B-170610, FEB 9, 1971

B-170610, FEB 9, 1971

BID PROTEST - TRANSPORTATION COSTS - COMPUTATION REAFFIRMING PRIOR DECISION DENYING PROTEST OF ASEA, INC., AGAINST THE AWARD OF A CONTRACT FOR TRANSFORMERS AND RELATED ITEMS TO BE INSTALLED AT THE GRAND COULEE THIRD POWERPLANT, COULEE DAM, WASHINGTON, TO BROWN BOVERI CORPORATION. WHILE ADDING A $50,000 ESTIMATE FOR TRANSPORTATION COSTS TO PROTESTANTS BID, F.O.B. ODAIR, WASHINGTON, TO INSURE FAIR COMPARISON WITH BROWN'S BID, F.O.B. JOB SITE, MAY BE QUESTIONED BECAUSE FAILURE TO REQUEST GUARANTEED TRANSPORTATION DATA DILUTED THE ACCURACY OF LOWEST ESTIMATED COST, UPON RECOMPUTATION ASEA IS NOT THE LOW BIDDER EVEN UNDER THE MOST CONSERVATIVE ESTIMATE; THEREFORE, THE SOLICITATION DESPITE ITS INADEQUACIES NEED NOT BE RESCINDED. FURTHERMORE, ASEA'S INTERPRETATION OF THE TERM "COMMERCIAL FREIGHT RATES" DENOTING ONLY 16 CENTS PER 100-POUND RATE TO BE CONSIDERED IN THE BID EVALUATION RATHER THAN THE ESTIMATED FULL TRANSPORTATION COST WOULD BE WHOLLY INCONSISTENT WITH ONE OF THE MAJOR PURPOSES OF PARAGRAPH B -4(A)3 OF THE SOLICITATION - NAMELY TO AFFORD A BASIS FOR COMPARISON OF BIDS ON AN F.O.B. ODAIR BASIS WITH BIDS ON AN F.O.B. JOB SITE BASIS.

TO MR. SECRETARY:

WE REFER TO A LETTER DATED DECEMBER 23, 1970, FROM THE DIRECTOR OF SURVEY AND REVIEW, RELATIVE TO THE REQUEST BY TELEGRAM OF OCTOBER 28, 1970, AND LETTER, WITH ENCLOSURES, DATED NOVEMBER 4, 1970, FROM HALE, RUSSELL & STENTZEL, COUNSEL FOR ASEA, INC., FOR RECONSIDERATION OF OUR DECISION B- 170610, OCTOBER 9, 1970. ON THE BASIS OF OUR DECISION, AWARD OF A CONTRACT WAS MADE TO BROWN BOVERI CORPORATION (BBC). BY LETTER DATED NOVEMBER 17, 1970, LEIBMAN, WILLIAMS, BENNETT, BAIRD AND MINOW, COUNSEL FOR BBC, HAS AT OUR REQUEST RESPONDED TO THE CONTENTIONS ADVANCED BY ASEA'S COUNSEL.

THE FACTS NECESSARY TO OUR CONSIDERATION OF THE REQUEST ARE RESTATED FROM OUR DECISION OF OCTOBER 9, 1970, AND THE RECORD BEFORE OUR OFFICE AS FOLLOWS.

OUR INITIAL CONSIDERATION OF THIS PROCUREMENT WAS INITIATED BY LETTER DATED AUGUST 11, 1970, FROM THE CHIEF ENGINEER (CONTRACTING OFFICER), BUREAU OF RECLAMATION, DENVER, COLORADO, FORWARDING THE BIDS OF ASEA AND BBC, WHICH WERE RECEIVED IN RESPONSE TO SOLICITATION NO. DS-6812 FOR TRANSFORMERS AND RELATED ITEMS TO BE INSTALLED AT THE GRAND COULEE THIRD POWERPLANT, COULEE DAM, WASHINGTON. SCHEDULE NO. 1 OF SOLICITATION NO. DS -6812 REQUESTED BIDS FOR FURNISHING 10 POWER TRANSFORMERS AND SPARE PARTS, EITHER ON DELIVERY F.O.B. RAILROAD CARS AT ODAIR, WASHINGTON, OR DELIVERY F.O.B. TRUCKS AT THE SITE OF THE THIRD POWERPLANT, GRAND COULEE DAM, WASHINGTON. ASEA SUBMITTED ITS BID OF $2,550,250, F.O.B. ODAIR, WASHINGTON; AND BBC BID $2,615,680, F.O.B. JOB SITE. THERE WERE ADDED TO THE PRICES OF THE TRANSFORMERS CERTAIN DIFFERENTIALS AND LOSS FACTORS, NAMED IN PARAGRAPH B-4A(4) AND (5) AND PARAGRAPH B-4B.

SCHEDULE NO. 2 OF THE SOLICITATION CALLED FOR FURNISHING 19 LIGHTNING ARRESTERS, WITH DELIVERY F.O.B. RAILROAD CARS AT ODAIR, WASHINGTON, OR F.O.B. TRUCKS AT THE POWERPLANT. ASEA DID NOT BID ON THIS SCHEDULE ITEM AND BBC BID $124,790, F.O.B. TRUCKS AT THE POWERPLANT.

TO EQUALIZE THE BIDS OF ASEA AND BBC ON THE BASIS OF SCHEDULES NOS. 1 AND 2 COMBINED, THE CONTRACTING OFFICER CONSIDERED THE BID OF GENERAL ELECTRIC COMPANY ON SCHEDULE NO. 2 OF $123,690, F.O.B. JOB SITE, IN CONJUNCTION WITH ASEA'S BID ON SCHEDULE NO. 1 WHICH WAS BASED ON F.O.B. ODAIR, WASHINGTON. THE CONTRACTING OFFICER THEN MADE AN EVALUATION OF THE COMBINED BIDS OF ASEA AND GENERAL ELECTRIC ON SCHEDULES NOS. 1 AND 2, RESPECTIVELY, AGAINST THE BBC COMBINED BIDS ON BOTH SCHEDULES, BUT WITHOUT REGARD TO TRANSPORTATION COSTS. THE BASIC QUESTION PRESENTED THEN AND NOW IS WHAT ARE THE PROPER TRANSPORTATION COSTS TO BE USED IN EVALUATING ASEA'S BID ON SCHEDULE NO. 1.

