B-154121, B-154059, JUN. 30, 1964

B-154121, B-154059, JUN. 30, 1964

TO PORTLAND COPPER AND TANK WORKS, INC.:

WE REFER TO YOUR LETTERS DATED APRIL 27, 1964, PROTESTING THE AWARD OF CONTRACTS UNDER INVITATION FOR BIDS NO. 197-297-64 AND INVITATION FOR BIDS NO. 197-296-64.

INVITATION FOR BIDS NO. 197-297-64 WAS ISSUED BY THE CONTRACTING OFFICER, UNITED STATES NAVAL ORDNANCE PLANT, LOUISVILLE, KENTUCKY, 40214 ON MARCH 21, 1964, FOR THE PROCUREMENT OF 3,580 MINE CASES, MK 55-2, LD 538044, UNDER ITEM 1, WITH VARYING QUANTITIES OF MISCELLANEOUS SPARE PARTS DESIGNATED AS (A) THROUGH (T) UNDER ITEM 2. THIS WAS A MULTI-YEAR PROCUREMENT DIVIDED INTO BID A AND BID B.

THE FIRST PROGRAM YEAR IN THIS PROCUREMENT, FISCAL YEAR 1964, WAS DESIGNATED AS BID A. LOT I UNDER BID A WAS COMPRISED OF ITEMS 1 AND 2 AND SPACES WERE PROVIDED FOR SUBMITTING BOTH DESTINATION AND ORIGIN BIDS FOR LOT I. BID A INCLUDED ITEMS 5 (A) AND 5 (B) WHICH WERE OPTIONAL ADDITIONAL QUANTITIES OF ITEM 1 AND SPACES WERE PROVIDED UNDER THE OPTIONAL ADDITIONAL QUANTITIES FOR SUBMITTING ORIGIN AND DESTINATION BIDS. THE MULTI-YEAR PROCUREMENT WAS DESIGNATED AS BID B. LOT 2 UNDER BID B WAS COMPRISED OF ITEM 3 (A) FOR 3,580 UNITS OF THE MINE CASES, MK 55-2, LD 538044, FOR FISCAL YEAR 1964; ITEM 3 (B) FOR FISCAL YEAR 1965 WAS FOR 1,000 OF THE MINE CASES; AND ITEM 3 (C) FOR FISCAL YEAR 1966 WAS FOR THE PROCUREMENT OF 1,000 OF THE MINE CASES. ITEMS 4 (A), (B) AND (C) INCLUDED SPARE PARTS FOR ITEM 3 (A), (B) AND (C) RESPECTIVELY. SPACES WERE PROVIDED UNDER LOT 2 FOR SUBMITTING DESTINATION AND ORIGIN BIDS. THE OPTIONS FOR ADDITIONAL QUANTITIES UNDER BID B WERE DESIGNATED AS ITEMS 6 (A) FOR THE FIRST PROGRAM YEAR FOR 500 TO 1,000 OF THE UNITS DESCRIBED UNDER ITEM 3 (A); 6 (B) FOR THE FIRST PROGRAM YEAR FOR 1,001 TO 1,790 OF THE UNITS DESCRIBED UNDER ITEM 3 (A); 6 (C) FOR THE SECOND PROGRAM, YEAR FOR 1 TO 500 OF THE UNITS DESCRIBED UNDER ITEM 3 (B) AND 6 (D) FOR THE THIRD PROGRAM YEAR FOR 1 TO 500 OF THE UNITS, DESCRIBED UNDER ITEM 3 (C).

PAGE 10 OF THIS INVITATION FOR BIDS CONTAINS THE FOLLOWING NOTE:

"LOT 1 UNDER BID A CONSISTS OF ITEMS 1 AND 2 FOR BOTH DESTINATION AND ORIGIN. LOT 2 UNDER BID B CONSISTS OF ITEMS 3 (A), 3 (B), 3 (C), 4 (A), 4 (B), AND 4 (C) FOR BOTH DESTINATION AND ORIGIN. AWARD WILL BE MADE TO THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER ON THE AGGREGATE COST OF LOT 1, DESTINATION OR ORIGIN, OR LOT 2, DESTINATION OR ORIGIN.' WITH RESPECT TO BID A, DESTINATION, PAGE 17 OF THE INVITATION INDICATED THE DESTINATION OF THE ITEMS. IN REGARD TO BID A. ORIGIN, PAGES 17 AND 18 OF INVITATION PROVIDED AS FOLLOWS:

"BID A - ORIGIN

(A) THE ARTICLES TO BE FURNISHED HEREUNDER SHALL BE DELIVERED FREE OF EXPENSE TO THE GOVERNMENT AND, AT THE GOVERNMENT'S OPTION, (I) LOADED, BLOCKED, AND BRACED ON BOARD CARRIER'S EQUIPMENT, (II) AT THE FREIGHT STATION, OR (III) PLACED ON WHARF OF WATER CARRIER (WHERE MATERIAL WILL ORIGINATE WITHIN OR ADJACENT TO A PORT AREA AND IS ADAPTABLE TO WATER MOVEMENT), AT OR NEAR CONTRACTOR'S PLANT AT

CHART

"/1) ------------------------ (BIDDER INSERT CITY OR TOWN IN WHICH

PLANT IS LOCATED),

"/2) ------------------------ (BIDDER INSERT EXACT LOCATION OF

PRIVATE SIDING OR NEAREST RAIL

TERMINAL FROM WHICH RAIL SHIPMENT

WILL BE MADE, TOGETHER WITH THE NAME

OF SERVING RAILROAD/S) (,

"/3) ------------------------ (BIDDER INSERT THE EXACT LOCATION

FROM WHICH TRUCK SHIPMENTS WILL BE

MADE, INCLUDING THE NAME OF THE

STREET OR HIGHWAY), AND

"/4) ------------------------ (BIDDER INSERT THE PORT, OR THE

SPECIFIC AREA WITHIN SUCH PORT, TO

WHICH SUPPLIES WILL BE DELIVERED).

"FOR SHIPMENT AT GOVERNMENT EXPENSE (NORMALLY ON GOVERNMENT BILL OF LADING) TO DESTINATIONS SPECIFIED UNDER BID A--- DESTINATION.' PAGE 11 OF THE INVITATION ENTITLED "INFORMATION TO BIDDERS" STATED AS FOLLOWS:

"THIS IS A MULTI-YEAR PROCUREMENT. REQUIREMENTS ARE SEPARATELY IDENTIFIED ABOVE (BID A) THE FIRST PROGRAM YEAR AND (BID B) FOR THE MULTI- YEAR PROCUREMENT.

"A PRICE MUST BE SUBMITTED FOR THE TOTAL REQUIREMENT FOR THE FIRST PROGRAM YEAR (BID A).

"A PRICE MAY BE SUBMITTED FOR THE MULTI-YEAR PROCUREMENT (BID B) AND IF SUBMITTED SUCH PRICE MUST BE FOR THE TOTAL REQUIREMENTS OF THAT PROCUREMENT.

"UNIT PRICES FOR THE MULTI-YEAR REQUIREMENT MUST BE THE SAME FOR EACH PROGRAM YEAR'S REQUIREMENT.

"EVALUATION OF OFFERS IN THIS MULTI-YEAR PROCUREMENT WILL BE MADE ON THE LOWEST OVERALL EVALUATED COST TO THE GOVERNMENT FOR BOTH ALTERNATIVES, THE MULTI-YEAR PROCUREMENT AND THE FIRST PROGRAM YEAR PROCUREMENT. EVALUATION WILL ALSO INVOLVE THE COMPARISON OF THE COST OF BUYING THE TOTAL REQUIREMENT UNDER A MULTI-YEAR PROCUREMENT WITH THE COST OF BUYING THE TOTAL REQUIREMENT IN SUCCESSIVE INDEPENDENT PROCUREMENTS.'

THE INVITATION CONTAINED NO PROVISION WITH RESPECT TO THE CONSEQUENCES OF A FAILURE TO BID ON BOTH AN ORIGIN AND DESTINATION BASIS UNDER BID A.

