B-152593, DEC. 4, 1963

B-152593, DEC. 4, 1963

TO ROSS, STARK, MATZKIN AND DAY:

REFERENCE IS MADE TO YOUR LETTERS DATED OCTOBER 4 AND NOVEMBER 4, 1963, WRITTEN IN BEHALF OF CONSOLIDATED DIESEL ELECTRIC CORPORATION AND PROTESTING AGAINST THE ACTION OF THE DEPARTMENT OF THE ARMY IN AWARDING A CONTRACT TO FRUEHAUF CORPORATION UNDER IFB NO. AMC (T) 23 204-63-610.

THE INVITATION IN QUESTION REQUESTED BIDS ON SUPPLYING 125 LARC-XV VEHICLES UNDER ITEM 1, FOR REPAIR PARTS SUPPORT UNDER ITEM 2, AND FOR TECHNICAL DATA AND OPTIONAL EQUIPMENT UNDER ITEMS 3 THROUGH 10. WITH RESPECT TO ITEM 1, SEPARATE BID PRICES WERE REQUESTED ON QUANTITIES OF VEHICLES FOR SHIPMENTS TO DESTINATIONS AS FOLLOWS:

TABLE

ITEM NUMBER OF VEHICLES DESTINATION

1.02A. 31 FT. EUSTIS, VA.

1.02B. 45 FAR EAST

1.02C. 47 FED.REP. OF GERMANY

1.02D. 2 CANAL ZONE

ARTICLE 5 OF THE ADDITIONAL INFORMATION AND DEFINITIONS INCLUDED IN THE INVITATION SPECIFIED CERTAIN DEEP WATER PORTS TO WHICH BIDDERS COULD ELECT TO DELIVER THE VEHICLES UNDER ITEMS 1.02B. AND 1.02D. ON AN F.A.S. BASIS, AND SPECIFIED THE TRANSPORTATION CHARGES FROM EACH OF SUCH PORTS TO THE FINAL DESTINATIONS OF THE VEHICLES WHICH WOULD BE ADDED TO BID PRICES FOR EVALUATION PURPOSES.

WITH RESPECT TO THE 31 VEHICLES LISTED UNDER ITEM 1.02A., ARTICLE 5C ADVISED BIDDERS THAT DELIVERY SHOULD BE EFFECTED F.O.B. GOVERNMENT DOCK, WHARF OR DISCHARGING STATION, FORT EUSTIS, VIRGINIA.

THE 47 VEHICLES UNDER ITEM 1.02C. WERE TO BE PURCHASED FOR THE FEDERAL REPUBLIC OF GERMANY PURSUANT TO A LETTER OF OFFER WHICH REQUESTED THAT SUCH VEHICLES BE DELIVERED TO THE GERMAN GOVERNMENT F.O.B. CONTRACTOR'S PLANT OR SUPPLY POINT. ARTICLE 5D OF THE ADDITIONAL INFORMATION AND DEFINITIONS THEREFORE ADVISED BIDDERS AS FOLLOWS:

"D. DELIVERY OF ALL QUANTITIES OVER 78 EA LARC-XVS (ITEM 1.01 C. OR 1.02 C.) SHALL BE EFFECTED FREE ALONGSIDE SHIP (F.A.S.) AT ANY FACILITY COMMONLY USED FOR LOADING OR DISCHARGING DEEP SEA VESSELS AT ONE OF THE CITIES LISTED IN A. ABOVE OR AT CHICAGO, ILLINOIS, OR MILWAUKEE, WISCONSIN. (THE EXACT FACILITY AT ONE OF THE NAMED PORTS WILL BE DESIGNATED BY THE GOVERNMENT). THE BIDDER SHALL DESIGNATE ONE OF THE CITIES TO WHICH HE CONTRACTS TO DELIVER ALL QUANTITIES OVER 78 EA (ITEM 1.01 C. OR 1.02 C.)

"FOR QUANTITIES OVER 78 EA LARC-XVS (ITEM 1.01 C. OR 1.02 C.) THE BIDDER MAY SELECT ANOTHER PORT WITH A DEEP SEA LOADING FACILITY AS A PLACE OF DELIVERY OF THE LARC-XVS. BIDDERS MAY SPECIFY ONLY ONE PORT FOR QUANTITIES OVER 78 EA. THE ALTERNATE LOADING FACILITY SELECTED BY THE BIDDER WILL BE EVALUATED FOR ITS ACCEPTABILITY BY THE GOVERNMENT PRIOR TO AWARD.

