B-72016, DECEMBER 23, 1947, 27 COMP. GEN. 343

B-72016: Dec 23, 1947

Additional Materials:

Contact:

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

 

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

THE SOLE BID RECEIVED WAS THAT OF THE DEFAULTING CONTRACTOR AT A PRICE HIGHER THAN THAT SPECIFIED IN THE ORIGINAL CONTRACT. 1947: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 15. THERE WAS TRANSMITTED WITH YOUR LETTER COPY OF A LETTER DATED NOVEMBER 14. THERE WAS TRANSMITTED THEREWITH A COPY OF THE BID OF THE ALTO COAL COMPANY. ONLY ONE BID WAS RECEIVED. DELIVERED IN RESPONSE TO THE POSTMASTER'S ORDERS AT SAID PRICE "AS THAT COMPANY WAS THE ONLY BIDDER EVEN THOUGH IT HAD DEFAULTED ON THE ORIGINAL CONTRACT.'. YOU STATE THAT THE POSTMASTER ADVISED THAT HIS PRESENT SUPPLY OF COAL WILL NOT LAST OVER TWO WEEKS. THE ACCEPTANCE OF THE CONTRACTOR'S BID OF $6.33 PER TON FOR DELIVERY OF COAL WHICH IT ALREADY WAS OBLIGATED UNDER THE ORIGINAL CONTRACT TO FURNISH AT $5.58 PER TON WOULD.

B-72016, DECEMBER 23, 1947, 27 COMP. GEN. 343

CONTRACTS - COAL - DEFAULTING CONTRACTOR SOLE BIDDER ON READVERTISEMENT FOR BIDS NOTWITHSTANDING THAT, UPON READVERTISEMENT FOR BIDS FOR THE FURNISHING OF BITUMINOUS COAL AFTER REFUSAL OF THE CONTRACTOR TO CONTINUE DELIVERIES AT THE CONTRACT PRICE, THE SOLE BID RECEIVED WAS THAT OF THE DEFAULTING CONTRACTOR AT A PRICE HIGHER THAN THAT SPECIFIED IN THE ORIGINAL CONTRACT, THE ACCEPTANCE OF SUCH BID, BEING TANTAMOUNT TO A MODIFICATION OF THE ORIGINAL CONTRACT TO PROVIDE FOR AN INCREASE IN PRICE WITHOUT ANY CONSIDERATION MOVING TO THE GOVERNMENT, WOULD BE UNAUTHORIZED.

COMPTROLLER GENERAL WARREN TO THE POSTMASTER GENERAL, DECEMBER 23, 1947:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 15, 1947, REQUESTING A DECISION AS TO WHETHER YOUR DEPARTMENT MAY ACCEPT THE BID OF THE ALTO COAL COMPANY FOR FURNISHING 123 TONS OF BITUMINOUS COAL TO THE ALTOONA, PENNSYLVANIA, POST OFFICE AT A PRICE OF $6.33 PER TON, SAID BID BEING THE ONLY ONE RECEIVED AS THE RESULT OF READVERTISEMENT FOR BIDS UPON THE COMPANY'S PARTIAL DEFAULT UNDER ITS ORIGINAL CONTRACT FOR DELIVERY OF 190 TONS OF THE SAME KIND OF COAL DURING THE FISCAL YEAR 1948, AT A PRICE OF $5.58 PER TON.

THERE WAS TRANSMITTED WITH YOUR LETTER COPY OF A LETTER DATED NOVEMBER 14, 1947, FROM THE ALTO COAL COMPANY TO THE POSTMASTER, ALTOONA, PENNSYLVANIA, MAKING CLAIM FOR AN ADDITIONAL 75 CENTS PER TON, AND FURTHER CORRESPONDENCE RELATIVE THERETO. ALSO, THERE WAS TRANSMITTED THEREWITH A COPY OF THE BID OF THE ALTO COAL COMPANY, OPENED DECEMBER 5, AS WELL AS THE " ABSTRACT OF BIDDERS AND DS.'

