B-140606, SEP. 21, 1959

B-140606, SEP. 21, 1959

TO MR. J. F. MAGUIRE, CONTRACTING OFFICER, DEPARTMENT OF THE NAVY:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 26, 1959, FILE AE-BAH, REQUESTING OUR DECISION AS TO THE PROPRIETY OF THE PROPOSED EVALUATION OF BIDS RECEIVED IN RESPONSE TO INVITATION NO. 210 FOR THE FURNISHING OF 40 FOUR-WHEEL LOADERS AND ACCESSORIES.

IN YOUR LETTER YOU STATE THAT IT HAS BEEN FOUND NECESSARY TO "SECTIONALIZE" HEAVY GROUND EQUIPMENT SO THAT SUCH EQUIPMENT MAY BE DISASSEMBLED, THE PARTS LIFTED BY HELICOPTER AND EASILY REASSEMBLED IN THE FIELD OF MILITARY OPERATIONS, WITHOUT THE USE OF SUPPLEMENTARY HEAVY EQUIPMENT. ALSO, IT IS STATED THAT THE MARINE CORPS HAS LONG USED DIESEL ENGINE-DRIVEN, SELF-PROPELLED SCOOP-TYPE LOADERS AND NOW PROPOSES TO PROCURE SUCH LOADERS IN SECTIONALIZED FORM. IN ORDER TO ACCOMPLISH THIS PURPOSE, INVITATION NO. 210 WAS ISSUED, ASKING FOR BIDS FOR 40 SCOOP-TYPE LOADERS IN ACCORDANCE WITH SPECIFICATIONMIL-L 52047/CE), AS MODIFIED BY APPENDIX A. APPENDIX A CONTAINS TWO PRINCIPAL MODIFICATIONS, AS FOLLOWS: (1) THE TORQUE CONVERTOR AND TRANSMISSION ARE REQUIRED TO BE ALLISON MODELS TC-300 AND CRT-3331, OR EQUAL, AND (2) THE TRACTOR SHALL BE DESIGNED TO PERMIT SECTIONALIZATION WITH EITHER ATTACHMENT IN NO MORE THAN 4 PACKAGES, AND SECTIONALIZATION SHALL BE EFFECTED WITH MAXIMUM OF 2 VERTICAL LIFTS.

YOU STATE THAT THE METHOD OF SECTIONALIZATION AND THE MEANS BY WHICH THE EQUIPMENT SHALL BE LIFTED TO EFFECT SUCH SECTIONALIZATION WAS NOT SPECIFIED BECAUSE IT WAS DESIRED THAT BIDDERS SHOULD SUBMIT PROPOSALS AS TO THE MOST EFFECTIVE MEANS TO ACCOMPLISH THIS PURPOSE. PRELIMINARY STUDIES HAD INDICATED TWO METHODS OF VERTICAL LIFT, NAMELY(1) BY INCORPORATING HYDRAULIC JACKS IN THE EQUIPMENT ITSELF TO RAISE THE EQUIPMENT OFF THE GROUND, OR (2) BY THE USE OF "A FRAMES" OR ,TRESTLES" TO LIFT THE EQUIPMENT OFF THE GROUND. THE EQUIPMENT TOOLS NECESSARY TO ACCOMPLISH THIS WERE REQUIRED TO BE FURNISHED AND THE SPECIFICATIONS DO NOT STATE WHETHER SUCH TOOLS ARE SPECIAL TOOLS OR ORDINARY TOOLS USED IN MAINTENANCE.

IN RESPONSE TO THE INVITATION THREE BIDS WERE RECEIVED. THE YALE AND TOWNE MANUFACTURING COMPANY SUBMITTED A TOTAL BID OF $921,064. THE ALLIS- CHALMERS MANUFACTURING COMPANY SUBMITTED A CONFORMING BID IN THE TOTAL AMOUNT OF $698,024. THE FRANK G. HOUGH COMPANY SUBMITTED A BID IN THE TOTAL SUM OF $693,050, BUT THE LETTER OF AUGUST 11, 1959, TRANSMITTING THE BID CONTAINED TWO EXCEPTIONS. THE FIRST EXCEPTION OFFERED, AS AN ALTERNATE TO THE MANUFACTURER'S OWN TORQUE CONVERTOR AND TRANSMISSION, TO SUPPLY THE ALLISON TORQUE CONVERTOR AND TRANSMISSION AT AN ADDITIONAL UNIT PRICE OF $450. YOU STATE THAT THIS EXCEPTION MAY BE DISREGARDED SINCE THE MARINE CORPS IS NOT PREPARED, AT THIS TIME, TO DETERMINE THAT THE HOUGH TORQUE CONVERTOR AND TRANSMISSION ARE NOT EQUAL TO THE ALLISON. THE SECOND EXCEPTION, AS CONTAINED ON PAGE ONE OF THE TRANSMITTAL LETTER, STATES THAT "WE ARE IN A POSITION TO SUPPLY * * * A 6,000 POUND CAPACITY TRESTLE UNIT * * * HOWEVER, OUR UNIT QUOTATION INCLUDED WITHIN THE ENCLOSED WOULD BE INCREASED BY $1,490.00 PER TRACTOR OR PER SET REQUIRED.'