"IT IS THE INTENT OF THE GOVERNMENT TO LOAD THESE LARC-XVS DIRECTLY ABOARD OCEAN-GOING VESSELS FOR SHIPMENT TO EUROPE WITHOUT THE NECESSITY OF TRANS-SHIPMENT. IN SELECTING AN ALTERNATE LOADING FACILITY, THE BIDDER SHOULD TAKE INTO CONSIDERATION THIS INTENT AND THE NECESSITY FOR DELIVERING THESE LIGHTERS F.A.S.'

ADDITIONALLY, PARAGRAPHS D, E, AND F OF THE NOTICE TO BIDDERS ADVISED AS FOLLOWS:

"D. BID PRICES SHALL INCLUDE ALL COSTS FOR PREPARATION FOR DELIVERY, LOADING, BLOCKING, BRACING, DRAYING, SWITCHING, TRANSPORTATION OR OTHER SERVICES NECESSARY TO EFFECT DELIVERY TO THE F.A.S. OR F.O.B. POINTS DESIGNATED IN ARTICLE 5.

"E. THE SHIPPING WEIGHT AND DIMENSIONS OF EACH ITEM WHICH WILL BE USED FOR EVALUATION OF TRANSPORTATION CHARGES ARE SPECIFIED BELOW:

TABLE

44,500 LBS. 45 FT. L BY 14 FEET 6 INCHES W BY 13 FEET 5 INCHES HIGH

SHIPPING WEIGHT

DIMENSIONS

"NOTE: DUE TO THE DIMENSIONS AND WEIGHT OF THE LARC-XV, THE BIDDERS ARE CAUTIONED THAT TRANSPORTING THE LIGHTER FROM PLACE OF PRODUCTION TO PLACE OF DELIVERY BY LAND TRANSPORT PRESENTS A NUMBER OF OBSTACLES. THIS MODE OF TRANSPORTATION IS NOT PROHIBITED, HOWEVER.

"IN EFFECTING DELIVERY, UNDER NO CIRCUMSTANCES WILL THE LARC-XV (EXCEPT FOR THE PILOT MODEL):

(A) BE TOWED, EITHER OVER LAND OR THROUGH WATER, FOR DISTANCES EXCEEDING 1000 YARDS OR AT SPEEDS EXCEEDING 3 MILES PER HOUR; OR,

(B) BE DRIVEN EITHER OVER LAND AND/OR THROUGH WATER FOR A TOTAL PERIOD REQUIRING ENGINE OPERATION EXCEEDING ONE HOUR.

"BIDDERS ARE REQUIRED TO FURNISH WITH THEIR BID THE PLAN THEY PROPOSE TO EMPLOY IN TRANSPORTING THE LARC-XV FROM PLACE OF PRODUCTION TO PLACE OF DELIVERY. THIS PLAN WILL BE EVALUATED BY THE GOVERNMENT PRIOR TO MAKING AN AWARD.

"F. IN EVALUATING BIDS, THE RATES SHOWN AND PORTS OF LOADING SHOWN IN ARTICLE 5A WILL BE USED. THESE PORTS AND RATES ARE FOR SHIPMENT TO ANY ONE OF THE FOLLOWING: PUSAN, KOREA; YOKOHAMA, JAPAN OR NAHA, OKINAWA. THE RATES ARE UNIT TRANSPORTATION RATES, WHICH INCLUDE PORT HANDLING AND OCEAN SHIPPING COSTS.

"/1) THIRTY-ONE (31) LARC-XVS (ITEM 1 A. OR 1.01 A. OR 1.02 A.) HAVE FINAL DESTINATION AT FT. EUSTIS, VIRGINIA. ALL TRANSPORTATION COSTS TO FT. EUSTIS ARE TO BE INCLUDED IN THE UNIT BID PRICE. BID PRICES ARE TO BE F.O.B. FT. EUSTIS, VIRGINIA. (SEE ARTICLE 5C)

"/2) QUANTITIES OF LARC-XVS OVER THE 78 EA ABOVE (ITEM 1.01 C. OR 1.02 C.) SHALL BE EVALUATED WITHOUT TRANSPORTATION COSTS BEYOND THE FREE ALONGSIDE SHIP (F.A.S.) POINT SPECIFIED BY THE BIDDER IN ARTICLE 5D. FREE ALONGSIDE SHIP (F.A.S.) MEANS THAT THE LARC-XV SHALL BE PLACED BY THE SHIPPER (CONTRACTOR) WITHIN THE REACH OF THE SHIP'S TACKLE IN A CONDITION FIT FOR SHIPMENT.