THE POWER TRANSFORMERS TO BE FURNISHED ARE VERY LARGE AND HEAVY ARTICLES, AS IS EVIDENCED BY ASEA'S GUARANTEED SHIPPING WEIGHT OF 275,000 POUNDS EACH. EQUIPMENT OF THIS SIZE AND WEIGHT TO BE MOVED OVER STATE ROADS AND HIGHWAYS REQUIRES THE SERVICES OF HEAVY HAULERS ESPECIALLY EQUIPPED AND EXPERIENCED TO HANDLE SUCH ARTICLES. THE TOTAL FREIGHT CHARGES FOR SUCH TRANSPORTATION ASSESSABLE BY THE HEAVY HAULERS ARE COMPUTED ON THE BASIS OF A SINGLE LINE-HAUL RATE, PLUS VARIOUS INCIDENTAL AND ACCESSORIAL CHARGES. FOR EXAMPLE, IN THE PRESENT CASE, WILLAMETTE TARIFF BUREAU, INC., FREIGHT TARIFF NO. 5, MP-I.C.C. NO. 2, NAMES A LINE-HAUL OR MOTOR CARRIER DISTANCE COMMODITY RATE FOR THE TRANSPORTATION OF ELECTRICAL EQUIPMENT, INCLUDING TRANSFORMERS, OF 16 CENTS PER 100 POUNDS, TRUCKLOAD MINIMUM WEIGHT 64,000 POUNDS, FOR A DISTANCE OF 31 MILES (ODAIR, WASHINGTON, TO GRAND COULEE DAM POWERPLANT). THIS RATE, HOWEVER, IS SUBJECT TO CERTAIN INCREASES. NOTE 2, ITEM 2705 OF THE TARIFF, PROVIDES THAT IF THE EQUIPMENT EXCEEDS 12 FEET, BUT NOT MORE THAN 14 FEET, IN HEIGHT, THE 16-CENT RATE IS INCREASED BY 10 PERCENT; AND IF THE EQUIPMENT EXCEEDS 14 FEET IN HEIGHT, THE 16-CENT RATE IS INCREASED BY 25 PERCENT. IN ADDITION, THERE ARE CHARGES FOR INCIDENTAL AND ACCESSORIAL SERVICES, SUCH AS FOR EMPTY MILEAGE (THE DISTANCE THE UNLOADED VEHICLE MOVES TO BE PLACED IN POSITION FOR LOADING, E.G., PORTLAND, OREGON, TO ODAIR, WASHINGTON, AND RETURN TO PORTLAND), A SPECIAL EQUIPMENT CHARGE OF 5-1/4 CENTS PER 100 POUNDS PER HOUR, EXTRA LABOR, PILOT CARS AND A CHARGE FOR DETENTION OF VEHICLE FOR PERIODS OF MORE THAN 1 HOUR EACH FOR LOADING AND UNLOADING.

BY LETTER DATED AUGUST 7, 1970, THE CHIEF, TRANSPORTATION MANAGEMENT DIVISION, TRANSPORTATION AND COMMUNICATIONS SERVICE, DENVER REGIONAL OFFICE, GENERAL SERVICES ADMINISTRATION (GSA), FORMALLY FURNISHED THE CONTRACTING OFFICER TWO ESTIMATES OF THE TRANSPORTATION COSTS THAT WOULD BE INCURRED IN TRANSPORTING THE TRANSFORMERS FROM ODAIR TO GRAND COULEE: THE FIRST IN AN AMOUNT OF $40,418.95, REPRESENTING THE TOTAL MOVE AT ASEA'S GUARANTEED WEIGHT; THE SECOND IN AN AMOUNT OF $38,867.29, BASED ON THE ASSUMPTION THAT THE TRANSFORMER ACCESSORIES WOULD BE TRANSPORTED ON VEHICLES SEPARATE FROM THOSE USED TO MOVE THE TRANSFORMERS. AS THE LETTER INDICATED, THIS SECOND ESTIMATE WAS BASED ON THE FURTHER ASSUMPTION THAT THE ACCESSORIES WOULD WEIGH 45,000 POUNDS PER TRANSFORMER.

IT SHOULD BE NOTED THAT ON JUNE 17, 1970, GSA INITIALLY SUBMITTED A TRANSPORTATION EVALUATION OF APPROXIMATELY $4,500 WHICH WAS LIMITED TO A COMPUTATION OF THE LINE-HAUL RATE TO GRAND COULEE, EXCLUSIVE OF "INCIDENTAL OR ACCESSORIAL CHARGES." SINCE THIS COMPUTATION DID NOT REFLECT ALL TRANSPORTATION COSTS, GSA WAS REQUESTED BY THE CONTRACTING OFFICER TO FURNISH ADDITIONAL TRANSPORTATION INFORMATION. IT RESPONDED BY LETTER OF JULY 8, WITH ESTIMATES FURNISHED BY THREE TRUCKING FIRMS: WILHELM TRUCKING CO., WITH AN ESTIMATE OF $50,000; NEIL F. LAMPSON, INC., WITH AN ESTIMATE OF $55,500; BIGGE DRAYAGE CO., WITH AN ESTIMATE OF $137,850. THE CONTRACTING OFFICER INITIALLY SELECTED WILHELM'S $50,000 ESTIMATE FOR EVALUATION AND THIS FIGURE WAS ADDED TO ALL F.O.B. ODAIR BIDS, AS EVIDENCED BY THE OFFICIAL BID ABSTRACT. THE USE OF THIS ESTIMATE WAS FORMALLY QUESTIONED BY ASEA IN A LETTER OF JULY 24, 1970. THIS PROMPTED GSA'S AUGUST 7 CALCULATION OF TRANSPORTATION COSTS AND, ULTIMATELY, THE CONTRACTING OFFICER'S REQUEST FOR OUR OPINION AS TO THE PROPER METHOD OF EVALUATING TRANSPORTATION COSTS IN LIGHT OF PARAGRAPH B- 4A(3) OF THE SOLICITATION, WHICH PROVIDES THAT:

"(3) IN THE CASE OF OFFERS STATING DELIVERY AT ODAIR, WASHINGTON, THE COST OF TRANSPORTATION BETWEEN THIS POINT AND GRAND COULEE THIRD POWERPLANT, COULEE DAM, WASHINGTON, BASED ON THE GUARANTEED SHIPPING WEIGHTS STATED BY THE OFFEROR IN HIS OFFER AND USING THE COMMERCIAL FREIGHT RATES FOR THE EQUIPMENT IN EFFECT AT THE TIME OF OFFER OPENING, WILL BE ADDED TO THE TOTAL PRICE OFFERED FOR EACH SCHEDULE."

IF THE TERM "COMMERCIAL FREIGHT RATES" DENOTES ONLY THE 16 CENTS PER 100- POUND RATE, THE ONLY TRANSPORTATION COST TO BE CONSIDERED IN THE BID EVALUATION WOULD BE APPROXIMATELY $4,500 - RATHER THAN THE ESTIMATED FULL TRANSPORTATION COST OF $38,867.29 (ADVANCED BY THE CONTRACTING OFFICER AS THE SUGGESTED ALTERNATE). ASEA'S BID WOULD BE LOW BY MORE THAN $30,000. ON THE OTHER HAND, IF ASEA'S BID ON THE F.O.B. ODAIR BASIS WAS EVALUATED WITH BBC'S BID ON THE F.O.B. JOB SITE BASIS, ASEA'S BID, PLUS THE GENERAL ELECTRIC BID FOR THE SCHEDULE NO. 2 ITEMS, PLUS THE EVALUATION FOR EFFICIENCY, FOREIGN DIFFERENTIAL, AND OTHER COSTS AS SHOWN ON THE CONTRACTING OFFICER'S ABSTRACT OF OFFERS, PLUS $38,867.29 FOR FREIGHT COSTS, WOULD TOTAL $4,481,654.33. BBC'S BID, PLUS THE OTHER COSTS SET FORTH IN THE CONTRACTING OFFICER'S ABSTRACT OF BIDS, WOULD AMOUNT TO $4,478,678.34. THIS WOULD MAKE BBC THE LOW BIDDER BY ABOUT $2,900.

