A-93954, APRIL 25, 1938, 17 COMP. GEN. 871

A-93954: Apr 25, 1938

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CONTRACTS - FREIGHT CHARGES - DEDUCTIONS - COMMERCIAL RATES V.'IN TRANSIT" RATES WHERE CONTRACT FOR THE PURCHASE OF MATERIALS SPECIFICALLY RESERVED THE RIGHT IN THE GOVERNMENT TO HAVE SHIPMENT MADE ON GOVERNMENT BILL OF LADING AND TO DEDUCT FROM ANY PAYMENT DUE CONTRACTOR THE COST OF TRANSPORTATION OF THE TOTAL CONTRACT MATERIALS AT COMMERCIAL FREIGHT RATES FROM CONTRACT SHIPPING POINT. THE FACT THAT THE CONTRACT MATERIALS ORIGINATED AT A PLACE OTHER THAN THE STATED CONTRACT SHIPPING POINT AND THAT CONTRACTOR MIGHT HAVE PROCURED A LOWER "FABRICATION IN TRANSIT" RATE DOES NOT ENTITLE IT TO ANY PART OF THE COMMERCIAL FREIGHT CHARGES DEDUCTED. AS A PARTIAL REMISSION OF COMMERCIAL FREIGHT CHARGES WAS DISALLOWED.

A-93954, APRIL 25, 1938, 17 COMP. GEN. 871

CONTRACTS - FREIGHT CHARGES - DEDUCTIONS - COMMERCIAL RATES V.'IN TRANSIT" RATES WHERE CONTRACT FOR THE PURCHASE OF MATERIALS SPECIFICALLY RESERVED THE RIGHT IN THE GOVERNMENT TO HAVE SHIPMENT MADE ON GOVERNMENT BILL OF LADING AND TO DEDUCT FROM ANY PAYMENT DUE CONTRACTOR THE COST OF TRANSPORTATION OF THE TOTAL CONTRACT MATERIALS AT COMMERCIAL FREIGHT RATES FROM CONTRACT SHIPPING POINT, THE FACT THAT THE CONTRACT MATERIALS ORIGINATED AT A PLACE OTHER THAN THE STATED CONTRACT SHIPPING POINT AND THAT CONTRACTOR MIGHT HAVE PROCURED A LOWER "FABRICATION IN TRANSIT" RATE DOES NOT ENTITLE IT TO ANY PART OF THE COMMERCIAL FREIGHT CHARGES DEDUCTED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ST. PAUL CORRUGATING CO., APRIL 25, 1938:

THERE HAS BEEN CONSIDERED YOUR LETTER OF FEBRUARY 15, 1938, REQUESTING REVIEW OF SETTLEMENT NO. 0468218 DATED OCTOBER 16, 1937, WHEREIN YOUR CLAIM FOR REMISSION OF $169.28 DEDUCTED FROM PAYMENT UNDER CONTRACT NO. 12R-6237, DATED JUNE 24, 1936, AS A PARTIAL REMISSION OF COMMERCIAL FREIGHT CHARGES WAS DISALLOWED.

IT APPEARS FROM THE RECORD THAT BY INVITATION NO. 45526-A DATED JUNE 4, 1936, THE BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR, SOLICITED BIDS FOR OPENING JUNE 15 FOR THE FURNISHING OF 34 ITEMS OF CORRUGATED METAL PIPE, PRESSURE BANDS, WELDED STEEL PIPE AND GALVANIZED CARRIER RODS, ETC., FOR DELIVERY AT THE BIDDER'S SHIPPING POINT AND/OR FRENCHTOWN, MONT.; THAT YOUR BID DATED JUNE 11, 1936, OFFERING DELIVERY F.O.B. FRENCHTOWN, MONT., WITH SHIPMENT WITHIN 20 DAYS FROM ST. PAUL, MINN., BEING THE LOWEST BID RECEIVED, WAS ACCEPTED ON JUNE 24, 1936, AS TO "ALL ITEMS NO. 1 AND NO. 34, INCLUSIVE; F.O.B. CARS, FRENCHTOWN, MONT., WITH SHIPMENT ON GOVERNMENT BILL OF LADING FROM ST. PAUL, MINN., AND LESS COMMERCIAL FREIGHT; " THAT THE CONTRACT SUPPLIES WERE SHIPPED FROM ST. PAUL, MINN., TO FRENCHTOWN, MONT., ON A GOVERNMENT BILL OF LADING; THAT FROM PAYMENT OF THE CONTRACT PRICE $423.20 WAS DEDUCTED AS THE EQUIVALENT OF COMMERCIAL FREIGHT COST ON THE SHIPMENT; AND THAT YOU EXCEPT TO THIS DEDUCTION AND CLAIM $169.28 FOR THE REASON THAT THE MATERIALS FURNISHED ACTUALLY ORIGINATED AT NEWPORT, KY., WHICH PERMITTED YOU A FABRICATION IN TRANSIT RATE ON THE MOVEMENT INASMUCH AS YOU HAD AVAILABLE INBOUND TRANSIT AT ST. PAUL, MINN.

