B-149659, SEP. 18, 1962

B-149659: Sep 18, 1962

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

DEFENSE SUPPLY AGENCY: REFERENCE IS MADE TO LETTER DATED AUGUST 7. A DECISION IS ALSO REQUESTED AS TO THE LEGALITY OF THE AWARD OF A CONTRACT MADE TO LEHIGH CHEMICAL COMPANY ON JULY 11. THE QUANTITIES SET FORTH ARE FIRM AND THE DATES ON WHICH DELIVERY IS TO BE MADE ARE SPECIFIED. ORIGIN BIDS DELIVERY IS TO BE MADE 10 DAYS EARLIER THAN THE DATES SPECIFIED FOR F.O.B. THE FACTS AND CIRCUMSTANCES INVOLVED ARE SET FORTH IN THE ATTACHED REPORT OF THE CONTRACTING OFFICER AS FOLLOWS: "4. ITEM 32 IS FOR THE SUPPLY OF 5. LEHIGH'S BID OF ?32 PER PINT WAS EVALUATED AS THE LOW ON THIS ITEM. ONE BIDDER WHO BID ?22 PER PINT WAS DECLARED NONRESPONSIVE BECAUSE OF AN EXCEPTION HE TOOK TO THE GOVERNMENT'S PACKING SPECIFICATIONS.

B-149659, SEP. 18, 1962

TO THE DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO LETTER DATED AUGUST 7, 1962, REQUESTING DECISION AS TO THE PROPRIETY OF ACCEPTING THE BID SUBMITTED BY LEHIGH CHEMICAL COMPANY, CHESTERTOWN, MARYLAND, IN RESPONSE TO INVITATION FOR BIDS NO. DSA -6-62-160, OPENED ON JULY 10, 1962, BY THE DEFENSE PETROLEUM SUPPLY CENTER, WASHINGTON, D.C. A DECISION IS ALSO REQUESTED AS TO THE LEGALITY OF THE AWARD OF A CONTRACT MADE TO LEHIGH CHEMICAL COMPANY ON JULY 11, 1962, CONTRACT NO. DSA-6-1375, UNDER A BID SIMILARLY WORDED.

THE INVITATION REQUESTED BIDS FOR REQUIREMENTS FOR PACKAGED PETROLEUM PRODUCTS. THE QUANTITIES SET FORTH ARE FIRM AND THE DATES ON WHICH DELIVERY IS TO BE MADE ARE SPECIFIED. ON F.O.B. ORIGIN BIDS DELIVERY IS TO BE MADE 10 DAYS EARLIER THAN THE DATES SPECIFIED FOR F.O.B. DESTINATION DELIVERY IN SECTION III, PARAGRAPH (E), PAGE 25 OF THE SCHEDULE. THE FACTS AND CIRCUMSTANCES INVOLVED ARE SET FORTH IN THE ATTACHED REPORT OF THE CONTRACTING OFFICER AS FOLLOWS:

"4. THE IFB CONSISTED OF THE COVER PAGE, TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, ADDITIONAL TERMS AND CONDITIONS OF THE INVITATION FOR BIDS; SPECIAL TERMS AND CONDITIONS; SMALL BUSINESS SET ASIDES; SCHEDULE, SECTIONS I THROUGH XIV; GENERAL PROVISIONS FOR PETROLEUM CONTRACTS (MPSA FORM 77, NOVEMBER 1961 EDITION) AND SUPPLEMENT Z THERETO. (INCL. 1).