"/3) FOR PURPOSES OF EVALUATION OF BIDS, AND FOR NO OTHER PURPOSES, THE FINAL DESTINATION OF TWO (2) LARC-XVS (ITEM 1 C. OR 1.01 D. OR 1.02 D.) WILL BE TO THE U.S. ARMY CARIBBEAN. IN EVALUATING BIDS, THE APPLICABLE RATES TO BE USED BY THE GOVERNMENT FOR SHIPMENT FROM THE PORT OF LOADING WILL BE TO THE PANAMA CANAL ZONE. THE PORTS OF LOADING AND RATES ARE LISTED IN ARTICLE 5B. THE RATES ARE UNIT TRANSPORTATION RATES WHICH INCLUDE PORT HANDLING AND OCEAN SHIPPING STS.'

PARAGRAPH (A) OF THE NOTICE TO BIDDERS PROVIDED AS FOLLOWS:

"A. AWARD WILL BE BASED UPON THE LOWEST PRICE FOR THE TOTAL QUANTITY TO BE PROCURED, AT THE TIME OF AWARD FOR ITEM 1, OR 1.01. OR 1.02 PLUS ITEM 2, 3, 5, 6, 7, 8, AND 10. TRANSPORTATION COSTS WILL NOT BE A FACTOR OF EVALUATION FOR ITEMS 1A, 1.01A, 1.01C, 1.02C, 2, 3, 5, 6, 7, 8 AND 10.'

THE FAILURE TO INCLUDE "1.02A" IN THE LAST SENTENCE OF PARAGRAPH (A) ABOVE APPEARS TO HAVE BEEN AN INADVERTENT OMISSION.

PURSUANT TO THE FINAL PARAGRAPH OF PARAGRAPH E OF THE NOTICE TO BIDDERS QUOTED ABOVE, AND WITH RESPECT TO THE VEHICLES DESTINED FOR FORT EUSTIS, FRUEHAUF'S BID ADVISED THAT "THE LIGHTERS TO BE DELIVERED TO FORT EUSTIS, VIRGINIA, WILL BE TRANSPORTED BY UNSCHEDULED COMMERCIAL STEAM SHIP.' CONSOLIDATED'S BID ADVISED THAT "FULLY PRESERVED UNITS WILL BE LOADED DIRECTLY FROM THE PRODUCTION LINE IN OUR BUILDING ON TO A SPECIAL TRAILER, TIED DOWN, AND DELIVERED BY LAND TRANSPORTATION TO FORT EUSTIS, VA.'

THE BIDS RECEIVED FROM CONSOLIDATED AND FREUHAUF WERE EVALUATED AS FOLLOWS:

TABLE

CONSOLIDATED 31 EA PACKAGED LEVEL C $83,825.00 EQUALS $2,598,575.00 45 EA DO. DO. A 83,400.00 EQUALS 3,753,000.00 47 EA DO.DO. A 82,700.00 EQUALS 3,886,900.00

2 EA DO. DO. A 83,400.00 EQUALS 166,800.00

$10,405,275.00

COST OF ANCILLARY ITEMS 147,100.00

$10,552,375.00

LESS 1/8 OF 1 PERCENT 20 DAYS 13,190.47

$10,539,184.53

TRANSPORTATION CHARGES 421,712.94

TOTAL $10,960,897.47

FRUEHAUF 31 EA PACKAGED LEVEL C $84,021.00 EQUALS $2,604,651.00 45 EA DO. DO. A 83,245.00 EQUALS 3,746,025.00 47 EA DO. DO. A 83,245.00 EQUALS 3,912,515.00

2 EA DO. DO. A 83,245.00 EQUALS 166,490.00

$10,429,681.00

COST OF ANCILLARY ITEMS 125,969.25

TRANSPORTATION CHARGES 402,013.20

TOTAL$10,957,663.45

THE CONTRACT AWARDED TO FREUHAUF ON SEPTEMBER 30, 1963, APPEARS TO HAVE BEEN BASED UPON A DETERMINATION, IN ACCORDANCE WITH PARAGRAPH (A) OF THE NOTICE TO BIDDERS, THAT FRUEHAUF SUBMITTED THE LOWEST BID BY $3,234.02 ON AN EVALUATED BASIS, AS SET OUT ABOVE.

THE PROTEST BY CONSOLIDATED IS BASED UPON THE FOLLOWING GROUNDS:

1. THAT IT IS IMPRACTICABLE TO DELIVER THE VEHICLES TO FORT EUSTIS BY COMMERCIAL STEAMSHIP AND THAT IT IS THEREFORE IMPOSSIBLE TO PROPERLY EVALUATE FRUEHAUF'S BID.

