A-65344, OCTOBER 25, 1935, 15 COMP. GEN. 340

A-65344: Oct 25, 1935

Additional Materials:

Contact:

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

 

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

PURCHASE OF COAL FOR FIELD SERVICE THE PROCEDURE TO BE EMPLOYED IN THE PURCHASE OF COAL FOR THE FIELD ACTIVITIES OF THE FEDERAL GOVERNMENT IS THAT CONTEMPLATED BY STANDARD GOVERNMENT FORMS NOS. 41 AND 43. WHERE DELIVERIES ARE OFFERED MEETING THE ADVERTISED REQUIREMENTS THERE IS NO BASIS FOR THE PURCHASE OF TRIAL LOTS FOR ANALYSIS TESTING PURPOSES BEFORE AWARDING THE CONTRACT. WITH RESPECT TO THE CIRCUMSTANCES UNDER WHICH THE PURCHASE WAS MADE. THE INVITATION DIRECTED THE ATTENTION OF BIDDERS TO CERTAIN ENUMERATED DOCUMENTS WHICH WERE MADE A PART OF THE ADVERTISEMENT. BIDDERS WERE FURTHER INSTRUCTED THAT BIDS FOR SEPARATE TONNAGE SHOULD BE SUBMITTED ON FORM "B.'. WAS ACCORDINGLY SUBMITTED ON THIS FORM.

A-65344, OCTOBER 25, 1935, 15 COMP. GEN. 340

PURCHASE OF COAL FOR FIELD SERVICE THE PROCEDURE TO BE EMPLOYED IN THE PURCHASE OF COAL FOR THE FIELD ACTIVITIES OF THE FEDERAL GOVERNMENT IS THAT CONTEMPLATED BY STANDARD GOVERNMENT FORMS NOS. 41 AND 43. IF THE NEEDS OF ANY PARTICULAR ACTIVITY REQUIRE A CERTAIN CLASS OF COAL, SUBJECT TO ANALYTICAL TEST, SUCH NEED SHOULD BE INDICATED IN THE ADVERTISED SPECIFICATIONS IN THE FORM OF GUARANTEED ANALYSIS REQUIREMENTS, AND WHERE DELIVERIES ARE OFFERED MEETING THE ADVERTISED REQUIREMENTS THERE IS NO BASIS FOR THE PURCHASE OF TRIAL LOTS FOR ANALYSIS TESTING PURPOSES BEFORE AWARDING THE CONTRACT.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, OCTOBER 25, 1935:

THERE HAS BEEN RECEIVED IN THIS OFFICE FOR DIRECT SETTLEMENT VOUCHER NO. 410219, IN FAVOR OF THE GERBER COAL CO. FOR $165.30, FOR ONE CARLOAD OF COAL DELIVERED THE BLACKFEET INDIAN AGENCY UNDER PURCHASE ORDER NO. 58, DATED JULY 18, 1934. THE VOUCHER HAS BEEN ADMINISTRATIVELY APPROVED BY THE ACTING COMMISSIONER OF INDIAN AFFAIRS FOR PAYMENT IN THE NET AMOUNT OF $156.48.

THE VOUCHER COVERS PROPOSED PAYMENT FOR A TRIAL SHIPMENT OF COAL ORDERED PRIOR TO FINAL AWARD OF CONTRACT FOR COAL TO MEET THE NEEDS OF THE BLACKFEET INDIAN AGENCY DURING THE FISCAL YEAR 1935. THE CORRESPONDENCE SUPPORTING THE VOUCHER CONTAINS A REQUEST FROM THE PURCHASING OFFICER, W. B. FRY, THAT HE BE ADVISED RELATIVE TO BASIS OF FINAL DISPOSITION THEREOF, AND AS TO THE PROPRIETY OF THE PROCEDURE INVOLVED IN PURCHASING COAL FOR THE NEEDS OF THE INDIAN SERVICE.