"5. LEHIGH CHEMICAL COMPANY OF CHESTERTOWN, MARYLAND SUBMITTED A BID ON ITEMS 32 AND 33 ONLY. ITEM 32 IS FOR THE SUPPLY OF 5,500 PINTS OF PENETRATING OIL FOR MARIETTA AIR FORCE STATION, MARIETTA, PENNSYLVANIA. LEHIGH'S BID OF ?32 PER PINT WAS EVALUATED AS THE LOW ON THIS ITEM. THE NEXT LOW BIDDER BID ?33 PER PINT. ONE BIDDER WHO BID ?22 PER PINT WAS DECLARED NONRESPONSIVE BECAUSE OF AN EXCEPTION HE TOOK TO THE GOVERNMENT'S PACKING SPECIFICATIONS, I.E., COMMERCIAL CANS IN LIEU OF SPECIFICATION CANS. ITEM 33 IS FOR THE SUPPLY OF 4,644--- 8-OUNCE TUBES OF TECHNICAL PETROLATUM ALSO FOR MARIETTA. LEHIGH WAS ALSO EVALUATED AS THE LOW BIDDER ON THIS ITEM AT ?48. THERE WAS ONLY ONE OTHER BID ON THIS ITEM AT ?61. (SEE ABSTRACT OF BIDS--- INCL. 2).

"6. UNDER EACH ITEM BID ON, LEHIGH TYPED IN A LINE AS FOLLOWS: "ITEM NO. 32: FOB CHESTERTOWN, MARYLAND; MINIMUM FREIGHT ALLOWED.' "ITEM NO. 33: FOB CHESTERTOWN, MARYLAND; MINIMUM FREIGHT ALLOWED.' AS THE EXACT MEANING OF THE ABOVE WERE NOT CLEAR, LEHIGH WAS REQUESTED TO CLARIFY SAME. LEHIGH DID SO BY LETTER DATED 11 JULY 1962. (INCL. 3).

"7. THE IFB STATED IN THE SPECIAL TERMS AND CONDITIONS (PAGE 8 OF IFB) THAT: "2. DESTINATION BIDS ARE REQUESTED ON ALL ITEMS UNLESS OTHERWISE INDICATED, BUT ORIGIN BIDS WILL BE CONSIDERED.' IT FURTHER STATED IN SECTION X OF THE SCHEDULE (PAGE 31) AS FOLLOWS: "SECTION X POINT OF ACCEPTANCE--- BY THE GOVERNMENT OF SUPPLIES FURNISHED HEREUNDER SHALL BE MADE AT ORIGIN ON F.O.B. ORIGIN DELIVERIES AND AT DESTINATION ON F.O.B. DESTINATION DELIVERIES.' CLAUSE 9 (B) OF THE GENERAL PROVISIONS (MPSA FORM 77, NOVEMBER 1961 EDITION) PROVIDES FOR SUBMISSION OF INVOICES IN ONE MANNER ON SUPPLIES DELIVERED F.O.B. ORIGIN AND OTHERWISE ON F.O.B. DESTINATION (AS WILL BE EXPLAINED BELOW, THERE IS UNCERTAINTY AS TO WHICH, IF EITHER, OF THESE TWO DESIGNATIONS SUCH A BID AS SUBMITTED HERE WILL FIT). CLAUSE 10 (B) STATES THAT, FOR DELIVERY ON AN F.O.B. ORIGIN BASIS, TRANSPORTATION WILL BE FURNISHED BY THE GOVERNMENT. CLAUSE 10 (C) PROVIDES THAT WHERE SUPPLIES ARE TO BE DELIVERED F.O.B. TRANSPORTATION EQUIPMENT AT CONTRACTOR'S REFINERY, ETC. THAT THE CONTRACTOR SHALL SHIP ON A GOVERNMENT BILL OF LADING AND SHALL COMPLY WITH ROUTING INSTRUCTIONS FURNISHED BY THE GOVERNMENT.

