B-162464, OCT. 13, 1967

B-162464, OCT. 13, 1967

BIDS - TRANSPORTATION SERVICES - RATE TENDERS DECISION CONCERNING PROTEST OF EVERETT LOWRANCE AND REFRIGERATED TRANSPORT COMPANY, INC., TO ACTION OF MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE BETWEEN PROTESTANTS AND C AND D TRANSPORTATION CO., INC. AND BAGGETT TRANSPORTATION CO. FOR TRANSPORTATION SERVICES IN LOUISIANA AND ALABAMA, FLORIDA AND MISSISSIPPI. CARRIER THAT CONTENDS THAT IT COULD MEET GOVERNMENT REQUIREMENTS FOR MIXED SHIPMENTS OF FROZEN AND CHILLED COMMODITIES BY TRANSPORTING FROZEN IN ONE VEHICLE AND CHILLED IN ANOTHER BECAUSE IT DOES NOT HAVE INTERSTATE OPERATING AUTHORITY OF ICC FOR SUCH MIXED SHIPMENTS IN SAME VEHICLE HAD TENDER PROPERLY DENIED AS NONRESPONSIVE. SINCE TENDER DID NOT CONFORM TO REQUIREMENTS DENIAL ACTION MAY NOT BE CONSIDERED AS HAVING BEEN ARBITRARY, OR CAPRICIOUS OR WITHOUT SUBSTANTIAL BASIS.

TO HAYS AND HAYS, ATTORNEYS AT LAW:

REFERENCE IS MADE TO YOUR PROTEST ON BEHALF OF YOUR CLIENTS, EVERETT LOWRANCE (LOWRANCE) AND REFRIGERATED TRANSPORT COMPANY, INC. (REFRIGERATED), RELATIVE TO THE ACTION OF THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE (MTMTS), IN ALLOCATION OF CERTAIN TRAFFIC AS BETWEEN YOUR CLIENTS AND C AND D TRANSPORTATION COMPANY, INC., AND BAGGETT TRANSPORTATION COMPANY.

THE CARRIERS INVOLVED ARE PARTIES TO A PERISHABLE SUBSISTENCE CARRIER SERVICE AGREEMENT, HEREINAFTER CALLED CARRIER SERVICE AGREEMENT, REQUIRED BY THE DEFENSE SUPPLY AGENCY AS A PREREQUISITE TO CONSIDERATION OF CARRIERS' TENDERS OF RATES AND CHARGES, AND POSSIBLE SELECTION AS PRIMARY AND/OR ALTERNATE CARRIERS FOR THE MOVEMENT DURING THE PERIOD OCTOBER 1, 1967, THROUGH SEPTEMBER 30, 1968, OF PERISHABLE SUBSISTENCE COMMODITIES FROM SUBSISTENCE REGIONAL HEADQUARTERS, NEW ORLEANS, LOUISIANA, DEFENSE PERSONNEL SUPPORT CENTER DISTRIBUTION POINTS, TO MILITARY INSTALLATIONS SERVICED THEREFROM. THE CARRIER SERVICE AGREEMENT OUTLINES CONDITIONS, MINIMUM STANDARDS, AND TERMS OF SERVICE INCIDENT TO THE TRANSPORTATION INVOLVED.

PURSUANT TO THE CARRIER SERVICE AGREEMENT, PRIOR TO THE CLOSE OF BIDS ON JUNE 9, 1967, LOWRANCE SUBMITTED ITS PERISHABLE SUBSISTENCE CARRIER RATE TENDER NO. 7 SETTING FORTH RATES UNDER WHICH IT PROPOSED TO TRANSPORT PERISHABLE SUBSISTENCE COMMODITIES BETWEEN NEW ORLEANS, LOUISIANA, AND ENGLAND AIR FORCE BASE AND FORT POLK, LOUISIANA. THIS RATE TENDER COVERED THE INTRASTATE TRAFFIC INVOLVED.

