B-142752, MAY 17, 1960

B-142752, MAY 17, 1960

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED APRIL 29, 1960, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, FILE R11.1, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH REGARD TO THE PROTEST BY THE RAYMOND CORPORATION AGAINST THE AWARD OF A CONTRACT TO ANY BIDDER UNDER INVITATION NO. IFB600-1382-60 ISSUED MARCH 1, 1960.

THE INVITATION REQUESTED BIDS FOR FURNISHING 80 FORK LIFT TRUCKS, F.O.B. ORIGIN. ON PAGES 8 AND 9 OF THE INVITATION IT WAS STATED THAT THE GOVERNMENT DESIRED THAT DELIVERY BE BEGUN 210 DAYS AFTER DATE OF CONTRACT AND BE MADE AT A RATE OF 20 UNITS PER MONTH. THE "MAXIMUM ACCEPTABLE DELIVERY SCHEDULE" PROVIDED THAT DELIVERY BE BEGUN 260 DAYS AFTER DATE OF CONTRACT AND BE MADE AT THE RATE OF 20 UNITS PER MONTH. WITH REGARD TO A BIDDER'S OFFER OF AN ALTERNATE TIME FOR DELIVERY,THE INVITATION PROVIDED AS FOLLOWS:

"IF THE BIDDER IS UNABLE TO MEET THE DESIRED DELIVERY SCHEDULE, IT MAY, WITHOUT PREJUDICE IN THE EVALUATION OF ITS BID, OFFER AN ALTERNATE TIME FOR DELIVERY FOR EACH ITEM BID IN THE SPACE PROVIDED BELOW, ENTITLED "BIDDER'S PROPOSED DELIVERY SCHEDULE," PROVIDED THAT ANY BID OFFERING DELIVERY BEYOND THE MAXIMUM ACCEPTABLE TIME SET FORTH BELOW SHALL BE CONSIDERED NON-RESPONSIVE TO THE INVITATION AND WILL BE REJECTED.

MAXIMUM ACCEPTABLE DELIVERY SCHEDULE

ITEM QUANTITY DELIVERY DATE

1 20 UNITS PER MONTH BEGIN 260 DAYS AFTER DATE OF

CONTRACT.

"ANY BID OFFERING AN INDEFINITE TIME FOR DELIVERY OR OFFERING DELIVERY CONTINGENT UPON THE AVAILABILITY OR RECEIPT OF MATERIAL SHALL BE REJECTED. UNLESS THE BIDDER OFFERS A DIFFERENT DELIVERY SCHEDULE, THE GOVERNMENT'S DESIRED DELIVERY SCHEDULE STATED ABOVE WILL APPLY.'

FOUR BIDS WERE RECEIVED. AFTER THE ADDITION OF FREIGHT COSTS, THE TOTALS OF THE 3 LOWEST BIDS RECEIVED ARE AS FOLLOWS:

TABLE

AUTOMATIC TRANSPORTATION COMPANY $385,954

THE RAYMOND CORPORATION 391,900

YALE AND TOWNE MANUFACTURING COMPANY 461,099

IT IS REPORTED THAT THE LOW BIDDER TOOK EXCEPTION TO THE REQUIREMENTS OF THE SPECIFICATIONS IN THAT (1) IT OFFERED TRUCKS MEASURING 61 3/4 INCHES IN WIDTH WHEREAS THE OVER-ALL WIDTH WAS NOT TO BE MORE THAN 60 INCHES WIDE; (2) THE SPECIFICATIONS REQUIRED MINIMUM SIZE DRIVE WHEELS 10 INCHES BY 5 INCHES BY 6 1/2 INCHES AND THE TRUCKS OFFERED HAVE DRIVE WHEELS 4 INCHES WIDE; AND (3) THE SPECIFICATIONS REQUIRED TANDEM MOUNTED LOAD WHEELS AND TRUCKS OFFERED HAD ONLY SINGLE LOAD WHEELS. IN VIEW OF THESE DEVIATIONS, WE AGREE WITH THE CONTRACTING OFFICER'S DETERMINATION THAT THE BID WAS NOT RESPONSIVE TO THE REQUIREMENTS OF THE INVITATION.

IT IS REPORTED THAT THE SECOND LOW BID BY THE RAYMOND CORPORATION WAS BASED ON TRUCKS WHICH MET ALL REQUIREMENTS OF THE APPLICABLE SPECIFICATIONS. ON PAGE 9 OF THE INVITATION, HOWEVER, THE BIDDER INDICATED THAT IT OFFERED DELIVERY "BEGINNING WITHIN 110 DAYS AFTER APPROVAL OF PRE-PRODUCTION SAMPLE" AND ON PAGE 11 OF THE INVITATION IT PROPOSED THAT IT WOULD SUBMIT A SAMPLE WITHIN 120 DAYS AFTER DATE OF CONTRACT. WITH REGARD TO SAMPLES, THE INVITATION PROVIDED THAT---

"/A) A PREPRODUCTION SAMPLE OF ITEM 1 IS REQUIRED TO BE SUBMITTED TO THE GOVERNMENT BY THE CONTRACTOR FOR INSPECTION AND TEST. PRODUCTION UNDER THE ITEM/S) SHALL NOT COMMENCE UNTIL SUCH SAMPLE/S) HAS (HAVE) BEEN APPROVED BY THE GOVERNMENT; PROVIDED, THAT, IN THE EVENT SUCH APPROVAL HAS NOT BEEN GIVEN WITHIN 30 DAYS AFTER SUBMISSION, THE CONTRACTOR SHALL SO NOTIFY THE CONTRACTING OFFICER AND THE CONTRACTING OFFICER, BY WRITTEN NOTICE TO THE CONTRACTOR, SHALL EITHER (I) DIRECT THE CONTRACTOR TO FABRICATE, IN ACCORDANCE WITH THE APPLICABLE SPECIFICATIONS, ALL OR PART OF THE PRODUCTION UNITS OR (II) NOTIFY THE CONTRACTOR THAT FABRICATION OF THE PRODUCTION UNITS SHALL NOT COMMENCE UNTIL SUCH SAMPLE HAS BEEN APPROVED.

