A-93559, MARCH 29, 1938, 17 COMP. GEN. 793

A-93559: Mar 29, 1938

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NOTWITHSTANDING THE BIDDER'S SUPPLIER MAY HAVE DISCONTINUED THE COMMERCIAL MANUFACTURE OF THE PARTICULAR TYPE OF EQUIPMENT. IF THE GOVERNMENT'S NEEDS WILL BE MET BY EQUIPMENT OF A DIFFERENT TYPE OFFERED BY THE BIDDER. THERE IS NO LEGAL OBJECTION TO ACCEPTING DELIVERY THEREOF IF PAYMENT IS NOT IN EXCESS OF THE ORIGINAL ACCEPTED BID PRICE. ADVICE IS REQUESTED AS TO WHAT STEPS SHOULD BE TAKEN IN THE FOLLOWING CASE. THERE ARE ATTACHED HEREWITH THREE (3) SETS OF PROPOSALS COVERING THE PROPOSED PURCHASE OF THREE (3) RCA TYPE TMV97C TEST OSCILLATORS. WAS AWARDED THE CONTRACT FOR FURNISHING THE TEST OSCILLATORS. WAS AWARDED THE CONTRACT FOR FURNISHING THE ANALYZERS. THE BIDS WERE ACCEPTED AND AWARDED.

A-93559, MARCH 29, 1938, 17 COMP. GEN. 793

CONTRACTS - MANUFACTURER'S DISCONTINUANCE OF INVOLVED EQUIPMENT - CONTRACTOR'S LIABILITY FOR DEFAULT THE ACCEPTANCE OF A BID TO FURNISH A CERTAIN TYPE OF TECHNICAL EQUIPMENT IMPOSED UPON THE BIDDER THE LEGAL OBLIGATION TO PERFORM THE CONTRACT OR PAY TO THE GOVERNMENT ANY DAMAGES RESULTING FROM DEFAULT IN PERFORMANCE AND PURCHASE OF SAID OR SIMILAR EQUIPMENT ELSEWHERE, NOTWITHSTANDING THE BIDDER'S SUPPLIER MAY HAVE DISCONTINUED THE COMMERCIAL MANUFACTURE OF THE PARTICULAR TYPE OF EQUIPMENT, BUT IF THE GOVERNMENT'S NEEDS WILL BE MET BY EQUIPMENT OF A DIFFERENT TYPE OFFERED BY THE BIDDER, THERE IS NO LEGAL OBJECTION TO ACCEPTING DELIVERY THEREOF IF PAYMENT IS NOT IN EXCESS OF THE ORIGINAL ACCEPTED BID PRICE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE CHAIRMAN, FEDERAL COMMUNICATIONS COMMISSION, MARCH 29, 1938:

THERE HAS BEEN RECEIVED YOUR LETTER OF MARCH 21, 1938, AS FOLLOWS:

OCCASION HAS ARISEN FOR THIS COMMISSION TO CONSULT YOUR OFFICE IN CONNECTION WITH CERTAIN BIDS ISSUED FOR THE FURNISHING OF OFFICIAL TECHNICAL EQUIPMENT. ADVICE IS REQUESTED AS TO WHAT STEPS SHOULD BE TAKEN IN THE FOLLOWING CASE.

THERE ARE ATTACHED HEREWITH THREE (3) SETS OF PROPOSALS COVERING THE PROPOSED PURCHASE OF THREE (3) RCA TYPE TMV97C TEST OSCILLATORS, AND THREE (3) WESTON MODEL 665 SELECTIVE ANALYZERS, TYPE 2; THE TEST OSCILLATORS TO BE USED FOR ALIGNMENT OF BROADCAST RECEIVERS, AND THE SELECTIVE ANALYZERS TO BE USED FOR SERVICE WORK ON OFFICIAL EQUIPMENT.

ON THE BASIS OF AWARDING CONTRACT TO THE LOWEST QUALIFIED BIDDER AS TO PRICE, THE RCA MANUFACTURING COMPANY, INC., CAMDEN, N.J., WAS AWARDED THE CONTRACT FOR FURNISHING THE TEST OSCILLATORS; AND THE WILMINGTON ELECTRICAL SPECIALTY COMPANY, INC., WILMINGTON, DELAWARE, WAS AWARDED THE CONTRACT FOR FURNISHING THE ANALYZERS.

THE BIDS WERE ACCEPTED AND AWARDED, AND OFFICIAL PURCHASE ORDERS WERE ISSUED TO EACH FIRM FOR FURNISHING MATERIAL AS CONTRACTED. HOWEVER, AFTER RECEIPT OF OFFICIAL PURCHASE ORDER, THE WILMINGTON ELECTRICAL SPECIALTY COMPANY INFORMED THE COMMISSION BY LETTER DATED MARCH 5, 1938, THAT THEY WERE UNABLE TO FURNISH THE MATERIAL AS SPECIFIED, DUE TO THE FACT THAT THE MANUFACTURE OF THIS TYPE ANALYZER HAS BEEN DISCONTINUED.