"8. THE CONTRACTOR'S BID, AS INTERPRETED BY HIS LETTER OF 11 JULY 1962, CONTEMPLATES INSPECTION AND ACCEPTANCE BY THE GOVERNMENT OF THE SUPPLIES IN HIS PLANT AND THEN HIS SELECTING THE TRANSPORTATION EQUIPMENT, THE ROUTING, AND PAYING THE FREIGHT BILL. IN SOLICITING BIDS UNDER THE IFB, THE GOVERNMENT AGREED TO CONSIDER BIDS ON AN F.O.B. ORIGIN OR F.O.B. DESTINATION BASIS. THESE TWO TERMS HAVE DEFINITE MEANINGS AND ARE SO UNDERSTOOD BY ALL CONTRACTORS AND GOVERNMENT PERSONNEL. F.O.B. ORIGIN MEANS THAT THE GOVERNMENT WILL INSPECT, ACCEPT AND TAKE TITLE AT THE CONTRACTORS PLANT AND WILL FURNISH A GOVERNMENT BILL OF LADING AND ROUTING INSTRUCTIONS. F.O.B. DESTINATION MEANS THAT FINAL INSPECTION AND ACCEPTANCE WILL BE AT DESTINATION AND THE CONTRACTOR WILL ARRANGE FOR AND PAY ALL FREIGHT CHARGES TO DESTINATION.

"9. WHAT THE CONTRACTOR HAS OFFERED APPEARS TO BY A HYBRID. IT MEETS NEITHER OF THE TWO TYPES OF DELIVERY INTENDED BY THE IFB. IT IS NOT F.O.B. ORIGIN, IN THAT GOVERNMENT DOES NOT PAY THE FREIGHT TO DESTINATION AND SELECT THE ROUTING AND CARRIER. ALSO, IT ALLOWS THE CONTRACTOR CONTROL OVER GOVERNMENT-OWNED PROPERTY IN THAT AFTER FINAL ACCEPTANCE, HE DECIDES HOW AND WITH WHICH CARRIER TO SHIP. FURTHER, THE BID CANNOT BE EVALUATED AS AN F.O.B. ORIGIN BID BECAUSE IT WOULD NOT BE FAIR TO ADD FREIGHT TO THE PRICE WHEN CONTRACTOR INTENDS TO PAY THE FREIGHT. IN CASE OF DAMAGE IN TRANSIT, THE CARRIER'S CONTRACT WOULD BE WITH THE CONTRACTOR BUT IT WOULD BE THE GOVERNMENT WHICH WOULD BE DAMAGED SINCE TITLE WOULD HAVE PASSED WITHIN THE MEANING OF THE CONTRACTOR'S LETTER OF 11 JULY 1962. THERE WOULD BE NO PRIVITY BETWEEN THE GOVERNMENT AND THE CARRIER AND THE CLAIM WOULD HAVE TO BE FILED BY THE CONTRACTOR. IT IS DOUBTED THAT THE CONTRACTOR WOULD BE VERY ENTHUSIASTIC IN PURSUING A CLAIM WHERE IT HAD ALREADY BEEN PAID FOR THE PRODUCT AND TITLE HAD PASSED TO THE GOVERNMENT. THE OFFER IS NOT AN F.O.B. DESTINATION OFFER BECAUSE THIS TERM INTENDS THAT FINAL INSPECTION AND ACCEPTANCE BE MADE AT DESTINATION.

"10. THERE IS A FURTHER QUESTION ABOUT THE EQUALITY OF THE POSITION OF THE BIDDERS WHEN ONE BIDDER IS ALLOWED TO USE THIS METHOD. THE ECONOMIC ADVANTAGE OF BIDDING F.O.B. DESTINATIONS IS THAT BY HAVING A CONTRACT WITH A CONTRACT CARRIER (AS OPPOSED TO COMMON CARRIER) OR USING YOUR OWN TRUCKING EQUIPMENT, A BIDDER CAN END UP NETTING MORE FOR HIS PRODUCT. FOR EXAMPLE, IF "A" BIDS ?32 F.O.B. ORIGIN,"B" BIDS ?35 F.O.B. DESTINATION AND "C" BIDS ?34 F.O.B. DESTINATION (AND THE COMMON CARRIER FREIGHT, WHICH "B" (BUT NOT "C") INTENDS TO USE, IS ?03), THEN THE BIDS ARE EVALUATED AS FOLLOWS:

