A-88574, SEPTEMBER 18, 1937, 17 COMP. GEN. 263

A-88574: Sep 18, 1937

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ALSO STATED "WILL EQUALIZE WITH ANY LAND-GRANT SAVING FROM ANY OTHER POINT. REFUND OF THE ADDITIONAL AMOUNT SO DEDUCTED IS NOT AUTHORIZED. WIOTA" WITH A FREIGHT ALLOWANCE OF $644 AND CONTAINED THE FOLLOWING STATEMENT: "WILL EQUALIZE WITH ANY LAND GRANT SAVING FROM ANY OTHER POINT.'. SAID BID WAS ACCEPTED NOVEMBER 14. AS FOLLOWS: REFERENCE IS MADE TO THE SUBJECT CONTRACT DATED NOVEMBER 14. THE GOVERNMENT WILL NOT BE SUBJECT TO PAYMENT OF LAND GRANT FREIGHT CHARGES IN EXCESS OF $0.80835 PER HUNDRED WEIGHT. WHICH IS THE MOST ADVANTAGEOUS RATE THE GOVERNMENT MAY OBTAIN FROM ANY OF THE SHIPPING POINTS NAMED IN THE BIDS RECEIVED. WHEN INVOICE IS SUBMITTED BY YOU. DEDUCTION WILL BE MADE OF APPROXIMATELY $0.36253 PER HUNDRED WEIGHT TO EQUALIZE THE DIFFERENCE BETWEEN THE LAND GRANT FREIGHT RATE FROM JOHNSTOWN.

A-88574, SEPTEMBER 18, 1937, 17 COMP. GEN. 263

ADVERTISING - BIDS - FREIGHT-RATE EQUALIZATION - AMBIGUOUS OFFER WHERE A BID FOR FURNISHING MATERIAL F.O.B. GOVERNMENT DESTINATION AUTHORIZED A FREIGHT ALLOWANCE DEDUCTION FROM THE BID PRICE IN A STIPULATED AMOUNT FOR SHIPMENT ON GOVERNMENT BILL OF LADING, AND ALSO STATED "WILL EQUALIZE WITH ANY LAND-GRANT SAVING FROM ANY OTHER POINT," AND THE CONTRACTING OFFICER, IN MAKING AWARD, CONSTRUED THE AMBIGUOUSLY WORDED BID AS AUTHORIZING NOT ONLY THE DEDUCTION OF THE SPECIFICALLY STATED AMOUNT OF FREIGHT ALLOWANCE BUT ALSO OF ANY FAVORABLE DIFFERENCE BETWEEN NET LAND-GRANT FREIGHT RATES FROM A COMPETITOR'S SHIPPING POINT AND THE SHIPPING POINT OF THE BIDDER, REFUND OF THE ADDITIONAL AMOUNT SO DEDUCTED IS NOT AUTHORIZED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE BETHLEHEM STEEL CO., SEPTEMBER 18, 1937:

YOUR LETTER OF MAY 25, 1937, REQUESTS REVIEW OF SETTLEMENT OF MAY 12, 1937, WHICH DISALLOWED YOUR CLAIM FOR $145.01 DEDUCTED FOR FREIGHT EQUALIZATION ON VOUCHER 2531 OF THE ACCOUNTS OF CAPT. J. B. HUGHES FOR DECEMBER 1935, MAKING PAYMENT FOR CERTAIN WIRE DELIVERED UNDER CONTRACT ER -W-631-ENG-96, DATED NOVEMBER 14, 1935.

IN RESPONSE TO AN INVITATION FOR BIDS FOR FURNISHING THE SPECIFIED WIRE "FOR DELIVERY AT F.O.B. SHIPPING POINT" WITH CONSIGNMENT TO "U.S. WAREHOUSE, FORT PECK, MONTANA (VIA WIOTA, MONTANA)," SHIPMENT TO BE MADE ON GOVERNMENT BILL OF LADING, THE BID OF BETHLEHEM STEEL CO., NAMING JOHNSTOWN, PA., AS THE SHIPPING POINT, QUOTED A PRICE OF $1,456 "F.O.B. WIOTA" WITH A FREIGHT ALLOWANCE OF $644 AND CONTAINED THE FOLLOWING STATEMENT: "WILL EQUALIZE WITH ANY LAND GRANT SAVING FROM ANY OTHER POINT.' SAID BID WAS ACCEPTED NOVEMBER 14, 1935, AS FOLLOWS: "ACCEPTED AS TO ITEMS MENTIONED ONE (1), LESS COMMERCIAL FREIGHT ALLOWANCE OF $644.00 AND FREIGHT EQUALIZATION ALLOWANCE OF $145.01.' THE RECORD SHOWS THAT ON THE SAME DATE, NOVEMBER 14, 1935, THE CONTRACTING OFFICER WROTE BETHLEHEM STEEL CO., AS FOLLOWS:

REFERENCE IS MADE TO THE SUBJECT CONTRACT DATED NOVEMBER 14, 1935, COVERING AWARD MADE YOUR BID ON SERIAL INVITATION 631-36-150 FOR 40,000 LBS. OF WIRE.