IN SUPPORT OF A RESTRICTIVE INTERPRETATION OF PARAGRAPH B-4A(3), ASEA ORIGINALLY URGED THAT THE 16-CENT RATE IS THE ONLY CLEAR AND CONCISE YARDSTICK AVAILABLE BECAUSE THE COMPUTATION OF ESTIMATED COSTS, DEPENDENT AS IT IS UPON VARYING UNIT SIZES, LABOR, LOADING AND UNLOADING, ETC., WOULD BE SPECULATIVE AND WOULD NOT COINCIDE WITH THE FULL ACTUAL COSTS EVENTUALLY PAYABLE FOR THE DELIVERY OF THE TRANSFORMERS, AND THAT UNDER THE TERMS OF PARAGRAPH B-11A IT WOULD ULTIMATELY BE LIABLE FOR THE ACTUAL TRANSPORTATION COST INCURRED. IT WAS ALSO SAID THAT HAD IT BEEN INTENDED THAT ACTUAL TRANSPORTATION COSTS WERE TO BE USED IN EVALUATION, THE SOLICITATION WOULD HAVE REQUESTED THE WEIGHT OF THE LARGEST PIECE AND THE DIMENSIONS OF THE TRANSFORMERS BECAUSE OF THE HEAVY LOADING COSTS AND DIFFERENTIAL OF 10 OR 25 PERCENT TO BE ADDED TO THE 16-CENT RATE, DEPENDENT UPON THE HEIGHT OF THE TRANSFORMER UNITS AS PREPARED FOR SHIPMENT.

BBC ASSERTED IN RESPONSE THAT, WHILE THERE WAS NO WAY OF PRECISELY DETERMINING THE FULL COST OF TRANSPORTATION, AN ESTIMATE PREDICATED ON INFORMATION OBTAINABLE FROM THE TARIFF AND OTHER AUTHORITIES CONSTITUTES THE BEST AVAILABLE MEANS OF DETERMINING THE TOTAL TRANSPORTATION COSTS THAT WOULD BE INCURRED, AND THAT PARAGRAPH B-4A(3) ADEQUATELY NOTIFIED BIDDERS THAT THE FULL COST OF TRANSPORTATION WOULD BE CONSIDERED.

IN REJECTING ASEA'S INTERPRETATION OF PARAGRAPH B-4A AS UNREASONABLE, WE MADE THE FOLLOWING OBSERVATIONS IN THE DECISION OF OCTOBER 9:

"IN ANALYZING THIS SITUATION IT IS NECESSARY TO CONSIDER WHAT PARAGRAPH B -4A(3) STATES IN ITS ENTIRETY. WE DO NOT BELIEVE THAT THE WORDS 'COMMERCIAL FREIGHT RATES' MAY BE ISOLATED FROM THE CONTEXT OF THE ENTIRE PARAGRAPH. THE PARAGRAPH STATES THAT IN CASE OF OFFERS STATING DELIVERY AT ODAIR, WASHINGTON, THE COST OF TRANSPORTATION BETWEEN THAT POINT AND THE POWERPLANT BASED ON GUARANTEED SHIPPING WEIGHTS STATED BY THE OFFEROR IN HIS OFFER AND USING THE COMMERCIAL FREIGHT RATES FOR THE EQUIPMENT IN EFFECT AT THE TIME OF OFFER OPENING WILL BE ADDED TO THE TOTAL PRICE OFFERED FOR EACH SCHEDULE.

"IT SEEMS CLEAR THAT WHAT THIS CLAUSE SIGNIFIES IS THAT THE ACTUAL COST, OR AS CLOSE AS IT CAN BE REASONABLY ASCERTAINED, OF TRANSPORTING THE 10 TRANSFORMERS IN ACCORDANCE WITH THE DELIVERY SCHEDULE, MUST BE USED IN ORDER TO MAKE A VALID COMPARISON WITH THE DELIVERED PRICE OF THE F.O.B. JOB SITE BID. TO SAY THAT ONLY A RELATIVELY SMALL PART OF THE COST OF TRANSPORTATION IS TO BE CONSIDERED IN EVALUATING BIDS IS TO IGNORE THE FACT THAT THE 16-CENT RATE PRODUCING THE $4,500 BASIC LINE HAUL COST WILL NOT DELIVER THE TRANSFORMERS TO THE JOB SITE.

"PARAGRAPH B-4A(3), THUS APPLIED, IS COMPATIBLE WITH PARAGRAPH B-11A OF THE SOLICITATION, RELATIVE TO SHIPPING PROVISIONS. THE THIRD SUBPARAGRAPH OF PARAGRAPH B-11A READS:

"'ON THE BASIS OF THE GUARANTEED SHIPPING WEIGHTS STATED BY THE CONTRACTOR IN HIS OFFER AND USING THE COMMERCIAL FREIGHT RATES IN EFFECT ON THE DATE OF THE OPENING, THE GOVERNMENT WILL COMPUTE THE COST OF TRANSPORTATION BETWEEN ODAIR, WASHINGTON, AND THE GRAND COULEE THIRD POWERPLANT, COULEE DAM, WASHINGTON. IF THE ACTUAL TOTAL COST OF SUCH TRANSPORTATION EXCEEDS THE COST OF TRANSPORTATION COMPUTED ON THE BASIS OF THE GUARANTEED SHIPPING WEIGHTS, THE GOVERNMENT WILL DEDUCT FROM ANY PAYMENT DUE THE CONTRACTOR SUCH EXCESS TRANSPORTATION COSTS.'

"AGAIN, THE TERM 'COMMERCIAL FREIGHT RATES' HAS TO BE READ AS EMBRACING THE BASIC LINE-HAUL RATE AND ALL OTHER DETERMINABLE INCIDENTAL OR ACCESSORIAL FACTORS WHICH, TAKEN TOGETHER, PRODUCE THE TOTAL TRANSPORTATION COST, REASONABLY COMPUTABLE ON THE BASIS OF EXPERIENCE AND SOUND JUDGMENT IN SUCH MATTERS. IT IS OBVIOUS IN THE PERTINENT SUBPARAGRAPH THAT THE BASIC LINE-HAUL RATE, APPLIED TO THE GUARANTEED SHIPPING WEIGHT, PRODUCES ONLY A PART OF 'THE ACTUAL TOTAL COST OF' THE NECESSARY TRANSPORTATION.

