B-134412, JANUARY 7, 1958, 37 COMP. GEN. 459

B-134412: Jan 7, 1958

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BID BECAUSE THE PROCURING AGENCY DID NOT CONTEMPLATE RESHIPMENT OVERSEAS BUT MERELY INTENDED TO OFFER BIDDERS THE OPTION TO DELIVER BY RAIL OR TRUCK AT DEPOT TERMINAL OR BY WATER AT DESIGNATED PIER IS PROPER UNDER ACCEPTED DEFINITION OF ABBREVIATIONS F.A.S. 1958: FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 13. YOU QUESTION THE PROPRIETY OF THE AWARD FOR THE STATED REASON THAT YOU WERE LOW BIDDER. CONSIDERING THAT YOUR BID WAS ON AN F.A.S. BASIS WHEREAS THE BID OF THE CASCADE PILING COMPANY WAS ON AN F.O.B. POINT: QUOTATIONS ARE REQUESTED F.O.B. IT WAS STATED ON YOUR BID. - WHICH WAS IN THE AMOUNT OF $2. - " PRICE IS F.A.S. WAS ON AN F.O.B. BID WAS IN FACT LOWER THAN THE F.O.B. IN THE CONTRACTING OFFICER'S REPORT IT IS STATED: 2.

B-134412, JANUARY 7, 1958, 37 COMP. GEN. 459

BIDS - EVALUATION - DELIVERY PROVISIONS - F.A.S. AND F.O.B. DESTINATION EVALUATION OF AN F.O.B. AND AN F.A.S. DELIVERY BID SUBMITTED IN RESPONSE TO AN INVITATION, WHICH PROVIDED FOR DELIVERY F.O.B. SUPPLY DEPOT OR F.A.S. DESIGNATED PIER AT SUPPLY DEPOT, ON AN EQUAL BASIS WITHOUT CONSIDERATION OF ADDITIONAL WHARFAGE AND UNLOADING CHARGES TO THE LOW F.O.B. BID BECAUSE THE PROCURING AGENCY DID NOT CONTEMPLATE RESHIPMENT OVERSEAS BUT MERELY INTENDED TO OFFER BIDDERS THE OPTION TO DELIVER BY RAIL OR TRUCK AT DEPOT TERMINAL OR BY WATER AT DESIGNATED PIER IS PROPER UNDER ACCEPTED DEFINITION OF ABBREVIATIONS F.A.S. AS MEANING MERELY "FREE ALONGSIDE" AND REQUIRING ADDITION OF WORD "VESSEL" OR OTHER APPROPRIATE INDICATION; HOWEVER, IN THE FUTURE TO AVOID CONFUSION THE PROCURING AGENCY SHOULD EXPLAIN THE INTENDED MEANING OF SUCH ABBREVIATIONS.

TO NIEDERMEYER-1MARTIN CO., JANUARY 7, 1958:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 13, 1957, ACKNOWLEDGED NOVEMBER 21, PROTESTING THE ACTION OF THE DEPARTMENT OF THE NAVY IN AWARDING TO CASCADE PILING COMPANY A CONTRACT FOR FURNISHING 10 LOGS UNDER INVITATION FOR BIDS NO. IFB-406-50-58, ISSUED OCTOBER 22, 1957, BY THE NAVAL SUPPLY DEPOT, SEATTLE, WASHINGTON. YOU QUESTION THE PROPRIETY OF THE AWARD FOR THE STATED REASON THAT YOU WERE LOW BIDDER, CONSIDERING THAT YOUR BID WAS ON AN F.A.S. BASIS WHEREAS THE BID OF THE CASCADE PILING COMPANY WAS ON AN F.O.B. BASIS.

THE INVITATION CONTAINED PROVISIONS AS FOLLOWS:

F.O.B. POINT: QUOTATIONS ARE REQUESTED F.O.B. DESTINATION OR

F.A.S. PIER 91, I.E., RECEIVING OFFICER, NA

SUPPLY DEPOT, SEATTLE 99, WASHINGTON AND/OR

F.O.B. CARRIER'S EQUIPMENT, WHARF, OR FREIGHT

STATION (AT THE GOVERNMENT'S OPTION) AT OR NEAR

CONTRACTOR'S PLANT. AND, IN THE COLUMN PROVIDED FOR INSERTION OF THE UNIT PRICE:

F.O.B. OR F.A.S. NAVAL SUPPLY DEPOT, SEATTLE, WASH. BIDDER TO

INDICATE WHICH IN HIS BID.

