A-56661, JULY 28, 1934, 14 COMP. GEN. 82

A-56661: Jul 28, 1934

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STATION WAGONS) IS EXCLUSIVE OF THE TRANSPORTATION COSTS OCCASIONED BY GOVERNMENT PURCHASES OF SUCH VEHICLES BUT INCLUSIVE OF TRADE-IN ALLOWANCES FOR USED MOTOR- PROPELLED VEHICLES. MAY ACCEPT THAT BID WHICH WILL RESULT IN THE LOWEST NET CHARGE AGAINST PUBLIC MONEYS. THE FOLLOWING QUESTIONS AFFECTING THE PURCHASE OF MOTOR PROPELLED PASSENGER- CARRYING VEHICLES ARE TRANSFERRED TO YOU FOR DETERMINATION: (1) IS THE "COST" REFERRED TO THE PRICE OFFERED BY THE BIDDER AT POINT OF DELIVERY TO THE GOVERNMENT WITHOUT TRANSPORTATION TO THE ULTIMATE DESTINATION BEING INCLUDED. OR (2) IS THE "COST" THE PRICE TO BE PAID AT FINAL DESTINATION OR AT THE BIDDER'S DELIVERY POINT PLUS TRANSPORTATION COSTS TO ULTIMATE DESTINATION? (3) IF THE COST REFERRED TO IS THE BID PRICE AT THE BIDDER'S POINT OF DELIVERY TO THE GOVERNMENT WITHOUT TRANSPORTATION COSTS TO THE ULTIMATE DESTINATION BEING ADDED THERETO THEN IN REQUESTING BIDS ON MOTOR-PROPELLED PASSENGER-CARRYING VEHICLES AT FINAL DESTINATION MAY THE BIDDER BE REQUIRED TO SHOW SEPARATELY PRICE OF THE VEHICLE EXCLUSIVE OF ANY TRANSPORTATION COSTS AND ALSO THE TRANSPORTATION COSTS TO HIM ON THE VEHICLE.

A-56661, JULY 28, 1934, 14 COMP. GEN. 82

APPROPRIATIONS - LIMITATION ON PURCHASE PRICE - MOTOR-VEHICLE EXCHANGE THE MAXIMUM LIMITATION CONTAINED IN SECTION 3 (A) OF THE ACT OF MARCH 15, 1934, 48 STAT. 450, OF $750 ON THE COST OF ANY MOTOR PROPELLED PASSENGER- CARRYING VEHICLE (EXCLUSIVE OF BUSSES, AMBULANCES, AND STATION WAGONS) IS EXCLUSIVE OF THE TRANSPORTATION COSTS OCCASIONED BY GOVERNMENT PURCHASES OF SUCH VEHICLES BUT INCLUSIVE OF TRADE-IN ALLOWANCES FOR USED MOTOR- PROPELLED VEHICLES. ADVERTISED SPECIFICATIONS FOR MOTOR-PROPELLED PASSENGER-CARRYING VEHICLES SHOULD REQUIRE QUOTATIONS OF PRICES FOR DELIVERY, BOTH F.O.B. GOVERNMENT DESTINATION AND F.O.B. POINT OF BIDDER'S SELECTION--- FACTORY OR OTHERWISE --- SO THAT THE GOVERNMENT, HAVING REGARD FOR LAND GRANT OR OTHER ADVANTAGES, MAY ACCEPT THAT BID WHICH WILL RESULT IN THE LOWEST NET CHARGE AGAINST PUBLIC MONEYS.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, JULY 28, 1934:

THERE HAS BEEN RECEIVED YOUR LETTER OF JULY 14, 1934, AS FOLLOWS:

THE ACT OF MARCH 15, 1934, MAKING APPROPRIATIONS FOR THE TREASURY AND POST OFFICE DEPARTMENTS FOR THE FISCAL YEAR ENDING JUNE 30, 1935, UNDER SECTION 3 (A), DIRECTED THE EXECUTIVE DEPARTMENTS NOT "TO PURCHASE ANY MOTOR-PROPELLED PASSENGER-CARRYING VEHICLE (EXCLUSIVE OF BUSSES, AMBULANCES, AND STATION WAGONS) AT A COST, COMPLETELY EQUIPPED FOR OPERATION, AND INCLUDING THE VALUE OF ANY VEHICLE EXCHANGED, IN EXCESS OF $750, UNLESS OTHERWISE SPECIFICALLY PROVIDED FOR IN THE APPROPRIATION.'

