A-59422, JANUARY 9, 1935, 14 COMP. GEN. 530

A-59422: Jan 9, 1935

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THERE IS NO AUTHORITY TO PAY IN EXCESS OF THE BID PRICE IF THERE IS NO SHOWING THAT AT THE TIME OF THE RESPECTIVE DELIVERIES TO THE GOVERNMENT THE CONTRACTOR HAD. REQUESTING DECISION WHETHER YOU ARE AUTHORIZED TO MAKE PAYMENT OF $151.27 ON A VOUCHER STATED IN FAVOR OF THE HOME OIL CO. YOU HAVE STATED THAT DOUBT AS TO THE PROPRIETY OF PAYMENT EXISTS DUE TO THE FACT THAT A COPY OF THE CONTRACT ON FILE IN YOUR OFFICE INDICATED THAT THE CONTRACTOR HAS. INDICATE THAT ANY VARIATIONS IN PRICE ARE TO BE CONSIDERED OR AUTHORIZED. THE CONTRACT IS FOR THE DELIVERY OF 10. THERE WAS NOT USED IN THIS CASE STANDARD FORM 33. THE QUESTION IS AS TO THE REQUIREMENTS OF THE CONTRACT. " AS FOLLOWS: ANY PERSON (AS SUCH TERM IS DEFINED IN THE CODE OF FAIR COMPETITION FOR THE PETROLEUM INDUSTRY) SELLING PETROLEUM OR THE PRODUCTS THEREOF TO THE UNITED STATES OR ANY AGENCY THEREOF.

A-59422, JANUARY 9, 1935, 14 COMP. GEN. 530

PURCHASE OF GASOLINE - FLUCTUATING PRICES UNDER A CONTRACT FOR DELIVERY TO THE UNITED STATES OF GASOLINE, STATING A BID PRICE AND A TOP PRICE AND PROVIDING THAT THE PRICES CHARGED THE GOVERNMENT FOR GASOLINE DELIVERED UNDER THE CONTRACT MIGHT FLUCTUATE BETWEEN THE BID PRICE AND THE TOP PRICE, THERE IS NO AUTHORITY TO PAY IN EXCESS OF THE BID PRICE IF THERE IS NO SHOWING THAT AT THE TIME OF THE RESPECTIVE DELIVERIES TO THE GOVERNMENT THE CONTRACTOR HAD, IN ACCORDANCE WITH THE PETROLEUM CODE, POSTED PRICES TO BE CHARGED THE GENERAL PUBLIC AT LEAST EQUAL TO THE TOP PRICE STATED IN THE CONTRACT.

COMPTROLLER GENERAL MCCARL TO MAJOR W. M. DIXON, UNITED STATES ARMY, JANUARY 9, 1935:

THERE HAS BEEN RECEIVED BY REFERENCE DATED DECEMBER 21, 1934, FROM THE OFFICE OF THE CHIEF OF FINANCE, YOUR LETTER OF DECEMBER 1, 1934, REQUESTING DECISION WHETHER YOU ARE AUTHORIZED TO MAKE PAYMENT OF $151.27 ON A VOUCHER STATED IN FAVOR OF THE HOME OIL CO. FOR CERTAIN GASOLINE DELIVERED DURING THE PERIOD FROM OCTOBER 1 TO OCTOBER 9, 1934, UNDER CONTRACT W 724-QM-1104, DATED JUNE 22, 1934. YOU HAVE STATED THAT DOUBT AS TO THE PROPRIETY OF PAYMENT EXISTS DUE TO THE FACT THAT A COPY OF THE CONTRACT ON FILE IN YOUR OFFICE INDICATED THAT THE CONTRACTOR HAS, IN PREPARING ITS BID, SUBMITTED A BID PRICE AS WELL AS A TOP PRICE WHICH PURPORTS TO BE IN ACCORDANCE WITH THE EXCEPTION GRANTED BY THE ADMINISTRATOR OF THE PETROLEUM CODE TO THE PROVISIONS OF RULE 3 OF ARTICLE V OF SAID CODE; THAT THE INSTRUCTIONS TO BIDDERS DO NOT, NOR DOES ANY PART OF THE CONTRACT IN QUESTION, OTHER THAN THE ACCEPTANCE, INDICATE THAT ANY VARIATIONS IN PRICE ARE TO BE CONSIDERED OR AUTHORIZED; THAT THE UNIT PRICE, AS STATED IN THE ACCEPTANCE, CORRESPONDED TO THE BID PRICE SUBMITTED BY THE BIDDER, WHILE THE CONTRACTOR HAS SUBMITTED ITS INVOICES ON THE BASIS OF TOP PRICES QUOTED IN THE BID.

THE CONTRACT IS FOR THE DELIVERY OF 10,000 GALLONS OF GASOLINE, THE GALLONAGE BEING DIVIDED EQUALLY AMONG FOUR DIFFERENT CAMPS AND CONSISTS OF A PROPOSAL OPENED JUNE 11, 1934, AND AN ACCEPTANCE DATED JUNE 22, 1934. THERE WAS NOT USED IN THIS CASE STANDARD FORM 33, STANDARD SHORT FORM OF CONTRACT FOR SUPPLIES--- SEE 7 COMP. GEN. 144, 146--- BUT THE PROPOSAL AND ACCEPTANCE CONSTITUTE A CONTRACT BINDING ON THE CONTRACTOR TO PERFORM IN ACCORDANCE WITH ITS TERMS. SEE UNITED STATES V. NEW YORK AND PORTO RICO STEAMSHIP COMPANY, 239 U.S. 88, AND ACT OF MAY 29, 1928, 45 STAT. 985, 986. THUS, THE QUESTION IS AS TO THE REQUIREMENTS OF THE CONTRACT.

