B-147835, FEB. 27, 1962

B-147835, FEB. 27, 1962

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED JANUARY 29, 1962 (RL.1), WITH ENCLOSURES, FROM CAPTAIN THOMAS H. BELL, SC, ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, IN REPLY TO OUR LETTER OF JANUARY 4, 1962, REQUESTING A REPORT ON THE PROTEST FILED BY THE ALLIED PAINT MANUFACTURING COMPANY, INCORPORATED, AGAINST THE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS NO. 63077-847-62.

WE ENCLOSE FOR YOUR INFORMATION A COPY OF OUR DECISION OF TODAY TO THE PROTESTING BIDDER. ALSO, WE ARE RETURNING HEREWITH THE ENCLOSURES TO THE LETTER OF JANUARY 29, 1962, EXCEPT THE CONTRACTING OFFICER'S STATEMENT OF FACTS.

ON THE BASIS OF THE RECORD IN THIS CASE, WE FEEL IT NECESSARY TO MAKE SPECIAL REFERENCE TO THE CONTROVERSY ARISING OUT OF WHAT MAY HAVE BEEN THE PROTESTING BIDDER'S INTENTION RESPECTING DELIVERY OF ITEM 1 (NX), AND THE POSITION TAKEN BY THE MILITARY INDUSTRIAL SUPPLY AGENCY RESPECTING SUCH BID.

THE INVITATION FOR BIDS ADVISED BIDDERS THAT DELIVERY OF ITEM 1 (NX) WAS TO BE MADE ON AN F.O.B. ORIGIN BASIS, AND IN CONNECTION THEREWITH BIDDERS WERE REQUIRED TO FURNISH CERTAIN INFORMATION SPECIFIED IN THE INVITATION. AT THE BOTTOM OF PAGE 9 OF THE INVITATION THERE IS SET FORTH THE FOLLOWING LANGUAGE:

"BID A - PLACE OF DELIVERY:ORIGIN

"/A) THE ARTICLES TO BE FURNISHED HEREUNDER SHALL BE DELIVERED, FREE OF EXPENSE TO THE GOVERNMENT AND, AT THE GOVERNMENT'S OPTION, (I) LOADED, BLOCKED, AND BRACED ON BOARD CARRIER'S EQUIPMENT, (II) AT THE FREIGHT STATION, OR (III) PLACED ON WHARF OF WATER CARRIER (WHERE MATERIAL WILL ORIGINATE WITHIN OR ADJACENT TO A PORT AREA AND IS ADAPTABLE TO WATER MOVEMENT), AT OR NEAR CONTRACTOR'S PLANT AT * * *.'

THE QUOTED LANGUAGE IS FOLLOWED BY SUB-ITEM 4 TO THE EFFECT THAT BIDDERS SHOULD INSERT THE PORT, OR THE SPECIFIC AREA WITHIN SUCH PORT, TO WHICH SUPPLIES WOULD BE DELIVERED FOR SHIPMENT AT GOVERNMENT EXPENSE TO THE SPECIFIED DESTINATION. AS WE READ THE BID OF THE ALLIED PAINT COMPANY, THERE IS SUBSTANTIAL REASON FOR BELIEVING THAT THE COMPANY INTENDED TO MAKE DELIVERY OF ITEM 1 (NX) AT ITS UNIT PRICE OF $10.60 PER PAIL "PLACED ON WHARF OF WATER CARRIER" AT THE "PORT OF PHILADELPHIA," FREE OF EXPENSE TO THE GOVERNMENT. IT SEEMS POSSIBLE THAT IN USING THE LANGUAGE REFERRED TO, YOUR DEPARTMENT DID NOT ANTICIPATE THAT BIDDERS WOULD OFFER AN F.O.B. DELIVERY AT A POINT INTERMEDIATE BETWEEN ORIGIN AND DESTINATION. HOWEVER, THE INDICATED LANGUAGE OF THE INVITATION REQUIRED BIDDERS TO FURNISH ALL INFORMATION CALLED FOR BY CLAUSE "A," INCLUDING THE NAMING OF A PORT TO WHICH SUPPLIES WOULD BE DELIVERED WHERE "MATERIAL WILL ORIGINATE WITHIN OR ADJACENT TO A PORT AREA * * * AT OR NEAR CONTRACTOR'S PLANT.' WE FEEL THAT THERE WAS CONSIDERABLE JUSTIFICATION FOR THE ASSUMPTION BY THE PROTESTING BIDDER THAT ITS PLANT WAS "ADJACENT" TO A PORT AREA, SINCE IT WAS RELATIVELY ONLY A SHORT DISTANCE AWAY.

OUR OFFICE HAS HELD THAT WHERE BIDS ARE REQUESTED ON AN F.O.B. ORIGIN BASIS ONLY, AND IF A BIDDER QUOTES A DESTINATION PRICE LOWER THAN ANY OTHER BID, THEN SUCH BID MUST BE ACCEPTED. THE SAME REASONING WOULD SEEM TO BE EQUALLY APPLICABLE WHERE A BIDDER QUOTES A PRICE F.O.B. POINT INTERMEDIATE BETWEEN ORIGIN AND DESTINATION. IN VIEW OF THE CONTROVERSY WHICH HAS ARISEN IN THIS CASE, AND IN ORDER TO PREVENT A RECURRENCE THEREOF, WE FEEL IT APPROPRIATE TO BRING THE MATTER TO YOUR ATTENTION TO THE END THAT THE LANGUAGE USED IN THE INVITATION MAY BE MODIFIED SO AS TO MORE CLEARLY INDICATE THE BASIS ON WHICH BIDS ARE REQUIRED. IT WILL BE NOTED FROM OUR DECISION OF TODAY THAT THE DENIAL OF THE BIDDER'S PROTEST WAS BASED ON OTHER GROUNDS.