A-51319, OCTOBER 10, 1933, 13 COMP. GEN. 100

A-51319: Oct 10, 1933

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WITH AN ADDENDA SIGNED BY THE BIDDER AGREEING THAT THE CONTRACTOR WILL COMPLY WITH ALL PROVISIONS OF THE APPLICABLE APPROVED CODE OF FAIR COMPETITION FOR THE TRADE OR INDUSTRY. COPIES OF FORM 33AND ADDENDA ARE ATTACHED. THE TERM "LOCAL RETAIL OR FILLING-STATION PRICE" WAS INCLUDED ON FORM 33 WITH THE UNDERSTANDING THAT IT IS TO BE CONSTRUED AS AN AVERAGE OF PRICES CHARGED BY FILLING STATION VENDORS IN THE LOCALITY AS DISTINGUISHED FROM THE PRICE ADVERTISED AND/OR CHARGED BY ANY INDIVIDUAL VENDOR. IS THE PREVAILING POSTED. ASSUMING THAT 12 CENTS WAS THE PREVAILING FILLING-STATION PRICE. ON THE DATE THE PROPOSAL WAS SUBMITTED. WILL ACCEPTANCE BY THE DEPARTMENT AT A LATER DATE RESULT IN A BINDING CONTRACT.

A-51319, OCTOBER 10, 1933, 13 COMP. GEN. 100

CONTRACTS - CODES OF FAIR COMPETITION - ADVERTISING THE CODE OF FAIR COMPETITION FOR THE PETROLEUM INDUSTRY APPROVED JUNE 16, 1933, AND THE TERMS OF EXECUTIVE ORDER NO. 6246, DATED AUGUST 10, 1933, DO NOT CONSTITUTE ANY MODIFICATION OF THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, THAT THERE BE ADVERTISEMENT FOR BIDS FOR THE DELIVERY OF GASOLINE AND THE ACCEPTANCE OF THE LOWEST RESPONSIBLE BID THEREFOR.

COMPTROLLER GENERAL MCCARL TO THE POSTMASTER GENERAL, OCTOBER 10, 1933:

THERE HAS BEEN RECEIVED YOUR LETTER OF OCTOBER 2, 1933, AS FOLLOWS:

THE POST OFFICE DEPARTMENT HAS RECEIVED BIDS FOR FURNISHING GASOLINE FOR THE 3 MONTHS' PERIOD ENDING DECEMBER 31, 1933, EXECUTED ON STANDARD FORM 33, WITH AN ADDENDA SIGNED BY THE BIDDER AGREEING THAT THE CONTRACTOR WILL COMPLY WITH ALL PROVISIONS OF THE APPLICABLE APPROVED CODE OF FAIR COMPETITION FOR THE TRADE OR INDUSTRY. COPIES OF FORM 33AND ADDENDA ARE ATTACHED.

THE TERM "LOCAL RETAIL OR FILLING-STATION PRICE" WAS INCLUDED ON FORM 33 WITH THE UNDERSTANDING THAT IT IS TO BE CONSTRUED AS AN AVERAGE OF PRICES CHARGED BY FILLING STATION VENDORS IN THE LOCALITY AS DISTINGUISHED FROM THE PRICE ADVERTISED AND/OR CHARGED BY ANY INDIVIDUAL VENDOR.

THE CODE OF FAIR COMPETITION FOR THE PETROLEUM INDUSTRY HAS BEEN CONSTRUED AS FOLLOWS: WHEN A VENDOR POSTS A PRICE IN THE MANNER AND FORM PRESCRIBED, AND COMPLIES WITH THE PROVISIONS RELATIVE TO MAKING NO DEVIATION FROM THE POSTED PRICE, HE COMPLIES WITH THE APPLICABLE CODE OF FAIR COMPETITION REGARDLESS OF THE PRICES POSTED AND CHARGED BY OTHER VENDORS IN THE LOCALITY.

THE POSTMASTER AT COLLEGEVILLE, PENNSYLVANIA, FORWARDED TWO BIDS COVERING HIS REQUIREMENTS. THE PURE OIL COMPANY PROPOSES TO FURNISH APPROXIMATELY 250 GALLONS TO BE DELIVERED FROM BIDDER'S PUMP AS NEEDED DURING THE QUARTER ENDING DECEMBER 31, 1933, AT 12 CENTS PER GALLON, STATE TAX NOT INCLUDED. APPARENTLY 12 CENTS PER GALLON, EXCLUSIVE OF STATE TAX, IS THE PREVAILING POSTED, OR FILLING-STATION PRICE IN THAT COMMUNITY. THE PENN SERVICE OIL COMPANY PROPOSES TO FURNISH APPROXIMATELY 250 GALLONS AT 2 CENTS PER GALLON BELOW FILLING-STATION PRICE, DATE OF DELIVERY, STATE TAX NOT INCLUDED.