TABLE

"A" - ?32 PLUS ?03 EQUALS ?35

"B" - ?35 PLUS ?00 EQUALS ?35

"C" - ?34 PLUS ?00 EQUALS ?34

"C" WOULD BE AWARDED THE CONTRACT; IF, HOWEVER, HE WAS ABLE TO MOVE THE PRODUCT TO DESTINATION FOR ?02 (OR ANY AMOUNT BELOW ?03) IT CAN BE SEEN THAT HE IS NETTING MORE AT THE FACTORY THAN THE OTHER TWO BIDDERS. IT IS FOR THIS REASON THAT LEHIGH WISHES TO ARRANGE FOR THE TRANSPORTATION. THE ADVANTAGE THAT AN F.O.B. ORIGIN BID HAS OVER AN F.O.B. DESTINATION BID IS THAT IN ACCORDANCE WITH SECTION X ACCEPTANCE IS MADE AT ORIGIN. THIS HAS THREE ADVANTAGES: (I) IF SUPPLIES DO NOT MEET SPECIFICATIONS THEY CAN BE CORRECTED BY CONTRACTOR'S PERSONNEL AT HIS FACTORY WHICH IS MUCH CHEAPER THAN CORRECTING AT DESTINATION OR HAVING THEM RETURNED (II) IF THEY ARE DAMAGED IN TRANSIT, IT IS THE GOVERNMENT'S PROBLEM, AND (III) IF THEY WERE ACCEPTED AT ORIGIN AND ARE NONSPECIFICATION AT DESTINATION, THE PRODUCT WOULD STILL BE RECEIVED AT DESTINATION AND STORED. IN THIS LATTER CASE, EITHER THE LATENT DEFECTS PROVISION OF THE INSPECTIONS AND ACCEPTANCE CLAUSE, OR THE GUARANTY CLAUSE COULD BE INVOKED BY THE GOVERNMENT, BUT THIS IS BETTER FROM THE SUPPLIER'S VIEWPOINT THAN HAVING THE SHIPMENT REJECTED AT THE DEPOT AND RETURNED. THIS IS BECAUSE HE HAS RECEIVED HIS MONEY AND HIS CAPITAL IS NOT TIED UP WHILE NEGOTIATIONS ARE GOING ON, AND ALSO BECAUSE IF THE DEFECT IS CORRECTABLE, THE GOVERNMENT WILL SOMETIMES ALLOW CORRECTION AT THE DEPOT AND THUS FREIGHT IS SAVED TO THE SUPPLIERS PLANT AND BACK TO THE DEPOT AGAIN.

"11. LEHIGH IS ATTEMPTING WITH THIS BID TO GET THE BEST OF BOTH F.O.B. ORIGIN AND F.O.B. DESTINATION BIDS (AS OUTLINED ABOVE) WHICH NO OTHER BIDDER HAS DONE.

"12. THERE IS CONSIDERABLE DOUBT IN THE MIND OF THE CONTRACTING OFFICER AS TO THE MEANING OF ,MINIMUM FREIGHT ALLOWED.' DESPITE THE BIDDER'S LETTER OF 11 JULY 1962, THIS TERM IS NOT WIDELY USED THROUGHOUT INDUSTRY. THE CONTRACTING OFFICER HAS MADE INFORMAL INQUIRY TO THE MILITARY TRAFFIC MANAGEMENT AGENCY AS WELL AS THE TRAFFIC BRANCH OF DPSC IN BOTH CASES HAS BEEN INFORMED THAT THIS PHRASE WAS UNFAMILIAR TO THEM. THE PHRASE "FREIGHT ALLOWED" IS KNOWN BUT WHEN THE WORK "MINIMUM" IS ADDED DOUBT IS CREATED. ONE INTERPRETATION IS THAT EVEN IF A SHIPMENT IS LESS THAN A MINIMUM CARLOAD OR TRUCKLOAD (RESULTING IN MAXIMUM COSTS) THAT THE CONTRACTOR WILL PAY REGARDLESS. THE OTHER IS THAT IT MEANS MINIMUM DOLLARS OUT OF THE CONTRACTOR'S POCKET.