WITH RESPECT TO THE CIRCUMSTANCES UNDER WHICH THE PURCHASE WAS MADE, IT APPEARS THAT THE PURCHASING OFFICER ISSUED AN INVITATION FOR BIDS ON STANDARD FORM NO. 30, TO BE OPENED MAY 24, 1934, FOR COAL TONNAGE REQUIRED DURING THE FISCAL YEAR 1935, AT SCHOOLS, AGENCIES, AND HOSPITALS OF THE INDIAN SERVICE. THE INVITATION DIRECTED THE ATTENTION OF BIDDERS TO CERTAIN ENUMERATED DOCUMENTS WHICH WERE MADE A PART OF THE ADVERTISEMENT, INCLUDING STANDARD GOVERNMENT PURCHASE CONDITIONS (COAL), STANDARD FORM NO. 43, AND INDIAN SERVICE FORM "B" (BITUMINOUS COAL). BIDDERS WERE FURTHER INSTRUCTED THAT BIDS FOR SEPARATE TONNAGE SHOULD BE SUBMITTED ON FORM "B.' CLAIMANT'S BID, FOR THE ESTIMATED 744 TONS REQUIRED BY THE BLACKFEET INDIAN AGENCY, AT $3 PER TON OF 2,000 POUNDS, WAS ACCORDINGLY SUBMITTED ON THIS FORM, WHICH CONTAINED A STIPULATION ON THE FACE THEREOF, "/TO BE ATTACHED TO AND BECOME A PART OF THE PURCHASE CONDITIONS AND INSTRUCTIONS TO BIDDERS ISSUED BY THE PURCHASING OFFICE OF THE DEPARTMENT OF THE INTERIOR, FOR THE PURCHASE OF COAL.) " THE BID AS SUBMITTED GUARANTEED THE QUALITY OF THE COAL OFFERED AS FOLLOWS: MOISTURE, 5.3; VOLATILE MATTER, 25.6; ASH, 18.2; SULPHUR; B.T.U. 10,933.

DOUBT APPEARS TO HAVE ARISEN AS TO THE QUALITY OF THE COAL PROPOSED TO BE FURNISHED. IN LIEU OF ACCEPTANCE OF THE BID FOR THE FULL QUANTITY, THE PURCHASING OFFICER ISSUED PURCHASE ORDER NO. 58, DATED JULY 18, 1934, FOR ONE CARLOAD ONLY AS A TRIAL SHIPMENT. UPON RECEIPT OF THE COAL, A SAMPLE WAS COLLECTED AND TRANSMITTED TO THE BUREAU OF MINES FOR ANALYSIS. THE ANALYSIS SHOWED THE FOLLOWING: MOISTURE, 29; VOLATILE MATTER, 49.6; FIXED CARBON, 21.4; SULPHUR, 2.6; B.T.U., 10,720. THE CARLOAD OF COAL APPEARS TO HAVE BEEN ACCEPTED AND USED ALTHOUGH THE EVIDENCE INDICATES THAT THE QUALITY OF THE COAL MADE ITS USE UNSATISFACTORY.

HAVING REGARD FOR THE CIRCUMSTANCES ATTENDING THE PURCHASE OF THE SAMPLE CARLOAD OF COAL, IT REASONABLY MAY BE CONSIDERED THAT THE PURCHASE WAS MADE SUBJECT TO THE TERMS OF STANDARD GOVERNMENT PURCHASE CONDITIONS (COAL), WHICH FORM WAS INCORPORATED BY REFERENCE IN BOTH THE INVITATION FOR BIDS AND THE BID AS SUBMITTED. ACCORDINGLY, SETTLEMENT UNDER THE PURCHASE ORDER WILL BE MADE AS ADMINISTRATIVELY RECOMMENDED AT THE CONTRACT PRICE, LESS A DEDUCTION FOR THE INFERIOR QUALITY OF THE COAL DELIVERED COMPUTED IN ACCORDANCE WITH PARAGRAPH 16, STANDARD GOVERNMENT PURCHASE CONDITIONS (COAL), STANDARD FORM NO. 43.

