B-142949, JUL. 21, 1960

B-142949, JUL. 21, 1960

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED MAY 17, 1960, FROM MR. L. J. NIEDERMEYER, A PARTNER IN THE NIEDERMEYER-MARTIN COMPANY, PORTLAND, OREGON, PROTESTING THE ADMINISTRATIVE DISALLOWANCE OF $368.57 BECAUSE OF LATE DELIVERY IN MAKING PAYMENT ON PURCHASE ORDER NO. 60DE-10676-1, CONTRACT NO. GS-O8S-15144, ISSUED BY THE FEDERAL SUPPLY SERVICE, DENVER, COLORADO.

THE RECORD BEFORE US DISCLOSES THAT GSA, AFTER REJECTING ALL OFFERS UNDER REQUEST NO. 10676, ISSUED TELEGRAPHIC REQUEST NO. 10676A, DATED FEBRUARY 8, 1960, REQUESTING NEW TELEGRAPHIC OR WRITTEN OFFERS FOR FURNISHING LUMBER FOR A CONSTRUCTION PROJECT AT FORT CARSON, COLORADO, TO BE DELIVERED WITHIN 15 DAYS. REQUEST NO. 10676A STATED THAT TIME OF DELIVERY MIGHT BE OF THE ESSENCE IN MAKING AWARD AND REQUESTED BIDDERS TO STATE THE EARLIEST FIRM DATE REQUIRED FOR COMPLETE DELIVERY.

IN REPLY TO THIS REQUEST, THE NIEDERMEYER-MARTIN COMPANY BY TELEGRAM DATED FEBRUARY 9, 1960, OFFERED TO DELIVER THE LUMBER WITHIN 15 DAYS AT A PRICE OF $117.50 PER THOUSAND BOARD FEET, SUBJECT TO IMMEDIATE TELEGRAPHIC ACCEPTANCE OF ITS OFFER. ON FEBRUARY 10, 1960, GSA ADVISED NIEDERMEYER- MARTIN BY TELEGRAM THAT AN ORDER FOR THE LUMBER ON THE BASIS OF ITS OFFER WAS IN PROCESS, THAT TIME OF DELIVERY WAS A FACTOR IN MAKING THE AWARD, THAT DELIVERY AT DESTINATION WAS DUE BY FEBRUARY 25, 1960, AND THAT A CONFIRMING ORDER WAS BEING AIRMAILED THAT DAY. THIS TELEGRAM FROM GSA FURTHER REQUESTED AN ACKNOWLEDGMENT FROM NIEDERMEYER-MARTIN, WHICH WAS GIVEN THE SAME DAY BY TELEGRAM ADVISING THAT PRODUCTION WAS STARTING IMMEDIATELY.

NIEDERMEYER-MARTIN CONFIRMED ITS ACCEPTANCE OF THE ORDER BY LETTER DATED FEBRUARY 10, 1960, IN WHICH IT AGREED THAT ALL LUMBER WAS TO BE DELIVERED AT FORT CARSON BY FEBRUARY 25, 1960. UP TO THIS TIME, NIEDERMEYER-MARTIN HAD BEEN ADVISED ONLY THAT TIME WAS OF THE ESSENCE AND THAT ITS PROMISED TIME OF DELIVERY HAD BEEN A FACTOR IN ITS RECEIVING THE AWARD. NIEDERMEYER-MARTIN ALLEGES FURTHER THAT UPON RECEIVING THE TELEGRAPHIC NOTICE OF AWARD IT MADE TELEPHONE INQUIRY OF GSA TO ASCERTAIN THE PRICES AND DELIVERY TERMS OFFERED BY OTHER BIDDERS AND WAS ADVISED THAT SUCH INFORMATION WOULD NOT BE DISCLOSED BECAUSE THE PROCUREMENT WAS MADE BY NEGOTIATION.

A PURCHASE ORDER AND CONTRACT, BOTH DATED FEBRUARY 10, 1960, WERE MAILED TO NIEDERMEYER-MARTIN BY GSA. BOTH CONTAINED THE FOLLOWING CLAUSE:

"AWARD WAS MADE TO OTHER THAN THE LOWEST ACCEPTABLE BIDDER AS TO PRICE TO SECURE EARLIER DELIVERY. FOR ANY SUPPLIES DELIVERED TO THE POINT SPECIFIED LATER THAN ABOVE DATE (FEBRUARY 25, 1960), THE PRICE PAYABLE TO THE CONTRACTOR FOR EACH ITEM SHALL BE THE PRICE QUOTED BY SUCH OTHERWISE LOWEST ACCEPTABLE BIDDER.'

WE ARE INFORMED BY THE FEDERAL SUPPLY SERVICE THAT NIEDERMEYER MARTIN REFUSED TO ACCEPT THIS CONDITION, AND DELETED IT FROM THE COPY OF THE FORMAL CONTRACT WHICH IT EXECUTED AND RETURNED TO GSA. IN THE LIGHT OF THE FACTS OUTLINED ABOVE, IT SEEMS CLEAR THAT A CONTRACT BETWEEN NIEDERMEYER-MARTIN AND THE UNITED STATES CAME INTO BEING ON FEBRUARY 10, 1960, UPON THE EXCHANGE OF TELEGRAMS THAT DAY BETWEEN THE COMPANY AND GSA. AS STATED, NIEDERMEYER-MARTIN HAD NO NOTICE OF GSA'S INTENTION TO APPLY THE ABOVE-QUOTED PRICE REDUCTION CLAUSE TO THE TRANSACTION UNTIL AFTER THE TELEGRAPHIC CONTRACT HAD BEEN CONSUMMATED. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE CONTRACTOR'S ENTITLEMENT TO PAYMENT MUST BE DETERMINED WITHOUT REGARD TO THE CLAUSE IN QUESTION.