"13. IT IS THEREFORE RECOMMENDED THAT THE BID BE DEEMED NONRESPONSIVE BECAUSE (I) IT TAKES EXCEPTION TO THE TERMS OF THE SOLICITATION OF OFFERS (IFB) WHICH EXCEPTION GOES TO PRICE AND DELIVERY (ASPR 2-405) (II) ACCEPTANCE OF THIS COUNTER OFFER WOULD NOT LEAVE ALL BIDDERS ON AN EQUAL FOOTING AS EXPLAINED IN PARAGRAPHS 8 AND 9 ABOVE (ASPR 2-301) AND (III) UNCERTAINTY AS TO MEANING TO THE EXPRESSION USED, WHICH, IF ULTIMATELY INTERPRETED IN A WAY NOT FORESEEN, WOULD RESULT IN AN UNASCERTAINABLE PRICE AND PERHAPS RESULT IN THE APPARENT LOW BIDDER (LEHIGH IN THIS CASE) BEING IN FACT THE HIGH BIDDER--- IF THE GOVERNMENT HAS TO PAY PART OF THE TRANSPORTATION COSTS.

"14. ADVICE IS FURTHER REQUESTED ON WHETHER A CONTRACT AWARDED ON 11 JULY 1962 SHOULD BE CANCELLED. IN THIS IFB LEHIGH MADE THE SAME STATEMENT UNDER THE ITEMS BID ON. THE AWARD WAS MADE WITH THE WORD "MINIMUM" OMITTED. UNDER CONTRACT NO. DSA-6-1375 THE BIDDER WAS AWARDED 3,023 EIGHT OUNCE TUBES OF AIRCRAFT AND INSTRUMENT GREASE AT ?75 PER TUBE AND 9,187 FOUR OUNCE CANS OF INSTRUMENT LUBRICATING OIL AT ?26 PER CAN. THE TOTAL CONTRACT IS FOR $4,655.87. (INCL. 4).'