2. THAT UNLOADING COSTS WHICH THE GOVERNMENT WOULD BE REQUIRED TO ASSUME IN THE EVENT FRUEHAUF DELIVERS BY VESSEL TO FORT EUSTIS WERE NOT INCLUDED IN THE EVALUATION OF FRUEHAUF'S BID.

3. THAT LEVEL C PACKAGING, AS CALLED FOR BY THE INVITATION, IS INADEQUATE FOR TRANSPORTATION BY VESSEL.

4. THAT COST SAVINGS TO THE GOVERNMENT RESULTING FROM AN AWARD TO CONSOLIDATED SHOULD PROPERLY HAVE BEEN CONSIDERED IN THE BID EVALUATION.

YOUR CONTENTION THAT IT IS IMPRACTICABLE TO DELIVER THE VEHICLES TO FORT EUSTIS BY COMMERCIAL STEAMSHIP IS BASED UPON THE FACT THAT VESSELS WITH DRAFT IN EXCESS OF 16 FEET ARE PRESENTLY UNABLE TO DOCK AT FORT EUSTIS, AND MUST THEREFORE UNLOAD CARGO AT EITHER HAMPTON ROADS OR NEWPORT NEWS AND TRANS-SHIP TO FORT EUSTIS BY LAND. IN THIS CONNECTION YOU POINT OUT THAT WHILE TWO ROLL-ON ROLL-OFF VESSELS WOULD BE ABLE TO DELIVER TO FORT EUSTIS, THE COST OF TRANSPORTING ON SUCH VESSELS WOULD BE AT LEAST 10 TIMES THE AMOUNT WHICH FRUEHAUF'S BID INDICATES WAS INCLUDED TO COVER TRANSPORTATION FROM LONG BEACH TO FORT EUSTIS. IT IS YOUR CONTENTION THAT IT WOULD BE COMMERCIALLY IMPRACTICABLE TO REQUIRE FRUEHAUF TO USE ROLL-ON ROLL-OFF VESSELS TO DELIVER IN ACCORDANCE WITH THE TRANSPORTATION PLAN SUBMITTED WITH ITS BID, AND THAT SUCH IMPRACTICABILITY WOULD RENDER DELIVERY UNDER FRUEHAUF'S PLAN IMPOSSIBLE AND WOULD PRECLUDE THE GOVERNMENT FROM INSISTING ON DELIVERY BY VESSEL TO FORT EUSTIS. YOU POINT OUT THAT UNDER SUCH CIRCUMSTANCES FRUEHAUF COULD DELIVER BY VESSEL TO NEWPORT NEWS OR HAMPTON ROADS, IN WHICH EVENT THE GOVERNMENT, BY REASON OF ITS APPARENT PREFERENCE FOR DELIVERY BY WATER AS SET OUT IN PARAGRAPH E OF THE NOTICE TO BIDDERS, AND BY REASON OF THE FAILURE OF THE INVITATION TO WARN BIDDERS OF SHORTAGES OF TRANSPORTATION FACILITIES OR OTHER FACTORS AT DESTINATION AS REQUIRED BY ASPR 1-1305.3, MAY BE REQUIRED TO PAY TRANSPORTATION COSTS FROM NEWPORT NEWS TO FORT EUSTIS.

AS INDICATED BY THE REPORT FROM THE DEPARTMENT OF THE ARMY ON CONSOLIDATED'S PROTEST, A COPY OF WHICH WAS FURNISHED TO YOU, THE TRANSPORTATION PLAN WHICH BIDDERS WERE REQUIRED TO SUBMIT UNDER PARAGRAPH E OF THE NOTICE TO BIDDERS WAS INTENDED FOR THE PURPOSE OF EVALUATING THE RESPONSIBILITY OF EACH BIDDER, BUT WAS NOT INTENDED TO BIND THE BIDDER TO DELIVER IN STRICT ACCORDANCE WITH THE PLAN IF OTHER DELIVERY METHODS WERE FEASIBLE. IN THIS CONNECTION, IT IS THE POSITION OF THE CONTRACTING AGENCY THAT THE PROVISIONS OF ARTICLE 5C OF THE ADDITIONAL INFORMATION AND DEFINITIONS, TOGETHER WITH THE PROVISIONS OF PARAGRAPH D OF THE NOTICE TO BIDDERS, CLEARLY ADVISED ALL BIDDERS THAT THE 31 VEHICLES DESTINED FOR FORT EUSTIS MUST BE DELIVERED F.O.B. TO FORT EUSTIS AND THAT BIDDERS SHOULD INCLUDE THE COST OF SUCH TRANSPORTATION IN THEIR BID PRICES.