THE PROCEDURE EMPLOYED IN THIS INSTANCE, NAMELY, THE PURCHASE OF THE CARLOAD OF COAL FOR TRIAL AND ANALYSIS BEFORE MAKING AWARD HAS HERETOFORE BEEN BEFORE THIS OFFICE FOR CONSIDERATION AND SEVERAL DECISIONS HAVE BEEN RENDERED WHEREIN IT HAS BEEN HELD, UNIFORMLY, THAT WITH EXCEPTION OF CERTAIN PURCHASES MADE BY THE GOVERNMENT FUEL YARDS, PROCUREMENT DIVISION, TREASURY DEPARTMENT, FOR FUEL TO BE USED IN COAL BURNING EQUIPMENT OF VARYING CONSTRUCTION AND EFFICIENCY IN THE VARIOUS DEPARTMENTS AND ESTABLISHMENTS AT THE SEAT OF GOVERNMENT, THERE PROPERLY IS FOR EMPLOYMENT IN THE PURCHASE OF COAL FOR FIELD ACTIVITIES OF THE FEDERAL GOVERNMENT THE USUAL PROCEDURE CONTEMPLATED BY STANDARD FORMS NOS. 41 AND 43, STANDARD GOVERNMENT FORM OF CONTRACT FOR COAL AND STANDARD GOVERNMENT FORM OF PURCHASE CONDITIONS FORMING A PART THEREOF. IF THE NEEDS OF ANY PARTICULAR ACTIVITY OF THE INDIAN SERVICE REQUIRE A CERTAIN CLASS OF COAL, SUBJECT TO ANALYTICAL TEST, SUCH NEED SHOULD BE INDICATED IN THE ADVERTISED SCHEDULES AND THERE SHOULD BE SPECIFIED THE MAXIMUM LIMITS OF MOISTURE AND ASH IN COAL TO BE DELIVERED AND THE MINIMUM HEATING VALUE OF THE DRY COAL IN B.T.U. THE STANDARD FORMS SPECIFICALLY PROVIDE HOW THE SAMPLES ARE TO BE TAKEN AND ANALYZED AND HOW ANY NECESSARY DEDUCTION FROM THE CONTRACT PRICE SHOULD BE COMPUTED. IN PURCHASES MADE UNDER SUCH CIRCUMSTANCES THE AMOUNT PAYABLE FOR THE COAL DELIVERED IS THE PRICE NAMED IN THE ACCEPTED PROPOSAL, ADJUSTED ON THE BASIS OF THE ANALYSIS MADE OF THE SAMPLES THEREOF. ANY BID THAT FAILS TO MEET THE MAXIMUM AND MINIMUM REQUIREMENTS STATED IN THE ADVERTISED SPECIFICATIONS IS NOT RESPONSIVE TO THE TERMS THEREOF AND IS NOT FOR ACCEPTANCE. IF THE BIDDER OFFERS TO DELIVER COAL MEETING THE GUARANTEED ANALYSIS, THERE IS NO BASIS FOR THE PURCHASE OF TRIAL LOTS FOR TESTING TO DETERMINE WHETHER SUCH COAL MEETS THE GUARANTEED ANALYSIS BEFORE AWARDING THE CONTRACT. IN THIS CONNECTION IT IS GENERALLY CONCEDED THAT COAL TAKEN FROM THE SAME MINE AT DIFFERENT TIMES MAY SHOW UPON ANALYSIS A DIFFERENT B.T.U., MOISTURE,ASH, OR OTHER CONTENT. FURTHERMORE, SECTION 3744, REVISED STATUTES, REQUIRES CONTRACTS UNDER THE INTERIOR DEPARTMENT TO BE REDUCED TO WRITING AND SIGNED BY THE PARTIES AT THE END THEREOF.

ACCORDINGLY, THE MATTER OF THE CORRECT PROCEDURE TO BE EMPLOYED IN THE PURCHASE OF COAL TO MEET THE FIELD-SERVICE NEEDS OF THE DEPARTMENT OF THE INTERIOR, AS HEREINBEFORE OUTLINED, IS BROUGHT TO YOUR ATTENTION IN ORDER THAT THE NECESSARY ACTION MAY BE TAKEN TO INSURE COMPLIANCE THEREWITH.