B-149963, DEC. 7, 1962

B-149963: Dec 7, 1962

Additional Materials:

Contact:

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

 

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

FROM THAT POINT THE COTTON WAS TO BE SHIPPED AT GOVERNMENT EXPENSE TO KOREA. FIRST DELIVERY WAS REQUIRED ON OR BEFORE SEPTEMBER 18. YOU STATE IN YOUR LETTER TO US THAT THE IMPOSITION OF THIS ADDITIONAL REQUIREMENT BY THE PURCHASING OFFICE WAS DUE TO A REGULATION WHICH PREVENTED THE PURCHASING OFFICE FROM ACCEPTING YOUR PROPOSAL AS OFFERED. THE PURPOSE OF YOUR LETTER IS TO INFORM US THAT SUCH REGULATION IS TOO RIGID SINCE IT PREVENTS THE PURCHASING OFFICE FROM PROCEEDING IN A REASONABLE FASHION. WE ARE NOT AWARE OF THE REGULATION TO WHICH YOU REFER. THAT PARAGRAPH 31 M OF THE ADDITIONAL GENERAL PROVISIONS TO YOUR CONTRACT PROVIDES THAT WHENEVER A PLACE OF DELIVERY IS CHANGED IN ACCORDANCE WITH THE "CHANGES" CLAUSE OF THE CONTRACT (A CHANGE MADE BY THE CONTRACTING OFFICER).

B-149963, DEC. 7, 1962

TO ALLENBERG COTTON COMPANY:

THIS REFERS TO YOUR LETTER OF AUGUST 16, 1962, WITH ENCLOSURES, RELATIVE TO A SITUATION ARISING UNDER CONTRACT NO. DSA-1-1001-63-T, AWARDED BY THE DEFENSE CLOTHING AND TEXTILE SUPPLY CENTER (DCTSC) TO YOUR FIRM ON JULY 20, 1962.

THE CONTRACT CALLED FOR SHIPMENT OF 187,831 POUNDS OF RAW COTTON, 1 1/16 INCH (ITEM NO. 1), AND 178,831 POUNDS OF RAW COTTON, 1 INCH (ITEM NO. 2), PORT OF LOADING, CORPUS CHRISTI, TEXAS. FROM THAT POINT THE COTTON WAS TO BE SHIPPED AT GOVERNMENT EXPENSE TO KOREA. FIRST DELIVERY WAS REQUIRED ON OR BEFORE SEPTEMBER 18, 1962.

BY LETTER OF AUGUST 7, 1962, YOU OFFERED TO MAKE DELIVERY OF COTTON GROWN IN THE WEST TO SHIPPING POINTS ON THE WEST COAST OF CALIFORNIA (LONG BEACH AND OAKLAND) INSTEAD OF CORPUS CHRISTI, AT A ONE-HALF CENT PER POUND REDUCTION IN PRICE. THE PURCHASING OFFICE NOTIFIED YOU THAT YOUR PROPOSED MODIFICATION WOULD BE ACCEPTABLE IF, IN ADDITION TO THE ONE-HALF CENT REDUCTION, YOU AGREED THAT YOUR FIRM WOULD BE RESPONSIBLE FOR ANY INCREASED LAND TRANSPORTATION COST THAT MIGHT RESULT FROM THE CHANGE, AND THAT ANY SAVINGS IN SUCH COST WOULD REVERT TO THE GOVERNMENT.

YOU STATE IN YOUR LETTER TO US THAT THE IMPOSITION OF THIS ADDITIONAL REQUIREMENT BY THE PURCHASING OFFICE WAS DUE TO A REGULATION WHICH PREVENTED THE PURCHASING OFFICE FROM ACCEPTING YOUR PROPOSAL AS OFFERED. THE PURPOSE OF YOUR LETTER IS TO INFORM US THAT SUCH REGULATION IS TOO RIGID SINCE IT PREVENTS THE PURCHASING OFFICE FROM PROCEEDING IN A REASONABLE FASHION. WE ARE NOT AWARE OF THE REGULATION TO WHICH YOU REFER. WE NOTE, HOWEVER, THAT PARAGRAPH 31 M OF THE ADDITIONAL GENERAL PROVISIONS TO YOUR CONTRACT PROVIDES THAT WHENEVER A PLACE OF DELIVERY IS CHANGED IN ACCORDANCE WITH THE "CHANGES" CLAUSE OF THE CONTRACT (A CHANGE MADE BY THE CONTRACTING OFFICER), THE AMOUNT INVOICED FOR THE SHIPMENT WILL BE ADJUSTED BY THE GOVERNMENT BASED ON A COMPARISON BETWEEN THE TRANSPORTATION COSTS APPLICABLE TO SHIPMENT TO THE NEW DESTINATION AND TO THE OLD DESTINATION.

IT MAY BE THAT IN VIEW OF PARAGRAPH 31 M, THE PURCHASING OFFICE ERRONEOUSLY CONCLUDED THAT THE GOVERNMENT COULD NOT ACCEPT YOUR PROPOSAL TO CHANGE THE PLACE OF DELIVERY AND TO REDUCE YOUR PRICE UNLESS IT RECEIVED ANY SAVINGS YOU MIGHT REALIZE IN LAND TRANSPORTATION. IN ANY EVENT, WE HAVE BEEN ADVISED BY THE ADMINISTRATIVE AGENCY THAT PARTIAL DELIVERIES WERE PERMITTED TO BE MADE TO WEST COAST DESTINATIONS, AND THAT IN FACT, NO SAVINGS IN LAND TRANSPORTATION WERE REALIZED BY YOU ON THESE SHIPMENTS.