B-118984, SEP 22, 1954

B-118984, SEP 22, 1954

PRECIS-UNAVAILABLE

FARGO MOTOR CORPORATION:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 18, 1954, PROTESTING THE AWARD BY FEDERAL SUPPLY SERVICE OF A CONTRACT FOR 80 TRUCKS, BIDS FOR WHICH WERE ORIGINALLY REQUESTED BY INVITATION NO. 4C-35863-R-10-20 53.

A REPORT ON THE PROCUREMENT WAS OBTAINED FROM THE ADMINISTRATIVE OFFICE AND THE MATTER WAS INVESTIGATED INDEPENDENTLY BY REPRESENTATIVES OF THIS OFFICE. IT APPEARS THAT YOUR ORIGINAL BID STATED ON CONTINUATION SHEET 16 THAT IT WAS BASED UPON FURNISHING DODGE TRUCKS OF THE MODEL STATED IN THE QUESTIONNAIRE WHICH WAS ATTACHED TO THE BID IN ACCORDANCE WITH THE PROVISION OF THE INSTRUCTIONS. THE INSTRUCTIONS WERE THAT "QUESTIONNAIRE FORM 388 COMPLETELY FILLED IN MUST BE SUBMITTED WITH QUOTATION AND WILL BE MADE A PART OF ANY RESULTANT CONTRACT." YOUR QUESTIONNAIRE SPECIFIED THAT THE TRUCKS OFFERED WERE EQUIPPED WITH TIMKEN FD-900 FRONT AXLES, APACITY 8,000 POUNDS. THIS WAS IN COMPLIANCE WITH THE INVITATION AS ORIGINALLY ISSUED. HOWEVER, BY SPECIAL NOTICE NO. 2, ISSUED TO PROSPECTIVE BIDDERS ON OCTOBER 14, 1953, THE SPECIFICATIONS WERE AMENDED TO REQUIRE TIMKEN AXLES OF MODEL FE-900, OR EQUAL, CAPACITY 10,000 POUNDS.

AFTER THE BID OPENING YOU ALLEGED ERROR IN YOUR BID, STATING THAT YOUR QUESTIONNAIRE HAD BEEN PREPARED BEFORE THE RECEIPT OF SPECIAL NOTICE NO. 2 AND INADVERTENTLY HAD NOT BEEN CORRECTED, BUT THAT YOUR BID HAD BEEN PREPARED ON THE BASIS OF THE AMENDED SPECIFICATIONS AND INCLUDED THE 10,000-POUND CAPACITY AXLES. AS A PREREQUISITE TO PERMITTING AMENDMENT OF YOUR QUESTIONNAIRE, THE AGENCY REQUESTED PROOF OF YOUR ALLEGATIONS. THIS YOU ATTEMPTED TO FURNISH BY SUBMITTING COPIES OF CERTAIN INTERCOMPANY CORRESPONDENCE, BUT THE ADMINISTRATIVE OFFICE DETERMINED THAT THE ALLEGED MISTAKE WAS NOT ESTABLISHED BY CLEAR AND CONVINCING PROOF AND REFUSED TO PERMIT AMENDMENT OF YOUR BID.

IT IS THE VIEW OF THIS OFFICE THAT THE ADMINISTRATIVE OFFICE WAS CORRECT IN ITS REFUSAL OF YOUR PROPOSED AMENDMENT OR CORRECTION. AS SUBMITTED, YOUR BID CLEARLY OFFERED TRUCKS EQUIPPED WITH 8,000-POUND AXLES AND, EVEN IN THE ABSENCE OF QUALIFICATION ELSEWHERE IN THE BID, IT IS AT LEAST QUESTIONABLE WHETHER ACCEPTANCE OF THAT BID WOULD NOT HAVE CREATED A CONTRACT FOR SUCH TRUCKS, AND NOT FOR TRUCKS WITH 10,000 POUND AXLES AS CALLED FOR BY THE AMENDED SPECIFICATIONS AND AS OFFERED BY OTHER BIDDERS. THE AXLE CAPACITY WAS NOT A MERE MINOR OR IMMATERIAL DETAIL BUT A VITAL CHARACTERISTIC SUBSTANTIALLY AFFECTING THE PERFORMANCE CAPABILITIES OF THE TRUCKS DESIRED. WHILE IT HAS BEEN ESTABLISHED AS A RULE FOR GOVERNMENT PROCUREMENT UNDER COMPETITIVE BIDDING PROCEDURE THAT CORRECTION OF A BONA FIDE ERROR BY A BIDDER IN ITS BID MAY UNDER STRICTLY LIMITED CONDITIONS BE PERMITTED, SUCH CORRECTION REQUIRES THAT PROMPT NOTICE BE GIVEN OF THE ERROR AND PROOF BE FURNISHED ESTABLISHING CONCLUSIVELY NOT ONLY THAT THE ERROR OCCURRED BUT EXACTLY HOW IT OCCURRED AND PRECISELY WHAT WAS INTENDED TO HAVE BEEN THE BID. THESE RULES MUST BE MOSTLY STRICTLY ENFORCED FOR THE PRESERVATION OF THE COMPETITIVE BIDDING SYSTEM SINCE EVERY BIDDER HAVING AN ERROR, BY ACCIDENT OR DESIGN, IN ITS BID WOULD BE IN A POSITION, AFTER KNOWLEDGE OF ALL BIDS, EITHER TO REMAIN SILENT AND TAKE THE BURDEN OR BENEFIT OF ITS ERROR, OR TO ALLEGE AND CORRECT THE ERROR, AS MIGHT SUIT ITS INTEREST, TO THE SERIOUS PREJUDICE OF OTHER BIDDERS.

