A-63482, OCTOBER 24, 1935, 15 COMP. GEN. 332

A-63482: Oct 24, 1935

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GOVERNMENT DESTINATION WHERE ADVERTISED SPECIFICATIONS NOTIFIED PROSPECTIVE BIDDERS THAT BIDS WERE TO BE SUBMITTED F.O.B. IS FOR DETERMINATION ON THE BASIS OF THE COMMERCIAL COST OF TRANSPORTATION FROM BIDDER'S SHIPPING POINT TO GOVERNMENT DESTINATION. WAS FILED ON JUNE 7TH IN THE AUDIT DIVISION AND ALSO THE RECORDS DIVISION. IS IN ERROR SINCE IT IS ACCEPTED FOR $2. THE CONTRACTOR CONTENDS THAT IF THE GOVERNMENT IS TO SHIP ON A GOVT. BILL OF LADING THAT THE ACCEPTANCE OF ITEM 1A SHOULD HAVE BEEN MADE. AFTER STUDY OF PROVISIONS CONTAINED ON FORM NO. 33 AND PARAGRAPH 9 OF THE DETAIL SPECIFICATIONS IT IS BELIEVED THAT THEY ARE CORRECT. IT IS THEREFORE REQUESTED THAT THE ORIGINAL AND RETURNS FILE COPIES OF THIS CONTRACT BE RETURNED HERE AS SOON AS POSSIBLE SO THAT CONTRACT MAY BE REWRITTEN AND TRANSMITTED TO THE INDIAN OFFICE FOR APPROVAL.

A-63482, OCTOBER 24, 1935, 15 COMP. GEN. 332

CONTRACTS - AWARDS - BIDS, F.O.B. BIDDER'S SHIPPING POINT AND F.O.B. GOVERNMENT DESTINATION WHERE ADVERTISED SPECIFICATIONS NOTIFIED PROSPECTIVE BIDDERS THAT BIDS WERE TO BE SUBMITTED F.O.B. BIDDER'S SHIPPING POINT AND F.O.B. GOVERNMENT DESTINATION, WITH THE RIGHT RESERVED IN THE GOVERNMENT TO ACCEPT EITHER BID AND THE FURTHER RIGHT THAT THE GOVERNMENT COULD REQUIRE SHIPMENTS TO BE MADE BY GOVERNMENT BILLS OF LADING, AWARD MAY BE MADE ON THE BASIS OF F.O.B. GOVERNMENT DESTINATION, WITH SHIPMENTS TO BE MADE ON GOVERNMENT BILLS OF LADING, AND THE DEDUCTION FROM THE BID PRICE, BECAUSE OF THE MANNER OF SHIPMENT, IS FOR DETERMINATION ON THE BASIS OF THE COMMERCIAL COST OF TRANSPORTATION FROM BIDDER'S SHIPPING POINT TO GOVERNMENT DESTINATION.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, OCTOBER 24, 1935:

THERE HAS BEEN RECEIVED A LETTER DATED JUNE 12, 1935, FROM C. J. MOODY, PROJECT ENGINEER, IRRIGATION SERVICE, COOLIDGE, ARIZ., AS FOLLOWS:

CONTRACT NO. I-136 IND. 325, IN FAVOR OF THE CONSOLIDATED ROOFING AND SUPPLY COMPANY OF PHOENIX, ARIZONA, WAS FILED ON JUNE 7TH IN THE AUDIT DIVISION AND ALSO THE RECORDS DIVISION.

THE ACCEPTANCE OF THIS CONTRACT, IT NOW DEVELOPS, IS IN ERROR SINCE IT IS ACCEPTED FOR $2,110.00 F.O.B. COOLIDGE, ARIZONA, SUBJECT TO A DEDUCTION OF COMMERCIAL FREIGHT AT NOT LESS THAN $1.44 PER CWT. FOR SHIPMENT ON GOVERNMENT BILL OF LADING FROM LOCKWOOD, OHIO. THE CONTRACTOR CONTENDS THAT IF THE GOVERNMENT IS TO SHIP ON A GOVT. BILL OF LADING THAT THE ACCEPTANCE OF ITEM 1A SHOULD HAVE BEEN MADE, AND AFTER STUDY OF PROVISIONS CONTAINED ON FORM NO. 33 AND PARAGRAPH 9 OF THE DETAIL SPECIFICATIONS IT IS BELIEVED THAT THEY ARE CORRECT. IN THIS EVENT ACCEPTANCE SHOULD BE MADE OF ITEM NO. 1 FOR $2,110.00 F.O.B. COOLIDGE, ARIZONA, LESS THE CASH DISCOUNT. THE CONTRACTOR IN QUOTING HIS PRICE FOR ITEM 1, CONTEMPLATED THAT SHIPMENT WOULD BE INCLUDED IN A THROUGH CAR OF POSSIBLY 80,000 LBS. IN WEIGHT WHICH WOULD REDUCE THE FREIGHT RATE.