VIEWED AS A WHOLE, WE MUST AGREE WITH THE POSITION OF THE CONTRACTING AGENCY THAT THE PROVISIONS OF THE INVITATION REQUIRING BID PRICES TO BE ON AN F.O.B. FORT EUSTIS BASIS CLEARLY OBLIGATE FRUEHAUF TO SO DELIVER AT ITS BID PRICE. WE SEE NO VALID BASIS UPON WHICH IT MAY BE CONTENDED THAT SUCH OBLIGATION IS EITHER CHANGED OR AFFECTED BY THE REQUIREMENT FOR SUBMISSION OF A TRANSPORTATION PLAN, ESPECIALLY IN VIEW OF THE FACT THAT NEITHER THE INVITATION NOR THE CONTRACT AWARDED REQUIRES THE CONTRACTOR TO DELIVER IN STRICT ACCORDANCE WITH THE TRANSPORTATION PLAN SUBMITTED. CF. B-151807, JULY 24, 1963, 43 COMP. GEN. --; 39 ID. 655. IT IS THEREFORE OUR OPINION THAT ACCEPTANCE OF FRUEHAUF'S BID OBLIGATES IT TO DELIVER F.O.B. FORT EUSTIS AT ITS BID PRICE AND, IN THE EVENT WATER TRANSPORTATION TO A POINT BEYOND NEWPORT NEWS IS CONSIDERED BY FRUEHAUF TO BE EITHER IMPRACTICABLE OR IMPOSSIBLE, IT IS OUR FURTHER OPINION THAT FRUEHAUF IS OBLIGATED BY ITS BID TO PROVIDE AND PAY FOR SUCH ADDITIONAL TRANSPORTATION AS MAY BE REQUIRED TO COMPLETE DELIVERY TO FORT EUSTIS BY RAILROAD OR TRUCK. NECESSARILY FOLLOWS THAT THE TRANSPORTATION PLAN SUBMITTED BY FRUEHAUF DOES NOT PRECLUDE A PROPER EVALUATION OF ITS BID. WITH RESPECT TO THAT PORTION OF THE PROTEST WHICH ALLEGES THAT UNLOADING COSTS AT FORT EUSTIS WERE NOT PROPERLY EVALUATED, YOU POINT OUT THAT THE NOTICE TO BIDDERS AND THE ADDITIONAL INFORMATION AND DEFINITIONS ADVISED BIDDERS AS FOLLOWS:

"PARAGRAPH D. BID PRICES SHALL INCLUDE ALL COSTS FOR PREPARATION FOR DELIVERY, LOADING, BLOCKING, BRACING, DRAYING, SWITCHING, TRANSPORTATION OR OTHER SERVICES NECESSARY TO EFFECT DELIVERY TO THE F.A.S. OR F.O.B. POINTS DESIGNATED IN ARTICLE 5.

"PARAGRAPH F (1). THIRTY-ONE (31) LARC XVS (ITEM 1A OR 1.01A OR 1.02A) HAVE FINAL DESTINATION AT FT. EUSTIS, VIRGINIA. ALL TRANSPORTATION COSTS TO FT. EUSTIS, VIRGINIA, ARE TO BE INCLUDED IN THE UNIT BID PRICE (BID PRICES ARE TO BE F.O.B. FT. EUSTIS, VIRGINIA (SEE ARTICLE 5C) ).

"ARTICLE 5C. DELIVERY OF 31 EA. LARC XVS (ITEM 1A OR 1.01A OR 1.02A) SHALL BE EFFECTED F.O.B. GOVERNMENT DOCK, WHARF OR DISCHARGING STATION FT. EUSTIS, VIRGINIA.'

