A-56353, AUGUST 14, 1934, 14 COMP. GEN. 119

A-56353: Aug 14, 1934

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THE BID IS ACCEPTED ON THE BASIS OF THE PRICE STATED. SUCH QUALIFICATION WAS. WAS WITHOUT EFFECT AND VOID. 1934: THERE IS BEFORE THIS OFFICE FOR CONSIDERATION THE CLAIM OF BAKER AND CO. BEING QUALIFIED BY THE FOLLOWING STATEMENT: THIS BID IS BASED UPON THE CURRENT DOLLAR BUYING 23.22 GRAINS PURE GOLD. IF AT ANY TIME WITHIN THE LIMIT OF THIS CONTRACT THE DOLLAR WITH WHICH WE ARE PAID DOES NOT BUY THIS AMOUNT OF GOLD. THEN THE PRICES QUOTED HEREIN INCREASE IN DIRECT PROPORTION TO THE GOLD-PURCHASING POWER OF THE DOLLAR IN WHICH WE ARE PAID. WAS NOTIFIED OF THE ACCEPTANCE OF ITS BID BY THE TREASURY DEPARTMENT AND UNDER DATE OF JULY 3. WISH TO CALL YOUR ATTENTION TO THE FACT THAT THESE PRICES ARE SUBJECT TO CHANGE IF THE AMOUNT OF GOLD WE CAN OBTAIN FOR $20.67 IS LESS THAN ONE TROY OUNCE.

A-56353, AUGUST 14, 1934, 14 COMP. GEN. 119

CONTRACTS - VARIATION IN PRICE - PAYMENT IN GOLD OR EQUIVALENT - PUBLIC HEALTH SERVICE WHERE A BIDDER PROPOSED TO FURNISH DENTAL GOLD AT A SPECIFIED PRICE PER OUNCE AND ATTEMPTED TO QUALIFY HIS BID TO PROVIDE FOR A VARIATION IN THE BID PRICE TO CORRESPOND WITH A DEPRECIATION OF THE GOLD PURCHASING POWER OF THE AMERICAN DOLLAR, AND THE BID IS ACCEPTED ON THE BASIS OF THE PRICE STATED, SUCH QUALIFICATION WAS, IN EFFECT, AN ATTEMPT TO MAKE THE CONTRACT PRICE PAYABLE IN GOLD, OR THE EQUIVALENT OF GOLD, AND UNDER THE PROVISIONS OF JOINT RESOLUTION APPROVED JUNE 5, 1933, 48 STAT. 112, WAS WITHOUT EFFECT AND VOID. PAYMENT AUTHORIZED TO BE MADE ONLY ON THE BASIS OF THE CONTRACT PRICE OF $21.20 PER OUNCE.

DECISION BY COMPTROLLER GENERAL MCCARL, AUGUST 14, 1934:

THERE IS BEFORE THIS OFFICE FOR CONSIDERATION THE CLAIM OF BAKER AND CO., INC., AGGREGATING $74.24, AS THE COST OF FURNISHING CAST-CLASP GOLD UNDER CONTRACT TBS-57061 DATED JULY 6, 1933.

IT APPEARS THAT BY CIRCULAR ADVERTISEMENT DATED JUNE 2, 1933, THE DIVISION OF SUPPLY, TREASURY DEPARTMENT, REQUESTED BIDS FOR FURNISHING GOLD FOR USE OF CERTAIN UNITED STATES PUBLIC HEALTH SERVICE DENTAL CLINICS DURING THE FISCAL YEAR ENDING JUNE 30, 1934. ITEM 4 OF THE SPECIFICATIONS CALLED FOR "CAST-CLASP GOLD, GOVERNMENT STANDARD, GOLD COLOR, HIGH-HEAT EQUAL.' BAKER AND CO., INC., AGREED TO FURNISH THE GOLD AS SPECIFIED AT THE PRICE OF $21.20 PER OUNCE, THE BID, HOWEVER, BEING QUALIFIED BY THE FOLLOWING STATEMENT:

THIS BID IS BASED UPON THE CURRENT DOLLAR BUYING 23.22 GRAINS PURE GOLD. IF AT ANY TIME WITHIN THE LIMIT OF THIS CONTRACT THE DOLLAR WITH WHICH WE ARE PAID DOES NOT BUY THIS AMOUNT OF GOLD, THEN THE PRICES QUOTED HEREIN INCREASE IN DIRECT PROPORTION TO THE GOLD-PURCHASING POWER OF THE DOLLAR IN WHICH WE ARE PAID.

