B-175564, JUL 11, 1972

B-175564, JUL 11, 1972

BID PROTEST - ALLEGED NONRESPONSIBILITY - ALLEGED IMPROPER EVALUATION DECISION DENYING THE PROTEST OF JOHN SCHWIMMER & COMPANY AGAINST AWARD OF A CONTRACT TO THE ISOE MANUFACTURING COMPANY UNDER AN IFB ISSUED BY THE DEFENSE PERSONNEL SUPPORT CENTER, PHILADELPHIA, PA. ABSENT CONVINCING EVIDENCE OF BAD FAITH OR ARBITRARY AND CAPRICIOUS ACTION, GAO HAS NO BASIS FOR OBJECTION TO A CONTRACTING OFFICER'S DETERMINATION OF BIDDER RESPONSIBILITY. B-174847, MARCH 10, 1972. FURTHER, SINCE THE NEW TARIFF RATES DID NOT BECOME EFFECTIVE UNTIL AFTER AWARD WAS MADE TO ISOE, THE COMP. GEN. IS UNABLE TO CONCLUDE THAT THE EVALUATION BASED ON THE OLD RAIL RATE WAS IMPROPER. ACCORDINGLY, THE PROTEST IS DENIED.

TO LA BRUM AND DOAK:

WE REFER TO YOUR LETTER DATED MAY 30, 1972, AND PRIOR CORRESPONDENCE, PROTESTING, AS COUNSEL FOR JOHN SCHWIMMER & COMPANY (SCHWIMMER), THE AWARD OF CONTRACT NO. DSA100-72-C-1288 TO THE ISOE MANUFACTURING COMPANY (ISOE) UNDER INVITATION FOR BIDS (IFB) DSA100-72-B-0788, ISSUED BY DEFENSE PERSONNEL SUPPORT CENTER, PHILADELPHIA, PENNSYLVANIA.

THE IFB WAS ISSUED JANUARY 7, 1972, FOR 120,050 FEDERAL STOCK NUMBER 7210 -268-8675 "PILLOW, BED, FEATHER, CHEMICALLY MODIFIED." ITEMS 0001AE, NORFOLK, AND 0001AG, GREAT LAKES, 7,250 EACH, AND ITEMS 0001AF, OAKLAND, AND 0001AH, SAN DIEGO, 10,800 EACH, WERE SOLICITED F.O.B. DESTINATION. ITEMS 0001AA AND 0001AC, MECHANICSBURG AND MEMPHIS RESPECTIVELY, 18,000 EACH; ITEM 0001AB, ATLANTA, 30,000 EACH; AND ITEM 0001AD OGDEN, 36,000 EACH, WERE REQUESTED F.O.B. ORIGIN AND/OR F.O.B. DESTINATION.

SIX BIDS WERE SUBMITTED AND OPENED ON JANUARY 26, 1972. THE UNIT PRICE BIDS OF ISOE AND SCHWIMMER WERE AS FOLLOWS:

0001AE 0001AF

0001AG 0001AH

ISOE $2.00 2.00 F.O.B. DESTINATION

SCHWIMMER 2.00 2.30 F.O.B. DESTINATION

0001AA 0001AC 0001AB 0001AD

ISOE 1.80 1.80 1.80 1.80 F.O.B. ORIGIN

2.00 2.00 2.00 2.00 F.O.B. DESTINATION

SCHWIMMER 1.72 1.72 1.72 1.72 F.O.B. ORIGIN

ISOE SUBMITTED ITS BID ON AN ALL-OR-NONE BASIS WITH A 2-PERCENT DISCOUNT FOR PAYMENT WITHIN 20 DAYS. SCHWIMMER DID NOT IMPOSE ANY QUANTITATIVE LIMITATIONS ON THE PROCUREMENT AND OFFERED A DISCOUNT OF 0.5 PERCENT FOR PAYMENT WITHIN 20 DAYS.

THE COST AND PRICE ANALYSIS REPORT DATED FEBRUARY 11, 1972, FOUND ISOE THE LOW BIDDER AT $230,619.74 WHEN COMPUTED ON A COMBINATION F.O.B. ORIGIN/DESTINATION BASIS: ITEMS 0001AB AND 0001AC F.O.B. ORIGIN AND ITEMS 0001AA, 0001AD, 0001AE, 0001AF, 0001AG, 0001AH F.O.B. DESTINATION. SCHWIMMER'S EVALUATED PRICE WAS COMPUTED AS $231,635.48, WHILE THE PRICE FOR MULTIPLE AWARDS DIVIDED BETWEEN SCHWIMMER AND THE ONLY OTHER BIDDER WILLING TO ACCEPT LESS THAN THE TOTAL QUANTITY OF THE PROCUREMENT WAS EVALUATED AT $232,008.02.