1. ASSUMING THAT 12 CENTS WAS THE PREVAILING FILLING-STATION PRICE, AS WELL AS THE BIDDER'S POSTED PRICE, STATE TAX EXCLUDED, ON THE DATE THE PROPOSAL WAS SUBMITTED, WILL ACCEPTANCE BY THE DEPARTMENT AT A LATER DATE RESULT IN A BINDING CONTRACT, REGARDLESS OF THE FACT THAT THE POSTED AND PREVAILING PRICE HAS CHANGED IN THE MEANTIME?

2. DOES THE PROPOSAL OF THE PENN OIL COMPANY TO FURNISH AT 2 CENTS BELOW THE PREVAILING PRICE CONTRAVENE THE CONDITION OF COMPLIANCE WITH THE APPLICABLE APPROVED CODE, OR WILL ACCEPTANCE BY THE DEPARTMENT RESULT IN A BINDING AND ENFORCEABLE CONTRACT?

3. WHERE THE CONTRACT CONTAINS THE STIPULATION REQUIRED BY THE PRESIDENT'S EXECUTIVE ORDER DATED AUGUST 10, 1933, THAT THE CONTRACTOR WILL COMPLY WITH ALL PROVISIONS OF THE APPLICABLE APPROVED CODE OF FAIR COMPETITION, WHAT CONCESSIONS AS TO REDUCED RATES OR DISCOUNTS CAN BE ACCEPTED BY THE DEPARTMENT ON PROPOSALS OFFERED BY VENDORS FOR:

(A) SERVICE STATION DELIVERY BY RETAILERS?

(B) TANK WAGON DELIVERY BY RETAILERS?

(C) TANK CAR DELIVERY BY REFINERS OR WHOLESALERS?

THE TERMS OF EXECUTIVE ORDER NO. 6246, DATED AUGUST 10, 1933, WHICH ARE QUOTED IN 13 COMP. GEN. 65, 67, REQUIRE EVERY CONTRACT ENTERED INTO WITHIN THE LIMITS OF THE UNITED STATES TO CONTAIN A REQUIREMENT, AMONG OTHER THINGS, THAT THE CONTRACTOR SHALL COMPLY WITH ALL PROVISIONS OF THE APPLICABLE APPROVED CODE OF FAIR COMPETITION FOR THE TRADE OR INDUSTRY OR SUBDIVISION THEREOF CONCERNED, AND THE CODE OF FAIR COMPETITION FOR THE PETROLEUM INDUSTRY APPROVED JUNE 16, 1933, PROVIDES, AMONG OTHER THINGS, IN ARTICLE V, RULE 3, THE POSTING OF PRICES AND THAT THE POSTING SHALL INCLUDE THE FOLLOWING:

THE PRICES FOR ALL CLASSES, TYPES, METHODS, AND QUANTITIES OF DELIVERIES, EXCEPT THOSE UNDER PREVIOUSLY EXECUTED CONTRACTS, BEING MADE FROM THE PLACE WHERE THE PRICE IS POSTED, A SCHEDULE OF ALL DISCOUNTS OFFERED AND THE TERMS THEREOF AND A STATEMENT OF ALL TERMS AS TO FREIGHT RATES AND DELIVERIES. IF DIFFERENT PRICES ARE OFFERED TO DIFFERENT CLASSES OF BUYERS, SUCH PRICES SHALL BE SEPARATELY POSTED. THE POSTED PRICES SHALL INCLUDE, AMONG OTHERS, THE PRICES FOR SPOT SALES. WHEN PRICES ARE POSTED FOR DELIVERIES IN TANK WAGONS OR TANK TRUCKS, THE POSTING SHALL DESCRIBE THE AREA TO WHICH THE PRICES APPLY. ALL SALES SHALL BE MADE AT THE POSTED PRICES APPLICABLE THERETO, AND NO DEPARTURE SHALL BE MADE FROM THE PRICES, SCHEDULE, OR DISCOUNTS OR FROM THE TERMS POSTED APPLICABLE TO ANY SUCH SALE.

THE PROVISIONS OF THE CODE WITH REFERENCE TO THE POSTING OF PRICES, ETC., DO NOT APPLY TO SALES TO THE UNITED STATES. SEE TITLE 49, SECTION 3, UNITED STATES CODE. SEE, ALSO, INTERSTATE COMMERCE COMMISSION CONFERENCE RULING 107, APPROVED JANUARY 3, 1927, AND ATCHISON, TOPEKA AND SANTA FE RAILROAD V. UNITED STATES, 256 U.S. 205.

SECTION 3709 OF THE REVISED STATUTES REQUIRES PURCHASES ON BEHALF OF THE UNITED STATES TO BE MADE THROUGH COMPETITION, AND BIDS OFFERING TO THE GOVERNMENT DIFFERENT PRICES ON A DIFFERENT BASIS ARE NOT TO BE UNDERSTOOD AS IN CONTRAVENTION OF ANY CODE, AND ACCEPTANCE OF THE LOW BID MAY BE ACCORDINGLY. IN OTHER WORDS, THE ADOPTION OF THE CODE OF FAIR COMPETITION DOES NOT CHANGE OR MODIFY THE HERETOFORE EXISTING PROCEDURE FOR THE PURCHASE OF GASOLINE FOR THE UNITED STATES ON THE BASIS OF COMPETITIVE BIDS.