B-147609, DEC. 12, 1961

B-147609, DEC. 12, 1961

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED NOVEMBER 16, 1961, FROM THE CHIEF, CONTRACTS DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING A DECISION WHETHER THE TROYLER CORPORATION IS ELIGIBLE FOR CONSIDERATION OF THE CONTRACT TO BE NEGOTIATED ON THE PORTION OF GUIDED MISSILE CONTAINERS SET-ASIDE IN IFB-IDP-X-ORD-01-021 62-10074 FOR CONCERNS IN LABOR SURPLUS AREAS.

THE INVITATION FOR BIDS SOLICITED PRICES FOR 260 UNITS OF ONLY ONE ARTICLE DESCRIBED AS A GUIDED MISSILE CONTAINER AND LISTED AS ITEM 1. BIDS WERE TO BE EVALUATED ON THE BASIS OF THE LOWEST OVER-ALL COST TO THE GOVERNMENT TAKING INTO ACCOUNT THE TRANSPORTATION COST FROM POINT OF ORIGIN TO DESTINATION, BIDDERS WERE REQUESTED TO BID ON BASIS A, F.O.B. ORIGIN, AND ALTERNATE BASIS B, F.O.B. DESTINATION. ON THIS PART OF THE INVITATION, DESIGNATED THE NON-SET-ASIDE PORTION, THE F.O.B. DESTINATION BID, INCLUDING DISCOUNT, SUBMITTED BY THE RECONY DIVISION OF THE VINCO CORPORATION WAS EVALUATED AS THE BEST OFFER RECEIVED AND AWARD WAS MADE TO IT FOR THE QUANTITY SPECIFIED.

AS TO ELIGIBILITY ON THE SET-ASIDE PORTION (ANOTHER 260 UNITS), THE INVITATION, INSOFAR AS PERTINENT, PROVIDED:

"TO BE ELIGIBLE FOR CONSIDERATION FOR THE SET-ASIDE PORTION OF AN ITEM, THE LABOR SURPLUS AREA OR SMALL BUSINESS CONCERN MUST HAVE SUBMITTED A RESPONSIVE BID ON SUCH ITEM (IN THE NON-SET-ASIDE PORTION) * * * AT A UNIT PRICE NO GREATER THAN 120 PERCENT OF THE HIGHEST UNIT PRICE FOR SUCH ITEM AWARDED UNDER THE NON-SET-ASIDE PORTION.'

TAKING INTO CONSIDERATION THE DISCOUNTS OFFERED BY BOTH BIDDERS, THE F.O.B. DESTINATION BID OF THE TROYLER CORPORATION EXCEEDS THE PRICE AWARDED TO RECONY BY MORE THAN THE SPECIFIED 120 PERCENT, WHEREAS THE F.O.B. ORIGIN BID OF TROYLER, ADJUSTED FOR THE COST OF TRANSPORTATION TO DESTINATION, IS WITHIN 120 PERCENT OF THE AWARD PRICE.

THE CONTRACTING OFFICER IS OF THE OPINION THAT TROYLER HAS ESTABLISHED ITS ELIGIBILITY FOR THE SET-ASIDE. HOWEVER, RECONY STATES THAT THE AWARD MADE TO IT ON THE NON-SET-ASIDE IDENTIFIES THE SUBJECT OF THE AWARD AS ITEM 1B AND CONTENDS THAT TROYLER IS THEREBY PRECLUDED FROM BEING CONSIDERED AS ELIGIBLE FOR THE SET-ASIDE SINCE ITS BID ON THAT BASIS IS GREATER THAN 120 PERCENT OF THE UNIT PRICE AWARDED TO RECONY FOR "SUCH ITEM" AND COMPARING TROYLER'S BID ON ITEM 1A WITH RECONY'S ON ITEM 1B WOULD VIOLATE THE PROCUREMENT PRINCIPLE THAT BIDS BE COMPARED ON AN EXACT BASIS. IN THE CIRCUMSTANCES, OUR DECISION IS REQUESTED.

REFERRING TO THE ELIGIBILITY CLAUSE, IT IS NOTED THAT IT REQUIRES THAT "TO BE ELIGIBLE FOR THE SET-ASIDE PORTION OF AN ITEM" A RESPONSIVE BID MUST BE SUBMITTED "ON SUCH ITEM" IN THE NON-SET-ASIDE PORTION. OBVIOUSLY, THE WORDS "SUCH ITEM" REFER BACK TO THE "ITEM" STATED AT THE OUTSET OF THE CLAUSE. THE NOTICE ADDENDUM FOR SET-ASIDE LIMITS THE DESCRIPTION OF THE ITEM TO THE GUIDED MISSILE CONTAINER ITSELF. THEREFORE, THE WORDS "SUCH ITEM" BEING DEPENDENT UPON THE MEANING OF THE WORD "ITEM" ALSO ARE RESTRICTED TO THE ARTICLE ITSELF AND DO NOT INCLUDE THE DELIVERY DESTINATION OF THE ARTICLE AS A PART OF THE ITEM. SO, WHILE FOR THE PURPOSE OF AWARD ON THE NON-SET-ASIDE PORTION OF THE PROCUREMENT THE SUBJECT MATTER OF THE PROCUREMENT MAY HAVE BEEN IDENTIFIED AS ITEM 1B, APPARENTLY 1 BEING DESCRIPTIVE OF THE ARTICLE AND THE LETTER B DESIGNATING THE POINT OF DELIVERY, FOR PURPOSES OF DETERMINING ELIGIBILITY FOR THE SET -ASIDE THE WORD "ITEM" IS NOT ENTITLED TO AS BROAD A CONSTRUCTION.

THEREFORE, AS THE TROYLER F.O.B. ORIGIN BID ADJUSTED FOR TRANSPORTATION COST DOES NOT EXCEED BY 120 PERCENT THE UNIT COST FOR THE GUIDED MISSILE CONTAINERS AWARDED TO RECONY, TROYLER IS ELIGIBLE WITHIN THE CONTEMPLATION OF THE ELIGIBILITY CLAUSE FOR CONSIDERATION OF A CONTRACT FOR THE SET- ASIDE. ALTHOUGH IT IS CONTENDED THAT SUCH PROCEDURE RESULTS IN CONSIDERING BIDS ON A DISSIMILAR BASIS, OUR OFFICE HAS LONG CONSIDERED THAT THE COMPARISON OF F.O.B. ORIGIN BIDS ADJUSTED FOR TRANSPORTATION WITH F.O.B. DESTINATION BIDS IS "COMPETITION ON AN EQUAL BASIS OR AN COMMON GROUND.' SEE 16 COMP. GEN. 21, 23.

ACCORDINGLY, WE CONCUR IN THE OPINION OF THE CONTRACTION OFFICER THAT TROYLER HAS ESTABLISHED ITS ELIGIBILITY FOR CONSIDERATION OF THE CONTRACT TO BE NEGOTIATED FOR THE SET-ASIDE.