IT IS THEREFORE REQUESTED THAT THE ORIGINAL AND RETURNS FILE COPIES OF THIS CONTRACT BE RETURNED HERE AS SOON AS POSSIBLE SO THAT CONTRACT MAY BE REWRITTEN AND TRANSMITTED TO THE INDIAN OFFICE FOR APPROVAL. THIS MATERIAL IS URGENTLY NEEDED.

THE ADVERTISED SPECIFICATIONS NOTIFIED PROSPECTIVE BIDDERS IN PARAGRAPH 9 THEREOF THAT:

9. SHIPMENT.--- ALL BIDS ARE DESIRED COVERING MATERIAL F.O.B. DESTINATION AND ERECTED. THE GOVERNMENT, HOWEVER, RESERVES THE RIGHT TO MAKE SHIPMENT OF MATERIALS ON GOVERNMENT BILLS OF LADING, TO THE END THAT THIS MAY BE DONE IF DESIRED. EACH BIDDER MUST STATE IN HIS BID THE POINT FROM WHICH SHIPMENT OF THE MATERIALS WILL BE MADE. QUOTATIONS ARE REQUIRED FOR SHIPMENT OF THE MATERIALS BOTH F.O.B. ERECTION SITE AND F.O.B. BIDDER'S SHIPPING POINT. IN CASE SHIPMENT IS MADE AT THE EXPENSE OF THE GOVERNMENT IN THAT MANNER THE GOVERNMENT BILLS OF LADING WILL BE FURNISHED THE CONTRACTOR BY THE PROJECT ENGINEER, UNITED STATES INDIAN IRRIGATION SERVICE, COOLIDGE, ARIZONA. THE CONTRACTOR SHALL PREPARE ALL MATERIAL FOR SHIPMENT IN SUCH A MANNER AS TO PROTECT IT FROM DAMAGE IN TRANSIT AND SHALL BE RESPONSIBLE FOR AND MAKE GOOD, BY REPLACEMENT AT THE SHIPPING POINT, ANY AND ALL DAMAGE DUE TO IMPROPER PREPARATION OR LOADING FOR SHIPPING. ALL PARTS THAT OTHERWISE MIGHT BE LOST SHALL BE BOXED OR WIRED IN BUNDLES AND PLAINLY MARKED FOR IDENTIFICATION.

AS THE PROJECT ENGINEER HAS STATED, THE ADVERTISED SPECIFICATIONS FURTHER REQUIRED PROSPECTIVE BIDDERS TO SUBMIT BIDS ON THE BASIS OF F.O.B. BIDDER'S SHIPPING POINT AND F.O.B. GOVERNMENT DESTINATION, AND THE CONSOLIDATED ROOFING AND SUPPLY CO. SO SUBMITTED ITS BID OPENED MAY 17, 1935, FOR THE DELIVERY OF THE MATERIAL. THE BID F.O.B. GOVERNMENT DESTINATION WAS NUMBERED 1 AND THE BID F.O.B. BIDDER'S SHIPPING POINT WAS NUMBERED 1A, AND THEY ARE AS FOLLOWS:

1. CORRUGATED ASBESTOS ROOF, DELIVERED F.O.B. ERECTION SITE NEAR COOLIDGE, ARIZONA, AND COMPLETELY ERECTED, IN FULL ACCORDANCE WITH THE DETAIL SPECIFICATIONS AND DRAWINGS HERETO ATTACHED AND MADE A PART HEREOF, FOR THE LUMP SUM OF -------------------------------- $2,110.00

1A. CORRUGATED ASBESTOS ROOF, DELIVERED F.O.B. BIDDER'S SHIPPING POINT AT LOCKLAND, OHIO (SHIPMENT OF MATERIALS TO BE MADE AT THE GOVERNMENT'S EXPENSE ON GOVERNMENT BILL OF LADING), AND COMPLETELY ERECTED, IN FULL ACCORDANCE WITH THE ATTACHED DETAIL SPECIFICATIONS AND DRAWINGS FOR THE LUMP SUM OF ------------------------------------- ---------- $1,670.00

THE BID OF SAID COMPANY, BEING THE LOWEST RECEIVED, WAS ACCEPTED JUNE 3, 1935, BY THE PROJECT ENGINEER, AS FOLLOWS:

ACCEPTED AS TO ITEMS NUMBERED 1, TOTAL $2,110.00 F.O.B. COOLIDGE, ARIZ., SUBJECT TO A DEDUCTION OF COM-L CARLOAD FREIGHT AT NOT LESS THAN $1.44 PER CWT. FOR SHIPMENT ON GOVT. B/L FROM LOCKLAND, OHIO, TO COOLIDGE, ARIZ.

