B-149619, FEB. 11, 1963

B-149619, FEB. 11, 1963

TO SMALL MOTORS, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 2, 1962, WITH ENCLOSURES, RELATING TO THE MATTER OF YOUR PROTEST AGAINST THE AWARD OF A CONTRACT TO CURTIS AUTOMOTIVE DEVICES, INCORPORATED, PURSUANT TO THE INVITATION FOR BIDS NO. CML-30-070-62-167, ISSUED BY THE UNITED STATES ARMY CHEMICAL PROCUREMENT DISTRICT, NEW YORK, NEW YORK, UNDER DATE OF MAY 8, 1962.

IN A LETTER DATED OCTOBER 5, 1962, TO HONORABLE EVERETT MCKINLEY DIRKSEN, UNITED STATES SENATE, WE GAVE CONSIDERATION TO THE MATTER OF YOUR PROTEST AND FOR THE REASONS SET FORTH THEREIN WE CONCLUDED THAT THE AWARD MADE TO CURTIS AUTOMOTIVE DEVICES, INCORPORATED, WAS PROPER AND SHOULD NOT BE DISTURBED.

A CONFERENCE CONCERNING YOUR PROTEST WAS HELD IN OUR OFFICE ON OCTOBER 24, 1962, ATTENDED BY MR. R. R. COOK AND MR. CORNELIUS KENNEDY OF SENATOR DIRKSEN'S OFFICE. AT THAT TIME MR. COOK WAS ADVISED CONCERNING THE FACTS REPORTED BY THE UNITED STATES ARMY MATERIEL COMMAND WAS WELL AS OUR REASONS FOR CONCLUDING THAT THE AWARD MADE TO CURTIS AUTOMOTIVE DEVICES, INCORPORATED, WAS PROPER. AMONG OTHER THINGS, IT WAS POINTED OUT TO MR. COOK THAT THE COMPUTATION OF FREIGHT CHARGES AS SET FORTH IN HIS LETTER OF AUGUST 21, 1962, TO THE UNITED STATES ARMY PROCUREMENT DISTRICT, WAS ON A DIFFERENT BASIS FROM THAT USED BY THE DEPARTMENT OF THE ARMY IN THAT HIS COMPUTATION WAS BASED UPON THE BELIEF THAT 8,050 UNITS FOR DELIVERY TO NEW CUMBERLAND, PENNSYLVANIA, COULD BE SHIPPED AT THE CARLOAD RATE APPLICABLE THERETO, AND THAT THE QUANTITIES FOR DELIVERY TO OGDEN, UTAH, AND LATHROP, CALIFORNIA, COULD BE SHIPPED AT THE CARLOAD RATE APPLICABLE THERETO, PLUS A STOPOVER CHARGE AT OGDEN. WE ALSO INVITED MR. COOK'S ATTENTION TO THE COMPUTATION OF FREIGHT CHARGES BY LEWIS SPARKS, TRANSPORTATION OFFICER, IN COMMENT NO. 2, DATED AUGUST 1, 1962, AS WELL AS TO THE CONTRACTING OFFICER'S LETTER OF AUGUST 30, 1962, TO YOUR CONCERN, CONTAINING THE FOLLOWING PARAGRAPH:

"YOU ARE ADVISED THAT WHILE THE CONTRACT PERMITS THE CONTRACTOR TO PRE- SHIP, THE GOVERNMENT CANNOT COMPEL THE CONTRACTOR TO MAKE EARLIER SHIPMENTS. ACCORDINGLY, THE CONTRACTING OFFICER MUST EVALUATE ALL BIDS ON THE BASIS OF THE MUTUAL CONTRACTUAL OBLIGATIONS. ACCORDINGLY, THE FREIGHT FOR THE SHIPMENTS TO NEW CUMBERLAND, PA., BELLBLUFF, VA., MEMPHIS, TENN., ATLANTA, GA., LATHROP, CALIF., AND OGDEN, UTAH, MUST BE EVALUATED ON THE BASIS OF ONE SHIPMENT TO EACH DESTINATION FOR EACH MONTH OF DELIVERY. BASED UPON THESE FACTS, THE FREIGHT RATES ESTABLISHED BY OUR TRANSPORTATION OFFICE ARE THE ONLY RATES WHICH THE CONTRACTING OFFICER MAY USE IN THE BID EVALUATIONS.'

