B-132865, SEP. 5, 1957

B-132865: Sep 5, 1957

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED AUGUST 8. ALLEGES WAS MADE IN ITS BID ON WHICH CONTRACT NO. N62649S-3624 IS BASED. PROSPECTIVE BIDDERS WERE ADVISED THAT THEY COULD BID. IF THEY WERE BIDDING FOR SCRAP. THE BID OF IISUKA SHINGO SHOTEN WAS ACCEPTED AS TO ITEM 13 AND OTHER ITEMS ON APRIL 22. CLAIMING THAT ITS BID PRICE FOR THE CRASH CRANE TRUCK COVERED BY ITEM 13 WAS BASED ON ITS BELIEF THAT SUCH TRUCK WOULD NOT HAVE TO BE SCRAPPED BUT THAT IT COULD BE IMPORTED INTO JAPAN AND THAT SUCH BELIEF WAS BASED ON THE FACT THAT VEHICLES OF NOT LESS THAN 7 1/2 TONS ARE SPECIFICALLY APPROVED TO BE IMPORTED INTO JAPAN IN THE BIDS OF THE UNITED STATES ARMY. THE CONTRACTING OFFICER ADVISED THE COMPANY THAT HE WAS WITHOUT AUTHORITY TO GRANT THE RELIEF REQUESTED BUT THAT.

B-132865, SEP. 5, 1957

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 8, 1957, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH IIZUKA SHINGO SHOTEN, YOKOHAMA, JAPAN, ALLEGES WAS MADE IN ITS BID ON WHICH CONTRACT NO. N62649S-3624 IS BASED.

THE UNITED STATES NAVAL SUPPLY DEPOT, YOKOSUKA, JAPAN, BY INVITATION NO. 62649/B-180-57, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS SURPLUS MOTOR VEHICLES. IN A SPECIAL NOTICE, ATTACHED TO THE INVITATION, PROSPECTIVE BIDDERS WERE ADVISED THAT THEY COULD BID, ON THE ITEMS BEING OFFERED FOR SALE, EITHER FOR EXPORT OR FOR SCRAP, AND THAT, IF THEY WERE BIDDING FOR SCRAP, THEY WOULD BE REQUIRED TO SCRAP THE ITEM OR ITEMS PURCHASED IN THE MANNER PRESCRIBED THEREIN. IN RESPONSE IIZUKA SHINGO SHOTEN SUBMITTED A BID, IN PART, AS FOLLOWS:

TABLE

TOTAL PRICE BID ITEM DESCRIPTION AND

QUANTITY UNIT OF PRICE BID NO. LOCATION OF PROPERTY (NUMBER OF UNITS) MEASURE PER UNIT DOLLARS CENTS 13. TRUCK, CRASH CRANE, 1 EA. APA 10 TON CAPACITY MODEL

50 V. 1945, EQUIPPED

WITH CRANE ATTACHMENT,

GAR-WOOD MODEL US6T26.

MANUFACTURED BY REO

MOTORS COMPANY INCORPORATED

USN NO. . . . . 82-02089

ENGINE SER. NO. 592418

CHASSIS NO. . . 8305

ESTIMATED WEIGHT 10,000 LBS.

ACQUISITION COST $11,600.00

(4,176,000.00 YEN)

(A) PRICE BID FOR EXPORT

(B) PRICE BID FOR SCRAP 432,000.00 YEN

($1,200.00)

THE LIST OF BIDS SHOWS THAT OF THE FIVE OTHER BIDS ON ITEM 13, FOUR BIDS SPECIFIED SCRAP PRICES RANGING FROM 215,000.00 YEN TO 153,900.00 YEN AND THAT THE FIFTH BID SPECIFIED AN EXPORT PRICE OF 347,760.00 YEN. THE BID OF IISUKA SHINGO SHOTEN WAS ACCEPTED AS TO ITEM 13 AND OTHER ITEMS ON APRIL 22, 1957.

BY LETTER DATED APRIL 25, 1957, IISUKA SHINGO SHOTEN ALLEGED ERROR, CLAIMING THAT ITS BID PRICE FOR THE CRASH CRANE TRUCK COVERED BY ITEM 13 WAS BASED ON ITS BELIEF THAT SUCH TRUCK WOULD NOT HAVE TO BE SCRAPPED BUT THAT IT COULD BE IMPORTED INTO JAPAN AND THAT SUCH BELIEF WAS BASED ON THE FACT THAT VEHICLES OF NOT LESS THAN 7 1/2 TONS ARE SPECIFICALLY APPROVED TO BE IMPORTED INTO JAPAN IN THE BIDS OF THE UNITED STATES ARMY. THE COMPANY REQUESTED THAT ITEM 13 OF THE CONTRACT BE CANCELLED. IN A LETTER DATED APRIL 29, 1957, THE CONTRACTING OFFICER ADVISED THE COMPANY THAT HE WAS WITHOUT AUTHORITY TO GRANT THE RELIEF REQUESTED BUT THAT, IF THE COMPANY DESIRED, THE MATTER WOULD BE SUBMITTED TO THE GENERAL ACCOUNTING OFFICE FOR ITS CONSIDERATION.

