B-143545, SEP. 7, 1960

B-143545: Sep 7, 1960

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YOUR BID WAS ACCEPTED ON A LOT OF INSECTICIDE. A 25 PERCENT VARIATION IN THE QUANTITY ADVERTISED WAS PERMITTED. THERE WAS WITHHELD FROM YOUR BID DEPOSIT THE AMOUNT BID PLUS 25 PERCENT TO COVER ANY POSSIBLE OVERAGE. APPROXIMATELY 3 WEEKS AFTER AWARD THE ITEM PURCHASED WAS DELIVERED. THREE DAYS LATER THE BID DEPOSIT LESS THE PRICE OF THE INSECTICIDE ACTUALLY RECEIVED WAS REFUNDED TO YOU. PAYMENT AT 10 PERCENT IN EXCESS OF THE BID PRICE WAS REQUIRED TO COVER A POSSIBLE VARIATION IN THE ESTIMATED QUANTITY OF THE ITEM PURCHASED PURSUANT TO THE TERMS OF THE SALES CONTRACT. WE ARE ADVISED THAT THE PROCEDURE IS REGARDED AS BENEFICIAL BOTH TO THE GOVERNMENT AND THE PURCHASER. GOVERNMENTAL AGENCIES ORDINARILY REQUIRE THAT SURPLUS MATERIALS SOLD BE PAID FOR IN FULL BEFORE THEY ARE TURNED OVER TO THE PURCHASER.

B-143545, SEP. 7, 1960

TO SURPLEX SALES:

WE REFER TO YOUR LETTERS OF JUNE 1 AND 18, 1960, CONCERNING A REQUIRED PAYMENT BY THE HIGH ACCEPTABLE BIDDER FOR ITEMS OF SURPLUS IN EXCESS OF THE BID PRICE TO COVER POSSIBLE OVERAGES IN QUANTITIES.

IN THE CASE OF A SURPLUS SALE AT CHANUTE AIR FORCE BASE, YOUR BID WAS ACCEPTED ON A LOT OF INSECTICIDE. PURSUANT TO THE INVITATION, A 25 PERCENT VARIATION IN THE QUANTITY ADVERTISED WAS PERMITTED. THERE WAS WITHHELD FROM YOUR BID DEPOSIT THE AMOUNT BID PLUS 25 PERCENT TO COVER ANY POSSIBLE OVERAGE. APPROXIMATELY 3 WEEKS AFTER AWARD THE ITEM PURCHASED WAS DELIVERED. THREE DAYS LATER THE BID DEPOSIT LESS THE PRICE OF THE INSECTICIDE ACTUALLY RECEIVED WAS REFUNDED TO YOU.

THE SECOND INSTANCES WHICH YOU NOTED OCCURRED WITH RESPECT TO A PURCHASE FROM THE WATERVLIET ARSENAL, AN INSTALLATION OF THE DEPARTMENT OF THE ARMY. IN THAT CASE, PAYMENT AT 10 PERCENT IN EXCESS OF THE BID PRICE WAS REQUIRED TO COVER A POSSIBLE VARIATION IN THE ESTIMATED QUANTITY OF THE ITEM PURCHASED PURSUANT TO THE TERMS OF THE SALES CONTRACT. WE ARE ADVISED THAT THE PROCEDURE IS REGARDED AS BENEFICIAL BOTH TO THE GOVERNMENT AND THE PURCHASER. GOVERNMENTAL AGENCIES ORDINARILY REQUIRE THAT SURPLUS MATERIALS SOLD BE PAID FOR IN FULL BEFORE THEY ARE TURNED OVER TO THE PURCHASER. FAILURE TO REQUIRE THE ADDITIONAL PAYMENT IN INSTANCES WHERE THE QUANTITY EXCEEDS THE ESTIMATE WITHIN PERMITTED TOLERANCES COULD RESULT IN DELAY, INCONVENIENCES, AND ADDITIONAL EXPENSE IF, FOR EXAMPLE, TRUCKERS SENT OUT TO PICK UP MATERIAL ON BEHALF OF THE PURCHASER ARE HELD UP PENDING THE ADDITIONAL PAYMENT.

SECTION 203 (C) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 40 U.S.C. 484, PROVIDES THAT SURPLUS PROPERTY MAY BE DISPOSED OF BY EXECUTIVE AGENCIES OF THE GOVERNMENT UPON SUCH TERMS AND CONDITIONS AS THE GENERAL SERVICES ADMINISTRATOR DEEMS PROPER. THE ADMINISTRATOR, AT 44 CFR 55.54 HAS PROVIDED THAT THE HEAD OF THE SELLING AGENCY MAY SELL SURPLUS PERSONAL PROPERTY ON CREDIT WHEN IT IS DEEMED TO BE DESIRABLE; HOWEVER, HE IS NOT REQUIRED TO DO SO. SO LONG AS CREDIT IS NOT TO BE EXTENDED THE REQUIREMENT IMPOSED BY THE WATERVLIET ARSENAL DOES NOT APPEAR TO BE UNREASONABLE, AND THERE APPEARS NO BASIS UPON WHICH WE COULD LEGALLY OBJECT THERETO.

AS NOTED ABOVE, CONDITIONS OF SURPLUS SALES ARE BY STATUTE WITHIN THE JURISDICTION OF THE GENERAL SERVICES ADMINISTRATOR. WE SUGGEST THAT ANY FURTHER CORRESPONDENCE WITH RESPECT TO THIS MATTER BE ADDRESSED TO HIM.