B-167544, JAN. 2, 1970

B-167544: Jan 2, 1970

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CHARGES ON BASIS OF ACTUAL PRACTICE AT TIME OF SHIPMENT WILL NOT RENDER AWARD WHICH WAS MADE ON BASIS OF APPLICABLE REGULATIONS AS INVALID OR SUBJECT TO QUESTION. PROCURING AGENCY IS ADVISED THAT IN FUTURE EVALUATION SHOULD BE AS REALISTIC AS POSSIBLE AND BEAR CLOSEST RESEMBLANCE TO CONDITIONS THAT WILL PREVAIL AT TIME OF ACTUAL PERFORMANCE. INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 4. PRICES WERE TO BE EXPRESSED PER GALLON. THE PORTS OF LOADING TO BE USED BY THE GOVERNMENT IN EVALUATING PROPOSALS WERE SPECIFIED AND OFFERORS WERE AUTHORIZED TO NOMINATE ADDITIONAL PORTS FOR CONSIDERATION. 4 OFFERS WERE RECEIVED ON JULY 7. (GULF STATES) WERE AS FOLLOWS: PROMPT PAYMENT OFFER B OFFEROR DISCOUNT OFFER A (ORIGIN) (PORT OF LOADING) TOTAL FOB TOTAL FOB PRICE POINT PRICE POINT GULF STATES 1% - 20 DAYS $336.

B-167544, JAN. 2, 1970

BID PROTEST--DELIVERY PROVISIONS--EVALUATION DECISION TO NEWHALL REFINING CO; INC. DENYING PROTEST CONCERNING EVALUATION OF PROPOSALS FOR FURNISHING NAVAL SUPPLY CENTER ASPHALTIC SOIL BINDER FOR DELIVERY TO DANANG, SOUTH VIETNAM. FAILURE OF PROCURING AGENCY TO ASSESS PORT HANDLING, ETC; CHARGES ON BASIS OF ACTUAL PRACTICE AT TIME OF SHIPMENT WILL NOT RENDER AWARD WHICH WAS MADE ON BASIS OF APPLICABLE REGULATIONS AS INVALID OR SUBJECT TO QUESTION. HOWEVER, PROCURING AGENCY IS ADVISED THAT IN FUTURE EVALUATION SHOULD BE AS REALISTIC AS POSSIBLE AND BEAR CLOSEST RESEMBLANCE TO CONDITIONS THAT WILL PREVAIL AT TIME OF ACTUAL PERFORMANCE.

TO NEWHALL REFINING COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 4, 1969, PROTESTING AWARD OF A CONTRACT TO ANOTHER OFFEROR UNDER REQUEST FOR PROPOSALS (RFP) NO. N00228-69-R-3261, ISSUED BY THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA.

THE SUBJECT RFP, ISSUED ON JUNE 6, 1969, SOLICITED OFFERS ON A TOTAL QUANTITY OF 1,296,000 GALLONS OF ASPHALTIC SOIL BINDER FOR ULTIMATE DELIVERY TO DANANG, SOUTH VIETNAM. PRICES WERE TO BE EXPRESSED PER GALLON, F.O.B. ORIGIN (OFFER A), AND/OR F.O.B. DESTINATION - PORT OF LOADING (OFFER B), AND REQUIRED OFFERORS TO FURNISH THE TOTAL GUARANTEED MAXIMUM SHIPPING WEIGHT AND CUBIC DISPLACEMENT FOR EVALUATION PURPOSES. THE PORTS OF LOADING TO BE USED BY THE GOVERNMENT IN EVALUATING PROPOSALS WERE SPECIFIED AND OFFERORS WERE AUTHORIZED TO NOMINATE ADDITIONAL PORTS FOR CONSIDERATION. IN ADDITION, THE RFP PROVIDED: (1) THAT PROPOSALS WOULD BE EVALUATED AND AWARD MADE ON THE BASIS OF THE LOWEST LAID-DOWN COST TO THE GOVERNMENT AT THE OVERSEAS PORT OF DISCHARGE; AND (2) THAT OFFERS WOULD BE EVALUATED TO THE OVERSEAS PORT OF DISCHARGE BY ADDING TO THE F.O.B. POINT PRICES ALL TRANSPORTATION CHARGES TO SAID DESTINATION, INCLUDING INLAND TRANSPORTATION COSTS FROM THE POINT OF ORIGIN TO THE PORT OF LOADING, THE PORT HANDLING CHARGES AT THE PORT OF LOADING AND THE OCEAN SHIPPING COSTS FROM THE PORT OF LOADING TO THE OVERSEAS PORT OF DISCHARGE. THE RFP ALSO INCORPORATED BY REFERENCE THE REQUIREMENTS OF SECTION 7-104.70 OF THE ARMED SERVICE PROCUREMENT REGULATION (ASPR), AND STIPULATED THAT IN EVALUATING PROPOSALS, PORT HANDLING AND OCEAN CHARGES ON FILE AND PUBLISHED BY THE MILITARY TRAFFIC MANAGEMENT AND TERMINAL SERVICE (MTMTS) AS OF THE DATE OF CLOSING AND EFFECTIVE FOR THE DATE OF THE EXPECTED INITIAL SHIPMENT WOULD BE USED.