TO COVER THE INTERSTATE TRAFFIC, LOWRANCE AND REFRIGERATED SUBMITTED THEIR JOINT PERISHABLE SUBSISTENCE CARRIER RATE TENDER NO. 8 SETTING FORTH RATES UNDER WHICH THEY PROPOSED TO TRANSPORT PERISHABLE SUBSISTENCE COMMODITIES BETWEEN NEW ORLEANS, LOUISIANA, AND MILITARY INSTALLATIONS IN ALABAMA, FLORIDA AND MISSISSIPPI.

PRIOR TO THE CLOSE OF BIDS ON JUNE 9, 1967, C AND D, AS A PARTY TO THE CARRIER SERVICE AGREEMENT AND PURSUANT THERETO, SUBMITTED ITS PERISHABLE SUBSISTENCE CARRIER RATE TENDER NO. 37 SETTING FORTH RATES ON AN "ALL OR NONE BASIS" UNDER WHICH IT PROPOSED TO TRANSPORT PERISHABLE SUBSISTENCE COMMODITIES FROM NEW ORLEANS TO THE SAME INSTALLATIONS COLLECTIVELY ENCOMPASSED BY THE PROTESTANTS' TENDERS NOS. 7 AND 8; THAT IS, BOTH THE LOUISIANA INTRASTATE AND THE INTERSTATE TRAFFIC.

BAGGETT, ALSO AS A PARTY TO THE CARRIER SERVICE AGREEMENT, SUBMITTED ITS PERISHABLE SUBSISTENCE CARRIER RATE TENDER NO. 136 SETTING FORTH ITS RATES FOR THE INTERSTATE TRAFFIC ONLY; THAT IS, FROM NEW ORLEANS TO INSTALLATIONS IN ALABAMA, FLORIDA AND MISSISSIPPI.

MTMTS SELECTED C AND D UNDER ITS TENDER NO. 37 AS THE PRIMARY CARRIER FOR ALL THE TRAFFIC, BOTH THE INTERSTATE AND THE LOUISIANA INTRASTATE. BAGGETT, UNDER ITS TENDER NO. 136, WAS SELECTED AS THE ALTERNATE CARRIER FOR ALL THE INTERSTATE TRAFFIC EXCEPT THAT MOVING FOR CAMP SHELBY, MISSISSIPPI, FOR WHICH NO ALTERNATE CARRIER WAS SELECTED. AND LOWRANCE, UNDER ITS TENDER NO. 7, WAS SELECTED AS THE ALTERNATE CARRIER FOR ALL THE LOUISIANA INTRASTATE TRAFFIC.

BY LETTER DATED AUGUST 17, 1967, MTMTS ADVISED EVERETT LOWRANCE THAT UNDER PARAGRAPH 2C OF THE CARRIER SERVICE AGREEMENT CARRIERS, AS A PREREQUISITE FOR CONSIDERATION, ARE REQUIRED TO ACCEPT AND TRANSPORT THE ENTIRE RANGE OF PERISHABLE SUBSISTENCE, FROZEN AND/OR CHILLED, IN STRAIGHT OR MIXED LOADS IN THE SAME VEHICLE AND THAT AN EXAMINATION OF TENDER NO. 8 REVEALED THAT ITS PROVISIONS DID NOT MEET THE REQUIREMENTS OF PARAGRAPH 2C OF THE CARRIER SERVICE AGREEMENT AND THE TENDER WAS CONSIDERED NONRESPONSIVE.

PARAGRAPH 2C OF THE CARRIER SERVICE AGREEMENT READS AS FOLLOWS:

"CARRIER AGREES TO ACCEPT AND TRANSPORT THE ENTIRE RANGE OF PERISHABLE SUBSISTENCE, FROZEN AND/OR CHILLED AS SPECIFIED IN ITEM 11 OF PERISHABLE SUBSISTENCE CARRIER RATE TENDER, IN STRAIGHT OR MIXED LOADS IN THE SAME VEHICLE. CARRIER FURTHER AGREES NOT TO MIX ANY SHIPMENT COVERED BY SUCH TENDER, WITH FREIGHT OTHER THAN PERISHABLE FOOD PRODUCTS INTENDED FOR HUMAN CONSUMPTION.'

