B-156647, JUL. 19, 1965

B-156647, JUL. 19, 1965

TO HENRY SPEN AND COMPANY, INC.:

IN YOUR TELEGRAM OF APRIL 27, 1965, AND IN SUBSEQUENT SUBMISSIONS DATED MAY 5, 11 AND 14, AND JUNE 16, 25 AND 30, YOU PROTEST THE AWARD OF CONTRACTS BY AVIATION SUPPLY OFFICE (ASO), DEPARTMENT OF THE NAVY, PURSUANT TO INVITATION FOR BIDS (IFB) NO. SBCS-IFB-383-337-65, FOR AIRCRAFT TOW BARS AND SEVERAL ITEMS OF SPARE PARTS.

WHILE YOUR ALL OR NONE BID PRICE FOR THE ITEMS INCLUDED IN THE IFB WAS NOT AS LOW AS THE TOTAL OF SEPARATE PRICES SUBMITTED BY OTHER BIDDERS ON A COMBINATION OF ITEMS, YOU ALLEGE THAT A PROPER FREIGHT CLASSIFICATION AND CORRECT EVALUATION OF TRANSPORTATION COSTS FOR THE TOW BARS, THE SOLE ITEM ON WHICH PRICES WERE REQUESTED F.O.B. ORIGIN, WILL DISCLOSE THAT YOUR BID IN FACT REPRESENTS THE LOWEST OVERALL COST TO THE GOVERNMENT. SPECIFICALLY, YOU CONTEND THAT THE PROCURING ACTIVITY ACTED ARBITRARILY IN CLASSIFYING THE SUBJECT TOW BARS UNDER UNIFORM FREIGHT CLASSIFICATION (UFC) ITEM 92670 (HAND TRUCKS WITHOUT ENDS, SIDES, STAKES OR STANDARDS), AND THAT IF IT HAD PROPERLY CLASSIFIED THE SUBJECT ITEM EITHER UNDER UFC ITEM 64100 (MACHINERY PARTS) OR UNDER UFC ITEM 9270 (AUTOMOTIVE TOWING POLES), SUCH CLASSIFICATION WOULD HAVE RESULTED IN A GREATER TRANSPORTATION ADVANTAGE IN THE EVALUATION OF YOUR BID THEN THE ROUGHLY $2,000 COMPUTED BY ASO. YOU FURTHER ASSERT THAT IF ASO HAD NOT FAILED TO CONSIDER THE SERVICES OF SEA-LAND SERVICE, INC., AS THE LEAST EXPENSIVE MEANS OF TRANSPORTING 50 PERCENT OF THE TOW BARS FROM YOUR PLANT TO OAKLAND, CALIFORNIA, THE ONLY DESTINATION SPECIFIED IN THE IFB WHICH IS SERVICES BY SEA-LAND, THE TRUE AMOUNT OF YOUR TRANSPORTATION ADVANTAGE WOULD HAVE BEEN STILL GREATER THAN REFLECTED BY THE COMPUTATIONS OF THE PROCURING ACTIVITY.

IT IS APPARENT THAT THE ASSERTIONS YOU MAKE WITH RESPECT TO FREIGHT CLASSIFICATION AND MODE OF TRANSPORTATION ARE RELEVANT ONLY IF YOUR BID DOES REPRESENT THE LOWEST OVERALL COST TO THE GOVERNMENT WHEN TRANSPORTATION COSTS ARE DETERMINED IN THE MANNER YOU CONTEND THEY SHOULD HAVE BEEN. THEREFORE, WE HAVE COMPUTED THE CHARGES WHICH WOULD RESULT FROM THE LOWEST AVAILABLE RATES, REGARDLESS OF THE MODE OF TRANSPORTATION, FOR TRANSPORTING THE TOW BARS FROM YOUR PLANT, AND FROM THE PLANT OF THE FIRM WHICH WAS AWARDED THE CONTRACT FOR THE ITEM, TO THE DESTINATIONS AND ACCORDING TO THE STAGGARED DELIVERY SCHEDULE SPECIFIED IN THE IFB. OUR COMPUTATIONS HAVE CONSIDERED THE LOADING CHARACTERISTICS OF THE ITEM, AND THEREFORE ARE BASED ON A CAPACITY OF NOT MORE THAN 180 UNITS PER CARLOAD. IN VIEW OF THE DISPUTE AS TO THE PROPER CLASSIFICATION FOR THE TOW BARS, OVERLAND CHARGES AND RATES WERE DETERMINED FOR UFC ITEMS 92670 (HAND TRUCKS), 64100 (MACHINERY PARTS) AND 9270 (AUTOMOTIVE TOWING POLES). AVAILABLE SEA-LAND RATES WERE NOT COMPUTED ON THE BASIS OF ANY OF THESE THREE CLASSIFICATIONS, BECAUSE THE APPLICABLE SEA-LAND TARIFF IS SUBJECT TO THE NATIONAL MOTOR FREIGHT CLASSIFICATION NO. A-7, WHICH IN SUPPLEMENT NO. 1 THERETO, EFFECTIVE SEPTEMBER 18, 1963, PROVIDED SPECIFIC RATINGS IN ITEM 186980 ON "TOW BARS OR TOW BAR ASSEMBLIES, AIRCRAFT GROUND TOWING OR TOWING AND STEERING COMBINED, NOT SELF PROPELLED, WITH OR WITHOUT WHEELS.' THE RATES FOR ITEM 086980 RESULT IN HIGHER CHARGES THAN THOSE OBTAINED BY USING ANY OF THE REFERENCED CLASSIFICATIONS FOR OVERLAND TRANSPORTATION.