AT THE CONCLUSION OF THE CONFERENCE MR. COOK STATED THAT IN FURTHER SUPPORT OF HIS PROTEST HE WOULD SUBMIT IN WRITING HIS VIEWS CONCERNING THE CORRECTNESS OF THE ADMINISTRATIVE ACTION TAKEN IN THIS MATTER. THEREAFTER, THERE WAS RECEIVED YOUR LETTER OF NOVEMBER 2, 1962, ENCLOSING SCHEDULE ,A" CONTAINING A COMPARISON OF THE BIDS SUBMITTED BY YOUR CONCERN AND SHOWING YOUR NET UNIT BID PRICE TO BE THE SUM OF $3.085 F.O.B. DESTINATION AS AGAINST THE UNIT BID PRICE OF $3.09 F.O.B. DESTINATION, SUBMITTED BY CURTIS AUTOMOTIVE DEVICES, INCORPORATED. IT WAS STATED THAT THE DELIVERY SCHEDULE DOES NOT DEMAND THAT LCL SHIPMENTS MUST BE MADE AND THAT THE SHIPMENTS COULD BE MADE IN ACCORDANCE WITH THE SHIPPING INSTRUCTIONS ON PAGE 16 OF THE INSTRUCTIONS FOR BIDS, WHICH SHOWS THAT DELIVERIES WERE TO BE MADE TO SIX DIFFERENT CHEMICAL CORPS WAREHOUSES. THE BASIS OF THE SHOWING CONTAINED IN YOUR LETTER YOU TOOK THE POSITION THAT YOU ARE ENTITLED TO THE AWARD PROVIDED THAT OUR OFFICE CONFIRMS THE FREIGHT RATES INVOLVED.

IN A FURTHER PARAGRAPH OF YOUR LETTER YOU EXPRESSED DOUBT THAT THE CURTIS AUTOMOTIVE DEVICES BID OF $3.09 PER UNIT CORRECTLY REFLECTS THE FREIGHT CHARGES FROM WESTFIELD, INDIANA, WHEN ADDED TO THEIR BID PRICE OF $2.99 EACH F.O.B. ORIGIN. YOU THEN REQUESTED TO BE ADVISED WHETHER, IF THE F.O.B. DESTINATION BID IS ACCEPTED, THAT CONCERN WOULD BE GRANTED AN ADDITIONAL AMOUNT TO COMPENSATE THEM IN THE EVENT THE FREIGHT COSTS WERE ACTUALLY HIGHER THAN $0.10 PER UNIT; ALSO, WHETHER CURTIS WOULD BE GRANTED AN ADDITIONAL AMOUNT IN THE EVENT THE GOVERNMENT REQUESTED SHIPMENT IN LCL LOTS AT A HIGHER COST TO CURTIS THAN $0.10 A UNIT.

RESPECTING YOUR FIRST INQUIRY WE WISH TO POINT OUT THAT SINCE THE CONTRACT AWARDED TO CURTIS AUTOMOTIVE DEVICES, INCORPORATED, WAS ON THE BASIS OF DELIVERED PRICE THE GOVERNMENT IS NOT CONCERNED WITH THE FREIGHT COSTS. IN OTHER WORDS, NO ALLOWANCE COULD BE MADE TO CURTIS ON ACCOUNT OF ANY CLAIM OF INCREASED FREIGHT CHARGES. AS TO THE SECOND INQUIRY, IT IS CLEAR THAT SINCE THE DELIVERY SCHEDULE CALLED FOR SHIPMENTS ON WHAT WAS OBVIOUSLY LCL LOTS, IT FOLLOWS THAT NO INCREASED FREIGHT CHARGES WOULD BE ALLOWABLE IF, IN FACT, THE ACTUAL FREIGHT CHARGES WERE IN EXCESS OF $0.10 PER UNIT.

