B-128633, AUG. 6, 1956

B-128633: Aug 6, 1956

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PUBLIC PRINTER: REFERENCE IS MADE TO A LETTER DATED JULY 16. THE ORIGINAL TERM WAS FROM JANUARY 1. THE CONTRACT PROVISIONS AS TO DELIVERY ARE AS FOLLOWS: " * * * PRICES QUOTED INCLUDE DELIVERY TO THE CONSIGNEE IF LOCATED WITHIN BALTIMORE. "DELIVERIES TO CONSIGNEES LOCATED IN AREAS OTHER THAN THOSE STATED IN THE PRECEDING PARAGRAPH WILL BE F.O.B. CONTRACTOR'S CITY AND ARE DEFINED AS DELIVERING TO A COMMON CARRIER IF THE CONSIGNEE IS LOCATED OUTSIDE THE CITY. IN WHICH THE CARDS ARE MANUFACTURED. IN WHICH THE CARDS ARE MANUFACTURED. IN WHICH THE CARDS ARE MANUFACTURED SHALL BE MADE IN ACCORDANCE WITH INSTRUCTIONS ACCOMPANYING THE PURCHASE ORDER BY ONE OR MORE OF THE FOLLOWING METHODS: "/1) GOVERNMENT BILLS OF LADING (TO BE FURNISHED BY THE ORDERING GOVERNMENT AGENCY WITH THE PURCHASE ORDER). "/2) PREPAID COMMERCIAL BILL OF LADING (CONTRACTOR TO BE REIMBURSED FOR SUCH COSTS BY THE ORDERING GOVERNMENT AGENCY). "/3) PREPAID PARCEL POST (CONTRACTOR TO BE REIMBURSED FOR SUCH COSTS BY THE ORDERING GOVERNMENT AGENCY).'.

B-128633, AUG. 6, 1956

TO HONORABLE RAYMOND BLATTENBERGER, PUBLIC PRINTER:

REFERENCE IS MADE TO A LETTER DATED JULY 16, 1956, FROM THE ACTING PUBLIC PRINTER, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER CONTRACT NO. GP-19172A, DATED DECEMBER 15, 1955, WITH INTERNATIONAL BUSINESS MACHINES CORPORATION MAY BE AMENDED SO AS TO PERMIT THE CONTRACTOR TO CONSOLIDATE SHIPMENTS AND FORWARD THEM IN POOL TRUCK CONSIGNMENTS AND WHETHER SHIPPING CHARGES MAY BE PAID TO THE CONTRACTOR BY GOVERNMENT AGENCIES WITHOUT RECEIVING A RECEIPTED FREIGHT BILL FOR EACH SHIPMENT.

THE CONTRACT REQUIRES THE INTERNATIONAL BUSINESS MACHINES CORPORATION TO FURNISH TABULATING CARDS IN SUCH QUANTITIES (SUBJECT TO SPECIFIED LIMITATIONS) AS MAY BE ORDERED BY VARIOUS AGENCIES OF THE GOVERNMENT DURING THE TERM OF THE CONTRACT. THE ORIGINAL TERM WAS FROM JANUARY 1, 1956, TO JUNE 30, 1956, BUT THE CONTRACT HAS BEEN EXTENDED TO DECEMBER 21, 1956. THE CONTRACT PROVISIONS AS TO DELIVERY ARE AS FOLLOWS:

" * * * PRICES QUOTED INCLUDE DELIVERY TO THE CONSIGNEE IF LOCATED WITHIN BALTIMORE, MARYLAND, WASHINGTON, D.C., OR THE SUBURBAN AREA OF WASHINGTON, D.C., (WITHIN A DISTANCE OF 15 MILES BEYOND THE DISTRICT OF COLUMBIA BOUNDARIES) VIA RAIL OR MOTOR FREIGHT.

"DELIVERIES TO CONSIGNEES LOCATED IN AREAS OTHER THAN THOSE STATED IN THE PRECEDING PARAGRAPH WILL BE F.O.B. CONTRACTOR'S CITY AND ARE DEFINED AS DELIVERING TO A COMMON CARRIER IF THE CONSIGNEE IS LOCATED OUTSIDE THE CITY, OR ADJACENT SUBURBAN AREA THEREOF, IN WHICH THE CARDS ARE MANUFACTURED, OR DELIVERY TO THE CONSIGNEE IF LOCATED IN THE CITY, OR ADJACENT SUBURBAN AREA THEREOF, IN WHICH THE CARDS ARE MANUFACTURED. SHIPMENTS MADE TO CONSIGNEES OUTSIDE THE CITY, OR ADJACENT AREA THEREOF, IN WHICH THE CARDS ARE MANUFACTURED SHALL BE MADE IN ACCORDANCE WITH INSTRUCTIONS ACCOMPANYING THE PURCHASE ORDER BY ONE OR MORE OF THE FOLLOWING METHODS:

"/1) GOVERNMENT BILLS OF LADING (TO BE FURNISHED BY THE ORDERING GOVERNMENT AGENCY WITH THE PURCHASE ORDER).

"/2) PREPAID COMMERCIAL BILL OF LADING (CONTRACTOR TO BE REIMBURSED FOR SUCH COSTS BY THE ORDERING GOVERNMENT AGENCY).

"/3) PREPAID PARCEL POST (CONTRACTOR TO BE REIMBURSED FOR SUCH COSTS BY THE ORDERING GOVERNMENT AGENCY).'