AT OPENING ON APRIL 20, 1964, BIDS HAD BEEN RECEIVED FROM:

(1) REIMERS MISSILE COMPONENTS, INCORPORATED

(2) CONCO ENGINEERING WORKS, INCORPORATED

(3) PORTLAND COPPER AND TANK WORKS, INCORPORATED

(4) GUENTHER MANUFACTURING COMPANY, INCORPORATED

(5) NEW BERN SHIPYARDS, INCORPORATED

(6) AERONCA MANUFACTURING CORPORATION

REIMERS MISSILE HAS BEEN DETERMINED TO BE NONRESPONSIBLE UNDER THIS INVITATION FOR BIDS AND THIS BIDDER HAS INDICATED THAT THIS DETERMINATION WILL NOT BE QUESTIONED; CONSEQUENTLY, THIS BID WILL NOT BE CONSIDERED FURTHER. THE PRICES QUOTED IN THE BIDS OF GUENTHER, NEW BERN AND AERONCA WERE HIGHER THAN YOURS; THEREFORE, THESE BIDS ALSO WILL NOT BE CONSIDERED FURTHER. CONCO'S BID, WHICH INCLUDED PRICES FOR BID A, LOT 1, ORIGIN, AND FOR THE OPTIONAL ADDITIONAL QUANTITIES UNDER 5 (A) AND 5 (B), ORIGIN IS LOW ON THE ITEMS COVERED. CONCO DID NOT BID ON THE MULTI-YEAR PROCUREMENT AND DID NOT SUBMIT A DESTINATION BID UNDER BID A FOR THE FIRST PROGRAM YEAR OR FOR THE OPTIONAL REQUIREMENT. YOU SUBMITTED A BID FOR THE FIRST PROGRAM YEAR, BID A, ORIGIN AND DESTINATION, AND A BID FOR THE MULTI-YEAR PROCUREMENT, BID B, ORIGIN AND DESTINATION. YOU ALSO QUOTED ORIGIN AND DESTINATION PRICES UNDER THE OPTION FOR ADDITIONAL QUANTITIES UNDER BID A AND BOTH ORIGIN AND DESTINATION PRICES FOR THE OPTION FOR THE ADDITIONAL QUANTITIES UNDER BID B. YOU ALLEGE THAT THE BID OF CONCO ENGINEERING WORKS IS NONRESPONSIVE, SINCE THIS BIDDER DID NOT SUBMIT A DESTINATION BID UNDER BID A.

IN B-149243, JULY 26, 1962, WE CONSIDERED A SIMILAR SITUATION. IN THAT CASE BIDDERS WERE ADVISED, BY AN ADDENDUM, TO QUOTE PRICES ON AN ORIGIN BASIS AND FOR STATED DESTINATIONS. IT WAS ALLEGED THAT THE BID WHICH WAS LOW ON AN ORIGIN BASIS WAS NONRESPONSIVE SINCE IT DID NOT ALSO INCLUDE DESTINATION PRICES. WE CITED 30 COMP. GEN. 179, FOR THE PROPOSITION THAT THE ESSENTIAL DETERMINATION TO BE MADE WAS WHETHER THE DEVIATION WENT TO THE SUBSTANCE OF THE BID SO AS TO AFFECT EITHER THE PRICE, QUANTITY, OR QUALITY OF THE ARTICLES OFFERED AND, THEREFORE, WHETHER WAIVER OF THE DEVIATION WOULD BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS. WE FOUND THAT THE ORIGIN BID WAS LOW ON AN ORIGIN BASIS AND, AS EVALUATED TO INCLUDE COST OF TRANSPORTATION, LOW ON A DESTINATION BASIS. WE CONCLUDED THAT THE CONSIDERATION OF THE ORIGIN BID WOULD NOT BE PREJUDICIAL TO THE OTHER BIDDERS, SINCE THE ADVERTISED SPECIFICATIONS ADVISED PROSPECTIVE BIDDERS OF THE DESTINATIONS AND THAT THE EVALUATION OF BIDS WOULD BE ON THE BASIS OF THE BID PRICE PLUS GOVERNMENT TRANSPORTATION COSTS FROM POINT OF ORIGIN.