THE QUESTION HAS ARISEN AS TO WHETHER THE FREIGHT AT GOVERNMENT RATES FROM FACTORY OR OTHER SHIPPING POINT MUST BE INCLUDED IN THE MAXIMUM AMOUNT OR WHETHER THE $750 MAXIMUM REFERS ONLY TO THE PRICE QUOTED BY THE BIDDER F.O.B. FACTORY. IN ORDER THAT THERE MAY BE A DEFINITE UNDERSTANDING AS TO WHAT THE MAXIMUM LAID DOWN IN THE ACT SHOULD COVER,THE FOLLOWING QUESTIONS AFFECTING THE PURCHASE OF MOTOR PROPELLED PASSENGER- CARRYING VEHICLES ARE TRANSFERRED TO YOU FOR DETERMINATION:

(1) IS THE "COST" REFERRED TO THE PRICE OFFERED BY THE BIDDER AT POINT OF DELIVERY TO THE GOVERNMENT WITHOUT TRANSPORTATION TO THE ULTIMATE DESTINATION BEING INCLUDED, OR

(2) IS THE "COST" THE PRICE TO BE PAID AT FINAL DESTINATION OR AT THE BIDDER'S DELIVERY POINT PLUS TRANSPORTATION COSTS TO ULTIMATE DESTINATION?

(3) IF THE COST REFERRED TO IS THE BID PRICE AT THE BIDDER'S POINT OF DELIVERY TO THE GOVERNMENT WITHOUT TRANSPORTATION COSTS TO THE ULTIMATE DESTINATION BEING ADDED THERETO THEN IN REQUESTING BIDS ON MOTOR-PROPELLED PASSENGER-CARRYING VEHICLES AT FINAL DESTINATION MAY THE BIDDER BE REQUIRED TO SHOW SEPARATELY PRICE OF THE VEHICLE EXCLUSIVE OF ANY TRANSPORTATION COSTS AND ALSO THE TRANSPORTATION COSTS TO HIM ON THE VEHICLE, THE PRICE OF THE VEHICLE EXCLUSIVE OF TRANSPORTATION COST BEING USED TO DETERMINE WHETHER THE COST OF THE CAR IS IN EXCESS OF $750?

IN CONSIDERING THE ABOVE QUESTIONS IT WOULD APPEAR THAT THE INTENT OF CONGRESS IN PLACING A LIMITATION OF $750 ON THE PURCHASE OF MOTOR PROPELLED PASSENGER-CARRYING VEHICLES WAS TO LIMIT THE PURCHASE OF VEHICLES TO A CERTAIN CLASS, AND THAT TRANSPORTATION COSTS SHOULD NOT BE CONSIDERED IN ARRIVING AT THE COST OF THE VEHICLES; OTHERWISE IT WOULD BE UNFAIR TO THOSE BRANCHES OF THE GOVERNMENT LOCATED IN FAR WESTERN AND SOUTHWESTERN STATES, IN WHICH IT IS NOT POSSIBLE TO OBTAIN BIDS ON VEHICLES FOR LESS THAN $750, IF THE TRANSPORTATION COSTS ARE TO BE CONSIDERED A PART OF THE COST OF THE VEHICLE, AS REFERRED TO IN THE ACT.

INASMUCH AS NUMEROUS BIDS ARE BEING SUBMITTED SHOWING PRICES AT DESTINATIONS IN EXCESS OF $750, BUT WHICH, THROUGH ALLOWANCES FOR VEHICLES TO BE EXCHANGED, SHOW A NET COST TO THE GOVERNMENT OF LESS THAN THE FACTORY PRICE, IT WILL BE APPRECIATED IF YOU WILL FAVOR THE DEPARTMENT WITH YOUR DECISION IN THE MATTER AT THE EARLIEST POSSIBLE MOMENT.

TRANSPORTATION COSTS OCCASIONED BY A GOVERNMENT PURCHASE OF A MOTOR PROPELLED PASSENGER-CARRYING VEHICLE--- THAT IS, TRANSPORTATION COSTS INVOLVED IN DELIVERY THEREOF--- ARE NOT A PART OF THE "COSTS" REFERRED TO IN SECTION 3 (A) OF THE ACT OF MARCH 15, 1934 (48 STAT. 450), QUOTED IN THE FIRST PARAGRAPH OF YOUR SUBMISSION.

REQUESTS FOR BIDS ON SUCH VEHICLES SHOULD REQUIRE QUOTATION OF PRICE FOR DELIVERY BOTH F.O.B. GOVERNMENT'S DESTINATION AND F.O.B. POINT OF BIDDER'S SELECTION--- FACTORY OR OTHERWISE--- SO THAT THE GOVERNMENT, HAVING REGARD FOR LAND-GRANT OR OTHER ADVANTAGES AVAILABLE IN SUCH CONNECTION, MAY ACCEPT THAT BID WHICH WILL RESULT IN THE LOWEST NET CHARGE AGAINST PUBLIC MONEYS. SEE MY DECISION OF TODAY, A-55677, TO THE SECRETARY OF WAR.

AS TO THE CONCLUDING PARAGRAPH OF YOUR LETTER, ATTENTION IS INVITED TO THE FACT THAT THE $750 LIMITATION IS NOT EXCLUSIVE OF TRADE-IN ALLOWANCES FOR THE REASON THAT THE STATUTE EXPRESSLY PROVIDES TO THE CONTRARY; THAT IS, THE $750 MAXIMUM LIMITATION ON THE COST OF THE MENTIONED CLASS OF MOTOR VEHICLES IS INCLUSIVE OF ANY TRADE-IN ALLOWANCES.