WE UNDERSTAND YOU CONCEDE THAT LOWRANCE AND REFRIGERATED DO NOT HAVE INTERSTATE OPERATING AUTHORITY OF THE INTERSTATE COMMERCE COMMISSION TO TRANSPORT MIXED SHIPMENTS OF FROZEN COMMODITIES AND CHILLED COMMODITIES IN THE SAME VEHICLE. IT IS YOUR CONTENTION THAT YOU CAN MEET THE REQUIREMENT OF PARAGRAPH 2C OF THE CARRIER SERVICE AGREEMENT WHEN TENDERED A MIXED SHIPMENT OF BOTH FROZEN AND CHILLED COMMODITIES BY TRANSPORTING THE FROZEN COMMODITIES OFFERED FOR SHIPMENT IN ONE VEHICLE AND HAULING THE CHILLED COMMODITIES IN ANOTHER VEHICLE AND STILL BE RESPONSIVE TO THE CARRIER SERVICE AGREEMENT.

PARAGRAPH 2A OF APPENDIX I OF THE CARRIER SERVICE AGREEMENT PROVIDES IN PERTINENT PART THAT

"RATE TENDERS * * * WILL BE EVALUATED BY HEADQUARTERS, MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE (MTMTS) ON THE BASIS OF THE OVERALL INTERESTS OF THE GOVERNMENT, TOTAL COST, QUALITY OF SERVICE AND OTHER FACTORS TO BE CONSIDERED.'

PARAGRAPH 4 OF APPENDIX I OF THE CARRIER SERVICE AGREEMENT PROVIDES IN PERTINENT PART THAT

"THE GOVERNMENT RESERVES THE RIGHT TO REJECT ANY RATE TENDER * * * WHICH INDICATES THAT THE CARRIER DOES NOT HAVE THE CAPABILITY TO SATISFACTORILY PERFORM THE SERVICE OFFERED, OR HAS NOT BEEN AN ESTABLISHED TRANSPORTER OF PERISHABLE SUBSISTENCE. AN ESTABLISHED TRANSPORTER OF PERISHABLES UNDER THIS TENDER IS DEFINED TO MEAN A CARRIER QUALIFIED TO COMPLY WITH THE GOVERNMENTS (SIC) SPECIFIED SERVICE REQUIREMENTS, SUCH AS * * * TRANSPORTING MIXED, CHILLED AND FROZEN ITEMS IN ONE VEHICLE UNDER DUAL TEMPERATURE CONTROLLED CONDITIONS * * *.'

APPENDIX IV OF THE SERVICE AGREEMENT CONCERNS RAIL CARRIERS AND THEIR TOFC SERVICE; PARAGRAPH 2F OF THAT APPENDIX CONTAINS THIS SPECIFIC REQUIREMENT TO WHICH RAIL CARRIERS ARE ASKED TO INDICATE EITHER YES OR NO AS TO WHETHER THEY CAN OR CANNOT MEET AND/OR COMPLY: "MIX FRESH AND FROZEN PRODUCTS IN THE SAME UNIT OR TRAILER AS OUTLINED IN PARAGRAPH 2 OF SERVICE AGREEMENT * * "

APPENDIX VI OF THE SERVICE AGREEMENT SETS FORTH THE MINIMUM STANDARDS OF SERVICE WHICH CONSIST OF THREE TYPES--/1) STRAIGHT LOADS OF FROZEN COMMODITIES, (2) STRAIGHT LOADS OF CHILLED COMMODITIES AND (3) MIXED LOADS OF CHILLED AND FROZEN COMMODITIES. PARAGRAPH 5 OF APPENDIX VI PROVIDES: "CARRIER WILL FURNISH COMPLETE REFRIGERATION OR HEATING * * * FOR THE PROPER PROTECTION OF THOSE TYPES OF VEGETABLES REQUIRING SUCH PROTECTION * * *. WHEN NECESSARY TO LOAD CHILLED PRODUCTS, (I.E., FRESH FRUITS, VEGETABLES, EGGS, CHEESE, ETC.) WITH THE PRODUCTS, (I.E., MEATS, PACKING HOUSE PRODUCTS, FROZEN FRUIT JUICE CONCENTRATE, ETC.), IN THE SAME UNIT OR TRAILER, ADEQUATE REFRIGERATION FOR BOTH TYPES OF PRODUCTS WILL BE PROVIDED * * *.'