WE BELIEVE THAT MORE HAS BEEN READ INTO THE OFFER MADE BY LEHIGH THAN ACTUALLY EXISTS. ON THE BASIS OF THE BID AS SUBMITTED, AND WHICH CANNOT PROPERLY BE CHANGED AFTER THE BID OPENING, LEHIGH OFFERED TO FURNISH FOR CERTAIN PRICES ITEMS 32 AND 33 "F.O.B. CHESTERTOWN, MARYLAND; MINIMUM FREIGHT ALLOWED.' WE WOULD READ THE WORDS "MINIMUM FREIGHT ALLOWED" IN THIS CONNECTION AS AFFECTING NOTHING EXCEPT THE PRICE TO BE PAID BY THE GOVERNMENT FOR THE GOODS,LEAVING ALL INCIDENTS OF PASSING OF TITLE AND DETAILS OF SHIPMENT EXACTLY AS IF THESE WORDS HAD NOT BEEN ADDED. APPARENTLY THERE WOULD HAVE BEEN NO QUESTION AS TO THE MEANING OF THE BID HAD LEHIGH OMITTED THE WORD "MINIMUM.' IN THAT CASE A GOVERNMENT BILL OF LADING WOULD HAVE BEEN ISSUED PROVIDING FOR SHIPMENT FROM CHESTERTOWN, MARYLAND, TO MARIETTA, PENNSYLVANIA. IN SO DOING, THE GOVERNMENT NATURALLY SHOULD PROVIDE FOR THE CHEAPEST METHOD OF TRANSPORTATION REASONABLY AVAILABLE CONSIDERING THE TYPE AND QUANTITY OF THE GOODS INVOLVED. THE AMOUNT OF THE TRANSPORTATION COSTS WOULD THEN BE DEDUCTIBLE FROM LEHIGH'S INVOICE. SHOULD THE GOVERNMENT FOR SOME REASON, SUCH AS A NEED FOR QUICKER DELIVERY OR OTHERWISE, DIRECT SHIPMENT BY OTHER THAN THE CHEAPEST REASONABLY AVAILABLE MEANS OF TRANSPORTATION THE ADDITIONAL COST FOR SUCH SERVICE COULD NOT BE CHARGED TO LEHIGH. IN OTHER WORDS, ONLY THE LOWEST OR "MINIMUM" FREIGHT TRANSPORTATION COSTS COULD BE CHARGED AGAINST THE CONTRACTOR. THUS WE DO NOT SEE THAT LEHIGH, BY ADDING THE WORD "MINIMUM" TO "FREIGHT ALLOWED," HAS IN FACT CREATED A DOUBT AS TO THE REASONABLE MEANING OF THE BID, WHEN WITHOUT THE WORD "MINIMUM" ALL THAT COULD BE CHARGED AGAINST THE CONTRACTOR WOULD BE THE LOWEST OF "MINIMUM" TRANSPORTATION COSTS FOR MOVING THE GOODS INVOLVED FROM POINT OF ORIGIN TO DESTINATION. THE SAME PROBLEM WOULD SEEM TO BE INVOLVED IN EVALUATING F.O.B. ORIGIN BIDS TO DETERMINE WHICH BID WOULD RESULT IN THE LOWEST COST TO THE GOVERNMENT.

IN LEHIGH'S LETTER OF JULY 11, 1962, EXPLAINING THE WORDS USED IN THE BID, IT IS STATED:

"THIS TERMINOLOGY IS WISELY USED AND ACCEPTED THROUGHOUT INDUSTRY AND OUR COMPANY HAS BEEN USING THIS METHOD FOR SOME TIME. IT IS VIRTUALLY IMPOSSIBLE TO GO INTO ALL OF THE DETAILS OF SUCH A TERMINOLOGY IN A BRIEF LETTER. BRIEFLY, IT IMPLIES THAT INSPECTION AND ACCEPTANCE BY THE GOVERNMENT IS AT OUT PLANT IN CHESTERTOWN, MARYLAND. FURTHER, IT MEANS THAT LEHIGH CHEMICAL WILL ROUTE AND PAY THE FREIGHT CHARGES INVOLVED TO THE GOVERNMENT DESTINATION SPECIFIED, ON A COMMERCIAL BILL OF LADING.'