THE CONTRACTOR STATES THAT ITS POOL TRUCK LOADS MOVE ON A PREPAID BASIS AND, THEREFORE, GOVERNMENT BILLS OF LADING CANNOT BE USED. IT NOW MAKES LESS THAN TRUCK LOAD SHIPMENTS AND A RECEIPTED FREIGHT BILL IS FURNISHED FOR EACH SHIPMENT. IT HAS SUGGESTED THAT IT BE GIVEN PERMISSION TO MAKE POOL TRUCK SHIPMENTS INSTEAD OF LESS THAN TRUCK LOAD SHIPMENTS, URGING THAT SUCH CHANGE WOULD RESULT IN A SAVING IN FREIGHT CHARGES TO BOTH THE GOVERNMENT AND ITSELF AND STATING, IN EFFECT, THAT INCLUSION OF GOVERNMENT SHIPMENTS IN POOL TRUCK SHIPMENTS WOULD MAKE POSSIBLE ADDITIONAL POOL TRUCK AREAS AS WELL AS SAVING TRANSPORTATION COST TO THE GOVERNMENT AND THE CONTRACTOR IN EXISTING POOL TRUCK AREAS. HOWEVER, IF SHIPMENTS ARE MADE BY POOL TRUCK IT WILL BE IMPOSSIBLE TO FURNISH A RECEIPTED FREIGHT BILL FOR EACH SHIPMENT TO DIFFERENT CONSIGNEES. IT IS CONTEMPLATED THAT THE CONTRACTOR SHALL PRORATE THE TRUCK LOAD AND LOCAL DELIVERY CHARGES AND ADD THEM TO INVOICES FOR THE CARDS, ALSO FURNISHING PROOF OF DELIVERY AND PAYMENT OF THE TRANSPORTATION CHARGES IN THE FORM OF A MEMORANDUM COPY SIGNED BY THE CONSIGNEE.

THE FOLDER FURNISHED TO YOU BY THE CONTRACTOR UNDER DATE OF MARCH 22, 1956, CONTAINS INFORMATION AS TO THE MATTER GENERALLY, INCLUDING THE AMOUNT OF SAVINGS IN TRANSPORTATION COSTS WHICH MIGHT BE EXPECTED TO RESULT FROM ADOPTION OF THE PROPOSED PROCEDURE. THERE ARE LISTED EXAMPLES OF ACTUAL SHIPMENTS BY POOL TRUCK FOR THE AIR FORCE AND THE VETERANS ADMINISTRATION SHOWING AN AVERAGE SAVING OF APPROXIMATELY $20 PER SHIPMENT. A TABLE SETTING OUT THE RATES FROM THE CONTRACTOR'S SAN JOSE PLANT TO THE AREA OF SAN FRANCISCO, LOS ANGELES, AND DENVER SHOWS THE POOL RATES TO BE APPROXIMATELY HALF OF THE LESS THAN TRUCKLOAD RATES.

IN THE LETTER OF JULY 16, 1956, THE ACTING PUBLIC PRINTER EXPRESSES HIS VIEW THAT ADOPTION OF THE PROPOSED PROCEDURE WOULD BE TO THE ADVANTAGE OF THE GOVERNMENT BY GIVING IT THE BENEFIT OF LOWER TRANSPORTATION CHARGES ON CARDS FURNISHED UNDER THE CONTRACT. HE CALLS ATTENTION TO THE FACT THAT POOL TRUCK SHIPMENTS ARE USED IN CONNECTION WITH PURCHASES BY THE DEPARTMENT OF THE ARMY AND THE DEPARTMENT OF THE NAVY AND THAT PAYMENT CAN BE MADE FOR SUCH SHIPMENTS WITHOUT RECEIVING A RECEIPTED FREIGHT BILL FOR EACH SHIPMENT, AS SHOWN BY A LETTER DATED MAY 11, 1956, FROM THE DEPARTMENT OF THE ARMY TO THE CONTRACTOR AND BY ABSTRACTION OF NAVY COMPTROLLER NO. 4, DISBURSING SECTION NO. 046357, PARAGRAPH 5, SECTION C, COPIES OF WHICH WERE FURNISHED BY THE CONTRACTOR AND ACCOMPANIED THE LETTER OF JULY 16, 1956.

IT IS WELL SETTLED AS A MATTER OF LAW THAT GOVERNMENT CONTRACTS MAY BE MODIFIED IN THE INTEREST OF THE UNITED STATES. SEE 34 COMP. GEN. 219; 19 ID. 662. IN THE INSTANT MATTER, IT APPEARS THAT ADOPTION OF THE PROPOSED PROCEDURE WOULD BE IN THE INTEREST OF THE UNITED STATES BY GIVING IT THE BENEFIT OF LOWER TRANSPORTATION COSTS ON CARDS FURNISHED UNDER THE CONTRACT. PAYMENT OF TRANSPORTATION CHARGES BY GOVERNMENT AGENCIES WITHOUT RECEIVING RECEIPTED FREIGHT BILLS FOR EACH SHIPMENT MADE BY POOL TRUCK IS NOT DEEMED OBJECTIONABLE, INASMUCH AS THE PROPOSED PROCEDURE WOULD APPEAR TO PROVIDE FOR SATISFACTORY PROOF OF THE DELIVERY OF SHIPMENTS AND PAYMENT OF THE TRANSPORTATION COSTS TO THE CARRIER BY THE CONTRACTOR. ACCORDINGLY, WE PERCEIVE NO OBJECTION TO MODIFICATION OF THE CONTRACT AS PROPOSED, IF SUCH MODIFICATION IS DEEMED NECESSARY TO AUTHORIZE THE DESIRED CHANGE IN THE METHOD OF SHIPMENT.