IN THIS INSTANCE THE PROOF OFFERED BY YOU ESTABLISHED MERELY THAT THE QUESTIONNAIRE WAS PREPARED AT YOUR DETROIT PLANT AND FORWARDED TO YOUR WASHINGTON OFFICE PRIOR TO RECEIPT OF THE SPECIAL NOTICE AMENDING THE AXLE REQUIREMENT AND THAT THE UNIT PRICES TO BE QUOTED WERE FORWARDED AFTER THAT DATE, WITH NOTES OF CERTAIN MINOR EXCEPTIONS OR DEVIATIONS, BUT NOT WITH RESPECT TO THE AXLE REQUIREMENT. THUS THE ULTIMATE FACT THAT THE PRICE STATED PER TRUCK WAS CALCULATED ON THE BASIS OF THE 10,000-POUND AXLE WAS LEFT DEPENDENT UPON INFERENCE RATHER THAN ESTABLISHED BY DIRECT AND CONVINCING EVIDENCE, AND IT CANNOT BE SAID THAT THE ADMINISTRATIVE OFFICE WAS NOT JUSTIFIED IN DECLINING TO PERMIT CORRECTION.

WITH RESPECT TO THE CONTRACT NEGOTIATED WITH INTERNATIONAL HARVESTER COMPANY AFTER REJECTION OF ALL BIDS AND SOLICITATION OF NEW PROPOSALS FOR NEGOTIATION, YOUR COMPLAINT IS THAT, IN OBTAINING FROM THAT COMPANY A REVISED CUBAGE FIGURE, THE CONTRACTING OFFICER PERMITTED AN AMENDMENT TO BE MADE UNDER SUBSTANTIALLY THE SAME CIRCUMSTANCES AS THOSE IN WHICH YOUR PROFFERED AMENDMENT WAS REFUSED. ASIDE FROM THE FACT THAT THE PROCUREMENT AFTER REJECTION OF THE FIRST BIDS WAS BY NEGOTIATION, AS PERMITTED BY SECTION 302 (C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT 393 THEREFORE INVOLVED A MUCH WIDER FIELD OF ADMINISTRATIVE DISCRETION THAN IS PERMISSIBLE UNDER COMPETITIVE BIDDING PROCEDURES, THE CIRCUMSTANCES WERE SUBSTANTIALLY DIFFERENT. THE QUESTION PRESENTED BY YOUR REQUEST WAS WHETHER OR NOT YOU HAD INTENDED TO OFFER ONE AXLE OR ANOTHER - A MATTER OF COMPLIANCE WITH AN ESSENTIAL ITEM OF THE SPECIFICATIONS. ON THE OTHER HAND, THE AMENDMENT BY THE INTERNATIONAL HARVESTER COMPANY DID NOT IN ANY WAY AFFECT EITHER THE TRUCK OFFERED BY IT, ALL ESSENTIAL DETAILS OF WHICH WERE FIXED BY THE BID AND SPECIFICATIONS, OR THE PRICE QUOTED BY IT. IT WAS MATERIAL IN SUPPLYING THE PROPER BASIS FOR COMPUTATION OF THE SHIPPING CHARGES WHICH WOULD HAVE TO BE PAID BY THE GOVERNMENT, A FACTOR PROPERLY FOR CONSIDERATION IN DETERMINING THE ULTIMATE COST OF THE TRUCKS AT THE DESIRED POINT OF USE. IN THIS, THE RELEVANT FACT WAS THE ACTUAL CUBIC DIMENSIONS OF THE TRUCK, AND THE CORRECTION OF THE FIGURES ORIGINALLY FURNISHED DID NOT IN ANY WAY AFFECT THE ACTUAL SHIPPING CHARGES WHICH WOULD IN ANY CASE BE MEASURED BY THE ACTUAL DIMENSIONS, BUT AFFORDED A BASIS FOR A MORE ACCURATE ADVANCE DETERMINATION OF WHAT THE AMOUNT OF THE CHARGES WOULD BE.

THAT THE FINAL FIGURES FURNISHED WERE MORE ACCURATE AND THAT THE GOVERNMENT IN FACT OBTAINED THE BEST PRICE OFFERED, COST AT DESTINATION CONSIDERED, HAS BEEN ESTABLISHED BY ACTUAL SHIPPING CHARGES PAID, WHICH WERE ON THE BASIS OF 1,232.4 CUBIC FEET PER TRUCK, OR LESS THAN THE REVISED GUARANTY OF 1,288.

FOR THE REASONS STATED, NO FURTHER ACTION BY THIS OFFICE IN THE MATTER IS CONSIDERED TO BE WARRANTED.