THE INVITATION, WHICH IN TURN BECAME YOUR BID, AND LATER, UPON ACCEPTANCE, THE CONTRACT, CONTAINS A PARAGRAPH, AS FOLLOWS:

EACH BIDDER SHALL STATE IN THE BLANKS PROVIDED THEREFOR IN THE SCHEDULE, THE TOTAL SHIPPING WEIGHT OF EACH ITEM THAT HE PROPOSES TO FURNISH. THE WEIGHTS STATED WILL BE USED IN COMPUTING THE DELIVERED COST TO THE GOVERNMENT AND IN DETERMINING THE LOW BID. FAILURE TO STATE THE SHIPPING AND DELIVERY POINTS AND THE TOTAL SHIPPING WEIGHT OF EACH ITEM, WILL BE CONSIDERED SUFFICIENT CAUSE FOR REJECTING THE BID. ALL EQUIPMENT, MATERIALS, AND SUPPLIES FURNISHED AND DELIVERED F.O.B. CARS AT CONTRACTOR'S SHIPPING POINT SHALL BE SHIPPED ON GOVERNMENT BILLS OF LADING. IN THE CASE OF EQUIPMENT, MATERIALS, AND SUPPLIES FURNISHED AND DELIVERED F.O.B. CARS AT DESTINATION, THE GOVERNMENT RESERVES THE RIGHT TO HAVE SHIPMENT MADE ON GOVERNMENT BILLS OF LADING AND TO DEDUCT, FROM ANY PAYMENT DUE THE CONTRACTOR, THE COST OF TRANSPORTATION, FROM THE CONTRACTOR'S SHIPPING POINT TO DESTINATION, OF THE TOTAL SHIPPING WEIGHT STATED IN THE SCHEDULE, AT COMMERCIAL FREIGHT RATES. IF THE ACTUAL SHIPPING WEIGHT, INCLUDING PACKING, AS LATER DETERMINED BY THE FREIGHT BILL, EXCEEDS THE SHIPPING WEIGHT STATED IN THE SCHEDULE, IN EITHER SHIPPING POINT OR DESTINATION BIDS, THE GOVERNMENT WILL DEDUCT, FROM ANY PAYMENT DUE THE CONTRACTOR, THE COST OF TRANSPORTATION AT COMMERCIAL FREIGHT RATES, ON ALL EXCESS WEIGHT OVER AND ABOVE THE WEIGHT STATED IN THE SCHEDULE.

NEITHER THE ABOVE QUOTED STIPULATION NOR THE TERMS OF THE GOVERNMENT'S ACCEPTANCE ARE IN ANY WAY AMBIGUOUS. IT MAY BE THAT BY MEANS OF THE "IN TRANSIT" PRIVILEGE YOU COULD HAVE SECURED A RATE MORE FAVORABLE THAN COMMERCIAL RATE BUT THIS CANNOT ALTER THE FACT THAT THE CONTRACT AUTHORIZED THE GOVERNMENT TO DEDUCT THE COMMERCIAL RATE.

THE CONTRACT IS THE MEASURE OF THE RIGHTS OF THE PARTIES AND THE FACT THAT THIS CONTRACT MAY HAVE RESULTED UNPROFITABLY BECAUSE OF YOUR FAILURE- -- IN SUBMITTING YOUR BID--- TO TAKE EXCEPTION TO THE ABOVE QUOTED PROVISION IS NO AUTHORIZATION FOR NOW REWRITING THE CONTRACT TO ACCORD WITH WHAT YOU NOW STATE TO HAVE BEEN YOUR INTENTION AT THE TIME YOU AGREED TO THE CONTRACT. THE ABOVE-QUOTED STIPULATION IN THE CONTRACT WAS NOT ADDED AFTER YOU HAD SUBMITTED YOUR BID BUT WAS MADE A PART THEREOF AT THE TIME. THE GOVERNMENT KNEW THE COMMERCIAL RATE FROM ST. PAUL, MINN., TO FRENCHTOWN, MONT., AND KNEW, ALSO, THAT IF SHIPMENT WAS MADE ON A GOVERNMENT BILL OF LADING THE GOVERNMENT COULD SAVE THE DIFFERENCE BETWEEN THE TWO RATES IN ACCORDANCE WITH THE STIPULATION INCORPORATED IN THE CONTRACT. HAD YOU KNOWN AT THE TIME THAT THERE WAS A POSSIBILITY OF SECURING THE BENEFITS OF AN "IN TRANSIT" RATE YOU SHOULD HAVE MADE THAT FACT KNOWN TO THE REPRESENTATIVES OF THE GOVERNMENT AT THE TIME YOUR BID WAS SUBMITTED BY TAKING EXCEPTION TO THE STIPULATION AS TO FREIGHT DEDUCTIONS.

THE SETTLEMENT HAVING BEEN MADE IN ACCORDANCE WTIH THE TERMS OF THE CONTRACT, THE SAME MUST BE AND IS SUSTAINED.