"IF THE 'COMMERCIAL FREIGHT RATES,' AS USED IN THE THIRD SUBPARAGRAPH IN PARAGRAPH B-11A, IS TO BE GIVEN THE SAME EFFECT AS ASEA ASSERTS IS APPLICABLE IN THE CASE OF PARAGRAPH B-4A(3), THE GOVERNMENT WOULD BE PRECLUDED FROM RECOVERING ANY TRANSPORTATION COSTS THAT MIGHT BE PAID BY IT IN EXCESS OF THE LINE-HAUL RATE APPLIED TO THE GUARANTEED SHIPPING WEIGHT. SUCH A RESULT IS CLEARLY NOT INTENDED BY THE ADJUSTMENT SUBPARAGRAPH OF THE SHIPPING PROVISIONS IN B-11A. IT IS JUST AS CLEARLY NOT INTENDED BY PARAGRAPH B-4A(3) THAT EVALUATION OF THE BIDS BE ACCOMPLISHED ON THE NARROW AND UNREALISTIC CONCEPT OF THE TERM 'COMMERCIAL FREIGHT RATES' ADVANCED BY ASEA. IF THE AWARD WERE TO BE MADE TO ASEA, ITS CONCEPT, CARRIED OVER INTO THE THIRD SUBPARAGRAPH IN B-11A OF THE SOLICITATION, WOULD REQUIRE THE UNITED STATES TO ABSORB FOR ITS OWN ACCOUNT TRANSPORTATION COSTS WHICH MAY BE CONSERVATIVELY ESTIMATED AS $34,318.90 ($38,867.29 LESS $4,548.39).

"FURTHERMORE, WE FIND NO AUTHORITY FOR THE POSITION TAKEN BY ASEA THAT THE TERM 'COMMERCIAL FREIGHT RATES' HAS A MEANING WHICH RESTRICTS ITS COVERAGE TO ONLY THE 16-CENT DISTANCE RATE, WITHOUT ATTEMPTING TO REACH SOME DECISION AS TO THE COMPLETE ACTUAL COST OF TRANSPORTATION FOR THE TRANSFORMER EQUIPMENT. THERE IS JUDICIAL AUTHORITY, HOWEVER, FOR THE POSITION TAKEN BY BROWN BOVERI THAT THE TERM 'FREIGHT RATES' MEANS PRACTICALLY EVERYTHING THAT A SHIPPER HAS TO PAY TO A CARRIER TO MOVE THE GOODS INVOLVED FROM A POINT OF ORIGIN TO A POINT OF DESTINATION."

WE ALSO REJECTED THE POSSIBLE OBJECTION THAT PARAGRAPH B-4A(3) OF THE SOLICITATION WAS NOT SUFFICIENTLY DEFINITE TO APPRISE BIDDERS OF THE BASIS FOR EVALUATION OF TRANSPORTATION COSTS, CITING THE STANDARD ARTICULATED IN 36 COMP. GEN. 380, 385 (1956): "THE 'BASIS' OF EVALUATION WHICH MUST BE MADE KNOWN IN ADVANCE SHOULD BE CLEAR, PRECISE AND EXACT AS POSSIBLE. IDEALLY, IT SHOULD BE CAPABLE OF BEING STATED AS A MATHEMATICAL EQUATION. IN MANY CASES, HOWEVER, THAT IS NOT POSSIBLE. AT THE MINIMUM, THE 'BASIS' MUST BE STATED WITH SUFFICIENT CLARITY AND EXACTNESS TO INFORM EACH BIDDER PRIOR TO BID OPENING, NO MATTER HOW VARIED THE ACCEPTABLE RESPONSES, OF OBJECTIVELY DETERMINABLE FACTORS FROM WHICH THE BIDDER MAY ESTIMATE WITHIN REASONABLE LIMITS THE EFFECT OF THE APPLICATION OF SUCH EVALUATION FACTOR ON HIS BID IN RELATION TO OTHER POSSIBLE BIDS. BY THE TERM 'OBJECTIVELY DETERMINABLE FACTORS' WE MEAN FACTORS WHICH ARE MADE KNOWN TO OR WHICH CAN BE ASCERTAINED BY THE BIDDER AT THE TIME HIS BID IS BEING PREPARED. *** "

WE THEN STATED IN THE OCTOBER 9 DECISION THE CONCLUSION THAT THE WILHELM TRUCKING CO.'S $50,000 ESTIMATE WAS AN ADEQUATE COMMON DENOMINATOR TO MAKE THE EVALUATION OF TRANSPORTATION COSTS UNDER PARAGRAPH B-4A(3). APPLYING THIS ESTIMATE TO ASEA'S BID, BBC WAS CLEARLY THE LOW BIDDER.

ON RECONSIDERATION, ASEA HAS QUESTIONED THE VALIDITY OF APPLYING THE $50,000 ESTIMATE TO ITS BID. IT HAS ALSO QUESTIONED THE ACCURACY OF BOTH GSA'S INDEPENDENT ESTIMATES OF TRANSPORTATION COSTS AND URGES THAT A CORRECT COMPUTATION OF TRANSPORTATION COSTS RESULTS IN ITS BID BEING LOW. ALTERNATIVELY, IT NOW MAINTAINS THAT IF WE REJECT ITS CURRENT COMPUTATION OF TRANSPORTATION COST, WE MUST CONCLUDE THAT THE SOLICITATION WAS DEFECTIVE BY REASON OF ITS FAILURE TO ELICIT INFORMATION NECESSARY TO A PROPER CALCULATION OF TRANSPORTATION COSTS.

AT THE OUTSET, IT MUST BE EMPHASIZED THAT NO ONE HAS SUGGESTED THAT ACCESSORIAL AND INCIDENTAL COSTS ARE NOT FOR CONSIDERATION IF THE TOTAL COST OF TRANSPORTATION OF THE TRANSFORMERS FROM ODAIR TO THE POWERPLANT IS TO BE DETERMINED. ASEA'S ARGUMENT DURING INITIAL CONSIDERATION WAS SIMPLY THAT THE SOLICITATION DID NOT PROVIDE FOR EVALUATION OF THESE COSTS AND PROPERLY DID NOT BECAUSE OF THEIR ALLEGEDLY SPECULATIVE NATURE. HOWEVER, IT FURTHER CONTENDED THAT IT WOULD ULTIMATELY BE LIABLE FOR THESE COSTS UNDER PARAGRAPH B-11 OF THE SOLICITATION. THUS, EVEN UNDER ITS INTERPRETATION, IT NOTED IN ITS LETTER OF OCTOBER 1, 1970, TO OUR OFFICE THAT:

" *** AN ESTIMATE OF THE ACTUAL COST OF TRANS-SHIPMENT HAD TO BE PREPARED BY EACH OFFEROR IN ORDER TO SUBMIT A PRUDENT BID. THIS ESTIMATE PERFORCE HAD IN EACH CASE TO TAKE INTO CONSIDERATION THE EFFECT ON SUCH COST THE FACTORS OF SIZE AND WEIGHT OF THE EQUIPMENT IN ACCORDANCE WITH ITS PARTICULAR DESIGN, THE NUMBER OF UNITS TO BE INCLUDED IN A GIVEN SHIPMENT, AS WELL AS CRANES, STANDBY LABOR, SAFETY PRECAUTIONS AND THE LIKE REQUIRED TO TRANSFER THE OFFEROR'S EQUIPMENT IN THE MANNER THE OFFEROR DESIRED. *** " CONSISTENT WITH THIS OBSERVATION, WE NOTE THAT ASEA SOLICITED AND RECEIVED FROM WILHELM TRUCKING CO. THE SAME $50,000 ESTIMATE THAT WAS GIVEN TO BBC AND TENTATIVELY USED BY THE CONTRACTING OFFICER. HOWEVER, WE RECOGNIZE THAT THE BIDDERS' RECOGNITION OF THE NATURE AND MAGNITUDE OF THE TRANSPORTATION COSTS INVOLVED DOES NOT RESOLVE THE INTERPRETATIVE QUESTION WHETHER PARAGRAPH B-4A(3) REQUIRES A DETERMINATION OF THE ESTIMATED TOTAL COST OF TRANSPORTATION FOR THE PURPOSE OF COMPARING F.O.B. ODAIR BIDS WITH F.O.B. JOB SITE BIDS OR THE ADEQUACY OF THE SOLICITATION FROM THE STANDPOINT OF APPRISING OFFERORS OF THE BASIS OF EVALUATION.

