B-128784, NOV. 1, 1956

B-128784, NOV. 1, 1956

TO MR. M. D. JENKINS:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 24, 1956, IN WHICH YOU PROTEST THE AWARD OF A CONTRACT RECENTLY ENTERED INTO BETWEEN THE GENERAL SERVICES ADMINISTRATION AND THE BIG HORN COAL COMPANY OF SHERIDAN, WYOMING, PURSUANT TO INVITATION FOR BIDS GS-08-453.

YOUR INQUIRY CONCERNS THE AWARD UNDER ITEM 17 OF THE INVITATION. ALTHOUGH L. C. SCOTT'S BID OF $6.35 PER TON WAS LOW ON THAT ITEM, AWARD WAS MADE TO BIG HORN WHO BID $6.95 PER TON ON THE BASIS THAT BIG HORN'S DELIVERED PRICE PER MILLION B.T.U. WAS ?36002 AS COMPARED TO ?36861 FOR L. C. SCOTT. YOU CONCEDE IN YOUR LETTER THAT THE CONTRACT SHOULD HAVE BEEN AWARDED ON THE BASIS OF THE COST PER B.T.U. YOU STATE, HOWEVER, THAT "IN THE VIEW OF THE KNOWN REPUTATION OF THE COAL FROM THE TWO SUBJECT CARRIERS IT IS VERY DIFFICULT FOR ME TO UNDERSTAND THE DIFFERENCE OF 60 CENTS PER TON IN THE COAL.' THE INVITATION PROVIDED IN PARAGRAPH 15 OF THE GENERAL CONDITIONS THAT:

"15. AWARDS: BIDDERS ARE REQUIRED TO ALLOW A MINIMUM OF 60 DAYS FOR CONSIDERATION OF THEIR BIDS AFTER DATE BIDS ARE OPENED.

AWARDS WILL BE MADE ON AN "AS RECEIVED" BASIS, COMPUTED ACCORDING TO THE FOLLOWING FORMULA:

100 MINUS MOISTURE CONTENT, TIMES "DRY" BTU, EQUALS BTU "AS RECEIVED.'

DELIVERED COST PER TON, TIMES 1,000,000)

DIVIDED BY ( EQUALS COST PER MILLION

BTU "AS RECEIVED," TIMES 2,000 (BTU "AS RECEIVED"

MOISTURE CONTENT FIGURE USED WILL BE THAT SHOWN BY BUREAU OF MINES ANALYSES OR GUARANTEED BY THE CONTRACTOR, WHICHEVER IS HIGHER.'

PARAGRAPH 1 OF THE GENERAL CONDITIONS SPECIFICALLY INCORPORATES BY REFERENCE SPECIAL PROVISIONS APPLICABLE TO COAL CONTRACTS DATED MARCH 9, 1951, WHICH PROVIDES AT PARAGRAPH 13---

"BID PRICES WILL BE EVALUATED ON THE BASIS OF THE BRITISH THERMAL UNITS SHOWN BY THE BUREAU OF MINES ANALYSES OR THOSE GUARANTEED BY THE CONTRACTOR, WHICHEVER IS LOWER.'

THE RECORD HERE SHOWS THAT THE BIDS IN QUESTION WERE EVALUATED ON SUCH BASIS AND WE HAVE BEEN ADVISED THAT THE BUREAU OF MINES ANALYSES USED IN THE EVALUATION WERE PREPARED IN SEPTEMBER 1954 FOR L. G. SCOTT AND FEBRUARY 1956 FOR BID HORN. WE HAVE BEEN ADVISED ALSO THAT L. C. SCOTT WAS ASKED SEVERAL TIMES TO SUBMIT SAMPLES FOR SUBSEQUENT ANALYSES BUT DID NOT CHOOSE TO DO SO WITH THE RESULT THAT A RELATIVELY OLD ANALYSIS WAS USED IN EVALUATING HIS BID.

IN ACCORDANCE WITH THE PROVISIONS OF THE INVITATION FOR BIDS QUOTED ABOVE, EACH BID WAS REQUIRED TO BE EVALUATED ON THE BASIS OF THE B.T.U.'S SHOWN BY THE BUREAU OF MINES ANALYSIS OR THOSE GUARANTEED BY THE CONTRACTOR WHICHEVER IS LOWER. IN THE CASE OF L. C. SCOTT, THE BUREAU OF MINES ANALYSIS WAS LOWER AND THEREFORE WAS PROPERLY USED. CONTRACTING OFFICERS OF THE GOVERNMENT ARE REQUIRED TO EVALUATE BIDS ON THE BASIS STATED IN THE INVITATION. ACCORDINGLY, SINCE THE LOWEST BID BASED ON THE EVALUATION PROVIDED FOR IN THE INVITATION WAS SUBMITTED BY BIG HORN, THE AWARD WAS PROPERLY MADE TO THAT COMPANY.