FROM THE 17 SOURCES SOLICITED, 4 OFFERS WERE RECEIVED ON JULY 7, 1969, THE DATE OF CLOSING. THE OFFERS OF YOUR COMPANY AND OF GULF STATES ASPHALT COMPANY, INC. (GULF STATES) WERE AS FOLLOWS:

PROMPT PAYMENT OFFER B OFFEROR DISCOUNT OFFER A (ORIGIN) (PORT OF LOADING)

TOTAL FOB TOTAL FOB

PRICE POINT PRICE POINT GULF STATES 1% - 20 DAYS $336,960 PLANT OR $336,960 PORT,

BEAUMONT, BEAUMONT,

TEXAS TEXAS NEWHALL 1/2% - 20 DAYS 323,870.40 PLANT, NEW- 328,250.88 PORT,

HALL, CALIF. LONG BEACH,

OR PORT, LONG CALIFORNIA

BEACH, CALIF.

THE PORT HANDLING AND OCEAN CHARGES USED IN THE EVALUATION OF OFFERS WERE ORALLY REQUESTED AND PROVIDED BY THE WESTERN AREA OF MTMTS, AS FOLLOWS:

NET PER

PORT HANDLING WATER RATES CUBIC FOOT PORT, BEAUMONT, TEXAS

$3.21 M/T 33.22 M/T $0.9107 PORT, LONG BEACH, CALIF. 6.00 M/T 35.16 M/T 1.029

BASED UPON THESE RATES THE GROSS EVALUATIONS OF COSTS TO THE GOVERNMENT WERE:

OFFER A OFFER B GULF STATES $628,657.20

$628,657.20 NEWHALL 633,829.16 638,187.74

CONSEQUENTLY, THE CONTRACT WAS AWARDED GULF STATES ON JULY 10, 1969, ON THE BASIS OF ITS LOW EVALUATED RESPONSIVE OFFER, F.O.B. PORT OF LOADING, BEAUMONT, TEXAS.

IT IS YOUR CONTENTION, IN SUBSTANCE, THAT THE CHARGES WERE IMPROPERLY ASSESSED AT THE RESPECTIVE PORTS WITHOUT REGARD TO THE TERMS OR CONDITIONS ASSOCIATED WITH THE RATES USED. SPECIFICALLY, YOU STATE:

"IN USING THE $3.21 EVALUATION FIGURE, GOVERNMENT PROCUREMENT ASSUMED THAT WHARFAGE AND PORT HANDLING COSTS WERE FOR THE ACCOUNT OF THE CONTRACTOR, HOWEVER, THIS IS NOT THE CASE. WE HAVE CONFIRMED THROUGH RECENT TELEPHONE CONVERSATIONS WITH THE ARMY OUTPORT OF BEAUMONT, THAT GOVERNMENT CONTRACT ASPHALT IS DELIVERED TO THE COMMERCIAL DOCK ON CONTRACTOR FURNISHED TRUCKS. THE ARMY OUTPORT ARRANGES AND PAYS FOR WHARFAGE. UNDER THESE CONDITIONS, THE SAME AS DEFINED IN PORT DELIVERY TERMS IIA, ..., THE ASSESSMENT FOR BID EVALUATION PURPOSES SHOULD HAVE BEEN $5.97 AND NOT THE LOWER RATE OF $3.21. AS A RESULT OF THE EVALUATION BEING MADE IN THE MANNER IN WHICH IT WAS, THE GOVERNMENT IS PAYING A PREMIUM FOR THE ASPHALT IN QUESTION AND NEWHALL REFINING CO; INC; HAS LOST VALUABLE BUSINESS."

