B-78812, SEP 1, 1948

B-78812: Sep 1, 1948

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THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO A LETTER DATED JULY 26. TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. WAS AWARDED. THE BID OF THE COMPANY WAS ACCEPTED AS TO ITEMS 7 AND 8. IN THAT THE CORRECT PRICE THEREFOR WAS $2.40 PER GALLON INSTEAD OF $1.40 PER GALLON. THAT HE WAS WITHOUT AUTHORITY TO INCREASE THE PRICE OF ITEM 8. THAT IF IT WERE FURNISHED EVIDENCE SHOWING CONCLUSIVELY THAT AN ERROR HAD BEEN MADE. THE COMPANY ADVISED THE CONTRACTING OFFICER THAT THERE WAS ATTACHED TO THE LETTER ITS "COST DEPARTMENT RECORD" SHEET AND ITS "ESTIMATED COST AND SELLING PRICE" SHEET SHOWING THE COST OF THE MATERIALS USED PLUS THE MANUFACTURING COST. THE PRICE OF THE MATERIALS IS SHOWN TO BE $147.76 PER 100 GALLONS TO WHICH WAS ADDED (1) $5.40 COVERING MANUFACTURING UNIT CHARGE.

B-78812, SEP 1, 1948

PRECIS-UNAVAILABLE

THE HONORABLE, THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED JULY 26, 1948, WITH ENCLOSURES, SIGNED BY THE CONTRACTING OFFICER FOR THE COMMANDING GENERAL OLMSTED AIR FORCE BASE, MIDDLETOWN, PENNSYLVANIA, RELATIVE TO AN ERROR ALLEGED BY THE GLIDDEN COMPANY, READING PENNSYLVANIA, TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. W 36-025-AC-563, DATED JUNE 30, 1948, WAS AWARDED. THE LETTER REQUESTS A DECISION AS TO THE PROPER ACTION TO BE TAKEN IN THE MATTER.

THE OLMSTED AIR FORCE BASE, MIDDLETOWN, PENNSYLVANIA, BY INVITATION NO. 36-025-48-58 REQUESTED BIDS-- TO BE OPENED JUNE 30, 1948-- FOR FURNISHING A QUANTITY OF ENAMEL, VARNISH, ETC., AS DESCRIBED IN ITEMS 1 TO 8, INCLUSIVE. IN RESPONSE TO THE INVITATION, THE GLIDDEN COMPANY SUBMITTED A BID DATED JUNE 29, 1948, WHEREIN IT OFFERED TO FURNISH SEVERAL ITEMS AT CERTAIN SPECIFIED PRICES INCLUDING THE FOLLOWING AT THE PRICE INDICATED:

UNIT

ITEM ARTICLE QUANTITY UNIT PRICE

NO. 8 VARNISH, SPAR, PHENOL FORMALDEHYDE, IN 186 GALLON $1.40 ACCORDANCE WITH SPECIFICATION NO. AN-V-26, IN 1-GALLON CANS. THE BID OF THE COMPANY WAS ACCEPTED AS TO ITEMS 7 AND 8, ON JUNE 30, 1948.

BY LETTER DATED JULY 2, 1948, THE GLIDDEN COMPANY ADVISED THE CONTRACTING OFFICER AT THE OLMSTED AIR FORCE BASE THAT AN ERROR HAD BEEN MADE IN QUOTING ON ITEM 8 OF ITS BID, IN THAT THE CORRECT PRICE THEREFOR WAS $2.40 PER GALLON INSTEAD OF $1.40 PER GALLON. THE CONTRACTING OFFICER ADVISED THE COMPANY BY LETTER DATED JULY 7, 1948, THAT HE WAS WITHOUT AUTHORITY TO INCREASE THE PRICE OF ITEM 8, AS REQUESTED, BUT THAT IF IT WERE FURNISHED EVIDENCE SHOWING CONCLUSIVELY THAT AN ERROR HAD BEEN MADE, THE MATTER WOULD BE FORWARDED TO THE COMPTROLLER GENERAL OF THE UNITED STATES FOR DECISION.

IN A LETTER DATED JULY 8, 1948, THE COMPANY ADVISED THE CONTRACTING OFFICER THAT THERE WAS ATTACHED TO THE LETTER ITS "COST DEPARTMENT RECORD" SHEET AND ITS "ESTIMATED COST AND SELLING PRICE" SHEET SHOWING THE COST OF THE MATERIALS USED PLUS THE MANUFACTURING COST.

THE REFERRED-TO "COST DEPARTMENT RECORD' SHEET SHOWS THE QUANTITIES OF VARIOUS MATERIALS REQUIRED FOR MAKING THE VARNISH. THE PRICE OF THE MATERIALS IS SHOWN TO BE $147.76 PER 100 GALLONS TO WHICH WAS ADDED (1) $5.40 COVERING MANUFACTURING UNIT CHARGE, AND (2) $7 FOR WAREHOUSE, LABOR AND STORAGE CHARGES, A TOTAL OF $160.16 PER 100 GALLONS, OR $1.60 PER GALLON. SAID PRICE PRE GALLON WAS ENTERED ON THE "ESTIMATE COST AND SELLING PRICE" SHEET AND THERE WAS ADDED THERETO (1) A PACKAGE COST OF $0.30, (2) PROFIT AND OVERHEAD OF $0.40 AND (3) FREIGHT CHARGES OF $0.10, A TOTAL OF $2.40 PER GALLON.

THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDS ON ITEM 8 WERE $4.05 PER GALLON AND $4.25 PER GALLON. THUS, THE BID OF THE GLIDDEN COMPANY IN THE AMOUNT OF $1.40 PER GALLON FOR ITEM 8 IS ENTIRELY OUT OF LINE WITH THE OTHER BIDS THEREON, WHEREAS, THE BID OF THE COMPANY ON THE SIX OTHER ITEMS ON WHICH IT QUOTED WAS IN LINE WITH THE OTHER BIDS THEREON WAS ON THOSE ITEMS. CONSEQUENTLY, IT WOULD APPEAR THAT THE DIFFERENCE BETWEEN THE BID OF THE COMPANY ON ITEM 8 AND THE OTHER BIDS SUFFICIENT TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE COMPANY; HENCE, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID.

ACCORDINGLY, SINCE THERE APPEARS NO ROOM FOR REASONABLE DOUBT THAT THE GLIDDEN COMPANY MADE AN ERROR IN ITS BID ON ITEM 8, AND SINCE THE COMPANY FURNISHED SATISFACTORY EVIDENCE OF THE CORRECT PRICE FOR SAID ITEM, CONTRACT NO. W 36-025-AC-563 MAY BE AMENDED TO PROVIDE A PRICE OF $2.40 PER GALLON FOR ITEM 8, WHICH IS STILL THE LOWEST BID THEREON.

A REFERENCE TO THIS DECISION SHOULD BE MADE IN FORWARDING THE AMENDMENT TO THE AUDIT DIVISION, GENERAL ACCOUNTING OFFICE.

SINCE A DECISION TO THE CONTRACTING OFFICER IS NOT AUTHORIZED, THE DECISION IS BEING MADE TO YOU. SEE DECISION OF DECEMBER 13, 1946, B 62476, 26 COMP.GEN. 993.

THE PAPERS FORWARDED TO THIS OFFICE BY THE LETTER OF JULY 26, 1948, ARE TRANSMITTED HEREWITH.

GENERAL ACCOUNTING OFFICE

DAILY SYNOPES OF DECISIONS

AUGUST 17 AND 18, 1948

AUGUST 17, 1948

B-77478** CLAIMS-- LOSSES OF WAR CONTRACTORS-- ACT OF AUGUST 7, 1946

IN ORDER TO BE ELIGIBLE FOR RELIEF UNDER THE PROVISIONS OF THE ACT OF AUGUST 7, 1946, AND EXECUTIVE ORDER NO. 9786, ISSUED PURSUANT THEREOF, AUTHORIZING THE SEVERAL DEPARTMENTS AND AGENCIES OF THE GOVERNMENT TO CONSIDER, ADJUST, AND SETTLE CERTAIN EQUITABLE CLAIMS OF WAR CONTRACTORS FOR LOSSES INCURRED UNDER THE CIRCUMSTANCES SET FORTH THEREIN, A CLAIMANT MUST SHOW A NET LOSS ON ALL CONTRACTS AND SUBCONTRACTS UNDER WHICH WORK, SUPPLIES, OR SERVICES WERE FURNISHED THE GOVERNMENT DURING THE PERIOD COVERED BY THE ACT, AND NOT MERELY A LOSS ON A PARTICULAR CONTRACT OR SUBCONTRACT.

B-77842** LEASES-- LESSOR'S OBLIGATION TO FURNISH TOILET FACILITIES AS INCLUDING COST OF TOWN SEWERAGE SERVICE. THE COST OF TOWN SEWERAGE SERVICE FURNISHED QUARTERS LEASED BY THE GOVERNMENT FOR USE AS A POST OFFICE OF THE SECOND OR THIRD CLASS IS NOT PROPERLY CHARGEABLE AGAINST THE GOVERNMENT WHERE THE LEASE EXPRESSLY OBLIGATED THE LESSOR TO FURNISH PLUMBING AND TOILET FACILITIES AS PART OF THE RENTAL CONSIDERATION, BUT, RATHER SUCH COST MUST BE ASSUMED BY THE LESSOR AS AN INCIDENT TO THE FURNISHING OF TOILET FACILITIES.

B-78693** TAXES-- MUNICIPAL-- OCCUPATIONAL LICENSE FEE-- WITHHOLDING FROM SALARIES OF FEDERAL EMPLOYEES

EVEN THOUGH AN ORDINANCE OF THE CITY OF LOUISVILLE, KENTUCKY, REQUIRING EMPLOYERS TO COLLECT THE ANNUAL LICENSE FEE IMPOSED THEREBY UPON EVERY PERSON ENGAGED IN AN OCCUPATION, TRADE, ETC., IN THE CITY, DEFINES THE TERM "EMPLOYER" AS INCLUDING A "GOVERNMENTAL BODY OR UNIT OR ADMINISTRATION OR AGENCY," NO DUTY OR RESPONSIBILITY WITH RESPECT TO THE LICENSE FEE PRESCRIBED BY THE SAID ORDINANCE CAN BE IMPOSED UPON THE UNITED STATES SO AS TO REQUIRE FEDERAL UNITS OR AGENCIES LOCATED IN LOUISVILLE TO DEDUCT THE AMOUNT OF THE PRESCRIBED FEE FROM THE SALARY OF EMPLOYEES PERFORMING SERVICES WHOLLY OR PARTLY IN THAT CITY.

AUGUST 18, 1948

NO SYNOPSES

**COPIES OF DECISION NOT DISTRIBUTED BUT AVAILABLE UPON REQUEST.