UNITED STATES OF AMERICA, ACTING IN THIS BEHALF BY C. J. MOODY, PROJECT ENGINEER.

THAT IS TO SAY, THE ADVERTISED SPECIFICATIONS CLEARLY NOTIFIED PROSPECTIVE BIDDERS THAT THEY WERE TO SUBMIT BIDS F.O.B. BIDDER'S SHIPPING POINT AND F.O.B. GOVERNMENT DESTINATION WITH THE RIGHT RESERVED IN THE GOVERNMENT TO ACCEPT EITHER BID AS THE BEST INTERESTS OF THE GOVERNMENT MIGHT APPEAR; ALSO, WITH THE FURTHER RIGHT THAT IN EVENT THE BID FOR DELIVERY GOVERNMENT DESTINATION WAS ACCEPTED THE GOVERNMENT COULD REQUIRE THE SHIPMENT TO BE MADE ON A GOVERNMENT BILL OF LADING AND DEDUCT THE COMMERCIAL FREIGHT FROM THE BIDDER'S SHIPPING POINT TO THE GOVERNMENT DESTINATION, AND SUCH PROVISION WAS INSERTED IN THE SPECIFICATIONS IN ORDER THAT THE UNITED STATES MIGHT AVAIL ITSELF OF LAND-GRANT RATES IN THE SHIPMENT OF THE MATERIAL. PRESUMABLY, THE DIFFERENCE BETWEEN THE BID F.O.B. BIDDER'S SHIPPING POINT AND F.O.B. GOVERNMENT DESTINATION IS THE AMOUNT OF COMMERCIAL FREIGHT OR OTHER COSTS TO THE BIDDER TO SHIP THE MATERIAL FROM HIS SHIPPING POINT TO GOVERNMENT DESTINATION, AND, OF COURSE, THE BIDDER WOULD BE REQUIRED, IN EVENT THE SHIPMENT WAS DELIVERED AT GOVERNMENT DESTINATION, TO PAY THE COMMERCIAL FREIGHT CHARGES. AS THE UNITED STATES IS NOT REQUIRED TO PAY THE COMMERCIAL FREIGHT CHARGES IN MAKING SHIPMENTS OVER LAND GRANT RAILROAD LINES OR OTHER RAILROAD LINES EQUALIZING THEREWITH, THE FURTHER PROVISION IN THE SPECIFICATIONS WAS TO OBTAIN FOR THE UNITED STATES THE BENEFIT OF SUCH LAND-GRANT RATES IN EVENT THE COST TO THE GOVERNMENT IN MAKING DELIVERY AT DESTINATION SHOULD BE LESS THAN THE COST TO THE CONTRACTOR.

THE ONLY APPARENT ERROR IN THIS MATTER WAS IN THE ACCEPTANCE OF JUNE 3, 1935, IN STATING THAT DEDUCTION WOULD BE MADE OF COMMERCIAL CARLOAD FREIGHT OF NOT LESS THAN $1.44 PER HUNDREDWEIGHT. THE DEDUCTION TO BE MADE FROM THE CONTRACT PRICE OF $2,110 F.O.B. GOVERNMENT DESTINATION IN EVENT THE SHIPMENT IS MADE ON A GOVERNMENT BILL OF LADING IS THE COMMERCIAL FREIGHT CHARGES WHICH THE CONTRACTOR WOULD HAVE HAD TO PAY,WHETHER SUCH CHARGES BE MORE OR LESS THAN $1.44 PER HUNDREDWEIGHT.

UNDER SUCH CIRCUMSTANCES THERE APPEARS TO BE NO LEGAL BASIS OF MODIFYING THE CONTRACT AS SUGGESTED BY THE PROJECT ENGINEER, ATTENTION BEING INVITED TO UNITED STATES V. AMERICAN SALES CO., 27 FED./2D) 389, AFFIRMED 32 ID. 141, AND CERTIORARI DENIED 280 U.S. 574. SEE ALSO BAUSCH AND LOMB OPTICAL CO. V. UNITED STATES, 78 CT.CLS. 584, 607. THE PROJECT ENGINEER SHOULD BE INSTRUCTED ACCORDINGLY.