B-151686, JUL. 2, 1965

B-151686, JUL. 2, 1965

TO ADMINISTRATOR OF VETERANS AFFAIRS:

REFERENCE IS MADE TO LETTER OF JUNE 16, 1965 (074B), FROM THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, OFFICE OF MANAGEMENT AND EVALUATION, CONCERNING THE REQUEST OF THE BORDEN COMPANY FOR WITHDRAWAL OF ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. 66-3, ISSUED MAY 18, 1965, FOR FURNISHING DAIRY PRODUCTS TO THE VETERANS HOSPITAL AT FAYETTEVILLE, NORTH CAROLINA, FOR THE FISCAL YEAR BEGINNING JULY 1, 1965.

BIDS WERE OPENED ON JUNE 2, 1965, AND THE BORDEN COMPANY SUBMITTED THE LOWEST AGGREGATE BID OF THE SIX BIDS RECEIVED. THE CONTRACTING OFFICER REPORTS THAT FOLLOWING BID OPENING A GENERAL DISCUSSION TOOK PLACE AMONG THE BIDDERS CONCERNING THE FAILURE OF BORDEN TO COMPLY WITH THE REQUIREMENTS OF FAIR TRADE PRACTICE ORDER NO. SIX, AS AMENDED, ADOPTED BY THE NORTH CAROLINA MILK COMMISSION UNDER AUTHORITY ARTICLE 28B, CHAPTER 106-266.6 ET SEQ., OF THE GENERAL STATUTES OF NORTH CAROLINA; THAT REPRESENTATIVES OF THE FIVE OTHER BIDDERS, WHO OFFERED IDENTICAL PRICES BECAUSE OF THE ABOVE REGULATION, EXPRESSED THE VIEW THAT BORDEN'S BID WAS NOT A PROPER BID AND THAT IF AN AWARD SHOULD BE MADE TO BORDEN A PROTEST WOULD BE MADE TO THE COMMISSION. THE CONTRACTING OFFICER FURTHER REPORTS THAT MR. MOORE, MANAGER OF THE LOCAL BRANCH OF THE BORDEN COMPANY, STATED THAT HE ARRIVED AT THE PRICES BID INDEPENDENTLY AS REQUIRED BY PARAGRAPH 14 OF VA FORM 10 1130 AND THAT HE THOUGHT THAT THE VA HOSPITAL WAS AN EXEMPT INSTITUTION, THE SAME AS THE MILITARY AND WAS NOT SUBJECT TO PRICE POSTING AS REQUIRED BY THE COMMISSION'S REGULATIONS. THE CONTRACTING OFFICER STATES, HOWEVER, THAT HE ANNOUNCED HIS INTENTION TO AWARD THE CONTRACT TO BORDEN.

THE CONTRACTING OFFICER FURTHER REPORTS THAT AT 2:00 P.M. ON THE SAME DAY BIDS WERE OPENED, MR. MOORE RETURNED TO HIS OFFICE AND REQUESTED WITHDRAWAL OF BORDEN'S BID; THAT HE WAS INFORMED THAT WITHDRAWAL COULD NOT BE PERMITTED AT THAT TIME AND HE WAS INSTRUCTED TO SUBMIT A FORMAL REQUEST FOR WITHDRAWAL; THAT MR. MOORE STATED THAT AFTER BID OPENING HE HAD CONTACTED HIS HOME OFFICE AT HIGH POINT AND HAD BEEN INSTRUCTED TO WITHDRAW HIS BID IMMEDIATELY; AND THAT MR. MOORE WAS AWARE OF OUR DECISION OF JUNE 18, 1963, B-151686 (42 COMP. GEN. 704), INVOLVING A SOMEWHAT SIMILAR SITUATION INCIDENT TO THE FURNISHING OF DAIRY PRODUCTS TO THE VA HOSPITAL AT SALISBURY, NORTH CAROLINA. BY LETTER DATED JUNE 2, 1965, MR. MOORE REQUESTED PERMISSION TO WITHDRAW BORDEN'S BID FOR THE REASON THAT IT DID NOT NOTIFY THE COMMISSION OF ITS PRICES 10 DAYS IN ADVANCE AND THAT THEREFORE IT SUBMITTED AN ILLEGAL BID.