IN YOUR LETTER YOU STATE, AND IT APPEARS FROM THE PAPERS TRANSMITTED THEREWITH, THAT THE ORIGINAL CONTRACT AWARDED TO THE ALTO COAL COMPANY UPON SOLICITATION OF BIDS OPENED ON APRIL 29, 1947, PROVIDED FOR DELIVERY OF 190 TONS OF BITUMINOUS COAL DURING THE FISCAL YEAR 1948 AT $5.58 PER TON; THAT, AFTER DELIVER OF 66 TONS OF COAL AT THE CONTRACT PRICE, THE CONTRACTOR REQUESTED AN INCREASE OF 75 CENTS PER TON FOR THE REMAINING TONNAGE DUE TO AN INCREASE OF A LIKE AMOUNT IN THE PRICE OF COAL BEING CHARGED BY ITS SUPPLIER; THAT, UPON BEING INFORMED THAT THE CLAIM COULD NOT BE ALLOWED SINCE THE CONTRACT DID NOT PROVIDE FOR SUCH AN INCREASE, THE CONTRACTOR REFUSED TO MAKE FURTHER DELIVERY AT THE CONTRACT PRICE; AND THAT, IN RESPONSE TO A SOLICITATION OF NEW BIDS ON NOVEMBER 28, 1947, FROM FOUR DEALERS, INCLUDING THE CONTRACTOR, FOR FURNISHING THE UNDELIVERED TONNAGE, ONLY ONE BID WAS RECEIVED, BEING THAT OF THE ALTO COAT COMPANY AT $6.33 PER TON. YOU REQUEST TO BE ADVISED AS TO WHETHER YOUR DEPARTMENT MAY ACCEPT THE BID OF THE ALTO COAL COMPANY AT $6.33 PER TON AND MAKE PAYMENT FOR COAL, DELIVERED IN RESPONSE TO THE POSTMASTER'S ORDERS AT SAID PRICE "AS THAT COMPANY WAS THE ONLY BIDDER EVEN THOUGH IT HAD DEFAULTED ON THE ORIGINAL CONTRACT.' IN CONNECTION THEREWITH, YOU STATE THAT THE POSTMASTER ADVISED THAT HIS PRESENT SUPPLY OF COAL WILL NOT LAST OVER TWO WEEKS.

THE ACCEPTANCE OF THE CONTRACTOR'S BID OF $6.33 PER TON FOR DELIVERY OF COAL WHICH IT ALREADY WAS OBLIGATED UNDER THE ORIGINAL CONTRACT TO FURNISH AT $5.58 PER TON WOULD, IN EFFECT, BE TANTAMOUNT TO A MODIFICATION OF THE ORIGINAL CONTRACT TO PROVIDE FOR AN INCREASE IN THE PRICE SPECIFIED THEREIN AND, AS SUCH, WOULD BE UNAUTHORIZED AS LACKING ANY CONSIDERATION MOVING TO THE GOVERNMENT. CF. J. J. PREIS AND COMPANY V. UNITED STATES, 58 C.1CLS. 81, 86; VULCANITE PORTLAND CEMENT COMPANY V. UNITED STATES, 74 C.1CLS. 692, 705; 19 COMP. GEN. 48. HENCE, YOU ARE ADVISED THAT THE PRESENT BID OF THE ALTO COAL COMPANY MAY NOT BE ACCEPTED.

UNDER THE CIRCUMSTANCES, IT IS SUGGESTED THAT AN EMERGENCY PURCHASE OF SUCH QUANTITY OF COAL AS MAY BE NECESSARY TO FILL THE CURRENT NEEDS OF THE POST OFFICE AT ALTOONA BE MADE FROM OTHER COAL DEALERS IN THE IMMEDIATE VICINITY AND THAT SUCH FURTHER EMERGENCY PURCHASES BE MADE IN LIKE MANNER FROM TIME TO TIME UPON THE REFUSAL OF THE CONTRACTOR TO DELIVER THE REMAINING TONNAGE AT THE CONTRACT PRICE OF $5.58 PER TON. THE CONTRACTOR SHOULD BE ADVISED OF SUCH ACTION AND THAT IT WILL BE HELD LIABLE FOR THE EXCESS COSTS, IF ANY, INCURRED BY THE UNITED STATES.