"/B) THE SAMPLE/S) SHALL BE SUBMITTED WITHIN -------- DAYS (90 DAYS UNLESS A DIFFERENT PERIOD BE INSERTED BY THE BIDDER) AFTER DATE OF CONTRACT.'

SINCE THE DELIVERY OFFERED BY RAYMOND WAS "TIED TO" THE APPROVAL OF THE PREPRODUCTION MODEL, IT IS THE OPINION OF THE CONTRACTING OFFICER-- AND WE AGREE--- THAT IT DID NOT OFFER A FIRM DELIVERY DATE IN COMPLIANCE WITH THE REQUIREMENTS OF THE SPECIFICATIONS. THERE HAS NOT BEEN OVERLOOKED THE STATEMENT OF THE GOVERNMENT REPRESENTATIVE FOR RAYMOND AS CONTAINED IN A LETTER DATED APRIL 22, 1960, TO THE EFFECT THAT THE GOVERNMENT SHOULD ORDINARILY APPROVE THE PREPRODUCTION MODEL IN LESS THAN 30 DAYS SINCE THE TYPE OF TRUCK HAS BEEN TESTED AND APPROVED BY GOVERNMENT INSPECTORS ON THREE DIFFERENT OCCASIONS, AND ON TWO PRIOR CONTRACTS THE PREPRODUCTION MODELS WERE NOT REQUIRED BY THE GOVERNMENT. THE DELIVERY TERMS SET OUT IN THE INVITATION AS ACCEPTABLE TO THE GOVERNMENT SPECIFIED THAT DELIVERY SHOULD BEGIN NOT LATER THAN "260 DAYS AFTER DATE OF CONTRACT.' IT IS REASONABLE TO ASSUME THAT THIS STARTING TIME WAS FIXED IN CONSIDERATION OF THE TIME WHICH A BIDDER MIGHT USE IN PREPARING A PREPRODUCTION MODEL, IF REQUIRED, THE TIME THE GOVERNMENT MIGHT TAKE IN APPROVING THE MODEL AND ALSO THE TIME CONSUMED BY THE CONTRACTOR IN RESUBMITTING A NEW MODEL IF THE ORIGINAL ONE SUBMITTED WERE REJECTED. RAYMOND, BY THE TERMS OF ITS BID, NOT ONLY COULD AVOID THE RISK OF FAILURE TO COMPLY WITH THE DELIVERY REQUIREMENTS DUE TO ANY DELAY BY THE GOVERNMENT IN APPROVING THE MODEL, BUT ALSO ANY DELAY RESULTING FROM ITS INABILITY TO OBTAIN THE GOVERNMENT'S APPROVAL BY FURNISHING AN UNACCEPTABLE OR NONCONFORMING MODEL. THE OTHER BIDDERS, WHO AGREED TO THE MAXIMUM ACCEPTABLE DELIVERY SCHEDULE SET OUT IN THE INVITATION, DID NOT HAVE THE ADVANTAGES WHICH RAYMOND WOULD THUS OBTAIN BY THE TERMS OF ITS BID. ITS BID, THEREFORE, MUST BE REGARDED AS OFFERING AN INDEFINITE TIME FOR DELIVERY, AND UNDER THE TERMS OF THE INVITATION IT MUST BE REJECTED. SEE 34 COMP. GEN. 24 AND OUR DECISION TO YOU, B-137586, NOVEMBER 18, 1958.

WITH REGARD TO THE THIRD LOW BID, SOME QUESTION HAS BEEN RAISED ABOUT THE RESPONSIVENESS OF THE BID. IT IS STATED, HOWEVER, IN THE CONTRACTING OFFICER'S STATEMENT OF FACT THAT IT IS NOT DEEMED DESIRABLE TO RESOLVE THIS QUESTION, IN THE LIGHT OF THE WIDE PRICE DISCREPANCY AND PREVIOUS PRICING HISTORY OF THE SAME UNITS PURCHASED IN THE YEARS 1957, 1958, AND 1959, WHICH SHOWS A DESCENDING UNIT PRICE OVER A PERIOD OF THREE YEARS. THE UNIT PRICES AS REPORTED FOR THESE YEARS ARE IN THE AMOUNTS OF $5,560, $4,975 AND $4,744, RESPECTIVELY. THE CONTRACTING OFFICER CONCLUDES THAT THESE FACTS, TOGETHER WITH THE PROSPECT OF PAYING APPROXIMATELY $70,000 IN EXCESS OF THAT WHICH COULD BE OBTAINED FROM A KNOWN MANUFACTURER OF IDENTICAL EQUIPMENT, WOULD NOT WARRANT MAKING AN AWARD TO THE THIRD LOW BIDDER BECAUSE THE AMOUNT OF THAT BID WOULD NOT BE A FAIR AND REASONABLE PRICE.

ORDINARILY, AN INVITATION FOR BIDS SHOULD NOT BE CANCELED AFTER OPENING AND THE PROCUREMENT READVERTISED EXCEPT FOR THE MOST COMPELLING REASONS. IT IS CONSIDERED BY YOUR OFFICE, HOWEVER, THAT THE READVERTISEMENT OF THIS REQUIREMENT WOULD BE IN THE BEST INTEREST OF THE GOVERNMENT. WE AGREE WITH THIS PROPOSAL TO REJECT ALL BIDS.