THE MILK COMMISSION ACT WAS ENACTED IN 1953, CHAPTER 1338, 1953, SESSION LAWS OF NORTH CAROLINA. WITH SUBSEQUENT AMENDMENTS IT HAS BEEN CODIFIED AS 28B, CHAPTER 106, AGRICULTURE, GENERAL STATUTES OF NORTH CAROLINA, SECTIONS 106-266.6 TO 106-266.21, INCLUSIVE. UNDER SECTION 106-266.8 (3) THE COMMISSION IS AUTHORIZED TO SUPERVISE AND REGULATE THE TRANSPORTATION, PROCESSING, STORAGE, DISTRIBUTION, DELIVERY AND SALE OF MILK FOR CONSUMPTION IN NORTH CAROLINA, AND UNDER SUBPARAGRAPH 10 OF THE SAME SECTION THE COMMISSION, AFTER HEARING AND INVESTIGATION IS AUTHORIZED TO ESTABLISH MINIMUM PRICES AT WHICH MILK MAY BE SOLD. SECTION 106-266.9, AS AMENDED, PROVIDES THAT NO DISTRIBUTOR SHALL VIOLATE THE PRICES ESTABLISHED BY THE COMMISSION OR OFFER ANY DISCOUNT OR REBATES WITHOUT AUTHORITY FROM THE COMMISSION; THAT THE COMMISSION MAY REQUIRE EACH DISTRIBUTOR TO FILE WITH THE COMMISSION ONE COMPLETE SCHEDULE OF HIS WHOLESALE AND RETAIL PRICES FOR EACH MARKETING AREA AND MAY REQUIRE EACH DISTRIBUTOR TO CHARGE HIS POSTED PRICES FOR ALL SALES AND TO GIVE 10 DAYS' NOTICE BY CERTIFIED MAIL TO THE COMMISSION AND EVERY LICENSED DISTRIBUTOR IN EACH MARKETING AREA AFFECTED PRIOR TO THE EFFECTIVE DATE OF ANY CHANGES IN SAID POSTED PRICES. THE RIGHT TO INJUNCTIVE RELIEF IS GRANTED THE COMMISSION UNDER SECTION 106-266.15 AND PENALTIES FOR VIOLATION OF THE PROVISIONS OF THE STATUTE ARE PROVIDED FOR UNDER SECTION 106-366.16.

UNDER AMENDMENT NO. 1 TO FAIR TRADE PRACTICE ORDER NO. SIX, SALES OF MILK AND MILK PRODUCTS TO NON-PROFIT HOSPITALS AND CHARITABLE INSTITUTIONS, OR OTHER AGENCIES WHICH ARE OPERATED AND SUPPORTED ENTIRELY BY A CHURCH, OR WHICH ARE SUPPORTED ENTIRELY BY THE FEDERAL, STATE, COUNTY, OR MUNICIPAL GOVERNMENT ARE EXEMPTED FROM THE UNIFORM PRICES AS REQUIRED BY SECTION A OF THE ORDER. UNDER SUBPARAGRAPH (2) OF SECTION B, HOWEVER, EVERY LICENSED MILK DISTRIBUTOR IS REQUIRED TO FILE WITH THE COMMISSION ON OR BEFORE MAY 18, 1964, ONE UNIFORM SCHEDULE OF LIST PRICES FOR THE COMPLETE LINE OF ALL FLUID MILK AND FLUID MILK ITEMS AND FOR ANY OTHER ITEM OR PRODUCT WHICH THE DISTRIBUTOR IS SUBJECT TO OFFER FOR SALE TO AN INSTITUTIONAL ACCOUNT, SETTING FORTH THE PERCENTAGE OF DISCOUNT APPLICABLE TO THE SCHEDULE OF LIST PRICES FOR THE HOME MARKET OF SUCH DISTRIBUTOR. IT IS PROVIDED, HOWEVER, THAT SUCH SCHEDULE SHOULD BE LIMITED TO THE INSTITUTIONAL ACCOUNTS LISTED IN SECTION B-1-/B), (C) AND (D) OF THE ORDER. PROVISION IS MADE FOR DEVIATION FROM THE DISTRIBUTOR'S UNIFORM PRICE SCHEDULES BY GIVING NOTICE TO THE COMMISSION 10 DAYS PRIOR TO THE EFFECTIVE DATE OF SUCH PRICE CHANGE. THE TERM "EFFECTIVE DATE" IS DEFINED AS MEANING THE DATE THAT SEALED BIDS ARE OPENED BY ANY PARTICULAR INSTITUTION OR THE DATE OF THE DISTRIBUTOR'S SUBMISSION OF ORAL OR WRITTEN PRICES.

WE HAVE BEEN ADVISED INFORMALLY THAT THE FAYETTEVILLE HOSPITAL WAS CONSTRUCTED ON A SITE ACQUIRED BY THE UNITED STATES IN 1938; THAT THE STATE OF NORTH CAROLINA CEDED EXCLUSIVE JURISDICTION OF THE SITE TO THE UNITED STATES UNDER AUTHORITY OF SECTION 8059, CHAPTER 25, LAWS OF 1907, AS AMENDED, SECTION 104-7 G.S., AND THAT ON JUNE 19, 1950, THE UNITED STATES ACCEPTED EXCLUSIVE JURISDICTION OF THE SITE. 40 U.S.C. 255. SINCE SUCH ACCEPTANCE OCCURRED PRIOR TO THE ENACTMENT OF THE MILK COMMISSION ACT THE PROVISIONS THEREOF AND REGULATIONS ADOPTED PURSUANT THERETO ARE NOT ENFORCEABLE ON THIS FEDERAL ENCLAVE. 42 COMP. GEN. 704. THEREFORE, THE FACT THAT BORDEN HAS NOT COMPLIED WITH FAIR TRADE PRACTICE ORDER NO. SIX, AS AMENDED, MAY NOT BE ACCEPTED AS FURNISHING ANY JUSTIFICATION FOR WITHDRAWAL OF ITS BID. 27 COMP. GEN. 782.

ACCORDINGLY, THE BORDEN BID SHOULD BE CONSIDERED FOR AWARD. THE DUPLICATE COPY OF THE BID IS RETURNED.