A-33833, OCTOBER 27, 1930, 10 COMP. GEN. 191

A-33833: Oct 27, 1930

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CONTRACTS - GUARANTEED DELIVERIES - DELAYS WHERE A CONTRACT WITH A HIGHER BIDDER IS BASED UPON A GUARANTEE THAT DELIVERY WILL BE MADE WITHIN A CERTAIN SPECIFIED PERIOD AND THAT IN EVENT DELIVERY IS NOT SO MADE. THE CONTRACTOR IS NOT ENTITLED TO ANY AMOUNT IN EXCESS OF THAT QUOTED BY THE LOWEST BIDDER WHEN THERE IS FAILURE TO MAKE DELIVERY WITHIN THE GUARANTEED PERIOD. CONTAINED THE FOLLOWING PROVISION: THIS AWARD WAS MADE TO YOU ON THE BASIS OF THE 20-DAY DELIVERY WHICH YOU OFFERED. IN THE EVENT OF A FAILURE TO DELIVER WITHIN THE TIME SPECIFIED PAYMENT OF AN AMOUNT EQUAL TO THAT QUOTED BY THE LOWEST BIDDER ONLY WILL BE MADE YOU. THAT IS TO SAY. THERE WERE DELAYS OF SEVEN DAYS IN DELIVERY OF THE MATERIAL AND THE CONTRACTOR HAS STATED IN LETTER DATED APRIL 7.

A-33833, OCTOBER 27, 1930, 10 COMP. GEN. 191

CONTRACTS - GUARANTEED DELIVERIES - DELAYS WHERE A CONTRACT WITH A HIGHER BIDDER IS BASED UPON A GUARANTEE THAT DELIVERY WILL BE MADE WITHIN A CERTAIN SPECIFIED PERIOD AND THAT IN EVENT DELIVERY IS NOT SO MADE, AN AMOUNT EQUAL TO THAT QUOTED BY THE LOWEST BIDDER ONLY WOULD BE PAID, THE CONTRACTOR IS NOT ENTITLED TO ANY AMOUNT IN EXCESS OF THAT QUOTED BY THE LOWEST BIDDER WHEN THERE IS FAILURE TO MAKE DELIVERY WITHIN THE GUARANTEED PERIOD.

DECISION BY COMPTROLLER GENERAL MCCARL, OCTOBER 27, 1930:

THERE HAS BEEN PRESENTED TO THIS OFFICE FOR CONSIDERATION AND SETTLEMENT A CLAIM OF MAC-IT PARTS CO. UNDER PROPOSAL AND ACCEPTANCE DATED FEBRUARY 12, 1930, FOR $84.15 DEDUCTED BY THE NAVY DEPARTMENT IN MAKING PAYMENT ON VOUCHER NO. 3883, MARCH, 1930, ACCOUNTS OF C. E. PARSONS.

THE ACCEPTED ORDER IN THIS CASE, WHICH FORMED A PART OF THE CONTRACT, CONTAINED THE FOLLOWING PROVISION:

THIS AWARD WAS MADE TO YOU ON THE BASIS OF THE 20-DAY DELIVERY WHICH YOU OFFERED. IN THE EVENT OF A FAILURE TO DELIVER WITHIN THE TIME SPECIFIED PAYMENT OF AN AMOUNT EQUAL TO THAT QUOTED BY THE LOWEST BIDDER ONLY WILL BE MADE YOU.

THE AGREEMENT PROVIDED FOR DELIVERY,"ALL TRANSPORTATION CHARGES PAID, TO THE SUPPLY OFFICER, NAVY YARD, WASHINGTON, D.C., " WITHIN THE GUARANTEED DELIVERY PERIOD OF 20 DAYS. THE LOWEST BIDDER OFFERED TO DELIVER IN 72 DAYS, A DIFFERENCE OF 52 DAYS IN TIME, WITH A DIFFERENCE OF $84.15 IN THE PRICE; THAT IS TO SAY, THE LOWEST BIDDER AGREED TO MAKE DELIVERY FOR $84.15 LESS THAN THE MAC-IT PARTS CO. BUT REQUIRED A PERIOD OF 72 DAYS WITHIN WHICH TO MAKE DELIVERY; THE MAC-IT PARTS CO. GUARANTEED DELIVERY WITHIN 20 DAYS BUT AT A PRICE OF $84.15 IN EXCESS OF THE LOW PROPOSAL. THERE WERE DELAYS OF SEVEN DAYS IN DELIVERY OF THE MATERIAL AND THE CONTRACTOR HAS STATED IN LETTER DATED APRIL 7, 1930, THAT---

