LOADING COSTS TO THE CONTRACTOR. IN THIS SITUATION WE FEEL AN APPROPRIATE CHANGE ORDER COULD BE ISSUED REQUIRING THE CONTRACTOR TO LOAD THE GREATER NUMBER OF UNITS IF THE GOVERNMENT COMPENSATES THE CONTRACTOR FOR THE ADDITIONAL COSTS INCURRED. IT SHOULD BE NOTED, HOWEVER, THAT WHERE LOADING A GREATER NUMBER OF UNITS THAN THE NUMBER OF UNITS DESIGNATED BY A BIDDER FOR A PARTICULAR MODE OF TRANSPORTATION WILL RESULT IN INCREASED COSTS TO THE BIDDER, THE EVALUATION SHOULD BE IN ACCORDANCE WITH THE LOADING PATTERN SET FORTH IN THE BID.

IN REGARD TO ATAC'S CONTENTION THAT HEAVY HAULERS MAY BE ILLEGAL FOR TRANSPORTING GOODS UNDER INVITATION FOR BIDS NO. AMC-20-113-2096/T) AND THE EFFECT OF THIS CONTENTION ON OUR DECISION B-153067, SUPRA, THIS MATTER IS BEING CONSIDERED FURTHER BY OUR OFFICE AND YOU WILL BE ADVISED OF OUR CONCLUSIONS.