THESE WERE, OF COURSE, THE BASIC QUESTIONS RESOLVED IN OUR DECISION OF OCTOBER 9 AND ASEA INDIRECTLY RAISES THESE ISSUES AGAIN.

WE HAVE REVIEWED OUR INTERPRETATION OF PARAGRAPH B-4A(3) IN LIGHT OF ASEA'S OBJECTIONS TO THE SOLICITATION AND WE MUST AGAIN REJECT ITS INTERPRETATION OF THE TERM "COMMERCIAL FREIGHT RATES" AS USED IN THAT PARAGRAPH FOR THE REASONS SET FORTH IN OUR DECISION OF OCTOBER 9 AND QUOTED ABOVE. TO ACCEPT ASEA'S INTERPRETATION, WE MIGHT ADD, WOULD BE WHOLLY INCONSISTENT WITH ONE OF THE MAJOR PURPOSES OF PARAGRAPH B-4 - NAMELY, TO AFFORD A BASIS FOR COMPARISON OF BIDS ON AN F.O.B. ODAIR BASIS WITH BIDS ON AN F.O.B. JOB SITE BASIS. IF ASEA'S INTERPRETATION HAD MERIT, IT SHOULD HAVE PROMPTED INQUIRIES FROM THE BIDDERS BUT, AS THE DIRECTOR OF SURVEY AND REVIEW STATES IN HIS LETTER OF DECEMBER 23, 1970, "OF THE 12 FIRMS OFFERING BIDS ON THE TRANSFORMERS, NOT ONE SUGGESTED, PRIOR TO BIDDING, ANY NEED FOR CLARIFICATION OR REMOVAL OF AMBIGUITY IN ANY RESPECT."

ASEA ASSERTS THAT IF, AS WE MUST CONCLUDE, PARAGRAPH B-4A(3) WAS INTENDED TO REQUIRE CALCULATION OF ACTUAL SHIPPING COSTS, THEN THE SOLICITATION WAS NECESSARILY DEFICIENT FOR FAILURE TO ELICIT INFORMATION NECESSARY TO CALCULATE PROPER TRANSPORTATION COSTS, CITING, INTER ALIA, 43 COMP. GEN. 537 (1964). SPECIFICALLY, ASEA MAINTAINS THAT IT IS NOT POSSIBLE TO EVALUATE TRANSPORTATION COSTS SOLELY ON THE BASIS OF THE TOTAL GUARANTEED SHIPPING WEIGHT - THE ONLY INFORMATION CALLED FOR IN THE SOLICITATION. THIS REGARD, IT NOTES THAT THE SOLICITATION'S REQUEST FOR A TOTAL GUARANTEED SHIPPING WEIGHT IS BASED ON AN ASSUMPTION THAT THE ENTIRE TRANSFORMER, INCLUDING ACCESSORIES, WOULD HAVE TO BE SHIPPED ON ONE VEHICLE BUT THAT IF THE ACCESSORIES WERE SHIPPED SEPARATELY A LOWER TRANSPORTATION COST WOULD RESULT. THIS IS EVIDENCED BY CONTRASTING GSA'S $40,418.95 ESTIMATE WITH THE $38,867.29 ESTIMATE, THE LATTER OF WHICH IS BASED ON SEPARATE TRANSPORT FOR THE ACCESSORIES. IT ALSO POINTS OUT THAT THE DIMENSIONS OF THE TRANSFORMERS BEAR ON THE ACTUAL TRANSPORATION COSTS, AND THAT BIDDERS WERE NOT REQUIRED TO SUBMIT GUARANTEED DIMENSIONS.

IN THE CONTEXT OF THIS CASE, WE MUST AGREE WITH ASEA'S CONTENTION THAT FAILURE TO REQUEST GUARANTEED TRANSPORTATION DATA IN THE AREAS NOTED DILUTES THE ACCURACY OF THE DETERMINATION OF THE LOWEST ESTIMATED TOTAL COST TO THE GOVERNMENT OF TRANSPORTING THE TRANSFORMERS FROM ODAIR TO THE JOB SITE.

WITH RESPECT TO A REQUEST FOR SEPARATE GUARANTEED WEIGHTS FOR TRANSFORMERS AND ACCESSORIES, THE DIRECTOR OF SURVEY AND REVIEW'S LETTER OF DECEMBER 23, 1970, SEEMS TO SUGGEST THAT THIS METHOD IS UNDESIRABLE, AND PERHAPS NOT INTENDED, BY QUESTIONING ASEA'S ADVANCEMENT OF AN ALLEGEDLY "UNUSUAL DISASSEMBLY MODE" FOR PURPOSES OF SHIPMENT, WHICH WOULD LEAD TO UNANTICIPATED REASSEMBLY COSTS. ALTHOUGH WE ARE NOT PREPARED TO SAY THAT BECAUSE OF THIS POTENTIAL PROBLEM THE SOLICITATION COULD NOT HAVE RESTRICTED THE MODE OF SHIPMENT, THE REQUEST FOR A TOTAL GUARANTEED SHIPPING WEIGHT (COVERING BOTH THE TRANSFORMERS AND ACCESSORIES) IS NOT SUFFICIENT TO CONVEY AN INTENT TO RESTRICT THE MODE OF SHIPMENT. INDEED, A READING OF THE ENTIRE SOLICITATION MAKES IT CLEAR THAT IN VIEW OF THE NATURE OF THE ITEMS BEING PROCURED, TRANSPORT OF ACCESSORIES APART FROM THE TRANSFORMERS WAS PERMISSIBLE. MOREOVER, RECOGNITION OF THIS MODE OF TRANSPORT IS CONSISTENT WITH DETERMINING THE LOWEST COST TO THE GOVERNMENT OF TRANSPORTATION, AS REQUIRED BY FEDERAL PROCUREMENT REGULATIONS (FPR) SEC. 1-19.203-3.