AWARD HAS BEEN MADE YOUR BID OF $1,456.00 LESS COMMERCIAL FREIGHT ALLOWANCE OF $644.00, SHIPMENT TO BE MADE ON GOVERNMENT BILL OF LADING NO. WE-135641 FROM JOHNSTOWN, PENNSYLVANIA, TO WIOTA, MONTANA. IN ACCORDANCE WITH PROVISION IN YOUR BID OFFERING TO EQUALIZE WITH ANY LAND GRANT SAVING FROM ANY OTHER POINT, THE GOVERNMENT WILL NOT BE SUBJECT TO PAYMENT OF LAND GRANT FREIGHT CHARGES IN EXCESS OF $0.80835 PER HUNDRED WEIGHT, WHICH IS THE MOST ADVANTAGEOUS RATE THE GOVERNMENT MAY OBTAIN FROM ANY OF THE SHIPPING POINTS NAMED IN THE BIDS RECEIVED. WHEN INVOICE IS SUBMITTED BY YOU, DEDUCTION WILL BE MADE OF APPROXIMATELY $0.36253 PER HUNDRED WEIGHT TO EQUALIZE THE DIFFERENCE BETWEEN THE LAND GRANT FREIGHT RATE FROM JOHNSTOWN, PA., TO WIOTA, MONTANA, AND THAT FROM STEELTON, MINNESOTA, TO WIOTA, MONTANA.

THE WIRE IS REPORTED AS HAVING BEEN RECEIVED AT FORT PECK, MONT., DECEMBER 7, 1935, AND PAYMENT THEREFOR WAS MADE ON VOUCHER 2531, AS NOTED ABOVE, DECEMBER 27, 1935, DEDUCTION BEING MADE IN THE SUM OF $145.01 FOR FREIGHT EQUALIZATION IN ACCORDANCE WITH THE AWARD OF NOVEMBER 14, 1935.

IN LETTER DATED AUGUST 6, 1936, TO THE UNITED STATES ENGINEER OFFICE, FORT PECK, MONT., YOU STATED:

WHILE OUR TERMS OF SALE READ THAT WE WILL EQUALIZE THE LAND GRANT SAVING FROM ANY OTHER POINT ON OUR SHIPMENTS FROM JOHNSTOWN, PA., WE INTERPRET THIS TO MEAN THAT IF THE GOVERNMENT WOULD RECEIVE A SAVING IN FREIGHT RATE HIGHER FROM ANY OTHER POINT FROM WHICH THE MATERIAL MIGHT HAVE BEEN SHIPPED THAN THE SAVING ACTUALLY RECEIVED ON THE SHIPMENT FROM OUR MILL AT JOHNSTOWN, WE WOULD EQUALIZE THE RATE ON THE BASIS OF SUCH HIGHER SAVINGS. AS THE MATTER ACTUALLY STANDS, THE GOVERNMENT RECEIVED A SAVING OF APPROXIMATELY 35 CENTS CWT. ON THE SHIPMENT FROM JOHNSTOWN WHEREAS THEY WOULD RECEIVE ONLY 23 CENTS CWT. ON A LIKE SHIPMENT FROM STEELTON, MINNESOTA. THERE IS, THEREFORE, NO SAVING IN THIS CASE HIGHER THAN THE ONE FROM JOHNSTOWN AND NO FURTHER REFUND IS DUE FROM US.

THUS YOUR INSISTENCE APPEARS TO BE THAT THE STATEMENT IN YOUR BID "WILL EQUALIZE WITH ANY LAND-GRANT SAVING FROM ANY OTHER POINT" WAS INTENDED TO MEAN THAT IF THE DIFFERENCE BETWEEN THE COMMERCIAL AND LAND-GRANT RATES FROM ANY COMPETITIVE POINT SHOULD PROVE TO BE GREATER THAN THE DIFFERENCE BETWEEN THE COMMERCIAL AND LAND-GRANT RATES FROM YOUR SHIPPING POINT, JOHNSTOWN, PA., DEDUCTION TO THE EXTENT OF THE EXCESS OF SUCH DIFFERENCE WOULD BE PERMITTED FROM THE PRICE STATED IN YOUR BID.