THE PRE-AWARD SURVEY, CONDUCTED BY THE DEFENSE CONTRACT ADMINISTRATION SERVICES, DALLAS, RECOMMENDED COMPLETE AWARD TO ISOE ON FEBRUARY 23, 1972. CONCURRENCES IN THE RECOMMENDATION WERE RECEIVED FROM THE VICE CHAIRMAN, PRE-AWARD SURVEY BOARD ON MARCH 2, 1972, THE INDUSTRIAL SPECIALIST, PRODUCTION MANAGEMENT BRANCH, PRODUCTION DIVISION, DIRECTORATE OF PROCUREMENT AND PRODUCTION ON MARCH 6, 1972, AND THE CHIEF QUALITY ASSURANCE BRANCH, DIVISION OF TECHNICAL OPERATIONS, DIRECTORATE OF CLOTHING AND TEXTILES ON MARCH 20, 1972. AWARD WAS MADE TO ISOE ON MARCH 22, 1972.

YOU HAVE PROTESTED AGAINST THE AWARD TO ISOE ON THE GROUNDS THAT (1) ISOE WAS NOT A RESPONSIBLE BIDDER AT THE TIME OF AWARD AND (2) BID EVALUATION WAS PREDICATED UPON THE APPLICATION OF AN ERRONEOUS FREIGHT RATE.

CONCERNING YOUR FIRST ALLEGATION, OUR OFFICE HAS CONSISTENTLY TAKEN THE POSITION THAT THE DETERMINATION OF RESPONSIBILITY OF A BIDDER RESTS WITHIN THE DISCRETION OF THE CONTRACTING OFFICER AND IS NOT SUBJECT TO OBJECTION BY OUR OFFICE ABSENT CONVINCING EVIDENCE THAT IT WAS BASED UPON BAD FAITH OR LACK OF A SUBSTANTIAL BASIS FOR THE DETERMINATION. B 174847, MARCH 10, 1972. NO SUCH EVIDENCE HAS BEEN PRESENTED IN THIS CASE AND, CONSEQUENTLY, NO BASIS EXISTS FOR ANY LEGAL OBJECTION BY OUR OFFICE.

WITH RESPECT TO THE SECOND CONTENTION, IT IS YOUR POSITION THAT THE USE OF THE $9.90 PER HUNDREDWEIGHT (CWT) RAIL RATE IN EVALUATING THE SCHWIMMER BID TO DESTINATION WAS INCORRECT BECAUSE IT DID NOT REPRESENT THE LOWEST POSSIBLE RATE. YOU ASSERT THAT THE LOWEST APPLICABLE RATE WAS THE TRUCK CLASSIFICATION RATE OF $7.14 PER CWT BECAUSE THE EXCEPTION RATING OF $13.74 PER CWT WAS DETERMINED UNREASONABLE AND ORDERED TO BE CANCELED BY INTERSTATE COMMERCE COMMISSION (ICC) RULING NO. 35243, FEATHER AND DOWN ASSOCIATION, INC. V. MIDDLEWEST MOTOR FREIGHT BUREAU, ET. AL., 340 ICC 76 (FEBRUARY 22, 1971), AFFIRMED BY THE DISTRICT COURT FOR THE DISTRICT OF UTAH, MARCH 24, 1972. YOU ASSERT THAT HAD THE CLASSIFICATION RATE BEEN APPLIED, SCHWIMMER WOULD HAVE BEEN EVALUATED AS THE LOW BIDDER.

HOWEVER, THE RULE IS STATED IN MOBILE & O.R. CO. V. SOUTHERN SAWMILL CO., 251 S.W. 434, 437 (1923):

"IT SEEMS TO BE THE RULE THAN AN ORDER OF THE INTERSTATE COMMERCE COMMISSION DIRECTING THE CARRIER TO CANCEL A RATE DOES NOT HAVE THE EFFECT OF ANNULING SUCH RATE. *** SO LONG AS THE RATE IS ON FILE, IT IS THE DUTY OF THE DELIVERING CARRIER TO ACTUALLY CHARGE AND COLLECT THE RATE ON FILE. SUCH RATE IS TO BE CONCLUSIVELY PRESUMED TO BE THE LEGAL RATE, AND ANY DEPARTURE THEREFROM IS MADE AN OFFENSE."

FURTHER, EVEN THOUGH THE ICC DID DECLARE THE EXCEPTION RATE UNREASONABLE, AND THAT DETERMINATION WAS AFFIRMED BY THE DISTRICT COURT AFTER THE AWARD WAS MADE IN THIS CASE, THE NEW TARIFFS WERE NOT PUBLISHED UNTIL APRIL 5, 1972, EFFECTIVE APRIL 10, 1972. IN THE CIRCUMSTANCES, WE CANNOT CONCLUDE THAT THE EVALUATION AND AWARD THAT WAS MADE WAS IMPROPER INASMUCH AS THEY WERE ACCOMPLISHED PRIOR TO THE DISTRICT COURT AFFIRMATION AND BEFORE THE EFFECTIVE DATE OF THE DELETION OF THE EXCEPTION CLASSIFICATION.

ACCORDINGLY, THE PROTEST IS DENIED.