SIMILARLY, THE SOLICITATION SHOULD HAVE REQUESTED GUARANTEED DIMENSIONS. AS PREVIOUSLY INDICATED, THE DIMENSIONS ARE IMPORTANT FOR ACCURATELY DETERMINING THE INCREASES TO THE 16-CENT PER 100 POUNDS LINE HAUL RATE. UNDER THE WILLAMETTE TARIFF, IF THE EQUIPMENT EXCEEDS 12 FEET, BUT NOT MORE THAN 14 FEET, IN HEIGHT, THE RATE IS INCREASED BY 10 PERCENT. THIS CASE, THIS IS THE ONLY AREA IN WHICH DIMENSIONS PLAY A ROLE IN DETERMINING TRANSPORTATION COST. WE NOTE THAT ASEA HAS MAINTAINED THAT ITS EQUIPMENT WOULD BE SUBJECT TO THE 10-PERCENT DIFFERENTIAL, AND THAT ALL COMPUTATIONS OF THE ESTIMATED COSTS OF TRANSPORTATION HAVE BEEN BASED ON THIS ASSUMPTION.

WHILE WE RECOGNIZE THE INADEQUACIES IN THE SOLICITATION ADVANCED BY ASEA, THE QUESTION REMAINS AS TO WHETHER THESE DEFECTS IN LIGHT OF THE CIRCUMSTANCES OF THIS CASE REQUIRE THAT THE AWARD OF THE CONTRACT TO BBC MUST BE RESCINDED, THE SOLICITATION CANCELED AND THE PROCUREMENT READVERTISED. NUMEROUS DECISIONS OF OUR OFFICE RECOGNIZE THE PRINCIPLE, EXPRESSED IN 43 COMP. GEN. 537 (1964), THAT CANCELLATION OF A SOLICITATION IS TO BE AVOIDED, WHERE POSSIBLE, BECAUSE OF THE OBVIOUS PREJUDICIAL EFFECT OF THE DISCLOSURE OF ALL BIDS. APPLICATION OF THIS PRINCIPLE TO CASES OF THIS NATURE HAS PROPERLY LED TO AN EXAMINATION OF THE PURPOSE WHICH WOULD BE ACHIEVED BY CANCELLATION. WHERE, AS WAS THE CASE IN 43 COMP. GEN., SUPRA, THE ONLY APPARENT REASON FOR READVERTISING WOULD BE TO OBTAIN TRANSPORTATION DATA, WHICH SHOULD HAVE BEEN SUPPLIED WITH THE BID, BUT WAS NOT, THE INQUIRY NARROWS TO A CONSIDERATION OF THE IMPACT THE UNREQUESTED DATA WOULD HAVE ON THE COMPUTATION OF THE COST OF TRANSPORTATION. IF THE "LIKELIHOOD IS VIRTUALLY NIL THAT IF SUCH INFORMATION WAS ORIGINALLY IN THE BIDS A DIFFERENT BIDDER MIGHT HAVE BEEN EVALUATED AS THE LOW BIDDER," THERE IS NO COGENT OR COMPELLING REASON TO CANCEL. 43 COMP. GEN., SUPRA, AT 539. THIS INQUIRY HAS, OF COURSE, BEEN FORMULATED IN VARIOUS WAYS DEPENDING ON THE CIRCUMSTANCES INVOLVED. HERE, WE BELIEVE THE QUESTION SHOULD BE WHETHER, UNDER THE MOST CONSERVATIVE COMPUTATION OF THE TOTAL TRANSPORTATION COSTS, ASEA WOULD DISPLACE BBC'S BID.

TURNING NOW TO THE EVALUATION OF THE COST OF TRANSPORTATION, ASEA MAINTAINS THAT THE APPLICATION OF THE WILHELM TRUCKING CO.'S $50,000 ESTIMATE TO ITS BID IS IMPROPER. UPON RECONSIDERATION, WE MUST AGREE. MUST MAKE IT CLEAR, HOWEVER, THAT BECAUSE OF THE NATURE OF THE ITEMS INVOLVED, WE FIND NOTHING PER SE ILLEGAL, AS ASEA SUGGESTS, IN CONSIDERING ESTIMATES FURNISHED BY AN INDEPENDENT TRUCKING COMPANY EXPERIENCED IN HANDLING EQUIPMENT OF THIS NATURE. FURTHER, CONTRARY TO ASEA'S CONTENTION, THE COPY OF WILHELM'S LETTER OF JULY 1, 1970, SUBMITTED TO THE CONTRACTING OFFICER WITH THE LETTER OF JULY 8, 1970, FROM THE CHIEF OF GSA'S DENVER TRANSPORTATION MANAGEMENT DIVISION, INDICATES THAT WILHELM'S ESTIMATE WAS BASED ON THE CURRENT CHARGES FOR TRANSPORTATION OF THE TRANSFORMERS AND ACCESSORIES. IN THIS REGARD, WE NOTE THAT WILHELM IS A PARTY TO WILLAMETTE TARIFF NO. 5.

WILHELM'S ESTIMATE WAS, HOWEVER, PREDICATED ON THE TRANSFORMERS WEIGHING 230,000 POUNDS EACH, RATHER THAN THE ACTUAL WEIGHTS OF ASEA'S TRANSFORMERS AND ACCESSORIES. WE NEED NOT EXPLORE THE RAMIFICATIONS OF THE WEIGHT DIFFERENCE AND HOW IT WOULD HAVE AFFECTED WILHELM'S ESTIMATE. WE MUST, NEVERTHELESS, OBSERVE THAT SIGNIFICANT TRANSPORTATION CHARGES, SUCH AS EXTRA LABOR, VEHICLE DETENTION AND PILOT CARS DO NOT DEPEND ON WEIGHTS, BUT REQUIRE AN ESTIMATE OF TIME AND LABOR - AN AREA WHERE EXPERIENCED JUDGMENT IS NOT WITHOUT SIGNIFICANCE.

WITH ITS REQUEST FOR RECONSIDERATION, ASEA HAS SUBMITTED TWO RECALCULATIONS OF THE ESTIMATED ACTUAL TRANSPORTATION COSTS INVOLVED. THE FIRST, IN AN AMOUNT OF $34,381.10, IS BASED ON THE METHOD OF COMPUTATION USED BY GSA IN ARRIVING AT ITS $38,867.29 WITH THE EXCEPTION THAT THE CHARGES PRESCRIBED BY THE WILLAMETTE TARIFF ARE SUBSTITUTED FOR THE RATES OF THE PACIFIC INLAND TARIFF (USED BY GSA). THE SECOND COMPUTATION, IN AN AMOUNT OF $32,586.84, IN ADDITION TO APPLYING THE WILLAMETTE TARIFF, SUBSTITUTES THE ALLEGED ACTUAL WEIGHT (206,500 FOR THE TRANSFORMER AND 68,500 POUNDS FOR THE ACCESSORIES). UNDER ASEA'S FIRST COMPUTATION, COMPARISON OF ITS BID WITH BBC'S BID WOULD RESULT IN ASEA BEING THE LOW BIDDER BY $1,510.20, WHILE UNDER THE SECOND COMPUTATION ASEA WOULD BE LOW BY $3,304.46. WE WILL CONFINE OUR DISCUSSION TO ASEA'S SECOND COMPUTATION SINCE IT IS BASED ON THE ALLEGED ACTUAL WEIGHTS OF ASEA'S TRANSFORMERS AND ACCESSORIES AND, THUS, PRESENTS ALL OF THE DATA THAT WOULD BE OBTAINED BY READVERTISEMENT.