THE CONTRACT ON FILE IN THIS OFFICE INCLUDES AS A PART OF THE ADVERTISED SPECIFICATIONS, PARAGRAPH 16, UNDER THE HEADING "INSTRUCTIONS TO BIDDERS," AS FOLLOWS:

ANY PERSON (AS SUCH TERM IS DEFINED IN THE CODE OF FAIR COMPETITION FOR THE PETROLEUM INDUSTRY) SELLING PETROLEUM OR THE PRODUCTS THEREOF TO THE UNITED STATES OR ANY AGENCY THEREOF, OR TO ANY STATE OR TERRITORY OR POLITICAL SUBDIVISION, OR AGENCY THEREOF, OR TO THE DISTRICT OF COLUMBIA, OR TO ANY MUNICIPALITY, MUST COMPLY WITH THE PROVISION OF RULE 3 OF ARTICLE V OF THE CODE OF FAIR COMPETITION FOR THE PETROLEUM INDUSTRY, EXCEPT THAT A TOP PRICE MAY BE BID. IN NO EVENT SHALL THE TOP PRICE BE LOWER THAN 25 PERCENT MORE THAN THE POSTED PRICE ON THE DATE THE BID IS MADE, LESS DISCOUNTS AUTHORIZED UNDER RULE 3 OF ARTICLE V. NO CONTRACT CONTAINING A TOP PRICE PROVISION SHALL BE MADE FOR A PERIOD EXCEEDING THREE MONTHS. NOTHING HEREIN CONTAINED SHALL BE CONSTRUED TO ALLOW DISCOUNTS FROM THE POSTED PRICE AT FILLING STATIONS.

THE HOME OIL CO. QUOTED BOTH A BID PRICE AND A TOP PRICE IN ACCORDANCE WITH THE STATEMENT CONTAINED IN THE INSTRUCTIONS TO BIDDERS. PRESUMABLY, THE BID PRICE WAS THE POSTED PRICE OF THE BIDDER AT THE TIME THE BID WAS SUBMITTED AND THE TOP PRICE WAS AT LEAST 25 PERCENT MORE THAN THE POSTED PRICE AT SUCH TIME. THE ACCEPTANCE OF JUNE 22, 1934, OF THE BID STATES THAT THE PRICES SHOWN "IN THIS CONTRACT ARE CONTRACTOR'S NET PRICE TO COMMERCIAL TRADE ON DATE OF BID, EXCLUSIVE OF STATE TAX. IN NO EVENT SHALL PRICE TO BE PAID BY THE GOVERNMENT EXCEED UNIT PRICE SHOWN HEREIN, PLUS 25 PERCENT.'

THE PRICES "SHOWN HEREIN; " THAT IS, IN THE ACCEPTANCE OF JUNE 22, 1934, ARE THE UNIT PRICES QUOTED BY THE BIDDER BUT IT SEEMS QUITE EVIDENT THAT BOTH THE BID AND THE ACCEPTANCE CONTEMPLATED THAT THE BID PRICES QUOTED COULD BE INCREASED BY NOT MORE THAN 25 PERCENT ABOVE THE POSTED PRICES AT THE DATE OF THE BID. OF COURSE, SUCH INCREASE OF PRICE MAY NOT BE CHARGED THE UNITED STATES UNDER THE CONTRACT UNLESS THIS BIDDER HAD, IN FACT, POSTED AS REQUIRED BY THE TERMS OF THE PETROLEUM CODE, PRICES AT ITS STATIONS AT LEAST EQUAL TO THE TOP PRICES QUOTED IN THE CONTRACT. OTHER WORDS, THE CONTRACT PROVIDES THAT THE PRICES CHARGED THE GOVERNMENT FOR GASOLINE DELIVERED UNDER THE CONTRACT MAY FLUCTUATE BETWEEN THE BID PRICES AND TOP PRICES QUOTED BY THE BIDDER IN ITS ACCEPTED BID PROVIDED SUCH PRICES ARE POSTED BY THE CONTRACTOR AND CHARGED TO COMMERCIAL CUSTOMERS MAKING SIMILAR PURCHASES OF GASOLINE AT THE TIME DELIVERIES WERE MADE UNDER THE CONTRACT BUT IN NO EVENT MAY THE TOP PRICES CHARGED THE GOVERNMENT EXCEED THE TOP PRICES QUOTED IN THE CONTRACT.

AN EXAMINATION OF THE VOUCHER ACCOMPANYING YOUR LETTER OF DECEMBER 1, 1934, INDICATES, AS YOU HAVE STATED, THAT THE HOME OIL CO. HAS CHARGED THE GOVERNMENT THE QUOTED TOP PRICES FOR THE DELIVERY OF THE GASOLINE IN QUESTION BUT THERE IS NO SHOWING THAT AT THE TIME OF THE RESPECTIVE DELIVERIES, THE CONTRACTOR HAD, IN ACCORDANCE WITH THE PETROLEUM CODE, POSTED PRICES TO BE CHARGED THE GENERAL CONSUMING PUBLIC AT LEAST EQUAL TO THE TOP PRICES STATED IN THE CONTRACT; AND, IN THE ABSENCE OF SUCH SHOWING OF FACT, YOU ARE ADVISED THAT PAYMENT ON THE VOUCHER IS NOT AUTHORIZED AT ANY PRICE IN EXCESS OF THE BID PRICES, NOT TOP PRICES, STATED IN THE CONTRACT.