IN THE PRESENT CASE THE NOTE ON PAGE 10 OF THE INVITATION, QUOTED ABOVE, STATES THAT AWARD WILL BE MADE TO THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER ON THE AGGREGATE COST OF LOT 1, DESTINATION OR ORIGIN AND IT IS CLEAR THAT THE INFORMATION TO BE FURNISHED BY THE BIDDER UNDER CLAUSE (A), BID A--- ORIGIN, ON PAGES 17 AND 18 OF THE INVITATION, QUOTED ABOVE, IS FOR THE PURPOSE OF EVALUATING F.O.B. ORIGIN BIDS. ALSO, PAGE 17 OF THE INVITATION INDICATES THE DESTINATIONS FOR THE ITEMS. THEREFORE, BIDDERS WERE ON NOTICE THAT THE EVALUATION OF BIDS WOULD BE ON THE BASIS OF BID PRICES PLUS GOVERNMENT TRANSPORTATION COSTS FROM POINT OF ORIGIN. IN ANY CASE, THE EVALUATION OF COST OF TRANSPORTATION TO INITIAL DESTINATION IS ALWAYS FOR CONSIDERATION WHERE IT IS TO BE PAID BY THE GOVERNMENT. COMP. GEN. 162, 164.

UNDER INVITATION FOR BIDS NO. 197-297-64, CONCO'S BID FOR THE REQUIREMENTS OF BID A, LOT 1, ORIGIN IS $1,157,197.80 AND YOUR BID FOR THE REQUIREMENTS OF LOT 1, BID A, ORIGIN, AS INDICATED BY THE ABSTRACT OF BIDS IS $1,662,693.48. WE HAVE BEEN INFORMALLY ADVISED BY NAVY THAT THE TRANSPORTATION CHARGES FOR CONCO UNDER THIS INVITATION FOR BIDS ARE $48,122.36. BID A, LOT 1, ORIGIN, OF CONCO AS EVALUATED IS $1,205,320.16 AND YOUR PRICE FOR BID A, LOT 1, DESTINATION UNDER THIS INVITATION AS INDICATED BY THE ABSTRACT OF BIDS IS $1,707,521.11. THE RECORD THEREFORE ESTABLISHES THAT CONCO'S ORIGIN BID FOR BID A, LOT 1, IS LOWER THAN YOUR ORIGIN BID AND THAT CONCO'S BID A, LOT 1, AS EVALUATED IS LOWER THAN YOUR BID ON A DESTINATION BASIS. CONSEQUENTLY, WE DO NOT FEEL THAT CONSIDERATION OF CONCO'S ORIGIN BID, WHICH IS LOW, WOULD BE PREJUDICIAL TO YOUR FIRM OR OTHERWISE CONTRARY TO THE COMPETITIVE BIDDING SYSTEM.

YOU HAVE ALSO ALLEGED THAT THE LANGUAGE ON PAGE 11 OF THE INVITATION, THAT A PRICE MUST BE QUOTED FOR THE TOTAL REQUIREMENTS OF THE FIRST PROGRAM YEAR (BID A) PRECLUDES A CONSIDERATION OF CONCO'S ORIGIN BID. IS CLEAR AFTER A READING OF ALL THE PROVISIONS UNDER "INFORMATION TO BIDDERS," QUOTED ABOVE, THAT THE PURPOSE OF THE LANGUAGE REQUIRING A BID ON THE TOTAL REQUIREMENTS OF BID A IS TO ADVISE BIDDERS THAT A BID ON THE MULTI-YEAR REQUIREMENT (BID B) WITHOUT A BID ON THE FIRST PROGRAM YEAR REQUIREMENT (BID A) WOULD NOT BE ACCEPTABLE. TO CONSTRUE THIS LANGUAGE AS REQUIRING BOTH AN ORIGIN AND DESTINATION BID UNDER BID A WOULD RESULT IN A BROADER CONSTRUCTION THAN WAS INTENDED AND FAILS TO TAKE INTO ACCOUNT THE OTHER LANGUAGE APPEARING ON PAGE 11 UNDER ,INFORMATION TO BIDDERS.'