IT WAS STATED ON YOUR BID--- WHICH WAS IN THE AMOUNT OF $2,240--- " PRICE IS F.A.S. NAVAL DEPOT, SEATTLE, WASH.' THE BID OF CASCADE PILING COMPANY, IN THE AMOUNT OF $2,100, WAS ON AN F.O.B. BASIS.

YOU CONTEND THAT THE TERM "F.A.S.' CONTEMPLATES DELIVERY ALONGSIDE OVERSEAS VESSEL AND WITHIN REACH OF ITS LOADING TACKLE; THAT THE ADDITIONAL COST OF PLACING THE LOGS IN THAT LOCATION AS COMPARED WITH DELIVERY F.O.B. NAVAL SUPPLY DEPOT WOULD BE APPROXIMATELY $3.39 PER LONG FOR WHARFAGE AND $22.50 PER LOG FOR UNLOADING CHARGE; AND THAT, THEREFORE, YOUR F.A.S. BID WAS IN FACT LOWER THAN THE F.O.B. BID OF CASCADE PILING COMPANY.

IN RESPONSE TO THE REQUEST OF OUR OFFICE, THE DEPARTMENT OF THE NAVY HAS FURNISHED PERTINENT PAPERS AND A REPORT SETTING OUT THE FACTS AND ITS VIEWS IN THE MATTER. IN THE CONTRACTING OFFICER'S REPORT IT IS STATED:

2. ENCLOSURE (4) ASKED FOR BIDS FOR DELIVERY OF CAMEL LOGS ONE OF TWO WAYS, EITHER F.O.B. OR F.A.S., NAVAL SUPPLY DEPOT, SEATTLE, WASHINGTON, OR F.O.B. CARRIER'S EQUIPMENT WHARF, OR FREIGHT STATION AT OR NEAR CONTRACTOR'S PLANT. THE STIPULATION OF F.A.S. WAS ADDED A NUMBER OF YEARS AGO TO IFBS FOR HEAVY TIMBERS AND PILING TO ALLOW DELIVERY BY WATER. THIS ADDITION WAS BASED ON REQUESTS FROM THE LUMBER INDUSTRY. AS FAR AS THIS ACTIVITY IS CONCERNED THERE IS NO DIFFERENCE IN THE COST OF HANDLING OF HEAVY TIMBERS OR PILING BETWEEN F.O.B. AND F.A.S., PIER 91, SEATTLE, WASHINGTON. THE CONTRACT STEVEDORE COST FOR UNLOADING OR LOADING OF HEAVY TIMBERS OR PILING IS THE SAME WHETHER RECEIVED BY RAIL CAR, TRUCK, OR IN THE WATER ALONGSIDE THE PIER. THE ONLY REASON ENCLOSURE (4) REQUESTED THE BIDDER TO INDICATE F.O.B. OR F.A.S. ON HIS BID WAS TO ENABLE THIS ACTIVITY TO MAKE NECESSARY UNLOADING ARRANGEMENTS.

7. FUTURE IFBS ISSUED BY THIS ACTIVITY FOR HEAVY TIMBERS OR PILING WILL CONTAIN A STATEMENT THAT F.O.B. AND F.A.S. FOR DELIVERY TO THIS COMMAND WILL BE EVALUATED EQUALLY.

IT IS STATED ALSO IN THE REPORT THAT YOUR BID DID NOT CONTAIN THE REQUIRED INFORMATION AS TO WHERE INSPECTION WAS TO BE MADE.

