A-83392, FEBRUARY 5, 1937, 16 COMP. GEN. 729

A-83392: Feb 5, 1937

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MAY ACCEPT THAT BID WHICH WILL RESULT IN THE LOWEST NET CHARGE AGAINST PUBLIC MONEYS. A BID SUBMITTED IN RESPONSE TO SUCH SPECIFICATIONS IS NOT OBJECTIONABLE BECAUSE THE PRICE F.O.B. POINT OF ORIGIN IS FOR DETERMINATION BY DEDUCTING FROM THE QUOTED F.O.B. AS FOLLOWS: THERE IS NOW FOR CONSIDERATION THE PROPRIETY OF MAKING AWARDS FOR THE PURCHASE OF CEMENT FOR USE IN EMERGENCY RELIEF PROJECTS UNDER TERMS IMPOSED BY CEMENT MANUFACTURERS GENERALLY. FOR YOUR COMPLETE INFORMATION THERE IS ATTACHED A COPY OF BID RECEIVED FROM THE UNIVERSAL ATLAS CEMENT COMPANY IN RESPONSE TO INVITATION ISSUED BY THE STATE PROCUREMENT OFFICER FOR FLORIDA FOR 132 BARRELS OF CEMENT IN PAPER BAGS. IT WILL BE OBSERVED THE BIDDER HAS NAMED TWO PRICES.

A-83392, FEBRUARY 5, 1937, 16 COMP. GEN. 729

ADVERTISING - BIDS - EVALUATION - F.O.B. DELIVERIES ON GOVERNMENT BILLS OF LADING ADVERTISED SPECIFICATIONS FOR THE FURNISHING OF SUPPLIES SHOULD REQUIRE BIDS 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 AVAILABLE IN SUCH CONNECTION, MAY ACCEPT THAT BID WHICH WILL RESULT IN THE LOWEST NET CHARGE AGAINST PUBLIC MONEYS, AND A BID SUBMITTED IN RESPONSE TO SUCH SPECIFICATIONS IS NOT OBJECTIONABLE BECAUSE THE PRICE F.O.B. POINT OF ORIGIN IS FOR DETERMINATION BY DEDUCTING FROM THE QUOTED F.O.B. DESTINATION PRICE THE TRANSPORTATION COST TO THE GOVERNMENT OF SHIPMENT ON GOVERNMENT BILL OF LADING FROM BIDDER'S SHIPPING POINT TO GOVERNMENT DESTINATION.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, FEBRUARY 5, 1937:

THERE HAS BEEN RECEIVED YOUR LETTER OF JANUARY 25, 1937, AS FOLLOWS:

THERE IS NOW FOR CONSIDERATION THE PROPRIETY OF MAKING AWARDS FOR THE PURCHASE OF CEMENT FOR USE IN EMERGENCY RELIEF PROJECTS UNDER TERMS IMPOSED BY CEMENT MANUFACTURERS GENERALLY.

FOR YOUR COMPLETE INFORMATION THERE IS ATTACHED A COPY OF BID RECEIVED FROM THE UNIVERSAL ATLAS CEMENT COMPANY IN RESPONSE TO INVITATION ISSUED BY THE STATE PROCUREMENT OFFICER FOR FLORIDA FOR 132 BARRELS OF CEMENT IN PAPER BAGS,"F.O.B. CARS, POINT OF ORIGIN" AND "F.O.B. CARS CHIPLEY, A.' IT WILL BE OBSERVED THE BIDDER HAS NAMED TWO PRICES, ONE OSTENSIBLY,"F.O.B. ORIGIN" AND THE OTHER "F.O.B. DESTINATION.' THE LATTER IS A BONA FIDE "F.O.B. DESTINATION" BID BUT THE FIRST IS NOT WHAT IT APPEARS TO BE. BOTH ARE ACTUALLY DELIVERED PRICES BUT THE FIRST IS SIMPLY A BASIS TO DETERMINE THE COST TO THE GOVERNMENT AT THE BIDDER'S SHIPPING POINT, THE DETERMINATION TO BE REACHED BY DEDUCTING THE COST TO THE GOVERNMENT OF TRANSPORTATION FROM BIDDER'S SHIPPING POINT TO DESTINATION.

WHILE ONLY THE ONE BID IS OFFERED FOR CONSIDERATION, IT IS A MATTER OF RECORD THAT BIDS FROM ALL CEMENT MANUFACTURERS ARE RECEIVED IN IDENTICAL FORM.

ADVICE IS REQUESTED WHERE THE GOVERNMENT CAN PROPERLY ACCEPT IN THE INSTANT REPRESENTATIVE CASE THE "F.O.B. ORIGIN" BID OF $2.1635 PER BARREL, DEDUCTING THEREFROM THE COST OF TRANSPORTATION BASED UPON COMMERCIAL, LAND GRANT, OR SPECIAL RATE, WHICHEVER IS LOWEST, AND MOVE THE MATERIAL ON GOVERNMENT BILLS OF LADING.

THE DECISIONS OF THIS OFFICE HAVE BEEN TO THE EFFECT THAT COST OF DELIVERY IS ALWAYS A MATTER FOR CONSIDERATION BY THE GOVERNMENT IN DETERMINING WHICH IS IN FACT THE LOWEST BID RECEIVED (10 COMP. GEN. 402). AND IN ORDER THAT THIS MAY BE ACCOMPLISHED, THE ADVERTISEMENT FOR BIDS SHOULD PROVIDE FOR SUBMISSION OF BIDS 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 AVAILABLE CHARGE AGAINST PUBLIC MONEYS.

IT APPEARS THAT THE BIDDER IN THIS CASE ATTACHED A RIDER TO ITS BID,AS FOLLOWS:

THE U.S. GOVERNMENT SHALL DETERMINE ITS CONTRACT PRICE F.O.B. CAR, LEEDS, ALA., ON SHIPMENTS MOVING ON U.S. GOVERNMENT BILLS OF LADING TO THE ABOVE NAMED DESTINATION ONLY, BY SUBTRACTING FROM THE ABOVE MENTIONED DESTINATION COST TO THE U.S. GOVERNMENT THE LAND GRANT RATE AS DETERMINED BY THE U.S. GOVERNMENT AS BEING APPLICABLE FROM LEEDS, ALA., TO SAID DESTINATION, OR THE ACTUAL COMMERCIAL RATE OR SPECIAL U.S. GOVERNMENT RATE APPLICABLE FROM LEEDS, ALA., TO SAID DESTINATION, WHICHEVER RATE IS THE LOWEST.

THERE WOULD APPEAR TO BE NO OBJECTION TO THE SUBMISSION AND CONSIDERATION OF A BID ON SUCH A BASIS. SEE DECISION OF JANUARY 28, 1937, A-83059 (16 COMP. GEN. 697).