YOUR CLIENTS APPARENTLY RECOGNIZE THAT THEY ARE VARYING THE TERMS OF THE SERVICE AGREEMENT CALLING FOR THE TRANSPORTATION TO BE FURNISHED "IN THE SAME VEHICLE.' IN THEIR LETTER OF JUNE 29, 1967, TO THE DEFENSE PERSONNEL SUPPORT CENTER, RECEIVED AFTER THE CLOSE OF BIDS, LOWRANCE STATES:

"THE OPERATING AUTHORITY OF EACH OF THE CARRIERS (LOWRANCE AND REFRIGERATED) PERMITS MOVEMENT OF FREEZE ITEMS AND CHILL ITEMS TO EACH INSTALLATION BY SEPARATE TRUCKS.

"THE CONDITIONS OF CARRIAGE IN SEPARATE TRUCKS ARE NOT RELATED TO THE MANNER IN WHICH THE GOVERNMENT WILL BE BILLED FOR FREIGHT CHARGES. THE CARRIERS AGREE TO ACCEPT, AS ONE SHIPMENT, UNDER ONE GOVERNMENT BILL OF LADING, MIXED, FROZEN AND CHILL ITEMS FOR EACH STATION, AND THE RATE TO BE APPLIED AND CHARGES BILLED TO THE GOVERNMENT WILL BE BASED ON THE TENDER OF ONE SHIPMENT, NOTWITHSTANDING THE CARRIAGE OF THE FROZEN IN A SEPARATE VEHICLE AND THE CHILL IN A SEPARATE VEHICLE.' IN ITEM 13, LOWRANCE STATES THAT IT IS "AUTHORIZED TO TRANSPORT ALL COMMODITIES LISTED IN ITEM 11 IN SAME VEHICLE AS STRAIGHT OR MIXED SHIPMENT.' SUCH STATEMENT, IN THE LIGHT OF THE LETTER OF JUNE 29, 1967, SEEMS CLEARLY TO BE ERRONEOUS.

TENDER NO. 8 IS ALSO DEFICIENT IN ANOTHER RESPECT: UNDER ITEM 10 OF THE TENDER, CARRIERS ARE SUPPOSED TO LIST THE PUBLISHED TARIFFS AND SCHEDULES THAT THEY WILL PROTECT IN CONNECTION WITH THE ALTERNATIVE PROVISIONS OF THE TENDER; AND LOWRANCE HAS NOT LISTED ANY. THUS, FOR THIS ADDITIONAL REASON, MTMTS STATES THAT YOUR CLIENTS' TENDER NO. 8 WAS NOT FULLY RESPONSIVE TO ALL THE TERMS AND CONDITIONS OF THE CARRIER SERVICE AGREEMENT.

MTMTS REPORTS THAT C AND D IS QUALIFIED TO PROVIDE THE REQUIRED SERVICE AND HAS PERFORMED FOR THE MILITARY IN A SATISFACTORY MANNER FOR MANY YEARS. IT ALSO REPORTS THAT FIRST CONSIDERATION FOR THIS SPECIALIZED TRAFFIC IS SERVICE AND ABILITY TO PERFORM. AND THAT ALTHOUGH COST IS A FACTOR, SERVICE OF THE TYPE CALLED FOR IN THE CARRIER SERVICE AGREEMENT IS THE PARAMOUNT CONSIDERATION.

MTMTS IN THE EVALUATION OF THE BIDS FOUND THAT THE BID OF C AND D WAS RESPONSIVE, THAT NO IRREGULARITIES IN CONNECTION WITH THE FILING OF ITS TENDER NO. 37 ARE KNOWN TO EXIST, AND THAT IT COULD FURNISH THE DESIRED SERVICE AS INDICATED IN THE SERVICE AGREEMENT. IN THIS EVALUATION MTMTS FOUND THAT THE BID OF YOUR CLIENTS' TENDER NO. 8 WAS NONRESPONSIVE AND THAT YOUR CLIENTS COULD NOT FURNISH THE SERVICE CALLED FOR BY THE SERVICE AGREEMENT.