YOU CONTEND THAT THE PHRASE "F.O.B. GOVERNMENT DOCK, WHARF OF RECEIVING STATION" OBLIGATES THE CONTRACTOR ONLY TO DELIVER THE VEHICLES FREE ON BOARD CARRIER AT THE FORT EUSTIS DOCK, WHARF, OR RECEIVING STATION, AND THAT SUCH INTERPRETATION IS SUPPORTED BY THE SPECIFIC REFERENCES TO LOADING COSTS INCLUDED IN PARAGRAPH D, AND BY THE FAILURE OF THE INVITATION TO INCLUDE SIMILAR ADVICE TO BIDDERS TO INCLUDE UNLOADING COSTS IN THEIR BID PRICES. IN VIEW THEREOF IT IS YOUR POSITION THAT, IN EVALUATING BIDS, THE COST TO THE GOVERNMENT OF UNLOADING THE VEHICLES AT FORT EUSTIS SHOULD HAVE BEEN ADDED TO THE BID PRICES SUBMITTED BY BOTH CONSOLIDATED AND FRUEHAUF. ADDITIONALLY, IT IS YOUR BELIEF THAT SUCH UNLOADING COSTS SHOULD BE COMPUTED ON THE BASIS OF THE TRANSPORTATION PLANS SUBMITTED WITH THE BIDS AND THAT THE COSTS RESULTING FROM UNLOADING THE VEHICLES FROM VESSELS, AS PROPOSED BY FRUEHAUF'S TRANSPORTATION PLAN, WOULD EXCEED THE COST OF UNLOADING FROM TRAILERS UNDER CONSOLIDATED'S TRANSPORTATION PLAN BY MORE THAN THE $3,234 DIFFERENCE IN THE EVALUATED BID PRICES ON WHICH THE CONTRACT AWARD TO FRUEHAUF WAS BASED.

IT IS OUR UNDERSTANDING THAT THE PHRASE "F.O.B. WHARF" IN A SALES CONTRACT HAS BEEN CONSISTENTLY CONSTRUED BY THE VARIOUS GOVERNMENT AGENCIES AND THEIR CONTRACTORS AS IMPOSING AN OBLIGATION UPON THE SELLER TO DELIVER FREE OF CHARGE ON THE WHARF AT THE DESIGNATED DELIVERY POINT. IN THIS CONNECTION, IT SHOULD BE NOTED THAT THE CASE OF REPUBLIC OF INDONESIA V. J. R. SIMPLOT COMPANY, 220 F.2D. 321, TO WHICH YOUR BRIEF REFERS, APPLIES TO SHIPMENTS F.O.B. RAILROAD DOCK, RATHER THAN VESSEL WHARF.

IN VIEW OF THE FOREGOING, WE MUST CONCLUDE THAT, IN THE EVENT FRUEHAUF SHOULD ELECT TO DELIVER TO FORT EUSTIS BY VESSEL, THE COST OF UNLOADING MUST BE BORNE BY FRUEHAUF (SEE 17 CORPUS JURIS, CUSTOMS AND USAGES, SECTION 54). IT NECESSARILY FOLLOWS THAT SUCH COSTS SHOULD NOT HAVE BEEN ADDED TO ITS BID PRICE IN EVALUATING ITS BID. WHILE A DIFFERENT RESULT MAY WELL BE REACHED BY APPLICATION TO CONSOLIDATED'S BID, WHICH PROPOSED LAND TRANSPORTATION TO DOCK OR RECEIVING STATION AT FORT EUSTIS, OF THE PRINCIPLE SET OUT IN REPUBLIC OF INDONESIA V. J. R. SIMPLOT COMPANY, CITED ABOVE, SUCH APPLICATION WOULD ONLY OPERATE TO INCREASE CONSOLIDATED'S EVALUATED BID PRICE, WITH A CORRESPONDING INCREASE IN THE AMOUNT BY WHICH FRUEHAUF'S EVALUATED BID WAS LOWER THAN THAT OF CONSOLIDATED. THE FAILURE TO ADD SUCH COSTS IN EVALUATING CONSOLIDATED'S BID THEREFORE OFFERS NO BASIS TO SUPPORT ITS PROTEST.

CONCERNING THAT PORTION OF YOUR PROTEST WHICH IS DIRECTED TO THE COST OF PACKAGING, YOU POINT OUT THAT WHILE THE INVITATION ASKS FOR BID PRICES ON THE 31 VEHICLES DESTINED FOR FORT EUSTIS, WHICH PRICES ARE TO INCLUDE AND BE BASED ON LEVEL C PACKAGING, SUCH PACKAGING IS INADEQUATE IF THE VEHICLES ARE TO BE TRANSPORTED BY OCEAN STEAMSHIP FROM CALIFORNIA TO FORT EUSTIS. IN SUPPORT OF THIS CONCLUSION, YOU CALL ATTENTION TO THE FACT THAT LEVEL A PACKAGING WAS REQUIRED ON ALL OTHER VEHICLES DESTINED FOR OCEAN SHIPMENT. IN VIEW OF THE ADVICE IN PARAGRAPH E OF THE NOTICE TO BIDDERS THAT TRANSPORTATION PLANS WERE TO BE EVALUATED, AND SINCE IT IS YOUR BELIEF THAT LEVEL A PACKAGING ON THE 31 VEHICLES DESTINED FOR FORT EUSTIS WOULD RESULT IN ADDITIONAL COSTS OF AT LEAST $7,875 WHICH THE GOVERNMENT MIGHT HAVE TO BEAR ON THE EVENT OF AN AWARD TO FRUEHAUF, IT IS YOUR CONTENTION SUCH INCREASED COST SHOULD PROPERLY HAVE BEEN INCLUDED IN THE EVALUATION OF FRUEHAUF'S BID.