THE WESTON COMPANY, MANUFACTURERS OF THIS PARTICULAR EQUIPMENT, ON THEIR INVITATION AND BID, CROSSED OUT "TYPE 2" AND INSERTED "TYPE 1.' HOWEVER, THE WILMINGTON COMPANY BID IN ACCORDANCE WITH THE SPECIFICATIONS AS SET FORTH ON THE INVITATIONS. TEN (10) DAYS WERE ALLOWED BEFORE OPENING OF BIDS, FEBRUARY 18, 1938, AND PURCHASE ORDER WAS ISSUED FEBRUARY 25, 1938.

THE COMMISSION REQUESTS THE RETURN OF THE ATTACHED PAPERS AND LETTERS PERTINENT TO THE CASE.

AN EARLY REPLY WILL BE APPRECIATED.

THE ACCEPTANCE OF THE BID SUBMITTED BY THE WILMINGTON ELECTRICAL SPECIALTY CO., INC., FOR THE DELIVERY OF "WESTON MODEL 665 SELECTIVE ANALYZERS, TYPE 2," IMPOSED ON THAT COMPANY THE LEGAL OBLIGATION TO PERFORM THE CONTRACT IN ACCORDANCE WITH ITS TERMS OR TO PAY THE UNITED STATES ANY DAMAGES RESULTING FROM DEFAULT IN PERFORMANCE. SEE UNITED STATES V. NEW YORK AND PORTO RICO STEAMSHIP CO., 239 U.S. 88, AND UNITED STATES V. PURCELL ENVELOPE CO., 249 U.S. 313. THE FACT IS IMMATERIAL, AS NOW ALLEGED BY THE WILMINGTON ELECTRICAL SPECIALTY CO., INC., THAT ITS SUPPLIER, THE WESTON ELECTRICAL INSTRUMENT CORPORATION, HAS DISCONTINUED THE COMMERCIAL MANUFACTURE OF TYPE 2 WESTON MODEL 665 SELECTIVE ANALYZERS. THE UNITED STATES IS NOT NECESSARILY REQUIRED TO DEPEND UPON COMMERCIAL MANUFACTURE FOR SUPPLIES MEETING ITS NEEDS AND THERE APPEARS NO REASON WHY THE WILMINGTON ELECTRICAL SPECIALTY CO., INC., SHOULD HAVE SUBMITTED A BID TO DELIVER THE SUPPLIES IN QUESTION WITHOUT HAVING SUCH SUPPLIES IN ITS POSSESSION OR HAVING PREVIOUSLY DETERMINED THAT THEY COULD BE OBTAINED. IN ANY EVENT IT IS APPARENT THAT A "WESTON MODEL 665 SELECTIVE ANALYZER, TYPE 2," CAN BE MANUFACTURED, AND IF THE NEED OF THE FEDERAL COMMUNICATIONS COMMISSION IS SUCH THAT ONLY SUCH AN INSTRUMENT WILL MEET THE NEEDS OF THE GOVERNMENT THE CONTRACTOR SHOULD BE REQUIRED TO DELIVER SAME, AND IF IT FAILS TO DO SO THREE SUCH ANALYZERS OR SIMILAR ONES SHOULD BE PURCHASED ELSEWHERE AND THE CONTRACTOR CHARGED WITH ALL DAMAGES TO THE UNITED STATES BY REASON OF THE DEFAULT IN PERFORMANCE.

IT IS NOTED THAT THE CONTRACTOR HAS REPORTED IN LETTER OF MARCH 5, 1938, THAT IT COULD FURNISH A TYPE 1 WESTON MODEL 665 SELECTIVE ANALYZER FOR A NET PRICE OF $55.58 AND $3.93 EXTRA FOR THE CARRYING CASE AS COMPARED WITH THE CONTRACT PRICE OF $46.30 FOR THE TYPE 2 INSTRUMENT. IF THE GOVERNMENT NEEDS MAY BE MET BY A TYPE 1 INSTRUMENT, THERE WOULD APPEAR TO BE NO LEGAL OBJECTION TO PERMITTING THE WILMINGTON ELECTRICAL SPECIALTY CO., INC., TO MAKE DELIVERY OF THREE TYPE 1 INSTRUMENTS IN LIEU OF THE THREE TYPE 2 INSTRUMENTS REQUIRED BY THE TERMS OF THE CONTRACT, BUT THE WILMINGTON ELECTRICAL SPECIALTY CO., INC., MAY BE PAID NO AMOUNT IN EXCESS OF THE CONTRACT PRICE THEREFOR, TO WIT, $46.30 EACH. SEE PREIS V. UNITED STATES, 58 CT.CLS. 81. ..END :