IT APPEARS THAT UNDER DATE OF JULY 1, 1933, BAKER AND CO., INC., WAS NOTIFIED OF THE ACCEPTANCE OF ITS BID BY THE TREASURY DEPARTMENT AND UNDER DATE OF JULY 3, 1933, SAID COMPANY ADVISED THE DEPARTMENT AS FOLLOWS:

WE ACKNOWLEDGE YOUR JULY 1ST NOTICE THAT OUR PROPOSAL DATED JUNE 9TH FOR FURNISHING GOLD FOR DENTAL SECTION OF PUBLIC HEALTH SERVICE HAS BEEN ACCEPTED FOR CERTAIN ITEMS WHICH YOU MENTION IN DETAIL, ALSO PRICES. WISH TO CALL YOUR ATTENTION TO THE FACT THAT THESE PRICES ARE SUBJECT TO CHANGE IF THE AMOUNT OF GOLD WE CAN OBTAIN FOR $20.67 IS LESS THAN ONE TROY OUNCE. WE PLAINLY STATED THIS UPON BID.

IN OTHER WORDS TO MAKE OURSELVES CLEAR, THERE IS DANGER OF GOLD GOING TO PREMIUM. IF THIS HAPPENS THE PRICES WHICH WE QUOTED WOULD NO LONGER OBTAIN.

UNDER DATE OF JULY 6, 1933, THE TREASURY DEPARTMENT AGAIN ADVISED THE CONTRACTOR THAT ITS BID WAS ACCEPTED.

PURCHASE ORDERS NOS. 18290, 18968, AND 19855, DATED NOVEMBER 25, 27, AND DECEMBER 7, 1933, RESPECTIVELY, CALLED FOR THE DELIVERY AT VARIOUS PLACES OF CAST-CLASP GOLD AT THE STIPULATED CONTRACT PRICE OF $21.20 PER OUNCE. IN BILLING FOR THE GOLD FURNISHED ON THE PURCHASE ORDERS DATED NOVEMBER 25 AND 27, THE CONTRACTOR CLAIMED PAYMENT AT THE RATE OF $30.20 PER OUNCE AND ON THE PURCHASE ORDER DATED DECEMBER 7, CLAIMED PAYMENT ON THE BASIS OF $30.54 PER OUNCE. PAYMENT WAS MADE FOR 1 1/2 OUNCES OF GOLD DELIVERED ON PURCHASE ORDER NO. 18290, DATED NOVEMBER 25, ON THE BASIS OF $21.20 PER OUNCE BY CHECK NO. 942637 DATED DECEMBER 8, 1933, IN THE AMOUNT OF $31.80, VOUCHER 108484, ACCOUNTS OF J. L. SUMMERS, DISBURSING CLERK, TREASURY DEPARTMENT. THE CHECK WAS RETURNED BY THE CONTRACTOR CALLING ATTENTION TO THE CHANGE IN PRICE OF GOLD RESULTING IN ITS INCREASE IN THE CONTRACT PRICE, THE CONTRACTOR STATING:

THE CORRECTION WHICH YOU MADE WAS UNDOUBTEDLY BASED UPON OUR BID MANY MONTHS BACK. THIS BID, THOUGH, WAS QUALIFIED AT THE TIME WITH A CLAUSE STATING THAT IF THE DOLLAR PRICE PER OUNCE OF GOLD CHANGES THAT THE BID ALSO WOULD CHANGE * * *.

THE CHECK WAS RETURNED TO THE CONTRACTOR AND THERE IS NOW FOR CONSIDERATION A SUPPLEMENTAL VOUCHER FOR THE DIFFERENCE CLAIMED AMOUNTING TO $13.50 AND THE AMOUNTS CLAIMED FOR THE GOLD FURNISHED ON PURCHASE ORDERS 18968 AND 19855 AS TO WHICH NO PAYMENT HAS BEEN MADE. JOINT RESOLUTION APPROVED JUNE 5, 1933, 48 STAT. 112, ENTITLED "TO ASSURE UNIFORM VALUE TO THE COINS AND CURRENCIES OF THE UNITED STATES," PROVIDES:

WHEREAS THE HOLDING OF OR DEALING IN GOLD AFFECT THE PUBLIC INTEREST, AND ARE THEREFORE SUBJECT TO PROPER REGULATION AND RESTRICTION; AND WHEREAS THE EXISTING EMERGENCY HAS DISCLOSED THAT PROVISIONS OF OBLIGATIONS WHICH PURPORT TO GIVE THE OBLIGEE A RIGHT TO REQUIRE PAYMENT IN GOLD OR A PARTICULAR KIND OF COIN OR CURRENCY OF THE UNITED STATES, OR IN AN AMOUNT IN MONEY OF THE UNITED STATES MEASURED THEREBY, OBSTRUCT THE POWER OF THE CONGRESS TO REGULATE THE VALUE OF THE MONEY OF THE UNITED STATES, AND ARE INCONSISTENT WITH THE DECLARED POLICY OF THE CONGRESS TO MAINTAIN AT ALL TIMES THE EQUAL POWER OF EVERY DOLLAR, COINED OR ISSUED BY THE UNITED STATES, IN THE MARKETS AND IN THE PAYMENT OF DEBTS. NOW, THEREFORE, BE IT * * * THAT (A) EVERY PROVISION CONTAINED IN OR MADE WITH RESPECT TO ANY OBLIGATION WHICH PURPORTS TO GIVE THE OBLIGEE A RIGHT TO REQUIRE PAYMENT IN GOLD OR A PARTICULAR KIND OF COIN OR CURRENCY, OR IN AN AMOUNT IN MONEY OF THE UNITED STATES MEASURED THEREBY, IS DECLARED TO BE AGAINST PUBLIC POLICY; AND NO SUCH PROVISION SHALL BE CONTAINED IN OR MADE WITH RESPECT TO ANY OBLIGATION HEREAFTER INCURRED. EVERY OBLIGATION HERETOFORE OR HEREAFTER INCURRED, WHETHER OR NOT ANY SUCH PROVISION IS CONTAINED THEREIN OR MADE WITH RESPECT THERETO, SHALL BE DISCHARGED UPON PAYMENT, DOLLAR FOR DOLLAR, IN ANY COIN OR CURRENCY WHICH AT THE TIME OF PAYMENT IS LEGAL TENDER FOR PUBLIC AND PRIVATE DEBTS. ANY SUCH PROVISION CONTAINED IN ANY LAW AUTHORIZING OBLIGATIONS TO BE ISSUED BY OR UNDER AUTHORITY OF THE UNITED STATES, IS HEREBY REPEALED, BUT THE REPEAL OF ANY SUCH PROVISION SHALL NOT INVALIDATE ANY OTHER PROVISION OR AUTHORITY CONTAINED IN SUCH LAW.

THIS JOINT RESOLUTION, OF WHICH THE CONTRACTING OFFICER AND THE BIDDER MUST BE ASSUMED TO HAVE HAD KNOWLEDGE, BECAME EFFECTIVE PRIOR TO THE BID OF BAKER AND CO., INC., WAS SUBMITTED TO THE TREASURY DEPARTMENT, AND THE ATTEMPT OF THE BIDDER TO PROVIDE IN ITS BID FOR A VARIATION IN THE BID PRICE TO CORRESPOND WITH A DEPRECIATION OF THE GOLD PURCHASING POWER OF THE AMERICAN DOLLAR WAS IN EFFECT AN ATTEMPT TO MAKE THE CONTRACT PRICE PAYABLE IN GOLD OR THE EQUIVALENT OF GOLD AT THE RATE OF 23.22 GRAINS OF PURE GOLD TO THE DOLLAR. THE ATTEMPTED QUALIFICATION OF THE CONTRACT PRICE IN THIS CONTRACT WAS WITHOUT EFFECT AND VOID AND UNDER THE EXISTING LAW THE UNIT PRICE STIPULATED IN THE CONTRACT IS PAYABLE IN TERMS OF UNITED STATES MONEY REGARDLESS OF THE QUALIFICATION OF THE BID AND THE DEPRECIATION OF THE AMERICAN DOLLAR IN TERMS OF FINE GOLD AND IS NOT PAYABLE IN AN AMOUNT IN MONEY OF THE UNITED STATES MEASURED BY GOLD.

THE PAYMENT MADE ON VOUCHER 104484 FOR GOLD FURNISHED ON PURCHASE ORDER 18290 ON THE BASIS OF THE CONTRACT PRICE OF $21.20 PER OUNCE WAS CORRECT, AND, UNDER THE LAW, NO FURTHER PAYMENT IS AUTHORIZED THEREON. PAYMENT FOR THE GOLD FURNISHED ON PURCHASE ORDERS 18968 AND 19855 IS AUTHORIZED TO BE MADE ONLY ON THE BASIS OF THE CONTRACT PRICE OF $21.20 PER OUNCE. SETTLEMENT WILL ISSUE ACCORDINGLY.