UNDER DATE OF NOVEMBER 15, 1962, WE TRANSMITTED A COPY OF YOUR LETTER OF NOVEMBER 2, 1962, AND THE ENCLOSURES THERETO, TO THE SECRETARY OF THE ARMY, WITH THE REQUEST THAT OUR OFFICE BE FURNISHED WITH THE COMMENTS OF THAT DEPARTMENT REGARDING THE REPORTED LATE ACCEPTANCE OF THE BID SUBMITTED BY CURTIS AUTOMOTIVE DEVICES, INCORPORATED, AND WHETHER THE PRACTICE SET FORTH ON PAGE TWO OF YOUR LETTER WAS THAT REQUIRED TO BE FOLLOWED BY THE CONTRACTING OFFICER. THE COMMENTS OF THE DEPARTMENT WERE ALSO REQUESTED CONCERNING THE CONTENTIONS MADE GENERALLY IN YOUR LETTER OF NOVEMBER 2, 1962, AND PARTICULARLY WITH REFERENCE TO YOUR INSISTENCE THAT UNDER THE TERMS OF THE INVITATION FOR BIDS A CONTRACTOR WAS PRIVILEGED TO ACCELERATE DELIVERIES AT NO COST TO THE GOVERNMENT, AND THAT THE DELIVERY SCHEDULE DOES NOT DEMAND THAT LESS-THAN-CARLOAD SHIPMENTS BE MADE.

WE ARE NOW IN RECEIPT OF A REPORT FROM THE ARMY MATERIEL COMMAND FORWARDING THE COMMENTS OF THAT AGENCY ON THE MATTERS SET FORTH IN YOUR LETTER OF NOVEMBER 2, 1962. IT WAS REPORTED THAT THE BID SUBMITTED BY CURTIS AUTOMOTIVE DEVICES, INCORPORATED, WAS RECEIVED AFTER THE TIME OF THE BID OPENING. IT WAS POINTED OUT, HOWEVER, THAT THE INVITATION FOR BIDS PROVIDED THAT BIDS RECEIVED AFTER THE EXACT TIME SPECIFIED FOR THE OPENING OF BIDS WOULD NOT BE CONSIDERED UNLESS SUBMITTED BY MAIL AND RECEIVED BEFORE AWARD AND IT WAS DETERMINED BY THE GOVERNMENT THAT THE LATE RECEIPT WAS DUE SOLELY TO DELAY IN THE MAILS FOR WHICH THE BIDDER WAS NOT RESPONSIBLE.

IN SUPPORT OF THE ADMINISTRATIVE ACTION TAKEN IN THIS CASE THE ARMY MATERIEL COMMAND TRANSMITTED HERE A COPY OF A LETTER DATED JUNE 22, 1962, IN WHICH THE UNITED STATES POST OFFICE AT WESTFIELD, INDIANA, REPORTED THAT THE REGISTERED AIRMAIL SPECIAL DELIVERY LETTER NO. 134, MAILED BY CURTIS AUTOMOTIVE DEVICES, INCORPORATED (CONTAINING THAT CONCERN'S BID), WAS ACTUALLY MAILED AT THAT OFFICE BEFORE 5:00 P.M. ON JUNE 6, 1962, AND LEFT THAT OFFICE ON THE LAST DISPATCH AT 6:30 P.M. WE ENCLOSE FOR YOUR INFORMATION A COPY OF A LETTER DATED JUNE 27, 1962, FROM THE POSTMASTER AT NEW YORK, NEW YORK, TO THE U.S. ARMY CHEMICAL PROCUREMENT DISTRICT, ADVISING THAT THE INDICATED LETTER SHOULD BE IN THE REGULAR COURSE OF HANDLING HAVE BEEN DELIVERED TO THE LATTER AGENCY BEFORE 2:00 P.M. ON JUNE 7, 1962. ON THE BASIS OF THE RECORD IN THIS CASE, THE ARMY MATERIEL COMMAND TAKES THE POSITION THAT THE BID OFFICER FOLLOWED THE ARMED SERVICES PROCUREMENT REGULATION PROCEDURES FOR LATE BIDS AND THAT THE CONTRACTING OFFICER ACTED PROPERLY IN OPENING THE BID. WE AGREE.

