B-127291, MAR. 22, 1956

B-127291: Mar 22, 1956

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YOU REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT ON THE VOUCHER IS AUTHORIZED. WAS F.O.B. THE STATED TRANSPORTATION CHARGE FROM DEARBORN TO THE ASSEMBLY PLANT IN MEMPHIS WAS $94.92. YOU QUESTION WHETHER THE TRANSPORTATION CHARGES OF $94.92 IS FOR APPLICATION AGAINST THE UNIT PRICE OF $1. THE TERMS OF THE INSTANT CONTRACT REGARDING DELIVERY AND TRANSPORTATION COSTS ARE CLEAR AND UNAMBIGUOUS. IT WAS FURTHER AGREED THAT SHIPMENT FROM THE ASSEMBLY PLANT TO ULTIMATE DESTINATION (LITTLE ROCK. WHICH YOU STATE WAS DONE. THIS CASE IS SIMILAR TO THAT CONSIDERED IN 21 COMP. WHEREIN IT WAS HELD (QUOTING FROM THE SYLLABUS): "WHERE THE ACCEPTED BID FOR DESTINATION DELIVERY OF A PASSENGER CARRYING MOTOR VEHICLE SPECIFIED THE "MAIN FACTORY" AS THE POINT OF ORIGIN AND A LOCAL ASSEMBLY PLANT AS THE POINT FROM WHICH DELIVERY TO DESTINATION WAS TO BE MADE.

B-127291, MAR. 22, 1956

TO MR. W. E. PILCHER, FINANCE AND ACCOUNTING OFFICER, DEPARTMENT OF THE ARMY:

THERE HAS BEEN RECEIVED BY REFERENCE FROM THE CHIEF OF ENGINEERS, DEPARTMENT OF THE ARMY, A VOUCHER IN THE AMOUNT OF $4,310.52, STATED IN FAVOR OF THE FORD DIVISION, FORD MOTOR COMPANY, DEARBORN, MICHIGAN, COVERING PAYMENT FOR THREE AUTOMOBILES FURNISHED THE CORPS OF ENGINEERS, LITTLE ROCK, ARKANSAS, UNDER CONTRACT NO. DA-41-443-CIVENG 56-187, DATED DECEMBER 14, 1955. YOU REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT ON THE VOUCHER IS AUTHORIZED.

THE INVITATION FOR BIDS PROVIDED FOR DELIVERY OF SEVERAL LOTS OF AUTOMOBILES F.O.B. THE RESPECTIVE DISTRICT ENGINEER OFFICES LISTED THEREIN OR, IN THE ALTERNATIVE, F.O.B. POINT OF BIDDER'S SELECTION. IN EACH CASE THE CONTRACTOR BASED ITS BID ON ITS POINT OF SELECTION WHICH, UNDER ITEM 3 (B), THE ITEM HERE IN QUESTION, WAS F.O.B. FORD ASSEMBLY PLANT, MEMPHIS, TENNESSEE. THE BID AS ACCEPTED UNDER THIS ITEM PROVIDES FOR SHIPMENT ON GOVERNMENT BILL OF LADING WITHIN 90 CALENDAR DAYS AFTER RECEIPT OF NOTICE OF AWARD FROM THE ASSEMBLY PLANT IN MEMPHIS TO LITTLE ROCK, ARKANSAS.

IN SUBMITTING ITS BID THE FORD MOTOR COMPANY ATTACHED SCHEDULE "A," PARAGRAPH 5 OF WHICH SETS FORTH THE CURRENT TRANSPORTATION CHARGES APPLICABLE TO THE DELIVERY OF THE VARIOUS ITEMS FROM ITS MAIN PLANT IN DEARBORN, MICHIGAN, TO EACH OF THE STIPULATED ASSEMBLY PLANTS (BIDDER'S F.O.B. POINTS OF SELECTION). THE STATED TRANSPORTATION CHARGE FROM DEARBORN TO THE ASSEMBLY PLANT IN MEMPHIS WAS $94.92.