THE FIRST PART OF THE EXPLANATION OF THE BID, THAT FINAL INSPECTION AND ACCEPTANCE IS AT ORIGIN, IS IN ACCORDANCE WITH THE TERMS OF THE INVITATION. THE SECOND PART, HOWEVER, IS INCONSISTENT BOTH WITH THE TERMS OF THE INVITATION AND WITH WHAT WE CONSIDER AS THE REASONABLE INTERPRETATION OF THE BID AS SUBMITTED. UNDER THE BID AS SUBMITTED, WE BELIEVE THAT THE GOVERNMENT HAS THE RIGHT TO ISSUE A GOVERNMENT BILL OF LADING AS PROVIDED UNDER CLAUSE 10 (C) OF THE GENERAL PROVISIONS OF THE INVITATION AND REQUIRE SHIPMENT TO BE MADE ACCORDINGLY. IT WOULD APPEAR TO US THAT LEHIGH'S INTERPRETATION OF THE BID ACTUALLY IS NOT RESTRICTING ITS RESPONSIBILITY BUT, RATHER, IS PROBABLY ENLARGING IT. UNDER THE BID AS SUBMITTED, THE GOVERNMENT TAKES TITLE AT ORIGIN AND CAN DIRECT SHIPMENT OF THE GOODS ON A GOVERNMENT BILL OF LADING, AND THE CONTRACTOR IS RELIEVED FROM LIABILITY OR RESPONSIBILITY FOR LOSS OR DAMAGE IN TRANSIT. HOWEVER, LEHIGH STATES THAT IT "WILL ROUTE AND PAY THE FREIGHT CHARGES INVOLVED TO THE GOVERNMENT DESTINATION SPECIFIED, ON A COMMERCIAL BILL OF LADING.' THUS LEHIGH OFFERS TO ASSUME THE RESPONSIBILITY FOR SHIPPING THE GOODS AND PAYING THE TRANSPORTATION COSTS. IT CAN BE ARGUED THAT UNDER SUCH ARRANGEMENT LEHIGH WOULD ALSO ASSUME RESPONSIBILITY FOR LOSS OR DAMAGE IN TRANSIT, DESPITE THE FACT THAT TITLE TO THE GOODS MAY HAVE PASSED TO THE GOVERNMENT AT ORIGIN. IN ANY EVENT, SINCE THE GOVERNMENT WOULD TAKE TITLE TO THE GOODS AT ORIGIN AND SINCE IT WOULD BE THE CONSIGNEE, IT WOULD HAVE SUCH A RELATIONSHIP WITH THE CARRIER AS WOULD AUTHORIZE ACTION IN ITS OWN NAME AGAINST THE CARRIER FOR ANY LOSS OR DAMAGE THAT MIGHT OCCUR IN TRANSIT. 49 U.S.C.A. 20 (11). EVEN IF LEHIGH SHOULD BE ALLOWED TO ARRANGE FOR THE TRANSPORTATION WE DO NOT BELIEVE THAT THERE IS ANY REAL QUESTION OF LEHIGH HAVING UNLAWFUL CONTROL OF GOVERNMENT-OWNED PROPERTY, EVEN THOUGH TITLE WOULD HAVE PASSED ORIGIN, SINCE THE GOODS WOULD NOT BE PAID FOR UNTIL DELIVERY. THE PRICE WHICH THE GOVERNMENT WOULD PAY FOR THE GOODS AT DESTINATION, IN ANY EVENT, IF FIXED AND THE MEANS BY WHICH THEY ARE DELIVERED IS ESSENTIALLY IMMATERIAL. HOWEVER, AS WE INTERPRET THE ORIGINAL BID, THE GOVERNMENT, UPON ACCEPTANCE THEREOF, COULD HAVE REQUIRED SHIPMENT TO BE MADE ON GOVERNMENT BILL OF LADING. SINCE IN OUR VIEW THE BID AS SUBMITTED WAS RESPONSIVE AND WAS THE LOWEST BID RECEIVED, THE BIDDER'S LETTER OF JULY 11 MAY PROPERLY BE CONSIDERED AS A VOLUNTARY OFFER OF A FURTHER CONCESSION TO THE GOVERNMENT WHICH COULD BE ACCEPTED, IF DESIRED, WITHOUT PREJUDICE TO OTHER BIDDERS.

FOR THE FOREGOING REASONS YOU ARE ADVISED THAT THE BID OF LEHIGH CHEMICAL COMPANY ON ITEMS 32 AND 33 OF INVITATION FOR BIDS NO. DSA-6-62 160 SHOULD BE CONSIDERED FOR AWARD. YOU ARE ALSO ADVISED THAT THE AWARD MADE TO LEHIGH ON JULY 11, 1962, CONTRACT NO. DSA-6-1375, ON THE BASIS OF A SIMILAR BID, IS CONSIDERED PROPER AND WILL NOT BE QUESTIONED BY THIS OFFICE, IF OTHERWISE PROPER.