SINCE THE VEHICLES WERE TO BE DELIVERED F.O.B. FORT EUSTIS, AS DISTINGUISHED FROM THE DELIVERY F.A.S. LONG BEACH OF VESSELS TO BE SHIPPED TO OTHER DESTINATIONS, IT IS APPARENT THAT FINAL INSPECTION, ACCEPTANCE, AND PASSAGE OF TITLE WILL NOT OCCUR UNTIL THE VEHICLES ARE DELIVERED AT FORT EUSTIS. THE RISK OF DAMAGE RESULTING FROM INADEQUATE PACKAGING, AND THE RESPONSIBILITY FOR ADEQUATE PACKAGING, IS THEREFORE IMPOSED SOLELY UPON FRUEHAUF UNDER THE TERMS OF THE INVITATION AND ITS BID. WE THEREFORE SEE NO VALID BASIS UPON WHICH IT MAY BE CONTENDED THAT THE GOVERNMENT COULD BE REQUIRED TO BEAR ANY PACKAGING COSTS IN ADDITION TO THOSE ALREADY INCLUDED IN FRUEHAUF'S BID PRICE. WE ARE THEREFORE UNABLE TO AGREE WITH YOUR CONTENTION THAT ANY AMOUNT REPRESENTING SUCH ADDITIONAL PACKAGING COSTS SHOULD HAVE BEEN INCLUDED IN THE EVALUATION OF FRUEHAUF'S BID.

THE REMAINING PORTION OF YOUR PROTEST IS DIRECTED TO THE FAILURE OF THE CONTRACTING AGENCY TO CONSIDER FACTORS OTHER THAN THOSE SPECIFIED IN THE INVITATION IN DETERMINING WHICH BID WAS MOST ADVANTAGEOUS TO THE GOVERNMENT. SPECIFICALLY, YOU POINT OUT THAT THE CONTRACTING AGENCY PRESENTLY UTILIZES AN INSPECTION TEAM OF 13 PERSONS FOR THE PURPOSE OF INSPECTING LARC V VEHICLES WHICH ARE CURRENTLY BEING MANUFACTURED BY CONSOLIDATED. IT IS YOUR BELIEF THAT, IN CREATING A NEW INSPECTION FACILITY AT FRUEHAUF'S PLANT AND IN MAINTAINING DUAL INSPECTION FACILITIES AT THE PLANT OF BOTH FRUEHAUF AND CONSOLIDATED FOR THE REMAINDER OF THE LARC V PRODUCTION SCHEDULE, THE CONTRACTING AGENCY WILL INCUR ESTIMATED INCREASED COSTS OF $100,000. YOU THEREFORE CONTEND THAT SUCH INCREASED INSPECTION COSTS SHOULD HAVE BEEN INCLUDED IN THE EVALUATION OF FRUEHAUF'S BID, NOTWITHSTANDING THE FACT THAT THE INVITATION FAILED TO ADVISE BIDDERS SUCH ADDITIONAL COSTS WOULD BE INCLUDED IN THE EVALUATION OF THEIR BIDS.