ON THE BASIS OF THE FOREGOING, YOU QUESTION WHETHER THE TRANSPORTATION CHARGES OF $94.92 IS FOR APPLICATION AGAINST THE UNIT PRICE OF $1,438.69 UNDER ITEM 3 (B) OF THE CONTRACT SO AS TO BRING THE CONTRACT UNIT PRICE WITHIN THE STATUTORY PRICE LIMITATION OF $1,350 AS PROVIDED FOR IN SECTION 201, TITLE II, GENERAL GOVERNMENT MATTERS APPROPRIATION ACT OF 1956, 69 STAT. 195.

THE TERMS OF THE INSTANT CONTRACT REGARDING DELIVERY AND TRANSPORTATION COSTS ARE CLEAR AND UNAMBIGUOUS. THE CONTRACTOR AGREED TO DELIVER THE CARS AT ITS ASSEMBLY PLANT IN MEMPHIS, ITS F.O.B. POINT OF SELECTION, AND STIPULATED THAT THE TRANSPORTATION COST PER VEHICLE FROM DEARBORN, MICHIGAN, POINT OF ORIGIN, TO MEMPHIS WOULD BE $94.92. IT WAS FURTHER AGREED THAT SHIPMENT FROM THE ASSEMBLY PLANT TO ULTIMATE DESTINATION (LITTLE ROCK, ARKANSAS) WOULD BE BY GOVERNMENT BILL OF LADING. THUS, WHEN THE CONTRACTOR RELEASED THE CARS TO THE CARRIER FOR SHIPMENT TO LITTLE ROCK, WHICH YOU STATE WAS DONE, IT FULFILLED ALL OF ITS CONTRACT OBLIGATIONS AND TITLE TO THE CARS BECAME VESTED IN THE GOVERNMENT.

WITH THE EXCEPTION THAT THE GOVERNMENT ASSUMED THE PAYMENT OF FREIGHT CHARGES FROM THE F.O.B. POINT OF SELECTION, THIS CASE IS SIMILAR TO THAT CONSIDERED IN 21 COMP. GEN. 474, WHEREIN IT WAS HELD (QUOTING FROM THE SYLLABUS):

"WHERE THE ACCEPTED BID FOR DESTINATION DELIVERY OF A PASSENGER CARRYING MOTOR VEHICLE SPECIFIED THE "MAIN FACTORY" AS THE POINT OF ORIGIN AND A LOCAL ASSEMBLY PLANT AS THE POINT FROM WHICH DELIVERY TO DESTINATION WAS TO BE MADE, AND SPECIFIED A LUMP-SUM AMOUNT AS FREIGHT COST WHICH IS REPORTED TO BE A CHARGE APPLIED BY THE MANUFACTURER TO ALL COMMERCIAL PURCHASES TO COVER TRANSPORTATION TO THE ASSEMBLY PLANT, THE ACTUAL COST OF TRANSPORTATION FROM THE DESIGNATED POINT OF ORIGIN TO DESTINATION MAY BE DEDUCTED FROM THE TOTAL DESTINATION PRICE, EXCLUSIVE OF TRANSPORTATION COST, IS WITHIN THE STATUTORY LIMIT. 20 COMP. GEN. 677, DISTINGUISHED.'

ACCORDINGLY, IN ANSWER TO THE QUESTION PRESENTED, YOU ARE ADVISED THAT THE TRANSPORTATION CHARGE OF $94.92 MAY BE APPLIED AGAINST THE UNIT BID PRICE OF $1,438.69 SO AS TO BRING THE CONTRACT UNIT PRICE WITHIN THE STATUTORY PRICE LIMITATION OF $1,350.

THE VOUCHER IS RETURNED HEREWITH AND YOU ARE ADVISED THAT PAYMENT THEREON IS AUTHORIZED.