IT IS THE UNIVERSAL PRACTICE TO QUOTE DELIVERY BASED ON TIME FROM RECEIPT OF ORDER UNTIL THE DATE MATERIAL IS DELIVERED TO THE TRANSPORTATION COMPANY. THIS IS DUE TO THE FACTS AS SET FORTH IN PREVIOUS CORRESPONDENCE. WE, OF COURSE, DO NOT HAVE ANY CONTROL OVER THE ORDER WHILE IN TRANSIT TO US OR THE SHIPMENT AFTER IT IS DELIVERED TO THE TRANSPORTATION COMPANY. WE THINK THIS IS A PERFECTLY JUST PRACTICE WHICH IS THE ONLY REASON WE OPENED THE DISCUSSION.

IT TOOK EIGHT DAYS FOR THIS SHIPMENT TO GET FROM LANCASTER FREIGHT STATION TO YOUR RECEIVING DEPARTMENT AT THE NAVY YARD WHICH WE THINK YOU WILL AGREE IS POOR SERVICE. IF WE MUST CHANGE THE COMMON PRACTICE OF QUOTING DELIVERY, WE WOULD, OF COURSE, HAVE TO TAKE THIS INTO CONSIDERATION. ON THIS LAST SHIPMENT WE WOULD HAVE HAD ONLY TWELVE DAYS, INCLUDING SUNDAYS AND HOLIDAYS, TO MAKE THE ENTIRE ORDER.

THE STATEMENTS OF THE CONTRACTOR THAT THE DELAY OCCURRED IN TRANSIT AND THAT IT HAD NO CONTROL OVER THE TRANSPORTATION COMPANY NEED NOT BE QUESTIONED, FOR THE FACT IS THAT THE CONTRACTOR AGREED TO ASSUME AND BE RESPONSIBLE FOR ALL SUCH DELAYS--- THE AGREEMENT SPECIFICALLY STATING THAT DELIVERY WOULD BE MADE WITHIN 20 DAYS,"ALL TRANSPORTATION CHARGES PAID, TO THE SUPPLY OFFICER, NAVY YARD, WASHINGTON, D.C.' THE CONTRACTOR SHOULD HAVE TAKEN INTO CONSIDERATION ANY POSSIBLE DELAYS IN TRANSIT AND MADE SHIPMENT ACCORDINGLY.

MANIFESTLY, IT WOULD BE UNFAIR TO BOTH THE UNITED STATES AND TO THE LOW BIDDER NOW TO ALLOW THE CONTRACTOR THE FULL CONTRACT PRICE WHEN THE AGREEMENT TO PAY THE EXCESS OF $84.15 WAS SPECIFICALLY BASED UPON THE GUARANTEE THAT DELIVERY WOULD BE MADE WITHIN 20 DAYS WITH NOTIFICATION TO ALL CONCERNED THAT IN EVENT OF FAILURE TO MAKE DELIVERY WITHIN THAT PERIOD PAYMENT WOULD BE MADE "OF AN AMOUNT EQUAL TO THAT QUOTED BY THE LOWEST BIDDER.'

THE CASE HERE PRESENTED IS UNLIKE THAT CONSIDERED IN 9 COMP. GEN. 65 WHERE THERE WAS AN APPORTIONMENT OF THE AMOUNT OF DAMAGES BASED ON THE NUMBER OF DAYS' DELAY IN DELIVERY. IN THE PRESENT, WHETHER THERE WAS ONE DAY'S DELAY OR 20 DAYS' DELAY, THE AGREEMENT WAS THAT IN EVENT OF FAILURE TO MAKE DELIVERY WITHIN THE 20 DAYS PERIOD, THE GOVERNMENT WOULD PAY AND THE CONTRACTOR WOULD ACCEPT AN AMOUNT EQUAL TO THAT QUOTED BY THE LOWEST BIDDER.