IN A PUBLICATION ENTITLED "WORLDWIDE CARGO TRANSPORTATION COSTS GUIDE," ARMY PAMPHLET 55-5, 7 PORT DELIVERY TERMS ARE USED BY MTMTS IN DETERMINING WHAT THE PORT HANDLING CHARGES WILL BE AT EITHER (A) COMMERCIAL PIERS OR (B) MILITARY PIERS. THE THREE DELIVERY TERMS PERTINENT HERE ARE:

SERVICES TO BE SERVICES TO BE

ARRANGED FOR AND ARRANGED FOR AND DELIVERY TERMS PAID BY THE CONTR PAID BY THE GOV'T

TERM NO. 2 DELIVERED IN CONTRACTOR INLAND TRANSPORTATION TO ALL SERVICES AND FURNISHED TRUCKS AT SPECIFIED PORT. COST SUBSEQUENT TO SPECIFIED PORT.

ARRIVAL OF CARGO IN

TRUCKS AT SPECIFIED

PORT.

TERM NO. 4 DISCHARGED FROM INLAND TRANSPORTATION AND ALL SERVICES AND CONTRACTOR FURNISHED UNLOADING OF CARGO AT COST SUBSEQUENT TO TRUCKS AT SPECIFIED PORT SPECIFIED PORT. UNLOADING OF CARGO PROVIDED (A) INLAND FROM TRUCKS AT TRANSPORTATION CHARGES SPECIFIED PORT. INCLUDE LOADING OF TRUCKS OR (B) CONTRACTOR OWNED OR LEASED TRUCKS ARE USED.

TERM NO. 5 DELIVERED TO PLACE OF INLAND TRANSPORTATION, ALL SERVICES AND REST WITHIN SHIP'S UNLOADING FROM CARRIER'S COST SUBSEQUENT TO BERTH ON CONTRACTOR EQUIPMENT, WHARFAGE, DELIVERY (ON PALLETS, FURNISHED LOADING PIER PALLETIZATION (IF IF REQUIRED) TO PLACE AS COORDINATED AND REQUIRED), AND HANDLING OF REST WITHIN SHIP'S DIRECTED BY GOVERNMENT TO PLACE OF REST WITHIN BERTH AS DEFINED BY PORT AUTHORITY. SHIP'S BERTH AS DEFINED GOVERNMENT PORT

BY LOCAL GOVERNMENT PORT AUTHORITY.

AUTHORITY.

AS EARLIER STATED, THE SOLICITATION INCORPORATED BY REFERENCE ASPR 7- 104.70, WHICH PROVIDES:

"F.O.B. ORIGIN (1968 JUN)

THE CONTRACTOR IS RESPONSIBLE FOR DELIVERY TO AND FOR LOADING, BLOCKING, AND BRACING THE SUPPLIES ON, THE CARRIER'S VEHICLE; OR FOR DELIVERY TO AND PLACEMENT ON THE CARRIER'S WHARF (AT SHIPSIDE, WITHIN REACH OF THE SHIP'S LOADING TACKLE, WHEN SHIPPING POINT IS WITHIN A PORT AREA HAVING WATER TRANSPORTATION SERVICE) OR THE CARRIER'S FREIGHT STATION; ALL AT GOVERNMENT'S OPTION, WHICHEVER PLACE OF DELIVERY IS SPECIFIED BY THE GOVERNMENT AT THE TIME OF SHIPMENT. * * *"

ALSO, UNDER PARAGRAPH 4.1 OF THE SOLICITATION OFFERORS WERE REQUIRED UNDER BID A TO FURNISH THE SOLICITED ITEMS FREE OF EXPENSE TO THE GOVERNMENT AND, AT THE GOVERNMENT'S OPTION "* * * PLACED ON WHARF OF WATER CARRIER * * *." THUS IT IS CLEAR THAT THE UNLOADING COSTS WERE REQUIRED BY THE TERMS OF THE SOLICITATION TO BE BORNE BY THE CONTRACTOR, AND THE FACT THAT THEY MAY HAVE BEEN PAID BY THE GOVERNMENT WOULD NOT APPEAR TO RELIEVE THE CONTRACTOR OF LIABILITY THEREFOR.