PURSUANT TO THE INFORMAL REQUEST OF MR. KENNEDY, WE ADDRESSED A LETTER TO THE POSTMASTER AT INDIANAPOLIS, INDIANA, UNDER DATE OF JANUARY 11, 1963, REQUESTING THAT OUR OFFICE BE FURNISHED A COPY OF THE RECEIPT REPORTEDLY ISSUED BY THAT OFFICE SHOWING THE RECEIPT OF A REGISTERED AIRMAIL SPECIAL DELIVERY LETTER MAILED BY CURTIS AUTOMOTIVE DEVICES, INCORPORATED, AT WESTFIELD, INDIANA, BEFORE 5:00P.M. ON JUNE 6, 1962, AND THAT WE BE ADVISED AS TO THE HOUR OF THE PLANE DEPARTURE BY WHICH THE INDICATED LETTER WOULD HAVE BEEN FORWARDED TO NEW YORK CITY. WE ENCLOSE FOR YOUR INFORMATION A COPY OF THE REPLY MADE BY THE POSTMASTER AT INDIANAPOLIS UNDER DATE OF JANUARY 23, 1963, TOGETHER WITH COPIES OF THE ENCLOSURES THERETO. THE ENCLOSURES ARE SELF EXPLANATORY AND NO COMMENT THEREON BY OUR OFFICE APPEARS TO BE NECESSARY EXCEPT THAT THE INFORMATION FURNISHED APPEARS TO FULLY SUPPORT THE REPORT OF THE POSTMASTER AT NEW YORK CITY.

IT IS OUR VIEW THAT THE COMPUTATION OF FREIGHT CHARGES AS SET FORTH IN SCHEDULE "A" IN YOUR LETTER OF NOVEMBER 2, 1962, IS NOT SUPPORTED BY THE LANGUAGE IN THE INVITATION FOR BIDS. IN THIS CONNECTION, WE REFER TO THE LANGUAGE QUOTED ABOVE IN THE CONTRACTING OFFICER'S LETTER OF AUGUST 30, 1962, TO THE EFFECT THAT FREIGHT CHARGES MUST BE EVALUATED ON THE BASIS OF ONE SHIPMENT TO EACH DESTINATION FOR EACH MONTH OF DELIVERY. IN OTHER WORDS, THERE IS NO BASIS FOR YOUR ASSUMPTION THAT CARLOAD FREIGHT CHARGES ARE APPLICABLE TO THE SHIPMENTS TO NEW CUMBERLAND, PENNSYLVANIA, AND TO OGDEN, UTAH, AND LATHROP, CALIFORNIA.

THERE REMAIN FOR CONSIDERATION THE "OTHER FACTORS" REFERRED TO ON PAGES 3 AND 4 OF YOUR LETTER. IT WAS IMPLIED IN YOUR LETTER THAT THE ARMY MATERIEL COMMAND WAS DEALING WITH A NEW CONCERN WHICH WAS NOT FAMILIAR WITH THE PRODUCTION OF FILTERS AND, PARTICULARLY, GAS FILTERS, AND YOU THEN WENT ON TO SUGGEST THAT A SAVING OF $1,085.49 COULD HAVE BEEN EFFECTED BY AWARD OF THE CONTRACT TO YOUR CONCERN. RESPECTING THESE "OTHER FACTORS" WE QUOTE A PARAGRAPH FROM THE REPORT OF THE ARMY MATERIEL COMMAND, AS FOLLOWS:

"4. SMALL MOTORS HAS TRAINED PERSONNEL AND TEST EQUIPMENT. HOWEVER, CURTIS AUTOMOTIVE HAS HAD A NUMBER OF CONTRACTS FROM THE SUBJECT PROCUREMENT DISTRICT. THE LATTER COMPANY HAS HAD A NUMBER OF FURNISHED TEST DEVICES. NO DIFFICULTY HAS EVER BEEN ENCOUNTERED IN THE COMPANY'S UTILIZATION OF THIS EQUIPMENT. IN ADDITION, THE IFB SPECIFICALLY PROVIDED THAT IF THE CONTRACTOR DESIRED, THE GOVERNMENT WOULD TRAIN CONTRACTOR PERSONNEL AT ARMY CHEMICAL CENTER, MARYLAND AT THE CONTRACTOR'S EXPENSE. THE INVITATION PROVIDED THAT THE GOVERNMENT FURNISHED PROPERTY WAS LOCATED AT ARMY CHEMICAL CENTER, MARYLAND AND THAT THE BID WOULD BE EVALUATED BASED ON SHIPMENT FROM THAT LOCATION. THE COST OF FURNISHING GOVERNMENT PROPERTY FROM ARMY CHEMICAL CENTER TO WESTFIELD, INDIANA IS LESS THAN FROM ARMY CHEMICAL CENTER TO CHICAGO.'