IN A LETTER DATED MAY 20, 1957, THE COMPANY STATED:

"IT WAS TWO OR THREE YEARS AGO THAT THE JAPANESE MITI STOPPED TO APPROVE DISPOSITION OF THE VEHICLES FROM THE U.S. FORCES, MAYBE FROM THE POINT OF VIEW OF REHABILITATION OF THE JAPANESE NATIONAL ECONOMY IN THE AUTO INDUSTRY (EXCEPT EXPORT). DUE TO THE ABOVE, WE SUFFERED FOR ALONG TIME SERIOUSLY.

"AFTER THIS, WE DID NOT RECEIVED FOR A LONG TIME ANY INVITATIONS OF VEHICLE SALE UNTIL THE JANUARY 1957 WHEN THE ARMY AGAIN BEGAN TO SELL VEHICLES. THE NAVY'S INVITATIONS OF VEHICLE SALE WE RECEIVED IN AND AFTER THIS MARCH 1957. BUT, AT ABOUT THE SAME TIME THE ARMY (FIRST I THOUGHT BOTH ARMY AND NAVY) BEGAN TO ADOPT THE METHOD OF AMENDMENT (A SAMPLE ATTACHED HERETO) BASED ON MITI'S GUARANTEE TO THE EFFECT THAT MITI GUARANTEES NEVER TO EXPORT SUCH VEHICLES, BECAUSE 7 1/2 TON TRUCK OR MORE ARE NOT HURTING JAPANESE INDUSTRY. AND SUCH AMENDMENTS WE SOMETIMES KNEW ACTUALLY WHEN WE RETURNED TO OUR COMPANY SOMETIMES AFTER BID OPENING.

"TO BE VERY UNFORTUNATE TO US, ALL THE SENTENCES OF THE INVITATION ISSUED BY THE ARMY AND THE REQUIREMENTS OF THAT WRITTEN IN THE NAVY'S INVITATION AS TO VEHICLE SALES ARE VERY SIMILAR, AND BESIDES, WE THE BIDDERS CANNOT READ ENGLISH WELL. I AM SURE IT IS VERY RARE THAT THERE IS ANY BIDDER WHO IS SO-CALLED "SCRAP-MAN" AND THAT CAN READ COMPLICATED ENGLISH REGULATIONS AS WELL AS ENGLISH TEACHER IN SCHOOL.

"THE REAL WEIGHT OF SCRAP OF ITEM NO. 13 IS ONLY 5 TONS OR SO SCRAP AS 200,000.00 YEN, BUT NEVER 400,000.00 YEN. PLEASE REFER TO THE IN THE SUBJECT CONTRACT WERE INCORPORATED THEREIN BY THE DEPARTMENT OF PRICES WE BID FOR OTHER ITEMS UNDER THE SAME BID TOGETHER WITH THE TONNAGES OF EACH. MY COMPANY, FURTHER, NEVER BID FOR EXPORT. MY COMPANY IS SCRAPPING COMPANY.'

IT IS EVIDENT FROM THE RECORD THAT THE SCRAPPING REQUIREMENTS CONTAINED IN THE SUBJECT CONTRACT WERE INCORPORATED THEREIN BY THE DEPARTMENT OF THE NAVY TO COMPLY WITH THE RESTRICTIONS IMPOSED BY THE MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY, JAPANESE GOVERNMENT. IT IS REPORTED BY THE DISPOSAL DEPOT THAT THE REFERRED-TO SCRAPPING REQUIREMENTS HAVE SINCE BEEN MODIFIED AND THAT EQUIPMENT SUCH AS THAT COVERED BY ITEM 13, IF OFFERED TODAY, WOULD NOT HAVE TO BE SCRAPPED UNLESS SO DIRECTED BY THE JAPANESE MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY. IT SEEMS TO BE CLEARLY ESTABLISHED THAT THE COMPANY'S BID AS TO ITEM 13 WAS BASED ON THE EXPECTATION OF USING THE TRUCK COVERED BY THAT ITEM.

IT APPEARS FROM THE COMPANY'S LETTER OF MAY 20, 1957, THAT THE COMPANY IS IN POSSESSION OF THE TRUCK COVERED BY ITEM 13. ACCORDINGLY, SINCE IT APPEARS THAT THE JAPANESE MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY HAS LIFTED ITS IMPORT RESTRICTIONS ON THE TYPE OF EQUIPMENT COVERED BY ITEM 13, WE SEE NO NEED FOR REQUIRING THE COMPANY TO COMPLY WITH THE SCRAPPING REQUIREMENTS OF THE CONTRACT. THE COMPANY SHOULD BE ADVISED THAT THE UNITED STATES GOVERNMENT WILL NOT ENFORCE THE SCRAPPING REQUIREMENTS OF THE CONTRACT AND THAT INSOFAR AS OUR GOVERNMENT IS ..END :