AFTER THE BIDS WERE OPENED, A CONFERENCE WAS HELD ON AUGUST 24, 1959, WITH REPRESENTATIVES OF ALLIS-CHALMERS, AND A SEPARATE CONFERENCE WITH REPRESENTATIVES OF HOUGH, TO DETERMINE SPECIFICALLY THE TYPE OF SECTIONALIZATION AND METHOD OF VERTICAL LIFT WHICH EACH BIDDER WAS OFFERING. THE REPRESENTATIVES OF ALLIS-CHALMERS STATED THAT THEY INTENDED TO USE THE HYDRAULIC METHOD OF VERTICAL LIFT, BUT THAT IF SUCH METHOD PROVED NOT TO BE FEASIBLE, THEY WOULD FURNISH WHATEVER MEANS WERE NECESSARY TO EFFECTIVELY ASSEMBLE AND DISASSEMBLE THE SECTIONALIZED EQUIPMENT. THE REPRESENTATIVES OF HOUGH LIKEWISE STATED THAT THEY HOPED TO USE THE HYDRAULIC METHOD, BUT ACKNOWLEDGED IN A LETTER OF AUGUST 25--- THE DAY AFTER THE CONFERENCE--- THAT "OUR COVER LETTER COULD BE CONSTRUED DIFFERENTLY THAN WAS INTENDED" AND THAT IF IT BECAME NECESSARY TO USE A TRESTLE UNIT TO EFFECT THE VERTICAL LIFT, SUCH UNIT WOULD BE FURNISHED WITHIN THE TOTAL BID PRICE WITHOUT ADDITIONAL COST. THIS STATEMENT IS AT VARIANCE WITH THE STATEMENT IN THE LETTER OF AUGUST 11 THAT A TRESTLE UNIT COULD BE FURNISHED FOR AN ADDITIONAL UNIT PRICE OF $1,490.

YOU STATE THAT YOU HAVE CONCLUDED THAT YOU HAVE NO ALTERNATIVE BUT TO INCLUDE THE AMOUNT OF $1,490 PER TRACTOR IN THE TOTAL BID OF HOUGH FOR THE PURPOSE OF EVALUATION OF BIDS FOR THE FOLLOWING REASONS. THE BID OF ALLIS -CHALMERS CONTAINS NO EXCEPTIONS AND THE COMPANY WOULD BE REQUIRED TO FURNISH WITHIN ITS BID PRICE WHATEVER MEANS OF VERTICAL LIFT IS NECESSARY TO MAKE THE EQUIPMENT FULLY OPERATIVE. HOWEVER, HOUGH'S LETTER OF AUGUST 11 STATES THAT THE SUPPLEMENTAL QUOTATIONS ARE BEING SET FORTH IN ORDER TO PLACE ITS QUOTATION ON A LEVEL THAT WILL BE COMPARABLE TO ANY AND ALL OTHER POSSIBLE BIDDERS. THE HIGHEST POSSIBLE COST TO THE GOVERNMENT OF A SECTIONALIZED LOADER WITH AN EFFECTIVE VERTICAL LIFT MUST BE CONSIDERED.

THE REFERENCE TO SUPPLYING TRESTLE UNITS, AS CONTAINED IN HOUGH'S LETTER OF AUGUST 11, MAKES ITS BID AMBIGUOUS. ON THE ONE HAND, IT MAY BE CONSTRUED AS OFFERING ALTERNATIVE EQUIPMENT, AT THE OPTION OF THE GOVERNMENT. ON THE OTHER HAND, IF THE HYDRAULIC METHOD OF VERTICAL LIFT SHOULD NOT BE FEASIBLE, AND TRESTLE UNITS ONLY WOULD PROVE TO BE FEASIBLE, THE LANGUAGE EMPLOYED BY HOUGH WOULD INDICATE THAT IT WOULD EXPECT ADDITIONAL COMPENSATION OF $1,490 PER UNIT, WHICH WOULD THEN MAKE ITS BID HIGHER THAN THE BID OF ALLIS-CHALMERS. THIS AMBIGUITY IS ADMITTED BY HOUGH IN ITS LETTER OF AUGUST 25, SUBMITTED SUBSEQUENT TO THE OPENING OF BIDS. WHILE THE STATEMENTS OF HOUGH IN THE LETTER OF AUGUST 25 INDICATE THAT IT CONSIDERS ITSELF OBLIGATED, IF THE BID OF $693,050 IS ACCEPTED, TO FURNISH WHATEVER IS NECESSARY TO MEET SPECIFICATIONS, EVEN THOUGH THE USE OF TRESTLE UNITS IS THE ONLY FEASIBLE WAY TO DO SO, AND THAT IT EXPECTED COMPENSATION FOR $1,490 PER TRESTLE UNIT ONLY IF THE GOVERNMENT ORDERED THESE UNITS, IT WOULD NOT BE PROPER TO EVALUATE THE BIDS ON ANY OTHER BASIS THAN TO CONSIDER THE HIGHEST POSSIBLE COST TO THE GOVERNMENT ON THE BASIS OF THE ORIGINAL SUBMISSION OF HOUGH'S BID. SINCE YOU PROPOSE TO EVALUATE THE BIDS ON SUCH A BASIS, WE AGREE WITH YOUR PROPOSED EVALUATION.