BASED ON THE FOREGOING, OUR COMPUTATIONS SHOW THAT THE DOLLAR AMOUNT OF THE TRANSPORTATION ADVANTAGE YOU ENJOY IF THE TOW BARS ARE CLASSIFIED AS HAND TRUCKS IS NOT APPROXIMATELY $2,000, AS COMPUTED BY THE PROCURING ACTIVITY, BUT APPROXIMATELY $1,200. FURTHERMORE, IF THE TOW BARS ARE CLASSIFIED AS MACHINE PARTS OR AUTOMOTIVE TOWING POLES, YOUR ADVANTAGE IS APPROXIMATELY $1,700 AND $1,150, RESPECTIVELY. IT FOLLOWS THAT IN NONE OF THE CIRCUMSTANCES PRESCRIBED ABOVE WOULD YOUR BID REPRESENT THE LOWEST OVERALL COST TO THE GOVERNMENT. ON THE CONTRARY, THE DISPARITY BETWEEN THE COST REPRESENTED BY YOUR BID AND THAT REPRESENTED BY THE AWARDED CONTRACTS APPEARS TO BE EVEN GREATER THAN AS EVALUATED BY THE PROCURING ACTIVITY, REGARDLESS OF WHICH FREIGHT CLASSIFICATION IS USED FOR THE EVALUATION.

WHILE THE FOREGOING WOULD APPEAR TO DISPOSE OF YOUR QUESTION RELATIVE TO THE RESULT OF CONSIDERING USE OF SEA-LAND IN EVALUATING YOUR BID, ASO HAS ALSO ADVISED THAT IT TAKES NO MORE THAN 10 DAYS TO SHIP THE TOW BARS TO OAKLAND BY RAIL. ON THE OTHER HAND, IT APPEARS FROM SEA-LAND'S "INTERCOASTAL SAILING SCHEDULE NO. 11" THAT THE SAME SHIPMENT BY THAT MODE OF TRANSPORTATION WOULD TAKE 16 OR 17 DAYS TRANSIT TIME, PLUS UP TO AN ELEVEN DAY LAPSE BETWEEN SCHEDULED SAILINGS FROM THE EAST COAST TO THE WEST COAST. WITH RESPECT TO THE IMPORTANCE OF DELIVERING THE SUBJECT ITEMS AT A HIGHER SPEED THAN PROVIDED BY SEA-LAND, ASO OFFERED THE FOLLOWING COMMENTS CONCERNING THE PRIORITY DESIGNATOR WHICH WAS ASSIGNED TO THE REQUISITION FOR THIS PROCUREMENT:

"1. THE REQUISITION RECEIVED BY THE BUYER DID NOT CONTAIN A REQUIRED DELIVERY DATE BECAUSE THE ASO RECORDS INDICATED A ZERO STOCK POSITION AND THEREFORE DELIVERY WAS REQUIRED AS SOON AS POSSIBLE. THE STOCK CONTROL COMMODITY MANAGER ASSIGNED AN ISSUE PRIORITY 8 DESIGNATOR TO THE REQUISITION PURSUANT TO ASO INSTRUCTION P4400.22 (ISSUED AS A GUIDE IN PROMULGATION OF OPNAV INSTRUCTION 4614.1A) WHICH INDICATES THE ASSIGNMENT OF PRIORITY 8 WHERE THERE IS NO STOCK ON HAND. (SEE PARAGRAPH 02040.3.A (2) (A) OF ASO INSTRUCTION P4400.22, PAGE II-6.) THE PRIORITY 8 DESIGNATOR ASSIGNED TO THE REQUISITION REVEALED TO THE CONTRACTING OFFICER THAT ASO WAS IN A ZERO STOCK POSITION AND THAT THERE WAS A NEED FOR DELIVERY AS SOON AS POSSIBLE. WHEN THE REQUEST FOR A FREIGHT EVALUATION WAS SUBMITTED TO THE FREIGHT ANALYST, THE URGENCY OF THE REQUIREMENT AND THE PRIORITY 8 DESIGNATOR ASSIGNED TO THE REQUISITION WERE CALLED TO THE ATTENTION OF THE FREIGHT ANALYST BY THE CONTRACTING OFFICER. THE DECISION TO SELECT OVERLAND RATES WAS BASED ON THE FOREGOING. (PARAGRAPH 16 OF OPNAV INSTRUCTION 4614.1A PROVIDES THAT "HIGH-SPEED TRANSPORTATION WILL BE CONSIDERED THE NORMAL MEANS OF TRANSPORTATION FOR MATERIAL IN PRIORITY DESIGNATORS 1 THROUGH 8.''"

IN VIEW OF THE FOREGOING, WE SEE NO VALID BASIS FOR DISAGREEMENT WITH THE ACTION OF THE CONTRACTING AGENCY, AND YOUR PROTEST MUST THEREFORE BE DENIED.