COPIES OF ASEA'S SECOND COMPUTATION, AS WELL AS BBC'S REPLY THERETO, HAVE BEEN MADE AVAILABLE TO ALL PARTIES. ALL, APPARENTLY, AGREE THAT THE WILLAMETTE TARIFF, AND NOT THE PACIFIC INLAND TARIFF, IS FOR APPLICATION, SINCE IT PROVIDES THE LOWEST FREIGHT RATES AVAILABLE. SEE FPR SEC. 1- 19.203-3. IN ADOPTING THE RATES SET FORTH IN THE WILLAMETTE TARIFF, IT IS IMPORTANT TO COMMENT ON THE REASONABLENESS OF GSA'S ESTIMATE OF THE TIME, ESPECIALLY THE NUMBER OF MAN-HOURS, IT WILL TAKE TO LOAD, MOVE AND UNLOAD THE TRANSFORMERS. IN OUR DECISION OF OCTOBER 9, WE REFERRED TO GSA'S COMPUTATION ON THE BASIS OF THESE JUDGMENTS AS THE "LOWEST AVAILABLE TOTAL TRANSPORTATION COST ESTIMATE" AND INDICATED THAT IT WAS "CONSERVATIVELY ESTIMATED." WE WISH TO STRESS, AT THIS POINT, OUR OPINION, BASED ON OUR REVIEW OF THE MATTER, THAT THE GSA JUDGMENTS ARE INDEED CONSERVATIVE AND PERHAPS UNDERSTATED. HERE, IT SHOULD BE RECALLED THAT WILHELM'S ESTIMATE WAS BASED ON ESSENTIALLY THE SAME ASSUMED WEIGHT DISTRIBUTION USED BY GSA IN MAKING ITS SECOND COMPUTATION.

COUNSEL FOR BBC HAS DRAWN ATTENTION TO THE FOLLOWING INACCURACIES IN GSA'S SECOND COMPUTATION WHICH WE BELIEVE MUST BE CORRECTED. IN THIS REGARD, COUNSEL FOR BBC URGES IN ITS LETTER OF NOVEMBER 17, 1970, THAT:

"PROPER APPLICATION OF THE WILLAMETTE TARIFF TO GSA'S ASSUMED TRANSPORTATION FACTORS NECESSITATES CORRECTING SOME ASPECTS OF GSA'S EARLIER APPLICATION OF A TARIFF TO THESE SAME ASSUMPTIONS. *** THE ADJUSTMENTS MADE IN PROPERLY APPLYING THE TARIFF INVOLVE THE EXTRA LABOR AND PILOT CAR COST CATEGORIES. TO REACH ITS ORIGINAL EXTRA LABOR COST FIGURE, GSA ESTIMATED THAT TRANSPORTATION OF THE TRANSFORMERS CALLED FOR BY THE SOLICITATION WOULD REQUIRE FIVE MEN WORKING 16 HOURS FOR EACH TRANSFORMER AND THEN APPLIED TO THE TOTAL MAN HOURS A SINGLE TARIFF LABOR RATE. THIS WAS INCORRECT, HOWEVER, FOR THE APPLICABLE WILLAMETTE TARIFF INDICATES THAT ONE LABOR CHARGE WILL APPLY FOR THE FIRST EIGHT HOURS WHICH THE FIVE MEN WORK, BUT A HIGHER CHARGE MUST BE APPLIED TO THE NEXT EIGHT HOURS. WHILE IT IS TRUE THAT THE 16 HOURS OF REQUIRED LABOR NEED NOT BE PERFORMED CONSECUTIVELY, PERHAPS THEREBY AVOIDING THE HIGHER NIGHT-TIME LABOR CHARGES, AN OVERNIGHT BREAK IN THE CONSECUTIVE WORK HOURS WOULD APPROXIMATELY DOUBLE THE VEHICLE DETENTION COSTS CALCULATED BY GSA. THEREFORE, A RECALCULATION OF THE GSA ESTIMATE MUST INCLUDE EITHER A CHARGE BASED UPON MANY HOURS OF PREMIUM LABOR OR A VASTLY INCREASED VEHICLE DETENTION COST. THIS SAME PRINCIPLE IS TRUE IN THE CALCULATION OF THE COST OF PILOT CARS, WHICH IN GSA'S APPLICATION OF TARIFF PROVISIONS TO ITS ASSUMPTIONS WAS UNDERESTIMATED BECAUSE OF THE FAILURE TO ALLOW FOR HIGHER LABOR CHARGES WHEN PILOT CAR DRIVERS WORK MORE THAN A NORMAL, EIGHT -HOUR DAY. *** "IN ADDITION TO THE FOREGOING CORRECTIONS IN THE APPLICATION OF A TARIFF TO GSA ASSUMPTIONS, IT APPEARS NECESSARY TO CORRECT THE MILEAGE FIGURES USED IN GSA'S CALCULATION OF EMPTY EQUIPMENT CHARGES. WHILE GSA USED KENNEWICK, WASHINGTON, AS THE BASE POINT FOR FIGURING TOTAL EMPTY VEHICLE MILEAGE, THE NEAREST CARRIER IN THE AREA ABLE TO PERFORM THE REQUIRED TRANSPORTATION IS LOCATED IN PORTLAND, OREGON. *** WE HAVE CORRECTLY USED PORTLAND-ODAIR MILEAGE AS THE BASIS FOR EMPTY EQUIPMENT CHARGES." WITH RESPECT TO THE EXTRA LABOR CHARGES, ASEA OFFERS THE FOLLOWING COMPUTATION:

"EXTRA LABOR

FIVE MEN X 16 HOURS PER UNIT X $7.47 PER HOUR X 10 $5,976.00" WE AGREE, HOWEVER, WITH BBC'S RECAPITULATION OF THE EXTRA LABOR CHARGES, WHICH TAKES INTO CONSIDERATION OVERTIME CHARGES PRESCRIBED BY ITEM 636 OF THE TARIFF:

"EXTRA LABOR

FIVE MEN FOR 16 HOURS:

-FOR 8 HRS. (BETW. 8 AM - 5 PM) $7.47 X 10 $2,988.00

-FOR 8 HRS. (BETW. 5 PM - 8 AM) $11.20 X 10 4,480.00 $7,468.00"

THUS, IT IS CLEAR THAT A FAIR ESTIMATE OF LABOR CHARGES WOULD BE AT LEAST $1,492 GREATER THAN ASEA'S FIGURE; AND, AS ITEM 636 OF THE WILLAMETTE TARIFF SHOWS, THIS FIGURE DOES NOT INCLUDE FOREMEN OR SUPERVISORS NEEDED FOR PERFORMANCE OF THIS HAUL.