YOU HAVE PROTESTED THE AWARD OF A CONTRACT UNDER INVITATION FOR BIDS NO. 197-296-64, ISSUED BY THE CONTRACTING OFFICER, UNITED STATES NAVAL ORDNANCE PLANT, LOUISVILLE, KENTUCKY, ON MARCH 21, 1964, FOR THE PROCUREMENT OF MINE CASES, MK 52-0, LD 291774, REV.P, AND RELATED SPARE PARTS. BIDS UNDER THIS INVITATION WERE OPENED ON APRIL 20, 1964 AND BIDS WERE RECEIVED FROM THE OLLOWING:

(1) CONCO ENGINEERING WORKS, INCORPORATED

(2) REIMERS MISSILE COMPONENTS, INCORPORATED

(3) GUENTHER MANUFACTURING COMPANY, INCORPORATED

(4) AERONCA MANUFACTURING CORPORATION

(5) PORTLAND COPPER AND TANK WORKS, INCORPORATED

(6) NEW BERN SHIPYARDS, INCORPORATED

CONCO SUBMITTED THE LOW ORIGIN BID FOR BID A, LOT 1, FOR THIS PROCUREMENT AND IN THIS CONNECTION YOU ALLEGE THAT CONCO'S BID MAY NOT BE CONSIDERED AS THIS BIDDER DID NOT SUBMIT A DESTINATION BID UNDER BID A, LOT 1.

WE HAVE REVIEWED INVITATION FOR BIDS NO. 197-296-64 AND WE FIND THAT THE ORGANIZATION OF THIS INVITATION WHICH IS ALSO A MULTI-YEAR PROCUREMENT IS SUBSTANTIALLY THE SAME AS THE ORGANIZATION OF INVITATION FOR BIDS NO 197- 297-64, DESCRIBED ABOVE. MOREOVER, THE NOTE ON PAGE 9 OF INVITATION FOR BIDS NO. 197-296-64 IS THE SAME AS THE NOTE WHICH APPEARS ON PAGE 10 OF INVITATION FOR BIDS NO. 197-297-64, QUOTED ABOVE, AND PAGES 15 AND 16 OF INVITATION FOR BIDS NO. 197-296-64, ARE SUBSTANTIALLY THE SAME AS PAGES 17 AND 18 OF INVITATION FOR BIDS NO. 197-297-64, QUOTED ABOVE. THE PROVISIONS UNDER "INFORMATION TO BIDDERS" ON PAGES 9 AND 10 OF INVITATION FOR BIDS NO. 197-296-64 ARE THE SAME AS THE PROVISIONS ON PAGE 11 OF INVITATION FOR BIDS NO. 197 297-64, QUOTED ABOVE. INVITATION FOR BIDS NO. 197-296-64 CONTAINS NO PROVISION WITH RESPECT TO THE CONSEQUENCES OF A FAILURE TO BID ON BOTH AN ORIGIN AND DESTINATION BASIS UNDER BID A.

CONCO'S ORIGIN BID FOR LOT 1, BID A, UNDER INVITATION FOR BIDS NO. 197- 296-64 WAS $346,893.40 AND YOUR ORIGIN BID UNDER LOT 1, BID A AS INDICATED BY THE ABSTRACT FOR BIDS WAS $814,985.90. NAVY HAS INFORMALLY ADVISED OUR OFFICE THAT TRANSPORTATION CHARGES FOR CONCO ON LOT 1,BID A ARE $24,276.25. BID A, LOT 1 OF CONCO AS EVALUATED FOR TRANSPORTATION IS $371,169.65 AND YOUR PRICE FOR BID A, LOT 1, DESTINATION, AS INDICATED BY THE ABSTRACT FOR BIDS IS $837,076.56. THE RECORD IS CLEAR THAT UNDER INVITATION FOR BIDS NO. 196-296-64, CONCO'S ORIGIN BID IS LOWER THAN YOUR ORIGIN BID AND THAT BID A, LOT 1 OF CONCO AS EVALUATED TO INCLUDE TRANSPORTATION COSTS IS LOWER THAN YOUR BID ON A DESTINATION BASIS. THESE CIRCUMSTANCES OUR DISCUSSION RELATING TO THE ACCEPTABILITY OF CONCO'S BID UNDER INVITATION FOR BIDS NO. 197-297-64 WOULD ALSO BE APPLICABLE HERE. CONSEQUENTLY, WE FEEL THAT CONSIDERATION OF CONCO'S LOW BID FOR BID A, LOT 1, ORIGIN, UNDER INVITATION FOR BIDS NO. 197-296-64 WOULD NOT BE PREJUDICIAL TO YOU OR OTHERWISE CONTRARY TO THE COMPETITIVE BIDDING SYSTEM.