B-141460, MAR. 22, 1960

B-141460, MAR. 22, 1960

TO THE WARNER AND SWASEY CO.:

REFERENCE IS MADE TO YOUR LETTERS OF DECEMBER 10 AND 24, 1959, TRANSMITTING COPIES OF YOUR LETTERS DATED DECEMBER 7 AND 23, 1959, TO THE COMMANDANT OF THE UNITED STATES MARINE CORPS, REQUESTING CERTAIN INFORMATION WITH RESPECT TO THE METHOD OF EVALUATING THE PROPOSALS SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 53, ISSUED BY HEADQUARTERS, UNITED STATES MARINE CORPS. YOUR LETTERS TO THE PROCUREMENT AGENCY QUESTION THE GUARANTEED SHIPPING WEIGHT OF THE END PRODUCT, AS LISTED IN THE BID OF STEWART AND STEVENSON SERVICES, INC., AND YOU REQUEST TO BE ADVISED WHETHER BIDS OFFERING F.O.B. ORIGIN PRICES MAY BE COMPUTED ON THE BASIS OF FREIGHT RATES AVAILABLE ONLY TO THE GOVERNMENT, FOR THE PURPOSES OF EVALUATING SUCH BIDS AGAINST BIDS OFFERING DELIVERY F.O.B. DESTINATION. IN YOUR LETTER OF DECEMBER 10, 1959, TO US, YOU STATE THAT YOUR CONTENTIONS RELATE ONLY TO BIDS NOS. 3 AND 4 OF THE TABULATION YOU ENCLOSED, NAMELY, YOUR BID, AND THAT OF STEWART AND STEVENSON SERVICES, INC.

THE RECORD DISCLOSES THAT THE SUBJECT INVITATION SOUGHT BIDS ON 347 GENERATOR SETS TO BE AWARDED AS A LOT, EITHER ON THE BASIS OF F.O.B. DESTINATION, ALBANY, GEORGIA, 143 UNITS, AND BARSTOW, CALIFORNIA, 204 UNITS, OR THE ENTIRE QUANTITY, F.O.B. ORIGIN. THE PROVISIONS THEREOF STIPULATED THAT THE CONTRACTOR WILL BE REQUIRED TO ABSORB FREIGHT CHARGES FOR ANY WEIGHT IN EXCESS OF THAT SPECIFIED IN THE BID. IT FURTHER RESERVED TO THE GOVERNMENT THE RIGHT TO ELECT WHETHER THE AWARD WOULD BE MADE ON A DELIVERED OR F.O.B. SHIPPING POINT BASIS. THIRTEEN BIDS WERE RECEIVED, THE FOUR LOWEST OF WHICH WERE EVALUATED AS FOLLOWS: TABLE BIDDER F.O.B. ORIGIN COMBINED FREIGHT TOTAL COST HOL-GAR MFG. CO. $1,096,798.40 $72,313.41

$1,169,111.81 STEWART AND STEVENSON 1,135,461.00 60,777.21 1,196,238.21 WARNER AND SWASEY (1,196,586.60) (2,160.94) 1,198,747.53 MIDLAND IND. CO. 1,149,056.00 60,932.28 1,209,988.28

YOUR ABOVE QUOTATION WAS ON THE BASIS OF F.O.B. DESTINATION, AND THE ADDITIONAL FREIGHT CHARGES SHOWN COVER ONLY THE SHIPPING COSTS OF THE GOVERNMENT-OWNED ENGINES TO YOUR PLANT SITE. ON THE BASIS OF THE FOREGOING EVALUATION HOL-GAR MANUFACTURING COMPANY WAS THE LOWEST RESPONSIBLE BIDDER AND, IN VIEW THEREOF, CONTRACT NOM-70981 WAS AWARDED TO THAT FIRM.

IN VIEW OF THE SPECIFIC PROVISIONS OF THE INVITATION, WHEREBY THE GOVERNMENT RESERVED THE RIGHT TO ACCEPT THE PROPOSAL WHICH WOULD INVOLVE THE LEAST ULTIMATE COST TO THE GOVERNMENT, THERE WOULD BE FOR CONSIDERATION, IN THE CASE OF F.O.B. ORIGIN BIDS, BOTH THE TRANSPORTATION COSTS OF THE ENGINES FURNISHED BY THE GOVERNMENT, AND THE SHIPPING COSTS OF THE FINISHED PRODUCT FROM THE BIDDERS' PLANT TO THE TWO DESTINATIONS STIPULATED. SUCH SHIPPING COSTS WOULD BE COMPUTED ON THE BASIS OF THE LOWEST FREIGHT RATES AVAILABLE TO THE GOVERNMENT ON THE MOVEMENT OF BOTH THE ENGINES AND THE COMPLETED GENERATOR SETS. ALSO, SINCE THE CONTRACTOR WAS REQUIRED TO FURNISH A GUARANTEED SHIPPING WEIGHT AND CUBIC FEET DIMENSION OF THE UNIT PACKED FOR SHIPMENT, ANY TRANSPORTATION COSTS INCURRED BY THE GOVERNMENT IN EXCESS OF THE RATES BASED UPON THE ABOVE GUARANTIES CLEARLY WOULD BE FOR THE ACCOUNT OF THE CONTRACTOR. FOR THAT REASON THE ACTUAL WEIGHT OF THE END PRODUCT WOULD APPEAR TO BE IMMATERIAL FOR BID EVALUATION PURPOSES. IN REGARD TO THIS PROCUREMENT, HOWEVER, SINCE YOU HAVE LIMITED YOUR INQUIRY TO THE BID OF STEWART AND STEVENSON SERVICES, INC., AND SINCE THE BID OF THAT FIRM WAS NOT LOW, ITS GUARANTEED SHIPPING WEIGHT WAS NOT QUESTIONED.

IN VIEW OF THE FACTS OF RECORD WE FIND NO LEGAL BASIS TO DISTURB THE ACTION TAKEN BY THE PROCUREMENT AUTHORITIES.