MOREOVER, IF WE ASSUME THAT NO OVERTIME IS PERFORMED, THERE WOULD NECESSARILY BE SUBSTANTIAL INCREASES IN VEHICLE DETENTION AND SPECIAL EQUIPMENT CHARGES, FOR THE REASON THAT ON A STRAIGHT-TIME BASIS, ALL OPERATIONS WOULD CEASE AT 5 P.M., WITH THE RESULT THAT ALL EQUIPMENT WOULD BE HELD ON A DETENTION AND WAITING TIME BASIS UNTIL 8 A.M. THE NEXT MORNING. THESE EXTRA CHARGES WOULD GREATLY EXCEED THE OVERTIME CHARGES REFLECTED IN BBC'S COMPUTATION. ITEM 2705 OF THE WILLAMETTE TARIFF SHOWS THAT WAITING TIME, AFTER ALLOWING 1 HOUR TO LOAD AND 1 HOUR TO UNLOAD, IS $19.06 AN HOUR; AND ITEM 638 PROVIDES FOR AN ADDITIONAL WAITING TIME RATE ON THE HEAVY VEHICLE OF 5-1/2 CENTS PER 100 POUNDS PER HOUR.

CONSISTENT WITH THE FOREGOING TREATMENT OF OVERTIME, BBC OFFERS, AND WE AGREE WITH, THE FOLLOWING COMPUTATION OF CHARGES FOR PILOT CARS IN RESPONSE TO THE $1,357.08 TOTAL COST FOR THIS ITEM USED BY ASEA:

"PILOT CARS

10 TRIPS AT 62 MILES (ODAIR TO JOB SITE AND RETURN) X 2 CARS 1240 MILES

1240 MILES $ .14 $ 173.60

2 MEN FOR 8 HOURS $7.47 X 10 1,195.20

2 MEN FOR 8 HOURS $11.20 X 10 1,792.00

$ 3,160.80"

AGAIN, WE BELIEVE THE MORE ACCURATE ESTIMATION OF PILOT CAR COST IS THAT SHOWN BY BBC, WHICH IS $1,803.72 GREATER THAN ASEA'S FIGURE.

INSOFAR AS THE EMPTY EQUIPMENT CHARGE IS CONCERNED, ASEA COMPUTED THIS ITEM ON THE BASIS OF GSA'S ESTIMATE OF $1,111.50, PLUS $147 FOR A POSSIBLE ADDITIONAL TRIP TO TRANSPORT ACCESSORIES. THE COMPUTATION USED BY GSA AND ASEA DOES NOT TAKE INTO CONSIDERATION THE FACT THAT ON THE BASIS OF ASEA'S BREAKDOWN OF THE GUARANTEED SHIPPING WEIGHTS THERE WOULD BE APPROXIMATELY 68,000 POUNDS OF EQUIPMENT FOR EACH TRANSFORMER. THIS EQUIPMENT WOULD REQUIRE THE PLACEMENT OF AN ADDITIONAL VEHICLE OR VEHICLES AT ODAIR AND THE COMPUTATIONS FOR EMPTY EQUIPMENT WOULD BE AS INDICATED BY BBC AS FOLLOWS:

"MOVEMENT OF BARE TRANSFORMERS

"A. EMPTY MOVEMENT ON 4/15/73 (4 TRANSFORMERS, 4 TRIPS REQUIRED)

PORTLAND TO ODAIR AND RETURN TO PORTLAND 608 MILES

DAMSITE TO ODAIR (31 MILES X 3) 93

DAMSITE TO ODAIR (31 MILES X 4) 124

732

"B. EMPTY MOVEMENT ON 10/15/73 (3 TRANSFORMERS, 3 TRIPS)

PORTLAND TO ODAIR AND RETURN TO PORTLAND 608

701

"C. EMPTY MOVEMENT ON 4/15/74 (3 TRANSFORMERS, 3 TRIPS)

PORTLAND TO ODAIR AND RETURN TO PORTLAND 608

DAMSITE TO ODAIR (31 MILES X 3) 93

701

TOTAL EMPTY MILES (TRANSFORMER VEHICLE) 2,134 MILES

TARIFF RATE X $.60

COST (TRANSFORMER VEHICLE) $1280.40

"MOVEMENT OF ACCESSORIES

"A. EMPTY MOVEMENT ON 4/15/73 (180,000 LBS., 3 TRIPS REQUIRED)

PORTLAND TO ODAIR AND RETURN TO PORTLAND 608 MILES

DAMSITE TO ODAIR (31 MILES X 3) 93

701

"B. EMPTY MOVEMENT ON 10/15/73 (135,000 LBS., 3 TRIPS) 701

"C. EMPTY MOVEMENT ON 4/15/74 (135,000 LBS., 3 TRIPS) 701

TOTAL EMPTY MILES (ADDITIONAL VEHICLE) 2,103 MILES

TARIFF RATE X $.49

COST (ADDITIONAL VEHICLE) $1,030.47" THE FOREGOING RESULTS IN A TOTAL EMPTY EQUIPMENT CHARGE OF $2,310.87. THIS CHARGE IS ALSO A MORE ACCURATE ESTIMATE OF THE CHARGE FOR EMPTY EQUIPMENT; AND IT IS $1,052.37 GREATER THAN ASEA'S ESTIMATE.

IN ADDITION, THE BROAD COMPUTATIONS ADVANCED BY THE PARTIES HAVE FAILED TO TAKE INTO CONSIDERATION THE FACT THAT UNDER THE DELIVERY SCHEDULE, THREE SEPARATE DELIVERIES ARE REQUIRED. THIS REQUIREMENT WOULD MEAN THAT THE FACTORS OF EMPTY MILEAGE, DETENTION LABOR CHARGES AND PILOT CAR CHARGES ARE ACTUALLY SUBJECT TO THREE SEPARATE COMPUTATIONS, WHICH WOULD INCREASE THE CHARGES OVER THOSE COMPUTED BY ONE COMPUTATION TO COVER 10 TRANSFORMERS AS ONE TRANSACTION. HOWEVER, ON THE BASIS OF THESE ADJUSTMENTS TO ASEA'S FIGURES NOTED ABOVE, IT IS CLEAR TO US THAT ASEA IS NOT THE LOW BIDDER, EVEN UNDER THE MOST CONSERVATIVE ESTIMATE OF THE TOTAL COST OF TRANSPORTATION. THE THREE ITEMS DISCUSSED ABOVE RESULT IN AN INCREASE TO ASEA'S FIGURES OF $4,358.09, WHICH WOULD RAISE ASEA'S COMPUTATION FROM $32,586.84 TO $36,844.93.

ACCORDINGLY, WE FIND NO BASIS FOR TAKING FURTHER ACTION IN THIS MATTER AND ASEA'S REQUEST IS THEREFORE DENIED. WE DO, HOWEVER, RENEW OUR RECOMMENDATION THAT IN FUTURE PROCUREMENTS OF THIS NATURE, CONSIDERATION BE GIVEN TO OBTAINING BIDS ON AN F.O.B. JOB SITE BASIS ONLY, THEREBY ELIMINATING THE NEED TO DETERMINE TRANSPORTATION COSTS ON AN ESTIMATED BASIS.