IN ANY EVENT, IT SEEMS APPARENT THAT DELIVERY TERM 5 WAS NOT FOR APPLICATION, AND THE NAVY NOW SO AGREES, SINCE NEITHER OFFEROR WAS TO FURNISH A LOADING PIER. RATHER, DELIVERY TERM 4A SHOULD HAVE BEEN USED FOR BEAUMONT, AND DELIVERY TERM 4B FOR LONG BEACH. IN THIS REGARD THE NAVY IN A SUPPLEMENTAL REPORT TO OUR OFFICE, OBSERVED:

"USING THESE RATES, ($3.68 M/T FOR BEAUMONT AND $7.00 M/T FOR LONG BEACH) WHICH ARE MORE LIKELY TO HAVE BEEN APPLIED IN ACTUAL PRACTICE AT TIME OF SHIPMENT, PROVIDED THE CONTRACTOR WERE HELD TO BEAR UNLOADING COSTS AT THE SPECIFIED PORT WITHIN RESPONSIBILITIES DEFINED BY THE APPLICABLE ASPR 7- 104.70 F.O.B. ORIGIN CLAUSE, THE GULF STATES X X X QUOTATION WOULD HAVE EVALUATED TO A NET OVERSEAS DESTINATION FIGURE OF $632,480.40 (AT A COMPOSITE RATE OF ?9225 PER CU. FT.) AND THE NEWHALL REFINING (OFFER A) QUOTATION, TO A FIGURE OF $641,399.09 (AT A COMPOSITE RATE OF $1.054 PER CU. FT.), SO THAT GULF STATES WOULD HAVE BEEN LOW BY EVEN A GREATER MARGIN."

FROM OUR OWN INDEPENDENT INVESTIGATION IT DOES APPEAR AS YOU CONTEND, THAT DELIVERY TERM NUMBER 2 WAS THE ONE APPLIED IN ACTUAL PRACTICE AT THE TIME OF SHIPMENT. WE DO NOT FEEL, HOWEVER, THAT THE FAILURE TO EVALUATE ON THAT BASIS WAS ERRONEOUS. IT SEEMS APPARENT TO US THAT THE USE OF THE ABOVE QUOTED LANGUAGE "DELIVERY TO AND PLACEMENT ON THE CARRIER'S WHARF (AT SHIPSIDE, WITHIN REACH OF THE SHIP'S LOADING TACKLE ... ) ... AT GOVERNMENT'S OPTION" IN THE CONDITIONS OF THE SOLICITATION CLEARLY PRECLUDED THE USE OF DELIVERY TERM NUMBER 2 FOR EVALUATION OF OFFERS. CONCEDING THAT THE ACTUAL PRACTICE BEING FOLLOWED AT THE TIME OF SHIPMENT WOULD HAVE RESULTED IN A HIGHER EVALUATION OF GULF STATES OFFER, IF EFFECTIVE TO RELIEVE IT OF LIABILITY FOR UNLOADING COST, WE FEEL DELIVERY TERM NUMBER 4A WAS THE METHOD CONTEMPLATED UNDER THE TERMS OF THE SOLICITATION. TO REQUIRE OFFERORS TO INCLUDE IN THEIR OFFERING PRICE THE COST OF LOADING, BLOCKING, AND BRACING THE SUPPLIES ON THE CARRIER'S VEHICLE AND FOR DELIVERY TO AND PLACEMENT ON THE CARRIER'S WHARF AT SHIPSIDE, AND THEN TO EVALUATE OFFERS ON THE BASIS OF DELIVERY TERM NUMBER 2, WOULD BE CONTRARY TO SOUND PROCUREMENT PROCEDURES. ALSO, AS HAS BEEN NOTED, EVEN IF THE PROPER DELIVERY TERM (NUMBER 4A) HAD BEEN EMPLOYED IN EVALUATING YOUR OFFER, YOUR OFFER WOULD NOT HAVE BEEN THE LOWEST. WE ARE NOT UNAWARE THAT A PROPER EVALUATION OF ESTIMATED FREIGHT CHARGES IS REQUIRED BY 10 U.S.C. 2305 (B), WHICH REQUIRES THAT AWARDS SHALL BE MADE TO THAT RESPONSIBLE BIDDER WHOSE BID "WILL BE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED." HOWEVER, WE THINK THERE IS FOR EQUAL APPLICATION THE PRINCIPLE STATED IN OUR DECISION B- 108531, APRIL 8, 1952, TO WIT:

"WHILE THE FUNCTION OF MAKING AWARDS UPON BIDS IS PRIMARILY AN ADMINISTRATIVE RESPONSIBILITY, IT DOES NOT APPEAR THAT IN DETERMINING THE COMPARATIVE DELIVERED COSTS UNDER THE RESPECTIVE BIDS THE ADMINISTRATIVE OFFICERS ARE REQUIRED TO DO MORE THAN EXERCISE THE BEST JUDGMENT OF WHICH THEY ARE CAPABLE IN DETERMINING THE RATINGS APPLICABLE IN SUCH INDEFINITE RATING SITUATIONS AS EXIST IN THE PRESENT MATTER. * * *" SINCE THE EVALUATION AND AWARD WERE MADE IN GOOD FAITH AND IN ACCORDANCE WITH APPLICABLE REGULATIONS IT WOULD APPEAR THAT THE ACTION TAKEN CREATED A VALID AND BINDING CONTRACTUAL OBLIGATION. IN ARRIVING AT OUR DECISION NOT TO QUESTION THE AWARD MADE TO GULF STATES WE HAVE TAKEN INTO CONSIDERATION THE FACT THAT THE PROCUREMENT ACTIVITY RELIED UPON THE MILITARY TRAFFIC AGENCY, WHICH IT WAS REQUIRED TO DO UNDER SECTIONS 19-301.1 AND 9.301.2 OF ASPR, TO FURNISH THE ESTIMATED FREIGHT RATES, AND WE FIND NO GROUND TO DOUBT THAT HONEST JUDGMENT WAS EXERCISED IN THE EVALUATION OF OFFERS. THIS REGARD, THE FOREWORD TO ARMY PAMPHLET 55-5 (OCTOBER-67ED.) STATES IN PART:

"1. * * * IT APPLIES TO CONTINENTAL UNITED STATES (CONUS) EXPORT SHIPMENTS (OTHER THAN COMMERCIAL OCEAN CONTAINER SERVICE) AND IS INTENDED FOR USE IN CONSONANCE WITH POLICIES SET FORTH IN THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) AND DEPARTMENTAL PROCUREMENT PUBLICATIONS.

"3. THESE COST DATA DO NOT REFLECT REIMBURSEMENT BILLING COSTS AND SHOULD NOT BE USED FOR BUDGET OR REIMBURSEMENT PURPOSES NOR FOR COMPARING COSTS OF LIFTING CARGO BY MILITARY AIRCRAFT VERSUS OCEAN TRANSPORTATION." THUS THE PAMPHLET IS AN "IN-HOUSE" DOCUMENT TO BE USED AS A GUIDE ONLY IN EVALUATING OFFERS AND IS INTENDED TO PUT ALL OFFERORS ON THE SAME BASIS, WHICH WE FIND WAS DONE HERE.

YOU ALSO CONTEND THAT PUBLISHED FREIGHT RATES AND PORT HANDLING CHARGES SHOULD BE INCLUDED IN FUTURE SOLICITATIONS. WE FIND NOTHING IN THE REGULATIONS WHICH WOULD INDICATE THAT THIS IS OR SHOULD BE A REQUIREMENT FOR ASSURING SOUND PROCUREMENT PRACTICES. INDEED, PARAGRAPH 2 OF THE FOREWORD TO THE PAMPHLET STATES:

"2. THIS PAMPHLET IS NOT INTENDED FOR DISTRIBUTION TO COMMERCIAL CARRIERS, STEVEDORE CONTRACTORS, VENDORS, OR OTHER PRIVATE CONCERNS. CASES OF INQUIRY, COST FACTORS CONTAINED HEREIN MAY BE DISCUSSED ONLY WITH REPRESENTATIVES OF A COMMERCIAL CARRIER, TERMINAL OPERATOR, CONTRACTOR OR VENDOR DIRECTLY INVOLVED." IN THIS REGARD, IT IS INTERESTING TO NOTE THAT YOU ENCLOSED WITH YOUR PROTEST COPIES OF PERTINENT PAGES OF THE PUBLICATION, WHICH WOULD INDICATE THAT IT IS NOT UNOBTAINABLE. WHILE WE HAVE NOT QUESTIONED THE AWARD, WE ARE BY SEPARATE LETTER ADVISING THE NAVY THAT WE AGREE WITH THEIR RECENT STATEMENT:

"* * * THIS ACTIVITY STRONGLY BELIEVES THAT ANY EVALUATION SHOULD BE AS REALISTIC AS POSSIBLE AND SHOULD BEAR THE CLOSEST PRACTICABLE RESEMBLANCE TO CONDITIONS THAT WILL MOST LIKELY PREVAIL AT TIME OF ACTUAL PERFORMANCE. IN THIS RESPECT, EFFORTS ARE BEING MADE BY FURTHER INQUIRIES THROUGH DEFENSE TRANSPORTATION CHANNELS TO IMPROVE RATE QUOTATION AND EVALUATION TECHNIQUES, AND TO COORDINATE CONTRACTOR RESPONSIBILITIES UNDER ASPR CONTRACT CLAUSES WITH ACTUAL PORT PRACTICES, WHICH SHOULD RESULT IN GREATER PRECISION IN MATTERS OF THIS NATURE." WE ALSO ARE RECOMMENDING THAT PROMPT STEPS SHOULD BE TAKEN TO IMPLEMENT THIS STATED DESIRE TO IMPROVE EVALUATION PRACTICES, AND ADVISING THAT ATTENTION BE GIVEN TO COLLECTION FROM THE CONTRACTOR OF THE UNLOADING COSTS, AS REQUIRED BY ITS CONTRACT.

FOR ALL OF THE FOREGOING REASONS YOUR PROTEST IS DENIED.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTERS OF SEPTEMBER 10 AND 24, 1969, FROM THE DEPUTY COMMANDER, PURCHASING, OF THE NAVAL SUPPLY SYSTEMS COMMAND FURNISHING OUR OFFICE REPORTS RELATIVE TO THE PROTEST OF NEWHALL REFINING COMPANY, INC; UNDER RFP NO. N00228-69-R-3261, ISSUED BY THE NAVAL REGIONAL PROCUREMENT OFFICE, OAKLAND, CALIFORNIA.

ENCLOSED IS A COPY OF OUR LETTER OF TODAY TO THE PROTESTANT. WHILE FOR THE REASONS STATED WE HAVE DENIED THE PROTEST, WE CANNOT APPROVE ALL OF THE PROCEDURES FOLLOWED IN THE SUBJECT PROCUREMENT.

SPECIFICALLY, WE QUESTION THE PRACTICE OF ORAL REQUESTS BEING MADE TO MTMTS FOR PORT HANDLING AND OCEAN CHARGES TO BE USED IN THE EVALUATION OF OFFERS, ESPECIALLY WHERE MTMTS IS NOT ADVISED OF THE DELIVERY TERMS REQUIRED UNDER THE SOLICITATION, SINCE THIS WOULD TEND TO CAUSE MTMTS TO QUOTE PORT HANDLING COSTS (AS THEY DID HERE) DIFFERENT FROM THOSE WHICH WOULD BE APPLIED IN ACTUAL PRACTICE AT THE TIME OF SHIPMENT. WE THEREFORE THINK A MORE FORMAL REQUEST FOR RATES SHOULD BE MADE OF MTMTS, WHICH SHOULD INCLUDE A STATEMENT OF ALL PERTINENT FACTS AND CONTRACT TERMS NECESSARY TO DETERMINE WHAT RATES ARE APPLICABLE UNDER A GIVEN SOLICITATION AT A PARTICULAR PORT. IN THIS REGARD, WE THINK IT ADVISABLE TO ASCERTAIN WHAT THE ACTUAL PRACTICES ARE AT THE PORTS INVOLVED IN ORDER TO DETERMINE, PERHAPS BEFORE THE SOLICITATION IS ISSUED, REALISTIC DELIVERY REQUIREMENTS TO BE INCLUDED IN THE SOLICITATION.

IN THE INSTANT CASE IT WOULD APPEAR THAT THE ARMY OUTPORT AT BEAUMONT (MTMTS) HAS BEEN BILLED, AND HAS PAID OR WILL PAY TO THE COMMERCIAL PORT THE ACTUAL PORT HANDLING CHARGES INVOLVED, INCLUDING COSTS OF UNLOADING THE CONTRACTOR'S TRUCKS. MTMTS WILL IN TURN BILL YOUR DEPARTMENT FOR THESE EXPENSES. IF SO, AND SINCE IT APPEARS THAT THE CONTRACTOR IS RESPONSIBLE FOR UNLOADING COSTS UNDER THE TERMS OF ITS CONTRACT, APPROPRIATE DEDUCTION TO COVER THE AMOUNT THEREOF SHOULD BE MADE FROM THE CONTRACTOR'S INVOICE.

THE ENCLOSURES FURNISHED WITH THE LETTER OF SEPTEMBER 10, 1969 ARE RETURNED.