OUR OFFICE CONSISTENTLY HAS HELD THAT THE DETERMINATION AS TO WHETHER THE PARTICULAR SERVICE OFFERED BY A BIDDER COMPLIES WITH THE REQUIREMENTS OF THE INVITATION FOR BIDS (HERE THE CARRIER SERVICE AGREEMENT) IS PRIMARILY A FUNCTION OF THE DEPARTMENT OR AGENCY CHARGED WITH THE ADMINISTRATION OF THE CONTRACT. SUCH A DETERMINATION MUST, OF NECESSITY, BE BASED UPON FACTUAL INFORMATION AVAILABLE TO THE DEPARTMENT OR AGENCY PRIOR TO AWARD AND, IN THE ABSENCE OF A SHOWING OF BAD FAITH OR THE LACK OF A REASONABLE FACTUAL BASIS FOR THE DETERMINATION, OUR OFFICE WILL NOT OBJECT TO THE CONCLUSION REACHED.

THE DETERMINATION THAT THE SERVICE OFFERED BY YOUR CLIENTS UNDER TENDER NO. 8 FAILED TO MEET THE SERVICE AGREEMENT REQUIREMENTS WAS MADE ONLY AFTER A CAREFUL EVALUATION OF EVERY ASPECT OF THE BID. MOREOVER, YOUR CLIENTS WERE AWARE THAT THE TENDER OF RATES DID NOT COMPLY WITH THE SERVICE AGREEMENT'S REQUIREMENTS, FOR AFTER THE BIDS WERE OPENED THEY SAW FIT BY LETTER OF JUNE 29, 1967, TO EXPLAIN HOW THEIR TENDER WOULD PROVIDE A SUBSTITUTE FORM OF SERVICE WHICH THEY BELIEVED WOULD FULFILL THE REQUIREMENT THAT LOADS MUST MOVE IN THE SAME VEHICLE WHETHER STRAIGHT OR MIXED SHIPMENTS OF FROZEN AND CHILLED SUBSISTENCE COMMODITIES WERE INVOLVED. THIS BEING THE CASE, AND SINCE THE RECORD BEFORE US FAILS TO SHOW THAT THE DETERMINATION WAS ARBITRARY OR CAPRICIOUS, OR WAS WITHOUT SUBSTANTIAL BASIS, YOUR CONTENTION THAT THE BASIC EXCEPTIONS TAKEN BY MTMTS WERE NOT MATERIAL AND, THEREFORE, THAT YOUR CLIENTS' TENDER NO. 8 SHOULD BE CONSIDERED AS CONFORMING TO THE SERVICE AGREEMENT REQUIREMENTS IN ALL SUBSTANTIAL ASPECTS APPEARS TO BE WITHOUT A SOUND FOUNDATION.

ACCORDINGLY, WE SEE NO LEGAL BASIS FOR OBJECTING TO THE ACTION TAKEN BY MTMTS IN RESPECT TO TENDER NO. 8 SUBMITTED BY YOUR CLIENTS IN RESPONSE TO THE DEFENSE PERSONNEL SUPPORT CENTER'S NEW ORLEANS LINE HAUL SUBSISTENCE CARRIER SERVICE AGREEMENT FOR WHICH BIDS WERE CLOSED ON JUNE 9, 1967. ALSO, SINCE THE AWARD ON AN "ALL OR NONE BASIS" TO C AND D PRECLUDED DESIGNATION OF LOWRANCE AS PRIMARY CARRIER UNDER ITS TENDER NO. 7, AS TO THE INTRASTATE TRAFFIC, WE SEE NO BASIS FOR DISTRUBING THE AWARD TO C AND D AS PRIMARY CARRIER OF THE INVOLVED INTRASTATE TRAFFIC.