WHILE NUMEROUS FACTORS, OTHER THAN BID PRICE, ARE SPECIFIED BY ASPR 2- 407.5 AS PROPER FOR CONSIDERATION IN DETERMINING WHICH BID IS MOST ADVANTAGEOUS TO THE GOVERNMENT, AND INSPECTION COSTS ARE LISTED AMONG SUCH FACTORS, WHETHER THESE FACTORS WILL PRODUCE SAVINGS OR ADDITIONAL COSTS TO THE GOVERNMENT IN ANY GIVEN PROCUREMENT IS SOLELY WITHIN THE KNOWLEDGE OF THE CONTRACTING AGENCY. WHETHER INSPECTION COSTS SHOULD, OR SHOULD NOT, BE CONSIDERED IN EVALUATING BIDS IS THEREFORE A MATTER PRIMARILY FOR CONSIDERATION AND DETERMINATION BY THE CONTRACTING AGENCY. IN THE INSTANT PROCUREMENT IT IS THE POSITION OF THE CONTRACTING AGENCY THAT ANY INCREASE IN INSPECTION COSTS RESULTING FROM AN AWARD TO FRUEHAUF WOULD BE SPECULATIVE, UNCERTAIN, AND NOT SUSCEPTIBLE OF MEASUREMENT. ADDITIONALLY, IT SHOULD BE NOTED THAT UNDER DATE OF DECEMBER 19, 1962, B-148825, THIS OFFICE ADVISED THE SECRETARY OF DEFENSE AND THE SECRETARY OF THE ARMY THAT IN FUTURE PROCUREMENTS WHERE RELATED COST FACTORS OF THE TYPES SPECIFIED IN ASPR 2-407.5, INCLUDING INSPECTION COSTS, ARE TO BE CONSIDERED IN THE EVALUATION OF OFFERS OR BIDS, THE SOLICITATION OF BIDS OR OFFERS SHOULD IDENTIFY SUCH FACTORS. IN VIEW OF THE DETERMINATION BY THE CONTRACTING AGENCY THAT INSPECTION COSTS WERE NOT TO BE A CONSIDERED FACTOR IN EVALUATING BIDS ON THE INSTANT PROCUREMENT, TOGETHER WITH THE FACT THAT THE INVITATION DID NOT PROVIDE FOR SUCH EVALUATION BY SO ADVISING BIDDERS, WE MUST CONCLUDE THAT THE ADDITION OF ANY AMOUNT REPRESENTING ADDITIONAL INSPECTION COSTS TO FRUEHAUF'S BID PRICE IN EVALUATING SUCH BID WOULD HAVE BEEN IMPROPER.

IN CONSIDERING YOUR PROTEST WE HAVE ALSO CONSIDERED THE APPLICABILITY OF THAT PORTION OF OUR DECISION OF DECEMBER 19, 1962, B 148825, WHICH ADVISED THE SECRETARY OF THE ARMY IT WAS IMPROPER TO ADD FIRST DESTINATION TRANSPORTATION COSTS, ON VEHICLES TO BE PURCHASED BY GERMANY F.O.B., FACTORY, IN EVALUATING OFFERS. SINCE IT WAS CONSIDERED ADVISABLE IN THE INSTANT PROCUREMENT TO REQUIRE THE CONTRACTOR TO DELIVER F.A.S. VESSEL BOTH ON VEHICLES TO BE PURCHASED BY GERMANY AND THOSE TO BE PURCHASED BY THE UNITED STATES, AND SINCE BIDS SOLICITED ON THAT BASIS INCLUDED FIRST DESTINATION TRANSPORTATION COSTS ON SUCH VEHICLES, IT WOULD APPEAR THAT THE PRINCIPLE ENUNCIATED IN OUR DECISION OF DECEMBER 19, 1962, IS NOT FOR APPLICATION IN EVALUATING THE BIDS RECEIVED IN RESPONSE TO THE INSTANT INVITATION.

IN VIEW OF THE FOREGOING IT WOULD APPEAR THAT FRUEHAUF'S BID WAS PROPERLY EVALUATED UNDER THE PROVISIONS OF THE INVITATION, AND THAT ITS BID WAS THE LOWEST RECEIVED BY AT LEAST $3,234 AFTER EVALUATION ON THAT BASIS.

ADDITIONALLY, IT WOULD APPEAR THAT A SAVING OF $28,849, RATHER THAN THE EVALUATED BID PRICE DIFFERENCE OF $3,234, WILL ACCRUE TO THE UNITED STATES UNDER AN AWARD TO FRUEHAUF, SINCE THE GERMAN GOVERNMENT WILL BE REQUIRED TO REIMBURSE THE UNITED STATES $25,615 MORE THAN IT WOULD BE REQUIRED TO REIMBURSE UNDER AN AWARD TO CONSOLIDATED. SUCH SAVING IS COMPUTED AS FOLLOWS:

TABLE

CONSOLIDATED FRUEHAUF EVALUATED PRICE

$10,960,898 $10,957,664 GERMAN REIMBURSEMENT 3,886,900 3,912,515

------------ ------------ U.S. COST

$ 7,073,998 $ 7,045,149

WE MUST THEREFORE CONCLUDE THAT THE ACTION OF THE DEPARTMENT OF THE ARMY IN AWARDING A CONTRACT TO FRUEHAUF WAS PROPER AND, ACCORDINGLY THE PROTEST BY CONSOLIDATED AGAINST SUCH AWARD MUST BE DENIED.