YOUR PROTEST OBVIOUSLY IS FOUNDED UPON THE SUPPOSITION THAT THE LOGS WERE INTENDED FOR RESHIPMENT BY WATER FROM THE SEATTLE DEPOT, AND THAT CONSEQUENTLY THE COST TO THE GOVERNMENT OF MOVING THEM FROM RAILROAD CARS OR TRUCKS TO SHIPSIDE WOULD HAVE TO BE ADDED TO THE F.O.B. PRICE IN ORDER PROPERLY TO COMPARE A BID F.O.B. CARS OR TRUCKS WITH YOUR BID F.A.S. PIER. THE INVITATION CONTAINS NOTHING TO SUPPORT SUCH AN ASSUMPTION, AND IT APPEARS TO BE THE FACT THAT THE LOGS WERE DESIRED AT THE SUPPLY DEPOT, AND BIDDERS WERE GIVEN THE OPTION OF DELIVERING THEM BY RAIL OR TRUCK AT THE DEPOT TERMINAL OR BY WATER AT THE DESIGNATED PIER. IN EITHER CASE THE SELLER'S OBLIGATION WOULD END UPON ARRIVAL OF THE LOGS AT ONE OF THOSE POINTS, AND THE GOVERNMENT WOULD HAVE THE COST OF UNLOADING, WHICH, ACCORDING TO THE ADMINISTRATIVE REPORT, WOULD BE THE SAME WHETHER LAND OR WATER SHIPMENT WAS INVOLVED. ON THESE FACTS, WE MUST CONCLUDE THAT THE CONTRACTING OFFICER'S ACTION WAS CORRECT.

PRESUMABLY YOUR ASSUMPTION WAS OCCASIONED BY THE USE OF THE ABBREVIATION F.A.S., WHICH YOU CONSTRUE TO MEAN THAT THE PRICE INCLUDES DELIVERY OF THE GOODS ALONGSIDE OVERSEAS VESSEL AND WITHIN REACH OF ITS LOADING TACKLE. WHILE THIS APPEARS TO BE THE GENERALLY ACCEPTED CONNOTATION, IT IS CUSTOMARILY USED WITH THE WORD "VESSEL" OR WITH THE NAME OF A SPECIFIC VESSEL, AND IT IS ALSO USED WITH THE WORD "PIER," OR "DOCK," AS IT WAS IN THIS INSTANCE, WHERE THE POINT DESIGNATED IS THE DESTINATION OF THE SHIPMENT RATHER THAN THE POINT OF SHIPMENT. SEE, FOR EXAMPLE, THE W. FERDINAND ARMSTRONG, 69 F.1SUPP. 824; SMILEY STEEL CO. V. SCHMOLL, 193 N.Y.S. 522. WE MAY ALSO POINT OUT THAT WHERE OVERSEAS SHIPMENT IS INVOLVED THE ABBREVIATION "F.O.B.' PROPERLY MEANS FREE ON BOARD THE OVERSEAS VESSEL. SEE MCGOWIN LUMBER AND EXPORT CO. V. R. J. AND B. F. LUMBER CO., ( ALA.) 68 SO. 263.

THE INITIALS "F.A.S.' HAVE BEEN DEFINED AS MEANING "FREE ALONGSIDE SHIP" ( BLACK L. D.),"FREE ALONGSIDE STEAMER" ( BALLENTINE L. D.), OR "FREE ABOARD STEAMER" (55 CORPUS JURIS, SALES SECT. 323). PROFESSOR WILLISTON, HOWEVER, CONSIDERS THE INITIALS AS MEANING MERELY "FREE ALONG SIDE," REQUIRING THE ADDITION OF THE WORD "VESSEL" OR OTHER APPROPRIATE INDICATION (2 WILLISTON, SALES, ( REVISED USED.) 120), AND THAT USAGE APPEARS TO BE RECOGNIZED BY THE FOREIGN TRADE DEFINITIONS ADOPTED IN 1941 BY A JOINT COMMITTEE OF THE U.S. CHAMBER OF COMMERCE, THE NATIONAL COUNCIL OF IMPORTERS, AND THE NATIONAL FOREIGN TRADE COUNCIL.

WE AGREE THAT THE USE OF SUCH ABBREVIATIONS WITHOUT EXACT DEFINITION AND ADEQUATE EXPLANATION TENDS TO BE CONFUSING, BUT IN THE CONTEXT OF THE SUBJECT INVITATION WE THINK THE TERM F.A.S. SHOULD NOT BE CONSTRUED AS CONTEMPLATING ANYTHING MORE THAN DELIVERY BY WATER TO THE PIERSIDE. THE DEPARTMENT OF THE NAVY WILL BE ADVISED OF OUR VIEW THAT THE USE OF THESE AND SIMILAR ABBREVIATIONS WITHOUT CLEAR EXPLANATION OF THE MEANING INTENDED SHOULD BE AVOIDED.