IF SUCH WAS THE INTENTION IN SUBMITTING THE BID, THEN THE LANGUAGE EMPLOYED WAS, TO SAY THE LEAST, AMBIGUOUS. THE RECORD SHOWS THAT THE CONTRACTING OFFICER UNDERSTOOD THE BID TO MEAN THAT IF A SAVING COULD BE EFFECTED THROUGH THE USE OF AN AVAILABLE NET LAND-GRANT RATE FROM A COMPETITOR'S SHIPPING POINT LOWER THAN THE NET LAND-GRANT RATE AVAILABLE FROM THE BIDDER'S SHIPPING POINT A DEDUCTION TO EQUALIZE THE DIFFERENCE WAS AUTHORIZED. THE LETTER OF NOVEMBER 14, 1935, FROM THE CONTRACTING OFFICER TO THE BIDDER EXPLAINED, IN CONNECTION WITH THE OFFER "TO EQUALIZE WITH ANY LAND-GRANT SAVING FROM ANY OTHER POINT" THAT A DEDUCTION WOULD BE MADE OF ,APPROXIMATELY $0.36253 PER HUNDRED WEIGHT TO EQUALIZE THE DIFFERENCE BETWEEN THE LAND-GRANT FREIGHT RATE FROM JOHNSTOWN, PA., TO WIOTA, MONT., AND THAT FROM STEELTON, MINN., TO WIOTA, NT.' AS THE WEIGHT OF THE WIRE WAS 40,000 POUNDS, THE DEDUCTION ON THIS BASIS AMOUNTED TO $145.01. THUS NOT ONLY WAS THE LANGUAGE OF THE BID UNDERSTOOD AS HAVING A DIFFERENT MEANING FROM THAT WHICH THE BIDDER NOW URGES WAS INTENDED, BUT THE FACT THAT IT WAS SO OTHERWISE UNDERSTOOD BY THE CONTRACTING OFFICER IN AWARDING THE CONTRACT WAS COMMUNICATED TO THE BIDDER BY LETTER AS OF THE DATE OF THE ACCEPTANCE OF THE BID AND THE ACCEPTANCE ITSELF SPECIFIED "EQUALIZATION ALLOWANCE OF $145.01.' APPARENTLY NO OBJECTION WAS MADE UNTIL AFTER THE CONTRACT HAD BEEN PERFORMED AND PAYMENT THEREFOR MADE PURSUANT TO THIS ACCEPTANCE. MOREOVER, THE RECORD SUGGESTS THAT IF THE OFFER TO EQUALIZE HAD BEEN GIVEN THE MEANING NOW URGED THE BETHLEHEM STEEL CO. WOULD NOT HAVE BEEN THE LOW BIDDER.

CONCERNING THE SUGGESTION IN THE REQUEST FOR REVIEW THAT LAND-GRANT RATES ARE NOT PUBLIC PROPERTY, THAT YOU HAD NO WAY OF KNOWING WHETHER THE GOVERNMENT "WOULD RECEIVE A LOWER NET DELIVERED COST UNDER THIS CONTRACT IF SHIPPED FROM THE MILL OF ANY OTHER MANUFACTURER THAN IF SHIPPED FROM OUR MILL," AND THAT YOU ACCEPTED THE STATEMENT OF $145.01 AS FREIGHT- EQUALIZATION ALLOWANCE, MADE IN THE ACCEPTANCE OF YOUR BID, IN THE UNDERSTANDING THAT IF SAID AMOUNT SHOULD PROVE TO BE INCORRECT THE GOVERNMENT WOULD MAKE CORRECTION THEREOF, IT IS TO BE NOTED THAT THE CLAIM HERE CONCERNED IS BASED UPON THE CONTENTION THAT THE EFFECT OR MEANING GIVEN THE OFFER TO EQUALIZE WAS IN ERROR RATHER THAN THAT THE RATES EMPLOYED IN GIVING THE OFFER SUCH MEANING AND EFFECT WERE INCORRECT.

THE SITUATION HERE PRESENTED IS SUBSTANTIALLY SIMILAR TO THAT CONSIDERED IN 16 COMP. GEN. 569, WHEREIN IT WAS SAID:

THE LANGUAGE COVERING THE EQUALIZATION OFFER OF THE PITTSBURGH STEEL CO. IS THE BIDDER'S OWN LANGUAGE DELIBERATELY ADOPTED AND SUBMITTED IN RESPONSE TO THE INVITATION FOR BIDS AND, THEREFORE, IF IT IS AMBIGUOUS OR SUSCEPTIBLE OF MORE THAN ONE INTERPRETATION THE INTERPRETATION MOST FAVORABLE TO THE GOVERNMENT MUST BE TAKEN AS INTENDED. AMERICAN SURETY CO. V. PAULY, 170 U.S. 133, 144; CALDERON V. ATLAS S.S. CO., 170 U.S. 272, 280-281.

ACCORDINGLY THERE APPEARS NO BASIS FOR GIVING THE OFFER TO EQUALIZE THE MEANING NOW URGED, AND THE DISALLOWANCE OF THE CLAIM FOR AN ADDITIONAL AMOUNT ARRIVED AT THROUGH THE APPLICATION OF SUCH MEANING IS SUSTAINED.